Tuesday, February 6, 2007

Crowdsourcing: New name, same old story

Robin posted a link to this Wired story on "Crowdsourcing". While the word is a clever portmanteau and play on 'outsourcing', after reading the article, I don't really feel there's anything all that new here.

This is yet another story of disruptive technology (in this case, the internet & online community technologies) allowing new business models to rapidly displace incumbents.

The first example they discuss is iStockphoto. In this case, it's Internet + online community + cheap professional grade digital photography combining to disrupt the stock photography business. (More on this in a minute)

The second example include user-created video content. America's Funniest Home videos was perhaps the advent of this; with the proliferation of cheap camcorders. The current 'wave' of sites and soon network shows taking advantage of this have just added Internet + community to the disruptive technology brew.

The also look at examples of 'crowdsourced' R&D and menial problem solving. But in all cases, it's the same thing: The internet solves the distribution of labor problem, and the community tech solves the 'how to connect to the right person on the internet' problem.

New name, but its the same old thing. No different than when the word processor displaced the typewriter, or (to use my favorite Guy Kawasaki example) when the advent of refrigeration displaced the ice harvesting business.

Now, back to the iStockPhoto example, there's another interesting lesson here. From the article:

"In 2000, Harmel made roughly $69,000 from a portfolio of 100 stock photographs, a tidy addition to what he earned from commissioned work. year his stock business generated less money – $59,000"

And they are implying that the stock-photo side of his business will eventually go to zero. Note though, that his commissioned work business, at least as far as we know, is unaffected.

There's still value in the service side of his business. It's the product side that's been commoditized.


Nox said...

One interesting difference between crowdsourcing and previous shifts in workflow created by new technology is that crowdsourcing doesn't just change how people tackle a task, it changes how they can collaborate on and define the task.

There are two good blogs tracking the phenomenon: Jeff Howe (of Wired Magazine), and Cambrian House (where I work).

KimPallister said...

> crowdsourcing doesn't just change how people tackle a task, it changes how they can collaborate on and define the task

So did the telephone, or email, or the printing press for that matter.

I get that the latest incarnation is different, but the meta level trend is the same. Technology can be disruptive in it's impact upon a given market's business model.

Anonymous said...

....but I have yet to see a y-tube video on how to DIY a $400 brake job.

Then again, you won't find that on netflix.

KimPallister said...

Anon: Good point! However, one has to wonder how much of that is the knowledge and how much is the service of actually doing it.

i.e. I know how change my brake pads (or change my oil for that matter), but I choose to let someone else do it.

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