ImpactWatch Blog

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Crowdsourcing – harnessing the collective intellect of a community – can be a highly effective and inexpensive solution for fulfilling an almost limitless variety of business needs.

There are two strategies to employ crowds for your business:

1. Find an existing community. Besides the dozens of crowdsourcing websites dedicated to building collaboration networks, businesses can also turn to non-specialized crowds, like social networking sites, to gather information and feedback.

2. Create a community. Large corporations and organizations dedicated to long-term crowdsourcing initiatives often build their own specialized crowd communities to address their specific goals.

Companies use crowdsourcing in almost every function of business. Below are some examples both of companies that have created their own crowd communities and of organizations that bring together crowds to work with client companies.

Payments to crowd members for their contributions can range from a few cents for simple tasks to six-figure sums for developing new products. Other crowds are compensated for their time with prizes, products or just the satisfaction of contributing.

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1. Idea generation – Dell’s launched it’s Ideastorm site in 2007 to allow the public to suggest new product ideas and improvements to existing Dell products. User comments led Dell to release 3 computer systems with a Linux offering within 3 months of Ideastorm’s launch. IdeaScale also allows users to submit ideas to be commented and voted upon by the community.

2. Product Development: Acclaim’s Project Top Secret is a forum for the collaborative development of a new video game. Contributors earn prizes and receive design credit. Crowdspirit joins crowd members with internal product development teams from client companies.

3. R&D: Eli Lilly’s InnoCentive and Ninesigma crowdsource scientists and researchers to propose solutions to client challenges.

4. Forecasting: Google, Eli Lilly and Hewlett Packard have all created crowdsourced decision markets for revenue prediction. FreeRisk is a developing site that aims to create a free repository of risk-modeling tools and data. Inkling allows companies to engage their employees, peers, and customers to improve forecasting, predict corporate metrics and identify opportunities for innovation. Trendwatching employs a crowd of 8k to identify emerging consumer trends.

5. Advertising/Marketing: CreateAd facilitates “consumer-generated advertising” with a platform that allows companies to offer prizes for the best advertisements submitted. Marketing lends itself easily to the crowdsourcing concept. All marketers have an ultimate goal of having the customers do the marketing. Virtually all marketing tasks can be crowdsourced.

6. Customer support: Get Satisfaction creates a neutral forum for companies to support customers, exchange ideas, and get feedback about their products. SuggestionBox similarly allows the creation of a social community of customers to gather feedback and build customer relationships.

7. Sales/Funding: LeadVine works by allowing businesses to advertise for the type of sales leads they are interested in and offer a referral fee (from $50) for leads that convert to sales. Non-profits like Kiva have appealed to their community of micro-lenders to generate loans for entrepreneurs in developing countries.

8. Resource organization: iStockPhoto brings together a community of photographers who submit their work for purchase at prices far lower than traditional stock photo firms. Wikipedia relies on contributions from it’s community to aggregate and vet information.

9. Knowledge Tasks: This runs the gamut from general task lists like Amazon’s Mechanical Turk, to repetitive tasks such as Google’s Image Labeler, to skilled tasks such as GeniusRocket’s media creation offerings. There are scores, if not hundreds, of crowdsourcing communities built on completing tasks that can’t be performed by computers.

10. Testing Tasks: uTest, TopCoder and UserTesting.com all harness crowdsourcing to find qualified software testers for clients. Distributed Proofreaders created an open community of volunteers who proofread the digitized versions of public domain books.

There are a LOT more crowdsourcing companies and examples of organizations creating their own crowd communities. Here’s a big list of them  – and please feel welcome to tell me about others in the comments below.

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Some potential benefits of crowdsourcing:

1. Take advantage of a broader range of knowledge and expertise than would be possible through outsourcing to a small group or particular firm.

2. Reduce costs by employing volunteers or offering nominal pay for the completion of tasks.

3. Turn customers into partners and increase brand awareness by engaging the public in your business efforts.

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And some potential pitfalls:

1. Contributors lack a contractual connection to your company, possibly reducing their commitment to your goals and potentially creating legal issues such as intellectual property protection.

2. Managing a loose network of virtual collaborators can be challenging, often requiring substantial in-house managerial time to organize, interact with and motivate participants.

3. Quantity and quality of work is not guaranteed – results will depend on the dedication and expertise of the community. Additionally, contributed data must be organized, analyzed and reconciled with the objectives of the project.

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As always, each company needs to look at their individual objectives and find a solution that will best fit their needs. One possibility is to use existing communities as a jumping off point – learn the dynamics of crowds and how crowdsourcing fits your company – before attempting to develop a specialized community for your project.

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Photo courtesy of: Cyron

Tags: crowd community, crowdsourcing

This entry was posted on Tuesday, May 5th, 2009 at 3:41 pm and is filed under Resources. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.