Last month, as 99designs hit 99,999 projects, we asked for your questions and thoughts to put forward to 99designs. Jason Sew Hoy, chief operating officer at 99designs responds below.

A common opinion within the graphic design community is that sites such as 99designs are devaluing the industry, making design a mere commodity and taking advantage of students. What is your response to such claims?
In any industry there is a spectrum of clients and budgets. At one end, there are companies and corporations who can afford to have either in-house designers or large design agencies serving their needs. At the other end, there are the start-ups, small businesses and ‘mum and dad’ businesses who are working hard to get their businesses established.

Most start-ups tell us that they don’t have the budget to seek a traditional graphic designer. The way they get their identity off the ground is to get a friend to help them out, or their nephew, or, even worse, they fire up Microsoft Word and put their name next to some clipart.

What we do is provide an affordable option for every small business to get themselves a professional identity that will help to give their business the best possible chance of success. That is growing the market for design at the bottom end. In turn, as those businesses mature, they’ll go on to increase their spend on design – no doubt using the services of professional designers and agencies.

From a designer’s point of view, it’s an unfortunate fact that we’re in a period of global economic uncertainty which means a lot of designers are struggling to find work, from students right through to senior designers with years of experience.

At the end of the day, we believe it’s a case of horses for courses, and we wouldn’t be here if our site didn’t provide value to both small businesses and designers alike.

With over 100,000 projects completed and over $26M USD paid out to designers, we’re proud of the opportunity we’ve created for designers and think that, in the long term, we’ll see a positive flow-on effect for the entire industry through growing the market for design within early-stage startups.

Jason Sew Hoy, chief operating officer at 99designs

What plans do you have to ensure the 99designs business model doesn’t diminish the value of design?
We’re going to continue to support what naturally occurs between customers and designers in sourcing a design. What some people probably don’t know is that we didn’t invent the idea of crowd-sourcing design as such, we just observed what was already happening within the design forums of our parent company SitePoint.com. We then built the tools to support those interactions.

In terms of our model, we’re going to continue to listen to the needs of our customers and our designers and then evolve our model to suit. For example, our designers are telling us that design contests are often just a lead generation system for them, almost like speed-dating. They meet a customers through a design contest, where they design a winning logo, and often the customer will then ask the designer to design their business cards, brochures or even their website on a one-to-one basis.

How is 99designs contributing to the creative economy?
We believe that 99designs is building the bottom end of the design economy – serving the startups and small businesses who otherwise wouldn’t undertake a creative spend. We’re bringing real, paying customers to designers, and designers can chose who they want to work with while playing to their strengths, whether that’s web or logo design.

In addition to building an active design community, where learning and networking can occur, we’re also helping designers to build their portfolios – something that’s especially valuable for students looking for experience with paying customers so that they can demonstrate these skills when approaching the big agencies.

99designs is also allowing creatives to develop relationships with customers who need their skills, with many of our projects leading directly to follow-on work.

Besides profit, how does 99designs measure the success of its service?
We measure our success in a number of ways:

Our payouts to designers. We pay out more than $1.1 million to designers on average every month.

The success stories we play a part in. We’re thrilled when we hear how we’ve helped startups like Adioso.com to succeed. Many businesses say that they wouldn’t be where they are today if not for 99designs. On the other side of the coin, we also enjoy hearing stories of designers who’ve been able to change their lives by building freelance design businesses through the clients they’ve met via 99designs. A husband and wife team in Perth, for example, recently told us how 99designs enabled them to quit their day jobs and freelance full time. In other cases, professional designers have told us how they’ve used 99designs to grow their businesses in regions less affected by the economic downturn.

The feedback we receive. Both our customers and designers are engaged and vocal when it comes to what they do and don’t like. When we get positive feedback, we know we’re doing something well.

The word of mouth we generate. We estimate that word of mouth has fuelled 95% of our growth, something we’re proud of.

How does 99designs justify the promotion of free pitching?
Anyone who has ever owned, run or sold product for a business knows that free pitching is a fact of life. It’s what you do to secure customers and demonstrate that you can provide value that’s worth paying for. Ice cream stores provide free samples, cosmetics stores provide free makeup sessions, advertising agencies put together entire pitches and anyone servicing the corporate market spends weeks on proposals all in the hope of landing the deal. It’s a competitive world and the design market isn’t different.

What makes 99designs different, however, is that we bring opportunity to the doorstep of designers. So it’s not about your sales skills, your proposal writing skills, which agency you belong to or what your design portfolio looks like, it’s about your ability to create the best design to match a specific customer’s requirements. Designers get to let their design do all the talking and focus on what they love most: designing. Best of all, they can do it all from the comfort of their own bedroom.

Where do you see 99designs heading in the next five to 10 years?
99designs pioneered the idea of crowdsourced design when we launched in February 2008. While we’ve now completed over 100,000 projects for small businesses, it’s still early days. Our contest model is a work in progress and there’s a lot we want to do. Our mission is to provide professional graphic design services to small business and to be the best platform in the world for designers to do business online.

Is there any chance you will amend your system so all pitched ideas will get paid a certain percentage in the future?
We are always open-minded when it comes to changing our model. Being only four years old ourselves, we certainly don’t think we’ve got everything right and there are lots of ideas that we consider from time-to-time, including different models for how we reward designers.

While it’s too early to provide details at this time, I can definitely say that we listen to our design community and there are some very exciting changes in store for the near future.

Want to read more? We asked six creatives for their thoughts on crowdsourcing design here.