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Which are the benefits of crowdsourcing?

Cost

The amount involved in a crowdsourcing project depends always in the nature of each of them. Some of them can include several thousands of dollars as the Netflix prize of $1 Million to anyone that out-performed Netflix’s recommendation algorithm. Some others will make micro-payments such as The Sheep Market Project done by Aaron Koblin. And in some other cases the projects would include other kind of incentives such as social recognition, increase in the self-esteem or the development of individual skills. The outcome of any of these payment systems would tend to get the same conclusion; the major advantage of Crowdsourcing is its relatively low cost and the possibility to use it as a marketing tool.

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Quality

The quality depends on various aspects regarding the type of crowdsourcing. When it is addressed to a creativity task, the quantity of proposals from the crowd can give a longer list of works and the diversity of them can increase considerable the variety. It could increase the chances that the user will find an idea that match its expectations. When the crowdsoursing is used for a complex task, the higher the crowd the higher the chances of finding one or several experts and if they can interact between them, their solutions can surpass the results of the people inside an institution.

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Network externalities

It is possible to talk about network externalities when the value of a system increases dependent on the number of other using it. In some applications such as the OpenStreetMap the value of this tool increases with the richness of the geographical content and the possibilities to use this data with GPS devices.

Agency issues

When using Crowdsourcing the client firm doesn’t depend on one agency for the completeness of the job. The client can choose between a pool of participants and in the worse case he could decide in changing the selected project or idea. That will reduce the risk of outsource a task to a single provider.

Motivation and incentives

The motivation for an individual to become part of a Crowdsourcing project doesn’t always come from the payment that they will get at the end of the project. Several times incentives such as social recognition, increase in the self-esteem or the development of individual skills can be more important and if they are well applied by the user firm it can be a way of involving the people with the brand and make them feel part of the creation process.

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