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CROWDSOURCING

WHY THE POWER OF THE CROWD

IS DRIVING THE FUTURE OF BUSINESS

J E F F H OW E

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Copyright © 2008, 2009 by Jeff Howe

All rights reserved.


Published in the United States by Three Rivers Press, an imprint of the
Crown Publishing Group, a division of Random House, Inc., New York.
www.crownpublishing.com

Three Riuvers Press and the Tugboat design are registered trademarks
of Random House, Inc.

Originally published in hardcover in slightly different form in the


United States by Crown Business, an imprint of the Crown Publishing
Group, a division of Random House, Inc., New York, in 2008.

Library of Congress Cataloging-in-Publication Data


is available upon request.

ISBN 978-0-307-39621-1

Printed in the United States of America

Design by Nancy Beth Field

10 9 8 7 6 5 4 3 2 1

First Paperback Edition

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CONTE NTS

Crowdsourcing: A Status Update ix

I NTRODUCTION
The Dawn of the Human Network 1

SECTION I • HOW WE GOT HERE

1 • TH E R I S E OF TH E AMATE U R
Fueling the Crowdsourcing Engine 23

2 • FROM SO S I M PLE A B EGI N N I NG


Drawing the Blueprint for Crowdsourcing 47

3 • FASTE R, CH EAPE R, S MARTE R, EAS I E R


Democratizing the Means of Production 71

4 • TH E R I S E AN D FALL OF TH E FI R M
Turning Community into Commerce 98

SECTION II • WHERE WE ARE

5 • TH E MOST U N IVE R SAL QUALITY


Why Diversity Trumps Ability 131

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Contents • vii

6 • WHAT TH E CROWD KNOWS


Collective Intelligence in Action 146

7 • WHAT TH E CROWD CR EATE S


How the 1 Percent Is Changing the Way Work Gets Done 177

8 • WHAT TH E CROWD TH I N KS
How the 10 Percent Filters the Wheat from the Chaff 223

9 • WHAT TH E CROWD FU N DS
Reinventing Finance, Ten Bucks at a Time 247

SECTION III • WHERE WE’RE GOING

10 • TOMOR ROW’S CROWD


The Age of the Digital Native 261

11 • CONCLUS ION
The Rules of Crowdsourcing 278

Notes 289

Acknowledgments 301

Index 304

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CROWDSOU RCI NG:
A STATUS U PDATE

In July 2008, having recently finished the manuscript for


this book, I took a much-needed vacation with my fam-
ily. About halfway through I received an urgent phone
call from the food writer at the Washington Post. What,
she wanted to know, did I think about crowdsourcing for
restaurants. Jerked abruptly from my poolside reverie, an
uncomfortable silence filled the line while I tried to
gather my thoughts. “Restaurants?” I asked, thinking I
might have misheard her. Uh huh, she said, restaurants.
“Well, not much,” I admitted. “Can you crowdsource a
restaurant?”
Indeed, it seems, one could. She explained how a
community of four hundred foodies had gathered on a
community site to develop everything from the cuisine to
the décor to the logo of a restaurant they hoped to open
the following year. I had often said that crowdsourcing
could be applied to anything reducible to bits and bytes,
but not products measured in pounds and ounces. But
after that phone call I changed my maxim. Crowdsourc-
ing’s limits are determined by people’s passion and imag-
ination, which is to say, there aren’t any limits at all.

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x • Crowdsourcing: A Status Update
As if to prove the point, a seemingly endless array of
start-up companies have emerged since this book was
first published in the fall of 2008, each determined to
turn the crowd’s manifold energies to their own gain. In
this same interim a less predictable development un-
folded, as established institutions like government agen-
cies and Fortune 500 companies also embraced various
forms of online collaboration. The rise of participatory
networks has become a defining hallmark of our fright-
ening and exhilarating age.
If the tone of this book exhibits more excitement
than fear, that too is a mark of the age in which it was
written. By its very name, crowdsourcing encourages a
comparison to outsourcing, and all the negative associa-
tions people have with that term. But when this book
went to press—well before widespread bank failure set
our economy reeling—it was far from clear whether the
phenomenon would realize its disruptive potential. Just
one year later, it seems increasingly obvious that it will.
Aided by a new generation of savvy entrepreneurs, ever
cheaper creative tools, and—most of all—a recession that
is forcing cost-saving measures on businesses, crowd-
sourcing is rapidly migrating from the fringe to the
mainstream.
As it proliferates, the creative destruction hinted at in
this book has accelerated faster than I anticipated. And
as the case has been in previous periods of swift tech-
nological change, new industries are emerging even as
older industries struggle to adapt. Crowdsourcing has
contributed to this disruption, but it will almost surely
become part of the foundation on which a new order is
built, especially in fields like media and entertainment.
Some professionals rightly regard crowdsourcing as a
threat; others, likewise, view it as a solution. In fact it is

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Crowdsourcing: A Status Update • xi

both. These, then, are the most prevalent dynamics to


emerge since this book was first published: proliferation,
on the one hand, and disruption on the other.
Both factors give rise to larger ethical and regulatory
issues. In most instances, of course, individuals are will-
ing—indeed, enthusiastic—partners in a crowdsourcing
effort. But as more and more fields undergo such trans-
formation, traditional firewalls against labor exploitation
must be reinvented. What happens when the only possi-
ble route to gainful employment in one’s craft takes place
in a crowdsourcing environment—will individuals be
able to obtain the same protections that exist in an offline
world, like minimum wage and overtime pay? We could
well be seeing the emergence of the home sweatshop,
with people’s productivity and work habits closely moni-
tored via their computers. Two years ago such a vision
seemed ridiculous on its face. Now it strikes me as in-
escapable.

Proliferation

In the beginning, the savings promised by turning labor


over to the crowd were more theoretical than real. Wiki-
pedia had been generated on virtually no budget, spon-
taneously created by legions of volunteers. But applying
the Wikipedia model to, say, automotive design, seemed
challenging at best and ill conceived at worst. Com-
pounding the problem, when companies did attempt to
engage online communities, they often acted in a
clumsy, tone-deaf fashion, alienating the very people
(usually their customers) they stood to gain from the
most.
In just the last year, companies have grown far more

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xii • Crowdsourcing: A Status Update
adept at the peculiar craft of community management.
Philips boosted sales of electric toothbrushes by 40,000
units using a crowdsourced marketing campaign. Procter
& Gamble built a “discreetly branded” website for Tam-
pax tampons and later said it had been “four times as
effective as a comparably priced TV campaign.” The
Japanese consumer goods company Muji crowdsources
the design of some of its products. The crowdsourced
lines—a “beanbag sofa,” for instance—outperform those
designed in-house, which is to say, the products requiring
the least investment returned the most revenue.*
Such success stories have inspired a host of multina-
tional corporations to integrate crowdsourcing strategies
into their business. Kraft runs the “Innovate with Kraft”
program, which asks consumers (and inventors) to come
to them with their “favorite recipes” or “new packaging
idea.” Nokia maintains a site for customers who test-drive
trial versions of the company’s cell phones, then report
back to the “betalab” community about their experiences.
Feedback from these “lead users,” Nokia executives say,
have been essential in determining the design and func-
tionality of the company’s phones. The beverage giant
PepsiCo used video games, sweepstakes, and voting to in-
duce the crowd to collaborate on a new flavor of Moun-
tain Dew.
If some of these examples sound more like branding
campaigns, that’s because they are. What marketing exec-
utives and advertising agencies have discovered is that in-
volving consumers in the production process builds
goodwill and brand loyalty. Some people, for instance, are
passionate about technology. Others are passionate about

* Paul Marsden, “Crowdsourcing: Your Recession-Proof Marketing


Strategy?,” Contagious, Issue 18 (2009): p. 25.

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Crowdsourcing: A Status Update • xiii

the technology produced by a particular company—Apple


being just one obvious example. We’ve long understood
that brands play an outsize role in creating identity, be-
coming in the process far more integral to our lives than
the physical product. This deep, abiding interest com-
prises a precious asset, at least from the marketer’s per-
spective. After decades of neglect, that resource is now
being put to use.
Interest in crowdsourcing has grown even more rap-
idly within the crowd itself. The ranks of the online
networks and communities profiled here have grown
substantially in the last year. Submissions to the T-shirt
design site Threadless.com have nearly doubled since I
first wrote about them in 2006, and the crowdsourcing
software company TopCoder now counts nearly 200,000
community members, compared to just over 100,000
when I first spoke to them in 2007. Add to this the
sundry crowdsourcing initiatives that have launched in
the last year. I used to cover crowdsourcing start-ups on
my blog, but they began multiplying so rapidly I gave up
trying. It goes without saying that most of these start-
ups will fail. But it’s notable that a down economy has
increased—not dampened—the entrepreneur’s ardor for
crowdsourcing.
To some extent the growth of contributors and prolif-
eration of sites to which they can contribute are both due
to increased awareness. As more crowdsourcing projects
sprout up, more media attention is devoted to the con-
cept, inciting more people to contribute to individual
projects. Here too our current economic downturn plays
a role. As the ranks of both the unemployed and the par-
tially employed grow, so too does the role financial incen-
tives play in collaborative exchanges. If crowdsourcing
runs on people’s “spare cycles”—their downtime not

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xiv • Crowdsourcing: A Status Update
claimed by work or family obligations—that quantity is
now in surplus.
This can be seen in the success of distributed labor
networks like Amazon’s “Mechanical Turk.” In the origi-
nal edition of this book I largely ignored this particular
genre of crowdsourcing—in which money is offered in re-
turn for performing simple, rote tasks like tagging images,
transcribing audio materials, or culling records from on-
line databases. Instead I focused on forms of productive
activity that took place within the context of community.
It’s time to correct that oversight.
In early 2007, Mechanical Turk’s success was any-
thing but assured. Companies seemed unwilling to exper-
iment with it, and the pool of “Turkers” (the people who
accept these menial assignments) looked to be a diminish-
ing resource. Then a cottage industry of third-party firms
sprung up specializing in helping companies exploit the
service and filtering out the inevitable low-quality re-
sponses. Add in a recession, and the service has blos-
somed into a 200,000-person strong workforce.
Given the paltry rewards, one would imagine that
most Turkers hail from the developing world. In fact, ac-
cording to several surveys, the majority live in the United
States and Canada. Why do they do it? To hear them tell
it, to kill time and earn a little bit of pocket change.
Crowdsourcing is proving to be highly efficient at identi-
fying and exploiting those “spare cycles” I write about.
The company LiveOps has built a thriving business run-
ning a network of freelancers who work from home tak-
ing calls generated by infomercials, selling insurance, or
even taking pizza orders. These virtual employees work
entirely according to their own schedule.
In 2008, the Harvard Law School professor Jonathan
Zittrain wrote about the rise of Mechanical Turk and

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Crowdsourcing: A Status Update • xv

other examples of what he calls “ubiquitous human com-


puting.”* In the near future, people won’t sit in subway
cars reading the newspaper. “Instead they will stare into
screens even for just a few minutes and earn as much
money in that time as their respective skills and stations
allow.” It’s a somewhat disheartening vision, but then
technology—as well as the behavior it engenders—has al-
ways been deployed to a variety of ends. Encouragingly,
crowdsourcing has also been recently put to imaginative
use in fields with more philanthropic objectives.
In December 2008, Ory Okolloh, a consultant and law
school graduate, went back to her native Kenya to vote in
that country’s presidential election that spawned wide-
spread violence among Kenya’s ethnic and political rivals.
In the midst of a news blackout Okolloh did her best to
document the chaos on her blog. Soon she had teamed up
with a few volunteers to create a mash-up of Google Earth
and the open source software program FrontlineSMS that
would allow her to aggregate eyewitness reports onto a sin-
gle website. Called Ushahidi—the word means “testimony”
in Swahili—it allows people to send e-mails or text mes-
sages to a central source. These reports are then vetted for
authenticity before being displayed on a map. Ushahidi
has already proven its value during outbreaks of bloodshed
in South Africa and the Congo. In January 2009, Ushahidi
won an award from USAID in a competition that was itself
crowdsourced, an indication of the degree to which the col-
laborative zeitgeist has penetrated the field of international
development.
USAID is just one of several government agencies
adopting various forms of crowdsourcing. In this they are

* Jonathan Zittrain, “Ubiquitous Human Computing,” University of


Oxford Legal Research Paper Series, June 2008, Paper #32.

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xvi • Crowdsourcing: A Status Update
able to follow no-less-commanding a model than the of-
fice of the president. In his presidential campaign, Barack
Obama was able to demonstrate the efficacy of mass or-
ganizing. As president, he has vowed to continue encour-
aging large-scale participation, leveraging the diverse
experience, knowledge, and viewpoints of the American
citizenry.
His initial experiments with crowdsourcing display
both the raw power of crowdsourcing—his open calls for
contributions are deluged with hundreds of thousands of
responses—and its pitfalls. In March 2009, the president
held what was billed as an “interactive town hall.” Rather
than just answering questions from the press, the presi-
dent announced he would answer questions from the
public as well. The public—which is to say anyone in the
world with an Internet connection, U.S. citizen or not—
submitted their questions via a website called Open for
Questions, which was organized into categories like Edu-
cation, Small Business, and Budget. Visitors to the site
could then vote yea or nay on other people’s questions.
The most popular questions rose to the top.
In the end, some 92,000 users cast over 3.5 million
votes on some 103,000 questions. The voice of the people
was loud and clear: legalize marijuana. During his press
conference, the president made short work of the most
popular topic on his own forum. “I don’t know what this
says about the online audience, but no, I do not think [le-
galizing marijuana] is a good strategy for growing our
economy,” he said to general laughter from the studio au-
dience. Next question, please.
While a lot of ink was spilled over the aborted crowd-
sourcing experiment, very little analyzed the president’s
use, or misuse, of social media to engage the citizenry.
The common perception was that the forces of drug re-
form “hijacked” the White House’s crowdsourcing plat-

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Crowdsourcing: A Status Update • xvii

form. Pro-drug reform organizations like NORML had


sent out e-mail blasts asking people to vote up questions
regarding marijuana legalization. This grassroots effort
worked spectacularly well, despite the fact that decrimi-
nalization is nowhere to be found in any list of what
Americans think are the most important issues facing the
country.
But calling the NORML lobbyists “trolls” or dismiss-
ing the incident as the abuse of the White House Open
for Questions platform reveals a fundamental misunder-
standing of how crowdsourcing works. It assumes that
the technology used by the White House is capable of
creating a representative sampling of popular opinion.
The tech doesn’t do that, and we shouldn’t expect it to.
We possess other, highly effective tools for that job—
they’re called polls.
Open for Questions fits squarely within a genre of
crowdsourcing I call “idea jams,” and they constitute
their own evolutionary branch of brainstorming. Users
don’t just submit ideas, but also vote and (usually) com-
ment on them as well. Idea jams are a big hit with the
private sector. Companies like Starbucks, Dell, IBM, and
even General Mills have all adopted them, for the excel-
lent reason that they’re a cost-effective method for prod-
uct innovation and inspire goodwill with your customers
to boot. The best-publicized incarnation involves Dell’s
“IdeaStorm,” which the computer maker used to tap its
most loyal (or at any rate, most vocal) customers. They’ve
now integrated some 280 suggestions from IdeaStorm
into their product line.
So if the idea jam format works for companies, why
isn’t it working for our president? A few reasons:
First, the White House isn’t matching the right tool to
the right job. “The whole point of [idea jams] is not to
find the question that the whole group wants to ask and

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xviii • Crowdsourcing: A Status Update
that is predictable—but to enable cognitive outliers to ask
the unpredictable question—to promote ways of thinking
about problems (and solutions) that are uncommon,”
writes Kim Patrick Kobza, CEO of Neighborhood Amer-
ica, which develops social software for business and gov-
ernment.
In other words, idea jams are built to allow people to
discover the fringe question (or idea, or solution), then
tweak it, discuss it, and bring the community’s attention
to it. When Dell launched IdeaStorm, it was hijacked by
Linux die-hards who suggested (nay, insisted) that Dell
release a Linux computer. These folks were trolls to the
same extent the drug legalization lobbyists swamping
White House servers are, and Dell struggled with how to
deal with them.
The company’s ultimate reaction is instructive. First,
they merged all the Linux comments into one thread, giv-
ing much-needed daylight to other ideas. Next, they saw
the value in what the Linux folk were saying. The outcry
for an open source operating system had revealed that
there was a “constituency” large enough to justify enact-
ing this particular “policy.” Put another way, there was
adequate demand to support a new product line. Three
months after launch, Dell released three computers pre-
installed with the Linux operating system.
In this sense, the virtual town hall performed a valu-
able function. It highlighted an important, if nonurgent,
issue and stimulated an ultimately useful public dia-
logue. The problem was that the president’s office wasn’t
part of that conversation. Unlike Dell and other private
sector groups that have made use of idea jams, the White
House didn’t weigh in on the issues raised on its forums,
or otherwise engage its contributors. They had failed to
heed one of social media’s central tenets: participation
goes both ways.

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Crowdsourcing: A Status Update • xix

As Bob Pearson, Dell’s former “chief of communities


and conversation,” notes, “Idea management is really a
three-part process. The first is listening. That’s obvious.”
The second part, says Pearson, is integration: “We had
engineers studying IdeaStorm posts and debating how
they could be implemented.”
The last part is the trickiest and most important: “It
involves not just enacting the ideas, but going back into
your community and telling them what you’ve done.”
Starbucks, which maintains its own version of IdeaStorm,
employs forty-eight full-time moderators whose only job
is to engage the online community. In other words, Star-
bucks is investing the vast share of its resources in the
second and third parts of the idea management cycle,
exactly those steps in the process that the White House
ignored.
Of course, the White House, Dell, and Starbucks
aren’t putting people out of work, and indeed, many uses
of crowdsourcing do not involve the displacement of tra-
ditional workers. If anything, crowdsourcing provides
added value to a company or institution without devalu-
ing the labor being contributed by full-time employees.
But this is not always the case. If proliferation has been
one theme to emerge since the original edition of this
book was published, the other theme to arise has been
turmoil, most of it occurring within the media and enter-
tainment industries.

Disruption

One year ago crowdsourcing’s disruptive potential, too,


was largely theoretical. To a large extent it was contained
within a single, comparatively tiny field—stock photogra-
phy. In the hardcover edition of this book, I pondered

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xx • Crowdsourcing: A Status Update
whether photography was just the canary in the coal
mine. It was an open question at the time. Now it’s not.
Witness the upheaval afflicting the design industry,
sparked by the rise of so-called “spec design” sites like
crowdSPRING and 99designs. Customers post creative
briefs directly to the community, which then competes to
create a design that best fits the clients’ needs. A typical
“assignment” will draw dozens of submissions. The win-
ner receives a nominal fee (as little as $200), and the
client receives a logo or website design at a fraction of
what a professional agency might charge. The losers get
zip, which goes a long way to explaining why working on
spec (“on speculation,” or without guarantee of payment)
has always been considered the toil of last resort for writ-
ers, designers, and other creative professionals.
Given the low pay and the brutal competition, one
might reasonably expect crowdSPRING and 99designs to
wither away like so many other seemingly ill-conceived
Web 2.0 start-ups. Instead, they are by all accounts flour-
ishing. 99designs says it has paid out more than $4 mil-
lion to its community of 30,000 artists, and crowdSPRING
expects to be profitable by next year. Alarmed by the pop-
ularity of the spec model, a group of designers formed a
protest group called NO!SPEC to persuade their col-
leagues (and prospective clients) to just say no to design
contests. Their effort has not been in vain. The trade
group AIGA, with around 22,000 designer members, has
gone so far as to stake out an official position on spec
work: “AIGA strongly discourages the practice of request-
ing that design work be produced and submitted on a
speculative basis in order to be considered for acceptance
on a project.”
The fact is that the demand for low-end design has
ballooned in recent years alongside the profusion of start-
ups and small businesses. Conveniently enough, so has

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Crowdsourcing: A Status Update • xxi

the supply of what we might call “low-end designers”


(many of them amateurs, recent grads, and retirees). Ac-
cording to Forbes there are 80,000 freelance designers in
the United States alone. Most of these are, proverbially
speaking, waiting tables. When someone matches de-
mand and supply, that’s kismet.
The squabble over crowdSPRING and 99designs has
united the design community against the barbarians at
their gate, which ostensibly bodes ill for the future health
of the spec sites. But then, a similar array of industry
forces aligned against iStockphoto and its ilk when they
first gained market share back in 2005. The fact that this
debate has been largely settled—in favor of the barbar-
ians—speaks volumes about where graphic design, and,
for better or worse, most other creative fields, are head-
ing. In the end, dirt-cheap photos produced by commu-
nities of enthusiastic amateurs totally disrupted the $2
billion stock photo industry. iStock is now the third-
largest purveyor of stock images, and 96 percent of its
“workforce” is comprised of people whose bread is pri-
marily buttered through some other vocation.
The controversy currently embroiling the design
world both echoes the one that consumed photography a
few years ago and prefigures the conflicts between pro-
fessionals and amateurs sure to arise in other fields as
the basic crowdsourcing model continues to migrate.
Such conflicts may already be breaking out. Entre-
preneurs within the advertising field were a few of the
first to try to bring open models of idea generation to
their profession. The website AdCandy.com launched in
2006 with the premise that anyone could come up with a
brilliant slogan or image for an advertisement. At first
such upstarts seemed destined to sputter toward un-
happy oblivion, derided by professional advertising exec-
utives and ignored by their big-name clients. But recently

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xxii • Crowdsourcing: A Status Update
attitudes have begun to shift, signaling a potential sea
change for the advertising industry.
“I think what you’ll see soon is a big agency will
build their own crowdsourcing network,” says John Win-
sor, the executive director of strategy and innovation at
the Miami-based ad agency Crispin Porter + Bogusky.
“When they do you’re going to see massive disruption in
the industry as agencies rush to mimic them.” Such ex-
periments have been discussed for years at various in-
dustry gatherings, says Winsor, but so far no one’s made
the leap. “The finance guys freak out. They’re like, ‘If we
do this there’s going to be incredible downward price
pressure.’ My point is that if we don’t do this there’s
going to be incredible downward price pressure. At least
if we [a professional agency like Winsor’s CP+B] do it we
can maintain some level of control over the disruption.”
That’s just the thinking behind the creation of BBH
Labs, a skunkworks setup by the venerable London-
based ad agency Bartle Bogle Hegarty. “There’s a conflu-
ence of factors coming together that anyone can see, but
not everyone wants to see,” says Ben Malbon, a manag-
ing partner at BBH Labs. “Agencies need a more flexible
business model than trying to house all its talent under
one roof. That means external networks like crowdsourc-
ing.” Echoing Winsor, Malbon notes that BBH Labs was
initially called “Project Nemesis,” the idea being that
BBH should try to create its own nemesis, the kind of
forward-looking agency that could eventually cripple it.
The danger, Malbon says, is that clients will simply
tap the crowd on their own and bypass agencies alto-
gether. It’s hardly an idle threat. Shortly after launching
BBH Labs in January 2009, the agency made headlines by
crowdsourcing its logo on crowdSPRING, eventually gen-
erating some 1,100 responses. “It’s a telling coincidence

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Crowdsourcing: A Status Update • xxiii

that a few weeks later one of our largest clients [cell


phone maker] LG used crowdSPRING for a huge project.”
(LG held a contest on crowdSPRING to design a new cell
phone.) Needless to say, it’s just the sort of business BBH
would have received in the not-at-all-distant past.
If companies can forge direct links to creatives, will
the agency go the way of the typing pool? CP+B’s John
Winsor doesn’t think so, and I don’t either. What’s be-
come clear over the last several years is that, as in so
many aspects of life, the optimal solution involves a so-
phisticated hybrid of the new and the old. “It’s hard to
distinguish wheat from chaff,” Winsor says. He should
know—he’s writing his current book, Flipped, via a wiki
with loads of reader contributions. “You’ll see a handful
of professionals using a crowdsourcing network to gener-
ate a lot of raw ideas, but then picking and refining those
ideas and creating value around them for the client.”
It’s no accident, in my opinion, that news organi-
zations have pursued hybrid approaches as well. In chap-
ter 7, I recount the failings of my own experiment in
crowdsourced journalism, Assignment Zero. In the broad-
est of strokes, we overestimated the crowd’s ability to cre-
ate a journalistic product from whole cloth. However, we
underestimated its interest in participating in the process
by suggesting ideas, conducting interviews, and playing
other roles crucial to any journalistic outfit.
Such lessons seem not to have been lost on the news
industry at large as it struggles to adapt to a rapidly dete-
riorating financial environment. Of all the fields sur-
veyed in this book, none is suffering so egregiously as the
news media. In the month I spent working on this fore-
word, the Rocky Mountain News folded, the Seattle Post-
Intelligencer canceled its print edition, and bankruptcy
looms for such august publications as the San Francisco

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xxiv • Crowdsourcing: A Status Update
Chronicle and, further down the road, possibly even the
New York Times.
This has not curbed the speed with which newspa-
pers (and their sister outfits in broadcasting and on the
Internet) are experimenting with crowdsourcing. In fact,
on the day I am writing this the New York Times posted a
658-page document detailing the daily schedule of Timo-
thy F. Geithner from January 2007 to January 2009,
when he was the president of the Federal Reserve Bank
of New York. Readers are encouraged to peruse the diary
and “share [their] observations” with the Times. It’s pre-
cisely the model—using the crowd as an investigative an-
cillary force—that has worked so well for Josh Micah
Marshall at the political blog TalkingPointsMemo.com,
which I also write about in chapter 7.
“Crowdsourcing may be destroying other industries,
but it isn’t destroying the news industry,” says Bob Gar-
field, the host of the public radio program On the Media.
“If anything, crowdsourcing is enabling existing news or-
ganizations to conduct a journalism of the sort it could
never conduct before.” He pauses before continuing. “So
in the five minutes before those news organizations ut-
terly collapse, they can enjoy the benefits of a crowd-
sourced world.” He chuckles, darkly.
Crowdsourcing doesn’t mean the end of design, ad-
vertising, journalism, or any of the other fields—product
design and innovation come quickly to mind—in which it
has started to compete with traditional methods. As
Garfield notes, “Afterwards some of this will coalesce
into a reasonable facsimile of the vast journalistic infra-
structures that are now in the process of collapsing.” It’s
a sobering but oddly reassuring thought. Writers will still
write, designers will still design, photographers will still
take photographs. The structures in which it all takes
place, however, are about to change forever.

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I NTRODUCTION
The Dawn of the Human Network

The Jakes didn’t set out to democratize the world of


graphic design; they just wanted to make cool T-shirts. In
2000, Jake Nickell and Jacob DeHart, as they’re more for-
mally known, were college dropouts living in Chicago,
though neither had found much work putting his abbre-
viated educations to use. Both were avid members of a
burgeoning subculture that treated the lowly T-shirt as a
canvas for visual flights of fancy. So when they met after
entering an online T-shirt design competition, they al-
ready had a lot in common. For starters, both thought it
would be a good idea to start their own design competi-
tion. But instead of using a jury, they would let the de-
signers themselves pick the winner. That November a
company was born—the product of equal parts youthful
idealism and liberal doses of beer.
The pair launched Threadless.com a few months later
with a business plan that was still in the cocktail-napkin
stage: People would submit designs for a cool T-shirt.
Users would vote on which one was best. The winner
would get free T-shirts bearing his or her winning design,

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2 • CROWDSOURCING
and everyone else would get to buy the shirt. At first the
Two Jakes, as people called them, ran Threadless from
Nickell’s bedroom. But the company grew. And grew.
And grew yet more. People liked voting on T-shirts, and
the designs were less staid and less formulaically hip than
those sold by Urban Outfitters or Old Navy. The winning
designs started appearing on hit TV shows and on the
backs of hip-hop artists. The company has nearly doubled
its revenue every year since. Threadless currently re-
ceives some one thousand designs each week, which are
voted on by the Threadless community, now six hundred
thousand strong. The company then selects nine shirts
from the top hundred to print. Each design sells out—
hardly surprising given the fact Threadless has a fine-
tuned sense of consumer demand before they ever send
the design to the printer.

Design by democracy, as it happens, isn’t bad for the bot-


tom line. Threadless generated $17 million in revenues in
2006 (the last year for which it has released sales figures)
and by all accounts has continued its rapid rate of growth.
Threadless currently sells an average of ninety thousand
T-shirts a month, and the company boasts “incredible
profit margins,” according to Jeffrey Kalmikoff, its chief
creative officer. Threadless spends $5 to produce a shirt
that sells for between $12 and $25. They don’t need ad-
vertising or marketing budgets, as the community per-
forms those functions admirably: designers spread the
word as they try to persuade friends to vote for their de-
signs, and Threadless rewards the community with store
credit every time someone submits a photo of themselves
wearing a Threadless shirt (worth $1.50) or refers a friend
who buys a shirt (worth $3).
Meanwhile, the cost of the designs themselves isn’t

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Introduction • 3

much more than a line item. DeHart and Nickell have in-
creased the bounty paid to winning designers to $2,000
in cash and a $500 gift certificate, but this still amounts
to only $1 million per year, a fraction of the company’s
gross income, and Threadless keeps all the intellectual
property.
But as any number of winners will happily volunteer,
it’s not about the money. It’s about cred, or, to give that a
more theoretical cast, it’s about the emerging reputation
economy, where people work late into the night on one
creative endeavor or another in the hope that their com-
munity—be it fellow designers, scientists, or computer
hackers—acknowledge their contribution in the form of
kudos and, just maybe, some measure of fame. Thread-
less’s best sellers (such as “Communist Party,” a red shirt
featuring Karl Marx wearing a lampshade on his head)
are on regular view at coffee shops and nightclubs from
London to Los Angeles.

The Jakes now enjoy a certain degree of notoriety them-


selves. Nickell and DeHart have become heroes among
the do-it-yourself designer set, and even have given lec-
tures to MBA students at MIT’s Sloan School of Manage-
ment. Aspiring executives spent much of the time
explaining all the basic business tenets the Jakes had bro-
ken in building Threadless. Good thing they weren’t
there when Nickell and DeHart were first launching their
company. Nickell and DeHart are smart enough to know
a good idea when they stumble on it. They created a par-
ent company, skinnyCorp, which includes not just
Threadless but a spin-off division that takes a similarly
democratic approach to the creation of everything from
sweaters to tote bags to bed linens. “Next we’re thinking
of doing housewares,” says Nickell.

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4 • CROWDSOURCING

An Accidental Economy

In late 2005, the Pew Internet & American Life Project


released a paper called “Teen Content Creators and Con-
sumers.” The study, which consisted of interviews with
more than eleven hundred Americans between the ages
of twelve and seventeen, drew little attention when it
was published, but the findings were extraordinary:
there were more teens creating content for the Internet
than there were teens merely consuming it. At the time it
was commonly assumed that television had created a
generation of consumers characterized by unprecedented
passivity. Yet now it seemed the very opposite was the
case. In his book The Third Wave the futurist Alvin
Toffler predicted that consumers would come to exercise
much more control over the creation of the products they
consumed, becoming, in a word, “prosumers.” In 1980,
the year Toffler published his book, this seemed like
mere fodder for bad science-fiction novels. From the per-
spective of 2005, it seemed stunningly prescient.
Pew’s conclusions confirmed my own recent experi-
ence. A few months before the study was released I had
been hopscotching across the country attending concerts
on the Warped Tour, a carniesque collection of punk
bands and the hangers-on that followed them from town
to town. I was writing about the social networking site
MySpace, which was known—to the degree it was known
at all—as a grassroots-marketing venue for Emo bands,
off-color comedians, and Gen Y models. In the hours I
spent with the performers and their fans, I noticed that
very few defined themselves as musicians, artists, or any
other such label. The singers were publishing books of
poetry; drummers were budding video directors; and the

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Introduction • 5

roadies doubled as record producers. Everything—even


one musician’s pencil portraits—was posted to the Inter-
net with minimal attention to production quality. These
were what Marc Prensky, a game designer and educator,
calls the “digital natives.” The rapidly falling cost of the
tools needed to produce entertainment—from editing
software to digital video cameras—combined with free
distribution networks over the Web, had produced a sub-
culture unlike anything previously encountered: a coun-
try within a country quite capable of entertaining itself.
Next I heard about the Converse Gallery ad cam-
paign, in which the shoemaker’s ad agency solicited
twenty-four-second spots from anyone capable of wield-
ing a camcorder. The shorts had to somehow convey a
passion for Chuck Taylors, but that was it. You didn’t
even have to show the shoe. The best of the spots were
very, very good—electric with inventive energy, yet
grainy enough to look authentic, as indeed they were.
Within three weeks the company had received seven
hundred fifty submissions, a number that climbed into
the thousands before Converse discontinued the cam-
paign in early 2007. It was viewed as a smashing success
by both the company and the advertising industry, as
well as a seminal example of what is now called user-
generated content.
This was the new new media: content created by am-
ateurs. A little research revealed that amateurs were mak-
ing unprecedented contributions to the sciences as well,
and it became clear that to regard a kid making his own
Converse ad as qualitatively different from a weekend
chemist trying to invent a new form of organic fertilizer
would be to misapprehend the forces at work. The same
dynamics—cheap production costs, a surplus of under-
employed talent and creativity, and the rise of online

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6 • CROWDSOURCING
communities composed of like-minded enthusiasts—were
at work. Clearly a nascent revolution was afoot, one that
would have a deep impact on chemistry, advertising, and
a great many other fields to boot. In June 2006, I published
a story in Wired magazine giving that revolution a name:
crowdsourcing. If anything, I underestimated the speed
with which crowdsourcing could come to shape our cul-
ture and economy, and the breadth of those effects. As it
happens, not just digital natives, but also digital immi-
grants (whom we might define as anyone who still gets
their news from a newspaper) would soon be writing book
reviews, selling their own photographs, creating new uses
for Google maps, and, yes, even designing T-shirts.
As I’ve continued to follow the trend, I’ve learned a
great deal about what makes it tick. If it’s not already
clear, Threadless isn’t really in the T-shirt business. It
sells community. “When I read that there was a site
where you could send in designs and get feedback, I in-
stantly thought, this is really cool,” says Ross Zeitz, a
twenty-seven-year-old Threadless designer who was
hired to help run the community after his designs won a
record-breaking eight times. “Now I talk to other design-
ers, and they’re motivated by the same things I was. It’s
addictive, especially if you’re at a design school or some
corporate gig, where you’re operating under strict guide-
lines,” says Zeitz. The only restriction at Threadless, by
contrast, is that the design has to fit onto a T-shirt.
Threadless, its founders have noted, is a business only
by accident. None of the Threadless founders set out to
“maximize profits” or “exploit the efficiencies created by
the Internet.” They just wanted to make a cool website
where people who liked the stuff they liked would feel at
home. In succeeding at this modest goal, they wound up
creating a whole new way of doing business.

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To purchase a copy of 

Crowdsourcing 
 
visit one of these online retailers: 
 
Amazon 
 
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AB OUT TH E AUTHOR

JEFF HOWE is a contributing editor at Wired maga-


zine, where he covers the entertainment industry
among other subjects. Before coming to Wired, he was
a senior editor at Inside.com and a writer at the Village
Voice. In his fifteen years as a journalist he has traveled
around the world, working on stories ranging from the
impending water crisis in Central Asia to the implica-
tions of gene patenting. He also has written for U.S.
News & World Report, Time magazine, the Washington
Post, Mother Jones, and numerous other publications.
He lives in Brooklyn, New York, with his wife and
children.

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