Wired, the magazine that brought us the meme "long tail" has now brought the new meme "crowdsourcing" to the light of day.
As defined by its creator, Jeff Howe, in a June Wired article and new blog:
"Crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.
"For the purposes of the article, we set even stricter parameters: We decided we would only look at case studies involving big established companies (like Getty, Viacom and P&G). For the purposes of the blog, I advocate a slightly more inclusive definition. I interpret crowdsourcing to be taking place any time a company makes a choice to employ the crowd to perform labor that could alternatively be performed by an assigned group of employees or contractors, even if the company is just now putting up a shingle. In other words, crowdsourcing need not require an active shift from current employees (or again, contractors) to the crowd; it can start with the crowd."
The short version: "Everyday people using their spare cycles to create content, solve problems, even do R&D."
The shorter, much more blunt and to-the-point version: "A billion amateurs want your job."
Simply put, this is open innovation on a much larger playing field. Some of us may not yet have made the connection that the revolution in customer-created media -- Flickr, YouTube, etc. -- would extend to R&D. In the innovation media (wow -- it just occurred to me that there is such a thing! and that IdeaFlow and the Innovation Hub are part of it!), we've talked about customer input into innovation and distributed creativity via the Lego's model, for example, and Eric Von Hippel's lead user theory. We've talked about InnoCentive, the website started by Eli Lilly where the likes of Proctor & Gamble and Dupont now post scientific challenges for the InnoCentive community to solve.
Howe's crowdsourcing marries these concepts and describes a playing field for open innovation that includes technology and science -- coding, scientific and engineering problems -- as well as content creation for advertising itself and to sell advertising around.
Here are some of my thoughts about the effect crowdsourcing will have on business innovation:
-- Increased competition: What took you years to build will take your competition much less time if they are able to harness distributed solutions in order to do it.
-- A shift of emphasis from production to filtering: If crowdsourcing means that the cost of solving problems and of generating content will go down, it also means the cost and the need for filtering will go up. You will need to filter not only for what's good vs what's bad, but for what fits your strategy. As Henry Chesbrough says, "not all the smart people work for you." The challenge will not be to find the smart people and hire them, nor to outsource to the cheapest source -- but to find the right sources.
This will require a shift of thinking. For instance -- if you have an idea management program for your employees, is there a way to alter it to include ideas and/or content from the outside? If you are outsourcing jobs to India or China, would it be better to find or build a marketplace on which to offer not jobs but projects to the highest possible qualified pool of labor at the cheapest possible cost? What does this do to your processes for getting ideas into the pipeline? To your development process?
What is crowdsourcing going to do for -- or to -- *your* business?
To give you more to think about, I'll include some quotes of what others are saying:
Comments on digg.com: "Although 'crowdsourcing' has existed in the open source community for years, the difference now is that the technology has evolved to allow anyone to participate in these communities. Fifteen years ago, you almost needed a computer science degree just to use open source products, not to mention actually contributing to them. With the web 2.0 technology of today, even those with minimal computer skills can join and become active participants in online communities to contribute thoughts and ideas via blogs, photography via Flickr and iStockphoto, and maybe even solve a complex R&D problem for a major company. 'Crowdsourcing,' while not a new idea, is now becoming a mainstream phenomenon.
Techdirt: "It then raises two issues: how does that challenge existing ways of doing business and what types of companies spring up to take advantage of the new possibilities....It's a case where companies are recognizing that sometimes a fresh perspective is quite valuable, rather than assuming that they need to somehow protect their traditional way of doing business. Unfortunately, as with many buzzwords, expect to start seeing lots of new business models that talk up how they're leveraging "crowdsourcing" when the truth will be that very few are actually doing so." (Note: TechDirt also recommends this BuinessWeek article on the rise of the "digital working class.")
ZDNet blogs: "Will crowdsourcing eclipse long tail [as a buzzword]?"
Bruce Sterling in Wired Blogs: "Like Jeff Howe, I also believe that 'crowdsourcing' is indeed a useful neologism. That's because "crowdsourcing" names part of the same elephant as 'Long Tail,' 'Invisible Tail,' 'collective intelligence,' 'folksonomy,' 'search and publish/publish and search,' 'attention economy,' 'collaborative web filters,' 'architecture of participation' and 'commons-based peer-production, among other such. New terminology is boiling out of this realm of activity practically every day now. It is being created because there is a pressing and demonstrable need for it."
And, finally, from the Crowdsourcing article itself: "Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd."