Ignite innovation? Lower costs? Turn to the crowd source

crowd source

By Mark Schaefer

Buying incremental bits of people’s time, talent, and experience through “crowd-sourcing” is an incredibly important trend, yet it’s s still flying under the radar for most companies.

To learn more about this development, I attended a crowdsourcing conference and learned from experts from GE, Microsoft, eBay, NASA and other leading companies. The conference was created by {grow} community member David Bratvold and his company Daily Crowdsource.  David did an excellent job bringing together cutting-edge thinkers in this space and unearthing the vast opportunities … and controversies … surrounding this trend. Here are a few highlights from the world’s crowd-sourcing experts:

Stephen Shapiro, author of Best Practices are Stupid, talked about the echo chamber of innovation facing most companies who don’t look outside for ideas.  “Expertise is the enemy of innovation,” he said. “People return to the same safe grooves in their brain. In a room full of rocket scientists, adding one more rocket scientist is probably not going to make a difference.  Breakthroughs come from different domains of expertise, connecting ideas and perspectives that were previously unconnected.”

Bryan Saftler of Microsoft covered three possible negatives of crowd-sourcing:

  1. Ownership rights. How do you know somebody creates something original when it may not be?
  2. Crowdsourcing is an open process — do you want your competition to see it?
  3. Crowd-sourcing the wrong thing. R&D should probably be an internal activity if you want a competitive advantage. Should be a discrete problem, not an open-ended problem.

There was quite a bit of debate over this last point, as other participants argued about the benefits of putting R&D problems out to the crowds, including …

Jason Crusan of NASA — NASA is using crowd-sourcing extensively to solve problems ranging from long-term space food packaging to component design for the International Space Station.  He said that the key to extracting extreme value from open innovation is tied to generating a vast number of solutions — you can’t get to the “long tail” of break-through thinking unless you get a large number of responses. As this field progresses, the challenge is sorting and finding that superior solution. Software is being developed to manage this.

NASA is running many open-ended “competitions” to generate ideas with cash prizes for the best solutions. The key to success is very carefully defining what needs to be solved.  85 percent of the solutions they’ve found have come from innovators outside the U.S., making NASA a world space agency.  NASA has been so successful crowd-sourcing solutions to complex problems that it is now teaching other agencies such as Medicare how to use these strategies.

Max Yankelevich of Crowd Computing Systems — How do you tap into the “cognitive surplus” of the world, and your own employees, beyond mundane micro-tasks?  Artificial intelligence promises to take crowd sourcing beyond commodity tasks like photo tagging and sentiment analysis and move into more complex large-scale tasks. “We are heading to a freelance economy,” he said. “And this will be enabled by algorithms. With the application of AI to crowdsourcing, eventually there will be no limit to the complexity of the tasks that will be able to be crowd-sourced.”

Dori Albert of Lionbridge showed how even highly sensitive projects are opportunities for crowd-sourcing. Technology has progressed so that even secure data — like tax forms — can be processed through crowd-sourced models.  Data forms are broken up into snips that are sent out so that no single person can see data from the same form — information is transmitted out of context.  Every piece of work is sent out to two different people (dual sourced) to provide over 99.9% accuracy. The work (or “snips”) are then re-assembled into the original tax forms and sent back to the state governments in a form that highlights problems and under-payments.

The primary benefit is that state tax entities have cut their tax form processing costs by 50 percent and collected millions of dollars in additional taxes by more thoroughly identifying under-payments.

Dr. Lisa Kennedy, Chief Marketing Officer of General Electric’s healthymagination program showed an example of a 15-year-old boy who invented a diagnostic tool for pancreatic cancer. Innovation is happening in the most unlikely ways, in the most unlikely places. “Innovation is being democratized,” she said. Very sophisticated tools and datasets are available for anyone to use for their own investigations and experiments. Crowd-sourced healthcare breakthroughs are occurring in bio-engineering, cancer research, treatment, imaging, and diagnostics.

GE has created the healthymagination toolbox to put information in the hands of “garage inventors.” MedStartr is a crowdfunding site for life sciences ideas. GE wants to help inventors use big data to solve problems. “Let’s face it,” she said, “your local pizza parlor is probably doing a better job using data analysis to learn about you than your doctor.”

James Rubinstein of eBay talked about the need to do intense research on your customers by asking the right questions. eBay uses crowd-sourced workers to help tag products and refine search terms with search results. The trick is, finding the right workers with the right skills to be effective. He gave examples that showed how search keywords can have wildly different meanings in different parts of the world. Frame of reference is also important — People who love fashion are the best people to match to fashion-related projects. Constantly testing to make sure they have the right workers on the right projects is essential to crowdsource success.

Stephen Paljieg, Senior Market Development Manager for Kimberly Clark said that “Ideas area limited by the people in our company, the experience in our company, and the budget in our company. Yet ideas are abundant!  We can liberate the brand promise by opening up our future to our customers.”

The company’s Huggies brand sponsors crowd-sourced innovations from their “mom” customers. “There are more than 6 million women entrepreneurs in the U.S. yet less that 3 percent of venture capital goes to women-owned businesses. We see this as a huge opportunity.” The Huggies brand is experimenting with a mom-funding effort to provide grants to customer-inspired new businesses. “Not only are we driving innovation, we’re showing that we are willing to invest in our customers.”

The company has created goodwill and PR with the program but has not yet created a product that can be sold through Kimberly-Clark.


I had a chance to catch up with Clint Bonner, VP -Marketing for Top Coder, for an interview. With access to 450,000 resources in 200 countries, Top Coder has become a leading crowd-sourcing resource for many top brands. How do you manage 450,000 resources?  What is the opportunity for smaller businesses? Let’s find out in the brief video interview:

Click here if you can’t view the video interview with Clint Bonner of Top Coder.

Are you using crowd-sourcing?  Any opportunities to create competitive advantage for your business?

Disclosure: Daily Crowdsource, the sponsor of Crowdopolis, provided me the opportunity to attend this event for free.Keynote speaker Mark SchaeferMark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant.  The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.

Illustration: Photos by Mavis, Flickr Creative Commons

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