When we chose to develop a new logo for our company, we decided to use the Website 99designs.com to have multiple designers compete with ideas for our logo.
The process worked very well. You create a "contest" and select an award to give to the winner (minimum $150 -- we chose $300). If not satisfied, you don’t need to award a winner. You only take copyright ownership of the design materials once you pay and award the prize.
You also have the option to "guarantee" that you will pick a winner of the contest once you have 10 valid designs. Once we did this, the number of entries skyrocketed from 25 to a total of over 70.
Much like eBay Inc. (Nasdaq: EBAY), you can promote your contest to designers via add-ons like a featured listing in boldface or one exposed to crawling by search engines, all generating additional fee revenue for the site.
One of the best things is that over the course of the seven-day contest, the feedback we gave on each of the early designs really drove people to come up with better and better designs, while still encouraging randomness and variety in the process. Our winning design was one of the last designs submitted overall, from one of the first designers who entered, who had incorporated some of his or her original concepts along with some ideas that other designers had come up with.
We never knew much more than the screen names of the designers. While 99designs is an Australian company, I still don’t know exactly where our designer is -- but it really doesn’t matter. Nor did it matter if the designer spent 100 hours on the job or one -- it was truly a global results-driven experience. And of course, it got me thinking.
What kinds of other business processes or tasks can benefit from this kind of approach, in which feedback and transparency of entries are combined? How about things that people traditionally envision as less "creative," such as an RFP process or any multi-party negotiation that allows for a diversity of components? How about longer-term engagements where you would introduce quantitative as well as qualitative feedback?
This type of model is quintessentially what the Internet is and should be all about -- creating universal, borderless access, turning traditional top-down approaches into bottom-up feedback-loop-driven collaborations -- and automating it all from start to finish.
99designs.com isn't the only site specializing in fractional expertise. A similar site, Crowdspring.com, offers "easy, effective and affordable logo, graphic design and writing services for small business."
The Gerson-Lehrman Group (GLG) offers a more static "who knows what" database of experts on call, who can explain technologies or market conditions in 30- to 45-minute phone calls to clients (typically investors). The expert database is supplemented by GLG clients' private feedback on which experts were most helpful to them in repeated interactions.
With their large fractional expert network, GLG solves both the expert identification problem and the time/payment problem -- and thus they get a disparate group of individuals to contribute a small fraction of their time to help the client solve a specific business problem.
The fractional expert model is often seen as highly disruptive to the established order and causes consternation in some circles with entrenched interests. There has been heavy criticism of 99designs and Crowdspring, for instance, from graphic designer trade groups for "devaluing creative work."
These concerns are understandable -- but hogwash. As most who have tried them can tell you, outsourcing and crowdsourcing are not perfect substitutes to having the full attention of higher-cost professional people on staff and in person -- though they will subsume some business on the margins.
Instead, sites like 99designs and the other mentioned here represent a new category of knowledge product -- one that taps in to the fractional time and expertise of highly skilled individuals. When coordinated and collaboratively enhanced by Internet technology, on-demand expert networks will increasingly shape the future of business.
I think crowdsourcing, especially in the area of creative work (I'm a marketing professional), is great for small organizations which are almost always on a very miniscule marketing budget. Yes, it would also be cost-effective for big companies, but you could imagine how much confidential information they'd have to divulge. Like if they were launching a new product and they'd need a logo for it, they'd have to write up a whole brief about the product and put it up online where competitors could see it.
On another note, if there's one thing I'm really like about the logo contest phenomenon, it's that it saves the world from those awful logos they would have otherwise drawn in Microsoft Word using Wordart and 3-D shapes. That and many freelancers around the world have another income opportunity.
Thank you for very interesting article and even more catching comments. I’m inclined to think that people do not like crowd-sourcing because people always embrace changes guardedly. And crowd-sourcing is a change to standard consulting. I agree that two heads are better than one, and that still more heads will yield even better results. Crowdsourcing is about gathering inspiration from those who are central to every marketing communication: the customers.
Could you imagine to delegate or outsource parts of your regular consulting work to group of people if you are too busy with more important/lucrative work, in order to add more value and fresh input, to access additional knowledge and perspectives, perhaps to do some interdisciplinary consulting with experts from different expertise categories, etc.?
With kind regards, Tatiana http://world4brains.com/
Yes, I (along with every other privately practicing attorney I know) charge much more than $35/hour.
Of course, there are some things that most lawyers bill on a flat fee basis instead of an hourly fee basis (basic wills & estate plans, no-contest divorces, and misdemeanor defense representations are all good examples). And then, of course, there are contingent fee matters for various types of plaintiff's work.
Regardless of your profession, however, what it comes down to for us professionals is this: Do you really want a client who doubts that you're worth what you say you are?
The issue presented by crowdsourcing is one of low self-confidence (whether justified or not). "Crowdsources" believe they're worth almost nothing.
It is true that -- in some form or another -- you're going to give away a lot of work for free -- or super cheap -- over the course of your long career (especially when you're starting out). But choosing to give something away for pennies on the dollar for reasons of charity or good will is far different from underpricing oneself to the entire market.
Ha ha! yeah guilty!. I had thought about buying those legal services, but haven't had a real need for them yet. Even at $35 an hour (for people I like), I'm cheap compared to others, but yeah, I would cry if a lawyer charged me that much and of course he would charge more.
I too am concerned about crowdsourcing devaluing the professionals' work and expertise, but for the most part, I think we just have to accept this phenomenon as an economic cycle.
I'm a believer in the free market. When the crowdsourcing phenomenon is followed to its logical culmination, professionals like yourself will refuse to participate in it (realizing it for the inequity that it is), resulting in a glut of cheap-to-free untalented hacks as the only crowdsource.Clients will become fed up, and will begin to realize that they need to pay for quality.(This may be coupled with a modest drop in prices to try to get this market share back; after all, crowdsourcing is largely a price reaction.)
To this extent, crowdsourcing is not something to be taken as a particularly serious threat – if the product or service is actually worth more than the going crowdsourcing rates.
The real problem with crowdsourcing and other cheap e-solutions is when it occurs in industries that sell prophylactic services or products – such as medical and legal advice – where results may be especially latent.I’ll use the legal industry as an example because I know it well.
The Internet is rife with people trying to get free or cheap legal advice on complicated matters because they are too – ahem – frugal to pay for it (even though thousands, tens of thousands, or hundreds of thousands of dollars may be at stake).Sites have sprung up where you can pay a fraction of the market price for a legal document or bit of legal advice (often a contract, business agreement, or estate planning document).
What is actually happening is that it is a one-size-fits-all, mass produced solution being sold.Companies like this sell forms in which they have an independent contractor literally just plug in a few fill-in-the-blanks – and they’re done with it.It’s a quick buck, and the client thinks they got a real bargain.The fact of the matter, however, is that almost NO legal issue has a one-size-fits-all solution.Legal documents and other legal advice must be specially tailored to the client depending upon the exact circumstances.(Perfect example: Residential lease agreements.Most residential landlords just grab a form document from their realtor or off the Internet, and tenants unquestioningly sign it.I have yet to see a form residential lease agreement that I could advise a prospective tenant or landlord to sign even close to as is.)Additionally, each of the 50 states and other jurisdictions in the United States have their own laws with which contracts, wills, and the like have to comply to be effective.What may be a properly drafted and executed will in Florida may be a nearly worthless piece of paper in Vermont.
The problem, therefore, is that these quick fixes are no better than “legal” snake oil.Most of the time, the clients won’t realize that they’ve been had, because no non-compliance or litigable problems ever arise (at least, not to the point that it’s a major issue).And when a problem does occur, it will usually be years later (especially in the case of a will or a business organization document).
I once bought one of those $40 “e-attorney” software programs to see what it was like (check out the competition, so to speak).It was garbage.If I drafted documents like that, I’d get sued for malpractice faster than you can say “free initial consultation.”
When it comes to cheap Internet solutions, regardless of the industry, the phrase to go by is: “caveat emptor.”
No, sorry, you opinion on crowdsourcing graphic design being devalued is totally wrong. Sites like this do devalue our work. If I chose to do a logo for the $300 you paid the guy, then I'm an idiot because obviously, you could have paid more. And if you become a multimillion dollar company and keep that logo, then I've really screwed myself. Hopefully you get the same guy to redo it then and pay him what it's really worth. $300 is what I would charge my friends for something like that.
When a company thinks they can get work that cheap, they will continue to try to get the prices knocked down. I've just spent the past ten years fighting just this kind of attitude that has permeated business' mindset. A site like this, while good for students to get noticed and make some money, is still inherently dangerous for our industry. Most people see a price advertised for anything will never again want to pay more for it.
Photography has already been devalued in the same way. Yes, I can get my prints and enlargements done cheaper and almost as good as more expensive New York labs, so I can charge my client less because I have less out of pocket costs. Those costs have lowered my prices. But Stock use? Yes, I've had a budget and when I couldn't pay for Comstock or Corbis or Tony Stone, I went to Photo Disc and now with the net, we got iStockphoto and for 10 bucks I could buy close to what I needed royalty free. Large corporations still need rights management to protect their identity and look, but Sprint recently ran the same iStockphoto image of a jigsaw puzzle that my friend paid $10 for to use on the cover of his budget publication.
Graphic Artist Guild has been fighting the devaluation of the industry by publishing a pricing guide to help artists who might not know how much to charge for a certain service. It gives a good range of each value so that an artist could adjust their pricing based on their experience and the amount of work demanded.
The one thing I have always done though, which I found out later is a professional no-no, is I never charged for work that wasn't accepted. If I was asked to design three ads for an indecisive client and they only picked one, I never charged for the other two. ALL work is to be charged for in this industry, but I don't believe in charging for something that the client rejected, whatever the reason. But that's just me.
While there are merits in the arguments as to how these are becoming virtual sweat shops, there is an upside to it too. And this upside is BIG. When the commercial sea cargo gained widespread use, it allowed the goods produced at one continent to be sold at another, providing a bigger market for producers.
Similarly, Internet enabled many service providers (both individuals & small organizations) in the developing world to render their services to more & more on-line users (again for both individuals & organizations). This has actually raised the demand for better services and also the prices. So many in the developing world using internet as service delivery platform, the income is increasing due to a bigger market that offer better prices, compared to what they would have gone in their own country.
Very interesting article, Rob. I've been on both sides of this effort as someone who has built startups on very little funding and have worked with both local and outsourced developers for years.
The concept of fractional expertise is very powerful especially when applied to professionals that you are paying for their years of experience and knowledge. You feel that you have easy access to extremely qualified experts that might otherwise be very challenging to find. Technology applied to this problem makes great sense and is basically a win-win for everyone.
However, I do feel that this idea of crowdsourcing in the creative fields leads people to push the value of these efforts to near zero. That's a dangerous path in a lot of ways even if it is valuable to those (such as a startup or a small business) who cannot afford to properly compensate someone for their time.
The technology in this case is not about finding a qualified expert but finding someone, somewhere who can do it for the absolute lowest cost and is willing to work without getting paid. It's this last part that is most dangerous in my opinion.
There's a million analogies of why this process feels wrong...would you hire 100 people to photo/videograph your wedding and then pay only the one that does the best job? Or hire a 100 people to build a presentation for you and then pick the best presentation?
However, I get it on a global scale but worry about the effect it has locally and valuation of people's time and efforts.
I guess you know you are on the leading or bleeding edge when you find out the name of what you are doing long after you start doing it!
Even though I have consulted for Gerson-Lehrman Group (GLG) and used Crowdspring.com, it's your post that put a name on this for me. I had thought of it as a new approach to freelancing - but the term fractional expertise is a great way to explain it.
In fact, with the departure of a key communications person I was in the midst of assembling options for a project and now I have the proper buzzwords!
Great post - and obviously I am a believer that this is going to be part of the future of the business world.
Great idea about having the logo prototypes submitted only to the client, RIMMAN. As is, this website sounds like a lawsuit waiting to happen.
Besides, sites like this will *not* put the professionals out of business. Professional marketing consultants have the experience and resources to know what works and what doesn't -- including studies, focus groups, and all kinds of empirical data. They do NOT bank on trying to get lucky with something that looks pretty.
Sites like this are fine for start-ups and small business owners that lack the venture capital and creativity to come up with their own designs, but there will always be people who will pay more for proven quality, expertise, and a good business relationship.
Free market capitalism will continue rule the day.
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