Chapter 3 Methodology
4.2 Maintaining the Balance in Crowdsourcing
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
align with our service quality… In short, we control the high quality of providers in our platform,” said the marketing manager of Go1Buy1. “I can claim that the quality of our goods and service is excellent,” said the honestbee’s community manager.
Self-expression on 104Job Bank and Go1Buy1 is one motivation that drives participants from both sides of users to their platforms because they can post things aboutthemselves and include related feelings, findings, or ideas. Providers on Go1Buy1 and GoGoVan feel consent & satisfaction because purchasing agents are almost all
shopaholics and drivers receive more satisfaction in accomplishment after delivery than in traditional express companies. In addition, providers are motivated by self-efficacy. Regarding that it is a marketplace of workforce, providers all volunteered to show their abilities to provide products or services on the platform. Reciprocity motivation showed only on Go1Buy1 in terms of its requestors. “We gives requestors
some incentives when they post an unboxing in return,” said the marketing manager
of Go1Buy1. The unboxing not only helps providers to promote their products and services to other requestors but also helps build the reputation of Go1Buy1.After aggregating the motivations of users’ service participation on crowdsourcing platforms, we now have a more complete picture of why the platform is so fascinating and what is so important that makes crowds willing to join in such platforms and provide or request products or services. It turns out that a crowdsourced two-sided platform with network effects and technology assistance practically helps people solve problems amusingly, efficient and flexible manner in which one user group can create values on the platform for other user group to consume, and besides, the platform plays an important role in sustaining both sides of users.
4.2 Maintaining the Balance in Crowdsourcing
Based on our review of the previous literature, we developed a conceptual framework of CFs for the virtuous cycle of crowdsourcing platforms (see Figure 1 in section 2.3.2 ) to illuminate how a platform manager maintains the balance between two user groups and manages the platform in a virtuous cycle, which is our third research question. Thus, we asked interviewees for details regarding their platform and how they manage it, including the strategies, operations, difficulties and solutions, and as
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
well as its projected future development. We divided by maintaining the balance of participants on crowdsourcing platforms and building up the virtuous cycle of
crowdsourcing platforms into two sections which are covered in sections 4.2 and 4.3, respectively.
Businesses with network effects face unique barriers in attracting an initial group of users (Coles and Edelman, 2011). In a crowdsourced two-sided platform with network effects, the value of user participation depends on the number of other users. The first question about balance in the crowdsourcing platform is which side of users should attract first. This chicken-and-egg problem is difficult to answer for everyone. The responses from the experts all indicated that they first focus on the supply side. The 104 Job Bank group general manager said, “I believe that we were looking for both
sides of users almost at the same time. Theoretically, there are too many job seekers;
from this perspective, we start by finding enterprises which have vacancies available, and then move on to attract job seekers. This is the normal operation. If we focus on job seekers [as the first group to find], we need to plan a campaign to let enterprises release their vacancies.” The Go1Buy1’s marketing manager also stated, “Our business focuses first on helping purchasing agents because we initially would like to provide a good order management system to them (providers). Moreover, we take severe estimates of those who applied to be a purchasing agent.” GoGoVan
eventually asked for drivers to first join them, although they were initially been confused about which side should go first. They feel that the demand side is comparatively easier than the supply side to conquer, which can easily begin from themselves and their friends in becoming prdering customers. The GoGoVan’s Taiwan country manager said, “It must look for drivers first, or you won’t have customers. Atthat time, we were asking whether to find drivers first or to find customers first. We looked for drivers first at last … If there were no orders, we could ask friends to order or we could order by ourselves. In this way, we were trying because we did not have many customers.” However, the community manager of honestbee said, “We focused on the demand side first because we just started and we already had our own
shoppers and delivery persons to satisfy customers’ requests.” Thus, honestbee was in
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
first side which must be built is the supply.
The three dimensions of our framework are technological assistance, strategy deployment, and operational mechanisms. CFs in technology is that innovative
technology can revolutionize the used working structures used and can help accelerate business growth more rapidly and more scalability. Technology implementation can differentiate services (i.e. specify economies of scope) and lower costs (i.e. diminish marginal costs). Nowadays, as a result of the pervasiveness of the Internet and the mobile mind shift, everyone has a smartphone. We learned that the interviewed companies not only have their own websites but also have their own exclusive apps for both sides of their users respectively, and fulfill their users’ needs and habits. If there are requirements, people pull out their smartphones and with a couple of touches, they can accomplish their tasks quickly and simply. Take 104 Job Bank for example, if a student is in a hurry to find a summer internship, the student can
simultaneously search vacancies and receive responses anytime and anywhere with a 104 Job Bank app in his or her smartphone. Drivers on GoGoVan can customize in ways that traditional delivery finds difficult because drivers on GoGoVan have more flexible working hours and case options. In traditional logistics, drivers must work at least eight hours daily with certain a minimum delivery volume. However, the
example above explains that technology has revolutionized the working structure, and the mobile mind shift has change our lives. Platform managers should seize upon changing technology which can impact people, such as the mobile moment which letting customers think of you when they need you.
In particular, scalability plays an imperative role when managing a crowdsourcing platform because it is a two-sided market along with network effects and depends on both sides of its participant pool, which are always changing. After the initial period, supply and demand will grow but is not in parallel. Both will expand and contract, and neither remain constant at all times. For example, there is supply ready for demand when demand is low or non-existent, or demand might expand dramatically as supply drops slightly or stay in silent. Thus, scalability means that a platform can endure dramatic change and that the platform manager has ability to avoid or to solve various situations in time.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
The scalability problem is said to be the balance problem in the crowdsourcing context as well. Strategies and operations, which are the other dimensions in our framework, can help address the scalability problem. CFs of strategy deployment includes financial incentives, a focus on the value proposition, and resource allocation that provides a good transaction environment for participants. CFs of operation includes sales channels, promotions, and safety and trust mechanisms. The following are the responses received from experts based on their experiences.
The strategies and operations that 104 and Go1Buy1 adopted can provide good examples for us to understand how to balance different segmentations on their platforms. According to our expert interviews, the platform managers usually have created different segmentations to fulfill the needs of the demand side. Although segmentation not only helps platform managers to manage their business but also helps platform users to easily find the right way to provide or request for products or services, supply and demand will expand and contract and will not always remain constant. For example, at 104 Jab Bank, when providers and requestors cannot meet and match on the platform although they have provided or requested products or services on it. This result may due to 104 Job Bank divided vacancies into various categories by different industry, so job seekers sometimes find it difficult to locate a job when they are searching in these categories. The categories that job seekers hold differ from enterprises’ recruiters’, so they cannot meet one another. To deal with this problem, their group general manager said, “We performed a correlation analysis to
optimize the query of the platform by putting related categories into a cluster to increase the exposure of providers’ and requestors’ posts. Ineitably, however, the categories are based on their industry characteristics. It is hard to define key words.”
They used their inner sources and changed the structure to fulfill the goal of each side.
Moreover, they also developed a recommendation system for recommending jobs and talents to both job seekers and recruiters.
Providers on Go1Buy1 are mainly separated into different countries, although products may also be differentiated among providers. Go1Buy1 has a restrictive
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Besides, Go1Buy1 controls products on the platform as well. The marketing manager added, “For example, when there are too many products for mommy and baby,
customers may be confused as to whether this site specializes in mommy and baby products only. Thus, we need to control the number of each category of products and grasp popular trends to adjust the numbers to satisfy requestors’ needs.” Without a
doubt, Go1Buy1 is dedicated to building up a well-known overseas purchasing agent site for everyone who would like to buy things from foreign countries at low prices.GoGoVan and honestbee also face scalability problems. During inclement weather, the demand of customers will skyrocket while the supply is limited and or stay in silent. Thus, GoGoVan and honestbee all have their own full time providers to cover this kind of situation. honestbee may find it easier than GoGoVan because their providers are mostly their own employees, and only a part of their labor force are independent contractors (e.g. GoGoVan) although this structure can lead to higher costs. The honestbee’s community manager said, “We are different than other
start-ups. Our headquarter in Singapore spends a substantial amount of money to us to achieve our goals.” On the other hand, a function which is a financial incentives for
drivers launched on GoGoVan helps solve this problem. Customers can offer tips to attract drivers to deliver things for them, and GoGoVan also can expense some costs to give drivers extra incentive. The Taiwan country manager of GoGoVan said, “If itis a rainy day or it is too hot, drivers are reluctant to take cases, especially
motorcyclists. To deal with this problem, we pay extra money - such as fifty or a hundred dollars - to attract drivers. This approach has both good and bad elements.
On one hand, we need to change the beliefs of our customers that you can just tip some extra money to drivers for your order to be accepted rapidly. Otherwise, we have to give tips to encourage drivers to take cases. On the other hand, the mechanism released increases the growth of orders, so we soon have another problem: to find more drivers to handle it.” Other problems about scalability may
occur during a promotion campaign. For example, honestbee encourage its customers with no delivery fee or getting hundreds in rebates for every thousands purchase;moreover, there is an annual sale from European boutique on Go1Buy1, or there is a season in which many students are looking for jobs. At such times, a good platform manager can plan robust supporting measures beforehand.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Boosting the number of participants on a crowdsourcing platform leads to more transactions. However, balancing the two sides of users on crowdsourcing platforms is important at all times. On top of the measures introduced by experts above, safety and trust mechanisms constitute another important gesture worth noting. Go1Buy1
verified that safety and trust is particularly important to requestors on their platform.
The Go1Buy1’s marketing manager said, “Customers (requestors) go onto Go1Buy1
to locate suitable purchasing agents, yet they are still afraid of frauds. Thus, we provide a review system for them to score the serviced purchasing agent (provider).
Meanwhile, we examine and review providers with regard to timing to control the quality of their providers.” Similarly, GoGoVan also has a review system for
requestors to score the serviced provider and which motivates providers to be responsible and honest. The Taiwan country manager of GoGoVan said, “I believethat it is important to customers that they can control and monitor all information they need. Thus, we provide the GPS of their serviced driver to track the location of their packages. We also provide the same review system as Uber. If the score is under three, we will listen to our customers to learn what should be improved.” A review
system is implemented not only to win users’ confidence and reliability but also to help platform managers understand the quality of their products or services from users’ perspective. GoGoVan also provides experience coupons for users (both providers and requestors) for the first time to build confidence and reliability.GoGoVan and the other companies hold that the user experience is the key to success.
In summary, the experts all supported our conceptual framework of crowdsourcing platform with their experiences. Technology is merely the beginning of the business, while supporting strategies and operations assist the management of crowdsourcing platforms and leads businesses to grow steadily and balanced.