99designs CEO: Silicon Valley Doesn't Have A Mortgage On The Next Big Thing

The idea for 99designs spun out of an online forum where time-rich designers would play “Photoshop tennis”, creating spoof responses to fictional briefs for their amusement.

Picture: Office sketch photo / Shutterstock

In 2006 one curious designer who had an actual client brief decided to ask the group to suggest real responses – and offered to pay for a design that he could use.

“The community said, ‘Well we do it for fun, of course we’ll do it for money’,” says Patrick Llewellyn, 99designs CEO. “And he did pick someone – and that’s essentially how our contest model started.”

Seven years later, from its beginnings as a Melbourne start-up, 99designs has paid out over $52 million to designers around the world. They’ve served over 200,000 customers, and raised $35 million in investment two years ago which has funded its expansion into Europe and has it planning a move into Brazil.

The platform is simple: businesses needing design work submit a brief to the community. Any designer, anywhere, can submit a concept in response. The client chooses a winner and works with them through the 99designs platform to completion. Prices are set at the start of the process, so there’s no bidding wars, just the contest between designs.

Tech entrepreneurs looking for design work have been the core business but the customer base is broadening into everything from doctors to landscape gardeners in an era when a clever butcher, baker, or candlestick maker could make good use of an iPhone app.

Some combined megatrends in global business have helped spur the company’s growth. They include the proliferation of broadband services worldwide, the critical importance of digital marketing to small businesses, and the post-GFC economy that has led designers with previously set career paths looking for new ways to make money.

There’s a big rise in designers using 99designs in Britain, for example, where the youth unemployment is around 19%.

“There’s a sense of you can look at where economies are struggling and where designers are finding it harder to find work from the more local sources,” Llewellyn, a former investment banker, told Business Insider in Sydney this week.

Add to this the growing need for design consistency across multiple screens with the splintering of the device market and you have a high demand for visual executions which 99designs meets with its global network. It has 90 staff worldwide – 46 in San Francisco, over 30 in Melbourne, and then smaller offices in London, Berlin, and Paris.

Along with the arrival of cloud hosting, virtual front offices, and cheaper website development, creative marketplaces like 99designs are among the tools endlessly driving down the costs of entry to a market for anyone with an idea they want to test.

“There’s no better time to start a business, right?” Llewllyn said. “You can test, fairly cheaply, your assumption. I think for a lot of business ideas you don’t want to spend a lot of time in a black box – you can quickly get out and test: is there a fundamental need for what I’m providing?

“I think it means that the world’s going to become hyper-competitive, but it also means that opportunity abounds for anyone. I don’t think that Silicon Valley has a mortgage on being the place that produces great businesses.”

“You can test, fairly cheaply, your assumption. I think for a lot of business ideas you don’t want to spend a lot of time in a black box – you can quickly get out and test: is there a fundamental need for what I’m providing?”

On the platform, designers from Silicon Valley to Serbia are competing for the same business.

“Our typical designers in the western markets have been freelancers who use us as an adjunct to their business, or maybe they’re designers in full-time gigs who use this for additional income,” Llewellyn said. “Or, they’re in fact professionals in another field who have a real passion for design.

“When you see the guys coming in from emerging markets, they typically are on the platform a lot more consistently and are significantly more active. That activity doesn’t necessarily equate to higher win rates. The west is still doing very well but they’re just less prevalent.”

“For a designer in Serbia or Croatia we’re now their full-time gig. They spend their whole working day working on 99designs-related projects. They definitely build a customer base that means that they aren’t always doing 99designs work because once they’ve met (the customer) they might go off platform.”

In recent years the proportion of briefs coming out of the US has fallen from 70-75% to 60-65%, as the company has established offices in Berlin, Paris, and London.

So far, it’s been a case of right product, right time for 99designs. The rapid movement of small business marketing onto digital platforms has opened new opportunities from clients in unexpected sectors.

Beyond the tech sector, the client base is now starting to include “white-collar professionals who are self-starters – doctors, dentists, lawyers – and then it moves into the creative field. Lots of bakers, hairdressers, landscape gardeners, photographers – people who are visual. And then now we’re seeing a real strong trend in things like crossfit gyms and personal trainers.”

“Ten years ago, people were maybe thinking about going online,” Llewellyn said. “Small business, now they know they have to be online. That’s the only way they’re going to be found because Yellow Pages is dead.”

The next play for 99designs will be Brazil, a country of almost 200 million people and an economy going gangbusters with GDP growth at around 5% a year.

“It will kind of round out for us Latin America. We’ve already tackled the Spanish-speaking Latin market and we’re starting to build out there. So Brazil, with Portuguese, is the next cab off the rank.

“And from there, I think we’ll continue to evaluate what we’ve done in Europe and we’ll see if some of our more experimental bets like Dutch, for example, if we see the same sorts of gains that we’ve seen in Germany and France, then we’ll start to look at other parts of Europe.”

While there are designers from Indonesia, India, and The Philippines competing for briefs on 99designs, expanding operations into Asia and building a client base there would be a tougher challenge, Llewellyn says.

“I think Asia poses technical challenges – the languages are just harder to deal with and sometimes there a very different design aesthetic. But there are massive opportunities there.”


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