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Crowdsourcing: What it is and how it can benefit your small business

Crowdsourcing, in its most generalized definition, is simply the practice of drawing on new ideas or needed services from a large group of people. Crowdsourcing encourages creative and diverse ways of thinking, often yielding innovative results. Although this idea takes various forms, crowdsourcing as we know it today is done largely online. Crowdsourcing makes it easier than ever for companies of all sizes and industries to actively engage with large audiences.

Starbucks – My Starbucks Idea

This year marks the ninth anniversary of Starbucks’ very own social network, The website allows users to share, vote and discuss new ideas that could improve the company and provides a direct line of communication between Starbucks and its consumers. Users can submit improvements and additions to the product line as well as ways to improve the Starbucks experience as a whole.

As it turns out, there are a lot of people who are passionate about the Starbucks brand. More than 150,000 ideas have been submitted, and 277 have actually been implemented by the company. There is no financial compensation or reward for ideas submitted or implemented; rather, users are driven by the intrinsic value of contributing to the brand’s success. Some of the ideas implemented thus far include splash sticks to keep drinks from spilling, mobile payment transactions, digital rewards for the use of personal Starbucks Cards, free in-store Wi-Fi, smaller-sized treats such as cake pops, and new flavors such as the Hazelnut Macchiato and Pumpkin Spice Latte.

All these innovations were made possible because of, making the Starbucks crowdsourcing campaign a success.

Shell – GameChanger

Shell, one of the largest oil companies in the world, has also taken to crowdsourcing as a way to foster innovative ideas. Launched in 1996, the GameChanger program is designed to encourage inventors to engage in creative thinking to solve complex industry problems such as increasing energy production, carbon management, and energy conversion, storage, and distribution. Shell provides the necessary financial support and technical expertise to ensure that these inventors’ best ideas become realities. So far, Shell has interacted with more than 5,000 innovators from all over the world and has turned approximately more than 150 ideas into reality (1). Shell’s crowdsourcing campaign looks to make a difference by changing the game of the energy industry.

General Electric – Ecomagination Challenge

GE’s crowdsourcing campaign, known as Ecomagination, is a series of challenges designed to reach out to leading businesses, entrepreneurs, inventors, and students for innovative solutions to energy issues. The Challenge from 2011, entitled “Powering Your Home,” focused on innovative ideas for managing and using energy in the home setting. GE and its partners invested $200 million into promising start-ups and ideas from across the globe. The entrants that are selected by the Challenge’s judges are each rewarded with $100,000 in cash and with the possibility of an equity investment by GE or others, a cooperative agreement to develop a product or technology, and/or a review of their product or service for possible entry into the Ecomagination program. GE has been rewarded itself through the program. As of 2011, GE reported a total of $105 billion in revenue and 142 new products and services from the Ecomagination program since its start in 2005 and an additional $25 billion in revenue from the program in 2012 alone. GE, however, is not the only one benefiting from Ecomagination. In 2012, GE also reported giving $219 million to the community and educational organizations. GE has combined both extrinsic and intrinsic rewards to fuel its successful crowdsourcing campaign.

Although the examples given are related to bigger corporations, crowdsourcing can be a valuable tool for a small business as well. It is crucial for your business to be active and engaging online via your own website and social media to reach larger crowds. Social networks such as Facebook and Twitter, as well as company blogs, are some of the best ways to directly interact with your consumer following.

Once you have established relationships, crowdsourcing can allow you to get an idea of what the market thinks of your products or services, as well as include the target market in the process of creating new ones. Crowdsourcing can be especially effective for coming up with truly innovative ideas. The need for innovation to drive business growth and development is not just for the big guys; your business needs it too. Crowdsourcing could potentially land your business an idea for a new product or service, a new design for your website, or a totally new way of conducting your business. The possibilities are endless.

The final thing to consider before launching any crowdsourcing campaign is whether the goals you have set for the campaign are appropriate. Netflix is the most notable company to fail to do this. In 2009, the company offered up the Netflix $1 Million Prize. Anyone who could improve Netflix’s recommendation engine algorithm by at least 10% would be awarded the prize. And it was done. But an April 2012 article on Forbes revealed that the company never implemented the solution because the “additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment.” Netflix had failed to set appropriate goals for the campaign. This also proved that setting the right goals is not solely dependent on your company’s financial situation, but also on its overall structural capabilities.

All in all, if you establish a strong relationship with consumers online and properly align campaign goals with realistic company capabilities, crowdsourcing can be an extremely beneficial tool in the growth and development of your own small business.

(1) "Shell GameChanger." Shell Global. N.p., n.d. Web. 28 June 2017.

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