Cowdsourcing.org The Industry Website

Register Login
or sign in with

Web's Largest listing of crowdsourcing and crowdfunding events

Events

Advertise
Web's Largest Directory of Sites

2,784 crowdsourcing and crowdfunding sites


Four Models for Engaging the Crowd
editorial

Four Models for Engaging the Crowd

Editor's Note: We continue our look at the leading industry research and advisory work that our sister organization massolution is engaged in. The piece below is just a sampling of a presentation from a recent workshop massolution helped to organize for its client, the Multilateral Investment Fund of the Inter-American Development Bank. For more information on massolution and its industry research, go to crowdsourcing.org/research; for services, visit massolution.com. The previous piece in this series, discussing ‘third-level survivorship’ in crowdfunding, is here.

Crowdsourcing, broadly, is an online distributed model for production, problem solving, and capital formation.

Companies use crowdsourcing to complete micro- and expertise based tasks (which fall under production), for ideation based tasks (problem solving) and crowdfunding (capital formation).

All iterations of crowdsourcing are evolving rapidly. Crowdfunding is exploding across the world – the industry raised nearly $1.5 billion in 2011, a sum that was set to double in 2012. Enterprise crowdsourcing is also on the rise, with crowdsourcing service providers’ (CSPs) revenues growing by 75 percent from 2010 to 2011. This has enabled individuals to supplement their income and companies to hire freelancers on demand, cutting costs and allowing for more flexibility.

With the crowdsourcing industry maturing and internet penetration rates rising across the world, success stories have convinced governments, NGOs, and large enterprises to consider implementing crowdsourcing and crowdfunding on a larger scale.

As we wrote previously, one such organization is the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB).

MIF is the largest technical assistance provider to the private sector in Latin America and the Caribbean, allocating over $100 million each year to projects aimed at helping small producers, entrepreneurs, and poor and low-income households. IDB as a whole is the largest source of development financing for the region and has helped a number of industries take root, including microfinance.

In order to understand how crowdfunding can help Latin America foster small business growth and job creation, MIF engaged massolution to help with the discovery and ideation process, and to consider plans that would bring social and economic impact to the region.

In a project initiation workshop held in Washington, D.C. on Tuesday, January 29th, massolution’s founder Carl Esposti explained crowd behavior, and introduced four models of engaging with the crowd. Though the workshop focused primarily on crowdfunding, understanding these models is important as they apply to crowdsourcing as a whole, of which crowdfunding is a subsection. We examine them below, and look at the mechanisms that made these models possible. 

Esposti's presentation:

Engaging the Crowd

While we generally divide “crowdsourcing” into five groups (cloud labor, distributed knowledge, open innovation, crowdfunding, and crowd creativity), underlying all of these are four models for engaging the crowd, according to Daren Brabham of the University of North Carolina at Chapel Hill. They are: Distributed Human Intelligence Tasking, Managed Asset Discovery, Broadcast Search, and Peer Vetted Creative Process.

Distributed Human Intelligence Tasking refers to the work that members of the crowd are able to perform. Generally, companies ask the crowd to perform front- and back-office processes. Consider, for example, Needle, which connects potential buyers with individuals who have proven to be experts around certain brands or products. These ‘Needlers,’ driven by their passion for and knowledge about the products, help client brands convert sales and reach a higher level of customer satisfaction. Other CSPs focus on back-office tasks, like transcription or research. The work is completed on-demand, meaning companies can cut costs and increase flexibility.

Managed Asset Discovery means asking the crowd for help finding and organizing knowledge or assets. The “funding” part of “crowdfunding” refers exactly to this: entrepreneurs who chose to crowdfund their projects leverage their ideas in hopes of attracting capital. Other examples of this include sites like Airbnb, the crowdsourced platform for finding short-term living space, and FlightFox, the platform that uses crowdsourcing to find the cheapest flights.

Broadcast Search refers to identifying experts within the crowd. The most common examples of this are open innovation challenges, which broadcast problems to large crowds. The open innovation intermediaries generally help screen the responses to find the best solutions, which often come from unexpected places. The underlying premise of this model is that a company or individual does not have all the experts working for it internally.

Peer Vetted Creative Process is using crowdsourcing for feedback. This can stand alone (asking the crowd to vote on potential ideas, like Lay’s recently did), but is also commonly paired with the other models. Open innovation initiatives, for example, often ask the crowd to vote for and comment on their favorite ideas.

Increasingly, we are seeing the models mix with one another – for more on that, read a previous article in this series about the ‘engagement effect.’

Slides from Esposti's presentation:

Enablers and outlook

In his presentation, Esposti identified a number of factors that have enabled crowdsourcing to flourish.

First and foremost is reliable, fast, and widespread broadband and mobile technology. As many as three billion people are predicted to be online by 2016, creating a massive virtual workforce. The workforce structure is also changing – more and more people are able to work online, whenever is convenient for them. Online payment systems are important as well, as they allow money to be transferred quickly, securely, and cheaply. Meanwhile, cloud-based technologies have standardized the process of externalizing key business activities.

The future outlook for all of these enablers is positive – cloud-based services are growing rapidly, and more people are entering the virtual workforce. Just how big the crowdsourcing market can become has yet to be determined, and that is exactly what IDB and MIF are exploring. The initiation workshop was well received and inspired the participants to further explore opportunities across Latin America for building crowdsourcing and crowdfunding ecosystems to create digital jobs and to raise capital to accelerate the development of private sector businesses.

To learn more about crowdsourcing and crowdfunding business models, check out our research section, which features more reports by massolution. 

Update: This article was amended on March 14th to provide an additional citation to Daren C Brabham, Ph.D. Assistant Professor, University of North Carolina at Chapel Hill for developing the four crowd engagement models who was cited in the presentation slides but not the body of this article. 

About massolution

Massolution is a unique research and advisory firm specializing in the crowdsourcing and crowdfunding industries. Massolution works with governments, institutions and enterprises in the design and implementation of crowdsourcing and crowdfunding business models that drive improved business performance, product and service innovation, enhanced levels of customer engagement and in the formation of new sources of capital.

Massolution also operates the industry website Crowdsourcing.org.

You can reach a representative at massolution by emailing contact@crowdsourcing.org.

Flag This

1

Comments

  • Rachel Xiang Rachel Xiang Mar 09, 2013 02:18 pm GMT

    Good breakdown of the industry. We fall under -- Managed Asset Discovery -- at our crowdsourcing website (HuMuch? - crowdsourcing consumer retail prices around the world)

Guest
 Join or Login
 Optional