Sourcing the Right Crowd

10/30/08Follow @anneswift

Commercialization is rarely a solitary pursuit; bringing an idea to the world requires a set of diverse skills and knowledge, a proverbial commercialization village. Or a crowd. Enter the power of crowdsourcing.

Crowdsourcing refers to aggregating a large number of people to express their opinions or ideas about specific topics—and the term first appeared in a 2006 Wired magazine article by Jeff Howe. But simply bringing together a large number of people is not enough to create new products. An integral part of engaging a large community to solve the world’s biggest problems is matching the right type of crowd to two stages of the commercialization process: a diverse crowd for brainstorming of breakthrough innovations, and a large crowd for refining the product for the market.

By its definition, innovation requires a break with the status quo. Research repeatedly shows that groups with diverse backgrounds propose the largest number of unique solutions to a problem. This has also been my experience with BrainBuzzes, brainstorming events that I organize for Young Inventors International. The simplest explanation for this phenomenon arises from research by James March and the late Nobel Laureate and Turing Award winner Herbert Simon, who suggest that our capacity to search for solutions is limited by what we know. Thus, we find solutions that are “locally” optimal to what we know, but which may not be “globally” optimal for innovation because we are restricted in our search space. By bringing together a diverse group of people, we end up expanding the search field for increasingly “global” solutions and drawing on expertise from unrelated fields. While a larger number of people can brainstorm more solutions, diversity is key when crowdsourcing new, breakthrough product ideas.

One of the most established Internet companies that uses crowdsourcing to assist with brainstorming is Innocentive. Innocentive brings together companies that post problems for scientists and engineers around the world; the winning solution receives a specified amount of prize money. Innocentive focuses on brainstorming new breakthrough solutions; its model allows the company to provide economic opportunities to a diverse group of researchers from outside of North America whose experiences may be different from those of their North American colleagues. Another web site, Innovation Exchange, works on a similar premise, although it also allows for collaboration among problem solvers.

However, the success of an innovation depends not only on its ingenuity but also on its appeal to and adoption by the market. The market is perilous and fickle, and the products that are most likely to succeed are those that are best able to anticipate and satisfy the needs of the largest number of customers. For many years, marketing experts have used focus groups of potential customers to assist with identifying issues of usefulness and usability of new products. Today, the Internet allows for relatively easy aggregation of large numbers of people who can provide feedback on a product or vote on the optimal solution. The number of participants matters more in this case. Indeed, the ideal crowd to source is one comprising of all potential customers.

Other companies in the space include Cambrian House, Kluster, IdeaScale, CrowdSpirit, FellowForce, and IdeaBlob. All of these companies incorporate elements of voting for the best ideas. But to arrive at the wisdom of the crowd, the sites require large amounts of traffic. As more of these sites arise, there is a battle for users and, unless there are incentives for participants to contribute, these communities may suffer. For product refinement and focus group crowdsourcing, the best model might be for companies to encourage feedback on their own web site, such as Dell does through its Idea Storm site and Salesforce does through its Idea Exchange. This model is likely to generate better results because the companies already receive large amounts of traffic interested in their products and participants can be rewarded with free products or product discounts relevant to their interests.

While giving away products, discounts, or flat fees might suffice as compensation for focus group participants, determining sufficient compensation for innovators who create truly disruptive ideas with breakthrough market potential is more difficult. If correct incentives do not exist to compensate participants for their contribution of intellectual property, those with the most promising ideas will choose to commercialize them on their own. Understanding the type of group that must be sourced for a specific purpose allows us to begin designing rewards that will attract the right crowd essential to the complex journey of commercialization.

Anne Swift is the Head of Marketing (a.k.a. Chief Marketing Nut) at Nuts.com and a Director of the Fields Institute for Research in Mathematical Sciences. She is also the founder of Young Inventors International, which has helped thousands of university innovators around the world through online and offline events. Follow @anneswift

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  • http://www.crowdspring.com Ross Kimbarovsky

    Hi Anne,

    We’ve been big fans of Innocentive from the moment we started working on crowdSPRING (http://www.crowdspring.com). You are absolutely right that the success of innovation depends on the appeal of the “product” to the market or the community. And this is something that we’ve recognized from the start. We launched in May 2008 and in our first five months, we’ve built a community of buyers from 32 countries and over 8,200 designers from 130+ countries. crowdSPRING focuses on graphic design at the moment. Buyers who need a new logo, website, marketing materials or other creative content post what they need, when they need it and how much they want to pay. Once posted, creatives from around the world will submit actual work – not bids or proposals as they would on the marketplaces you’ve listed in your article – for the buyer to review. As the submissions come in, buyers are able to review, sort, rate, provide feedback and collaborate with creatives until they find the “the one.” crowdSPRING provides customized legal contracts, full project management, robust notifications, and many more.

    As you’ve correctly pointed out, it’s important that the community in a crowdsourcing marketplace receive incentives to participate. For many, these incentives must stretch beyond monetary compensation, since it’s unlikely that everyone can receive money. And some companies, like DELL, have figured out that there are ways to create incentives and persuade people to contribute.

    On our own site, we provide lots of education and collaboration opportunities and this has helped us to build a great community in a short amount of time. In fact, we were recently honored when WIRED magazine named us as one of 5 small biz finalists in their 2008 competition (winner to be decided in December).

    Best,

    Ross Kimbarovsky
    co-Founder
    http://www.crowdspring.com

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  • http://www.utest.com Matt Johnston

    Anne,

    Great post. I’d be interested in hearing your (and/or your readers’) thoughts on the crowdsourcing space at large. It seems that there are at least two types of sites / businesses within this realm:

    1. Those that solicit feedback and ideas around products or solutions. Example include those cited above.
    2. Those that connect companies or consumers with skilled professionals. Examples include Elance (www.elance.com), ServiceMagic (www.servicemagic.com) and my firm, uTest (www.utest.com).

    Obviously, both face some of the same challenges, including:
    *Building and profiling a community of users who supply the ideas or skills.
    *Establishing rewards and reputation systems –both monetary and non-monetary — that incent the desired behavior.
    *Creating stickiness outside the transaction.

    However, I’m convinced that there are some unique challenges between these two segments, and that there may even be other types of crowdsourcing sites. I’d love to hear from others who are living within this evolving space every day.

    Best regards,
    Matt Johnston

    VP of Marketing
    uTest, Inc.
    http://www.utest.com

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