CrowdSourcing by Jeff Howe - Excerpt

J E F F H OW E

CROWDSOURCINGW H Y T H E P O W E R O F T H E C R O W D

IS DRIVING THE FUTURE OF BUSINESS

Howe_9780307396211_2p_all_r1.pdf 3Howe_9780307396211_2p_all_r1.pdf 3 6/11/09 10:05 AM6/11/09 10:05 AM

http://www.randomhouse.com/crown/trp

Copyright © 2008, 2009 by Jeff Howe

All rights reserved.Published in the United States by Three Rivers Press, an imprint of theCrown Publishing Group, a division of Random House, Inc., New York.www.crownpublishing.com

Three Riuvers Press and the Tugboat design are registered trademarksof Random House, Inc.

Originally published in hardcover in slightly different form in theUnited States by Crown Business, an imprint of the Crown PublishingGroup, a division of Random House, Inc., New York, in 2008.

Library of Congress Cataloging-in-Publication Datais available upon request.

ISBN 978-0-307-39621-1

Printed in the United States of America

Design by Nancy Beth Field

10 9 8 7 6 5 4 3 2 1

First Paperback Edition


www.ThreeRiversPress.com


To purchase a copy of

Crowdsourcing

visit one of these online retailers:

Amazon

Barnes & Noble

Borders

IndieBound

Powell’s Books

Random House


http://www.amazon.com/Crowdsourcing-Power-Driving-Future-Business/dp/0307396215?tag=randohouseinc2-20

http://search.barnesandnoble.com/Crowdsourcing/Jeff-Howe/e/9780307449320&afsrc=1&lkid=J28248944&pubid=K124596&byo=1

http://www.tkqlhce.com/click-2665379-10568661?url=http://www.borders.com/online/store/TitleDetail?sku=0307396215&cmpid=pub-rh-56

http://www.indiebound.org/book/9780307396211

http://powells.com/biblio/62-9780307396211-0

http://www.randomhouse.com/catalog/display.pperl?isbn=9780307396211&ref=other_scribd-pdf-random-crowds-0909


CONTENTS

Crowdsourcing: A Status Update ix

INTRODUCTIONThe Dawn of the Human Network 1

SECTION I • HOW WE GOT HERE

1 • THE RISE OF THE AMATEURFueling the Crowdsourcing Engine 23

2 • FROM SO SIMPLE A BEGINNINGDrawing the Blueprint for Crowdsourcing 47

3 • FASTER, CHEAPER, SMARTER, EASIERDemocratizing the Means of Production 71

4 • THE RISE AND FALL OF THE FIRMTurning Community into Commerce 98

SECTION II • WHERE WE ARE

5 • THE MOST UNIVERSAL QUALITYWhy Diversity Trumps Ability 131




Contents • vii

6 • WHAT THE CROWD KNOWSCollective Intelligence in Action 146

7 • WHAT THE CROWD CREATESHow the 1 Percent Is Changing the Way Work Gets Done 177

8 • WHAT THE CROWD THINKSHow the 10 Percent Filters the Wheat from the Chaff 223

9 • WHAT THE CROWD FUNDSReinventing Finance, Ten Bucks at a Time 247

SECTION III • WHERE WE’RE GOING

10 • TOMORROW’S CROWDThe Age of the Digital Native 261

11 • CONCLUSIONThe Rules of Crowdsourcing 278

Notes 289

Acknowledgments 301

Index 304




CROWDSOURCING: A STATUS UPDATE

In July 2008, having recently finished the manuscript forthis book, I took a much-needed vacation with my fam-ily. About halfway through I received an urgent phonecall from the food writer at the Washington Post. What,she wanted to know, did I think about crowdsourcing forrestaurants. Jerked abruptly from my poolside reverie, anuncomfortable silence filled the line while I tried togather my thoughts. “Restaurants?” I asked, thinking Imight have misheard her. Uh huh, she said, restaurants.“Well, not much,” I admitted. “Can you crowdsource arestaurant?”

Indeed, it seems, one could. She explained how acommunity of four hundred foodies had gathered on acommunity site to develop everything from the cuisine tothe décor to the logo of a restaurant they hoped to openthe following year. I had often said that crowdsourcingcould be applied to anything reducible to bits and bytes,but not products measured in pounds and ounces. Butafter that phone call I changed my maxim. Crowdsourc-ing’s limits are determined by people’s passion and imag-ination, which is to say, there aren’t any limits at all.




As if to prove the point, a seemingly endless array ofstart-up companies have emerged since this book wasfirst published in the fall of 2008, each determined toturn the crowd’s manifold energies to their own gain. Inthis same interim a less predictable development un-folded, as established institutions like government agen-cies and Fortune 500 companies also embraced variousforms of online collaboration. The rise of participatorynetworks has become a defining hallmark of our fright-ening and exhilarating age.

If the tone of this book exhibits more excitementthan fear, that too is a mark of the age in which it waswritten. By its very name, crowdsourcing encourages acomparison to outsourcing, and all the negative associa-tions people have with that term. But when this bookwent to press—well before widespread bank failure setour economy reeling—it was far from clear whether thephenomenon would realize its disruptive potential. Justone year later, it seems increasingly obvious that it will.Aided by a new generation of savvy entrepreneurs, evercheaper creative tools, and—most of all—a recession thatis forcing cost-saving measures on businesses, crowd-sourcing is rapidly migrating from the fringe to themainstream.

As it proliferates, the creative destruction hinted at inthis book has accelerated faster than I anticipated. Andas the case has been in previous periods of swift tech-nological change, new industries are emerging even asolder industries struggle to adapt. Crowdsourcing hascontributed to this disruption, but it will almost surelybecome part of the foundation on which a new order isbuilt, especially in fields like media and entertainment.Some professionals rightly regard crowdsourcing as athreat; others, likewise, view it as a solution. In fact it is

x • Crowdsourcing: A Status Update




both. These, then, are the most prevalent dynamics toemerge since this book was first published: proliferation,on the one hand, and disruption on the other.

Both factors give rise to larger ethical and regulatoryissues. In most instances, of course, individuals are will-ing—indeed, enthusiastic—partners in a crowdsourcingeffort. But as more and more fields undergo such trans-formation, traditional firewalls against labor exploitationmust be reinvented. What happens when the only possi-ble route to gainful employment in one’s craft takes placein a crowdsourcing environment—will individuals beable to obtain the same protections that exist in an offlineworld, like minimum wage and overtime pay? We couldwell be seeing the emergence of the home sweatshop,with people’s productivity and work habits closely moni-tored via their computers. Two years ago such a visionseemed ridiculous on its face. Now it strikes me as in-escapable.

Proliferation

In the beginning, the savings promised by turning laborover to the crowd were more theoretical than real. Wiki-pedia had been generated on virtually no budget, spon-taneously created by legions of volunteers. But applyingthe Wikipedia model to, say, automotive design, seemedchallenging at best and ill conceived at worst. Com-pounding the problem, when companies did attempt toengage online communities, they often acted in aclumsy, tone-deaf fashion, alienating the very people(usually their customers) they stood to gain from themost.

In just the last year, companies have grown far more

Crowdsourcing: A Status Update • xi




adept at the peculiar craft of community management.Philips boosted sales of electric toothbrushes by 40,000units using a crowdsourced marketing campaign. Procter& Gamble built a “discreetly branded” website for Tam-pax tampons and later said it had been “four times as effective as a comparably priced TV campaign.” TheJapanese consumer goods company Muji crowdsourcesthe design of some of its products. The crowdsourcedlines—a “beanbag sofa,” for instance—outperform thosedesigned in-house, which is to say, the products requiringthe least investment returned the most revenue.*

Such success stories have inspired a host of multina-tional corporations to integrate crowdsourcing strategiesinto their business. Kraft runs the “Innovate with Kraft”program, which asks consumers (and inventors) to cometo them with their “favorite recipes” or “new packagingidea.” Nokia maintains a site for customers who test-drivetrial versions of the company’s cell phones, then reportback to the “betalab” community about their experiences.Feedback from these “lead users,” Nokia executives say,have been essential in determining the design and func-tionality of the company’s phones. The beverage giantPepsiCo used video games, sweepstakes, and voting to in-duce the crowd to collaborate on a new flavor of Moun-tain Dew.

If some of these examples sound more like brandingcampaigns, that’s because they are. What marketing exec-utives and advertising agencies have discovered is that in-volving consumers in the production process buildsgoodwill and brand loyalty. Some people, for instance, arepassionate about technology. Others are passionate about

xii • Crowdsourcing: A Status Update

* Paul Marsden, “Crowdsourcing: Your Recession-Proof MarketingStrategy?,” Contagious, Issue 18 (2009): p. 25.




the technology produced by a particular company—Applebeing just one obvious example. We’ve long understoodthat brands play an outsize role in creating identity, be-coming in the process far more integral to our lives thanthe physical product. This deep, abiding interest com-prises a precious asset, at least from the marketer’s per-spective. After decades of neglect, that resource is nowbeing put to use.

Interest in crowdsourcing has grown even more rap-idly within the crowd itself. The ranks of the online networks and communities profiled here have grownsubstantially in the last year. Submissions to the T-shirtdesign site Threadless.com have nearly doubled since Ifirst wrote about them in 2006, and the crowdsourcingsoftware company TopCoder now counts nearly 200,000community members, compared to just over 100,000when I first spoke to them in 2007. Add to this thesundry crowdsourcing initiatives that have launched inthe last year. I used to cover crowdsourcing start-ups onmy blog, but they began multiplying so rapidly I gave uptrying. It goes without saying that most of these start-ups will fail. But it’s notable that a down economy has increased—not dampened—the entrepreneur’s ardor forcrowdsourcing.

To some extent the growth of contributors and prolif-eration of sites to which they can contribute are both dueto increased awareness. As more crowdsourcing projectssprout up, more media attention is devoted to the con-cept, inciting more people to contribute to individualprojects. Here too our current economic downturn playsa role. As the ranks of both the unemployed and the par-tially employed grow, so too does the role financial incen-tives play in collaborative exchanges. If crowdsourcingruns on people’s “spare cycles”—their downtime not

Crowdsourcing: A Status Update • xiii




claimed by work or family obligations—that quantity isnow in surplus.

This can be seen in the success of distributed labornetworks like Amazon’s “Mechanical Turk.” In the origi-nal edition of this book I largely ignored this particulargenre of crowdsourcing—in which money is offered in re-turn for performing simple, rote tasks like tagging images,transcribing audio materials, or culling records from on-line databases. Instead I focused on forms of productiveactivity that took place within the context of community.It’s time to correct that oversight.

In early 2007, Mechanical Turk’s success was any-thing but assured. Companies seemed unwilling to exper-iment with it, and the pool of “Turkers” (the people whoaccept these menial assignments) looked to be a diminish-ing resource. Then a cottage industry of third-party firmssprung up specializing in helping companies exploit theservice and filtering out the inevitable low-quality re-sponses. Add in a recession, and the service has blos-somed into a 200,000-person strong workforce.

Given the paltry rewards, one would imagine thatmost Turkers hail from the developing world. In fact, ac-cording to several surveys, the majority live in the UnitedStates and Canada. Why do they do it? To hear them tellit, to kill time and earn a little bit of pocket change.Crowdsourcing is proving to be highly efficient at identi-fying and exploiting those “spare cycles” I write about.The company LiveOps has built a thriving business run-ning a network of freelancers who work from home tak-ing calls generated by infomercials, selling insurance, oreven taking pizza orders. These virtual employees workentirely according to their own schedule.

In 2008, the Harvard Law School professor JonathanZittrain wrote about the rise of Mechanical Turk and

xiv • Crowdsourcing: A Status Update




other examples of what he calls “ubiquitous human com-puting.”* In the near future, people won’t sit in subwaycars reading the newspaper. “Instead they will stare intoscreens even for just a few minutes and earn as muchmoney in that time as their respective skills and stationsallow.” It’s a somewhat disheartening vision, but thentechnology—as well as the behavior it engenders—has al-ways been deployed to a variety of ends. Encouragingly,crowdsourcing has also been recently put to imaginativeuse in fields with more philanthropic objectives.

In December 2008, Ory Okolloh, a consultant and lawschool graduate, went back to her native Kenya to vote inthat country’s presidential election that spawned wide-spread violence among Kenya’s ethnic and political rivals.In the midst of a news blackout Okolloh did her best todocument the chaos on her blog. Soon she had teamed upwith a few volunteers to create a mash-up of Google Earthand the open source software program FrontlineSMS thatwould allow her to aggregate eyewitness reports onto a sin-gle website. Called Ushahidi—the word means “testimony”in Swahili—it allows people to send e-mails or text mes-sages to a central source. These reports are then vetted forauthenticity before being displayed on a map. Ushahidihas already proven its value during outbreaks of bloodshedin South Africa and the Congo. In January 2009, Ushahidiwon an award from USAID in a competition that was itselfcrowdsourced, an indication of the degree to which the col-laborative zeitgeist has penetrated the field of internationaldevelopment.

USAID is just one of several government agenciesadopting various forms of crowdsourcing. In this they are

Crowdsourcing: A Status Update • xv

* Jonathan Zittrain, “Ubiquitous Human Computing,” University ofOxford Legal Research Paper Series, June 2008, Paper #32.




able to follow no-less-commanding a model than the of-fice of the president. In his presidential campaign, BarackObama was able to demonstrate the efficacy of mass or-ganizing. As president, he has vowed to continue encour-aging large-scale participation, leveraging the diverseexperience, knowledge, and viewpoints of the Americancitizenry.

His initial experiments with crowdsourcing displayboth the raw power of crowdsourcing—his open calls forcontributions are deluged with hundreds of thousands ofresponses—and its pitfalls. In March 2009, the presidentheld what was billed as an “interactive town hall.” Ratherthan just answering questions from the press, the presi-dent announced he would answer questions from thepublic as well. The public—which is to say anyone in theworld with an Internet connection, U.S. citizen or not—submitted their questions via a website called Open forQuestions, which was organized into categories like Edu-cation, Small Business, and Budget. Visitors to the sitecould then vote yea or nay on other people’s questions.The most popular questions rose to the top.

In the end, some 92,000 users cast over 3.5 millionvotes on some 103,000 questions. The voice of the peoplewas loud and clear: legalize marijuana. During his pressconference, the president made short work of the mostpopular topic on his own forum. “I don’t know what thissays about the online audience, but no, I do not think [le-galizing marijuana] is a good strategy for growing oureconomy,” he said to general laughter from the studio au-dience. Next question, please.

While a lot of ink was spilled over the aborted crowd-sourcing experiment, very little analyzed the president’suse, or misuse, of social media to engage the citizenry.The common perception was that the forces of drug re-form “hijacked” the White House’s crowdsourcing plat-

xvi • Crowdsourcing: A Status Update




form. Pro-drug reform organizations like NORML hadsent out e-mail blasts asking people to vote up questionsregarding marijuana legalization. This grassroots effortworked spectacularly well, despite the fact that decrimi-nalization is nowhere to be found in any list of whatAmericans think are the most important issues facing thecountry.

But calling the NORML lobbyists “trolls” or dismiss-ing the incident as the abuse of the White House Openfor Questions platform reveals a fundamental misunder-standing of how crowdsourcing works. It assumes thatthe technology used by the White House is capable ofcreating a representative sampling of popular opinion.The tech doesn’t do that, and we shouldn’t expect it to.We possess other, highly effective tools for that job—they’re called polls.

Open for Questions fits squarely within a genre ofcrowdsourcing I call “idea jams,” and they constitutetheir own evolutionary branch of brainstorming. Usersdon’t just submit ideas, but also vote and (usually) com-ment on them as well. Idea jams are a big hit with theprivate sector. Companies like Starbucks, Dell, IBM, andeven General Mills have all adopted them, for the excel-lent reason that they’re a cost-effective method for prod-uct innovation and inspire goodwill with your customersto boot. The best-publicized incarnation involves Dell’s“IdeaStorm,” which the computer maker used to tap itsmost loyal (or at any rate, most vocal) customers. They’venow integrated some 280 suggestions from IdeaStorminto their product line.

So if the idea jam format works for companies, whyisn’t it working for our president? A few reasons:

First, the White House isn’t matching the right tool tothe right job. “The whole point of [idea jams] is not tofind the question that the whole group wants to ask and

Crowdsourcing: A Status Update • xvii




that is predictable—but to enable cognitive outliers to askthe unpredictable question—to promote ways of thinkingabout problems (and solutions) that are uncommon,”writes Kim Patrick Kobza, CEO of Neighborhood Amer-ica, which develops social software for business and gov-ernment.

In other words, idea jams are built to allow people todiscover the fringe question (or idea, or solution), thentweak it, discuss it, and bring the community’s attentionto it. When Dell launched IdeaStorm, it was hijacked byLinux die-hards who suggested (nay, insisted) that Dellrelease a Linux computer. These folks were trolls to thesame extent the drug legalization lobbyists swampingWhite House servers are, and Dell struggled with how todeal with them.

The company’s ultimate reaction is instructive. First,they merged all the Linux comments into one thread, giv-ing much-needed daylight to other ideas. Next, they sawthe value in what the Linux folk were saying. The outcryfor an open source operating system had revealed thatthere was a “constituency” large enough to justify enact-ing this particular “policy.” Put another way, there wasadequate demand to support a new product line. Threemonths after launch, Dell released three computers pre-installed with the Linux operating system.

In this sense, the virtual town hall performed a valu-able function. It highlighted an important, if nonurgent,issue and stimulated an ultimately useful public dia-logue. The problem was that the president’s office wasn’tpart of that conversation. Unlike Dell and other privatesector groups that have made use of idea jams, the WhiteHouse didn’t weigh in on the issues raised on its forums,or otherwise engage its contributors. They had failed toheed one of social media’s central tenets: participationgoes both ways.

xviii • Crowdsourcing: A Status Update




As Bob Pearson, Dell’s former “chief of communitiesand conversation,” notes, “Idea management is really athree-part process. The first is listening. That’s obvious.”The second part, says Pearson, is integration: “We hadengineers studying IdeaStorm posts and debating howthey could be implemented.”

The last part is the trickiest and most important: “Itinvolves not just enacting the ideas, but going back intoyour community and telling them what you’ve done.”Starbucks, which maintains its own version of IdeaStorm,employs forty-eight full-time moderators whose only jobis to engage the online community. In other words, Star-bucks is investing the vast share of its resources in thesecond and third parts of the idea management cycle,exactly those steps in the process that the White Houseignored.

Of course, the White House, Dell, and Starbucksaren’t putting people out of work, and indeed, many usesof crowdsourcing do not involve the displacement of tra-ditional workers. If anything, crowdsourcing providesadded value to a company or institution without devalu-ing the labor being contributed by full-time employees.But this is not always the case. If proliferation has beenone theme to emerge since the original edition of thisbook was published, the other theme to arise has beenturmoil, most of it occurring within the media and enter-tainment industries.

Disruption

One year ago crowdsourcing’s disruptive potential, too,was largely theoretical. To a large extent it was containedwithin a single, comparatively tiny field—stock photogra-phy. In the hardcover edition of this book, I pondered

Crowdsourcing: A Status Update • xix




whether photography was just the canary in the coalmine. It was an open question at the time. Now it’s not.

Witness the upheaval afflicting the design industry,sparked by the rise of so-called “spec design” sites likecrowdSPRING and 99designs. Customers post creativebriefs directly to the community, which then competes tocreate a design that best fits the clients’ needs. A typical“assignment” will draw dozens of submissions. The win-ner receives a nominal fee (as little as $200), and theclient receives a logo or website design at a fraction ofwhat a professional agency might charge. The losers getzip, which goes a long way to explaining why working onspec (“on speculation,” or without guarantee of payment)has always been considered the toil of last resort for writ-ers, designers, and other creative professionals.

Given the low pay and the brutal competition, onemight reasonably expect crowdSPRING and 99designs towither away like so many other seemingly ill-conceivedWeb 2.0 start-ups. Instead, they are by all accounts flour-ishing. 99designs says it has paid out more than $4 mil-lion to its community of 30,000 artists, and crowdSPRINGexpects to be profitable by next year. Alarmed by the pop-ularity of the spec model, a group of designers formed aprotest group called NO!SPEC to persuade their col-leagues (and prospective clients) to just say no to designcontests. Their effort has not been in vain. The tradegroup AIGA, with around 22,000 designer members, hasgone so far as to stake out an official position on specwork: “AIGA strongly discourages the practice of request-ing that design work be produced and submitted on aspeculative basis in order to be considered for acceptanceon a project.”

The fact is that the demand for low-end design hasballooned in recent years alongside the profusion of start-ups and small businesses. Conveniently enough, so has

xx • Crowdsourcing: A Status Update




the supply of what we might call “low-end designers”(many of them amateurs, recent grads, and retirees). Ac-cording to Forbes there are 80,000 freelance designers inthe United States alone. Most of these are, proverbiallyspeaking, waiting tables. When someone matches de-mand and supply, that’s kismet.

The squabble over crowdSPRING and 99designs hasunited the design community against the barbarians attheir gate, which ostensibly bodes ill for the future healthof the spec sites. But then, a similar array of industryforces aligned against iStockphoto and its ilk when theyfirst gained market share back in 2005. The fact that thisdebate has been largely settled—in favor of the barbar-ians—speaks volumes about where graphic design, and,for better or worse, most other creative fields, are head-ing. In the end, dirt-cheap photos produced by commu-nities of enthusiastic amateurs totally disrupted the $2billion stock photo industry. iStock is now the third-largest purveyor of stock images, and 96 percent of its“workforce” is comprised of people whose bread is pri-marily buttered through some other vocation.

The controversy currently embroiling the designworld both echoes the one that consumed photography afew years ago and prefigures the conflicts between pro-fessionals and amateurs sure to arise in other fields asthe basic crowdsourcing model continues to migrate.

Such conflicts may already be breaking out. Entre-preneurs within the advertising field were a few of thefirst to try to bring open models of idea generation totheir profession. The website AdCandy.com launched in2006 with the premise that anyone could come up with abrilliant slogan or image for an advertisement. At firstsuch upstarts seemed destined to sputter toward un-happy oblivion, derided by professional advertising exec-utives and ignored by their big-name clients. But recently

Crowdsourcing: A Status Update • xxi




attitudes have begun to shift, signaling a potential seachange for the advertising industry.

“I think what you’ll see soon is a big agency willbuild their own crowdsourcing network,” says John Win-sor, the executive director of strategy and innovation atthe Miami-based ad agency Crispin Porter + Bogusky.“When they do you’re going to see massive disruption inthe industry as agencies rush to mimic them.” Such ex-periments have been discussed for years at various in-dustry gatherings, says Winsor, but so far no one’s madethe leap. “The finance guys freak out. They’re like, ‘If wedo this there’s going to be incredible downward pricepressure.’ My point is that if we don’t do this there’sgoing to be incredible downward price pressure. At leastif we [a professional agency like Winsor’s CP+B] do it wecan maintain some level of control over the disruption.”

That’s just the thinking behind the creation of BBHLabs, a skunkworks setup by the venerable London-based ad agency Bartle Bogle Hegarty. “There’s a conflu-ence of factors coming together that anyone can see, butnot everyone wants to see,” says Ben Malbon, a manag-ing partner at BBH Labs. “Agencies need a more flexiblebusiness model than trying to house all its talent underone roof. That means external networks like crowdsourc-ing.” Echoing Winsor, Malbon notes that BBH Labs wasinitially called “Project Nemesis,” the idea being thatBBH should try to create its own nemesis, the kind offorward-looking agency that could eventually cripple it.

The danger, Malbon says, is that clients will simplytap the crowd on their own and bypass agencies alto-gether. It’s hardly an idle threat. Shortly after launchingBBH Labs in January 2009, the agency made headlines bycrowdsourcing its logo on crowdSPRING, eventually gen-erating some 1,100 responses. “It’s a telling coincidence

xxii • Crowdsourcing: A Status Update




that a few weeks later one of our largest clients [cellphone maker] LG used crowdSPRING for a huge project.”(LG held a contest on crowdSPRING to design a new cellphone.) Needless to say, it’s just the sort of business BBHwould have received in the not-at-all-distant past.

If companies can forge direct links to creatives, willthe agency go the way of the typing pool? CP+B’s JohnWinsor doesn’t think so, and I don’t either. What’s be-come clear over the last several years is that, as in somany aspects of life, the optimal solution involves a so-phisticated hybrid of the new and the old. “It’s hard todistinguish wheat from chaff,” Winsor says. He shouldknow—he’s writing his current book, Flipped, via a wikiwith loads of reader contributions. “You’ll see a handfulof professionals using a crowdsourcing network to gener-ate a lot of raw ideas, but then picking and refining thoseideas and creating value around them for the client.”

It’s no accident, in my opinion, that news organi-zations have pursued hybrid approaches as well. In chap-ter 7, I recount the failings of my own experiment incrowdsourced journalism, Assignment Zero. In the broad-est of strokes, we overestimated the crowd’s ability to cre-ate a journalistic product from whole cloth. However, weunderestimated its interest in participating in the processby suggesting ideas, conducting interviews, and playingother roles crucial to any journalistic outfit.

Such lessons seem not to have been lost on the newsindustry at large as it struggles to adapt to a rapidly dete-riorating financial environment. Of all the fields sur-veyed in this book, none is suffering so egregiously as thenews media. In the month I spent working on this fore-word, the Rocky Mountain News folded, the Seattle Post-Intelligencer canceled its print edition, and bankruptcylooms for such august publications as the San Francisco

Crowdsourcing: A Status Update • xxiii




Chronicle and, further down the road, possibly even theNew York Times.

This has not curbed the speed with which newspa-pers (and their sister outfits in broadcasting and on theInternet) are experimenting with crowdsourcing. In fact,on the day I am writing this the New York Times posted a658-page document detailing the daily schedule of Timo-thy F. Geithner from January 2007 to January 2009,when he was the president of the Federal Reserve Bankof New York. Readers are encouraged to peruse the diaryand “share [their] observations” with the Times. It’s pre-cisely the model—using the crowd as an investigative an-cillary force—that has worked so well for Josh MicahMarshall at the political blog TalkingPointsMemo.com,which I also write about in chapter 7.

“Crowdsourcing may be destroying other industries,but it isn’t destroying the news industry,” says Bob Gar-field, the host of the public radio program On the Media.“If anything, crowdsourcing is enabling existing news or-ganizations to conduct a journalism of the sort it couldnever conduct before.” He pauses before continuing. “Soin the five minutes before those news organizations ut-terly collapse, they can enjoy the benefits of a crowd-sourced world.” He chuckles, darkly.

Crowdsourcing doesn’t mean the end of design, ad-vertising, journalism, or any of the other fields—productdesign and innovation come quickly to mind—in which ithas started to compete with traditional methods. AsGarfield notes, “Afterwards some of this will coalesceinto a reasonable facsimile of the vast journalistic infra-structures that are now in the process of collapsing.” It’sa sobering but oddly reassuring thought. Writers will stillwrite, designers will still design, photographers will stilltake photographs. The structures in which it all takesplace, however, are about to change forever.

xxiv • Crowdsourcing: A Status Update




INTRODUCTION

The Dawn of the Human Network

The Jakes didn’t set out to democratize the world ofgraphic design; they just wanted to make cool T-shirts. In2000, Jake Nickell and Jacob DeHart, as they’re more for-mally known, were college dropouts living in Chicago,though neither had found much work putting his abbre-viated educations to use. Both were avid members of aburgeoning subculture that treated the lowly T-shirt as acanvas for visual flights of fancy. So when they met afterentering an online T-shirt design competition, they al-ready had a lot in common. For starters, both thought itwould be a good idea to start their own design competi-tion. But instead of using a jury, they would let the de-signers themselves pick the winner. That November acompany was born—the product of equal parts youthfulidealism and liberal doses of beer.

The pair launched Threadless.com a few months laterwith a business plan that was still in the cocktail-napkinstage: People would submit designs for a cool T-shirt.Users would vote on which one was best. The winnerwould get free T-shirts bearing his or her winning design,




and everyone else would get to buy the shirt. At first theTwo Jakes, as people called them, ran Threadless fromNickell’s bedroom. But the company grew. And grew.And grew yet more. People liked voting on T-shirts, andthe designs were less staid and less formulaically hip thanthose sold by Urban Outfitters or Old Navy. The winningdesigns started appearing on hit TV shows and on thebacks of hip-hop artists. The company has nearly doubledits revenue every year since. Threadless currently re-ceives some one thousand designs each week, which arevoted on by the Threadless community, now six hundredthousand strong. The company then selects nine shirtsfrom the top hundred to print. Each design sells out—hardly surprising given the fact Threadless has a fine-tuned sense of consumer demand before they ever sendthe design to the printer.

Design by democracy, as it happens, isn’t bad for the bot-tom line. Threadless generated $17 million in revenues in2006 (the last year for which it has released sales figures)and by all accounts has continued its rapid rate of growth.Threadless currently sells an average of ninety thousandT-shirts a month, and the company boasts “incredibleprofit margins,” according to Jeffrey Kalmikoff, its chiefcreative officer. Threadless spends $5 to produce a shirtthat sells for between $12 and $25. They don’t need ad-vertising or marketing budgets, as the community per-forms those functions admirably: designers spread theword as they try to persuade friends to vote for their de-signs, and Threadless rewards the community with storecredit every time someone submits a photo of themselveswearing a Threadless shirt (worth $1.50) or refers a friendwho buys a shirt (worth $3).

Meanwhile, the cost of the designs themselves isn’t

2 • CROWDSOURCING




much more than a line item. DeHart and Nickell have in-creased the bounty paid to winning designers to $2,000in cash and a $500 gift certificate, but this still amountsto only $1 million per year, a fraction of the company’sgross income, and Threadless keeps all the intellectualproperty.

But as any number of winners will happily volunteer,it’s not about the money. It’s about cred, or, to give that amore theoretical cast, it’s about the emerging reputationeconomy, where people work late into the night on onecreative endeavor or another in the hope that their com-munity—be it fellow designers, scientists, or computerhackers—acknowledge their contribution in the form ofkudos and, just maybe, some measure of fame. Thread-less’s best sellers (such as “Communist Party,” a red shirtfeaturing Karl Marx wearing a lampshade on his head)are on regular view at coffee shops and nightclubs fromLondon to Los Angeles.

The Jakes now enjoy a certain degree of notoriety them-selves. Nickell and DeHart have become heroes amongthe do-it-yourself designer set, and even have given lec-tures to MBA students at MIT’s Sloan School of Manage-ment. Aspiring executives spent much of the timeexplaining all the basic business tenets the Jakes had bro-ken in building Threadless. Good thing they weren’tthere when Nickell and DeHart were first launching theircompany. Nickell and DeHart are smart enough to knowa good idea when they stumble on it. They created a par-ent company, skinnyCorp, which includes not justThreadless but a spin-off division that takes a similarlydemocratic approach to the creation of everything fromsweaters to tote bags to bed linens. “Next we’re thinkingof doing housewares,” says Nickell.

Introduction • 3




An Accidental Economy

In late 2005, the Pew Internet & American Life Projectreleased a paper called “Teen Content Creators and Con-sumers.” The study, which consisted of interviews withmore than eleven hundred Americans between the agesof twelve and seventeen, drew little attention when itwas published, but the findings were extraordinary:there were more teens creating content for the Internetthan there were teens merely consuming it. At the time itwas commonly assumed that television had created ageneration of consumers characterized by unprecedentedpassivity. Yet now it seemed the very opposite was thecase. In his book The Third Wave the futurist AlvinToffler predicted that consumers would come to exercisemuch more control over the creation of the products theyconsumed, becoming, in a word, “prosumers.” In 1980,the year Toffler published his book, this seemed likemere fodder for bad science-fiction novels. From the per-spective of 2005, it seemed stunningly prescient.

Pew’s conclusions confirmed my own recent experi-ence. A few months before the study was released I hadbeen hopscotching across the country attending concertson the Warped Tour, a carniesque collection of punkbands and the hangers-on that followed them from townto town. I was writing about the social networking siteMySpace, which was known—to the degree it was knownat all—as a grassroots-marketing venue for Emo bands,off-color comedians, and Gen Y models. In the hours Ispent with the performers and their fans, I noticed thatvery few defined themselves as musicians, artists, or anyother such label. The singers were publishing books ofpoetry; drummers were budding video directors; and the

4 • CROWDSOURCING




roadies doubled as record producers. Everything—evenone musician’s pencil portraits—was posted to the Inter-net with minimal attention to production quality. Thesewere what Marc Prensky, a game designer and educator,calls the “digital natives.” The rapidly falling cost of thetools needed to produce entertainment—from editingsoftware to digital video cameras—combined with freedistribution networks over the Web, had produced a sub-culture unlike anything previously encountered: a coun-try within a country quite capable of entertaining itself.

Next I heard about the Converse Gallery ad cam-paign, in which the shoemaker’s ad agency solicitedtwenty-four-second spots from anyone capable of wield-ing a camcorder. The shorts had to somehow convey apassion for Chuck Taylors, but that was it. You didn’teven have to show the shoe. The best of the spots werevery, very good—electric with inventive energy, yetgrainy enough to look authentic, as indeed they were.Within three weeks the company had received sevenhundred fifty submissions, a number that climbed intothe thousands before Converse discontinued the cam-paign in early 2007. It was viewed as a smashing successby both the company and the advertising industry, aswell as a seminal example of what is now called user-generated content.

This was the new new media: content created by am-ateurs. A little research revealed that amateurs were mak-ing unprecedented contributions to the sciences as well,and it became clear that to regard a kid making his ownConverse ad as qualitatively different from a weekendchemist trying to invent a new form of organic fertilizerwould be to misapprehend the forces at work. The samedynamics—cheap production costs, a surplus of under-employed talent and creativity, and the rise of online

Introduction • 5




communities composed of like-minded enthusiasts—wereat work. Clearly a nascent revolution was afoot, one thatwould have a deep impact on chemistry, advertising, anda great many other fields to boot. In June 2006, I publisheda story in Wired magazine giving that revolution a name:crowdsourcing. If anything, I underestimated the speedwith which crowdsourcing could come to shape our cul-ture and economy, and the breadth of those effects. As ithappens, not just digital natives, but also digital immi-grants (whom we might define as anyone who still getstheir news from a newspaper) would soon be writing bookreviews, selling their own photographs, creating new usesfor Google maps, and, yes, even designing T-shirts.

As I’ve continued to follow the trend, I’ve learned agreat deal about what makes it tick. If it’s not alreadyclear, Threadless isn’t really in the T-shirt business. Itsells community. “When I read that there was a sitewhere you could send in designs and get feedback, I in-stantly thought, this is really cool,” says Ross Zeitz, atwenty-seven-year-old Threadless designer who washired to help run the community after his designs won arecord-breaking eight times. “Now I talk to other design-ers, and they’re motivated by the same things I was. It’saddictive, especially if you’re at a design school or somecorporate gig, where you’re operating under strict guide-lines,” says Zeitz. The only restriction at Threadless, bycontrast, is that the design has to fit onto a T-shirt.

Threadless, its founders have noted, is a business onlyby accident. None of the Threadless founders set out to“maximize profits” or “exploit the efficiencies created bythe Internet.” They just wanted to make a cool websitewhere people who liked the stuff they liked would feel athome. In succeeding at this modest goal, they wound upcreating a whole new way of doing business.

6 • CROWDSOURCING




To purchase a copy of

Crowdsourcing

visit one of these online retailers:

Amazon

Barnes & Noble

Borders

IndieBound

Powell’s Books

Random House


http://www.amazon.com/Crowdsourcing-Power-Driving-Future-Business/dp/0307396215?tag=randohouseinc2-20

http://search.barnesandnoble.com/Crowdsourcing/Jeff-Howe/e/9780307449320&afsrc=1&lkid=J28248944&pubid=K124596&byo=1

http://www.tkqlhce.com/click-2665379-10568661?url=http://www.borders.com/online/store/TitleDetail?sku=0307396215&cmpid=pub-rh-56

http://www.indiebound.org/book/9780307396211

http://powells.com/biblio/62-9780307396211-0

http://www.randomhouse.com/catalog/display.pperl?isbn=9780307396211&ref=other_scribd-pdf-random-crowds-0909


ABOUT THE AUTHOR

JEFF HOWE is a contributing editor at Wired maga-zine, where he covers the entertainment industryamong other subjects. Before coming to Wired, he wasa senior editor at Inside.com and a writer at the Village

Voice. In his fifteen years as a journalist he has traveledaround the world, working on stories ranging from theimpending water crisis in Central Asia to the implica-tions of gene patenting. He also has written for U.S.

News & World Report, Time magazine, the Washington

Post, Mother Jones, and numerous other publications.He lives in Brooklyn, New York, with his wife andchildren.



Documents

CrowdSourcing by Jeff Howe - Excerpt