Outsourcing is already an old word, and we all know what it means – sending jobs to countries where the labor is cheaper than in the US. The new worldwide pool of cheap labor, they say, is called Crowdsourcing.It means taking a task, especially in software design, and putting it out there to the world to solve.

The word was coined in an article in Wired magazine in 2006. Jeff Howe published an article called “The Rise of Crowdsourcing”.  He wrote: “Technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing.”

What used to be top secret industrial secrets in the past, became open-source. It was sent out to the world to improve on, solve problems or fix. An open call to an unidentified group of people to solve a problem. It taps to the knowledge and wisdom of the many, for the benefit of many. Those who ask for help in an open-source know that their programs are now open to all. In Crowdsourcing it is between the companies and the solvers.

The “crowd” – the people involved, usually form an online community and submit solutions. The best solutions – also chosen by the crowd – go on to the source who posed the problem. The solvers are sometime rewarded, either monetarily or by fame. Crowdsourcing produces solutions from amateurs and experts alike, who like to solve problems as an intellectual challenge, or for a prize.

Eli Lilly the pharmaceutical company funded in 2001 to connect with people outside the company who could help develop drugs and speed the process. Very quickly they opened their doors to other companies who were interested in reaching their network of unknown experts. Companies like Boeing, DuPont and Procter & Gamble post their hardest problems on the site.

As an example: One of the problems posted was how to inject Fluoride in powder form into a tube of toothpaste without dispersing it. Colgate Palmolive’s problem was solved by someone who knew the solution the moment he read the problem. He suggested imparting an electric charge to the Fluoride and grounding the tubes. This person became famous in the “crowd” circles.

Another example: when HTC came out with the first Windows operated smartphone, the expectations were very high. Here it is again, the old revelry between Apple and Microsoft. The iPhone was so innovative, let’s see what the PC people can do to improve on it. The phone flew off the shelves and some stores reported a waiting list of over hundred people.

Not a month went by, and the bubble burst. The phone did not perform well. Callers to T-Mobile tech support, the company that sold the phone, were told to remove the battery at least twice a week to reboot it. Not an acceptable solution in our fast moving world.

At about the same time, Google open-sourced it’s Android. Within a few days a forums was opened and linked to many tech sites. The discussions were the disappointment and what to do with this new phone. One person, known only be his code name, took it upon himself to coordinated an effort to adapt the Android to the HTC phones.

2 days later the program was posted online, with instructions. Improvements were posted 2-3 times a day. Different people took upon themselves to work on specific problems; the camera, the map, the contact list. Less than a week later the Android operating system was sitting solidly on HTC phones.

The companies who post problems on InnoCentive’s site these days, post the reward that comes with solving the problem. The rewards pay from $1,000,000 for doubling the speed of Gnome Mapping to $10,000 for The Economist-InnoCentive Human Potential Index Challenge. Groups are formed and share in the reward. Is Crowdsourcing the new hobby? A form of cheap labor? New form of R & D? Yes to all of those. It is tapping to the smarts of people, whomever or wherever they are.





  1. Great post here. When I seen the title I thought of Eli Lilly and then there it was in the body. Awesome references here!

  2. Tara Gen says:

    Crowdsourcing is one thing that’s very in right now. The more connections you have, the more successful you’ll probably be.The more you got in your crowd, the more information you would get and disseminate.

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