A PRACTICAL GUIDE Ideavibes Whitepaper TO CROWDSOURCING A Practical Guide to Crowdsourcing
Tuesday June 7, 2011
A Practical Guide to Crowdsourcing
A PRACTICAL GUIDE TO CROWDSOURCING
“...the world is becoming too fast, too complex and too networked for any organization to have all the answers inside.” - Yochai Benkler, Yale University (from The Wealth of Networks)
Many Minds Gather Great Ideas
Picture yourself sitting at your favourite thinking spot, brainstorming an idea for a new product, service or other moneymaking idea. Now, imagine your customers dropping by to weigh in on the process—telling you exactly what they would like see and giving you their ideas for the products your company should develop. Where are the better ideas likely to come from—one mind or many minds? Where will you be likely to ﬁnd the most inspiration and the best direction? I place my bet on many minds generating the most promising and relevant ideas. Crowdsourcing harnesses the ideas of large groups of people— for example, of customers—to gather useful input and insights that lead to practical solutions. In this paper I will provide concrete examples of how crowdsourcing can be used to solve problems, answer questions, make decisions and fund projects. But ﬁrst, a practical introduction to crowdsourcing. performed by one person and outsourcing to a large group of people. Crowdsourcing is like an open call for ideas. Organizations use crowdsourcing to engage audiences in their projects, challenges and decisions. Through social media, they are leveraging humans’ natural inclinations towards creativity, competition and involvement to generate powerful ideas and solutions—much more powerful than what could be achieved through other more traditional means. It can be notoriously difﬁcult for organizations to engage with their communities; to strengthen relationships with customers, stakeholders or members; to be customer or citizen focused. Yet nearly everyone would agree that communities—be they internal or external—have ideas that should be harnessed because they come from diverse backgrounds, experiences and education.
Crowdsourcing = People Power
Today, organizations are successfully engaging with their target audiences using crowdsourcing techniques. They are expanding their product offerings, strengthening brand loyalty, ﬁxing product problems and enhancing their bottom lines. What sets these companies apart from others? They know, believe and invest in a simple concept: crowdsourcing = people power.
Author Jeff Howe was one of the ﬁrst people to coin the term, crowdsourcing. The practice applies Open Source principles to ﬁelds outside of software by taking a task traditionally
EARLY DISCOVERIES In 1906, while visiting a livestock fair, Francis Galton stumbled upon an intriguing contest. An ox was on display, and the villagers were invited to guess the animal’s weight after it was slaughtered and dressed. Nearly 800 individuals participated, but not one person hit the exact mark: 1,198 pounds. Galton’s insight was to examine the mean of these guesses from independent people in the crowd: Astonishingly, the mean of those 800 guesses was 1,197 pounds—accurate to a fraction of a percent.
- From Wikipedia entry on Francis Galton
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A PRACTICAL GUIDE TO CROWDSOURCING
Crowdsourcing gathers the collective wisdom of large numbers of people to arrive at outcomes and conclusions that are more accurate, or otherwise superior to, the wisdom of any individual. James Surowiecki, in his 2004 book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, acknowledges that not all crowds are wise—such as a crazed mob. He identiﬁes these four attributes of a wise crowd: i. Diversity of opinion—each contributor/source has private information or interpretation of the topic ii. Independence—contributors’ opinions are not determined by those of others iii. Decentralization—contributors can specialize by drawing on local knowledge iv. Aggregation—a mechanism is in place to gather private judgements into a collective decision Effective crowdsourcing leverages these attributes to gain more accurate insights into problems and solutions than can be gained through discussions with individuals or small local groups.
To create effective, targeted crowdsourcing campaigns, you need to understand the motivations of the different people in your crowd. You can leverage that knowledge to pique a crowd’s interest and continue to engage them. I recommend that you divide your crowd into different categories based on the following questions: • • • • What types of people already use our products or seek our services? How are people getting to our website (or other online presence)? Who do we already engage with online? Who else is in our crowd—or who could potentially be in our crowd? (You can look at user forums, ‘blog comments, article re-tweets, competitor websites, industry associations, and other points of interaction that take place online to help answer this question).
Diversifying Your Crowd
Diverse crowds have the most wisdom because they bring together different experiences, opinions and lifestyles to inﬂuence ideas. The more diverse your crowd, the greater the skill set within it. Depending on the goal of your crowdsourcing campaign, you’ll need to have the right mix of people in your crowd. The wisdom of your crowd will be far greater than the sum of its parts!
Deﬁning Your Crowd
Brands, companies, products and organizations all have crowds of people that support them. Your crowd can be broad or narrowly deﬁned. It can also be organic in nature, changing over time. As you build on existing relationships and begin new ones, your crowd will change, grow, and may divide into multiple crowds. When you think about your crowd, consider two components: 1. The crowd you know: customers, members, subscribers, citizens, prospects, mailing list subscribers, partners, brand fans, etc. The crowd you don’t know: network extensions through the crowd you know, competitors’ customers, brand fans, thirdparty mailing lists, industry observers, etc.
Practical Applications of Crowdsourcing
Organizations and brands of all sizes and types are using crowdsourcing to achieve their goals and help make better decisions. These are some ways that you can engage a crowd to achieve your goals:
Crowdsource for Ideas
The world needs BIG ideas. It also needs bite-sized ideas that are easy to understand and support. More than ever, consumers,
“Remember outsourcing? Sending jobs to India and China is so 2003. The new pool of cheap labor: everyday people using their spare cycles to create content, solve problems, even do corporate R & D.”
- Jeff Howe, The Rise of Crowdsourcing, Wired Magazine, 2006
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A PRACTICAL GUIDE TO CROWDSOURCING
citizens and donors are attracted to providing input into the projects, brands and communities that they feel a part of. They expect to be able to make a direct and visible impact on things that matter personally to them. Crowdsourcing gets the crowd involved in a way that encourages more people to participate than just the most vocal. You can use crowdsourcing to generate new ideas and to reﬁne or validate existing ideas.
commercials and other advertising elements. The submissions are posted to a website where voting is open to the public and the entry with the most votes wins the prize. These campaigns increase brand awareness through consumer engagement and the power of social media—and, they get people talking!
Crowdsource to Improve Quality
Customers complaining about a product defect? Product usability issues? Crowdsourcing allows you to deal with these issues directly and in less time than traditional methods. In today’s society, we want answers yesterday. When an issue is identiﬁed, you can communicate with consumers in real time to let them know the progress being made in rectifying the issue. Constant consumer contact and responsiveness go a long way in developing a loyal crowd, so get started!
Crowdsource to Solve a Problem
Solving problems through crowdsourcing involves asking the crowd questions—questions about what the most pressing problems are, soliciting feedback on problems you may not know exist, and getting the crowd to weigh in on the best solutions to speciﬁc problems. This approach can have big business impact without having to pay a consultant or professional agency to conduct research, surveys and interviews.
Crowdsource for Content
Crowdsourcing can be used to solicit and receive submissions that form the content of programs, exhibits and business models. For example: • The Click! exhibit (2008) at the Brooklyn Museum was completely crowdsourced. An open call invited artists to submit their work electronically. The submissions were displayed in an online forum, creating a virtual museum where visitors could comment, vote on favourite pieces, ask questions and provide evaluations of the work displayed. Threadless.com relies on their crowd to submit t-shirt designs and vote on which ones move through to production for sale on the company’s website. Threadless uses the crowd’s votes to ﬁnd out what they would want to buy, and then makes it available to them.
Crowdfunding: More Practical Applications
A newer, particularly high-value application of crowdsourcing is called crowdfunding, in which the principles of crowdsourcing are applied to receive donations (or capital or other resources) for projects, causes, start-up companies and campaigns that require funding. Also known as crowd sourced capital, crowdfunding uses the Internet to connect diverse individuals who pool their money to achieve a speciﬁc result.
Crowdfund for Donations In-Kind
Not-for-proﬁt organizations often cannot afford to hire new staff or enlist professional agencies. Crowdsourcing can be used to source any resources that may be required—from graphic design to volunteers, advertising and capital funds. And, because people today generally favour giving in smaller, actionable ways, non-proﬁt and charitable organizations can also effectively use crowdfunding to fund speciﬁc projects.
Crowdsource for Awareness
Contest-style crowdsourcing campaigns can be used to reach out to consumers and create viral awareness of brands, companies and causes. These campaigns get individuals to submit their ideas for book covers, CD covers, company logos, TV
Crowdfunding is an affordable way for organizations of any size and budget to raise funds for speciﬁc projects. There has been a recent shift in fundraising towards small, actionable gives.
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A PRACTICAL GUIDE TO CROWDSOURCING
Smaller, more targeted projects make it easier for people to feel like they are making a difference, and crowdfunding enables this type of giving. An organization can capitalize on the social nature of its crowd by allowing members to spread the word about the organization’s needs to their own networks. In this way, crowdfunding provides the beneﬁts of donations and awareness building. The power of the crowd can also make it possible to collect larger sums of money than what may exist in an organization’s inner circle.
pooled the resources of those around us, networked and connected with others in our crowd’s network until we reached the goal of funding our vision.
Business decisions generally boil down to money—money to be saved, money to be earned, money to be lost. Community input can create clarity and provide direction by helping organizations understand what their audiences (the crowd) really value. What services are least valued and could therefore be cutback without damaging backlash? What new features are customers willing to pay for? What problems are likely to cause members to leave? Research, experiments and anecdotes have all shown that the broader and more diverse the community is, the more likely that crowd is to provide the most accurate answer or the best idea. That’s why crowdsourcing can have direct positive impact on an organization’s bottom line.
Crowdfund a Startup
For entrepreneurs operating one-person ventures or trying to get a new business up and running, crowdfunding can alleviate some of the initial pressures of starting a company. Business people have creatively crowdfunded everything from product development movies and music, and even purchase a soccer (football) club. Wikipedia provides just one example, in which music fans funded an album: “One of the pioneers of crowd funding in the music industry have been the British rock group Marillion. In 1997 American fans underwrote an entire US tour to the tune of $60,000, with donations following an internet campaign—an idea conceived and managed by the fans before any involvement by the band.” The social nature of crowdfunding makes it easier for word to spread, helping start-ups to tap into new sources of funds. Ideavibes itself is an example of a crowdfunded company: we
The Crowd is Talking, Are You Listening?
Crowdsourcing gives businesses and organizations crisp insights and valuable information that is not available from within. Less costly, more immediate and able to affordably reach a more diverse contributor base than focus groups and surveys, crowdsourcing can provide equally valuable input and direction. It also expands a brand’s reach and helps to turn relationships into referrals, repeat customers and lifelong revenue streams.
“Conversations among the members of your marketplace happen whether you like it or not.” Knowing where your crowd gathers and how they communicate is the ﬁrst step to tapping into that conversation. Crowdsourcing—and other social media—are tools that ignite conversations and turn bystanders into active participants in your organization.
As Seth Godin has said, “Conversations among the members of your marketplace happen whether you like it or not.” Knowing where your crowd gathers and how they communicate is the ﬁrst step to tapping into that conversation. Crowdsourcing—and other social media—are tools that ignite conversations and turn bystanders into active participants in your organization. Ideavibes™ has developed the ﬁrst hosted Crowd Engagement Platform™ that is designed to allow organizations to frame
engagement in a way that creates greater stakeholder, customer, citizen or donor engagement. It is also the ﬁrst to give organizations the power to create crowdsourcing or crowdfunding campaigns from a single, easy to use control panel. For more information, visit www.ideavibes.com and www.fundchange.com.
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