What Is Crowdsourcing? 3 Benefits of Crowdsourcing

Crowdsourcing is a form of collective intelligence to gather information, goods, or services from a large group of people. Examples of crowdsourcing include online reviews of goods and services and real-time updates for traffic apps. Entrepreneurs can use crowdsourcing to gather feedback on new products to assess business models. Brands and influencers can use polling to engage followers on social media platforms.

Crowdsourcing has long served as a popular method for obtaining information and goods. In the 1700s, the British government offered a large cash reward for anyone who could create an effective tool to measure longitude at sea. The internet further changed crowdsourcing. In “The Rise of Crowdsourcing”—a 2006 Wired article—Jeff Howe explores how people gain inspiration from others through crowdsourcing platforms such as social media and online review sites.

Crowdsourcing can take a few different forms, including:

1. 1. Crowdfunding: Crowdfunding—a combination of “crowdsourcing” and “funding”—is raising capital for a cause or business venture by asking a large number of people to make small donations on a crowdfunding site. Individuals, small businesses, startups, and nonprofits all use crowdfunding platforms.
2. 2. Open source: Open source is by individuals for a community. Copyright holders release open-source software under license and grant users the rights to change, use, and distribute the software and its source code to anyone. Companies can customize open-source algorithms to progress micro-tasking projects.
3. 3. Outsourcing: Crowdsourcing involves communicating with a nonspecified group, such as all social media followers, while outsourcing means handing a small task or study off to a formal party, such as a consultant.

A company going through a rebrand might use crowdsourcing to find an artist to create a new graphic design identity for the company. Stakeholders might invite graphic design submissions or hold a visual design contest online. Stakeholders might also release the plans on social media as a form of engagement.

The online encyclopedia Wikipedia is another example of crowdsourcing. The public can edit and contribute content (which may go through a reviewal process) as they see fit to keep the information up to date.

Crowdsourcing can offer a company a host of benefits. Some advantages include:

1. 1. Access: Crowdsourcing can provide broader, immediate access to your audience’s thoughts. Coming up with ideas in an office with a few peers differs from asking your audience of thousands what they think. Crowdsourcing allows companies to hear directly from their base.
2. 2. Costs: Consultants can be expensive. Crowdsourcing is a highly affordable way to check the pulse of your business model.
3. 3. Visibility: Crowdsourcing can yield higher engagement rates, leading to viral content. Crowdsourcing can increase your company’s online visibility and make the brand more recognizable.

Crowdsourcing also has several drawbacks, such as:

1. 1. Few professional opinions: Crowdsourcing gifts companies with the public’s views, but the ideas from respondents may feel scattered or challenging to quantify. Setting up a clear feedback form helps streamline these efforts, but consultants will typically have a clear system for analyzing data.
2. 2. Lack of confidentiality: If you raise a question to an audience or voice a concern, you expose yourself to a large group of people without masking your needs. While transparency can be a positive attribute, it can also expose your weak points.
3. 3. Possibility of failure: Crowdsourcing is usually a low-cost endeavor, but sometimes crowdsourcing efforts can fail. This can become a challenge when dealing with time-sensitive issues.

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