Crowdsourcing benefits, limitations and how to avoid failure

By | April 28, 2014

What do Amazon, Elance and 99designs have in common? How would you relate those companies to Jeff Howe?

The answer to these questions is crowdsourcing.

Since Jeff Howe coined the first definition of crowdsourcing in 2006 as “… the process by which the power of the many can be leveraged to accomplish feats that were once the province of a specialized few”, a great number of companies have been strategically and successfully incorporating this concept in their business models.

Crowdsourcing

Today, crowdsourcing applies to a wide range of sectors and can be divided into many different categories. Crowdfunding, crowdwisdom and crowdsourced design are among the most popular ones.

If you’re leading a company and you have not used crowdsourcing yet, you might be thinking that you’re one step behind and that you should hurry up. Wait!

Before you take the plunge, you should thoroughly analyse crowdsourcing’s benefits and limits. It will help you decide whether it is the optimum solution for your business or not, and avoid making irreversible mistakes.

Crowdsourcing brings multiple benefits 

Crowdsourcing is based on the idea that union is strength and more heads are better than one. The way companies use this collaborative model highly depends on their business strategy. 

Some time ago, General Electric and Netflix canvassed a crowd of people to improve the quality of their products. The opportunity to choose the most innovative idea or to find solutions to problems too complex to solve internally highly influenced their decision to use crowdsourcing.

Companies such as VoiceBunny and VerbalizeIt play around with the idea to make business’ life easier and increase their competitiveness offering them affordable voice-overs and rapid translations services.

As for ClimateColab and CrowdMed, they rely on the wisdom of crowd to share expertise and accurate advice. Recently, Digital Globe also supported this type of altruist initiative by launching a campaign to help look for the missing Malaysia Airlines flight MH37.

When crowdsourcing goes wrong

Crowdsourcing can rapidly turn into nightmares when it is not properly handled.

When President Barack Obama tried crowdsourcing to collect questions for a press conference, he did not expect his website, entitled “Open For Questions”, to be overtaken by enthusiasts for the legalization of marijuana.

Obama’s misfortune is just one of many examples of crowdsourcing reduced to uncontrollable battles on online platforms.

How to explain these failures?

In a blog post published on Harvard Business Manager, Johann Füller (CEO of Hyve AG), identified several sources of crowd-resistance.

One of them is unfairness. When the crowd feels that the crowdsourcing company may not be treated them fairly or if they consider that the information provided by the company is not sufficient enough, they are most likely to express their discontentment.

The other source of crowd-resistance includes manipulation. Manipulation can be particularly dangerous for crowdsourcing companies. Indeed, if one of the members strongly disagrees with the company’s rules or actions, he may try to sow discord and influence the rest of the community.

Apart from the risk of crowd-resistance, your company could be affected by the bad quality of the results delivered by your ‘virtual’ employees. This happens particularly when you fail to give clear instructions to the crowd or to filter applicants. Quality should be one of your priorities #1 since it has a direct impact on your company’s reputation.

How to effectively manage the crowd

Crowdsourcing limits do exist but they are not insuperable. In order to work around them and manage the crowd effectively, you should consider the following principles:

Define your expectations: Being specific often produces better results. This is the reason why your online platform must provide users with clear and detailed information of what they have to do. There should be no room to misunderstanding. In this case, developing standardized forms can be very helpful to guide the crowd.

Be transparent: To avoid frustration and discontent, you must set transparent and comprehensible communication with the crowd. What is required to work on a project? How much do I get paid? How do I get selected? Make sure you address their most frequent questions. Otherwise, you’ll probably receive thousands of mails from users asking the same question. FAQs usually help avoid this kind of problem.

C3D-DM

Focus on quality: If you don’t deliver quality results, your clients will certainly stop using your platform. So it is fundamental to recruit the right people, check results and make sure they meet your clients’ requirements.

Value and reward: It is important to genuinely value work or participation. This can be easily done through social media. Besides, it is essential to reward them and establish a win-win situation. If you don’t make it worth it, they will make no effort. There are many ways of rewarding the crowd. Obviously, it varies depending on your business model.

Are you up to the challenge?

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Category: Crowdsourcing

About Laura Gaudino

Laura Gaudino is currently Communications Manager at Crowdsourced Testing. Part of her work consists of managing the official blog of the company, conducting interviews and writing articles related to software testing. Laura is passionate about mobile technology and cloud computing. She strongly believes in the power of crowdsourcing to solve business problems.