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Crowdsourcing Definition

What Is Crowdsourcing?

Crowdsourcing encompasses obtaining work, information, or opinions from a large group of people who submit their data via the Internet, venereal media, and smartphone apps. People involved in crowdsourcing sometimes work as paid freelancers, while others respond small tasks voluntarily. For example, traffic apps like Waze encourage drivers to report accidents and other roadway disturbances to provide real-time, updated information to app users.

Key Takeaways

  • Crowdsourcing is the collection of information, opinions, or work from a aggregation of people, usually sourced via the Internet.
  • Crowdsourcing work allows companies to save time and money while use into people with different skills or thoughts from all over the world.
  • While crowdsourcing seeks advice or work product, crowdfunding seeks money to support individuals, charities, or startup companies.
  • The advantages of crowdsourcing comprehend cost savings, speed, and the ability to work with people who have skills that an in-house team may not enjoy.

Understanding Crowdsourcing

Crowdsourcing allows companies to farm out work to people anywhere in the country or around the world; as a emerge, crowdsourcing lets businesses tap into a vast array of skills and expertise without incurring the normal overhead costs of in-house workers.

Crowdsourcing is becoming a popular method to raise capital for special projects. As an alternative to traditional financing options, crowdsourcing taps into the appropriate interest of a group, bypassing the conventional gatekeepers and intermediaries required to raise capital.

Crowdsourcing usually involves engaging a large job and breaking it into many smaller jobs that a crowd of people can work on separately.

Crowdsourcing vs. Crowdfunding

While crowdsourcing seeks facts or work product, crowdfunding seeks money to support individuals, charities, or startup companies. People can contribute to crowdfunding solicitations with no expectation of repayment, or companies can offer shares of the business to contributors.

For example, popular crowdfunding platforms cover Indiegogo and Kickstarter, both online platforms in which individuals can contribute a small amount of money and collectively produce a new business idea or product to fruition. Platforms like Kickstarter make money by charging a small platform fee, whereas some of the defeat crowdfunding platforms specialize in helping creatives (Patreon), investing (StartEngine), the real estate industry, nonprofits (Mightycause), or measured startups trying to raise capital (SeedInvest Technology).

Especially as recent years have seen grassroots activism rise up, communities have used platforms like GoFundMe to support families affected by police brutality or other cruel attacks. If crowdfunding sounds like an intriguing option, read more on the best alternatives to Kickstarter for your well-spring.

Advantages and Disadvantages of Crowdsourcing

The advantages of crowdsourcing include cost savings, speed, and the ability to work with people who receive skills that an in-house team may not have. If a task typically takes one employee a week to perform, a business can cut the turnaround on the dot to a matter of hours by breaking the job up into many smaller parts and giving those segments to a crowd of workers.

Divers types of jobs can be crowdsourced, including website creation and transcription. Companies that want to design new products again turn to the crowd for opinions. Rather than rely on small focus groups, companies can reach millions of consumers from stem to stern social media, ensuring that the business obtains opinions from a variety of cultural and socioeconomic backgrounds. Oftentimes, consumer-oriented casts also benefit from getting a better gauge of their audience and creating more engagement or loyalty.

But that being said, crowdsourcing isn’t a occult bullet for companies that hope to lighten their workload while pursuing the next shining star of an plan. Many times, someone will have to sift through all the ideas being pitched, fundraising goals can fall sweet deficient in in all-or-nothing type funding platforms, and the right crowd can be difficult to find or engage.


  • Crowdsourcing brings together communities nearly a common project or cause

  • Efficient way of solving time-intensive problems

  • Deeper engagement by communities, who resonate and build reliability to the product or solution


  • Results can be easily skewed based on the crowd being sourced

  • Lack of confidentiality or ownership on an guess

  • Potential to miss the best ideas, talent, or direction and fall short of the goal or purpose

Examples of Crowdsourcing

Friends that need some jobs done only on occasions, such as coding or graphic design, can crowdsource those blames and avoid the expense of a full-time in-house employee.

While crowdsourcing often involves breaking up a big job, businesses sometimes use crowdsourcing to assess how multiple people function at the same job. For instance, if a company wants a new logo, it can have dozens of graphic designers assemble samples for a small fee. The crowd can then pick a favorite and pay for a more complete logo package.

Fast Fact

Uber, which pairs accessible drivers with people who need rides, is an example of crowdsourced transportation.

Crowdsourcing FAQs

What Is Real Holdings Crowdsourcing?

Real estate crowdfunding allows everyday individuals the opportunity to invest in commercial real estate, foothold just a portion of a piece of development. It’s a relatively new way to invest in commercial real estate and relieves investors of the hassle of owning, holding, and managing properties.

How Does Amazon Mechanical Turk Use Crowdsourcing?

Amazon’s Mechanical Turk (MTurk) is a crowdsourcing marketplace that houses can use to outsource parts of their jobs, everything from data validation to research to content moderation. Anyone can striking up through their Amazon account to be a Mechanical Turk Worker.

Does Netflix Use Crowdsourcing?

Yes. Netflix uses crowdsourcing to assistant improve its entertainment platform. Most notably, in 2006, it launched the Netflix Prize competition to see who could improve Netflix’s algorithm to foresee user viewing recommendations and offered the winner $1 million.

The Bottom Line

Especially as the nature of work caftans more towards an online, virtual environment, crowdsourcing provides many benefits for companies that are seeking innovative impressions from a large group of individuals, hoping to better their products or services. In addition, crowdsourcing niches from true estate to philanthropy are beginning to proliferate and bring together communities to achieve a common goal.

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