Posted by in Musings

Crowdsourcing, the cousin of outsourcing, has fully entrenched itself as a viable, and profitable, method to procure specialized labor. Crowdsourcing uses the collective knowledge of the crowd with the intention of finding the right answer in solving a problem.

Just like outsourcing, when an individual or company is in need of a service, they will seek specialists outside of the company whom are experts within a given industry. By contracting with these experts, the company can seek skills outside of their own repertoire, allowing them higher quality results, overall cost efficiency and many other reasons. The term outsourcing has even evolved to incorporate the method of using cheaper labor overseas, technically called off shoring, in order to save manufacturing costs. Crowdsourcing is essentially outsourcing in almost every aspect, expect for one key concept–it thrives off the notion of “power in numbers.”

As opposed to outsourcing to one individual/company, crowdsourcing involves the incporation of many potetial sepcialists. Whoever is seeking a service (referred to now as the “REQUESTER”) will present a desired request, and the respective price of the request, to anyone who may be interested accepting the “contract” (reffered to now as the “SPECIALIST.”) Effectively they are broadcasting this service to anyone and everyone willing to accept. Now the specialists can choose to perform the request, however they don’t automatically accept a contract. Instead at this stage, they are only competing against all the other specialists to create the best overall product/result. The requester then has the power to give constant feedback to all specialists, using the democracy of production, to choose elements from each specialists’ work, in order to craft the perfect final outcome. Once the request has been fulfilled, the requester awards the payment to the specialist who best fulfilled the request.

There are many basic and well established elements of crowdsourcing that explain it’s success. First, competition breeds innovation. By creating an environment where multiple specialists compete, the requester benefits by having many perspectives that he can then combine to make the optimal outcome. Second, it uses the idea of Auction Theory. Auction theory states price is not, and should not, be dictated by a set market price where supply equals emand. Rather each individual has a certain amount they are willing to pay, or in this case work for, . Therefore you can expect if you offer $1,000,000, you can expect hundreds of specialists to get involved, yet you there may still be people willing to work for $100. Everyone has their price, and with crowdsourcing, you are able to find those individuals willing to work for your desired price.

Essentially crowdsourcing is community-based innovation. Combined with the extensive reach the internet has to offer, outsourcing can be performed through individuals directly as opposed to large companies. This has remarkable implications for industry such as graphic design.

I’ve personally looked into many Crowdsourcing websites. When I was in the production stage for the ThoughtChalk website, I cosindered using 99Designs. Their model seemed exactly what I needed, only problem was I really didn’t have enough money to get the results I really wanted. So I settled with my own personal design, which has sufficed for now. If I do make money someday off this site, then I’ll make some major upgrades.

Another website I was recently introduced to is called TaskRabbit. They have created a service to crowdsource ANY task, no matter how menial or trivial, for a small price. So if you need someone to grab groceries for you, you just pay them the cost of the groceries plus a nominal, and the certified TaskRabbit will take care of it. (I think it’s such a solid business model that as of yesterday, I have signed up to become a TaskRabbit. I hoping I’ll make a little extra money on the side while I’m in medical school.)

Other sites include uShip (a service to find cheap ways of shipping just about anything), Kickstarter (a crowdfunding website to raise money for small scale projects) and Kiva (which I’ve already written about, but is a crowdfunding microfinance company providing loans to individuals and small businesses around the world). There are SO MANY Crowdsource based services online that there is a Crowdsourcing directory for every possible thing you could imagine.

The internet has birth another entirely novel concept, and like everything else on the internet, it has exploded. And it will continue to grow as more people realize it’s potential. In retrospect, I should have crowdsourced this blog post….probably would have been written better.

Crowdsourcing for tasks, to create small tasks for people to complete. The breaking town of a major project into smaller tasks for many to complete.