Peersourcing: The Case Of Logoworks By HP

Logoworks is one of the largest logo design firms in the world (acquired by HP in May 2007), and has served over 45,000 small businesses since the company was founded in 2001. I had the opportunity to interview Noelle Bates, the company’s Director of Customer Loyalty, about their “peersourcing” business model, the NIH syndrome, and competing crowdsourcing initiatives.

1. In which way is Logoworks active in the field of open innovation and crowdsourcing?

How Logoworks fulfills on design work is not done by crowdsourcing in the typical sense of the word. We actually call what Logoworks does “peersourcing” because the work isn’t done in the form of a purely open call and the work isn’t done by an undefined group. (Crowdsourcing is the act of taking a job traditionally performed by an employee or contractor, and outsourcing it to an undefined, generally large group of people, in the form of an open call.)

To explain, when Morgan Lynch, the founder of Logoworks, began developing his business plan one of the things he wanted to do was bring multiple graphic designers to a single project but he wanted to make it affordable to the customer. He figured the way to do that was to develop a network of pre-screened freelance designers who picked up the design projects at their leisure. The design community is not an open community, it’s a controlled entity called “Arteis.” Arteis started with just a few designers and as the customer base grew we were able to grow the design community through referrals by designers already in Arteis; that is why we called it “peersourcing” - all of the designers in our community were and still are referred by their peers. These designers, once accepted into Arteis, are able to log in to the Arteis portal to see what projects are available and then sign up for the projects in which they are interested. They know exactly what is required for the project and exactly how much they will be paid for their work before they begin on the project.

2. The Not-Invented-Here (NIH) syndrome is seen as a common obstacle in open innovation processes. Could you give 3 practical tips to change a company’s internal mindset to a culture of Proudly-Found-Elsewhere (PFE)? How are you tackling this issue?

Here is what I would say about that.

1) A PFE mindset requires that management accept there are smarter and more creative people outside their walls who can bring a fresh perspective to a company, and that outsiders can understand a business as well as management does without having to have a desk in the office.

2) Because we have hundreds of people that are located throughout the world doing work for us we are able to get work that is continuously fresh and represents perspectives from dozens of cultures and countries. This is obviously very important to a company who sells to an international customer base. This outsider perspective brings a constant stream of new ideas and creativity to us and to our customers. I think this benefit would translate to a lot of other businesses.

3) Groupthink is real. Having people who aren’t inextricably tied to you and who are free to express their ideas and opinions without having to fear they will set off political landmines is hugely beneficial. You get people who tell you what they really think and can instigate change that wouldn’t otherwise occur. It isn’t always easy to hear but that kind of constructive criticism and insight has been tremendously beneficial to us.

3. On Logoworks, companies can tap into the creativity of a group of professional logo designers. A competing business model is the crowdsourcing model behind platforms like SitePoint: companies launch a design contest, designers send in their logo designs, the best is selected, and the winner is rewarded. On the one hand, you can tap into a broader, more varied pool of creative talent for a much lower cost. On the other hand, the business model is heavenly criticized for undervaluing designers’ efforts, as well as for a lack of professionalism. What’s your take on this?

That is an interesting question. While this is not how Logoworks operates I have to admit I’m not familiar with SitePoint so I’m a little reluctant to speak to their model. All I can really say is that from from what you’ve described is that I can absolutely see why designers feel that designers are being undervalued in this type of model. On the other, it wouldn’t work unless designers were participating in it. The designers that do participate must see a benefit whether that be financial, an opportunity to build their portfolio, learn from other designers, or other reasons I’m not aware of. It would be interesting to hear from those designers as to why they participate.

I should probably point out that Logoworks pays every designer for their work and their compensation is clearly defined, regardless of whether the customer chooses their work. Some make a great deal of money while others earn just a little spending cash - it depends mainly on how much work they pick up, not on factors they can’t control. They are our community and a huge part of our company that we value greatly and know that to have them stay involved they have to feel valued both from a creative and a financial perspective. Despite that we are often criticized by outside designers for devaluing designers as well , but I feel a lot of that criticism comes as a result of a misunderstanding about how we work with our designers. We feel that by providing affordable professional graphic design to small businesses who wouldn’t otherwise have access to it opens their eyes to the benefit of design. We’re an entry point into that new perspective and our designers believe we do that fairly and in a system that is rewarding.

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