I think it all started with American Idol, or not. Bruce Houghton’s article, A Graphic Look At Crowdsourcing, labelled a movement that I have been watching for a while. I have watched companies tap into the masses to develop a product, or judge which product is best. Either way, the company is not employing inside employees or independent contractors to make the decision.
American Idol outsourced their final judging. Oh yes, Simon used to get his licks in when he was judge, but ultimately, the viewers determined who their favorite idol was going to be. The best part was the viewer (or the outsourced judge) was also the consumer of the music product.
Crowdsourcing, ( as in “Crowd Outsourcing”) has been around for a while. Such companies as Amazon.com (mechanical turk competition) and Netflix (algorithm competition) have used it successfully. These companies launched a proposal to the world to develop something for them in a contest manner. The winner was significantly compensated.
The article speaks of the objective benefits and deteriments. But, can the average business person use it, even if the outsourcing is a success? Take a look at these factors?
- Does your business lack the resources and/or talent to develop a major new concept or product?
- Do you have a strategy that is within your budget to solicit “the crowd” through such means as social networking?
- Can you offer something of value to the winner of your outsource?
- Do you have a close horizon so that your winning solution will not be old technology, or old fashion by time it is released?
- Do you have the internal infrastructure to launch this new product or service?
Let’s take an example. Let’s say you are a tile manufacturer and you want to create an app that Ipad users can design their own tile within your factory. You want the app to tie into your production and distribution processes, and be delivered anywhere in the world within 7-14 business days. You offer all sorts of tools and colors and the option to make only one sample for early approval. Let’s go through the questions:
- Does your business lack the resources and/or talent to develop a major new concept or product? YES. YOU ARE A MANUFACTURER, NOT A PROGRAMMER AND ENGINEER.
- Do you have a strategy that is within your budget to solicit “the crowd” through such means as social networking? WELL, YOU CAN EXPAND YOUR REACH, BUT RIGHT NOW IT IS WORD OF MOUTH AND SALESREP. THIS STRATEGY MUST BE OPERATIONAL PRIOR TO THE OUTSOURCING.
- Can you offer something of value to the winner of your outsource? FREE TILE WON’T WORK. IT HAS TO BE CASH, OR MAYBE A COMBINATION.
- Do you have a close horizon so that your winning solution will not be old technology, or old fashion by time it is released? IF TECHOLOLGY CHANGES EVERY EIGHT MONTHS, YOU MUST DO YOUR DUE DILIGENCE TO MAKE SURE NOTHING IS BEING DEVELOPED BY ANOTHER.
- Do you have the internal infrastructure to launch this new product or service? BIG QUESTION. IF YOU DON’T HAVE THE RESOURCES TO TIE YOUR WHOLE SUPPLY CHAIN TOGETHER TO MEET THE 7-14 BUSINESS DAY TURNAROUND, THEN YOU HAVE TO DEVELOP THAT FIRST AND TEST IT ON A SMALLER, LESS COSTLY PROJECT.
So, you can see, Crowdsourcing may lure you into, what seems like, an easy solution, but if the other aspects are not in place, it can ruin your core company processes.