Victus Spiritus


Efficient Markets: Tools which extract value from aggregate leisure

30 Jul 2010

Are Crowd Farmed Volunteers Efficient?

After reading a detailed background article on Caterina Fake and Hunch (the company she's helping Chris Dixon build) early this AM, I wondered at the efficiency of "volunteer labor". Here's the quote that caused me to open my eyes a little wider at 4:30:

Some 7,400 power users submit the bulk of the surveys . “I mean, it’s amazing, ”Dixon says. “That’s like having a thousand times our workforce.” He points to Ryyan Joye of Annandale,Virginia, who, with over 280,000 banjos, is one of Hunch ’s most diligent contributors .

“That’ s the magic of Caterina, ” Dixon says, shaking his head. “I could never get people to do this.”

My first reaction after reading this: social networks of all kinds are grossly inefficient. Active users could be doing anything and generating more value than the parent company farms. But this was a naive gut response.

What's really happening is a large scale society hack. Leisure time is getting converted in bulk into cash, a variant of the entertainment industry. People willingly give up their time, myself included. Users of any growing social network visit first to explore, usually invited by a friends recommendation. People return because they have free time and enjoy the activity, or perceive value derived from the network (i.e. twitter is a good way for me to keep informed on startups and web tech).

The flavor, form and pace of information is addictive in social networks or games well matched to our tastes. What large scale networks and crowd knowledge engines do is convert aggregate free time into financial value. They farm our free time, and we volunteer it willingly.