Open Innovation From A Practitioner's Perspective


Netflix Prize Winners Announced

This is proving to be a fascinating story on open innovation/crowdsourcing and the tremendous benefits it can provide, beyond financial. Clearly it’s important to achieve the desired financial results (new sales, reduced costs, etc) but the other rewards are just as important. These include learning how to ask the question, the value of iteration, expanding your network.

Netflix has announced the winner of the first Netflix prize, which was created to improve their current recommendation engine by 10%. The process itself and what was learned along the way were as interesting as the result itself. Teams cooperated and published their algorithms, with the hope that others would come in and improve them (and they did). The original team would take the improved algorithm and make it even better. Some companies gave their employees permission to work on this during their work hours. Why? Because in the end this made them better programmers and what they learned by participating actually led to $10 million payoff (internally), according to one company.

Netflix announced a new competition with a new set of criteria, it’s also covered in the same article. Looks like they learned how to better frame the question……

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NY Times: The Crowd Is Wise (When It’s Focused)

Here’s an article that came out today in the NY Times on open innovation titled “The Crowd Is Wise (When It’s Focused)”.

I couldn’t agree more with the argument. I would also submit that one way to focus the crowd is to properly frame the question. They also point out that it’s not always the size of the network that matters, it’s what that network can do. I also agree but only on the type of challenge that is specific in nature. Jeff Howe (Crowdsourcing) calls this crowdcasting. Another form of crowdsourcing is where every member of the community can participate such as the NASA Clickworker Project ( In that project, the size of the network DOES matter. The collective intelligence (or capacity) increases with every new member.

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