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December 16, 2007

Crowdsourcing 101: Episode 1 – The Basics

FacepartyYou’re sure “Crowdsourcing” isn’t that thing they do at concerts, but what exactly is it?  Coined by Jeff Howe in his June 2006 Wired piece, the term refers to “the act of taking a job traditionally 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.

A relatively new term, Crowdsourcing has evolved to encompass other similar practices, each with the common purpose of enlisting a community to provide design or feedback. Community members can be asked to provide input on a product or even develop it.  They can create their own advertisements or figure out a solution to a problem; some concepts which frequently appear under the “Crowdsourcing” umbrella include : Mass Collaboration, Consumer-generated Media, some forays into Human Computation and Crowdcasting, among others.

As a bonus to marketers, Crowdsourcing can frequently produce the dual effect of promoting a company to the masses, while simultaneously encouraging their input in its development, all at a fraction of the cost of generating that progress in-house.  Lego’s foray into crowdsourcing with its Mindstorms NXT created a buzz that “lit up online message boards and techie blogs, which in turn helped rev up demand for the [product’s] release”.

In his article “Crowdsourcing”, Gary Stein notes: “Companies that already involve consumers in product development have a leg up. ... Lego has turned consumers into partners by drastically shrinking the distance between creator and consumer and stretching the boundary between employee and customer to the point where it's highly permeable. Which makes the task of marketing a cinch.”  He goes on to emphasize that: “participants are given consumers. You hardly have to do anything to get them to buy, use, and (ahem) talk about the product. That, my marketing friends, is the real power and relevance of crowdsourcing.”

Threadless knows this module well.  The company describes itself as “an ongoing tee shirt design competition” which works like this: “Four to six designs are chosen every week from 600+ submissions to be printed and sold from the site with the winning designers receiving $2,000 in cash and prizes.” Threadless has been immensely successful – quite a feat for a business founded by two guys who were not even of voting age (read: off to my therapist now to discuss feelings of inadequacy...).

Trendwatching is another innovative business which gets its pool of over 8,000 “spotters” to watch for the latest thing, findings which “help marketers, CEOs, researchers, and anyone else interested in the future of business and consumerism, to dream up new goods, services and experiences for (or even better, with) their customers”.

Of course, the use of crowds is not limited to product development. Procter and Gamble created Tremor which taps into the teen market to promote its products including hair colouring and guitar company, Gibson, is actively soliciting consumers to create their own instructional video for its new product, the Robot Guitar.

By requesting input and reviews, businesses can know what products consumers prefer and, subsequently, what they should further stock or promote.  Further, while Crowdsourcing makes it easy to learn from the community about a need for enhancement, it can be similarly beneficial in improving something that is already functioning well but could be superior (e.g. Netflix’s recommendation system). 

So, it’s all good, right?  Not exactly.  There are many benefits to be gained from this process, but there are also disadvantages.  Some worry about the blandness of a product if consensus is necessary for its conception, or of the possibility of groupthink and herd mentality, especially when voting tallies are visible.  Other concerns include exploitation of people for little money and the potential loss of jobs.

And even with the right ingredients, there's no guaranteeing success, Assignment Zero editor Lauren Sandler, commented: “It’s like throwing a party. You program the iPod, mix the punch and dim the lights and then at 8 o’clock people show up. And then who knows what is going to happen?

So it’s a gamble and it’s controversial?  Yep, to some extent, it is.  There are, however, factors which encourage success (assuaging your conscience will be discussed in a future article).  I equate these elements with flu vaccines – they may not keep you from all the bugs, but they keep the most popular ones at bay. 

Tapping the right crowds is essential, as is the understanding that “successful crowdsourcing taps into a well of passion about a product that stretches beyond monetary incentives”. And while communities can be very active, these organizations still need organization. Tread carefully with this last point, as leadership is essential, but monitoring with too heavy a hand can often have the unfortunate result of discouraging participation – the exact opposite of what you are trying to achieve.

Stay tuned. The series continues with Episode 2 – “Are You Afraid of the Crowds?”

Photo credit: Faceparty by RichardAM

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Comments

How is crowdsourcing different from plain old feedback

why is ti that marketing 2.0 needs to have a new term coined to describe what already exists?

Is this a function of the blogosphere - where everyone is an author and wants to leave a distinctive footprint? If so - it will lead to more confusion than understanding?

Monica, notwithstanding I always enjoy your articles. Looking forward to more of the same next year.

Seasons Greetings
Or maybe I should say
"Happy Festivus"

Hi Miro,

Thanks for your comments 2.0 and the compliment 2.0.

There is (overall) a vast difference between good old fashioned feedback and Crowdsourcing. With crowdsourcing the crowd is generally involved in other aspects as well (such as development, marketing etc.). I see Threadless as the perfect example.

By and large, the crowd is not merely asked for feedback, it becomes an active participant.

Mon

I understand that -
so why not describe it as collaboration or collaborative feedback/marketing - it builds on established concepts everyone understands from the very outset

my point isn't in the notion itself as much as our rush to invent new terms where they aren't necessary

Peace

Oh! Got it. Good point :)

The comments to this entry are closed.

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