In this fascinating book, New Yorker business columnist James Surowiecki explores a deceptively simple idea: Large groups of people are smarter than an elite few, no matter how brilliant-better at solving problems, fostering innovation, coming to wise decisions, even predicting the future.

With boundless erudition and in delightfully clear prose, Surowiecki ranges across fields as diverse as popular culture, psychology, ant biology, behavioral economics, artificial intelligence, military history, and politics to show how this simple idea offers important lessons for how we live our lives, select our leaders, run our companies, and think about our world.

Netflix has been running their own X-prize ('Netflix prize'), a crowdsourcing competition for a million dollars to come up with a better algorithm for predicting movie preferences than the algorithm Netflix is currently using. That approach, Cinematch, currently captures 2 million new ratings (between 1 and 5 stars) per day, and is used to predict preferences ('if you liked Braveheart, you will also like...') for the 65,000 movies they rent, about 1 billion times per day. They are looking for a 10% improvement in accuracy, which doesn't sound like much, but would mean 10M of ther customers would get better matches each day - which is quite a lot, if you're trying to differentiate yourself to apture the off-line (and soon, online) rental market!. Read more »

A good summary of the growth of Wikipedia is here. A discussion about using similar technology within corporate environments is here.

I've been wondering how and where to go to tap into sources of useful new information. Of course I make great use of Wikipedia, and Safari Online is great. Community boards can also be helpful, if they're well run and have people supporting them that can really provide useful advice. But the traditional news outlets (as distributors) - even those that are technical - seem to be all struggling to find their role, voice, and value proposition in the context of the internet, and are not as timely or insightful as I'd like.

Increasingly, the things I want to get information on are highly specialized, and only known by a small community of independent practitioners, who are often discovering and sharing insights about these new ideas directly from the front lines, and are often sharing such information via personal blogs. However, such blogs are of varying quality, and can come and go with time. I felt it would be useful to develop a capability that would provide the following features: Read more »

Is a culture of giving staff more control over their project priorities a simple way to statistically leverage the hive-mind of the organization? A natural form of prediction market?

Prediction markets are a powerful tool to harness the wisdom of crowds to peer into the future. In a bottom-up fashion, the individual instincts of people who are closer to the customer and/or technology are given a voice - which can provide a healthy balancing force to temper the otherwise top-down vision, plans, and predictive beliefs of the company. And from a lean perspective, these are sister concepts to Kaizen continuous improvement and many other techniques to close your feedback loops.

All businesses would love better insight into the fuzzy future. Here are 10 ways to harness the wisdom of crowds in your organization. Read more »