Whether we like it or not competition is inevitable. It’s the bedrock of our capitalist system – The Free Market. Whilst existing competitors try and out smart each other (Like the BMW/Audi Ad’s below) new entrants will also challenge an industry structure. Schumpeter calls this “Creative Destruction”. In the Free Market customers will pursue the most attractive deals. Kodak famously ignored customer preferences and lost their majority market share. The big record companies have vigorously fought change. They’ve even sued their own customers! The traditional design industry is now being challenged by a new type of entrant – ‘Free Pitching’ marketplace providers 99designs and Crowdspring.
Competition is a bitch
In this difficult environment what should an incumbent industry do about a new emerging structure, driven by a new type of competitor:
- Ignore the challenge
- Fight the new structure
- Adapt to change
As a design customer I’ve been drawn into the ensuing battle. The design industry is up in arms about this new type of supplier. Our website monitoring startup has used one of these new suppliers. The outcome was good and we’ve told others about our experience (p.s. I’m not affiliated with 99designs). When I’ve commented on the web its been responded rapidly by the design community:
- A post referring to our experiences on the Enterprise Nation home startup blog was commented on by designer Damon Trasatti and linked to The No-Spec campaign.
- An email response on the London OpenCoffee Meetup group linked to The Design Institute of Australia and their views on ‘Free Pitching’ and to The Design Council statement.
- Ryan Carson tweeted recently: “@99designs and @crowdspring are forces for evil, not good, in the design industry.”
There is tremendous passion from the design community in fighting the new entrants. A steaming post entitled 99designs: Bullshit 2.0 said:
“Those “savvy clients” just got a shitty design, the winner got some shitty pittance for their effort, and all of the other shitty designers got jack shit for their shitty work.”
Perversely, this huge effort and passion in battling off the likes of 99designs is increasing the new entrant profile. It has become a talking point and thus the message becomes even more viral. It seems an increasing number of design customers are trying these new design marketplaces.
Perhaps this is the start of a major shift within this industry, it could simply be market segmentation or maybe its just a fad. Rather than designers fighting, which wastes time and energy, why not understand the customers changing preferences and change business models. This does not mean doing the same as the new upstarts but do it better. Like BMW customers, clients will always pay more for a better quality of service.
Changes in technology, law and customer preferences that effect market structures are inevitable. Change can either be fought or embraced. Seth Godin recently said:
“viral marketing means that you can spread an idea farther and faster than ever before. It also makes it far cheaper for a competitor to enter the market putting existing players under significant pressure from newcomers. This business model revolution is just getting started. It’s’ not too late to invent a better one.”
Some designers such as Doug Lyon from Mash Interactive seems to be embracing a new business model. Doug: “We do not charge for work , rather, we invite our clients to pay what they can afford”.