Before I turn to the virtues of crowdsourcing, let me tell you a story that happened 7-8 years ago. I worked with a client, a statistician in the consumer product field. (To tell this story freely, I changed the industry affiliation of my client. It doesn’t really matter here). My client felt that an analytical algorithm he used to process the data was suboptimal. He also had a hunch that there may be someone, somewhere, who has an idea on how to improve this algorithm. So we decided to run a crowdsourcing campaign asking for improvements to the old algorithm. The brief that we posted online was unavoidably technical in nature, but in essence what it was saying was that: “Here is what I do and here is my algorithm. Here is what I dislike about it. Here is what I’d consider a substantial improvement to it. If you do that, I’ll pay you $20,000.”

I have to admit that initially I had doubts about the potential success of this campaign: I simply wasn’t sure that the crowd of people we were approaching had enough individuals capable of dealing with such a specific topic. To my pleasant surprise, the problem posted by my client was met with high interest and enthusiasm. Educated questions followed, which is always a good sign, and by the posting deadline, we had a respectable number of submitted solutions.

I had no clue with regards to the quality of these proposals. In many cases, I can “feel” good ones–I don’t know how, perhaps, just by a manner a submission looks and reads. Alas, not in the case of descriptions full of mathematical formulas. But my client liked what we got. He initially focused on three most promising solutions and then rapidly singled out one that he announced a winner.

I proceeded with paperwork, a set of formalities needed to move money from one party to another. At this point, I could disclose the identity of the winning solver to my client, and when sending this information, I noticed with some amusement that both my client and the solver lived in the same state.

A few days later, I received a phone call from my client. “Are you kidding me?” he was yelling in my ear, “Are you kidding me with this guy?” I froze. “What? What’s wrong?” (However unlikely, but theoretically speaking, people may turn out to be ineligible to receive an award after completing their part of paperwork.) “Are you kidding me or what? This guy is my neighbor!”

As it turned out, my client and the gentleman who solved his problem were indeed living a few houses apart on the same street in a small Mid-Western town. They were meeting regularly outside, exchanging greetings and opinions about weather while walking their dogs, but never had a chance (or need?) to formally introduce each other. (Do you really know names and occupation of all of your neighbors?) So the irony was that my client has been struggling with this problem for years, and the person who solved it in less than two months lived down the same street.

What is the moral of this story? When facing a complex technical or business problem, many organizations have a natural inclination to engage experts in finding a solution. In order to do that, they first need to know who the experts are and then choose supposedly the best–and most of large organization already have a stable of pre-selected consultants for each area of potential interest. The expert of choice then provides his or her personal opinion. Sure, organizations may ask for a second opinion, but this is rear because experts, especially the elite ones, command high consulting fees. In other words, asking for an expert opinion requires organizations to know in advance where to go for a solution.

Crowdsourcing is different. When posting your problem online, you become agnostic on the sources of potential solutions. They may come from any direction, and you don’t have to do anything to “target” your search–given, of course, that you’re approaching a large and sufficiently diversified crowd. In other words, when you crowdsource, you don’t have to know where to go; you just announce to the world that you have a problem, and then solutions come to find you. That’s why properly designed crowdsourcing campaigns are so cost-effective.

And then, there is a question of diversity of responses. If you’re approaching a person, who is an expert in Method A, don’t expect him or her to tell you that using Method B might be a better option to deal with your problem. And if you’re approaching an expert in Method B, don’t expect him or her to tell you that this method won’t work–you’ll get at least some solution using Method B. And then, there is always a possibility that there exist Methods C, D or E, but you never heard about them and therefore know no appropriate experts. In other words, when asking for an expert opinion, you narrow the scope of potential solutions to what you already know.

Crowdsourcing is different again. Crowdsourcing is not only agnostic on the source of responses, but also on their nature. Unless you specifically indicate that you’re interested only in Methods A or B (and sometimes, you have to do that for some specific reasons), incoming solutions will be focused on solving your problem, not the way of solving it. That’s why the best praise I can get from my clients is hearing them say: “Wow, we never even thought about that!”

In summary, a properly designed crowdsourcing campaign will allow you to significantly simplify your search for a solution to your problem, reduce cost of the problem-solving process and result in diversified, original and sometimes even unexpected solutions. Especially if you don’t really care whether the solution will come from your neighbor or a person on the other side of the globe.

Image credit: Henry John Yeend King “Friendly Neighbors” (http://www.paintinghere.com/painting/henry_john_yeend_king_friendly_neighbors_26898.html)