Back in 2011, crowdsourcing was fueling an explosion in open innovation. At that time, most Fortune 500 firms had launched crowdsourcing initiatives or partnered with startups in order to access outside innovators or co-create with customers. The providers of crowdsource solutions had their heyday. Kaggle had raised $11M from Koshla Ventures. InnoCentive raised $7M and bought OmniCompete. TopCoder stepped from strength to strength, raising $11M in 2010. Quirky raised two rounds totaling $21M. But the glory didn’t last. Within six years, Kaggle had been acqui-hired by Google; a struggling TopCoder sold itself to Appirio; InnoCentive has been shrinking for years according to LinkedIn data; and Quirky has declared bankruptcy.
4 Mistakes That Kill Crowdsourcing Efforts
Don’t underestimate good platform design.
July 21, 2017
Summary.
By 2011, most Fortune 500 firms had launched crowdsourcing initiatives or partnered with startups in order to access outside innovators or co-create with customers, and crowdsourcing firms like Innocentive and Kaggle proliferated. But many of these have struggled of failed. Their common mistake is that they failed to understand the rules of good platform design. As a result, they made for types of sometimes fatal errors: They allowed messy unfocused core interactions; had too much vertical integration and too little orchestration; produced too much social waste; and, perhaps most importantly, failed to leverage network effects.
New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.
Learn More & See All Courses
New!
HBR Learning
Innovation and Creativity Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Innovation and Creativity. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Unlock your team's curiosity and willingness to take smart risks.