comprehensive test of its software because testers are bombarding their code from multiple angles at once. The same type of concept is applied to marketing content with GeniusRocket. Individuals in the crowd submit design proposals in a competition to win a final prize. Local Motors, while very similar, is taking an even more ambitious approach for crowdsourcing the design of new cars with the aim of opening up local factories that produce small batches of very unique cars.
How can startups and business use crowdsourcing? John B. Rogers, co-founder of Local Motors, explains that you need to ask yourself two questions: “Who’s your customer? And, who’s your crowd? If you can identify that as a business, and have some notion of what that is, then you can start to build a strategy around that.” The key to building a successful business with a crowdsourcing model is in the creation of a marketplace that attracts both individuals with a passion for using your product and individuals with a specific skill set to help you build the best version of that product.
Participants in crowdsourcing are willing to engage in this model because its a source of extra income, fame, and provides new opportunities. “Within our community of 10,000, we polled and found out that roughly 67 percent of the people joined to make money. The next largest percentage is for people who joined and wanted access to types of clients they wouldn’t have otherwise,” explained Peter LaMotte, who leads marketing for GeniusRocket.
It begs the question of whether crowdsourcing is a new labor model. “Absolutely, yes.” Doron Reuveni, the co-founder of uTest, remarked. Some of his testers are making $2,000 to $3,000 a month working part time. However, John continued to say that it’s much more than just a labor model. “I don’t like the whole labor argument that much. Because even though its inextricably tied to people who are part of crowdsourcing, providing solutions, and are equitable to a labor pool, it’s really an unintended consequence of the fact that you’re really looking for are great ideas.” It’s the same concept that has enabled Threadless to sell out of all its t-shirts. The crowd submits designs, but also chooses the overall best. Of course they’ll sell out, the crowd is predicting future demand before manufacturing even starts.
However, incentives are different in the open source world. Contributed work doesn’t necessarily have to be tied financial reward. Jay Batson, co-founder of Acquia, explains that “the Drupal community completely motivates itself, we don’t pay anyone, and yet we get one of the best pieces of Web technology and software…there are already over 900 contributors to Drupal 7, the current release in development. And, that’s just the core. There are over 4,000 Drupal contributed models. That number doubles every year. When I first started raising money it was close to 2,000 and the year before that there were about 1,000.” The important takeaway there is that the everyone gets to benefit from each others’ work.
The conclusion of the panel certainly pointed in the direction that crowdsourcing and community based models are very attractive. The combination of those benefits and current economic conditions support an argument that this trend will continue. Doron Reuveni believes so and thinks “2009 will be the year of crowdsourcing.”
If you are interested, you can find the full transcript of the crowdsourcing panel discussion on College Mogul. Or, feel free to sign up for the Ultra Light Startups mailing list to attend similar events.
