Although the term was created simply by adding two well-known words, crowd and outsourcing, it was given a much more complex meaning than it may seem at first sight. Crowdsourcing, as well as the process or model it denotes, has become a smart reaction to all those challenges global businesses had to face.
In order todetermine which advantages this business tendency has,we are going to make out what on earth crowdsourcing is and why it has recently come into so sharp focus.
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Definition
In a nutshell, crowdsourcing is a specific type of online activity which involves different people into one project, initiated and controlled either by an organization or by an individual.
With the help of remote access the participants can work on the project simultaneously in different corners of the world. The tasks can be completed either be a group of specialists or by each participant solely.
Four Main Types of Crowdsourcing
The authors of the term are Jeff Howe and Mark Robinson, who were editors at Wired, one of well-known monthly magazines in the US. However, most online sources attribute it only to Jeff Howe.
Actually, they both used the word crowdsourcing in 2005 to define the process of outsourcing a certain part of work “to the crowd” via the Internet. In 2006 Jeff Howe published an article,The Rise of Crowdsourcing, in which he introduced the new word to the public.
In his book, Crowdsourcing (2008), he described four types of this tendency:
- Crowd Creation: you are not likely to care whether the person who writes content for your start-up website has a Master Degree in English Language if the work is always done flawlessly. And that is the thing. In the Internet no one knows who you are in real life, and this is what gives freedom to crowd creative thinking and boosts problem solving.
- Crowd Funding: it is often used by artists, musicians, charities, start-uppers or budding researchers to collect the necessary sum of money for their projects. Donors are usually offered some nice rewards.
- Crowd Voting: as the name suggests, Internet users “vote” for different kinds of online content (articles, images, videos) by following links or just by viewing web pages. This helps filter the target content and rank it. Even Google’s search engineis built on this principle.
- Crowd Wisdom:however incredible it may sound, but it is proved that the crowd can solve a problem or make a highly probable forecast in a faster and more effective way, hence outperforming a concentrated group of employers. That is why “crowd wisdom” is a good strategy of successful project management.
Some Prehistory
Although the word to denote this phenomenon appeared only in the beginning of the 21st century, the world history can easily set a few bright examples of crowdsourcing activity of the 20th, 19th and even 18th centuries. Let us take a quick look at them!
- In 1783 the last King of France, Louis XVI, encouraged brainy volunteers to come up with the most economical method of decomposing sea salt to get an alkali and thusease its shortages in manufacture.
- In 1884, after 800 volunteers collected and catalogued thousands of English words, the very first fascicle of the English Oxford Dictionarysaw the daylight.
- In 1957 a Danish architect, Jørn Utzon, was awarded the first prize of £5,000for his drawings of the Sydney Opera House, which is nowadays easily recognized by its original shape.
More Detailed Look at the Features of Crowdsourcing
These days crowdsourcing is becoming a worthy successor of outsourcing,which was the right solution for the challenges of 2000s. However, the time of outsourcing has gone, so it has to give place to the more progressive model.
And here are the main reasons why.
- Crowdsourcing can help your business cut costs.The Everest Group, the management consulting and research firm headquartered in Dallas, Texas, reported that companied could save about 70% of operating costs if they chose crowdsourcing. Indeed, you do not need to rent an office somewhere overseas to seat all your employees there. That is why the cost of rent is not included into the price for your products or services, making it lower and thus more attractive for customers.
- It guarantees transparency of all transaction data, conducted through a single platform. This advantage is closely connected with the principle of Crowd Voting: with real-users’ reviews and verified interactions it gets easier and fairer to reward really worthy producers or providers and identify the black sheep.
- You do not need to look for talented peopleand teach them things they should understand. They will find you! Because they already know what you want them to know. What is more, they will come from all over the world and bring their innovative ideas. It does not matter if they finished that Computer Science course or where they studied Japanese. The most important thing is that their knowledge and skills can contribute to the development of your project.
- It is a free marketing tool to promote your ecommerce business. Facebook, Instagram and Twitter can become great helpers in creating folk’s awareness of your website, brand and products (or services).
- So, it engages your potential customers,making them aware about and loyal to your brand.Also, crowdsourcing helps you establish communication with them: your customers can evaluate your products, offer improvements, share their reviews and so on.
But Is Everything Really So Cloudless?
Of course, the coin of crowdsourcing has the other side. Here are some challenges you should take into consideration.
- Management of a crowdsourced business can be a really costly and time-consuming thing until all wanted specialists are found and given tasks.
- In the cases when users can deal with one another directly, fairness of marketplace can appear to be quite questionable.
- However, the main risks come from the human factor: whether you like it or not, crowdsource members are people with different level of professionalism as well as with different motivation. Some guys may generate revolutionary ideas on a regular basis and work 24/7, while others may just disappear once they decide your task is not interesting for them.
Great Examples of Successful Non-Profits and Businesses Powered by Crowdsourcing
Check out the list of the world’s most successful projects, companies and organizations that have benefited from crowdsourcing.
- These is no need to introduce this volunteers-based online source to you.
- Greenpeace crowdsource their activists for different campaigns.
- The Waze app is supported by users themselves, as they can report traffic jams, while the app chooses the best route.
- Samsung collaborates with other companies and just interested people to find innovative ideas for their products.
- Starbucks uses different social media to engage consumers to view and discuss their ideas together with the guys from Starbucks departments.