Micro-labor: Business Model of the Future?

~Updated below, 8/15/07~

Advertising won’t pay the bills for every web service forever. And there are many concerns that because customers are so used to everything being free, they’ll balk at subscription models. I think I’ve come up with what I think is a new business model for web services, in which users essentially earn paid account status.

On the same principle as Amazon’s Mechanical Turk (possibly even integrating that service into yours), customers complete basic human insight tasks (“Is this a picture of a cat, or a picture of a dog?”) that assist you, your partners, or Mechanical Turk submitters in solving problems that need mass input. Instead of your customer earning money from completing those tasks, that money goes straight to you, and the customers ‘Progress/Power/Cool Bar/Meter/Gauge’ is ‘charged/filled/increased’ as they do more, until it reaches 100%, at which point they’ve earned a paid account for the next month.

Assuming one hour of basic human insight is worth $5 (and I’m just throwing this number out there), a user pays for a $20/month paid account with less than 10 minutes of ‘work’ per day. Of course, most of us earn more than $5/hour already, so why wouldn’t we just simply pay for the paid account?

  1. This is an ideal solution for kids, stay-at-home parents, students, or others who don’t have jobs.
  2. I think it’s psychologically more tempting to say to a customer “earn extra features” rather than “pay for extra features”. It breaks out of the traditional salesperson-buyer paradigm.
  3. This model also helps as a transition into *subscription business models*. What happens when someone who’s been earning paid user status for the past 3 months procrastinates until they only have a day to earn their paid account status for the next month? Do they try and do all of it at once (four hours of work), do they let the extra features they’ve been enjoying just disappear… or do they simply pay you directly, either the full amount or the remainder if they’ve only partially earned the next month’s service?

These are only some quick thoughts, I’ll be back to write more about how micro-labor could be implemented, and possibilities for it other than utilizing basic human insight. But I’d love to know, what are your thoughts on this from what I’ve written so far?

Update: Other Uses of Micro-Labor

So what if you don’t want to abandon advertising as a business model? Maybe you’re in a niche where there are lots of companies with products relevant to your customers. If so, a micro-labor business model puts you in an even stronger position to serve ads. For a few minutes at a time, your users are giving a specific part of your site their complete attention.

1 minute of their time is worth only $0.083. Would an advertiser be willing to reach 50,000 alert, attention-paying consumers with a 1 minute video for only $4,150? With a silent “Click Here” prompt that appears once during playback to prove a viewer is really watching, wouldn’t your customers be worth more to an advertiser than TV viewers, even?

The micro-labor system allows many different activities to be done. While you couldn’t require it, you could give customers the option of providing more detailed demographic information about themselves or their computer. Computer information, after being anonymized, could be especially useful for resale. Desktop software companies might want to find out if users of your service have their software or the software of a competitor installed on their machines.

With a simple “earn 10% toward your paid month” offer for running a system scan, you can generate reports for 3rd parties with statistics such as “35,000 out of 50,000 of our customers who ran a system scan for us contained your software installed on their machine. 5,000 contained your competitor’s software. Of the 35,000, X had systems with Y RAM, CPU, etc. Z were between the ages of 21 to 25, N were between the ages of 26 to 30, etc.”

Micro-labor turns a webservice’s collection of customers into a willing workforce, capable of performing many simple tasks for your service and its partners in return for the premium features you offer. It’s a win-win scenario that doesn’t eliminate any options for you to gather revenue, and only creates new ones.

Would you use it?