Getting Rich Off Free Labor


Time magazine looks at getting rich off those who work for free. It's not very in-depth, but is one of the articles that, finally, is beginning to break out the real rules of open source work and peer production. Volunteering is nothing new – people have donated their skills to non-profits for generations, but over the last few years there has been this ridiculous movement that acts like a volunteer workforce is going to reshape commerce and take down big companies. It will, but only in a few instances. This quote from the article is a good example.

Clever entrepreneurs and even established companies can profit from this volunteerism–but only if they don't get too greedy. The key, Benkler says, is "managing the marriage of money and nonmoney without making nonmoney feel like a sucker."

People are willing to donate their free time to things, but the return they receive has be greater than the effort they expend. This means that extremely busy people aren't going to do it because they have no spare capacity. It also means you have to watch out for the "jury effect" – which is what happens when you get a bunch of people willing to contribute because they have the time, but they may not be the right people.

To add to Benkler's point – you should try to tap intrinsic motivations and let people use skills that may be underutilized in their regular jobs. The problem with what I just wrote is that it's extremely difficult to do. If you can find a way for people to appropriately self-select, that would be great, but self-selection is often influenced by cognitive biases. You get people who think they are much better at something than they really are. If you have to put people into positions based on interest, skill, and an understanding of the work, then that takes a lot of time. Another option is to run it like a competition – let people duplicate contributions and then choose the best one, but then you can get motivational problems.

All of these are hard to execute. And the bad news is that they only work within a limited set of contexts. That's my main Web2.0 beef – that everyone acts as if the Linux model and sharing, tagging, altruistic behavior, etc. is the only way to go for new products and ideas. But people are still human. We still want personalization, convenience, and the ability to express our individuality. Web2.0 works best when the marginal cost of sharing is low.

It's nice to at least see the early seeds of the media's attempt to clarify the context of this fad.

  • AOL would have never overtaken Compuserve, Prodigy, Netscape and would have never been able to buy Time Warner without the legions of volunteers who made the service easy for lot of people to use. They added ten of millions in support.
    The big question business (and the business press) hasn’t answered is “why do people give their love and labor?” One way to answer that is to find out why they stopped giving it to AOL.

  • David G

    IMO, the “context of this fad” will only be defined by history — it can not be predicted or “scoped”. The reason is that the extent to which we employ social production to remake our economy and public policy is entirely up to us. I agree with Benkler who says the adoption of peer production is not a natural evolution — it’s not a forgone conclusion. If anything it’s at direct odds with the extremely powerful and comfortable status quo. Not ony does the current seat of power not have time for “sharing” as you pointed out, but more importantly, it is not in their interest to do so. Social production will only be adopted to the extent that the status quo is disintermediated and that’s transformation that will never come from within.

    There’s a lot at stake here. We now have the tools to reinvent productivity. Only those of us with nothing to loose can gain from this power shift — shame on us if we don’t grab this opportunity with both hands.

  • Paul P

    The key to the opensource market is to monetise the tasks.

    Companies such as Cambrian House ( and I-Stcckphoto ( ) are leading the way in monetising the “crowd-sourced” market.

    I believe this is the future of online company building.

  • I checked out six Cambrian projects and saw these four notices:
    Due to insufficient demand, product development on AdWord Alerts has been suspended.
    Due to insufficient demand, product development on CVR for Parents has been suspended.
    Due to insufficient demand, product development on PodBlast has been suspended.
    Due to insufficient demand, product development on Desktop Playground has been suspended.
    These things happen but is the community learning anything? The blog seemed like it was all breathless hype.