Commercializing Community

I liked Bruce Livingstone five minutes into my first conversation with him. Bruce is the founder and CEO of iStockPhoto.com, to my knowledge the first and largest of the so-called "microstocks." (To see the role microstock has played in the development of crowdsourcing, read here.) For one thing, Bruce likes to fly fish, and while it's possible there are untrustworthy types out there who also fly fish, I haven't met them. Second, he spent years touring the West Coast as the singer of a punk rock band, evidence that Bruce appreciates the finer things in life. But what I find most winning about Bruce is that he's an accidental entrepreneur. A designer and photographer, he started iStock because he didn't have the money to launch a traditional stock company. So he gave his photos away, and found a community of other talented people willing to give their photos away to. The value, as many content companies are still struggling to understand, wasn't necessarily in the thing itself.

I've got a special treat today. Bruce has written something for us here at Crowdsourcing.Com, a two-part meditation on how to make money off community. I think this question has become increasingly important to everyone in the culture industry, as communities have begun to replace the company as an organizing unit of labor. This is still terra incognita, which makes Bruce a pioneer of sorts. Without further ado, here's part one of Bruce's essay:

Is Social Networking Sustainable? Thoughts on Building a Social Network with Staying Power ...

The phenomenon of entertaining media sharing sites may be devouring itself with hundreds of flavor of the same offering. While advertising can be very successful as a model, for long-term success, it works best triangulated with other revenue methods, such as monetizing the user-generated content itself, or smart co-marketing agreements.With more than one million passionate members, including more than 33,000 contributing artists and an image or video file downloaded somewhere in the world every three seconds, iStockphoto has effectively turned community into commerce. Here are six principles I've adhered to as CEO of iStockphoto:

1) Put the Passion First

Here are a couple of the most notable quotes I've heard from iStock members: “iStock was built on passion, not on dollars” and "iStock is not a full-time job, but a lifelong passion." Threads and connections of people with common interests and shared passion for visual communication built the roots of iStock. The economy of micropayment stock followed.

2) Virtual Community is Only Sustained by Real World Gain

Social networking and social media sites are hot topics right now just like the mid-nineties when having a Web site made you "e"-enabled and cutting-edge. Natural selection will subsume the weakest players in this phenomenon. As competition grows, I believe the most economically successful social networks will be niche-focused with offerings that fill a real-world business need. For example, iStockphoto makes value-priced royalty-free images, illustrations and video available to a broad market of people who couldn’t afford great visual content before. We also give artists direct access to more than one million potential clients, more than they could ever reach alone. So, everybody stands to make money, or save money, while sharing and learning about our shared passions, pictures and video.

3) Build a Community to Fill the Gap, Not Follow the Leader

When I was a young punk, I thought I would pursue a career in music and spent years in bands and playing in dirty nightclubs. One day a kid showed up and could play EVERY instrument better than I ever could. I thought, ‘This kid is 10 years younger than me, and he’s kicking my ass. I’m not going to compete where I can’t win.’ That idea has guided many of my career decisions and I think it is a good rule.  So many people are trying to compete in social networking segments where there is already a clear winner. Why?  I say, look for the areas where no one is providing a solution, and create one. Then innovate like hell, stay fresh and keep growing. With iStockphoto, we saw a need for value-priced imagery for designers working on a budget or small business owners, and we filled that need. Others have come after us, but no one does it as well.

Tune in tomorrow for the rest of Bruce's essay ...

Comments

[LukePDQ]

3 great business tenets you shared there.
Passion and focus (not a pun) clearly a winning strategy for you.

I guess, #3 is a key guiding business principle, coupled with creating a "barrier to entry" for others, which you did with your loyal community in iStock photo.

I look forward to your follow up.

[Daren C. Brabham]

Those first three are good principles, and I look forward to the remaining three. However, I'd like to complicate the first principle about passion for the sake of discussion.

It is no doubt that passion is the real driving force behind why sites like iStockphoto and Threadless have been so successful. After all, one must have passion for their photography (hobby or profession), or one must have passion for their graphic/fashion design (again, as a hobby or a profession), in order to be initially motivated to post their ideas to a forum and hope to win or make some sales. But there's also the bounty to be won. This bounty includes both monetary reward (the commission rate at iStockphoto or the cash and free t-shirts at Threadless) and community reward. The community reward would be the recognition by the community as having good enough photos for a client to want to download or good enough designs for the community to vote for and want to wear. There's some motivation built into wanting this bounty--to feel good and to make some cash.

I wonder how much of the motivation to play among the crowd is dependent on inner passion for the work at hand or dependent on the size of the bounty. In other words, surely there are iStockphoto members who are 100% doing it for passion and not that interested in making any money from downloads or recognition. And there are probably members on the other end of the spectrum. Odds are, though, it's a diverse mix of both passion and the bounty that keep the crowd participating.

So, my question for discussion is this: what happens when there is not enough passion to create a large and diverse enough crowd? And what happens when there is no bounty (i.e., no money for a winning design and you stay anonymous if you win, preventing any cultural reward)? My guess is that you wouldn't have a successful crowdsourcing application. I also guess that you would be far more likely to have a successful crowdsourcing venture if you had pure passion and no bounty than if you had a giant bounty and no passion. The reason I ask this is because I wonder if crowdsourcing would be an appropriate application for, say, government contracting, the development of logistics plans, and other "dryer" problems to be solved. In those cases, where you may not have enough passion in the crowd to make for a sizeable pool of input, even the biggest bounty may not work. In other words, I wonder if crowdsourcing can ever be forced (through a large bounty) or if crowdsourcing must always emerge organically, must always be dependent on some critical mass of passion.

Sorry for the long post...

db

[Alan]

New technologies that give ready and affordable access might be the primer for any discussion regarding the huge numbers of participants that are driving recent attention grabbing bounties. For the vast majority the returns are minimal to non-existent. Human nature surely drives us to excel but the distant promise of treasure or the recognition of our community has to be a factor.

A generation that grew up as these new technologies were developing is at ease, wielding the medium more naturally whether creators or users. I suspect that the creators are striving out of very personal or organic circumstances, that is central to what we see happening, at least with many of the ground breaking new ventures that appear out of no-where and often are precursors of change, http://www.group94.com/.

Those with the hundreds of millions to knead a concept into fruition, http://money.cnn.com/magazines/business2/business2_archive/2006/12/01/8394990/index.htm, are evolving into leaders from the traditional mold whereas the ventures that are rocking the establishment, I believe, are connected and participatory for different reasons at least until the first huge by out!

The “dryer” question is interesting. I suspect that the “dependent on some critical mass of passion” element would disappear in situations where it’s work for sale in the more traditional sense and the media is well, up-dated but being used like any other. In other words, the "individualized" relationship/participation between the development and use of new technologies and the creation/release of passion appears to be the vital element. Alan.

[Jeff Howe]

On the contrary, Darren, thanks for the thoughtful and provocative post. Do crowdsourcing initiatives require passion? I think that depends. Mechanical Turk would seem to inspire little passion, and yet the Turkers keep coming back. My instinct is that each individual crowdsourcing effort must find the correct combination of rewards: A little bit of money, a little bit of passion and a little bit of wuffie (Cory Doctorow's excellent coinage for reputation currency). Actually, Harvard Business School Prof Karim Lakhani has looked extensively at motivational factors in open source programming communities, though to my knowledge the journal articles aren't available online. (This Harvard Business Review Q&A is, however: http://hbswk.hbs.edu/item/5544.html)

[Steven Burda]

Good read, Thanks!

- Steven Burda, MBA
http://www.linkedin.com/in/burda

[Jonathan Rasmusson]

Hey Jeff great post and interview.

I love the third point:

Build a Community to Fill the Gap, Not Follow the Leader

I especially like Bruce's story about the kid 10 years younger who could play every instrument better then he could. Story of my life.

Can't wait for part II.

Cheers - JR

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I wonder how much of the motivation to play among the crowd is dependent on inner passion for the work at hand or dependent on the size of the bounty. In other words, surely there are iStockphoto members who are 100% doing it for passion and not that interested in making any money from downloads or recognition. And there are probably members on the other end of the spectrum. Odds are, though, it's a diverse mix of both passion and the bounty that keep the crowd participating.

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