This presentation shows how economics can help us understand better the motivations of the crowd to contribute to crowdsourcing and crowdfunding, but also to identify potential issues that might undermine the success of crowdsourcing and crowdfunding campaigns. 6 takeaways are given in the presentation to help people and companies engaging with the crowd to lead more successful campaigns.

1. CROWD MOTIVATION &
THE IMPACT OF
TECHNOLOGY
Prof. Thierry Rayna!
@ThierryRayna
CROWD15

2. About me…
Professor of Economics, Novancia Business School Paris!
Affiliate Professor, Imperial College London!
Mentor, currently 5 start-ups

3. Joint Research Group

4. CROWD MOTIVATION

5. The Power of the Crowd
Or is it?

6. Wikipedia users: billions!
Wikipedia registered contributors: millions!
Wikipedia active contributors: thousands

7. Why so few?!
Is it enough?!
How can we make sure the right people contribute?

8. WHAT CAN ECONOMICS
TELL US ABOUT
CROWD MOTIVATION?

9. The Tale of the Free Rider

10. Goods in Economics
Rival Non-rival
Excludable Private good Club good
Non-excludable Common pool Public good

11. The Free Rider Problem
A rational individual knows no one can be excluded!
Why contribute to what you can get for free?!
Why pay for free riders?!
The ‘rational’ behaviour is to free ride!
No public good can be produced without state
intervention (and taxation)

12. Does the Free Rider really
exist?
Yes …!
… but only partially …!
People contribute 30-50% of what they should!
Depends on the country, age, culture, gender !
… but contributions decrease over time

13. Takeaway #1
The crowd tends to contribute much less (time, money)
than the actual value of the product/project has for
them!
This contribution most likely will decrease over time
even if they value the service/product

14. How many users report
problems?!
How many users just
keep the app open?

15. The Tale of the Whale & the
Minnows

16. A little
A lot
= € 1
A little
A lot

18. Takeaway #2
Make sure anyone can contribute… (I mean it, anyone)!
From €0.01 to infinity and beyond!
Create options for people to contribute with time if
they don’t contribute with money!
Blend crowdfunding and crowdsourcing (and vice
versa)

19. Whales from Mars
A speaking role in the movie!
A framed copy of the page of
the script that includes your
line. !
Premiere and the after party.
You are, after all, in the movie. !
Blu-Ray/DVD/Digital combo
pack, T-shirt and a pdf of the
shooting script.!
$ 10,000, all taken

20. A Whale for Coffee
+
= $610,000

21. Minnows
OUYA: $10-25, reserve username (1,770)!
Coolest Cooler: $ 5-25, thanks forever (1,078)!
Pono: $5-50, love + thanks!
Pebble: $1–99, updates (2,615)!
Veronica Mars: $1-10, eternal gratitude + updates (5,938)

22. Crowdsourcing Whales
Editors 1-1000
Editors 1001-2000
Editors 2001-3000
Editors 3001-4000
Editors 4001-5000
Editors 5001-6000
Editors 6001-7000
Editors 7001-8000
Editors 8001-9000
Editors 9001-10000
Rest of Editors
Number of Wikipedia (EN) edits

23. The Tale of the Dark Side of the
Crowd

24. Supply exceeds demand?
How do you know the right people are contributing? How
do you get the right people to contribute?!
Loose relationship between perceived and actual social
value !
How do I know that what I contribute is valuable?!
Poor contribution might ‘crowd out’ good ones!
« Web 2.0 is Cheap: Supply exceeds Demand » http://ssrn.com/
abstract=1371077

25. Takeaway #3
Think ‘pull’ and not just ‘push’!
Maximising contribution is also about finding high
potential contributors who for some reasons have been
left out.

26. WHAT ABOUT
MOTIVATIONS?

27. Different types of co-
creation
DIFFERENTIATED
INTEGRATED
MASSCUSTOM
INPUT
OUTPUT
Crowdsourcing
Crowdfunding
Open Source
Printed objects
Printed food
Crowd-customisation?
User manufacturing

28. Different types of
motivation
Direct benefit!
Monetary rewards!
!
Non-monetary rewards:!
Enjoyment and fun!
Intellectual stimulation!
Peer recognition!
Reputation &
professional status!
Socialisation

29. Different challenges
Trust & social capital!
Issue of group vs individual rewards!
Finding lead users!
Finding the right mix of motivations

30. Takeaway #4
Motivations are complex and multidimentional !
Getting most of the crowd usually requires
multidimensional incentives

31. ‘Quantum Economics’
For very small amounts of money, the traditional ‘laws’
of economics do not seem to apply!
Contributors prefer receiving nothing than
something too small!
Backers may pay something small for nothing in
return!
Hard to figure out!

32. THE ROLE OF
TECHNOLOGY

33. How Can Technology
Help?
It can help by lowering the cost of contribution!
It can help figure out what the correct incentive
scheme is

34. Takeaway #5
Don’t think just about active crowdsourcing, think
passive crowdsourcing

35. Big Data to the Rescue
Better to ask zero than 0.99!
Yes, but it depends on genre, bands, fans…

36. Takeaway #6
Big Data and data mining are critical when trying to
make most of the crowd!
No ‘silver bullet’: the right strategy changes for each
particular campaign and over time!
Monitoring is critical

37. #1 contributions sub-optimal and decreasing!
#2 ultra-wide array of contribution (time AND money)!
#3 don’t wait for high contributors, find them!
#4 give multidimensional incentives!
#5 enable passive crowdsourcing through technology!
#6 use big data continuously to fine-tune incentives

38. QUESTIONS?
trayna@novancia.fr!
@ThierryRayna