The popularity of social media has generated the new practice--and new term--of "crowdsourcing." This is the recognition that solving problems is easier when many people are involved. Crowdsourcing helps business owners find solutions and obtain insights by getting lots of people involved in the process--from helping determine where to open a new location to getting to the bottom of shortcomings in customer service.

What makes crowdsourcing an ideal way for companies to gather business intelligence is the sheer volume and breadth of information that can be gathered relatively quickly for a reasonable investment of money and other resources.

It's Not a Focus Group
What differentiates crowdsourcing from focus groups is that focus groups typically bring a select number of people together in one location for a set period of time, whereas most crowdsourcing initiatives are open-ended, soliciting feedback from a broad base of geographically dispersed participants whose interests are so varied that many times the only thing they have in common is the topic at hand.

Also, as opposed to relying on traditional recording devices, checklists and the infamous two-way mirror, crowdsourcing aggregates feedback using customized web-based databases. That enables the companies using crowdsourcing tools to slice and dice data in altogether new ways. Crowdsourcing bears fruit in its potential to uncover keen competitive insights in many directions at once.

For example, bulbstorm.com allows companies to leverage crowdsourcing in a protected environment to test new product concepts and market receptivity. Services such as bulbstorm.com are cost-effective strategies to help entrepreneurs gather market research and invaluable consumer feedback in a way that can be stored and later mined to capture specific data points and trends.

One of the most noted cases of successful crowdsourcing initiatives is Michael Dell's eyebrow-raising Idea Storm. One of the questions Dell put to this crowdsourcing market was, "What product do you really want us to create?" The overwhelming response was to create a laptop that had the option of no operating system or the Linux operating system. Dell listened to its market to significant results: Reports state that Dell has sold more than 40,000 laptops with the Linux-based Ubuntu OS installed. You don't have to have a huge company like Dell to create your own "idea storm"; you just have to be willing to create a listening venue and then do exactly that--listen.

A Way to Get Work Done
Inasmuch as crowdsourcing is a modern alternative to surveys and focus groups, it's also a way to get real work done. In other words, you can source the crowd to bid on work your company needs to complete.

A super-stable player in global marketplace crowdsourcing is oDesk. This 5-year-old company is quietly stirring a revolution--one that CEO Gary Swart says is "changing how the world works." oDesk is a website that connects buyers of services ranging from web development to virtual assistance with providers of these services. This might sound similar to eLance or Guru.com, and in a few ways it is. But it has some drastic differences that are allowing oDesk to corner the market on global task-based crowdsourcing.

The first differentiator is that when a buyer uses oDesk to hire a provider, the buyer can actually see the work as it's being done with a series of randomly timed screen shots of the provider's computer desktop (the provider is aware that this is happening and can selectively remove screenshots it may not want the buyer to see). This way you only pay for actual work done on your project. No more guessing whether your invoice is actually for work performed. Thanks to oDesk's "Team Room" platform, Katherine Kline, vice president of marketing at California Business Resource, says she was able to catch an employee who was looking for another job on her dime.

Additionally, because oDesk requires buyers to create an account that's funded by a working credit or debit card, providers don't have to worry about not getting paid.

And if you prefer to work with U.S.-based providers, oDesk has a stable of talented, near-shore business professionals who are ready to help you address various business needs.

Swart says the oDesk platform is "great for businesses because they get to see what's going on and exactly the work that's being done for their company, and it's a win for providers because payment for their hard work is guaranteed."

Successful Crowdsourcing
Crowdsourcing success very much depends on the quality and quantity of participation. If you are using crowdsourcing to gather data, the best way to maximize participation is to have a firm grasp on the desired outcome and to reward people for contributing. If the desired outcome is to get as much information about a particular topic as possible, then the rules of the game need to reward participants who deliver quality information about that topic and penalize those who don't.

If you are using crowdsourcing to get work done, it's imperative that you start with a job description that is interesting, open and informative. Have you ever sorted through resumes and been appalled by the way some completely fail to interest you? Look at the job description you wrote with the same eye. Is it compelling? Does it draw the right candidates and clearly discourage those with, say, insufficient experience or an inability to meet your deadline? Are you selling yourself to the best talent out there or just throwing your doors open to whomever is desperate enough to apply? Consider all these questions when writing a job description.

Now that entrepreneurs are looking to do more with less, crowdsourcing is a competitive means of keeping costs low and results high.