“Crowdsourcing” is a relatively recent concept that encompasses many practices. To a superficial analysis, it could result just as the outsourcing of tasks to a large group of people, instead of assigning such tasks to an in-house employee or contractor.
But in my opinion, there is more to it.
We have to consider it as a strategic model to attract an interested and motivated crowd of individuals, capable of providing solutions superior in quality and quantity to those that even traditional forms of business can. It’s community, involvement, empathy and transparency, are all made possible and facilitated by web 2.0. The new behaviors and new mental structures that emerged with the rise of social networks allow a constant interaction between "equals"
(with no defined hierarchies) at a global level.
The paper explores different kinds of crowdsourcing, describing differences and similarities between them. The first kind of crowdsourcing analyzed, is the “Contest”, in witch the sponsor (the company) identifies a specific problem or request, offers a cash prize and broadcasts an invitation to submit solutions. Google offers us a best case in this field: in March 2014 the company has hold a contest called "Pwnium”, in which hackers could put their skills to the test by trying to hack into either the HP Chromebook 11 or the Acer C720 Chromebook for a combined total price of nearly $3 million. At the end of it, Google profit from this action by discovering several bugs then being able to repair them and also got an extra return in terms of brand image. We can notice that this modality works well when it’s not obvious what combination of skills or even which technical approach will lead to the best solution for the problem.
“Collaborative Communities” can also be useful for solving problems in which creativity and subjectivity influence the evaluation of solutions; but whereas contests separate contributions and maximize diverse experiments, communities are organized to marshal the outputs of multiple contributors and aggregate them into a coherent and value, creating whole much as traditional companies do. Wikipedia is without any doubt the most successful case of collaborative communities: in less than a decade the internet-based encyclopedia has disrupted the reference world and demonstrated the power of large-scale, highly diverse collaboration within a new organizational model.
This model is strictly related to concept of collective intelligence, the shared intelligence that emerges from the collaboration, collective efforts, and competition of many individuals and appears in consensus decision-making.
Threadless is a crowd-company that built its entire business model as a mix of contests and collaborative communities: designers from all around the world are invited to submit their idea for new T-shirts; after this, the Threadless’ community participates through the platform suggesting changes and improvements to the projects. Based on customers vote, results that have the highest rate are produced and then sold. The designers are rewarded with a percentage fee on the T-shirts sold. We see how the company, involving the crowd both for generating and rating the products, was able to create a win-win-win situation for itself, the designers and the customers.
The third type of crowd-powered innovation, named “Crowd Complementors” - enables a market for goods or services to be built on core product or technology, effectively transforming that product into a platform that generates complementary innovations. The success of Apple in the music industry, for instance, is based on iTunes, a free to download software that pushes the sells of the main products such as iPhone, iPod and iPad. iTunes allows the core business to collect licensing or transaction revenues from complementors, who sell their products to customers of the core product. Building these kinds of multi side platform required a culture of open innovation to manage all the critical issues regarding the intellectual property.
Whereas contests offer crowds rewards for coming up with solutions to specific problems, “Labor Markets” match buyers and sellers of services. An amazing example comes from the Planet Hunters project, a platform that uses the images collected by NASA's satellites to discover identify new planets in the universe. So far, Planet hunters discovered a bounty of unknown planet candidates and several confirmed planets, resulting from the efforts of nearly 300,000 volunteers worldwide.
Beyond all these examples of success in involving the crowd within different faces of the companies’ activities, most of them seem to be even scared by the idea. But sooner or later they’ll have to deal with this emerging source of competitive advantages.