How do you feel about http://99designs.com, in particular the competition model in regards to design?
I've personally used them a few times with vary levels of success. It is particular useful for lightweight projects such as logo designs.
I've personally used them a few times with vary levels of success. It is particular useful for lightweight projects such as logo designs.
From the point of view of being a business, they did a very good job. They went for the lowest end of the market, where at a typical price point on 99d, clients don't require a lot of hand-holding. Instead, the illusion of value is delivered to clients by the fact that many designers compete to create something for you. They have captured the cheap-and-fast market well.
From the point of creating value, however, I am really not a big fan of 99d. I do know some people who had some level of success there, but I know a lot more who spent money only to get back some very crappy results.
The mechanics of a cheap marketplace simply don't allow for value. Designers have no incentive to spend time working for you, because the odds of them getting paid are really low. They are, in fact, incentivized to produce the bare minimum at the fastest speed possible.
At the end of the day, you may feel like 20 people worked for you and one was the winner, but in reality, you only got the minimum attention and effort.
I wrote a little more on this topic before, in case you're interested: https://medium.com/startup-shenanigans/66896bbf21da
However, I was unhappy with how little the designer actually received. I paid $799 to run the competition, and the winning designer only got $387! Charging >50% commission seems highly exploitative, especially when all the designers who don't get selected receive nothing at all despite spending spending time creating designs.
Also, to your point about charging 50%+. Word is, 99Designs used to do very well, up until the point when the founder took on a huge VC investment and left the company. I guess since their business model is pretty much tapped out, they figured that raising margins would fix the slow growth.