Crowdsourcing: a new/old model of decision making

kevin | Decision Making | Thursday, July 3rd, 2008

Crowdsourcing, opening the design and marketing of a product to a social network (my definition) has found a new proponent in a hot new shoe company called Ryz. Anyone can play. If you have an idea for a visual design, you download a template, do your cleverest, and post it on the company’s website. If the crowd digs it, you get money in your pocket, accolades and fame, and the product gets produced. It’s trendy, but some people think it’s a model whose time has come.

our first will always be special

Here’s the lead on an article about the company from the Oregonian.

Dozens of young creatives packed into a Pearl District loft Thursday night to judge a shoe-design contest.

The entries — five high-tops — came from artists outside the footwear industry and as far away as New York City. They’d been picked from 60 entries submitted online to a Portland startup, Ryz, which promised to make and market 100 pairs of the winning design.

Ryz founder Rob Langstaff watched excitedly in the background. The former Adidas America Inc. president hopes to replicate this contest each month.

But he plans to do so entirely on Ryz’s Web site, where users can submit designs, vote on the entries and buy the winning shoes. Winners will get $1,000 and a $1 royalty for each pair he sells.

Langstaff’s startup joins a number of young companies nationwide engaged in “crowdsourcing,” a practice that relies on online clusters of consumers to design products and decide which ones to sell. In Ryz’s case, it’s MySpace meets “American Idol,” with footwear as the unit of expression.

It’s a model some believe to be the future of consumer product making, combining social networking, open-source design and word-of-mouth marketing.

Some academics think consumer-driven design will displace corporate research-and-development centers at many companies because it outsources both design and marketing in a way that cultivates and retains customers.

“It’s a more economic model,” said Eric von Hippel, a management professor at the Massachusetts Institute of Technology and author of the 2005 book “Democratizing Innovation.”

“The users are making designs, and other users are getting to choose the ones they like. The first function replaces in-house research and development. The second function replaces marketing research,” von Hippel said.

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