This post covers the benefits of crowdsourcing new product design at your firm. There are just so many things to love about the internet. After all, it is the internet that has allowed humankind to experience the freedom of knowledge dynamically and virally. The internet has also paved the way for numerous actions that drive human creativity and innovation. It was back in 2008 when the wisdom of the crowd rose to popularity. Probably one of the best uses of the internet is its ability to take advantage of the power of the masses, crowdsourcing opinions, with the hopes that these will all lead to innovation.
Today, the combination of social networking and state-of-the-art communication technologies has made the practice of crowdsourcing easier, simpler, faster, more convenient, and more powerful than ever. Many big-name companies, including Netflix, Procter and Gamble, Dell, Boeing, and Hilton Hotels, use this innovative form of product design and development. But what is crowdsourcing in the first place? What are the benefits of crowdsourcing new product design at your company?
What is crowdsourcing?
Crowdsourcing is a term that combines the words crowd and outsourcing, and it was mentioned in 2006 for the very first time in Jeff Howe’s published article in Wired entitled “The Rise of Crowdsourcing”. The crowdsourcing process involves acquiring opinions, information, and work from an extensive group of people, who submit data using the internet, smartphone apps, and social media. People interested in crowdsourcing often work as paid freelancers, and others voluntarily handle small projects.
Crowdsourcing allows companies to distribute work and projects to people in different parts of the country or even worldwide. Thanks to this, crowdsourcing enables businesses to tap into an extensive selection of expertise and skills without paying for the usual overhead costs of onsite employees. The crowdsourcing process has become a popular technique to raise capital or funds for unique and up-and-coming projects.
It functions as a great alternative to conventional financing options, tapping into a group’s shared interest and circumventing the usual intermediaries and gatekeepers necessary for raising capital. Most of the time, crowdsourcing involves taking on a large project and breaking this down into several smaller jobs that the crowd can work on individually.
Crowdfunding vs. crowdsourcing
Crowdfunding raises money to support startup companies, charities, or individuals. Crowdsourcing, on the other hand, seeks work products or information. People can also contribute to requests for crowdfunding without any expectations of repayment, and companies can also offer business shares to the contributors. Kickstarter and Indiegogo, for example, are two of the most popular platforms for crowdfunding.
These are online platforms where people can contribute small amounts of cash and collectively turn a business product or idea into reality. Platforms such as Kickstarter earn money by charging a few platform fees. Other venues for crowdfunding specialize in investing, helping creatives, nonprofits, the real estate industry, and startups hoping to raise capital. With the increase of grassroots activism over the past few years, communities have also been using platforms such as GoFundMe to support families who are victims of violent attacks or police brutality.
The role of crowdsourcing in new product design and development
When it comes to product design and development, crowdsourcing refers to the process of tapping into groups of people with defined or known characteristics and leveraging their knowledge to develop something new and valuable. As far as new product design is concerned, crowdsourcing involves casting a wider net for new and fresh ideas over and beyond the inner sanctum of the typical market research, marketing, and product development functions of a modern organization.
Using crowdsourcing as a well-defined business process of competitive value requires a different model than conventional product development. “Consumer” is a term that has historically carried the implication that companies produce and market products that consumers happily “consume.” The crowdsourcing process blurs the lines between designers, marketers, and consumers. The people who contribute to the product’s design today can finish it and recommend it to a relative or friend tomorrow.
The first and most crucial step in crowdsourcing is to have an open conversation with everyone involved in your business. Take a look at how crowdsourcing can influence the traditional new product design and development framework, from the process of idea generation to marketing, and finally distribution.
- Generation of ideas
Opening up the process of new product design to the crowd, including your customers, employees, vendors, outside subject matter experts, consumers, and the public in general, will put a greater demand on your company to know its specific wants and how much you are willing to spend for a fully functioning product.
Most companies embark on this process hoping that focus groups and consumer studies will give them the appropriate product definition. Doing this will only increase your risk of failure because of the groups’ limited breadth and size and the possibility of the focus groups capturing only the opinion and not the actual behavior of consumers.
RELATED: 12 Brands Using Crowdsourcing for Product Design Ideas
- Screening of ideas
The customers themselves are considered the best screeners of ideas. Many of the crowdsourcing techniques today came from the world of open-source computing. When you visit websites or use a specific web browser, you are considered an open-source consumer. The open-source software, financial, and consumer products that follow the open-source design principles give product creators and other related communities a chance to conduct idea screening in a more democratic way that provides a more accurate reflection of what people will do.
- Development and testing of concept
The Lego company’s approach to the development and testing of the product is based on crowdsourcing. This is done through the sponsorship of the online Lego Factory, where anyone gets the chance to design virtual Lego scenes and customize colors and blocks. Rules integrated into the system prevent customers from developing blocks that are impossible to reproduce in the actual world. The Lego company currently has a laboratory that runs 24 hours a day, seven days a week, observing customers who develop and purchase products.
The T-shirt company Threadless produces shirts made by their online community members. The members cast their votes every week on the shirts that will be created, and the company then follows the group’s recommendations. Threadless always manages to sell out their shirts, a remarkable feat in an industry where it is already considered lucky for a brand to sell 20 percent of their products at full retail.
- Marketing and distribution
Based on the fundamental tenets of crowdsourcing—democracy of ideas, inclusion, and community—the marketing and distribution process is made more straightforward than ever. Companies that take time to include their employees, vendors, customers, and everyone else willing to participate in the development process can enjoy the perks of having a group of loyal people willing and ready to help in marketing and distributing the products they have made themselves. Record companies, milk producers, and Procter and Gamble all use committed customer groups to go out and promote their products.
Now, you might think that letting such large groups do the marketing will be expensive on their part. But you would be surprised to know that many of these brand promoters work for free, while others offer samples of the products. A company that seeks help is what makes a brand unique. At the same time, this also strengthens the bond between the company and its customers, paving the way for real and full-blown marketing at its finest.
Crowdsourcing and its benefits for your company’s new product design and development process
Now that you know how the crowdsourcing framework can apply to the design and development of your company’s new product, it is time to learn more about the exciting benefits that it has to offer.
More diverse thoughts and ideas
A larger pool of people working together unlocks more diverse thoughts and unexpected and innovative ideas. For most businesses today, particularly smaller ventures and startups, the size of the staff team might limit their ability to provide the kind of innovation diversity required to address some challenging issues. Good thing that crowdsourcing can help change all of this.
When you invite a large group of thinkers to take part in this problem-solving exercise, it gives your company immediate access to a mixture of contexts, experience, expertise, and knowledge that you wouldn’t otherwise have had. The Ideas Portal of Lego is the best example of this innovation diversity in full action. The company asks fans worldwide to send in their ideas for new sets of Lego, giving Lego access to a diverse group of preferences and thoughts. It also allows them to amass new suggestions that they can use to create unique new products in the future.
Reduced burdens on the part of the management
Crowdsourcing’s management aspect is not something that many people understand well, but this is one of its significant benefits. When your company innovates internally, it often places a substantial management burden on the person who leads and organizes the entire project. Designers and thinkers must be constantly reminded to pitch in their ideas, and there are also instances when they require encouragement along the way.
Thanks to crowdsourcing, your company can set clear and defined terms and conditions for the process and allow all ideas to flow in. This kind of hands-off approach will take up less time than conventional ideation processes, and it also gives people the freedom to focus on more important and exciting things.
Excellent source of customer data
Crowdsourcing can provide your company with more detailed insight into your most dedicated customers and fans. For companies such as Starbucks, their My Starbucks Idea portal is a form of crowdsourcing that goes beyond acquiring great new ideas. Starbucks collects and analyzes information about the participants, gathering pertinent information about customer profiles.
This way, the company learns the core demographics of people who submit their details. They also discover the communication methods that can be used best to connect with these people. The responses provided also inform them of the preferences and tastes of the most dedicated fans of the company. This only shows that crowdsourcing offers benefits that go beyond the solutions themselves. Crowdsourcing done right can also generate valuable customer insights.
Brand promotion
There is nothing wrong with using your crowdsourcing challenge as a chance to build and establish the image of your brand. When LG announced its intention to use crowdsourcing for designing its new phone model, it received a lot of publicity. This happened way before the winner was selected and the latest model was launched on the market.
The public always loves hearing about companies that take a more innovative approach and give ordinary people a chance to change the world. You might be surprised to see the amount of PR your company will get if you launch a crowdsourcing challenge.
RELATED: Industries That Can Benefit the Most from Crowdsourcing
Cost-effective
Even if your company works hard to contribute to the common good, your bottom line is and will always be your topmost concern at the end of the day. After all, there is no way to change the world if you cannot stay in business in the first place. Crowdsourcing has an explicit aspect of profitability that makes it an excellent choice for your company.
Consider the amount you will have to spend to hire a new team of professionals that will specifically work on your new project. Aside from paying wages and covering their health insurance, you also need to provide this fresh team with an office space. With crowdsourcing, all you have to do is give a one-time reward to those who come up with a solution, saving you from the worry of surprise fees down the road.
Problem-solving done faster
Crowdsourcing doesn’t only give you access to the best and freshest ideas. At the same time, it also allows you to find ideas in the fastest way possible. If your company tries solving problems internally, you will experience constraints and limitations on how quickly your employees can work. Even the best innovators in your company can only work so fast. When you invite a large pool of people to participate in the process, your company can get more new ideas within a short period.
This can make a big difference to the overall success of your project, which is crucial for time-sensitive tasks such as emergency software patches or medical research. An excellent example of this is the Human Genome Project. This is a global effort to map out humans’ genetic code fully. The project leveraged the work of expert scientists across 20 institutions from six different countries. It saw its completion in 2003 after intensive work that only lasted for 13 years.
Without the help of crowdsourcing the work across several institutions, the Human Genome Project would still probably remain stuck in its early stages to this day. This only shows how powerful crowdsourcing can be.
Fresher perspectives
The crowd, unlike your employees, doesn’t have a bias towards your company and its products. They can bring in a brand new perspective to those issues that have been bogging down your team all this time. More often than not, all it takes is another pair of eyes to find that missing piece that you have long been searching for. The diverse backgrounds of the crowd are no doubt one of its most significant benefits.
The crowd comprises people from various countries with multiple worldviews, multiple experiences, and different socioeconomic statuses. When you seek help from the crowd, you invite an amazingly diverse group to bring their ideas to the table and view the challenges from different perspectives. Thus, it won’t be a surprise if one of them comes up with a new and innovative solution.
Hands-off approach
Company managers and CEOs may have plenty of resources available at their disposal. However, time is usually not among these resources. As you go about a traditional research and development project, you will have to regularly supervise the project and ensure that the whole team works efficiently and meets deadlines. When you rely on crowdsourcing, on the other hand, the only thing left for your management team to do is come up with the challenge, sit back, and wait as innovators from across the world do their magic. It saves you the need to check in on every professional throughout the entire process.
More marketing buzz
Crowdsourcing can also be an excellent source of marketing buzz mainly because it is an engaging spectacle in the general public’s eyes. Instead of simply turning to the usual problem-solving processes in your company, crowdsourcing has a competitive and communal aspect to it. It will not just help you establish a more extensive network of fans; it also gives people something new and exciting to discuss.
This form of marketing buzz is why companies such as Frito-Lay launch competitions for the public to participate in. Their contest Do Us a Flavor, for instance, asks the fans of the chips company to send in their wackiest and best ideas for new flavors of potato chips. Through this, the snack company doesn’t just get an opportunity to develop ideas for what might soon turn into top-rated products. At the same time, they also get substantial media coverage for all of their current product offers, making it a win-win situation.
Have new hires onboard
Many companies often have a hard time recruiting innovative and creative talents that can be part of their team. Taking part in crowdsourcing challenges can give people the best chance of showcasing their talents. In turn, this will allow companies to offer new jobs to the winners if they wish to do so. If you were impressed by the innovative solutions developed by the winners, you might invite them over to join your company. Their skills in solving problems can become a continuous asset that your company can take advantage of. It comes in handy for projects you cannot outsource to the crowd because of confidentiality and similar concerns.
Surprising solutions to difficult problems
The last but not the least benefit of crowdsourcing new product design for your company is its ability to discover unforeseen solutions. If your company tries to solve issues internally, it is all too easy to fall into the trap of just sticking with the existing ways of thinking. When your company has been doing things in a certain way all this time, breaking free from those habits is not easy.
This form of status quo inertia is one of the major concerns for all businesses, large and small alike. It is one of the top reasons why Steve Jobs and other geniuses of innovation have made it their priority to bring third-party experts into the business with the hopes of challenging the conventional way of thinking.
It is also why crowdsourcing offers such a remarkable advantage. When a bigger group of people is involved in solving problems, your company can gain access to hundreds or thousands of different problem-solving approaches. The perfect example of this advantage of crowdsourcing is the Open Innovation portal of Unilever. The company uses the portal to ask experts worldwide to present innovative solutions to difficult and tricky problems, such as product cooling technologies and sustainable packaging, with surprising results.
The bottom line
Crowdsourcing has undoubtedly taken the whole world by storm, and there are no signs that it will be going away anytime soon. Corporate executives and company owners should aim to explore different ways to take advantage of the untapped treasure trove of skills, expertise, and knowledge from the available sources, not just for new product design and development but also to boost customer satisfaction to the fullest.
If your company is considering crowdsourcing your upcoming product design, Cad Crowd is the industry leader that can help you crowdsource your new product innovation to help you gain a more competitive advantage. Thanks to Cad Crowd, crowdsourcing has become a simpler and easier process for all parties involved.
How Cad Crowd can help
Take advantage of our crowdsourcing design contests for engineering! With so many freelancers in Cad Crowd’s network, you’ll acquire several submissions, giving you flexibility in selecting the freelancer and the design you want to move forward with. You get to set the contest prize amounts and choose the winner. Our network includes mechanical engineers, civil engineers, and electrical engineers. We know our freelancers can handle any engineering job, so go ahead and post a design contest today.