The point here is, on the company side, to remember Warren Buffett’s “institutional imperative” analogy. A manager’s job is not to keep up with buzzwords, after all. Crowdsourcing is a new thing, therefore relatively untested, and it certainly has its optimal applications and its limits – which probably haven’t been found yet. It’s just another tool available and should be subject to the same rigorous analysis before the company starts using it.

Links:

The crowd is wise – when it’s focused – NY Times, July 2009 – here’s the link to a MIT paper they quote called “Harnessing Crowds: Mapping the Genome of Collective Intelligence”

Wired’s 2006 seminal article on Crowdsourcing – by Jeff Howe, who later wrote the inevitable book version.

Jeff Howe’s blog on the subject – Pretty much dead, but it has links to other Crowdsourcing stories.

But that’s not all that matters: is crowdsourcing then a substitute for companies’ R&D demands? Does it always work? How open do you really want to be? Some people are looking at it and saying “hold your horses”. That’s always a good advice in our book.

As for Netflix, they’re happy enough to have a Netflix Prize 2 on the works. Very smart: it keeps the ball rolling and takes advantage of the community they built. The press coverage doesn’t hurt, either.

But there’s more. We’d argue that the benefits of the Netflix Prize in terms of research in statistics/ data mining/ etc. in large data sets may be felt for years. It’s interesting to consider this in terms of efficiency gains for many different types of companies. It’s something companies all around the world should be paying attention to.

Here’s a video interview with Reed Hastings, Netflix’s CEO, at the time of the award.

Links:

Crowdsourcing page on Wikipedia

Jeff Howe’s classic article on Wired, his book and his blog

The teaser for Netflix Prize 2

Winning the Netflix Prize – NY Times, October 2008 (huge article with a video that apparently can’t be embedded here).