Crowdsourcing – The new human resource model?

Crowdsourcing industry breakdownCrowdsourcing enables companies to adopt a new human resource model by engaging with a globally distributed workforce to complete tasks on demand and at scale. Weather small or large, businesses are already taking advantage of this new phenomenon.

This has become especially popular in the design space, where companies such as DesignCrowd and 99designs are providing crowdsourced solutions. (99designs won a $US35 million investment from  Accel Partners  in 2010).1

The Australian site Freelancer went public in 2013 and was briefly valued at $1 billion on the same day.2 These investments showcase a huge amount of interest.

Now more than ever the business imperatives around cost efficiencies, speed to market and breadth of solutions and services can be met by leveraging the long tail of knowledge.

Crowdsourcing types

Case in point: Crowdsourcing for solving problems


Founded in 2010 in Melbourne and moved to San Francisco in 2011. Kaggle connects companies to a large global community of more than 140,000 data scientists. Kaggle helps companies to host and frame the competition and its fee depends on the size of the prize pool and the amount of work necessary to run the competition.

Top success stories

  • GE – Delivered more accurate airline departure and arrival times
  • NASA -  More accurate imaging of dark matter
  • Merck – Better predictability for drug targets
  • 3 4


Launched in 2001 in the US with seed funding from Eli Lilly & Co. InnoCentive enables challenges across various disciplines and leverages its global community of more than 300,000 individuals. Through its online platform InnoCentive seeks to match a global network of solvers with the seeker organisations. These organisations post challenges and pay a fixed fee to to the platform.

Top success stories:

  • Prize4Life – Accelerated the development of biomarker
  • Oil Spill Recovery Institute – Found solution to help clean up oil spill
  • TB Alliance - Improved the manufacturing process of a drug to treat tuberculosis

5 6 7

Looking at the future

The future is bright for crowdsourcing. With businesses using social media and the various products outlined here, it’s inevitable more sites will appear to cater for different areas. However, this will also present challenges for both these companies and the businesses which use them.

Relying on crowdsourcing might reduce cost, but could expose a business to higher rates of risk.Inevitably, more crowdsourcing websites will start taking on major projects from large businesses – it will become an accepted part of the corporate structure.

What you need to know

Just as businesses are able to communicate better with their customers through social media, tapping into a huge amount of feedback through crowdsourcing can help produce products and services which cater to a wider range of consumers, having already been exposed to prototypes. It may be beneficial for businesses to investigate how crowdsourcing can contribute better insights for future products and services.

Graph 1:, ‘Crowdsourcing Industry Report – Enterprise Crowdsourcing: Market, Provider and Worker Trend’, February 2012
Graph 2: InnoCentive Overview
1 TechCrunch, ‘Accel Invests $35M. in 99designs… After Years of Trying’, 28 April 2011
2 Reuters, ‘Australia’s Freelancer soars on debut as investors pile into outsourcing’, 15 November 2013
3 Kaggle, ‘Mapping Dark Matter – The universe isn’t behaving’, 2011
4 Kaggle, ‘Help develop safe and effective medicines by predicting molecular activity’, 2012
5 InnoCentive, ‘Prize4Life Announces $50,000 ALS Prediction Prize Winners’, 13 November 2012
6 InnoCentive, ‘InnoCentive Solver Develops Solution to Help Clean Up Remaining Oil From the 1989 Exxon Valdez Disaster’, 2007
7 InnoCentive, ‘InnoCentive Seeker Spotlight: TB Alliance Works to Eradicate One of the World’s Deadliest Diseases’, 2008