Crowdsourcing Economics
Traditional Companies / Orgs:
- Characterized by vertical (silo) integration
- Product development is tightly held secret
- Scale by locking out competition, (Apple).
- Service is a detractor
- Vendors are told what to do
- Innovation is for company elite, everybody else “Shut up and row!”
Crowdsourced Companies / Orgs:
- Create a market: (Linux, IBM) created markets and then gave away core product. They make money by selling services to that product.
- Price competition is gone (can not be under sold on core product) IBM nullified competition by joining Linux and giving away product
- Removes financial strain of developing competitive product (Linux)
- Lots of smart people will help you develop product (IBM, Lifian)
- You focus on customer relationship and innovation (profit leaders)
Goldcorp Case Study
Goldcorp owned a 50 year-old mine in Red lake Ontario. Company geologists knew there was gold in the mine but not exactly where (expensive to make mistakes).
- After hearing of the success of Linux, CEO Rob McEwen had an idea to use crowdsourcing to find the gold.
- Industry protocol is to NEVER release geological data. EE’s were also concerned over their standing in industry “what you can’t find your own gold?”
- Interesting people joined the challenge: Students, military, physicists, computer graphics
- Australian company Fractal Graphics won the competition by applying science of geographic information system (GIS) to the “flat” Goldcorp data. Fractial never visited the mine.
