Wikinomics could change everything as concept of sharing spreads
January 2, 2007 9:56pm CST
Remember when your teacher taught you that lesson about the benefits of sharing? As it turns out, it's more than simply a tool to facilitate Lilliputian peace accords. It might even make you rich. That is the message behind Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony Williams. This is another book about profitless Internet start-ups. To make that clear, the authors don't start with blogging, Wikipedia, YouTube or any other stars of the Web. No, they want you to take a look at a company involved in one of the oldest industries: gold mining. When Rob McEwan became CEO of Goldcorp, he and company geologists knew that their property contained untapped resources "thirty times the amount Goldcorp was currently mining!"But with 55,000 acres, nobody at Goldcorp could figure out where to look for the buried treasure. To avert a wild goose chase, McEwan shared on the Web Goldcorp's geological data going back to 1948 and offered $575,000 in prizes to those who could come up with the best way to find and extract the gold. Participants in the contest found 55 drilling targets Goldcorp had not identified. Eighty percent hit pay dirt. "In fact, since the challenge was initiated, an astounding eight million ounces of gold have been found" and in four years Goldcorp's cost of production dropped 600%. Tapscott and Williams say Goldcorp took advantage of a new economic paradigm they call wikinomics: a word combining economics and Wikipedia - the online encyclopedia to which anyone can contribute. This model of wealth creation is based on collaboration and sharing the authors call peering. To make sense of this, a primer on Wikipedia is handy: Anyone can read, edit and write encyclopedic articles at Wikipedia.com. Users have added "three million articles in two hundred languages."Wikipedia relies on its thousands of volunteers and has only has five full-time employees. Wikipedia is the model for the economic system Tapscott and Williams are investigating: harnessing collaborative, external resources, labor and capital to benefit an organization. If readers think Goldcorp and Wikipedia are outliers, the authors offer examples of collaborative success at organizations as diverse as Internet telephony company Skype and Procter & Gamble. Some examples of companies taking advantage of wikinomics:•Linden Lab produces less than 1% of the content for its online, virtual society Second Life. The rest is created by players in the game. •P&G is near its goal of sourcing "50% of its new innovations from outside the company." It says that for every good scientist on salary, there are 200 outside whose skills should be harnessed. •InnoCentive is a website where companies offer money for solving scientific problems posted online. Freelance scientists can earn up to $100,000 per solution. •IBM gives labor and money for developing free computer operating system Linux. It then loads Linux on much of its hardware. •Boeing and BMW open most design work on new products to the companies they partner with. Discussions of these companies and others are the bulk of Wikinomics, and most of the insights come from them. The latter parts of chapters can bog down in repetitive, and often banal, conclusions, but it is worth forging past them. Tapscott and Williams took their own advice in writing Wikinomics, with Tapscott working in Toronto and Williams based in London. They write: "When we were both working on the manuscript at the same time, we hooked up with a Skype connection, talking, exchanging material or being silent as appropriate. At times, it felt like we were in the same room."The last chapter - "The Wikinomics Playbook" - has only a Web address, wikinomics.com, and the authors' invitation to readers to join them in writing the "definitive guide to 21st-century strategy."Whether they succeed in creating a print/Web-based book, they are clearly on to something with the concept of wikinomics. As they quote Michael Powell, former chairman of the Federal Communications Commission, saying, after trying Skype for the first time: "It's over. The world will change now inevitably."