The TribeQa Company

How To Build A Collective Intelligence System?

A Common Sense Approach

a publication for Investors & Strategic Partners

1.1- Acknowledgement

TribeQa owes much of the content of this presentation to two

diverse, but excellent papers:

Mapping the Genome of Collective Intelligence

by Thomas W. Malone and his group at MIT

The Business Experiment by Rob May

The Business Experiment (BTE) offers a real-life experience while

asking tough questions on crowd-sourcing. MIT brings a deeper
understanding of collective intelligence systems.

MIT = Centre for Collective Intelligence of the Massachusetts

Institute of Technology’s Sloan School of Management
1.2- What does TribeQa offer?

TribeQa designs primarily new online business models for its own risk.
After presenting the early beta versions, we seek financial and
strategic partners to accelerate expansion. All of our business cases
incorporate some form of

collective intelligence of the smart crowd and/or

active crowd participation in strategy, operations and
decision-making

With our practical experience TribeQa also advises companies on how

to set up social finance, online sales and other collective
intelligence ventures.
1.3- Social Finance – A New Paradigm?

Financial consumer brands have lost their credibility as trusted

partners. Consumers, however, see no viable alternatives, so they
continue their business as usual. But the resentment against
bankers & brokers offers new initiatives a great opportunity.

TribeQa thinks that any viable alternative needs to incorporate

some sort of collective intelligence system. These systems are the
best in (a) capturing the needs of specific consumer groups and (b)
harvesting the knowledge of employees (close client contact) and
other stakeholders.

This approach ensures a much more consumer-centered operation,

which could define a new or revive a tarnished brand.
1.4- What is The Crowd?

IS the crowd really smarter, all the time?

TribeQa feels that collective intelligence systems can be improved
even more if the Crowd is selected on specific, but vital traits. For us,
the Smart Crowd is a ‘talent pool of people’ with intelligent,
independent-thinking, competitive, ambitious people having fun to
compete finding better solutions.

We recruit them from a broad spectrum of social, professional and

generational backgrounds, avoiding the conformist GroupThink of the
Financial Establishment, that lied at the root of the Financial Crisis.

The Smart Crowd will outperform any expert,

..... most of the time!
2.1- Making Life simpler?

Fortunately collective intelligence has drawn a lot of academic

interest, but for TribeQa it is simply a common-sense tool to make
life easier for (financial) consumers and .... more profitable.

BTE: make your site useful even if you only have one user. Sites are
not useful, where users can share valuable stuff, unless there is
critical mass. Del.icio.us is useful even without the user base.

In the GroupIQ, we essentially created an investment decision-

making tool that filters and validates the overkill of information. We
create order in the chaos by ranking the Top10% solutions and
integrating the superior products in solid designed personal
portfolios, with all the advanced expertise under the hood.

This is valuable even for one user!

 PART 2

THE BUILDING BLOCKS

An MIT analysis of 250+ examples of Web enabled collective intelligence
2.1- The building blocks of Collective Intelligence

TribeQa designs “collective intelligence systems” from a relatively

small set of building blocks. This framework is important in designing
any system for collective action, be it a traditional organization or a
new kind of online endeavor.

MIT defines the building blocks as the answers

to one of the key questions associated with a
single task in the system.

Who is performing the task?

Why are they doing it?

What is being accomplished?

How is it being done?
2.1- The building blocks of Collective Intelligence

MIT research of 250+ projects reveals a small set of main blocks

Who? Hierarchy or Crowd

Why? Incentives
Money/ Love/ Glory

What? Create & Decide

How? Creating with or without the input of others

Collection /Contests/ Collaboration

Types Group Decisions

Voting/ Consensus/Averaging/ Prediction Markets

Types of Individual Decisions

Markets/Social Networks
2.2- Who? The Hierarchy or The Crowd

In her research MIT has found that ‘reliance on the crowd is a central
feature of online collective intelligence systems’. But, almost always,
some form of hierarchy is included in the decision-making process.

Hierarchy. In traditional hierarchical organizations, managers assign employees

to perform certain tasks. Linux community is not a traditional firm, Linus Torvalds
still uses Hierarchy to decide which modules are included in the next release.

Crowd. Activities can be undertaken by anyone who chooses to do so, without

being assigned by someone in a position of authority. Anyone can submit a module
for possible inclusion in Linux.
2.3- Who? The Hierarchy or The Crowd Part II

TribeQa strongly favors crowd models for its effectiveness in many

situations where knowledge is scattered widely among the members
of a group.
In prior decades, due to high costs movies were made by only a few. But
creative ideas have always been widely distributed in the population,
and now with cheaper systems anyone can create and share their own videos.

Many collective intelligence systems use the crowd for creation and
some intermediate decisions, but leave the final decision to a small
group assigned to the task.
As an exception, TribeQa designed a crowd model for the GroupIQ, in which
power is almost completely handed over to the Smart Crowd. The GroupIQ is now
the first financial company in the world managed by the collective
intelligence of the Smart Crowd. A unique market position.
2.4- Why? The incentives for the Crowd

Crowd models that depend on free contributions carry big risks. People
need incentives to act: Love, Glory or Money.
MIT: What is novel about many of the collective intelligence systems that
have emerged in recent years is their reliance on Love and Glory, in
contrast to traditional organizations, which have relied on Money as motivation.

TribeQa feels that money should be part of the equation. Especially

because as TBE noted ‘intangible, long-term incentives might not be a
good way to get people involved’.

And even money will not suffice for rainmakers and opinion-leaders
with enough money, contacts & ideas. They simply lack the time. For
them sacrificing one hour is big and the marginal value of
money becomes less and less.
2.5- Why? The incentives for the Crowd Part II

In the GroupIQ strategic and investment solutions are rewarded by

Love, Glory and Equity Points(!!). On the other hand, operational
tasks are rewarded by cash, Love, Glory and equity points.

The Top50 Producers share a 50% (!!!) stake in the company, the
revenues and the profits. Also, we use solutions to reduce the Time
Factor for high-profile opinion-leaders

(MIT) Getting the motivational factors wrong could well be the

single greatest factor behind failed efforts to launch new collective
intelligence systems. Appealing to Love and Glory may reduce costs,
but could also provoke accusations of exploitation and freeloading.
2.6- What? The actions of the Crowd

The many organizational goals encountered in collective intelligence

systems can be boiled down into two basic activities.

Create - the crowd generates something new—a piece of

software code, a blog entry, a T-shirt design.

Decide - the crowd evaluates and selects alternatives—

deciding on selections.

Each week, Threadless relies on the crowd to create a group of new T-shirt designs,
and then decides which ones to produce through a combination of voting (by
anyone who is interested) and a hierarchical decision (by Threadless management).
2.6- What? The actions of the Crowd Part II

Crowd production works most efficient if (a) work is divided in small

pieces (micro-chunks) and (b) the members get an understanding of
the context associated with the work.
TBE: Crowds often do what is popular, fun, exciting, novel or cool. Crowds
don't make decisions that say "let's bite the bullet and endure this
temporary pain for the long-term benefit (look at the political systems).“

In the GroupIQ project, TribeQa developed the whole system by itself

first. The Crowd now gets the free hand to improve it within specific
strategy, quality and timeline constraints.

Because members can see the whole project, they have the
context they need to improve the micro-chunked issues.
2.2- How? The Crowd Creates

In the Creation Process projects could use

Collections. Useful if it is possible to micro-chunk actions done independently by
different members of the crowd. In the GroupIQ members find great articles; clip
valuable opinions, and based on that define the right questions? Ergo, they
create a large portfolio of valuable knowledge.

Contest. Useful if one needs to select a few top solutions. In the GroupIQ the
contest is the driving element on various levels, all because the challenge is to
find the best solutions out of large universe of opportunities.

Collaboration. Useful when micro-chunking becomes too difficult. On the

level of strategy the GroupIQ selects or layers the Crowd in smaller units who
collaborate on creating better solutions, headed by a senior member.
2.2- How? The Crowd Creates Part II

The complexity (risk) of the creation process is determined by the level

of collaboration (often under time pressure). Will the chain in the work-
flows not be broken frequently, if dependency is high? How will you
manage a process like that, if members work for free?

MIT: Many collective intelligence systems still use hierarchies for some of
their tasks, but what is novel is how they use crowds for Creation
and Decision-making. A key {notion} ....is whether the different members
of the crowd make their contributions and decisions independently of
each other or whether there are strong dependencies between their contributions.

In each project TribeQa analyses carefully what part of the work-flow

can be assigned to independent contributions and which
ssues needs a collaborative effort.
2.2- How? The Crowd Decides

Who controls what? How much power is handed over to the Crowd?
Always a hot debate as it defines the total enterprise.
Having decided on the power of the Crowd, the next question is how
to organize the decision-making process. And this NOT a big problem;
many providers offering the tools for it.

Normal, implicit or weighted voting

Consensus

Averaging Marketocracy runs an investment portfolio selected by averaging
the opinions of the top 100 investors from over 55,000 on the website.

Prediction market Microsoft used it to estimate project completion. Within
minutes ,the market indicated a 1% probability of on time completion. The
project ended up three months late.
2.2- How-Individual Decision

TBE: The wisdom of crowds is a byproduct of other processes, not a process in and of
itself. You have to establish a process that allows people to make their own individual
decisions and reap the rewards and consequences of their decisions individually.

TribeQa tracks consumers making their normal day-to-day (financial)

decisions and converts their actions into a market action (buy/sell).
This feeds the system with important independent, personal input
that will be much larger than the group of active members.
2.2- The End. How To design Collective Intelligence Systems

We have presented

the building blocks that make up the most crucial parts of any collective
intelligence system.

some examples of how other projects have been doing it. (more on the website)

what kind of choices TribeQa made in the GroupIQ project.

We hope that the presentation starts giving some deeper

understanding of the fascinating potential of crowd/employee
participation models.
 PART 3

You See It or You Don’t See It

3.1- The End ! Really ☺

TribeQa seeks investors and strategic partners to improve and

accelerate new or existing projects by improving scalability,
interactivity and personalization.

Being ahead of mainstream thinking, we realize that

Most investors/potential partners feel comfortable following the herd,

especially in cases without high-profile managers.

Thus, our challenge is to identify, convince and recruit original-

thinking crowd investors ($10.000), angel investors ($250.000) and
potential partners to launch and participate in other “collective
intelligence” projects.