Visitors of the West of England Livestock Fair in 1906 were asked to estimate the weight of an ox. Researching collective intelligence, a British scientist later calculated the average of all 787 participant’s guesses and, to his surprise, discovered that the average was more accurate than any single guess submitted, including those of presumable experts such as butchers. The estimate of this “crowd” was more accurate than each individual’s!
This anecdote from James Surowiecki’s book “The Wisdom of Crowds” reveals how the value of crowdsourcing has been observed for a long time. Yet only in the last decade has crowdsourcing really become feasible on a bigger scale thanks to the emergence of the social web.
Crowdsourcing’s maturity has also brought with it the emergence of a veritable jungle of new concepts. To help you find your way in this brave new world, here an overview and definition of the most common terms:
The term was first coined by the American journalist Jeff Howe in a Wired article from 2006. Crowdsourcing is composed of the two terms “crowd” and “outsourcing”, in this sense it is an outsourcing process to the crowd. It’s an umbrella term that covers a wide range of services/assets that can be introduced or procured through the crowd.
Cloud Labour is the virtual outsourcing of work to the crowd. Similar to cloud computing, where computing power and memory capacity of servers are provided on the Internet, companies can request the services of so-called clickworkers online to complete tasks that range from researching contact information to programming software.
Case in point: When Hurricane Katrina struck New Orleans in 2005, the Red Cross call center to connect friends and family was quickly overrun. Cue LiveOps, which set up a virtual call centre in only three hours, arranging for 400 operators to handle calls on behalf of the Red Cross.
Literally “cooperative creation”, co-creation refers to services provided by cooperative market partners, in most cases consumers. Co-creation elements are found and then developed by companies into their marketing strategies to promote participation and involvement of consumers.
Case in point: When Jørgen Vig Knudstorp took over as CEO of LEGO in 2003, the company was almost broke. He decided to relaunch LEGO Mindstorms, a previously successful product, but much of the original team had moved on – so LEGO reached out to the game’s fanbase for new ideas. The (re)launch was a huge success, establishing for LEGO the value of co-created ideas. Subsequently in 2011 it launched LEGO Ideas, a platform where anyone can submit ideas, and if 10,000 people vote for an idea, LEGO reviews it.
As its name conveys, crowdfunding is about an alternative financing model in which the crowd funds an idea or project. The first platforms for crowdfunding were founded in 2008 (Indiegogo) and 2009 (Kickstarter), and by now there are hundreds of crowdfunding initiatives tailored to different subject areas.
Case in point: The Pebble Time watch is not only the most funded campaign in Kickstarter’s history, but also the fastest funded, raising $1 million in less than an hour (the initial goal was $500,000).
Open innovation is the practice of accelerating innovation in research and development (R&D) by allowing for the inflow and outflow of knowledge. It is the combination of companies making use of both external and internal ideas and market paths.
Case in point: Cisco Systems wanted to compete with Lucent Technologies but did not have the internal R&D capabilities they had. So they pursued another strategy: Whatever technology Cisco needed, it acquired from the outside, which allowed them to keep up with Lucent without having to conduct much research on their own.
Crowdstorming is the modern evolution of brainstorming. Instead of developing ideas and concepts in a small group, crowdstorms connect a much larger group of creative talent, often with several thousands of participants. Unlike brainstorming, crowdstorming allows for not only the sourcing of ideas but also the structured discussion and review of concepts. The traditional attitude of brainstorming, “every idea is a good idea”, is thus deliberately broken to increase the quality through constructive dissent. In 2013 Wiley published “Crowdstorm: The Future of Innovation, Ideas, and Problem Solving”, co-written by jovoto founder, Bastian Unterberg.
Case in point: The 130-year-old swiss army knife is a traditional product that was established but in need of a fresh breath of air. In 2012 Victorinox partnered with jovoto and held a crowdstorm to submit design ideas for a limited edition collection. The result: a 70% increase in sales, making it the most successful collection to date. Victorinox now hosts the contest every year, making the mini swiss army knife a major global success.
Crowdsourcing can not only help correctly estimate the weight of an ox but also tackle more complex challenges. At jovoto, we couple 9-years of experience in crowdstorm strategy & management with our platform of 80 000 global creatives to allow faster, easier, and better innovation. To not only win at the local fair but on the global market, contact us to learn more.