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Crowdsourced Workforces Rising

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Crowdsourcing is a growing trend in the tech startup industry, and one that has the potential to address pressing needs in various markets. In particular, crowdsourcing of workforces is seeing tremendous uptick. At 1M/1M we've encountered several startups that are applying the model on different problem domains related to hiring and staffing.

CrowdFlower founder Lukas Biewald accepted an offer from Yahoo in 2004 to work specifically on search algorithms. But after utilizing a team of freelance workers to outsource a project, Luke became curious about the power of crowdsourcing--as did his co-worker, engineer Chris Van Pelt. In 2007, Chris and Luke set out to create a company that would make crowdsourcing a usable solution for enterprises. "It's a bit ironic," he said in an interview with 1M/1M. "CrowdFlower is the opposite [of automation] because it uses human beings to do things that we expect artificial intelligence to be able to do."

Over a million freelancers now contribute to a wide variety of CrowdFlower projects, one of the most common being analysis of social media sentiment. In its current business model, CrowdFlower receives an order from a company at a fixed per-unit price. These short, simple tasks vary in value based on the project and the client.

The crowdsourcing model takes on a creative turn with crowdSPRING, self-described as "the world's largest online marketplace for buyers and sellers of crowdsourced creative services." Founded in 2008, the Chicago-based company is the collaborative effort of former trial attorney Ross Kimbarovsky and Emmy-winning producer Mike Samson. Unsuccessful attempts to redesign the law firm website and a desire to outsource video work combined, resulting in a new way for small and mid-sized businesses to purchase creative services.

CrowdSPRING clients submit proposals for single projects through the site. A network of subscribed artists then bid on the project, which allows the client to view each bidder's portfolio of finished designs and thus select an artist for hire. crowdSPRING aims to make freelance creative work more affordable and accessible to companies, but also to "level the playing field" for aspiring designers by allowing them equal opportunity to showcase their work. CrowdSPRING's approach has proved overwhelmingly successful, with over 25,000 registered buyers.

On the other side of the world in 2008, Australia-based designers Mark Harbottle and Matt Mickiewicz came together to create a graphic design marketplace that puts designers first. Catering primarily to small businesses, 99designs provides a space where clients pay to post design projects on the site. A community of registered designers submits their entries, one of which is chosen by the client, and the winning artist is paid for the work. Today, 99designs is the fastest growing art community in the world, with a new design uploaded to the site every five seconds.

The two Internet entrepreneurs leveraged the audience of their previous venture, Web development community SitePoint.com, providing them with a base of designers early on. The community itself has grown to host over 200,000 artists worldwide, and with it the 99designs team has grown to an international team of 70. 99designs' business model has become an incredibly popular one for entrepreneurs everywhere, and is seen as the ideal method for young artists to grow their portfolio at minimal cost. Although some criticize the 99designs approach as encouraging clients to find the cheapest designs without regard for skill level, the site continues to pull nearly 100,000 unique visitors per month.

One such example of crowdsourcing adaptation is the Kolkata, India-based CreativeCrowd. Intended to bring the crowdsourced creative services model to the Indian marketplace, CreativeCrowd is referred to by founder Rakesh Mondal as "India's first affordable crowdsourcing marketplace." A lifetime lover of art and design, Rakesh created this platform for Indian designers to share their work in 2010.

The platform shares the 99designs business model, featuring design contests and a money-back guarantee to clients. Price points for art and design work are generally lower to make the community accessible to the Indian population as a whole. Despite challenges scaling the business, this winner of the 1M/1M New Year Challenge 2013 continues to plow along.

Although the crowdsourcing model has proven incredibly profitable within the creative space, CrowdFlower's early outreach is proof that it has traction in the technical space as well. This is further confirmed by the customer support platform CrowdEngineering. Founded in late 2008 by Gioacchino La Vecchia and Massimo Piccioni and with offices in Italy, Silicon Valley, and Boston, the company enables businesses to crowdsource customer service by engaging expert customers in the process of answering questions.

Another look at crowdsourcing in the tech industry brings to mind 99tests, a Bangalore, India-based firm offering crowdsourced software testing to software product companies. Software tester Praveen Singh launched 99tests in 2010, looking to create a catch-all system to find and fix software bugs before they reached the end user.

99tests allows software companies to hire 20-60 software testing professionals on-demand from their existing pool of 4,500 testers. Their product is then tested in real-world conditions so that critical bugs are detected and resolved before customers report them. To date, 99tests has logged over 23,000 bugs for more than 50 companies.

By outsourcing work to independent freelancers through internationally accessible platforms, millions of dollars are getting redirected to once untouched corners of the world. Crowdsourcing is an important movement to fuel globalization of the workforce, and is a crucial trend to leverage for entrepreneurs everywhere.