DesignCrowd, an online marketplace where businesses can crowdsource logos and graphics from designers worldwide, started in 2008, when co-founder and CEO Alec Lynch and his partners invested their savings to bring the idea to life. Nearly eight years later, DesignCrowd has paid out more than $30 million AUD (about $21.5 million USD) to 488,121 partner designers in 165 countries. Intending to disrupt the design industry from the beginning, DesignCrowd raised $12 million AUD ($8.5 million USD) in capital from Australian investors who saw the model's potential. Business News Daily talked with Lynch about what it was like to start DesignCrowd and grow it from the ground up. (Editor's note: All subsequent currency figures are in Australian dollars; 1 AUD = 0.71 USD as of Nov. 6, 2015)
Business News Daily: Tell us about your business.
Alec Lynch: DesignCrowd is an online crowdsourcing marketplace where businesses can outsource or crowdsource graphic, logo and Web design ideas from designers working all over the globe.
Businesses from around the world, from Sydney to San Francisco, can post projects on DesignCrowd requesting logo, Web or graphic design ideas. Then, designers from around the world, from New York to New Delhi, submit their creative ideas and designs for the client to review. The typical project on DesignCrowd can receive over 100 different designs, with some of the first designs submitted within hours.
DesignCrowd provides designers from around the world with more job opportunities and provides businesses with a faster, cheaper, more creative and risk-free way to get design work.
BND: How long have you been in business?
A.L.: DesignCrowd launched in January of 2008.
BND: Did you start with a formal business plan? If not, how did you lay the groundwork for your business?
A.L.: I started by researching the global design industry and sizing the opportunity. What I could see is that the traditional design market was large — over $50 billion — and that it was ripe for disruption. I could see there were a number of problems for businesses buying design, and designers working in the industry, and that there was an opportunity for a marketplace like DesignCrowd.
Once I had a prototype for the website built, by my co-founder Adam Arbolino, I quit my job, moved back home to live with my mum and launched the business in early 2008.
BND: How did you finance your endeavors, both initially and as your business grew?
A.L.: I bootstrapped DesignCrowd for the first two years, funding it with credit cards, $10,000 in savings and $30,000 of loans from friends and family. In 2009, we raised $300,000 from four angel investors, and in 2011, we raised a $3 million Series A from Starfish Ventures. Since then, we've raised a further $9 million, including a $6 million Series B in January 2015 led by AirTree Venture. In total, we've raised over $12 million in capital, all of which has come from Australian investors, which is not easy to do and which we are particularly proud of.
BND: How much did you invest personally?
A.L.: I invested about $70,000 in cash, including $10,000 of savings, $30,000 of credit cards and $30,000 of loans from friends and family. I also took no salary for two years. That first two years was tough, but I believed in the idea and today, we have 45 staff in three countries and almost $20 million in revenue.
BND: Is your business today what you originally envisioned at the outset, or has it changed significantly over time?
A.L.: When I started DesignCrowd, I was 23 years old, and I thought the idea had global potential and maybe could generate a few million dollars in sales. In the first six months, the business made less than $1,000 in sales, and it's certainly come a long way from my mum's house. Today, we have almost 500,000 designers, over $30 million in payments and almost $20 million of revenue a year.
BND: What were the most important factors that contributed to your success?
A.L.: DesignCrowd's success can be attributed to three things: a great team, a great idea/product, and capital. We've been lucky to attract a super talented group of people and great investors who have invested over $12 million in capital. But the main reason for our success is the product. Our crowdsourced model is better — faster, cheaper and more creative — than going to a traditional design agency, and everything else has been about executing on a great idea and taking it to every corner of the world.
BND: What are the next steps you want to take as a business owner? How do you see yourself achieving those goals?
A.L.: In the next year, DesignCrowd is looking to grow the business globally even further, and we're aiming to grow our revenues by 60 percent. Along with our growth plans, we're also working on some new partnerships and product innovations that myself and the whole team will be superexcited to announce.
BND: What is your best advice to someone with a great business idea who is ready to give it a shot?
A.L.: My best advice would be to start today. I hear lots of people say, "I've got this awesome idea," but the majority of them merely talk about it, instead of taking action. The only way you're going to combat this is to take an action, no matter how small — whether it's writing up your business plan, buying your domain name, designing a logo or just getting some business cards. Take that first step, and your idea will begin to materialize.