Crowdsourcing is the practice of engaging a crowd or group for a common goal. It is a core element for adapting and maintaining a innovation strategy. Crowdsourcing can take place on many different levels and across various industries.
The idea of crowdsourcing is based on a practice that nowadays is very popular, rather than relying on a few experts to solve specific innovation problems, you open up the process to the crowd. A common practice that companies follow is to post the problem on a web platform and invite for solutions, sometimes these companies offer back a significant prize. Another very common practice is the open source software projects, in which volunteers contribute to developing a product or a system.
The advantages of crowdsourcing are many. By inviting a large number of people to solve a specific problem or to undertake a task, most of whom you probably could not have found on your own, you increase the probability of developing a novel solution. New technologies and social media support crowdsourcing so that start-ups and companies have now access to new ideas, solutions, opportunities, deeper consumer engagement in a very low cost.Internet and social media have brought companies closer to their stakeholders.
“Crowds are a hit. Millions of people, connected by the Internet, are contributing ideas and information to projects big and small. Crowdsourcing, as it is called, is helping to solve tricky problems and providing localized information. And with the right knowledge, contributing to the crowd — and using its wisdom — is easier than ever.” -The New York Times
We have also to keep in mind that crowdsourcing works better for some kind of problems than for others. For instance, it requires fast and efficient ways to test a large number of potential solutions. If testing is very time consuming an costly then you need some other approach.
Another practice is to involve consumers in the innovation process. Some people in the business world believe that close collaboration with customers reveals insights that can lead to novel offerings. But others say that working to closely with customers will blind you to opportunities for truly disruptive innovation. At the end, everything comes to strategy matters and the goals that you are trying to achieve.
This new way of doing things – crowdsourcing, crowdfunding, co-creation, collaboration, and open innovation – is challenging business models and workings of organizations across the board, offering an immense opportunity to rethink and reinvent conventional processes.
1) Solve a real world’s problem that people care about and they don’t have yet a solution
Make sure that your start-up or your new application is really solving a problem to a big amount of people. We know that you may think that small incremental changes to existed solutions, will make the difference and this could obviously happen. But most of the times the incremental changes, are not the ones who will give you the ultimate power to the entrepreneurial world. You need to think that you will solve a problem of the big mass and this will unlock your opportunity to success and let you enter the market dynamically. Think what others have don’t, and solve a millions customers’ pain.
2)Focus on sustainability
The first thing you need to think about when becoming an entrepreneur is sustainability. Sustainability is the only indicator who will make your business last over time, and if you don’t have sustainability you will lose all the investors who will maybe be interested for your startup. Sustainability starts with a profitable business model that generate cash, sales, marketing, customers support and loyalty, legal and finance. As a startup it is sure that you may not have achieve all these from the start, but you need to have a clear roadmap in your mind that you will succeed all these in some point of time. As clear as to be able a third person to know and see in front all your steps which will lead you to this goal. Before building something at its final version, ask your potential customers if they would pay for that and how much. This is your driving test, as if the customers are not willing to pay, you need definetely do something differently. After you determine how much are your customers willing to pay, you need to consider how much do they cost you your services that you are going to launch (i.e. your cost of goods sold). Do you achieve a positive gross margin? Benchmark with your competition in order to see how much you will need to spend in order to acquire customers. Do you need to have any legal resources on place before going live? Such as terms and conditions and privacy policies who are the most common ones.
3)Masterize your self in making decisions and take actions
An another characteristic that you need to have as an entrepreneur is the ability of making the decisions at the right time. As you go along with your startup, the voices around you become more and more, from your co-founders, your friends and supporters, but at the end some decisions need to be taken. Make sure you do recognize the most important and not get comfused by the crowd. Do your research, write down on a paper the pros and cons, ask other entrepreneurs and have experience in this journey of entrepreneurship and create a balanced and diverse board. Don’t be afraid to challenge the different point of views, but at the end be sure that you kept the best one.
4) Cash must be your priority
Any startup seems successful if it hasn’t achieved to gain some cash flows. We hear it over and over again from investors, angel investors, venture capitalists and people in the entrepreneurial world, that a business is as important as its money that generates. So now do you imagine why your cash flows are a very important indicator? If you have built a perfect product but you haven’t secured your cash flows or how they will come to you, then nothing else matters. At the end, you need to bring something sustainable in the market, that will generate revenues and could make a positive impact to society.
5) Calculate and Measure
An another secret of your success will be to have the total control of your startup and what’s going on. This may happen by always MEASURE, MEASURE AND MEASURE. Take control of your progress, set clear targets and milestones, calculate your conversion rates with your visitors who become customers, your daily visits or downloads in your application, the bounce rates and who are the reason behind them and many more. Having numbers on hand and being organized, is the only way to tackle any obstacles on your way, or solve any future problem by knowing how it started, what is the reason and how you can solve it.