Spec Work is a Ponzi Scheme

Last month in San Francisco I asked Stowe Boyd if I should keep writing about this spec work thing, and his advice was fairly candid:

“If it matters to you, it matters to you, and you can’t hide that.”

I love design.  I was a fulltime freelancer for 3 years.  I have my college degree in Computer Graphics and New Media.  My daily routine is revolves around respecting, critiquing, using and creating design.  Because of this, and a few other interests, I watch trends over quite a few industries, watching them ebb and flow.

A graphic design industry evil has recently been in my feed reader.  To me it cheats the client, the designer, and most importantly to me, it cheats the design.  There is a beautiful process of design, where the client and designer create something amazing through many phases, sketches, meetings and downright skill.  Equal pressure is put on the client and designer, and what comes out can be magical.  I love design, and while it has been quite some time since I have done a paid graphic design job, I find this very important.

So here we are.  Spec work has reared its ugly head, and some prominent web folks have been tricked into it.  Bigger clients like Dictionary.com have been using it too.

What is funny about this is the heavy PR outreach by the spec companies.  They know they have a PR nightmare here, and the ugliness of spec work, once out, will kill their chance at a quick buck.

Those new to the spec work debate, simply the argument is if a client should be able to ask for custom work to be done (such as a logo) with the promise that they might get paid once completed.  Think of making a tshirt for someone with their name on it, if they don’t buy yours, the product you just worked to produce is worthless.

To me, asking a group of people to do something with the motivation of payment, knowing you are not going to pay 99% of them is evil enough to write off the practice. But for others, the rational of “If they choose to do it, it is fine!”  Yes there is a gray area, but you need to look at the ecosystem to make a decision of best practices.

This really bothers me, the parade of fallacies.  Here is a short list of fallacies I see being used to defend spec work:

  • Appeal to Pity “but how do designers in poor nations get portfolios?”
  • Appeal to Authority “we talked to thousands of designers from around the world.”
  • Appeal to Belief “it has been done for thousands of years”
  • Appeal to Common Practice “look at all the projects!”
  • Appeal to Popularity “thousands of designers are doing it”
  • Bandwagon “If it ok for shirts, it is ok for other things.”
  • Circumstantial Ad Hominem “He is just against it because he is a designer”
  • Questionable Cause “clients are looking for a fresh way to act with clients”

My Thoughts on Spec I’ve said this before, but for me, seeing spec work is like seeing someone dump oil down a river drain, and then tell all their friends “I found a new way of recycling that works really well!”  It doesn’t solve the problem (finding quality designers at my price point), it gets a group together with the promise of compensation, and leave the majority of them with a bad taste in their mouths.

It hurts quite a few others in the process and has shown a history to not work out long term (and I am not talking ‘they took our jobs‘ sensationalism).   One can look ad the ad agencies of the 90’s to see the massive collapse of the practice.

So with all of this in mind, I can’t help but compare it to a Ponzi scheme to me (no, not that lovable Ponzi. 🙂  Not really a pyramid scheme, but short sighted, quick results stunt and a long term poisoning of the community.

In my earlier post on a specific spec company, I said:

Design, unlike other industries, is unique in that the intellectual property is put into your deliverable, and when the client asks for you everything you have to put into the project to think about purchasing.  …

It is a major ethical flaw of both parties.

Yes, I am naming both the designers and the clients at fault here.  The designers should value their work while the clients should see that design can do so much more.

I find it very dangerous.

Spec work and a nice Ponzi scheme:

  • Works well short term but destructive the more people that get involved.
  • People advocating it swear it has worked for hundreds of years
  • People advocating it try to get you to not google the term
  • People running them swear they aren’t bad
  • People at the top make the money and the people putting in money/work are left with nothing
  • Encourages lack of quality in workmanship
  • There is a large network that will tell you it is dangerous to get involved

Every time I hear “come rate my contest” I think “get in toward the top of the scheme!”

So let’s get back to that logo done for Charlene Li (who I have enormous respect for).  If her company is successful, she has over a hundred designers with a bad taste in their mouth that might just pop up.  “She got rich and I did free work for her?”  She did, knowingly, use a monetary motivation to have work done for her with the intent not to pay the people doing the work.

The dark and evil side of spec is starting to surface.  Over the last five months I have met five ‘designers’ (yes, evil hand quotes and all) that are doing spec work with the intent of suing down the road.  I would assume these guys are licking their chops when money guys like Paul Kedrosky get into the game.

So What?

Design, as an industry, will go down in quality, appreciation and pay.  Charlene Li found a great designer via spec work.  His stuff is great, and produced a pretty good logo for her for $400 (I would argue that you can’t create a great logo for a company that you have only read a paragraph about).  Say Charlene wants to do another project with him, what do you think the rate will be?   $400, or less.

What happens after about 5 years of this being common place?  If 100 people spend 2 hours to ‘compete’ for a $250 logo, that means the average hourly is $1.25.  How many logos do you have to produce to buy a font? Buy PhotoShop?  Buy a MacBook?  Pay rent?  To make it buy, a designer would have to have a template that each client gets to see their name by.  What happens when a designer starts winning with the same design?  What happens if it is similar to another one submitted?  What happens when the company tries to do a redesign down the road?

Yes there is a gray area.  Yes both parties choose to do it, but just like dumping oil down the drain, it is the responsibility of everyone in the process to make sure we adopt sustainable practices.

Spec is similar in practice to hiring a employee on commission (work for free, and get paid a generous % of revenue you create).  If commission was done on spec work, the employee would hand in their sales, and the company would decide if it is good enough to pay them.  See the difference?

A casual observer will wonder why this is such a big deal.  Simply, it is a big deal because recently, with the rise of the authentic community (think twitter), a few opportunists have popped up to try to profit off of spec work.  It has been seen as preying on the designers, having their business be built up on the unpaid work (while bringing them in with the thought of getting paid).

Before publishing this, I shared it with a friend, who responded, “Good, but hasn’t the whole Ponzi thing gone away?  People know it is bad, right?”

Last months Business Week

Wall Street trader Bernard Madoff allegedly defrauds the rich and famous out of tens of billions of dollars. Minnesota businessman Tom Petters allegedly fleeces hedge funds out of $3.5 billion. And socialite New York lawyer Marc Dreier may have duped some hedge funds into giving him hundreds of millions of dollars for an apparently bogus real estate scheme.

Oh, we have years to watch spec work blow up.  There of those of use who care about design, and are speaking up and warning off the practice.  I see a house of cards being built up, a developer cashing out on it and nobody warned them of the upcoming wind storm.  The warnings are now, whether the community comes to respect the ecosystem, respect their neighbors and friends (I’m not talking about just design here) is yet to be known.  Part of me wants to continue writing about this, part of me wants to say ‘I did my part’ and get some popcorn.

So what now?  See someone using spec (with the community sites like 99 designs or CrowdSpring)?  Forward them this post.  Or write your own.  We all deserve better.

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  • Rachel

    I was sincerely hoping your “they took our jobs” link was going to a South Park clip. I was not disappointed. 🙂

    Also, from the standpoint of someone in a neutral position, your points are convincing. I agree with you.

  • It's an interesting conversation and a complex discussion. I'm interested in what more you, Jeremiah, and others have to say about it. The discussion clearly has broader applicability than
    simply a contest for graphic designs.

    One thing that threw me off a bit was calling this a Ponzi Scheme. I could see calling the contests a “con job” or maybe a “racket”, but I don't see an obvious connection between contracting for designs and fraudulent investment pyramid schemes.

    The amazing thing about Madoff's scheme was the large number of years that he did pay off investors before the downturn had too many people calling for their assets.

    This is a minor quibble, and maybe I just don't get it.

  • I'm curious how it's different from shirt design sites, don't designers submit their shirt hoping it's liked enough to be made into a shirt, and the 'losers' get nothing?

    As a non designer I don't get it. As a developer it feels similar to things like eLance. “Be cheapest and the job is yours” there's no discusion of skill or past success, be cheap, get the job.

    I'm also curious if this is different than traditional design. I mean if I needed a full branding campaign, I'd hire an agency, but if all i need a logo, why pay agency prices for that? Let's be honest, most agencies drink their own kool aid way too much. I don't care if you came up with the talking VW, i just need a logo and don't have VW's budget.

    Tough call for sure. Is Spec work is evil, is any crowdsourcing ok? what about “let's write a book on twitter, everyone submits 140 chars” is that evil? those writes probably won't get a dime, but they contributed, right?

  • te

  • Andrew –

    As a freelance professional, my experience is that the best work is produced when an employer values my expertise, and I receive equal pay for my work in equal time.

    To me, spec work is a violation of these simple rules. In that way, it doesn't best serve either the employer or the professional. It does not build great companies, nor great portfolios.

    Evil or not, I think it's counter productive. Some are willing to do it – and that's fine by me – but I'm glad I'm not one of them.

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  • Nice work. I found it when Ross from cs (I won't advertise the whole name) tweeted it and said you had your head in the sand, more or less. I agree with you – not him – for the record.

    Looks like a duck, quacks like a duck, it's a freakin' duck, Ross.

    Creatives need to do more to educate businesses that design is worth investing in, and stop being pushed around by doing spec.

  • This is a timely post, as I'm considering having a real designer help me out with my website. Thanks, now I have to feel guilty about trying to be cheap! I understand all of your arguments, and probably agree with them, but at this point, the payback on a redesign of the site approaches infinity.

    Could I ease my conscience by promising to pay a local designer market rates to do a redesign somewhere down the line (after getting a “cheap one”) once the site can afford to pay for that?

  • Hi Ryan, I appreciate your understanding of us creatives wanting to maintain the integrity and value of our profession.

    I will tell you this: I designed at least two sites and three brand identities last year that went through craigslist or somebody's little brother first. You're right: redesigns are expensive. Do it right the first time and you'll be months ahead. Find a flexible designer and work out a payment plan, offer to do some trade, etc.

    Just my 2 cents… good luck to you.

  • andrewhyde

    It is one of my favorite episodes.

    I hope my message is rooted in sustainability.

  • andrewhyde

    I'm comparing the audiences, those who participate, and noting how similar (and disastrous) they can be.

  • andrewhyde

    Huge difference, it is all about intent and the result.

    I can submit my own artwork to a shirt site. It doesn't have to include anything, and my main motivation isn't money, it is design and community.

    What you get from that is a great push in the quality of design and the community around the brand.

    This make sense?

    Crowdsourcing can be done in a way where it is a win win for everyone. Have you read Lessig's Remix? Fantastic book on this issue.

  • andrewhyde

    Spot on comment.

  • andrewhyde

    The best work come out of collaboration. I love the end result when this is done by two great parties.

  • andrewhyde

    It amazes me that your website and logo can reach so many, while you as a person can only shake so many hands. Amazing branding can lead to make your project and company so much more.

    I saw the tweet, thought it was funny. Quack.

  • andrewhyde

    If you know what you want, the project can actually be quite cheap. I should write a series on this. Startup and bootstrap doesn't mean you can't get a kick ass project.

    I'm not saying design has to be out of reach expensive.

    I would do it right from the start. Let me know if you need some local contacts.

  • You quote your own line from the CrowdSpring post two months ago — “Design, unlike other industries, is unique in that the intellectual property is put into your deliverable, and when the client asks for you everything you have to put into the project to think about purchasing.” In all that time, no one has mentioned this isn't a complete sentence. The sentiment you're trying to express here is lost on me. Could you clarify?

    The rise of crowdsourcing is part of a much larger cultural movement that is driving the cost of almost all creativity toward zero. The profession of design is probably as endangered as most other creative professions. There are ways to survive in that world, but everyone must find his or her own way.

  • I'm not into doing any kind of spec work. Find someone else.

  • nancypub

    Spec work is exploitive, in my opinion, and the folks I know who have used it for their projects get on mini power-kicks. They love all these people begging for their business.
    I am not a designer, I am in PR. But I know the importance of a brand and what goes into cultivating it. I also know that nearly every client at the ad/pr agency I used to work for would come in with a crappy $300 logo done by their brother in law in PowerPoint and ask us to re-do it. In the long run it is the buyer who suffers by trying to do it on the cheap. (Of course I, I admit that fiascos like the Tropicana and Pepsi redesigns don't help my position one bit!)

  • I'm not sure where I stand on this. As a coder and author, I would certainly never provide free copy or snippets in order to be vetted. On the other hand, I've been a consumer of design services (either hiring subcontractors or partnering with a design firm) and more often than not I've experienced a lot of pain. Most of the designers I've worked with are preening creative prima-donnas with very little understanding of business. They may as well have created a logo at random than talk to my client.

    I warrant that this is probably my bad process for hiring creatives. Thing is, I don't want to learn how to talk to creatives, manage them, or figure out which button I need to mash to bolster their egos. I have to do all that with developers and writers (who can also be frail and fickle), so my bus is full, thanks.

    Maybe the crowdsourcing thing is just the market telling designers to wake up, change process, or something? Thoughts?

  • The SXSW panel on Spec Work is at 10am this Sunday morning. Jeffrey Kalmikoff of @threadless is on the panel; this will surely get discussed in more detail there.

    @jeremiah was just tweeting about Andrew's blog entry; he talks about his position at the end of http://is.gd/mQFe . This Forrester analyst is also on the Sunday SXSW panel.

  • We recently redesigned our site (<a href=”http://www.the42ndestate.com/”The 42nd Estate) and didn't once consider spec work. If a designer doesn't have a portfolio and wants to submit a sample piece to get a project, fine. However, as a client I'd much, much rather check out a few portfolios, pick the designer whose personality and style most closely match ours, and hire him/her to do the work. Once hired, it's up to the client to convey what they want, and for the designer to translate that idea into an actual design.

    Truthfully, we had a bunch of rough ideas on what we wanted, but the designer we hired (the uber-awesome Andrew Lindstrom), made an initial draft, multiple revisions, and ended up turning our ideas into a fabulous design that simply put would not have been created out of spec work. If you want a quality design that is customized to you/your company I don't see a way around hiring the designer upfront. Maybe there's a way we could have gotten the design done cheaper but there's no way it would be such a perfect fit to our brand. There's just no way. By hiring and paying him upfront, we were able to be confident that he would focus on us and if he didn't we had a proper legal recourse to pursue. I just don't see how a designer could focus on the client 100% without being paid upfront. If I was the designer I would be constantly worried that the design wouldn't be good enough to get paid and thus the designer, client and the end product would all suffer.

    When you're hiring a designer, you're not just paying for the end product but also the designer's expertise and advice DURING the creative process. You can't go from 0% to 100% in one fell swoop.

    I have absolutely no complaints about the process and think it works perfectly IF the client focuses on conveying their ideas to the designer. When doing spec work, you can't give specific custom directions to each designer and in the end you end up with a generic product.

    So take it from an extremely satisfied client, don't do spec work!

  • Bravo Andrew! Although comparing spec work to a Ponzi scheme might be a stretch for me, I do agree with your comments and believe you hit the nail right on its head. Having been involved in the creative industry as a graphic designer and art director for 15 years I have found it is impossible to provide a client with the desired results when not doing the proper due diligence on the front end. I have seen more bad results because of spec creative and have fought, and continue to do so, my entire career.

    I also believe that spec work is a major insult to all those creative people who recognized they had talent, went to school and put in some hard work to gain and refine their skills in our profession. It amazes me that many people feel the can call themselves designers just because they think it's the cool thing to be. What if anybody could call themselves an attorney and offer their “spec-services”? Of course this wouldn't happen because they would lack the credibility, the background and most important a document that shows them having passed the bar exam, an industry standard. Hence most people not arguing the hourly rates for attorneys, despite the fact they might think they are too high.

    However, I do believe the design and creative industry is to blame for this. I can't fault companies for asking, but I can fault designers, studios and agencies for offering these services. I could go on about this for days on end and would welcome this dialogue, but in the end it's simple “spec work = loose loose situation for everyone involved.” Thoughts anyone?

    Keep up the good gospel Andrew!

  • The difference is that ponzi schemes are clearly illegal while spec work is legal.

    A ponzi scheme must hide its mechanism to be effective, but spec work is clearly stating how its mechanism works upfront.

    Any attempt to equivocate the two activities may work on an emotional level but fails on a rational one.

    A far better equivalence is the insanity of participating in a MegaBucks lottery: many invest their money, but a vanishingly small number of people win. And, as a @PRIthislife episode demonstrates, the odds are mightily stacked against even the few winners.

  • We recently redesigned our site (The 42nd Estate) and didn't once consider spec work. If a designer doesn't have a portfolio and wants to submit a sample piece to get a project, fine. However, as a client I'd much, much rather check out a few portfolios, pick the designer whose personality and style most closely match ours, and hire him/her to do the work. Once hired, it's up to the client to convey what they want, and for the designer to translate that idea into an actual design.

    Truthfully, we had a bunch of rough ideas on what we wanted, but the designer we hired (the uber-awesome Andrew Lindstrom), made an initial draft, multiple revisions, and ended up turning our ideas into a fabulous design that simply put would not have been created out of spec work. If you want a quality design that is customized to you/your company I don't see a way around hiring the designer upfront. Maybe there's a way we could have gotten the design done cheaper but there's no way it would be such a perfect fit to our brand. There's just no way. By hiring and paying him upfront, we were able to be confident that he would focus on us and if he didn't we had a proper legal recourse to pursue. I just don't see how a designer could focus on the client 100% without being paid upfront. If I was the designer I would be constantly worried that the design wouldn't be good enough to get paid and thus the designer, client and the end product would all suffer.

    I have absolutely no complaints about the process and think it works perfectly IF the client focuses on conveying their ideas to the designer. When doing spec work, you can't give specific custom directions to each designer and in the end you end up with a generic product.

    So take it from an extremely satisfied client, don't do spec work!

  • Frank Brown

    Simply stating that you are about to do something unethical/unfair/inappropriate does not make it any less unfair. To use Andrew's analogy, announcing, “I am going to dump oil down the drain” before you do it doesn't make it ok to do it just because you gave a warning. Telling someone, “I am only going to pay you if I like the work you do”, doesn't make it any less ethical just because you told them up front. If all we end up with as designers is a situation where we are hoping and praying our hard earned labor is compensated for, it will be a terrible state of affairs. What other industry has a contingency based economy other than litigation, which is as corrupt as can be? As for the lottery analogy, it would be hard to argue that many people earn their livelihoods from playing the lottery. The risk is actually MUCH less – despite the low odds. Paying $10 for a chance to win $1,000,000 is not very risky if all you stand to lose is $10. Working hard at what you do for a living and hoping you get compensated for it has a much greater impact.

  • i see spec work as being simply one side of a coin: the other being some of the 10k logos i've seen built by local (boulder) firms. i'd say asking for a spec work is a rational reaction to getting gouged by a few exorbitant vendors. the real question is how and where to find qualified professionals, and how to work with them in a way that produces the results required. if someone solves this problem i'm all for damning the outliers but, until that problem is solved generically i think it's reasonable to accept that some practices will take advantage of clients, and some of designers.

    i guess i'm saying that spec work seems like a symptom, not a cause, of a landscape that is difficult to navigate for any normal human being that's not in the 'club'.

    finding a good designer is very difficult. finding one that is good, available, and affordable even more so. this is the root cause behind asking for spec work to be done and prevention lies in examining these causes, not labeling spec work in general.

    my 2cts.

  • I understand that saying pre-announcing one's intent to do something unethical/unfair/inappropriate does not justify it. That's a straw man. My objection was Andrew's equivocating something that's clearly illegal with something that is clearly not illegal. The claim may buttress an emotional argument, but it undermines a rational one.

    I agree that few if any could make a living on the lottery. OTOH, that does seem exactly comparable: people here are saying that one could not make a living solely by doing the due diligence on each of these contests for spec work.

    As an aside, people are spending far more than $10 a year on state lottery games, and lower incomes are spending a disproportionate portion of their income on such games. If one views state lotteries as a tax, it's essentially the most regressive one on the books.

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  • Hi Andrew,

    I'm glad you went ahead and voiced your concerns. I've been doing likewise, even though there's a little voice saying, “your readers will be getting tired of this”. It's your blog, and you should talk about what's important to you.

    Well written.

  • Cat

    'seeing spec work is like seeing someone dump oil down a river drain'

    Good one.

  • OT to this discussion but for Frank. From http://www.motherjones.com/media/2009/02/books-… : “Americans buy more than $57 billion worth of lottery tickets a year. That works out to $500 a household—more than is spent on movies, music, and books combined.”

    Remember: that's the average. Many households are spending more than $10 per week on the lottery, and a large number of those low-income households cannot afford this most unfair of taxes.

  • It's another good analogy for imagery. Imagine Charles Ponzi dumping copious amounts of used oil down the drain in his house from his ill-gotten gains….

    The analogy breaks down when you look at the law. Dumping oil down the drain is illegal in many states. I found documents on the ny.gov website clearly stating it was illegal there. OTOH, spec work is legal.

    Andrew, are you saying you'd like to see spec work be illegal?

  • Danno

    You should be on the SXSF panel on Sunday arguing about “crowdsourcing” (or, rather, the design contest business model) instead of David Carson — who may or may not be the single voice out of the four who will argue clearly against this. But, since the panel was created and stacked by the crowdspring co-founder, I'm not terribly hopeful.

    Besides, as we all know in politics — when you're completely in the wrong, making the issue a wash is really a huge win.

    Below are some of my bulletpoints on the issue:

    Six reasons Design Contests Suck (for Creatives)!

    1. Nobody Competes Based on Skill and Talent:

    The rhetoric is resonant. Open access, vast untapped reservoirs of talent, fair and level playing fields, the Darwinian, blood-pumping nobility of open free-market competition. Pure 100% uncut meritocracy. It’s like the Olympics. Do you have the drive, the discipline, the skill? You got what it takes? Step up!

    Except here’s where it breaks down: The judges and refs are there only by virtue of having paid a small sum for the privilege. Imagine a hockey referee calling the shots who’s never even put on ice-skates, let alone witnessed a live match before

    Now imagine how well random “contest judges” generally do.

    But now imagine what you can possibly get away with (see “advanced money-making techniques,” below).

    2. Contest Judges Are Just No Judge:

    Sure, it doesn’t pass the smell test — who ever heard of a “contest” judged by a random “buyer” who pays to be a judge? So let’s call a bunch of baloney a bunch of baloney. Contest holders are just no judge.

    Or expert visual communications pros. Or experienced art directors. Or brand managers. Or marketing gurus. Or production specialists. Nor are they people aware of the value of harnessing a trustworthy, talented, experienced pro to help shape and advise their visual communications decisions. Because they're a self-selected group who simply want to pick-out a brand identity (or website) within the week, cheap and fast, from some anonymous soul on the internet.

    Most often, these contest judges have little experience, training or even professional interest in visual communications or design. They’re regular people whose knowledge and experience lies entirely elsewhere. Thus, they’re often easily trickable. Trip-up-able. Bribable. Distractable. Glitz, glam, filter and gradient can hide a lot of real crap. A few can identify basic aesthetic concerns but are unable to visually differentiate their business or read into deeper visual communication issues.

    3. Rights Schmights

    So, you win a little. Congratulations! You automatically forfeit your rights — any and all your rights and copyrights — to all the intellectual property you’ve just created, for ever and ever, into perpetuity and infinity and beyond.

    “So what?” You shrug. “Big whoop.”

    If your work is valuable, these are very valuable rights. So you’re probably right, no big deal. And besides, most contest entrants aren’t even aware that some of these rights are not simply given away for nothing in the design profession.

    Here’s a passage from crowdSPRING (a large design contest site):

    “Buyer shall be the sole and exclusive owner and copyright proprietor of all rights and title in and to the results and proceeds of Creative's services in whatever stage of completion and Creative hereby irrevocably transfers all right and title under such works-made-for-hire to Buyer. If for any reason the results and proceeds of Creative's services hereunder are determined at any time not to be a “work made for hire”, Creative hereby assigns to Buyer all rights to such Work, including but not limited to all other copyrights.”

    Here’s someone ranting about why the above contract is such a raw deal: http://www.graphicpush.com/work-for-hire

    4. Know When To Hold 'Em (and Never Ever Fold 'Em)

    Sure — you dump in loads of time and effort, pressing the “submit” button over and over, day after day, contest after contest. The voice in your head chatters on, “I SHOULD win. I might win! This could be the one! All this time! All this effort! The streak’s gotta end! Roll the dice! Aww…bad beat. Bad beat. Just one more time!”

    Embrace your inner gambler’s compulsion. Those who never ever ever win, might just quit the game. Fortunately, it’s a proven fact: behavior is strongly reinforced when you randomly win a minor payoff here and there.

    5. Fast-Junk-Food

    If you aspire to be an excellent chef, you don’t train by working the fry vat at McDonalds. You’ll stagnate. But you’ll also get really good at slapping pre-packaged, formulaic crap together superfast.

    At critical stages of learning, those few with talent and potential benefit from in knowledge and experience from people who’ve been around. It accelerates understanding, hones talent and increases effectiveness. Blah blah blah. But who wants to be pushed to new insight and strength? Internships? Summer jobs? Teachers? Training? That’s like work. Better to just stay in the cozy computer room, updated on the grab-bag of software tips and tricks that allow you and everyone else to recreate a quick, mediocre facsimile of familiar-looking styles, trends, fads and looks. And flip flip flip those pixels.

    Remember, with such a low percentage time-effort-payoff ratio, and lack discernment on the part of the random cheap buyer — you’ve gotta be quick at the pixel-vat. Flip those designs.

    6. Don’t Forget the Joker Principle:

    Heath Ledger’s Joker has some great lines in the new Batman film. One of my favorites is, “If you’re good at something, don’t do it for free.”

    Win or lose, you’re creating custom design — and value — on behalf of the for-profit contest site. They sound nice and keep forums civil and make you feel cared-about. In return, you aren’t paid wages, benefits, sick-leave, vacation-pay, Holiday bonus or health insurance — whether you work part-time here and there or slave away 8 hours a day developing and executing custom design services on behalf of the site’s client-buyer-judges.

    If you’re not good at something, you’ll have to do it for free. Either way, just don’t be a sucker. As the founder of crowdspring notes,

    “Designers working on crowdSPRING often don’t have access to clients – they’re stay at home moms, students, retired designers, designers just starting out, disfranchised designers from the “corporate” world, etc. They have difficulty competing on Elance because there it’s about the price and it’s tough to compete on price with $25 logo design from India. And who’s going to hire a student in the traditional model?” http://www.37signals.com/svn/posts/1253-the-nos

    ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

    Is it even “Crowdsourcing”?

    The reason for sourcing crowds is clear: “a diverse collection of independently-deciding individuals is likely to make certain types of decisions and predictions better” than any single individual or even a single expert. This is according to one of the greatest examples of crowd-sourcing, Wikipedia.

    In short, the theory is this: sometimes crowds, taken in aggregate, predict and decide better than individuals — even expert individuals.

    It’s clear from the outset — the design contest model simply isn’t crowdsourcing. Yes, it uses random people from anywhere with an internet connection. But it has nothing to do with harnessing the powerful predictive and decision-making “expertise” of crowds. It’s random outsourcing, not crowdsourcing.

    The crowd’s collective wisdom is not harnessed to decide design contests. Or anything else of consequence. The solitary arbiter and decision-maker for each contest is the random paying “buyer” who, by virtue paying a small fee, becomes a “judge” and makes the contest decision alone.

    Wikipedia, for example, is a non-profit enterprise made up people who work collectively to ensure a quality encyclopedia of free, openly-accessible and easily-supplemented information. Design contest sites are for-profit enterprises made up of a web “community” of people competing directly against one another to win small sums of money.

    :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

    Six Reasons Design Contest Sites Suck (for Buyers)!

    Two-Faced Marketing:

    One the one hand, these sites are pitched to “creatives” as great practice for amateurs, hobbyists, retirees, stay-at-home moms, newbies, students, and anyone incapable of otherwise finding clients or commanding professional wages. (see The Joker Principle).

    On the other hand, these sites pitch their services as offering excellent quality, professional-level design solutions for potential buyers. Somebody gets bamboozled, quality suffers and mediocre (but rapidly churned-out) quantity reigns.

    When the crowd you’re sourcing is (regardless of their self-proclamations) made-up of random folks who can’t otherwise figure out how to earn a living as designers, that’s precisely the level of experience, insight and talent, skill and quality the buyer pays for. A buzz-wordy business model doesn’t change that.

    Your New Logo May Have Fallen “off the back of a truck.”

    It’s inevitable. Contest sites are wellsprings of copied, “inspired-by” and flat-out stolen intellectual property design work already owned (and copyrighted and perhaps trademarked) by existing companies and individuals. The problem is, there’s no real way to stop it, because you’re not working with an experienced, trusted, talented partner guiding you through the process of creating, selecting and trademarking unique and top-notch solutions — you’re working with a random group of anonymous “contest entrants” from anywhere in the world with an internet connection. Each with a powerful incentive toward speed and quantity — certainly not time-consuming labor of creating truly unique, appropriate, trademarkable, quality custom work for each instance of so little chance at so little money.

    The “quick-n-dirty,” open-access, all-on-line model virtually guarantees that some will copy-paste and live-trace and rip logos from designers’ online portfolios and vast logo-collection sites such as logopond, logolounge, logomoose, logo faves and logo design love, in seconds flat. It’s terribly easy, with relatively low risk of recognition or exposure (except from random fellow contest entrants also jockeying to win) — until you put the logo out into the wider world, gaining increasing popularity, success and recognition…and someone spots the rip-off.

    Like, for example, here: http://www.thelogofactory.com/logo_blog/index.p

    No Real Guarantees, No Real Protection:

    Don’t forget to read the policy fine-print before you get slapped with a lawsuit. Crowdspring, the current top design crowdsourcing site, expressly does not even guarantee the legality of its creative services:

    “We have no control over and do not guarantee the quality, safety or legality of Creative Services, the truth or accuracy of project listings or member information, the qualifications, background, or abilities of members, the ability of creatives to deliver Creative Services, or that members will complete a transaction.”

    So cross your fingers and hope you didn’t accidentally select and distribute a logo that was created using unlicensed, stolen fonts or illegally made on pirated software. (When you think about it — how do so many of these people afford professional industry-standard vector, pixel and layout software which runs into several thousands of USD — especially on the monetary prizes they’re slaving over? What about the thousands of dollars worth of professional fonts from top foundries flying around? (It would take months and months of solid wins for many participants to merely to get out of debt and back to zero, if they’re using these resources legally).

    You’re exposed to liability and legal risk:

    First, you’re exposed to lawsuits for copyright violation (if your random winning “contest entrant” happened to have been “inspired” by a pre-existing logo from a company, site or individual.

    True, you probably won’t find out for a few months or even years — but by then the damage can be irrevocable. For added fun, logo and web-site “chop-shops” are all over the net, preying on the unsuspecting. You can easily be sued when a design is so close to an existing logo that it encroaches on the intellectual copyright of the original. Intentional or not. Aware of the infringement or not. Same with a website.

    And don’t forget the ever-present threat of lawsuits from font foundries and software corporations if you happen to own and distribute a work created using stolen or pirated goods. All in all, it’s a nightmare liability risk.

    You Get Screwed Come Production Time

    The inexperience, un-expertise and lack of production knowledge on the part of your “creative” is invisible to most people. But it will cost you money. Lots and lots of money. Especially when you hand over the files you were given to the printers or web-builders.

    Maybe your files are incorrectly formatted. The color gamut is out. Separation plates aren’t clean. Preflight shows embedding trouble. Trapping is off. Overprinting is wrong. Fonts missing. Spots and varnishes? Double-sided five-color business card runs? Vast sums can be saved and lost depending on how much your random “creative” knows — not just in terms of avoiding easy-to-make production mistakes, but at cleverly saving you money at the same time.

    “It’s a number’s game,” and a Spam-a-lot Business Model

    Contest sites are filled with visual spammers. Churning out metric tons of quick-crap and seeing what sticks. Why? It’s a numbers game. The chances of winning any individual contest are very low, whether your solution is appropriate or not, excellent or not, poor or not, derivative or not, unique or not. (see Judges Are Just No Judge).

    “Creatives,” in the quest for higher return on investment (and greater efficiency and lower per-contest costs in time and creative energy) — will regurgitate old failed entries. Make quick tweaks to existing solutions. Have fifteen contests going at once. Barely read the brief. If a logo doesn’t work for one contest, just re-use it for some others. Heck, if it does work for one, reuse it for some others…

  • Perhaps something different is happening, Andrew.

    In a world bursting with designers and low-cost low-distance collaboration solutions designed to support spec work, perhaps the value of design is dropping. As a result, the traditional modes of finding, selecting, and working through design concepts with a designer are under drastic attack by a new mode.

    Once upon a time, type was set by hand. Once automated technologies for automatic typepsetting came along, the old workers were obsolete. However, because of strong unions at the time, some typesetters continued to get paid for years, for doing nothing.

    Designers — for better or worse — are not unionized, or more generally, are not organized into a guild or professional association. As a result, like other workers confronted with radical transitions based on technological advance, they will have to find a new way of competing on this pieceworky universe that is popping up. Or get another line of business.

    And the ethical stance you are taking is not crisp and clear. Don't buyers like Paul Kedrotsky and Charlene Li have a right to invite designers to compete for their work? Who is harmed?

    Instead of buyers (and designers, too) spending long periods of time assessing designers based on their portfolios or recommendations from others — often with bad results, anyway — spec work mediated by tools like 99designs allows everyone to get down to the actual design work, without a lot of fooling around.

    So designers might have to become adept at creating eye-catching design ideas quickly, rather than cultivating a deep understanding of a client. So, ok. A new basis of competition, and a new economic reality.

  • Danno

    …perpetuates the common mistake that poorly positioned, often-doomed businesses make:

    A business identity, it's brand promise, it's differentiation — IS A PRETTY LOGO WITH A PRETTY SHAPE, perhaps related to the client's industry.

    Real designers help stop businesses from tumbling off this 'blanding' cliff, all the while misapprehending what visual communications is and where its power can be harnessed for their needs.

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  • I see it as a part of the sales process. In enterprise software sales, I used to have to invest dozens of hours into RFP's, customized demos and sometimes even prototypes. As a social media strategy consultant, I've given clients dozens of hours of essentially free consulting trying to get the larger sale.

    I fail to see how this is significantly different. It's the nature of competition. It's especially an issue when time is a factor. Do I want to spend weeks going through multiple iterations of ideas with one designer to finally get to something that maybe I'm happy with? Or do I get multiple designers to compete for my business? And the one who gets the closest, I hire for additional work?

    Sorry, but I see spec work as just part of the sales cycle, no different from what consultants and enterprise software salespeople have been doing for years — decades, even.

  • I heard the stories long ago, but I see no references when googling. As I heard it, the practice was called “ghost typesetting”. It happened in a small number of newspapers in NYC. The big retail stores were giving camera-ready pages to the newspapers, but contracts forced the staff to originate all material published in the paper.

    The solution was to use a copy of the camera-ready pages as a dummy, create an entirely new page from scratch, have it signed off, then destroy it. The original from the retail store was then run in the paper.

    I can't quite imagine what the employee reviews or morale was like for people who did this. Wonder if they tried to “improve” the originals, or they just ground out their work. All in all, it was a nightmare for creativity.

    If there are any online references to this ancient practice, I'd like to hear about them.

  • Bruce Sterling refers to it: http://www.deadmedia.org/notes/40/406.html, and there seems to be a lengthy exposition of the strkie in The Postwar Decline of American Newsparers, 1945-1965 http://books.google.com/books?id=hscmK3nWZ4cC&p

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  • Jerry

    > knowing you are not going to pay 99%

    This is true in any instance, but you need to think more broadly than this. For a designer with talent, they will win some and lose others. Over a year (approximately 2000 hours), they might be able to submit 1000 ideas. A really good designer might win 200 of these contests, at say $500 each. SO, even though they would be “working for free” 800 times, they would still pull in $100K. On the other hand, a really bad desinger would win very little, and would receive very little compensation. Over time that bad designer would probably leave the business for career opportunities that are a better fit for them.

    In the end, the good designers will win out over the poor designers, and will be compensated for their work.

    Note: this does not address the question about whether the overall level of compensation for designers will go down. I think it will, but that is what happens when your world opens up and competition scales up dramatically. Designers are facing the same challenges that others are facing when they have to compete internationally for work.

  • Jerry

    Lotteries are a tax on the statistically ignorant.

  • Jerry

    I think this post shows that there will be a range of business models embraced by the markeplace. Some will want a traditional client/designer relationship, some will prefer a crowdsourcing approach. Both will exist.

    That being said, if one camp spends a lot of effort attacking the other camp, they will look like asses and long term will hurt themselves.

  • Jerry

    > “If you’re good at something, don’t do it for free.”

    If you never win, sorry to tell you this, but you aren't any good.

  • Steve

    The analogy also breaks down when you consider why dumping oil down a river drain is immoral. Pouring oil down a drain is immoral because it damages what economists call a “public good” — something shared jointly by everyone — specifically, the environment. What public good is being damaged when a designer willfully chooses to submit a design to CrowdSpring/99designs fully knowing they only have a chance at winning? The thing that is damaged is the wages of professional designers because increased competition lowers wages. But the market wage of designers is not a public good. This is just good old-fashion competition. Designers may say that the expectations of customers have been “damaged” because they now expect designers to do spec work. But this is only “damage” from the perspective of one special interest group — professional designers. From the public's perspective it is just more aggressive competition — no public good has been damaged. So the “oil down the drain” argument is fundamentally flawed.

    The “oil down the drain” analogy only holds when you assume that your entire audience is made up of professional designers. But that is kind of ego-centric.

  • Steve

    Saying Spec Work is a Ponzi Scheme is just plain silly for anyone who knows what a Ponzi Scheme is. You're just using that phrase because Madoff and Ponzi Schemes have been in the news recently.
    If it was 2001, your article would have been titled, “Spec Work is Terrorism.”
    If it was the 90's, “Spec Work is Unsafe Sex.”
    If it was the 80's, “Spec Work is Acid Rain.”
    If it was the 70's, “Spec Work is Watergate.”
    If it was the 60's, “Spec Work is Vietnam.”
    If it was the 50's, “Spec Work is Communism.”
    If it was the 40's, “Spec Work is Nazism.”
    If it was the 30's, “Spec Work is the Great Depression.”
    “Spec Work is <insert latest hot-button issue>.”
    When you write “Spec Work is a Ponzi Scheme” you just look silly and undermine your own credibility!

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