The Coming of "Crowdsourcing"

Using "not invented here" as a pejorative is a relatively new phenomenon in business, which has a long tradition of drawing ideas from customers, interested third-parties and even out-and-out outsiders.

The latest reminder of this tradition is Jeff Howe's book "Crowdsourcing." The book, spurred by a Wired cover story of the same name, is out now, and BNET's Useful Commute has a quick six-minute interview with Howe.

So, what does Howe say crowdsourcing is? "The cocktail version is 'wikipedia, but for everything." He gives the "forexample" of Threadless.com, which effectively outsourced t-shirt design, then had people vote on the best ones, which has helped it have remarkably good demand forecasting.

Howe also has this caveat: "Not everyone should adopt crowdsourcing," he tells BNET. "The phrase 'wisdom of crowds' is a bit misleading. When people act as a crowd they act against collective inteligence. it's not the crowd per se, but the structure of it."

He says that useful collective intelligence comes "when there is diversity in the crowd and people feel free to express themselves."

The interview is a teaser to what is shaping up as an excellent, business-focused expansion on James Surowiecki's "The Wisdom of Crowds," or a jazzed-up version of Eric von Hippel's seminal book "Democratizing Innovation." Howe isn't inventing something here, other than coining the phrase 'crowdsourcing' to play off of outsourcing. But it's a hugely important concept for business. If the book follows the magazine article, and Howe's subsequent blog it will be worth a think for business leaders of all sorts (as Threadless proves, it can work for small startups as well as big companies).

Some other links: Here's the "Crowdsourcing" trailer
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Also, Richard Pachter's Harnessing the Power of the Crowd disses the name 'Crowdsourcing' but says of the book

Howe is an interesting writer and fine reporter. The text follows his intellectual curiosity as he seeks ways that a diverse multitude acts in concert to predict winners of political contests, solve scientific challenges, distribute music, design clothing and conduct all manner of commerce.