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5.1.1.1. Advantages of Crowdsourcing 1.1.1.2. Advantages of Crowdsourcing

Some advantages of crowdsourcing are as follows: The various advantages of crowdsourcing are given
1) Income: The obvious first benefit is cash. below:
Addressing capital needs is often the most 1) Income: Cash is the first advantage provided by
difficult challenge facing a young business. the crowdsourcing because capital is one of the
Crowdfunding can provide a much-needed cash major challenge faced by the entrepreneurs.
infusion that can allow one’s team to focus on Crowdsourcing allows an entrepreneur to focus on
other points of execution in the business. other area of the business by providing the
significant and sufficient amount of capital.
2) Honest Feedback. If one observes best practices
in a crowdfunding campaign and is still having
2) Honest Feedback: Crowdsourcing allows the
trouble attracting interest in the project, it may be
entrepreneurs to get honest feedback from his/her
that the product or service is not meeting a big
potential customers. One can arrange a
enough need or solving a meaningful problem. By
crowdsourcing campaign to know the views and
inviting input from the masses, one can get
suggestions from his/her potential customers
invaluable insight from would-be customers as to
regarding what is good and not good about the
what is good and not good about the idea. One can
business. This will help the entrepreneurs in
even set up for pre-orders to gauge consumer
getting first mover advantage by measuring the
interest and make the first run more worth the
needs and wants of the potential customers.
effort.
3) Advantage of the Lab. Just as backers in 3) Advantage of the Lab: Crowdsourcing allows
crowdfunding will give the feedback on whether entrepreneurs the advantage of lab i.e.
one’s project has legs, they will also give very experiments. They will provide an honest
valuable feedback on whether or not the product feedback to the entrepreneurs that whether their
or services is likely to work as promised. Expect business will run in the market as promised or not.
to get comments, questions, and critiques of the One can expect to get questions, comments,
product or service as well as requests for suggestions and critiques in order to make product
improvements to make the product more useful or and services more useful and flexible according to
adaptable to certain situations. a particular situation.
4) Legitimacy from the Platform: Respected 4) Legitimacy from the Platform: Before listing the
crowdfunding sites check projects before they are entrepreneur’s project, the respectful
listed, so if one makes it through that process, crowdsourcing sites check the projects and one get
there is instant credibility that is attached to the instant credibility if he/she makes it according to
project. the process.
1.1.1.1. Disadvantages of Crowdsourcing 1.1.1.3. Disadvantages of Crowdsourcing
Disadvantages of crowdsourcing are as follows: The various disadvantages of crowdsourcing are given
1) Poor Quality Entries: Crowdsourcing contestants below:
normally submit whatever comes to them off the 1) Poor Quality Entries: Whatever comes to the
top of their heads. They may not know much entrepreneur, they accept all the entries of
about one’s industry and do not take the time to crowdsourcing. Moreover, they ignore any naming
learn about it. They often ignore any naming criteria and may not show interest in learning
criteria one stated, so one has to walk through a much about any of the industry. As a result, they
ton of wildly off-target suggestions. They do not get suggestions which are not worth off. The way
think carefully about all aspects of one’s naming professional consultant would think, the
challenge the way professional name consultants entrepreneurs do not think about all aspects of
would. challenges associated with one’s naming.
2) Paying more does not Improve Quality: Some
talented crowd source members will work hard for 2) Paying more does not Improve Quality: There
paisas on the rupee; meanwhile, their not-so- are some crowd sources who are hardworking and
talented associates will demand a high price for give significant results in low charging. However,
 mediocre results. This is inevitable with any
business but it is more prevalent with
crowdsourcing because the group consists of a
mixture of individuals. In contrast, outsourced
and/or hired labour is more carefully screened,
and paying more for its services typically results
in higher quality ideas and/or products.
3) Wrong Marketing: At times crowdsourcing can
3) Wrong Marketing: Many times, there can be
result in wrong marketing by passing the bad word
of mouth publicity. Take for examples an
automobile company tries to crowdsource its next
model design. In case if the end product is proved
not good from the comfort aspect and not good in
aesthetics, who is to be blamed? People will
simply say that the company nowhere takes
quality seriously and rather tries to crowdsource to
get the work done in very small amount of money.
4) Bad Reputation/Marketing Risk: Crowdsourcing
can be a useful method for one’s ecommerce 4) Bad
business to start generating ideas and deducing
which of these ideas have merit. By harnessing the
“power of the masses”, one finds out what the
customers and the public at large are looking for in
the business. The benefits of such an approach are
numerous and come at a low cost. Conversely,
crowdsourcing also has its detractions, including
questionable intellectual rights, lack of member
productivity, and the risk of gaining a bad reputation
there are some crowd sources who charges high
for average results. This can happen mostly in the
crowdsourcing business because of the mixture of
individuals. On contrary, the screening of hired or
outsourced is more carefully done and they results
in higher quality of goods and services if they are
paying more for the services.
wrong word of mouth publicity is passed by the
crowd sources. For example, in case, an
automobile company wants to corwdsource its
new product and its end product is not of good
quality in sense of comfort and aesthetics. In this
case, the people may think that the company only
wants to crowdsource to get work done in fewer
amounts and never thinks of the quality of the
product.
Reputation/Marketing Risk: For
determining what method is useful for generating
the ideas and which idea is to be best for the
business is one of the merits of crowdsourcing. As
a result, one can easily find out what customers
are expecting from the business. There are several
benefits attached to this approach, however, it has
certain limitation also. There is a lack of member
productivity; risk of bad reputation and doubtful
intellectual rights comes with the crowdsourcing
approach.