If you’re looking to do marketing research or raise money for any project or business venture, you need to know about “crowdsourcing” and “crowdfunding.”
Crowdsourcing: The “Best Entries” Approach
James Surowiecki wrote a book entitled The Wisdom of Crowds in which he demonstrates that 10 experts trying to guess how many jelly beans are in a jar can’t compete with the average of the guesses of thousands of randomly selected people. Crowdsourcing should produce better quality results since you can select the best result from a lot of “best entries” instead of just the best entry from a single provider.
How might you use crowdsourcing? Let’s say you want to build a better bicycle. You would gather information about what thousands of people in the world desire in a bicycle that isn’t offered today. What used to cost tens of thousands of dollars through focus groups and other marketing efforts can now be done for free and the results can be far more powerful.
At the University of Texas, Austin, students have been crowdsourcing solutions by simply creating a page on DellChallenge.org. The program offers $350,000 in prize money to multiple winners, and it receives thousands of ideas that help grow worthwhile business and nonprofits. In 2013, winning ideas included solar food dehydrators that help farmers minimize spoilage, and recycling old tires to make rubber shoes for the poor.
You might offer a payment or reward for the best designed logo for your new product or service. You’re likely to get a better-designed logo at a lower price than if you hired one designer.
Crowdfunding: Financial Help for Your Venture
Once you’ve received all the feedback, you can then use the power of crowds to fund your idea or project. This is called crowdfunding. Want to start a business? Nourishmat, a garden business, raised $107,534.
Be realistic about your goal because if you don’t reach your threshold for an amount of money raised, the fundraising campaign is typically canceled and you get nothing. People have raised amounts ranging from a few hundred to over a million dollars.
Some of the best sites for crowdfunding are Crowdfunder, Kickstarter, RocketHub, Crowdrise and AngelList. Some of these support business ventures only, while others focus on charity.
I am amazed that all of this exists. Suddenly all of us have the ability to gather Fortune 500 quality marketing data for a very low cost. Money can be raised for your idea without having to ask your closest friends for support or go to a bank and risk your own money. Whether you’re looking for the best name for your new business, or you’re seeking to raise money for cleaning up your local beach, you can be just weeks or months away from success.
