What Can The Crowd Do?

Chapter VII What the crowd creates:

• When done correctly, businesses using crowdsourcing (like istockphoto) can undercut their competitors at a mere fraction of the cost, while harboring a growing and enthusiastic community of people who share the same passions.These communities can provide the rewards of mentorship and making friends through similar interests rather than a shared workspace - which usually cannot be achieved at 'jobs'.
• Those truly gifted with talents (such as good photographers) will always find jobs. Meanwhile, those declaring themselves as professionals now must compete with the crowd for the same assignments.
• For a successful business to have a crowd and a community surrounding it, there needs to be a meaningful exchange of goods and experiences, or else the crowd will vanish.

An example of failure to recognize the limits of the crowd is the business model of current.com

• The website designers overestimated the crowd's willingness to invest in video equipment and editing software to upload their own videos of citizens reporting the news.
  
• The designers also underestimated the amount of interest that the crowd had in actually reporting the news and taping serious types of videos. (see youtube.com and search cats for proof by contraposition)
  

Tips on getting the crowd to work with you:

• You need to draw them in by engaging them in part of the action. "Just because they show up once doesn't mean they'll show up over and over."
  
• You need to accommodate a range of commitment levels when putting crowdsourcing to work. (newassignment.net e.g. counting cars, recording price of groceries and comparing them)

Chapter VIII What the Crowd Thinks:

• The crowd is its own best filter (American Idol, Youtube Ratings, sort by popularity/downloads)
• 1:10:89 rule - for every 100 people on a given site, 1 will create something, 10 will vote on that creation, and 89 will consume the creation.
• Amazon and eBay use rating systems and recommender systems to help sell stuff better
• The crowd is large enough so that work can be split up such that users can contribute a minimal effort and complete tasks (like tagging photos on flickr)
• Corollary: The crowd as a source of work means they tasks are infinitely* scalable yet still very responsive.
• Note: The Great Digg Riot of 2007 and HD-DVD encryption key and the issue of trying to censor the crowd does not end well, sort of
  

*a turn of phrase

Also, Andrew Keen points out that the cult of the amateur will make us collectively dumber:
"we're diving headlong into an age of mass mediocrity in which the mob replaces experts and we all become collectively dumber." Additionally, Howe adds "Google, YouTube and Digg all constitute a form of mob rule, and as their importance increases, so does the mob's influence. But there is a fine line between mobocracy and democracy, and some tolerance of the former is generally required to achieve the latter."