Crowd Business Models

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= according to Ross Dawson in Getting Results from Crowds, there are seven core crowd business models: marketplaces, platforms, crowd processes, content and product markets, media and data, crowd services, and crowd ventures. „„


Ross Dawson:

"Increasingly we are seeing entire business models that are fundamentally based on tapping contributions from crowds, where a primary source of value creation is from the crowd. In other cases companies are creating value by helping their clients use crowds well.

Each business models relies on a set of specific monetization models, including across transaction fees, subscriptions, and content and product sales.

„„ There are a range of success factors for the business models, which can be classed as contributor characteristics, buyer characteristics, and capabilities."

  1. Media and Data
  2. Marketplace
  3. Platform
  4. Crowd Services
  5. Crowd Ventures
  6. Crowd Processes
  7. Content and Product Market
  8. Non-profit

Monetization Strategies

Monetization of crowd business models

Depending on the type of crowd business model, there are a variety of different approaches to monetization that can be applied. Below are brief descriptions of each of these mechanisms.

  • Transaction fees

These are especially applicable where crowd platforms are essentially acting as a broker between clients and service providers, in some cases aggregating the work created by the providers. Transaction-based payments can include job posting fees, bidding fees, and commission on payments.

  • Membership fees

Fees may be payable by either or both clients and service providers in order to participate in the platform, service, or value creation model.

  • Test fees

As tests are a significant aspect of how providers are assessed by potential clients, fees can be charged for taking tests on capabilities such as language abilities or software skills. Tests may be repeated by providers wishing to improve their scores.

  • Licensing

Software such as crowd platforms can be licensed for installations behind corporate firewalls. In some cases content including data can be licensed for re-use in a variety of formats.

  • Pay per task

Pricing may be based on particular well-defined tasks or services being performed for the client. In this case the margin received by the business is dependent on managing provider costs.

  • Product sales

Where products such as clothing, cards, gift items, or other goods are designed by crowds, the primary revenue source can be direct sales of those products.

  • Advertising

Revenue from content-based models can be generated primarily from advertising on the media generated. In some cases search advertising is the primary revenue source, in which case the content created needs to be generated specifically to maximize search visibility and user actions.

  • Subscription

A regular payment schedule can be established for either cloud-hosted software or for access to high-value content.

  • Content sales

Packaged pieces of content such as books or reports can be sold in a variety of formats.

  • Packaged services

A clearly defined service at a fixed price can be delivered by crowds.

  • Custom services

Bespoke services can be delivered by crowds, with the company acting as an interface to the end-client through relationship management and quality control. This is significantly more complex than pricing packaged services, as fees need to be quoted and negotiated for each service, and it is rare to base pricing on labor costs."

Success Factors

They are essentially dependent on:

Network Effects

  • Contributor community breadth and quality
  • Buyer community breadth and quality

and Capabilities

  • Public reputation measures
  • Internal reputation measures
  • Project management capabilities
  • Quality control
  • Project management tools
  • Content monetization model
  • Fulfilment