What Is Crowdsourcing? Here's How It Works 💡

  • Marketing
Contra Tips
· 6 min read

Learn all about crowdsourcing, including how it can benefit your business, the different types, pros and cons, and helpful insights and examples.

Tapping into the collective power of many can redefine the trajectory of your business. Welcome to the world of crowdsourcing — a strategy where collaboration meets innovation. 

In this guide, we’ll look at the powerful crowdsourcing approach, including what it is, the different types, and pros and cons. Whether you're just beginning to consider crowdsourcing or looking to refine your approach, we’ll empower you with the tools and knowledge needed to leverage the masses and bolster your business success.

What is crowdsourcing? 🧐

Crowdsourcing capitalizes on the collective intelligence and diverse expertise of a crowd –– often involving tasks like problem-solving, data collection, or idea generation –– and can be used in various sectors, from business to arts to research. By tapping into a vast pool of perspectives and skills, organizations can foster innovation, speed up processes, and address challenges more effectively. 

How does crowdsourcing work? 🤔

Crowdsourcing involves identifying a challenge and presenting it to the public, often via online platforms, in the form of an open call. Rather than entrusting the entire task to a single entity, it breaks down the challenge into smaller, digestible parts. Multiple participants then contribute, bringing diverse perspectives and expertise to address these parts or propose solutions to the primary challenge.

Once the crowd submits their ideas or completes the tasks, the organizer reviews and selects the best outputs. Depending on the crowdsourcing platform, contributors might receive rewards ranging from monetary compensation to recognition. Ultimately, the collated solutions or data are integrated into the organizer's operations, allowing businesses to benefit from a breadth of expertise and accelerate task completion.

Types of crowdsourcing 🥳

Crowdsourcing is not a one-size-fits-all approach. Its versatility makes it applicable in various forms, each tailored to address unique challenges and objectives. Here, we'll dive into a few predominant types of crowdsourcing and understand how each functions: 

  • Microtasking: This involves breaking down a large job into microtasks that can be distributed to many people.
  • Crowdfunding: In this popular method, individuals or entities solicit funds for projects or ventures from the public. Platforms like Kickstarter or Indiegogo allow creators to raise capital by showcasing their ideas and gathering financial support from backers.
  • Crowd wisdom: This concept stems from the belief that collective knowledge of a group leads to better decision-making than an individual. Businesses seek the opinions and input from large groups of people.  
  • Crowd voting: This method leverages a crowd’s collective opinion to make decisions, rank options, or determine the popularity of an idea or product. 
  • Crowd contest: Here, organizations pose challenges or competitions to the public to create something. A crowdsource contest example is a graphic design task where the winner will be paid for producing the best design.

Pros and cons of crowdsourcing 🎭

While crowdsourcing presents a promising avenue for businesses to tap into the collective wisdom and skills of the masses, it's not without challenges. Make an informed decision by exploring both the advantages and potential pitfalls of a crowdsourcing strategy. Here are a few:

Pros 👍

  • Cost-efficiency: Crowdsourcing is often more cost-effective than traditional methods, especially when dealing with large-scale tasks that can be broken down into smaller units.
  • Diverse input: Crowdsourcing opens doors to a broad spectrum of ideas, insights, and experiences. This diversity can lead to more innovative solutions and approaches.
  • Flexibility and scalability: With a vast pool of contributors available, businesses can scale their efforts up or down based on the project's requirements.
  • Rapid results: Tapping into a large group means businesses can concurrently perform tasks, often resulting in quicker outcomes.

Cons 👎

  • Quality control: With a diverse group working on tasks, maintaining consistent quality can be a challenge.
  • Security concerns: Sharing projects or data with a large group can sometimes lead to confidentiality or intellectual property issues.
  • Management complexity: Coordinating and managing a massive group of contributors can be logistically challenging.
  • Potential for exploitation: There's a fine line between cost-saving and undercompensating. Businesses must treat participants fairly.

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Crowdsourcing examples 💯

From driving innovation to solving complex problems, companies and organizations have tapped into crowdsourcing to achieve remarkable outcomes. Here are a few real-world examples to check out: 

  • Wikipedia: Perhaps the most well-known example of crowdsourcing, Wikipedia is a free online encyclopedia created by volunteers worldwide. Instead of a limited team of experts, the platform allows anyone to edit and contribute, resulting in a vast and continually updated knowledge base.
  • LEGO Ideas: LEGO fans can submit their unique design concepts on this platform. The community then votes on these designs, and popular ideas are turned into actual LEGO sets, with the original designer receiving credit and sales share.
  • Duolingo: This language-learning app gathers data from its millions of users to refine and improve its exercises. As users translate sentences or correct them, Duolingo uses this feedback to enhance its teaching methods.

Tips and tricks to consider 📝

Harnessing the crowd’s power can be a transformative strategy, but conducting the process wisely to reap the maximum benefits is essential. Here are a few tailored pointers to ensure a smooth and effective experience:

  • Clearly define objectives and guidelines: Before diving into crowdsourcing, identify your goals. Whether innovative ideas, feedback, or specific tasks, a well-outlined objective will guide the process and keep everything streamlined.
  • Learn how to track and measure results: Prioritize quality over quantity. Employ robust analytics and tracking mechanisms to evaluate the outcomes. This helps identify the best contributions and refines your crowdsourcing approach for future endeavors. 
  • Provide value to participants: The more engaged your contributors are, the better the results. Offer feedback, incentives, or even simple acknowledgments to keep the crowd motivated and invested in your project.

Crowdsourcing vs. crowdfunding: The key differences 🔐

While both crowdsourcing and crowdfunding rely on the "power of the crowd," they’re distinct concepts.

Crowdsourcing helps businesses or individuals gather input, services, ideas, or content by seeking contributions from a large group of people, especially an online community. This involves harnessing collective intelligence to solve problems, innovate, or achieve specific tasks.

Crowdfunding, on the other hand, is a method of raising capital or funds for a project or cause from a large group of people, primarily through online platforms. Instead of seeking large sums from a few investors, crowdfunding campaigns typically collect smaller amounts of money from a vast number of supporters –– for example, an artist seeking funds on platforms like Kickstarter or Indiegogo to produce a music album.

Hire the best with Contra 🤩 

In the age of interconnectedness, leveraging collective intelligence through crowdsourcing can redefine business solutions and innovations. But while it's beneficial to tap into the wisdom of the masses, there's also unparalleled value in hiring specialized talent for precise business needs. That's where Contra can help. 

If you're a client on the hunt for expertise, delve into Contra's diverse pool of Independents. Join Contra for Clients, discover professionals who can align perfectly with your business vision, and drive transformative results. Also, the Contra Blog offers advice on an array of topics, like working with Independents, running a marketing agency, contracting out your tasks, and more.

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