What is crowdsourcing?

Crowdsourcing is the practice of turning to a body of people to obtain needed knowledge, goods or services.

The term crowdsourcing is a combination of crowds and outsourcing and was coined in 2006 by Wired magazine author Jeff Howe in his article "The Rise of Crowdsourcing."

How crowdsourcing works

As the term implies, crowdsourcing is when an entity -- whether an individual or an organization -- requests specific resources from a group of people. Businesses, individuals and organizations of all kinds have used this process to solicit ideas and raise money as well as consolidate and promote information.

These entities rely on the internet, social media and purpose-built platforms to elicit and receive the knowledge, goods or services they're seeking. This approach allows them to engage with a broader spectrum of sources than they would if they had used employees, suppliers and other traditional sources of expertise via conventional routes of engagement.

Benefits and challenges of crowdsourcing

Crowdsourcing can give entities access to a wider set of expertise at a faster pace and at a lower cost than traditional routes. On the other hand, those entities can't guarantee that the crowd they reach has the expertise, experience or resources to deliver what they need nor whether they're reaching the best sources to deliver the best possible outcome.

Crowdsourcing also has different, if not more, management requirements. Entities that turn to crowdsourcing may need to be more specific about their needs and expectations as well as how they evaluate responses, compensate participation or parse out ownership of the results. Entities may need to manage thousands, if not tens of thousands or more, of responses to their requests.

Types of crowdsourcing

There are different types of crowdsourcing.

A crowd contest is one popular type of crowdsourcing. In this case, an organization may use a crowd contest to create something, such as a graphic design. The organization may seek multiple qualified designers who will each submit their best idea or ideas in the hopes of being the winner who will be paid for producing the top design.

Similarly, an entity can use crowdsourcing to seek out an individual who can handle a specific project -- a type of crowdsourcing called macrotasking. Or the entity can seek out many respondents, assigning each one a task or a smaller part within a larger project. This is called microtasking.

Another subset of crowdsourcing is crowdfunding, in which individuals or nonprofits ask for money to cover the costs of an identified endeavor -- whether it's a dream vacation, a down payment on a house, an artistic endeavor or something altruistic. Entrepreneurs can also seek out funds for their businesses, although investment laws can limit what they're able to request and promise in return.

There is also a type of crowdsourcing known as crowd voting. It's as simple as the name sounds: The crowd votes to determine the best. Entities may opt to use crowd voting to engage stakeholders, such as employees or customers, as well as the public to help prioritize ideas or help determine a course of action.

Some areas of crowdsourcing have spurred specific recognition for the individuals involved. Citizen science, for example, recognizes the contributions that individuals make to science when they contribute data or help with reporting and analysis.

Crowdsourcing technology

While the internet and social media platforms are fundamental technologies for crowdsourcing, enabling entities to reach crowds at the scale and speed needed, specific crowdsourcing technologies exist to support this endeavor.

Some technologies enable specific types of crowdsourcing. For instance, Amazon Mechanical Turk, or Mturk, connects businesses with individuals for what it calls human intelligence tasks. GoFundMe is a crowdfunding site for individuals and organizations seeking money for specific projects or events, and Kickstarter is designed for entities raising money for creative projects.

Meanwhile, vendors offer crowdsourcing platforms for niche markets, such as nonprofit organizations looking to engage with activists around various issues and companies trying to reach their employees for help innovating on new business strategies.

In addition, some organizations are entirely built on crowdsourcing. One of the best known examples is the free online encyclopedia Wikipedia, with intellectual contributions of research, writing and editing as well as donations coming from volunteers around the world.

This was last updated in March 2023

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