WTF Is Crowd Wisdom?
Two heads are better than one, as the old saying goes. But what about thousands of heads? A million? Or perhaps a billion brains joining forces to solve the world’s most pressing problems, foster ground-breaking innovations, and help businesses and individuals grow and prosper?
That’s the crowd — and today the crowd is hard at work.
Where Does the Wisdom Part Come In?
About 14 years ago, James Surowiecki published a landmark book called The Wisdom of Crowds. He argued that crowds of like-minded folks working together toward a common goal are smarter and wiser than a roomful of the highest IQs in the universe.
The heart of Surowiecki’s theory is that everyone’s opinion and knowledge within the crowd — right or wrong, well-informed or misinformed — contains a certain value. That value is crucial to the crowd’s collective intelligence and ability to outperform small cliques of experts. Errors balance each other out. There are no dumb answers.
To achieve such wise-crowd status, four conditions must be met:
- Diversity of opinion (and exclusive information)
- Independence of thought (you zig when others zag)
- Decentralization (anyone can play and nobody’s in charge)
- Aggregation (process and store all those ideas, thoughts, data points, etc.)
Why Crowd Wisdom Means That Everybody Wins
As corny as it sounds, the “wise” crowd Surowiecki is talking about doesn’t really have any losers.
Crowd members’ open-mindedness, diverse range of views, and willingness to share can help carry everyone across the finish line.
To do this, the crowd requires its members to be factual and logical. They, in turn, compel fellow crowd members to set aside their self-interests and biases to work harder and smarter so that they can achieve the best outcome.
One practical example? The development of artificial-intelligence (or AI) products. Right now around the globe, millions of computer scientists, software developers, and computer experts — among others — are collaborating to create new AI applications for the consumer, financial, health-care, and manufacturing industries.
Other Crowd Wisdom Examples
Bitcoin and other cryptocurrencies are a good example. This new and promising technology can’t function without the crowd (i.e. the computer experts I mentioned) whose main task is to verify and secure every peer-to-peer transaction on Bitcoin’s secure digital ledger system — that is, the blockchain.
But the best examples of crowd wisdom are crowdsourcing and crowdfunding. The former involves breaking down business projects of any scale and scope into microtasks distributed to workers possessing the exact skills who can complete the tasks efficiently. The latter has far more promise.
Why Crowdfunding Dominates
Like crowdsourcing, crowdfunding taps into the power of the crowd to raise capital in order to start or sustain a business or help folks in financial need.
But rather than tackling a microtask, crowdfunding tackles microfunding. What’s so cool about this fundraising tool is that it can bring new technologies and consumer products to life — as well as art, film, journalism, and music projects — that might otherwise have languished in somebody’s basement or brain.
More than $34 billion has been raised through crowdfunding.
Some of that money is in the form of donations. In other cases, people expect to get their money back, as well as a return on their investment. Interested? Kickstarter, Indiegogo, GoFundMe, and SeedInvest are the best online platforms to consider.
Don’t Fear the Crowd
Surowiecki’s take on crowd wisdom is clearly distinguished from what we think of as the “herd” or “mob.” A mob consists of people who come together out of a primordial fear response and act out, typically at the expense of others. Our base instincts tell us that it’s all about winners and losers. The same thing can be said of game theory — there’s always a loser in a world of zero-sum games.
Why You Should Care About the Wisdom of Crowds
The world is becoming increasingly integrated thanks to the genius of the internet, which brings people and ideas together to form crowds. It’s estimated that only 50 percent of the world is connected to the internet. Imagine a 100-percent connection rate. Who knows? Some kid in Africa could hold the cure to cancer. She just needs to join the crowd and harness its collective wisdom to help achieve her dream while changing the world.