The Pros and Cons of Crowdsourcing Contests
Prize-based contests can be powerful ways to drive innovation and help firms solve their R&D problems.
However, when they are poorly designed, too broadly scoped, and badly managed they can become nightmares that chew up a company’s resources. What follows is a list of some of the pros and cons of crowdsourced contests:
Pros:
Yield ideas quickly – the crowd works feverishly hard to come up with the best ideas in a time frame that you set.
Talent seeks you out – no need for an expensive recruitment campaign to hire top experts. A well-publicised campaign will have people knocking on your door to participate.
Great marketing tool – good prize-based contests generate column inches and sometimes TV, radio and Internet exposure. That’s free publicity and good word of mouth.
It’s cheaper R&D – whilst there are costs associated with designing and managing a competition they are typically lower than the R&D investment to come up with a similar result.
Excellent headhunting tool – perhaps one of the solvers participating in the competition will catch your attention? Well, that’s just saved you a heap of cash that would’ve been spent on headhunting.
Cons:
Challenges can be too broadly scoped – if you don’t define your problem well enough you’ll be inundated with ideas, many of them shallow. It’s too costly and time-consuming to go through them all. You may only skim them superficially which could mean a potential solution being missed.
Confidentiality – working with the crowd means that a company may not be able to reveal everything about what it needs. That obviously reduces the chances of receiving a suitable solution.
The crowd could take you down a disastrous path – in Australia, the company behind Vegemite, a popular sandwich spread decided to crowdsource the name of one its variants. The most popular suggestion was ‘iSnack 2.0’ but when the name was publicized it met with almost universal condemnation from consumers. Ultimately it had to rename the product.
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