In the last part of this Blog entry, we discussed the basic premise of the Crowd and why we are looking more to the Crowd for insights. There have been many studies on whether the Crowd is really smart or is it a distortion field which is swayed by the voice of a few powerful influencers. Most notable among these include a study in 2009, led by Carnegie Mellon University (CMU) professor Vassilis Kostakos pokes a big hole in the prevailing wisdom that the "wisdom of crowds" is a trustworthy force on today's web. His research focused on studying the voting patterns across several sites featuring user-generated reviews including Amazon, IMDb, and BookCrossing. Do you know that the Crowd has moved beyond just user reviews.

Let's look at some real life examples - a popular one quoted by Don Tapscott in his book MacroWikinomics is "Local Motors", a company that builds custom cars that is based on deisgn ideas submitted by car enthusiasts from around the world. Not only can you design your own car, you can visit a local motor location, order parts, customize your car and do whatever you want to build it to your specification. Their mission statement reads "To lead the next generation of crowd-powered automotive manufacturing, design, and technology in order to enable the creation of game changing vehicles".  Another great example is Fiat Mio an open innovation of a car by Fiat Motor Company.

Why is open innovation with crowdsourcing more popular? two reasons (1) The internet has created a virtual world where there are no physical boundaries. This means you can simply form communities of common interest and that leads to building a crowd that is very knowledgeable and passionate about a particular topic or topics, (2) When you open a problem to be solved by a large crowd of individuals, you get a set of solutions that will have a higher confidence factor to work and a potential lower risk factor. 

Let's come back to the reviews and feedback on various forums, why do you care or why does an online or a brick&mortar retailer care or why does your 401k investment management care? the reasons for this from a business perspective are to create that transparency and trust in you as a customer or a prospect. Your opinion will be formed based on experiences of others and you need to hear the positive and negative sentiments equally to get an informed opinion or decision. Word of mouth marketing in any social media channel allows you to get access to more metrics than ever before and the socially aware customer is a better customer to acquire and retain.

Crowdsourcing has also become mainstream with companies like Kaggle, Threadless, CrowdAnalytix, Cambrian House and Innocentive hosting competitions for the Crowd to solve. These problems range from simple to complex puzzles and often come with cash prizes.

Linux, Hadoop and many popular software's today are stellar examples of the Wisdom of Crowds.

In conclusion, we see from ancient and recent history that the Crowd formed from a community of interest has often proved to be powerful and game changing. As we move into the future, the internet and social media together have created the platform for virtual crowds to form and create powerful game changing movements.