How to Best Use Crowdsourcing

How can crowdsourcing work for your business? A look at some online resources that stand out from the crowd.
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Writer and Author, Specializing in Business and Finance
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This story appears in the December 2010 issue of . Subscribe »

In 2006, writer Jeff Howe coined the term "crowdsourcing" to mean replacing an employee's efforts with the contributions of a crowd of people. Since then, crowdsourcing has helped companies improve products and develop creative concepts. BP even tried it in an attempt to find solutions in this spring's disastrous Gulf Coast oil spill.

"Crowdsourcing was typically for the generation of content or concept, but now we see it used in many ways," says Michael Michalowicz, founder of Obsidian Launch, a Boonton, N.J.-based small-business consultancy that uses crowdsourcing to launch ventures. Small businesses can turn to crowds to help develop ideas for products, for product testing and feedback and to find providers of various services, to name a few. But where do you find them? A cottage industry of crowdsourcing businesses has sprung up to provide crowd resources for a variety of applications. Here's a look at some of the best. This online marketplace for creative services allows users to post the parameters of their design or writing project and name the price they want to pay. Creatives then work on spec, submitting their ideas, and the user chooses the one he or she likes best. Any agreed-upon fees are paid upfront along with a $39 posting fee and a 15 percent commission. Companies can post the types of sales leads they're seeking (e.g., a tech-sector public relations consultant can request leads for prospects who meet certain criteria). After a transaction closes, users pay their stated referral fee to the person who provided the lead. A spinoff of tech crowdsourcing leader Cambrian House, this platform connects business with consumers, employees, partners or other resources. Need new product ideas? Done. Unsure about that marketing concept? Use their crowds to test it. Looking for funding? You might find sources here. Usage fees are based on a subscription model, which includes the planning and management of your own community. They start around $1,200 and go up from there, depending on how large and complex your project is. Here, a crowd of designers, craftspeople and others can make you a prototype or sample. Just describe what you want created and say how much you're willing to pay for it. Designers will respond with sketches and, if necessary, revised pricing (especially if the fee you named was too low). Designers are paid directly while Pokono is paid for the creation of the item(s).

You need to be comfortable releasing information about your company, strategies and goals to these crowds, which means competitors could get access to that intel. "You need to trust your instincts [about what to share]," Michalowicz says, "but the power of crowds is something that most small businesses can use."


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