What Is Crowdsourcing – Advantages and Disadvantages

Crowdsourcing, a combination of the terms “Crowd” + “Outsourcing”, is the practice of companies, business owners or even individuals, making an open call to a broad community of people to help them solve a particular problem. One of the advantages of crowdsourcing is that it can drive down the cost of solving a problem quite substantially, in addition to being able to receive a huge amount of ideas, suggestions, etc.

As an example, say you want to create an eCommerce website about audio books. In this case, your problem is coming up with a nice and catchy name, find an available domain name and a great slogan. Instead of banging your head against the wall and spend a lot of time trying to figure it out for yourself, you can go to sites such as prizes.org and put up a competition, where the best entry gets a prize (normally money). The community over there will then do the work for you and all you have to do is wait for those entries to come in, and pick the best of the best.

As you can see from the example above, crowdsourcing has a lot of advantages. Combining the power of a “massive” amount of people providing you with ideas, suggestions, etc., is simply too good to not take advantage of. Now, not everything is a sea of roses. Crowdsourcing, depending on what problem you have, may not be the right way to go. There is no guarantee that the end result will be of good quality (e.g. logo design for example). At the end of the day, it really depends on what solution you are looking for.

Regardless, crowdsourcing is here to stay and there are more sites being launched everyday. If you are looking for a “freelance” opportunity and earn some money yourself, you can join sites such as eLance, oDesk, etc.. Crowdsourcing is a huge market and it is estimated that over $1 billion has already been paid to workers for several projects.

Below is an infographic courtesy of oBizMedia. Nothing better than a visual summary about the topic in question. Enjoy!

That’s it! What do you think of crowdsourcing? Have you used it? Are you taking advantage of this possible opportunity to make an extra income on the side?