When seeking open innovation solutions for vexing problems, many large organizations and companies think they have a binary either/or choice. The perceived choice is to go down a broad crowdsourcing route with a wide range of non-expert potential problem-solvers, or they can initiate a topic-specific technology scouting project directed towards a more tightly defined crowd within a specific sector. In reality, choosing one route over the other is not an organization’s only choice: there are many times when they can be successful together, or sequentially. At a high level – if you are doing tech scouting correctly – you may want to employ both a specialist curated crowd and a general crowd. We’re seeing an increasing trend recently of more organizations doing exactly that.
First let’s define the curated crowd. A specialist curated crowd draws upon the expertise of the team doing the searching. Ideally, that team can still have hundreds or even thousands of brokers, partners, and contacts globally, in order to source ideas the internal open innovation team has not thought of. The idea is that you are pulling from a broad, deep extended pool of pre-selected experts and innovators.
Broad vs Curated Crowds
Crowdsourcing offers a great open innovation solution for many types of challenges. Typical crowds have certain intrinsic modes of operating. They require specific rules so that everyone involved knows the parameters. It should be clear if the participants get to keep their IP or if they must give the IP to the sponsoring organization. Generally, there is also a prize for the winner(s); you need to incentivize people to show up. That prize needs to be defined and well-understood. With these factors in place, crowdsourced challenges can be very powerful – they are a general broadcast call for solutions and draw a broad potential crowd.
However, a potential downside of crowdsourcing is that the challenge sponsor can often aim to own any Intellectual Property generated. This means that any potential partner with an existing and possibly valuable IP may be disincentivized to participate. The best ideas for the problem may self-select to never participate; giving away their IP is a non-starter for them. Or a challenge sponsor may face a choice: select a less effective solution and own the IP, or run with one where IP is already registered.
On the plus side, if a challenge sponsor can get 10,000 people to participate in crowdsourcing, they can have high confidence they will find a solution. The approach draws on both the serendipitous and the non-obvious. The crowd can often think in surprising and non-linear ways. Crowds work best when the challenge sponsor aims to resolve creative and design-type problems – such as different ways to design a molecule, automobile designs, and more. Intrinsically, the crowdsourcing process applied to these types of challenges will usually generate very early-stage ideas that are not yet patented.
The alternative use of curated crowds, or proactive scouting, can seem to be less powerful – at first glance. Whereas crowdsourcing goes broad, curated crowds go deep. Curated crowds tend to have less serendipity than do crowdsourcing challenges.
The benefit, however, is that an organization can discover much more valuable technology. This is due to a different incentive structure; proactive scouting agreements often have an open-ended structure. The submitter/partner gets paid much more appropriately. For example, an average yet2 deal ends up with the submitter/solution provider getting $1+ million up front, often with an additional royalty or earn out on the end of the contract.
A specialist curated crowd is pre-selected based on the specific requirements of the organization and the problem. This approach is virtually guaranteed to discover at least three-to-five extremely relevant solutions. The scouting team winnows a larger pool of potential partners to a small set of truly promising leads. They sort through all the chaff to find the few kernels of wheat.
When Crowdsourcing Enables Broad and Curated Crowds to Work Together
It might seem these approaches are diametrically opposite of each other. In fact, they can be complementary. For example, yet2 (open innovation and technology scouting consultants) recently worked with the U.S. Bureau of Reclamation on a proactive scouting project. Our team surveyed recent developments in non-destructive inspection of fiber reinforced polymer components to look for gaps that could be addressed by a crowdsourcing challenge. It was clear that many new technologies were becoming commercially available and that there could be significant benefits from supporting companies as they advance the state of the art.
The U.S. Bureau of Reclamation then engaged HeroX, a yet2 partner, to launch the “Imperfection Detection: Detect Me If You Can” prize challenge. It opened in March 2021 with the goal of developing portable tools that use non-destructive evaluation (NDE) methods to assess the condition of existing FRP composite structures.
The first phase of the challenge has a deadline of June 24, 2021. The team will select up to five winners of $60,000 to support development of a prototype. The winner of the competition will then win $50,000.
This is a clear example of how a proactive scouting project provided invaluable knowledge and strategic insight to the crowdsourcing challenge, resulting in a greater chance of success.
Before an organization starts an open innovation project, it should ask: “How would we benefit from going broad and deep for a solution to this problem?”