The authors examine an increasingly popular open innovation practice, “design crowdsourcing,” wherein firms seek external inputs in the form of functional design solutions for new product development from the “crowd.” They investigate conditions under which managers crowdsource design and determine whether such decisions subsequently boost product sales. The empirical analysis is guided by qualitative insights gathered from executive interviews. The authors use a novel data set from a pioneering crowdsourcing firm and find that three concept design characteristics—perceived usability, reliability, and technical complexity—are associated with the decision to crowdsource design. They use an instrumental variable method accounting for the endogenous nature of crowdsourcing decisions to understand when such a decision affects downstream sales. The authors find that design crowdsourcing is positively related to unit sales and that this effect is moderated by the idea quality of the initial product concept. Using a change-score analysis of consumer ratings, they find that design crowdsourcing enhances perceived reliability and usability. They discuss the strategic implications of involving the crowd, beyond ideation, in helping transform ideas into effective products.
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