Category Archives: Crowdsourcing

Building Virtual Bench Strength

Many small businesses are doing what they can to keep things going in the face of one of the worst economic downturns in our lifetimes, but with so many elements of uncertainty many are loathe to make full time hires or resume their pre-recession growth trajectories. And yet, there is still work to be done. While we wait to see what will happen with health care reformlabor lawstax changes and other variables, it is important to keep moving, stay focused, and explore other ways to get things done.

One way to keep projects moving and stay on track is through the use of virtual teams and the thousands of freelancers around the world who are eager to ply their craft, but have been sidelined as a result of the economy and job market.

I see a tremendous opportunity through virtual outsourcing, for small- to mid-sized businesses as well as freelancers and solopreneurs.

Since I started my business in March 2010, I’ve tested a number of these online resources, such as oDeskGuru,99designs and several others. In many cases, you will find very capable US-based freelancers registered on these sites as contractors and service providers. And in many cases, using these services is not the cheapest option. I have had some projects go very smoothly, and others that (four months later) are still not complete. And in that timeframe, I have learned some things that I am going to share with you.

  1. Have a plan. This would seem pretty obvious, but in the US workplace we’re so used to ambiguity and lack of specificity in job assignments that it’s tempting to apply the same approach with virtual team support. Don’t! If you cannot create a “paint by the numbers” plan for the project that spells out the goals, elements and deliverables then you are kidding yourself if you think the person on the other end is just going to figure it out for themselves. It is up to you to spell it out, and be as specific as possible in defining the scope of work and what the finished product should look like.
  2. Use specific questions to narrow the field. Many times, freelancers and virtual teams will simply bid on every project that is posted, and they will decide later (once they’ve made the cut for interviews) whether they can actually do the project. Eliminate these pikers right up front by putting questions in the original job posting that they need to answer in their response. No answers, no need to pursue further. If they won’t pay attention to details when they are eager to win your business, how attentive will they be once you’ve paid them?
  3. Set a price for the project, don’t go hourly. It is very tempting when you see the hourly rates that are posted on services like oDesk to just create an open-ended project … after all, for $3.50 an hour or sometimes as high as $11.00 an hour you can get lulled into the sense that you are getting “cheap labor.” And that’s true to a point. However, what you will find is that there’s a pretty significant delta between our expectations in US business (including research, writing, marketing, etc.) that doesn’t necessarily resonate in other parts of the world. What that means is that you will end up paying someone for 20 hours to learn what it is that they need to be doing, when you could have hired a US-based “VA” (virtual assistant) or an intern to perform that same task in a couple of hours. So, bottom line: set a price that you are willing to pay and make it a project price not an hourly rate. You will weed out the people who don’t have the ability to get it done, AND you will create an incentive for fast delivery because the project is only fully paid upon completion.

More tips later. Like”Keep an open line for communication.” and “Check the work in progress and be specific about changes.” What questions would you like to ask? What tips would you share based on your experience?

Work in 2020

Currently about 20-30% of the workforce in Fortune 100 companies is made up of “contingent” workers; that percentage is expected to swell to 50% by 2020.

If you’re a corporate manager in the future, you may need to make decisions regularly about whether your needs can be addressed by a “virtual” freelancer … or a former colleague who became a contractor after getting laid off. You may even have both types of contingent workers on your team, working alongside a few highly compensated company employees. As a result, you’ll need to manage folks with widely varying economic realities and pressures simultaneously. Their motivations may be very different.

Or, if your company gets leaner, you may be among the freelancers being managed.

Read more here.

The Double-Edged Sword of the Freelance Economy

One thing that concerns me about how crowdsourcing is being depicted is that it is somehow exploitative by design. Listening to David Alan Grier’s talk about the history of crowdsourcing did nothing to dispel this notion. And whenKeniks founder and CEO Patrick McKenna shared his formula for crowdsourcing, he essentially ruled out the possibility that it is viable to harness real talent but that we should instead focus our business model on the low-end work.

Here’s what I think: what we are really talking about is tapping into the global talent supply chain in ways that were never before possible, and in doing so we have the opportunity to create meaningful work and viable opportunities for people who were marginalized as a result of the Great Recession and other seismic changes in the employment market.

There’s certainly a global perspective to explore, but for the moment I want to think about the domestic implications here in the United States. By some estimates, we currently have 15 million people unemployed in the U.S. My bet is that the number is higher than this. Most of us are now beginning to realize that many of the jobs that have vanished over the last decade are not coming back. Ever.

People who have followed the accepted employment model are used to job descriptions and career paths, and while empowerment is a popular buzzword most workers have a finite amount of latitude in what they do and how they do it within the corporation. In other words, people are used to being told what to do. Here’s the upshot: as part of the obsession to streamline and automate, coupled with the availability of outsourcing services, those positions which could be tightly defined in a job description are mostly gone, either to an “offshore” service provider or simply eliminated.

Our education system is more closely aligned to the 20th century model of employment, but what if the 21st century Knowledge Economy actually requires a completely different orientation to employment? For example, what if the estimated 42 million or so “free agents” (sole proprietors, contractors, consultants, etc. – according to the Human Capital Institute) are actually on the leading edge of the next economy? What skill sets do they need to have to succeed? And how prepared are we as a workforce to take our skills directly to the marketplace and earn a living based not on a more-or-less predictable employment model but rather in the fluid free agent market?

Here’s where the lessons of crowdsourcing come in. The “game changer” which makes 21st century crowdsourcing possible is the Internet, and its ability to link people anywhere in the world. The Internet is the backbone of the new global talent supply chain, and the participants in this new economy can participate whether they are in the corporate parks of Bangalore, India or the rural counties of Indiana.

More to follow …

I Can Haz … My Own Business?

With apologies to those out there who love the so-called LOL cats, this is a quick blog post on the idea that, with today’s technology and access to worldwide talent, it is actually possible for a person to set up a global enterprise with virtual offices as far flung as China and India, or as close by as the local Starbucks.

I know. I’ve done it.

Okay, to be honest, the folks at Siemens and IBM don’t need to look over their shoulders … yet. But the point is, broadband access, personal computing capability and social media have created a completely new playing field for micro-enterprise and small business to play in the same sand box as the big global corporations.

Part of the goal of this blog and the Talent Hub project is to show you how it can be done … from having dozens of people working for you around the globe to some of the lifestyle design tips adapted from Tim Ferriss’s 4-Hour Work Week. And more. So keep an eye on this blog, there’s lots more to come!

Case Study in Creative Destruction

Don’t worry, this blog post has nothing to do with Charlie Sheen, who has his own brand of creative destruction. This is about crowdsourcing … and before I go any further, I promised a definition of just what “crowdsourcing” actually is:

Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.

That’s according to WIRED Magazine’s Jeff Howe, who is credited with coining the term crowdsourcing. And as a result of globalization, ubiquitous access to broadband and the lack of barriers to entry on the Internet, just about anyone on the planet can take part in this new model of work.

Here are just two recent examples, based on the work I am doing for my client in Florida: global positioning and fleet tracking service provider FleetBoss GPS.

Part of the project scope was a “refresh” of the company’s look, from the website to the corporate logo to the marketing collateral and stationery. Typically, this is the type of work that is farmed out to an agency as a turnkey project, or managed in-house by a marketing department. We tried something different: crowdsourcing.

Wanted: “Out of this world” fresh, new logo for a GPS tech firm.

First up: changing the logo. The old logo had been designed in 2004 and was getting a bit long in the tooth. Once the company management team became comfortable with the idea of a change, we created a design brief on the site99designs – a “design contest” site where artists provide their interpretations and the winner receives a pre-paid prize. Here is an excerpt from the design brief:

FleetBoss GPS is a company with over a decade of achievement in the GPS technology field, and GPS (e.g., satellite or other image) should be considered as a key component of the new logo. Where in the past, the full company name was in the logo (FleetBoss Global Positioning Solutions, Inc.) for the new logo the focus should be on “FleetBoss GPS.” Ideally, the blue and red colors from the original logo should be included in the new logo design, although other color schemes will be considered.

And here is the winning logo design, now in use on all of the FleetBoss GPS marketing materials:

Corporate website overhaul for technology B2B company

That was the headline that announced the next big crowdsourcing project. After exploring a more traditional approach for the website redesign, we took a look at what was available using an online service called oDesk. After writing up the general scope of work for the new website, I posted this opportunity on oDesk and within 24 hours had more than 40 bids for the project. We wanted to keep this work in the US, and selected a project manager based in Tampa and her team that was actually in Canada … they worked diligently for six weeks and the site launched on time, on budget and on spec.

These are just a couple of examples of how crowdsourcing is changing how we get things done. Right now, I am working on a business model that will create crowdsourcing opportunities for the U.S. based workforce. Stay tuned for more details …

Crowdsourcing … Good for Business?

Here are three reasons why sending your work overseas could come back to bite you. And why when we think about crowdsourcing, we should think about the local talent market first!

Sold to the lowest bidder! Using services like oDesk (which I think is one of the best when it comes to fast access to a contingent workforce) I have literally seen hourly rates bid as low as $1.11 per hour. And there is a certain allure to having someone on the other side of the planet working for 20% of the prevailing “living wage” here in the US.

But think about this for a second: if we keep going at this rate, treating the workforce as a commodity, we will forfeit the investment we are making right here in the US with the billions spent on our education system and continue to transfer our national wealth overseas. And when you have a person in India willing to do the work for $5.01 per hour competing against another person in China who will do it for half that price, what chance does a US worker have in that equation? Probably none.

And if that’s not reason enough for you to reconsider, think about this: the Department of Labor and IRS are looking into these outsourcing arrangements to consider labor and tax implications.

That’s not what I meant! One thing that you will have to learn the hard way if you are using overseas talent is that workers in many Asian cultures will take your project and instructions at face value, even if they know from the beginning that what you are asking for is unreasonable or simply impossible. And in cases where you’ve agreed to pay an hourly rate for the work but you haven’t been clear with your expectations, the provider/contractor will be churning for hours on the clock on a road to nowhere. At the end of 100 hours of work, you will have to sort though the mess and try to figure out if it can be salvaged. Don’t expect “push back” or questions from the overseas contractors, you have to make your intentions and expectations crystal clear or you will be disappointed.

Anyone here? Let’s say that neither of the foregoing reasons were compelling enough for you. How about this: what happens when the “race to the bottom” on commodity labor results in a national economy based solely on services, with all knowledge work and production work sent overseas? If the US workforce is marginalized, guess who won’t be buying from you?

Don’t get me wrong; I am a proponent of crowdsourcing, just not of turning the workforce into a commodity that can be bid lower and lower like corn, oil and pork bellies. It really does come down to people, and as a U.S. small business owner, I think we have to strike the right balance between cost effective labor and sustainable business systems.

Crowd Worker Bill of Rights

In an attempt to bring leadership to this issue of potential exploitation, author David Alan Grier has offered up a “Crowd Workers Bill of Rights” [podcast] that would set standards for how crowdsourced workers are treated, paid, and involved in the projects they are hired to support.

Grier describes four classes of crowd workers, starting with the divided labor worker (sometimes referred to as microlabor) who works on smaller tasks that become part of a larger project; partial employment workers (interchangeable with temporary workers) with more sophisticated skills; contest workers, competing “on spec” in the hopes of being paid, but frequently working without payment; and public opinion workers, such as bloggers and others who volunteer their time to curate and participate in the development of online content.

At a minimum, according to Grier, each class of worker deserves to be paid for their work (unless they are knowingly volunteering their time), they should be aware of how their work is being used to support a larger project or goal, and they must understand, in the event their work is not selected, why they were excluded and if an aspect of their work was deemed insufficient (Grier, 2011).

Welcome to the New Normal

Crowdsourcing is here to stay. Companies have learned how to take advantage of technology and global sourcing practices for every element of their respective supply chains, including access to talent and labor in the physical and virtual dimensions. What remains to be seen is whether common sense will prevail to tip the scales in favor of competitive pay rather than exploitation, but if the fates of the textile industry, furniture making and heavy manufacturing are any indication, the rush to capitalize on rock-bottom prices in the commodity labor market will only pick up speed until there are consequences for the businesses involved.

As economic recovery plays out differently in different parts of the world, the U.S. finds itself as a laggard rather than a leader of the recovery, leading to a much slower pace of job creation domestically. People who were laid off at the beginning of the recession in 2008 and still have not found work are likely to have reached the end of their unemployment benefits as well, forcing them to evaluate their options and perhaps settle for unqualified, low wage work to have any income at all. Meanwhile, in this dual-speed global recovery, emerging markets are encouraging more workers to learn computer skills and get into the global marketplace to compete for work, and many of these workers are able to work for wages that range from $3.00 to $5.00 per hour and live comfortably.

In the so-called New Normal, freelance work may be the only option for many American workers, at least in the near term. A certain amount of government intervention appears to be inevitable, as what is currently taking place in the unregulated virtual labor market comes dangerously close to violating tax and labor laws. Companies that are sourcing work online are usually not paying taxes in the countries where the work is being done, which could cause other countries to work with the U.S. government to reign in some of the more egregious practices.

For those workers who have valuable creative and technical skills, it should be possible for them to earn a comfortable living and continue to remain competitive in spite of the global crowdsourcing competition. However, there are a number of professions that are being blindsided by this emerging market and its price pressures, among them lawyers, accountants, marketing and design specialists, translators, and many others. Some have taken the “if you can’t beat ‘em, join’em approach” and started sub-contracting their own work to crowdsourced freelancers in low cost countries, while others have scaled back their businesses to a minimal level of sustainability, hoping for things to improve.

Breaking Down Crowdsourcing

At CrowdConf (2010), Patrick McKenna, founder of crowdsourcing firm LiveOps and president of Kineks, generally described the three levels of labor as follows:

(1)   Transactional: tasks that can be delegated or assigned to an individual or entity with specific instructions and expectations for the completed work

(2)   Relational: projects and tasks that are interpersonal in nature, and frequently require interaction and collaboration among more than one team member to complete the work

(3)   Creative: requires intellectual and/or creative content from an individual, often based on ambiguous instructions or loose guidelines

McKenna emphasized the potential and scalability of the transactional work, offering a “formula” for profitability in crowdsourcing: find a pile of cash with transactional tasks;  understand how you add value to the transaction, by lowering costs, increasing quality, increasing the speed of answers; and build a process that leverages the crowd and an interface that enables the crowd to optimize the transaction (CrowdConf, 2010).

What is Crowdsourcing?

If outsourcing was the non-traditional employment trend of the latter part of the twentieth century, this century’s trend appears to be crowdsourcing. Crowdsourcing is the practice of taking complex projects and tasks and breaking them down into smaller pieces to allow multiple people to work on the component elements that will later be assembled for a completed project. It differs from outsourcing in that the work is broken down and components are assigned or awarded to individuals, as opposed to taking an entire business process and assigning it to another entity for turnkey management. Like freelancing, crowdsourcing in its simplest form is not new.

One early example of crowdsourcing: the compilation of recipes for some of the first Betty Crocker cookbooks in the 1930s, the vast majority of which were submitted for free in hopes of winning one of General Mills’ contests. While the activities that constitute crowdsourcing are decades old, the term “crowdsourcing” was coined in 2006 by Jeff Howe, a writer for WIRED magazine, as a way to define and make sense of the emerging trend, facilitated by technology and accelerated by increasing worldwide access to high-speed internet and the competitive pressures of globalization.

Howe defines crowdsourcing as the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers (2006).

In an Alabama Law Review analysis of crowdsourcing in the context of the Fair Labor Standards Act (FLSA) the author further defines crowdsourcing as a process “where complicated tasks are broken down and distributed to thousands of workers throughout cyberspace, then later consolidated into a finished product (Cherry, 2009, pg. 1079).

Today’s crowdsourcing encompasses a variety of activities, many of which are a natural complement to current social media practices and technology. The more social applications of crowdsourcing include photo sharing, movie reviews and other word of mouth recommendations. However, there are dozens of areas where crowdsourcing begins to encroach upon traditional roles and employment opportunities, such as advertising, programming, writing, research, design, product development, and data analysis. Technology makes it possible to source this work instantly without following traditional hiring processes, and globalization puts United States workers in competition with a global labor market.