What Is Crowdsourcing?

Definition & Examples of Crowdsourcing

Woman on a city street uses a crowdsourced app.
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Crowdsourcing is the process of using many people to perform services or to generate ideas or content. Crowdsourcing is a way for companies to outsource labor to a large group of people in the form of microtasks; it can also be useful as a way of gathering opinions and information.

Find out more about crowdsourcing and how companies use it.

What Is Crowdsourcing?

Crowdsourcing is the outsourcing of work to a large, sometimes undefined crowd of people. It can also be thought of as a method of sourcing goods, labor, information, or ideas from a large group of participants.

The concept of crowdsourcing is built on a theory sometimes referred to as the "wisdom of crowds." The idea is that, together, a large group of people can collectively provide surprising insight or value, even if individually they're wrong, uninspired, or inaccurate.

The idea of the wisdom of crowds is demonstrated in the example of British scientist Sir Francis Galton, who in 1906 analyzed the guesses of 800 attendees of a county fair as to the weight of an ox. Galton predicted the group's overall answer would be way off the mark, but was shocked to find that, when averaged together, the crowd guessed the ox's weight within one pound.

How Does Crowdsourcing Work?

Crowdsourcing works by distributing labor among many people.

Some businesses use crowdsourcing to accomplish specific objectives or to 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, nonprofits or community organizations with limited budgets can use crowdsourcing to spread their messages, promote events, or create works. The online encyclopedia Wikipedia is a crowdsourced, nonprofit work of knowledge, where many editors write and update encyclopedia entries for free.

The internet facilitates easy information sharing and efficient communication, both of which are key to crowdsourcing. It's also key to finding and accessing the crowd necessary for the work. Apps, websites, social media, email, and other forms of technology enable companies to quickly and easily reach large groups of people.

One example of crowdsourcing is ridesharing apps such as Uber and Lyft. These companies effectively crowdsourced transportation, using individual drivers with their own cars as an always-ready fleet. The move reduced labor costs (drivers typically weren't classified as employees, so they don't get paid benefits or overtime) while ensuring customers had ready access to reliable transportation.

Paid and Unpaid Crowdsourcing

Crowdsourced labor may be paid or unpaid. By seeking input from the crowd, businesses or other organizations bypass the process of hiring someone to do the desired job. Sometimes this technique results in a business effectively securing unpaid labor for a task, such as when hosting a logo design contest among its customers. The business can receive submissions for logo concepts from its customer base without hiring a professional brand designer.

Other times the labor is paid, but the individual fees are tiny. Online crowdsourcing marketplaces provide opportunities for groups of people to perform routine 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.

Pros and Cons of Crowdsourcing

Pros
  • Cheaper than hiring an employee

  • Can surface original ideas

  • Can reduce risk

Cons
  • Limited control

  • Quantity may outpace quality

Pros Explained

  • Cheaper than hiring an employee: Crowdsourced labor is often cheaper than hiring a professional contractor or a traditional employee. It can even be free, with workers participating for reasons outside of money (such as personal interest).
  • Can surface original ideas: Crowdsourcing can be good for achieving positive results because the crowd might generate ideas that wouldn't have been discovered through a more traditional approach
  • Can reduce risk: With crowdsourcing, risk is externalized, meaning the company doesn't risk its own time, money, or labor on the task at hand, but rather accepts only the results that satisfy its requirements.

Cons Explained

  • Limited control: 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.
  • Quantity may outpace quality: When tasks are outsourced to a wide group of disparate individuals, a company may receive a number of submissions, ideas, or completed tasks, but the individual results of those tasks may be subpar. That results in an overwhelming effort to sift through the low-quality crowdsourced material to find usable results.

Key Takeaways

  • Crowdsourcing is the outsourcing of routine or creative labor to a large crowd of people.
  • Crowdsourcing is a way for companies to surface original ideas or save on labor costs.
  • However, crowdsourcing also results in limited control over the product and the possibility of low-quality results.

Article Sources

  1. James Surowiecki. "The Wisdom of Crowds," Page XIII, Anchor Books, 2005.

  2. Harvard Business Review. "Why Crowdsourcing Often Leads to Bad Ideas." Accessed Sept. 9, 2020.