1. Review: A Case of Crowdsourcing Gone Wrong
Alexander Prenta BUS 550 9/27/2018

2. Summary Introduction to crowdsourcing Case study: Quirky
Four pitfalls made by Quirky
Discussion
Quiz

3. -Crowdsourcing is a sourcing model in which individuals or organizations obtain goods and services. -Divides work between participants to achieve a cumulative result -Can include pooling or any type of resource

5. Companies That Utilize Crowdsourcing
Budweiser – (Black Crown) 12 brewers, 12 beers, 25,000 customers.
Patagonia – Utilizes social media (Tumblr) as a blog for customers to share photos of there used Patagonia gear and tell stories behind them.
Amazon Studios – Anyone can submit a script and concept videos, which are review through “Amazon Preview”.

6. HBR Case Study of Crowdsourcing Gone Wrong
Quirky, Founded in 2009: Modeled as a platform for inventors (primarily external) to share ideas for new product ideas that would be developed and manufactured by Quirky
Ideas were reviewed, voted on and eventually put into development and production if approved.
- Built a community of over a million contributing members and commercialized over 100 products.
Raised $185 million in venture capital
Went bankrupt in 2015

7. Pitfall 1: Lots of Products, Few Homeruns
Once an idea was submitted “members” commented and rated them.
Management and community then made final decisions to go forward on an idea
Ideas were often incremental improvements on existing familiar product types, rarely if ever breakthroughs.
Ideas that made it to production were ever put into development and production on the basis of consumer demand research, but rather the “member” community input.

8. Pitfall 2: Open Approach Undermined Quality Control
Quirky did not specialize in any product segment, was involved in over 26 product segments, making a dedicated QC department virtually impossible
As a result very few of Quirky’s products were market leaders in terms of quality
Open innovation served to undermine core competency

9. Pitfall 3: Failure to Achieve Economies of Scale
Large product portfolio made it difficult for mass production and therefore the ability to offer products at a competitive price
Without the volume and items that were inherently high turnover, Quirky could not produce enough to sell at large retail stores like Target and Walmart.
“Output of the innovation process must match the commercialization process.”

10. Pitfall 4: Members Didn’t Like Being Managed
Quirky promised member inclusion in the product development process.
This led to conflicts between Members and the actual needs of the business, of which members had little understanding of or insight to, let alone how product development is managed.
GE partnership: remote control air conditioning development. GE’s approach vs Members democratic process led to contention between the community

11. Discussion
Could crowdsourced innovation company like Quirky still prove successful if these issues were addressed? Or would they not have the breadth of users/members to be profitable?
Other than shared innovation, what are some other crowdsourcing resource examples and the challenges that may be inherent to them?
When does crowdsourcing work best?

12. Quiz Time! What types of resources can be utilized with crowdsourcing?
A – Money
B - Technology
C – Knowledge
D – All of the above

13. Quiz Time! How many product categories did Quirky get involved in?
B - 26
C – 30
D – None of the above

14. Quiz Time! What activities may be involved in a crowdsourcing project?
A – Design
B – Process development
C – Brainstorming
D- All of the above
E – None of the above