Listen to my conversation with Lukas Biewald, CEO of CrowdFlower, which uses the Web to instantly source labor on demand for businesses.
In this podcast, learn how businesses are recruiting distributed labor via the Internet to quickly get repetitive tasks completed, and learn why this new flavor of cloud-enabled outsourcing is becoming an established means of connecting businesses with the information workers they need to get a job done.
Listen to or download the 7:47 minute podcast below:
---Transcript---
PW: This principle of crowdsourcing is quite a new concept — your company's been going for two or three years now. Perhaps most famously [the concept] was initially kicked off by the launch of Amazon's Mechanical Turk, but obviously has moved on a lot and become more sophisticated since then. But how do you explain it to people when someone comes up to you and asks you, 'What does your company do?'
LB: Sure. It's a little tricky actually, but what I say is, about ten years ago, businesses started to — maybe even longer now, right — businesses started to outsource core parts of their process. They started to realize we could take, for example, answering phones, and send it to a call center halfway around the world. And they started to get comfortable with taking core business processes and getting them outside of their company. And I think what we're starting to see in the last year or two is businesses getting comfortable with taking their core processes and sending them out to strangers that are working out of their own houses, often for small amounts of time. And the advantage there is that you have a totally scalable workforce. So if one day, you need ten times the number of people, it's really easy for you to access more people.
I'll give you some examples. So LiveOps is a distributed call center company. So when you call their customers, it doesn't go to a call center in India, it actually typically goes to stay-at-home moms in the midwestern United States, where they can press a button and that puts them on, which means now they're answering calls. And so they do real customer support for real businesses, but they can control what times they're working and not working.
Another great example is, Facebook actually translated all of the content using their users. So they would make lists of different words that they needed translated to put the site in all different languages, and their passionate users would come and write in what the translation should be. And so traditionally, businesses would be really, really afraid to take core parts of their business — core things that matter to them — and send them to strangers they had no relationship with. But I think what we're finding is that people can actually do a really good job — and there's ways to incentivize people to get results back that you really trust.
So what sort of services are people using CrowdFlower for?
Sure. So people use CrowdFlower for the simplest, highest-volume, core parts of their business. So one example is, certain types of businesses really need to verify all the addresses in their directory. So, some businesses might have ten million companies that they want to keep track of, right? It might be a local directory service, or a mapping service — and these businesses are changing all the time. And what they used to do is, employ armies of people that would sit there all day long calling the businesses. Instead, today, whenever they think that a business might have changed, or whenever a business listing gets stale, or one of their customers complains, they send it to us; and we send it out to workers around the world that check the business and get paid for each individual business that they verify.
So you can compare the person that sits there all day long calling business after business to check the location, versus someone that just wants to make a little bit of extra money and does one or two and then switches to a different task that we might have available.
Right. Therefore, there's a cost advantage because you're paying someone for slack time that they otherwise couldn't monetize. And you're able to give those tasks to that external person and your internal staff can actually concentrate on things that require more skill, or more of their acquired knowledge. So that makes economic sense. But if someone is getting paid for verifying business addresses for example — that's the example you gave — how do I as the customer actually verify that the verification has actually happened? Because surely the simplest way to get paid is just to pretend that you've done the verification.
Certainly, and this is the kind of obvious question that every customer has that has held back crowdsourcing. And at CrowdFlower, we put almost all of our focus into building technology to make sure that people are doing a good job. Now, I think there's a — people do a surprisingly good job anyway. I think there's a natural tendency of people to be honest and want to do good work.
At the same time, there's lots of technology you can build to ensure that people do a good job. For example, you can hide in businesses where you know what the right address is, and if someone doesn't get that, you warn them and you tell them, 'Hey, that was wrong, you should've put in this answer.' If they repeatedly miss questions, then you can kick them out of the system or pay them less, or maybe pay them more when they get a streak of businesses right. And over time, you learn that certain people do a really good job, certain people do a mediocre job, certain people do a bad job. And you can route more tasks to the people that are doing a really good job, which incentivizes people to get in that category of people doing a good job, and also improves the quality of the results that you're giving back to a business.
And is that kind of — rewarding the people who do well and testing to make sure that people are doing the job — is that something that the business has to program into their crowdsourcing or is it something that you provide as part of your infrastructure, as part of the service?
So this is something that we provide as part of our infrastructure. And it's something I really love about our business, because we're building a global meritocracy here, right? Tom Friedman [author of The World Is Flat] talks famously about connecting San Francisco and Bombay. But what we're doing is connecting San Francisco, or wherever your business is, with everywhere in the world.
So we send jobs even to people in refugee camps that have donated hundred-dollar laptops and donated satellite infrastructure. And you know a lot of them can't do some of the jobs that we have, right — verifying a business address or checking attributes of a product they might not be familiar with — but some of them actually can. And because we can tell exactly how good of a job someone's doing, we can reward the people that do a good job and we can also use people for work that previously couldn't do jobs and previously couldn't access the global economy.
Right, I think that's very helpful. And certainly, it also gives people much more flexibility to be able to work from wherever they happen to be. Do you think this is going to become more commonplace in the future, or is it just a passing fad?
Well, I think that there's a big trend towards crowdsourcing. And I think what's happening here is — really, distributed labor might be the better term for what I'm talking about, from all of us who are super-linked.
I think what you're seeing is, as the Internet gets ubiquitous and everyone in the world gets access to high-bandwidth Internet and computers, I think it really changes the way that work is happening — because the transaction cost for connecting with the perfect person to do your job is getting really low, right. It used to be really expensive to hire someone for an hour, right. But now it's actually — it's pretty cheap, right, to find that person and then take their work, right? It used to be really expensive to do micropayments, but the cost of micropayments is rapidly decreasing.
And at the same time, you're seeing more and more information and digital work that's actually perfect for this medium. You have all kinds of problems when you try to take a truck and, like, send materials to a factory. There's tons and tons of transaction costs there. But with the digital work there's very, very low transaction costs.
I think you see all these trends converging on creating an industry here and you're seeing — I've seen probably 30 or 40 crowdsourcing startups in the past six months get funded. So I think this distributed work trend is a huge trend. It's going to change the world.
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