An entrepreneur's guide to crowdsourcing

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Fergus Dyer-Smith explains how every small business can tap into the wisdom of the crowd.

Do you know the name of the person who invented the safety pin? Most people don’t. He was called Walter Hunt and his one creative idea changed the way the entire world does certain things. Innovative ideas can come from anyone. There are millions of exceptionally creative people on this planet but that doesn’t mean any of them actually work for you.
The beauty of crowdsourcing means that you can tap into this global talent pool with just the click of a mouse. By sidestepping expensive suppliers and going direct to a limitless resource of world experts – freelancers, hobbyists, stay-at-home parents – you benefit from highly competitive rates and ultra quick solutions.
So what is crowdsourcing? This new business model takes a task normally delivered by a supplier or employee such as raising finance, generating sales leads or creating an advertising slogan and outsources it to a community of experts through an "open call" on the internet.
You set a price and post your brief on a crowdsourcing platform. Experts from across the globe then pitch for the work by posting their solutions and you pick the best one.
Perfect for small companies with limited budgets, crowdsourcing allows entrepreneurs to grow from one person doing their IT, sales or fundraising to over 1,000 specialists overnight, without the overheads of increasing their workforce.
In fact, in the read/write era of Web 2.0 technology, entrepreneurs can harness crowdsourcing platforms from start-up phase right through to growth, all at minimal cost but with maximum control.
Here are ten ways that entrepreneurs can use the masses to create an impact:
1. Idea generation – Dell’s Ideastorm allows the public to suggest new product ideas and improvements to existing Dell products. Facebook and other social networking sites are a great way to research new niches.
2. Product development: Threadless uses an entire community to decide which T-shirt it will release each week. Their form of market research and product development has ensured many of their products have sold out before they are even produced.
3. Research and development: InnoCentive and Ninesigma crowdsource scientists and researchers to propose solutions to client challenges. Prizes can range up to hundreds of thousands of dollars.
4. Forecasting: Trendwatching employs a crowd of 8,000 to identify emerging consumer trends. Twitter and Google Zeitgeist are great tools for crowdsourcing your future market plans.
5. Advertising and marketing: Promotional activity lends itself to the crowdsourcing concept. Sites like Ideabounty and Buildabrand allow brand identities to be built and then marketing collateral can be created through 99 Designs, crowdSPRING and AdHack.
6. Customer support: Get Satisfaction has created a neutral forum for companies to support customers, exchange ideas and get feedback about their products or services. SuggestionBox is a customer feedback management solution which allows communities to be created with a view to feeding back views and comments.
7. Sales and funding: LeadVine lets businesses advertise the type of sales leads they are interested in and then offers a referral fee (from $50) for leads that convert into sales. Kiva is a not-for-profit organisation that appeals to its community of micro-lenders to generate loans for entrepreneurs in the developing world.
8. Resources: iStockPhoto brings together a community of photographers who submit their work for purchase at prices far lower than traditional stock photo firms.
9. Testing and knowledge tasks: uTest, TopCoder and all harness crowdsourcing to find qualified software testers for clients. Amazon’s Mechanical Turk calls on a worldwide workforce to complete small tasks.
10. Professional services: Legal documents are hosted and uploaded through sites such as Docstoc and a crowd of accountants are ready to answer your questions on JustAnswer.
So how are businesses currently benefiting from crowdsourcing?
Last year food giant Unilever dropped the ad agency it had been using for over a decade and put up a $10,000 bounty for new ideas to promote Peperami on television.
The marketing industry was shocked. Big agencies seethed as the Peperami brand replaced its loyal ad shop of 16 years with two individuals, one based in Munich, the other in London, who jointly won the prize.
This break with conventional methods of sourcing marketing services may have caused a storm but it saved Unilever bags of money. The $10,000 payment is a fraction of what old agency Lowe would have charged. More than that, the mischievous Peperami brand cheekily engaged its consumers throughout the process, tapping into their collective intelligence by asking them to come up with advertising ideas. A total of 1,185 concepts were submitted and brand awareness was boosted by a torrent of media coverage.
Another crowdsourcing organisation, a college in the US, wanted to provide its IT students with USB hard drives so they could upload crucial software and work from home. In the past this was always a problem since most thumb drives are not large enough to hold the operating systems students needed and they had problems getting USB drives to boot correctly.
One entrepreneurial college teacher was an avid Facebook member and decided to post the problem on his Facebook page. He immediately got so many replies that he couldn’t keep up with them and asked respondents to post all comments to a forum he set up on his personal website. Within two weeks, the discussion produced a complete set of instructions on how to configure everything so the computer would be able to boot from operating systems installed on the removable USB hard drive.
Since the term was first coined in US technology magazine Wired back in 2006, the crowdsourcing community has grown rapidly. Hundreds of platforms now straddle a range of industries and services from IT to fashion. For many SMEs, crowdsourcing is becoming integral to the birth and subsequent growth of their businesses and in 2010 this process of tapping into the masses will come of age. No longer a geeky sideline of the Web 2.0 revolution, crowdsourcing will become a powerful business model, changing the way people, especially small company owners, do business.

Fergus Dyer-Smith is co-founder and CEO of - an online platform that allows users to source creative people to work on video, motion or rich media projects.

For more in the 'An entrepreneur's guide to' series, click here.


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By markhall
21st Apr 2010 13:42

There are some great resources listed here, however you don't mention the nightmare or complete lack of control that comes with outsourcing or the lack of stabilty when not dealing with an agency.

While using an agency may be more expensive , you do get a full team working on your project including creative, design, tech, account mangement and with that comes experiance, knowledge and in some cases a whole host of awards.

Have a look at

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By virtuallysorted
21st Apr 2010 14:53

Great article Fergus - can I add Smartsheet's integration with Mechanical Turk to the list?

I'd also agree with Mark though.  Managing a crowdsourcing project takes time and effort - how do you sift the great ideas from the truly dire ones?  Or make sure that the project is keeping on track or has the right description in place?   Project management of these tasks is the key to harnessing the power of crowdsourcing and Wikinomics. 

You don't necessarily need to micromanage it, but having someone keeping an eye on the progress can be a fantastic help to achieving results.  (Or of course use a virtual assistant to do it for you!)


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By Business Angel
22nd Apr 2010 15:37

Well thanks Caroline you kind of answered the previous comment.

For smaller or more early stage businesses the choices are often made by the owners and so working with these sites has no real impact on the decision making process. An agencies fees are just not an option and they would be likely working with a freelance designer for example and having to make those decisions anyway

I agree though I still think there is a great deal of value a media agency can add to businesses BUT the model could shift. The value add being provided by the agency, (e.g the working up of concepts)  but the actual work of creation by some form of CS solution. 

I only mentioned a few sites here but check for a more comprehensive list

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