Buliding Better Crowds, Part 3 of 3

If you read part one and part two of building better crowds, then you understand there is quite a bit that goes into building a crowd.

After you’ve declared war on ambiguity by putting in clear processes and solved for quality control and created transparent forums for discussion, it’s now time to start building a business to sustain the crowd.

That may seem to imply that you start with building the crowd before you start building the business. I apologize for that implication because it’s certainly wrong. For any business or activity which requires a crowd, the crowd building efforts should occur in parallel with the development of the business. Essentially, the business isn’t just your life line to success, it’s the crowd. And for crowd-based businesses, what’s “good for the goose is good for the gander.” (I’d go so far as to say the crowd is the goose and the company is the gander, btw).

My under-riding premise is that you need to build a business to support the crowd. This is perhaps more subtle than you realize. Most people start businesses to support themselves—and crowdsourcing isn’t necessarily an exception; however, you do need to understand that without your crowd, you have no business. Crowdsourcing companies are just middleman between “labor suppliers and labor doers.”

The interesting complication for crowdsourcing companies is that they have two customer sets: (1) the traditional, we-pay-the-bills-by-buying-your-service customers and (2) the people in your crowd (who get your work done for you).

It’s great (and absolutely necessary) that you pay significant part of your time focused on the ‘we buy your service’ group, but if you think of your crowd as a knowledge base or an expertise provider that makes customers from the first group possible, then it becomes apparent you need to promote the interests of your crowd as well.

There are a number of “user experience” enhancements that will make doing your work for you appealing to workers but I actually think that isn’t the place to start (but when you get the big ticket items in place, it is a good place to get some easy morale wins).

Rather than focus entirely on “UX improvements,” I think it’s better that you focus on building a business that will sustain the crowd. The crowd pretty much does not care about your company. At all. And they never will. (At least not 10% as much as you do.) There is no loyalty on the internet. As soon as a better service comes around that offers your crowd a solution to their problem, they’re leaving.

And when it comes to building a crowd, this means your investment is leaving.

This isn’t a business factor that many traditional companies needed to grapple with very often because, outside very rare cases, entire workforces do not leave a company all at one time—I think of the labor movements in the early 20th century when I think of mass picketing and assembly line abandonment. This isn’t to say that companies today do not worry about building strong cultures because they do. Most companies recognize that a strong company culture fosters higher productivity and increases company retention. Traditional, brick-n-morter businesses focus on these two areas (productivity and retention) because they see their employees as an asset worth protecting.

In time, crowdsourcing companies too will come to see that their crowds are assets worth protecting. For example, this is one of the main points Matt Johnson CMO of uTest made at CrowdConf 2011.

How do you build a business to support the crowd?

I can’t give you a direct answer, unless you’re happy with “focus on building a strong business” as your answer (I suspect you’re not).

I can provide some clues that I’ve been able to suss out from working with crowds over the last two years.

Clue 1 — Focus on business models, customers, processes and markets that will sustain the crowd for more than one project, preferably dozens of projects.
The absolute worst position you can be in is having to build a crowd from scratch for every project. If you’re trying to create awareness for a niche cause, then maybe it makes sense to bounce around building special-purpose crowds but for the majority of businesses this is a recipe for failure. And that is a larger business lesson in itself: focus on building a sustained business.

What this means in practice is that you need to ascertain where you’re gaining traction and focus in on that area with all your effort. This takes massive discipline. It means reigning in your marketing and sales team from going out and finding those random “they really think we’re awesome, want to buy but we have to build a crowd to {{xx, yy}}.” In most cases, that {{xx, yy}} is going to be more expensive than it’s worth. I know from personal experience that it is immensely difficult to turn away business, especially when a business is just starting out. But if that “new customer” is in an area where you have no expertise, then it’s not likely to be worth it because you’re setting yourself up for failure.

Clue 2 — It’s better to have an oversupply of work than an under-supply of work.
For the business manager looking to meet customer orders this is an extremely difficult to situation to be. It’s very stressful to have more work to get done in less time than the “factory” can deliver. All very true but this isn’t looking at it from the crowd’s perspective. Also, if this is the situation you find yourself in then congradulations! Your business is growing. :)

It is very frustrating to go to a freelance job site like Guru.com looking for work only to find that most of the work is bid on by dozens and dozens of people—or to be one name among 50 that responded to a Criagslist ad. Crowds are looking for work and if your site no longer provides that work, they will find the site that does and quickly leave never to return. As a measure to protect the investment in the crowd, it is far better to have too much work than too little, assuming an ideal equilibrium between demand and supply cannot exist. (Note the difference between a traditional company that simply won’t hire anyone if there isn’t a need whereas with crowdsourcing the companies are essentially “always hiring.” It makes for a much different labor market.)

To achieve this state (more work than demand), you need to be out selling and marketing your services. Selling and marketing are not passive activities. I’ve been at more than one company (unfortunately) where the necessity of sales and marketing was ill understood, leading me to clue three.

Clue 3 — It’s not enough to build it; you have to sell it.
Our culture is obsessed with “Build it and they will come” mentalities, and I’m not sure how we became so obsessed with this type of thinking. It’s easy to build and so we pin all our hopes on “well, they’ll come after I finish this…” It’s true that we’ve had a few examples of businesses that really took off after only a small sub-set of users were on the system (MySpace/Facebook, Twitter) come to mind. But I can’t think of another business where this was the case. This means that once you finish building the minimum viable product, it’s time to get off your butt and start selling. :)

Clue 4 — It takes commitment.
Selling a product is not easy. Marketing a product is not easy. There are going to be days when you think, “Man…I’ve tried everything. I don’t know what to do. Does my product suck? …Or maybe I just suck. Maybe I was wrong and this is not a good business.”

All the thoughts that plague any entrepreneur are going to haunt the crowdsourcing startup. To see your way through this long night of doubt, you need commitment. To have commitment, you need to know that there is indeed a market large enough to support you and your crowd. (You also need to have strong character to resist backing down at the first hundred instances of obstacles.)

The people with good character are the ones who dust themselves off, get out a clean sheet of paper and start thinking up new marketing and sales plans.

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