Point: Crowdsourcing is maturing beyond its amateur-content and open innovation origins toward core business processes.

Story:

In the beginning, companies used crowdsourcing as part of their open innovation efforts to get new ideas from lead users, customers, and the world at large.  But now, entrepreneurial companies such as Trada and CloudCrowd are moving beyond one-off design efforts and contests (e.g., the Netflix Prize) to encompass routine everyday business processes.  As CloudCrowd CEO Alex Edelstein sees it, “similar to the way Henry Ford’s early assembly lines created a new, more efficient way to complete work, we’ve designed an online process that delivers accurate finished work for even complex projects at a significant savings.”  Let’s look at these two examples.

First, Trada Inc., which recently emerged from stealth mode private beta, offers crowds of pay-per-click experts who create paid-search marketing campaigns.  Each vetted crowd member generates his/her own keywords, ad copy, and deep links to attract prospective pay-per-click customers to the client site.  The result is a much broader span of keywords with less chance of overpaying for over-used common keywords.  By giving access to the long tail of keywords, Trada executes campaigns at lower cost and with greater success than do traditional agencies with in-house employees.

Second, CloudCrowd has 18,000 registered workers who participate in its Labor-as-a-Service business. CloudCrowd’s project managers begin by breaking down a complex task into hundreds or thousands of smaller tasks. These tasks are then passed on to Cloudcrowd’s registered workers. CloudCrowd speeds delivery time and lowers costs in a wide range of BPO (Business Process Outsourcing) applications.  Tasks that CloudCrowd has deconstructed include tracking the University of Southern California’s “lost alumni” and a wide range of web content creation tasks.

Both Trada and CloudCrowd eschew the winner-take-all model of contest-oriented crowdsourcing projects.  Instead, they offer well-defined incremental pay for incremental results.  In the case of Trada, an expert gets paid for each click-through of the ad that the expert created (Trada also offers pay-per-sale crowdsourced campaigns).  CloudCrowd gives its workers a pre-agreed payment for each unit of work they successfully complete.  In CloudCrowd’s case, a worker’s “success” is measured using a system of escalating peer reviews that are also crowdsourced.

Both Trada and CloudCrowd create carefully-cultivated crowds — more like reliable workforces than mobs of transient volunteers of dubious quality.  Trada uses online testing and verified identities to ensure that its experts are really experts.  CloudCrowd assesses each worker’s percentage of correctly-completed tasks to compute a Credibility Rating.  Highly-rated workers gain access to higher-level, higher-paying tasks.

Action

• Evaluate which business processes might benefit from on-going outside expertise or labor
• Create clear tasks and clear rewards
• Create processes to vet or rate prospective crowd members on expertise or quality
• Use the crowd to monitor the crowd

Sources:

Personal interviews with Niel Robertson, CEO, Trada http://trada.com/

and Cloudcrowd (via email) http://www.CloudCrowd.com/

Point: You may not be able to predict the future, but you can prepare for it by tracking early trends and staying open to disruptions.

Story: What will the web look like in 20 years? Stuart Miniman of the Office of the CTO at EMC Corporation asked me to contribute my thoughts on this, as part of EMC’s ON magazine celebration of the web’s 20th anniversary.

My predictions for 2030? I know that I don’t know, but I do follow some heuristics that are helpful regardless of which future materializes.

“You can’t predict the future,” said Google’s Eric Schmidt back in 1993 when he was president of Sun Technology Enterprises (a subsidiary of Sun Microsystems). “But you can estimate it.  Your estimations are based on understanding the model of technology.”  Schmidt’s mental model of technology involves looking at underlying drivers and expecting innovation from anywhere. “Don’t think your company is the best and will be the first to come with an innovation in your area.  That attitude will lead you to become blindsided.”

With that in mind, here are two trends I’ll be watching closely for emerging innovations:
* Geo-Spatial Data and Semantic Smarts

Consider these facts by Jeff Jonas, IBM Distinguished Engineer and Chief Scientist, Entity Analytic Solutions, IBM Software Group:

Mobile devices in America are generating something like 600 billion geo-spatially tagged transactions per day. Every call, text message, email and data transfer handled by your mobile device creates a transaction with your space-time coordinate, whether you have GPS or not. Every few minutes, it sends a heartbeat, creating a transaction whether you are using the phone or not.

The implications? Companies can use data analytics to learn unprecedented amounts of information on their customers (how far they travel, locations where they hang out, the people they hang out with). It may sound like big brother, but some consumers are already turning this into a big game and social lifestyle with the help of companies like Foursquare, Loopt, Brightkite, etc. There’ll be opportunities for companies to use this data combined with web-based data to serve their customers better.

With every device and service gathering more and more data and becoming more connected, systems will begin to “understand” the meaning of the data to give people what they want.  I don’t know if real AI will ever happen, but with all the available data, social tools, and clever people building clever companies, it seems that devices are going to act like they know the meaning behind the data and and take or suggestion actions to help you. For example, if your cellphone knows your calendar’s next appointment, your location, and gets the Tweets about the traffic jam on the highway, it can alert you to leave a little earlier or alert whomever you’re meeting that you’ll be late.

* Social/Distributed Decision-Making

Knowledge-intensive tasks such new product and service development will be aided by enterprise-wide collaboration systems with built-in voting, reputation systems, and predictive markets.  These concepts were envisioned by MIT Prof. Thomas W. Malone before the Web as we know it even existed. His publications, such as Computers, Networks and the Corporation, describe the organizational changes that networked computers would bring.

Tom Malone now heads the Center for Collective Intelligence at MIT. The center’s basic research question is:  How can people and computers be connected so that—collectively—they act more intelligently than any individuals, groups, or computers have ever done before?

I think one of the most powerful uses of the web in the future is for crowdsourcing and open innovation to tackle some of the world’s biggest problems.  Take, for example, that Innocentive just announced a GlobalGiveback Innovation Challenge Set to help solve some of the world’s water problems through open innovation. Other crowdsourcing platforms like ideas4all.com are enabling entrepreneurs to suggest product, service and business ideas to win funding.  The web will enable collaboration on a global scale that will let us marshal our creative energies to tackle global issues.

What do you think?

And, yes, whatever the future brings, there’ll be an app for that.

Action

• Look for things that are becoming ubiquitous but aren’t being used as much as they could be.
• Avoid self-centered attitudes about the future. Just because you don’t want to be tracked doesn’t mean others don’t want to be tracked or that someone won’t create a fun and rewarding reason to change your mind about tracking.
• Look for chocolate+peanut-butter combinations like geo-spatial data + semantics.
• Test out some crowdsourcing platforms (ideas4all.com is public and ongoing) to get a feel for how they work. Consider how you could apply them.

Sources:

EMC’s ON magazine: The Web at Twenty

Jeff Jonas: Your Movements Speak for Themselves

Eric Schmidt at the University of Colorado-Boulder, February 9, 1993

Point: Open innovation makes developing niche products and services affordable

Story:Tesco.com, the world’s largest online grocery retailer, is opening its API to third-party developers. Developers get access to Tesco’s powerful grocery engine to design apps for specialized purposes. For example, a developer could design an app for customers who have an allergy to peanuts. The app would display only those Tesco grocery items that are free of any peanuts. Likewise, another app could focus on calorie counting: customers could order just the right amount of food to stay within the calorie, carb, and fat limits of their chosen diet.

The Open Innovation strategy is a win/win: Tesco doesn’t have time to develop and support all these apps internally, so it benefits from the skills of external developers. The developers might have special relationships with particular customer segments (e.g., a tie to allergist or being the author of a best-selling diet books).  External developers get compensated (currently 5 pounds) for each new customer who signs on to Tesco.com, and they receive a micropayment for each purchase made that used the app.

The biggest hurdle Tesco executives had to overcome before opening up to external developers was “allowing someone to be between us and the customer,” said Nick Lansley, head of Tesco.com. “This is an issue. But what convinced us is that we don’t have the time or resources to write for all these different websites, but others do.”  Tesco requires that developers must support the app and they can’t use “Tesco” in the title, only “powered by the Tesco API.”  To further convince developers that the initiative is real, Tesco stated that they will maintain the API for at least two years.

Action:

1. Define a reusable interface that lets software developers bundle or use your systems to meet new needs
2. Create a mutually-beneficial compensation plan to both attract developers and to encourage developers to attract customers
3. Pledge to support the API

For Further Information:

http://www.vimeo.com/7738321