Deflation 2.0 ™
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 ™.