This is the first post in our 30 Day Ask Clay Crowdfunding Q&A.

I’ll be answering a new question every day in June.

Submit your question by going to CrowdfundingHacks.com/AskClay, where you can see all of the questions and all of my answers.

Full Transcript

Hey everyone…this is Clay Hebert from CrowdfundingHacks.com…and today’s question is…

What’s the difference between crowdfunding and crowdsourcing?

This is an important question because a lot of people, even really smart people, even people who work in this space…often misuse the words “crowdfunding” and “crowdsourcing”.

They’re actually two completely different things, and it’s important to know the difference.

Let’s talk about crowdsourcing first.

Wikipedia says…

Crowdsourcing is the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.

So very simply, crowdsourcing is the sourcing of anything from a crowd.

Here are a few examples of crowdsourcing:

1. Wikipedia is a crowdsourced encyclopedia. Lots of people who have never met contribute information to Wikipedia every day.
2. At the MIT Center for Collective Intelligence, there is a project called the Climate CoLab, where you can work with people from all over the world to create and submit proposals for what to do about climate change.
3. Need a logo? At 99 Designs, you can crowdsource your graphic design.
4. Quirky is an entire company dedicated to producing and selling ideas that are generated and then voted on, by the crowd.
5. And at Threadless, a Chicago-based T-shirt company, the T-shirt designs are all submitted by members of the community. They submit designs, vote and the ones who get the most votes get produced. They have over 4 million members and over 10 million customers and reportedly make over $30 million in annual revenue.

So if that’s crowdsourcing, then what is crowdfunding?

Very simply, crowdfunding is the sourcing of funds from a crowd. So crowdfunding is actually a specific type of crowdsourcing.

Platforms like Kickstarter or Indiegogo are crowdfunding platforms and allow backers to contribute money in exchange for rewards.

So to recap, crowdsourcing is the sourcing of anything…from a crowd.
Crowdfunding is the sourcing of funds, or money…from a crowd.

If it’s services, ideas or information, it’s crowdsourcing.
If it’s money, it’s crowdfunding.

You can submit your question or see all of the crowdfunding questions and my answers at http://crowdfundinghacks.com/AskClay

End Transcript