Signal vs. Noise

A recent Screens Around Town post prompted a healthy debate about crowdSPRING and designers working on spec. We invited crowdSPRING’s Ross Kimbarovsky to write more about the issue. Below is his response.

For those who haven’t heard about us: crowdSPRING is the creative marketplace, where buyers post creative projects (logos, websites, print design, illustrations, marketing materials, etc.) and instead of receiving bids and proposals, designers from around the world submit actual designs. Buyers choose the design they like. Since our launch in May 2008, 700 buyers from 30 countries have posted creative projects. Today over 6,100 designers from 130+ countries work on crowdSPRING. We’re in Chicago, a few blocks from 37signals. We make products we like (we used our own marketplace to design our site – the designer was a 20 year old student from the Netherlands) and we believe others will like them too.

Our business model differs from offline and online design shops and from other marketplaces. Because buyers on crowdSPRING select from actual designs, designers on crowdSPRING submit work on spec. “Spec” is a short name for doing any work on a speculative basis, without a prior agreement that you’ll be paid for your work.

Some in the design community object to work on spec. AIGA, the U.S. professional association for design discourages designers from doing work on spec. A few years ago, the NO!SPEC campaign was founded to organize people who object to work on spec.

When we started working on crowdSPRING in 2006, we noticed that some companies (iStockphoto, Threadless) were succeeding with business models that allowed professionals and non-professionals to fairly compete against each. Today, we believe even more strongly than we did in 2006 that there is an underground, underdog community of creatives that is shaping the Internet. They are the future. They’re writers and inventors, photographers and designers, musicians and coders. They post videos to YouTube, photos to iStockphoto, t-shirt designs to Threadless. They write great code.

The establishment has long held that these ‘amateurs’ – students and stay-at-home moms, freelancers and fed-up corporate refugees – are nothing more than a novelty and are not capable of competing with the ‘professionals.’ The establishment is wrong. The Internet has blurred the boundaries between professionals and non-professionals. The underdogs are challenging tradition in industry after industry. They are risk takers. They are true entrepreneurs. The underdogs compete on their ideas and their work, not education, training, and fancy offices. They make things they like and they hope that other people will like them too.The underdogs are a threat to AIGA and the NO!SPEC campaign. There are millions of them. They demand that a level playing field be created to allow them to compete. They demand the democratization of the design industry.

The NO!SPEC campaign has offered a number of arguments suggesting that work on spec is wrong. Let’s talk about the arguments and what crowdSPRING has done to address them:

Most professional-level designers won’t participate in work on spec. Some suggest that designers who participate in spec projects are typically less experienced. This is sometimes true. Yet a less experienced designer is capable of great work while a more experienced designer is capable of poor work. Experience does not always translate into great design. Education doesn’t guarantee great design. Fancy offices don’t ensure great design. Great design is about great ideas. Great ideas can come from anywhere, from anyone, and at anytime.

It is true that experienced designers bring much value beyond their ability to create graphical elements and typography. We’ve never intended that crowdSPRING replace experienced designers or design shops. We welcome them with open arms (many professionals work on crowdSPRING) but do understand that crowdSPRING is not for everyone.

Ironically, even though nearly 500,000 new businesses are started in the U.S. every single month, most “experienced” designers won’t work for such new businesses because most of those businesses don’t have sufficient budgets to afford such designers. While we can debate whether our business model helps or harms the industry, we should be able to agree that alternatives driven by price (where the designers submit bids in an effort to be the least expensive) are far more dangerous and damaging to the design profession.

For those who question whether crowdSPRING represents professional level design – let me offer this: many criticize our business model because much of the design on crowdSPRING represents professional level design.

But we do understand that it’s important to deliver great services to clients. We’ve created a level playing field where experience doesn’t matter. The only thing that matters is your work. Buyers pick from actual designs, not bids and proposals. Good designers do very well in this model because, very simply, they are good designers. We’ve also continued to iterate. Last week at the DEMOfall2008 conference, we introduced crowdSPRING Pro. Almost from the day we launched, brands and agencies have asked us if we can give them privacy features and greater control over projects. We responded by building crowdSPRING Pro. Minimums in all projects start at $1,000. In addition to the features we offer in all projects (escrow, legal agreements, etc.), designers must agree to non-disclosure, and clients have full control over privacy in the project. Clients also have full control over who participates in their project. We’ve partnered with Tribune Interactive and Omnicom’s Element79 on crowdSPRING Pro.

No Guarantee. Designers sell ideas and time. When designers work on spec, there is no guarantee that they will be compensated for their time. This is true. But there rarely is a guarantee. Traditionally, institutions take on the risk. Companies make products in the hope that customers will buy them. 37signals invested time and ideas to create software products they thought were great in the hope that others would like them too. Movie studios spend millions on movies in the hope that people will buy tickets and DVDs.

The growing creative movement –millions of people around the world – is changing the risk/reward model in remarkable ways. The underdogs have a high tolerance for risk because they have few alternatives. They develop great software that challenges conventional thinking – before a single customer agrees to pay to use that software. They do this with eyes wide open and hearts exposed. They understand the risk and embrace it. They create not just for the money, but because they have a need to create. Novelists write books before they have a publisher. Painters paint before they have gallery representation or a single commission. Musicians and bands record songs long before a label deal is in sight.

But this doesn’t mean that we should ignore the fact that designers who work on spec take on risk. Here’s what we’ve done to minimize the risk: First, we have a strong user agreement that expressly protects the work of all designers working on crowdSPRING. We recognize this is not nearly enough. Second, we escrow the award(s) offered by clients by requiring them to pay in full before their project is posted. We make no exceptions to this. Clients cannot simply abandon their projects like they do on other marketplaces. Third, we give clients a simple guarantee: they’ll receive 25 entries to their project or they can ask for a full refund (including our commission). This is a two-way guarantee. If clients receive more than 25 entries, we require them to select a winning designer, and if they don’t, a panel at crowdSPRING does and assigns the awards (we’ve done this in about 8 projects so far). Fourth, each project on crowdSPRING is protected by a customized written legal agreement that client and designer receive when the client picks the designer at the end of the project. That agreement specifically states that once the designer provides the final deliverables, we will pay them. All file transfers take place on crowdSPRING, to protect both sides.

Spec work undervalues and commoditizes the design profession. Some argue that work on spec reduces design to a commodity and ultimately undervalues the profession. Design is not like pork bellies or wheat. Design is about ideas and creativity.

Can there ever be too many ideas?

Here’s what we’ve done to address this issue: First, we’ve established minimums in all project categories. Logo projects must be for at least $150. Most are much higher. Uncoded website design (typically single page) must be for at least $400. Most are much higher. Our overall average across all projects is about $350. We’ve had thousand dollar logo projects and multiple-thousand dollar uncoded website design projects. Second, we’ve spent a great deal of time and effort to educate clients about design, including the value of good design. You can see this for yourself by reading our blog. Third, we’ve worked very hard with our entire community to educate designers – about good design, about good communication with clients, about professionalism, etc. Fourth, we’ve given real people real opportunities to find real clients. Half of the designers who’ve received awards are U.S. designers. Some are earning thousands of dollars per month working part-time on crowdSPRING.

Work on spec is often done without contracts. This is true. In fact, we were absolutely stunned when we talked to hundreds of designers and buyers around the world in 2006 about this issue. Every single person with whom we talked said that they thought the protection of intellectual property was very important (we expected this). Fewer than 40% of the people actually protected intellectual property in their transactions (we did not expect this). When intellectual property is not protected, both the client and the designer lose. Here’s what we’ve done to address this issue: First, as mentioned above, we have a strong user agreement that expressly protects the work of all designers on crowdSPRING. Second, we’ve created a unique system of written legal agreements that protect the intellectual property of all designers working on crowdSPRING. These agreements are customized for each project and reflect the relevant law that would apply to the transaction between the client and selected designer. The agreements provide that the intellectual property is owned by the designer at all times until the designer is paid. After payment, the rights to the IP are transferred to the client.

The tension between the growing creative movement on the Internet and centuries of tradition will disrupt and define the creative industries for years to come. It’s a polarizing topic, but an important one because individuals and companies who ignore this creative movement will fail. Those who find ways to leverage this creative movement (iStockphoto, Threadless) will evolve and succeed.

We thank 37signals for the opportunity to start the conversation and we look forward to engaging with you in a further discussion.

Best,
Ross Kimbarovsky, co-Founder, crowdSPRING

I’ve been randomly Twittering from our 37signals Twitter account for a few months now, but it’s time for me to go out on my own.

You can follow my personal thoughts on design, innovation, business, and other general daily observations at my jasonfried Twitter account.

Follow me!

Apparently there’s something worse than being despised and that is to be utterly irrelevant. Gruber hits it spot on in his commentary on Microsoft’s panic response to the mixed reception of the Seinfeld ads. A company that stands for nothing can not market themselves out of that position.

I actually liked Microsoft better when they stood for something. Even when that something was being a ruthless corporation hell-bent on world domination. Batman needs the Joker too.

It’s hard to imagine that the once mighty 800-pound gorilla in the room has been reduced to a mere monkey. A monkey with a $230B market cap, but a monkey no less.

I pity the marketers working the Microsoft account. There’s no way to win. If they go vague, they get people_ready. If they go edgy, they get panic and push back. Talk about a set of golden handcuffs.

Kris Jordan published detailed summaries of 37signals presentations at the Web 2.0 Expo in NYC yesterday:

1) Jason Fried: Keynote: Be a Software Curator

Think of yourself as a curator. You want to be a curator. You have to decide what comes in and what goes out. Curator’s job is to say no. Curator takes an entire universe of options to decide whether or not something makes it into a museum. If you think of your product as a museum and your features as art then you’re in charge. If you take all of the possible art and put it into a room it doesn’t make it a museum. All the art in the world in a single room isn’t a museum it’s a warehouse.

2) Jason Fried: Things We’ve Learned at 37Signals

Momentum – Has its hands in just about everything and is incredibly important. Esp for morale. Most typical projects are really exciting at the beginning and then people tend to lose interest and fade out. Long projects eat at you and you’re not even looking to do good stuff you just want to finish things and they don’t turn out well. Create a situation where projects are short and there’s excitement and it’s a short 2 week project and it leaves people in excited mode. Break big projects into as many small projects. 2 week rule.

3) David Heinemeier Hansson: Go REST with Rails

How did I get interested in all this? I wasn’t interested in programming I was interested in having programs. I desired an outcome. Same thing with REST.

[thanks VH]

Some recent posts at the 37signals Product Blog:

Backpack
Backpack helps researcher working in imaging of ancient texts
“Where Backpack really shines is in its ability to share data. It lets me pull together notes, images, and lists to quickly share results with colleagues in a clean, professional layout. Since I work in imaging and visualization, galleries let me easily share images of all sizes with a small preview and some optional descriptive text, on the same page with any other information I want to get across. It’s only a short step up from there to have a page other people can readily collaborate on.”

Basecamp
[Case Study] Leading martial arts site: “Basecamp is a complete necessity for us”
“As a start-up business (growing from nothing last year to being now one of the leading online martial arts communities) our team of 4 constantly sing the praises of Basecamp. The fact we are not yet office based and are all working remotely (often odd hours) has made Basecamp a complete necessity for us. The days of a disorganised million emails flying back and forth are gone thankfully!”

Further clarification on the IE 6 phase out
“It’s unlikely that anyone using IE 6 with Basecamp will run into any problems in the near future, but it’s important to keep in mind that any future upgrades might not work with IE 6.”

Video: One Year of Using Basecamp
“I can’t imagine managing web projects without it. I want to share with you a fun video he did showcasing the power of messaging through Basecamp. We exploited the tool as much as it would let us, to stay on the same page with designers, developers, project managers and representatives from several different departments throughout the school.”Campus Technology reports on Carnegie Mellon’s use of Basecamp
Carnegie Mellon University is using Basecamp to manage centralized information technology projects.

Highrise
Jolt Magazine: Highrise is “a jewel of an application”
“If what you need is simple contact & task management, this is a jewel of an application. The workflow is seamless.”

Getting Real
Getting Real: Not just for software developers
Jim Semple, Vice President of Brandt Engineered Products: “Getting Real is jam packed with sound business advice that could apply to a service business, a manufacturing operation or running an airline just as easily as it applies to building a successful web application. It’s all about people and leading them toward optimum effectiveness. We manufacture heavy equipment for customers around the world. In addition to sound engineering, good communications and effective decision making makes the difference between hitting the target and missing the mark. Getting people to perform at optimum levels on a continuous basis is the challenge. Getting Real tells you why it’s important and how to do it. Great book! Read this book and you’ll dodge a lot of potholes on the road to success. I can’t wait for the sequel. I’ll need copies for all my managers.”

Multiple products
The Daily Netizen: Basecamp, Backpack, and Highrise are “must-have” web tools for telecommuters
Jessica Merritt of The Daily Netizen just published a list of the 100 Must-Have Web Tools for Telecommuters. We’re proud to say a few 37signals apps made the list.

The secret to writing a successful to-do list
Gina Trapani, the founding editor and lead blogger for Lifehacker: “There are lots of ways you can make a to-do list into something that actually gets done. Often when people get to the point when they are writing it, they are doing a brain dump. They just have to just get things down on paper. But to get to the point where you’re checking things off, you want to make it a do-able to-do list. Things need to be as easy for yourself to do as possible. So you have to break things down into tasks. We sabotage ourselves by writing down things like “Plan the anniversary party” or “Learn French.” Those are projects, not tasks and don’t belong on your to-do list.”

Subscribe to the Product Blog RSS feed.

Below is an interesting story about a building where tenants were complaining about long elevator waiting times. The solution shows how the key to solving a problem is often defining the problem correctly in the first place.

A classic story illustrates very well the potential cost of placing a problem in a disciplinary box. It involves a multistoried office building in New York. Occupants began complaining about the poor elevator service provided in the building. Waiting times for elevators at peak hours, they said, were excessively long. Several of the tenants threatened to break their leases and move out of the building because of this…

Management authorized a study to determine what would be the best solution. The study revealed that because of the age of the building no engineering solution could be justified economically. The engineers said that management would just have to live with the problem permanently.

The desperate manager called a meeting of his staff, which included a young recently hired graduate in personnel psychology…The young man had not focused on elevator performance but on the fact that people complained about waiting only a few minutes. Why, he asked himself, were they complaining about waiting for only a very short time? He concluded that the complaints were a consequence of boredom. Therefore, he took the problem to be one of giving those waiting something to occupy their time pleasantly. He suggested installing mirrors in the elevator boarding areas so that those waiting could look at each other or themselves without appearing to do so. The manager took up his suggestion. The installation of mirrors was made quickly and at a relatively low cost. The complaints about waiting stopped.

Today, mirrors in elevator lobbies and even on elevators in tall buildings are commonplace.

Excerpted from “Turning Learning Right Side Up: Putting Education Back on Track” [Amazon].

Aesthetics have a bad rap in geek circles. CmdrTaco infamously slammed the original iPod with “No wireless. Less space than a nomad. Lame”. In other words, it’s all about the features and the functionality. If you don’t do more than the other guy, you’re useless. I don’t agree, but I accept.

It’s when the argument is raised from the “I” and to the “them” that it starts getting ridiculous. In arguing some new, ugly IBM laptop over the MacBook Air, I read the following and thought this is exactly where it goes wrong: “If you’re buying a laptop to impress girls at Starbucks (in which case, you might want to do some serious self-evaluation), this ain’t the one for you”. In other words, people only buy beautiful products to impress other people (and that’s a shallow thing to do).

It’s actually not so much that this position is ridiculous, it’s more that I feel sorry for someone holding it. I get so much enjoyment out of surrounding myself with beautiful things that I feel sad for anyone missing out on that. Aesthetics is a feature in itself. One that I — and most the rest of the human race — is perfectly willing to let trump other functionality.

I think you’ve fundamentally misunderstood why people buy beautiful products, if you think it’s all about projection. While there’s certainly something to that (and I see absolutely no shame in that either!), it’s at the core about people feeling good about that which is pretty. That doesn’t make us shallow, that just makes us human.

Jeesh JetBlue. Is this a coupon or some sort of chronological date riddle?

If you’re at Web 2.0 tomorrow (Wednesday, September 16) I hope you’ll come to our sessions:

10:05am in room 1A23 & 24: “10 Things We’ve Learned at 37signals” (Jason Fried)

11:10am in room 1A08 & 10: “Go REST with Rails” (David Heinemeier Hansson)

3:20pm in the Special Events Hall: Keynote (Jason Fried)

We hope to see you there!

The Vice Fund invests in companies, both domestic and foreign, engaged in the aerospace and defense industries, owners and operators of casinos and gaming facilities, manufacturers of gaming equipment such as slot machines, manufacturers of cigarettes and other tobacco products, and brewers, distillers, vintners and producers of other alcoholic beverages.

For good measure be sure to also pick up McDonalds, Yum (they own Taco Bell, Pizza Hut, KFC), and some pharmaceuticals that specialize in blood pressure, high cholesterol, diabetes, and obesity drugs, and you might just get rich in this new “we’re fucked” economy.

Neat thinking: “Windbelt, Cheap Generator Alternative, Set to Power Third World” [Popular Mechanics] tells the story of Humdinger, the world’s first turbine-less wind generator.

Working in Haiti, Shawn Frayne, a 28-year-old inventor based in Mountain View, Calif., saw the need for small-scale wind power to juice LED lamps and radios in the homes of the poor. Conventional wind turbines don’t scale down well—there’s too much friction in the gearbox and other components. “With rotary power, there’s nothing out there that generates under 50 watts,” Frayne says. So he took a new tack, studying the way vibrations caused by the wind led to the collapse in 1940 of Washington’s Tacoma Narrows Bridge (aka Galloping Gertie).

Frayne’s device, which he calls a Windbelt, is a taut membrane fitted with a pair of magnets that oscillate between metal coils. Prototypes have generated 40 milliwatts in 10-mph slivers of wind, making his device 10 to 30 times as efficient as the best microturbines. Frayne envisions the Windbelt costing a few dollars and replacing kerosene lamps in Haitian homes.

Neat thinking to take aeroelastic flutter, what caused the Tacoma Narrows Bridge to do this…

...and turn it into power for the third world (and potentially more):

Below, Frayne discusses his model for invention. Money quote: “A lot of times when you really box yourself into a tight corner, that’s when you do your best thinking.”

[Thanks RH]

Our good friends AJ and Gary Vaynerchuk launched PleaseDressMe recently, a search engine for tshirts. Kind of a brilliant idea over there. How many times have you been looking for a shirt you saw on someone by Googling the phrase, or browsing through every tshirt site out there. Do you know how many tshirt sites are out there??

This is a great example of meeting a need in a very niche market doing something incredibly simple: Give people a box to type in and return what they’re looking for. Slap on an API and some very simple widgets and you’ve got a way for vendors and retailers to integrate your site into theirs, and everyone wins.

I really love these simple solutions people have been building lately to meet very simple and obvious needs. It’ll be interesting to see how PleaseDressMe develops over the next few months. Well done, guys!

(bigger version)

First person to solve the maze and link up the solution in the comments section gets $50 off their 37signals product of choice.

Check out the amazing Plastic Logic Reader:

Very cool shit.

But there’s a demo lesson to be had here: When you’ve got a product that does something amazing, don’t waste 40 seconds talking about it. Just show it! The best demo is a usage demo, especially if you’ve got wow factor. Explain it later (...or maybe you won’t have to explain it at all).

Surely, the demo at the Plastic Logic site doesn’t make the same mistake. Nope. It’s even worse! Two minutes until the good stuff. Hey guys, we know what paper looks like. Get on with the show.

Earlier this week we launched a big Basecamp update that allows people to attach files and leave comments on to-dos and milestones.

Since we launched the new feature 72-hours ago:

• 220,568 comments have been posted
• 197,003 (89.03%) comments were posted on messages
• 18,481 (8.35%) comments were posted on to-dos
• 5088 (2.3%) comments were posted on milestones

(You may notice that the numbers don’t add up — that’s because new comments were added between the database queries)

We’re really happy that about 10.5% of the comments posted in the past 48 hours were comments posted on to-dos and milestones. That’s great uptake on a new feature in just 3 days. We’re thrilled that people are loving the new feature! Thanks for your continued support.