CROWDSOURCING:
COSTUMERS AS CREATORS
Presented by:
FAWAD AHMED
Master degree student
Process System Engineering
School of Chemical Tech
Content
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Introduction
Commercial examples
Challenges
Conclusion
References
Discussion
Crowdsourcing - Introduction
• ”user-centered innovation”.
• Utilizing unpaid or low-paid crowd to:
▫ design products
▫ create content
▫ tackle corporate R&D problems
• value creation process is changing from
▫ from linear to networked
▫ from top-down to bottom-up
▫ from centralized to decentralized
▫ from closed to open
Crowdsourcing - Introduction
According to Thomas Kohler2, crowdsourcing-based business models consist of three
elements
1. Open business model
share ideas and technologies with others
2. Leverage technology
exploit social networks, peer to peer tech, and mobile connectivity to
invite users in value creation activities
3. Transfer value-creating activities
crowd members co-create platforms with provider or other groups
Crowdsourcing - Examples
MIT publication shown two examples of risks management which are similar to
crowdsourcing concept
• Threadless
▫ Chicago-based T-shirt maker
• Muji
▫ Japanese specialty furniture retailer
Threadless
• Online contest for T-shirt design
• Designs posted on website and scored
by audience
• 4-6 highest rated designs in production
▫ Only after pre-orders by costumers
to save money loss
• Winners get cash and prizes
Threadless
• Real motivation for crowd
▫ Own work in public
▫ Name on T-shirt label
• For designers, it's a creative outlet.
• For customers, it's a wider range of
choices.
• For company,
▫ doesn't have to hire a design staff
▫ Production of only pre-order designs
Muji
• Uses community members for new
ideas
• Asks members to pre-evaluate design
• Professional designers develop
highest-rated ideas or designs
• Run production after pre-order of 300
items by costumers.
• Endorsed it’s costumers top items on
website
Crowdsourcing-Challenges
• Crowd-driven business model is difficult to deploy
• Some unsuccessful firms;
▫ Crowdspirit – communities designed products
- Admits that business model was wrong
▫ Genius Crowd – helped individuals to bring ideas into market (5000 users)
- Admits to reevaluate business model
Crowdsourcing-Challenges
• Sharing sensitive information with crowd, advantageous for competitors
• Do not create radical innovation, it requires insight knowledge about processes,
products and company’s values
• Crowd may suggest existing ideas, no guarantee of plagiarism free ideas
• Professionals struggle to compete unknown low budget idea suppliers
Crowdsourcing-Conclusion
• Crowdsourcing is different from traditional outsourcing, because of undefined
individuals or groups
• Social crowd can be deploy at different stages of product development
• Crowd can be engage to solve problems
• People can be motivated by desire to learn, winning prize and setting reputation
among peers
• Cost can be concern due to uncertain result
References
1. http://www.bloomberg.com/news/articles/2006-07-12/crowdsourcingconsumers-as-creators
2. Kohler, T 2015, 'Crowdsourcing-Based Business Models: HOW TO CREATE AND
CAPTURE VALUE', California Management Review, 57, 4, pp. 63-84, Business
Source Complete, EBSCOhost, viewed 31 March 2016.
3. Agafonovas, A, & Alonderienė, R 2013, 'VALUE CREATION IN INNOVATIONS
CROWDSOURCING. EXAMPLE OF CREATIVE AGENCIES', Organizations & Markets
In Emerging Economies, 4, 1, pp. 72-103, Business Source Complete, EBSCOhost,
viewed 31 March 2016.
4. https://www.threadless.com/infolocation/
5. http://www.muji.eu/
Discussion