Crowdsourcing in 2024: Types, Benefits & Top Use Cases

Crowdsourcing is rapidly transforming how businesses leverage talent and ideas to meet their objectives. This in-depth guide covers everything you need to know to successfully crowdsource work.

What is Crowdsourcing and How Does it Work?

Let‘s start with a definition – crowdsourcing refers to outsourcing work traditionally done by employees to a large, online community or "crowd" through an open call for contributions.

Jeff Howe, who coined the term, defines it as:

"The act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call."

Crowdsourcing process

Crowdsourcing leverages an online community to source talent, ideas, or funding

Crowdsourcing has grown rapidly in adoption over the last decade, enabled by platforms that provide access to on-demand talent pools around the world.

According to a Statista forecast, the global crowdsourcing market is projected to grow from $11.4 billion in 2021 to $26.5 billion by 2027. That‘s a compound annual growth rate of 14.1%.

Clearly, leveraging crowdsourcing can yield significant advantages for businesses. But before we dive into the benefits, let‘s look at the different types of crowdsourcing models.

Types of Crowdsourcing Models

There are four broad categories of crowdsourcing:

1. Microtasking

This involves breaking down complex projects into smaller, well-defined tasks that individuals can independently complete in minutes or hours. For example, an ecommerce business might leverage the crowd for:

  • Categorizing products
  • Moderating content
  • Transcribing audio snippets
  • Correcting data errors
  • Tagging images

Microtasking is suited for simple, repetitive work like data entry, research, categorization and content moderation.

Top platforms like Amazon Mechanical Turk, Clickworker and Appen connect you with on-demand workers around the world for microtasks.

2. Macrotasking

With macrotasking, you engage an online community of experts to solve larger, more complex problems and projects requiring specialized skills.

For example, macrotasks could include:

  • Developing a new product design
  • Improving an existing software algorithm
  • Providing consulting on a business challenge

R&D, product design, software development and other projects benefit from macrotasking. Topcoder, Kaggle and InnoCentive are leading platforms.

3. Crowdfunding

Crowdfunding platforms like Kickstarter, Indiegogo and GoFundMe allow entrepreneurs and causes to raise funds by soliciting small contributions from a large number of backers.

Instead of traditional financing, creators pre-sell products or offer rewards to secure funding. Crowdfunding brings new products and ideas to life.

4. Innovation Contests

Also known as crowdsourcing challenges, innovation contests allow companies to source ideas, designs or solutions from a community.

An organization defines a problem statement and invites submissions from the crowd. The best solutions are awarded prizes or benefits.

Examples include logo design contests, hackathons, and public challenges like UNICEF‘s UAV challenge to map areas for disaster relief.

Now that you understand the models, let‘s examine the benefits driving adoption of crowdsourcing.

Key Benefits of Crowdsourcing for Businesses

What makes crowdsourcing so valuable for today‘s organizations?

Access Specialized Skills

Crowdsourcing provides instant access to niche experts around the world. Rather than maintaining specialized skills in-house, you can get targeted help from the crowd.

For example, an accounting firm used the crowd to develop a dynamic forecasting model combining FP&A with machine learning. This level of data science expertise wasn‘t available internally.

Significant Cost Savings

Crowdsourcing converts fixed employment costs into variable costs, enabling businesses to scale up or down on demand.

You avoid overhead like office space, equipment, benefits, recruitment costs and training. Crowdsourcing is estimated to offer 7% savings on human resources spend.

Faster Execution

Distributing microtasks across a large pool of global talent accelerates work. What takes weeks or months internally can be achieved in days with crowdsourcing.

When Unilever wanted to categorize and sub-categorize 80,000 shopper images, it would have taken months internally. With crowdsourcing, it was completed in just 3 days.

More Diverse Perspectives

Tapping collective insights from people of diverse backgrounds often yields more creative, smarter solutions not possible with a homogeneous team.

Enhanced Scalability

Crowdsourcing provides immense scalability to ramp up capacity for short-term needs. You avoid costs of hiring, training and downsizing temporary employees.

For example, the Census Bureau used crowdsourcing to efficiently process tens of thousands of surveys.

Beyond cost and speed advantages, crowdsourcing also unlocks innovation.

Top Use Cases and Examples

Let‘s examine some of the most common use cases with examples of companies succeeding with crowdsourcing.

Market Research

Brands use crowdsourcing to quickly gather consumer insights across demographics and global markets.

  • Surveys: Starbucks leverages the crowd to provide localization insights across 75 markets to inform store designs and offerings.
  • Product testing: Consumer goods companies get feedback on product concepts and packaging designs early in the process.
  • Focus groups: A shampoo brand crowdsourced hair care discussions to understand consumer pain points.

Content Creation

Crowdsourcing is a cost-effective way to produce content – from blog posts to videos.

  • Blog content: HubSpot used followers to source over 150,000 blog post ideas to fuel content creation.
  • Training content: Microsoft tapped technical crowdsourcers to create how-to guides and demo videos for its products.
  • Translation: Rovio localizes its popular Angry Birds game into different languages using crowdsourced translators.

Creative Design

Launch design contests to crowdsource logos, t-shirt designs, packaging, naming, and more.

  • Logos: DesignCrowd has facilitated over 50,000 logo design contests for brands. The crowd submitted over 1 million concepts.
  • Apparel: Threadless leverages an online community to design t-shirts. Top designs selected by the crowd go into production.

Innovation Challenges

Pose an innovation challenge to the crowd to source breakthrough solutions.

  • New products: LEGO Ideas platform lets fans submit new product ideas. Concepts receiving 10,000 votes are reviewed and launched.
  • Business solutions: Goldcorp challenged the crowd to analyze geological data to find new gold deposits, yielding over $3 billion in new revenue.
  • Social impact: UNICEF‘s UAV challenge tapped the crowd to create drones helping map areas in humanitarian crises.

Training Data for AI

Creating datasets to train AI algorithms is made faster, affordable and scalable with crowdsourcing.

  • Image annotation: Self-driving car companies leverage crowdsourced drivers to label real-world images for training computer vision models.
  • Text annotation: Machine learning teams use platforms like Appen to annotate text data for natural language processing.
  • Speech transcription: Startups like DeepScribe crowdsource audio transcription to train speech recognition models.

Software Development

Crowdsourcing is gaining traction for coding, debugging, testing and building software platforms.

  • Coding: Topcoder organizes crowdsourced code sprints where community developers collaborate to build apps.
  • Testing: Uber crowdtests its app by enabling drivers and riders worldwide to provide direct product feedback.
  • Open source: Apple engaged the developer community to build the open source Swift programming language.

As these examples demonstrate, creative use of crowdsourcing can accelerate key business objectives from market research to product development.

But what does it take to implement crowdsourcing successfully?

How to Launch a Successful Crowdsourcing Initiative

Here is an 8-step framework to set your crowdsourcing program up for success:

1. Define the problem

Start by clearly defining the problem you want to solve or goals you hope to achieve. Frame an engaging problem statement to spark the crowd‘s interest.

2. Choose the right model

Evaluate which crowdsourcing model – microtasks, macrotasks, crowdfunding or contests – is the best fit based on your goals, budget and timeline.

3. Find the right platform

Research crowdsourcing platforms that specialize in your needs, like content, design, data, testing etc. and align with your budget and quality standards.

4. Structure pricing and incentives

Determine sensible pricing models and incentives like bonuses to attract quality submissions and reward top performers.

5. Launch the campaign

Post your brief, requirements, examples, guidelines, FAQs, and selection criteria to optimize clarity. Promote the initiative on social media to generate buzz.

6. Review and select submissions

Have a structured review process to evaluate and filter submissions. Provide feedback to contributors.

7. Close the loop

Keep contributors updated on campaign progress and announce winners. Share how their efforts helped achieve goals.

8. Incorporate learnings

Analyze results at the end of the campaign to apply lessons learned to future initiatives.

By following these steps, you can launch an impactful crowdsourcing program tailored to your specific business needs. But what are some of the potential risks and downsides?

Challenges of Crowdsourcing and How to Mitigate Risks

While crowdsourcing offers immense advantages, it does come with some risks to be aware of. Here are some key challenges and mitigation strategies:

Quality control

Mitigate by screening contributors, providing clear instructions, implementing rating systems, reviewing submissions closely.

Vetting crowd skillsets

Mitigate by using platforms with testing and credentialing, reviewing portfolios, using qualification-based pricing.

Copyright and IP protection

Mitigate via NDAs, secure collaboration platforms, vesting periods before awarding prizes.

Data privacy

Mitigate through de-identification, encryptions, access controls, secure cloud tools.

Scope creep

Mitigate by defining expectations upfront, implementing change controls, securing binding contracts.

With thoughtful risk management, you can maximize the return from crowdsourcing and minimize potential downsides.

Conclusion

Crowdsourcing offers immense potential to accelerate business goals from market research to product development by tapping into global talent.

The key is matching specific business needs with the right crowdsourcing model and platform partner. With a strategic approach, crowdsourcing provides fast, affordable access to skills, ideas and solutions.

I hope this guide provided you a comprehensive overview of crowdsourcing models, benefits, applications, and best practices. Let me know if you need any help assessing if crowdsourcing is a good fit for your business needs. I‘m happy to chat or brainstorm ideas!

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