Crowdsourcing Is Outsourcing Web 2.0 Style

Outsourcing has been around for years and has been complained about for just as long. Now, there is a new whipping boy, crowdsourcing. Crowdsourcing is basically outsourcing reworked to take advantage of the power of the internet. However, crowdsourcing does nothing to fix the problems that outsourcing had. So, what is all the fuss about? First, let’s look at the background.

Outsourcing was a way for big companies to decrease the costs of various business processes. The typical outsourcing example is the software development project that is sent to India to be completed. The idea was that these outsourced resources were cheaper than in-house development staff, so the long term costs would decrease significantly. Of course, reality did not always work like the theory so many people had problems. First, not all outsourcing companies are the same. Like any industry, there are some companies that oversell their capabilities. So, those companies typically deliver the project late, over budget (though the budget was much smaller than in-house) and it does not function as required. These are the same reasons that companies started outsourcing in the first place. Another problem was that many companies did not know that you needed to manage the outsourced team just like any other consulting group doing work for your company. If your company realized this early enough, they may have been successful with outsourcing. Of course, developers of all skill levels complained that this cheapened the work that they do. They saw outsourcing as an attempt to make software development a commodity.

One problem with outsourcing is that it has largely been difficult for small businesses to take advantage of. Some companies have appeared over the years to enable this type of work, like ODesk and eLance. This allows smaller companies to find a freelancer at very low rates. However, there is a new trend that puts a more social spin on this freelancing industry, crowdsourcing. Crowdsourcing, turns the freelancing model on its head. The basic idea is that you post your idea and a budget, hopefully several people submit their work and you choose your favorite. In the design world, this is called “spec” work where the work is completed entirely based on the specification. No conversations or iterations need to be completed. This is the model chosen by sites like 99designs and crowdSPRING. Not surprisingly, designers hate this idea.

Hutch Carpenter wrote an excellent post on the current feelings for crowdsourcing. Designers complaints about crowdsourcing should look familiar to people that know about outsourcing:

  1. Lack of compensation for designers whose entries are not selected
  2. Diminishes the design profession
  3. Not sustainable in the long term

It is also getting more attention from various “web celebrities”. Robert Scoble recently sang crowdsourcing’s praises when he got a redesigned logo. Some entrepreneur’s are using crowdsourcing to keep their initial costs as low as possible. Even Chris Brogan is getting into the discussion. However, Chris does get into the problem from the business angle:

a business person looking to launch a blog or whatever and get the project served might find it hard to see the difference between a $365 project and a $20,000 project, especially if his or her goal is just to get the thing launched and start creating something of value.

The key thing here is that small businesses typically cannot afford a big budget designer, not the $20,000 logo but even the $2000 logo. For some businesses, getting something cheaper “just to get the thing launched” is much more important than a true brand identity. Chris also explains why he paid for the big budget designer, it was a recommendation from one of his business partners. So, word of mouth and networking meant that Chris got an outstanding designer instead of trying to crowdsource his logo. He also talked to the designer to ensure that he was getting a logo that matched what he was trying to do, not a design based on a few bullet points.

In the past few weeks, I was also looking at designers and I looked at crowdsourcing as an option. I also looked at various freelance designers, who gave me quotes from $200 to $2000 for a logo. How did I choose the designer? I ended up looking at their portfolios as well as general recommendations. Crowdsourcing fails miserably in this respect as there is no real concept of a designer or portfolio, there is only the final product. Freelance boards like ODesk and eLance are only a little better as they have reviews and the freelancer can have links to various sites. The designer I chose had a portfolio that was excellent and had some items that looked similar to what I think I want. I also know the designer from a few social sites that I have participated on.

In the end, the cheaper work will be farmed out to freelance sites and crowdsourcing sites. If you really want to make a living doing graphic design or even software development as a freelancer, you still need to build your network. Thankfully, all of the social sites we have now make this much easier than before. You do not have to go to local chamber of commerce meetings, though they could still help. Your business can be more global than before, and you may not need to leave the comfort of your home. So, just stop complaining about crowdsourcing, because they are doing the work that you did not want to do anyway.

9 thoughts on “Crowdsourcing Is Outsourcing Web 2.0 Style

  1. Also worth noting is that the success of crowdsourcing varies based on whom is asking for the crowdsourced work. Of course Scoble is going to rave about it, he’s a web celebrity. Of course it’s going to work for a Ford or an Ashton Kutcher, both have name credibility, a wealth of networks, and resources that would attract the best people to work, essentially, for free.

    But I have to tell you Rob, I’ve been crowdsourcing for two years now, and the results have been piss poor. Unless there is something to gain, you’re not going to get the quality you would get if you paid for it.

    Not to mention, if later on you run into problems with the thing you crowdsourced, who do you go to? They’re essentially volunteers and you can’t keep asking them to make tweaks.


  2. Brandon

    It seems like I was not entirely clear (and this should not be a surprise to regular readers). My point was that on a tight budget, you can use crowdsourcing to get something cheap. However, you sometimes get what you pay for. There are also the tweaks that you talk about, and the whole human process. Many logo designers will create 2 or 3 concepts to start, and once the concept is chosen there are a few rounds of modifications.

    So, we actually agree, even though the post is not entirely clear about it.


  3. i’ve used 99designs a few times–as well as experimented with outsourcing through guru and elance–and if you put your specifications together correctly (accurately and detailed), you should get very good results. you also have to provide feedback. it’s not a turn it on and let it run. you’re still dealing with humans and humans need feedback. projects that go over budget and beyond deadline are typically a result of people changing the specifications, asking for new requirements, etc. that is, they have bad product/program management.

    the comment that with crowdsourcing there’s no portfolio is just *wrong*. a cursory look through 99designs, guru and elance would reveal that all the designers/workers there have a portfolio. so…yeah…it’s fine not to be a fan of crowdsourcing but you should do your research before making blanket statements like that.


  4. “nunya”

    I tried to keep sites like guru and elance as separate from the true crowdsourcing sites. They are more freelancing sites which is a little different. You can select freelancers directly with both sites after a bid or quote process.

    Regarding 99designs, I just didn’t look hard enough for the portfolios. However, that is not really the point of the site. It is meant to create a design competition and see what you like. You really are not selecting the designers directly. At least, it was not readily obvious to me.

    I do agree that any project that goes past a deadline or over budget typically had some management problem. It is also harder to manage external people than internal people.


Comments are closed.