Friday, May 28, 2010

Win $1,000 Click here to rename crowdsourcing courtesy of GeniusRocket and 99 competition

What to call crowdsourcing.

Beyond buzz. Crowdsourcing outfits GeniusRocket and 99designs have joined forces to rename the term ‘crowdsourcing’… by crowdsourcing the task to the community.
The Are You a Dick… But Really Wish People Would Call You Richard? project asks participants to think about what crowdsourcing means to the creative community and the businesses that use it, and how the model will continue to drive innovation in marketing and branding. Then, they have to suggest a new name for the whole show.
One thousand dollars to the winner. Right here.
“The fact of the matter is that the term ‘crowdsourcing’ has just become too vague,” says GeniusRocket CEO Mark Walsh. “We want a term that describes the power the global creative community can provide, not just a business industry buzzword.”
Click on this link to win $1,000
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Crowdsourcing self reliance start-up over tech support raises $7.8 million

Soluto wins TechCrunch Disrupt with software that targets and fixes computer issues

Twenty startups presented on-stage at the TechCrunch Disrupt conference in New York this week, and Wednesday night only five remained. Out of those finalists, the impressive music-making site UJAM, took the runner-up spot, and Soluto, a startup that has developed software to make computers perform better, was announced as the winner.

In addition to being one of the few startups at Disrupt to build desktop software, Soluto was also one of the most compelling and useful products at first glance. The company has basically crowd-sourced computer maintenance with its “anti-frustration software”.

Soluto’s software monitors your computer for a wide range of issues, including unstable applications, or programs that eat up too many resources. It then alerts you with various suggestions on how to fix them. The software also keeps track of your computer’s speed over time, and can show you if installing a certain application or driver made performance worse.

Here’s where it gets interesting: Soluto’s software also tracks how issues are fixed, and can alert other users with the same problem about the fix. In addition, the software can automatically fix the issue for users who pay a subscription fee. The manual version of the software will remain free, which makes it compelling for computer geeks who would rather fix their own computer problems.

Soluto sees the software as something that IT departments will adore (and pay for) at the enterprise level as well.

Its PCGenome project could also help users to avoid problems in the first place. With user-submitted data, Soluto can determine which software works best on different computers. That information could lead someone looking to run Photoshop as one of their primary applications to one brand and model of computer, and it could also make them aware of known issues with their current hardware.

Having worked in IT support for some time, what Soluto is promising has the potential to change the way average computer users interact with their machines. Instead of calling tech support when they have a problem, or begging a tech-savvy friend or family member to help them, users running Soluto could become more self-reliant.

Thus far, the Tel Aviv, Israel-based company has raised $7.8 million in seed and first-round funding from Proxima Ventures, Bessemer Venture Partners, and Giza Venture Capital.
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Thursday, May 27, 2010

YouTube Launches Platform for Crowdsourcing Suggestions

YouTube is looking to ramp up engagement between viewers and content creators through the integration of Google Moderator, the search giant’s crowdsourcing and feedback product.

Google Moderator, which launched in 2008, is one of the company’s lesser-known products. It allows a person to manage feedback and questions from large groups of people. Users submit their suggestions or questions via Moderator, and can then vote specific questions or suggestions up or down to bring the best ideas to the top.

For the last six months, YouTube (YouTube) has been testing Google Moderator integration with a few select partners and events, most prominently during YouTube’s interview with President Barack Obama..

Starting today though, anyone can integrate Google Moderator into his or her YouTube channel. Channel owners can adjust features such as the dialogue, submission types and conversation length. Then channel viewers can respond with their own feedback or ideas.

YouTube’s launching the new Moderator integration with 12 launch partners, including Stanford University, Howcast, singer Kina Grannis and YouTube star Michael Buckley. Stanford, for example, is using Moderator to have cadiologist Dr. Euan Ashley answer viewers’ questions about heart disease and genetic disorders (see video below).

The goal, as YouTube News Manager Olivia Ma told me yesterday, is to give YouTube channel owners a better way to connect with their audiences. Google Moderator seems well-suited for that goal. While it is a niche product, we can see why YouTube’s decided to make it an option for all users. We’re sure we’ll see some unique uses for Moderator over the next few weeks.
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Wednesday, May 26, 2010

HuffPost Business Is Looking For The 'Innovator Of The Week'

We're looking for a few good innovators.

As the U.S. economy digs out from underneath the rubble of the greatest financial crisis since the Great Depression, the Huffington Post is looking for the entrepreneurs, CEOs and forward-thinking business leaders who are determined to do things differently. HuffPost Business is launching a new crowd-sourced feature called the HuffPost Innovator of the Week. The idea is simple. We're looking for the unheralded companies that are changing the way they -- and their competitors -- do business on a daily basis.

Though we'd be happy to find the next Steve Jobs or a future MacArthur grant recipient, we're looking for more than just sheer technological innovation. We're out to discover the companies that are leading the way in the creation of new business models, pushing corporate, environmental and social responsibility forward and generally reinventing what we think a for-profit firm can do. Nominees can range from local start-ups to established firms that have re-imagined a significant portion of their business.

Here's the wrinkle: each week, we'll feature a handful of the most noteworthy companies from our submissions and leave it up to HuffPost users to decide which is most innovative and ground-breaking. We will be soliciting submissions on HuffPost Business, and via our Twitter and Facebook accounts.

(You can also take part in the conversation on our Innovators of the Week via the Twitter hashtag #innovate.)

To submit an innovative company, provide a short description below and a picture of the founder, CEO or entrepreneur behind the company you're nominating.

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Move Over Real World, The Founders 2010 is Here

Forget MTV's reality show "The Real World" - if you're considering getting into the startup game but want to get a glimpse of what's in store, then The Founders 2010 is for you. The weekly video series is in its second incarnation and follows three startup companies - content crowdsourcing service Grogger, mobile augmented reality platform creator Omniar and property management software RentMonitor - in their adventures through Techstars.

Techstars is a 90-day program that provides seed capital and mentorship for Internet startups. The program offers up to $18,000 in seed funding as well as "the chance to pitch to angel investors and venture capitalists at the end of the program", according to the website. From what we've seen, the program has quite the success rate, with nearly 70% of companies coming out of Techstars raising outside funding or becoming profitable on their own.

The series follows "the experiences of three companies throughout the summer in Boulder, Colorado from the time they arrive through investor day and beyond" and looks at what it means to be a startup going through Techstars.

In the first episode, David Cohen, the managing director for Techstars, explains that "when people think about the startup and why do you do it, they always think about the exit and getting out and making a bunch of money, but it's really all about the ride. It's a huge adrenaline rush."

From showing how startup partners can quickly become family members as the business operates from the basement, to the difficulties and sleepless nights, "The Founders 2010" gives a sneak peek into the world of Internet entrepreneurship.

While "The Founders 2010" follows startups in Techstars Boulder, the program is also available in Boston and recently expanded to Seattle. The entire 2009 season of "The Founders" is also available on the Techstars website.
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Tuesday, May 25, 2010

Mountain Dew Fans Crowdsource Ad Media Buys

Mountain Dew took three new Dew flavors to fans, asking for feedback on placing ad media buys. The move represents the latest in a series of attempts through Dew Labs to turn over the entire product development cycle and marketing process to consumers who love the brand most.

The year-long project now asks Mountain Dew lovers to guide the media-buying process after creating the products and designing the marketing campaign. Through the DEWmocracy project, Mountain Dew polled the 4,000 Dew Labs members about their favorite Web sites. Gathering that information, Mountain Dew invited the potential media partners to pitch the DEW Labs community.

Entertainment Web sites CollegeHumor, The Onion, Crave Online, and Funny or Die became Mountain Dew Media Partners after DEWmocracy members were asked in February to name their favorite Web sites.

At CollegeHumor, the group created a campaign that emphasized the ultimate road trip. For each Dew flavor, the site will come up with three video ideas, and then it's up to those in the DEW Lab to decide which one they want to see. The three videos will post to the CollegeHumor site and allow users to decide their favorite. The flavor that wins dictates where the group goes on the road trip. The group will film all of its popular series.

The CollegeHumor cast will tweet clues on Twitter as to their specific location, but it's up to DEW Lab fans to find them. One lucky fan will get a chance not only to ride in the CollegeHumor tour bus, but also to star in a segment of "Hardly Working." That's if CollegeHumor wins the media pitch challenge and the members of the DEW Labs vote them in.

It turns out the road trip gets underway this week. The team will meet up with the DEWmocracy Flavor Teams already on the road. The Distortion video that CollegeHumor created received the most "likes," so the team will meet up with the Mountain Dew's group on its Flavor Campaign Tour in Cincinnati this week.

Mountain Dew, whose parent company PepsiCo shunned this year's Super Bowl in favor of advertising on social media, has been rallying soft drink fans not only to create and name the Dew flavors, but to market them too. Since last year, competing teams chose flavors, voted on new drink names, spread the word on Twitter and Facebook, inspected commercials and organized stops for the sampling vehicle.

"Between 70% and 90% of the more than 4,000 members have responded throughout the process," says Brett O'Brien, Mountain Dew's marketing director.

The vans with marketers and fans recently set out across the United States representing each flavor -- Typhoon, Distortion, and White Out. Consumers can track the vans through the DEWmocracy Web site. A map link to the Twitter page provides geographic location. Technology and social media give the travelers the ability to tweet their location and have fans nearby join them for a little fun and a taste test. The iPads in the trucks allow fans to vote and have their preference added to the tally in real-time.

Designed by consumers, Mountain Dew's three new flavors hit store shelves three weeks ago. Voting on the flavor will continue until June 15, and on Labor Day the next permanent product created entirely by Dew drinkers will debut.

The first DEWmocracy initiative began in late 2007, allowing consumers to create flavor, color, name and graphics. About 1 million participated in the process. The result was Voltage, a citrus-flavored beverage that came to market in January 2009.

DEWmocracy 2 followed in July. The idea to give the brand's fans another outlet to express their passion created an ongoing dialogue between the brand and DEW drinkers by leveraging social media and giving consumers a voice.

The DEWmocracy platform has become a pedestal for collaboration among fans, as Pepsi loosens control and turns over the creative process and marketing to those who dig deep into their pockets to support the brand.

"We don't plan to continue to outdo ourselves," O'Brien says. "It's really about keeping the lines of communication open."
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Friday, May 21, 2010

"What should I crowdsource? 3 criteria to consider"

by Kyle Hawke - (Guest Blogger) "Kyle Hawke founded Whinot in 2009 and is based in the United States. Whinot provides crowdsourced business consulting for small-medium business owners. More about Whinot can be found at"

Crowdsourcing. It’s becoming a hot topic, and it’s likely to be an enduring trend. To begin, what exactly is crowdsourcing? Simply put, it’s “asking the audience” instead of “phoning a friend.” It’s about taking work typically done by one person and broadcasting it to a large group. The Web makes this much easier, and there’s reason to believe that crowdsourcing can result in more efficient solutions for managers.

With crowdsourcing on the rise, a lot of small business managers are asking the question: “What can and should be crowdsourced and what should remain in the hands of a single contractor or employee?”

Here are three criteria to consider when answering this question:

1. Type of Knowledge

“Knowledge is power.” – Sir Francis Bacon

Explicit knowledge can be crowdsourced.

Explicit knowledge is knowledge that can be easily communicated to others. For crowdsourcing, we must take that definition one step further. Explicit knowledge that can be easily communicated to others using electronic mediums can be crowdsourced. By definition, crowdsourcing uses the web to assemble a crowd. Therefore, if the information (knowledge) cannot be communicated through the web, then it will be less easily crowdsourced.

On the other hand, tacit knowledge – that is knowledge that is not easily taught or communicated – is not a good candidate for crowdsourcing.

For example: You can crowdsource the market research to figure out a market’s size or the competitive landscape, but can’t crowdsource the actual product launch.

2. Level of Knowledge Transfer

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” – Chinese proverb

Like traditional outsourcing, crowdsourcing should be used on non-strategic tasks and activities … when you are looking for a fish, not to wanting to learn how to fish.

Sure, crowdsourcing is (often) quicker and cheaper than using a single employee or contractor and that’s great for small, routine tasks. On larger, more complex tasks, crowdsourcing’s biggest benefit is the fresh, third-party perspective. By nature, the crowd is not burdened by the routines, mindset and “group think” of full-time employees.

But this benefit comes with a twist. Organizations using crowdsourcing for the fresh perspective it brings (not just because it’s fast and cheap) must keep in mind that they will lose the value of the acquired knowledge they would have realized if they did it themselves. For more complex tasks, the crowd can tell you, but can’t show you how to do it.

Crowdsourcing gives you a fish while a full-time employee will allows you to learn how to fish.

3. Size of Task

“Not too big, not too small, but just right!” - Goldilocks

Small tasks are more easily crowdsourced than large tasks. This is true because the typical, unpaid crowd has a short attention span for this type of work. Unpaid crowds (or minimally paid crowds) are completing small tasks primarily for intrinsic motivations – e.g., they find it fun, they like the challenge. If the task becomes too large, the crowd will lose interest and dissipate.

There’s a balance to maintain here between making tasks too large that the crowd becomes disinterested and making tasks too small that they present no challenge or enjoyment for the individual. You need “Goldilocks” tasks, those that are not too big, not too small, but just right.

Large projects can still be crowdsourced, but they must first be broken down into logical, manageable parts that can be easily aggregated back into a meaningful solution for the owner.

When considering paid crowds or expertsourcing, tasks can grow in size and still be effective.


Crowdsourcing clearly provides different benefits for different tasks. Managers can use these criteria to start to understand which tasks to crowdsource and which to keep in-house. Once that decision is made, the next question is how to crowdsource. This depends on the type of task and on the attributes of the crowd – their relationship, motivation, skill set, etc. Putting this puzzle together is both an art and a science and is acquired through trial and error / experience. Whinot has this experience. Let us know if we can help.

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Wednesday, May 19, 2010

Yahoo buys crowdsourcing website associated content for $100,000,000

Yahoo has announced that it will be acquiring Associated Content, a producer of content for the web that stands alongside the likes of Demand Media and AOL's Seed.

The details of the deal have yet to be made public but at least two sources mention that the price Yahoo paid for the outfit lies between $90 million and $100 million, which anyway is much smaller than the $150 million that AC wanted only a few months ago.

As part of Yahoo, Associated Content will be able to access more than 600 million users monthly and the acquisition kind of make sense for Yahoo who has been looking to move away from search since its strategic partnership with Microsoft allowed it to refocus on marketing and advertising.

But for some reason, rather than following AOL which passed on the opportunity of buying AC last year only to launch its own rival, Seed, Yahoo apparently wanted to move faster into the crowded content crowdsourcing field.

t does give the former darling of the internet a ready to use platform and a solution that can churn out content cheaply. AC is only five years old but has nearly 400,000 contributors who together have published more than two million pieces of content which have generated 1.75 billion page views.

Arguably the risk here is that it heralds a new era where search engines and portals produce their own content, a very dangerous and slippery slope indeed for them and other content producers.

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Sunnyvale, Calif. â - May 18, 2010 - Yahoo! Inc. (NASDAQ: YHOO) today announced it has signed a definitive agreement to acquire Associated Content Inc. This strategic move extends Yahoo's ability to provide high quality, personally relevant content for the benefit of more than 600 million users as well as tens of thousands of advertisers. As Yahoo! enhances its social, mobile, local, and media offerings, the acquisition of Associated Content reinforces the company's longstanding promise to offer the best of the Web — by combining Associated Content's approximately 380,000 contributors who provide rich and varied content on a broad array of passion points, with Yahoo's leadership in partnering with established content brands and the award-winning team of editors and experts from Yahoo!.
"Combining our world-class editorial team with Associated Content's makes this a game-changer," said Carol Bartz, CEO, Yahoo! Inc. "Together, we'll create more content around what we know our users care about, and open up new and creative avenues for advertisers to engage with consumers across our network. These are important aspects of building engaging consumer experiences on Yahoo!, and one of the reasons why we're one of the most visited destinations online."
"The Associated Content team and our 380,000 contributors are looking forward to joining Yahoo! and to the opportunities that being part of a global Internet brand presents," said Luke Beatty, Associated Content founder and president. "Combining our crowd sourced content with Yahoo!'s distribution, world class editorial team and online marketing leadership will accelerate our growth as we continue to leverage our best-of-breed platform to deliver high quality compelling content on more than 60,000 topics."
For advertisers, this deal will expand Yahoo! into more topic areas and real-time content generation. The combination promises to offer advertisers even more opportunities to engage groups of passionate consumers in ways they will find uniquely appealing to their interests and tastes. Having insight into user intent through its leading search products enables Yahoo! to identify topics important to advertisers and users. Yahoo! plans to use Associated Content to create content around those topics and leverage Associated Content to contribute content to existing media properties. Associated Content also provides more opportunities for Yahoo! to partner and collaborate with publishers who can help the company shape the tremendous variety of content coming in, into something bespoke and even more engaging.
While current Associated Content content is U.S.-centric, Yahoo! expects to scale the platform globally.
Associated Content was founded by Luke Beatty in Denver, Colorado, in 2004. Associated Content receives more than 16 million unique users per month (comScore) and the editorial staff reviews more than 50,000 pieces of content per month, including articles, images, audio and video. Yahoo! expects to complete this acquisition in the third quarter of 2010. Financial terms were not disclosed.
About Yahoo!Yahoo! attracts hundreds of millions of users every month through its innovative technology and engaging content and services, making it one of the most visited Internet destinations and a world-class online media company. Yahoo!'s vision is to be the center of people's online lives by delivering personally relevant, meaningful Internet experiences. Yahoo! is headquartered in Sunnyvale, California. For more information, visit or the company's blog, Yodel Anecdotal (
Yahoo! is the trademark and/or registered trademark of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
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Jon Bond Joins Victors & Spoils

Jon Bond has joined crowdsourcing agency Victors & Spoils as a strategic partner, the Boulder, Colo., company said today.

In February, the co-founder of Kirshenbaum, Bond, Senecal + Partners left the agency, following the final payout from parent MDC Partners. During his 23 years at his namesake shop, Bond (pictured) was associated with brands like Snapple, Kenneth Cole, Capital One and Wendy's. Victors & Spoils said Bond's "investing" in the six-month-old agency is his first business move since leaving KBS+P.

"Running a traditional agency today is like being captain of the Titanic, and Victors & Spoils the iceberg. As an investor, I stand behind new agency models designed to challenge the 'unsinkable,'" Bond said in a statement.

"Victors & Spoils is already the undisputed leader in helping today's brands navigate the new marketing landscape. Plus, crowdsourcing is building huge momentum."

John Winsor, Claudia Batten and Evan Fry launched Victors & Spoils last October. Winsor is the author of Spark: Be More Innovative Through Co-Creation; Batten is an entrepreneur who has founded companies like videogaming concern Massive; and Fry is a former Crispin Porter + Bogusky creative director who worked on accounts like Best Buy and Domino's.

The agency now claims "more than 10 marquee brand clients" including Dish Network, General Mills, Brown Forman and Virgin America. Victors & Spoils also said it has a global creative and strategic network of more than 750 individuals.

"It is fantastic to have an advertising legend like Jon Bond join our team within our first six months," said agency CEO Winsor in a statement. "There has been tremendous interest among the investment and marketing communities. We believe our model provides businesses with a better way to solve their marketing, advertising and product-design problems using tools based on crowdsourcing principles."
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Tammy Camp Sets World Kiteboarding Record via 'Crowdfunding'

Tammy Camp, entrepreneur and adventure traveler, has set a new kiteboarding world record for completed back loops in one minute (60 seconds), and has set a new precedent by raising funds for the attempt via crowdsourcing. Tammy's 5 full back loops, all completed within 60 seconds, now represents the standard others will shoot for. The record was set by Tammy on the afternoon of May 9th, 2010, in the kiteboarding hotspot of Cabarete, Dominican Republic. The attempt was filmed, and verified by the Universal Record Database.

In an interesting twist, Tammy raised the funds to attempt and film the record-breaking attempt through the popular crowdfunding site IndieGoGo. The money, raised from names such as John Ferber of, Kane Ng of Happy Madison Productions, and Tim Ferriss, author of The 4-Hour Workweek, covered costs for travel, equipment, film crews, and the fees of having the record verified.
“Setting a new world record, and entering the sport of kiteboarding into the world record database for the first time, is a huge thrill. Doing it with the help and support of so many people through the crowdfunding platform made it that much better,” said Tammy Camp. “I’m hoping this will bring new excitement to the sport of kiteboarding, and add more credibility and viability to the concept of crowdfunding.”

Crowdfunding, the financing alternative for artists and entrepreneurs alike, leverages the power of groups of people each willing to give a small amount for a cause. These small sums add up when put together, allowing people to support and produce the ideas they want to see, and giving providers the resources and freedom to bring them to fruition. Tammy is a well known proponent of the crowdfunding model.
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Crowdsourcing saves lives

Seeking help for a charity or cause via social networking isn't new.

But a current campaign to save the life of a 4-year-old boy has taken off in a big way, hoping to capitalize on crowdsourcing and social media to help him beat the odds.

And according to a note on the group's website, there's a chance that it's already worked.

Devan Tatlow, whose family lives in Washington, D.C., has a rare form of leukemia and needs a bone marrow transplant. Complicating that is his mixed south Indian-northern European ancestry - which supporters say gives him a 1-in-200,000 chance of finding a match.

Doctors say they have less than 12 weeks.

Instead of trying to beat those odds the normal way, his family and their friends went online and turned their quest viral.

Rob Kenny, Devan's godfather, said hundreds of people have taken active roles drumming up support in what has become a global effort. While Devan lives in Washington, Kenny is in the United Kingdom, the Facebook campaign is being run out of Hong Kong and active recruitment drives are happening in Mexico, Singapore and other places.

Their message has been tweeted by the thousands on Twitter, and probably even more people have mentioned Devan's cause in their Facebook statuses.

Their efforts have been promoted throughout the online community through posts on the Huffington Post, tech blog Gizmodo and other sites.

The group is urging people to register at Be The Match, in hopes they'll be a match for Devan or someone else.

On Tuesday came some good news: there's a chance their efforts have paid off.

A message on the site's homepage said "a potential cord blood match" for Devan has been located. The group is awaiting confirmation that it truly is a match.
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Monday, May 17, 2010

Jelli Lands $7 Million for Interactive Crowdsourced Radio

San Mateo, Calif. - Jelli, the operator of a crowdsourced, hybrid online and on-air radio format, announced on Thursday that it has raised $7 million in its first round of financing, led by Battery Ventures with participation from First Round Capital.

San Mateo, Calif.-based Jelli launched its platform in 2009, piloted the service on CBS Radio's Live 105 in San Francisco, and is now on the air in 17 markets in the U.S. and Australia.

The social music service lets listeners vote songs up or down, to create and alter the on-air playlist in real-time -- even enabling listeners to pull a song off the air in mid-spin.
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Saturday, May 15, 2010

Kiva Co-Founder's New Startup Wins $50,000

Yesterday evening, the Summit Series held a pitch competition to give $50,000 to one young startup. Unlike other competitions, the winner was determined by the audience -- not just by voting but by actually trading shares on a simulated market. When all was said and done, the winner was crowdfunding for founders startup ProFounder, the new startup of Kiva co-founder Jessica Jackley.

I believe that over the next five to ten years, the number of people who decide to strike an entrepreneurial path is going to increase dramatically. Some of this will be new people (schmuks like me, in fact) who join existing low-barrier-to-entry startup fields like software. But a lot more of it is going to be people building homebased or "lifestyle" businesses.

For these groups, the state of current funding just doesn't work. These are groups who are unlikely to ever have (or sometimes even want) returns that would justify traditional angel investment, much less venture capital. Bank loans, when they are available, add nothing to the founder's company except cash and interest rates.

Even for entrepreneurs who need bigger infusions of capital, crowdfunding from friends, communities and contacts might bring the benefit of creating a team of loyal evangelists and lead supporters right from the beginning. ProFounder works on a debt and revenue sharing model, so people theoretically get their money back, plus a rate of return based on how well the company is doing. It can accommodate capital raises up to $1,000,000.

I'll admit, I've been and to some extent remain pretty skeptical of the crowdfunding for entrepreneurs idea. It's hard (if not impossible) to make it work legally if people are getting equity for their investments, and debt is often not an attractive option for companies that are going to need a series of pivots to achieve a fit between the product and the problem they're trying to solve. What's more, undercapitalization (a business that raises $18,000 instead of $30,000 and tries to make it work, for example) could be a major problem.

All that said, there are some places where it makes a lot of sense. Like I mentioned above, for small home-based businesses that don't need huge amounts of capital to get started. I think that we're just going to see more and more of this. There are already a huge number of eBay businesses and Etsy businesses. I think we'll start to see Airbnb businesses soon, as well. Beyond these platforms, I think people will continue to want to open restaurants, pet supply stores, and all the other businesses where local still matters.

For that sort of group, raising money on a site like ProFounder means that they're basically rolling marketing and customer acquisition into the process of funding, which could be a really valuable process. What's for sure is that we're going to need a more complex funder environment for a new generation of businesses, so I'm glad to have them experimenting no matter what comes of it.

The prize was funded by Presumed Abundance, a new fund which I've written about previously that builds in a pay-it-forward mechanism into every investment. When companies are successful, they become angels with presumed abundance and fund a new set of companies with the money they made. $10,000 of the $50,000 investment prize will be churned right back into a scholarship fund to help people attend Summit.
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EC Roundup: Crowdfunding, fundraising and the state of venture capital

Here’s the latest from VentureBeat’s Entrepreneur Corner.

What’s better for startups? Partnerships or incorporation? – Thinking about partnering with a friend of colleague to start a new company? Attorney Scott Edward Walker says you should think twice when considering this route vs. incorporation, as it can be wrought with potential problems that could affect your personal finances.

The new face of venture capital: The rise of crowdfunding – Conventional VC networks often produce poor returns. Serial entrepreneur Kevin Lawton believes that as startup financing continues to evolve, crowdsourcing and crowdfunding will augment or replace traditional methods and create the high-return VC of the future.

Should an entrepreneur have an MBA? – Traditional thinking holds that most entrepreneurs don’t need MBAs, but serial entrepreneur Steve Blank argues that it’s not as simple as some have argued. Whether you need the advanced degree really comes down to the trajectory of your career.

It’s a relationship, not a transaction: Tips for fundraising entrepreneurs – While it’s not easy for entrepreneurs to find funding these days, that doesn’t mean you should jump at just any offer. Nat Goldhaber, co-founder and managing director of Claremont Creek Ventures, offers advice on how to ensure you have a good relationship with your investor.

The state of venture capital – The post-recession world is a tough one for venture capitalists – and it’s not likely to get easier, says Intel Capital Vice President Lisa Lambert. In this thought leader lecture, she gives her thoughts on what she sees as the coming consolidation.
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Web extra: More Resources for Crowdsourcing

If you’re a small-business owner, your resources are probably limited. The following sites can help you employ crowdsourcing to help with everything from marketing and design to innovation for products and services.

Marketing and Design


This creative online community with thousands of innovated students, designers and marketers is ready to help you with your ideas. Use RedesignMe for product design, logo design, idea generation or marketing concepts for your company.


CrowdSPRING offers logo, graphic design and writing services for small businesses at an affordable price. Post your creative project, creatives submit their ideas, and then you choose the one you like best. Set your own price and deadline. An average project gets more than 100 entries.

Atizo connects your business with outside innovators and collaborators to create new ideas and concepts for your company.

Freelancers Platforms


Join a community of competitive software developers, programmers and graphic designers who build software for companies ranging from Fortune 100s to small businesses.

Use this crowdsourcing site for your copywriting needs. Get your business material professionally produced, including business plans, Web content, presentations and press releases.

Thousands of Clickworkers can assist in the fast and efficient processing of projects for your business.

Open Innovation Software


This company helps solve your business’s biggest, most important problems, such as boosting revenue growth and profitability, increasing collaboration, maintaining sustainability, and improving processes. It specializes in innovation, idea management and developing methods, processes, and software tools to help your business thrive.

Tap into the minds of your employees, customers and partners to help drive the value of your company. Spigit’s innovation management software helps your business improve process efficiencies, decrease time to market, discover subject-matter experts within your organization, and connect people across departmental and geographic boundaries.

This portal of experts from around the world can help your business with advice and ideas, like giving innovated ideas for a marketing campaign, boosting your company’s PR, and developing products and services.

Intermediary Open Innovation Services

Big Idea Group

This site has an open source network of 13,000 problem solvers and inventors to solve your innovation challenges. It will help develop and execute your innovations and generate ideas in products, services and marketing.

Chaordix is a multipurpose crowdsourcing engine for open innovation, market prediction, brand collaboration, research and discovery for your company.

Peer Production

Involve innovators outside of your business to assist in design for innovative products and services.
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The Diaspora Project and Kickstarter: The Power of (Micro)Funding a Good Idea

$162,376 pledged on for the Diaspora Project with a goal of $10,000
a massive response! (as of Saturday 15th May 2010.

Since we broke the story about the Diaspora Project last week, the plans for an open source, distributed alternative to Facebook has seen widespread press. But just as importantly, funding for the undertaking has skyrocketed.

The Diaspora Project is the brainchild of four NYU computer students, and as Sarah Perez noted in her article, while the concepts of "open source" and "distributed network" might not normally have mass appeal, the latest round of privacy concerns with Facebook have helped to generate a lot of attention for the project and the concepts behind it.

The project is currently being hosted on Kickstarter, a site that lets entrepreneurs crowdsource funding. Kickstarter allows entrepreneurs to set a funding goal and deadline, as well as offer an optional set of rewards to their backers. Projects that don't reach that goal have their pledges returned.

In Kickstarter's words, the service demonstrates that "good idea, communicated well, can spread fast and wide" and that "a large group of people can be a tremendous source of money and encouragement."

Last week, Diaspora was $2000 short of their $10,000 goal with under a month left to go until reaching their deadline. Yesterday, when Techcrunch wrote about the project, funding stood at around $60,000. As of this morning, they have raised over $90,000 from over 2100 backers, including some fairly big names in the tech industry, and still have 19 days of fundraising to go.

Kickstarter offers a sliding scale, of sorts, for donations, and most of the funding for the Diaspora Project has come in small amounts. While 4 backers have pledged over $2000, most backers have opted to donate $5, $10, or $25. The latter has been the most popular donation amount, with almost 900 individuals committing $25. That $25 will get you a CD, some stickers, and a t-shirt - and the satisfaction of helping support a Facebook alternative.

While certainly the Diaspora Project is well-timed, their use of the Kickstarter platform also points to the power of crowdsourced microfunding - particularly for a project that many people outside typical investment circles are finding compelling and important. The Diaspora Project
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Friday, May 14, 2010

Rate-a-Trailer: Iron Sky

Nobody likes Nazis, not even in the future. This is why directors love having the Third Reich in their film: they embody a timeless evil that everyone can agree to hate. Simply by slapping a swastika onto a soldier’s uniform, the wing of a plane, or having an entire space station built in the image of one on the moon, viewers can instantly recognize the bad guys.

The Finnish film Iron Sky is described as a science-fiction comedy, which, with nothing but the trailer to go on, doesn’t make a whole lot of sense to us at the moment. All we know is that near the end of the clip, the words “SEND US YOUR MONEY” are seen flying through space amongst fighter jets as the sun starts to emerge behind some unidentifiable planet. That’s because the project is being funded entirely through crowdsourcing.

Iron Sky (Finnish: Rautataivas) is an upcoming Finnish feature-length comedy science fiction film from the makers of the Star Wreck series, directed by Timo Vuorensola and produced by Samuli Torssonen as their next project after the success of Star Wreck: In the Pirkinning.[3][4][5] Aboard as screenwriter for Iron Sky is the award-winning Finnish author Johanna Sinisalo.[6][7] The film is being created by the Energia Productions, Blind Spot Pictures and Cinet production companies. It is estimated to be released in cinemas early 2011.

As World War II comes to an end in 1945, Hans Kammler and other German scientists make a breakthrough in anti-gravity research. From a secret base in the Antarctic, Nazi spaceships are sent to the "dark side" of the Moon to establish the military base "Schwarze Sonne" (Black Sun).[3] Their plan is to build a powerful fleet and return to conquer Earth. The film is set in the year 2018 when their descendants finally return.[3][5]
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Thursday, May 13, 2010

Crowd-funded sites find stock market style

Online retail just became a lot more interesting and interactive.

With the advent of social networking, many fashion websites are heeding technology’s call to utilize a new business fad aptly named “crowd funding” to provide clients with support.

Crowd funding first appeared in France in 2004 and has since spread to the business worlds of the United States and other European countries. The basic idea behind this Internet phenomenon mixes social networking and monetary donations to provide business sponsorship.

Fashion sites using this medium include from the United Kingdom, the Chicago-based and the upcoming uses a system in which adult visitors to the site living within the UK or Ireland can invest in a designer — based on photographs of sample pieces — in increments of 11 pounds to fund a collection by that designer. Once a designer reaches their funding goal, which could be anywhere from 5,000 to 50,000 pounds, the designer then has six months to produce and sell a clothing line earning at least equal revenue to what the investors had given.

If all goes as planned and the collection earns as much as what it cost to produce, a percentage of the profits goes to the users who previously invested in that designer.

This kind of stock market approach to the fashion industry promises great benefits for both consumer and designer. Customers decide which creative minds to invest in, and the up-and-coming fashion designer receives the funding he or she might not have otherwise had to produce his or her own clothing line. This creates a support group for new designers, giving them the monetary and social backbone needed to survive in the fickle fashion industry.

However, risks are always present in any stock market. If a designer does not meet his or her funding goal, the line never launches, and investors lose the money they had advanced to the designer’s aid.

Although only allows for UK and Ireland residents 18 years of age or older to financially back designers, the site does receive and ship orders to and from the United States and Europe. is set to launch very soon and will provide the United States with a version of in which American consumers can become active shareholders of designers.

So the next time you have dreams of being a fashion star, try asking for donations from your friends or family members to fund your line. Just make sure you have enough money to go around once you become famous.
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The lazy CEO’s 10-step guide to crowdsourcing every business task

Whether you are starting a new company or are just the laziest CEO ever, there’s great news for you — the explosion in crowdsourcing strategies and solutions means you might be able to get started without any full-time employees! If you have projects or jobs that need to be completed quickly and inexpensively, here are some tips for getting the crowd to do your heavy lifting:

1. You need a name for your business. One iPhone developer put the task of naming his e-reader out to the crowd through Amazon’s Mechanical Turk, and $27.50 and 500 responses later came up with the name iReadFast. That’s even cheaper than the Silicon Valley tradition of getting a few friends together with a few cases of beer before crushes your dreams.
2. Now your great new name needs an eye-catching logo. 99 Designs helps companies crowdsource graphic design work to a broad network of artists and designers who compete to submit the best idea. You offer a payment price for the best logo, then pick the one you like best from the submissions.
3. Once you cover those basics, you probably need lots of money. Immediately. Crowdsource your funding with Kickstarter, a funding platform for artists, designers, filmmakers, musicians, journalists, inventors, explorers and more. You name the amount of money you need to do something; people in turn pledge amounts in support of this project or business. If you receive enough pledges, your donors’ payments are processesed and you receive the full amount. You can incentivize your crowdfunders in creative ways with items like t-shirts, books, etc.
4. In the digital age, you will probably need code development or programming. TopCoder claims to have been crowdsourcing since 2001, before there was a name for this phenomenon. It runs competitions with prizes that enable participants to compete for the best software, development and employment services solutions. To make an amazing webpage, oDesk can connect you with a web developer (or any other sort of freelancer you may seek). Its tools enable you to view progress on the project as work is completed.
5. No product will be successful without customers – and that means marketing. Go to Trada, a search engine marketing and optimization company that lets the crowd pick the best keywords for your company or campaign.
6. With your website and your AdWords account, you have a solid online presence. Find leads in the industries you are targeting with Jigsaw (recently acquired by It lets people upload contact information in exchange for the ability to download other people’s contact information. If you want all the phone numbers of all the execs, there’s a way to make it happen. Jigsaw has what it claims to be the world’s largest database of contact information.
7. Now that you have these leads, it’s time to take a good look in the mirror and decide whether or not you really want to call them all. Chances are you don’t, which is right about when you want to visit LiveOps. The company specializes in call center outsourcing where you can set the script that you want “your” sales people to use. It has thousands of people (many of whom are stay at home mothers) in the United States who make the calls from their own homes.
8. In the inevitable event that your customers get angry, use Get Satisfaction, where they can help each other. Get Satisfaction gives your customers a place to ask questions and voice complaints about your product. Often, your customer is the best person to respond to an issue another customer is having.
9. Now that you have a healthy business you need to make sure that you invest in R&D to stay ahead of the competition. This is the point at which you want to visit InnoCentive, a company that allows you to outsource research and development of any kind. It lets you set bounties for the discovery of new things. This could range from a new compression algorithm to a new drug.
10. By now you are undoubtedly big enough and prosperous enough to have your own corporate social responsibility efforts. Samasource lets you send microtasks to youth, refugees and women in developing countries. Your rich friends who are iPhone/iPad users can support this via GiveWork (iTunes link), an app developed with CrowdFlower that allows users to donate their time to charity by double checking the work done by Samasource workers.

Crowdsourcing isn’t just a buzzword –- it’s an effective way for companies to get started fast and iterate quickly with less overhead. All of these companies offer a service with less upfront commitment than traditional outsourcing -– and that advantage really shines when it comes to early stage companies.
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Cash-strapped entrepreneurs get creative

Got a great business idea but no money to finance it? It's the age old problem faced by would-be entrepreneurs. But a new generation of online funding platforms is taking the pain out of raising capital to get new ventures off the ground.

The platforms cater for everyone from starving artists to tech start-ups. They allow anyone with a business proposition to post an online pitch which goes straight into the offices and homes of potential investors and donors across the world.

When Los Angeles-based design students Jesse Genet, 22, and Stephan Angoulvant, 24, needed to raise $12,000 (£8,000) to launch Lumi Co, a printing and design company, they decided to bypass traditional avenues and cut out the middle men.

They registered with, a site aimed at anyone in the creative industries.

"Kickstarter seemed like a really good match for our product. It allows anyone with a creative dream to make it a reality," says Angoulvant.
Rewards system

The creators of every project must set a cash goal and a time limit, though there is no limit on how much people can raise. If they reach the goal within the time limit they get to keep the pledges. If they don't, all pledges are returned.

Kickstarter takes 5% commission on all projects which are successfully funded.
Continue reading the main story Perry Chen

It's not about philanthropy or charity. It's about patronage and commerce

Perry Chen Kickstarter co-founder

Crucially, the owners of all businesses and projects funded through the site keep 100% ownership of their ventures.

The incentive for backers is both altruistic and actual. "Everyone must offer a system of rewards," says Kickstarter co-founder Perry Chen. "It's not about philanthropy or charity. It's about patronage and commerce."

Genet and Angoulvant surpassed their fundraising goal, securing $13,598 from people who pledged anything from $1 to over $1,000. As an incentive they offered backers gifts from their range including wallets and bags.

The feedback the young entrepreneurs received from would-be investors enabled them to refine their products and gave them lots of ideas for their business going forward. It also provided them with a ready made group of potential customers.

The 650 projects which have so far succeeded in meeting their funding goals through Kickstarter include a woman who is circumnavigating the globe solo by boat, a band recording their first CD and a cartoonist travelling to Afghanistan to do political sketches.

Since Kickstarter was launched by five friends in April 2009, pledges have come in from 70,000 people around the world.
Connecting people is the brainchild of a group of Philadelphia-based music industry professionals. It is popular among musicians and other creatives who accept pledges from as little as $1. The majority of pledges to fund new CDs and tours have come from friends, families and fans.
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Grow VC appealed to us because it is very international and it is for small companies

Eric Cheng Chief executive, Emagist

Taking a more traditional investor/entrepreneur approach is Grow VC. Founded in February by Jouko Ahvenainen and Valto Loikkanen, Grow VC bills itself as the first global crowdfunding tool for web and mobile start-ups. Through the site, start-ups can secure initial funding ranging from $10,000 to $1m.

The site has 2,500 registered users in 108 countries worldwide. Some 25% of Grow VC users are in the US, 11% in the UK and 7% in India.

"From the start we knew we wanted to make it very international so that investors and start-ups around the world could connect with each other," says Ahvenainen.

The total capital raised through the site so far is $12.8m.

Entrepreneurs using Grow VC include Eric Cheng, the chief executive of Hong Kong gaming company Emagist.

"Venture capitalists here are looking for big companies," says Cheng. "Grow VC appealed to us because it is very international and it is for small companies."
Petra Soderling Petra Soderling invests $20 a month through Grow VC

Within a few months, Emagist outgrew the site. But through Grow VC it made contact with venture capitalists in Europe, the US and mainland China.
Growth potential

Along with professional investors, a growing number of ordinary people with an interest in investing have been logging on to Grow VC.

Petra Soderling heard about Grow VC on Twitter and is making the minimum Grow VC investment of $20 a month. "For me it's about investing and hoping to see a profit but also about using a small amount of money to help small companies," she says.

Not everyone is successful.

Among those who failed are New York-based Englishman Toby Daniels. His business idea, Betacup, seeks to reduce the amount of landfill in the US resulting from disposable coffee cups. Although he did not reach his funding goal, Starbucks heard about what he was trying to do on Kickstarter and offered to donate the $20,000 needed to get his plans off the ground.

"This would never have happened if we hadn't made contact with a small but engaged group on the site who got our story out there," says Daniels.

Kickstarter co-founder Perry Chen believes these new funding tools have a lot of potential for growth. "You are reaching out to your audience in a very new way which is very involving and makes them feel a strong connection," he says. "We might not be ready for Avatar 2 but the scope is huge."
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Wednesday, May 12, 2010

Morning Read: The rise of ‘crowdfunding’

The rise of “crowdfunding”: Arguing that the existing venture capital model is broken, Entrepreneur Kevin Lawton provides an introduction to “crowdfunding.” The idea is that traditional methods of screening investments aren’t working well (such as relying on human networks), so VCs need to rely on the wisdom of crowds to pitch in and drive consensus–the direction a number of other industries seems to be moving in. GrowVC is an early example. “As it matures, crowdfunding will become the norm,” Lawton says, “and span many business disciplines and multiple rounds.”

Say No to VC tax breaks: Credit peHUB’s Dan Primack with an excellent, and more importantly intellectually honest and non-pandering post about venture capital tax breaks. At a time when everyone seems to think they deserve lower taxes no matter what their salary and there’s little sense of shared sacrifice, it would’ve been easy for Primack to go with the flow and endorse the industry’s conventional wisdom. Instead, Primack picks apart the rationale for preserving the tax break and calls out what it is: a loophole that for little reason taxes capital gains at a far lower rate than other types of profits.

Medicare “cuts” to some are “savings” to others: One in five Medicare hospital patients returns to the hospital within 30 days–at a cost to Medicare of $12 billion to $15 billion a year–and by 90 days the rate rises to one of three, writes Maggie Mahar. A portion of that represents potential savings to the federal government, and that’s why it’s encouraging that the health reform law cuts Medicare reimbursements to hospitals with particularly high rates of avoidable readmissions.

Reform cost estimates go up: More bad news for reform advocates (and good news for those looking for more to fodder to complain about Obamacare)–the Congressional Budget Office estimates that the health reform law will cost $65 billion more than previously thought.

No annual meeting for you: Already unpopular with the FDA, investors and the Justice Department, device maker Boston Scientific can add antagonist to the list: the media. The company barred the media from its annual meeting, despite having let reporters attend in the past. A spokesman then declined comment as to the reason(s) why. Not exactly the corporate transparency that seems to be all the b-school rage these days.

Get out of the stock market: That’s the advice from Reuters’ excellent financial reporter Felix Salmon in the wake of last week’s meltdown and bounceback. “We are entering an era of massive volatility,” Salmon says. “You, as an individual investor, just simply don’t have the risk appetite to be able to deal with that kind of volatility.”
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Crowdsourcing goes global: The NYT’s “Moment in Time”

Visit the New York Times’ Lens blog today, and you’ll find an image slightly different from the high-quality photographs that normally populate the outlet: a spinning globe, highly stylized, its surface popping with piles of pictures.

“Here it is,” the site announces: “Earth, covered by stacks of thousands of virtual photographs, corresponding in location to where they were taken by Lens readers at one ‘Moment in Time.’”

The moment in question? Sunday before last, at 11 a.m. EST — the time when the paper asked its users to take photos in an image-gathering project that was equal parts collaborative art and crowdsourcing on steroids.

The invitation to participate:

Attention: everyone with a camera, amateur or pro. Please join us on Sunday, May 2, at 15:00 (U.T.C./G.M.T.), as thousands of photographers simultaneously record “A Moment in Time.” The idea is to create an international mosaic, an astonishingly varied gallery of images that are cemented together by the common element of time.

The feature’s editors — James Estrin, who conceived of it and oversaw its implementation, David Dunlap (who wrote much of the project’s witty instructions and textual updates), and Josh Haner (who, along with Aron Pilhofer, Jacqui Maher, and the Times’ vaunted interactive news team, helped facilitate the behind-the-scenes tech masterminding) — expected that the blog’s invitation would elicit a couple thousand photos. And that organizing and presenting them would take a couple days.

But: they received, in the end, over 10,000 user-generated submissions, Estrin told me — from photographers amateur and professional, from around the world. (Actually, they received over 13,000 at first — then removed some from the pile when it became obvious, whether by lighting or timestamp or other indicators, that the photos weren’t, in fact, taken at the allotted time.) And the process of organizing all that content took well over a week — a fact about which Dunlap repeatedly (and wittily) apologized. In a post entitled “Patience,” Dunlap wrote, “We have to ask it of you once again. Our interactive ‘Moment in Time’ gallery isn’t ready yet.”

We were bold — O.K., maybe a bit foolhardy — to think we would only need two or three days to prepare a complex three-dimensional computer display showing more than 13,000 photographs from around the world; organized geographically and searchable by topic, with captions and photo credits as coherent and accurate as possible. It’s obviously taken us longer than that and will almost certainly take us a day or two more. (We’re getting out of the prediction business for now.) We simply hadn’t had the experience of dealing with such numbers before. The popular “Documenting the Decade” project, for example, drew only 2,769 submissions.

Please bear with us while we take the time we need to get it right…Be assured that we’ll post as soon as we can. And don’t think for a moment that we’ve been using this time to weed out pictures of cats, dogs, tulips and coffee cups. There’ll be plenty.

And plenty, indeed, there are. The pictures (sortable by fellow-user recommendation, but also by Community, Arts and Entertainment, Family, Money and the Economy, Nature and the Environment, Play, Religion, Social Issues, Work, and — my personal favorite — Other) are, in general, high-quality and compelling. There’s the predictable fare — meditative close-ups of flowers, pictures of cats — but there’s also more surprising and evocative stuff: a grandmother and grandson in Bangladesh, a couple lounging in bed (caption: “My boyfriend and I planned a big adventure for Sunday morning, but we both ended up sick”), an Amish horse-and-buggy (caption: “We live in a part of Pennsylvania where wifi and No-fi coexist pretty well”).

“A Moment in Time” (and, with that, I’ll try not to use the project’s name again in this post — so that you won’t, as I did, get something unfortunate stuck in your head as a result of repeated exposure) is aesthetically compelling and socially revealing. It also suggests the Times’ openness to exploring avenues of documentation and expression that don’t fall into the neat categories of traditional journalism.

“I was driving to work, and it just hit me: Okay, we’ll get thousands of people around the world to take a photograph at the same moment,” Estrin told me of the project’s inception. And the goals of the project mix the artistic and the journalistic to the point that it’s difficult to tell where the journalism ends and the aesthetic begins: first, to produce a valuable document, one that records — to an extent — a particular moment as it’s lived out across the world. Second, from the social media angle, to facilitate the sense of shared identity that comes with “doing things as a community around the world — doing the same things at the same time.” Ultimately, Estrin says, the project was about “the intentional profundity of the moment.”

Whether the feature represents journalism, or something more, or something less, the reaction it’s received from Times users offers a lesson for news organizations chasing after the holy grail-and-sometimes-white-whale that is reader engagement. If the project’s participatory outpouring is any indication, it has struck a nerve with Times users. In a good way. And the ‘why’ in that is instructive. The project involved an assignment with specific instructions; users weren’t merely being asked for something — a hazy invitation to contribute — but to provide something specific, and easily attainable. And to provide something, moreover, that would be part of a project with a clearly defined, but also inspiring, purpose: to document the world, via its many corners, at a particular moment. That mix of depth and breadth, of pragmatism and idealism, can be a potent incitement to action — a fact evidenced by the thousands of images currently blanketing the globe over at the Lens blog.
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Crowdsourcing and the challenge of payment

An unusual Distributed Work Meetup was held last night in four different cities simultaneously, arranged through many hours of hard work by Lukas Biewald and his colleagues at distributed work provider CrowdFlower.

With all the sharing of experiences and the on-the-spot analyses taking place, I didn't find an occasion to ask my most pressing question, so I'll put it here and ask my readers for comments:

How can you set up crowdsourcing where most people work for free but some are paid, and present it to participants in a way that makes it seem fair?

This situation arises all the time, with paid participants such as application developers and community managers, but there's a lot of scary literature about "crowding out" and other dangers. One basic challenge is choosing what work to reward monetarily. I can think of several dividing lines, each with potential problems:

* Pay for professional skills and ask for amateur contributions on a volunteer basis.

The problem with that approach is that so-called amateurs are invading the turf of professionals all the time, and their deft ability to do so has been proven over and over at crowdsourcing sites such as InnoCentive for inventors and SpringLeap or 99 Designs for designers. Still, most people can understand the need to pay credentialed professionals such as lawyers and accountants.

Pay for extraordinary skill and accept more modest contributions on a volunteer basis.

This principle usually reduces to the previous one, because there's no bright line dividing the extraordinary from the ordinary. Companies adopting this strategy could be embarrassed when a volunteer turns in work whose quality matches the professional hires, and MySQL AB in particular was known for hiring such volunteers. But if it turns out that a large number of volunteers have professional skills, the whole principle comes into doubt.

Pay for tasks that aren't fun.

The problem is that it's amazing what some people consider fun. On the other hand, at any particular moment when you need some input, you might be unable to find people who find it fun enough to do it for you. This principle still holds some water; for instance, I heard Linus Torvalds say that proprietary software was a reasonable solution for programming tasks that nobody would want to do for personal satisfaction.

Pay for critical tasks that need attention on an ongoing basis.

This can justify paying people to monitor sites for spam and obscenity, keep computer servers from going down, etc. The problem with this is that no human being can be on call constantly. If you're going to divide a task among multiple people, you'll find that a healthy community tends to be more vigilant and responsive than designated individuals.

I think there are guidelines for mixing pay with volunteer work, and I'd like to hear (without payment) ideas from the crowd.

Now I'll talk a bit about the meetup.
Venue and setup

I just have to start with the Boston-area venue. I had come to many events at the MIT Media Lab and had always entered Building E14 on the southwest side. The Lab struck me as a musty, slightly undermaintained littered with odd jetsam and parts of unfinished projects; a place you could hardly find your way around but that almost dragged creativity from you into the open. The Lab took up a new building in 2009 but to my memory the impact is still similar--it's inherent to the mission and style of the researchers.

For the first time last night, I came to the building's northeast entrance, maintained by the MIT School of Architecture. It is Ariel to the Media Lab's Caliban: an airy set of spacious white-walled forums sparsely occupied by chairs and occasional art displays. In a very different way, this space also promotes open thoughts and broad initiatives.

The ambitious agenda called for the four host cities (Boston, New York, San Francisco, and Seattle) to share speakers over videoconferencing equipment. Despite extensive preparation, we all had audio, video, and connectivity problems at the last minute (in fact, the Boston organizers crowdsourced the appeal for a laptop and I surrendered mine for the video feed). Finally in Boston we disconnected and had an old-fashioned presentation/discusser with an expert speaker.

In regard to the MIT Media Lab and Architecture School, I think it's amusing to report that Foursquare didn't recognize either one when I asked for my current location. Instead, Foursquare offered a variety of sites across the river, plus the nearby subway, the bike path, and a few other oddities.

We were lucky to have Jeff Howe, the WIRED contributor who invented the term Crowdsourcing and wrote a popular book on it. He is currently a Nieman Fellow at Harvard. His talk was wildly informal (he took an urgent call from a baby sitter in the middle) but full of interesting observations and audience interactions.

He asked us to promote his current big project with WIRED, One Book, One Twitter. His goal is to reproduce globally the literacy projects carried out in many cities (one happens every year in my town, Arlington, Mass.) where a push to get everyone to read a book is accompanied by community activities and meetups. Through a popular vote on WIRED, the book American Gods by Neil Gaiman was chosen, and people are tweeting away at #1b1t and related tags.

With the sponsorship by CrowdFlower, our evening focused on crowdsourcing for money. We had a few interesting observations about the differences between free Wikipedia-style participation and work-for-pay, but what was most interesting is that basic human processes like community-building go in both places.

Among Howe's personal revelations was his encounter with the fear of crowdsourcing. Everyone panics when they first see what crowdsourcing is doing to his or her personal profession. For instance, when Howe talked about the graphic design sites mentioned earlier, professional designers descended on him in a frenzy. He played the sage, lecturing them that the current system for outsourcing design excludes lots of creative young talent, etc.

But even Howe, when approached by an outfit that is trying to outsource professional writing, felt the sting of competition and refused to help them. But he offered respect for Helium, which encourages self-chosen authors to sign up and compete for freelance assignments.

Howe is covering citizen journalism, though, a subject that Dan Gillmor wrote about in a book that O'Reilly published We the Media, and that he continues to pursue at his Mediactive site and a new book.

Job protection can also play a role in opposition to crowdsourcing, because it makes it easier for people around the world to work on local projects. (Over half the workers on Mechanical Turk now live in India. Biewald said one can't trust what workers say on their profiles; IP addresses reveal the truth.) But this doesn't seem to have attracted the attention of the xenophobes who oppose any support for job creation in other countries, perhaps because it's hard to get riled up about "jobs" that have the granularity of a couple seconds.

Crowdsourcing is known to occur, as Howe put it, in "situations of high social capital," simply meaning that people care about each other and want to earn each other's favor. It's often reinforced by explicit rating systems, but even more powerful is the sense of sharing and knowing that someone else is working alongside you. In a blog I wrote a couple years ago, I noted that competition site TopCoder maintained a thriving community among programmers who ultimately were competing with each other.

Similarly, the successful call center LiveOps provides forums for operators to talk about their experiences and share tips. This has become not just a source of crowdsourced help, and not even a way to boost morale by building community, but an impetus for quality. Operators actually discipline each other and urge each other to greater heights of productivity. LiveOps pays its workers more per hour than outsourcing calls to India normally costs to clients, yet LiveOps is successful because of its reputation for high quality.

We asked why communities of paid workers tended to reinforce quality rather than go in the other direction and band together to cheat the system. I think the answer is obvious: workers know that if they are successful at cheating, clients will stop using the system and it will go away, along with their source of income.

Biewald also explained that CrowdFlower has found it fairly easy to catch and chase away cheaters. It seeds its jobs with simple questions to which it knows the right answers, and warns the worker right away if the questions are answered incorrectly. After a couple alerts, the bad worker usually drops out.

We had a brief discussion afterward about the potential dark side of crowdsourcing, which law professor Jonathan Zittrain covered in a talk called Minds for Sale. One of Zittrain's complaints is that malicious actors can disguise their evil goals behind seemingly innocuous tasks farmed out to hundreds of unknowing volunteers. But someone who used to work for's Mechanical Turk said people are both smarter and more ethical than they get credit for, and that participants on that service quickly noted any task that looked unsavory and warned each other away.

As the name Mechanical Turk (which of course had a completely unrelated historical origin) suggests, many tasks parceled out by crowdsourcing firms are fairly mechanical ones that we just haven't figured out how to fully mechanize yet: transcribing spoken words, recognizing photos, etc. Biewald said that his firm still has a big job persuading potential clients that they can trust key parts of the company supply chain to anonymous, self-chosen workers. I think it may be easier when the company realizes that a task is truly mechanical and that they keep full control over the design of the project. But crowdsourcing is moving up in the world fast; not only production but control and choice are moving into the crowd.

Howe highlighted Fox News, which runs a UReport site for volunteers. The stories on Fox News' web site, according to Howe, are not only written by volunteers but chosen through volunteer ratings, somewhat in Slashdot style.

Musing on the sociological and economic implications of crowdsourcing, as we did last night, can be exciting. Even though Mechanical Turk doesn't seem to be profitable, its clients capture many cost savings, and other crowdsourcing firms have made headway in particular fields. Howe hails crowdsourcing as the first form of production that really reflects the strengths of the Internet, instead of trying to "force old industrial-age crap" into an online format. But beyond the philosophical rhetoric, crowdsourcing is an area where a lot of companies are making money.
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5 Ways to Crowdsource Easily, Legally & with Quality

When Jeff Howe coined the term "Crowdsourcing" in a 2006 Wired cover story, journalism was just tiptoeing beyond comments into the wild world of reader blogs.

Four years later, as journalism organizations race to find new remedies for a painful revenue drought, crowdsourcing is spreading into news organizations in a myriad of ways.

Beyond blogging, readers are gathering data, opening doors to fresh information sources, and in some cases, starting competitive or collaborative sites of their own. In so doing, they're converting community building from an afterthought into a key strategy for forward-looking news outlets.

One of the primary ideas that emerged over the course of a two-day Poynter conference on user content and crowdsourcing last week was that cultivating reader participation is not just about telling more stories with fewer resources. Nor is it just about users offering commentary or neighborhood news.

It's about cultivating fundamentally new kinds of stories and capitalizing more efficiently on the expertise and passions of the people formerly known as the audience. Here are five of the conference's key takeaways.

Structure is Crucial

Crowdsourcing is more science than sorcery, said Amanda Michel, ProPublica's director of Distributed Reporting. Carefully crafting a call to action is the key to getting readers to participate in news gathering.

Throwing out a blind call for tips or ideas may yield an occasional gem, but Michel's experience, with the Huffington Post's Off the Bus campaign coverage -- and in several recent projects at ProPublica -- demonstrates that targeted questions tend to yield more fruitful data that can be sifted, mapped and analyzed as part of a reporter's fact-gathering process.

Make it Easy

Michel advised news organizations to make it as simple as possible for readers to participate in ways that are relevant and meaningful. Draw on participants' specific experience and expertise, she says. Stay in touch with them. Share their characteristics in a database to draw on when needed. ProPublica recently asked readers to help reporter Paul Kiel gather information about the mortgage crisis.

Those who had sought a mortgage modification were invited to fill out a quick form on the site expressing interest. To lower the barrier to participation, the initial step required just the reader's name, e-mail address and ZIP code. Filling out that brief form got the ball rolling. Eventually, more than 800 participants answered a series of questions, providing valuable data about their experiences navigating the mortgage system. Their answers, anecdotes and insights planted the seeds for multiple stories.

Cultivate Civility

In the midst of his launch week heading up Honolulu start-up, former Rocky Mountain News editor John Temple said his long career had taught him the value of building a vibrant community founded on constructive conversation. "People are drawn to the idea that they can have a dialogue in a place that's not a sludge pit," Temple told conference participants during a Skype video chat three days after the site debuted.

He said having the entire staff of 12 start on the same day enabled Civil Beat to begin with an internal culture of openness to parallel the site's community focus. "We have to be able to disagree without being disagreeable," he said.

Watch Your Language

Labels matter in the eyes of the law. That was evident in a presentation by Alison Steele, an attorney who has represented Poynter and the Poynter-owned St. Petersburg Times. Sites that draw heavily on reader contributions have to pay close attention to legal nuances that govern how contributors/volunteers/members are treated. Something as subtle as how an organization refers to its participating readers could make a significant difference in those participants' legal standing.

Inviting readers to be "members" of a site and to contribute to data gathering may be more legally secure if you classify those readers as "sources." Using titles that blur the line between readers and employees is asking for trouble down the road. For example, news organizations that ask readers to provide, without compensation, work similar to that provided by paid employees may find themselves in conflict with IRS and other government regulations.

The Crowd Can Measure Quality

In addition to leading voices from within the fourth estate, the conference also spotlighted crowdsourcing approaches from leaders of non-traditional and international outlets. Helium CEO Mark Ranalli described his content aggregation site as the world's largest editorial community. More than 160,000 writers have contributed 1.8 million pieces to Helium over the past three years.

Peer writers rate articles up or down, and Ranalli says a growing number of journalism sites are buying the best of the articles to fill gaps in their coverage. It's not about replacing journalists, but supplementing them, he says, though some fear that the broad availability of cheap, aggregated content may curtail opportunities for professional journalists.

As journalism draws in a growing number of citizen participants, new resources are surfacing to address the crowdsourcing boom. A new role has emerged, for instance, for conduits between news organizations and bloggers and other members of the so-called Fifth Estate. John Wilpers of the Innovation Media Consulting Group spoke about the mutual benefits of the blogger-news organization partnerships.

J-Lab's Jan Schaffer described her organization's support for several initiatives by news organizations to incorporate local bloggers in their news reports.

Susan Karol of the Suburban Newspapers of America Association described research tracking reader attitudes toward content submitted by other readers.

In addition, Howard Finberg, Poynter's director of Interactive Learning, announced a new online certification program for journalism training to supplement its extensive and constantly updated NewsU curriculum. The program enables journalism newcomers to develop and demonstrate a grounding in the basic skills and values of news.

Unresolved Questions

Crowdsourcing remains very much in beta mode in the journalism world.

Experiments are common, but standard practices are still taking shape. Here are a few issues the journalism world has yet to iron out.

How will legal authorities categorize claims against news sites from disgruntled reader-contributors dissatisfied with their authorial designation, their compensation, or the use of their intellectual property?
To what extent will aggregated content sites (such as Helium, Demand Media and Associated Content) change the business landscape for professional writers?
In Jeff Howe's presentation on the roots of crowdsourcing, he cited the dramatic impact of on market prices for professional stock photography. Will professional writers see rates similarly bottom out?
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