CrowdSpring leverages weasel economics
I saw CrowdSpring present at a recent Under the Radar conference I was moderating. I like the service a lot, because it simplifies the process of licensing creative works, and it levels the playing field so anyone can play. What it does, in a nutshell, is let people who need design work done put their requests up on the site. Then creatives compete for the jobs.
It sounds familiar, doesn't it -- like TaskMarket, Elance, and other task boards?
It's not. CrowdSpring has a radically different cashflow model. It works like this: If there's a job you want done -- say, the creation of a logo for your startup -- you post that on the site. And you pay CrowdSpring in advance, before any contractor has even seen at your req. Wait, it gets better.
ID8 needs a new logo. Can you do better than this?
The creatives who want to earn the fee don't go through the process of marketing themselves to you to earn the right to work on your project. Rather, they do the work up front, submitting their work, in public, to the job page that's on the site.
Once you pick the work you like, rights to it transfer to you and the artist gets paid.
Let's review: Clients pay for their work up front. Artists do the work before they have the contract. CrowdSpring collects the float.
It's the ultimate in weasel economics. But it works. Check out some of the closed jobs on the site - the quality of the work is quite good, there's a lot of variety to choose from, and customers are paying bargain prices.
I wouldn't recommend CrowdSpring for complex jobs or secret projects, but it's a good tool for simple creative tasks. And if you find a contractor you like on the system, you are of course free to hire them for a longer engagement.
I hope, but am not convinced, that CrowdSpring can stay as good as it is today. An existing and larger task market, like Elance, could add a CrowdSpring-like assignment option, giving designers and clients exposure to a larger selection of business partners. CrowdSpring does have two things going for it, though: First, a purity of purpose that shows itself in a simple and easy-to-use marketplace. And second, there are apparently people out there willing to do creative work based only for the hope of getting paid. I'm wondering now how many other new businesses can be built to leverage this desperation.
Rafe Needleman writes about start-ups, new technologies, and Web 2.0 products, as editor of CNET's Webware. E-mail Rafe.
Huge thanks for moderating at the UTR conference and your analysis. With only 30 days of operating history behind us, we run into new terms every day, but "weasel economics" has to be one of the more unusual.
About 500,000 new businesses are started in the U.S., and millions around the world, every MONTH. The vast number of these new businesses cannot afford expensive design work. In fact, the "professional" designers tell us that they won?t work with start-ups because start-ups can?t afford their fees. For every established creative professional who?s made it, there?s a groundswell of untapped creative talent around the world just looking for a way to express themselves and get noticed. Millions of people. This is who we built crowdSPRING for.
In 35 days (we launched May 6), we have well over 2,000 creatives, from over 100 countries around the world. Our buyers have come from many countries (70% from the U.S., 30% from overseas). In a little over one month of operation, we've already paid tens of thousands of dollars in awards to those creatives - and we never charge creatives a dime; they receive 100% of the awards offered by buyers.
Businesses with small budgets have two practical options for creative services - go to a site like TaskMarket and Elance, where they can buy a logo for $50 - but have no real choice and end up with a logo that's worth almost every penny of the $50 - or they can leverage crowdSPRING's unique model - which gives THEM a level playing field to compete against established businesses. We are very proud about the quality of the work - and the choices offered by buyers. A recent logo project, where the buyer offered two awards ($250 and $200) generated 198 entries. A recent uncoded site design project for a homepage where the buyer offered $1500 generated over 60 entries. That's real choice. Buyers set their price, define the requirements, and pick what they like.
Just as iStockphoto helped bring about a change in the industry, crowdSPRING has an opportunity to do the same. iStockphoto opened the door to millions upon millions of people who previously had no way to get noticed in the creative community. We think there is a huge opportunity beyond stock photography to radically change the way creative services are bought and sold. We decided to be pure in our purpose and transparent in our design and communication to demonstrate unambiguously that a level playing field is an enormously powerful model.
crowdSPRING provides end-to-end project management, legal contracts, file transfer, communication, payment to creatives anywhere in the world, and, we believe, top-notch customer service. Even our revenue model is pure and simple - we collect a 15% commission - from the buyer, on top of the award amount(s). And we are working to very soon add more complex projects (audio, video, copywriting, animation, etc.) and private projects - many companies, including some rather large ones - have asked us to add this capability.
I would respectfully suggest that it is not desperation that drives businesses and creatives to meet on a level playing field. It is a desire to operate under pure and fair rules. It is a desire to leverage the Internet in ways that the traditional marketplaces never have. And, when experience, resumes, qualifications, and fancy offices are taken out of the equation, and the focus is solely on the work itself - as it is on crowdSPRING - a janitor and a student can beat out established graphic design professionals (our logo was designed by a janitor from Canada - we paid $200; our site by a graphic design student from the Netherlands, in a project that received 337 entries, from 80 designers - we paid $5000).
That's a pure free market. And it works. Beautifully.
Again, thanks so much for the kind words.
Ross
In my first 8 days on cS, I submitted 10 entries and won two projects. Total take home? $450. I estimated my hours spent on all submissions and realized I was earning at about $40 an hour. Now, this may not be what ALL World Creative Agency downtown bills out, but for a husband and father of two, it has it's advantages for the time spent after the kids are asleep and the wife is reading on the futon.
What I love about cS, and what I believe all passionate designers appreciate, is the chance to put your skills to the test vs. other designers. Anyone who has a real passion for the creative process appreciates this dynamic.
The chance I'll spend time on a project and lose doesn't bother me. Why not? Well, it's a risk/reward model, and the skills I bring to the table leave me pretty confident that I'll do well on cS. Besides, I love designing, so do the 2000 other registered creatives that are putting out great stuff for buyers all over the world.
Let me draw a comparison, professional golf. Those guys tee it up every weekend in the hopes they'll make the cut and earn a paycheck right? If they don't, the played 36 holes for nothing. But, it's the passion for what they do that drives them.
The passion for design is definitely what drives me.