crowdsourcingYou’ve probably heard of Crowdfunding, and the impact it is having on the ability of entrepreneurs to raise funds for new business ventures by tapping the public for small contributions instead of using traditional financing from banks and venture capitalists. But you may not be aware of how Crowdsourcing is changing the way work is being done in businesses large and small.

“Crowdsourcing,” first coined by Jeff Howe in a 2006 Wired Magazine Article, The Rise of Crowdsourcing, is defined as , “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.“  In practical terms, this can mean getting the “crowd” to perform tasks for free (or for a prize such as a free month of service, or a free product) that were once done by paid employees; or it can mean paying multiple people small fees to perform “micro-tasks” that are combined to complete a project that would have cost significantly more had it been done by an employee or a single outside firm.

Small business owners are acutely aware that when they can do more with less, it is a win for the business.  And, crowdsourcing has the added bonus of potentially engaging your customers to help solve your business problems—which can end up helping you create a product or service that they are more likely to buy, and fostering customer loyalty in the process.

A Crowdsource project can be as simple as running a contest online to come up with a new logo for your company and awarding a prize to the winner; or opening a vote for selecting your new company tagline.  It can also be as complex as creating a new software application, executing a multi-channel marketing campaign, or creating a community of users who help each other with using and troubleshooting your products and services.  A newer incarnation is enterprise Crowdsourcing, or managed Crowdsourcing, in which you hire a company to manage all aspects of your project—from breaking down the tasks and assigning them, to micro-task integration, to quality control on the finished product.

For an in depth introduction to Crowdsourcing, check out the Enterprise Crowdsourcing: Changing the Way Work Gets Done webinar slide deck from If you want to view the webinar itself, you can register here.  You can also listen to a Google Hangout presentation (37 minutes) from Lionbridge, a managed crowdsourcing provider, on How Quality Crowdsourcing is the New Outsourcing.

For an example of Crowdsourcing at work, read the whitepaper, A Strategic Guide to Crowdsourcing a Video Campaign from geniusrocket, another managed crowdsourcing provider.  And to fully understand the risks and rewards of using the crowdsourcing approach, read the ideavibes whitepaper, Exploring Crowdsourcing and Risk.

If you want to investigate using Crowdsourcing for your business, a recent post, Let the Crowd Build Your Company provides links to software, graphic design, and managed Crowdsourcing providers.  Also, check out the Tools section on for posts about Crowdsourcing applications, platforms and service providers.

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Lisa Hephner

Lisa Hephner

My name is Lisa, and I’m the Vice President of Knowledge, responsible for the management of corporate, product, competitor, marketplace, legal, and regulatory knowledge, and creation and dissemination of knowledge tools using these assets to PaySimple prospects, customers, employees, and partners.

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