In
1907, the eminent British scientist Francis Galton traveled to the town of
Plymouth for the annual fat stock and poultry exhibition. There he encountered
a contest under way in which people could guess the weight of an ox for six
pence.
About
800 people entered the contest, and with his expertise in statistics, Galton
decided to find out what the average guess had been. While most people who
entered were way off the mark, the average guess of the ox’s weight
after being butchered was 1,197 pounds.
As
recounted in James Surowiecki’s landmark book The Wisdom of Crowds,1 the actual weight of the meat was
1,198 pounds.
This
phenomenon, in which the crowd turns out to be much smarter than any individual
within it, has been raised to the level of gospel in today’s business world,
and goes under the name of crowdsourcing.
Likewise,
when combined with modern technology for communicating and aggregating what
people know or think they know, it has become a powerful tool of business. To
underscore this new reality, Time magazine’s choice for its Person of
the Year for 2006 was “You.”
Crowdsourcing
is now being used for everything from forecasting elections to designing
advertising campaigns to designing new products and even solving tricky R&D
problems.
Netflix,
Eli Lilly, and DuPont, just to name a few, all have crowdsourcing initiatives
under way. In one spectacular example of the power of crowdsourcing, the Guardian newspaper loaded 2 million pages of investigative documents onto its Web site
and asked people to sort through them to see if members of Parliament were
cheating on their expense accounts.
Guardian readers sorted through 170,000 documents
in the first 80 hours, with an astonishing 56 percent of visitors to the site
participating. The resulting findings created an international scandal that
was reported on virtually every news source.
Three
essential conditions are necessary to make crowdsourcing work:
- Diversity
- Aggregation
- Incentive
Let’s
take a closer look at these three conditions.
First,
the crowd must be diverse in its thinking. Markets are good at
...
