Crowdsourcing – No Way Back

A term not yet recognised by spellcheck programs has been coined by Jeff Howe writing for last months Wired magazine. Influenced by the open-source culture and outsourcing by companies, the idea of crowdsourcing has the potential to overthrow the traditional relationships between employee and employer, especially in the scientific research and programming industries. Crowdsourcing is not a completely new idea as such, since Wikipedia has been running on that formula for some years now, but others are catching on. Cambrian House is a new company who encourage people to come up with ideas for products or services. Only a few ideas actually go into production after a pool of ‘crowdsourcers’ have evaluated the idea. Another good example of how crowdsourcing changes industries is iStockphoto, where photographers upload good photo’s which are sold for prices starting at $1, a price traditional stockphotography companies cannot compete with. As a result, iStockphoto has been bought by Getty Images, a traditional company, who’d rather control their competitors. The idea has also spread to huge corporations like Proctor & Gamble, who use websites such as Ninesigma and Innocentive where researchers on a global level colaborate to find results. Their websites boast that their “global innovation sourcing solutions help you accelerate top-line growth, reduce risk and lower cost by expanding the reach and capabilities of your innovation management organization and by improving your innovation management processes.” Companies such as Threadless and Muji use their customers to evaluate new designs before they are put into production, and even ask customers to come up with design ideas.
A great example of how crowdsourcing is changing the market is a website called rentacoder. A journalist who needed a website got quotes of over $1000 for a fairly simple design idea from established webdesigners. In the end he used a company he found on on rentacoder and he got a perfectly well working website built for him for only $60.
Crowdsourcing is another way of reducing transaction costs, which will change the way business is done in the future. Companies will still keep in-house specialists, but a increasing proportion will be outsourced to a global pool of workers/specialists. A question that arises is if this is favourable for the ‘little guy’, but the fact is that there is no way back.