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Location: Toronto, Ontario, Canada

I've been online since 1971 and I like to smoothe the way for everyone else. Among other things I co-founded Sympatico, the world's first easy-to-use Internet service (and Canada's largest).

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Saturday, December 02, 2006

Deflation 2.0 ™

Back in April I wrote about how Web 2.0 would contribute to deflation and its consequences (such as unemployment). I didn’t call this Deflation 2.0 ™, but since Google shows no matches for that term I’m coining it now, and trademarking it just like O’Reilly Media would tongue sticking out. Licensed use of this trademarked term, Deflation 2.0 ™ (did I mention that it’s trademarked?), is available at a reasonable price (my wife and I have expenses, you know, and our five cats plus the local homeless cats we feed collectively eat quite a lot).

Via Gagglescape I just read a Business 2.0 story about how some large corporations have turned to “crowdcasting”, where a large number of people (e.g. 3000 MBA students) compete to address a particular business problem (such as how to attract consumer attention to GE Money). This is work that might ordinarily have gone to big consulting firms. Instead it’s going to a few people at the crowdcasting company and those who win the competition. All the losers work for free — but their work is necessary because nobody knows in advance who will have the best ideas.

Crowdcasting is similar to crowdsourcing. Canada’s Cambrian House says of their particular crowdsourcing model “it’s like open source, but with money!” The thing is, you only get the money if your idea is chosen. (At least at Cambrian House there is an alternate way to make money: help build one of the chosen products. Then you too get a share of the resulting royalties. If there are any, of course, but that’s business.)

So, just as professional journalists have their turf invaded by amateur bloggers, professional consultants are now being encroached on by MBA students. It’s like hiring an intern, but without having your expensive office space occupied or having to buy more coffee.

Where does Web 2.0 come into this? It makes it feasible to manage the contributions of all those people. Rummaging through 3000 paper submissions or emails is not practical. The Business 2.0 story doesn’t go into how this is done, but this sentence does touch on it: “[Crowdcasting company] Idea Crossing also earns consulting and licensing fees from companies that use its Web platform to manage their own idea [competitions]”.

Why pay a bunch of people when you can have even more people work for you and pay even fewer of them? More Deflation 2.0 ™.


Anonymous Anonymous said...

Thanks for the Cambrian House mention! We're seeing the success of the crowdsource model each and everyday... So many people have great ideas and skills, why not brig them together and watch innovation soar?!

Sunday, December 3, 2006 at 2:01:00 p.m. EST  

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