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What is Crowdsourcing?

Updated on February 21, 2019
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Heidi Thorne is an author and business speaker specializing in sales and marketing topics for coaches, consultants, and solopreneurs.


Crowdsourcing versus Crowdfunding: What's the Difference?

There's a lot of talk these days about crowdsourcing and crowdfunding. Though the terms are often used interchangeably, they are are two different concepts.

  • Crowdsourcing solicits input and participation from interested parties in order to accomplish some goal or to facilitate decision-making. In exchange for their donation of time, talent, thoughts or effort, participants may be entitled to some form of compensation or perks such as free passes to events, although that is not always a requirement. Many crowdsource participants merely wish to be part of the project for emotional or intellectual benefits or even bragging rights. The call for help is usually broadcast to the target community through online means (e.g., social media, online forums and chats, websites, blogs).
  • Crowdfunding solicits financial donations from interested parties to accomplish a project, goal or build a business. Depending on what the funding platform allows, funded projects could be creative endeavors, new products, charities, personal endeavors and more. Unlike stocks or other investments, investing donors do not receive a stake in the project or business, nor do they share in the resulting returns (or losses). However, donors may receive a variety of perks for their donations such as first chance to receive a new product when it is produced or a special experience. Currently popular crowdfunding sites include and

So while crowdsourcing may be a no cash effort, crowdfunding is all about the cash.

Uses for Crowdsourcing

How can crowdsourcing be used?

  • Problem Solving. Using the "two heads are better than one" philosophy, collaborative or multiple solutions can often be accomplished through crowdsourcing.
  • Collaborative Works. Ever visit Wikipedia? Who hasn't? Wikipedia is a free online encyclopedia written by its users for its users. This project makes use of a platform called a wiki which makes it easy for people to participate.
  • Events. An event may solicit participation from people in the communities they serve. These folks are usually committed to the brand, business or cause hosting the event and are willing to volunteer their time and talent for it. This is common for nonprofit events. In exchange for volunteering, these volunteers may be given special perks for participating such as a limited edition promotional T shirt or be invited to an exclusive party.
  • Research. Research projects may be crowdsourced to: 1) Gain expanded or diverse viewpoints; 2) Offload a massive volume of work to accomplish a goal more quickly and efficiently (or even make it possible to accomplish!); or, 3) To engage a population of ideal research study participants.
  • Open Source. Generally refers to open source software programs which are freely distributed with participants collaborating to continually improve the code.
  • Preference Polling. When an organization wants input on a new design or idea, they may allow a target community to vote on their favorites. For example, if restaurant wants to figure out which new dish to add to their menu, they may post choices in a community forum to see which ones would be winners with that crowd.

Crowdsourcing Fun Facts

  • The term crowdsourcing was coined in 2005 by the editors of Wired magazine.
  • An early example of a crowdsourcing project was the Oxford English Dictionary in the mid-19th century.

Source: Wikipedia

Crowdsourcing Don'ts

While crowdsourcing sounds like an ideal way to get valuable input and participation for very little dollar outlay, there is some etiquette that should be observed:

  • Don't Overask. Asking the same people over and over again and/or asking for a huge investment of time and talent can brand an organization as a beggar. As well, it narrows the type of input received, which may make it less valuable.
  • Don't Use Crowdsourcing Just for Cheap Labor. Sure, an organization's crowd may be emotionally or personally invested in the brand, cause or effort. But to expect them to always work for free in the name of crowdsourcing could brand the business as cheap and uncaring. Plus, an organization may be liable for actions of crowdsourced help. Consult a legal professional and commercial liability insurance provider for advice on protections and precautions.
  • Don't Overpromise. Especially when it comes to soliciting feedback, do not promise that any specific action will be taken as a result of the feedback given. This will set up the crowd for disappointment and disenchantment.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2014 Heidi Thorne


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