Integrated and Transactional Platforms: Crowdsourcing and Crowdfunding Platforms

Integrated and Transactional Platforms: Crowdsourcing and Crowdfunding Platforms

DOI: 10.4018/978-1-5225-5457-8.ch007
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In recent years, crowdsourcing has increased in popularity as a method for gathering ideas for new innovations and providing solutions to existing problems. In this chapter, crowdsourcing intermediaries and business models are analyzed. How intermediaries' providers are managing interactions between different groups of platform actors (contributors) in order to receive new ideas, feedback, and solutions for improving consumers products and services is studied. Crowdfunding platforms are discussed based on crowdsourcing open innovation vision. Hence, research focuses on crowdfunding innovations for alternative financial services. The chapter aims to collect and analyze quality data regarding the current status and prospective evolution of crowdfunding. The study offers classification and examination of the current status of crowdfunding and proposes a definition of the crowdfunding multi-sided platform, develops research framework for crowdfunding platform comparison and business model analysis. The results of this chapter reveal benefits but also practical challenges to overcome before innovation crowdsourcing and crowdfunding intermediaries can be effectively utilized.
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The term “crowdsourcing” was introduced by Howe (2006) and defined as “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.”

Estellés-Arolas, E. and González-Ladrón-de-Guevara (2012) found more than 40 definitions of crowdsourcing in the extant literature. Based on those findings, they have created a comprehensive definition for crowdsourcing: “Crowdsourcing is a type of participative online activity in which an individual, an institution, a non-profit organization or company proposes to a group of individuals of varying knowledge, heterogeneity and number, via a flexible open call, the voluntary undertaking of a task. The undertaking of the task, of variable complexity and modularity, and in which the crowd should participate bringing their work, money, knowledge and/or experience, always entails mutual benefit. The user will receive the satisfaction of a given type of need, be it economic, social recognition, self- esteem or the development of individual skills, while the crowdsourcer will obtain and utilize to their advantage what the user has brought to the venture, whose form will depend on the type of activity undertaken.”

Brabham (2008, 2013) defined “crowdsourcing” as an “online, distributed problem-solving and production model.” Brabham defined the following 4 key ingredients of crowdsourcing:

  • 1.

    An organization that has a task it needs to be performed,

  • 2.

    A community (crowd) that is willing to perform the task voluntarily,

  • 3.

    An online environment that allows the work to take place and the community to interact with the organization, and

  • 4.

    Mutual benefit for the organization and the community.

What is more, crowdsourced labor is truly motivated to make a contribution only if they see their efforts make a real difference and the game is worth playing. That is why crowdsourcing is about networking and tapping the right crowd (Belleflamme et al., 2014).

Nakatsu, Grossman and Iacovou (2014) define crowdsourcing as a four-step process in which:

  • 1.

    A requestor (either an individual or organization) identifies a specific task to be performed or problem to be solved;

  • 2.

    The requestor broadcasts the task or problem online;

  • 3.

    The crowd performs the task or solves the problem;

  • 4.

    Depending on the nature of the task, the requestor either

    • a.

      Sifts through the solutions and selects the best solution (selective crowdsourcing), or

    • b.

      Aggregates/synthesizes the crowd’s submissions in a meaningful way (integrative crowdsourcing).”

It is helpful to look at the levels of crowdsourcing classification (see Figure 1) to determine what is included in crowdsourcing approaches.

Figure 1.

Classification of crowdsourcing approaches (2 levels)


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