The term crowdsourcing has existed since 2006, where Jeff Howe introduced it in the article “The Rise of Crowdsourcing”. Crowdsourcing is a process, where users are involved in companies' product development through the internet and social media.
The word is a contraction of the words crowd and outsourcing. The method works as a problem solving and manufacturing process, which implies that you outsource assignments to a (relevant) network of people – also known as the crowd. Based on the principle that two (or more) brains are better than one.
There are several different types of crowdsourcing, and we'll introduce you to them below.
A well-known example of crowdsourcing is Wikipedia. Wikipedia doesn't produce their own content for their encyclopedia and hire no journalists, editors or experts. Instead, they give the crowd the possibilities to make the content themselves. The result is a product that is created by the users.
Crowdsourcing doesn't require a lot of people in order to be efficient, and especially when it comes to product development, this works best when just a few people, who are real experts on a subject, are involved. What's important, is finding people who are passionate about the assignment and excited by the process.
Crowdsourcing is also cheap way for small companies to develop and innovate, and this can be done in several ways. Below, we describe five of them, along with several links that help you begin the process yourself.
If you need to design a new logo, you can send it to a network of designers along with a description of what you are after, how much you are willing to pay and your deadline. The interested designers will each produce a complete design exclusively for you. This way you get somewhere between 0 and 500 (maybe more) different logos to choose from. You choose the one you like the most, and reward the designer accordingly. Crowdsourcing can also be applied for designing furniture, fashion, advertisements, video and much, much more.
Crowdfunding gives you the opportunity to find money for a project. You find the right platform to search from, by targeting the crowd to your specific project. With a description of the project, you ask a group of people (potential funders) if they want to donate money for your project. In the description you should include the desired amount of money, your deadline and the reward that's in store for the funder. Remember, that most people will think “What’s in it for me?”, when they support your project. This is natural – and fair.
Some funders are more or less indifferent to the reward and are just in it to support the project, which they find exiting, interesting or rewarding. With rewards you show that you understand that there is a little “bargaining” in crowdfunding. You must gather your entire desired amount of money before deadline, or else you have to give back the donations to the funders. A deadline is typically less than 60 days. For example, if you seek funding for a theatrical play, the reward could be two tickets, or if you want to produce a new product, the funders could receive the product.
Micro-assignments are a type of crowdsourcing that gives you the opportunity of breaking down a large assignment into several micro-parts that you send to a group of people. An example could be, if you have 1000 pictures on your webpage that needs supplementary text, then you can ask a crowd if they will each provide an amount of text and thereby split the assignment into micro-parts. You set a price for each micro-assignment. With micro-assignments you can expect to see results immediately. Other micro-assignments could for instance be scanning pictures, correcting text, correcting databases, transcribing soundbites and so on.
If you are uncertain where to begin on an idea for a new area of business, a new product or your new marketing strategy, you can crowdsource it through open innovation. Open innovation gives investors, designers, inventors, marketers and many more the opportunity to cooperate and make your idea a reality. This can either happen through a special web-platform, where the crowd can “meet” and share inputs, or it can be applied internally for coworkers, where you take advantage of the strengths across different departments.
When a webpage gathers opinions and beliefs from a large group of people within a certain topic, it's called crowdvoting. An example of how crowdvoting works is seen at www.threadless.com, which sell t-shirts. The users provide the designs, and the t-shirts that gets the most votes from the users are manufactured and sold. Even though it's a small company, thousands of people vote and send in their designs. The products are exclusively made and chosen by the crowd.
The biggest advantage from crowdsourcing, when it works optimally, is that the quality of the product that emerges from the process is high. It is based on several people – rather than just one – providing their best ideas, skills and support. Crowdsourcing gives you the opportunity to choose the best result from a vast ocean of “best contributions”, as opposed to receiving the best contribution from a single supplier. The results can be delivered much faster than traditional methods, since crowdsourcing is a type of freelancing. You can receive a complete video within a month, a complete design or an idea within a week and micro-assignments completed in a matter of minutes.
For crowdsourcing to function at its best, it requires clear instructions on your behalf. You can end up with a product that completely misses its target and the demands of your customers, if the crowd doesn't clearly understand your instructions. The quality can be hard to evaluate, if your expectations are not articulated precisely.
Links for webpages that specializes in different types of crowdsourcing.
Source: “The Rise of Crowdsourcing”. Wired Magazine, June 2006