How to Make Smarter Crowds
Not all crowds are smart. In fact, some crowds can be pretty dumb. However, being able to use crowds successfully can mean the difference between tapping into a vast collective intelligence and losing your shirt.
A while back I posted an article about stupid crowds and got such insightful feedback from readers that it warranted a follow up.
Here’s a quick guide to making crowds smart.
The Independence Condition
As I wrote in my previous article about the stupidity of crowds, in order for crowds to be smart, the individuals have to be independent. When they’re not, bad things happen. Markets crash, we get stuck in traffic jams and have to listen to horrible music on the radio (which makes a bad traffic jam even worse!)
For a crowd to be truly independent there can’t be significant linkages or communication between individuals. That’s actually a pretty stringent condition, but it’s absolutely crucial. Interconnections create feedback loops which cause people to think and do things just because the crowd says so.
George Soros has made a fortune betting on dumb crowds. He waits for a crowd to take the germ of a good idea and then blow it up out of all proportion. Once people lose their ability to make independent judgments, he bets the other way and makes a killing. He calls this concept reflexivity.
Mysteries vs. Puzzles
In a comment he attributes to Stephen Denning, Stanislav Yanakiev of Semanit makes the distinction between mysteries and puzzles. Mysteries require lots of information to solve while puzzles require a more holistic, deductive process.
If you are looking for a hotel and have lots of options to choose from, a site that makes use of the multitudes, such as tripadvisor, is the best way to go. However, if you would like a step by step guide on how to move around the city, you’re better off buying a Lonely Planet Guide.
In a similar way, big brands such as Doritos have used crowdsourcing to come up with TV ads, but not to direct their strategy or write the brief.
Big Ideas
Digital Tonto readerAlexandre Pina pointed out that while crowds can generate a lot of ideas, they’re not so useful when you need to come up with a big idea. Paradigm shifting ideas take a great deal of thought and perseverance. Crowds don’t tend to stick around that long.
Einstein took ten years to come up his theory of special relativity and another ten to come up with the general theory. It was two decades between Darwin’s famous voyage and the publishing of On the Origin of Species. In both cases, they needed to go against the crowd to change the world.
Moreover, breakthrough ideas are always ahead of the crowd. The “Next Big Thing” is always small and unprofitable (if it wasn’t, it would be the present big thing). The crowd isn’t going to make your bets for you.
Good Crowds Have Great Leaders
To make a Star Trek analogy, the difference between a smart and dumb crowd is the difference between the android Commander Data and Captain Pickard. While the former is able to synthesize far more information, it is the latter that makes the final decisions.
While it is true that crowds have the ability to self-organize, what form they take is very much a product of the direction they are given. The organism depends greatly on the substrate.
Anybody who has developed online media of a consequential scale knows not only the value of user participation, but also how hard it is to organize effectively. Crowds must have a clear objective, a reason to participate and an environment conducive to usability and productivity.
Anybody who expects crowds to do their work for them will be sorely disappointed.
– Greg
Greg,
Thanks for another thought-provoking post.
I like your Star Trek angle, but it also pointed me in a little different direction. Using your analogy, Commander Data could also represent, well, data. And though he could represent all the crowd data, good and bad, he holds the metric key to the crowd’s feedback. Captain Pickard, to his credit, seemed consistently able to tell when the data was the important factor and when it was misleading. So, he was able to look at all the input and decide what action to take.
Crowds are one example of data being an unreliable single source. It is a misconception that the will of a crowd is collective in its nature and therefore can be its one corroboration. In reality, a crowd only gives you one metric to consider among many possibilities.
-John
.-= John Cavanaugh´s last blog ..It’s Not Easy Being Green-ish =-.
John,
Thanks, but you said it better. That’s actually what I did mean. Crowds are great for aggregating data, which is why they make such good pricing mechanisms, but they are very bad at seeing around corners and can often be self referential.
– Greg
Hi Greg,
I love the concepts on how to make crowds smarter. The analogy around Good crowds have great leaders is really really true. The more I put the lens on crowds that I am participating, I am gravitated and more productive when leader is inspirational, visionary and participatory.
Thanks for sharing.
.-= Chaitra´s last blog ..Integrating Smart Partnering into business process: A Case Study – Alticor =-.
Thanks Chaitra
Good luck.
– Greg
Interesting article; you are very right that we can’t just rely on the wisdom of the crowds. The key is knowing how to source relevant information, and learning to cherry-pick the best ideas, and ignoring the bad ones.
Of course, if we want to be trendsetters, we need to learn to think ahead of the curve. I suppose that would be the hardest thing, but with the greatest rewards if we can succeed.
Thanks for the thought provoking read.
Jacob,
Good points. Thanks.
– Greg
Greg,
Nice to see one more article on “Crowds”. It is a challenging and quite broad subject. With today’s “wired” crowds we are to discover new ways of doing things, that were unthinkable in the past, and we will also have to get rid of some illusions. When and how crowds can contribute positively in this new world is yet to be discovered. Let’s not forget that blogging itself has an element of crowdsourcing – you write and get immediate feedback that help you work on next posts. That was not so easy with traditional media. Probably a natural topic for your blog would be crowds in online media. I would love to read something on that.
Stan
Stan,
Thanks for your contribution.
– Greg
Greetings, Greg. Thanks for quoting. Another masterpiece of the challenging thinking of yours. I think it’s absolutely right that there are 2 phases: (1) give what people realy need or want desperately, and (2) antecipate their needs. Which in some cases, don´t even knew that might need. Examples abound (iPad just to quote the most recent). The difference between Einstein and Today, is the speed, quantity, and learning curve, which are much quicker and happen faster, now. Feedback is almost instant, and each one can do it. You can have Soros’s everywhere, and can change everything, from that moment on. Crowds are normally happy with what they have… they follow! Just to quote A. Lefley (P&G), for major consumer goods companies, there are 2 moments of truth: Win new Consumers, and Retain them continuosly. Big changes-innovations-transformations, always came from small groups. Yes, with great leaders that lead them. Is there ONE single example that proves against? Best, and please keep up the topic.
Thanks Alexandre! (For both comments)