The Context of Crowdsourcing: Start-up vs. Existing organisation
Since Jeff Howe coined the term “Crowdsourcing” in 2006, there has been a lot of buzz about the subject and its promising potential. Despite many examples of crowdsourcing projects – some more successful than others – I have found it very difficult though to apply the concept in my day to day business development activities.
The concept as such is rather straight forward: When you crowdsource a task, you take a job traditionally performed by an employee or contractor, and outsource it to an undefined, generally large group of people in the form of an open call. Leading initiatives have applied crowdsourcing to tasks as solving technology problems, designing new logos, developing (software) products, contributing videos, finding gold, and even predicting the future.
With all these success stories, of course you want to apply crowdsourcing yourself or at least consider it. To start with, I have found it important to understand the difference between:
1. Start-ups using crowdsourcing as their core business model: f.e. YouTube, Threadless…
2. Existing organisations applying crowdsourcing to a specific job: f.e. P&G posting R&D challenges on Innocentive or Goldcorp crowdsourcing the search for gold resources.
So the first step is to define the context. Do you want to use crowdsourcing as a business model for a start-up or new business unit? Or do you want to review specific tasks within an existing organisation (marketing, distribution, R&D challenges…), and redefine the optimal way of performing the task: inhouse, partnership, outsourced, or by crowdsourcing?
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March 11th, 2009 at 13:58
In my master thesis project on crowdsourcing, I also searched for differences between crowdsourcing examples. I have used a different perspective that in my view can explain the differences between the examples in a more useful way.
You ask: “do you want to use crowdsourcing as a business model for a start-up or new business unit?” In my view, there another question that needs to be answered, namely ‘which business model should be used?’. I have found that crowdsourcing is not one business model, but a collection of business models. Categorizing the examples according to the way crowdsourcing is used (instead of the type of task or the type of organization) can help to better understand the possibilities of crowdsourcing. Because: Is Threadless, which uses the crowd for its own purposes, that different from 99designs, where other companies are the ones to directly benefit from the crowd? Or is openstreetmap, which uses crowdsourcing as their core business model, that different from TomTom, which uses crowdsourcing complementary to their other activities? And how are they different from YouTube or Wikipedia, where the crowd is also used to produce content?
In my thesis, I have used the work of Jeff Howe as a basis for my classification, but adapted it such that the crowdsourcing types would represent different ways of using the crowd, representing different business models.
1. Crowdcasting, in which a particular challenge is broadcasted to the crowd, generally organized as a competition with a financial reward. InnoCentive, Threadless, 99designs, and GoldCorp all belong to this type.
2. Crowdstorming, which involves an online brainstorming session, where interaction between participants is important. In many cases, this involves a company asking the crowd for ideas. An example of this type is Dell’s IdeaStorm.
3. Crowd production, in which the crowd produces content for a website or database. Typical examples of this type are Wikipedia and iStockPhoto.
4. Crowdfunding, where instead of the spare time, abilities and knowledge of the crowd, their spare money is used. Examples are Sellaband, MyFootballClub and Kiva.
Although variations within these types are possible, I think this classification provides a useful perspective for analysing existing examples and possible applications for existing companies.
March 11th, 2009 at 16:51
Simone,
Is there anyway we can come in contact and for me to read your thesis?
I’m currently working on my Bsc thesis Human Technology on the implementation of an open innovation platform for small and middle sized businesses.
The company that serves as a case for my research has the highest quality standards and wants to ‘co-create’ with there customers and be totaly open about there products and methods.
I would be very interested in your view and work in this area.
you can reach me by sending a mail to info (at) joom dot nl. (Hope this keeps the spammers away)
Hope to hear from you,
Peter B.
March 18th, 2009 at 09:22
Dear Simone,
At this moment I started writing my masterthesis on your second point: Crowdstorming, to let the crowd give suggestions to organizations how to improve business and interact with employees of an organization to improve interaction and diversity of opinions,to come to more creative ideas.
I would be very interested in reading your thesis.
please contact me at arjen_brasz AT hotmail DOT com
June 30th, 2009 at 14:49
Great discussion. Sorry I did not see it when current.
If Peter, Arjen or Simone are interested in a discussion it would be my pleasure.
John Delaney
CEO
Intrade