One of the problems with sites like 99designs and crowdspring, in particular, is that they ask designers to work for free — or “bid” in their parlance on very small projects.

As some comments note, this contest or auction approach works for very large and publicly funded projects where large studios with resources compete for lucrative contracts.

This model breaks down for freelancers though. It is simply not sustainable for freelancers to earn a living working for these sites. The risk of not winning well outweight the benefits of winning, in my mind.

Let's say a typical project-contest pays $1,000 and there are 10 submissions from 10 freelancers each having worked 20 hours. One freelancer wins the contest and is paid 1,000 for those 20 hours or $50/hr.

To begin with, $50 is not a stellar rate, particularly if the freelancer is working less than 100% of the hours available in a given workweek/month/year.

Second, the chance of losing out on a project in many cases, as in the example, is very large (90% in my example) thus making the expected return (a concept borrowed from on basic finance) only $100 (10% x $1000).

Thus is this average freelancer devotes 200 hours to 10 different contests, winning 1 contest, then his or her expected return is only $1000, or $5/hour.

This is a lousy situation for the freelance designer and comes close to exploitation or thinly disguised slavery.

What this means is that good designers will simply not work under these conditions.

What's left over are a cohort of designers that either don't think about their work in order to do it more quickly or plagiarize work in order to do it more quickly, and neophytes trying to gain experience. There might also be a number of designers from foreign countries where the exchange rate makes the expected payoff much greater.

If I am a company and am entrusting my brand to someone, I am not sure that any of these make me feel very confident and the best option seems to be the foreign based designer who has the greater incentive to do good work.

I recently saw one of these sites boasting that their top earner was a Romanian that had netted all of $25,000. That is probably a handsome salary in Bucharest but will not pay the bills for more than one person in Cleveland.

In design, as in life, we get what we pay for.

http://www.miguelbuckenmeyer.com

One of the problems with sites like 99designs and crowdspring, in particular, is that they ask designers to work for free — or “bid” in their parlance on very small projects.

As some comments note, this contest or auction approach works for very large and publicly funded projects where large studios with resources compete for lucrative contracts.

This model breaks down for freelancers though. It is simply not sustainable for freelancers to earn a living working for these sites. The risk of not winning well outweight the benefits of winning, in my mind.

Let's say a typical project-contest pays $1,000 and there are 10 submissions from 10 freelancers each having worked 20 hours. One freelancer wins the contest and is paid 1,000 for those 20 hours or $50/hr.

To begin with, $50 is not a stellar rate, particularly if the freelancer is working less than 100% of the hours available in a given workweek/month/year.

Second, the chance of losing out on a project in many cases, as in the example, is very large (90% in my example) thus making the expected return (a concept borrowed from on basic finance) only $100 (10% x $1000).

Thus is this average freelancer devotes 200 hours to 10 different contests, winning 1 contest, then his or her expected return is only $1000, or $5/hour.

This is a lousy situation for the freelance designer and comes close to exploitation or thinly disguised slavery.

What this means is that good designers will simply not work under these conditions.

What's left over are a cohort of designers that either don't think about their work in order to do it more quickly or plagiarize work in order to do it more quickly, and neophytes trying to gain experience. There might also be a number of designers from foreign countries where the exchange rate makes the expected payoff much greater.

If I am a company and am entrusting my brand to someone, I am not sure that any of these make me feel very confident and the best option seems to be the foreign based designer who has the greater incentive to do good work.

I recently saw one of these sites boasting that their top earner was a Romanian that had netted all of $25,000. That is probably a handsome salary in Bucharest but will not pay the bills for more than one person in Cleveland.

In design, as in life, we get what we pay for.

Basically, it's probably what you don't know that you should know, that will be the problem.

All I'm saying really is that you can save money on logos (and design) from crowdsourcing and “industrial” shops like this, but to get the BEST product, you need to compensate for those savings with your own legwork, self-training, and sweat.

You can also hire someone who has read a few books on programming to design an entire ERP software package for you. But you better be pretty good at coding . . .

But, really, logos and visual identity can be a very distant tenth or twentieth to all other business issues for most ventures. Don't waste your time. Make money. Then hire a pro to redesign your logo when you're rich.