In a simple layman view as said by Goodrich (2013) crowdsourcing is a management tactic to distribute the problem-solving mechanism since it is well verse that “the best way to have good ideas is to have lots of ideas.” In the process, the stakeholder outside the company also contributes to the success of the project, most of the time, creating a win-win situation for both, company as well as all the stakeholders. And the process actively operates in the online setting vide internet and social sites. Crowd-funding, Crowd-contests, and Micro-tasking are some examples of crowdsourcing.
Interestingly, “Threadless” and “ChallengePost” have also leveraged themselves via crowdsourcing. “Threadless” which was initiated with $1000 seed money now worth’s multimillion-dollar, and all its success goes to the paradigm shift that it has incorporated in its product design. Rather than limiting itself in knowing its customers through the group of researchers and workaholic working in its company, it decentralized and delegated product design ultimately empowering its customers leading to “innovation” and “co-creation.”
Moreover, in the present scenario of cut-throat competition, the price-war among enterprises does not ensure its market stability, i.e., is a company X reduces its price by a unit of a dollar, company Y will also imitate the same or will come with even more tarnished marketing campaign availing second mover advantage. So, in the contemporary situation, the resilience of the company is also dependent on its internal environment, i.e., operational management. Hence, I feel that the success of “Threadless” was due to its divergent product design campaign and its ability to surrogate operational cost in aggressive researching by the economical process of community involvement thru the use of the internet. Its success came from valuing its customers, reviewing their product expectation and manufacturing the products which were already tested and proven in the market.
Both the companies have obtained competitive advantage in-compare to other traditional firms in the industry. Let’s analyze the “Threadless,” and “ChallengePost” through Input-Process-Output mechanism vide below process flow diagram.
Figure: Process Flow Diagram
Though all the firms and industry operates in the fundamental modality of using the resources from the environment, processing it and giving back to the community(as shown in above diagram in an open environment), the competitiveness lies in how they use the resources, process them and produce the final products. Here, both the companies, except their internal resources have also used the ideas of the consumer through crowdsourcing. They have created an open domain; consumer can come up with their expected T-Shirt design and in “ChallegePost,” an open solution is requested to the communities. Once the company obtains the ideas, they are tested(i.e., processed). “Threadless” reviews the rating of the design and finalize to manufacture only with the highest votes, similarly, “ChallengePost” reviews the participant’s ability to solve the problem. Ultimately, producing community desired and accepted products, services and even in at a low development cost. In both of the sampled companies, their outcome is not limited to the products and services but unequivocally generates immense satisfied customers, agile company, and foremost the reduced operations cost which in itself is a competitive advantage.
Hence both the companies have competitive as well as comparative advantage in the product redesign through i) high product success rate, since they are tested prior to the commercial launch and ii) lower research and product development cost, since they should not invest resources in new empirical researches iii) valued by their consumers and other stakeholders, since they also equally contribute to the product manufacturing process. But in contrast, the same kind of the firms in the industry, so-called traditional or orthodox either due to their higher resistance to change or lower receptivity to amalgamate are not able to re-engineer their process leading to their higher dependency on limited numbers of inter-organization staffs making the organization susceptible to closure. Nokia Inc., if had understood the expected trend of the market towards the Android platform would not have suffered the historical loss (Sull, 1999). Had they use any measures of crowdsourcing and incorporate market dimension, they would not have lost.
As mentioned above crowdsourcing is capitalizing on the knowledge, skills, and wisdom of the people those are beyond the boundaries of an organization. A perfect apotheosis could be Wikipedia.org, where the contents are contributed by the authors who are motivated to do so. As per (Kearns, 2015), multinational companies like McDonald's, Samsung, Lays and Airbnb has also incorporated crowdsourcing. In 2014, McDonalds Burger conducted the project where the customers could design the burger of their choice, latter burgers were voted by the country and designs with higher votes were on the stores to serve consumer taste buds along with the picture and short bio of the creator. So, the rudimentary logic is to reduce the chance of product failure by leveraging the resources effectively and efficiently the way market desires. Since the failure of the product is not only limited to the loss of the financial resources the company has but it’s unequivocally about the big question mark in the “brand image” leading to jeopardize its “brand equity.”
Equally, the crowdsourcing has limitations as well as drawbacks, if the participant happens to be ill-intent than the overall e-brainstorming process could be havoc. Some people may not be a good “netizen” and may not practice “netiquette”; online ethics. The feeders are not the employee of the company, so it is hard to control them. Moreover, as we know, the bad news transmit faster than the good ones, the vulnerabilities are higher in open platform. For example, if somebody with bad intent comment disturbing and distracting issues in “Threadless” or if a group deceptively ranks a design better than the actuality, the consequences could be detrimental.
Crowdsourcing has become a major source of startup, not only for its ability to develop ideas, raise debt or equity but unequivocally its capacity to diversify the risk and generate an enormous pool of ideas. As mentioned ahead, outsourcing could be for ideas or also for capital. For example, the project, “The Pebbe E-Paper Watch” raised $10,266K through Crowd-funding.
I fell that, Los-Angeles has the worst nightmare with public transportation, the public transportation is a real mess and takes hours even to complete some couples of miles, so I think now it is a time to come up with an idea of flying cars principally build on the modality of drones. Here, the promising ideas could be funded by the Angel Investors also. Similarly, the food sharing could be another burning example; most elites group in the society are throwing their food, fruits, and vegetables, in their home, office, restaurants et cetera. Whereas, underprivileged and marginalized groups are starving for that food. If a common platform, i.e., a mobile application, notifying the excess hygienic food if is shared than it could be helpful to those who are in needs. Actually, it not only satiates others hunger but also save our precious environment through the effective use of raw materials. Just for a while think that you just shared the fries, excess milk that you were to dispose of in drain due to your travel abroad, uncooked fresh vegetables that were in your refrigerator since you were busy in meetings, in the sharing application that could be useful for others rather than throwing them. In both of the cases, the general public could be appealed to come up which some promising concepts in an open portal. From the very beginning, these concepts of crowdsourcing or crowd-funding will help to generate ideas as well as a fund for the project and equally the aggressive promotion and word of mouth from the initiation.
An analogy could be clearly drawn between the crowdsourcing and business success through differentiation, cost reduction leading to innovation and co-creation. Similarly, the inevitable importance of the crowd participation for the success could not be denied. As done by “Threadless” and “ChallengePost”, the methodology could be practiced by every business entities as its benefits significantly outweigh the cost.
Bibliography
Goodrich, R. (2013, February 26). What is Crowdsourcing? Retrieved January 19, 2018, from www.businessnewsdaily.com: https://www.businessnewsdaily.com/4025-what-is-crowdsourcing.html
Kearns, K. (2015, October 07). 9 Great Examples of Crowdsourcing in the Age of Empowered Consumers. Retrieved January 19, 2018, from www.tweakyourbiz.com: http://tweakyourbiz.com/marketing/2015/07/10/9-great-examples-crowdsourcing-age-empowered-consumers/
Sull, D. N. (1999). Why do companies go bad. Harvard Business Review, 42-52.
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