Chapter 2

Getting to Know the Forms of Crowdsourcing and Crowdmarkets

In This Chapter

Understanding the benefits of each form of crowdsourcing

Getting to grips with the rules of crowdsourcing

You may be as keen as mustard to unleash the awesome power of the crowd. You’ve heard about all that the crowd can do and you want to use it for your business, for your neighbourhood association or for your own purposes. You might want to use the crowd to design an advertisement for your company, to conduct a poll, to search for a lost child or to have a team of skilled workers behind you.

But whoa there! If you want to be a skilled crowdsourcer and use crowdsourcing to really transform your work, your business or your non-profit group, you need to understand the basic properties of the different forms of crowdsourcing before you make a headlong rush into starting a project; you need to understand what they can do for you. Each form of crowdsourcing, because it has its own rules, works in a way that’s slightly different from how the other forms work. Each is best for certain kinds of jobs and less good for others, and each has certain benefits and drawbacks. Therefore, to get the benefits – to transform your work – you need to know which form will best work for you.

The five forms of crowdsourcing are:

Crowdcontests

Macrotasking

Microtasking

Self-organised crowds

Crowdfunding

I look at each of these forms more fully in Chapters 5–9, but in this chapter I introduce you to them, to help you get to grips with the basic elements of these forms of crowdsourcing. You’ll see here how they differ from one another and how you might apply these forms to certain kinds of jobs. And because each form of crowdsourcing has its own rules, its own purposes and its own form of crowdmarket, you also get acquainted here with the different kinds of crowdmarkets – virtual online marketplaces used to help manage the crowd’s contributions – and how you can use them to engage the crowd. All this is here, ultimately, to help you match the job that you want to do with the right form of crowdsourcing, and to guide you to the right part of the book that will enable you to become an expert crowdsourcer.

Harnessing the Power of Divided Labour

Crowdsourcing is a powerful means of getting work done by giving that work to a large group of workers – the crowd. It gets its power from the idea of divided labour, of taking a large job and dividing up the work. Each of the five forms of crowdsourcing involves a different way of dividing the work. Understanding all five ways enables you to work out the best way of dividing your job so as to get the best work back from the crowd.

Keeping the job whole

The simplest way of dividing a job is to keep it as a single task and not divide it at all. If you do this, you give the job to a single person to complete. When you do this kind of division in crowdsourcing, you rely heavily on that single person, so you obviously want the best possible person to do the work. Crowdsourcing enables you to find the best person by letting the crowd compete for your job. You ask the members of the crowd to submit their best work, you choose the best submission and then reward the person who did it. This form of crowdsourcing is known as a crowdcontest.

Crowdcontests are commonly used to create a single product quickly and easily and are great for creative activities such as graphic design, package design or video production, and can be useful for other activities such as product development, statistical analyses and financial projections. Crowdcontests are also well suited to activities in which workers believe that they benefit by participating in the contest even if they aren’t ultimately awarded the winner’s prize, because crowd members can use contests to practise and develop their skills and don’t have to invest anything beyond their time and energies.

Caitriona uses crowdsourcing for her cookware store. In addition to standard commercial kitchen utensils, she sells a small line of custom plates, bowls and tableware. She obtains her designs by running crowdcontests. She describes what kind of product she wants and lets the members of the crowd propose designs. She identifies the design that she thinks is best, manufactures it and sells it in her store.

A crowdcontest is for you if you don’t want to manage the crowd and you don’t have an interest in a long-term relationship with any member of the crowd. Crowdcontests can deliver products quickly and generally don’t take much effort to manage.

Crowdcontests do have two drawbacks, though. First, they aren’t suited to all kinds of jobs, especially those that take a long time. For any job that requires a lot of work and investment, you have to offer a large prize to get a good crowd. The second drawback is the lack of a long-term relationship with the crowd. You may not, for example, be able to contact the winner of your last contest if you decide that you want to have her help you again.

You can find more about crowdcontests in Chapter 5.

Splitting the job into big pieces

Instead of keeping a job whole, an alternative approach is to divide it into large pieces that each require specific skills. You give each of these large pieces to a member of the crowd who has that specific skill. You manage the process and pay the workers. This form of crowdsourcing is known as macrotasking.

Macrotasking is the most flexible form of crowdsourcing because it’s an expanded version of freelancing. With it, you can identify a specific skill that you need, find someone with that skill and recruit her to help with your work. The macrotaskers can help you individually; they can join an office team; they can even lead a project for you. Crowdsourcers often use macrotasking to bring specialist skills to an organisation for a short time.

Kwame uses macrotasking in his corporate communications firm, where he helps companies prepare public relations strategies. When Kwame acquires a new client, he assembles a team to help the client deal with its communications problem. That team usually has a manager, a writer and a presentation designer. It may also have several specialised workers, such as a graphic designer, a speach coach or an advertising expert. Kwame tends to hire the specialised workers from a macrotask market.

Macrotasking offers you the broadest set of skills. Not only can you find artistic skills, you can find technical and programming skills, various business and office skills, language skills, communications skills and management skills. Macrotasking also offers you the chance to nurture a long-term relationship with a worker if you find a particularly good macrotasker. It also requires the least amount of preparation, as the work of hiring a macrotasker is just a simpler version of the process of hiring an ordinary employee.

Macrotasking does have its drawbacks, though. Sometimes you may find it difficult to track down exactly the skill you’re seeking. Other times, you may find it a challenge to communicate with a macrotasker who lives several time zones away and in a different culture. Finally, managing a macrotask worker can require as much effort as you’d expend to manage a regular employee. If you want a simpler form of crowdsourcing, you may want to consider crowdcontests instead.

You can find out how to hire a macrotask worker in Chapter 7.

Dividing the job as small as you can

Dividing up your job into small or tiny tasks means you can engage more of the crowd and get your job done more quickly. When you do this kind of crowdsourcing, you pay all members of the crowd who work for you. This form of crowdsourcing is known as microtasking.

The basic forms of microtasks are simple – usually far simpler than macrotasks. You describe what you want done, post your job on a microtask site and wait for the crowd to respond. You can judge each submission and accept those that are properly done, without having to first review the résumés of potential workers or interview them.

When microtasking, crowdsourcers generally look for a large crowd to do their work, and so they divide it into small tasks that can be done by many, many people. This usually means that the tasks can’t require special skills that only one or two people may have. You can microtask if you can find a crowd of ten to help you, but you can’t microtask if you can only find one person.

Niall prepares instruction manuals for electronic consumer goods. He has to have the instructions translated into eight major languages and check that the translated instructions are still accurate. He once hired an expert translator to check each version of the instructions, but discovered he can use microtasking to check the translations instead. To do this, he divides each newly translated manual into paragraphs, posts each paragraph on a crowdsourcing platform and invites the crowd to translate each paragraph back into English. He then compares the retranslation with the original English. When the paragraphs match, he knows that the translated instructions are accurate.

Microtasking brings the power of human intelligence to tasks that computers can’t do well. It can help you deal with non-textual data such as handwriting or photographs; it can help you collect data from places that you can’t reach; it enables you to make judgements about large collections of data, such as the material displayed on web pages or found in big company databases. If you’re carrying out elementary tasks with crowdsourcing, microtasking is often the quickest and easiest way to do them.

Microtasking has two drawbacks, however. First, the workers can be unreliable. You have to review each submission to make sure each task has been done properly, and if you’re doing a large job, you’ll need to create some kind of system to review each submission and verify it. Such a system can be complicated to create and difficult to implement. Second, microtasking can quickly get complicated. You often need to combine multiple macrotasks with the process called workflow to get your results.

Chapter 8 tells you how to prepare and run microtasks (and Chapter 16 can help you see the wood from the trees when thinking about workflow).

Letting the crowd divide the job

In some cases, you don’t need to divide the job at all – you can let the crowd decide how to divide it. When you engage in this form of crowdsourcing, you post a job on the crowdsourcing platform, offer a reward for the person or group who does the job best, set a deadline for the job and then let the crowd work. When the deadline arrives, you review the different submissions and reward the best one. This form of crowdsourcing is call self-organised crowdsourcing. Self-organised crowdsourcing comes in many forms. Innovation crowdsourcing, for example, is commonly used for developing new goods or services. ( I look at innovation crowdsourcing in Chapter 18.)

Jamilla has been given the responsibility of reorganising the customer relations department of a large consumer products company. She’s concluded that the company’s customer relations program is badly broken and that it simply can’t handle the unique problems created by the company’s products and markets. Rather than hire a consultant to review the system and propose a fix, Jamilla decides to crowdsource a solution. But rather than tell the crowd what to do, she asks the crowd what she should do and lets the crowd form a team to give her advice. She describes the problems with the existing system and gives requirements for a new system, then she posts the information on a crowdsourcing platform and offers a reward for the best system. Since no one person can create such a system, members of the crowd create teams. Usually one member of the crowd is the leader and recruits friends and colleagues to be part of a team. Several teams enter the competition. One, which includes both company employees and a few outsiders, proposes a radically new system that addresses the company’s needs.

Self-organised crowds sound great. In theory, you can accomplish anything you want with a self-organised crowd. To date, people have used them to gather information, study markets, monitor elections, create new products and predict the future of the economy. In these applications, you can use a self-organised crowd just as easily as you would use a market survey or focus group. Likewise, software systems such as Ushahidi make it easy to recruit a self-organised crowd and to have it gather data for you. (You can learn more about using self-organised crowds to gather information by turning to Chapter 17.)

Self-organised crowdsourcing has one drawback. It’s a new form of crowdsourcing and isn’t as well understood as the other forms. You can spend a lot of time preparing a job for a self-organised crowd and be surprised when the crowd does something completely unexpected. Researchers are working hard to understand how crowds organise themselves, how they cooperate and what they can do. If you’re looking to use the crowd beyond the applications that have already been tried and tested, such as innovation crowdsourcing (see Chapter 18), you may become a crowdsourcing pioneer yourself.

Chapter 9 shows you the ropes for working with a self-organised crowd.

Using crowdsourcing to raise money

Crowdfunding is the one form of crowdsourcing where the objective is to raise money rather than do work. In crowdfunding, you use the crowd to raise money for your company, your charity or your artistic endeavour. Crowdfunding has two forms. The first is charitable crowdfunding, where you pass a hat to the crowd and ask for donations. The second form, called equity crowdfunding, raises money for a company by selling the crowd inexpensive shares of stock. (I cover crowdfunding in detail in Chapter 6.)

While charitable crowdsourcing is common in all parts of the world, equity crowdfunding is not. Equity crowdfunding is regulated by the same government agencies that control stock markets and corporate governance. In some countries, these agencies impose regulations on equity crowdfunding or outlaw it altogether. You need to check with the Security and Exchange Commission in the US, the Financial Services Authority in the UK or the equivalent agency in your country about any regulation of equity crowdfunding.

Tierney is the manager of a rural county animal shelter. The shelter is overcrowded and is no longer able to use part of the building that was damaged in a recent storm. Tierney gets her operating budget from the county council but has to raise money for the building herself. She decided to post a request on a crowdfunding site and used her online social network to notify the county’s residents about the campaign. To her requests, she added short videos of children playing with abandoned puppies and kittens in the damaged wing of the building. The campaign got wide publicity in the area and brought in sufficient funds to rebuild the structure. Her crowdfunding campaign engaged more people than any prior fundraising campaign she’d run.

The big drawback to crowdfunding is the work you have to do to get the crowd interested in your project. It requires some effort – you have to recruit a crowd to go to your crowdfunding page and give to your cause – but it does give you a much greater likelihood of success than if you try to raise money through conventional means.

You’re most likely to be successful in crowdfunding if you have some fundraising skills. If you review crowdsourcing sites, you’ll see that in successful cases the crowdsourcer is able to plan a good campaign, write a good description of the project, draw a large crowd to the site and support the campaign with professional photographs or video.

You can find out more about the ins and outs of crowdfunding in Chapter 6.

Looking at the Rules that Govern How Crowdmarkets Work

Understanding the differences between the five forms of crowdsourcing is important. You can easily distinguish the forms by the way they divide labour, but the other differences are a little more subtle. For example, macrotasking generally handles jobs that have been divided into large pieces, but sometimes you can have the crowd do large tasks with microtasking. Likewise, you can think of self-organised crowds as a form of contest, but you don’t have to run them as contests.

The major forms of crowdsourcing are distinguished by the rules they impose on the crowdmarket – an online virtual marketplace that is used to help manage the contributions of the crowd.

As a crowdsourcer, in most cases you deal with the crowdmarket through a crowdsourcing platform – a website that supports your crowdsourcing. As well as a crowdmarket, platforms offer additional services that support you as a crowdsourcer. Crowdsourcing platforms usually offer a payroll service that pays your workers and files all the appropriate paperwork with Her Majesty’s Revenue and Customs (in the UK) or the Internal Revenue Service (in the USA). The platform provider can also help promote your project, give you advice about how to crowdsource, and even help you find specific skills within the crowd.

When a crowdsourcing platform creates a crowdmarket, it usually sets two kinds of rules that determine how that market operates:

The first type of rule – often called the contract or contest rule – determines what kind of payments are offered to members of the crowd. When you post a project on a crowdmarket, you can pay the crowd in one of two ways:

• You can pay every member who contributes to your project. This is a contract market, or pay-all market.

• You can pay the one worker who submits the best job. This kind of market is called a contest market, or pay-one market, because it’s similar to a contest.

The second type of rule for crowdmarkets determines the way in which the workers collaborate. The market can encourage the members of the crowd to collaborate – this type is imaginatively called a collaborative market – or it can require the each member to work in isolation – called an independent market.

All forms of crowdsourcing involve markets and exchanges, but not all markets and exchanges involve money. In some cases, crowdworkers donate their earnings to a good cause. In other cases, they work for something other than money, such as satisfaction or status. If a market offers satisfaction rather than money, it’s a contract market. Everyone who contributes to the job gets something in return.

I set aside crowdfunding in this section. Crowdfunding is a form of crowdsourcing that’s easy to understand and which differs from the four other forms in that you use it to raise money rather than to manage work. You can distinguish these four working forms of crowdsourcing from one another by how they use the crowdmarket. (Crowdmarkets are the places where crowdsourcers – the managers of the crowd – meet with the crowd to offer them tasks and accept their work. See Chapter 1 for more about crowdmarkets.)

Distinguishing between contract and contest markets

Two forms of crowdsourcing – macrotasking and microtasking – use contract markets. Contract markets pay the members of the crowd for all work that’s done on the contract market site. For macrotasks, the market usually pays by the hour. The macrotask worker works for a certain number of hours on a task and gets paid for those hours of work. In a microtask market, the workers are generally paid by the task. Workers receive the same amount for a task no matter how much time they spend on it.

The other two working forms of crowdsourcing – crowdcontests and self-organised crowds – use contest markets. Crowdcontests use a contest market in a fairly straightforward way. Many members of the crowd submit work to the market; the crowdsourcer picks the best submission and rewards it. This scenario is a contest and nothing more. Self-organised markets, however, use the contest market in a more sophisticated way. The market asks for submissions from the crowd and rewards the team that submits the best work. The team then decides how to divide the reward among its members.

When used for self-organised crowds, the contest market removes an important tool of management from the crowdsourcer and gives it to the crowd. The crowdsourcer no longer evaluates the contribution of each member of the team and rewards it. That work’s done by the winning team itself. If the team is strong and well-organised, it will have a good mechanism for dividing the reward and recognising the contributions of each individual. If it’s weak and poorly organised, it’s likely to have trouble deciding how the money should be divided.

Understanding collaborative and independent crowdworking

When crowd members engage the market, they can either work independently or with other members of the crowd. Crowd members tend to work independently when they complete microtasks or participate in crowdcontests. In both cases, each crowdworker prepares her work without dealing with other members of the crowd and submits that work to the crowd market. In contrast, self-organised crowds are always collaborative affairs. The crowdsourcer poses a question to the crowd and asks the crowd to work together to find a solution.

You can also think of macrotasking as a collaborative effort. You can assemble a team of macrotaskers and ask the individuals to work together on a problem. To be fair, you can also hire a single macrotasker to work by herself on a project. Macrotasking is probably the most flexible form of crowdsourcing and, because it allows for collaboration, you can think of it as a collaborative form of crowdsourcing.

Combining the two rules

Each of the four different forms of crowdsourcing (excluding crowdfunding) represents a different combination of the rules that determine how you pay the crowd and how you encourage the members to collaborate. Table 2-1 demonstrates how the different combinations of these rules determine how the four forms of crowdsourcing operate.

Table 2-1 Different Forms of Crowdsourcing

	Independent Markets	Collaborative Markets
Pay one member of the crowd (contest market)	Crowdcontests	Self-organised crowds
Pay all members of the crowd (contract market)	Microtasking	Macrotasking