Like most trendy buzzwords, “crowdsourcing” is very misunderstood. It is very different than asking a lot of people the same question. And sometimes it is the worst way to get the answer you’re looking for. In this article you will learn how it’s done, why it works, and how to avoid screwing it up.

In the last couple years, companies like GroupOn and Amazon have popularized the idea of collecting the effort of individuals to solve a bigger problem. Based on their success it’s no wonder everybody and their dog is “crowdsourcing” something. Apparently it’s the thing to do!

The problem is that most companies aren’t crowdsourcing; they’re just asking a lot of people the same question.

I have worked with a variety of companies that believe the only way to truly feel good about a decision is to ask a few thousand people and go with the most popular choice.

That can be really wrong.

In fact, there are only a few specific situations where crowdsourcing is the right way to go.

When to use crowdsourcing

1: There is an objective right answer, but nobody knows what it is.

Have you ever tried to guess the number of jellybeans in a jar?

Random guesses have a predictable pattern in a group. Any one person could be wrong by any amount, but the average of all the answers will be shockingly close to the true answer.

So whether you’re trying to guess the number of jellybeans or Apple’s upcoming stock price… crowdsourcing is for you. Just make sure there are no important variables that might change after you get your result.

2: Every customer has a different, subjective preference.

When buying stock photos, every customer is looking for something different, and tastes are always changing.

By allowing thousands of photographers to submit photos, every customer is able to find something they like, through the sheer diversity of the selection. If a massive, unpredictable inventory is your problem, crowdsourcing might be your solution.

3: You need a lot of small contributions that add up to a bigger benefit.

Although charities have been crowdsourcing for centuries, it’s only recently that companies have realized this method can work for them too. Both GroupOn and Amazon’s Mechanical Turk use crowdsourcing like this, by properly incentivizing the individuals in the crowd.

If you need a million simple answers, or a thousand pages checked for spelling, or access to bulk discounts by helping many small buyers to work together, crowdsourcing is for you.

When NOT to use crowdsourcing

If you’re looking for the quality rather than quantity — the “best” answer rather than the “right” answer — crowdsourcing is wrong.

When GAP redesigned their classic logo using crowdsourced opinions, the end result was appalling, and totally failed. They went back to the old logo afterward. The problem is that subjectivity is the reason experts exist. They spend their lives getting better and better at a specific kind of intuition, like design.

The other way crowdsourcing can fail is when a lot of contributions don’t combine to create a bigger benefit. If the end result of your crowdsourcing is that you just have a lot of options to choose from, you’re trying to please yourself instead of the crowd.

That’s like changing the number of jellybeans to match your guess.

So respect the crowd, but be careful how you use it!