What is crowdsourcing and how does it work?

Crowdsourcing contributes to most industries around the world. It can be extremely powerful if used at the right time and in the right place. You may have heard this term before, but what does it mean? In this article, we will explain what crowdsourcing is, how it works, and why many companies use this format to improve their work.

What is crowdsourcing?

Crowdsourcing is the practice of using the knowledge of a group for a common purpose. It is most useful when solving complex problems in an innovative way or for simplifying complex processes.

The term was first used by Jeff Howe in a 2006 article about this practice. Although crowdsourcing has been around in one form or another for centuries, its popularity began to increase around the same time that e-commerce, social media, and smartphone culture developed. What has most contributed to the growth of interest in this practice is the increased connectivity between people all over the world.

How does crowdsourcing work?

Crowdsourcing has become an important tool for companies and is being used in many different areas, including data collection, productivity improvement and problem solving. It allowed many companies to develop at an unprecedented pace; it got to the point that this practice led to a revolution in many industries.

Crowdsourcing can manifest itself in many different ways, and it depends on the goals of the business.

To successfully crowdsource a company, the first step is to break down a large project into individual microtasks. Workers come together to solve these micro-tasks in small pieces, which, in fact, speeds up the process.

The way a company assembles workers to complete these tasks often correlates with the type of tasks to be completed. A company can use a digital space, sometimes referred to as a crowdsourcing platform or a microtasking site, to bring these workers together in one place and task them with microtasks.

For complex projects that require workers of specific specialties, a business can use a specialized platform designed for a particular industry. For example, many software developers use GitHub for this purpose. If a business collects user data, it may turn to social media or other user platforms to crowdsource information from users.

Benefits of Crowdsourcing

Crowdsourcing has many benefits that companies can use to their advantage. Let’s take a look at why so many companies are investing in crowdsourcing.

Increasing scalability

Scaling is a difficult task for any business, especially when you have to work on large projects with inadequate resources on hand. However, crowdsourcing provides an easy solution for scaling by outsourcing small portions of a project that can be completed by remote workers at any time needed. This flexibility is one of the main reasons why companies are interested in crowdsourcing.

Filling gaps in knowledge

If the company is not huge, at a particular point in time it most often does not have all the necessary labor resources. Crowdsourcing allows access to people with skills that are not available within the company. This can be an invaluable contribution to projects or tasks that require specialized knowledge or skills that are in short supply.

Process acceleration

Crowdsourcing allows businesses to complete tasks faster than a single employee could. Breaking a project down into a set of small pieces and handing those pieces over to a large group of workers speeds up the completion of the process. In general, crowdsourcing ensures that work gets done more efficiently.

Reduced operating costs

Crowdsourcing is a cheaper way to complete projects. When a group of people come together digitally to complete a task, businesses can eliminate most of the costs typically associated with operations. They include the cost of accommodating employees and paying them a full salary, as well as the cost of training employees in new skills and much more. In some projects, reducing the time to get results is also equivalent to increasing profits.

Increasing customer activity

If a business decides to crowdsource customers, it can lead to a high level of activity. Most marketing media hold a customer’s attention for a short amount of time. If a company invites consumers to participate in a particular task or provides long-awaited information about its brand, it will receive valuable attention, for which many companies pay a lot of money to acquire.

Examples of crowdsourcing

Many popular companies have used crowdsourcing in various ways to advertise their own products, obtain customer data to design new products, fund small creative projects, and so on. Here are a few examples of small and large companies taking advantage of crowdsourcing.

Data crowdsourcing

Many companies have chosen to use crowdsourced data to improve their own products. Some of them even use crowdsourcing to create the foundation of their product or give it a distinctive look.

One of the best-known examples of companies using crowdsourcing in this way is Waze. There are many GPS apps for mobile devices on the market, but Waze has stood out from competitors like Google Maps by crowdsourcing travel-related information into its product. Users can enter information about traffic, traffic hazards, and even police radar, and then this information becomes visible to other users. This not only increases the value of the GPS application for consumers, but also turns it into a community-driven product that actively engages users.

Open source software

One of the most common types of crowdsourcing is open source software development. Open source development allows developers to have access to the source code, modify and improve it according to their requirements. It also allows many people to analyze the code and apply their unique skills to improve it.

Many companies have used this kind of crowdsourcing to create outstanding software that is used around the world. Some of the examples of open source software are: Linux operating system, Firefox browser, Hashicorp development tools.


Many consumers are accustomed to using crowdsourcing to raise funds, this technique is also called crowdfunding. This technique allows anyone, from one person to a large company, to attract people interested in his ideas and raise funds without the need to promote among large investors, banks or other intermediaries that can refuse funding.

Here are some examples of successful products that started as crowdfunding projects: Oculus, Tile and Pebble Watch.

Best Crowdsourcing Platforms

Although crowdsourcing is implemented in many different ways, most businesses use a certain list of crowdsourcing platforms to attract employees. Some of these platforms can also be used to break down projects into microtasks. The choice of crowdsourcing platform depends on the type of tasks. Below we will highlight some of the best crowdsourcing platforms for various tasks.

For microtasks and data collection: Mechanical Turk

For tasks like data entry, transcription, content creation, user research, and more, Amazon’s Mechanical Turk is the perfect solution. Workers around the world connect to Mechanical Turk 24/7 to receive HIT (human intelligence task). The site allows you to break projects into microtasks and is able to support a wide range of project types.

It is best suited for simple tasks or user surveys rather than creative or innovative work. As an employer, you can specify any pay rate for tasks and select the type of workers that can have access to those tasks.

For creative crowdsourcing: 99Designs

There is a large selection of creative crowdsourcing platforms that can offer many design options for logos, websites, advertisements, packaging, and more. One of the most famous of them is 99Designs, and for good reason. Bringing together designers from all over the world, 99Designs uses crowdsourcing to provide unique and affordable creative services to companies large and small.

For crowdfunding: Kickstarter

The popularity of crowdfunding has grown significantly, so there is a large selection of reliable platforms. One of the most famous is


. Kickstarter is mainly aimed at creative projects: music, graphics, films, etc.

This crowdfunding platform charges a reasonable price for its services, which makes it stand out from other platforms. Many Kickstarter campaigns have raised thousands and sometimes millions of dollars.

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