Product life cycles have shortened 400% over the last 50 years, pushing companies to innovate.  95% of new consumer products fail each year, resulting in businesses wasting 46% of resources devoted to innovation.  Companies with successful product and service offerings share a common characteristic: They converse and collaborate with their consumers.
Crowdsourcing* is an increasingly popular way for companies to engage with consumers. Merriam-Webster defines crowdsourcing as "the practice of obtaining needed services, ideas, or content by soliciting contributions from a larger group of people and especially from the online community rather than from traditional employees or suppliers."  
Many projects would benefit from crowdsourcing,* but there are others that are best done in-house or with suppliers and partners.  In the next few slides, we share an approach to quickly determine...
  • types of projects that benefit from crowd sourcing
  • ways to get people to participate
  • whether to set up collaborative or non-collaborative contributions
  • the process for deciding project outcomes (e.g., voting, analyses)
Crowdsourcing creates value by synthesizing collective insights from your target consumers.  Making predictions, generating ideas, and rating content are all practices which collectives may do better than your in-house experts or traditional partners.
Sources: Malone, T. W., Laubacher, R., and Dellarocas, C. N. (2010) The collective intelligence genome. MIT Sloan Management Review, 51(3), 21-31.
Stanoevska-Slabeva, K. (2011) Enabled innovation: Instruments and methods of internet-based collaborative innovation. Conference Draft, Oct. 25-27, 2011.
Crowdsourcing is most useful when consumer demand for your product--or the ways that consumers may use or value it--is unknown or fluid.  If you're manufacturing nails, consumer demand is clear.  However, if demand for your product or service could shift in relation to cultural trends or consumer goals, crowdsourcing your design and marketing would be helpful.  As tastes shift, crowdsourcing will maintain the enthusiasm of your existing customers and advance your brand with new audiences. 
  • Lego Cuusoo was started by Lego in 2008 to allow users to submit ideas for Lego products.
  • Pepsi launched a marketing campaign in early 2007 that allowed consumers to design the look of a Pepsi can. The winners would receive a $10,000 prize, and their artwork would be featured on Pepsi cans.
  • Moleskine is supported by worldwide communities of enthusiasts who write, sketch, and paint on Moleskine notebooks. These communities share images of decorated pages through social networking and alternative media sites (e.g., blogs, Youtube), influencing other creative people to join the group.  
Sources: Van Dijk, J. (2012). The role of ‘co-creation’ in product innovation and marketing. Insite Consulting.
Many crowdsourcing efforts fail because of low engagement.  There are 5 drivers of participation:  
  1. Perceived exclusivity:  People are more likely to participate if it affirms their status or increases their prestige.  For example, the site could offer membership to a select, high status group, with invites from respected group members.
  2. Publicity--sponsor an activity or event to showcase the project:  For example, Twitter went "viral" after it presented at the South by Southwest (SXSW) event where attendees were obliged to use it.
  3. Low transaction costs: Simply stated, people are more likely to contribute if the burden of participation ("cost of transaction") is low.  For example, Wikipedia has low costs for participation.  While one is able to make large contributions, one can participate by fixing something as simple as a comma. Contributions are anonymous, so the user isn't putting their reputation on the line.  Another example is Pinterest, which has attracted laggard adopters by making it effortless to bookmark images with their "Pin It" bookmarklet.
  4. Simple interface & well defined activities: An intuitive, simple UI design is crucial.  For example, Wikipedia's "low tech" user interface makes it clear how to contribute.
  5. Incentives--glory, learning, love, money:  Studies of Wikipedia and open source software (OSS) have shown that a mix of these incentives drive participation.  For example, a participant may be driven by the pursuit of glory and love ("love" can involve chances to socialize with a valued community or to contribute to a cherished cause).
  If you plan to appeal to these motivations, it is useful to...
Maintain transparency and openness
Establish trust with your brand
Engage with a group who strongly identifies with your brand's core values and what it represents
Sources: Gandjei, A. (2013). Essatory data analysis.  Malone, T. W., Laubacher, R., and Dellarocas, C. N. (2010) The collective intelligence genome, MIT Sloan Management Review, 51(3), 21-31.
Should you crowdsource to the general public and/or to a select group (e.g., experts, trendsetters)? It depends on your project.
  • The general public can communicate their tastes, experiences, and needs, and they can spread the word about your product.
  • Experts and trendsetters can contribute novel ideas and images that will help you to refine and position your product.  
​If your in-house experts offer much technical know-how, you may not need to crowdsource to outside experts.  However, it can be useful--especially in cases where cultural trends or innovative ideas are far-flung and rapidly changing--to crowdsource to experts/trendsetters beyond your organization. 
After you pick who should participate, you must determine whether their contributions should be collaborative or non-collaborative.  
  • If you just need to know personal ideas and experiences, then you'll need a platform that enables individual contributions.  
  • If you want your contributors to brainstorm or to influence each other, then you'll need a platform that supports collaborative contributions.   
​Ideally, your crowdsourcing platform should enable public/expert and collaborative/non-collaborative contributions.  For some projects, it can be useful to combine them.  For example, you could ask experts or trendsetters to lead brainstorming sessions with the general public.   
Source: Crowdsourcing: Hanging Out with All the Right People.  Big Idea: Social BusinessBlog   December 09, 2012   Robert Berkman
Your toolbox should enable you to design and market new products and services as well as to enhance existing offerings.  For both collaborative and non-collaborative projects, useful tools include
  • Aggregate multimedia content from social network sites such as Twitter and Facebook
  • Bookmarklet
  • Uploading
  • Collection for storing multimedia
  • Multimedia collage-making
  • Writing and editing functions
  • Capacity to publish items to external social media sites
  • Access control
  • Data collection & analysis tools
  • What-if-scenarios
  • Help pick this or that
  • Multimedia collage-maker
  • Customizable quiz modules
For collaborative projects, these additional tools are useful:
  • Ability to ask questions and to vote
  • Ability to give feedback​
  • Access control at the item level
  • Ability to follow people or to add them as buddies
  • Capacity for multimedia meetings in "realtime"
  • Collaborative multi-media collage maker
  • Selective or open social networking capabilities
You must choose whether a select group (experts, trendsetters, in-house staff) or the general public will decide project outcomes.
For example, after the contributions are made, who will select contest winners or whether a particular product design will go to market?  You could enable the public to vote, or you could rely on a consensus of experts/trendsetters, or you could base the decision on the projections of your in-house staff.  
Whatever approach you choose, you will need a platform that supports the decision-making process.  Let's say that you enable your contributers to vote.  To arrive at a decision, they may desire to get input from their social circle.  Therefore, sharing tools and privacy settings are important features to include.  Alternatively, you may think it best for outside experts or your in-house staff to decide. To do so, they will need tools to analyze the contributions