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The DesignCrowd team with their Deloitte Technology Fast 50 award.

DesignCrowd is the disruptive new online-based marketplace connecting graphic designers with businesses via an innovative and advanced crowd-sourcing model. Its aim is to win a larger slice of the sizeable $50bn global-market in graphic design that has so far been dominated by traditional design agencies and printers.

The DesignCrowd model is perfect for small to medium sized businesses (SMBs) that don’t have the resources or time to engage traditional graphic design companies. Roughly 80 per cent of the platform’s clients are SMBs and entrepreneurs.

The business was founded in 2007 by Alec Lynch, an engineer by training, who started the concept after leaving his job at strategy consulting firm Booz & Company and taking out $10,000 in savings to run the business from his garage.

DesignCrowd chief operating officer Chris McNamara tells Dynamic Business that Alec came up with the concept after spending a lot of his spare time creating websites for his friends and family.

“Through that process, the idea occurred to him, ‘wouldn’t it be great if freelance developers could have access to a single online resource where they could find potential freelance jobs?’ That’s really where the idea for DesignCrowd was born.

Chris McNamara
Chris McNamara, Chief Operating Officer, DesignCrowd

“He used a bunch of his personal savings to develop a really basic prototype and this was while he was still working at the strategy consulting firm full time. In his spare time he was doing research on the web-design market and in doing so discovered that web-design is part of a much larger global graphic design market or industry.”

Chris says that part of the inspiration came from the drive to ensure that businesses did not have to fork out thousands and thousands of dollars for someone to design a website or wait for extended periods of time for the work to be done.

“His (Alec’s) observation is that most small business owners, most entrepreneurs, don’t have weeks or months to spare on something that’s not core to running their business… We believe that our proposition is really different to an offline agency or local print shops. And we think the model is massively disruptive.”

Given the huge $50bn global market in design, Chris says there is enormous growth potential for DesignCrowd, with the business growing its profile significantly over the last several years. There are currently over 400,000 designers that use the site and some of the biggest clients to have used the platform include Virgin and Microsoft.

DesignCrowd is seeing more than $10 million in turnover and has opened up an office in Manila, Philippines, as well as San Francisco, United States. It also employs roughly 30 staff.

The disruptive nature of DesignCrowd lies in its ability to break the limitations of traditional graphic design agencies by allowing many designers to compete in “contests” to win jobs advertised by businesses. This empowers the business by giving it more choice and the chance of finding a designer who is the right fit.

However, Chris says it is a “common misconception” to think that there are hundreds of designers competing for every job or that it is very hard for designers to win contests.

“That’s not actually our experience of how designers utilise the market place,” he says. “Our experience is that designers are much more selective in how they approach participating in contests.

“Designers have a choice about which contests they participate in. In speaking with our designers we understand that different designers have different criteria in assessing where they will focus their efforts – logo designers might focus on logos, business card designers will focus on business cards.

“The second thing is that designers will also participate based on their own interest. They have the opportunity to read briefs and decide whether that’s an interesting idea – it might even be fun.”

The project holder has the ability to set the budget for the project, with higher budgets attracting more designers.
“Some designers will target higher budgets whereas others will target lower budgets,” Chris says. “You actually have some different strategies or different approaches to how designers actually source work form the market place.”

Some of the more popular designers on DesignCrowd can make a living using the platform, with Chris revealing the top ranking designer has earned close to half a million over the last few years.

“He’s an incredible case study in what can be achieved. I guess, one of the amazing things that we can do is introduce graphic designers from around the world to clients that they would otherwise never have had the opportunity to meet.”

One of the pitfalls of crowd-sourcing for work is the tendency for the platform to create a “race to the bottom on price”.

DesignCrowd negotiates this flaw by removing the ability for designers to compete on price. Instead, all jobs are subject to a “price floor” with businesses able to set the budget at any level above the price floor. “It’s the ultimate kind of meritocracy,” Chris says. “It’s all about quality ideas.”

There are two key revenue streams for DesignCrowd. The first is a “posting fee” of between $30 to $50 to advertise a project on the website. Secondly, DesignCrowd takes a commission of 15 per cent on the project budget once the work is done.

Businesses can also invite designers to enter into contests by offering them “participation payments” – an enticement to submit their creative ideas.

DesignCrowd has doubled in size every year since 2008 and has been used by designers from over 150 countries. The largest market for both customers and designers is the US, while Australia is the second largest. This is followed by the UK and Canada. “In aggregate, those four countries would represent around two thirds of our business,” Chris says.

The website runs roughly 3,500 projects per month and has made over $20 million in designer projects through the online marketplace since 2008.

“I guess overall our goal would be to double the business in next 12 months. We believe that our business can be more than five times its current size in the next three to four years.”

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Joe Kelly

Joe Kelly

Joe Kelly is a writer for Dynamic Business. He has previously worked in the Canberra Press Gallery and has a keen interest in business, the economy and federal policy. He also follows international relations and likes to read history.

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