Businessmodel of 99designs

Customer Segments

99designs targets three main customer segments. It provides services to designers – primarily freelancers – that wish to find jobs and interact with clients, to companies that are looking for relatively low-cost design solutions, and to agencies that are seeking to outsource design work.

While 99designs provides services to a range of companies, its services are directed principally at small businesses and start-ups that do not have the resources to outsource work to large design companies or to employ an in-house team. This includes freelance and independent workers who wish to add a degree of professionalism to the way they are presented online. According to reports, while around half of 99designs’ designers are from Asia, the majority of jobs are listed by customers in North America.

Value Propositions

For its design community, 99designs’ greatest value is that it provides access to a constantly-updated list of jobs and networking opportunities, charging no membership fees. It also enables freelance users to form ongoing relationships with clients. For its business customers the platform provides access to bespoke design services at an affordable price.

The Company’s design contests and logo store also allow customers to view a range of products before selecting a design, making it more likely that they will be able to find something that fulfils their design criteria. The 99designs platform also provides a ready-made community of professional designers to whom agencies are able to outsource work where necessary.

Channels

Designers, agencies and clients can access the 99designs marketplace via its desktop and mobile websites at www.99designs.com. It also operates regional domains, including www.99designs.co.uk. The Company does not currently appear to be accessible via mobile applications.

Customer Relationships

The 99designs platform is primarily self-service, with users able to compete for and post jobs following completion of their online registration.

Gold and platinum customers are also provided a dedicated manager to assist them in the job-listing process and the selection of designers, with a member of the 99designs team being available to them at all times.

While 99designs is not a social tool, its content remains user-driven with all products provided by its design members. The Company is able to interact with its community via its own webpage and its social media accounts, including Twitter, Facebook and Pinterest.

Key Activities

99designs operates and manages an online graphic design platform, which links designers with customers seeking design services. Through its users, the Company provides logo, web and application, packaging and labelling, and book and magazine design services, as well as business and advertising solutions. 99designs also maintains a digital marketplace where ready-made logos can be bought and sold.

Key Partners

99designs partners with a number of companies that provide services where clients may also require logo or design products. This includes a recent partnership with website builder Jimdo, with which 99designs now offers a logo a website package deal, and a partnership with event management platform Eventbrite, through which the Company provides designs to event organisers.

Additionally, 99designs collaborates with businesses that work closely with startups and small businesses, an important segment of the Company’s client base. On its website, 99designs names a number of companies among its featured partners which range from bookkeeping and legal services providers to email and marketing software developers. This includes partnerships with Legal Zoom, Live Plan, Pocket Lawyer, Funding Circle and Tax Jar.

A key part of 99designs’ marketing strategy is its use of affiliates. The Company partners with a number of websites which receive $55 for every customer that is turned on to 99designs’ services. 99designs has also partnered with international money transfer platform Payoneer to provide a full range of payment options for its users and clients.

Key Resources

99designs’ key resources are its platform and proprietary technology. The Company however does not have any patent applications registered with either the US Patent and Trademark Office or with IP Australia.

The Company also depends largely in its community of designers to provide work for its customers and on its personnel to develop and maintain partnerships.

Cost Structure

Much of 99designs’ costs are associated with the development and maintenance of its digital platform, including server rental and the retention of a software engineering and design team.

99designs also incurs fixed operating costs in the form of office rental, utilities and employee salaries at its offices in Australia, Brazil, the US and Germany.

Revenue Streams

99designs’ revenue is generated primarily by the sale of design work provided by its users. At the lowest, 99designs takes a 5% commission on its jobs. This commission can go up further, depending on the package chosen by the client, with gold and platinum packages costing more than basic bronze and silver packages.

The majority of the Company’s revenue comes via its design contests, in which clients provide a brief to the community and receive numerous designs from the platform’s users from which it selects a winner.

In these cases only the winner receives payment. Clients can also pay to upgrade their contest-listing making it more visible to designers. 99designs also generates revenue through the sale of off-the-shelf design products via its online logo store.