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

5/4

I can not believe it is already May. School will be over in a couple of weeks which makes the days seem to go by even slower. A friend of mine will be having her quince in June and I am counting down the days. We got our dresses this Friday and we all get our own style. She's big on the whole individuality thing. I love the dress she picked because it goes well on a short girl. Hopefully this upcoming week goes by quickly because I'm starting to grow tired of school. That's basically my whole week guys.

Works Cited

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

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

                Web. 27 April. 2014

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

                MyECommerce. Cindy Floren, July 23, 2012.

                Web. 27 April. 2014.

No author. “Crowdfunder Blunder: Leverage Crowdfunding or Waste of Time?”

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

                Web. 27 April, 2014.

No author. “Pledge Based Crowdfunding.”

                MarketingMoxie. No publisher, N.D.

                Web. 27 April, 2014.

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

                AllBusiness. Frederick Paul, 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

crowdsourcing

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 utilized to increase profit through the collaboration of many people (Tarokh). Usually happening via the Internet, forms of crowdsourcing include funding or brainstorming. 
Crowdsourcing is effective in business because of it’s access to resources, scale, and transparency (citation).
Although effective because of this support system, crowdsourcing may also be ineffective in business because of it’s
You can lose money trying to gain the information you need instead of increasing profits. For example, there was a company who promised participants watches if they provided them with information about the product. In the end, they didn’t even gain valid info and they wasted millions of dollars sending out products (Arora). Some people require payment for their knowledge. As an investor, you try to get the
cheapest rate possible but that can be one of the biggest mistakes you can ever make. Paying the lowest amount won’t save you money. The people who take that small amount are the ones who most likely have little to no knowledge about your work. In the long run, you lose profit for being cheap (Paul).

There are so many different ways you can lose money due to Crowdsourcing but a huge
one is lawsuits. An investor can lose the patience because you aren’t making the money you promised you would be making. They have a right to sue a business due to failure and that is a big way for you to lose even more money than you already have for failing (Arora).

Other people would argue about the validity of the data collected. Marcia Yudkin, owner of
a marketing solutions website and a marketing mentor, states that participants would more or
less state whatever comes to them off the top of their heads. The participants don’t necessarily have to know a thing about your company or what you’re even working on. Sometimes, they even ignore your criteria and just give you information on what they feel is right (Yudkin).

Based on the data you received, it can shoot you towards the other direction of what you
intentionally wanted. For example, you may have a project that has to do with growing plants that will help with cleaning our air. Another person will provide you with information like how to grow a plant that will supposedly make our air fresh. Once you believe this person and build on what they say, the end result will have nothing to do with what you were even trying to accomplish.  By recieving false data and believing it to be true, it can lead to the downfall of your project and later your company (“Pitfalls”).

        Another disadvantage to Crowdsourcing is your marketing place. Depending on where
you put out your business plans, people can tarnish your product or your company. Angry
customers or investors can put out negative reviews leading to other customers or investors to not want your product (Floren).

When you put your business on a site like kickstarter, for example, it does not guarantee
the success of your company. Not all of the ideas pitched there are blown up into something bigger. Only 10 percent of all the business projects put up actually succeed (“Plunder”). There are a few marketing places that have huge hidden disadvantages you don't really think about until its too late. Indiegogo will take a huge percent of your final fund if you don't reach the goal you intended to meet. Fundables monthly fees will soon add up if you you campaign. Depending on the amount you raised for your business. CircleUp will take a percentage of all the money earned (MarketingMoxie).
 As you can see, marketplace can mean everything to your business. It can determine whether you succeed or you fail.

       

4/27

This week went by pretty quick. Its probably because of the two days we got to miss for school. Which was great because no one was ready to go back too school after spring break. This weekend I helped my aunt at church. They flew this couple in from Florida to sing for their church and they had a fundraiser to earn money for their tickets. They held like an international food day and my aunt had Puerto Rico. We had loads of great foods. Everyone else had great food too. That was basically my week. It was pretty boring.

CrowdSourcing

‘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 utilized to increase profit through the collaboration of many people (Tarokh). Usually happening via the Internet, forms of crowdsourcing include funding or brainstorming.  

Crowdsourcing is effective in business because of contribution from different sources working to achieve success. A business will use crowdsourcing because it builds up their profits by having people do all the work for them at a small price.

4/6

I have had a pretty amazing week. It did go by pretty slow and that was agonizing but, it was well worth it. My weekend was super slow and i appreciate that very much. My older sister invited me to go with her and her daughter to see sesame street live. Let me just say that was a freaking blast. I thought it would be lame but it was funny and fun. I had a great time with my niece and i could tell this was a huge moment for her getting to see elmo up on stage. That was basically the highlight of my week.