Biz Basics – What is Crowdsourcing !

crowdsourceMany of you might have heard about crowdsourcing and for many this might be the first time. Its not a rocket science to understand it but if successfully implemented in business it definitely holds Rocket profits. Let me try to explain you the origin and rationale behind Crowdsourcing and the opportunity it holds.

Crowdsourcing as termed by Jeff Howe back in 2006 in one of his articles in Wired magazine. In his words Crowdsourcing is “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call”.

Didn’t get it? Let me explain in simpler terms. Crowdsourcing is a way to tap the power of masses. Rather than getting a task done by your employees or getting it outsourced, you can ask the masses to do it. Although here the people working on your request increase, the cost of doing the same decreases. We always want new business ideas and ways we can develop our products and when it comes at dirt cheap prices, isn’t it worth  a shot.

Crowdsourcing is not a new phenomenon many a times we saw contests hosted by companies to award people who can design a cool logo for them or give a whacky /name/tagline/etc. The final award winners will be 1 or max 3. But in this process the company gets cool new ideas too and that is free of cost.

Let me take a very down to earth example, recently LG has crowdsourced (assume this as throwing up a competition) to get its next mobile phone model designed. This event was called “Design the Future”. The final chosen design will be paid a whooping 20,000 $. The overall prizes will cost LG 75,000$ and above (some LG phones up for grabs). If this clicks well, This would be a good case study in days to come. (And if you read such case study couple of months later, remember you read this first on BizDharma.com) May be the number of entries that LG has received might not justify the prizes thrown but it has given a lot of extra value to the brand. Just search for LG and crowdsourcing and see the tons of articles. Again if LG gets good and I mean really good number of entries though there would be just 43 winner LG in turn will get many ideas and that too free of Cost !

There are sites where you can ask a sea of heads to get some stuff done. They will toil harder to make that extra buck and give you tens of options. Though a thing to remember is that, this business model has not completely established and is implemented in various ways across the web. You can get stock photos, data entry, daily chores and even your research work done in pennies. Don’t you than think Crowdsourcing then is a big thing? So, do your companies have a CrowdSourcing plan in place? The Internet biggie Amazon too has a website for providing field for Crowdsourcing. Go checkout Mechanical Turk for yourself.

New social media and Internet is connecting every hook and corner of this world. And companies shouldn’t do this grave mistake of assuming this just a business jargon! The competition has already risen for the end designer/developer/whoever and this is not going to settle pretty soon. We will definitely be looking new ways of implementing this concept.

“What makes eBay successful.. the real value and the real power at eBay is the community. It’s the buyers and sellers coming together and forming a marketplace.” — Pierre Omidyar

(source woopidoo.com)

Though have inserted quiet a few links, I am looking forward to share more understanding of Crowdsourcing and new insights that I have gained reading about it. Rather even share a list of such platforms available. Hope to catch up with you soon on that. By that time you can read more on
Wikipedia
or catch the orignal article by Jeff Howe.

In case if you have any query understanding Crowdsourcing, feel free to fire here in the comment box.

I will be in Pune for attending the Blog Camp Pune 2009, if you are around feel free to connect… Keep reading, Keep sharing ! 


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sonia george June 30, 2009 at 6:40 am

Gud one .. got to know abt crowdsourcing :)

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