It's dawn at a Los Angeles apartment overlooking the Hollywood Hills. Laura Sweet, an advertising creative director in her early 40s, begins to surf the Net. She searches intently, unearthing such bizarre treasures for sale as necklaces for trees and tattoo-covered pigs. As usual, she posts them on ThisNext, a social network where people exchange shopping leads. Why does she spend so many hours each week working for free? "It's sort of a cool feeling that you're influencing people," she says.
A half-hour's drive to the west, a serial entrepreneur named Gordon Gould strolls into the Santa Monica offices of ThisNext. Gould has managed to entice an army of volunteers, including Sweet, to labor on his site without pay. Traffic on ThisNext is soaring, with unique visits nearly tripling in a year, to 3.5 million monthly. Revenue comes from advertisers, who pay to display their wares amid so many shoppers. What's in it for the volunteer workers? "They can build their brands," Gould says. "In their niches, they can become mini-Oprahs."
Here's how it works: Entrepreneurs like Gould build meeting places that provide visitors with tools to express themselves, mingle with friends and strangers, and establish their personal "brands." The result, when all goes well, is an outpouring of creativity. These bottom-up efforts have produced not only ThisNext but also YouTube (GOOG) and even American Idol.RECESSION CREATIVITY
Does the crashing economy affect the market for free labor? Gould says no. In fact, he's betting that people will continue to invest in their personal brands during hard times. Between investor visits during a recent trip to New York, he sips a soy latte and speculates. Amid the downturn, he says, firings are sapping loyalty to companies and steering people toward goals of self-sufficiency. In other words, Gould says acerbically, "the only person I can rely on not to screw me—hopefully—is myself."
Beyond brand-hungry strivers, masses of free laborers—from coders building Linux open-source software to editors fine-tuning an entry on Wikipedia—continue to toil without ever seeing a payday, or even angling for one. Many find compensation in currencies that predate the market economy. These include praise from peers, a respected place within a community, victories in online contests, and satisfaction from helping others.
The challenge for managers all across the economy is to harness as much of this free labor and brainpower as possible to their own enterprises. From universities to the computer labs of Internet giants, researchers are working to decode motivations and perfect the art of enlisting volunteers. Prabhakar Raghavan, chief of Yahoo! Research, estimates that 4% to 6% of Yahoo's (YHOO) users are drawn to contribute their energies for free, whether it's reviewing films or handling questions at Yahoo! Answers. If his team could devise incentives to draw in an additional 5%, it would enhance Yahoo's pages, bringing more traffic and advertisers to the site. Incentives might range from contests to thank-you notes.
Raghavan has hired microeconomists and sociologists from Harvard and Columbia to match different personalities with appropriate rewards. Researchers elsewhere are trying out novel approaches. Luis von Ahn, a professor at Carnegie Mellon, has come up with online games that lead people to do tasks computers can't handle, such as identifying the subjects of photos on Web sites. "For some jobs, you need their brainpower for only five or 10 seconds," he says.
Recruiting volunteers for moneymaking ventures, however, can create problems. For centuries humans have learned to distinguish between two economies: the social and the market. Dinner guests, for example, satisfy social obligations by offering their hosts a bottle of wine.