Authored by Alpheus Bingham, Ph.D.
Few would dispute the enormous impact that cloud computing has had on the technology and business landscape during the past decade. In 2001, the approach to hosting business applications on the emerging web wasn’t even remotely proven and, in fact, had failed because the first generation of web-hosted application service providers (ASPs) got it all wrong.
But over the course of a decade, what we now call cloud-based or software-as-a-service (SaaS) applications has taken the world by storm and become mainstream. Today, cloud computing is an umbrella term that applies to a wide variety of successful technologies (and business models), from business apps like Salesforce.com, to infrastructure like Amazon Elastic Compute Cloud (Amazon EC2), to consumer apps like Netflix. It took years for all these things to become mainstream, and if the last decade saw the emergence (and eventual dominance) of the cloud over previous technologies and models, this decade will see the same thing with crowdsourcing.
Both an art and a science, crowdsourcing taps into the global experience and wisdom of individuals, teams, communities, and networks to accomplish tasks and work. It doesn’t matter who you are, where you live, or what you do or believe -- in fact, the more diversity of thought and perspective, the better. Diversity is king and it’s common for people on the periphery of -- or even completely outside of -- a discipline or science to end up solving important problems.
The specific nature of the work offers few constraints – from a small business needing a new logo, to the large consumer goods company looking to ideate marketing programs, or to the nonprofit research organization looking to find a biomarker for ALS, the value is clear as well.
To get to the heart of the matter on why crowdsourcing is this decade’s cloud computing, several immediate reasons come to mind:
Crowdsourcing Is Disruptive
Much as cloud computing has created a new guard that in many ways threatens the old guard, so too has crowdsourcing. For example, a research team leader may believe that crowdsourcing innovation challenges is a sign of failure because his team couldn’t solve problems on its own. Or, he may believe that opening the challenge up to problem solvers from outside the organization risks intellectual property leakage. While these concerns have some legitimacy, they can be overcome through diligent education, communication, change management, working with a trusted partner and dealing with fundamental issues such as organizational culture. Crowdsourcing will be more disruptive for some and less so for others. But this shouldn’t dissuade you from at least experimenting with crowdsourcing and learning from your experiences.
Crowdsourcing Provides On-Demand Talent Capacity
Labor is expensive and good talent is scarce. Think about the cost of adding ten additional researchers to a 100-person R&D team. You’ve increased your research capacity by 10% (more or less), but at a significant cost - and, a significant FIXED cost at that. If demand on these resources fluctuates you may find that they are not always fully utilized. Not only does crowdsourcing lend additional “virtual” talent capacity to solving the problems, but the problems can be deconstructed, distributed, solved and reassembled in parallel without having to rely on captive resources. You can crowdsource as many innovation challenges as you need, when you need them. It’s the massively parallel equivalent of cloud computing and it allows for near infinite and fully variable capacity.
Crowdsourcing Enables Pay-for-Performance.
You pay as you go with cloud computing -- gone are the days of massive upfront capital expenditures followed by years of ongoing maintenance and upgrade costs. Crowdsourcing does even better: you pay for solutions, not effort, which predictably sometimes results in failure. In fact, with crowdsourcing, the marketplace bears the cost of failure, not you. Crowdsourcing innovation challenges not only enables you to tap into a diversity that you don’t possess (and never will since you can’t hire all the potentially beneficial perspectives and technical disciplines), but you can do so with significantly less cost and risk than if you were to make additional hires. Crowdsourcing is highly complementary to existing ways of assigning and completing tasks and work and should be viewed as an important and valuable tool in your innovation toolbox.
Crowdsourcing “Consumerizes” Innovation
Crowdsourcing can provide a platform for bi-directional communication and collaboration with diverse individuals and groups, whether internal or external to your organization -- employees, customers, partners and suppliers. Much as cloud computing has consumerized technology, crowdsourcing has the same potential to consumerize innovation, and more broadly, how we collaborate to bring new ideas, products and services to market.
Crowdsourcing Provides Expert Services and Skills That You Don’t Possess.
One of the early value propositions of cloud-based business apps was that you didn’t need to engage IT to deploy them or Finance to help procure them, thereby allowing general managers and line-of-business heads to do their jobs more fluently and more profitably. Crowdsourcing service providers possess unique talent, expertise, methodologies and experience to help organizations rapidly achieve their goals, be it logo design, solving innovation challenges, or designing high profile custom prize competitions. Most organizations have no way of even beginning to figure out how to reach thousands or even millions of diverse people from around the world. Crowdsourcing service providers already have captive communities that you can readily connect to and collaborate with in order to achieve your key objectives.
When predicting the “next big thing,” parallels can be drawn between where cloud computing was several years ago and where crowdsourcing is today and where it is headed in the future. Crowdsourcing can be seen as a catalyst for global innovation and is something businesses should keep an eye on going forward.
Alpheus Bingham is a co-founder and a member of the board of directors at InnoCentive.