The	  crowdsourcing	  compendium	  
Crowdsourcing:	  The	  act	  of	  taking	  a	  job	  tradi2onally	  performed	  	  by	  a	  designated	  agent	  (usually	...
The	  logic:	  Given	  the	  right	  set	  of	  condi2ons,	  	  the	  crowd	  has	  the	  poten2al	  to	  outperform	  	  ...
More	  and	  more	  companies	  are	  becoming	  	  aware	  of	  this	  logic,	  and	  are	  aEemp2ng	  to	  	  exploit	  ...
Making	  crowdsourcing	  possible	  •  Emergence	  of	  open	  source	  soIware	  movement	  •  Tools	  of	  produc2on:	  ...
Why	  does	  the	  crowd	  do	  it?	  •  Intrinsic	  mo2va2ons	       –  A	  belief	  in	  a	  project	       –  Obliga2on...
5	  types	  (some	  overlap)	  1.  Collec2ve	  intelligence	  2.  Crowd	  crea2on	  3.  Crowdtasking	  4.  Crowd	  filterin...
1.	  CollecBve	  intelligence	  Asking	  people	  inside	  and	  outside	  the	  company	  	  to	  help	  solve	  problems...
No	  maDer	  who	  you	  are,	  	  most	  of	  the	  smart	  people	  	  work	  for	  someone	  else	  Bill	  Joy,	  Sun	 ...
3	  types	  of	  collecBve	  intelligence	  •  Problem-­‐solving	  networks	  •  Idea	  jams	  •  Predic2on	  markets	  Je...
3	  types	  of	  collecBve	  intelligence	  •  Problem-­‐solving	  networks	  •  Idea	  jams	  •  Predic2on	  markets	  
In	  the	  beginning…	  	  
The	  longitude	  prize	  
John	  Harrison	  Picture	  source	  needed	  
Eric	  von	  Hippel:	  DemocraBzing	  InnovaBon	  Users	  leading	  companies	  to	  the	  cubng-­‐edge	  •  Scien2fic	  in...
The	  collaboraBon	  imperaBve	  •  The	  current	  R&D	  model	  is	  “broken”	      –  In	  some	  cases,	  R&D	  expens...
If	  I	  can	  tap	  into	  a	  million	  minds	  simultaneously,	  	  I	  may	  run	  into	  one	  that’s	  uniquely	  pr...
Used	  by	  more	  than	  150	  corpora2ons:	  Eli	  Lilly,	  Boeing,	  DuPont,	  P&G,	  Colgate-­‐Palmolive…	  
PolyvaBon:	  mulBple	  sources	  of	  innovaBon	  
InnoCenBve	  and	  The	  value	  of	  diversity	  •  Harvard	  research:	  166	  problems	  from	  26	  different	  compani...
innocen2ve.com	  
Example:	  Ed	  Melcarek	  •  Problem	  from	  Colgate-­‐Palmolive:	  	      how	  to	  inject	  fluoride	  powder	  into	 ...
People	  whose	  networks	  span	  structural	  holes	  	  have	  early	  access	  to	  diverse,	  oTen	  contradictory,	 ...
wired.com	  
The	  trailblazer	  
In	  2000,	  we	  decided	  to	  stop	  being	  Fortress	  P&G,	  	  and	  move	  to	  an	  open	  innovaBon	  system	  th...
When	  I	  became	  CEO	  of	  P&G	  in	  2000,	  we	  were	  introducing	  new	  brands	  and	  products	  with	  a	  com...
This	  was	  important	  to	  us	  for	  several	  reasons:	  	  First,	  we	  needed	  to	  broaden	  our	  capabiliBes…	...
pg.com	  
pg.com	  
brandchannel.com	  
The	  Diversity	  Trumps	  Ability	  Theorem	  A	  randomly	  selected	  collec2on	  of	  problem	  solvers	  	  will	  ou...
Why	  is	  a	  community	  a	  more	  efficient?	  •  BeEer	  at	  iden2fying	  talented	  people	        –  The	  community...
CondiBons	  for	  diversity	  to	  trump	  ability	  •  Scale	  of	  diversity	  =	  a	  large	  enough	  pool	  	       t...
More	  network	  examples	  (Some	  overlap	  with	  idea	  jams)	  
Challenges	  and	  prizes	  (A	  few	  examples)	  
wired.com	  
readwriteweb.com	  
techcrunch.com	  
techcrunch.com	  
•    44k	  entries	  •    5k	  teams	  •    186	  countries	  
•    The	  mining	  firm	  made	  its	  proprietary	  data	  about	  a	  mining	  site	  in	  Ontario	  public,	       then...
3	  types	  of	  collecBve	  intelligence	  •  Problem-­‐solving	  networks	  •  Idea	  jams	  •  Predic2on	  markets	  
•    Idea	  genera2on	  by	  employees	  •    Set	  up	  in	  1996	  •    Annual	  seed	  funding	  budget:	  $40M	  •    ...
ibm.com	  
•    2006:	  The	  biggest	  ever	  jam	  •    150k	  minds	  in	  104	  countries	  •    Clients,	  consultants,	  employ...
The	  world	  is	  my	  lab	  now.	  John	  Kelly,	  Director	  of	  IBM	  Research,	  	  discussing	  IBM’s	  collaborato...
•    The	  Linux	  pre-­‐installment	  idea	  was	  brought	  up	  	       on	  the	  day	  of	  the	  launch	  (February	...
By	  July	  2009:	  ~12k	  ideas,	  ~85k	  comments,	  ~675k	  vo2ngs,	  354	  implementa2ons	  
• 	   	  
Idea	  jam	  plajorms	  
Google	  
•  Powered	  by	  Google	  Moderator	  •  More	  than	  125,000	  users	  submiEed	  over	  44,000	  ideas	  and	  cast	  ...
Powered	  by	  Google	  Moderator	  
Other	  examples	  (Not	  all	  of	  them	  100%	  crowdsourcing)	  
L	  Genius
guardian.co.uk	  
mashable.com	  
3	  types	  of	  collecBve	  intelligence	  •  Problem-­‐solving	  networks	  •  Idea	  jams	  •  PredicBon	  markets	  
[Nearly	  every	  individual]	  has	  some	  advantage	  over	  all	  others	  because	  	  he	  possesses	  unique	  info...
Nobody	  knows	  everything.	  But	  everybody	  may	  know	  something.	  James	  Surowiecki,	  The	  Wisdom	  of	  Crowd...
•    Correct	  on	  80%	  of	  Oscar	  nomina2ons	  •    Never	  missed	  more	  than	  one	  top	  award	  	       since	...
Drawbacks	  of	  internal	  predicBon	  markets	  •  Not	  using	  real	  money	      –  Lower	  credibility	      –  Skew...
No	  longer	  with	  us	  (Some	  of	  them	  predicted	  it)	  
Marketocracy	  [ini2al	  incarna2on]	  The	  Masters	  100	  mutual	  fund	  was	  comprised	  of	  the	  leading	  100	  ...
2.	  Crowd	  creaBon	  
The	  1%	  rule	                                            Geek	  	          0.01%	                                      ...
How	  it	  all	  began	  
The	  free	  soTware	  movement	  •  Free	  as	  in	  free	  speech,	  not	  free	  beer	  (liberty,	  not	  price)	  •  S...
Some	  lessons	  •        Given	  a	  large	  enough	  beta-­‐tester/co-­‐developer	  base,	           almost	  every	  pr...
Crowd-­‐created	  soTware	  Apps,	  app	  stores	  and	  app	  challenges.	  Here’s	  a	  (really)	  par2al	  sample.	  
In	  the	  beginning…	                                marke2ngvox.com	  
Now	  at	  more	  than	  18Bn	  
Not	  just	  mobile,	  of	  course…	  (Many	  in	  the	  form	  of	  app	  challenges)	  	  
mashable.com	  
marke2ng-­‐interac2ve.com	  
Crowd-­‐created	  journalism	  
We	  think	  of	  our	  members	  as	  an	  army	  	  of	  eyes	  and	  ears.	  But	  we’re	  not	  asking	  them	  	  to	...
InvesBgaBve	  reporBng	  milestones	  •  Ft	  Myers	  News-­‐Press:	  contribu2ng	  to	  serious	  journalis2c	     inves2...
guardian.co.uk	  
Crowd-­‐created	  maps	  
readwriteweb.com	  
Picture	  source	  needed	  
techcrunch.com	  
techcrunch.com	  
mashable.com	  
techcrunch.com	  
Crowd-­‐created	  markeBng	  Flavors,	  ads,	  plazorms	  
Crowd-­‐created	  flavors	  
Walker’s	  Do	  Us	  a	  Flavor:	  1.2M	  ideas	  [no,	  that’s	  not	  a	  typo]	  –	  	                    profit	  shari...
Crowd-­‐created	  ads	  A	  few	  of	  the	  pioneers	  
The	  chain	  thing	   caught	  on	  J	  
mashable.com	  
In	  a	  class	  by	  itself	  
•    The	  compe22on	       generated	  1Bn	       impressions	  (=	  media	       investment	  of	  $36M)	  •    During	 ...
Success	  led	  to	  implementa2on	  in	    more	  countries	  
2nd	  year	  was	  a	  flop	  
Back	  to	  basics	  in	  3rd	  year	  +	  more	  money	  
news.bostonherald.com	  
If	  it	  ain’t	  broke,	  	         don’t	  fix	  it	  
mashable.com	  
MarkeBng	  crowdsourcing	  plajorms	  	  
Where	  art	  thou?	  
Formerly	  XLNT	  Ads	  
Crowd-­‐created	  content	  (Just	  a	  few	  examples)	  
Those	  were	  the	  days	                                     marke2ngvox.com	  
Crowd-­‐created	  (physical)	  products	  Lego,	  crowdsourced	  hardware,	  Threadless	  &	  Etsy	  
Lego	  
The	  company	  wrote	  a	  “right	  to	  hack”	  into	  the	  mindstorms	  soIware	  license	  
Source:	  LEGO	  
Source:	  LEGO	  
Source:	  LEGO	  
Source:	  LEGO	  
With	  Lego	  Factory	  we	  can	  expand	  	  beyond	  our	  100	  in-­‐house	  designers	  	  to	  marvel	  at	  the	  c...
•    Lego	  provides	  a	  community-­‐like	       environment	  where	  users	  can	       share	  their	  Lego	  experie...
Crowdsourced	  hardware	  Open	  source	  +	  P2P	  (and	  not	  really	  new…)	  
Dozens	  of	  hardware	  inventors	  around	  the	  world	  	  have	  begun	  to	  freely	  publish	  their	  specs.	  	  ...
wikipedia.org	  
Threadless	  &	  Etsy	  P2P,	  really	  (especially	  Etsy)	  	  –	  but	  I	  couldn’t	  resist	  
Customers	  as	  R&D,	  designers,	  sales	  force,	  employees	  
3.	  Crowdtasking	  
Crowdsourced	  science	  
•    Iden2fying	  and	  measuring	  landforms	  (craters,	  ridges,	  valleys)	  –	  	       in	  order	  to	  find	  evide...
•    Observa2ons	  grown	  10-­‐fold	  in	  a	  period	  of	  5	  years	  •    “You	  don’t	  need	  a	  PhD	  to	  count	...
Crowdsourced	  weather	  
readwriteweb.com	  
Crowdsourced	  patent	  review	  
Outsourcing	  patent	  review	  •  The	  system	  is	  broken	       –  On	  average,	  2.5	  years	  between	  filing	  an...
IBM,	  MS,	  GE,	  US	  Patent	  &	  Trademark	  Office	  
Crowdsourced	  law	  
Crowdsourced	  surveillance	  
Crowdsourced	  translaBons	  
mashable.com	  
readwriteweb.com	  
techcrunch.com	  
Crowdsourced	  transcipBon	  
springwise.com	  
Crowdsourced	  fact-­‐checking	  
ps•.com	  
Crowdsourcing	  along	  the	  value	  chain	  
springwise.com	  
ps•.com	  
Crowdsourced	  microtasks	  
Crowdsourced	  crisis	  informaBon	  
4.	  Crowd	  filtering	  Passively	  and	  ac2vely	  filtering	  	  the	  exponen2ally-­‐increasing	  catalogue	  of	  the	 ...
Mass	  amateurizaBon	  has	  created	  a	  filtering	  problem	  	  vastly	  larger	  than	  we	  had	  with	  tradiBonal	 ...
The	  acBvity	  of	  the	  10%	  [who	  filter]…	  	  is	  as	  valuable	  to	  any	  online	  community	  as	  	  the	  ac...
Filtering	  websites	  
fortune.com,	  techcrunch.com	  
Filtering	  news	  
Those	  were	  the	  days	  
Those	  were	  the	  days	  
readwriteweb.com	  
Filtering	  media	  content	  
paidcontent.org	  
Filtering	  soTware	  
Filtering	  people	  
Filtering	  locaBons	  
Product	  reviews	  
If	  an	  appliance	  manufacturer	  finds	  a	  reviewer	  	  on	  buzzilions.com	  saying	  that	  his	  oven’s	  door	  ...
 Amazon	  has	  branded	  itself	  by	  gathering	  informa2on	  from	  consumers	  –	  	      and	  then	  returning	  it...
Up	  to	  23	  collabora2ve	  features	  	                                     on	  any	  Amazon	  product	  page	  Pictur...
emarketer.com	  
emarketer.com	  
emarketer.com	  
Web	  2.0	  companies...	  build	  systems	  	  that	  get	  beDer	  the	  more	  people	  use	  them...	  	  The	  archit...
The	  crowd	  produces	  mostly	  crap.	  The	  crowd	  finds	  the	  best	  stuff.	  The	  rise	  of	  Crowdsourcing,	  Wir...
The	  filtering	  sequence	  has	  been	  reversed	  	  From	  	  Filter-­‐then-­‐Publish	  To	  Publish-­‐then-­‐Filter	  ...
5.	  Crowdfunding	  
huffingtonpost.com	  
cnet.com	  
guardian.co.uk	  
alleyinsider.com	  
readwriteweb.com	  
techcrunch.com	  
businessinsider.com	  
techcrunch.com	  
thenextweb.com	  
Summary	  
5	  types	  (some	  overlap)	  1.  Collec2ve	  intelligence:	  what	  the	  crowd	  knows	        –  Solu2on	  networks,	 ...
Crowdsourcing	  rules	  1.      Pick	  the	  right	  model	  out	  of	  the	  5	  (or	  a	  combina2on)	  2.      Pick	  t...
Crowdsourcing	  rules	  [cont.]	  6.     Keep	  it	  simple	  and	  break	  it	  down	        –     Be	  clear	  on	  what...
If	  you’re	  not	  conducBng	  an	  exercise	  like	  that	  in	  your	  organizaBon,	  	  you	  risk	  missing	  the	  b...
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Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
Crowdsourcing - everything you ever wanted to know
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Crowdsourcing - everything you ever wanted to know

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Crowdsourcing - everything you ever wanted to know

  1. 1. The  crowdsourcing  compendium  
  2. 2. Crowdsourcing:  The  act  of  taking  a  job  tradi2onally  performed    by  a  designated  agent  (usually  an  employee)  and  outsourcing  it  to  an  undefined,  generally  large  group  of  people,  in  the  form  of  an  open  call  Jeff  Howe,  Crowdsourcing  
  3. 3. The  logic:  Given  the  right  set  of  condi2ons,    the  crowd  has  the  poten2al  to  outperform    any  number  of  employees  
  4. 4. More  and  more  companies  are  becoming    aware  of  this  logic,  and  are  aEemp2ng  to    exploit  it  by  tapping  into  the  excess  capacity    and  collec2ve  brainpower  of  the  crowd  –  usually,  for  liEle  or  no  compensa2on  
  5. 5. Making  crowdsourcing  possible  •  Emergence  of  open  source  soIware  movement  •  Tools  of  produc2on:  widely  available,  faster,   cheaper,  easier  to  use  •  Rise  of  online  communi2es  •  Renaissance  of  amateurism/DIY  
  6. 6. Why  does  the  crowd  do  it?  •  Intrinsic  mo2va2ons   –  A  belief  in  a  project   –  Obliga2on  to  community   –  Enjoyment     –  Fulfillment  (crea2ve  or  other)   –  Altruism   –  Showing  off  (prove  how  smart/crea2ve  you  are)   –  Reputa2on  enhancement   –  OCD  •  Extrinsic  mo2va2ons:     –  Financial  reward   Non-­‐comprehensive  list,  of  course.  Usually  several  mo2va2ons  will  coexist.  
  7. 7. 5  types  (some  overlap)  1.  Collec2ve  intelligence  2.  Crowd  crea2on  3.  Crowdtasking  4.  Crowd  filtering  5.  Crowdfunding  Jeff  Howe,  Crowdsourcing  [except  for  #3]  
  8. 8. 1.  CollecBve  intelligence  Asking  people  inside  and  outside  the  company    to  help  solve  problems  and  suggest  new  products  
  9. 9. No  maDer  who  you  are,    most  of  the  smart  people    work  for  someone  else  Bill  Joy,  Sun  co-­‐founder  
  10. 10. 3  types  of  collecBve  intelligence  •  Problem-­‐solving  networks  •  Idea  jams  •  Predic2on  markets  Jeff  Howe,  Crowdsourcing  
  11. 11. 3  types  of  collecBve  intelligence  •  Problem-­‐solving  networks  •  Idea  jams  •  Predic2on  markets  
  12. 12. In  the  beginning…    
  13. 13. The  longitude  prize  
  14. 14. John  Harrison  Picture  source  needed  
  15. 15. Eric  von  Hippel:  DemocraBzing  InnovaBon  Users  leading  companies  to  the  cubng-­‐edge  •  Scien2fic  instruments  •  Computer  chips  •  Sports:  windsurfing,  snowboarding,  mountain  biking  •  Many  other  areas  
  16. 16. The  collaboraBon  imperaBve  •  The  current  R&D  model  is  “broken”   –  In  some  cases,  R&D  expenses  rising  faster  than  sales     –  e.g.,  10-­‐15  years  and  $Bns  to  develop  a  new  drug  •  With  the  escala2on  in  R&D  costs,  collabora2on     is  becoming  an  aErac2ve  economic  solu2on  •  Businesses,  research  ins2tu2ons,  government  labs,   universi2es  are  moving  towards  collabora2on
  17. 17. If  I  can  tap  into  a  million  minds  simultaneously,    I  may  run  into  one  that’s  uniquely  prepared.  Alpheus  Bingham,  Eli  Lilly  [at  the  2me]  
  18. 18. Used  by  more  than  150  corpora2ons:  Eli  Lilly,  Boeing,  DuPont,  P&G,  Colgate-­‐Palmolive…  
  19. 19. PolyvaBon:  mulBple  sources  of  innovaBon  
  20. 20. InnoCenBve  and  The  value  of  diversity  •  Harvard  research:  166  problems  from  26  different  companies  •  The  odds  of  a  solver’s  success  were  higher  in  fields  in  which   they  had  NO  formal  exper2se   –  The  farther  a  challenge  is  from  the  solver’s  specialty,  the   more  likely  it  is  to  be  solved  •  75%  of  solvers  already  knew  the  solu2on  to  the  problem   –  The  problem  simply  needed  a  diverse  enough     set  of  minds  to  have  a  go  at  it  The  Value  of  Openness  in  Scien2fic  Problem  Solving,  Karim  R.  Lakhani,  Lars  Bo  Jeppesen,  Peter  A.  Lohse    and  Jill  A.  PaneEa,  Technology  and  Opera2ons  Management,  January  2007  
  21. 21. innocen2ve.com  
  22. 22. Example:  Ed  Melcarek  •  Problem  from  Colgate-­‐Palmolive:     how  to  inject  fluoride  powder  into  a  toothpaste  tube     without  the  powder  dispersing  into  the  surrounding  air  •  Solu2on:  impart  an  electric  charge  to  the  powder     while  grounding  the  tube  •  An  electrical  solu2on  to  a  seemingly  chemical  problem  
  23. 23. People  whose  networks  span  structural  holes    have  early  access  to  diverse,  oTen  contradictory,    informaBon  and  interpretaBons  which  gives  them    a  good  compeBBve  advantage    in  delivering  good  ideas...    This...  is  creaBvity  as  an  import-­‐export  business.    An  idea  mundane  in  one  group    can  be  a  valuable  insight  in  another.  Ronald  Burt,  The  Social  Origin  of  Good  Ideas  
  24. 24. wired.com  
  25. 25. The  trailblazer  
  26. 26. In  2000,  we  decided  to  stop  being  Fortress  P&G,    and  move  to  an  open  innovaBon  system  that  could  aDract  innovaBons  of  all  stripes  from  the  outside.    Great  invenBon  is  going  on  anywhere  and  everywhere    in  the  world.  [We  have]  about  8,500  researchers,  and    we  figured  there  are  another  1.5M  similar  researchers  with  perBnent  areas  of  experBse.    Why  not  pick  their  brains?  A.G.  Lafley,  CEO,  P&G  
  27. 27. When  I  became  CEO  of  P&G  in  2000,  we  were  introducing  new  brands  and  products  with  a  commercial  success  rate  of  15  to  20  percent…    Today,  our  success  rate  runs  between  50  and  60  percent.  That’s  as  high  as  we  want  [it]  to  be.  If  we  try  to  make  it  any  higher,  we’ll  be  tempted  to  err  on  the  side  of  cauBon.    Over  the  same  period,  we’ve  reduced  R&D  spending  as  a  percentage  of  sales;  it  was  about  4.5%  in  the  late  1990s  and  only  2.8%  in  2007.  [We]  focused  on  creaBng…  open  innovaBon:  taking  advantage  of  the  skills  and  interests  of  people  throughout  the  company  and  looking  for  partnerships  outside  P&G.  In  essence,  we  are  building  a  social  system  with  the  purchasers  (and  potenBal  purchasers)  of  our  products,  enabling  them  to  co-­‐design  and  co-­‐engineer  our  innovaBons  A.G.  Lafley,  P&G’s  Innova2on  culture,  Strategy  &  Business  magazine    
  28. 28. This  was  important  to  us  for  several  reasons:    First,  we  needed  to  broaden  our  capabiliBes…    Second,  building  an  open  innovaBon  culture  was  criBcal  for  realizing  the  essenBal  growth  opportunity  presented  by  emerging  markets…    A  third  reason…  had  to  do  with  fostering  teams…    For  all  these  reasons,  we  consciously  set  in  place  a  series  of  measures  for  building  an  open  innovaBon  culture…  A.G.  Lafley,  P&G’s  Innova2on  culture,  Strategy  &  Business  magazine    
  29. 29. pg.com  
  30. 30. pg.com  
  31. 31. brandchannel.com  
  32. 32. The  Diversity  Trumps  Ability  Theorem  A  randomly  selected  collec2on  of  problem  solvers    will  outperform  a  collec2on  of  the  best  individual  solvers  
  33. 33. Why  is  a  community  a  more  efficient?  •  BeEer  at  iden2fying  talented  people   –  The  community  doesn’t  need  to  find  the  person     most  suited  for  the  task,  because…   –  The  person  with  the  right  combina2on  of  talent,  willingness     and  spare  2me  will  self-­‐iden2fy  for  the  task  –  and  undertake  it     without  permission,  contract  or  instruc2on   –  Transac2on  costs  =  zero  •  BeEer  at  evalua2ng  output   –  If  the  contributor  has  overes2mated  his  or  her  own  abili2es  –     the  community  will  iden2fy  that,  too  Clay  Shirky,  Here  comes  everybody  
  34. 34. CondiBons  for  diversity  to  trump  ability  •  Scale  of  diversity  =  a  large  enough  pool     to  guarantee  a  diverse  array  of  approaches  •  Qualified  members  (“not  just  subway  passengers”)  •  Method  of  aggrega2ng  and  processing     individual  contribu2ons  •  A  real  problem  (=challenging)  Clay  Shirky,  Here  comes  everybody  
  35. 35. More  network  examples  (Some  overlap  with  idea  jams)  
  36. 36. Challenges  and  prizes  (A  few  examples)  
  37. 37. wired.com  
  38. 38. readwriteweb.com  
  39. 39. techcrunch.com  
  40. 40. techcrunch.com  
  41. 41. •  44k  entries  •  5k  teams  •  186  countries  
  42. 42. •  The  mining  firm  made  its  proprietary  data  about  a  mining  site  in  Ontario  public,   then  challenged  outsiders  to  advise  where  to  dig  next  •  The  par2cipants  suggested  more  than  a  hundred  possible  sites  to  explore,  many  of   which  had  not  been  mined  by  Goldcorp  –  and  that  yielded  new  gold  
  43. 43. 3  types  of  collecBve  intelligence  •  Problem-­‐solving  networks  •  Idea  jams  •  Predic2on  markets  
  44. 44. •  Idea  genera2on  by  employees  •  Set  up  in  1996  •  Annual  seed  funding  budget:  $40M  •  Employees  receive  $300k-­‐$500k     for  proposals  that  turn  into  business  plans  
  45. 45. ibm.com  
  46. 46. •  2006:  The  biggest  ever  jam  •  150k  minds  in  104  countries  •  Clients,  consultants,  employees,  families  •  4  subject  areas:  transporta2on,  health,  environment,  finance  &  commerce  •  46k  ideas;  $100M  invested  in  10  of  them  
  47. 47. The  world  is  my  lab  now.  John  Kelly,  Director  of  IBM  Research,    discussing  IBM’s  collaboratories  (=open  innova2on  laboratories)    
  48. 48. •  The  Linux  pre-­‐installment  idea  was  brought  up     on  the  day  of  the  launch  (February  16  2007)  •  30k  users  quickly  gave  it  a  thumbs  up  •  In  May,  Dell  launched  3  such  models  
  49. 49. By  July  2009:  ~12k  ideas,  ~85k  comments,  ~675k  vo2ngs,  354  implementa2ons  
  50. 50. •     
  51. 51. Idea  jam  plajorms  
  52. 52. Google  
  53. 53. •  Powered  by  Google  Moderator  •  More  than  125,000  users  submiEed  over  44,000  ideas  and  cast  1.4M  votes
  54. 54. Powered  by  Google  Moderator  
  55. 55. Other  examples  (Not  all  of  them  100%  crowdsourcing)  
  56. 56. L  Genius
  57. 57. guardian.co.uk  
  58. 58. mashable.com  
  59. 59. 3  types  of  collecBve  intelligence  •  Problem-­‐solving  networks  •  Idea  jams  •  PredicBon  markets  
  60. 60. [Nearly  every  individual]  has  some  advantage  over  all  others  because    he  possesses  unique  informaBon  of  which  beneficial  use  might  be  made.  Each  member  of  society  can  have  a  small  fracBon  of  the  knowledge  possessed  by  all,  and  each  is  therefore  ignorant  of  most  of  the  facts    on  which  the  working  of  society  rests…    One  of  the  ways  in  which  civilizaBon  helps  us  overcome  that  limitaBon…  is  by  conquering  ignorance,  not  by  the  acquisiBon  of  more  knowledge,  but  by  the  uBlizaBon  of  knowledge  which  is  and  which  remains    widely  dispersed  among  individuals…  CivilizaBon  rests  on  the  fact    that  we  all  benefit  from  knowledge  that  we  do  NOT  possess.  FA  Hayek,  1974  Nobel  Prize  in  Economics.  From  The  use  of  knowledge  in  society,  1945  
  61. 61. Nobody  knows  everything.  But  everybody  may  know  something.  James  Surowiecki,  The  Wisdom  of  Crowds  
  62. 62. •  Correct  on  80%  of  Oscar  nomina2ons  •  Never  missed  more  than  one  top  award     since  1996  launch  
  63. 63. Drawbacks  of  internal  predicBon  markets  •  Not  using  real  money   –  Lower  credibility   –  Skewed  incen2ves  •  Thin  markets   –  Not  enough  trades/traders   –  Not  enough  diversity  
  64. 64. No  longer  with  us  (Some  of  them  predicted  it)  
  65. 65. Marketocracy  [ini2al  incarna2on]  The  Masters  100  mutual  fund  was  comprised  of  the  leading  100  porzolios  out  of  100,000  virtual  porzolios  managed  on  the  Marketocracy  website.  Masters  100’s  performance  consistently  “beat”  the  S&P500  .
  66. 66. 2.  Crowd  creaBon  
  67. 67. The  1%  rule   Geek     0.01%   gods   Content  creators   1%   Content  contributors   10%   Content  downloaders   70%   Casual  surfers   100%  Source  needed  
  68. 68. How  it  all  began  
  69. 69. The  free  soTware  movement  •  Free  as  in  free  speech,  not  free  beer  (liberty,  not  price)  •  Started  well  before  Linux  was  created,     but  it’s  probably  the  most  widely-­‐known  example  
  70. 70. Some  lessons  •  Given  a  large  enough  beta-­‐tester/co-­‐developer  base,   almost  every  problem  will  be  fixed  quickly   –  “Given  enough  eyeballs,  all  bugs  are  shallow”  (Linuss  Law)  •  More  users  find  more  bugs  –  because  adding  more  users   adds  more  different  ways  of  stressing  the  program    •  The  next  best  thing  to  having  good  ideas  is  recognizing   good  ideas  from  your  users.  Some2mes  the  laEer  is  beEer.    Eric  Steven  Raymond,  The  Cathedral  and  the  Bazaar  
  71. 71. Crowd-­‐created  soTware  Apps,  app  stores  and  app  challenges.  Here’s  a  (really)  par2al  sample.  
  72. 72. In  the  beginning…   marke2ngvox.com  
  73. 73. Now  at  more  than  18Bn  
  74. 74. Not  just  mobile,  of  course…  (Many  in  the  form  of  app  challenges)    
  75. 75. mashable.com  
  76. 76. marke2ng-­‐interac2ve.com  
  77. 77. Crowd-­‐created  journalism  
  78. 78. We  think  of  our  members  as  an  army    of  eyes  and  ears.  But  we’re  not  asking  them    to  be  journalists.  The  phrase  ‘ciBzen  journalism’    makes  about  as  much  sense  as  ‘ciBzen  denBst.  Leonard  Brody,  CEO,  NowPublic.com  
  79. 79. InvesBgaBve  reporBng  milestones  •  Ft  Myers  News-­‐Press:  contribu2ng  to  serious  journalis2c   inves2ga2ons   –  2006  housing  development,  bid-­‐rigging •  Talking  Points  Memo  and  the  firing  of  state  aEorneys,  March   2007   –  Awarded  the  George  Polk  Award  for  Legal  Repor2ng  for  “tenacious   inves2ga2ve  repor2ng”   –  When  Dept.  of  Jus2ce  dumped  3,000  pages  of  documents  on  the   press,  site  members  divided  the  pile  into  50-­‐page  slices  and  made   stunningly  quick  work  of  the  subject
  80. 80. guardian.co.uk  
  81. 81. Crowd-­‐created  maps  
  82. 82. readwriteweb.com  
  83. 83. Picture  source  needed  
  84. 84. techcrunch.com  
  85. 85. techcrunch.com  
  86. 86. mashable.com  
  87. 87. techcrunch.com  
  88. 88. Crowd-­‐created  markeBng  Flavors,  ads,  plazorms  
  89. 89. Crowd-­‐created  flavors  
  90. 90. Walker’s  Do  Us  a  Flavor:  1.2M  ideas  [no,  that’s  not  a  typo]  –     profit  sharing  is  a  great  incen2ve…  
  91. 91. Crowd-­‐created  ads  A  few  of  the  pioneers  
  92. 92. The  chain  thing   caught  on  J  
  93. 93. mashable.com  
  94. 94. In  a  class  by  itself  
  95. 95. •  The  compe22on   generated  1Bn   impressions  (=  media   investment  of  $36M)  •  During  and  aIer  the   compe22on,  the  ad   garnered  600M  views •  Cost  of  the  winning  ad:   $12.80  
  96. 96. Success  led  to  implementa2on  in   more  countries  
  97. 97. 2nd  year  was  a  flop  
  98. 98. Back  to  basics  in  3rd  year  +  more  money  
  99. 99. news.bostonherald.com  
  100. 100. If  it  ain’t  broke,     don’t  fix  it  
  101. 101. mashable.com  
  102. 102. MarkeBng  crowdsourcing  plajorms    
  103. 103. Where  art  thou?  
  104. 104. Formerly  XLNT  Ads  
  105. 105. Crowd-­‐created  content  (Just  a  few  examples)  
  106. 106. Those  were  the  days   marke2ngvox.com  
  107. 107. Crowd-­‐created  (physical)  products  Lego,  crowdsourced  hardware,  Threadless  &  Etsy  
  108. 108. Lego  
  109. 109. The  company  wrote  a  “right  to  hack”  into  the  mindstorms  soIware  license  
  110. 110. Source:  LEGO  
  111. 111. Source:  LEGO  
  112. 112. Source:  LEGO  
  113. 113. Source:  LEGO  
  114. 114. With  Lego  Factory  we  can  expand    beyond  our  100  in-­‐house  designers    to  marvel  at  the  creaBvity  of  more  than  300,000  designers  worldwide.  Mark  Hansen,  Director,  Lego  Interac2ve  Experiences  
  115. 115. •  Lego  provides  a  community-­‐like   environment  where  users  can   share  their  Lego  experience  and   the  company  can  get  feedback   as  well  as  new  ideas  •  In  Lego  Creator,  users  upload   their  own  crea2ons;  other  users   vote,  and  Lego  turns  the  most   popular  ones  into  real  products.  •  The  company  brings   ‘high-­‐spenders’  to  the  more   advanced  Brickmaster  program  
  116. 116. Crowdsourced  hardware  Open  source  +  P2P  (and  not  really  new…)  
  117. 117. Dozens  of  hardware  inventors  around  the  world    have  begun  to  freely  publish  their  specs.    There  are  open  source  MP3  players,    VOIP  phone  routers,  mobile  phone,  laptop…  Clive  Thompson,  Wired  
  118. 118. wikipedia.org  
  119. 119. Threadless  &  Etsy  P2P,  really  (especially  Etsy)    –  but  I  couldn’t  resist  
  120. 120. Customers  as  R&D,  designers,  sales  force,  employees  
  121. 121. 3.  Crowdtasking  
  122. 122. Crowdsourced  science  
  123. 123. •  Iden2fying  and  measuring  landforms  (craters,  ridges,  valleys)  –     in  order  to  find  evidence  of  water  •  As  a  pilot,  an  already-­‐categorized  dataset  was  put  online  –  88k  images   –  Within  a  month  all  were  categorized  accurately  by  the  community   –  Took  a  professional  geo-­‐scien2st  two  years  
  124. 124. •  Observa2ons  grown  10-­‐fold  in  a  period  of  5  years  •  “You  don’t  need  a  PhD  to  count  the  birds  in  your  backyard”  •  Ornithology,  like  astronomy,  is  by  now  highly  dependent  on  amateurs   for  gathering  and  siIing  through  raw  data  
  125. 125. Crowdsourced  weather  
  126. 126. readwriteweb.com  
  127. 127. Crowdsourced  patent  review  
  128. 128. Outsourcing  patent  review  •  The  system  is  broken   –  On  average,  2.5  years  between  filing  and  decision   –  Backlog  of  1M  patent  applica2ons,  ~470k  in  2007  alone   –  5,500  examiners  –  only  20  hours/applica2on   –  Patent  parking –  Overlapping,  dubious  patents     (e.g.,  system  for  crea2ng  a  note  related  to  a  phone  call  –  MicrosoI)  •  Solu2on:  open  the  review  process  to  public  comment  
  129. 129. IBM,  MS,  GE,  US  Patent  &  Trademark  Office  
  130. 130. Crowdsourced  law  
  131. 131. Crowdsourced  surveillance  
  132. 132. Crowdsourced  translaBons  
  133. 133. mashable.com  
  134. 134. readwriteweb.com  
  135. 135. techcrunch.com  
  136. 136. Crowdsourced  transcipBon  
  137. 137. springwise.com  
  138. 138. Crowdsourced  fact-­‐checking  
  139. 139. ps•.com  
  140. 140. Crowdsourcing  along  the  value  chain  
  141. 141. springwise.com  
  142. 142. ps•.com  
  143. 143. Crowdsourced  microtasks  
  144. 144. Crowdsourced  crisis  informaBon  
  145. 145. 4.  Crowd  filtering  Passively  and  ac2vely  filtering    the  exponen2ally-­‐increasing  catalogue  of  the  Web  
  146. 146. Mass  amateurizaBon  has  created  a  filtering  problem    vastly  larger  than  we  had  with  tradiBonal  media,    so  much  larger  that  many  of  the  old  soluBons    are  simply  broken.  The  brute  economic  logic  of  allowing  anyone  to  create  anything  and  make  it  available  to  anyone    creates  such a  staggering  volume  of  new  material    that  no  group  of  professionals  will  be  adequate  to  filter  [it].    Mass  amateurizaBon  of  publishing  makes    mass  amateurizaBon  of  filtering  a  forced  move.  Clay  Shirky,  Here  comes  everybody  
  147. 147. The  acBvity  of  the  10%  [who  filter]…    is  as  valuable  to  any  online  community  as    the  acBons  of  the  [1%  of]  ‘supercontributors’.    Bradley  Horowitz,  former  VP  of  Advanced  Development  Division,  Yahoo  
  148. 148. Filtering  websites  
  149. 149. fortune.com,  techcrunch.com  
  150. 150. Filtering  news  
  151. 151. Those  were  the  days  
  152. 152. Those  were  the  days  
  153. 153. readwriteweb.com  
  154. 154. Filtering  media  content  
  155. 155. paidcontent.org  
  156. 156. Filtering  soTware  
  157. 157. Filtering  people  
  158. 158. Filtering  locaBons  
  159. 159. Product  reviews  
  160. 160. If  an  appliance  manufacturer  finds  a  reviewer    on  buzzilions.com  saying  that  his  oven’s  door    melts  on  the  self-­‐cleaning  cycle,  then    the  manufacturer  has  a  quality  problem,    not  a  review  problem.  Groundswell  
  161. 161.  Amazon  has  branded  itself  by  gathering  informa2on  from  consumers  –     and  then  returning  it  to  them  in  the  form  of  services  such  as     product  recommenda2ons,  sales  ranking  and  client  reviews.    
  162. 162. Up  to  23  collabora2ve  features     on  any  Amazon  product  page  Picture  source  needed  
  163. 163. emarketer.com  
  164. 164. emarketer.com  
  165. 165. emarketer.com  
  166. 166. Web  2.0  companies...  build  systems    that  get  beDer  the  more  people  use  them...    The  architecture…  is  such  that  users  pursuing    their  own  “selfish”  interests  build    collecBve  value  as  an  automaBc  byproduct.    An  architecture  of  parBcipaBon.  Tim  O’Reilly  
  167. 167. The  crowd  produces  mostly  crap.  The  crowd  finds  the  best  stuff.  The  rise  of  Crowdsourcing,  Wired  Magazine  
  168. 168. The  filtering  sequence  has  been  reversed    From    Filter-­‐then-­‐Publish  To  Publish-­‐then-­‐Filter      Clay  Shirky,  Here  Comes  Everybody  
  169. 169. 5.  Crowdfunding  
  170. 170. huffingtonpost.com  
  171. 171. cnet.com  
  172. 172. guardian.co.uk  
  173. 173. alleyinsider.com  
  174. 174. readwriteweb.com  
  175. 175. techcrunch.com  
  176. 176. businessinsider.com  
  177. 177. techcrunch.com  
  178. 178. thenextweb.com  
  179. 179. Summary  
  180. 180. 5  types  (some  overlap)  1.  Collec2ve  intelligence:  what  the  crowd  knows   –  Solu2on  networks,  idea  jams,  predic2on  markets  2.  Crowd  crea2on:  what  the  crowd  creates   –  The  1%  rule  3.  Crowdtasking:  what  the  crowd  does  4.  Crowd  filtering:  what  the  crowd  thinks   –  The  10%  rule  5.  Crowdfunding:  what  the  crowd  finances  Jeff  Howe,  Crowdsourcing  [except  for  #3]  
  181. 181. Crowdsourcing  rules  1.  Pick  the  right  model  out  of  the  5  (or  a  combina2on)  2.  Pick  the  right  crowd  (=target  audience)  3.  Offer  the  right  incen2ves   –  Personal  glory,  sense  of  community  –  or  even  cash  4.  Ask  not  what  the  crowd  can  do  for  you,     but  what  you  can  do  for  the  crowd   –  Crowdsourcing  works  best  when  the  individual/company     give  the  crowd  something  it  wants   –  Create  a  horizontal  rela2onship  within  the  community.  It  could  be   more  important  than  a  ver2cal  rela2onship  between  the  company     and  the  individual  contributors.  They  want  to  talk  to  each  other  5.  Keep  the  pink  slips  in  the  drawer  Jeff  Howe,  Crowdsourcing  
  182. 182. Crowdsourcing  rules  [cont.]  6.  Keep  it  simple  and  break  it  down   –  Be  clear  on  what  you  want  your  contributors  to  do   –  Get  the  division  of  labor  right   –  “While  crea2ve  capacity  and  judgment  are  universally  distributed  in  a   popula2on,  available  2me  and  aEen2on  are  not”  (Yochai  Benkler)   –  “Because  everyone  already  knew  what  an  encyclopedia  entry  was”     (Jimmy  Wales,  when  asked  why  Wikipedia  has  done  so  well)  7.  The  dumbness  of  crowds,  or  the  benevolent  dictator  principle   –  Have  someone  there  to  greet  them  when  they  show  up   –  Someone  needs  to  guide,  and  some2mes  decide  8.  Remember  Sturgeon’s  Law  9.  Remember  the  10%  rule,  the  an2dote  to  Sturgeon’s  Law  10.  The  community’s  [almost]  always  right   –  Don’t  try  to  control  the  discussion  –  provide  the  plazorm  for  it  
  183. 183. If  you’re  not  conducBng  an  exercise  like  that  in  your  organizaBon,    you  risk  missing  the  boat  on  a  sea  change  that’s  transforming  business.    You  must  overcome  natural  organizaBonal  resistance  to  the  idea    of  relinquishing  significant  control  to  people  outside  the  company.  Even  without  knowing  your  business,  I’d  be  willing  to  bet    that  contribuBon  systems  can  address  one  or  more  of  the  business  challenges  you  face  beDer  than  the  methods  you  currently  use.    Your  company  probably  has  advantages  that  start-­‐ups  can  only  dream  of:  exisBng  customers,  traffic  to  your  website…    Naturally,  adopBng  those  methods  is  easier  when  compeBtors    have  beaten  you  to  the  punch...  But  what  if  you  want  to  lead  your  rivals?  ScoE  Cook,  Intuit  Founder  &  Chairman,    The  contribu2on  revolu2on,  Harvard  Business  Review  

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