Crowdsourcing vs. Crowdfunding and Everything in Between

Crowdsourcing has become a very common term online. Sometimes, however, the meaning gets blurred with other crowd-relatedCrowdsourcing vs. Crowdfunding and Everything in Between terms. It can be confusing to hear someone say crowdsourcing when they really mean crowdfunding. It can also mean that the purpose or focus of a project gets completely overlooked simply because a different word was used.

What is Crowdsourcing? 

Crowdsourcing is a business term coined in 2006. It is defined as “the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.”

Crowdsourcing takes on a variety of forms. It can be organized as a contest for the public, such as the challenges at Innocentive. Or, crowdsourcing can be organized as an internal way for organizations to gain feedback and innovative ideas from their employees or stakeholders. Regardless of how it’s used, crowdsourcing has proven itself to be incredibly helpful in a wide variety of organizations.

There are many benefits to crowdsourcing. The process allows organizations to solve problems more quickly. The collective insight of a group is generally superior to the ideas of a single expert or handful of executives because of the diversity and breadth of ideas the large group brings. As long as ideas are organized in an innovation platform, and carefully vetted before implementation, your organization stands to gain tremendously from crowdsourcing.

Crowdsourcing vs. Other Crowd-Based Terms 

There are other terms that are related to crowdsourcing, primarily based on their emphasis on using large groups of people to achieve a goal. Here are some common crowd-related terms that you will want to be familiar with:

  • Crowdfunding: A form of alternative finance that involves the funding of a project or business venture by raising monetary contributions from a large number of people.
  • Crowd Creation: A form of crowdsourcing where ideas for creating something are solicited from a group of people, often online. Examples include customers creating commercials and amateur hobbyists reporting their findings to help develop scientific databases.
  • Crowd Voting: A form of crowdsourcing that uses a community’s judgment to organize and filter content. Examples include readers rating articles online or viewers voting on who should continue on a reality television program.
  • Crowd Wisdom: A form of crowdsourcing that harnesses the knowledge and experience of a large group of people to solve problems or predict future outcomes. Examples include prediction markets such as the Iowa Elections Market or the Hollywood Stock Exchange.
  • Co-Creation: Co-creation allows employees, customers, or other stakeholders to become part of the product creation process. Examples include snack companies taking suggestions for a new flavor of potato chip, or shoe companies allowing customers to design their shoes online.
  • Collective Intelligence: A shared or group intelligence that emerges from collaboration and collective efforts to reach a group consensus. Examples include Wikipedia’s database of volunteer-written articles and Google’s indexing of millions of websites to find useful information through search.

When you fully understand crowdsourcing and its related terms, you’ll reduce the risk of miscommunication, projects will run smoother and you’ll see results faster. For more information, download our report Crowdsourcing: An Introduction today.

Comments are closed.