10 Ways Crowdsourcing Can Save or Fail Your Business

Crowdsourcing is kind of the best of the internet. Strangers self-organize to complete a task or solve a problem, and the solution often comes faster and cheaper than anything one desk jockey in a cubicle could come up with on his own. An amazing example of crowdsourcing in action is the Haiti Crowdsourcing project which connected real time texts and phone calls from Haitians in need after the earthquake with a graphical overlay map of their precise location, so emergency personnel could respond.

Of course, when you set the crowd free, dangerous things can happen, too, like in the case of the popularity contest that left Kraft re-naming Australia’s beloved Vegemite “isnack 2.0” and then quickly changing it back after the public outcry about the stupid name.

Entrepreneurs and brand managers alike are left wondering how to utilize these tools to benefit their businesses without opening themselves up to disaster. Folks who are passionate about social change are also concerned about using these tools effectively without coercing the individuals in the crowd to do work for free that might otherwise be done by a professional. These are some of the themes that emerged from the SXSW panel Crowd Sourcing Innovative Social Change. The panel was crowdsourced, of course, with the moderator walking the crowd and taking questions and answers alike from both the panelists and the audience members. Here are the best and worst uses of crowdsourcing, straight from the hive mind:

The Best

1. Helping small scrappy organizations find a voice
If you’re in start-up mode and you don’t have money to spare, but you want to get the word out, crowdsourcing is a great way to do it. The crowd can be used for everything from logo design to event promotion via Twitter and Facebook. The great equalization of the Web means that if you have a great idea, but not a lot of money, the crowd will gladly help you spread the word. Examples include Open Green Map where users enter environmentally friendly businesses in their communities and Invisible People where a network of hard to reach homeless is alive and well.

2. Giving away money
Granted, this is a good problem to have, but if you are a foundation that has money to spare and you would rather give the bulk of it away than hire a bunch of Program Officers to review applications, crowdsourcing can both introduce you to great causes you might not have heard of or show you how they resonate with your community. The Case Foundation is a master at this one, using crowdsourcing to learn about worthy non-profits and to galvanize giving beyond its walls.

3. Building your brand
Crowdsourcing is a great way to build brand recognition on the cheap. Whether you’re giving away money, like Pepsi with it’s Refresh campaign, which invites community members to vote for the best causes, or Coke’s New Coke fail which was the result of too much reliance on focus group data.  The danger is that it can be tough to tell how the crowd will respond in advance, but either way, it’ll be your name in big lights!

4. Spreading the workload
If you have a daunting task and not enough people to complete it, turning it over to the crowd in bits and pieces is a great way to get things done. reCAPTCHA stops spam bots by requiring users to type a few keystrokes when they want to leave a comment somewhere–but the letters it requires you to type aren’t random. reCAPTCHA makes good use of your 10 seconds of time, by requiring each user to type in a word or two from a digitized book–over time, whole libraries are edited for clarity one word at a time. Websites love it because it’s a free way for them to keep spammers out, and users are spending 10 second increments to do something useful. It’s a win-win.

5. Predicting the future
The crowd correctly tapped Obama for president way back before he’d even secured the Democratic nomination. Sometimes, when thousands of people put their best bet forward, it’s more accurate than dozens of experts put together. Businesses can harness futures markets for strategic planning.

6. Eloquent solutions to complex problems
Arguably, the most effective way to use crowdsourcing is to solve complex problems in an eloquent way. The X Prize, and DARPA both understand that crowds can solve amazingly complex problems when they are given a challenge and a tempting prize. Both of these organizations use the prize model to galvanize hundreds of thousands of people to apply their brainpower to a difficult problem. If your business has a problem and only a set amount of money to solve it, you might be better off framing it as a prize challenge than spending the money internally on R&D or salaries–the crowd can create eloquent solutions that individuals might never have the opportunity to land on.

The Worst
Of course,
like any tool, crowdsourcing will not work for every application, and in some cases could actually hurt your business. Here are the four ways you should tread carefully if you plan to use crowdsourcing–or maybe avoid it all together:

7. Following the rules
When it comes to compliance, it’s probably safer to pay more attention to what your accountants and lawyers have to say than the crowd. They probably don’t have the experience to advise you properly, and they are not on the hook for paying the fines if you mess up. The ever-helpful respondents that form the hive mind on Metafilter are always quick to advise questioners that they aren’t lawyers for that reason.

8. Deciding what to work on
Strategic planning or other tasks that require a high level of attention to detail and focus, like the development of a mission statement, are
best left to professionals and the people who work for you full time. They know your business best, and their attention to detail and due diligence are vital in developing a successful plan for future work. The crowd has a remarkable level of passion for a group of outside observers, but they are ultimately just outside observers.

9. Work you should be paying for
Crowdsourcing can be tremendously useful for getting work done on the cheap, but businesses with a social mission should be careful to avoid exploiting the crowd for work they really should be paying for. Too much reliance on the crowd could be construed as unethical and open your company up to criticism about the true nature of your social mission. Mechanical Tuck by Amazon can be a great way to  get work done on the cheap, but when you pay four cents per micro task, you can be construed as exploiting your workforce and lowering the value of its work.

10. Building a community
Finally, the crowd is incredibly effective at galvanizing a community you already have, but crowdsourcing techniques can be more difficult to utilize if you are trying to build a community at the same time. Especially if you are hoping to have work done for you–like idea generation or problem solving, if you don’t give the crowd an incentive and you don’t have built-up good will with them, you might find your crowdsourcing efforts to be less than successful.

Readers, what are your favorite examples of successful or not so successful crowdsourcing? Share them in the comments!

Jen Boynton

Jen Boynton is editor in chief of TriplePundit and editorial director at 3BL Media. With over 6 million annual readers, TriplePundit is the leading publication on sustainable business and the Triple Bottom Line. Prior to TriplePundit, Jen received an MBA in Sustainable Management from the Presidio Graduate School. In her work with TriplePundit she's helped clients from SAP to PwC to Fair Trade USA with their sustainability communications messaging. When she's not at work, she volunteers as a CASA -- court appointed special advocate for children in the foster care system. She enjoys losing fights with toddlers and eating toast scraps. She lives with her family in sunny San Diego.

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