BusinessWeek posted an interesting article yesterday called "Will Work for Praise: The Web's Free-Labor Economy." The article talks about the challenges of encouraging participation online, both with and without financial remuneration.

While the article focuses mainly on a company called ThisNext and the public online community they have built around the concept of sharing shopping/product recommendations, it has implications for online focus groups and research communities as well.  There are a few interesting points from the article I'd like to comment on, including:

• The $10 Stipend - The article mentions the position of Communispace, a fellow online research community provider, and their belief that a small $10 stipend can boost participation.  This is something we have noticed as well - a small stipend can go a long way in boosting participation when combined with intrinsic forms of motivation (e.g., acknowledgement of contributions, emphasizing exclusivity, reporting back to the community on progress, etc...).  We also agree that the impact of the stipend diminishes as the amount is raised, unless you are able to tie contributions directly to the honorarium amount (e.g., through a points system).
• 4% to 6% Participation Rates - Yahoo notes that 4% to 6% of their users contribute their energies for free, which is in-line with rates I've heard for public communities.  In a private research community, however, those kind of participation rates would be difficult for many companies to stomach, especially if they are paying in the six figures to keep their research community open.  It would be like paying for a focus group where only one participant talks, and points to another reason why sometimes it makes sense to monetize contributions from community members.
• Varying Incentives by Personality - From the article, the chief of Yahoo Research also suggests that point systems must be varied by personality.  While we believe that providing an honorarium for members is generally a good idea, there are indeed situations and audiences where an alternative approach may be warranted.  For example, it wouldn't be appropriate to pay a $10 stipend to a research community of physicians or business executives.  In those examples, it makes the most sense to emphasize the intrinsic rewards above any monetary compensation.
• The Role of the "Maven" - The article talks about the role of mavens in boosting participation and creating valuable content for the community.  However, many researchers may be uncomfortable relying solely on the opinions of mavens to fuel the decisions they make as a result of their research community.  While mavens can be very valuable to a community, it's important to encourage feedback from a cross-section of users.  To extend the focus group metaphor again, relying on mavens would be like listening mostly to the overpowering participant in the group...

Predictions for the "Free" Labor Economy

If I had to make a prediction among online communities in general, I would guess that many will look to ways of monetizing the contributions of users.  This will especially become more common as the technology to setup and maintain a social site become widely available and the active users of these sites are increasingly more valuable.  I believe companies will look for ways to reward "average" users, and that this will likely be accomplished through point systems that are customized around the primary audience for the site.

What do you think?

Where will the direction of the web's "free labor economy" head?  Will more sites start monetizing the contributions of users?  What impact will this trend have on research communities?  Comments are welcome!

Related Posts:

If you've been following the blog here, you may have caught our earlier post on incentives in online research communities, which outlines some of our thoughts on why it is often appropriate to pay incentives in online communities.