The document discusses the rise and potential fall of crowdsourcing. It notes that while some crowdsourcing initiatives have been successful, not all live up to expectations. Barriers to success include difficulties making people aware of initiatives, getting people to contribute, and keeping contributors engaged over time. As more crowdsourcing sites emerge, they will compete for limited crowd resources, potentially decreasing participation rates. Only initiatives that offer high rewards or connect to major brands may sustain long-term business models relying solely on crowdsourcing. While crowdsourcing shows promise, many initiatives are likely to fail due to challenges in participant awareness, engagement, and retention.

1. The Rise and Fall of Crowdsourcing?
Dr. Henri Simula
Aalto University, Finland

2. MOTIVATION
• Despite some seemingly successful case examples, not every
crowdsourcing initiative has taken off.
• While some of the barriers are case or industry specific, there
are also certain overall reasons hindering crowdsourcing from
reaching de facto modus operandi, especially in the innovation
creation context.
• Why crowdsourcing initiatives may not always live up to the
expectations placed upon them?

3. CROWDSOURCING
“Crowdsourcing is thus a powerful resource
for innovators. ... A world of people and
organizations is available to assist you, if
you have the commitment and care to
engage them properly.” (Chesbrough 2011)

4. CONCEPTUAL MESS
… also peer production, collaborative systems, community
systems, collective intelligence, crowd wisdom, customer
empowerment & mass collaboration…

5. CROWDSOURCING
“Crowdsourcing is a type of participative online activity in which an
individual, an institution, a non-profit organization, or company proposes
to a group of individuals of varying knowledge, heterogeneity, and
number, via a flexible open call, the voluntary undertaking of a task. The
undertaking of the task, of variable complexity and modularity, and in
which the crowd should participate bringing their work, money,
knowledge and/or experience, always entails mutual benefit. The user
will receive the satisfaction of a given type of need, be it economic, social
recognition, self-esteem, or the development of individual skills, while the
crowdsourcer will obtain and utilize to their advantage that what the user
has brought to the venture, whose form will depend on the type of activity
undertaken.”
Estellés-Arolas &
González-Ladrón-de-Guevara, 2012

13. Other examples just to name few
• Microtasking: Amazon Mechanical Turk
• Gamification: Fold.it
• Microloans: Kiva
• Community development: MindMixer
• Work marketplace: TaskRabbit
• Crowdfunding: Kickstarter
• New business model: Threadless
• Etc.

14. Unsuccessful crowdsourcing initiatives
Gambrian House
• One of the first firms that described themselves as a
crowdsourcing company.
• Despite interest from the press and a quite decent member
rate, the firm did not manage to engage the community to
participate in actual implementation of ideas.
• Most of the visitors just looked, and sometimes ranked, the
ideas but did not participate to make the ideas real

15. Unsuccessful crowdsourcing initiatives
CrowdSpirit
• An innovation intermediary with the original idea to provide a
platform for the community to manage the whole R&D
process.
• The original business model was to sell a product designed
by a community to end-users – something that did not work
in reality due to the low number of actual contributors.
• Difficulties in defining a viable business model that would
capitalize on crowdsourcing and provide viable business in
terms of revenue stream.
• Additional challenges were associated with the development
of proper incentive structures and distribution of intellectual
property rights

16. The generic challenges with
crowdsourcing initiatives
Can you keep
the crowd on
board?
Can you get the
crowd to
contribute?
Can you make the
crowd aware of an
initiative?

17. How can you make a crowd aware of
something?
• How can you make the general public aware of
crowdsourcing initiatives?
• How can you spread the word about initiative?

18. How can you get the crowd to
contribute?
• One of the simplest ways to motivate a crowd to contribute is
to offer significant monetary rewards.
• As the amount of crowdsourcing initiatives grows, it is likely
that a tragedy of the commons has an affect on
crowdsourcing culture i.e. not every initiative is able to
motivate people to really work with their best efforts and
make them contribute as much as they could.
• When people do not feel like being part of something
valuable to them, they lack the commitment and engagement
and lose their interest to contribute.

19. Recent example
• The number of Wikipedia’s volunteer editors has been on the decline from
around 56,000 in 2007 to some 35,000 at the end of 2012.
• "Several changes the Wikipedia community made to manage quality and
consistency in the face of a massive growth in participation have ironically
crippled the very growth they were designed to manage,”
Halfaker, et al. (2012). The rise and decline of an open collaboration system: How
Wikipedia’s reaction to sudden popularity is causing its decline. American Behavioral
Scientist.

20. How to get a crowd to stay on board
• How to motivate participants to ‘stay on board’ after the first
excitement has disappeared.
• Crowdsourcing sites are competing with each other for
available ‘crowd-resources’.
• Not all projects will be able to create enough traction, i.e.,
maintain a sufficient amount of contributors to create a
virtuous development cycle.

21. Additional issues hindering
crowdsourcing
• Organizational resistance,
• Tweaking the game,
• The crowd versus companies,
• The question of labor exploitation,
• Dealing with legal issues,
• De-democratization of the Internet,
• Actual quality of ideas

22. Propositions
P1. When the amount of crowdsourcing sites will increase the
amount of participants per site will decrease.
P2. The quality of contribution in terms of added value to a site
owner will decrease when the amount of competitive sites
will increase.
P3. The turnover rate of participants will be shorter when the
amount of crowdsourcing sites will increase.
P4. Only those crowdsourcing initiatives with lucrative prices
and/or a connection to a famous brand or a major link to
common societal well-being will be able to continue with
“one winner gets all” kind of business model.

23. Conclusion
• Despite the provocative title of this paper we do not want to
claim that crowdsourcing is doomed to fail automatically.
• We started this investigation with the premise that ‘a hype’
that often coins new management concepts and ‘isms’
requires some investigation that takes a more critical
approach.
• In any event, we expect many new crowdsourcing initiatives
to emerge, some to succeed and many of them to fail…. Time
can only tell which will be which.

24. THANK YOU FOR YOUR ATTENTION!
henri.simula@aalto.fi
Twitter @HenriSimula
LinkedIn: HenriSimula