What Is Crowdsourcing?

Forms of online and in-person crowdsourcing used by businesses

Crowdsourced workers together in office space

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Crowdsourcing is the process of using many disparate individuals (the "crowd") to perform services or to generate ideas or content. As a practice, it has been around longer than the actual term, which dates back only to 2006.

How Did Crowdsourcing Start?

The concept of crowdsourcing is built on an early 20th-century theory sometimes referred to as the "wisdom of crowds." The idea is that a large group of people can collectively provide surprising insight or value as a workforce.

This is rooted in the example of British scientist Sir Francis Galton, who in 1907 asked more than 700 people at a county fair to guess the weight of an ox. No one individual guessed correctly, but the average of all the guesses provided a number almost identical to the ox's weight.

Who Uses Crowdsourcing?

Some businesses use crowdsourcing to accomplish specific tasks or generate ideas. While traditional outsourcing involves businesses choosing a specific contractor or freelancer for a job, crowdsourced work is spread across a large, often undefined group. Unlike a traditional business model, the people in these groups have no connection to each other or to the business aside from their crowdsourced input.

In addition to the completion of tasks, crowdsourcing can provide valuable data and insight into the actions of large groups of people. For example, knowing what information people look for in search engines or what videos they watch online can help businesses gauge public interest in their own content, products, and services.

In addition to businesses, small nonprofits or community organizations with limited budgets can use crowdsourcing to spread their messages or promote events.

Online Crowdsourcing

Since the practice of using many individual inputs to create a single common product came to be known as crowdsourcing, it has become popular on the internet. Online culture facilitates easy information sharing and efficient communication, both of which are key to crowdsourcing.

One common example of crowdsourcing is in software development. Many software programs, especially those that are available for free, are "open source." This means that the actual code is available for programmers to see and review, allowing them to make changes or additions to the software.

OpenOffice, which is a productivity suite compatible with Microsoft Office products, is one example of open-source software. Because it is developed through a form of crowdsourcing, it also is free to download and use.

Crowdsourcing Marketplaces

Many forms of crowdsourcing are a means of attracting free labor. By seeking input from the crowd, businesses or other organizations bypass the process of hiring someone to do the desired job. There are forms of crowdsourcing, though, that involve getting paid.

Crowdsourcing marketplaces on the web, also known as "micro-labor" sites, provide opportunities for groups of people to perform tasks or "micro-jobs" for small fees. Crowdsourcing websites put out open calls on behalf of clients who need microtasks performed. For example, Amazon’s Mechanical Turk offers virtual tasks that can be done online from home, and TaskRabbit connects people to complete virtual tasks in addition to running errands or doing odd jobs in person.

Microworkers on these sites are not necessarily providing the same form of wisdom as those in other forms of crowdsourcing, such as with open-source software. Crowdsourcing marketplaces are different because each micro-worker is simply following instructions from a crowdsourcer.

However, companies that use micro-labor often label these tasks as crowdsourcing jobs and do still receive some of the benefits of a large crowd. If they are putting out calls for many small tasks to be completed and getting responses from many micro-workers, the company still gets the benefit of multiple viewpoints over time from multiple sources.

Pros and Cons of Crowdsourcing

No matter whether it uses in-person groups, online connections, or micro-labor from marketplaces, crowdsourcing comes with pros and cons.

It is often cheaper than hiring a professional contractor or a traditional employee. For example, if a business wants to develop a new logo or slogan, it might put the concept in front of its customer base, challenging people to come up with ideas or designs that could be used. This method can be good for achieving positive results because the crowd might generate ideas that no one would have discovered through a more traditional approach—and the cost might be no more than rewarding those with the best ideas with discounts or other perks.

However, the process offers limited control. Following the same example of the new logo or design, a traditional approach would allow the company to oversee the process from beginning to end. If there's even a slight miscommunication with the crowd in a crowdsourcing campaign, the project can go in the wrong direction quickly and might result in nothing more than a waste of time and an irate customer base.

Before embarking on a crowdsourcing campaign, consider how both the benefits and drawbacks might impact your business.