CROWDSOURCING -Think Global, Act Local

[4N_Man]

Recently I mentioned to someone I was going to get a lot of printing done and they gave me the contact details of a person they use in China. I was surprised because this person is in my network and expects other members to refer business to them and they were referring me not only outside of the network but overseas. This got me thinking about the whole crowdsourcing concept and how detrimental it can be to local businesses.

There seems to be a growth in sites that pitch your job worldwide. Now I'm no expert on crowdsourcing but it bothers me that I meet business people who moan about how tight things are then go and crowdsource a lot of their jobs to Philippinos and Indians. Running a business network I hear lots of stories, some are positive some not. The main complaints are;

- time consuming due to time zone differences
- cultural differences affect design and content
- un-reliable
- can't just pick up the phone to get changes made
- with design it can be difficult to convey the ethos behind what you want
- it can be difficult to be open with friends in the industries you are using overseas, eg you want your friend the graphic designer to refer people to you but you have an Indian on $4hr doing your design for you so you keep quiet about it. This isn't good for trust building in relationships which is the basis of networking.

I'm all for competition but there is no way our designers, printers, web guys etc can compete on price with people overseas. Personally I'll stick to local services where I. What do others think?

[bluepenguin]

As a designer I'm not a fan of crowdsourcing design related tasks, however, at the end of the day, if a person or business is just after the cheapest option, they are not really in my target demographic anyway so it's not a problem. I have no interest in competing for their business - unless I can get them to understand the value of my services.

The biggest 2 problems I have with the way design is crowdsourced are:

1. Many people submit work and never get paid for it - or the lucky one's get paid very little. If someone pays $30 for 100 people to work on their logo, and only the designer who creates the chosen design gets paid (after the website takes their cut), I think that's very unethical.

2. There is zero accountability when it comes to infringing on copyrights and using pirated software. (On some websites, I'd have to win 600 logo design contests just to pay for the software I use.)

So yeah, I think it's bad but it's here to stay so it's not worth losing sleep over.

[JohnSheppard]

Originally Posted by 4N_Man

I'm all for competition but there is no way our designers, printers, web guys etc can compete on price with people overseas. Personally I'll stick to local services where I. What do others think?

Competition is competition....it's good for all consumers

Australian manufacturers can't compete against Chinese manufacturers either, and that's been going on for decades? The only thing Australian manufacturers can win on is is quality. Some consumers want that some don't (it'd be nice if more had the brains to want it a little more lol)....

You just have to accept that that's the way things are. If you happen to be in the low quality design/development space in Australia...you might do well to talk to a marketing consultant or something...

From a consumers perspective, why should you stick to Australian products and services? Before anyone says protecting our own....imo that's the governments job....not the market...

[Khalid Adam]

A business competing on price is doomed to fail. better to close doors now & get a job before they loose their spouse as well. welcome to the harsh reality.

understand the mass affluent and learn how to market to them.

mass affluent = >$250k in personal income.

They dont buy on price because their time is too valuable to fix things. you will have to combine any offer with a service level agreement, guarantee, tangible assurance.

[bluepenguin]

Originally Posted by hymstrategies

A business competing on price is doomed to fail.

A disagree with this. There are many successful businesses who are successful primarily because they goods/services are the cheapest in their industry.

[JohnSheppard]

Originally Posted by bluepenguin

A disagree with this. There are many successful businesses who are successful primarily because they goods/services are the cheapest in their industry.

I disagree with it too

The thing is....just like highlander...there can be only one There's usually a whole bunch of business competing to be the cheapest because that's the first thing inexperienced business owners think...I can do it cheaper...

I agree with Hym that it's just not a smart place to go for many many reasons...

I think the best thing is to go where ever there is least competition...

[Khalid Adam]

And what happens when ur competition offers a better price and u dont have a differentiation strategy?

I u could differentiate ur business, why would u compete on price?

The only model that works well is a low or no front end offer and the margins are on the up/cross sell or its a subscription programme with free trials.

[JamesMillar]

I think price can be a USP in its own right (everyone loves a bargin) and it can work as a business model but only in exceptional circumstances. (which I think is the point of hymstrategies comments - it rarely works because it's generally not sustainable).

Price based business models usually only work in very well resourced / funded operations and this is not typically the realm of SME's. As a strategy in its own right it requires a very careful analysis of your completion, your cost advantages (which to must have under that model), your ability to ride out counter price strategy. The only way you can normally obtain such a cost advantage is via vertical integration of the supply chain (back to manufacturing and in some cases manufacturing the components of the final product).

The best example that comes to mind is the Australian domestic aviation market. Every few years a small operator tries to take on the big boys (such as Qantas) and invariably they struggle to maintain price based competition whilst keep service levels to an acceptable standard (eg Tiger). However if the timing, resources and strategy are right it can work (virgin).

Would I recommend it as an SME strategy - possibly but unlikely. It's a very high risk strategy and most can't pull it off.

[TrishF]

Grant
Can you clarify? - are you against crowdsourcing, overseas outsourcing, or both? They are 2 different things.
I can't see anything wrong with either.
Trish Fehon