99 problems but a design ain't one

Summary:99designs strengthened its claim as the world's number one purveyor of crowdsourced logo competitions by acquiring German rival 12 Designers, but the quest for global domination has created enemies and taken casualties.

Planting 99designs' flag firmly in German soil, Berlin, established a critical European beachhead to execute its mission to democratise design via a contest-driven model — one where practitioners responded to customer briefs by freely submitting fully-developed designs to win a cash prize.

However, some have complained that the company's riches are built on the backs of a design slave trade, because the contest-driven model doesn't suitably remunerate professionals for their work.

The threat that their craft could be commoditised called the industry to arms, resulting in the NoSpec campaign that aims to raise awareness of the problem behind soliciting free designs.

This uprising was noticed by 99designs CEO Patrick Llewellyn, who made a move to intellectually engage designers.

A new hybrid competition model, called "gold exclusives", rewards more designers for participating in a competition, and not just the winner. Additionally, a global mentoring network — administered by an in-house team of ten designers — allows the site's top designers to create content to educate the less experienced practitioners.

They will help designers develop their craft as they grow more experienced.

"That's been a big part of us," Llewellyn said, who recently hired a former Apple staffer to reinvent the company's brand. As a designer, "you have your foot in the door, you start meeting people — maybe it wasn't as great as you'd like — but you developed your craft as you got more experienced," he said.

"That's certainly what our designers experience: the transformation from early designers to mid-ranking to consistently winning."

"You see they've improved significantly," he said. "Not just their raw skills, but also just interpreting what the hell the customer is asking for. That's the critical thing."

SWOT analysis

Strengths

99designs has already secured a US$35m investment from Silicon Valley firm Accel Ventures . It has the first-mover advantage and it is expanding globally.

Weaknesses

The model is easily copied, which has resulted in a number of competitors. It couldn't grow organically in Germany and was forced to buy a local competitor.

Opportunities

The contest-driven model has only touched on very simple products, like logos, but there is a significant opportunity to service other areas of design, such as websites and brands. Providing education resources could also generate big rewards.

Threats

99designs' model has divided the design community, and further aggravation could alienate users and present an opportunity for new competitors.

Conclusion

Few start-ups have the honour of saying they inspired a rebellion and 99designs' response to the NoSpec movement will determine its success. I believe it has the resources and the desire to navigate the delicate balance of serving designers and customers.

Verdict: BOOM.

Topics: Start-Ups, Australia

About

Mahesh Sharma earned his pen licence in his homeland, where he covered the technology industry for ZDNet, SMH, Sky Business News, and The Australian--first as an FTE, and later as a freelancer. The latter fueled his passion for startups and empowered a unique perspective on entrepreneurs' passion to solve problems using technology. Armed... Full Bio

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