The two teenagers were short of nearly everything when they kick-
started their Chicago T-shirt business seven years ago. Jake Nickell
and Jacob DeHart each chipped in $500. They ran it out of Nickell's
apartment since DeHart still lived with his mother. For shipping,
they enlisted friends to carry the shirts to the post office.
But they had a killer design team: the Web. They solicited designs
from thousands of Internet users and then had them vote on which to
manufacture. Outsourcing design work to the Web's mass audience has
built the company, now called Threadless, into one of the country's
hottest T-shirt retailers, with estimated annual revenue of about $15
million.
In a similar fashion, Fortune 500 companies such as Procter & Gamble,
Dow AgroSciences and General Mills now turn to the Internet to solve
some of their thorniest research problems. They post them on a Web
site called InnoCentive, which links up companies and scientists,
promising a reward often worth tens of thousands of dollars in
exchange for the best answer.
From quirky Internet start-ups to industrial titans, companies are
increasingly outsourcing segments of their business to sources in
cyberspace -- much as they began shifting production overseas a
generation earlier. This process, known as crowdsourcing, means that
work once done in-house, from design and research to information-
related services and customer support, can now be farmed out, tapping
new expertise, cutting costs and freeing company employees to do what
they do best.
The trend is gaining pace as corporate executives embrace the
openness of the Web. Analysts said the promising gains in
productivity will ultimately benefit the wider economy.
"It's a way to access the distributed knowledge that is out there on
the Web," said Karim R. Lakhani, a professor at Harvard Business
School who has studied the trend. "You can now basically focus on
your core business."
This approach exploits the vast human wisdom and expertise available
via the Internet. But crowdsourcing is less of a collaborative
endeavor than a means of finding individuals with the right skills
for the right price.
Companies are still sorting through a raft of new challenges. While
executives worry about sharing too much proprietary information with
outside contractors, lawyers wrestle with concerns over who owns the
rights to contributions from the crowd. Managers are also evaluating
how to assure quality control and are assessing which tasks are best
suited for outsourcing to the Web.
Publishers that once hired their own photographers are turning to
sites like iStockphoto, which offers nearly 1.8 million images shot
by thousands of amateurs and are available royalty-free for as little
as a dollar per picture or $5 for a video clip. Elance.com offering
freelance services, said its writers complete about 300 jobs a week
for an average $500 each. Feedback for the writers is posted on the
Elance site along with their credentials, which in some cases are
verified by an outside company.
One of the Web's premier sellers, Amazon.com, has become a broker for
the Internet labor force. Amazon's Mechanical Turk service enables
"requesters" to post tasks online and facilitates payment once
they're finished.
Using Amazon's two-year-old service, PriceGrabber.com finds Internet
users to collect images of products and related information for its
catalogue, according to Peter Cohen, director of Mechanical Turk.
(The program is named for the ploy of an 18th-century Hungarian
nobleman who built a turbaned mannequin and claimed it was a
mechanical automaton capable of beating anyone in chess. Hidden
inside was an actual chess master.) Another company, which makes
games, turned to Amazon to hire people who can write trivia questions
and then verify the answers. Cohen said more than 100,000 people have
performed work through Mechanical Turk since it was introduced in
late 2005.
For Threadless, the Internet has been part of the company's fiber
from its founding.
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