Harnessing the power of consumers through social media to share problems and find solutions is revolutionising the way businesses find new ideas, engage with their customers and secure investment. Vision reports on the future of a crowdsourced world
First defined in 2006 by journalist Jeff Howe, crowdsourcing essentially takes a job traditionally performed by a small number of people and outsources it via an open call to a larger group. At the smallest level, it has the power to liberate new businesses by connecting them with an unlimited supply of fresh ideas and untapped investment; at the other end of the scale, it can help people band together to create social initiatives that can change millions of people’s lives. The word may be new, but the principle is not.
The act of outsourcing a problem to a wider circle of people can be traced back 300 years. In 1714, the British government offered a £20,000 prize to anyone who could provide a solution to “the longitude problem”. Thousands of sailors were dying each year because they did not know the longitude they were travelling on and were unable to navigate safely. Many thought the problem was unsolvable, but the unlikely winner came in the form of John Harrison, a carpenter’s son with no formal education, who invented the marine chronometer, an innovation that later enabled Captain Cook to successfully undertake a three-year voyage around the southern Pacific.
These days the power of crowdsourcing is being used to save lives on a far grander scale. The Hult Prize claims to be the biggest crowdsourcing initiative in the world dedicated to solving social challenges, inviting students to develop solutions to problems in education, housing and energy. This year, the prize was won by an international team of students from NYU Abu Dhabi, who devised a scheme to provide solar lighting to one million homes in Africa by 2013. Their prize was a share of a US$1m cash grant that will go towards implementing their idea.
Crowdsourcing has also been put to good commercial use within the fashion industry. Eric Koger and Susan Gregg Koger founded online clothing retailer ModCloth.com in 2002. Their aim when starting the company was simple: democratise fashion by allowing consumers to design and vote on which products they made. ModCloth’s ‘Make the Cut Crowdsourced Design Competition’ held in November 2011 led to more than 1,900 submissions, with seven winning designers receiving US$500 for each piece selected to be put into production.
It is not just boutique companies that are dabbling in this new vogue for crowdsourcing. In 2011, Volkswagen launched its ‘People’s Car Project’ in China calling for consumers’ dream designs and saw an enormous response. Thirty-three million people visited the website and the project received more than 119,000 ideas for new cars. Three winning designs, which included a magnetic hover car, were turned into computer-generated concept cars displayed at Auto China 2012. Luca de Meo, Volkswagen’s Director of Marketing, describes this as “the beginning of a new era in automobile design”.
“We are no longer just building cars for but also with customers, and at the same time initiating a national dialogue, which gives us a deep insight into the design preferences, needs and requirements of Chinese customers,” De Meo adds.
Crowdsourcing can be a method of collecting cash as well as information. Businesses and individuals are asking the public to fund their enterprises through websites such as Kickstarter.com and Indiegogo.com, which offer a platform for individuals to showcase product concepts. It is an ideal solution for entrepreneurs struggling to finance their business through traditional methods. Founded in 2008, Kickstarter was named one of the best inventions of 2010 and one of the best websites of 2011 by Time. As of 18 July 2012, completed successful projects had raised US$241m.
Ahmad Zahran, owner of Dubai-based startup Infinitec, used Kickstarter to raise more than US$500,000 for his Pocket TV invention (a USB-sized device that can turn any TV into a giant computer) after failing to attract investors elsewhere. He is now in talks to distribute the product globally.
The real benefit for all parties may lie in connecting crowdsourcing and crowd funding, creating a system that rewards everyone. Dubai-based company Eureeca.com aims to do just that with the “first global crowd-investing marketplace”.
Launched in July 2012, and still in the beta phase, the website offers investors the opportunity to earn equity in a business for as little as US$100, but the relationship between investor and business does not have to end at finance. “Eureeca is much more than a platform for crowd investing: we are creating an ecosystem of experts and service providers who can support every step of an entrepreneur’s journey,” says Managing Director Sam Quawasmi.
The potential of crowdsourcing appears to be almost limitless. It is even being tested as a way to catch international criminals. In a recent experiment, the US State Department challenged groups of academics from all over the world to catch a make-believe gang of diamond thieves through social media alone, and the competition was won by a team from Abu Dhabi’s Masdar Institute. Their success came from offering financial rewards to those they recruited around the world to be their eyes and ears.
“It’s all very well having people on social media tweeting messages, but to get them to actually work for a specific goal, financial incentives are the best way,” explains Dr Iyad Rahwan, the leader of Team Crowdscanner and Associate Professor of Computing and Information Science at the institute.
Four days into the search for the criminals, Team Crowdscanner were announced as the champions, having tracked down three of the five suspects. “We were thrilled to have found that many,” says Dr Victor Naroditskiy, a Crowdscanner member from the UK’s University of Southampton. But none of the teams that took part in the manhunt successfully caught all five, prompting Steve Miller, a co-organiser of the challenge, to admit there may be limits to what social media can help people accomplish in time-critical situations.
Nevertheless, Dr Rahwan remains committed to researching how to use the crowd in real-world, time-critical scenarios. “With the right set of tools, unthinkable information-gathering tasks can be accomplished in a timely manner.”
Read the full Vision Magazine article.