crowdsourcing introduction

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TheBlogTV S.p.A Crowdsourcing Università Bocconi 8 Marzo 2011

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Bruno Pellegrini made a lesson in Bocconi about Crowdsourcing. Bruno Pellegrini is one of the top Italian experts in new media and UGC, after graduating in business administration at the Bocconi University in Milan, he worked at Procter & Gamble and Bain & Co. He took his MBA at Insead, Paris, and joined Mediaset where he developed and produced multimedia projects including the web-TV during the first edition of Big Brother.He was co-founder in 2001 of Offside, a company which produces several television programs and films for private cinema that won numerous international awards, including the Locarno Film Festival and David di Donatello.In 2004 he conceived and founded the satellite channel, NessunoTV.He is currently CEO of TheBlogTV, a media company he founded in 2006 specializing in user-generated


  • 1. www.theblogtv.itCrowdsourcing Universit Bocconi 8 Marzo 2011TheBlogTV S.p.A

2. TheBlogTV is the first Social Media Company in Europe, and it is present in Italy, France, Spain, and the UK. Founded in 2007,Our mission is toTheBlogTV spa iscreate economicsupported by a team of prominent investors amongvalue through thewhom an Italian industrialpotential of Web 2.0 member leader in television production (DeAgostini)and by engagingand two Venture Capitalcommunities. funds specialized in media and and telecommunications (Innogest e Tlcom). 100 people work for the company.TheBlogTV S.p.A 2 3. Participatory Value is the new fronteer of business management. Crowdsourcing is one emerging model which leverages on external resources in order to create participatory value. INTRODUCTION Crowdsourcing In the near future any company and organization must recognize where its participatory value lies and how to create/activate it.TheBlogTV S.p.A3 4. DEFINITIONCROWDSOURCING is when aCOMPANY takes a job that was ONCE PERFORMED BY EMPLOYEES and outsources it ina form of an open call to a LARGE UNDEFINED GROUP OF PEOPLE generallyusing the internetTheBlogTV S.p.A 5. CROWSOURCING AND OTHER TYPES OF CO-CREATION09TheBlogTV S.p.A /5 0 6. THE ORIGIN OF CO-CREATIONThe origin of crowdsourcing are to be found in the early work of Eric vonHippel (MIT) in late 70: Users as innovators (1979) or Get new products fromcustomers (1982)For me, the 1991 book of Salvatore Vicari Limpresa Vivente highlightedsharply that enterprises must open their boundaries if they want to fight theentropia and win the competition.More recently, Ramaswamy and Prahalad (Co-Opting CustomerCompetence, 2000 HBR) have defined some key pillars of the co-creationmodel.09TheBlogTV S.p.A / 60 7. CROWDSOURCING MODELA first generic categorization of crowdsourcing sees twobasic models:Corporate Crowdsourcing happens when crowdsourcing isstarted by a companyCrowdsourcing Vendors are enterprises whose businessmodel is entirely built on crowdsourcing09TheBlogTV S.p.A / 70 8. CROWDSOURCING TURNOVER IN 2009Accounting for overlap, and using some very general assumptionsrelative to work type, category and company revenue model, wedestimate that over 1 million workers have earned $1 2 billion over thepast 10 years via crowdsourced work allocation.The revenues earned by the paid crowdsourcing vendors themselves aresubject to a wider margin of error in estimation, but are likely around$500 million per year among all vendors.Vendor Revenues will pass $1B in 5 Years 0 9TheBlogTV S.p.A/ 8 0 9. No matter who you are, most of the smartest people work for someone else Attributed to Sun Microsystems cofounder Bill Joy, this law emphasizes the CASE STUDIESessential knowledge problem that faces Crowdsourcing many enterprises today, that is, that in any given sphere of activity most of the pertinent knowledge will reside outside the boundaries of any one organization, and the central challenge for those charged with the innovation mission is to find ways to access that knowledge.TheBlogTV S.p.A 9 10. INERNATIONAL CROWDSOURCING MAPwww.crowdsourcingresult.comTheBlogTV S.p.A 11. ITALIAN CROWDSOURCING MAP www.crowdsourcingnetwork.itTheBlogTV S.p.A 12. CROWDSOURCING HISTORY09TheBlogTV S.p.A / 12 0 13. CROWDSOURCING CASE STUDIESCORPORATE INNOVATION: P&G ConnectTheBlogTV S.p.A 14. CROWDSOURCING CASE STUDIES CORPORATE INNOVATION: Dell / StarbucksDELL IDEA STORMMYSTARBUCKSIDEASSince 2007, DELL has received 15.400 StarBucks has received more thanideas and implemented 432100.000 ideas in 2 years (more than 400)TheBlogTV S.p.A 15. CROWDSOURCING CASE STUDIES CORPORATE INNOVATION: Mulino Bianco / NesquickNELMULINOCHEVORREI NESQUIK SAI COME ME LO IMMAGINOIn 2010 MulinoBianco receives almost 5.000 In 2010 Nesquik engaged mothers toideas and are implemented 4. develop a new concept for its website TheBlogTV S.p.A 16. CROWDSOURCING CASE STUDIESINNOVATION VENDORS: Innocentive / YourEncoreINNOCENTIVE YOURENCOREThe site aggregate more than 200.000The characteristic of this platform is toscientists from 200 countries. Since 2003 keep retires in the game allowing themmore than $7mln prizes have beento participate to crowdsourcing projectsassigned. for top customers. TheBlogTV S.p.A 17. CROWDSOURCING CASE STUDIES CREATIVITY VENDORS: BootB / CrowdspringBOOTBCROWDSPRINGBorn in 2009 it allows brand to engage a Together with 99design it is the mostcommunity of creatives famous creativity crowdsourcing vendor in US TheBlogTV S.p.A 18. CROWDSOURCING CASE STUDIES CONTENT VENDORS: UserFarm / Associated ContentUSERFARM ASSOCIATED CONTENTSince 2009 more than 80 contentYahoo bought AC in 2010 for almostcrowdsourcing project have been$100mln in order to integrate its model inlaunched on the platform the content making process. TheBlogTV S.p.A 19. CROWDSOURCING CASE STUDIESCORPORATE CONTENT: RAI / France24FRANCE 24 LES OBSERVATEURS CITIZEN REPORT - RAI The first time Rai opens to user generated content, a participatory TV Show aired on 2010 with excellent audience results.CNN I REPORT TheBlogTV S.p.A 20. CROWDSOURCING CASE STUDIES CROWDFUNDING VENDORS: SellaBand / FashionStakeSELLABAND FASHIONSTAKEBorn in 2006, it helps new music bands to Since 2010 it gives young designer araise money and get visibilitychance to enter in the fashion worldTheBlogTV S.p.A 21. CROWDSOURCING CASE STUDIESCROWDFUNDING: Kapipal / KivaTheBlogTV S.p.A 22. CUSTOMER CAREVodafone / CrowdengineeringVODAFONELAB CROWDENGINEERINGSince 2007 more than 100.000A white label customer careVodafone users subscribed and crowdsourcing platform used byparticipate to the lab. many international customers.TheBlogTV S.p.A 22 23. MARKETINGCORPORATE CSR: Pepsi / WWF PEPSI REFRESH YOUR PROJECT SONY/WWF OPEN PLANET IDEAS A sizable 44 percent have used crowdsourcing asking customers to provide ideas and help in decision-making on how to tackle issues. Of these, 95 percent found it valuable to their company. Regardless of use, 83% see the potential. The perceived value of crowdsourcing is that it surfaces new perspectives, builds engagement with key audiences, invites clients and customers from nontraditional sources to contribute ideas and it brings new energy to the process of generating ideas and content.Weber Shandwick October 2010 216 Fortune 2000 Corporate Executives with Program orTheBlogTV S.p.A Communications Oversight for Corporate Philanthropy, Social Responsibility & Community Relations 23 24. CROWDSOURCING CASE STUDIESI Pad and Iphone applications On my opinion one of the most interesting crowdsourcing example is the Iphone and Ipad AppStore. Here the concept of becoming a platform to harness the participatory value is fully exploited. Letting anyone to develop and sell their applications has led to 250.000 apps building a critical mass far above any competitors. APPLE APPLICATION STORETheBlogTV S.p.A 25. Choose the best To achieve the objective of leveraging the knowledge of the masses, business must realise that to get the best answers, it is necessary to attract those GUIDELINESwho can give them, and these are the Crowdsourcing people who also best know the value of the knowledge they hold.Donal ReddingtonTheBlogTV S.p.A25 26. CO-CREATION GUIDING PRINCIPLES 0 9TheBlogTV S.p.A/26 0 27. CROWDSOURCING 5 KEY SUCCESS FACTORS1. Crowd Responsiveness - What each vendor seeks to achieve is enough volume, breadth and quality intheir on-demand workforce to provide the payers a good chance of getting results in a timely fashion.They also seek to provide the most lucrative experience for their workers as the barrier to working foralternative vendors is low.2. Ease of Use - A well designed on-demand service will hand hold a work requester through the processof creating a work definition and proposal. Itll provide a mechanism for the provider to keep tabs onthe progress of the work all the way through to approving the results delivered and the subsequentpayment of the worker.3. Satisfactory Results Low quality or unexpected results are the single biggest factor in companieschoosing to abandon paid crowdsourcing as a viable outsourcing option. Many of the business peoplesurveyed were willing to invest the time and effort to submit trial work through a paid crowd vendor, butunwilling to give it a second chance when the initial results were below their expectations.4. Cost Advantage - Cost benefits run second to results quality in determining business interest in paidcrowdsourcing. Cost advantages over traditionally sourced work range from orders of magnitudedifference to similarly priced. Some work types can only be done economically via paidcrowdsourcing. Some examples:Traditional OutsourcingPaid Crowdsourcing Transcription $2 6/minute$0.75/minute Company Research* $3 - 10/hr $1.85/hour Image Tagging Feasible?$0.02/image5. Security / Privacy The option for autonomy and the assurance of security is a built in feature for most0categories of paid crowdsourcing. In addition, vendors have developed sophisticated procedures that 9utilize accounts, escrows, and modern payment processors like Paypal along with approval procedures TheBlogTV S.p.A/that work fairly well in protecting both the provider and the worker when settling the bill. 27 0 28. CASH REWARD IS NOT EVERYTHINGIn the case of output that is not needed by the contributor, a cash reward might betendered for substantial contributions. Such efforts are not undertaken with any ex-ante guarantee that they will be rewarded. Rather, payment is at the discretion of thesponsoring organization, made after the work has been completed and evaluated asmeeting a certain criteria, and is usually attended by the formal transfer of intellectualproperty between contributor and sponsor.Beyond pecuniary benefits, extrinsic reasons for participation include job marketsignaling and skill and reputation building. Distributed innovation communities providea relatively open and transparent platform for exhibiting skills and talents toprospective employers. Participants dont need high-level credentials to directlydemonstrate their abilities in highly specialized domains, and employers can screenand hire talent by directly observing or soliciting third-party verification of skills.The intrinsic and extrinsic motivations to participate in distributed innovation systemsare not intuitively obvious to new observers of the phenomenon. Most, in fact, find tobe counterintuitive the association of fun, enjoyment, and a personal sense of identitywith the accomplishment of complex technical tasks. But the research findings stronglysuggest that the functioning of these systems is driven by mixed and heterogeneousmotivations. Consequently, optimizing on only one dimension might have the effect oflimiting participation.0 9TheBlogTV S.p.A/ 280 29. IMPACT OF CROWDSOURCING1) GLOBAL RE-DISTRIBUTION OF KNOWLEDGE WORK2) DISINTERMEDIATION OF TRADITIONAL AGENCIES3) FOCUS ON VALUE CREATION4) VALUE IS NOT ONLY ECONOMIC5) VALUE WILL BE EQUALLY SHARED 0 9TheBlogTV S.p.A/ 290