Why stop there? Who would have believed that poor farmers could secure $100 loans shared from perfect strangers on the other side of the planet—and pay them back? That is what Kiva does with peer-to-peer lending. Several decades ago international banks discovered they had better repayment rates when they lent small amounts to the poor than when they lent big amounts to rich state governments. It was safer to lend money to the peasants in Bolivia than to the government of Bolivia. This microfinancing of a few hundred dollars applied many tens of thousands of times would also jump-start a developing economy from the bottom. Loan a poor woman $95 to buy supplies to launch a street food cart and the benefits of her stable income would ripple up through her children, the local economy, and quickly build a base for more complex startups. It was the most efficient development strategy invented yet. Kiva took the next step in sharing and turned microfinancing into peer-to-peer lending by enabling anyone, anywhere to make a microfinance loan. So you, sitting at Starbucks, could now lend $120 to a specific individual Bolivian woman who plans to buy wool to start a weaving business. You could follow her progress until she paid you back, at which time you could relend the money to someone else. Since Kiva’s launch in 2005, over 2 million people have lent more than $725 million in microfinance loans via its sharing platform. The payback rate is about 99 percent. That is a strong encouragement to lend again.
If that works in developing countries with Kiva, why not install peer-to-peer lending in developed countries? Two web-based companies, Prosper and Lending Club, do that. They match up ordinary middle-class citizen borrowers with ordinary citizen lenders willing to loan their scheme at a decent interest rate. As of 2015, these two largest peer-to-peer lending companies have facilitated more than 200,000 loans worth more than $10 billion.
Innovation itself can be crowdsourced. The Fortune 500 company General Electric was concerned that its own engineers could not keep up with the rapid pace of invention around them, so it launched the platform Quirky. Anyone could submit online an idea for a great new GE product. Once a week, the GE staff voted on the best idea that week and would set to work making it real. If an idea became a product, it would earn money for the idea maker. To date GE has launched over 400 new products from this crowdsourced method. One example is the Egg Minder, an egg holder in your refrigerator that sends you a text when it’s time to reorder your eggs.
Another popular version of crowdsourcing appears, at first, to be less about collaboration and more about competition. A commercial need prompts a contest for the best solution. A company offers a payment prize to the best solution selected among a crowd of entrants. For instance, Netflix announced an award of $1 million to the programmers who could invent an algorithm that recommended movies 10 percent better than the algorithm they had. Forty thousand groups submitted very good solutions that improved the performance, but only one team achieved the goal and won the prize. The others had worked for free. Sites such as 99Designs, TopCoder, or Threadless will run a contest for you. Say you need a logo. You offer a fee for the best design. The higher your fee, the more designers will participate. Out of the hundred design sketches submitted, you pick the one you like best and pay its designer. But the open platform means that everyone’s work is on view, so each contestant is building upon the creativity of others and trying to outperform them. From the client’s point of view, the crowd has generated a design that is probably way better than the one they could have got from just one designer in that price category.
Can a crowd make a car? Yep. Local Motors, based in Phoenix, employs an open source method to design and manufacture low-volume customized performance (fast) cars. A community of 150,000 car fanatics submitted plans for each of the thousands of parts needed for a rally car. Some were new off-the-shelf parts hijacked from other existing cars, some were custom-designed parts made in several microfactories around the U.S., and some were parts designed to be 3-D printed in any shop. The newest car from Local Motors is a fully 3-D-printed electric car, also designed and manufactured by the community.
Of course, there are many things that are too complex, too unfamiliar, too long term, or too risky to be financed or created by the potential customers. For example, a passenger rocket to Mars, a bridge spanning Alaska and Russia, or a Twitter-based novel are probably out of reach of crowdfunding in the foreseeable future.
But to repeat the lesson from social media: Harnessing the sharing of the crowd will often take you further than you think, and it is almost always the best place to start.
We have barely begun to explore what kinds of amazing things a crowd can do. There must be two million different ways to crowdfund an idea, or to crowdorganize it, or to crowdmake it. There must be a million more new ways to share unexpected things in unexpected ways.
In the next three decades the greatest wealth—and most interesting cultural innovations—lie in this direction. The largest, fastest growing, most profitable companies in 2050 will be companies that will have figured out how to harness aspects of sharing that are invisible and unappreciated today. Anything that can be shared—thoughts, emotions, money, health, time—will be shared in the right conditions, with the right benefits. Anything that can be shared can be shared better, faster, easier, longer, and in a million more ways than we currently realize. At this point in our history, sharing something that has not been shared before, or in a new way, is the surest way to increase its value.
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In the near future my day will follow a scenario like this: I work as an engineer in a co-op with other engineers from around the world. Our group is collectively owned and managed not by investors, nor by stockholders, but by 1,200 engineers. I earn money for my engineering tweaks. I recently designed a way to improve the efficiency of the flywheel for a regenerative brake on an electric car. If my design is used in the final manufacturing, I get a payment. In fact, anywhere my design is used, even if it is copied for a different car or another purpose, payments still flow back to me automatically. The better the car sells, the higher my micropayments. I’m happy if my work goes viral. The more it is shared, the better. It’s the same way photography now works. When I post a photo onto the net, my credentials are encrypted inside the photo image so that the web tracks it and the account of anyone who reposts the photos will pay me a very miniscule micropayment. No matter how many times the picture may be recopied, the credit comes back to me. Compared with last century, it’s really easy to make, say, an instructional video now because you can assemble the available parts (images, scenes, even layouts) from other excellent creators, and the micropayments for their work automatically flow back to them as a default. The electric car we are making will be crowdsourced, but unlike decades earlier, every engineer who contributes to the car, no matter how small her contribution, gets paid proportionally.