5 Things About Crowdsourcing You Might Not Have Known

1. It's not the same as Crowdfunding.

Crowdfunding, although a widely popular form of funding a venture by raising small amounts of money from a large number of people, is only one form of Crowdsourcing and alternative finance. According to the latest update by Investopedia, the top 6 Crowdfunding platforms include: 

• Indiegogo 
• SpeedInvest 
• Mightycause 
• StartEngine 
• GoFoundMe 
• Patreon 

The 2020 top campaigns on Indiegogo included an e-bike from Babymaker, a coffee grinder from Niche, and a smartwatch from Amazfit. As of May 2020, the three have raised more than 16 million USD, having more than 25 thousand people supporting it. 

2. It is not unique for innovative startups only. 

According to the Wikipedia definition, Crowdsourcing is a sourcing model in which individuals or organizations obtain goods and services, including ideas, voting, micro-tasks, and finances, from a large, relatively open, and often rapidly evolving group of participants.

Airbnb is an excellent example of an innovative startup, which entire business model is based on Crowdsourcing. Airbnb is essentially a travel website that allows individuals to let out their homes all over the world. 

eToro, an Israeli social trading startup, focuses its entire business model on Crowdsourcing. For over a decade, eToro has been a leader in the global Fintech revolution, with the declared agenda of disrupting the traditional trading industry. Even people with no financial background or education can copy the best performing investment portfolios and increase their assets' value. Social trading has made a lot of progress in recent years and is likely to continue to do so. 

Another example of a great Crowdsourcing campaign has been introduced by the Lego company, which has undergone a significant turnaround in the last decade. The Danish plastic construction toys maker is responsible for probably one of the best examples of Crowdsourcing we have seen. Lego allows users to design new products, and at the same time, test the demand. Any user can submit a design that other users can vote for. The idea with the greatest number of votes gets moved to production, and the creator receives a 1% royalty on the net revenue. 

3. It can help you to better assess the future potential of existing and new ventures. 

According to Inc.com, business strategies will significantly change by 2025. Apart from envisioning the most powerful factors that could harm the business case, leaders need to develop new and innovative product ideas to meet new customers' demands. Nobody can call himself an expert in every possible field, from marketing, sales, operations, to finance.

Steve Jobs used to say that the great things in business are never done by one person, but rather by a team of people. Therefore business leaders need to learn how to unleash the crowd's potential and wisdom to get the best possible support while making strategic business decisions about new products and ventures. In the uncertain times of the Covid-19 pandemic, it is more relevant than ever before. Organizations with the highest innovation score are not only spending a relatively high proportion of their budgets on R&D but also can take the benefit of Crowdsourcing to come up with the best possible assessment for their next endeavors. 

4. It can have a positive impact on your business. 

The success of eToro and other social trading platforms suggests that Crowdsourcing in the field of financial investment can have a positive impact on your personal finance. However, what about the entire business models and corporate strategies?  

Actually, according to our research at Qvistiorp, Crowdsourcing of the strategic investment analysis process can have a substantial positive impact on the success of any given venture. Our clients often emphasize that involving people at an early stage of strategic decision-making can significantly boost the group's morale and motivation. Just imagine how you would feel as an expert in your specific area of expertise, that has not been involved in the decision-making process but only learned that you have to figure out how to deliver the "next big thing" after the board has given the "Go" decision? By involving people in the decision-making process early, organizations increase the chance of commercial success and future benefits realization. 

5. It is easier to implement than you think. 

"A journey of a thousand miles begins with a single step." - Lao Tzu. Our clients often ask us how to start with the Crowdsourcing idea in the space of strategic planning and portfolio management. As usual, some groundwork needs to be done, and if you are about to measure the strategic impact of your ongoing or planned initiatives, you need to have a map of your strategic goals and define the impact factors for them. Once this is done, the second thing you need is an IT solution that can capture and process all the different responses you get from your team. One such system is Qvistorp Growth , an innovative cloud-based solution that enables organizations to identify, analyze quickly, and measure which investment projects will deliver the highest possible returns. 

Let's imagine that one of your strategic goals is to build a competitive position with every product or service you will bring to the market. The list of possible impact factors along with the corresponding questions to end-users could look like this: 

• Market Saturation - How many direct competitors do operate in the market? 
• Brand Awareness - What is the impact of the project on brand awareness? 
• Market Share Impact: What is the impact on the market share? 

The pre-defined and standardized list of potential answers allows capturing a particular project's relevance and impact on strategic product groups or other strategic goals set for the organization. At the end of such strategic impact analysis, organizations develop the so-called Strategic Impact Score, which is consolidated to one number and can be compared across different projects in the portfolio. 

Crowdsourcing can have many different applications, from social trading to idea generation. It can also be applied to modern strategic management, portfolio optimization, and benefits realization. If you would like to learn more about various ways to re-shape in the post-Covid-19 pandemic, visit the Qvistorp web page and talk. 

KJ