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Businesses look to crowdsourcing

by Angela Hey

Does your business need better promotion? Do you want to compile a sales lead list? Why not split the job into tasks, broadcast requirements on the Internet, find skilled contractors and get results quickly? That's crowdsourcing.

Frederick Taylor, the father of scientific management, was responsible for making factories efficient by breaking jobs down into little tasks. In his classic treatise "Scientific Management" he wrote about factories of 500 to 1,000 people that aimed for "the best initiative of every workman." This led to a huge blue-collar skilled labor force.

Fast-forward 100 years to Google's campus, where I attended the Crowdsortium Symposium last May to learn about crowdsourcing. Crowdsortium is an informal group of 85 companies interested in discussing crowdsourcing practices and trends. Just as Frederick Taylor changed manufacturing by turning craftspeople and artisans into assembly line workers, crowdsourcing is taking today's professionals and turning them into skilled labor on virtual assembly lines driven by web software.

First, a crowdsourcing website will host a vast number of workers — thousands of times more than in a factory. Mountain View's Elance has over 500,000 freelancers and over 160,000 active clients. MerchantCircle, another Mountain View company, has 1.6 million merchants. San Francisco's CrowdFlower that helps companies manage data has over 1.5 million workers.

Secondly, as in a factory, the pay can be very low. With an hourly minimum wage of $8, some companies won't take on California workers. You might get five cents for entering data from a web search. In Mountain View, a $200-per-month wage is tiny, but in a country where the average monthly wage is $40, it provides riches.

Elance takes a cut of the client's payment to a worker. Graphic design firm 99designs runs contests and only the best submitters get paid. Fabio Rosati, CEO of Elance, is not in favor of the contest business model, as losers aren't paid. He believes that professional designers' guilds increasingly will want adequate compensation for their members.

Third, just as Taylor wanted the best out of every worker, crowdsourcing companies are fastidious about quality. Workers can get stars and ratings. Redwood City's, oDesk, offering professional services, qualifies workers with tests. CrowdFlower can use multiple workers to catch errors. It seeds work with questions that have known answers to eliminate spammers. Ben Smith, chairman of MerchantCircle, attracts merchants with information created by crowdsourcing. For example, plumbers may be attracted to a question about a failed water softener.

Finally, crowdsourcing firms are becoming more specialized. From Colorado, Trada, whose CEO Niel Robertson was a co-founder of Crowdsortium, has 2,000 workers who find keywords and design ads for search engines Google and Bing. Trada gives its adword creators better assignments as they gain experience. Not surprisingly, Google Ventures is an investor in Trada.

Niel says he is in the process of surveying Crowdsortium members on the economic impact of crowdsourcing. Results will be published in the next few weeks. He believes that a real economic revolution is underway and that it is moving the economy forward, because location is no longer a barrier to getting a job.

Programmers, designers, testers, marketers, video creators, strategists and writers here may lose out competing against crowds in lower-cost communities. Savvy professionals will hire crowd workers and choose higher value tasks for themselves. A Stanford professor joins a crowd as the perfect expert to solve a hard problem. A traveler waiting in an airport gets paid to answer a few questions. Stay-at-home parents, the disabled, retirees, students and the unemployed will join crowds to find new income sources.

Crowdsourcing enables small companies to get a stunning logo, professional sales collateral, a stellar website and a list of sales leads to compete successfully with major corporations. How will your business change?

Will you hire the crowd or join the crowd?

Angela Hey advises technology companies on marketing and business development. She can be reached at amhey@techviser.com.

Posted by Byron, a resident of another community, on Nov 23, 2011 at 4:12 am

There’s also a different approach on crowdsourcing – internal prediction markets that modern business use to forecast important matters (e.g. S&OP, new product potential and risk) more efficiently and at a much lower cost in comparison to traditional methods.

Companies use prediction markets to aggregate the wisdom of their employees, who have valuable knowledge and experience. In a prediction market each participant can give their own forecasts on certain business-related issues. Thanks to the gamification and stock exchange resemblance, early and more accurate forecasts have greater value, while incorrect and late predictions are being filtered out by the system, driving up the accuracy and success rate.

An example of such a prediction market would be CrowdWorx - founded in 2007, and was used by clients in Europe and North America for Social Decision Support services, including Social Forecasting, Crowdsourcing, and Enterprise 2.0 portals.

On the homepage of CrowdWorx, crowdworx.com, you can find a "Social Forecasting Test" and a live demo of the system. Moreover, white papers on crowdsourcing, prediction markets and other topics, as well as case studies are available in the "Resources" section.

Posted by Observer, a resident of the Old Mountain View neighborhood, on Nov 23, 2011 at 7:21 am

Now try presenting the other side of Frederick Taylor.

Taylor's scientific management treated workers like parts of a machine and not like human beings. Those that couldn't keep up with the machine were replaced.

Your lack of knowledge of history scares me.

And then there's this statement:

"Just as Frederick Taylor changed manufacturing by turning craftspeople and artisans into assembly line workers..."

Surely, you must see something wrong with such a statement. This is why the masses should be scared of people. Your scientific management is nothing but cattle herding.