Crowdsourcing is using many amateurs, often volunteers, to achieve business goals. Companies can benefit from the talent and imagination of fans and enthusiasts, resulting in richer variation at no direct cost. Crowdsourcing models include reaching out to existing communities, offering small prizes for solutions, and attracting content and ordering from users. This allows companies to profit from the work of a huge creative and technical population at a fraction of the cost of traditional business models.
Crowdsourcing is a term for a phenomenon that has existed in one form or another since the early days of the internet and before, but has only recently begun to realize its full potential. Crowdsourcing refers to using many amateurs to achieve the goals set for a business or organization.
While these amateurs might be paid a small fee, in many cases crowdsourcing relies primarily on volunteers. Usually these are fans or devotees of the product or service, or people who simply enjoy solving the kind of problems they are presented with. Large companies have realized in recent years that they can benefit enormously from using these huge reserves of talent and imagination, rather than limiting themselves to small groups of professionals.
One way crowdsourcing can work is to simply reach out to an existing community of fans or enthusiasts to come up with new ideas at no cost. Many RPG companies, for example, have used a crowdsourcing model for many years, coming up with new ideas for games and supplements by appealing to their fan communities. Rather than hiring a full-time team of a small number of creators, these companies can instead garner thousands of ideas from devoted fans, resulting in a much richer variation at no direct cost.
Another model for crowdsourcing is to use small prizes as an incentive for ideas from a large pool of ideas. An R&D wing of a company, for example, might post a glitch they’re having on a website. They might then offer a decent monetary reward for the best solution to this problem. Word of the contest will then spread through the ranks of those qualified to come up with a solution – in some cases companies keep lists of scientists on hand. The winner will then be paid for their work, and the company will have solved the problem much faster and cheaper than it could have done by paying its own R&D team.
Yet another type of crowdsourcing attracts content and ordering from its users. This allows a company to build an entire product line with essentially no manufacturing work on their part. Many online t-shirt companies follow this crowdsourcing model, with members uploading t-shirt designs, which other users then rate. The member who uploaded the design gets a portion of the profits and the company keeps the rest. This way they have no upfront outlay from paying designers and the content is quickly sorted and ranked by other users. This has been done with many quite profitable things on the internet including books, music and stock photography.
The term crowdsourcing was first coined in 2006 and it seems clear that unleashing its potential has only just begun. There is a huge creative and technical population in the world, many of whom have interesting ideas or skills, and crowdsourcing allows companies to profit from their work – often giving them healthy lives in return – at a fraction of the cost of a more traditional business model.
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