What Is Crowdsourcing & How Does Crowdsourcing Work?

What Is Crowdsourcing?

The idea for the term came about in 2005 when Jeff Howe and Mark Robinson were discussing the new directions that businesses were taking particularly how companies were leveraging the power of the internet in order to solve issues using the public community rather than relying on their internal workforce to do so. After concluding that businesses were “outsourcing to the crowd”, they came out with a Wired Magazine article in June 2006 titled “The Rise of Crowdsourcing”, shortly after the article was published, the term took off and the rest is history.

So how does crowdsourcing work?

According to Jeff Howe, the “father” of the term, crowdsourcing is “when a company takes a job that was once performed by employees and outsources it in a form of an open call to a large, undefined group of people generally using the internet.” It’s an organizational method that helps businesses increase their value and visibility by involving large groups of users outside of the company’s boundaries. With the level of connectivity that we have today, reaching out to a global network of people who are willing to participate in a venture is increasingly possible.

The scope of a business’s ability to perform at today’s competitive levels becomes vastly narrowed, especially at a time when social media is so prevalent. Customers and peers want to be connected they want to feel like they are included and that their voice has an impact, and crowdsourcing is the answer to that. With traditional business logic, a company is only able to work with “what it’s got” at any moment in time, and it must utilize those limited resources to the best of its ability, meaning overtime and new hires—easy ways to eat away at a budget. The challenge in this method is that companies can only tap into their current employees or new potentials that have physical proximity to the business itself. It’s these inflexibilities that really limit the movement and momentum that businesses need in order to deliver the best products and services possible.

When a business embraces the concept of crowdsourcing, it gives them the flexibility and reach that they need in order to find the best solutions to problems that they’re trying to solve. There are experts in every industry all over the world, and with a business method like crowdsourcing, companies have the ability to tap into this global pool of resources in order to aggregate information, find solutions to problems, enhance audience participation, increase brand awareness, and so on.

As the crowdsourcing industry has grown more popular, Crowdsourcing Networks have popped up, seeing an opportunity to capitalize on the need for a facilitator of sorts, between the freelancers, and the companies looking to the crowd for help. It is very important that these networks have the ability to handle mass payments effectively to the many freelancers that they have to disburse funds to. Depending on their operations, crowdsourcing networks can accumulate up to thousands of freelancers at any given time. Paying all of these freelancers can get complicated as there are different documents, rules and regulations, taxes, and payment methods that a business needs to manage in order to make the proper payouts to their freelancers in a timely, accurate, and professional fashion. If not, their freelancers will be less satisfied with their service and may choose to take their services to another crowdsourcing network.

With that said, what makes crowdsourcing so powerful is that the public actively and voluntarily participates in unearthing solutions to a company’s problems. Startup companies, in particular, tend to utilize crowdsourcing for help with creativity, innovation, communication, investments, and content. When a wide net can be cast in the direction of experts and thinkers who enjoy participating in crowdsourcing, amazing things can happen. In fact, the individuals who actively participate in crowdsourcing can influence research and development, the discovery of new ideas and concepts, the development of new products, software, and services, and even a company’s culture and their relationship with their customers.

These are revolutionary times, and businesses need to learn how to adapt in order to remain successful in the ever-evolving modern world. With so many people participating in crowdsourcing, the success lies in a company’s ability to manage the participation at hand.

Some of the largest corporations in the world also practice crowdsourcing and have discovered a good deal of their future products through the use of crowdsourcing. For example, P&G, Dell, and Starbucks all participate in crowdsourcing. After all, the audience that participates is likely full of loyal customers that know the company’s products or services on an intimate level. It would be wise to listen to what the voice of your audience is saying.

There are many different kinds of crowdsourcing. The many different platforms, including YouTube, Facebook, Twitter, and Pinterest, give companies opportunities to promote their brand, attract new customers, discover talented people in various sectors, share new thoughts, interact with visitors, and increase value. There’s a lot to learn about crowdsourcing and businesses must explore how they can tap into this innovative trend to help their company grow.