“Crowdsourcing is when a company takes a job that once was performed by employees, and outsources it as a form of open call to a large undefined group of people generally using the Internet.”
– Jeff Howe, Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business
As a comment to an earlier post, for start-ups to be not perceived as sleazy, I argued that entrepreneurs’ execution of “end” and “means” must adhere to value-add and accountability principles. This semester, after analyzing InnoCentive, Threadless and OpenIDEO in Managing Innovation, then dissecting Google+, Cheezburger Network, PatientsLikeMe and Tripadvisor in Digital Marketing Strategy, I’d like to turn my critical “sleaze detector” lens to the monetization of crowdsourcing.
To test whether my anti-sleaze i) “end” and ii) “means” hypotheses hold true, let us reflect on these two perspectives as observed from industry leaders’ corporate strategies and best practices.
i) “End”: Distill your start-up’s value-add to target demographicWhat continues to drive growth for today’s winning crowdsourcing platforms? Wikipedia facilitates intrinsic rewards for its unpaid knowledge-based contributor community. iStockphoto shares extrinsic financial and social value with users as an aggregator and intermediary. Kiva is a mission-driven crowdfunding platform that leverages prosocial decision-making. To refine a customer value proposition and accelerate product-market fit, entrepreneurs must perform clear stakeholder analyses and design specific built-in tools to address (at least one of) each stakeholder’s underlying motivations, e.g.
Win (Users) + Win (Vendors) + Win (Employees) = Win (Company)1
Users:2 Autonomy + Competence + Relatedness
Vendors: Access to data + Intimacy with users
Employees: Positive progress + Personal affirmation
Company: Direct engagement + Meaningful relations + User loyalty
ii) “Means”: Customize accountability towards user base throughout your processAfter product-market fit is achieved, how have winning crowdsourcing platforms most effectively capitalized on earned advantage? Start-ups must sustain a symbiotic give-and-take relationship with users. Recognizing the concept of “no free lunch”, Wikipedia, iStockphoto and Kiva strive to continuously demonstrate commitment to creating and returning tangible and non-tangible value to users, who sacrifice time and resources in generating quality UGC to be farmed. Hence, to reinforce a start-up’s customer value proposition, follow through on delivery of service offerings to end-users matters too, e.g.
Deriving Your Do’s…
- Recognizing that user communities are not always incentivized by material rewards, always align towards users’ authentic interests by designing relevant and generous incentives;
- Engineer personalized learning experiences and empower rational decision-making, while building tools that simplify complex processes, democratize inaccessible information and offer options of meaningful value to users;
- Build multiple channels for access to diverse collaborative experiences and facilitate value-sharing with friends which translate from online to offline.
Deriving Your Don’ts…
- Avoid surprises as described here. Being open with data collection or usage, refusal to lock users into opaque transactions, and sharing appropriate information creates trust with user communities;
- Per Daniel Pink, humans have interests and needs to exercise creativity and productivity in ways that monetary incentives cannot facilitate. Paid crowdsourcing can adulterate motives behind contributions; if users’ intentions or actions change, micro-outsource to paid contractors.
References
1 ”Happiness as Your Business Model”, Tara Hunt, Thinking Digital UK (2008): http://www.slideshare.net/missrogue/happiness-as-your-business-model-414463
2 ”Intrinsic and Extrinsic Motivations: Classic Definitions and New Directions”, Richard Ryan and Edward Deci, Contemporary Educational Psychology (2000): http://mmrg.pbworks.com/f/Ryan,+Deci+00.pdf
