Chapter 3 Methodology
4.3 Building the Virtuous Cycle on Crowdsourcing Platforms
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.
4.3 Building the Virtuous Cycle on Crowdsourcing Platforms
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
motivations than requestors, whereas requestors are encouraged more by extrinsic motivations than providers, which may result because providers are providing products or service from their hearts and are willing to be responsible for the tasks they pledged to provide. Requestors may be more realistic in asking for products or services and receiving good values more than they expected in return. Therefore, platform managers are dedicated to meeting requestors’ expectations by providing great user experiences, while they control the quality of providers rigidly by treating them as their working partners which leads platform managers to attach great
importance to educating and training of their providers.
In section 4.2, we discussed the CFs for virtuous cycle of crowdsourcing platforms using experts’ support and their practical experiences. Overall, our conceptual framework is supported. 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. As Eisenmann et al. (2006) stated that in the user-generated context, with two distinct user groups on crowdsourcing
platforms, platforms catalyze a virtuous cycle with scalability, such that when successful, more demand from one user group spurs more from the other.
Regarding that a crowdsourcing platform is a novel business model, there are an increasing numbers of users from individuals, communities, enterprises to
governments are employing crowdsourcing in their business model. They participate in fierce platform competitions while continuing to explore constructing robust crowdsourcing platforms. The applications of crowdsourcing platforms are always transforming such that the experts which we interviewed have different opinions toward the future development of crowdsourcing platform, although they somehow aim for the same goals. The following are four main points that experts’ opinions for managing a crowdsourcing platform. First, the experts all stressed that they noticed that providers must be educated and trained and should be assisted them when they encounter problems by treating them as working partners, which reveals that the safe and trusted mechanisms should be built to ensure that the products or services on the platform are reliable. Secondly, continually product development and capability of
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
resource utilization capabilities promote building a good environment for the
satisfying transaction experiences of two user groups because doing so can strengthen the close relationship between the participants and the platform. Thirdly, the effects of social networking in user-generated contexts should not be diminidhed, and the power to assist the growth of business should be spread out to capture positive network effects and make the platform grow. For example, platform managers can consider building a social network for participants who are on the platform. The platform may grow as participants share their experiences of good transactions on the platform, which will build the reputation of the platform, promoting the platform on a
worldwide basis. Finally, the experts all hold that the know-how can be replicated, but the connection among the platform and two sides of user groups, which is typically said to be a platform’s ecosystems, is difficult for new competitors to reproduce.
Therefore, fostering the relationships between the two sides of user groups is important.
In our previous study, we obtained alignment results between academia and practice.
The results showed that technology is the beginning of adopting a crowdsourcing platform and should be characterized by scalability. Scalability of the crowdsourcing platform involves constructing an ecosystem for a good transaction environment that encourage growth, such that strategy deployment and operational mechanisms play imperative roles to support. Nonetheless, this is not the end of our research. We further turned our attention to building the virtuous cycle on crowdsourcing platforms using the results from sections 4.1 and 4.2 .
According to our previous studies and observations, there are three phases to building the virtuous cycle on crowdsourcing platforms. The first phase (see Figure 2) aims at enabling the platform to embody core values and to attract providers who are willing to provide products or services ready for launching to the market and servicing requestors. Requestors will come for the first try through sales channels and promotions. They might be motivated by the products or services, novel business model, low prices, broadcasting to mass media, their friends, and so forth. The key in
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
effects begin to leverage the growth of the platform.
Figure 2.Building the Virtuous Cycle on Crowdsourcing Platforms- Phase I
Thanks to network effects (assuming that they are positive network effects), the numbers in the two user groups will increase which can involve same-side or cross-side network effects. However, the experiences during trading have a great impact on the growth of platform; these issues include feeling consent and satisfaction toward the service, matching speed, and whether there are safe and trusted mechanisms that ensure that the transactions on the platform are reliable. Therefore, in the second phase (see Figure 3), to make the platform works in a virtuous cycle, platform managers should focusing on the above mentioned issues, which can motivate both user groups to come again, which is why the experts hold that user experience is the key to success. In addition, the scalability of the platform is put to a harsh test. First, the demands of the providers and requestors should be balanced while the numbers of the two user groups expand and contract. Second, the quality of the products or services which are offered by providers should be at a standard level to meet requestors’ expectations.
Requestor Provider
Platform
Pricing
Channel &
Promotion
Transaction
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 3.Building the Virtuous Cycle on Crowdsourcing Platforms- Phase II
The last phase (see Figure 4) is the key for the virtuous cycle to circulate
continuously. Given the difficulty of testing to deal with scalability problems, the solution to the situation is to differentiate values for participants on the platform.
Apart from maintaining the balance between the supply and the demand and controlling the quality of the products or services, platforms should strive to
continually develop new products or services and effectively utilize resources to assist in building a good transaction environment for the satisfaction of both user groups.
For instances, platforms might launch new functions which requested by most of the participants, engaging in cross-sector cooperation like honestbee with GoGoVan, and provide education and training for participants (particularly to providers). As the experts stressed, to retain old participants and to attract new participants is to
strengthen the ties between the participants and the platform, understanding what they needs and wants and helping and satisfying them.
Same-side Network Effects
Same-side Network Effects
Requestor Provider
Platform
Trust & Safety PricingChannel &
Promotion Scalability
Cross-side Network Effects
Transaction
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 4.Building the Virtuous Cycle on Crowdsourcing Platforms- Phase III
Finally, there is another additional interesting finding from the expert interviews. The four chosen subjects were established in Taiwan from between 20 years ago and approximately 6 months ago, which not only showcases our diverse sample but also reveals the short evolution of crowdsourcing platforms. 104 Job Bank is the oldest platform, but the transaction between providers and requestors is relatively simple and focused on vacancies although the firm has been developing new functions to keep up with the vicissitude of time. GoGoVan and Go1Buy1 are only three- and four-year-old companies. These companies tend to concentrate on only one work occupation to make their offering professional. However, both are contemplating collaborations with other companies. Intriguingly, honestbee, which is the youngest company in our interview subjects, is the one that clearly combines two professions (purchasing agents and delivery persons) together. The exciting finding regarding the evolution of crowdsourcing platforms implies a phenomenon that has existed since ancient times:
after a long period of division, the world tends to unite, whereas after a long period of union, it tends to divide. This may indicate that the business model of crowdsourcing platform is transforming.
Same-side Network Effects
Same-side Network Effects
Requestor Provider
Platform
Differentiation
Pricing Trust & Safety
Channel &
Promotion Scalability
Cross-side Network Effects
Transaction