GeniusRocket: Toxic Environments and Startups

On a run last week I was exploring just why I was so against spec work. The core of the reason, is because it creates a toxic environment, that is destined to fail.  A house of cards or a pyramid scheme, doing things ‘because you can get away with it’ is unethical and just plain mean.

So enter in spec work profiteer GeniusRocket, who, like crowdspring, promises a bunch of designers will complete work for the chance of payment.  Of course, they get paid for every project, but the designers doing work have about a 1% chance of getting paid.

Kinda gimmicky, and on the surface, very cool.  But when you drill deep what is happening is nothing but ugly. Follow @specwatch to see a sample of how the contest model just doesn’t turn out well.

Green Button I met the guys at GenuisRocket at SXSW last year, and they showed little knowledge on the disastrous history of spec.  At the time I didn’t really think much of it, but what a red flag.

Last month a designer doing work for GenuisRocket found out the company was using his work that he did for a contest on their home page, without attribution or payment.

Slimy. Can you trust the company?

When contacted, GenuisRocket just pointed to the legal terms stating that they had the right to do so.  Alienating the designers that are the core to your business (which is ripping them off)?  That is plain stupid.

They did agree to give some money to charity to have the designer take down the site.  I think it should stay up, the terms of service are exactly the same.  I will host this with permission.

I’ve said spec will fail, and you can see the implosion happening.  Use spec work, have tons of negative press (as CP+B learned last month).  How does that work out for your brand?  First few pages of google results talking about how unethical and evil you are.  Not an ideal solution.

Why is this happening?  It is all about sustainable vs. toxic environments.  If you are a startup, the holy grail is positive and engaging user generated content.  To do this you must create a sustainable environment.  If you create a toxic environment, everyone fails.  Here is how spec creates a toxic environment:

The goal of the designer, I can assume, is to get better and pay the bills.

  • If they have a 1% chance of winning a contest valued at $500.
  • They are competing against others who copy and steal work from others
  • They have little to no contact with the client, and don’t build a relationship or really know the product
  • The winning design resembles a winning logo of another project on the site
  • The hosting spec site doesn’t want to kick designers off, because they are making money off of their work, so the plagiarized work stays
  • The designers realize the only way to pay rent is to do a mass amount of designs, creating a glorified clip art marketplace
  • After all this spec work they have a portfolio of work that isn’t used by anyone, looks very similar and the market has shifted to using ‘design contest sites’ so the jobs at the end of the tunnel are no more

At the end we have a toxic process.  Designers don’t win.  Clients don’t win.  Spec work companies profit.  How can this not work?  A common argument is ‘designers must evolve.’  Kinda like saying companies should pollute because it is cheaper and they should get with the program, pass of the problem as not your own.

As Americans, we know of these processes (Real Estate or the current political process anyone?).   So we have two paths, a toxic one and a sustainable one.  Stand up against this shit.

  • Designers are devalued. Writers are devalued ($5 for a blog post). Are highly-technical coders and systems engineers the only people who deserve to make a living?

  • You were one of the first people to tell me about spec work, Andrew, and I have to say, I was a little shocked. It just never occurred to me to ask someone to work for free.

  • ryanwanger

    Andrew, where do you put companies like Threadless on the spec work spectrum?

  • andrewhyde

    They have created a sustainable environment and are not spec work (they would be spec if they required things about the designs).

    Similar but done right, everyone wins.

  • beaubrewer

    Hey Andrew,

    Interesting post–I always liked GeniusRocket and thought they had the ability to grow into the eLance or TopCoder of the creative space and really work for SMBs, but I didn't realize that they were using a straight contest model, which I agree does not usually work out well for the suppliers.

    I'm curious if you're OK with a model like Zadby's (and please don't let the fact that we were funded by another incubator change your opinion). We do use crowdsourced video production talent, but we pay on a per-view basis so there isn't a binary or arbitrary contests-model payout. This payout structure attracts video producers with established followings (since they can pretty easily calculate how much money they are likely to make working with us). Perhaps most importantly, we only make money when our suppliers make money and we always give a transparent majority of the budget to our suppliers.

    Is this the sort of crowdsourcing you can get behind?

    Thanks for any feedback,
    Beau

  • andrewhyde

    hmmmmm… grey area there, but that is ok. I can't quite seem to understand the whole model.

    Is it sustainable? If everyone did it, would it still work?

    We love startups btw, no matter what program / who funded you. The more strong and sustainable ones, the better.

  • beaubrewer

    Andrew,

    Whole model is this:

    Zadby sells online video audience to advertisers–for example 1M views in 18-34 demo. When advertisers buy the audience, they give us a pretty typical ad brief on how the brand should be integrated. Financial opportunity (rate per view) is included in the brief.

    We have a cattlecall to our registered video producers for proposals. Those who hit 18-34s and like the financial terms and have a great way to integrate the product into their next video send us a proposal.

    Advertiser approves proposals for creation and we facilitate payment of the agreed upon rate per view of the finished video to producers.

    Does that make sense? Lots of small details, but that's the basic model.

    I'm glad to hear that you are funding agnostic. We'd like to think that we're strong and sustainable–we've done 4 quarters of revenue growth in this economy and worked with a half dozen Fortune 500s to date not to mention some of the best online video producers on the net, so I hope we're scratching an itch for both sides of our marketplace.

  • I've worked as a freelance designer before. I'd never go back because of all the lowball offers from potential clients using spec contest prize costs as a bargaining tactic.

  • lancefisher

    You've made some good points in this article, and I agree with a lot of it. However, I don't think this is an either/or choice. In other words, people who use contest sites to get a logo for a couple hundred bucks, probably would not have hired a designer in the first place. These sites fill a different niche in the market. The designs that come out of them will never be as good as designs from good designers that can spend more time on a project.

    Asking the question, “if everybody did this this would it still work” is not good enough to gauge sustainability. For example, if everybody were plumbers would society still work? No, but plumbers fill a certain need.

    There is a point to be made that contest sites create more interest in custom design work. I'd like to hear from people who participate in these contests. They may have a different view on the subject. It could be a starting point in their career, or a relationship with a client who may want commissioned work in the future.

    There is a need for both contest-type “spec” work, and commissioned work, and I think there is room for both.

  • andrewhyde

    I think there is room for $300 logos, but not even an inch for spec.

  • andrewhyde

    I think there is room for $300 logos, but not even an inch for spec.

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