CrowdSource Business Model – How Does It Work?

Most companies have well-defined operations. These companies know where they obtain their goods or services, finance or work from and how to use these sources.

However, for some companies, the paths may not be well-defined. Some companies may obtain help from a large and open group of participants. Among these companies, the crowdsource business model is prevalent.

What Is the CrowdSource Business Model?

The crowdsource business model comes from the idea of crowdsourcing. Crowdsourcing is when individuals or organizations obtain ideas, voting, micro-tasks, or finances from an open group of participants.

The participants are not defined beforehand. Therefore, crowdsourcing varies from traditional business practices, where these come from predefined sources.

The crowdsource business model allows companies to implement users’ contributions to their operations. Crowdsourcing may apply across all business interactions.

Since the ideas and participations come from a network of external users, the crowdsource business model revenue structure is also complicated.

However, companies do not use the business model individually and usually combine it with other models to maximize their potential.

The crowdsource business model has existed for a long time. There are various examples of crowdsourcing and crowdfunding in the past.

However, several online platforms have started offering crowdsourcing services due to the internet. It has revitalized the crowdsource business model and allowed more companies to benefit.

How Does the CrowdSource Business Model Work?

The crowdsource business model allows companies to incorporate the work of others into their business. As mentioned, this work may come in as ideas, voting, micro-tasks, finance, and much more.

Through crowdsourcing, companies have achieved better results through the collective efforts of a group of participants.

Similarly, the crowdsource business model may allow for contributions from over the globe. Some companies may incorporate the user-generated content business model along with crowdsourcing.

There are various examples of companies using the combination for several reasons, such as translations and open-source software.

The primary source of income for the crowdsource business model depends on several factors. However, it mainly depends on the other business model combination used along with the model.

Therefore, companies may have several sources of revenue, such as ads or subscription-based services.

Some organizations may also offer services for free and power their operations through crowdsourcing. These organizations depend on donations or crowdfunding to operate.

Lastly, companies using the crowdsource business model may also need an active moderation team. Since the crowdsource information may come from unknown sources, these companies must validate it first.

It is to avoid any misuse by users. Some companies use their moderation teams, while others outsource it through crowdsourcing.

What are the advantages and disadvantages of the CrowdSource business model?

Using a crowdsourcing business model can have several advantages and disadvantages. This model shares its benefits and drawbacks with crowdsourcing in general. Some of the top advantages and disadvantages of the crowdsourcing business model are as follows.


The crowdsource business model allows companies to develop solutions to challenging problems. Through the combined effort of various users, crowdsourcing provides better solutions than limiting input.

Similarly, having an objective view of outsiders can help companies look at problems differently.

The business model also allows companies to focus on developing a platform while the work comes from a crowd. Some online outlets have used this in practice.

These platforms only provide a tool for users to utilize while others contribute and fund it. Through this, these companies have achieved a successful business model.

The crowdsource business model can also be costly and time-saving. If companies use employees or specific services to perform their tasks, they need to pay for it.

However, through crowdsourcing, companies can obtain services without having to bear substantial costs. Similarly, it allows various users to contribute to the company’s operations, saving time.


With a crowdsource business model, companies use information or work provided by external users. It makes any contribution by those users susceptible to manipulation.

While some users may genuinely contribute to the work, others may try to provide misleading information. It can harm the platform’s image.

In traditional work environments, every employee or worker has well-defined tasks and roles. In the crowdsourcing business model, the role definition may be ambiguous.

Therefore, it can lead to conflicts or other issues among the users. It can also harm the platform’s operations and may slow it down.


Wikipedia is an online platform that uses the crowdsourcing business model. Wikipedia has millions of users worldwide that contribute to its information regularly.

Other users recheck the information provided for discrepancies and can vote on it. Other companies, such as Google, YouTube, LEGO ideas, Unilever, and Coca-Cola, have benefited from crowdsourcing.

Top 10 CrowdSource Alternatives & Competitors

  1. Fiverr: Fiverr is a global online marketplace offering tasks and services, beginning for $5 per job performed, from which it gets its name. It is an online role-play between employers and freelancers where businesses and entrepreneurs can find, hire, collaborate with, and pay for creative services on their next great project. On Fiverr, clients can post jobs of all kinds, such as design work, video editing, web development, or programming, that need to be done quickly and cheaply.
  2. Upwork: Upwork is an American freelance platform for businesses to connect easily with hidden talent worldwide. It offers access to a global network of freelancers across various disciplines, from software engineering to marketing and data entry. A prominent feature of Upwork is its Built-in Payment Protection system which serves as an escrow service wherein funds are securely held in escrow until project completion.
  3. provides a platform for employers to source freelance professionals in over 100 different categories, including website development, graphic design, and copywriting, among many others. The platform helps employers find the right professionals by allowing them to post projects and inviting freelancers who fit the bill to bid on those projects, including price quotes along with timelines for work completion based on budgets provided by employers and other criteria such as experience required.”
  4. Guru: Guru is similar in function to other freelancing sites such as Upwork but differs slightly in critical areas such as ease of use than most competitors when it comes time for employers to look for cloud specialists or mobile developers – both popular searches within Guru’s job search engine  
  5. PeoplePerHour: PeoplePerHour (PPH) offers a wide range of services, from simple logo designs through copywriting service to complete software building projects, consequently making it one of the most comprehensive offshore jobs search engines available today.”
  6. 99designs: 99designs provides freelance services limited mainly to graphic design works like creating logos from scratch or giving your existing logo a revamp, t-shirt designs, etc. They also allow you access to stock photos via their partner site.
  7. DesignHill: Designhill is best known amongst entrepreneurs since its main focus revolves around branding/logo designs, but it has also branched out into designing stationery items like business cards, etc. Designhill also has more personal touches than its competitors by having an entire section devoted entirely to custom artwork.
  8. Toptal: Toptal provides some excellent coding capabilities that many top-tier companies used back before the dawn of crowdsourcing platforms like the ones mentioned earlier. Many IT departments use Toptal’s resources when they need specialized code written quickly.
  9. TaskRabbit: Task Rabbit focuses purely on tasks rather than freelance projects. However, it operates purely through local markets, so if you’re looking for remote help, this isn’t your best solution.
  10. CrowdSpring: CrowdSpring is similar in scope & capabilities as compared To some platforms already mentioned but differs slightly, offering services like logo & website design, custom illustrations, audio production & corporate identity packages.


The crowdsource business model allows companies to obtain work from external users. These users don’t work for the company but may contribute to it. The basis behind the crowdsourcing business model is the concept of crowdsourcing.