Tuesday, April 27, 2010

Crowdsourcing & Web 2.0

For many years, it seems the buzzword in business circles has been "outsourcing," the idea that companies turn to third-parties (often overseas) to fulfill some of their services. But it may be the new "sourcing" buzzword is "crowdsourcing," turning not to a single third-party but to "the crowd" for help in projects. With the growth of social media and Web 2.0 tools, crowdsourcing is becoming increasingly popular.

The idea of crowdsourcing draws, in part, on James Surowiecki's 2004 book
The Wisdom of Crowds. In it, Surowiecki makes the argument, as the subtitle suggests that "the many are smarter than the few" and that collective wisdom has much to teach businesses and governments.

This potential for benefiting from the "wisdom of crowds" has been embraced by several new technology tools that allow users to weigh in and assist in the development and decision-making processes. These crowdsourcing tools are innovative ways in which public sentiment can be used to shape the direction for a product or a project.

Crowdsourcing has been used to assess a number of different areas, including determining speakers at conferences, in deciding on logos for businesses, and -- in the case of perhaps the best known example, Wikipedia -- in determing what constitutes "knowledge".

Typically crowdsourcing efforts fall into one of three areas:

  1. Creating products and projects: When using crowdsourcing for product creation and testing, input from users is taken and weighed in order to ascertain the direction for a project.
  2. Predicting outcomes: Recent studies have shown that analyzing sentiment via Twitter is a good indicator for the success a film will have over its opening weekend
  3. Organizing information: Wikipedia and StumbledUpon are good examples of taking user input to categorize information.

While there are many tools that can be used to help with crowdsourcing -- tools where companies can solicit input and gauge users' response -- it is important to remember that sometimes the wisdom of the crowd proves to be decidedly "unwise." Surowiecki speaks to the dangers of this in his book, noting that crowds can be swayed by the emotionality and conformity of the group. Sometimes "the crowd" is too homogeneous to be innovative. And Surowiecki reminds readers that despite crowdsourcing's "wisdom," crowds are only as smart as their smarted individual member.

Nevertheless, crowdsourcing seems to point to interesting potentials for engagement with the customer and can be a powerful way to
do good. "Outsourcing" has been a controversial move for some companies. It remains to be seen if crowdsourcing will be viewed as a positive or negative move. After all, what are the implications of handing over your creative processes to outsiders?

Have you tried to crowdsource any projects? What were your experiences? Comments welcome!

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