The Power Of Crowds

by John R. SedivycloseAuthor: John R. Sedivy Name: John R. Sedivy
Email: john@capecodbranding.com
Site: http://www.capecodbranding.com
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Introduction
Certainly many are aware of insourcing and outsourcing but what about crowdsourcing? I was recently exposed to the concept of crowdsourcing while reading the book of the same title – Crowdsourcing by Jeff Howe. This article provides a refresher on the concepts of insourcing and outsourcing but is intended to introduce the readers to crowdsourcing and what this new concept means to individuals and businesses.

Insourcing and Outsourcing Revisited
Although most have likely come across the concepts of insourcing and outsourcing in some capacity in their lives, these concepts, especially outsourcing, serve as a foundation to crowdsourcing, so they are worth revisiting here. If you already possess a solid grasp of these concepts feel free to move to the next section where I jump into crowdsourcing.

Insourcing is the concept of choosing to complete a task in-house rather than to subcontract or delegate a task to an external person or company. Individuals and companies insource when they have a higher degree of confidence in their internal capability than the ability of an outside source to complete a given task – this can either be measured in terms of technical proficiency, cost, or schedule. In addition, when a new company is started, the new company may choose to insource activities that they would highly desire to outsource in order to save cost. As revenue increases and additional funds are available the new company may choose to outsource more activities to free up resources within their company and trade money for time. Advantages of insourcing include maintaining control of a task and reduced cost, although insourcing is not always less expensive.

Outsourcing is making the decision to move an activity or task to an external entity – an individual or business. Whereas insourcing is the conscious decision to complete a task oneself, outsourcing is choosing not to complete the task themselves and move the task to another. In recent years outsourcing has been somewhat of a controversial term as many tasks (work and jobs) have been moved from the United States offshore to other nations. When we discuss outsourcing in this article this is only one aspect. The main concept for the purposes of this article is the offloading of activities to another whether it is your neighbor, a nearby business, another state, or even another country. We are not concerned about where the activity, task, or work is being moved to, just the fact that it is being transferred.

There are many advantages to outsourcing such as an increased product performance, lower cost, and faster time to market. One may choose to outsource an activity to an outside entity who is experienced in building a specific aspect of a product, accomplishing a given task, or providing a service – and therefore can generally accomplish this much faster, cheaper, and at a higher level of quality due to expertise gained by repetition and experience. For example, if I were to build something requiring a computer it might make sense to outsource the computer aspect to a computer manufacturer such as Apple – they could build the computer much faster, cheaper, and at a much higher quality level than I could – mainly due to their expertise in the field and having done so on a large scale over many years. Of course there is the possibility I could do so myself given enough time and resources – but that is the point, outsourcing is saving me time and resources and allowing me to focus on other activities without re-invent something that someone has already done well.

Now that you have been refreshed on the concepts of insourcing and outsourcing, let’s move on to crowdsourcing.

Crowdsourcing
So what exactly is crowdsourcing? Let’s start with two definitions as provided by the author, Jeff Howe on his Crowdsourcing blog – the first definition he refers to as “The White Paper Version”:

“Crowdsourcing is 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.”

The second definition, referred as as “The Soundbyte Version” is as follows:

“The application of Open Source principles to fields outside of software.”

So in essence Crowdsourcing is a form of outsourcing where an individual or business can transfer their task in need of completion to the crowd. In this instance the term crowd refers to you, me, and anyone who has access to the Internet. As alluded to in “The Soundbyte Version” the software engineering field has been practicing this concept for years with the Open Source movement. For those unaware, Open Source is basically the collaboration of individuals for the greater good. For example in the field of software engineering, software developers work together towards the development of a product which evolves over time. The product in it’s various stages is freely available to everyone for download, use, or modification.

Open Source may be contrasted with a traditional closed task where development of a project would take place by a select few individuals – perhaps a team of five members. Access was restricted to team members, maybe a few trial or “Beta” testers who could evaluate the product and provide feedback. The product would be released at various phases and access to the product was controlled strictly by a company or other governing organization. A practical example of Open Source is the UNIX operating system where source code is freely available to the public, and a closed system is the Mac OSX operating system where one must purchase the operating system either bundled with their computer or separately as an update.

The interesting thing about the Crowdsourcing phenomenon is that it takes the basic concept of Open Source and expands it to other fields such as biotechnology, space exploration, finance, and politics just to name a few. The idea is the same regardless of the field in question:

1. Identify a problem
2. Reduce it to smaller tasks
3. Post the tasks for crowd consumption
4. Receive and screen results

This is not an absolute sequence but it gives you the general idea of how the concept works. Let’s say you’ve identified a problem that is affecting your business. You would provide an “open call” or announce to the public that you have a problem that you do not know how to resolve. If it is a large, complicated task, it is best reduced to smaller parts prior to announcing – UNIX (the example of the open system provided earlier) was developed in this fashion; if it is a simple task it may be posted or announced as is. The final step would be to receive and screen the results for quality and integrate the smaller pieces into a larger project.

Crowd Motivation
The beauty of the Crowdsourcing model is that it works in situations where the crowd works for free or for payment. An example of the free model may be viewed in many online discussion forums. When running into a technical issue with our blog one of the first things we do (after a basic web search) is post a question to an online discussion forum such as WordPress. Within a short amount of time, usually within hours, we generally receive a response which provides instructions on how to resolve the problem, free of charge. Not only have we saved cost but the rapid response keeps things moving, where the technical issue, depending on the severity, may shut us down for days. This is an example of crowdsourcing in its basic form – a definite lifesaver for an early stage startup company.

Corporations are also using the crowdsourcing model to solve problems at low cost (low is obviously a relative term here, but it is lower than what it would cost to solve the problem themselves or to hire a consultant or outside organization) and high speed. It appears that many companies are posting a problem to a job board and allowing the crowd to take a crack at solving a given problem. Whoever provides a solution to the issue receives payment. This is a win-win situation, it is a way for problem-solvers to make extra money or take on a new career as an independent. For the company it is a guaranteed solution to their problem. Here are a few companies who are among the top crowdsourcers as listed by Jeff Howe during an interview at CROWDpreneur: Google with PageRank, IBM with Many Eyes, and Proctor and Gamble with InnoCentive.

So what motivates the crowd, especially those who undertake crowdsourcing activities free of charge? Simply put, a love of problem solving and/or the subject matter in which they are operating. Many in the crowd just love solving problems and if payment is received for problem solving – it is an added bonus. In addition there are many who just want to better society and move along human progress at a faster rate – something that crowdsourcing has the potential to do.

Jeff Howe warns in his Crowdsourcing book that the crowd is smart though. Companies attempting to get free or cheap labor will be transparent to the crowd, and therefore the effort will fail. Like most aspects of the Internet, activities must be authentic and transparent. The crowd desires to assist individuals but will not be taken advantage of.

Crowdsourcing & Quality
At first glance one may assume that the quality of crowdsourced work is low, it is after all  being accomplished by a mob of amateurs. Nothing could be further from the truth. In fact, in many instances the quality of crowdsourced work is equal to if not higher than work accomplished strictly by professionals in the past. One such example documented in the “Crowdsourcing” book is that of the NASA “Clickworkers” program.

NASA Clickworkers was basically a program which experimented with the idea of crowdsourcing analysis of photos that were being returned from a Mars mission. Basically planetary geologists possessed a control set of images that were already analyzed, therefore they were known – this was basically NASA’s way of testing the waters with crowdsourcing. They released the images to the public and announced the need to have the images analyzed. At the completion of the study the crowd had finished analyzing all the images within a month to a comparable degree of accuracy as the geologists. The crowd had accomplished in one month what had taken NASA professionals two years to accomplish – all without sacrificing quality.

According to Jeff Howe there are three aspects in particular that make Clickworkers a crowdsourcing project:

1. An enormous task is distributed across a massive network
2. There is no limit to the number of potential contributors
3. The work is broken into small, discrete tasks

The last aspect is important in that it allows an individual with a few minutes to spare to make a meaningful contribution to the overall effort without infringing upon the work of others. Give crowdsourcing a try yourself, for the latest Clickworkers site click here.

Why Now?
You may ask why crowdsourcing is happening now and if it so great why we haven’t discovered this earlier? There are several reasons for the timing – first off we are in a unique time due to the emergence of the Internet and the strengthening of online communities, mainly brought about through such vehicles as social media. The Internet is strengthening our connections, virtually and allowing the sharing of information at a rapid rate. This strengthening and rapid rate of sharing is allowing for individuals and companies with problems to meet up with individuals with the right mix of abilities and desire to come together, much easier than any other time in history.

Another aspect as identified by Jeff Howe is the lowering cost of technology. Technology is becoming less expensive by the day, and this lowering of cost makes technology more accessible to the general public or the crowd. Individuals with previously unknown abilities are now discovering said abilities now that they can afford these new technologies. Consider digital photography – the accessibility of digital photography equipment is changing the photography industry, crowdsourcing companies such as iStockphoto are prospering where individuals who may have previously had a monopoly on their business may disappear if they are unwilling to adapt to the changing nature of their work due to crowdsourcing.

Crowdsourcing is in its infancy, but certainly has the potential to change the way we do business and propel society forward. It will be interesting to witness as crowdsourcing progresses and its impact on the world. For those wanting to know more about crowdsourcing – I highly recommend the Crowdsourcing book authored by Jeff Howe. Although the subject matter can be heavy at times it is a definite worthwhile read for those interested in crowdsourcing and how to successfully implement it.

Crowdsourcing has the potential to drastically change the way work is done!

-John R. Sedivy of Cape Cod Branding

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