The lure of the crowd
Facebook, eBay, AirBnB all use the crowd almost
totally in their core business. Some of
the more conventional companies Amazon, Huffington Post and Gilt Groupe use it
too.
Should you?
Crowdsourcing is an emerging tool for firms using the
internet for businesses, extremely powerful when used correctly.
If Henry Ford’s moving assembly lines created the
modern factory in the industrial age, crowdsourcing is the equivalent in the
information age, creating new-era factories using data as raw material,
manufacturing informational and quasi-informational products and adding value
to physical ones. Instead of factory workers, it is us, the consumers who
willingly and unwittingly become the factory hands. Ford’s assembly lines upped productivity
eight times and as others adopted and improved on it, it raised global
productivity significantly, one of the great unheralded innovations.
Crowdsourcing will do more.
Wikipedia with only a few full time employees is ten
times bigger than Encyclopedia Britainica and is roughly the same in accuracy
from a study by Nature. The other
factories of today, Google, Alibaba, Sohu are generating profits through
crowdsourcing..
This post in three parts explores the role
crowdsourcing plays as businesses begin to use the digital channel to increase
sales.
What is crowdsourcing?
Factories gave rise to modern consumerism. We consume.
Now it is the turn of the consumers!
We produce.
Crowdsourcing is a method that engages mainly the
public to contribute resources, mostly effort, voluntarily in the production
process. It is done through the
internet.
It can be for a design (GPS system for BMW), software
(open source), information (Wikipedia), expertise (Quora), funding (Kickstarter)
and other uses yet to be pioneered. Data makes up a huge part. Crowdsourcing is being used indirectly by
social enterprises (Google +, Twitter) to curate data which is then monetised. For these modern innovators, it is business
via the crowds.
In short, with crowdsourcing you use the crowd to do
something for you.
A website using it in effect sources manpower from the
crowd to populate it, thus crowdsourcing.
It can be a conscious effort or unconscious, for profit or non-profit. The crowd can be the public or groups of
common interest. They can also be
companies. It is usually symbiotic.
The term website is used but unlike web 1 era
when they were mostly front covers of annual reports, websites today is about business.
I also define a crowdsourced site as one that depends
on resources outside the organisation.
This is in contrast to conventional firms that rely mostly on internal
resources for the production of goods or services.
A bit of history cements
understanding of this important modern business tool
While a recent term, crowdsourcing was used in the genesis
of the internet. A defining event was
when the concept for an RFC was created. Traditionally tech design is carried out by a single
team within an organisation but with the internet a different approach was
taken. The community around Arpanet (the
predecessor of the internet), the group of participating researchers from universities,
government and private entities conceived the RFC concept. An initial design is written up and circulated
among the community for comments, therefore Request For Comments (RFC). This
resulted in an iterated ‘extragroup’ design.
In effect it facilitated a team effort of diverse groups and individuals
totalling hundreds within and without. Anyone
can participate, even a new recruit, not just the few key engineers. Working with unforced participants outside
the core team became an operating culture of the early internet. This developed further. When an engineer or
two conceive an idea, he specifies the design into an RFC which is openly
published, seeding it, effectively inviting anyone anywhere ie. globally to
contribute to the development of that idea.
This was how all the design specifications of the internet were done
then, even today, unconventional as it is.
This entered the working culture of the internet industry today.
While this is not quite a public crowdsource-design
but that of a special interest group, you can say the same today of
Wikipedians. And of eBay. And the seeding effort to draw in the crowd
is how Facebook became a global phenomenon.
The foundation is laid. Contrast
this to the traditional committee-based decision making process where
meritocracy is trusted only within, not without. But that’s before the internet that made reaching
the 0.001% (see next post) of the crowd of experts or the like-minded easily
and cheaply. In fact the RFC model influenced
more than crowdsourcing, it laid down the roots for the internet industry’s culture
of openness and furthering the democratic, bottoms-up and collaborative nature. Initiatives on the internet today tend to
reflect these norms.
But I think while this early manner reflected human
behaviour by nature independent while community-oriented, the modus operandi of
organisations then (and now) was very much encapsulated in the 1956 best
seller, “The Organisation Man” by William H. Whyte. “A central
tenet of the book is that average Americans subscribed to a collectivist ethic rather than to the prevailing notion of rugged individualism” according to
Wikipedia. The collectivism is within
the organisation he belongs to, hence organisation man. I interpret this book as influenced by the
machinery of the industrial age. Factories and management needed this ethos to
get their products produced efficiently.
The RFC process
perhaps (I’m no social scientist!) reflects
a change in society back towards individualism,
breaking down the traditional collectivist ethic that innately trust internal
resources and thus confidence in individuals within and without. This may have something to do with the shift
from the industrial to the information age we are now in since the latter
empowers the individual.
As the internet took hold, user generation first
became evident with newsgroups (circa 1979) intensifying with blogs (1994),
both of content. In 1999 there were 23
blogs and by the middle of 2006, there were 50 million blogs. It accelerated with the introduction of the
web (1993). Free email services added to
it but they had no value then. Ditto
gopher, the early ‘search’. This wave began
the commoditisation of information and monetisation a bit later. Open source (a topic of a future post) while known
mostly as a software movement but is actually a generic production model took
crowd production beyond content. From internet
software, it has been used in books and video (film) and in time to come, become
generic in application.
So much for how crowdsourcing came about, in the next
post, why crowdsourcing works in the context of modern society and progressive
business will be examined.
©Chen Thet Ngian,
internetbusinessmodelasia.blogspot.com (2013).
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