The Wisdom of Crowds

Crowdsourcing is the practice of using ordinary people to generate ideas and intelligence. Here, Lie Luo, Lead Consultant for Mobile and Wireless at market intelligence firm Global Intelligence Alliance, offers advice to companies looking to crowdsource mobile services

Lie Luo_low res Successful crowdsourcing projects carried out by prominent online service vendors  such as Threadless, InnoCentive, iStockPhoto and Google are now inspiring similar crowd-based concepts in the mobile world.
Like their online counterparts, mobile software and service vendors are attracted by the opportunity of crowdsourcing to drastically cut fixed development costs in areas such as mobile software testing, where crowdsourcing helps firms bypass the need to own or rent physical handsets in distant locations, as well as the need to hire dedicated in-house testers. In many cases crowdsourcing also increases content relevance and appeal by directly sourcing the content from prospective users themselves.

Viral user bases

Mobile firms are also tapping into crowdsourcing models to build up large viral user bases or service offerings within comparatively short periods of time. Mobe4Hire, a crowdsourced mobile testing firm, has been able to quickly build up a tester community representing 2,400 handsets over 239 carriers in nearly 90 countries in just two years – something that used to take many years and hundreds of thousands of dollars in development budget to support.
The ubiquity, real-time streams, improved multimedia capabilities, and mass reach of mobile phones is driving more creative crowdsourced solutions that were previously less feasible or simply impossible on the personal computer. One good example of this is Google Maps traffic data.
As mobile crowdsourcing becomes more commonplace, the cost savings and quicker time-to-market effects will gradually fade as key drivers. Instead, companies will increasingly find crowdsourcing to be an attractive option to ensure content relevance and proof of concept.
Meanwhile, the unique benefits of mobile technology, such as ubiquity, media convergence, and global mass reach, will continue to drive new, innovative crowd-based service concepts over mobile.

Empowered consumers

Advancements in mobile communications technology and higher mobile penetration rates really empower average consumers, giving them greater access to information, social connectivity, and the ability to produce exciting content on the move. This is driving a transfer of industry value from centralized product development to crowd creation and validation. We see this in particular in consumer services that emphasize geo-location or social networking elements.
Mobile phones have become ubiquitous vehicles for real-time communications and user-generated content. The latest figures from the International Telecommunications Union (ITU) indicate that mobile subscriptions may reach 4.6 billion by the end of the year, with mobile broadband subscriptions topping 600 million in 2009. Mobile broadband subscribers overtook fixed broadband subscribers in 2008. The actual number of people that use a mobile phone is in fact even higher, given the popularity of pre-paid usage and the trend for phone-sharing in developing countries.
In emerging markets, where there is a noticeable digital divide and significantly lower
Internet penetration, mobile phones are often the sole information and communications channel for the majority of the local population. At the turn of 2009, China saw its domestic mobile penetration rise to 50% while its Internet penetration was just about 23%, according to its Ministry of Industry and Information Technology.

Success stories

Given the exponential growth in mobile usage, and the relatively low set-up cost of a
crowdsourcing service, its perhaps not surprising that many innovative start-ups or projects have quickly emerged. Some of the most notable include:

  • Data collection on the move – Google Maps and Waze crowdsource traffic congestion information from drivers GPS-enabled mobile phones.
  • Social networking – Google Latitude and Loopt generate social networks supported by geolocation features, while Twitter exemplifies the best practice of real-time content streams.
  • Product testing – Companies such as uTest and Mob4Hire employ crowds to test newly-developed mobile applications and provide feedback on functionality, load and performance, and usability.
  • User-generated entertainment – Emerging mobile video sharing applications services such as Qik and Kyte tap into crowdsourcing to generate a large variety of content,  similar to the role of YouTube on a PC.
  • User experience optimization – A similar trend of passive or subconscious crowdsourcing is also occurring, as information vendors such as Google increasingly integrate and analyze mobile usage data extracted from various sources and use the information to help refine and optimize their user experience, as in personalized search.
  • Leveraging mass reach – Innovative services such as Googles SMS Channels and SMS Trader bridge the digital divide by creating a mobile platform for user-generated content and person-to-person trades in emerging markets such as India and East Africa, where these types of services are otherwise unavailable on PC.

Many successful services also take advantage of a combination of the features mentioned above. Ushahidi takes advantage of both the ubiquity and market reach of mobile phones in underdeveloped regions like sub-Saharan Africa, Philippines, and India to crowdsource crisis information such as medical supply stock-outs, political unrests, or swine flu outbreaks.
The mobile video sharing applications of Qik and Kyte enable news organizations such as CNN to provide instant news material over its user-generated iReport channel. An innovative service currently launched in East Africa, txteagle, showcases a great example of collective intelligence and crowd voting by providing users with the opportunity to earn airtime or other currency surrogates by contributing to a wide range of tasks, including software localization, citizen journalism and search relevance, among others.
All these examples take advantage of some or all of the demand for ubiquitous real-time streams, converged multimedia capabilities, and the mass reach of mobile phones.

Rules of engagement

To succeed in mobile crowdsourcing, service vendors need to clearly consider and effectively leverage at least one or all of the described mobile-specific characteristics, instead of simply looking to save development costs, seek user-relevant content, or quickly ramp up operations and offerings.
For successful implementation, mobile service providers must also take into consideration platform-based service positioning, value-based monetization and flexible business models often based on open calls.
Most of the service mentioned above position themselves as service platforms or marketplaces, rather than content publishers, vendors or mobile retailers. This is an important factor for success, as it gives users a sense of ownership and incentivizes them to contribute information, content, or volume to the service.
Even in the case of iReport, where CNN purports to hold the right to edit, withhold, and license the submitted content, the company maintains the platform positioning and does not actively edit every upload, both in order to retain the originality of the content and to avoid unnecessary personnel costs.
Perhaps the only exceptions are fee-based services such as uTest, Mob4Hire, and txteagle, where corporate customers pay for the vendor to deploy their crowd resources to conduct application testing and localization. In these cases, the services tend to hold a more proprietary interface, and act as a strict intermediary between the  customer and crowd testers for commercial purposes. Here, the crowd is incentivized by financial rewards and is less concerned with gaining an audience.

Monetization by value
Most mobile crowdsourcing services are currently at the build-up phase and some may not yet have a clearly defined monetization model especially if they represent a breakthrough concept (e.g. Twitter, Qik).
Generally, the commercial model needs to take into account the service value proposition, and there does not appear to be a one-size-fits-all model. On the one hand, Mob4Hire and uTest directly compete against incumbent testing service providers by offering similar billing models, while others such as Google Maps and CNN iReport hope to monetize their services indirectly by integrating with their larger service platforms, and ultimately make money through advertising.
In many cases, services hope to first build up the user base before entering into
monetization (e.g. Google Latitude, Waze, Loopt). If the service is to be fee-based, it is essential to clearly state payment terms and schedule in order to avoid user confusion.
An inherent challenge in building a successful mobile crowdsourcing service lies in managing content diversity and mass appeal. As a pioneer in crowdsourcing services, Google tends to opt for an organic product development approach by experimenting with interface features, or even service features, over time. To date, Google Maps traffic, Latitude and SMS Trader all reflect such a mentality, while even more refined and commercialized services such as uTest also took years for the service concept to evolve.

Organic quality control
Ultimately, the quality of a crowdsourced community is policed by the community itself. For fee-based services such as uTest, Mob4Hire, and txteagle, this is particularly important, since quality is often the number one concern for prospective customers of their services. Like the online examples, such as eBay, these companies typically implement a rating system. Customers would rate the performance of the testers employed for projects and those that receive consistently poor ratings will cease to receive new project offers. The rating system could also be implemented by more media-centric crowdsourcing examples such as Qik, iReport, Twitter, similar to YouTube online, and the goal there is often more to increase content relevance and appeal.
To successfully crowdsource a mobile service, you need to first ensure that the service
concept is unique to the mobile medium and takes advantage of its ubiquity, media convergence or mass reach characteristics. With the exceptions of fee-based services, the service should be designed as a platform, while its business model and product
management should be allowed to evolve organically, rather than approached with a fixed business plan.