Bruno Pellegrini made a lesson in Bocconi about Crowdsourcing. Bruno Pellegrini is one of the top Italian experts in new media and UGC, after graduating in business administration at the Bocconi University in Milan, he worked at Procter & Gamble and Bain & Co. He took his MBA at Insead, Paris, and joined Mediaset where he developed and produced multimedia projects including the web-TV during the first edition of Big Brother. He was co-founder in 2001 of Offside, a company which produces several television programs and films for private cinema that won numerous international awards, including the Locarno Film Festival and David di Donatello. In 2004 he conceived and founded the satellite channel, NessunoTV. He is currently CEO of TheBlogTV, a media company he founded in 2006 specializing in user-generated production. www.theblogtv.it/en www.userfarm.com

1. www.theblogtv.it
Crowdsourcing
Università Bocconi
8 Marzo 2011
TheBlogTV S.p.A

2. TheBlogTV is the first Social Media
Company in Europe, and it is present in
Italy, France, Spain, and the UK.
Founded in 2007,
Our mission is to TheBlogTV spa is
create economic supported by a team of
prominent investors among
value through the whom an Italian industrial
potential of Web 2.0 member leader in television
production (DeAgostini)
and by engaging and two Venture Capital
communities. funds specialized in media
and and
telecommunications
(Innogest e Tlcom). 100
people work for the
company.
TheBlogTV S.p.A
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3. Participatory Value is the new
fronteer of business management.
Crowdsourcing is one emerging model
which leverages on external resources in
order to create participatory value.
INTRODUCTION
Crowdsourcing In the near future any company and
organization must recognize where its
participatory value lies and how to
create/activate it.
TheBlogTV S.p.A
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4. DEFINITION
CROWDSOURCING is when a
COMPANY takes a job that was ONCE
PERFORMED BY EMPLOYEES and outsources it in
a form of an open call to a LARGE
UNDEFINED GROUP OF PEOPLE generally
using the internet
TheBlogTV S.p.A

5. CROWSOURCING AND OTHER TYPES OF CO-CREATION
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6. THE ORIGIN OF CO-CREATION
The origin of crowdsourcing are to be found in the early work of Eric von
Hippel (MIT) in late ’70: Users as innovators (1979) or Get new products from
customers (1982)
For me, the 1991 book of Salvatore Vicari “L’impresa Vivente” highlighted
sharply that enterprises must open their boundaries if they want to fight the
entropia and win the competition.
More recently, Ramaswamy and Prahalad (Co-Opting Customer
Competence, 2000 HBR) have defined some key pillars of the co-creation
model.
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7. CROWDSOURCING MODEL
A first generic categorization of crowdsourcing sees two
basic models:
Corporate Crowdsourcing happens when crowdsourcing is
started by a company
Crowdsourcing Vendors are enterprises whose business
model is entirely built on crowdsourcing
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8. CROWDSOURCING TURNOVER IN 2009
Accounting for overlap, and using some very general assumptions
relative to work type, category and company revenue model, we’d
estimate that over 1 million workers have earned $1 – 2 billion over the
past 10 years via crowdsourced work allocation.
The revenues earned by the paid crowdsourcing vendors themselves are
subject to a wider margin of error in estimation, but are likely around
$500 million per year among all vendors.
Vendor Revenues will pass $1B in 5 Years
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9. “No matter who you are, most of
the smartest people work for
someone else”
Attributed to Sun Microsystems cofounder
Bill Joy, this “law” emphasizes the
CASE STUDIES essential knowledge problem that faces
Crowdsourcing many enterprises today, that is, that in
any given sphere of activity most of the
pertinent knowledge will reside outside
the boundaries of any one organization,
and the central challenge for those
charged with the innovation mission is to
find ways to access that knowledge.
TheBlogTV S.p.A
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10. INERNATIONAL CROWDSOURCING MAP
www.crowdsourcingresult.com
TheBlogTV S.p.A

11. ITALIAN CROWDSOURCING MAP
www.crowdsourcingnetwork.it
TheBlogTV S.p.A

12. CROWDSOURCING HISTORY
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13. CROWDSOURCING CASE STUDIES
CORPORATE INNOVATION: P&G Connect
TheBlogTV S.p.A

14. CROWDSOURCING CASE STUDIES
CORPORATE INNOVATION: Dell / Starbucks
DELL IDEA STORM MYSTARBUCKSIDEAS
Since 2007, DELL has received 15.400 StarBucks has received more than
ideas and implemented 432 100.000 ideas in 2 years (more than
400)
TheBlogTV S.p.A

15. CROWDSOURCING CASE STUDIES
CORPORATE INNOVATION: Mulino Bianco / Nesquick
NELMULINOCHEVORREI NESQUIK – SAI COME ME LO IMMAGINO
In 2010 MulinoBianco receives almost 5.000 In 2010 Nesquik engaged mothers to
ideas and are implemented 4. develop a new concept for its website
TheBlogTV S.p.A

16. CROWDSOURCING CASE STUDIES
INNOVATION VENDORS: Innocentive / YourEncore
INNOCENTIVE YOURENCORE
The site aggregate more than 200.000 The characteristic of this platform is to
scientists from 200 countries. Since 2003 “keep retires in the game” allowing them
more than $7mln prizes have been to participate to crowdsourcing projects
assigned. for top customers.
TheBlogTV S.p.A

17. CROWDSOURCING CASE STUDIES
CREATIVITY VENDORS: BootB / Crowdspring
BOOTB CROWDSPRING
Born in 2009 it allows brand to engage a Together with 99design it is the most
community of creatives famous creativity crowdsourcing vendor
in US
TheBlogTV S.p.A

18. CROWDSOURCING CASE STUDIES
CONTENT VENDORS: UserFarm / Associated Content
USERFARM ASSOCIATED CONTENT
Since 2009 more than 80 content Yahoo bought AC in 2010 for almost
crowdsourcing project have been $100mln in order to integrate its model in
launched on the platform the content making process.
TheBlogTV S.p.A

19. CROWDSOURCING CASE STUDIES
CORPORATE CONTENT: RAI / France24
FRANCE 24 – LES OBSERVATEURS
CITIZEN REPORT - RAI
The first time Rai opens to user generated
content, a participatory TV Show aired on
2010 with excellent audience results.
CNN – I REPORT
TheBlogTV S.p.A

20. CROWDSOURCING CASE STUDIES
CROWDFUNDING VENDORS: SellaBand / FashionStake
SELLABAND FASHIONSTAKE
Born in 2006, it helps new music bands to Since 2010 it gives young designer a
raise money and get visibility chance to enter in the fashion world
TheBlogTV S.p.A

21. CROWDSOURCING CASE STUDIES
CROWDFUNDING: Kapipal / Kiva
TheBlogTV S.p.A

22. CUSTOMER CARE
Vodafone / Crowdengineering
VODAFONELAB CROWDENGINEERING
Since 2007 more than 100.000 A white label customer care
Vodafone users subscribed and crowdsourcing platform used by
participate to the lab. many international customers.
TheBlogTV S.p.A
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23. MARKETING
CORPORATE CSR: Pepsi / WWF
PEPSI – REFRESH YOUR PROJECT SONY/WWF – OPEN PLANET IDEAS
A sizable 44 percent have used crowdsourcing – asking customers to provide
ideas and help in decision-making on how to tackle issues. Of these, 95 percent
found it valuable to their company. Regardless of use, 83% see the potential.
The perceived value of crowdsourcing is that it surfaces new perspectives, builds
engagement with key audiences, invites clients and customers from
nontraditional sources to contribute ideas and it brings new energy to the
process of generating ideas and content.
Weber Shandwick – October 2010 – 216 Fortune 2000 Corporate Executives with Program or
TheBlogTV S.p.A Communications Oversight for Corporate Philanthropy, Social Responsibility & Community Relations
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24. CROWDSOURCING CASE STUDIES
I Pad and Iphone applications
On my opinion one of the most
interesting crowdsourcing example
is the Iphone and Ipad AppStore.
Here the concept of “becoming a
platform to harness the
participatory value” is fully
exploited.
Letting anyone to develop and sell
their applications has led to
250.000 apps building a critical
mass far above any competitors.
APPLE APPLICATION STORE
TheBlogTV S.p.A

25. “Choose the best”
“… To achieve the objective of
leveraging the knowledge of the masses,
business must realise that to get the best
answers, it is necessary to attract those
GUIDELINES who can give them, and these are the
Crowdsourcing people who also best know the value of
the knowledge they hold.”
Donal Reddington
TheBlogTV S.p.A
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26. CO-CREATION GUIDING PRINCIPLES
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27. CROWDSOURCING 5 KEY SUCCESS FACTORS
1. Crowd Responsiveness - What each vendor seeks to achieve is enough volume, breadth and quality in
their on-demand workforce to provide the payers a good chance of getting results in a timely fashion.
They also seek to provide the most lucrative experience for their workers as the barrier to working for
alternative vendors is low.
2. Ease of Use - A well designed on-demand service will hand hold a work requester through the process
of creating a work definition and proposal. It'll provide a mechanism for the provider to keep tabs on
the progress of the work all the way through to approving the results delivered and the subsequent
payment of the worker.
3. Satisfactory Results – Low quality or unexpected results are the single biggest factor in companies
choosing to abandon paid crowdsourcing as a viable outsourcing option. Many of the business people
surveyed were willing to invest the time and effort to submit trial work through a paid crowd vendor, but
unwilling to give it a second chance when the initial results were below their expectations.
4. Cost Advantage - Cost benefits run second to results quality in determining business interest in paid
crowdsourcing. Cost advantages over traditionally sourced work range from orders of magnitude
difference to similarly priced. Some work types can only be done economically via paid
crowdsourcing. Some examples:
Traditional Outsourcing Paid Crowdsourcing
Transcription $2 – 6/minute $0.75/minute
Company Research* $3 - 10/hr $1.85/hour
Image Tagging Feasible? $0.02/image
5. Security / Privacy – The option for autonomy and the assurance of security is a built in feature for most
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categories of paid crowdsourcing. In addition, vendors have developed sophisticated procedures that 9
utilize accounts, escrows, and modern payment processors like Paypal along with approval procedures
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28. CASH REWARD IS NOT EVERYTHING
In the case of output that is not needed by the contributor, a cash reward might be
tendered for substantial contributions. Such efforts are not undertaken with any ex-
ante guarantee that they will be rewarded. Rather, payment is at the discretion of the
sponsoring organization, made after the work has been completed and evaluated as
meeting a certain criteria, and is usually attended by the formal transfer of intellectual
property between contributor and sponsor.
Beyond pecuniary benefits, extrinsic reasons for participation include job market
signaling and skill and reputation building. Distributed innovation communities provide
a relatively open and transparent platform for exhibiting skills and talents to
prospective employers. Participants don’t need high-level credentials to directly
demonstrate their abilities in highly specialized domains, and employers can screen
and hire talent by directly observing or soliciting third-party verification of skills.
The intrinsic and extrinsic motivations to participate in distributed innovation systems
are not intuitively obvious to new observers of the phenomenon. Most, in fact, find to
be counterintuitive the association of fun, enjoyment, and a personal sense of identity
with the accomplishment of complex technical tasks. But the research findings strongly
suggest that the functioning of these systems is driven by mixed and heterogeneous
motivations. Consequently, optimizing on only one dimension might have the effect of
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29. IMPACT OF CROWDSOURCING
1) GLOBAL RE-DISTRIBUTION OF KNOWLEDGE WORK
2) DISINTERMEDIATION OF TRADITIONAL AGENCIES
3) FOCUS ON VALUE CREATION
4) VALUE IS NOT ONLY ECONOMIC
5) VALUE WILL BE EQUALLY SHARED
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