Outsourcing and crowdsourcing are killing some creative businesses. What do we do?

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Competition / Freelancing

I was reminded recently of the massive changes taking place in the world of work, particularly the creative services industries.

The exponential growth in technology and the avenues opening up through the spreading of an increasingly more efficient Internet brings with it the good and potentially the bad.

[Listen to the audio version of this post on Youtube here]

It was through reading Kotler/Diamandis’ fascinating book – Bold: How to Go Big, Create Wealth, and Impact the World – that prompted me to write an article on the changes, and what options we as creative entrepreneurs have.

The book discussed the exciting opportunities opening up for entrepreneurs through exponential technological growth, and things like crowdsourcing – with our increasing ability to do more by leveraging other people, especially large numbers of people at any one time.

One thing that concerned me was that despite the advantages of being able to hire out effective work – like design – for a fraction of the cost, the writers seemed to give little regard for those of us who’s creative services are being undercut by things like cheap overseas labour, and crowdsourced, low cost design.

Sites like 99Designs enable people who need design work to brief multiple, if not hundreds of people to compete against one another in order to win a chosen design. This means many people put in time for no reward beyond a new portfolio piece.

99 Designs explainer page.

99 Designs explainer page 2015.

 

For many, especially in countries where the cost of living is cheaper, this kind of speculative, or lower fee work can be feasible because their living costs are not so high.

Places like these, as well as sites like Upwork, where creatives bid for work, often for extremely low prices, are becoming increasingly prohibitive to those that are looking for more than peanuts in income.

Here’s the deal. Technologies like these, whereby work can be outsourced cheaply is not going to go away, at least for a while. It will grow, and there is no avoiding it and the dangers it can bring to business.

In many respects it is a huge positive as well, allowing more of us to leverage the work of other people, for less, whilst ensuring huge swathes of people in poorer countries, for whom it was previously very difficult, to get paid and develop their skills.

So what do we do to make the most of this massively connected climate? How can the modern day creative entrepreneur, especially those based in costlier parts of the world, stay relevant, in demand, and earning well?

In my view, there are three options in front of us:

1. Dominate

The best businesses and the best people earning money on their own do not compete. They dominate a corner of the market.

Their value emulates from the fact that they stand out from the crowd; they solve problems in their own unique way, and they are in a league of their own.

This is the approach I’ve been applying to my own work and the approach I’ve been encouraging people take on this site for years.

Outsourcing and crowdsourcing might be providing many clients with opportunities to get work done for less, but it does not ensure the very best quality, and it does not guarantee that they will be working with people who are experienced and the most creative.

In a world that relies on innovation, authenticity, and quality output to get ahead, this is where you have the edge over the less-experienced and the under-initiated.

Many clients are still willing to pay more for their problems solved with an extra creative, human and experienced hand.

Many of the best clients also understand that a lot of the skill they want is not to be found in a crowd-sourced project, and in online environments where people try to outcompete each other based on diminishing prices.

You can increase your value to these prospects and attract the best clients by working on standing out and amping up your value.

You do this by being the specialist, by focusing on a niche, by committing yourself to mastering your craft and delivering an outstanding, personal service.

When you become a master at what you do, you can still command high prices and people will still look to you to work with them, even if thousands of others are shouting for their attention.

This is why the very best – people like Stefan Sagmeister, Dan Cederholm, Lotta Nieminen, Kate Moross, and Dan Matutina – all people who deliver excellent work via a cared-for service, will continue to stay in demand.

This is not to say that huge talent is not starting to show up on the battlefields of freelance services auction sites. There will always be talented people out there pushing us to raise our own standards and produce our best art.

Promoting yourself, building your value and keeping close to your network will keep you front of mind and your clients’ looking in your direction.

Continue to dominate, and the encroachment of cheap labour will not be a problem for you.

2. Join them

If you can’t beat ‘em, join ‘em.

If we think intelligently about the new capabilities that have opened to us, we might see that these changes can bring plenty of benefits.

How might your business grow by making use of a cheaper, yet effective workforce around the world?

I’ve personally outsourced many things for my own business from great people in places like Pakistan and the Philippines, including book formatting, research, admin and even finance work.

Crowdsourcing could bring a huge amount of leverage for less money than had you otherwise done it yourself.

There are many ways businesses can use the power of multiple people to carry out tiny tasks that accumulate to something really meaningful for you.

Amazon’s ‘Mechanical Turk’, for example, is a platform that enables you to work with potentially hundreds of thousands of people that you can pay to perform basic tasks like gathering leads, writing descriptions, organising images, and even creating art itself.

Aaron Koblin’s ‘Sheep Market’ used 10,000 MTurkers to draw a sheep for a massive animated artwork earning each worker 2 cents.

Copyright Aaron Koblin

Copyright Aaron Koblin

 

Don’t forget the massive worth of crowdfunding, where creative projects and businesses are getting financial support where – in a previous age – this would not have been at all possible.

Corey Godbey’s success with his picture book: ‘Tales from the Wilder Forest’ which was a Kickstarter campaign that raised close to $9,000.

Matthew Inman’s ‘Exploding Kittens’ card game was also a Kickstarter campaign, which had initially aimed at raising $10,000 to fund the production of the game, but ended up raising over $8 million from his community and elsewhere within a month.

Copyright Matthew Inman

Copyright Matthew Inman

 

In a similar vein to joining the bandwagon, there are many options for the intrepid traveler. You can move to a cheaper country, like I did in going to Vietnam for several months.

In this way, you can make use of ‘geoarbitrage’ to mitigate the eroding of rates for some creative services, or simply as a means to save money.

3. Get out of the way

The problem with work being outsourced to people who are willing to exchange their time for little money (even if it is a substantial fee for them) is that many services, especially those less creative, like data-entry, even basic web development, are simply tipping up supply, and disrupting the industry to the detriment of suppliers like you.

If you decide against finding your niche and dominating, joining in with the masses, or outsourcing work yourself, the third option is to avoid or reduce your output in the services industry.

It could be wise to think about transferring your skills and your output from providing a service, which earns you money for your time as a one-off, to creating a product, or an asset, which maintains and grows value into the long term.

As an example, rather than charging a certain amount for illustration commissions before having to do the same thing over again later on, you can create prints, wallpapers, books of your work that can be sold over and over again into the future, without you needing to start a piece from scratch each time.

A product, especially one that you can quite easily scale or multiply, such as a digital online course, can be sold repeatedly.

My ‘How to Get Illustration Clients‘ online course is one example, and will earn me income into the future with very little additional work on my side.

Setting yourself up to sell products takes you out of the services industry and into a system that is more accumulative, in which you start to earn passive income and grow wealth.

Licensing your inventions, designs, and illustrations, for example are other ways of moving from services to building assets as you can earn money from licensed work over and over again.

Merchandising is another way of ‘productising’ your creations whether that be in the form of prints of your paintings, to t-shirts featuring your graphic designs.

A lot of the people who are earning peanuts on freelancing sites are not incentivised to create assets like products. The rest of us are. Take advantage of the added incentive we now have in creating assets for yourself.

The other thing you can do, particularly if you want to continue to provide a service but are not committed to dominating, is to change the service you provide entirely or switch careers to be a step ahead. The risk with this is that you might be forever chasing.

The truth is that not everyone is suited to being a creative freelancer or entrepreneur. It takes hard work and awareness, and constant pushing to stay relevant and in the minds of your prospects.

To conclude, these are the options we now have. With impending doom comes many rays of hope and highways of abundance.

We can dominate and master our craft, we can join in with the chaos, we can get out the way, or we can dabble in all three.

That’s your choice to make.

.

The Author

Alex is a project starter, sometimes finisher, writer and illustrator. He started Red Lemon Club in 2009 with the aim of helping talented creative people leave their mark.

3 Comments

  1. My take is that clients that think crowdsourcing is a good idea are not my prospects anyway. If they do not understand the value of good branding and design, and that YOU GET WHAT YOU PAY FOR in this life, then they are short sighted, inexperienced working with professionals, and basically not a good fit for me.
    I always say to clients that are unsure – If you thing hiring a Professional is expensive, try hiring an Amateur to manage your brand…. :))) This resonates, and works every time.
    > v <

    • Alex Mathers says

      Thanks Vincent. I’m with you on that, and that can be a solid boundary to have when it comes to avoid bad clients.

      That’s not to say that clients who are doing amazing things (like the writers of the book!) will not use crowdsourcing, unfortunately. As long as people underestimate the value of good design, this will be a thorn in the side of the industry.

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