Skip to contentSkip to navigation

Benefiting from the Wisdom of Crowds

Why people contribute to collaborative projects and what companies stand to gain from understanding their motivations.

(originally published by Booz & Company)

Harnessing Crowds: Mapping the Genome of Collective Intelligence

Thomas W. Malone, Robert Laubacher, and Chrysanthos Dellarocas

MIT Sloan School of Business, Research Paper No. 4732-09

Date Published: 
February 2009

The Internet offers many examples of how groups of people can work together in surprisingly efficient ways. Take Wikipedia, the user-generated, Web-based encyclopedia. Or Linux, the open source software project that encourages contributions from individual developers. Even companies that don’t rely directly on the “wisdom of crowds” can benefit from collaborating with their customers. Through research at MIT’s Center for Collective Intelligence, the authors of this paper examined nearly 250 Web-enabled collaborative projects to better understand how these systems function and evolve. They found that people who choose to participate in these projects are motivated by one of three things: a desire for money, love for a particular project, or the longing for recognition in the community. Understanding these motivations can help companies figure out the best way to cull the collective intelligence of their customers. For example, online movie rental company Netflix is offering US$1 million to anyone who can improve its algorithm for recommending DVDs to customers by at least 10 percent. Amazon has improved its site by offering users the ability to review products, which builds a sense of trust and community between the company and its customers.
Bottom Line:
By understanding the reasons people contribute to collaborative projects, companies can channel the wisdom of crowds and improve performance.


Get s+b's award-winning newsletter delivered to your inbox. Sign up No, thanks
Illustration of flying birds delivering information
Get the newsletter

Sign up now to get our top insights on business strategy and management trends, delivered straight to your inbox twice a week.