Crowdsourcing and Network Effect
Crowdsourcing, or using large groups of people (often via the internet) to produce services, content, or knowledge in a given context. Say for example, I’m the maker of Tile, a little brick which attaches to your things and tells you where they are. Part of Tile’s functionality relies on many users being able to pick up a signal from other peoples’ Tiles to help locate their lost objects in the network. I would need to establish a pretty large network for such a feature to be useful to losing things in the real world. My product uses crowdsourcing to obtain real time data about the location of everyone’s belongings. Tile has been criticized for never making production deadlines, but has raised millions, all while dismayed “investors” claimed it was a scam, counterproductive to their eventual use. Their delays, however, resulted in many orders all being filled at once, so that users will start to carry the product at around the same time, giving the network over all a boost in functionality. Personally, the Tile that I received a week or two doesn’t have much use other than reminding me where I parked. In more densely urban environments with lots of users, however, the network effect of Tile’s value skyrockets.
As Mike Elgan writes for ComputerWorld in this article, Tile’s value is a lot like that of cellphones or fax machines. If no one uses them, they don’t do much good. Elgan talks about conscious and passive crowdsourcing as well. Tile participates in the latter. Conscious crowdsourcing requires intentional participation in uploading or reporting data to a server, whereas passive crowdsourcing is more like Tile – it uses your phone’s bluetooth to pin locations on other people’s lost things without you doing anything. Crowdsourcing can greatly add to network effect, but it can also detract. In conscious sourcing participation, users often report bias which enters a positive feedback loop (think information cascade). Elgan cites the use of Google Flu Trends, which grossly overestimated the prevalence of flu outbreak based on users’ paranoid over catching said flu. In crowdsourcing operations, sometimes the downfall in value is the user base itself. All the more reason we as users need to get behind crowdsourcing, and do it responsibly.