Crowdsourcing: Good or Bad?
July 11, 2006 by Mark Evans
Filed under Business
I was listening to a segment on CBC radio this morning about crowdsourcing, a term apparently coined by Wired Magazine writer Jeff Howe in a recent feature story. Crowdsourcing is based on the idea that companies can slash expenses by sourcing content, ideas, feedback, etc. from everyone and everywhere rather than just relying on internal resources. Some of the people who come up with these external ideas, etc. are compensated while much of it is garnered for free. One of the companies cited during the CBC interview is Calgary-based iStockPhoto.com, which provides a way for amateur and professional photographers to make a few bucks from selling their work online. It was particularly interesting to hear from a New York-based stock photographer who talked about crowdsourcing sites such as iStockPhoto are caused stock photo prices to crumble in recent years. The photographer talked about a trend called crowd-dumping in which many people selling their photos online are willing to do so at very low prices – because even a $1 or so is more than they were getting before sites such as iStockPhoto came along. To me, this is as interesting than crowdsourcing because it puts the spotlight on supply and demand, as well as whether people are still willing to pay for quality. For more on crowdsourcing, check out Crowdsourcing.com.
I love the idea of crowd-sourcing. I think we will continue to see this trend occur on the net for years to come.
In the case of iStockPhoto, they are essentially playing along with the idea of democratization (i.e. giving the power back to the people rather than the corporate entity). Profits and margins are squeezed at the top end, but created at the lower levels for the individual. This levels the playing field on the business side.
From a consumer perspective, it is a win-win situation as well. Prices drop, quality increases, and selection increases.
Crowd-sourcing is a great way for corporations to capitalize on low resources and build a great brand (ala Flickr, Wikipedia, to name a few other tech examples).
One of the realling interesting features of ‘Web 2.0′ is that it gives corporations unprecedented access to their customers interacting with eachother, free of charge. A friend of mine works for a large PC manufacturer and mentioned how they are now actively monitoring appropriate social networks for ideas, suggestions, and complaints on their product. In the past this would have been costly, and would have required the company to build their own feedback group.
This is really a huge resource for companies, should they choose to use it.
Another interesting Canadian venture in crowdsourcing is cambrianhouse.com … Jeff Howe mentions it on his site crowsourcing.com Cambrian is taking the iStock approach to building Web apps. They call it “open source with money”…
Shazzz