2,527 crowdsourcing and crowdfunding sites
Jeff Howe looks back on his first encounter with the phenomenon of crowdsourcing and ventures a cautious look into the future.
Five years have already passed since Jeff Howe's groundbreaking article in Wired magazine (Issue 14/2006) was published, which marked the beginning of the crowdsourcing movement. Its title: "The Rise of Crowdsourcing."
"Not a day passes that I am not surprised at how quickly the model developed and what great ideas emerged from this," Howe said in his keynote speech during CrowdConvention in Berlin.
Ten years ago, Howe worked in the music industry, the first to understand the business potential of social networks. Mainly found on MySpace, it gave artists the opportunity to have direct contact with the fans and record tracks and albums to sell while bypassing the labels. Howe’s question that arose in 2005 was, what impact could the rapidly growing network of users have on business models? The answer was simple: Howe took the process from the music industry, replacing the content generated by these artists with that generated by users.
He used an initial example: the Open Source Footwear project by John Fluevog. The Canadian made a call to users to send in crazy shoe designs. There was no prize money or iPads - only a free pair of shoes and the fame because each shoe model was named after its designer. In fact, there are two designs made by Julia and Luisa from Berlin.
With the idea in the quiver, Howe said he proposed a story -and he didn’t even know if it was really a story - to Chris Anderson from Wired. As a working title, he used the term crowdsourcing as "outsourcing to the crowd."
"I hated the word from the beginning," said Howe. "It was so pandering, so typical of Silicon Valley." Chris Anderson called back with a positive message. The item was approved for eight pages.
After a very short search found Jeff the prototypical case study, which made his story: digital photography. The iStockPhoto platform collects images from everyone and sells them to designers, publishers and agencies, at a fraction of the price, which up until that point, big photo agencies like Getty Images had been used for. The photographs were almost only pennies per purchase. Due to the non-exclusivity and the size of the platform, it was quite possible to sell a picture 1,000 times, thereby generating an attractive fee.
While researching Getty Images, which iStockPhoto bought for $50 million, Howe recalls Getty-founder Jon Klein telling him that instead of allowing a competitor to cannibalize their own business, they decided to take the offensive and buy iStockPhoto, accepting that their business model was being redesigned and that it would be better to be part of it than fight it.
Howe named four factors that were responsible for the success of Crowdsourcing:
In order to illustrate the latter points, during the keynote speech in Berlin, Howe gave example of Etsy.com, a platform for creative amateur handicrafts of any form. "To the chagrin of my wife I have almost our entire house Etsy-fied."
Five years after his first research Howe also acknowledges the significance of the development of crowdsourcing and sees the risks. "The response is coming loud and associations and trade unions have the votes." Even today, many designers have criticized the fact that for platforms such as Crowd Spring "speculative" work is produced, because you never know if the work is paid.
Jeff Howe suggested that the biggest momentum for the future is in micro tasks. "The mobile applications will drive crowdsourcing forward. The greatest potential is the lunch crowd, on the coffee break, or even just tagging pictures to determine bird breeds.
By Frank Puscher
Frank has worked as a freelance journalist for online business since 1994. He writes for all major German publications like InternetWorld Business, Internet Magazine, Page, Ct or Webselling. Additionally Puscher is managing partner of Freigeist, a Hamburg based consulting company for strategic online marketing.