Companies need crowds. Whatever the company makes, it needs to be used by crowds. In the past, crowds were considered as just ‘consumers’ or ‘users’. However, as companies trying to attract the crowds, they saw the abilities and potentials crowds have that the company needs to maximize their profit. By then, the words ‘crowdsourcing’ and ‘crowdfunding’ are created. It’s just a combination of existing words: crowd, sourcing, and funding.
Crowdsourcing, first of all, is useful to catch people’s needs and wants. Finding what people needs and trying to meet what people wants are the key to success. By involving crowds, the company can get both of them very easily. Also, the company can get lots of ideas from the crowds. Since there are so many people, the company can choose and develop the ideas they wanted from a bunch of ideas the crowds come up with. Plus, there is high possibility of new and creative ideas that the company has never thought of. Using crowdsourcing, the company can save time and money too. Since the crowdsourcing is a form of freelancing, it’s much quicker and cheaper than the expertise-based-company work. For the crowds can deliver their needs and wants to the company, so it can be a win-win process of working. However, since the origin of the source is undefined, it’s unreliable. Company must take a look over a bunch of sources to distinguish whether the source is useful or not. Since the crowds are not experts, there can be some mistakes on their ideas. Also, most of the crowds will have similar ideas which is time-wasting for the company. To use crowdsourcing efficiently, the company must find a right group of people, efficient way of collecting ideas, and set up the standard in distinguishing ideas.
Crowdfunding, on the other hand, is necessary to the company. There are 4 types of crowdfunding: Equity, donation, lending, and reward. Crowds can fund their money, skills, talents, etc. When people fund their money, they become very logical and rational. They consider about the purpose, profitability, risks, etc before they fund their money. When the company is well-known, structured, big and historic, people are more opened and is easier to get funded. But the thing is most of the companies which badly requires crowdfunding are new-born ones. Since it has great risks to lose their money, it’s hard to find someone who supports the company.
Crowdsourcing and crowdfunding, having same root on crowds, differs in the method of approaching. To find the most ideal way to get crowds involved, the company should put on a lot of time and energy on it.