99designs, the world’s largest graphical design marketplace is one of the best examples of value co-creation. The platform was launched in 2008 by Matt Mickiewicz and Mark Harbottle. Their headquarters are based in San Fransisco, with additional offices in Paris, London and Rio de Janeiro. 99designs helps start-ups and small businesses as well as marketing agencies and other organizations with design needs by providing the creativity of over 250,000 graphic designers from 192 countries around the world. In excess of $62 million has been paid out to the above design community in more than 250,000 hosted design contests.
The platform acts as a middleman between business owners and graphic designers: the platform hosts contests in which clients post their needs and designers compete to fill their needs. Designers apply finished work customized to the clients’ specifications in the contest listing. According to 99designs, a win-win scenario exists: its clients gain access to the site’s resources (the designers), while the designers are given an opportunity to compete in contests that can accumulate to a pay-out of $600,000 monthly. This is not the only winning part of the platform: the company seems to have a big advantage too. It states it will generate up to $12 million in revenues and is growing monthly with 10%.
However, many graphic designers think the platform is not suitable to their needs. ‘99designs is something akin to a Walmart,’ says Dan Ibarra, industry veteran and co-founder of Aesthetic Apparatus, a Minneapolis design studio. ‘It’s not necessarily dedicated to bringing you good work, but to bring you a lot of it. That’s not necessarily better.’ 99designs fosters work in which the designer invests time and resources with no guarantee of payment, a huge gamble for designers competing against thousands of others. Competition is stiff: For each project, 99designs says an average of 95 designs are submitted.
Looking at the numbers, it also makes sense for business owners to not use 99designs. James Archer, CEO of Forty, explains this very well: ‘let’s say you find an up-and-coming student designer at your local university, and pay them $1,000 to design a logo for you. If their normal rate is $50/hour (which is reasonable for a less-experienced designer), you’ll get about 20 hours of their time for research, brainstorming, designing, revision, etc. It’s not a ton, but for a small business you could probably get a pretty good logo out of that project. In addition, that student designer has made some much-needed money, you’ve supported the local economy, etc. Let’s compare that to a crowd sourced “design contest.” You put up the same $1,000, and you get 100 logo variations from different designers. They’re certainly not going to put 20 hours’ worth of thinking and effort into a 1-in-100 chance at getting $1,000. If you divide that 20-hour-effort by the 1-in-100 chance, it comes to a reasonable time expenditure of just 12 minutes.’
So why does 99designs work so well even though the designers don’t seem to like it and businesses could be better off by just hiring one designer? Please let me know what you think in the comments.