Crowdsourcing software development: How to harness the collective power of the community

What does crowdsourcing software development and ‘open innovation’ mean for businesses? Here are my thoughts on the topic, and some real-life examples.

A passionate community flocks to a music gig.

Data without insights has no value. That is the common mistake made by so many organisations today.

Many entities hoard their data, for fear of giving away valuable intellectual property, and in doing so, limit the organisations worth and with it, the potential to grow.

What if we could unlock business value by harnessing the collective talent that exists across the wider development community? Or, crowdsource software development.

The Value Of Open Innovation

Open Innovation, in its broad context, is not new, however this concept can now be harnessed by business. Particularly relevant in a world where dynamic change is rife, business must adapt, evolve, or face extinction.

But most organisations don’t have access to the best ideas, fundamentally because they cannot all be found in one place.

What if we had a way to unlock value, that idle data holds within your business? What if we seeded ideas and allowed the wider development community to feed their creative instinct, like fish on burley?

By planting ideas, backed by nominal sums of prize money and serving up real data with which to build these ideas on, we could attract and access the minds of the global development community.

By delivering this through a collaborative, secure platform, where the brightest minds and freshest ideas are nurtured and developed, we naturally draw on those with the passion to respond.

What makes us qualified to talk about crowdsourcing ‘innovation’? Well, we’ve just helped Auckland Transport build one, They've called it “ATLabs” — a competition anyone can enter, submit their ideas, and great ideas win prize money. A full case study on ATLabs is on it’s way, so stay tuned.

Other Live Examples of Open Innovation


An example which sits the closest to home (in New Zealand) is Xero’s ‘Add On’ community.

Through API’s that Xero have made available, smart tech companies are integrating and ultimately enhancing Xero’s customer value proposition by providing a suite of additional products and services that compliment Xero’s existing accounting capability.

An example of Xero’s App Marketplace, as at February 2017.

For Xero, this not only delivers additional revenue through clipping subscription fees, but provides natural customer retention. Xero customers not only get a smart bolt-on application that is integrated to their core accounting system, but in many cases, they get a choice of several similar applications.

Each app delivers slightly different features, affording customers the choice to decide on the best fit. Finally, for the tech companies the relationship provides a channel to market (all be it at a lower margin), but it is great exposure, including brand association with an up-and-coming provider in the accounting space.

In short Xero have created a platform to attract products which enhance their value proposition.

Ansari X Prize

The Ansari X Prize was a space competition in which the X Prize Foundation offered a US$10m prize for the first non-government organisation to launch a reusable, manned spacecraft into space twice within two weeks.

The concept was modelled after early 20th-century aviation prizes, and aimed to spur development of low-cost spaceflight.

The eventual winner of Ansari X Prize — Mojave Aerospace Ventures with SpaceShipOne.

Created in May 1996 and initially called just the “X Prize,” it was renamed the “Ansari X Prize” on May 6, 2004 following a multimillion-dollar donation from entrepreneurs Anousheh Ansari and Amir Ansari.

The prize was won on October 4, 2004 by Mojave Aerospace Ventures on the 47th anniversary of the Sputnik 1 launch. The project was designed by Burt Ratan and financed by Microsoft co-founder Paul Allen, using the experimental space-plane SpaceShipOne which spun out of their Tier Oneprogramme. More than US$100m was invested in new technologies by various companies in pursuit of the prize.

Several other X Prizes have since been announced by the X Prize Foundation, promoting further development in space exploration and technological fields.

Again Space X crated an environment where clever minds can compete for a bounty.


Like Xero, Salesforce allows smart tech companies to access, not only their API, but right through to the user interface.

The companies that partner with Salesforce can add custom buttons to the interface, creating an even more seamless integration with this Customer Relationship Management tool.

Again, by opening API’s and surfacing data to a developer community Salesforce can deliver more to their customers and in some cases, create additional revenue in the process.

Our Own Work With Crowdsourced Innovation

Propellerhead has engineered the early stages of a platform for ATLabs where code is committed securely, and the best ideas are rewarded. This allows clever minds to come together in an environment where everyone wins.

We believe that many innovative ideas come from learning, exploring, and collaborating with others, on things we are passionate about.

Our focus is on creating the right conditions, for great ideas to emerge and improve the way we interact with our surroundings, and each other.

We see potential in the convergence of real-world problems, open data, and inspired coding to create a better place to live.

So, What Does It Take To Create One?

Time And Effort Is Minimal

Time and effort required in creating a crowdsourcing environment for software development is surprisingly small.

This is because the creative thinking is done by the development community. You simply come up with a broad topic with any specifics you would like to see as part of the prototype, allocate prize money and a time frame, and send it out to the Ether.

A Process Is Needed

To ensure the API is not abused, collaborators must follow a process to play:

Just like accessing any other API, the first step is the registration. We do that so we can plan infrastructure and resources better. This also stops abuse of the API which makes life worse for everyone else.

Once collaborators register for an API they will receive two keys; a primary key and a secondary key. Either can be used, and are there to allow rolling updates and temporary access.

How Do I Select The Best Ideas?

After the deadline has closed, allow time to assess the best ideas, and select your winner.

You’ll need to ensure your selection meets your solution criteria; it may need to be scaleable, fit with particular future aspirations, and be compatible with legacy technology platforms and so on.

How Do I Ensure Good Ideas Are Progressed Effectively?

This is when you need either in-house capability, or a good technology partner to further develop the ideas coming through. We worked with AT Labs to rapidly develop new ideas they wanted to use, and were actually involved in selecting the ideas.

You’ll find that when ideas flow freely, they tend to propagate new and more innovative concepts and the concept grows organically.

What About Data Security?

Data security is a fundamental component of the framework for the platform. The API’s allow only the data you want to release is surfaced to the development community. What is released and when it is released can be totally up to you.

Who Owns The IP?

The discussion of ownership of IP is one to be had on a case-by-case basis. This conversation is between you and the developer.

Essentially, if you have paid for the idea then you own it, as a default position. However, the end result may take one of several different forms, including joint ownership as a possibility.

It really depends on the solution and the strategic value to your organisation.

If the idea looks to be substantial enough, you may consider setting up a separate entity or subsidiary. This might be a way to keep things cleaner through a degree of separation.

What Could This Mean For My Business?

A crowdsourcing software development platform is a channel through which your business can seed fresh ideas to clever people, who you (or your organisation) don’t ordinarily have access to.

All of those “I wonder if we could…” or “what if we…” conversations now have a vehicle to be explored.

They can also be explored in a way which doesn’t destroy the company’s bottom line.

In fact, there is a strong possibility that when you find a great concept, it will unlock significant value, or even move the direction of the business entirely.

But either way it keeps you abreast of cutting edge technology and how it represents possibilities to keep your business ahead of the curve.

The Possibilities Are Endless

The future looks bright.

With the big data becoming a reality, and our biggest challenge now being how can we best leverage the incrementing mass of data available, we envisage the possibilities will be endless, as we consider linking the data from multiple sources to add even more value to the world we live in.

If you have any further insights on Crowdsourcing Software Development, please let us know?