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Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business [Paperback]

Jeff Howe
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Book Description

Sept. 15 2009
Why does Procter & Gamble repeatedly call on enthusiastic amateurs to solve scientific and technical challenges? How can companies as diverse as iStockphoto and Threadless employ just a handful of people, yet generate millions of dollars in revenue every year?

"Crowdsourcing" is how the power of the many can be leveraged to accomplish feats that were once the responsibility of a specialized few. Jeff Howe reveals that the crowd is more than wise–it’s talented, creative, and stunningly productive. It’s also a perfect meritocracy, where age, gender, race, education, and job history no longer matter; the quality of the work is all that counts. If you can perform the service, design the product, or solve the problem, you’ve got the job.

But crowdsourcing has also triggered a dramatic shift in the way work is organized, talent is employed, research is conducted, and products are made and marketed. As the crowd comes to supplant traditional forms of labor, pain and disruption are inevitable, and Howe delves into both the positive and negative consequences of this intriguing phenomenon. Through extensive reporting from the front lines of this workplace revolution, he employs a brilliant array of stories to look at the economic, cultural, business, and political implications of crowdsourcing.

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Review

"An informed and enthusiastic guide to the new collaborative creativity."
Times (London)

"A welcome and well-written corporate playbook for confusing times."
BusinessWeek

"An engaging mix of business, sociology, organizational theory, and technology writing and fits the mold of Malcolm Gladwell’s perennial bestseller, The Tipping Point."
Newsweek

“While small groups have often been the foundation of great performance—think SWAT teams and Skunk Works—Jeff Howe has made the compelling case for the power of far larger communities of interest. He shows in Crowdsourcing—with rich illustrations from Google and InnoCentive to Threadless and Wikipedia—that the right community with the right incentives can often invent, write, and run research and business initiatives more effectively and less expensively than traditional enterprise.”
—Michael Useem, professor of management and director of the Leadership Center at the Wharton School, University of Pennsylvania, and author of The Go Point: When It’s Time to Decide and The Leadership Moment

“Beyond the wisdom of crowds is the work of crowds, a powerful and transformative source of creativity and an economic engine that defies traditional rules. Jeff Howe’s guide to crowdsourcing—to use his perfect coinage—is insightful, fun, and indispensable to those who want to understand, or participate in, this amazing phenomenon.”
—Steven Levy, author of Hackers and The Perfect Thing

“Jeff Howe has captured a complex and vital change in the business landscape: in the next few years, your customers could become your collaborators, or your competitors. His ability to weave story and strategy together makes Crowdsourcing a readable and indispensable guide to this new world.”
—Clay Shirky, author of Here Comes Everybody


From the Hardcover edition.

About the Author

JEFF HOWE is a contributing editor at Wired magazine, where he covers the entertainment industry among other subjects. Before coming to Wired he was a senior editor at Inside.com and a writer at the Village Voice. In his fifteen years as a journalist, he has traveled around the world working on stories ranging from the impending water crisis in Central Asia to the implications of gene patenting. He has also written for U.S. News & World Report, Time magazine, the Washington Post, Mother Jones, and numerous other publications. He lives in Brooklyn with his wife and children.


From the Hardcover edition.

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3 of 3 people found the following review helpful
By Donald Mitchell #1 HALL OF FAME TOP 50 REVIEWER
Format:Hardcover
If you have been paying close attention to the subject of crowd sourcing, this book will contain few surprises. But you just might pick up an insight or two that will make the book of much value. That was my experience.

While much of the book covered things I know in more detail than Jeff Howe describes, I began to see connections between how one aspect of crowd sourcing could be combined with other aspects to make more progress more rapidly. I intend to apply those insights into my global project for increasing the rate of global improvements by 20 times.

Ultimately, crowd sourcing's significance is determined in the battle between the tendency of crowds to contain wisdom and the average results of crowds to be lousy. If you use crowd sourcing to get lots of ideas, you also need to rely a lot on crowd sourcing to get rid of the junk.

Although Mr. Howe claims to be taking a journalist's approach to the subject, he comes across as more of an advocate than an observer. In particular, he fails to capture the ways that prolific production of content can overwhelm the accuracy of crowd sourcing votes. Highly ranked contributions often reflect popularity and the crowd's agreement with the conclusions more than the quality of the production. As a result, you can often end up with something that looks like what a lot of undisciplined teenagers would produce.

Yet, even that problem can be solved by adding a layer of expert evaluation to the more popular entries. He mentions that point in passing, but misses its significance.

For a book that aims to describe the fundamentals of how crowd sourcing will be used by business, the conclusion section is pretty limited and abstract.
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Amazon.com: 4.2 out of 5 stars  33 reviews
29 of 30 people found the following review helpful
4.0 out of 5 stars Defines the dynamics that will drive the future of commerce Oct. 17 2008
By Mark P. McDonald - Published on Amazon.com
Format:Hardcover
Every significant trend requires a book that defines its key concepts, pioneers and rational. Crowdsourcing is that book for the application of social and community capability to business and society. Jeff Howe has created a readable chronicle of the early adopters who use crowds to replace experts. Coupled with James Surowieck's "Wisdom of Crowds" the two books will be used in corporate offices and marketing teams to look at how to engage crowds in the future.

Executives, marketing professionals, and product managers should read both books to better understand how to tap into this resource. However, do not expect a recipe book, specific solutions, or a road map to crowdsourcing.

Readers will find the book very descriptive and illustrative, which is strength, but its analysis and recommendations are a weakness and hence the reason for a four star review. I still highly recommend this book, but recognize that it comes from a journalistic tradition, rather than a hard core business book. Given the subject matter, I believe that the journalistic approach is more fitting to the subject.

This book is recommended to gain an understanding of this phenomenon, pick up examples and stories, and gain a new vocabulary. Strategists, executives, and marketing types will find examples that they will need to think about in order to gain the answers they are looking for and need.

DETAILED REVIEW

The book focuses on describing how to crowds are creating new sources of value than the specific ways to tap into that value. Chapters 1 through 5, the first half of the book, concentrates on providing examples of the crowd sourcing phenomenon. The second half focuses down on the impact of crowds to economic and business organization.

Chapter 1: The Rise of the Amateur - discusses the shifting balance between individuals with deep expertise and communities of interest. These differences and the increasing amateur access to information and collaboration are changing the playing field in multiple disciplines for the better.

Chapter 2: From So Simple a Beginning - traces the rise of crowd sourcing back to the open source software movement. Howe details the early history of open source software, an interesting tale, as well as its basic principles of self responsibility, community contribution, and breaking large problems into small units. Howe describes the start of Wikipedia, SETI and the USPTO's use of open software approaches in the chapter.

Chapter 3: Faster, Cheaper, Smarter, Easier - looks at the results that come from employing diversity and crowds to solve complex problems. Examples here range from desktop publishing, viral video, and music. In each case, the shift from centralized to distributed production results in the transformation of markets and the creation of new opportunities.

Chapter 4: The Rise and Fall of the Firm - puts together the principles of the first three chapters and describes their collective impact on modern business and market structures. Howe uses readily accessible examples, like CincyMoms, to illustrate how open access; amateur interest and aggregating intelligence upset traditional markets and organizations. This chapter is well researched and may be the best of the book as it bridges between academic studies (Benkler's "The Wealth of Networks') with real life examples.

Chapter 5: The Most Universal Quality - discusses the role of diversity and the power of crowds to aggregate diversity to match or out perform experts in many different situations. This chapter is the most like the Wisdom of Crowds as Howe explains both socially and mathematically how a crowd of amateurs can be more accurate than an individual expert.

Chapter 6: What the Crowd Knows is an extension of Chapter 5 and concentrates on the channeling of crowd wisdom into collective wisdom through prediction markets and other types of solutions. The chapter also introduces the idea of Marketocracy as a means to find talent in a crowd based on their results rather than their resumes.

Chapter 7: What the Crowd Creates focuses on the creative aspects of communities that require a different set of solutions to the aggregation of collective intelligence. These chapter discuses the notion of user-generated content and its dynamics based on tools, incentives, rewards, and ownership. It dives deep into the operation of iStock as an example of a company that harnesses the creations of a community.

Chapter 8: What the Crowd Thinks recognized the power of personal expression in terms of participatory decision making, reviews and visibility. Howe points out that about 10% of a community provides their opinions and views, setting the tone for the overall community. However those opinions operate as a significant filter for the community. BTW, Howe points out that Amazon reviews are an example of this - so welcome to the crowd. This chapter focuses on phenomenon such as American Idol and Digg as illustrations of crowd opinions.

Chapter 9: What the Crowd Funds is a short chapter that discusses the application of crowd sourcing principles to finance with applications such as peer-to-peer lending, micro-lending and Barak Obama's appeal to large numbers of small individual donors.

Chapter 10: Tomorrow's Crowd highlights the rise of the digital native and the fact that people growing up today expect to work more collaboratively than their parents. This chapter explores how this next generation works, multitasks and collaborates. These traits are largely explained through changes in the media industry, which makes sense since digital natives are currently the target audience in that market. It's just a matter of time before they are the target audience in every market.

Chapter 11: Conclusion - the rules of Crowdsourcing summarizes the book, wrapping its ideas into a few simple and powerful rules:

1. Pick the right model from among collective intelligence, creation, voting, or funding.
2. Pick the right crowd from the participants to the people who will influence and usher the crowd.
3. Offer the right incentives to the crowd that are often expressed in recognition rather just money.
4. Keep the pink slips in the drawer - crowdsourcing is not outsourcing
5. The dumbness of crowds, or the benevolent dictator principle - crowds need leaders who influence
6. Keep it simple, break it down - give the crowd something each individual can work on, yet can aggregate into something great.
7. Remember Sturgeon's Law - 90% of what is created is crap so you will need to allow the crowd to separate the cream from the crap
8. Remember the 10 percent, the antidote to Sturgeon's law - related to #7 that the crow can do the sorting in a democratic and open forum better than the experts.
9. The community is always right
10. Ask not what the crowd can do for you, but what you can do for the crowd - a crowd forms and is most effective when it sis working on something it wants.

Crowdsourcing is among the foundational books for the next generation of commerce, whether you call it Web 2.0, Social Production, or Crowdsourcing, - this book describes the core principles and examples of the way we will work in the future.
7 of 7 people found the following review helpful
4.0 out of 5 stars A Survey of Crowdsourcing Activities, Sociological Evaluations, and a Few Prescriptions for Business Oct. 22 2008
By Donald Mitchell - Published on Amazon.com
Format:Hardcover
If you have been paying close attention to the subject of crowd sourcing, this book will contain few surprises. But you just might pick up an insight or two that will make the book of much value. That was my experience.

While much of the book covered things I know in more detail than Jeff Howe describes, I began to see connections between how one aspect of crowd sourcing could be combined with other aspects to make more progress more rapidly. I intend to apply those insights into my global project for increasing the rate of global improvements by 20 times.

Ultimately, crowd sourcing's significance is determined in the battle between the tendency of crowds to contain wisdom and the average results of crowds to be lousy. If you use crowd sourcing to get lots of ideas, you also need to rely a lot on crowd sourcing to get rid of the junk.

Although Mr. Howe claims to be taking a journalist's approach to the subject, he comes across as more of an advocate than an observer. In particular, he fails to capture the ways that prolific production of content can overwhelm the accuracy of crowd sourcing votes. Highly ranked contributions often reflect popularity and the crowd's agreement with the conclusions more than the quality of the production. As a result, you can often end up with something that looks like what a lot of undisciplined teenagers would produce.

Yet, even that problem can be solved by adding a layer of expert evaluation to the more popular entries. He mentions that point in passing, but misses its significance.

For a book that aims to describe the fundamentals of how crowd sourcing will be used by business, the conclusion section is pretty limited and abstract. If that's why you want to read the book, borrow the book at the library (or read it standing up at a book store) because you'll finish that section faster than a cup of coffee.

To me, the biggest economic impact will be on problem solving. There's plenty in the book on that point, but Mr. Howe fails to explain why so few companies are using crowds for that purpose.

I conducted a worldwide contest two and a half years ago to gain answers, ran the contest for essentially no money, and was astonished at the quality of the results. But I started with no community, built no community, and don't plan to aim the findings back to establish a new community later. As a result, I seriously question his conclusion that crowd sourcing can only be done by people who get benefits from a community. I would argue, by comparison, that participants need to get some benefits . . . but they don't have to be community-based ones.

I suspect that a better book on this subject would emerge from a crowd sourced methodology rather than relying on typical "professional" journalism methods.

Want some good answers? Ask the world.
3 of 3 people found the following review helpful
5.0 out of 5 stars The 40-hour week leaves time for meaningful work Nov. 8 2010
By Charlotte A. Hu - Published on Amazon.com
Format:Paperback
Although the author doesn't specifically address the 40-hour work week, he does deal with a range of results from that fact. He talks about how people's hobbies are increasingly allowing them to contribute significantly en masse to major projects -- like Linux, a collectively developed free software or uploading thousands of bird sitings to help onithologists track bird migrations. The author talks about the incredible power of the masses in contributing to major developments and notes that the "over education of the middle class" and increasing levels of job dissatisfaction are the cause.

He definitely got some of these elements right, but I think sociologically speaking the meaning of job has changed. After the great depression, a great job was one that fed the family -- assembly line work at an auto manufacturing plant would be an ideal job under that description. However, more recently, employees want more personally engaging, intellectually stimulately jobs which provide creativity outlets for them. Thus, jobs at Google and similar companies that encourage and permit time for employee creativity are more valued. Moreover, companies are beginning to see that sometimes it pays to give employees more latitude.

However, not everyone can work at such places and those who don't have a naturally engaging job look for alternatives for "meaningful work" as the author calls the Pro-Am -- a new term, spelled out the professional amateur, which means amateurs who work at a professional level.

Karl Marx saw humans as naturally creative; I think that's true. And he saw the labor of the the 1800s as demeaning this naturally creative nature, which might also have been true. However, today, as Crowdsourcing illustrates, people have increasing levels of access to universities and institutions of higher learning, more time to devote to hobbies of higher interest and thanks to the Internet, a method by which to collectively collaborate on projects of common interest.

The end result is that this book, unlike many other "new media" books doesn't have a doomsday message. It gives more facts and illustrations and avoid the preachy pitfall some other new media authors have fallen in. It is both a great read -- or listen in my case -- and an excellent collection of facts and realities.

I'm particularly fond of the 5th chapter that traces dilettantism back to Charles Darwin and other great thinkers. It suggests that all of us can now participate in grand adventures like the Voyage of the Beagle, even if we never leave our keyboards and make our personal discoveries by reading the crowd-sourced Wikipedia for new imagination inciting facts. This book is awesome!
3 of 3 people found the following review helpful
3.0 out of 5 stars Howe's exuberance has some merit but is ultimately a little misguided April 11 2010
By Jay P - Published on Amazon.com
Format:Paperback|Verified Purchase
"No matter who you are, most of the smartest people work for someone else," quips Bill Joy, a Sun Microsystems co-founder. This declaration was articulated as a paean to the wisdom of crowds, the subject of Jeff Howe's 2008 book, Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business. Why limit yourself to a small, expensive subset of the available talent, the argument goes, when a global network of freelancers will gladly do the job better for little or free?

Howe's enthusiasm is very nearly unequivocal. He predicts that today's tech-savvy youth will "help accelerate the obsolescence of such standard corporate fixtures as the management hierarchy and nine-to-five workday," concepts he deems to be "artifacts of an earlier age when information was scarce and all decisions...trickled down from on high." And Howe's praise of the community as exemplified in crowdsourcing is so complete that it borders on subservience: "Yes, communities need a decider," he concedes in his concluding chapter, but while "...you can try to guide the community...ultimately you'll wind up following them."

The author's unabashedly optimistic chronicle of the ascendancy of crowdsourcing (a label he created) brings to mind a phrase once made famous by former Federal Reserve chairman Alan Greenspan: "irrational exuberance." Jeff Howe's full-fledged advocacy for the crowd's potential is equally as overreaching as Jaron Lanier's dire warnings on the same topic. In You Are Not a Gadget, Lanier writes ominously, "We [have]...entered a persistent somnolence, and I have come to believe that we will only escape it when we kill the hive."

Both authors fail to account for some basic rules of human nature. Lanier laments that "when [digital developers] design an internet service that is edited by a vast anonymous crowd, they are suggesting that a random crowd of humans is an organism with a legitimate point of view." To which Howe would undoubtedly respond, Damn right. In fact, he explicitly states that "a central principle animating crowdsourcing is that the groups contain more knowledge than individuals."

Howe and Lanier are each right in their own ways. Crowdsourcing does indeed represent an entirely new model of work, one that transcends business and could upend a sizable chunk of existing corporate practices. Many of Lanier's fears, while understandable, are not feasible now or in virtually any other conceivable time horizon. And yet he is right that crowdsourcing will never replace the value of specialization. While Howe correctly lauds the democratization of decision-making -- for example, aspiring filmmakers are no longer beholden to studio executives' every whim -- his populist celebration of online egalitarianism is not bounded by realistically described limitations. "The crowd possesses a wide array of talents," Howe writes, "and some have the kind of scientific talent and expertise that used to exist only in rarefied academic environments."

The key word here is "some." Howe notes Sturgeon's Law ("90 percent of everything is crap") and briefly admits that this may present an inaccurate portrayal of reality: "a number of the people I talked to for this book thought that was a lowball estimate." Even for the ten or fewer percent that actually do provide reasonably intelligent contributions to the marketplace of ideas, much will be repetitive or non-cumulative. A thousand people with a hobbyist's interest in chemistry may all eagerly contribute to a forum on noble gases, but it hardly follows that they will achieve any real breakthrough that eludes far more studied experts in the field.

Ultimately, it is not so much the anecdotes that undercut Howe's thesis, nor is it his own repetition (which, in one particularly egregious case, consisted of several sentences copied wholesale from an earlier section of the book). Instead, it is his idealism that brings to mind countless earlier predictions of technology's ability to transform human nature, prophesies that have more often than not been proved demonstrably untrue. It remains to be seen what will become of crowdsourcing; will it go the way of the flying cars that American prognosticators naively envisioned over half a century ago? This seems unlikely, and yet so does the author's vision of a crowdsourcing revolution in business. The truth will likely lie somewhere in the middle, lodged comfortably between Jeff Howe's crowd-fueled utopia and Jaron Lanier's "hive mind" hell.
2 of 2 people found the following review helpful
2.0 out of 5 stars Great topic... poor delivery Dec 15 2012
By twiygul - Published on Amazon.com
Format:Paperback
Crowdsourcing by Jeff Howe was an interesting read for the most part. He takes the same approach to explaining a topic in a way that assumes he is making great connections for the reader and that the entire book should be an "Ah-ha" moment. This is similar to the style in which Malcolm Gladwell along with most other writers of this genre write. This is great if you actually are having these "Ah-ha" moments, however for a reader who knows anything about anything it becomes almost annoying and childish.
The author did almost too good a job of thoroughly explaining the topic which might have been his main fault in the book. If you have read the article Howe wrote in Wired it basically sums up every point Howe made in the book. However, in the book Howe just gives more anecdotal stories about companies that use crowdsourcing that become cliché and boring after a while. Howe repetitively uses the example of iStockphoto over and over again which becomes very annoying quickly.
Besides the aforementioned problems the main point of the book, the importance and use of crowdsourcing as a viable business tactic, is very interesting. Howe's use of crowdsourcing to edit his book came back to haunt him, had a real editor edited the book it may have been shorter and more pleasant to read. Also, it seemed as though Howe was trying to sell you the idea of Crowdsourcing the whole time; had he taken more of an observer approach the book would have been much more readable. All in all, Crowdsourcing has a very interesting topic with a very poor delivery.
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