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.

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