Idemama, where we’re investors, is an online marketplace connecting individuals and businesses with designers for their logo, corporate identity, branding, and website design needs.
Until recently, Idemama served its members exclusively through a contest model. Individuals or businesses looking for a particular product would launch a contest for which they paid in advance, collect submissions from multiple designers, request revisions from the ones they liked, and then pick the one that they liked best. While this approach lets the contest creator influence the final outcome of the project and pick from among tens of alternative submissions, it has two drawbacks.
The first is that there’s a chance that the contest creator isn’t going to like any of the submissions. Although this is a small chance, it exists. And this possibility represents a hurdle for contest creators who think twice before launching a prepaid contest.
The second drawback is that, since only one designer wins each contest, many designers spend a lot of time working on a project for which they eventually aren’t compensated. The demand side has relatively more leverage than the supply side and this can discourage designers from participating in contests.
As a result of the pros and cons of the contest model, it appeals to a certain group of buyers and designers, but not all of them. Many buyers want to know what they’re getting at the time of their payment and many designers want to work on designs which they have a higher chance of eventually getting paid for.
This is why Idemama recently launched the Idemama Market. In contrast to the contest model, the Idemama Market is simply an e-commerce store which displays hundreds of alternative logo designs. Although the Market only showcases logos so far, it will expand to other product categories in the future.
Each logo is displayed together with its price. This way, buyers know what they’re getting before making a payment. And once a buyer chooses a specific design, the designer responsible for it is guaranteed to receive payment. Since the design is pre-made, designers don’t work on submissions that eventually won’t be selected. Competition to attract the buyer’s attention takes place among existing designs, not new submissions for each project.
I think that the contest model and the Market model will eventually coexist. Neither model is better than the other. Each meets the needs of different buyer and designer profiles. And the more alternatives a marketplace offers its members, the better off they are.
Originally published at Thoughts of a VC.