Principle

The crowdsourcing business model consists of a large number of players (consumers, amateur or professional service providers, the general public, etc.) carrying out a task or project that is normally carried out by a single person. Crowdsourcing can be done via an open call for actors or a targeted call if it is a project requiring specific skills.

Advantages of this economic model

Crowdsourcing allows the company to call on external people and thus benefit from their different and new points of view in relation to the company’s activities. It will also allow the company to exploit the intelligence, know-how and creativity of a large number of individuals in order to pool their imaginations to solve the innovative task, project or challenge that required the use of crowdsourcing.

Moreover, for the development of a future product, if the company uses crowdsourcing, it will receive the opinions, possible designs of future consumers, ensuring that they will buy its product in the future because consumers will buy what they have created.

On an economic level, crowdsourcing is much more advantageous as it will avoid the company having to pay development costs internally or having to use a design/creation agency.

From a financial point of view, the money or prizes paid to the participants in the crowdsourced event will therefore be much cheaper for the company than having to call on a professional.

For those involved in crowdsourcing, the aim is to get involved in such a challenge because they will receive a financial reward or a prize awarded by the company in exchange for their commitment. For a company, crowdsourcing can also be a way to do its market research at a low cost since by distributing its products to customers they will be able to provide advice and feedback to improve the product. For customers, it is also advantageous because they become brand ambassadors and get the products for free.

Evolution of the model over time

Historically several crowdsourcing initiatives have been significant as in 1714 with the British government launching the “longitude act”, an open call with a £20,000 reward for anyone who would provide an effective solution to determine the longitude of a ship. Then in 1884, the editors of the Oxford English Dictionary also made use of crowdsourcing. They asked people to submit their own definitions of as many words as possible. This crowdsourcing initiative helped to enrich the dictionary and English lexicons around the world. However, it was in 2006 that crowdsourcing took on this name following an article: The rise of crowdsourcing written by Jeff Howe and Mark Robinson, editors at Wired magazine.

Impact of digitalization

Since then crowdsourcing has been booming and is increasingly being used in particular to find the solution to challenges that one person in a company could not solve alone. Today crowdsourcing has become much more digital thanks to digital tools and many crowdsourcing platforms have been created.

With the Web and the development of digital crowdsourcing platforms, it is now possible to bring together a much larger number of players scattered around the world. This connection via crowdsourcing also makes it possible to collect much more data and information than if one person did it alone.

Impact of the sustainable revolution

With today’s environmental issues, crowdsourcing allows you to make either a targeted call on issues related to sustainable development or an open call that, thanks to the collaboration of multiple actors, will highlight trends and products on sustainable development. Indeed, among the multitude of actors involved, there will inevitably be some who are invested in sustainable development issues, enabling them to propose solutions and ideas with a positive impact on the environment. This is the case, for example, of the rethink plastic hackathon organized by Unilever.

Variants of the model

Crowdsourcing can be found in three other forms which are :

Crowdfunding: consists of an alternative method of financing since it allows, via participatory financing platforms, to collect funds from Internet users to finance a project.

Mass collaboration: consists of a collective action, bringing together a large number of people around a single project.

Open innovation: consists in the innovation process being based on sharing and collaboration by including people from outside the company in order to make the best use of collective intelligence.

Value chain & types of stakeholders

Crowdsourcing allows outsourcing to the greatest number of people by involving several types of players:

The people in the company who launch the challenge, the crowdsourcing project.

“The crowd: the people who take part in the call, by sending data, answers, solutions, etc.

The “jury” of the company, the employees who evaluate the solutions.

These are usually the people who launched the crowdsourcing project and who are also accompanied by employees of the company with expertise in the field in order to check the relevance of the crowd’s work.

Reference companies

Innocentive: InnoCentive is an open innovation and crowdsourcing company, they enable organizations to bring their unsolved problems and unmet needs, defined as “challenges”, to the crowd.

Procter & Gamble: Procter & Gamble launches Connect & Develop, the crowdsourcing platform for detecting innovations developed by external players.

Myfab: MyFab.com, opened in 2008, is an online sales site where Internet users vote for items offered online.
Kickstarter: Kickstarter is an American participatory financing company that allows Internet users to finance projects still at the idea stage.

Some key figures

During the Super Bowl in 2013 Coca-Cola launched “Coke Chase”, an interactive crowdsourcing-based ad. In the advert, three teams competed in the desert in a race for a giant Coca-Cola bottle. Fans and internet users had to vote for their favorite team on social networks and propose sabotage for the teams they did not want to see win. In the end, 1 million votes were counted and 7.3 million sabotages were proposed.

Starbucks coffee used crowdsourcing by launching the “My Starbucks Idea” website. The site enabled 150,000 ideas posted by customers and 2,000,000 votes on the questionnaires that were posted.

Products or services adapted to this model

Crowdsourcing can be used in multiple sectors and is now integrated as a vector for innovation projects. However, for two sectors crowdsourcing is all the more important because in these sectors projects cannot be solved by a single person:- IT (Synack platform)- Manufacturing & engineering (Sony First flight platform or Surcle.io)

On NextBusinessModels.com , our competitive intelligence platform, you can get more information on this business model and learn about inspiring players that already deployed it:

Contact us to get the complete analysis: info@inspiringtrend.com