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Five Signs That Crowdsourcing Will 'Cross the Chasm' In 2013

Five Signs That Crowdsourcing Will 'Cross the Chasm' In 2013

Editor's Note: The following comes to us from François Pétavy, CEO of eYeka, a crowdsourcing platform. Pétavy examines some of the trends in crowdsourcing and explains why he thinks crowdsourcing will begin to gain mainstream adoption in 2013. You can follow Pétavy @fpetavy and his company @eYeka.

Crowdsourcing has become a very successful business model for many startups such as YouTube, Wikipedia, Reddit, Threadless and Kickstarter - to name only a few. But so far, its usage by big companies has been sporadic and experimental.

The most visionary of Fortune 500 companies made initial forays in as early as 2006, with such experiments as Doritos’ “Crash the Superbowl”. But as of today, few large companies have adopted a deliberate and systematic strategy of leveraging crowdsourcing to improve their services and business model.

In “Crossing the Chasm”, Geoffrey Moore explains that most technologies face a moment of truth when they need to transition from “early adopters” (who use the technology because it’s new) to the “early majority” (who adopt the technology because it solves a problem). So far, crowdsourcing for brands still has to cross the chasm between those two segments – but there are clear signals that 2013 is the year when it may well do so.

1. Crowdsourcing now solves real business Problems

There are now a host of useful applications of crowdsourcing for corporations and these address problems that were either very costly or impossible to solve in the past.

For example, brands can cut into pieces the complex tasks that computers cannot complete, and delegate these to armies of crowd workers – this is called microstasking. This technique, for example, works very well to decide whether tweets about a brand are positive, neutral or negative, or to check the accuracy of data entries in a business directory.

In the like of the X-Prizes, brands can also tap into the collective intelligence of expert crowds to gather new innovation or marketing ideas, and solve problems that their employees or suppliers cannot crack.

Brands also can empower their own customers to customize their products (such as NikeID,which enables you to create online your very own pair of runners in a few steps), and thus better serve their exact needs and also predict future demand that way.

There are now so many such applications that people even have created maps for these:

2. The ROI of crowdsourcing Can now Be demonstrated

To start using new technologies, pragmatists need to have proof that they will get the job done better than the previous solutions. The good news for them is that there are now proof points that crowdsourcing can have an impact on the bottom line.

After crowdsourcing marketing ideas among a creative community, Coca-Cola recently found out that the overall approach provided a 900% productivity gain against traditional marketing methods, and that the best ideas actually ranked in the Top 10% against consumers.

Consumer goods brand Muji (who runs the Muji Awards) found out that, in the first year after introduction, sales revenues from user-generated products were three times higher – and gross margins four times greater – than those of designer-generated products.

Consultancies are pointing out the substantial profits that social technologies and crowdsourcing can provide. McKinsey estimates that packaged goods companies can cut costs by the equivalent of 4% of their revenues through these technologies.

Here’s to the skeptics. And to your bottom line.

3. Brands are rapidly reallocating their spending

Consumers have historically been moving faster than companies in adopting the latest technologies – and companies know they need to catch up. It took a solid 10 years for Fortune 500 companies to embrace e-business in the 2000’s. But in a context of ever-coming economic crises, increasing competition, and globalized and connected consumers, brands now need to innovate faster than ever.

And they are changing fast. Just look at advertising spending: Unilever recently announced it would to reduce "the part of the advertising spend which is used to make films, pay agencies and the like” to dramatically increase its online investments – by 40%. And they are not alone.

So corporate minds are now ready for change, and real money is starting to move in for new approaches such as crowdsourcing.

4. “Crowdsourcing” is becoming a household name

The term “crowdsourcing” was coined by Jeff Howe in 2006, and has gone a long way beyond the initial realm of VCs and entrepreneurs.

Now you can see big brands massively promoting crowdsourcing activities to engage consumers in the creation and selection of their ads. At this year’s Superbowl, many ads were crowdsourced, in part or in full – to the point that the press is now talking about “the Crowdsourcing Bowl.” So now, your mother probably knows about crowdsourcing.

5. Acceleration is already visible

IBM estimates that already 24% of large businesses are leveraging external talent, and that adoption will double in the next two years. Yes, double.

And if you need to see it to believe it – just have a look at this timeline that displays the main crowdsourcing projects by big brands in the last six years.

So fasten your seat belts.

What’s in it for me?

What it all means is that, from now on, your boss, your CEO and your colleagues know about crowdsourcing.

So whether you are into marketing, R&D, sales, customer service, finance or procurement, there are good chances that over 2013, someone around you will ask: “Have we thought about crowdsourcing for this?”. And if you have indeed ideas about how to use crowdsourcing, the good news is: even risk adverse people around you will be more prone to go ahead now that the concept is widely accepted.

In the last six years, entrepreneurs have been taking the risks first, with sometimes huge returns. They widely leveraged crowdsourcing to create new business models or disrupt established ones – just look at the lasting impact of Yelp and Google Maps on Yellow Pages, or of YouTube on the TV world.

Now that crowdsourcing is crossing the chasm, it may soon turn out that not leveraging it will become a competitive disadvantage. Ignore at your own risk.

François Pétavy has been focusing on the convergence between technology, marketing and content for more than 15 years. Before joining eYeka in 2008, he was a Director at eBay, in charge of developing the French marketplace on new areas of business. François’ past positions also include being a Producer at Ubi Soft (a video game publisher), and VP Project Management for AGENCY.COM (a digital agency). François Pétavy has an engineering degree from Ecole Polytechnique and Telecom ParisTech, and holds an MBA from INSEAD.

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  • Guest Youve Got Funds Feb 25, 2013 10:23 pm GMT

    Good article about how Crowdfunding is going mainstream.

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