The term crowdsourcing becomes more and more popular within the media. Is it only useful for companies? This essay will determine what crowdsourcing really means, how it is used and what the chances for other sectors are. Furthermore, it will provide some rules for successful crowdsourcing.
Jeff Howe mentioned this term, as one of the first, in an article in the magazine Wired in 2006. Later that year he defines it even more advocatory in his blog:
“I interpret crowdsourcing to be taking place any time a company makes a choice to employ the crowd to perform labor that could alternatively be performed by an assigned group of employees or contractors, even if the company is just now putting up a shingle. In other words, crowdsourcing need not require an active shift from current employees (or again, contractors) to the crowd; it can start with the crowd“.
So according to Jeff Howe crowdsourcing is basically the outsourcing of tasks, which are usually done by employees, to an anonymous, large group of people. This is called open call. But it does not have to start with a company, it also can begin with the crowd itself.
A more thorough definition was given by Henk van Ess in September 2010: “Crowdsourcing is channelling the experts' desire to solve a problem and then freely share the answer with everyone”.
Crowdsourcing in Business
To start with, I would like to give the 10 basic rules for successful crowdsourcing provided by Jeff Howe:
“1. Pick the right model from among collective intelligence, creation, voting, or funding.
2. Pick the right crowd from the participants to the people who will influence and usher the crowd.
3. Offer the right incentives to the crowd that are often expressed in recognition rather just money.
4. Keep the pink slips in the drawer – crowdsourcing is not outsourcing
5. The dumbness of crowds, or the benevolent dictator principle – crowds need leaders who influence
6. Keep it simple, break it down – give the crowd something each individual can work on, yet can aggregate into something great.
7. Remember Sturgeon’s Law – 90% of what is created is crap so you will need to allow the crowd to separate the cream from the crap
8. Remember the 10 percent, the antidote to Sturgeon’s law – related to #7 that the crowd can do the sorting in a democratic and open forum better than the experts.
9. The community is always right.
10. Ask not what the crowd can do for you, but what you can do for the crowd – a crowd forms and is most effective when it is working on something it wants.”
A recent example of Crowdsourcing is the case of Goldcorp, a Canadian mining company. They were struggling financially and were not able to find gold on their land in northern Ontario. So they decided to put all their geological data online and asked the people for help where the gold was located. They put up a reward of 500.000 $ for correct suggestions. They got answers from people all over the world and found gold worth 3 billion $.
On the platform Innocentive.com companies can post rather technical problems they are struggling with. They open up their database to a wide range of people and let them search for solutions. Usually you can win price money between 5.000 $ and 1 million $. For example: “The oil and gas software company Paradigm posted a challenge on the site because it wanted to find a better way to analyse 3D fault data. Interestingly one of the Solvers is a Swiss entrepreneur radiologist who had been working out ways to look at bones in 3D.”
iStockphoto.com is an online-photo-database where you can get quality pictures for a relatively small amount of money. Every approved and registered user can upload images. If a company or a person would like to use one of these pictures they just pay a small amount of money. This is one example of crowdsourcing that is actually started with the crowd itself and not by employees.
 Cf. http://news.bbc.co.uk/2/hi/uk_news/magazine/8788780.stm