06 March 2008 ~ 2 Comments                                       

Spigit: Kluster for the enterprise… and will all of this crowdsourcing stuff pay off?

You want to know what Spigit is?  Read my last post about Kluster and imagine a more powerful, enterprise version of the service.

A friend of mine asked recently whether this crowdsourcing stuff works; if I could point to a single product that had resulted from “crowdsourcing”.  The answer is yes and no.  It depends on what you’re talking about.  Is it potentially overhyped? Absolutely. Is there one monster “Crowdsourcing Success”?  No.  Are there projects out there that are attempting to leech off of the crowd for their own gain? Yup. (I like to call these “failures”.)

It’s not a magic bullet and it definitely won’t replace a vast majority of processes for product development/design/refinement or classic freelancing/outsourcing work. But it’s an alternative, niche way to develop things and get certain things done.  (Crowdsourcing has become an umbrella term to describe a whole bunch of crap going on, so it’s a bit of a fuzzy term, similar to Web 2.0.)

But there are tons of examples of various areas that have been successful that can be called crowdsourcing in one way or another:

Open source:
No examples necessary.

Funding:
Sellaband, crowdfunding of several album recordings.
A Swarm of Angels, crowdfuding and voting to create a film.
SliceThePie, funding, investing in bands
Prosper: P2P loans

Graphic Design:
Threadless, awesome tshirt designs submitted and voted on by anyone. Top 7 get made each week. I think their revenues are like 20 or 30 million a year.
Sitepoint: this is more of a design contest, you post what you want and how much you’ll pay. Dozens of people submit designs and you pick your favorite. Still, it’s crowdsourcing.

Product enhancements and new product development:
Dell’s Ideastorm, customer suggestions for new products and enhancements
P&G Connect+Develop, throw your ideas/products over the P&G wall and see if they want to buy it
Lego Mindstorms Community,

Writing:
Assignment Zero, crowdsourced research and interviewing for a Wired article

Small tasks done by many people:
Amazon’s Mechanical turk.

Complex scientific/chemistry/engineering problem solving:
Innocentive, used by large companies, post a complex problem, put a price on it, and open it up to people. This has been pretty successful.  Companies get to tap into resources that they don’t have internally.

Just plain crazy:
MyFootballClub: crowd ownership and control via voting of a soccer team in europe.
Tribewanted, crowd voting, building, eco-tourism Fijian island vacation. I highly recommend it.

Yet to be proven
Crowdspirit, consumer electronics development, which is probably the closest thing to what you’re envisioning.
Cambrian House, focused on website/software ideas and creation: a good example of a ton of talk with little to show for it from what I can tell.
Kluster
Spigit

And, of course, there are myriad closed, high-powered, complex collaboration platforms that allow people to interact across teams/geographies to design and engineer complex equipment.

In terms of Kluster: Ben Kaufman’s first company was called Mophie and they did actually use many crowdsourcing/outside innovation concepts to develop real, successful products (specifically iPod accessories).  At Macworld last year, they had an intense, in-person version in which people submitted ideas or drawings, these were voted on, etc, and by the end of the event Mophie’s industrial designers had created a CAD mockup of the most popular designs/ideas.  They took preorders and then eventually sold them as real products.  They are taking that core concept and creating a platform for anyone to do it, digitally.  And they also had in place an early version of kluster that was actually used successfully to create products called Illuminator.  (They did a similar thing this year at TED.)

Bottom line: the basic philosophy has been applied in many cases successfully, but it is still a nascent idea that hasn’t been fully worked out yet.  (Not to mention that there have been and will continue to be many failed attempts and companies who attempt to exploit the crowd for their own gain, which will fail as well.)  Sort of reminds me of the early days of search: search engines were largely crap dependent on just counting the words on a site to see if it was relevent, then, of course, people just repeated the word they wanted to be top search for over and over again. It wasn’t until Google came in with PageRank that search took a drastic leap forward: the signal to noise ratio went way up.

(On a side note: the concept of lead users http://en.wikipedia.org/wiki/Lead_user has been around for 20 years and successful harnassing of lead user innovations for the creation of real products is well documented.)

The thing that really intrigues me about kluster is: can you create a platform that can hit the required scale and quality of participation and actually create a marketplace (with real money involved) in which users are rewarded for their creativity and judgement (both intrinsically, because they are interested in it and want the products, and extrinsically, financially.) They need to: get scale and quality of participation and have a high signal to noise ratio.  My thought is that they should focus on a more narrowly defined category of goods, instead of such a wide range.

Three main points:
1) This is not magic. It still requires the hard work of individual people designing, engineering, innovating, and — my new favorite word — ideating.

2) It’s difficult to do right.

3) And most important: There is a vast difference between tapping into the innovation and ideas of your most passionate customers and attempting to incent outsiders to contribute who do not have a stake or love for your product. Projects that will most readily succeed are those that tap into passion that already exists rather than attempting to create it via incentives. 

— If you have any other examples of successful crowdsourcing-ish implementations, let me know and I’ll update the list.–

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2 Responses to “Spigit: Kluster for the enterprise… and will all of this crowdsourcing stuff pay off?”

  1. Liz Moise 7 March 2008 at 1:51 pm Permalink

    Thanks for a great post on open innovation. If you ever need more info on InnoCentive feel free to contact me directly.
    Regards,
    Liz Moise
    Marketing Manager
    InnoCentive


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