Have you ever needed help with achieving a goal or makning a decision. For advice, most people talk with colleagues, mentors, friends and families. Imagine what you could do if you had a million people who wanted to help you – they just didn’t know it yet!
So you share your idea with the masses. In return, you receive suggestions and investors. Yes, total strangers believe in you and your idea and want to help you succeed.
These techniques are referred to as crowd sourcing and crowd funding. Crowd sourcing is a marketing tool that involves distributing a task or tasks to a scattered and anonymous group of people. Crowd funding is asking people for donations. These processes are often used by start-ups, small and medium-sized businesses, and non-profit organizations. While these procedures can be done face to face but is often conducted online. Social media is a popular place for advertising these projects and asking friends and followers for advice, and even funds.
Crowd sourcing is often used when someone wants input for an idea or small project. For example, when creating the new logo for a city basketball team, asking the locals for ideas and suggestions is a great way in generating interest and potentially receiving smart and innovative feedback.
One of the main reasons people crowd source is because it is usually cheaper than hiring an employee for just a couple of tasks. It saves businesses the time and money of having to conduct interviews and finding an appropriate worker or contractor. This way they can have multiple people working for them at once with minimum hassle. Sometimes it can be done for free as individuals will put in the work because they want to get noticed or they are passionate about the subject at hand. Organizing contests with prize money or rewards is also a popular technique as it will offer an incentive for the public to help out. Sometimes companies end up receiving hundreds of different responses so choosing what to accept and what to disregard can be difficult.
Despite the many advantages, crowd sourcing does not guarantee you will get results. Sometimes there is little response and the results are often not done by professionals, so you should not expect professional-level work. However, if the message is clear and widely-spread, it can be highly beneficial to organizations and individuals.
Crowd funding is including others in the design, development and distribution of a new product or service, through use of invested funds. For example, if you want to build and develop a new line of clothing, you may seek investors to help pave the way for you and your budding business. In return, the investors receive a reward, such as a tee-shirt and the knowledge of helping others.
Crowd funding is used to raise funds. Sites, such as Kickstarter.com, IndieGoGo.com and GoFundMe.com enable inventors to meet investors. The inventors tell their story with words, pictures and video. The showcase their project and why they need the funds. Some projects reach their monetary goals, while many projects fall short. Similar to crowd sourcing, there are no guarantees a project will achieve its funding benchmarks or will even be produced through fruition. Crowd funding is a risk for inventors and investors, however the pay off may be great if a project is successful.
Whether you are thinking about crowd sourcing or crowd funding for your next project, be sure you have the internal processes in place to support it and an external arm to communicate your message to the public.