Today, we are pleased to present 99designs as our “WIP of the Week." The company was launched in Australia in 2008 as one of the first crowd-contest platforms for graphics design (e.g., logos, ads, brochures, packaging design, etc.). In the crowd-contest model, people or businesses that need something — say, a logo — can use the platform to run a crowd-contest:
- Develop a brief describing what is needed and specify the prize amount that the contest winner will receive
- Distribute the brief across a very large online “crowd” of registered designers
- Obtain and review contest responses
- Select contest winner and take rights to the design
- Release escrow payment to the winning designer
99designs is a part of an expanding online work intermediation platform (WIP) segment that is focused on addressing business needs for creative outputs (e.g., graphic designs, videos, branding). Many of these platforms support crowd-contest and other crowdsourcing models; others support freelancer engagements or direct procurement of predefined services (e.g., a 500-word blog post). In some cases, platforms support hybrid models.
Since its founding, 99designs has evolved with this environment, including adding additional service offerings beyond its core crowd-contest service offering, where there is significant competition from multiple players.
- Founded: 2008
- HQ location: Oakland, California (founded in Australia)
- CEO: Patrick Llewellyn
- Corporate status: Privately held
- Investment to date: $45 million in two rounds from five investors
- Investors from contingent workforce industry: Recruit Holdings (Recruit Strategic Partners)
- Annual spend on platform: Company reports current designer “payouts” run-rate of $2.3 million per month, which would equate to about $28 million annual. Recall, customers set their own payouts for contest winners but pay a greater amount to use the platform to run a contest.
- Annual growth rate: Management recently reported that the company tripled new customer growth rates in the United Kingdom and Germany and doubled new customer growth rates in the United States
- Other platform dimensions: The company reports more than 1 million registered designers from 192 countries around the world. Nearly 500,000 contests have been performed to date.
Like some other types of WIPs, such as online freelancer marketplaces, the contest originator side of the platform consists mainly of small businesses, including sole proprietorships, as well as creative agencies and individual business users in larger enterprises. Today, 99designs leverages its digital platform to go to market with its core crowd-contest service offerings and three other additional options.
The core crowd contest offering is the largest and most mature part of 99designs’ business today. Logos are clearly a big part of this. Pricing and service options to crowdsource logos are shown here:
The company website lists more than 150 types of designs and services that can be obtained through the platform. Some of these can be obtained through contests; however, three other service models are also available.
- The 1-to-1 projects offering is basically an online freelancer marketplace for designers. Similar to Upwork or freelancer.com, clients can select a designer they would like to work with (perhaps they have found the designer through crowd-contests), specify a project and pay the worker upon satisfactory completion. Project price is determined by originator and designer; 99Designs captures a transaction fee.
- The Tasks service is a kind of on-demand offering allows clients to procure certain short tasks (limited services) performed by a 99designer. The “task” will be complete in less than hour. There is a fixed price per task of $19. Some of the “tasks” offered include photo retouching, image vectorization and banner ad updates.
- Ready-made logos is also a kind of on-demand offering that allows clients to get a logo within 24 hours by choosing from a collection of more than 60,000 designs cataloged on the 99Designs website. Clients can select a design, provide specifics (such as business names, fonts, colors), receive a set of high resolution files and request final fixes or changes. The client cost per logo is $99.
99designs has been selected as a WIP of the Week for a number of reasons. It is one of the first platforms to establish a crowd-contest model for sourcing graphic designs, and it is perhaps a pre-eminent example of such a platform. Despite being in a rather competitive space, it has attracted investment and continues to grow at a high rate, in part by extending its platform-based service offerings.
While 99designs is mainly used by small businesses, it can be — and to some extent is — used by larger businesses. The potential benefits include cost savings, speed, ease, etc.-- benefits that would interest buyers of marketing/creative services. But perhaps more importantly, 99designs illustrates how, with a work intermediation platform, work can be broken down into units that can be performed and procured through a variety of means or modalities. 99designs, as such a platform with a highly specialized output focus, should be instructive to us by showing how work arrangement intermediation platforms will expand the scope of labor services procurement to include the sourcing, procurement, and consumption of a broad array of highly granular, specific services.