Introduction: The Dawn of the Human Network
An opening anecdote: two college students wanted to start a t-shirt company. They didn't have any design skills and no idea what would sell - so they held a contest online to get other people to do the design work and get people to "vote" on what designs they liked the best, using that as a measure of what they ought to produce. It worked well for them - they got thousands of entries and produced hundreds of shirts in small runs, often selling out their batches within a week. The company grew to $17 million per year, and had very low expenses. It eventually began selling shirts through mass-merchandisers and opening a couple of their own stores in Chicago.
The Internet itself was originally a crowdsourcing phenomenon. There were no companies online (they were not even allowed to create commercial sites until 1993) and all content was created by academics and computer enthusiasts (nerds). Even in the present day, some of the most popular websites - Wikipedia, YouTube, and the like - consist entirely of user-contributed content.
He mentions a few examples of major brands that adopted the same sort of approach: holding online contests to allow consumers to design products (tennis shoe design, soda flavor, shoot your own commercial, and so on), offering a small award to the winners, then mass-producing their products for the market.
Reference to Alvin Toffler, who predicted in 1980 that the future would be one in which the role of consumer and producer would be blended. He coined the term "prosumer" to describe a situation in which there is less central control over production - people in a connected community would revert to the pre-industrial practice of cottage production and trade.
Naturally, there's reference to "open source" software - in which a developer will create a basic program and share the source code with the community so that other programmers could add capabilities and refine functions. In this instance, there's no profit to be made by anyone - some are developing software for their own needs, others are simply programming as a hobby, and still others are seeking esteem in the programming community. But the net result is free software for the world.
Among corporations, it's becoming acknowledged that accountants don't make the best product decisions. Going with an executive's gut-feel of what they think customers want has always been a bad idea. Having a "secret and insulated" R&D department that has no contact with the customer was not much better. The value of market research was recognized - though for many years it was surveys and focus groups. Now, the Internet enables companies to be informed by massive numbers of highly vocal customers, who are happy to contribute their opinions in hopes of helping produce a better product. And it works.
Another story: Proctor and Gamble had a string of new product failures, and a new CEO came aboard with a mandate to tear down the walls. He broke down internal barriers between research, engineering, and marketing departments - as well as the walls that isolated insiders from their suppliers, retailers, and end users. The result was "one of the more compelling turnarounds in corporate history" as the firm's new products (most notably the "Swiffer" line of dusters, sweepers, and mops) that were designed by this open process were highly successful.
He cautions about putting too much emphasis on the technology. Technology facilitates crowdsourcing, but it is not the driving factor. You can build an astounding technical solution, and people will not use it - and the more complex the solution, the lower the adoption rate will be. The driving force behind crowdsourcing is the desire of people to contribute their ideas and efforts. If that desire does not exist, technology cannot create it.
(EN: Bravo. This point is very often ignored. But it is not often the technology that dooms crowdsourcing projects, but the mindset of the organizers. Companies want free labor, but they often want people to do mindless tasks without having creative input. Very often, people want the opposite - to send in an idea but have someone else do the work. It's fair to say that if people want the product badly enough, they will contribute mindless labor - but this is becoming increasingly rare. A successful crowdsourcing project means that the crowd, not just the organizer, gets something out of it.)
Another stray reference to the SETI project, which collected massive amounts of data but could not afford the computers to process it all. Their solution was to ask members of the public to donate computer time to the task: volunteers would download a "screen saver" that would give SETI access to their computers during idle moments. Their goal was to get 100,000 users to sign up - and they quickly got 5.2 million.
He then praises the democratizing effect of crowdsourcing. In the corporate world, you have to have credentials, but in crowdsourcing, your work is judged on its own merit. That is, a software company will only hire candidates with degrees and experience to work on their products - but anyone can contribute to open-source software, even a twelve-year-old who's just learning his first programming language. The basic principle is that "even a blind pig can sometimes find an acorn."
Crowdsourcing gives companies access to tens of millions of these blind pigs, and their combined effort turns up many acorns. The problem is, many of these nuts are rotten, and it requires a tremendous amount of time to sort through thousands of very bad ideas to find the few that have merit. But the evaluation process can be crowdsourced as well. (EN: This is often useful for choices that are fashionable, but the problem is often finding choices that are feasible. The crowd can "vote" that a given building design is their favorite, but their collective opinion doesn't mean that the design is structurally sound.)
He returns briefly to the motivation for individuals to participate in crowdsourced efforts. There is no profit, nor any wages, offered as a reward. So the motivation of participants is rather mysterious and complex. There is the desire to create, to receive esteem for their contributions, to be socially involved with others, and so on. (EN: It might be worth researching the reason people volunteer time to causes or nonprofit organizations, as I expect that crowdsourcing motivations are similar.)
He also returns to the corporate misconception of crowdsourcing as "a free ride" as many who have attempted to access the crowd as a cheap labor source have failed spectacularly. People are not motivated to work for free so that someone else can profit - they will contribute their effort if they perceive a personal benefit, or a benefit to a group for whom they have sympathy. They have a keen sense for when they are being exploited, and will quickly turn their back and discourage others from participating in an effort that affords them nothing.
(EN: This seems an abrupt end, but the remainder of the introduction was cheerleading and overblown rhetoric about the potential benefits of crowdsourcing and the way it will transform all of human existence. There's been too much hype on the topic already, so I'm cutting it here.)