How a once vibrant industry was looted and destroyed by corporate greed and borderline illegal labor practices.

First let’s talk about the concept of crowdsourcing itself. Crowdsourcing did not begin as a way to get a cheap logo or website, it’s roots and early successes are actually in the scientific community.  There have been some great success stories of hard-to-crack problems being solved because they were published for the world to see. With thousands of smart people thinking about these problems, solutions came quickly. Something a research department of 20 people had been working on and getting nowhere for a year would all of a sudden be solved in weeks because someone with a completely different perspective was able to look at the problem in a new way and discover a solution.

Naturally, the business community got wind of this idea. Combining the trend of outsourcing with an open call for submissions, a huge workforce could be mobilized at a fraction of the cost of hiring a single experienced professional. But let’s back up a little.

The term “Crowdsourcing” is generally considered to have originated in 2006 with an article in Wired magazine.  The article cites one of the first industries hit by Crowdsourcing for profit, the stock photography industry. The rise of low cost, high quality, digital cameras allowed for a flood of amateur photographers to make their work available for license for as little as a $1 per image. Many professional photographers who had been earning a living providing photos for ad campaigns of corporate clients, now had to compete with a product that was available for hundreds of times less than what they had to offer.

These photographers that had been selling licenses for images for a couple hundred dollars or more, were now competing with a product that could be purchased for a single dollar. Almost overnight they lost their livelihood. Their product had not simply been commoditized, it had been devalued to the point of being essentially worthless. Alas this is the plight of the modern age, technology allows us to produce things so cheap and easy that many people find themselves obsolete. The same way factory workers were replaced with robotics, and portrait painters were replaced with photographers back in the 1900’s.

Design contest however, are a slightly different animal. While they do label themselves as crowdsourcing, the differences are more than marginal. With a scientific problem, most of the people working on them, are working on them out of pure curiosity and the desire to solve a problem. They generally do not cause many research scientist to lose their jobs or have to work for next to nothing. The stock photography industry on the other hand was decimated, not only the individual photographers, but entire companies that dealt with stock photography were basically put out of business costing hundreds if not thousands of jobs. Why would anyone pay $50 for a stock image they can get for a dollar?

Design contest have a much larger price. The model could never work in any other field, and trying to apply it to one makes the idea sound absurd. The analogy has been illustrated many times, but for the sake of the argument, I will briefly give an example.

For this example I will try and keep the parameters as close to logo design as possible, so lets say, in the context of a design contest, someone with the most minor skills could put together a simple logo concept in under two hours. They have enough training to use design software and have some skill level manipulating pixels.

Ok so we have something that is basically an intangible product, a logo is a piece of artwork, you can not hold it in your hands until you print it on something. It’s not material goods, so you can not really compare it to say, dinner. So it is not fair to say that a design contest is the same as asking 50 cooks to make you a meal, and then you will examine each one and pay one cook for the one you decide to eat. While designers may agree with this analogy, and say that the time they put into designing it is comparable to the food cost, this is a bit of an oversimplification.

So we need to choose something that is a service, purely based on time applied by someone using some specialized tools (such as an illustration or photo editing program), and some education or training in the field who deliver a specialized custom service that does not have a tangible raw goods cost.

The first thing that comes to mind is a doctor or lawyer. However, the education required to be licensed for these professions makes the analogy pointless since no doctor or lawyer would ever agree to taking part in such a ridiculous scheme as to have them all do two hours of work and then 99 of them do not get paid because the client (or patient) is only going to pay one of them.

Tattoo artist don’t fit the bill, since 80 of them doing 2 hours of work on your skin would deliver the goods without the opportunity to take it back. You could almost use a barber or hair stylist, but it would be impossible to get 100 haircuts all delivered in a week.

This is proving more difficult than I had thought, so lets come back to this, I am sure that I can think of a trained group of professionals that would be happy to work for free and compete with 100 other people on the chance that they will get paid a minimal fee for their services.

For now, let’s think about Kathie Lee Gifford. In 1996 she was involved in a scandal involving her clothing line, sold at Walmart, that was being produced in sweatshops in Honduras. Now let’s take a look at a sweatshop. Besides the horrid working conditions, the workers are often very young and living in a terribly economically depressed area of the world. They are paid pennies for their work. Now there are obviously some differences between sweatshop workers and designers participating in design contest. Let’s examine some of those differences.

 

1) Sweatshop workers usually do not have any other options for earning a living.

Amateur designers can probably find something else to do. They obviously have a computer and internet access so they can probably find some other paying work.

2) Sweatshop workers suffer from incredibly long hours and often dangerous working conditions.
I would venture to guess the designers, while they may work many hours, are probably relatively comfortable and working from home or an internet cafe.

3) Sweatshop workers get paid, it might only be 3 cents an hour, but they receive something.

An average design contest has 117 entries, so assuming some people will submit multiple entries, let’s pick a conservative number and say 80 people work on the project. This means that 79 of those people work for free. If we average an hour and a half per submission, we end up with about 160 man hours of work done without pay. One of the participants will get paid, (usually a couple hundred dollars). Today there are 1605 contest open on the popular “crowdsourcing” site 99designs, contest run an average of one week. So if we do the math, we can see that there are currently 256,800 hours of unpaid work being done each week from this one site alone.

That comes to over a million unpaid hours of work each month! The sweatshop owners are squirming with envy.

Ok, so designers are being exploited on a monumental scale, it’s not like anyone is forcing them to work for free. True! People are voluntarily working for free and undermining and commoditizing an entire industry. No one is forcing the sweatshop workers to work either. So this might be an unfortunate situation but it’s not like it is causing anyone real hardship. Right?

If people are willing to do work for free, the market is going to take advantage of it. The reality can not be denied. And no one seems to see anything wrong with it. The design contest sites are raising millions in venture capital and are the darlings of the media. How savvy and smart the people who run these sites are, a real success story.

This new fad now called crowdsourcing is actually just a rebranding of an old concept that has been despised by creative professionals for years. It’s called spec work. Spec stands for speculative, it basically means you do the work first and then if the client likes it you get paid.

There are entire websites that discuss why this is bad for everyone involved. But crowdsourcing is spec work moved to a global scale. In the past a company might ask 5 designers to create comps before they decide who to hire, this is tempting for designers just starting out and needing work, but making it a global contest multiplies the competition by a factor of 10 or 20.

If the trend continues, the design industry will deteriorate to a level of quality so low that it will be essentially worthless. No one with any talent or skill in design will even consider getting into the field because you can not earn a living.

But to put this in perspective, many of the people who actually use the contest would not pay to have a professional designer do work for them. So while a serious business might budget $4000 or more to come up with a branding package and logo, many of these small business people who are just starting out simply do not have the budget. If they can get a logo designed for $300 they are going to use that service, regardless if they are getting substandard generic work that has probably been pitched to several people with a simple name change, copied from another company, and exploits a hundred people in the process.

So in the end, a client usually receives a design that is not worth the $300 they paid for it, 80 people did work for free and received nothing (none of whom are professional or experienced because if they were they would never do spec work or enter a contest), a real designer loses another customer, and the design industry is degraded to a valueless commodity. Oh and that happens about 1600 times a week.

The funny thing is that I think if you asked the people holding the contest, the person starting their new business, if they would work using the spec model, most of them would say absolutely not. They do not want to work for free, and they wouldn’t consider working for free, how would they get their business going if they didn’t charge? Yet they are happy to have a hundred other people work for them with no compensation.

So what is the point to all this, I don’t really know. I do know that the entire concept has been on my mind a lot the last few months. Full disclosure, I run a website called DesignQuote that services designers, it allows a single client to compare up to eight quotes from different designers, then pick one they like and hire them. We encourage our designers to not do spec work, and we do not use the bidding war model that many freelance sites use. We try to keep it fair for the designers and clients while delivering a quality product to everyone involved. The rise of these so-called crowdsourcing sites has definitely had an impact on our business. It’s hard to compete with a site that offers to have 80 people work for you for free! But I suppose I am lucky since I am no longer a designer competing with an army of amateurs that are willing to work for nothing.

I still can not think of another industry to use as an analogy to show the absurdity of this model. Perhaps you can come up with one?

About the author:
Wesley Warren started his career freelancing in the late 80’s doing graphic design. In the mid 90’s he moved into web design, and in the new century he ran a web development company. He runs several design related websites and writes and occasionally writes an article that complains about things that irritate him.

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