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Topic : Why startups fail at marketing?
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Should startups go for Crowdsourcing and Outsourcing?

Created by : Veena Gupta, Analyst, Blackstone Group  | 03 05 2010 07:12:25 +0000
Industry : Equity Research/AnalyticsFunctional Area : Getting Started(Entrepreneurship)
Keywords : entrepreneurs outsourcing startups crowdsourcing fan label crowdspring plugged.in bi forbes
Activity:  194 views;  last activity : 07 06 2010 20:18:09 +0000

We all have come across a representative who works for a call-center contracted to handle a comapany's account while calling a customer service. Large corporations that don't want to employ their own agents and maintain their own facilities will often outsource customer service to a third party, which at times can mean a company in another part of the world. While crowdsourcing and outsourcing are fundamentally different, they share similar risks, especially for startups and small businesses.

A recent post on crowdsourcing from the startup blog Plugged.in, and a Forbes article about outsourcing have both warned startups of the possible complications of both. Crowdsourcing is similar to outsourcing in that a task normally conducted by an employee is shifted to a third party, but in this case the job is performed by numerous people, not just one. As the Plugged.in article suggests, more mature companies might be better candidates for this type of work.

So users, according to you, should startups go for Crowdsourcing and Outsourcing?

  
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The similarity is only that both out-sourcing and crowd-sourcing, are activities performed through third party. And to best of my knowledge Crowd-sourcing is specific to areas where varied expertise is necessary or safety and security reasons warrant a full process be subdivided and outsourced in parts to varied unknown to each other performers and thus assembled.

Thus, whether in a startup or running business it is need specific to out-source and more specifically as crowd-source.
By Ravindra Sharma, Managing Consultant, CHEF-India  03 08 2010 08:05:29 +0000
 
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Startups are more prone to problems resulting from poor customer management. As such they should be very sure of who they are UTSOURCING to.

The sensitivity with which an issue is handled is all to important in the case of startups.

So I will partially vote for outsourcing to a mature - expert in the domain - outfit and against crowdsourcing.
By RAMESH KANDADAI, Principal Consultant, ARM Consultants  03 08 2010 07:44:27 +0000
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Crowdsourcing and outsourcing gives better opportunities for any entrepreneur. This will provide them better and vast market with cheap labour. Also, it would be better for them to focus on their core abilities than focusing on things which are not so important which can be easily outsourced. So I believe start ups should go for Outsourcing and crowdsourcing...
By Namrata Pathak, Accounts Manager, American Express  | 03 06 2010 08:53:47 +0000
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To my knowledge, crowdsourcing happens in case of an existing setup only. As you've said so Veena, crowds would not have a better sense of the problem (idea as you'd said) - thus less response from them to own the solution.

But as for startups and outsourcing. The costs of outsourcing any process is very high thus making it impractical for any startup to look at outsourcing as an option. In Indian market, capital plays a very important role in any startup and quite many an entrepreneurs are unable to carry their ventures beyond 3-4 years for lack of it. Thus, not a viable option but certainly a good debate for startup.
By Navjeet Sood, Business Head, ADI Media Pvt Ltd  | 03 05 2010 08:53:55 +0000
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Crowdsourcing and outsourcing works better when the audience participating is more aware of the product in the market. With startups, crowds may not have the most accurate sense of the best direction for an idea, especially one that is new and innovative. That's what you, the entrepreneur, are for. Startups should always listen to their users, but work with them, not for them. Also, it requires a lot of money to start with and its not an intelligent step for a startup to invest lot of money without knowing the market properly.
By Veena Gupta, Analyst, Blackstone Group  | 03 05 2010 07:20:33 +0000
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