Scrabulous: When should organizations give in to crowds?

First, let me be very clear: it’s just a game.

Well, sort of.  The game itself has some implications for the relationship between organizations and extra-organizational mass collaboration (EMC), and that’s why this discussion is worth thinking through.  After writing a bunch more words than I had intended to in the comments section of a Wikinomics post on Scrabulous, it seemed useful to develop the idea a little more in this space (note: If you want much better background on why you’ll see this again, Wikinomics is a good blog to read and a very good book as well).  I sense a recurring theme coming on…

Here’s a quick summary: a couple of brothers in India created a game called Scrabulous that is nearly identical to the board game Scrabble.  Scrabulous debuted on Facebook and attracted a huge following.  Hasbro, the copyright holder for Scrabble, asserted its copyright after discussions with the founders of Scrabulous to purchase their product.  Scrabulous on Facebook was shut down for North American users.  Two days later, the brothers introduced Wordscraper, which is different because the tiles are… round.

The link between Facebook and Scrabulous/Wordscraper raises some questions. A lot of people were playing a game that pretty clearly infringes on Hasbro’s IP, which brings (at least) three parties into a collusive relationship:

- the Scrabulous/Wordscraper guys;
- the people who played the game; and
- Facebook.

So, Hasbro stepped in and asserted copyright, which was within their right, and at least 50,000 people–a nascent EMC–signed up to protest. The interesting point here is that a Wikinomics-type community was able to exert enough influence to cause a reasonable conflict between company policy/law and the best interests of the business. Hasbro was probably right, but they still came out looking like the bad guys. There’s probably a lesson in there for them about how to play similar “power of the crowd” situations in the future.

There’s also the question of Facebook’s role. While they chose to remain silent on the Scrabulous controversy, there is a knock-on effect to their business. I have personally found myself going to Facebook less often since Scrabulous was shut down for North America (I live in Europe, but my opponents are almost exclusively in the US). I don’t know what the volume of Scrabulous hardcore users means to Facebook, but it’s worth studying. It’s certainly possible that another application could become even more popular–perhaps to the extent that Facebook and that application become analogous–and a conflict between a copyright holder and an enthusiastic crowd might cause harm to the host. This would be the semi-innocent bystander dilemma.

I suspect there’s a lot companies can learn by reviewing how this unfolded. With organizational transaction costs plummeting, it is almost certain that the sometimes uneasy relationship between companies and crowds will become more figural, and that there will be more situations like Scrabulous.

Again, Scrabulous is just a game.  Yet, the next application that facilitates the emergence of an EMC might not be.  Imagine, for example, if the application were a module to help pregnant women connect with each other and monitor daily health during the pregnancy.  It’s not far-fetched to imagine a boycott that could influence the stock price of a private company and get some heavy media coverage.  Crowds can certainly possess something resembling wisdom, but they can also exert something far more immediate and active: power.