November 7th, 2008
Crowdsourcing, Wikinomics and the Wisdom of Crowds
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In 2004, James Surowiecki wrote his brilliant book The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations and argued that a diverse collection (crowd) of independently-deciding individuals is likely to make certain types of decisions and predictions better than individuals or even experts.
Specifically, he says that the wisdom of crowds is great at solving three types of problems — cognition problems which involve identifying a correct definitive answer, coordination problems which involve synchronizing our individual activities with others, and cooperation problems which involve acting together despite our self-interest.
However, for the wisdom of crowds to work, four basic conditions need to be met — diversity of opinion to bring in different information, independence of members from one another to avoid the herd mentality, decentralization so that people’s errors balance each other out, and a good method for aggregating opinions to distill the wisdom from the crowds.
Therefore, the wisdom of crowds fails when groups are too homogeneous, too centralized, too divided, too imitative or too emotional.
Here’s a great video of James Surowiecki’s TED talk on how blogs often tend to suffer from all five of those failures and how the grassroots coverage of the Tsunami showed the true power of social media –
Another seminal book on a similar idea is Wikinomics: How Mass Collaboration Changes Everything, written by Don Tapscott and Anthony D. Williams in 2006.
Yesterday, Dennis Hancock suggested on the Wikinomics blog that the power of crowd-sourcing lies not only in leveraging the wisdom of crowds, but also in finding uniquely qualified minds –
If you work through all the examples of “wikinomics in action” in the book and on this blog, some of them are about harnessing the wisdom of crowds, and others are about attracting uniquely qualified minds. As one would expect, the strategies required for success on one side are very different from the strategies required for success on the other. This is a particularly interesting area to explore as the issue of incentives for collaboration become more important.
So, crowdsourcing can mean taking decisions without experts (wisdom of crowds), but it can also mean finding hitherto invisible experts (wikinomics). Surowiecki says that the prominence of such experts leads to the failure of the wisdom of crowds, whereas Tapscott and Williams say that such experts (and prosumers) are at the core of wikinomics. I think both views are valid and, as long as you don’t mix the two in your head, you can benefit from both in powerful ways.
Update: Dina Mehta, who ran the South East Asia Earthquake and Tsunami Blog, has written a great post on this paradox of the wisdom of the crowds –
So how do we resolve this - adopt the good from our networks and yet break away from the circular mill? Preoccupation with whuffie + easy answers = the circular mill of death?
What a great, updated explanation of crowdsourcing
for those who know about it or do not.
I agree with Dennis + the Obama campaign was a good example of
qualified people leading leading small groups (crowds)
and connecting a varied mix to each crowd
and connecting crowds http://www.movingfrommetowe.com/category/crowds...
Also someone in my audience rec'd your site & the quality of the content convinced me to subscribe.
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