The stars of Australia’s crowd-sourcing hub

It’s no wonder crowd-sourcing has been described as “outsourcing on steroids” – few trends have had as much impact on the way small businesses can compete with their bigger end of town, by giving them access to low-cost, high quality services from anywhere in the world across the internet.

Given the way it lets underdogs take on the big end of town, it’s not surprising crowd-sourcing has become popular in Australia.

But local entrepreneurs are not just users of the world’s top crowd-sourcing sites. In the past three years, crowd-sourcing has become the basis of numerous multimillion-dollar businesses in Australia, while many others have launched variations that utilise the web’s ability aggregate service providers.

New crowd-sourcing companies and models are springing up on a monthly basis, building on a rapidly-growing crowd-sourcing hub.

The founder of design crowd-sourcing service DesignCrowd, Alec Lynch says the reason for the model’s popularity is simple – it works.

“It’s quicker and it generally delivers a better result,” Lynch says. “What it is introducing into industries where it is applied is competition on quality, not competition on cost.”

We’ve gathered many of the best that Australia has to offer to present to you the Australian “in crowd”.

99designs

99designs grew out of the technology publishing business SitePoint in February 2008 when founder Mark Harbottle noted that designers were using its online forums to challenge each other to create better designs.

General manager Jason Sew Hoy says 99designs has the largest pool of designers of any crowd-source service globally, with 45,000 projects completed successfully and 550 projects currently open. 99designs has revenue of $12 million, 93% of which is earned outside of Australia, and is paying out more than US$600 thousand each month to its designers.

“We understand what makes designers tick and we attract more of them, which therefore leads to the customers coming to our marketplace because they see that we have more creativity,” Sew Hoy says. “Like any marketplace there are both customers and suppliers, and to have a sustainable business model you need to make sure that both sides are getting something out of it.”

Parent company Sitepoint is also trialling NameMyThingy.com which is a free crowd-source naming service that has seen names requested for everything from businesses and websites to greyhounds.

DesignCrowd

When Booz & Co consultant Alec Lynch first saw the London Olympic Games Committee’s much-maligned logo in 2007 it got him thinking that he knew 20 people who could have done better. But unfortunately for the world at large none of them were ever given an opportunity to compete.

Hence in September 2007 he started DesignCrowd (then known as DesignBay) as a site for posting design projects and letting the world’s designers compete. Lynch himself had previously created ad designs as a side business. He spent four months developing DesignBay before launching in January 2008, and the name was changed to DesignCrowd following an acquisition in October 2009.

“It’s about giving opportunities to people who have talent but don’t necessarily have their foot in the door in the industry,” Lynch says.

The three-person business is approaching $1 million in gross sales annually, although it does not report its actual revenues, and is growing at about 40% month-on-month. It has recently signed up its 15,000th designer, with contributors coming from around the world.

“It’s a virtual organisation – three people internally and then 15,000 people underneath,” Lynch says.

Envato

More of a marketplace than a crowd-sourcing service, Melbourne-based Envato has built a series of web businesses since it began in 2006. The company was founded by web designers Collis Ta’eed, his brother Vahid Ta’eed, wife Cyan Ta’eed and best friend Jun Rung in Collis’ living room. The aim was to build a single marketplace for developers what worked with Adobe’s Flash rich media technology.

“We kept adding new ideas and sights that popped into our heads, and it’s just got bigger and bigger,” Collis Ta’eed says.

Now Envato has seven marketplaces where people can buy and sell digital goods including WordPress themes, stock audio and multimedia project files, and are home to a community of more than 240,000 users, authors and buyers.

“Our aim is really to help people earn income that they may not have had access to previously,” Ta’eed says. “The highest earning author on the marketplace takes home more than $25,000 a month and lives in Austria.”

The company employs a core team of 25 in Melbourne and another 25 scattered around the world.