
How 99designs Built A Successful Business in 16 Months. - azharcs
http://blog.mixergy.com/how-99designs-built-a-5-million-business-in-16-months-with-matt-mickiewicz/
======
catone
99designs wasn't built in 16 months. This is nicely spun (maybe the result of
the PR company 99designs hired earlier this year?) but still rather
misleading.

I'm a former SitePoint employee, and have been around their forums since 2003
and as a moderator 2004-2008. 99designs was spun off from the SitePoint
Marketplace 16 months ago, where it existed as the SitePoint Contests property
(essentially the same thing but branded under their Marketplace). The first
contests were actually held on the forums, and if memory serves, that happened
in about 2002 (before I got there, could have even been 2001).

Eventually the Contests and Marketplace sections of their ultra popular web
developer forums grew big enough to be spun off into dedicated sections of the
site (still part of the SP organization, though), so SP developed and acquired
technology to create those new areas. That was in 2006 (see:
<http://www.sitepoint.com/about/media/release?id=39> ).

I was involved early on in developing rules and moderating the Marketplace and
Contests area. Once the Contests area got big enough, it was spun off as
99designs, and has grown like a weed since. (This time it was actually spun
off as a new business entity.)

So really, more accurately, 99designs has built a successful business over the
past 6 or 7 years (or if you want to go by the date it was spun out of the
forums, over the past 3 years).

All that said, SitePoint is a really classy organization, full of great
people. Matt Mickiewicz is a really nice guy, and what they've built is very
impressive. I wish them continued success.

~~~
Matt_Mickiewicz
Hi Josh,

You're definitely right.

In the interview I talk about how the idea begun in the SitePoint Forums, then
we started charging people to start a thread in the "Design Contest" section
in vBulletin, then we spun it off as its own separate section of sitepoint.com
with some basic software built around and only after we had proved that it was
a sustainable business did we re-architect the software, improve the usability
& interface, and then spin-it off as its own separate business in February
2008.

------
icey
It facilitated $5 million in design work... that's not really a $5+ million
dollar business is it? (I could have misread, but the article's headline seems
misleading to me.)

~~~
mediaman
Nice catch! Very misleading title. I thought they had $5mm in sales until I
read your comment and looked more closely.

I think Warner does this a lot with his articles -- he's full of hyperbole. A
proper editor would not have put that in the title.

~~~
axod
From their site:

"there is a listing fee of $39 plus 10% of the prize being offered."

"$5,212,395 awarded"

"$108,100 up for grabs in 302 open contests"

    
    
      estimate on number of contests awarded = 5212395 / (108100/302) = 14561
      Total listing fees = 14561 * $39 = $567,914
      Total 10% profit is $521,240
    

That'd put total revenue since starting at $1,089,154 as far as I can see.
Which is still awesome, but not really what is suggested by the article title.

~~~
wasiak
They've run almost 23,000 contests instead of 14,561 according to their
homepage. That's over $900K in listing fees alone.

Also, they charge for upgrades - bold, highlight, fast-tracked, etc. and
charge designers to withdraw money.

~~~
icey
We're still forced to guess - They didn't always charge listing fees. They
started at $0, then moved to $20, then $29. There's no way for us to ascertain
how many projects were done at each level.

------
charlesju
I would think that this isn't a big deal if this guy is the co-founder of
sitepoint, which is substantially bigger than 99designs.

~~~
ryanwaggoner
According to Wikipedia, sitepoint was founded in 1997, so it's had an eleven
year head start.

