Can Crowdsourcing Lead to Commoditization?

In general, I am a big fan of crowdsourcing - asking a large group to come up with a solution to a problem. Some of the best examples tap into the collective intelligence to come up with new ideas that go beyond what a smaller, less culturally diverse group might do (i.e. in-house R&D).

But there is a difference in sourcing ideas and sourcing products. Here's an interesting example of crowdsourcing ideas:

CambrianHouse - people submit ideas for products, solutions and businesses and like Threadless, users can vote on them 1-5 and "I'd buy that". I just voted on Teun's idea which is really a simple one that I share which calls for something to integrate our various social network profiles. Others include creating a kid's shoe exchange (that is a no-brainer and possibly already exists at a local level like in our local thrift store - still a good idea). CambrianHouse has big ambitions. More than an idea exchange, you will also be able to source talent and funding. They even have an inspirational message platform:

"How would you unleash the ideas, talents, and entrepreneurial drive of 6 billion people? Bring them together under one roof."

The devil is in the details. The interface has a great design. It maintains overall simplicity while using some hand-made-looking fonts which humanizes the overall experience.

But can it lead to destructive commoditization?

Yes. I remember in the, gulp, eighties doing work for MTV. They would routinely run contests for independent animators to create broadcast graphics for on-air use. My company created motion graphics professionally. It was common knowledge that MTV not only did this based upon some of the best impulses of crowdsourcing but also to get animation at pennies of the cost. In that case, the winners who recieved a small cash prize had the glory of being on TV. And the creative was judged by MTV-level creative directors so it was generally interesting stuff (even if it did undermine my business).

Now, the design crowdsourcing phenomena comes to Web2.0.

SitePoint - an online crowdsourcing exchange. Designers around the globe can submit work to win a prize. The designer retains intellectual property rights unless they win in which case they transfer it over to the company seeking the design service. Can you feel the collective membership of the AIGA just groaning? (I was/am a member - need to re-activate my membership....).

What's the problem, you ask? Look at the prizes: $100 - $1000. For what? Nothing less than a full identity package, logo development, oh and throw in 2 Web pages with that. DESIGN SHOULD NOT BE COMMODITIZED! If ever there was a case of YGWYPF (You Get What You Pay For) this is it. This is nothing more than a commodity marketplace for outsourcing at the cheapest price. This will not spur innovation or even good design. It will spur the growth of Photoshop amateurs creating crap. The one thing I will give Sitepoint is their own caveat staqted pretty clearly:

"What is this service not so good for?
The Design Contests are not suitable for people who expect to walk away with the perfect design every time. Sure, you might get lucky, but often what happens is you come away with a good design that needs a few finishing touches.
Once you've picked the design you like best and awarded the prize money, you can either work with the winning designer to finish the design off to your total satisfaction, or take it to someone else to perfect."

Still their claim is that you can get design for hundreds of dollars versus thousands of dollars. That presumes you will get the same quality of thinking and execution. Not likely. It also implies that design is overpriced in the "general" market. If anything I believe it is underpriced due to the design community's constant struggle drawing the line between design and business ROI (Yes, there are many that do - Target, Dyson, W Hotels, etc...).

Hint: Just look at SitePoint's site design, especially compared to CambrianHouse. I have no squabbles with it's simplicity, but they clearly have no appreciation for any significant level of design beyond the most base level of function-driven design.

The problem lies in the 3 places:

• There is a big difference between idea crowdsourcing and service marketplace. Both are good and interesting. Service marketplaces will lead to commoditization unless there are allowances for quality providers to rise within the marketplace (i.e. like the ability to rate the quality of the eBay seller). Services that are idea-driven like design run the risk of being commoditized in an environment that pushes for the lowest cost.

• The definition of crowdsourcing favors the marketplace version. Look at Wikipedia/crowdsourcing:
  • "a business model in which a company or institution takes a job traditionally performed by a designated agent (usually an employee) and outsources it to an undefined, generally large group of people in the form of an open call over the Internet. The work is compensated with little or no pay in most cases. However, in a few examples the labor is well-compensated. In almost every case crowdsourcing relies on amateurs or volunteers working in their spare time to create content, solve problems, or even do corporate R&D.^[1]."

• We need more of a common understanding of what intellectual property is worth in a crowdsourcing scenario. If I submit ideas that are incorporated in a product, how should I be compensated? There are examples all over the map on this one. Dell's Ideastorm solicits a wide range of ideas which really represent the wishes of their customers or prospective customers. No one is compensated for their suggestions. Innocentive, on the other hand has bounties in the $10K - $1m range for science-based solutions.   

Questions: 

I realize I am covering a lot of ground here. From crowdsourcing ideas to service marketplaces to co-creation. As these great experiments get played out on the Internet, what are the lessons-learned about what works best? Is there one definition of crowdsourcing and if so, is it more like the one at the head of this post or more like Wikipedia's?

Comments

[Matt Mickiewicz]

I highly disagree with your characterization: "This is nothing more than a commodity marketplace for outsourcing at the cheapest price. This will not spur innovation or even good design. It will spur the growth of Photoshop amateurs creating crap."

The difference between our marketplace and others is that it's NOT based on lowest price or cheapest service provider. In fact, it works in the exact opposite direction.

Over time, we've seen prize amounts increase significantly, as small businesses compete for the attention and time of designers all over the world. The more money they offer, the more concepts they'll see -- in some cases hundreds of them.

The person who claims the prize is the BEST and HIGHEST QUALITY designer, as judged by the person running the design competition, rather than the "cheapest bidder" as is often the case in other marketplaces on the web.

Of course, it's very disruptive to the industry at large, as it empowers designers anywhere in the world compete on a flat-playing field and be judged solely on their skill, and not what they wear or if they have an office in New York City or that they charge $50,000 for three logo concepts!

Likewise, it removes a lot risk for small business owners since they don't have to worry about paying for work they are unahappy with.

[John Bell]

At the heart of this is the expectation each of us has about the value and therefore the price of graphic design. I say $100 is too little. You clearly think that $50,000 for three logo directions is too much.

The best graphic design is driven from research (context) and insight and isn't as simple as applying craft. With current prices this low (a few hundred dollars) is it even possible to apply that kind of thinking in a logo or other solution?

Sitepoint's graphic design marketplace (only one of the things the company does) will be disruptive to the established graphic design industry. And I have no issue with that so long as it doesn't lead to the commoditization of design and more, lower quality solutions.

I have browsed through the entries. I see evidence of hope. I also see a lot of poor design. Will the marketplace cause the cream to rise?

One thing that would help the service overall is to require business to post the basics of a Creative Brief: business decription, business objective, audience, current message platform, competitors, etc... This is the least information necessary to create thoughful design AND provide evaluation criteria beyond teh purely subjective tastes of the individual (who may or may not be the business owner). At the same time you would help business become better clients and get better results for their inquiries.

[Mark Cahill]

I'm in total agreement. I spend a lot of time trying to educate customers on the value of professional design and development. Let's face it, your website is one of your primary points of marketing contact, to take a chance with anything less than the best is a risky endeavor.

[Carl]

I think one definition is still hard. And maybe it's good to let the discussion about it last a bit longer to let it evolve. I've made a list of what people at assignment zero think about it. It's at http://www.crowdsourcingdirectory.com/?p=50

[Logo Design]

Hi there i just come to your post while searching, i got this post informative, Thanks for it.

[tinggi badan]

Just look at SitePoint's site design, especially compared to CambrianHouse. I have no squabbles with it's simplicity, but they clearly have no appreciation for any significant level of design beyond the most base level of function-driven design.

[Sam Pierce]

I think one definition is still hard. And maybe it's good to let the discussion about it last a bit longer to let it evolve.
Custom Logo Design