The Creative Destruction of design

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.

BMW Audi Santa Monica Ad

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:

  1. Ignore the challenge
  2. Fight the new structure
  3. 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:

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”.

Advertisements

Tags: , , , ,

5 Responses to “The Creative Destruction of design”

  1. Jason Aiken Says:

    Hi Nick,

    Thanks for your post…

    Let me just say that we at 99designs are listening very closely. We recognize that our model is disruptive and causes a lot of emotions to swirl.

    The market is evolving and we feel that 99designs fills a niche…on the client side we primarily serve small businesses, entrepreneurs and other startups looking for a cost effective way to get the design work they need while being presented with a a variety of choices.

    On the designer side…we primarily serve younger designers who are looking to gain experience working on actual projects for actual clients, freelancers who are looking to tap into a pool of potential clients and hobbyists who just love designing for fun while making a little extra cash.

    We think that both designers and clients have a lot to gain by experimenting with the model.

    For the record… we are not a faceless, evil and diabolical entity hell bent on destroying the design industry.

    We are a small group of regular people just trying make our way in the world..like everybody else.

    We wake up in the morning…have coffee… and try to figure out how we can do better.

    How we can do better for our design community by helping them learn and grow while building positive relationships with other designers as well as clients.

    And how we can do better for our clients – making what can be an intimidating process of finding the right designer a whole lot easier.

    Our work is not done…but step by step we will get there. We appreciate all the constructive feedback we have received along the way and welcome more of it…please don’t hesitate to reach out.

    All the Best,
    Jason Aiken
    99designs

    jason (at) 99designs (dot) com

  2. Nick Barker Says:

    Hi Jason

    Thanks for the comment. Like I say it’s a difficult situation. Your company is seen by many within the industry as a threat. Your take on the changing market seems to be a move towards market segmentation and your companies focus on the lower end of the market. That still makes you a threat.

    If you look at dozens of comments on the 99designs bullshit2.0 post there seems to be a polarisation of views. However must are negative comments from traditional designers.

    You (99Designs) are trailblazing a new way and so are under enormous pressure. Everything you do is watched. If you screw-up you will be attacked. I’ve spoken with several startups that’ve also used 99designs and they were positive about how logos are developed across several people.

    Only time will tell whether this new form marketplace sourcing becomes the norm i.e. many similar suppliers, satisfied customers, happy designers and mainstream adoption, If/when that happens the attacks will probably stop. Until then you have a PR war.

    Good luck and keep your faith

    Nick

  3. I’m calling a ‘time of opportunity’ for London/UK internet startup industry « Nickpoint Says:

    […] bubble is coming to an end. But the end is not death, it’s change. The Internet continues to deconstruct entire industries: advertising, music, newspapers etc. This change brings new potential innovation opportunities for […]

  4. Advertising War: BMW vs Audi in Santa Monica Says:

    […] The Creative Destruction of design « Nickpoint […]

  5. rassa Says:

    Contest holders on 99designs are shit also! They need much more educate to be less stupid than now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: