Crowdsourcing: Is It Effective for Your Business?

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There is a practice that has been around for a few years. The term, “Crowdsourcing” is attributed to Jeff Howe (contribution editor at Wired magazine) in 2006, yet the practice goes back further. Quite simply, it’s a practice of using the “crowd” to drive competition to lower prices, sometimes, as creators lament, to a point where they can’t compete or survive in more developed nations with higher costs of living. The question is: “Does low prices assure the same quality and service and is it worth it?”

According to Wikipedia, the definition of crowdsourcing is:

The practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers. Often used to subdivide tedious work or to fund-raise startup companies and charities, this process can occur both online and offline. The general concept is to combine the efforts of crowds of volunteers or part-time workers, where each one could contribute a small portion, which adds into a relatively large or significant result. Crowdsourcing is different from an ordinary outsourcing since it is a task or problem that is outsourced to an undefined public rather than to a specific, named group.

Although the word “crowdsourcing” was coined in 2006, it can apply to a wide range of older activities. Crowdsourcing can involve division of labor for tedious tasks split to use crowd-based outsourcing, but it can also apply to specific requests, such ascrowdvoting, crowdfunding, a broad-based competition, and a general search for answers, solutions, or a missing person.

While some people believe Wikipedia is a crowdsourced form of information and therefore not accurate, Merriam-Webster dictionary defines it as:

The practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people and especially from the online community rather than from traditional employees or suppliers.

Not that much different but the similarity that interests and offends people on both sides of crowdsourcing is “rather than traditional employees or suppliers.”

How People Use Crowdsourcing

There are several uses that are prevalent these days. One is to use freelance suppliers to work on a project, often for either an hourly rate that is bid upon with the lowest bidder winning the project, or a call for a certain project in which vendors do the work on speculation, with the winner of the finished project being paid a pre-set amount and the other people who have done the speculative work, getting nothing. “Losing out,” as opponents label it.

Crowdsourcing uses the internet to draw a global bidding base for projects, rather than searching among local workers who will all have the same cost of living to consider. For companies and businesses that use this practice, they believe they will receive the same quality for the lowest possible cost. For vendors who participate, there are those to whom $ 50 is a good months salary, whereas there are those for whom $ 50 is a weeks worth of coffee.

Illuminated One

There are different web sites for crowdsourcing (DISCLAIMER: Listings are, in no way a sponsorship or recommendation. Sites are listed solely as examples). First, there are bidding sites such as eLance and oDesk. These sites present a project and registered members, designers, writers, illustrators, photographers, etc. bid on how much they can charge to complete the project using their talents. It is up to the person who posted the project, wrote the creative brief of the scope of the project, to decide among the bidders, who will receive the project. Sometimes it’s not the lowest bidder.

With web sites that run the projects more like a contest, the person or company will also write a creative brief for a project, such as a logo, web site, book cover designs, etc., set the price and wait for individual creatives to submit finished designs for judging upon the deadline for entries. A winner is chosen and paid. The other entrants don’t.

The Positives for All Parties

  • Those who want the finished product use globalized competition to get their project at a price they feel is within their budget or for the lowest price. Talent is not a commodity restricted by country or location and the output can be very professional. While some vendors are against this form of outsourcing, thanks to the web, competition is borderless and while displeasing to those who can’t match or beat lower prices, it’s just a fact in a globalized world.
  • Building the economy of nations with lower costs of living support stability in those nations and eventually, the standards and costs will rise to meet the costs of living elsewhere in the world.
  • Small businesses and under-funded startups can afford the design work they need to grow and evolve and hire more local employees, which helps their local economy.
  • It weeds out the weaker vendors who can’t compete on a global scale, leaving those who can in a stronger position among less local competition.

The Negatives for All Parties

Yes, there are always two sides to every action. Crowdsourcing, naturally, has its problems.

  • While web sites such as the ones described offer quick, easy and often cheap solutions, they remove interaction that some say is important to any project, whether design-based or intellectual. For example, brainstorming is a process that is better done in groups with interpersonal interactions.
  • A logo, is not just a logo for some businesses — it’s part of their brand and that branding needs to be done with consideration of all parts of the business and not piece by piece. A logo ties in with stationery, a web site and all other signage, printed and digital material.
  • There is also the relationship a client and vendor build that is necessary for an evolving business where the vendor is familiar with the client’s needs, as well as their desires. The process is often an evolution and that cannot be done blindly, through a short creative brief, delivered quickly, as if it is a product to be placed on a shelf for a consumer to pick among other items on a shelf.
  • Cheap solutions do not incorporate the search and consideration of copyright laws, which may force businesses, down the road, to reprint all of their materials as they throw out a logo with legal problems under the international copyright law and possibly pay hefty fines for such a problem. Shortcuts often lead to cliffs from which we can fall.
  • All creative organizations are firmly against crowdsourcing and aren’t rushing to change their minds.

A Sound Comment on Crowdsourcing

In a recent article on crowdsourcing, Jace Nickell, the Founder and CEO at Threadless (a crowdsourcing company, with contests and sales for popular T-shirt designs), wrote:

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This version of crowdsourcing is not only cheap, but it’s so very innovative! Take advantage of the networked world with crowdsourcing, and you can save a bunch of time and money. Why isn’t every company across the globe operating like this?

Because it’s exploitive. Because it doesn’t work. Because this isn’t how crowdsourcing really works. It’s short-term thinking.

The best crowdsourcing businesses work the opposite way. They find a common interest that a group of people invest their lives in. The members of this “crowd” would pursue this interest whether a crowdsourcing platform existed or not. The platform doesn’t abuse their talent. Instead, it adds value to what people would already be doing, usually as a hobby. The platform provides new opportunities and helps the individuals in the crowd grow — both independently and as a group.

One might question how Mr. Nickell runs a crowdsourcing company but has this opinion. He continues to explain Threadless’ business model:

Threadless started 12 years ago. A friend and I thought art would be way better on t-shirts than logos. We started a thread on a forum asking people to post designs for tees they would actually want to wear. We printed the ones that were the most popular. We just kept doing that until we realized Threadless had become a business. What’s funny is that we were crowdsourcing long before such a term even existed.

We’re not the only company that uses crowdsourcing in this way. Take a look at Kickstarter. Last year, 18,109 projects were funded on Kickstarter. The business is built on a crowd of individuals pursuing their passions, whether it’s music, art, film, or publishing. The crowdsourcing platform helps them grow, succeed, and bring their projects to life.

Etsy is another example of crowdsourcing done right. The platform gives independent artists a marketplace for their work. More than 850,000 people have shops on Etsy. And as Etsy grows in popularity, it brings more eyes to these individual’s shops. The ones who have the products people most want to buy become successful enough to quit their 9-to-5 jobs and can make their passion their full-time gigs.

I think you see what I’m getting at. The most important pillar of crowdsourcing is its individuals. The crowd isn’t just one big, anonymous, single entity. It’s made up of a bunch of people, each with a vision of their own. The crowd comes in when the car or phone goes to market, and people start reacting to it. They vote with their dollars when the product enters the marketplace.

A unique look at the crowdsourcing business model. There will, of course, be supporters and detractors from this practice. As one commenter on a similar article wrote:

You have the freedom of choice to participate or not. It won’t destroy the design industry as those who have little to no budget for design work aren’t, nor will they be my clients. Let them take a chance on a design contest site.

Still, there are those that do feel crowdsourcing is slave labor and taking advantage of those with lower standards of living. They feel the low prices destroy the markets in other countries. It seems there are several strong feelings about the practice.

Confused lost business man question arrows decision

One commenter on Mr. Nickell’s articles summed it up, with respect to any initiative that uses people of all financial and work levels:

This is an informative article that highlights and complements Value-Centered Leadership — respecting the value that participatory employees bring to the table and allowing them to make significant contributions toward a specific cause/goal in exchange for the things that they value most, i.e., impact, recognition, security, etc.

In all of the complaints aired about crowdsourcing and all of the compliments, you will rarely, if ever, find the words, “respect,” “contributions” or “value.” At least you don’t hear them used towards the participants in crowdsourcing — both the client nor the vendor. Perhaps the crowdsourcing business model needs a little more evolving before it’s seen as a viable solution, acceptable to all needed to make it succeed?

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Icon Contests are Crowdsourcing

Posted by: Admin  :  Category: Web Hosting

Back to crowdsourcing! The fact is crowdsourcing is more common and easier than we often think.  In a nutshell, crowdsourcing is the idea of putting a task into the hands of an army of pieceworkers who may do a great job — or a downright lousy job — with that task.  Some of the leaders in crowdsourcing are folks like Amazon’s Mechanical Turk and oDesk.  For example, if you have an art job you want completed for a low cost or in a short time, or you want to take a poll of likely customers, you can send these projects to the masses via a crowdsource platform.  The problem is sometimes the job you crowdsource doesn’t come back the way you wanted.  Sure the crowd can have a genius of it’s own, but it also has a profound stupidity of its own.  So the biggest drawback of crowdsourcing is that if you want expert work, you have to be the expert yourself.  You have to know exactly what you want, and exactly what good work will look like before you crowdsource your job.  Enter contests.

One way many web designers have overcome the problem of the stupidity of the crowd is by using contests to cull the inept from the downright brilliant.  Icon contests are a perfect example.  According to Smashing Magazine:

“A sweet, nice icon set is a perfect showcase of designer’s work and a powerful instrument to build up your reputation online. In fact, designers make use of it, creating absolutely amazing icon sets and offering them for free download. However, designing a high-quality icon set isn’t an easy task. It takes time, patience and resources and it requires professional skills and experience. We are regularly looking for talented artists and creative designers”

So they run icon contests to find the best icons and provide free use via creative commons rules.  But more interesting for web designers in search of their own perfect sets of icons, as well as other varieties of artwork, are crowdsourcing platforms that will actually run a contest for you.  These folks run contests for  web designers who want their own unique sets of icons and artwork.  Three well known art contest platforms are Design Contest, 99 Designs  and Design Crowd.

You create the contest and they run it for a fee.  The prices to run a contest vary and all are relatively low, but surely as more art-design contest platforms begin to compete the prices to run an icon contest will likely drop.

Another perhaps surprising aspect of these contests is that top designers are willing to compete in these contests for a minimal price or even for free at times because if they win they can publicize their abilities.  For Smashing Magazine they compete in order to give away a few icons as loss leaders: VisualPharm,  BanzaiTokyo (who provided our featured image above), and RocketTheme  for example, have entered some pretty wonderful icons in SmashingMagazine contests and giveaways.

Cupcake by Artdesigner.lv released by Smashing Magazine

Gingerman designed by Rockettheme and released by Smashing Magazine

The point is icon contests work on a bunch of levels to produce top quality work. Artists enter because they want to win even if just for the sheer joy of victory.  People like to watch contests, even some pretty weird ones!  And finally, there’s money and skill involved.  Web designers  choose the winners; since in the end the web designer is the expert and the artist has to meet those expectations to win.  Icons are a perfect place to compete, like cupcake contests.  Small, beautiful, exemplary of the artists’ overall work, and the excitement of watching the best in their fields engage in ruthless competition is actually awe evoking.  RAWR!  Let the icons games begin.

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CrowdSourcing: Use it.

Posted by: Admin  :  Category: Web Hosting

Grizzled, bleary-eyed, booze-reeking, day laborers arrive at a parking lot around 8 a.m. for work. If you hire one and want more work, hold off payment as long as possible; once paid he’ll vanish, until penniless and sobering up again, you find him at 8 a.m. in the future. That was forty years ago in most American cities.  Now a tremendous amount of day labor has gone online and not only has its image changed; it’s powerful and somewhat more humane! It’s called “crowdsourcing.”

Jeff Howe first identified crowdsourcing in the now classic 2006 Wired article, “The Rise of Crowdsourcing.” Distilled, crowdsourcing is the internet’s answer to day labor.  It is a combination of outsourcing and per project labor bid out to, and then performed by, a pool of millions of workers internationally. With the inexorable move toward Cloud storage which is rapidly disconnecting data from any particular server or device, crowdsourcing has been propelled into the stratosphere. Small businesses can now shop for skilled and unskilled part-time help in this booming new international, perpetually available “cloud labor” force.

One of the more exciting, and certainly terrifying, aspects of the rise of cloud labor is that the desk is dead or at least dying quickly. And so is the office. The workday is 24/7 from any mobile device wherever you happen to be. According to Michael Lock, VP, Americas, Google, “consumer IT is leading the world” and it is using mobile apps to do it.  Today 1.2 billion people access the web via 3-G.  In total, 2.2 billion people are on the Internet. Lock predicts by late 2013 more people will access the Internet via mobile devices than PCs. That explains why virtually no online worker works a 40-hour week at the office anymore. You simply don’t need to. The workday only ends when the phone vibrator is turned off. The Cloud Labor force allows easy collaborations across national and continental boundaries any time of the day or night.

So how does the little web guy use crowdsourcing?  And more important, should you?  Simple: Yes you should, but with care and due diligence. CrowdSourcing.org created this animated overview of crowd sourcing that is the ideal summary.

Just like the explosion of web hosting not long ago (giving rise to the need for our own Web Hosting Geeks!), crowdsourcing businesses have now taken off and some of the companies offering crowdsourcing are clearly better than others. Some are simply a better fit for one web-business than another. With all the crowdsourcing options available it is possible to crowdsource any online job from the development of a logo, identifying the best photo, translating Arabic into Urdu, doing product research, or finding an hourly CEO. Prices run from free to exorbitant.  But expense-wise the cloud laborer still remains exponentially cheaper than hiring a part-timer. Crowdsourcing perfectly supports the  “lean startup” model of entrepreneurship.  A small business can get a product off the ground relatively inexpensively,  find out if it’s profitable, and how to tweak the product–all before the startup funds and time have been used up.

Most everyone has heard of Amazon’s highly popular Mechanical Turk where anyone can bid out Human Intelligence Tasks (HIT’s) to a virtual workforce of MILLIONS for incredibly low cost.  But there are many other cloud labor sites as well and some give the employer vastly more control of their cloud laborers.  ODesk.com, for example, has a model that allows those who bid out the work (you!) to monitor the work in real time.  This interview of oDesk CEO, Gary Swart features a demonstration of oDesk in action.

There is also a relatively new ranking of “CrowdSourcing Websites & Pay Per Task Sites” on Ranker.com. Since these rankings themselves are crowdsourced by a rather small pool of rankers with no clear expertise in the field of crowdsourcing, I wouldn’t give tremendous credence to their rankings.  Still, their list is an ideal place to begin shopping for  crowdsourcing providers.

Now for a word of caution: before you take flight and begin crowdsourcing work to a remote cloud-labor force, become familiar Jeff Howe’s 5 Rules and  the 4th Rule in particular:  “The crowd produces mostly crap…. Any open call for submissions – whether for scientific solutions, new product designs, or funny home videos – will elicit mostly junk.” That means you will have to find some way to sift the gold from the sand, a task most of the crowdsourcing sites try to provide and one you should look for when making crowdsourcing decisions.  The simple unfortunate reality, despite the enormous collaborative capacity of the web, is crowds can be shockingly stupid, particularly when asked questions they have no capacity to answer.

According to Jon Burgstone and Bill Murphy, Jr.:  “…if you ask people things they’re likely to know about personally–the movies they watch, which politicians they’re going to vote for–you’ll get better data.” If you go to the crowd when you need to be the expert in your field that “seems downright lazy, whether you’re trying to save a life or change the world.” In conclusion, crowd sourcing is recommended only when you have the ability yourself to recognize a good solution. You wouldn’t take the advice of a friend when you’re not sure he knows what he’s talking about, so use that same caution taking the advice of an anonymous crowd. Or maybe crowd source that question.

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