We have often come across the term crowdfunding and crowdsourcing and we have almost thought them synonymous to each other. Many people consider crowdfunding and crowdsourcing as the same thing and thinks that their meaning is the same, but it is not so. Both crowdfunding and crowdsourcing involve gathering a large number of people who can act as contributors and employs mostly the online medium to communicate with people. Though crowdfunding and crowdsourcing might sound similar, they have very different meanings.
What is the difference between crowdfunding and crowdsourcing?
Crowdsourcing is defined as the way through which a person can gain support in the form of new ideas, content or by a taking work from people who are willing to contribute in a project or venture. It has various types which include crowdfunding, creative crowdsourcing, microwork, wisdom of the crowd and inducement prize contests.
Creative crowdsourcing means a process to get innovative ideas for business ventures or projects. It is often used for projects like content writing, fashion designing, etc.
Microwork or micro-tasking refers to a process in which a big task is broken down into several small ones and then people are involved in the completion of these small tasks.
Wisdom of crowd refers to a process in which the suggestions or opinions of a vast number of people are taken about a particular topic. This makes it easier to decide about an issue.
Inducement prize contests involves competitions or challenges in which people are given cash or prizes as awards for completing a task or challenge.
Crowdfunding is one of the classification of crowdsourcing and it the one which is most sought after. It is defined as way in which a large number of people are gathered to act as contributors who can help sponsor a new project or venture. Crowdfunding are of many types which include equity based crowdfunding, donation based crowdfunding, debt based crowdfunding and reward based crowdfunding.
The medium to reach as many people as possible in both crowdfunding and crowdsourcing is often through internet websites or social media. Sites like Facebook, LinkedIn, etc. are often used to garner attention of a vast crowd in case of both crowdfunding and crowdsourcing.
Crowdfunding and crowdsourcing are kind of two sides of a coin. Crowdfunding a kind of crowdsourcing and that too a popular one. There are many examples which can help us distinguish between crowdfunding and crowdsourcing. Let’s see some simple examples which can help us to differentiate between crowdfunding and crowdsourcing.
Wikipedia uses people’s contribution to gather all the information it has, hence it is one of the classic example of crowdsourcing. On the other hand sites like Kickstarter, etc. is the classic example of a crowdfunding platform as it gathers people to contribute to a project or business venture.
It is natural to get confused between crowdfunding and crowdsourcing, but we need to remember that though both crowd funding and crowdsourcing has several similarities, but they are used to serve different purpose. Crowdfunding and crowdsourcing have many benefits which include its effectiveness and speed when used properly. Another benefit of crowdfunding and crowdsourcing is that it can act as a platform to gain feedback or opinions of large number of people about a project. There are also certain disadvantages of crowd funding and crowdsourcing. One of the major drawback of crowd funding and crowdsourcing is that it exposes our project or venture to the danger of plagiarism.
