ScaleVP likes to do primary research in areas we’re considering for investment. When we did this Crowdsourcing work, we were looking for the next new business model, similar to SaaS, that would create multiple exciting startup investment opportunities. We decided to look at Crowdsourcing, as we’d seen a couple of companies pursuing that model that had caught the wave and were growing well. Crowdsourcing as a trend was also aligned with major shifts happening in society: a move to a free-agent attitude of employees, the need for companies to make more costs variable, and globalization of the talent pool.
The research got us even more jazzed to pursue investments in the sector. “Precise Procurement” and “Self Management” became our litmus tests for interest, along with good old-fashioned traction in the companies we looked at, and of course, market size. As a result of this work, we found and later invested in uTest. And many of our portfolio companies leveraged our work to use Crowdsourcing in their own businesses, either providing services directly to their customers, or as a replacement for traditional in- or out-sourcing.