CROWDSOURCING

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Introduction:
Over the past decade, crowdsourcing has emerged as a major problem-solving and datagathering paradigm on the World-Wide Web. Well-known examples of crowdsourcing include
Wikipedia, Linux, Yahoo! Answers, YouTube, Mechanical Turk-based applications, and much
effort is being directed toward developing many more.

Crowdsourcing is one emerging model which leverages on external resources in order to

create participatory value. In the near future any company and organization must
recognize where its participatory value lies and how to create or activate it.

Company takes a job that was once performed by employees and outsources it in a form
of an open call to a large undefined group of people generally using the internet.

Crowdsourcing is an online, distributed problem solving and production model.

Users--also known as the crowd--typically form into online communities based on the
Web site, and the crowd submits solutions to the site or produces its contents.

The crowd can also sort through the solutions, finding the best ones.

These best solutions are then owned by the entity that broadcast the problem in the first
place--the crowdsourcer

The winning individuals in the crowd are sometimes rewarded.

Many individuals in the crowd participate just for intellectual stimulation or because of
emotional ties to product or service

With crowdsourcing, a solution, or numerous different solutions can literally develop

overnight.

A first generic categorization of crowdsourcing sees two basic models:

1. Corporate Crowdsourcing happens when crowdsourcing is started by a company

2. Crowdsourcing Vendors are enterprises whose business model is entirely built on
crowdsourcing

Accounting for overlap, and using some very general assumptions relative to work type,
category and company revenue model, wed estimate that over 1 million workers have
earned $1 2 billion over the past 10 years via crowdsourced work allocation.

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The revenues earned by the paid crowdsourcing vendors themselves are subject to a
wider margin of error in estimation, but are likely around $500 million per year among all
vendors. Vendor Revenues will pass $1B in 5 Years
Some feel it may have negative effects on current business models, but these concerns are
being ironed out as the principles of crowdsourcing unfold, and the platforms and
methods used develop into a completely new avenue of online 'employment'.
Critics argue that the quality of work is not assured and sources may not be reliable. The
formal agreements between the agents and the contributors have been
questioned. Remuneration for the services and the possibility of businesses relying on
'free employment' rather than traditional outsourcing and ultimately job creation is also a
noted concern.

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Practices:

MyGov.in

MyGov.in is a social networking and citizen engagement platform founded

by Government of India to actively participate citizens in country's governance and
development. In the first week of August 2014, My Gov received 100, 000 registered
users, barely two weeks after its initiation.

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DELL IDEA STORM

Since 2007, DELL has received 15.400 ideas and implemented 432

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MYSTARBUCKSIDEAS

StarBucks has received more than 100.000 ideas in 2 years and implemented more than
400

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NELMULINOCHEVORREI

In 2010 Mulino Bianco receives almost 5.000 ideas and implemented 4.

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NESQUIK SAI COME ME LO IMMAGINO

In 2010 Nesquik engaged mothers to develop a new concept for its website.

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INNOCENTIVE

The site aggregate more than 200.000 scientists from 200 countries .Since 2003 more
than $7mln prizes have been assigned.

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YOURENCORE

The characteristic of this platform is to keep retires in the game allowing them to
participate to crowdsourcing projects for top customers.

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ASSOCIATED CONTENT

Yahoo bought AC in 2010 for almost $100mln in order to integrate its model in the
content making process.

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Vodafone Lab

Since 2007 more than 100.000 Vodafone users subscribed and participate to the lab.

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APPLE APPLICATION STORE

On my opinion one of the most interesting crowdsourcing example is the Iphone and Ipad
AppStore .Here the concept of becoming a platform to harness the participatory value
is fully exploited. Letting anyone to develop and sell their applications has led to 250.000
apps building a critical mass far above any competitors.

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Some Applications of Crowdsourcing:

Testing & Refining a Product

Netflix
SellaBand
Market Research
Threadless
Knowledge Management
Accenture
Wikipedia
Customer Service
My Starbucks ideas
R&D
InnoCentive
P&G Connect & Develop
Polling and Voting
In Trade
Building a new city

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GUIDELINES:
To achieve the objective of leveraging the knowledge of the masses, business
must realize that to get the best answers, it is necessary to attract those who can
give them, and these are the people who also best know the value of the knowledge
they hold.
Donal Reddington
Crowd Responsiveness - What each vendor seeks to achieve is enough volume, breadth and
quality in their on-demand workforce to provide the payers a good chance of getting results in a
timely fashion. They also seek to provide the most lucrative experience for their workers as the
barrier to working for alternative vendors is low.
2. Ease of Use - A well designed on-demand service will hand hold a work requester through the
process of creating a work definition and proposal. It'll provide a mechanism for the provider to
keep tabs on the progress of the work all the way through to approving the results delivered and
the subsequent payment of the worker.
3. Satisfactory Results Low quality or unexpected results are the single biggest factor in
companies choosing to abandon paid crowdsourcing as a viable outsourcing option. Many of the
business people surveyed were willing to invest the time and effort to submit trial work through a
paid crowd vendor, but unwilling to give it a second chance when the initial results were below
their expectations.
4. Cost Advantage - Cost benefits run second to results quality in determining business interest
in paid crowdsourcing. Cost advantages over traditionally sourced work range from orders of
magnitude difference to similarly priced. Some work types can only be done economically via
paid crowdsourcing. Some examples:
Traditional Outsourcing Paid Crowdsourcing
Transcription: $2 6/minute $0.75/minute
Company Research: $3 - 10/hr $1.85/hour
Image Tagging Feasible: $0.02/image
5. Security / Privacy The option for autonomy and the assurance of security is a built in
feature for most categories of paid crowdsourcing. In addition, vendors have developed
sophisticated procedures that utilize accounts, escrows, and modern payment processors like
Paypal along with approval procedures that work fairly well in protecting both the provider and
the worker when settling the bill.

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Disadvantages of Crowdsourcing:
1. No confidentiality. This is the deadliest downfall of crowdsourcing. Soliciting suggestions
makes your plans and the competitive advantages of your company or product public. Putting
your naming challenge out for crowdsourcing can clue in competitors to what you're up to and
make it possible for someone else to see your great new idea and run away with it. Someone
watching the entries come in can also hurry to register the best domains before you have a
chance to do that. On the other hand, if you try to be cagey and provide less information for these
reasons, namers don't have enough to go on to offer usable ideas.
2. Poor quality entries. Crowdsourcing contestants normally submit whatever comes to them
off the top of their heads. They may not know much about your industry and don't take the time
to learn about it. They often ignore any naming criteria you stated, so you have to wade through
a ton of wildly off-target suggestions. They don't think carefully about all aspects of your naming
challenge the way professional name consultants would.
3. Wrong direction. Because amateur naming helpers don't look at the whole business
landscape, they can lead you in a foolish direction. This pitfall snared Kraft Foods Australia,
when they asked the public to suggest names for a new Vegemite spread. What were they
thinking when they selected the entry "iSnack 2.0" as the winner from 50,000 submissions? Was
it because it was so different from the more obvious options? Their announcement of the new
name caused such uproar in Australia that within four days, Kraft retracted it amidst a public
relations disaster.
4. Popularity misleads. The number of votes received by an idea has nothing to do with whether
or not the target market will find it appealing, whether a name is legally free for use, whether it
contains any connotations that can backfire on the company, whether it sufficiently differentiates
the item to be named from the competition, etc.
5. Stolen or recycled names. Contestants in crowdsourcing competitions have been known to
deliberately submit ideas they copied, plagiarized or submitted in other competitions. One hightech company turned to crowdsourcing when they received a cease-and-desist notice about their
new logo. However, the exact same thing happened after they unveiled the winner of their
competition. It too prompted a cease-and-desist notice, from a company charging that the new
logo looked too similar to theirs. Ironically, this high-tech company ended up spending much
more on PR spin control and legal fees by turning to crowdsourcing than it would have cost to
hire a naming firm.
6. Coming up empty. Contestants don't normally have to ensure that their suggestions are
legally available, as well as linguistically wise and appropriate from a marketing standpoint.
Therefore, all the submitted options that stand up and sing may need to be eliminated from
consideration, leaving nothing worth using. On the other hand, naming companies assume
responsibility for delivering smart, feasible possibilities.
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7. Derailment. When NASA asked the public to help name a new room to be added to future
American space stations, comedian Stephen Colbert asked his fans to suggest it be called
"Colbert." And indeed they did, in droves, so that he received 40,000 more votes than the runnerup name. The U.S. space agency was not amused.
8. Missing the best talent. Those who are eager to contribute to a crowdsourcing competition
may not have the keenest talent, since those with the greatest experience and skills are probably
being handsomely paid for what they do. An episode of the TV show House MD spun a story
where a patient got so frustrated with his misdiagnoses that he posted his symptoms online and
asked the public to diagnose him in exchange for a $25,000 reward. At the end, viewers discover
that Dr. House anonymously submitted the correct diagnosis because he had recently quit his job,
was bored and needed a challenge - not for the reward. While fiction, the show nevertheless
made a valuable point .Experts are much more likely than novices to nail the assignment.
9. Hidden costs. Culling through 50,000 submissions takes vastly more time than considering
the top 5, 10 or 25 suggestions offered by a professional naming company. Since the legal risks
of intellectual property infringement are high with crowdsourcing, legal expenses can mount,
too, especially when the process goes awry or hasn't been set up properly to start with.

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Conclusion:
In the case of output that is not needed by the contributor, a cash reward might be tendered for
substantial contributions. Such efforts are not undertaken with any extant guarantee that they will
be rewarded. Rather, payment is at the discretion of the sponsoring organization, made after the
work has been completed and evaluated as meeting a certain criteria, and is usually attended by
the formal transfer of intellectual property between contributor and sponsor.
Beyond pecuniary benefits, extrinsic reasons for participation include job market signaling and
skill and reputation building. Distributed innovation communities provide a relatively open and
transparent platform for exhibiting skills and talents to prospective employers. Participants dont
need high-level credentials too directly demonstrate their abilities in highly specialized domains,
and employers can screen and hire talent by directly observing or soliciting third-party
verification of skills.
The intrinsic and extrinsic motivations to participate in distributed innovation systems are not
intuitively obvious to new observers of the phenomenon. Most, in fact, find to be
counterintuitive the association of fun, enjoyment, and a personal sense of identity with the
accomplishment of complex technical tasks. But the research findings strongly suggest that the
functioning of these systems is driven by mixed and heterogeneous motivations. Consequently,
optimizing on only one dimension might have the effect of limiting participation.

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