5 Crowdsourcing Business Models That Work

5 Crowdsourcing Business Models That Work 3 Comments

crowdsourcing fundingAccording to Pareto’s famous 20/80 rule, you can count on 20 percent of your followers to generate 80 percent of your revenue.This magical 20 percent will usually come from the set of highly engaged visitors who regularly interact with your company or brand online.

The more engaged they feel, the more likely they are to buy your products or services, and crowdsourcing is a great way to create this bond.

Successful websites like Threadless and Kickstarter have constructed their entire business models around this idea, and you can too.

Utilizing broad participation to complete a set aim

Transcribe Bentham is an award-winning project set out to transcribe the works of Jeremy Bentham, a famous 19th century philosopher. Based at University College London, the project relies on voluntary, collective labor to transcribe copies of the thinker’s works. As of August 2012, the project reported that 4,014 manuscripts had been fully or partially transcribed.

What do volunteers get out of it? The official site encourages volunteers to get on board by pointing out that transcribers’ efforts contribute to an important historical aim: making Bentham’s works easily and globally accessible, as well as furthering scholarship in this field. Transcribers will also receive acknowledgement in future publications of the Collected Works of Jeremy Bentham.

Maintaining a platform with crowd-based production, moderation, and funding

Wikipedia has few employees, but due to its crowdsourcing business model, that is all it needs. Millions of contributors flock to the site every day to create and monitor entries. Wikipedia makes it easy for users to write about new topics, and just as easy for astute readers to flag incorrect or poorly-cited information. All the site needs to do is maintain the machinery behind the scenes, like its servers.

It crowdsources funding, too. For years, it has held an annual fundraiser where users chip in money to keep the project running without advertisements.

Connecting creative ideas with capital

Rather than reaching out to a small group of investors, anyone with a creative idea can now use Kickstarter to reach out to thousands of potential donators, and the website takes a cut for setting up the exchange.

The incentive for many donators is contributing to a unique goal and, for some projects, getting promotional products and services as thanks for putting forward money. For many projects, it works – 67, 966 have been launched on the site and 44% reached their funding goals, with 235 projects pulling in six-figure amounts.

Facilitating user innovation, then handling production and distribution

At its core, Threadless is a website that hosts T-shirt design contests. However, one look at its legion of followers will attest that the site is also much more. It provides designers a platform for showcasing their work; the crowd then shapes the overall product design of the site’s shirts by giving high ratings to designs they love. Those with the best scores get printed and distributed by Threadless, which are purchased by many of the same people involved in bringing the design to print. Beyond recognition, winning designers also receive $2,000 in cash and prizes.

Provide access to goods and services through a marketplace

Hotels can be expensive, especially when they are in a fantastic location. Airbnb offers a different option: a marketplace where people who want to sublet rooms and full properties can meet people who have extra space and want to make some money. The concept itself in not wholly novel – craigslist, for example, provides a similar service.

What makes Airbnb unique is, for 10% of the booking price, it facilitates the transaction and, through reviews, quality control; it also offers up to a million dollars worth of protection in the event of theft or vandalism. In other words, it is mediated collaborative consumption geared to cut down on negative experiences.

Many say crowdsourcing business model is the future. Whether or not they dominate, it is safe to say incorporating some of its elements into business has the potential to lead to tremendous success.


Written by Mike Holmes

Mike Holmes contributed this guest post on behalf of Printercorp. Mike has had an extensive career as a business consultant. He has combined this with his love for freelance writing. His articles appear on various business blogs.



  1. “Connecting creative ideas with capital” – this seems most hard job. Capital – people with funds are usually suspicious and even if you have a great idea thay not often share your point of view :/
    Unless you got lots of your own money – you’ll find problems to start.

  2. You get it cheap but it can’t be costlier – That’s an irony. Take for example to get your job done you can outsource, and by paying more you can get better results (mostly). While in crowdsourcing this might not always be true. There are various individuals satisfying your need; some might be OK with a 100 dollar bill while others try to get at least 250. The prices are random and by increasing them, you not necessarily increase the quality of work, so to say.

  3. I personally find that crowd sourcing is only useful for a small number of things. But when it is useful, it tends to be effective. It is great for creative projects because it taps into the different perspectives and ideas of the crowd. It is also useful for getting mass opinions the way usertesting does.

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