Week 8: Crowdsourcing & Crowdfunding
The term ‘crowdsourcing’: how it is formed?
The term ‘crowd’ was used particularly as a term in which individual who self-establish of a common purpose, emotion or experience. However, organizations often use the context of ‘crowd’ to examine the collections of individuals engaged themselves in organizational purposes in order to construct competitive advantage. Therefore, crowdsourcing can be considered one of the strategic to influence the ability of an organization continuously create value to the firm (Prpic, Shukka, Kietzmann & Carthy 2014). Crowdsourcing consider as a practice of solving problems and provide localized information in order to strive for a common goal (What is Crowdsourcing, 2019). First step of crowdsourcing includes significant considerations that construct that how a crowd is formed. Then highlights the capabilities of a firm that need to establish to obtain and assimilate resources such as ideas, knowledge, expertise, time or funds from the crowd. The last step of crowdsourcing is to outlines the final decisions that the entrepreneur need to address to engage crowds effectively. In the past, people had to be physical to create the masses. However with Internet, people are able to create virtual groups because of their common preferences and interests which offer an immense opportunity to rethink and reinvent to improve organizational productivity (Sherman, 2011).
Examples of Crowdsourcing
Undeniably, one of the most successful crowd-powered startups is Waze. Waze is an app which offer for users to report traffic jams and automatically gives directions for the best route to take. In addition, Waze also crowdsourced the information by measuring drivers speed to determine traffic jams and by request users to report if there any road closures to avoid frustration sitting in traffic. It’s consider as a distinguish app that proves a dedicated crowd is sometimes all a company needs which aims to improve quality of everyone’s daily driving(Kearns, 2015).
On the other hand, even Samsung also realise the value of Crowdsourcing. Hence, what they seek is different from others which is innovative solutions for existing electronic products and technologies. Samsung also seek collaboration with other firms and interested individuals. In 2013, Samsung partnered with product development platform, Marbler to Crowdsource ideas on how they could utilise newly discovered patents from NASA. They provided users the opportunities to assist the company to create next product while generate a share of revenue along the way (Schoultz, 2016). As a conclusion, with the power of hundreds to thousands of creative minds throughout the world, microtasks can be performed simultaneously, and projects can be completed more quickly and cost effectively with the practice of crowdsourcing.
Introduction to Crowdfunding
The origin of crowdfunding, translated from the foreign crowding word, that is, public fundraising, is a “pre-consumption” model, which uses the form of “group purchase + pre-purchase” to raise project funds to the public with a modern way. Compared with traditional financing methods, crowdfunding is more open for funding a variety of new ventures, allowing individual founders of for profits, cultural or social projects or equity (Mollick, 2013). As long as it is a project that the public likes, the first fund can be obtained through crowdfunding, and the scale of the first fundraising will not be large, providing unlimited possibilities for more small businesses or creative people.Crowdfunding platforms collaborate an individual or entity in need of funding with community members willing to contribute cash. Although pessimists find it inexplicable, it has been consistently demonstrated that people worldwide have a philanthropic nature when it comes to causes in which they believe whether that’s an entrepreneurial product or service, disaster relief, an artist’s vision or something else entirely. Overall, crowdfunding is not just a practice to selling the idea of noble cause, but about the stories that make the cause worth contributing to (Finker, 2018).
Examples of crowdfunding
Crowdfunding is an emerging fundraising measure that utilize the ease of websites or other Internet tools to raise capital for small businesses from the general public in order to accomplish their own business plans (Valancience & Jegelevicute 2013). Hence, Kickstarter is a platform used by general public who use Crowdfunding as the characteristics of the Internet and SNS to allow small entrepreneurs, artists or individuals to reveal their ideas to the public, in order to get everyone's attention and support, then to get the financial assistance needed (Harburg, Hui, Greenberg & Gerber, 2015). As a results,crowdfunding succeeds in integrating the traditional funding model with a modern way of driving business and welfare. While crowdfunding does not necessarily guarantee the longevity of a company, project or idea, it helps many individuals gain experience, mobilize communities and create relationships for other opportunities.
References
Finker, L 2018, What Crowdfunding means for Philanthropy, Executive Leadership & Philanthropy, viewed 06 May 2019, <http://lazarfinker.org/what-crowdfunding-means-for-philanthropy/>
Harburg, E, Hui, J, Greenberg, M, Gerber, E 2015, Understanding the effects of Crowdfunding on Entrepreneurial Self-Efficacy, Segal Design Institute, viewed 06 May 2019, <https://pdfs.semanticscholar.org/6347/44b9f2be9cacd55c1ceb4902d4fe58b11def.pdf>
Kearns, K 2015, Great Examples of Crowdsource in the age empowered consumers, Tweak your biz, viewed 06 May 2019, <https://tweakyourbiz.com/marketing/9-great-examples-crowdsourcing-age-empowered-consumers>
Mollick, E 2013, ‘The dynamics of crowdfunding: An exploratory study’, Journal of Business Venturing, vol. 29, no. 1, p. 1 - 16.
Prpic, J, Shukla, P, Kietzmann, J, Carthy P 2014, ‘How to work a crowd: Developing crowd capital through crowdsourcing’, Business Horizons, vol. 58, Issue 1, pg. 77 - 85.
Schoultz, M 2016, How Brand Crowdsource for Continuos Ideas, Medium, viewed 06 May 2019, <https://medium.com/@mikeschoultz/how-brands-crowdsource-for-continuous-ideas-9409f62ca304>
Sherman, A 2011, How to use crowdsourcing techniques in your virtual team, Reuters, viewed 05 May 2019, <https://www.reuters.com/article/idUS405921270820110713>
Valancience, L & Jegeleviciute, S 2013, ‘Valuation of Crowdfunding: Benefits and drawbacks’, Economics and Management, viewed 06 May 2019, <http://www.ecoman.ktu.lt/index.php/Ekv/article/viewFile/3713/2499>
What is Crowdsourcing, 2019, Crowdsourcing Week, viewed 05 May 2019, <https://crowdsourcingweek.com/what-is-crowdsourcing/>
