2,526 crowdsourcing and crowdfunding sites
The term crowdsourcing is in fashion. It is being used to describe pretty much everything under the sun today. Unfortunately, the word crowdsourcing is also getting increasingly associated with "getting things done for free," or at least at ultra-cheap prices.
A few weeks ago, I was attending the NSF Workshop on Social Networks and Mobility in the Cloud. There, I ran into the NIST definition of cloud computing (PDF).
After reading it, I felt that it would be a nice exercise to transform the definition into something similar for the dual area of "cloud labor" (a.k.a. crowdsourcing).
Can the lack of a public reputation system on Amazon Mechanical Turk be the reason behind the success of current crowdsourcing companies? My analysis points to this conclusion. Unfortunately, this "feature" also leads to a stagnating crowdsourcing market with limited growth potential.
A contentious issue about crowdsourcing, and specifically about Amazon Mechanical Turk, is that wages are very low. It is not uncommon to see effective wages of $1/hr, or even lower. Why is that? I have argued in the past that Mechanical Turk is an example of a ‘market for lemons’ — good workers are drowning in the anonymity of the crowd. Since the good workers cannot differentiate themselves from bad workers before working on a task, they are doomed to receive the same level of compensation as the bad workers.
Last week, Newsweek published an article titled The Real Minimum Wage. The results "showed" that Americans are the ones willing to accept the lowest possible salary for working on a task. The conclusion of the article? Americans are more desperate than anyone else in the world. What is the key problem of this study? There are many more US-based workers on Mechanical Turk compared to other nationalities. So, if you have a handful of workers from other countries, and hundreds of workers from the US, you are guaranteed to find more extreme findings for the US. Why? To put it simply, you are searching harder within the US to find small values, compared to the effort placed on other countries.
I recall a highly talked about presentation (although highly unconventional) by M. Six Silberman whereby he discussed the "Sellers' problems in human computation markets". The basic question: can we protect the workers there from exploitation and from sweatshop salaries? Luis von Ahn posted a similar post on his blog. In the comments of the blog post, someone suggested that the low wages on Mechanical Turk is simply the result of high supply of workers and low demand for their work however I argue that what Amazon Mechanical Turk is today is a market for lemons, following the terminology of Akerlof's famous paper, for which he got the 2001 Nobel prize.