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Innocentive: Wisdom of the Crowd

July 15, 2014

InnoCentive fills in the gaps by tapping into experts

Ask and you shall receive … multiple answers of depth and quality. That’s the egalitarian philosophy that drives InnoCentive, the industry leader in crowdsourced problem-solving.

Crowdsourcing harnesses collective intelligence, and creates direct channels between problems and all potential solution sources. It allows companies, foundations and cities to solve their major innovation gaps quickly and efficiently, giving voice to those who might have insight and inspiration but not direct industry access. InnoCentive (www.innocentive.com) uses its virtual exchange platform to engage the right problem-solvers with the creative and analytical skills to make light work of heavy complexities.

Answers to these intricate and varied problems can come from the personal experiences of people from all walks of life, InnoCentive founder Dr. Alpheus Bingham passionately contends. His Waltham, Mass.-based company, launched in 2001, has borne out this theory through approximately 1,500 problems posed by businesses, foundations and nonprofits to an online pool of more than 275,000 problem-solvers who have won prizes between $500 and $1 million.

“If we assign a problem to me, or to Mary or to Joe, how do we know that one of us will have one of these clever, unique, breakthrough solutions? … On any given evening, not everyone is going to come up with the breakthrough solution,” says Bingham when reached recently for an interview.

“We need a way where many minds can be exposed to a problem,” he says. “It is more important to get all of this difference of thought—as different as the number of people you’re exposing it to—to reach breakthrough creativity than it is to make sure it is approached by a Harvard-trained scientist with 25 years’ experience and a Nobel Prize.”

What qualifies as breakthrough creativity? Bingham says it’s the best solution possible, instead of a routinely acceptable answer.

Receiving his Ph.D. in organic chemistry at Stanford University, “there were 20 to 25 reasonably smart people (in our class), and each time we got together, there could be mostly good work but not breakthrough knowledge,” he says.

bingham

Bingham, now 60, recalled the class where he and other students were assigned complex weekly problems that could take up to 60 hours to solve and had to be defended before a critical professor.

The business of InnoCentive goes nearly against his own experience, instead recognizing that people who haven’t been as formally educated but have different frames of reference can solve problems. He reconciles this with a quote from Damon Runyon from the play Guys and Dolls.

“The race is not always to the swift nor the battle to the strong, but that’s the way to bet,” he recalled one of his favorite quotes recently. “At Inno-Centive, we wondered, ‘Can I somehow cheat and place my bet after?’ We run the race first and then take the results and pick the winner from among them.”

The privately held InnoCentive now employs more than 50 people, and according to Bingham, hosted 200 new major challenges in 2012 alone. The company started in 2001 as a subsidiary of Eli Lilly, where Bingham had been in charge of research and design.

Five years later, an investment from venture firm Spencer Trask allowed InnoCentive to spin off from Eli Lilly, gain some independence, and attract other large companies, including pharmaceutical firms, as customers.

“(Spencer Trask’s investment) also provided additional capital for hiring, et cetera,” says Bingham. “It was crucial to InnoCentive.”

Though Bingham expresses a certain degree of satisfaction with the company’s growth, he says he believes egos still stand in the way. A company or foundation’s reluctance to publicize problems they cannot solve puzzles him, particularly in academia, from which most of InnoCentive’s trusted problem-solvers hail.

“Their identity is, ‘I’m a problem-solver.’ They think if they post on InnoCentive, it goes against their comfort zone of what their identity is,” Bingham says. “We try to point out to businesses, foundations and governments that their primary stakeholders actually aren’t hung up on who solves the problem. They want the problem solved.”

Out of 452 crowdfunding platforms in the United States in April 2012, Inno-Centive ranks high because of the number of challenges it has completed. According to industry research lab Crowdsourcing.org., those platforms raised a cumulative $1.5 billion in 2011, and 2012 was predicted to have seen a 300 percent increase in revenue.

Among its clients, the City of Boston, suffering from bumpy, pitted roads, recently crowdsourced a solution to its pothole problem by posing an InnoCentive challenge for a mobile application that would allow residents to reliably report potholes. The $25,000 award offered by Liberty Mutual was split three ways between a Somerville-based group of mostly MIT graduates, a professor from Grand Valley State University and an anonymous solver. The app is currently available on iTunes.

From the 700 submissions, InnoCentive’s team whittled down the number presented to Chris Osgood, co-chair of the mayor’s Office of New Urban Mechanics, to about 10 high-quality answers, three of which were chosen. The city was able to select the right answer after they saw the winners brought a “commonality of approach.”

“The typical way we might have gone about this was to write a standard contract where we would have partnered with someone based upon their resume and references and their experience,” says Osgood, who estimated the city saved thousands by crowdsourcing.

“What was interesting for us was to choose a solution based upon the quality of solutions … “It’s great that we could tap into this network of folks that InnoCentive has built.”

Edward Aboufadel, head of the math department at Grand Valley State in Michigan, says he and three students worked on Boston’s problem every day for eight weeks.

“For the pothole challenge, I had just purchased my first smartphone a few months earlier, and I was intrigued with the data that can be collected using it,” says Aboufadel, who had read an article about InnoCentive in Wired magazine and signed up as a problem-solver.

“When I read about the challenge, I had an idea that we could use wavelets (a mathematical tool used in research) as part of the solution.”

Aboufadel was surprised when he learned that he won the competition. “I remember reading the e-mail right after I woke up one morning, and I had to read it three times to believe it,” he said. “It was exciting! It was nice to demonstrate that mathematics can be used for a clear purpose. Winning also validated the work that I did with my students.”

Boston has gone on to smooth more of its roads and is interested in developing, from this new application, a pavement condition index that would help the city address the most serious potholes and manhole repairs in order of priority, Osgood said.

Gerald C. Kane, an associate professor of information systems at Boston College’s Carroll School of Management, sees crowdsourcing as a way for people to obtain credibility in their field with no experience.

“It’s a great opportunity for people trying to make their way into the field, because it gives them opportunities they wouldn’t have otherwise had, to build reputation and a portfolio of work before they even get a job,” says Kane.

The majority of problem-solvers specialize in research within academia with master’s level and doctoral degrees. Many are exposed to InnoCentive through partnerships with The Economist, Nature Publishing Group and Scientific American. Of the 34,000 submissions provided by problem-solvers, about 1,300 financial awards have been given to the best answers.

One of InnoCentive’s problem-solvers, Wurner Mueller from Dallas, was a passionate scientist, but every time he was successful, he was promoted to management. When he retired, he set up two workshops on his property: a laboratory and a woodworking shop. When he came across InnoCentive, he made its problems part of his daily structure.

Bingham says the growing popularity of crowdsourcing could have a slight impact on traditional business structure, but is more reflective of an existing trend.

“You know, there is a free agency kind of mentality that we see creeping into that relationship,” he says. “Employers are—by necessity, by business performance—less likely to hire you for 45 years and give you a gold watch” at retirement.

“Our current generations aren’t thinking gold watch. They’re thinking about mobility, personal growth, experience … A lot of problem-solvers say, ‘This way of working works for me. I’m not interested in all of the other performance issues that come with being an employee. And I can choose what problems I want to work on and hunker down in my basement and write you an algorithm.’

“We’re just following a trend that is already out there.”

 

 

By FRANCI RICHARDSON ELLEMENT

 

Spencer Trask principals and affiliates were initial or early investors in InnoCentive.

"We try to point out... that their primary stakeholders actually aren't hung up on who solves the problem. They want the problem solved.'
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– Alpheus Bingham , InnoCentive Founder