At SXSW, one of the more hotly debated panels was “Is Spec Work Evil?” with Jeffrey Kalmikoff from Threadless facing off (“…in this corner”) against Mike Samson of CrowdSpring (“..weighing in at…”).

The room was pretty full, probably 600-800 people, and there was clearly a line drawn between those for CrowdSpring and those for Threadless.

“Lets lay out some ground rules for this highly emotional debate…” Jeff Howe of Wired began.

The Companies

Threadless is an interesting company. Its truly a retail/ecommerce site driven by a community of designers (about 900,000 members).

The members of the Threadless community seem to break into three groups: The Designers, the Interactors, and Purchasers. Sometimes, a member will be part of multiple groups, but there are many that purchase without ever submitting or critiquing a design (like me) or vice versa, some that never buy, but interact consistently within the community.

Truthfully, it makes sense. Jake, Jacob and Jeffrey are all designers. They started and built the company as designers. I would almost be willing to guess that if those three werent as intelligent and saavy as they are, the business would have never gone far, because for designers, design always trumps business.

If you were to order the three parts of Threadless (the business, the community and the designers), I would bet that internally, its viewed as: The community –> the designers –> the business.

CrowdSpring is not a company. It is a marketplace, and marketplaces have a distinct operational makeup.

Competition reigns. Price points are driven by buyer demand and competitive sellers. The success of the marketplace rests on having the right number of buyers and sellers to ensure that the equilibrium pricing structure is exactly right to grow the marketplace (attract sellers and buyers) and provide enough in fees to the “marketplace manager” (in this case, CrowdSpring).

Does community matter for a marketplace? In its most basic form (such as a forum), yes. Low levels of collaboration create a false sense of traditional community and have the potential for increasing the value of the seller’s product. Which, helps drive up price points (and increases fees collected). Additionally, in order to have a thriving marketplace, sellers must either not directly compete or be driven by competition.(Basically, the best type of designer for CrowdSpring is a competitive one.)

Think of a farmers market. Or a busy street market. Vendors tend to either be different enough to exist side-by-side effectively, or they understand the importance of healthy competition to survive. In some cases, where the competiting vendors are selling a widely available product (like design work–yes, not GOOD design), competition can effectively drive one (or both) vendor(s) out of business.

A real fear in a marketplace is the concept of price colusion. While CrowdSpring clearly wants to attract a specific type of designer–one who is definately competitive by nature, and probably in need of work–it cannot have a community that agrees in private on what to charge for different types of products. This can drive artifical price inflation and drive off buyers. In order for CrowdSpring’s community to truly be effective for CrowdSpring, it has to be controlled (perhaps just monitored) to ensure that price collusion doesnt exist and that it fosters competition.

Finally, Ross Kimbarovsky and Mike Samson are business guys, not designers. They saw an inefficiency in the market, and decided to build a business around it. They are not community people (Ross is a former IP Lawyer and Mike is a former film producer), nor are they designers. If I were to bet how they view Crowdspring, I would guess its business –> buyers/sellers –> community.

The Argument

Here is the basic argument (at least how I see it):

  1. CrowdSpring’s business model is spec work (defined as: “Short for “speculation.” Work done “on spec” is done for no guaranteed remuneration, in hope of winning the job, campaign or account in question.”
  2. Spec Work is Evil
  3. Therefore, CrowdSpring is Evil.

How does that make you feel?

Designers hate spec work. There are a million posts out there about how spec work is destroying the graphic and web design industry.

Spec work exists in all service-type industries: public relations, marketing, acting and others have some type of spec involved in the attraction and landing of a job.

Because spec work creates such an emotional response amougst the design community, the argument has shifted from the efficiacy of having a marketplace for designers and companies to the moral argument around spec work.

Ross and Mike have artfully made the argument an emotional one not an intellectual one.

What are designers arguing? The merits of spec work not the effect of a efficent marketplace on the design profession.

Sure CrowdSpring is associated with spec work, and therefore some of the negative feelings around spec work land on them, but the reality is that the emotions surrounding spec work DO NOT MATERIALLY EFFECT THEIR MARKETPLACE.

They could be a marketplace for scrap metal. It doesnt matter. The buyers are looking for low cost design, and the sellers (designers) are willing to do it, REGARDLESS OF WHAT ITS CALLED. All that matters to CrowdSpring is that there is deal flow in their marketplace to drive the exchange of money so that they can collect fees. Thats the business.

(During the panel, Mike said that CrowdSpring has “paid out” close to $1,000,000 to their sellers. The truth is, they arent “paying out.” CrowdSpring places the buyers money in escrow (basically in a bank account), and then provides the buyer’s money to the designer selected for the job (less 15%). Threadless, on the other hand, writes a check from the company to the designer who’s design is selected for printing. Its an important distinction, and a further example of the futile effort of debating a company vs. a marketplace.)

The Winner

In this case, its clearly CrowdSpring.

1) They have obsficated the debate of the effect of an efficent marketplace on the design profession by getting designers to debate the merits of spec work (which in the greater scheme is a useless argument driven entirely by emotion).

2) They have been able to attach themselves to Threadless’ brand, and in many cases be spoken about equally.

Its no surprise that Ross, a former IP lawyer has skillfully driven the conversation away from where the discussion should be (that marketplaces often drive down prices and quality), and allows it to build around a emotional issue (guess who sponsored the Is Spec Work Evil panel? Not David Carson.)

For Threadless, or other designer driven communities, as long as the debate is focused on spec work, you’ve lost before you’ve started. Clearly, Threadless benefits designers. Clearly, CrowdSpring has shown that there was a hole in the market.

Its like debating Sam Flores vs. frozen fish.

** If you dont know who Sam Flores is, I am very, very sad.

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Micah March 19th

It All Starts With The Roots

I havent written in awhile. Mostly because I was at SXSW and I was absorbing everything I could. I absorbed Red Bull, BBQ, Rain, the SXSWSARS virus and words that provoked thought.

Before I go on, let me say this is not my SXSW wrap up post. That will probably be over at the Lijit blog (After all, SXSW was Lijit!).

At one point, I was sitting in a central location (actually by a men’s room – tell you why that matters in a second), after my friend Jeffrey and I were interviewed by Jeff Slobotski of Silicon Prairie News (who is also putting on the conference Big Omaha, where I will join Gary Vaynerchuk, Matt Mullenweg, Jason Fried, Jeffrey and others speaking at what is looking like an AMAZING event).

During Jeffrey’s interview, a guy walked quickly behind him on the way to the bathroom and before he got there, puked everywhere. Explosively.

BAM! All over the floor. And everyone kept walking as if nothing happened.

(I’ll get to a point, I swear.)

After we had finished up the interviews (and I got a chance to hang out with Melissa Pierce. If you havent heard of her project, Life in Perpetual Beta, please spend some time with it. Get involved. Contribute to the cause.) Gary walked by and asked Jeffrey, Melissa, Jeff and I to join him at Kathy Sierra‘s presentation.

About half way through the presentation, I leaned over to Gary and told him that his keynote from the day before caused a light bulb to go off in my brain. (I kinda lied, the light bulb happened when that dude puked all over the place, but I thought Gary might be offended that a dude puking caused the light bulb).

Many bloggers, especially video bloggers are like that puking dude. Extreme visuals, huge points, but everyone keeps walking by uncaring.

What sets Gary apart is his understanding that the strength of a tree is in its roots, not in the brightness of its leaves, or the height of its trunk.

Personally, when I see my friends around me succeed, I have the dual reaction of happiness and jealousy. “Why cant I do that? Whats holding me back?”

Its my roots.

Roots are really a simple concept. They are where you are from, what you did growing up, the education you received, what your parents taught you, etc.

Our roots truly form the foundation of what is best about us.

Here is the rub.

Along with all the positives, most people have negatives integrated in the roots that help create every action (and inaction). As deep as your belief in your own ability to do certain things is your deep set belief in the things you cant do.

At Kathy’s presentation, she always brings up a slide asking if Tiger Woods spends more practice time on his strengths or his weaknesses.

Most people shout out “Weaknesses!”

Kathy, in her quiet, assertive way, replies “Strengths.”

Tiger’s roots are set in the concept of the greater your strengths the weaker your weaknesses become.

So what does all this mean?

I started the 365andChange project as a way to make a change every day in hopes of improving on my weaknesses. Brute force change to give me the ability and self-belief in what I am doing. To gain that look in my eye that Gary has when he talks about owning the NY Jets.

The realization I finally came to at the moment that dude was unable to catch his puke as he stumbled to the bathroom is that changing my weaknesses one change at a time would ultimately not bare the fruit I was hoping it would. At the end of the year, I would still fundamentally be the same guy at the beginning of the year, except a did a few things differently.

I am taking a break from all my projects and taking a moment to take a look at what negative self-beliefs have integrated themselves in my roots, and recognizing my fears and lack of risk-taking for that.

You see, I can do anything. Its in my roots. I just need to believe that.

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Micah March 11th

Kill All The Designers

As I was driving into the Lijit offices, I was thinking about this years SXSW conference, and how different it would be for me. I was thinking about the posts I had read from friends who were going and had gone before.

The difference for me this year will be striking (speaking vs. not-speaking, knowing people vs. not knowing people, how much hotter I am, etc.). Yet with all the growth I have done personally and professionally, some of my friends are still light years ahead of me in terms of accomplishment and recognition.

And thats ok.

I realized that what I love most about life is the realization that no matter how much I accomplish, I always have people around me to remind me that I have a long way to go. That, for me, the only thing that drives me is success and since there will always be someone more successful than me, I have a long way to go.

Which brings me to the raging debate about spec work.

(huh? Yeah, I know, but its how my brain works. Stick with me.)

I am not a designer. I can barely draw a straight line. But, I have been a business man, even played one in real life.

Here is how I see a basic logo development conversation (for 99% of the world):

Business guy thinks to himself, “hmmm, I need a logo. Im bored/tired/renamed my business/whatever, and it about time. I dont want to spend a ton of money on it.”

Designer guys thinks to himself, “I love being an artist. I live to create. I dont just “do” logos, I create identity.”

Business guy: “sweet on the identity. How much will it cost?”

Designer dude: “$5,000.”

Business guy (after laughing so hard he is crying): “Thanks.”

And then business guy heads over to one of the “spec work” shops, and puts in a request for a logo, with a couple of requirements, and prices it at $500. A couple of weeks later, a logo is approved and used, and the business guy is happy. The “spec work” designer is less happy, but has $500, the “real” designer is totally unhappy, and blames everything: spec work, the business guy and the “spec work” designer (but not himself).

There is no questioning his pricing, or the value of his production, just that he got undercut by an “amateur.”

I think I get it.

Designers are being protective of their industry and their “art,” by railing against an activity that by design, reduces the amount of money they can charge.

At SXSW, Jeffrey is on a panel entitled “Is Spec Work Evil?” and the moderator, Jeff Howe wrote a great post called “Is Crowdsourcing Evil and Other Moot Questions …” where he wrote:

The demand for low-end design has ballooned in recent years alongside the profusion of start-ups and small businesses. Conveniently enough, so has the supply of what we might call “low-end designers” (amateurs, recent grads and the like). According to Forbes there are 80,000 freelance designers in the US alone. Most of these are, proverbially speaking, waiting tables. When someone matches demand and supply, well that’s kismet!

I agree that the market drives the business and the business practices. Take the hurt feelings out of the spec work debate, and you have an efficient marketplace driving costs down due to an overabundance of designers, coupled with the increasing number of small businesses and startups (which by definition, have no money to spend on huge design projects).

Is spec work “evil” (meaning detrimental)? Hell yes. It devalues the work of the designer and trains the business professional to accept a lower quality (but sufficient) work product.

But the problem is not with the companies that drive spec work, or the designers that participate in it, or even the companies that pay for it.

The problem is simply a result of an upside down economic model where the artificially high supply of designers is pushing the pricing downwards. Include the general efficiencies that are provides by the internet, and BAM! spec work is perceived as evil. Read Jeremiah’s post about how he views spec work from the business perspective, and you can see exactly this dynamic occurring.

I commented on Jeff’s post:

I am excited to listen to the panel and continue the conversation that we have had around these here parts (Its Boulder, we can sound Western…).

There is a constant fight for equilibrium between business interests and service providers, where businesses will always undervalue the esoteric value of intangibles, and service providers will always overvalue them.

There is not a service industry that is not touched by the concept of spec work or unfavorable (to the service provider) competitions. The canary has been dead for awhile, people just have named it.

Of most service industries, graphic design (and design as a whole) is probably the most disparate in perceived and actual value. How do you value “art”? How do you value “feeling”?

Businesses apply a value to everything. When I sold my company, when I agreed to accept a non-compete that had a value. The association of my name to the new company had a value.

The positive of the spec work revolution is that it forces designers to think: 1) am I talented enough to be charging what I am charging; and 2) what is the real value I bring to the table that can be counted by my client (the business) in dollars.

The negative is that designers are realizing that their perceived value is not equitable to their real value.

(There is also the reality of the economic abundance of designers makes it easy for spec work to exist. If I were a designer I would stop worrying about spec work and get more people to quit the industry.)

At the end of the day, being underpaid for valuable work sucks, which is what the specter of spec work brings. Want to combat it? Dont suck. Provide value. Set realistic expectations.

The only way to reduce the negative effects of spec work on the design industry is to make the supply of designers scarce.

Want to end spec work? Kill all the designers.*

  • of course this is meant simply as an oversimplification of a complex problem. Please dont kill the designers. Perhaps take away all the stolen copies of Photoshop, or disallow internet access for designers at coffee shops, but killing them might just be a bit more evil than the perception of spec work.
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