Crowdsourcing: A Million Heads is Better than One - ReadWriteWeb

Crowdsourcing can be looked at as an application of the wisdom of crowds concept, in which the knowledge and talents of a group of people is leveraged to create content and solve problems. The official definition from the term’s originator, Jeff Howe, is "the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call."

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Crowdsourcing can be broken down in to three categories: 

1. creation (like Wikipedia);
2. prediction (like Yahoo! Buzz); and 
3. organization (like Google). 

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fund, which now has $44 million in assets, has outperformed the S&P 500 Index (generally considered a good gauge of the U.S. equities market) and has an average annual return of 11.4% since its inception. However it has managed just a 2-star rating from Morningstar. That equates to an above average risk and a below average return, according to the Morningstar rating system.

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Crowds should operate within constraints. To harness the collective intelligence of crowds, there need to be rules in place to maintain order.

Not everything can be democratic. Sometimes a decision needs to be made, and having a core team (or single person) make the ultimate decision can provide the guidance necessary to get things done and prevent crazy ideas and groupthink from wreaking havoc on your product.

Crowds must retain their individuality. Encourage your group to disagree, and try not to let any members of the group disproportionately influence the rest.

Crowds are better at vetting content than creating it. It is important to note that in most of the above projects, the group merely votes on the final product; they do not actually create it (even at Cambrian House, where the group collaborates to create the product, individuals are still creating each piece on their own and the group votes on whose implementation of an idea is best).

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The wisdom of crowds is all around us these days. Wikipedia is one of the best known examples of the concept at work. Thousands of Wikipedia users have created an encyclopedia that studies have shown is as accurate as traditional volumes like Britannica. Another well-known project is the Yahoo! Buzz Game, which is a prediction market for "high-tech products, concepts, and trends." Their memetracker market, for example, has predicted the state of the market in line with Alexa data. Note: Read/WriteWeb covered a Yahoo! event about prediction markets here.

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Crowdsourcing can be broken down in to three categories: 

1. creation (like Wikipedia);
2. prediction (like Yahoo! Buzz); and 
3. organization (like Google). 

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At Cambrian House, people submit ideas for software products and then vote on which ideas are the best, commenting on changes or improvements they would like to see made. Development of the most popular ideas is then sourced to members of the community, who earn "royalty points" that determines how much each contributor makes. Cambrian House can be looked at as a commercial spin on the classic site, halfbakery.

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Although Cambrian House crowdsources the conception and creation of its web products, ideas are subject to editorial review by a core team and actual production is subject to a set of quality guidelines. In the case of conflicting code or design contributions, the community decides which is the best.

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One potential flaw in the model is that responsibility for support for the resulting products will fall to the community. While online forums have often given me the answer to computer problems, many consumers might balk at the lack of a reliable, trained tech support department (though that actually might be an oxymoron).

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One potential flaw in the model is that responsibility for support for the resulting products will fall to the community. While online forums have often given me the answer to computer problems, many consumers might balk at the lack of a reliable, trained tech support department (though that actually might be an oxymoron).

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Other projects in this category: A Swarm of Angels (creating a movie), AMillionPenguins (creating a novel), We Are Smarter Than Me (creating a business book)

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Marketocracy was launched in 2000 with the goal of finding the best investors and tapping their collective knowledge to create a superior mutual fund. Anyone can sign up for free and run a virtual fund, starting with $1 million. The site has attracted over 60,000 users to date. In November 2001 the company launched the Masters 100 Index, a real mutual fund based on the virtual investments of its 100 most successful members (as determined by a computer ranking).

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digg is not only a poster-child for Web 2.0 success, it is also an excellent example of using the wisdom of crowds to organize and highlight information. digg's concept is simple: users submit links to websites, articles, news stories, photos, or videos, and other users vote on whether they are worth checking out. Depending on how many people, who, and how quickly links are "dugg" they may be promoted to the main page as a worthy link of the day.

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StumbleUpon is a browser plugin for Firefox and Internet Explorer that allows users to rate and share web pages. The plugin is very straightforward: users vote thumbs up or thumbs down on pages and are served random pages based on their previous picks, specified topic areas of interest, and the picks of other like-minded users. The idea is that the sites with the most thumbs up votes, will be the most relevant. Further, users are fed sites that were voted up by others who share a similar vote history - i.e. the more you use StumbleUpon, the more it learns about what you like and the better recommendations it gives to everyone.

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I would be remiss not to mention Kathy Sierra’s widely read blog post "The Dumbness of Crowds." In it, Sierra argues that there is more to harnessing collective intelligence than just letting a group of people run wild with an idea. It is true that crowds are susceptible to "mania" - in which a less-than-stellar idea catches on and becomes popular. This is a well-documented and very old concept. One of my favorite books, "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay, was first published in 1841 and documents various manias of the 17th and 18th century in which decidedly bad ideas became all the rage.

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ollowing rules to help assure success in tapping the wisdom of crowds:

1. Crowds should operate within constraints. To harness the collective intelligence of crowds, there need to be rules in place to maintain order.
2. Not everything can be democratic. Sometimes a decision needs to be made, and having a core team (or single person) make the ultimate decision can provide the guidance necessary to get things done and prevent crazy ideas and groupthink from wreaking havoc on your product.
3. Crowds must retain their individuality. Encourage your group to disagree, and try not to let any members of the group disproportionately influence the rest.
4. Crowds are better at vetting content than creating it. It is important to note that in most of the above projects, the group merely votes on the final product; they do not actually create it (even at Cambrian House, where the group collaborates to create the product, individuals are still creating each piece on their own and the group votes on whose implementation of an idea is best).

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rules to help assure success in tapping the wisdom of crowds:

1. Crowds should operate within constraints. To harness the collective intelligence of crowds, there need to be rules in place to maintain order.
2. Not everything can be democratic. Sometimes a decision needs to be made, and having a core team (or single person) make the ultimate decision can provide the guidance necessary to get things done and prevent crazy ideas and groupthink from wreaking havoc on your product.
3. Crowds must retain their individuality. Encourage your group to disagree, and try not to let any members of the group disproportionately influence the rest.
4. Crowds are better at vetting content than creating it. It is important to note that in most of the above projects, the group merely votes on the final product; they do not actually create it (even at Cambrian House, where the group collaborates to create the product, individuals are still creating each piece on their own and the group votes on whose implementation of an idea is best).

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Crowds should operate within constraints. To harness the collective intelligence of crowds, there need to be rules in place to maintain order.

Not everything can be democratic. Sometimes a decision needs to be made, and having a core team (or single person) make the ultimate decision can provide the guidance necessary to get things done and prevent crazy ideas and groupthink from wreaking havoc on your product.

Crowds must retain their individuality. Encourage your group to disagree, and try not to let any members of the group disproportionately influence the rest.

Crowds are better at vetting content than creating it. It is important to note that in most of the above projects, the group merely votes on the final product; they do not actually create it (even at Cambrian House, where the group collaborates to create the product, individuals are still creating each piece on their own and the group votes on whose implementation of an idea is best).

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An excellent companion to The Wisdom of Crowds is Howard Rheingold's 'Smart Mobs' -- focusing more on the mobile revolution. A must-read -- Japan (ok Korea as well) and Finland are so ahead of the rest of the world that his revolutionary stuff from 2002 is still yet to crash on the shores of other countries.

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This fine article makes me think of - surprise! - some alt search engines. I would call some of these Prediction \ Recommendation Engines; they predict what books, songs, or movies you might like and recommend them to you: Amazon, Gnod {Music-Map and Live Plasma}, and What to Rent.
As far as Organization or Social Search Engines, there is Sproose, Yoople!, url.com, Ujiko, and VMGO. Finally, I would make my standard pitch for ChaCha: Yahoo! Answers and MSN's Live QnA "let the world answer" with, how shall I put it, "varied results." Here is a recent question on Yahoo! Answers: "My 4 week old puppy just bit me. Should it be put to sleep?" The result of the "answers" is currently a tie. Poor puppy! Google Answers, which charged money for "Expert" Answers, is no more. But when you ask a ChaCha guide a question, you get help finding the answer from a trained guide.

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Prosper.com, which allows you to crowdsource a loan.

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Sodahead (www.sodahead.com) - startup out of MySpace. The founder says in a recent interview: "Here, when someone votes, someone leaves a comment, or says something--should I pay attention to this person?...Should I go look at some experts, or just the wisdom of the crowds? James Surowiecki always talks about how the masses are right more often that the experts are."

Lijit Networks (www.lijit.com) - browser extensions that use "wisdom of crowds" to determine how safe web sites and software is.

Megabuzz (www.megabuzz.com) - uses "wisdom of crowds" in combination with contests to answer questions and polls. Founders out of Expedia.

Storage Markets (www.storagemarkets.com) - uses "wisdom of crowds" in a prediction marketplace for the storage industry. Based on the Hollywood Stock Exchange.

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