With Mechanical Turk, companies create HITs (Human Intelligence Tasks). Everyday people accept these tasks in exchange for small sums of money. The HITs are tasks that humans can quickly and easily accomplish, but would take many hours of programming for computers to carry out -- such as examining a scanned receipt and pulling out specific pieces of data. Mechanical Turk helps companies answer business-essential rank-and-file questions, and the folks answering those questions get paid.

Michael Dell raised eyebrows with the release of Dell Idea Storm. One of the questions Dell put to this crowdsourcing market was, "What product do you really want us to create?" The overwhelming response was to create a laptop that had the option of no operating system or the Linux operating system. Dell listened to its market to significant results: Reports state that Dell has sold more than 40,000 laptops installed with the Linux-based Ubuntu OS.

Group crowdsourcing is also cropping up. InnoCentive describes its community as “open innovation.” It is an alliance of various companies, called Seekers, designed to tap in to the creativity and collective intelligence of a global network of subject matter experts, called Solvers. In InnoCentive’s Open Innovation Marketplace, Solvers are handsomely rewarded with prizes reaching $100,000 for their solutions.

Ensuring optimal results
Crowdsourcing success very much depends on the quality and quantity of participation. The best way to maximize participation is to have a firm grasp on the desired outcome and to reward people for contributing. If the desired outcome is to get as much information about a particular topic as possible, then the rules of the "game" need to reward participants who deliver quality information about that topic and penalize those who don’t.

It’s easy to see how crowdsourcing, by its nature, can quickly get out of hand. It’s helpful to staff your crowdsourcing team with people who can think like both computer scientists and economists -- able to see 10 moves ahead. The ability to look for unintended as well as intended outcomes and to determine how to manage those facets for the betterment of the project is a critical skill.

Once your initiative has been launched, keeping a close eye on crowd engagement is essential to success. This means more than just noting whether folks are signing up and participating. You must continually assess whether your ability to forecast outcomes has improved as a result of your crowdsourcing data or, qualitatively speaking, whether the opportunities surfaced are gravitating toward solutions that make sense to implement.

Here, time is an important factor. In the short run, flukes are possible, but long-term improvement tracking is a key component of crowdsourcing success. Establish policies for analyzing results with the long term in mind.

The value of predictions
The most popular use of crowdsourcing by far is the prediction market, in which participants are given fake money or stock credits to use in trading-style transactions.

Prediction markets use the flow of the crowd’s currency to predict the occurrence of future events. Accurate predictions are important because they help companies allocate resources more effectively and benefit financially from projections.

Best Buy used an internal prediction market to determine when it would open its first store in China. The winning employees were rewarded with gift cards, and Best Buy was rewarded with near-prescient knowledge of when to prepare for its China debut.