Harnessing Creatives Who Work on Spec Pays for MiddlemenKaren Epper Hoffman
Before she stumbled onto online middlemen that match businesses with graphic designers a few years ago, Carol Sloan worked as a carpenter, seamstress, hotel manager, and auto mechanic, among other professions. Using her creative skills in a new field appealed to Sloan, so she started teaching herself how to use graphic design software and posting her designs to the sites.
Today, Sloan and her husband rely largely on his salary to get by and supplement their income with the $200 to $500 she makes monthly through sites like 99Designs, MycroBurst, and CrowdSPRING, doing graphic design projects on spec in the hopes that the business listing the project will choose her work and pay her for it. She notes there are typically “30 to 100 designers for every project holder” and about two of her designs are selected every month out of the dozen or more she may submit. “If I needed to do this to make a living, I would not do this,” says Sloan, who lives in Hancock, Md., and specializes in pet-oriented logos.
The rise of crowdsourcing creative projects to amateurs and the outcry among professionals has been documented before. Clients, often small businesses shopping for a cheap logo, typically pay participating designers a fraction, sometimes as little as one-tenth, of what they would pay an established design firm. “The hardest thing in the world as a young designer starting out is finding business and getting paid,” says Patrick Llewelyn, president and chief executive officer of San Francisco-based 99Designs, which has paid $43 million to its winning designers since launching in 2008.
The crowdsourcing model is attracting increased attention from creative types wallowing in a dismal job market, says Llewelyn. He won’t say what 99Designs’ average pay is for its 185,000 designers because it varies “so widely,” but notes a good one can make more than $1,500 per month. The average take for MycroBurst’s more than 40,000 designers is $507 a month, according to the Langhorne (Pa.) site’s CEO, Zaheer Dodhia.
Similar to many of its peers, 99Designs pays the winning designer the client’s fee, after taking 10 percent of the prize money offered in each design contest. The project holder also pays 99Designs a $39 listing fee. After taking its 15 percent cut, DesignCrowd, which has 90,000 designers, divides the fee paid (which averages about $315 for a logo) to all participants in a project. Its founder and CEO, Alec Lynch, says the site, based near Sydney, has hosted design contests for businesses and institutions including Harvard Business School and Amnesty International.
Executives at 99Designs, CrowdSPRING, MycroBurst, and DesignCrowd won’t say whether their businesses are profitable but claim revenue is growing quickly. In April 2011, 99Designs received $35 million in a venture capital round led by Accel Partners, and Llewelyn says he is using the money to expand internationally with deals like his August acquisition of German crowdsourced design site 12designer.
Criticism of the crowdsourcing model hasn’t diminished. Trade groups say the sites undercut their businesses by offering a product that is not as comprehensive or as professionally executed—at the expense of both the design community and the client. In a December 2011 letter, the New York City-based Graphic Artists Guild excoriated the Democratic National Committee for hosting a crowdsourced design contest to come up with its 2012 convention poster. “The Guild is deeply disappointed by this decision,” the letter states. “Instead of giving the design of the DNCC poster directly to a professional graphic artist, the DNC is choosing to crowdsource it.”
Ric Grefé, CEO of AIGA, the professional association for design in New York, says that “graphic design over time has become more of a consulting relationship,” where the execution of the final design may be as little as 10 percent of the work. He believes the sites are a “race to the bottom” for graphic designers. “Crowdsourcing rarely provides you with a designer with the background and training and expertise to deal with complex problems,” he says.
Rebecca Brookson, founder and chief curator of Bicyclette, an online boutique selling bicycles and home décor items set to launch in December, is unperturbed by the complaints. When she began fashioning her company, she wanted a “strong brand identity” on a $1,500 budget. Listing the job with CrowdSPRING in November 2011, she ended up getting more than 500 designs in less than two weeks, which led her to post a second project in apparel designs this year that is ongoing.
For MycroBurst’s Dodhia, the beauty of the model is that it is client-controlled and self-selecting. Clients set their price and the designers can choose whether they want to pursue the business. MycroBurst, which hosts 1,000 projects a month, makes money by charging a 20 percent listing fee to project holders and a 10 percent fee to designers. Says Dodhia: “It’s a marketplace. If a customer says ‘I want more creativity, better designers,’ they offer [to pay] a bit more.”