Crowdsourcing is all the rage these days, another aspect of the cloud computing proliferation that has companies doing crazy things. Even if you have never heard of it, you have probably purchased a product that was developed using crowdsourcing or have been directly involved yourself. Crowdsourcing is the outsourcing of idea generation or tasks that would normally be tackled by employed workers or contractors for a particular company. The task or idea is outsourced to the masses via the Internet or social media technology.
Crowdsourcing can be more than just a task or an idea. In general, if it brings benefit by bringing together many people for a common cause, there has been some successful crowdsourcing. One such example is daily discount provider Groupon. The upstart Web-based business sends daily emails to subscribers who can purchase a coupon for a particular service or product. So what's the hitch? The discount only kicks in if a set number of customers purchase the coupon, bringing together the purchasing power of many through crowdsourcing. Groupon is not a public company, but it was recently valued at more than $1 billion by a Russian venture capital firm that purchased a small share of the business.
See, crowdsourcing is fun and it can be very profitable and cost favorable for many companies. This is why the trend continues to grow. Let's have a look at how some other companies are using crowdsourcing to their benefit.
salesforce.com (Nasdaq: CRM )
Salesforce.com is one of the undisputed leaders in the cloud computing space, and it has used its expertise to build and acquire successful crowdsourcing ideas and applications. The company recently purchased Jigsaw, a large crowdsourced business contact database. Salesforce.com has combined the platform with its popular Chatter application to provide clients with a Facebook-like community for the business world. It updates in real time contact information, projects, data reports, etc. The application has more than 4 million company profiles and 22 million business contacts. The application is kept up to date daily by a community of more than 1.4 million users. Companies such as Nokia and Dell have used Chatter for years to help the companies become more profitable.
General Electric (NYSE: GE )
General Electric's Ecomagination Challenge is using crowdsourcing to create eco-friendly business ideas. According to the company website, "GE's Ecomagination Challenge is a $200 million call to action for businesses, entrepreneurs, innovators, and students to share their best ideas and come together to take on one of the world's toughest challenges – building the next-generation power grid to meet the needs of the 21st century." The company has received almost 3,000 entries so far, and the site has more than 38,000 users competing for the $200 million prize. The contest ends this week.
It is not certain how General Electric will ultimately select the winners of the challenge, but the company has set up user voting on the site that may play a role in the final determination of winners. Sony (NYSE: SNE ) recently launched a similar crowdsourcing effort with the World Wildlife Fund. Their contest does not involve creating new products and ideas, but to use existing products in more efficient and environmentally friendly ways. It should be interesting to see what type of participation there is for this contest because no prize is being offered.
Omnicom (NYSE: OMC )
Omnicom-owned public-relations firm Ketchum is using the brainpower of communications and digitally savvy college students across the world to help the company solve client, as well as internal, problems. Ketchum and selected clients will reward students who participate with career coaching and developments, job alerts and contacts, as well as offer monetary rewards for selected ideas.
Crowdsourcing has created a way for companies like Ketchum to receive extremely low-cost consulting efforts, while helping students in a terrible job environment make connections and gain experience. The first crowdsourcing opportunity is designed to help Wendy's/Arby's (NYSE: WEN ) find the most creative ideas for a new product launch.
The Foolish bottom line
Crowdsourcing has created a way for companies to generate new business ideas at a low cost, while also providing opportunities for people with different skill sets in a very slow economy. It is a win-win for just about everyone involved in the process. I like companies that use crowdsourcing as it shows it is connected to the community and willing to work outside the corporate box to generate ideas. In the ego-filled, slow-to-change corporate world that may be saying more than you think.