Watch Out, Wall Street?
Crowdsourcing and ancillary crowdfunding are revolutionizing life for The Little Guy – and possibly for Wall Street. In a recent press release, David Alan Grier, associate professor at George Washington University and crowdsourcing scholar, said: “…Crowdsourcing is a serious form of production… It marks the same kind of accomplishment that Henry Ford achieved in 1915, when he showed that an assembly line could build 250,000 cars in a year.”
Is this for real? You bet! If the crowd-as-a-resource isn’t on your radar, you could be missing out. Know the basics:
Crowdsourcing refers to an unprecedented mass distribution of labor online, offering incredible cost efficiencies to small businesses. At the same time, it’s bringing full- and part-time job opportunity to skilled, yet underserved populations. For example, Liveops' thousands of call center operators work from home, and non-profit SamaSource brings internet-based employment to disadvantaged economic areas.
What different crowdsourcing sites have in common is the ability to break down huge projects for execution by large numbers of remote workers. This model is enabling The Little Guy to compete on a level playing field with multi-nationals – and win!
Similarly, crowdfunding involves mass participation online – this time helping to bankroll independent Little Guy projects. It simultaneously offers small investors the chance to support things they want to see in the world.
In contrast to the UK’s for-profit crowdfunding, the concept remains in the non-profit sector stateside. Enterprises like Kickstarter sponsor the creative arts, whereas Cofundos boosts development of open software. However, with the SEC now taking crowdfunding seriously, it may soon be legal for Little Guy businesses in the U.S. to solicit capital from hundreds of individual stakeholders online — and then distribute earnings to those backers. By dealing directly with shareholders, small enterprises could save the enormous cost of IPO's and avoid the stock market altogether. Could for-profit crowdfunding in the U.S. mean the end of Wall Street as we know it? Maybe. In any case, it would certainly encourage more players.
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