If you run any kind of business, large or small, you’re always looking for ways to get quality work done at a low cost. And when it comes to contract jobs like web and logo design, or copywriting, you’re caught balancing between quality and cost. A couple years ago, CrowdSpring launched as a way for small and medium-sized businesses to get those projects done at a set price from multiple people around the world. Each project is a contest, and the buyer gets to pick the winning creative work — meaning everyone else just created something for nothing.

After talking to the co-founders of CrowdSpring, I put the site to the test by telling two friends about it. One is a vice president at a mid-sized tech startup, whose wife does graphic design. His first reaction was that yes, this could hurt his wife’s business and the designs must not be very good. His next reaction was to think seriously about whether his business should use CrowdSpring. Another friend needed a simple website design, and he decided against CrowdSpring and found someone local whom he could meet in person and brainstorm with.

My takeaway was that services like CrowdSpring are not for every designer, nor are they for every business looking for design or writing contract help. But they can work for the right type of work at the right time. Barilla pasta had people design a new type of pasta using a CrowdSpring contest, and Guy Kawasaki designed his new book cover using CrowdSpring. Here’s how the service works:

  1. You post your project needs at CrowdSpring, and set a price. (Minimum price for a logo design is $200 but they vary by category.) You pay CrowdSpring up front for the project price, plus a $39 fee and 15 percent commission.
  2. Creatives then have a specific time frame to submit their designs to the project page. You can provide feedback on their designs.
  3. The time frame ends, and you pick a winning design. You get the material and CrowdSpring pays the winner, usually via PayPal.
  4. If you’re not satisfied with any of the design choices, you can get your money back from CrowdSpring, minus the $39 fee. They still pay one creative a winning fee up to $250. $100.*

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Guy Kawasaki paid $1,000 for this book cover on CrowdSpring

While CrowdSpring said they are nearly profitable, and have more than 68,000 creative people in their community, more established professional designers hate the idea of people doing work “on spec” — without any promise of payment. An entire No!Spec campaign sprung up, with people like Andrew Hyde explaining why he hates CrowdSpring. His major worry was that the end game for crowdsourcing, if it becomes the standard, is there won’t be “more happy designers, or clients. Design as a whole will be lesser if this model is used, and that will be a real shame.”

But Mike Sampson, a co-founder of CrowdSpring, told me that opposition to them has changed.

“When we first started, it was a pretty steady drumbeat from many of the incumbent designers,” he said. “As it’s gone on, I think it’s tapered off and we only get pushback when a high-profile project is posted … But I think the numbers speak for themselves. We have about 68,000 registered users, creatives working on our site. It is by many multiples larger than the AIGA, which is the leading professional organization for the design industry [and has spoken out against CrowdSpring]. It does speak volumes in terms of acceptance and the pool of talent out there, and the people who are out there who want an outlet for their creativity.”

The following is an edited transcript of my phone chat with Sampson and the other co-founder of CrowdSpring, Ross Kimbarovsky. They told me why they started the company, its challenges, and how they’ve started a Pro version where companies can pre-screen creative workers.

Q&A

What was your motivation for starting CrowdSpring? What problem were you trying to solve?

Ross Kimbarovsky: We came at it from two complementary perspectives. I was an attorney at the time leading the redesign of my law firm’s website, dealing with traditional vendors. I had a very bad experience with those vendors. I picked a top candidate after a lengthy RFP [request for proposal] process, and when the vendor finally delivered, I was disappointed in the designs they offered us. At the same time, Mike [Sampson] and I had been talking because he … wanted to outsource video work, and I was running into the same problem with getting contract design work done.

I was so frustrated that I started to look online to see if there were better ways to buy creative services. I stumbled on some examples of groups around the world who had design contests, with students competing against each other for fun to see who could design the best print ad, for example. I called Mike and suggested we get together because we both were trying to solve slightly different issues, but it seemed like it presented a broader opportunity to change the way that people like us — small or mid-size businesses — buy creative services.

Mike Sampson: We identified a gap in the market. Small and mid-size businesses had limited access to the traditional design market. The pricing structure is prohibitive for many small businesses, and … there were geographical supply-and-demand deficiencies. If they were in a small town, they might not have access to talented creative.

Since you launched it about two years ago, how have things changed? Startups often have to change focus. Has that happened at all?

Kimbarovsky: There are two external changes that happened, though we didn’t have to change our whole business. One was that large companies and even agencies were interested in working with us and our creative community. We hadn’t considered that because we thought the problem only existed for small businesses and entrepreneurs. We created a more sophisticated version of our product that we call CrowdSpring Pro, which included more privacy, non-disclosure, user control. The other thing that changed in the marketplace was the acceptance of crowdsourcing more broadly across industries and government.

When you launched, there were some designers who said no one should join the CrowdSpring community and do work on spec. Are you still dealing with an anti-spec feedback from people in the creative community?

Sampson: We do. It’s interesting. When we first started, it was a pretty steady drumbeat from many of the incumbent designers. As it’s gone on, I think it’s tapered off and we only get pushback when a high-profile project is posted. For instance, we have a project on the site with Guy Kawasaki of Alltop [who] has a new book coming out. He’s sourcing the cover of the book design with us. We haven’t heard from the ‘no spec’ folks for some time, but as soon as Guy posted his project there’s been a bit of an uproar on Twitter and on social media because a lot of Guy’s followers are designers who work in the traditional model. And they aren’t thrilled that he’s using this different model.

Kimbarovsky explains that established designers who have plenty of work don’t need to use CrowdSpring’s speculative model:

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Tell me more about CrowdSpring Pro. How does it work and what does it cost?

Kimbarovsky: It differs in a few ways from our regular product. First, minimums in Pro start at $1,000 for most categories, and higher in some. For a typical design project, the minimum is $200. We always let the buyer set their own price, but we do have higher minimums in Pro. As a buyer in Pro, you can decide if the designers can see each other’s designs or not — you control who can see what. In Pro projects, you also decide who can participate in the project. Anyone who wants to work on one has to sign a non-disclosure agreement and can provide references, and the Pro buyer can check those out or their portfolio, and then decides who can participate.

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Barilla pasta outsourced the design of new pastas on CrowdSpring

We created this because we had agencies and companies who wanted to try different things like product design and didn’t want their competitors to see them. Or there were campaigns they wanted to launch but didn’t want competitors to know about them or what the collateral would be. Pro projects give buyers more granular control, so they’ve brought in more high profile clients. We’ve worked with LG [with the Design the Future Competition], Barilla pasta, and numerous others including agencies.

In those cases, they can pre-screen people before they do the work?

Kimbarovsky: Yes, they can pre-screen or let anyone who signs a non-disclosure sign up. We’ve had companies use our community for help, or some companies have only used their own internal community because Pro allows you to invite anyone you want for a project. So we’ve had companies who crowdsourced internally within their own organization and didn’t let anyone outside participate.

What’s the advantage of using CrowdSpring if they’re doing it their own community? Why not do it on their own?

Sampson: Basically they’re coming to us for the convenience of the platform, they’re leveraging what we’ve got. And they’re experimenting with the tools we have to see if it will work.

Each project has its own individual page and gallery with all the entries and submissions. It has entry detail pages, with larger thumbnails, more info on the creator of the entry, and a comment thread so the buyer can comment on the entry, it has feedback tools, and an ‘activity’ tab, which is a closed forum for participants in a project. And a wrap-up phase at the end of the project, with upload and download capabilities, file-handling, feedback, approval capability.

You talked about getting outsourced work from India. Do you get a sense that there are still a lot of people coming from India and China?

Sampson: About 50 percent of our creatives are U.S.-based, and the other people come from 175 countries around the world. We are truly a global company in that sense. Buyers are about 65 percent to 70 percent in the U.S.

Do you handle the monetary transaction between buyer and creator?

Sampson: Yes. When a buyer posts a project, we require them to escrow with us the full cost of the project at the start. We do that to protect the community [of creatives]. One of the things we learned early on from the creatives was that they were willing to participate in a model like this as long as they knew the buyer wasn’t window shopping, that they were serious about awarding their project. We hold the money while the project is in process, and only when the project is finalized and approved do we release money to the creative. We handle money coming in and the escrow of the funds and final payment to the winning creative.

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How do you handle payments, especially with so many people in various countries?

Sampson: It’s a challenge, because we have made payments to dozens and dozens of businesses. PayPal is a great business, and more than 90 percent of our payments go out via PayPal. Buyers can pay with either a credit card or PayPal account, and the rest we can pay by direct international bank wires.

What about with media companies themselves? Have they used you for designs? When you talk about “agencies” do you mean ad agencies?

Kimbarovsky: We’ve had projects from advertising agencies, design agencies, media buying, PR agencies. We have had projects from media companies, we’ve had projects from Forbes, from publishers like DoubleDay. In the Pro category, we’ve seen a handful of different kinds of buyers, but because of the private nature of them we can’t talk about them.

We’ve seen some interesting buyers in our writing category. We started with graphic and web design, and moved into industrial design. Earlier this year we launched copywriting projects, anything from domain names and company names and taglines to entire books. We’ve had people source entire books on CrowdSpring using our community of writers. We currently have a project from Air New Zealand looking for a new script for their safety video. They have a pretty irreverent attitude with customers, and their current video is six or seven years old, so they wanted something fresh for that video.

Kimbarovsky describes how a book publisher used CrowdSpring to write an entire book, chapter by chapter:

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When you added the copywriting category, did it bring any new challenges?

Sampson: The biggest challenge was similar to what we had when we launched the site: How do you build a community of skilled, talented people with experience to act as providers? We have a chicken-and-egg problem, which we had from the start. If you attract the buyers, will the providers follow? Or does it take a large base of providers to attract the buyers? Our approach has always been to market to buyers. Our thinking has always been that if there is enough work and money on the table, then the providers will follow.

How do you market to the buyers? What’s your best strategy?

Kimbarovsky: We’ve tried many approaches, as this is our main challenge. We leveraged social media very heavily, we are big users of Facebook, Twitter and have been from the moment we launched. As a startup outside Silicon Valley with a new business model, we had a lot of different challenges to climb. We write a small business newsletter that we send out to 65,000 people, our users, and PR is very important for us, helping introduce us to a wider audience. It all boils down to word of mouth, which is the single biggest driver of business to us.

What’s been one of the things that’s been a major complaint among your users?

Sampson: The biggest thing we hear is that the quality of the work isn’t high enough. But when we ask about quality in surveys, the perception of quality is very high. But occasionally someone comes along, maybe 1 out of 20, and says the quality isn’t up to what they’re looking for. And that’s a difficult thing. The perception of quality is very subjective. It’s very difficult for me to say what you will like. We might look at the same thing and I’ll think it’s high quality and you’ll think it’s low quality.

Kimbarovsky: Let me add one thing. One thing we’re seeing in our data is that quality perceptions are different in different countries. When we look at European countries such as France, they tend to be more sensitive about quality than people in other countries and a bit more critical.

So how can you address those quality issues?

Sampson: One of the things we track is buyer engagement, by checking their feedback. A highly engaged buyer leaves lots of comments, gives lots of feedback, scores every entry. And a buyer with low engagement does the opposite, leaves no comments, scores few entries. There’s a high correlation between low engagement and high dissatisfaction. Our approach is to try to engage buyers, because we believe the engagement itself will shift their perception. So we’ve added tools that don’t quite force buyers to get engaged, but strongly encourage them.

Kimbarovsky talks about how CrowdSpring has weathered the economic storm because it can save money for small businesses on contract work:

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Are there other areas you are considering expanding into?

Kimbarovsky: We are considering moving into video and audio as natural fits. Video is both a natural fit and something we know about. Mike was a director and producer working for just about every major Hollywood studio and TV network. So these are both markets that are challenging for small businesses because they are expensive and sophisticated, and these companies have trouble trying to source video content, whether for their blog or their website or for promotional materials.

*****

What do you think about CrowdSpring? Have you used the site as a buyer or creative designer? Or do you think people should avoid it? Share your thoughts in the comments below.

*Correction: An original version of this story said CrowdSpring paid a kill fee of $250 on refunded projects. Thanks to a commenter, we’ve corrected that to $100, a change that CrowdSpring made last June.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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