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Can crowdsourcing reconnect with the crowd?

By Barry Neild, for CNN
Winning over the crowd: Collaborative business ventures are developing new ways to crowdsource.
Winning over the crowd: Collaborative business ventures are developing new ways to crowdsource.
  • Crowdsourcing has been criticized as a jackpot system that rewards only a few
  • New types of crowd-based ventures work collaboratively and split profits
  • Existing crowdsourcing models say they offer a level playing field

(CNN) -- Crowdsourcing used to be an internet buzz word, frequently used by business visionaries to describe a shiny new economic model. Nowadays, amid claims of exploitation and shoddy standards, the financial luster has gone.

But a new breed of collaborative venture is finding ways to reconnect with the crowd and bring back the buzz.

Crowdsourcing -- the concept of farming work out to a web-based community and rewarding the best ideas -- was once seen as a win-win system that gave freelance creative thinkers the chance to work on lucrative projects whilst providing companies with a cheap ideas pool.

Now web forums on the subject are filled with the grumblings of disillusioned crowd members weighing the pros and cons of pitching speculative work -- typically design projects -- into jackpot systems that offer no guaranteed payday.

Such crowdsourcing models are "great for the person who wins it, but not for the 999 other people who submitted their ideas," said online marketing expert DJ Francis.

"And for the client it seems like 'I'm getting something cheap,' but they don't take into account the sort of brand guidelines which might be important for someone in pharma or a financial institution. There's certainly no thought about long-term strategy."

With the old crowd-type model you get so many submissions it takes so long to weed out the wheat from the chaff
--Online marketing expert DJ Francis

Crowdsourcing has had its naysayers since the phrase was popularized as part of the so-called web 2.0 era of internet participation, but it has developed into a widely used technique.

However, says Francis, for many who use the technique commercially, the day of reckoning is near.

"The one's that are going to fail first are the ones whose only benefit to the client is their inexpensive nature," he told CNN.

"Really they're just saying we can extract creative gold for these folks even less expensively than you were paying before, which is terrible from an ethical point of view, but also it just won't hold up, because it's not based on strategy or creativity or smart business."

It comes as no surprise that some new firms which use large online communities to collaboratively develop products are trying to distance themselves from the crowdsourcing tag.

One of these is Quirky, a year-old venture that connects inventors to an outsourced community of peer reviewers who help refine design concepts into fully-fledged products.

"The reason we don't like to call it crowdsourcing is that crowdsourcing implies an us-against-them dialogue," Quirky's head of design Gaz Brown told CNN. "We're really about the community -- there's a full transparency in terms of our relationship."

When a design makes it through the selection process, and receives enough orders to put it into production, Quirky splits the profits between all those who had a role in the process and, as it has with its hot-selling pivoting power strip, gives them a name check on the packaging.

Francis believes collaborative models similar to Quirky -- he cites the example of Napkin Labs, a Colorado-based outfit that also splits profits between its online community rather than offer one-off prize payments -- are the future of crowdsourcing.

"With the old crowd-type model you get so many submissions it takes so long to weed out the wheat from the chaff and it isn't viable anymore because you spend all your time doing that.

"But what [Napkin] does is only let in select folks who are experts in their field and what you have is professional smart folks talking about things in their bailiwick with other people."

For all the negativity over crowdsourcing, however, some businesses continue to enjoy success using the one-off prize model to deliver cost-effective solutions to clients through the willing participation of thousands of crowd members.

These include Crowdspring, a design venture which, according to Chicagoan co-founder Ross Kimbarovsky, thrives by offering a level playing field on which talented but unknown creatives can compete with established rivals.

Kimbarovsky says Crowdspring's creatives "don't do it for the money," but are instead attracted by the opportunities to work with big industry names. "We really try hard to make sure they have really good work," he added.

"We treat [crowd members] like we do our clients who are posting the projects. We really work hard to ensure their interests are protected."

Clients -- protected by a money-back guarantee -- also benefit, he said, because "they are able to leverage some very talented people often from around the world to help them with real problems."