Crowdsourcing Mode Research Based On Two-sided Market

The development of social network has provided a lot of chances for thefulfillment of personal interests and achievement of individual talent. It brings theemergence of certain business models such as "User Generated Content"(UGC),consumer-participation, etc., which have given many a new opportunities for theenterprises. The Crowdsourcing Mode was given birth against such background,which indicates an enterprise or organization outsource its R&D and innovation, orother undone tasks to a group of enthusiasts, from which the enterprise picks out theoptimal proposal on the basis of the competitive selection, and properly rewards thesuccessful bidder in the end. The Crowdsourcing mode will transfer the unusedintelligence resources into effective productivity, produce a new type of knowledgemarket, and provide new distributed solution and production mode for thedevelopment of an enterprise. The crowdsourcing is different from outsourcing: firstly,while the crowdsourcing task is assigned to the groups of the social network, theoutsourcing task is to the appointed individual; moreover, the crowdsourcing tasks aredissimilar from the open source software, as the former are posted by certain clientsand accomplished on the basis of groups or individuals, the latter is done by voluntarycreation and cooperation from the individuals of a colony. The Crowdsourcing modehas been applied by many companies such as IBM, Peugeot, Microsoft, Procter&Gamble (P&G), Nike, Adidas, BMW, and other renowned enterprises for theirresearch and development of the company innovation. Meanwhile, hundreds of smalland medium-sized enterprises are rapidly adapting to the crowdsourcing mode fortheir strategy of acquiring the external intelligence resources. Through crowdsourcing,the enterprise can obtain wider intellectual capital from the outside, and quicklyobserve the customer demand (Busarovs,2011). However, few research shed light oncrowdsourcing mode, most of existed researches are limited in introducing "what itis" and "what does it mean to the enterprise". Therefore, the dispersion andunsystematic academic research in the present could hardly guide the development of crowdsourcing mode.In order to enrich crowdsourcing mode research, we focus on three key questionsin the dissertation: Firstly, why the solvers will take part in crowdsourcing task?Secondly, how the crowdsourcer attract solvers? Finally, how the crowdsourcingplatforms boost the trade between solvers and crowdsourcer? As the difference fromprior research, we analyze crowdsourcing from the perspective of two-sided markets,which is the key point in the crowdsourcing research. The third-party crowdsourcingplatform bridge the buyer (crowdsourcer) with the seller (solver), so there are twobasic problems in the crowdsourcing mode:“crowd” combination, the crowdsourcingmarket needs two-sided participators constructing cross network effect;“outsource”implementation, how to make the trade goes smoothly. The research on solvers’motivation and crowdsourcers’ outsourcing tactics can figure out the “crowd” effect,and platform governce research can help the achievement of outsource. The purposeof this rsearch is to guide the practice of the crowdsourcer and platform, enlighten thecrowdsourcing mode theory systematically.We have conducted three researches corresponding to each participator’s keyquestion. Firstly, we applied content analysis method to solvers’ blog in study1,exploring constitutes and relationship mechanisms within solvers’ participatingmotivation. Secondly, in study2we used secondary hard data from crowdsoucers’task activities to test the effect of tactics, verifying the respective influences of prizeincentive, time framing and task types on sovlers’ attention, participation and efforts.Furthermore, the different tactics combination of prize incentive and time framingaccording to task type are analyzed, some suggestions are made. Finally, in study3we also adopted secondary data from crowdsourcing platform’s trading track, toexplain that how platform building the trust system between sellers and buyers toenhance their trade performance. Three studies are corresponding to the slover, sellerand platform respectively, which are useful to crowdsourcing practice.This paper is divided into four major parts: introduction, theory background,three empirical studies and the overall discussion, including six chapters. Summary ofeach chapter is as follows: Chapter I describes the main studing questions of this paper, research motivation,significance of the topic, and innovation. Crowdsourcing is a distributed problemsovlving method to the company, it brings outside human intelligence for thedevelopment of enterprise. The company can outsouce the difficult R&D problemsand unable finished task to the internet crowd via crowdsourcing. It gathers thedistributed and unoccupied human intelligent resources by social network, connectedthem with entrepreneurial capital needs, building a new knowledge two-sided market.Though it is significant to study on crowdsourcing mode, prior research is rare andlacks of systematic and academic analysis. The existed research just told us “what isthe crowdsoucing?”and “what it means to the company?”, but how to conduct asuccessful crwodsourcing practice, prior research can provide little guidance. So thereis a research gap. The difficulty in the development of crowdsourcing is yielding thecross network externality, to boost the “crowd”and “outsource” successfully. Threecomplementary research questions are arisen. Why the solvers will take part incrowdsoucing task? How the crowdsourcer can attract a lot of solvers to joint the task?How the platform can push the trade between their clients? Those researches canenrich crowdsourcing mode theory and are helpful to the crowdsoucer and platform.Chapter II mainly sorted out the literature about crowdsourcing mode, fromsocial production theory, open innovation theory to two-sided market theory. Firstly,crowdsourcing is a kind of social production, because the task is finished by a groupof voluntary solvers, which is the typical feature of social production. There two kindsof relationships among solvers during the social production process, one iscollaboration, for example the solvers work together to develop computer system inopen souce software; another is competition, take the crowdsoucing for an example,solvers competed with each other for prize. Social production provide basic theoryand new research topic for crowdsoucing mode research, because the uniqueness ofcrowdsourcing activity. Secondly, Crowdsourcing is making use of outside humanintelligence for R&D and other task, obey the logic of open innovation, whichadvocates company should integrate outside resource for development. So openinnovation is the theoretical background of crowdsourcing, however how to crowdsource is a challenge for research. Thirdly, crowdsourcing platform is stand fortwo-sided market, solvers and crowdsourcer are two different clients to the platform.The trading object is knowledge based creative product, which is different to thetraditional platform business, so how to service transaction better is new researchquestion for the two-sided market theory. Prior researches provide theoreticalbackground for this dissertation, and also bring about new challenges.Chapter III is the study1, which focused on the solvers’ motivation, analyzingconstitutes and relationship mechanism of solvers participating motivation.Crowdsourcing is different from prior mass activity, it provides human intelligentservice for the enterprise, and the final proposal is only belonging to the crowdsourcercompany. After contents analysis of solvers’ blog, we found solvers motivation can bedivided into three groups, consisting of16dimensions. Hobies and interests, prizeincentive and self learning capabilities are the main representatives. Furthermore, wefound that the relationship among motivations is complementary; it is notcontradictory to pursue prize, hobies and interests, and self learning capability in thesame time for solvers. The result is opposite to the open source software, so thisresearch can enrich the theory of solvers’ motivation in social production and openinnovation background.Chapter IV paid attention to the strategy of the crowdsourcing task givers, whichmainly tested their strategic impacts, and provided systematic advices forcrowdsourcing tactics of tasks with different levels of difficulty. Crowdsourcing issimilar to a competition event, while the participants are the netizens in the outside ofthe enterprises; meanwhile, the competitors fulfill a task before they enter the bid, thecrowdsourcing task-giving companies adopt the logical thinking of the Real Optionfor their managerial practices. In line with the application of the Real Option Theoryin competition, the main strategies of which could be operated by the enterprises areconcluded as the bonus amount, time cycle and task difficulty. Our research has foundthat the rewarding strategy attracts only the concerns and participation of the problemsolvers, whereas on the other hand, it poses a negative impact in their positivity ofinvolvement in working out the solution of the core problems. In addition, the relationship between the time cycle and the followers/participants appeared to be areversed U shape, which reflects the complexity of the strategy design ofcrowdsourcing. We further discovered that the composition of high bonus and longperiod is appropriate for easy task, in the way of improving the number of participantsand ensure the diversity of the proposals.On the other hand, low bonus and shortperiod combination is more suitable for difficult task, for which the key lies inmotivating the interests and expertise of the problem solvers and improving thequality of the proposal. The formulation of the task-giver tactics should be based onthe types, features and participant motivation of assignments, so as to maximize thepositive effects. And this study is aimed at offering effective guidance of strategyformulation for the crowdsourcing enterprises.Chapter V developed the third study of this paper and discussed the governancemechanism of the crowdsourcing platform, which mainly analyzed how thecrowdsourcing enterprises facilitate the business transaction smoothly. Owning to thetype of the transactional objects are the virtually intellectual innovation productswhich can hardly be standardized, thus trust is the key enabler of the successfulbusiness transaction. We found that under the circumstance of the internetenvironment, the costly and difficult nature for the establishment of the trust systemrequires a tripartite platform. Such platform provides the verification system which isthe antecedent for building up trust for both of the contracting parties, and improvingthe returns of the transaction. The mastering management and set-up of the trustsystem are hence the emphasis of the platform operation, and the reflection of the corecompetence of the enterprise. And this study was designed to give reasonablesuggestions for the tripartite platform.Chapter VI summed up the former research conclusions. This paper hassystematically explored three angles from the crowdsourcing mode: the problemsolvers, task giver and tripartite platform. Firstly, the reasons for the problem solversto participate in the crowdsourcing activities, are their interests, bonus stimulus andcapacity training; moreover, the tactics for task givers to attract the mass participation,are combining difficult assignment with low reward and limited time, which is to the contrary for a simple task; and the formulation of the task strategy should take themotivation analysis and task types into account; lastly, in order to successfullyfacilitate the business transaction of both contracting parties, the tripartite platformshould reinforce the validation control, so as to encourage the foundation of the trustsystem and improve the performance of the crowdsourcing transaction.This article conducts three studies and applies two research methods, includingcontents analysis and secondary data empirical analysis, to identify some solidconclusions. Our researches enrich the crowdsoucing and managerial theory of socialproduction theory, open innovation theory and two-sided market theory. Our findingscan improve the performance of crowdsourcer and platform.