2,940 crowdsourcing and crowdfunding sites
Last year around this time our own Carl Esposti sat down with George Washington University professor David Alan Grier and asked him to predict where crowdsourcing would be in a year. Now that year has elapsed and we've seen Grier's predictions come through (and then some), so I spoke with him again for our From the Crowd podcast to review where the industry stands and where it's heading in 2013.
Listen to or download the brief podcast below, or review the transcript at the bottom of this post:
Eric Mack: Welcome to "From the Crowd", crowdsourcing.org's podcast where we pull one of the leaders of the crowdsourcing and crowdfunding worlds to speak with them one-on-one about what they're working on, and today I've got on the line, David Allen Grier, he's a professor of international affairs at George Washington University. David, thanks so much for taking the time to talk with us.
David Alan Grier: Thank you, I'm very pleased to be part of it.
Mack: Great. I wanted to pick up, you had spoken with Carl Esposti from crowdsourcing.org at the last CrowdConf in 2011, and I was watching that interview earlier today and I noticed that the interview wrapped up when Carl asked you for a few predictions of where you thought we would be in about a year, and we're coming up on that milestone.
You told Carl that you would be looking for some crowdsourcing companies to be making a profit right now, and also for inroads into the Fortune 500. I took particular notice of that last part because actually, just today, we're working on a story, there's a rumor out that IBM is looking at crowdsourcing a lot of their internal work and considering going global on that. Their entire global outreach could now be largely crowdsourced. I guess, is this validation? First of all, do you buy that rumor, and second is this validation of that prediction you made a year ago?
Grier: Well, I'm so far out of the rumor tree, it sounds like a great story that I can neither confirm nor deny nor have any special insight into whether it's true.
I think in some ways I low balled my predictions last year, because clearly progress has been made on both of them. We are seeing crowdsourcing companies that are turning a profit on a month-by-month basis and I believe, although I don't have insight into all their books, that have actually turned the corner and are now having a revenue stream that is supporting them. That is the easy one, I also heard some stories that that might happen.
In terms of the Fortune 500, I have been surprised at what I have been seeing that the interest is one, far more than I anticipated, and two, coming from a slightly different way. These are firms that are interested in the services that crowdsourcing provides. They are less concerned with how they're provided. If they could figure some way of doing it without crowds they wouldn't. But, they have seen some of the benefits of this and we're now starting to see a large number of them talking about crowdsourcing activities that they're engaged in or services that they're interested in acquiring. So, I'm quite pleased and quite surprised at how firmly large enterprises are starting to engage crowdsourcing.
Mack: You say a lot of these enterprises don't seem interested in how the labor is done. They just want it done. What is the motivation there, then? Is it cost cutting or what?
Grier: Well, it's cost cutting but it's also services that they can't easily do in other ways. The crowd is in effect pulling together the intelligence of large numbers of people to do tasks that are difficult, that require certain detail or certain kinds of judgments that just aren't easily doable in any scalable way or any cost-effective way with any other mechanism. That's what I see that's happening.
The second side of it though is I think enterprises, more than some of the crowdsourcing firms, have grasped the fact that crowdsourcing has a lot in common with market research, mass marketing and activities like that. Because of that they have an innate grasp that sometimes the crowdsourcing firms miss. You not only get labor from the crowd, you also get a knowledge of the crowd, and the crowd may be consumers or producers, but you want to know about them.
Mack: You think in the past several months that the Fortune 500 has begin to catch on to that fact?
Grier: Yeah, it's not all departments within all companies. But I've seen a number of the crowdsourcing firms who have now steady contact and steady inquiries from Fortune 500 or Fortune 1000 firms that have been called back multiple times to pitch services or ideas to them. And a couple firms that have, as far as I can tell, some substantial contracts from the enterprise world.
The piece that I have been following very closely in the last year are some of the challenges of getting crowdsourcing processes to work. You have things like CrowdFlower or Trada or some of the big firms that have a lot of experience now and know what it takes to make their processes work. But we now have a lot of smaller firms that are starting to develop on their own and also beginning to realize that you don't just put up a website and invite the crowd down. It requires a lot of thinking and planning and organizing.
The parallel that I've been working on for my talk is that when we start to expand to retail, one of the technologies that helped push that forward was the cash register, but you just didn't buy a cash register and say to your employees, "here it is, this will help us keep track of our revenue." You had to train them and think about who had the rights among your employees to put money in the cash register, you had to think about how it fit into your accounting system, you had to think of what you did to balance things to make sure that you were on top of your cash flow. And I think we've begun to identify some of those problems in crowdsourcing, some of those issues. And beginning also to see more clearly how they affect the worker, and what the worker can expect in terms of greater freedom to work, greater ability to move and shift and choose jobs that appeal to them and get the most out of their potential. And at the same time, address the issues that employers have, which are making sure the work is done right, making sure that their organization is whole and its integrity is not challenged. Making sure that the goals of these organizations are well identified and being followed by the crowd.
Mack: It seems to me that what I hear over and over again is that crowdsourcing is moving towards being able to complete more custom tasks, moving into more niche areas of micro tasks or what have you. Do you have any insight into what model can succeed at expanding into bigger enterprises while at the same time working on more and more specific tasks, if that makes sense?
Grier: It's the trade off. You're identifying small markets and being able to provide a crowd that can do it. And that's where there's a lot of opportunity for growth. Yet at the same time you've got corporations that want stability, that have big problems and want to make sure that those needs are met. You know this is a management problem, like you have with all labor. Management problems, that of putting together the general concepts that work and what you need to do it. There's some technologies that are clearly coming on line that are helping. Some of the predictive analytics and some of the other tools that help you understand how the crowd works on tasks and how they engage it and how you can from this see who is doing well and who is not supporting the activity.
On the other side, though, you're seeing companies that now better understand how to use these services and how to bring them into their production processes. I've had several conversations with managers who first looked at these as Facebook for companies, you weren't sure what you did with it but it seemed flashy. Now they see some value in it, who have then moved to the next step of realizing that it requires them to rethink their labor processes and restructure them in a way that makes use of the kinds of judgments that the crowd can offer you rather than just following the old way and separating a piece of a traditional activity for a crowdsourced activity.
Crowdsourcing's flexibility really requires you to go and look at the big industrial processes that any company does and ask yourself, is this the right way to divide labor? Is this the right way to set up the process? And in many cases the advantage you get is cost saving, but increasingly they're seeing that it's the flexibility that you gain. The ability to respond to other markets, to other business needs, and that that is the great advantage underlying all of this.
Mack: So if I were really smart, I would set up a firm that crowdsources the analysis of all the data of how the crowd works?
Mack: That's getting pretty meta.
Grier: It's getting meta, but it also, I think, shows the change. It's the change of managing processes and having one more very creative, very flexible former process that you can put into it. Forty years ago, we thought every time you bought a computer you had to repair the software for it. And as the software industry started to dawn, a couple of things changed, and they were both subtle and profound. One was we had had a shortage of programmers and now you can advertise programmers across many, many companies because many companies would use your software. But also the shift came from managing programmers and machines, to managing programs ans users. And that was a very profound shift and it has produced the world of IT and the world that we're all very familiar with today. But that was invented only in the 70's and it was invented by trial and error, by people looking at these things and saying, "Software? Why do I have to manage it? Why do I have to train people? I'd have to devise systems around it?" We know the answers to these questions now. Forty years ago we didn't. How do we fit crowds into the enterprise? We have some ideas, we have a lot more ideas than we had two years ago. We are still at that point where we are learning and we are trying to make these things work and work well. The promises are there, the lessons are still being learned all the time.
Mack: I know another thing that you're keeping an eye on as we're living through this paradigm shift that you just described is treatment and quality of life for the workers that are performing this work. Tell me where we're at with that.
Grier: Not as far along as I would like. I think the leadership of the industry right now is very aware of the issue and we've seen several big companies in setting their companies and working out how they're going to work with the crowd really doing the right thing and making sure that the crowd has rights, that they have a transparent process, that they have rights of appeal, and they're cared for. I think the industry is vulnerable to one bad company coming in and making a mess of things and generating a lot of PR. And I think that over the long haul as this gets bigger some of these companies will have greater challenges in doing that. It's easy to manage a crowd that's relatively small and you only have to deploy a certain number of managers. And that the industry will be well served by making sure that they have a statement of policy and principles that they abide by by having at least a modest certification program where companies can say, I follow the standard "Worker's Rights for Crowdsourcing.' And I think that that will help them in the long run. We aren't as far along on that as we would like.
Mack: Finally, a year ago we asked you for a prediction to wind up the interview, and last year you were more than dead on, so let's do it again. Where are we going to be in twelve months do you think?
Grier: Where we're going to be in 12 months. I think we're going to see some of the mystery stripped away from crowdsourcing. And people really beginning to understand it as part of the work of the future and part of the company of the future. And that that understanding will spread well into the enterprise and into business schools as they begin to really appreciate it. I think we will have a much better understanding of its connection to mass marketing, mass distribution, the mass activity that we now understand so well in business schools and understand the various techniques that we can use to provide a good environment for the crowd to make them work well, to make good things come out of their labor and make that labor spread throughout the business community of the US and the world.
Mack: All right, great. Let's hope so. David Allen Grier, thanks so much for speaking with me.
Grier: Thank you very much.