In June I was attending the SaaStr Europa conference and I met with a lot of talented entrepreneurs who are trying to change the world by building better products and services.
When I was explaining to them what Braineet is doing, one thing struck me: every person I met had a different view on what crowdsourcing is.
Some even mistook it for crowdfunding or micro-tasking.
Well, if crowdfunding and micro-tasking are some forms of crowdsourcing, they are far from representing everything crowdsourcing has to offer.
So in this post, I’ll explain what crowdsourcing really is and run you through some of the key things you need to know before you open up the discussion to your fans and customers.
Crowdsourcing: a quick definition
Crowdsourcing involves seeking knowledge, goods, or services from a large body of people. These people submit their ideas in response to online requests made either through social media, smartphone apps, or dedicated crowdsourcing platforms.
Some of those involved in crowdsourcing are paid freelancers, but depending on the nature of the knowledge or services requested, most people perform these tasks on a voluntary basis.
A great example of crowdsourcing is online reviews. If you’ve ever reviewed a restaurant, gym, or bar on Google, congratulations! You’re a productive crowdsourcing contributor.
A brief history of crowdsourcing
Businesses, governments, and public organizations have always turned to crowds for great new ideas for products and services.
In 1714, for example, the British government offered a hefty £20,000 reward (almost £3 million in today’s dollars) for anyone who could invent a valid, dependable way to measure longitude at sea, which eventually went to watchmaker John Harrison.
In today’s digital age, our ability to communicate with many minds on a mass scale has made it a lot easier to turn to large groups of people for innovative new ideas.
As noted by author Jeff Howe in his influential 2006 Wired article ‘The Rise of Crowdsourcing’, people from all sectors use crowdsourcing to find great ideas, content, and inspiration for projects. This includes business professionals, artists, scientists, engineers, and more.
In his book Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business, Howe explores some of the modern ways people are turning to large groups of people for their next source of inspiration. This includes simple ideas like iStockphoto offering a bank of stock photographs, through to InnoCentive, a portal for engineering, scientific, and technical solutions.
Now, crowdsourcing can take a lot of different forms. Many companies and organizations use dedicated crowdsourcing sites like 99designs or Fiverr to find solutions to niche tasks like graphic design, proofreading, or software testing.
Elsewhere, businesses look to social media platforms like Twitter, Facebook, and Instagram to gather ideas for new products and services. This kind of collective mobilization helps to drive engagement with fans and customers, and also serves to improve business performance.
Even large tech companies like Google and Apple use crowdsourcing as well. For example, Google’s Crowdsourcing app lets its community of users contribute solutions and fixes to common problems with Google products and services.
Different types of crowdsourcing
Crowdsourcing can be used to find solutions to all kinds of tasks. This includes small things like a band asking its fans which cities they should play on their next tour, to ambitious projects like genetic researchers asking for help in sequencing the human genome.
The breadth and diversity of social media also offer huge potential for crowdsourcing, such as the Obama administration using Twitter to canvas questions for town hall debates, and football clubs asking fans to vote for the team’s starting lineup ahead of each match.
Crowdsourcing can also take the form of ideas competitions such as Ideas for Action, a forum for students and young professionals to submit solutions to global innovation challenges.
Hackathons are another popular form of crowdsourcing, often hosted by tech companies to find inventive solutions to challenging problems.
And let’s not forget perhaps the most prominent modern example of crowdsourcing: Wikipedia, the user-moderated online encyclopedia.
Crowdsourcing vs. outsourcing
Jeff Howe’s use of the word “crowdsourcing” is a clever combination of the words ‘crowd’ and ‘outsourcing’. However, crowdsourcing and outsourcing aren’t the same things:
- When a business or organization uses crowdsourcing to find a solution to a problem, they are turning to a non-specified public group (e.g. Twitter users)
- By contrast, outsourcing a problem involves handing something off to a defined person or group (e.g. outsourcing work using Amazon’s Mechanical Turk platform)
Outsourcing is commonly used in the scientific, engineering, or technical community to complete highly specialized tasks over a large number of qualified participants. This includes MIT’s Climate CoLab, the Human Genome Project, or DNA collection portal DNA.LAND.
Crowdsourcing vs. open-source
The term ‘open-source’ refers specifically to software for which the original source code is made available to any interested party. A great example of this is Mozilla Firefox, a web browser developed by thousands of global, not-for-profit contributors.
Crowdsourcing a project isn’t the same as making a project open-source. That’s because even when a company sources an idea from a large pool of people, it still retains control.
For companies, making something open-source is a great way to progress microtasking projects. However, this also involves a hands-off approach to ownership and isn’t appropriate for projects involving valuable intellectual property.
Crowdsourcing vs. crowdfunding
Crowdfunding is a type of crowdsourcing where individuals pledge money toward an idea at the concept or pre-production stage. This means consumers are backing an idea before it becomes available, funding its development through crowdfunding sites like Kickstarter and Indiegogo.
While some crowdsourcing involves crowdfunding, most forms of crowdsourcing don’t involve the question of funding at all. Instead, crowdsourcing simply asks a wide group of people to contribute their knowledge and expertise in solving a problem.
A few crowdsourcing basics
While the concept of crowdsourcing may be simple, finding great ideas and solutions isn’t as easy as just asking customers and fans for their best ideas.
After all, nobody wants to give away their valuable knowledge and expertise for free. There has to be a clear incentive in place, such as a financial incentive (either a cash prize or a share of eventual sales) or professional recognition.
To be effective, a crowdsourcing project also needs:
- A well-defined scope – respondents need to know exactly what is required in terms of a suggested idea or solution
- Comprehensive background information – respondents may need access to technical data before they can make a submission
- A clear preferred format for submissions
- A defined deadline for submissions
You also need to decide whether you want to target a large group of people (e.g. through big public social networks like facebook or twitter) or a specific group with highly-developed skills and experience (e.g. through specific platforms like 99designs with targeted designers).
A specialized crowdsourcing platform can help to structure this process and guide interactions between the organization or business seeking input, and those looking to provide it.
What are the advantages of crowdsourcing?
Everyone knows two minds are better than one when it comes to solving problems.
Even better than two minds? 10,000 minds.
By turning a question over to a wide talent pool, companies can gain access to amazing suggestions for a new product or service, or for a new solution to a challenging problem.
Not only does this help with problem-solving, but it also allows groups to feel connected to companies and organizations. Building this community of contributors can have huge benefits in terms of marketing, brand visibility, and customer loyalty.
Crowdsourcing offers a lot of other advantages, too:
- Lower costs: While winning ideas should definitely be rewarded, offering these rewards is usually a lot cheaper than formally hiring people to solve problems.
- Greater speed: Harnessing a wider pool of people can speed up the problem-solving process, especially when completing a large number of small tasks in real-time.
- More diversity: Some companies (especially smaller companies) may not have a lot of internal diversity. By crowdsourcing ideas, they can benefit from others with different backgrounds, values, and life experiences.
- Marketing and media coverage: Crowdsourcing can be an excellent and cost-effective source of marketing and media coverage, as seen in the examples of My Starbucks Idea and Lego Ideas.
Even with all of these advantages, you need to decide if crowdsourcing is right for your project.
Is crowdsourcing the right move for you?
Not every project is well-suited for crowdsourcing.
If you’re dealing with a sensitive problem, or a project involving a lot of valuable intellectual property, crowdsourcing may be one step too far. Although these problems may still benefit from collective intelligence, they may not be appropriate to turn over to a crowd.
While crowdsourcing is a powerful way to unlock innovation, it involves a lack of control – especially when involving online communities. Unless you oversee these projects closely, they can turn into PR liabilities and can threaten brand reputation.
Also, bear in mind that once you turn a question or problem over to a crowd, you may be stuck with a less than ideal solution. Just consider the colorful examples of Boaty McBoatface, or the crowdsourced concert itinerary sending Justin Bieber to North Korea.
Crowdsourcing examples: How companies can get it right
As always, the best way to learn how to do something is to see how the market leaders are doing it. Crowdsourcing is no exception.
Luckily, there are some great examples out there of companies using crowdsourcing to seek cutting-edge ideas from customers and fans:
- DeWalt: DeWalt’s Insight Community provides a way for the company’s fans and customers to contribute to the product development cycle, and has resulted in popular innovations like an expanded range of cordless hammer drills.
- Unilever: Launched in 2010, Unilever’s Open Innovation platform poses technical problems to the public, seeking input on things like smart packaging and cooling systems. Now, the company receives thousands of helpful responses each year.
- DHL: DHL’s Innovation Centers offer a way for the courier company’s customers to contribute ideas for improved systems and technology, such as drone delivery technology and remote navigation tools.
These examples of crowdsourcing show the different ways companies can find solutions to complex and challenging problems and the ingenuity of the communities working on these solutions.
Put the wisdom of crowds to work
As we’ve seen, crowdsourcing is a powerful way for businesses and organizations of all kinds to find valuable ideas and solutions to tough problems.
By putting many minds together, crowdsourcing lets companies leverage a wider and more diverse pool of creative talent. Whether this is with the aim of finding product range suggestions or breaking down complex projects into microtasks, crowdsourcing is a fast way to find ideas.
Not every project is suitable for crowdsourcing, however. If you’re managing a sensitive process involving valuable intellectual property, or if you’re working in an area prone to PR risk, you should think twice before involving a wide group of people.
If you can get this right, however, you might find the next million-dollar idea in the crowd.