August 1, 2014 admin

The misunderstood relationship between Crowdsourcing Platforms and Startups

By Christian Gabriel, Country Manager at FundedByMe.com, Co-founder at HeartReacher, Boardmember at DanishCrowdsourcing

In recent years startups have started to run more and more crowdsourcing campaigns and as a result the amount of crowdsourcing platforms has never been bigger. However, one could question if startups and platforms understand crowdsourcing or if it has been reduced to brief one-time campaigns?

During the last couple of years there has been increased hype around the possibility for startups to crowdsource resources.  These resources might be funding, workforce, or ideas etc. In most cases companies allocate this activity to a specific online crowdsourcing platform. On the platform companies either submit a campaign visible to the platforms crowd or browse through others submissions on the platform.

As more crowdsourcing platforms appear and an increasing number of campaigns is submitted, the competition is at a boiling point. However, it seems that the accelerated popularity of crowdsourcing has resulted in misconceptions about responsibility between startups and platforms.

Common misconceptions are related to work load and creation of campaign traffic. Crowdsourcing platforms encourage companies to create their own campaign traffic. And startups believe that the platform is paid for creating traction to their campaign. This misconception has resulted in many failed crowdsourcing campaigns and tensions between the startups and platforms.

The question is whether crowdsourcing platforms role is to distribute user traffic to campaigns or to build a new communication channel to companies existing crowd?

The role of the platform and startup relates to the size of the company and the type of platform. Large companies can buy packaged crowdsourcing software which allow them to run crowdsourcing campaigns internally and externally. Larger companies do not necessarily require a platform to distribute traffic to their campaign, as their social reach is already big. Meanwhile, startups use online crowdsourcing platforms because packaged software is expensive and more importantly because they depend on platforms to generate user traffic.

Meanwhile, no platform has the size to create enough traffic for all its campaign to succeed or the tools to keep the audience engaged. The truth is that the increased hype around crowdsourcing, has led to a perception, that platforms are never-ending automatic job, funding, hiring, idea etc. machines. Yes, one of the platforms primary purposes is to initiate interactive contact between a company and a crowd, however the exposure builds on a solid groundwork.  The equity crowdfunding platform Seedrs has published a study stating that crowdfunding campaigns having beforehand raised 30% of their funds from their own network have a 100% chance to succeed. Another study made by Testbirds shows the importance of understanding your crowds’ motivation before crowdsourcing softwaretests on platforms. Meanwhile the infamous Kickstarter campaign Oculus Rift  also proved how a successful campaign can backfire due to a lack of communication with the crowd.

All these examples shows that successful crowdsourcing is building a dedicated crowd and integrating different channels to communicate on specific topics over a long period of time. It’s not a quick and dirty “30 day campaign” as different platforms might state. For any startup to crowdsource it is a basic requirement to have a long term strategy and relation to a “caring crowd” – knowing the people who actually care about the product or service. Platforms should be better at preparing startups for crowdsourcing and offer tools and advice for longterm practices. Meanwhile startups needs to see platforms, as a complementary to an existing crowdsourcing strategy and not as an intense one-time crowdsourcing experience.

Crowdsourcing is still in its early days and long lasting best practices still remains to be seen. However we are already beginning to see the first baby steps of startups having successfully build their company up around crowdsourcing principles and at the same time effectively using crowdsourcing platforms.

 

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