Get Over It, Haters: 99designs Has Tipped

99designs, the highly controversial marketplace for crowd sourced designs, continues to march through the torches and pitchforks to build a pretty interesting business.

We last saw 99designs last April when they raised $35 million from Accel Partners to grow faster. Today, the company is announcing some significant momentum as a result.

It took four years for the company to get to 100,000 contests, and it expects to double that by the end of this year. The amount of money it’s paying out to designers is on the same trajectory: The company paid out $29 million to designers in the first four years of its life, and expects to pay another $25 million to designers this year. Designers have already earned double this month than they did a year ago in January on the site, and the number of design contests being run on the site has doubled year-over-year as well.

And yet, a very vocal minority of designers reading this will still call 99designs the death of the industry. I wrote a long piece here on why 99designs is so controversial and why I think designers need to get over themselves. Every service industry has been disrupted by the Web. You’re no different.

But 99designs founder Patrick Llewellyn is a lot nicer than I am. The hatred initially caught him by surprise, and rather than dismissing it, he’s worked hard to understand it. He has invested a lot of that new funding round in trying to make the platform better for designers. He’s devoted 20% of the resources for staff who help support the design community: Everything from making them “feel the love” to resolving disputes between different parties on the site.

They’ve run more recognition programs for good designers on the site, sending out Tshirts and modest bonuses and have invested in making the platform better for designers. And they’ve done good old fashioned grassroots marketing over social media and at in-person meet ups around the world. They recently held a meet up in a small town in Serbia where 90 designers turned out to a pub to toast the marketplace that had made a substantial difference in their fortunes.

99designs is also investing in some game mechanics to keep designers motivated: Things like ratings, leader boards and more contests and recognition for good work. (That may sound silly, but it can be effective. Tech blogs contort themselves in countless ways to inch up the TechMeme leaderboard.)

Typically the people who complain are somewhere below the top tier, but above entry level. The more established, high-end designers don’t worry about something like 99designs, because it focuses on things like logos and T-shirts. And many entry level designers love it because it gives them an easier way to get into the market and start making money.

It’s the people in the middle who haven’t yet made a name for themselves, but feel they are above designing logos and tshirts on spec who balk. And, speaking as someone who was in the same boat when journalism was ripped apart by the Web, I can relate. Here’s my advice: Embrace it. You can’t fight the Web’s power to compress service fees in the name of customer efficiency. The game has changed, but if you embrace the volatility first, you usually win. I jumped from old media in 2006, when it didn’t look possible to pay a mortgage off of blogging. And since then, I’ve made more money (and had way more fun) than I would have staying at a magazine.

Similarly, I talked to a few designers who’ve built staggering businesses off 99designs. Some are even hiring other designers to keep up with all the work. The smart ones treat 99designs like a business development tool and building longer relationships and more high-dollar work off of initial contests.

And these aren’t just people in Serbia who have a lower cost of living. These are people in New York and London. “I would say that half the contests that I have won have resulted in follow on work,” says Australian designer Chip Chase. “It’s a great starting point for business owners, yet they feel coming back to me privately is a smarter alternative than launching more contests. They already know I can deliver the goods.” Chase gets offended at the uproar around spec work. “99designs has been an amazing platform that has helped me launch my career as a graphic designer,” he says.

For Dean Rope, 99designs gave him a way to be a graphic designer and a stay-at-home dad, all from New Zealand, or as he says: “a small country at the bottom of the world.”

Michael Kirby, of London, is a very experienced designer and was initially a hater. But after trying the service, he’s reversed his opinion completely. He went back to 99designs because he was building a new design firm and wanted some quick jobs that would pay quickly. Within two weeks he won enough contests to make several thousand dollars– paid out to him fare more quickly than most clients do.

“I had replenished my client base with international clients, had signed over $10,000 in work, and then having completed that work was astounded to find that every single one of them paid me within a few hours of sending an invoice,” he says. Since then, he’s made another $20,000 from follow on work and $4,000in prizes, without ever needing to leave the house or write any proposals.

“When I think back to the amount of time I used to put into networking to meet people or writing proposals, none of which would guarantee work, the difference between traditional pitching and a bit of speculative work doesn’t seem that significant,” Kirby says. “The fact that 99designs drew me back after three years of not using it is a testament to how much it has changed and how much they have strived to improve the service in a relatively short amount of time.”

Nicholas Sheriff of New York describes the objections to 99designs as being more about fear than actual lost wages, since most of the haters have never actually used the site. “That’s to be expected though,” he says. “When a service is starting to go mainstream, it’s open up to a very large and very broad audience of whom some will say no by default. But those users like myself who are apart of the community, who really didn’t need 99designs at first, now see it as an inseparable part of their design firms growth and development. On 99designs I’m doing around $10k a month not only from contests won, but from referrals, clients connecting with me directly to develop a project after looking at my portfolio there.

“If many in arrogance want to leave free money on the table, let them do so. It’s not a question of if, but a question of when. Those who understand this are reaping the benefits, those who won’t are missing out on a tremendous opportunity for growth both personally and professionally.”

Put another way: That $25 million is going to go to someone this year. Designers have two choices: Get in the game or keep complaining on the sidelines.

Sarah Lacy

Sarah Lacy is the founder and editor-in-chief of PandoDaily. She is an award winning journalist and author of two critically acclaimed books, "Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0" (Gotham Books, May 2008) and "Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos" (Wiley, February 2011). She has been covering technology news for over 15 years, most recently as a senior editor for TechCrunch.

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nyc_professional 5 pts

Shit companies that area going nowhere get Shit logos from designers that are going nowhere. It sounds like a perfect match...

This 99designs business model only benefits the owner. Why all of these people, "businesses" and "designers", would want to make that guy rich is beyond me.