2nd Draft

Nicole Koleczek; Darivette Cruz

(Mr. Rehak)

(English II)

(Date)

The Effectiveness of Crowdsourcing in Business

‘Crowdsourcing’, first defined by Jeff Howe and Mark Robinson in the June 2006 issue of Wired Magazine, is a business model that solves problems through a distributed network of people (Brabham 76). In business, crowdsourcing is used to increase profit through the collaboration of many people (Tarokh). Usually happening via the Internet, forms of crowdsourcing in business include advertising and funding.

Crowdsourcing is effective in business because of it’s access to resources, scale, and transparency.

Crowdsourcing is effective in business because of it’s access to resources, such as skills and items. For example, Tim Fung, the CEO and founder of AirTasker, states that menial tasks are completed more skillfully through services such as photography, promotional staffing, office work or design. Profiles, reviews, and reputation credentials advertise these skills and items. A large, universally shared set of these resources is accessible.

Crowdsourcing is effective in business because of it’s access to scale, or size and location. For example, specific events or promotions are completed more skillfully through a large workforce rather than individual employment. Lowering costs is more flexible. Sources are redirected toward achieving business objectives.

Crowdsourcing is effective in business because of it’s access to transparency, or real world data. For example, data transactions are completed more skillfully through a large volume rather than a small one. Valid data will be rewarded whereas invalid data not. As “user-generated reputation” becomes more prevalent, other methods of building trust such as advertising become irrelevant (Fung).

Crowdsourcing is ineffective in business because of it’s obligation to support management, marketplace, and control.

Crowdsourcing is ineffective in business because of it’s obligation to support management, which should be efficient in cost when accessing resources, such as skills and items. For example, a company may promise participants a product in exchange for information about it but profit may decrease because of invalid information (Arora). Also, low payment in exchange for information is often accepted by those who are not as knowledgeable about a company's work (Paul). Investors may sue because of that company’s failure (Arora).

Crowdsourcing is ineffective in business because of it’s obligation to support marketplace, which should be fair when accessing scale, such as size and location. For example, a product or company may be tarnished by unsatisfied customers or investors through negative reviews (Floren). Also, websites such as Kickstarter do not guarantee the success of that certain product or company as only 10% actually succeed (“Blunder”). Websites such as Indiegogo, Fundables, and CircleUp may also profit from your earnings and apply fees (MarketingMoxie).

Crowdsourcing is ineffective in business because of it’s obligation to support control, which should be qualitative when accessing transparency, such as real world data. For example, Marcia Yudkin, owner of a marketing solutions website and a marketing mentor, states that participants would more or less state invalid information about your product or company (Yudkin). Also, participants do not necessarily have to know anything about the product or company and ignore the criteria of a company. Invalid information about the product or company may also hurt the product or company (“Pitfalls”).

Crowdsourcing, a business model that solves problems through a distributed network of people, is used in business to increase profit usually over the internet through services such as advertising or funding. Crowdsourcing is effective in business because of it’s access to resources such as skills and items, scale such as size and location, and transparency such as real world data. Although crowdsourcing may be ineffective in business because of it’s obligation to support the cost of management, a fair marketplace, and quality control, it is overall effective in increasing profit.

Arora, Rohit. “7 Reasons to Avoid Crowdfunding.”

               Fox Business, Small Business Center. Rohit Arora, October 23, 2012.

               Web. 27 April. 2014

“Crowdfunder Blunder: Leverage Crowdfunding or Waste of Time?”

               Social Media Today. Kriti Vichare, September 18, 2013.

               Web. 27 April, 2014.

Ecommerce Business.”

               MyECommerce. Cindy Floren, July 23, 2012.

               Web. 27 April. 2014.

Floren, Cindy. “The Advantages and Disadvantages of Using Crowdsourcing to Improve Your 

Paul, Frederick. “Small Businesses Save Big with Crowd Sourcing.”           

               AllBusiness. Frederick Paul, N.D.

            Web. 27 April. 2014.

“Pledge Based Crowdfunding.”

               MarketingMoxie. No publisher, N.D.

               Web. 27 April, 2014.

Yudkin, Marcia. “Crowdsourcing: 9 Hidden Pitfalls of This New Method of Generating Your New Business Name.”

               Creative Marketing Solutions. Marcia Yudkin, N.D.

            Web. 27 April. 2014