Wisdom of Crowds vs. Stupidity of Masses (Round 1)

Eran Eyal

by Eran Eyal of Springleap.com and Evly.com

Perhaps the biggest argument AGAINST crowdsourcing is the statement: “Why would I want to sift through heaps of rubbish to find one gem?”

I chuckle when I hear this statement because usually, within a few minutes, the speaker sites statistics or quotes Wikipedia. Ahem. You have just used data from crowdsourcing exercises, sir.

So if you are not familiar with the term “crowdsourcing” (so THAT’s the rock you’ve been living under!) then it’s time to wake up to the fact that the term describes something we have all participated in as a civilization, for a very long time.

Ever voted on something like American Idols, or a presidential election?
Crowdsourcing.

Ever submitted something into a competition and told your pals to come vote for you?
Crowdsourcing.

Ever used Quora, Springleap, Threadless, Yahoo Answers, Kickstarter, Kiva, 99 Designs, MyStarbucksIdea?
You guessed it! Crowdsourcing.

Crowdsourcing describes the act of putting out a task that would usually be fulfilled by a single contractor to a defined or undefined crowd/community.

By 2014 revenues from crowdsourcing will exceed US$1Bn and a recent survey showed that 80% of companies perceive value from crowdsourcing.

Why?

1. Variety in response
2. Virality – people enter and spread the words to their networks to vote for them so they can win (if a voting mechanism is supplied. It’s not a must)
3. People interact with your brand on a much higher level of activity than social alone and generally the activity lasts longer
4. People are incentivized – there is always something to be gained so there is a reason to get involved (their hearts, minds, egos or wallets)
5. People interact with your brand meaningfully bringing real value to help shape what they will consume. This reduces the barriers of entry as they generally attatch feelings of pride and loyalty to your brand. It’s about a sense of ownership.
6. You get meaningful analysis, statistics and market research as the brand owner.

That’s some of the most basic benefits.

So why the skepticism? – because, generally speaking, crowdsourcing works best in niches. When you invite people that are not experts in the niche and you have no system to differentiate the experts from the newbs (the young, wet-behind-the-ears-upstart-grasshoppers or the unabashed-skilless-yet-shameless-self-promoters), results can be varied or sketchy.

Most companies market too broadly or draw in communities that are too diverse instead of being selective.

Mostly the reason for this is

1. Inexperience with tools to attract the right crowd.
2. a feeling that more… well… is more;
3. That viral is about telling as many people as you can rather than getting the right people involved
4. Lack of a system to separate the wheat from the chaff
5. They plain just don’t know better but believe they do

Crowdsourcing works. In fact it works BRILLIANTLY… when the right conditions, expertise and systems are in place. Look at some of the models I have mentioned above – they are fantastic case studies.

So wisdom of the crowds vs stupidity of the masses… Round1 : who do you think is the winner. I know where I’m placing my bets.

Comments & Advice:
  1. Great summary Eran. Cheers!

  2. EranEyal says:

    Thanks Roii 🙂 Round 2 coming soon 😉

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