Friday, April 12, 2013

Emerging Maturity: The 3 Different Types of Crowdsourcing

Crowdsourcing, according to Gartner's hype cycle, is really in its infancy as it begins to approach the peak of the curve. The "crowdsourcing" term itself is less than ten years old, and the most of the key players in the industry are younger than that. There are countless blog posts that help define the handful of categories that most companies fit into, but there are really three key model differentiators in today's market.

“Crowdfunding”, “Crowdvoting”, and even Q&A sites can all be positioned under the umbrella of Crowdsourcing. They’re all categories which tap into a community to drive work or results. To add to the complexity, there are multiple different ways to define crowdsourcing, making the term more confusing and less descriptive as the market grows. Ignoring categories for a moment, let's take a look at the higher-level crowdsourcing business models:

(1) One-to-One
One-to-one is a new update on the classic contractor/freelancer concept. The crowdsourcing angle here is simply the addition of the internet to the model. Increasing the talent pool through the depth of the web, and removing a fair amount of middleman overhead has helped this model get its start. However once the work and workers are connected, the “crowdsourcing” aspect of this model ends and work progresses as usual:
  • Task complexity: Simple or complex
  • Capacity: Variable skills, but limited scale
  • Selection: Business selects the worker
  • Cost structure: Pay-for-hours/effort

(2) One-to-Many
This model is really how the majority of people view crowdsourcing today. It’s the method and structure behind companies like Kickstarter, Trendwatching, and Amazon’s Mechanical Turk. Unlike the One-to-One, these models truly tap into the power of a community by really hitting upon scale. The only limitation is that the model tends to primarily focus on small projects or microtasks for the members, trusting that the end result of the combined microtasks of hundreds or thousands of contributors creates value. For certain projects, tapping into scalable crowds of microworkers is absolutely invaluable:
  • Task complexity: Simple only
  • Capacity: No variability, but immensely scalable
  • Selection: Member self-selects the work
  • Cost structure: Pay-for-performance

(3) One-to-Competition
Organizations like, 99designs, and Tongal all run off a crowdsourced competition model. If done correctly for both the members competing and businesses consuming the service this model changes the entire game. One way to look at the transition is to look at the change from an organization using “the internet” to engage the world, versus using “the cloud” to transform a business. What competition allows is an efficient way to bring the complexity and elasticity of a One-to-One model to the scalability and pay-for-performance of the One-to-Many model:
  • Task complexity: Simple or complex
  • Capacity: Variable skills and scalable
  • Selection: Member self-selects the work
  • Cost structure: Pay-for-performance

These differentiations are important to consider as the crowdsourcing umbrella casts a wider and wider net. It takes a special recipe to efficiently drive the right variable skills and scale to enterprise projects, but it’s just as important to pick the right crowdsourcing platform for your specific need.

(Next post in this series: How Crowdsourced Competition Enables Task Complexity)

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