Have you ever tried crowdsourcing? You should. The idea of outsourcing a task or project to a network of people is appealing as it lets businesses look beyond their organisation to get their work done affordably.
What exactly is crowdsourcing? And how can it help businesses to cut down on costs as well as seek outside solutions that can’t be solved in-house?
Wired Magazine’s editors Jeff Howe and Mark Robinson first coined the term “crowdsourcing” in 2006, following conversations about how businesses were using the Internet to outsource work to a group of individuals.
Quite simply put, crowdsourcing leverages a global talent pool of independent contractors to help your business or startup augment what is available in your organisation and to get a more diverse set of skills. Often, this is at relatively low costs. An example would include how ice cream maker Ben & Jerry’s uses crowdsourcing to let residents in five US cities create their own locally-inspired flavours. Similarly, Amazon uses crowdsourced workers to create online catalogues.
Much of crowdsourcing spans tasks ranging from graphic design to IT services such as Web site creation, to crowd contests for data analysis and generating ideas to find possible solutions to complex problems.
The promises
Crowdsourcing works to the advantage of small and medium enterprises (SMEs) where resources are likely limited. Crowdsourcing can help with everything, from research & development of products and services to obtaining venture capital.
In the case of the former, Freelancer.com is a popular crowdsourcing site that connects businesses with over 7 million independent professionals globally, specialising in nearly 600 fields. The average job is completed for under US$200, making this a cost-effective service for businesses unable to justify the expense of hiring full time. Businesses can use such platforms to look for human resource to support their operations, which is particularly useful when budgets don’t allow the hiring of a dedicated headcount.
For the latter case, Kickstarter is a very good example of crowdfunding. Here, small outfits can get their projects crowdfunded by the public at large, in return for a tangible reward such as the initial run of the new product. Singapore-based startup Pirate3D, for instance, raised its target of US$100,000 in just 10 minutes for its affordable 3D printer product, and has since gone beyond eight times its original target.
Crowdsourcing also reduces the hassle of manually approaching multiple vendors, freeing up businesses to focus on more important things. Crowdsourcing platforms such as DesignCrowd or 99Designs creates an open marketplace where designers can compete and tender for projects, giving businesses more choices and more competitive pricing. The service also allows customers to launch contests for a variety of design work, from blog templates to t-shirts. To top it off, unhappy clients can opt for a full refund, which means business interests are protected.
In tapping the collective wisdom of the crowd, ideas are co-created. Businesses get a wide range of solutions and information beyond their in-house team.
Potential pitfalls
Crowdsourcing does bring its share of likely drawbacks.
- · Collaboration can prove difficult between crowd members who may try to exert their influence on the project or even sabotage it. For instance, Mountain Dew’s efforts to crowdsource the name of a soda drink last year was hijacked and rigged to show a list of controversial names.
- There is also a risk that the quality of the work is not what is expected. In some crowdsourcing cases, such as the Ben & Jerry’s example, there’s no contract since this is based on a loose, ad-hoc relationship between the business and crowdsourced contributors.
- · Crowdsourced contributors can disappear at any time, and intellectual property rights may be hard to protect since ideas are open.
- · There is also the possibility of idea theft, where contestants in crowdsourcing competitions have been known to deliberately submit ideas they copied or plagiarised. This could easily lead to legal risks involving intellectual property infringement.
- · Disputes among crowdsourced contributors, too, could be a marketing risk for businesses.
Business owners should also note that not everything can be crowdsourced. If it is a complicated project or R&D product that your company doesn’t want leaked, crowdsourcing may not be an option.
How to get started
Still, this is a trend that keeps growing. Crowdsourcing.org founder Carl Esposti did a study in 2012 which found that start-ups and small businesses make up 80 percent of crowdsourcing clients, accounting for 60 percent of crowdsourcing revenue.
The benefits of crowdsourcing are numerous and can be cost-effective as long as SMEs take heed of the pitfalls. To get started, if your business has a specific task to crowdsource:
- First clearly define the outcome desired so your business will know if the crowdsourced solution measures up.
- Next, find the crowdsourcing service that is right for your business. Resources such as Yahoo Answers and Linkedin Answers can help businesses get answers from the community at large, as well as provide feedback on the crowdsourced service you may want.
- From there, you may judge for yourself whether the solutions you get are the best or most relevant ones for your business.
So how do you think crowdsourcing can help your business? Do you have any crowdsourcing experiences to share with other enterprises?