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The Evolution of Crowdsourcing: Open Innovation

By cloudspokes In Uncategorized

Posted January 31st, 2013

This post was written by TopCoder founder Jack Hughes.

TopCoder founder and chairman - Jack Hughes Back around the time TopCoder was being founded, Henry Chesbrough coined the term “Open Innovation” in the book Open Innovation: The new imperative for creating and profiting from technology. We weren’t aware of the term at the time or, for that matter, the term “Crowdsourcing”, because neither had been invented yet. It is quite clear to me in hindsight that these terms were bound to be related and that TopCoder is a superset of them. It is also quite clear to me that both of these concepts are mega-concepts in their own right: Crowdsourcing quickly becoming so and, I believe, to be followed – likely with larger implications – by Open Innovation. The taxonomy of Crowdsourcing and Open Innovation will be argued about for some time, but from a practical sense, I would define them like this: Crowdsourcing is the practice of engaging someone to do a task for you through access to external people (the “crowd”) while Open Innovation is the practice of finding a way to do something new through access to people you normally wouldn’t be engaged with. They can be related because Open Innovation can use access to external people – a “crowd”, if you will – although we prefer the term community for reasons I will go into in another post. But they are not the same thing: Open Innovation in our view is a larger concept and, depending on the mechanism used, a superset of Crowdsourcing – when the process and platform include finding a way to create something new. Most firms are attracted to Crowdsourcing in the beginning because they perceive that it is a cheaper way to get things done: it is cheaper because the Internet gives you access to global resources where pay rates may be lower and because it removes the overhead of having to find, recruit, hire and manage someone qualified for a particular task. As far as this goes, it is reason enough that the market for Crowdsourcing platforms is growing quickly. I’m sure there are all sorts of great implications to this (who doesn’t want to buy something cheaper; it creates work for people who might not otherwise have access to it, etc.), but, at least to me, it just isn’t as interesting as engaging people to create. What’s interesting to me is finding or creating something new that has value. The promise of an Open Innovation platform is that it has the ability to create value, not just simply reduce expense.

Finding a way to do something new through access to external people is a loaded statement. I believe this will have a much larger impact than simply Crowdsourcing tasks. Finding ways to do new things – things that haven’t been done before – are at the heart of innovation. I have seen enough through TopCoder to understand the power of these platforms. When you can have thousands of people working on a problem or few people working on multiple approaches to solving the same problem in different and potentially better ways by being able to build on each other’s work (the essence of collaboration), it begins to become clear that the impact on innovation (creating new things) will be dramatic. I believe it will also drive at least a generation of learning in terms of how people create in a scaled setting across many areas – from marketing to health care to business formation to solving societal problems like energy, environment and many others. There is real science being done and to be done to understand it. This science will lead to an understanding of how we actually create and how the process of creation can be accelerated. [quotc]Finding ways to do new things – things that haven’t been done before – are at the heart of innovation. – Jack Hughes[/quotc] If we parse the statement we can see why it is loaded. The key terms are “finding”, “new” and “external people”. Each could take a book to describe.

Here is the short version: Finding implies the result of a search process. New implies that the result will be different (ostensibly an improvement on) from what existed before (even if only moments before). External people implies that it will be done not through conventional organizational structures – your company, group or even subject matter experts (consultants and the like) with a particular knowledge about something, but by others – people who we may have in all likelihood never met or worked with. Anyone who has done a Google search understands the power of a good search process. When you find something on Google – an experience so easy and intuitive at this point that it is easy to forget how much intelligence exists behind the scenes – a lot has to happen to make a meaningful result come back so that you say, “Yeah, that’s what I was looking for”. “New” implies creation and humans are the only species to create from the abstract (at least at any depth or scale that we are interested in). We can’t use Google, though, to find something that doesn’t exist yet – something new. For that, we need humans. People have the unique ability to take a set of incomplete information and draw some conclusion about it – we often call this vision, intuition or insight and it is at the heart of every innovation. To some extent, “find something new” is an oxymoron. How can we find something that doesn’t exist yet? This is where the real power of these platforms will become apparent. By understanding the process of how people go from the abstract to concrete and being able to apply this to myriad problems and new things yet to be created, we start to get a sense for the impact potential of these platforms. The final step can be looked at as the supercharger – external people.

Henry Chesbrough was mostly talking about collaboration in and amongst firms. When the external resource set is a few billion human brains connected together combining their experience and intellect to find new things (answers to problems, new products and services), in a word: create, that is something else entirely and it is easy to see how the results can be unprecedented in anything that has come before. I’ll have much to say about this in future posts, but, at least for me, it has become clear that in finding ways to create new things – solutions to seemingly intractable problems, new product/service designs, better understanding of ourselves, our customers, our neighbors and our relationships – Open Innovation will be a force like no other we have ever seen. It is the culmination of all of our tools in support of our best thinking brought to bear – in real-time and on a scale many orders of magnitude higher than ever before possible – on a uniquely human process: our ability to create.

We are defined by our progress. Ironically, our progress introduces new problems that didn’t exist before. As whoever the genius was that understood the ultimate iterative process to its core once wrote (on the back of a bottle): lather, rinse, repeat. Open Innovation as a superset of Crowdsourcing brings us to the point that we can solve problems and create new things faster and better and at a scale than ever before and we can do it on a continuous basis – in real-time, 24/7. An optimist (and I am one) looks at the world as an endless set of problems to be solved and new things to be created. Open Innovation is a powerful new tool that goes far beyond Crowdsourcing and into an arena in which people can do what people do best: create. In my view, we are entering a new period where many, many people connected together contribute to create together. TopCoder is but a small and early part of this (but, obviously, to me, a very important one). Even so, we are still just at the starting point: I would say that as extremely proud as I am of the community and of the platform the community has created, we are at about the .5% mark. There is still much to do. It is, after all, a creative process; one that never ends and one in which I hope to be spending a long time doing with all of you. It has already proven, after all, that it can’t be done alone.

What can you do:

Learn, learn, learn

The most valuable asset in this new world isn’t money or connections or your pedigree, it is the one that sits squarely between your ears: your brain. It is the most valuable asset you have, costs very little to operate and, by feeding it information, developing knowledge associated with that information and becoming skilled at applying it, can appreciate in value enormously. The best thing about it is: it is yours – you can take it anywhere. The second best thing about it is that while you are the only one who can make it more valuable, it is neither expensive nor difficult to do. Curiosity may have killed the cat, but it is the best thing to ever have happened to a human being. Commit yourself to learning one new thing every day and stay curious!


As a contributor, try to find an (or several) Open Innovation community with something that interests you. No need to even contribute anything beyond a comment or a trial – just watch and learn – learning is one of the biggest components of Open Innovation and one of the biggest things communities provide. Over time, you can figure out how to contribute. If Open Innovation does nothing else, the impact in learning alone will be huge.


As a consumer (though consumers are contributors too – they provide the problems and feedback to how well innovations impact them), learn how to interact with Open Innovation to solve problems and create new things and approaches. For companies and governments, this is a management exercise and given the rewards, one well worth investing in. Make learning how to manage Open Innovation communities part of the core aspect of what you do. And, of course, to keep yourself in both camps, do a little of all three.