CROWDSOURCING FOR VALUE CREATION IN LEAN START-UPS

Abstract

Lean start-up approach provides both small and larger companies a novel, important and useful way to organise their business development, while reducing related high risks. Traditional start-ups face a multitude of significant challenges and risks. A study by Ghosh (cf. Ref. [1]) showed that as many as 75% of all start-ups fail. Earlier research has preliminarily demonstrated that crowdsourcing has the potential to reduce the risks of failure of start-ups as well as overcome some of the inherent challenges lean start-ups face. The goal of this paper is to explore and understand in more detail the possibilities of crowdsourcing for value creation in lean start-up companies by analysis of interesting pioneering companies. We found that crowdsourcing can significantly improve the leanness and agility of a major part of start-ups' business functions. Major approaches and mechanisms of the various ways that crowds can be used to create value for start-ups and make them lean are presented, and the examples of how pioneering companies have used crowdsourcing platforms in lean start-ups value creation are illustrated.