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Crowdsourcing work allows companies to save time and money while tapping into people with different skills or thoughts from all over the world. While crowdsourcing seeks information or work product, crowdfunding seeks money to support individuals, charities, or startup companies. The advantages of crowdsourcing include cost savings, speed, and the ability to work with people who have skills that an in-house team may not have. Crowdsourcing allows companies to farm out work to people anywhere in the country or around the world; as a result, crowdsourcing lets businesses tap into a vast array of skills and expertise without incurring the normal overhead costs of in-house employees.5
Platforms like Kickstarter make money by charging a small platform fee, whereas some of the best crowdfunding platforms specialize in helping creatives (Patreon), investing (StartEngine), the real estate industry, nonprofits (Mightycause), or even startups trying to raise capital (SeedInvest Technology). Especially as recent years have seen grassroots activism ramp up, communities have used platforms like GoFundMe to support families affected by police brutality or other violent attacks. If crowdfunding sounds like an intriguing option, read more on the best alternatives to Kickstarter for your cause. The advantages of crowdsourcing include cost savings, speed, and the ability to work with people who have skills that an in-house team may not have. If a task typically takes one employee a week to perform, a business can cut the turnaround time to a matter of hours by breaking the job up into many smaller parts and giving those segments to a crowd of workers.
Companies that want to design new products often turn to the crowd for opinions. Rather than rely on small focus groups, companies can reach millions of consumers through social media, ensuring that the business obtains opinions from a variety of cultural and socioeconomic backgrounds.
Oftentimes, consumer-oriented companies also benefit from getting a better gauge of their audience and creating more engagement or loyalty.1