'Crowd Sourcing' Taps the Masses for Ideas

April 20, 2009 -- Tapping the world's wisdom, in the place of traditional research and development, is the job of InnoCentive CEO Dwayne Spradlin.

"Traditional companies believe they have some crystal ball and know where innovation will come from," said Spradlin. "But true innovation happens when you least expect it."

Late last month, for example, InnoCentive sponsored a competition for the best way to increase ridership on the Chicago public transportation system. The winner wasn't in Chicago, or even Illinois; it was Aaron Renn of Indianapolis, Ind., whose three-part solution included a new bus route, improving the existing infrastructure, and increasing capacity.

If not for InnoCentive's online database of problems in need of solutions, the public transportation officials would likely never have connected with Renn and his creative fix. And that's just the reason the company exists.

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With a technique known as crowd sourcing, InnoCentive sets out problems for an army of 175,000 people world wide. Sixty percent of the solvers have a master's degree or Ph.D. They are drawn to the problems by intellectual curiosity, financial rewards, and also for personal reasons: one challenge involving tuberculosis was solved by an Indian doctor who had watched a family member die from the disease.

The solvers have a menu of 300 challenges each year, about one per business day.

There are four types of challenges. The simplest is to come up with a conceptual solution for a reward of a few thousand dollars. The most complicated involves creating a working prototype; awards are in the tens of thousands -- or even million -- dollar range. Intellectual property rights are transferred to the company or organization that posted the challenge.

Probably the biggest beneficiaries of crowd-sourced innovation are small to medium-sized non-profits. These organizations need solutions but don't have the bank roll for an in-house development team.

Former U.S. ambassador Mark Bent is the CEO of SunNight Solar, a company that makes solar-powered flashlights for people off the electrical grid. SunNight Solar posted two challenges on InnoCentive's Web site, the most recent of which involved an inexpensive way to reduce mosquito bites.

"I thought I would see a lot of ideas using photovoltaics," said Bent. "But the ideas that the solvers came up with were brilliant." The winning idea used a solar collector, a device that concentrates sunlight, to warm a piece of wax during the day. At night, the wax warms human-scented fabric and produces carbon dioxide, which draws mosquitoes away from sleeping people.