"Crowdsourcing" is a business model that depends on work being done outside the traditional company walls.  The term was coined by Wired magazine writer Jeff Howe in his article "The Rise of Crowdsourcing". While not a new idea, crowdsourcing is now becoming mainstream, it relies on a combination of volunteers and low-paid amateurs who use their spare time to create content, solve problems or even do corporate R&D.

 In recent years internet technology has evolved to allow non-technical people to participate in online projects. All companies growing up in the Internet age are designed to take advantage of the networked world. But now the productive potential of millions of plugged-in enthusiasts is attracting the attention of old-line businesses, too. For the last decade or so, companies have been looking overseas, to India or China, for cheap labor. But now it doesn't matter where the laborers are – they might be down the block, they might be in Indonesia – as long as they are connected to the network.

In Howe's own words it's "technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn't always free, but it costs a lot less than paying traditional employees. It's not outsourcing; it's crowdsourcing".

The open source software movement proved that a network of passionate, geeky volunteers could write code just as well as the highly paid developers at Microsoft or Sun Microsystems. Welcome to the age of the crowd where distributed labor networks are using the Internet to exploit the spare processing power of millions of human brains.

Crowdsourcing presumes that a large number of enthusiasts can outperform a small group of experienced professionals. It is clear where the crowdsourcing phenomenon is coming from, but it does not create clear boundaries for what should be considered crowdsourcing and what should not. Does crowdsourcing necessarily involve something commercial? Can we classify social networks and collaborative production platforms as crowdsourcing? Probably there is no definitive answer for this phenomenon as crowdsourcing is forever reshaping and evolving.

Below is the list of companies that are addressing tasks previously performed by established business entities:

1. Innocentive – created by the pharmaceutical company Ely Lilly with the objective of bringing together companies with specific R&D needs and scientists dispersed all over the world (called solvers). A certain seeker comes to the online platform and describes what problem he is trying to solve, specifying the award he is willing to pay for the answer. Registered solvers are able to read the problem and submit solutions. Should the seeker find a feasible solution among the submitted ones the person who came up with it receives the award.
2. Cambrian House – "Cambrian House's mission is to discover and commercialize software ideas through the wisdom and participation of crowds". Created in the end of 2005 the company basically collects filters, develops and implements software ideas. All parts of the process are managed with inputs from the crowds, and royalties are paid whenever someone contributes with concepts or coding.
3. iStockphoto – only two years ago if you were interested in getting some professional looking images you would probably need to spend between $ 50 and $ 200 a pop with a professional photographer or studio. Today iStockphoto offers a huge collection of images with professional quality for prices as low as $ 1. What is the trick? They enable anyone to upload their own pictures and earn royalties as people or organizations purchase them. The service is also extremely simple and user-friendly: you register up for free, search images by keywords, select the ones you are interested, pay and download them.
4. Mechanical Turk – "Today, we build complex software applications based on the things computers do well, such as storing and retrieving large amounts of information or rapidly performing calculations. However, humans still significantly outperform the most powerful computers at completing such simple tasks as identifying objects in photographs—something children can do even before they learn to speak". The Mechanical Turk was created by Amazon.com to link together companies requiring HITs (Human Intelligence Tasks) performed and people who have spare time and want to earn some money.
5. Trendwatching – the company counts more than 8.000 collaborators (called trend spotters) around the world who are responsible for tracking and reporting any changes in the market place and consumer behavior. After this "trends gathering" process the firm offers both a free monthly briefing and specific paid services. What do the collaborators earn? When they submit trend reports they receive points that can be accumulated and exchanged for prizes such as flash memories, iPods and the like.
6. Threadless – incredibly smart concept. Artists or anyone with some spare creativity can submit their T-shirt designs. The designs get vote by the community (looks like the site is very famous within MySpace, but I have not checked it). The top rated designs get then produced and sold back to anyone interested. That is what I call lean production.
7. John Fluevog – Open Source Footware. Now that might sound weird, but it is exactly what John Fluevog Boots & Shoes is doing. One can submit designs for a shoe or even only part of a shoe. If the design subsequently passes the voting phase it will enter the production line. Now the person who came up with the design will not earn royalties on it since we are talking about "open source", instead he will be able to put his own name on the shoe and be recognized as a contributor for the John Fluevog company.
8. Ninesigma – the business model of Nine Sigma is pretty similar to Innocentive, but instead of focusing exclusively on scientific and research problems they aim for innovation management problems. The demand side (companies or managers) can request solutions for problems related to services, information or software, hoping to improve the innovative processes within their organization.
9. Second Life – There could be some discussion on whether Second Life represents or not a crowdsourcing company. In one hand it is relying on the work of thousand of people worldwide to build the content and create value for the "game". On the other, however, there is no clear relationship between the parts involved. Some players create content spontaneously to have fun; others aim to make profits, and so on.
10. Rent A Coder – "Rent a coder is an international marketplace where people who need custom software developed can find coders in a safe and business-friendly environment." The company basically receives requests for software development and forwards such requests to their pool of coders, which amounts to 150.000 worldwide. The coders, in turn, may decide to answer to a specific request with a proposal. Finally the requester chooses among the received proposals (with the possibility to view the resume of coders) and a contract is established once he finds a satisfactory solution.