How Crowdsourcing and Start-Ups Go Hand in Hand
Having an idea is only the start of the uphill climb to seeing its underlying vision become a reality. When discussing start-up enterprises, the term ‘crowdsourcing’ generally follows close behind and is almost synonymous.
In a more robust global economy and in the past, entrepreneurs have been able to secure investment and capital from financial institutions. Thanks to the ‘credit crunch,’ most freelance entrepreneurs have little chance of securing investment through traditional sources – which is why crowdsourcing is such a viable option for launching new platforms and ideas.
Crowdsourcing is a term that originates from two words: crowd and outsourcing. For many businesses, it is the best way to get the necessary support needed to take a product from concept to market successfully.
How Does Crowdsourcing Work?
Small companies or single proprietorships who are low on funding or resources but high on innovation can reach out for investors to help get their product or service off the ground. Since these companies do not have the resources to hire full or part time staffing, they may request support in one or both areas:
1) Capital funding.
2) Farming out of technical or skilled tasks.
Frequently, application platforms, technology services, and tools are crowdsourced in both ways. Funding may be sourced from ‘angel’ investors interested in the concept and in taking a chance on a start-up project. Assistance from skilled workers such as programmers, hardware or software specialists, and even marketing and promotional help can be sourced to get the project off the ground.
Famous Examples of Crowdsourcing
Not only small companies or private individuals show significant interest in crowdsourcing, major corporations looking for new ideas or concepts are likely to participate, depending on the potential of the product.
Sometimes the item that brands and organizations need most is positive word of mouth advertising to generate sales. Major international brands such as Coca-Cola®, General Mills® and Nokia® have used crowdsourcing to generate publicity and innovative ideas. Read “5 Examples of Companies Innovating with Crowdsourcing” to learn how they accomplished their goals through crowdsourcing.
Have you ever participated or volunteered to work as part of a crowdsourced project? Share your insights with us.