When we think of crowdsourcing we often blur together the concept of outsourcing with low cost. In many senses it is not that different from talent shows such as American Idol. At its heart it is a way in which the broadcast networks can get very low cost content generated by users – here contestants who will do what they can to capture that bit of exposure to allow them to be the next Justin Timberlake. When viewed under this lens, American Idol is just another form of crowdsourcing which has been in existence for many decades. So what is different now with crowdsourcing and how it can be applied to product creation?
When it comes to product creation, one of the biggest differences is that: it is not necessarily lower cost, nor is it done in a vacuum. In the research we have done, we have discovered that the savings can be had, but not in all instances. For example in Cisco’s I-Prize, Guido the project’s CTO claims in the Harvard Business Review, that if you want to save money, this is not the way to go. Other ways are less expensive. However, there are some ways that are definitely lower cost such as using outsourced workers and remote development. These would not be called crowdsourced mechanisms, but they achieve similar goals in saving costs.
On the other hand, it is indisputable that some of the most famous projects might have a demonstrated payback. For example, the work done by Netflix and their recommendation contest. The CEO Reed Hastings said that there was definitely a cost savings in tapping the great research talent outside the organization. In addition, Innocentive has demonstrated successes in outsourcing innovation. The incredible progress offered by the open source community and the creation of the now industry standard Linux operating system and associated ecosystem is undeniably recognized as a savings in cost.
So what are the common threads that tie together the success of I-Prize and Open Source (and the successful Cisco I-Prize teams)? It is that there was collaboration. In all cases the winning efforts were team efforts. For example, in the Cisco case, 70% of the top 40 ideas were created by teams. The Linux effort is entirely a team effort. The difference is the social web. So, when considering how best to leverage the notion of crowdsourcing think about how you can encourage team behavior.