Monetized Crowdsourcing: Cracking Down Hard on Sleaze

by Krizia Li

“Crowdsourcing is when a company takes a job that once was performed by employees, and outsources it as a form of open call to a large undefined group of people generally using the Internet.”    

– Jeff Howe, Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business 

As a comment to an earlier post, for start-ups to be not perceived as sleazy, I argued that entrepreneurs’ execution of “end” and “means” must adhere to value-add and accountability principles. This semester, after analyzing InnoCentive, Threadless and OpenIDEO in Managing Innovation, then dissecting Google+, Cheezburger Network, PatientsLikeMe and Tripadvisor in Digital Marketing Strategy, I’d like to turn my critical “sleaze detector” lens to the monetization of crowdsourcing.

To test whether my anti-sleaze i) “end” and ii) “means” hypotheses hold true, let us reflect on these two perspectives as observed from industry leaders’ corporate strategies and best practices.

i) “End”: Distill your start-up’s value-add to target demographic

What continues to drive growth for today’s winning crowdsourcing platforms? Wikipedia facilitates intrinsic rewards for its unpaid knowledge-based contributor community. iStockphoto shares extrinsic financial and social value with users as an aggregator and intermediary. Kiva is a mission-driven crowdfunding platform that leverages prosocial decision-making. To refine a customer value proposition and accelerate product-market fit, entrepreneurs must perform clear stakeholder analyses and design specific built-in tools to address (at least one of) each stakeholder’s underlying motivations, e.g.

Win (Users) + Win (Vendors) + Win (Employees) = Win (Company)¹

Users:² Autonomy + Competence + Relatedness

Vendors: Access to data + Intimacy with users

Employees: Positive progress + Personal affirmation

Company: Direct engagement + Meaningful relations + User loyalty

ii) “Means”: Customize accountability towards user base throughout your process

After product-market fit is achieved, how have winning crowdsourcing platforms most effectively capitalized on earned advantage? Start-ups must sustain a symbiotic give-and-take relationship with users. Recognizing the concept of “no free lunch”, Wikipedia, iStockphoto and Kiva strive to continuously demonstrate commitment to creating and returning tangible and non-tangible value to users, who sacrifice time and resources in generating quality UGC to be farmed. Hence, to reinforce a start-up’s customer value proposition, follow through on delivery of service offerings to end-users matters too, e.g.

Deriving Your Do’s…

• Recognizing that user communities are not always incentivized by material rewards, always align towards users’ authentic interests by designing relevant and generous incentives; 
• Engineer personalized learning experiences and empower rational decision-making, while building tools that simplify complex processes, democratize inaccessible information and offer options of meaningful value to users; 
• Build multiple channels for access to diverse collaborative experiences and facilitate value-sharing with friends which translate from online to offline. 

Deriving Your Don’ts…

• Avoid surprises as described here. Being open with data collection or usage, refusal to lock users into opaque transactions, and sharing appropriate information creates trust with user communities; 
• Per Daniel Pink, humans have interests and needs to exercise creativity and productivity in ways that monetary incentives cannot facilitate. Paid crowdsourcing can adulterate motives behind contributions; if users’ intentions or actions change, micro-outsource to paid contractors. 

So, do my guiding principles on how to avoid “sleazy” start-ups hold? Yes, I believe so. Of course, “end” and “means” require individualized fleshing out for application to different business models, but these two core concepts in tandem serve as fundamental cornerstones from where an entrepreneur should kick start his logic of designing a credible and ethically defensible crowdsourced start-up.

References
¹ ”Happiness as Your Business Model”, Tara Hunt, Thinking Digital UK (2008): http://www.slideshare.net/missrogue/happiness-as-your-business-model-414463
² ”Intrinsic and Extrinsic Motivations: Classic Definitions and New Directions”, Richard Ryan and Edward Deci, Contemporary Educational Psychology (2000): http://mmrg.pbworks.com/f/Ryan,+Deci+00.pdf