I'm an HR consultant/career coach and a workplace commentator, so when I hang with my friends or go to networking events or chat with the other elementary school moms, the conversation always turns to work. People tell me how their jobs are going, or tell me about their job searches or their entrepreneurial plans or their business headaches of the moment.
I don't mind -- I love that kind of conversation. About a decade ago, I started to hear from graphic designers and other kinds of "content" people (writers and photographers, e.g.) about the huge shakeups in the content arena. In a pretty short period -- three to five years, I'd say -- a lot of those folks went from creative guru status in their fields to something very close to commodities. That was their perception, anyway. Of course, the Internet was right in the middle of that. The same way that an antique store down the block from you could no longer sell a particular 19th-century French armoire for more than the prevailing sales price once we could easily check on prices for similar armoires, the premium-pricing opportunity based on location was mostly lost. (I say "mostly" because it costs a fortune to ship furniture here and there.)
The same thing happened to graphic designers, copywriters, photographers and other kinds of content people. In no time at all, they went from competing with people in their own geographic areas to competing with every other graphic designer in the whole world. You can imagine what that did to prices for lots of different kinds of content. Sites like elance.com let creative people find out about assignments located many timezones away, and prices for creative content plummeted.
I believe that open exchanges are good things and that water finds its own level. There are still top-drawer designers and design firms commanding big bucks to do amazing projects. There are also gazillions of people signing up for design projects that pay next to nothing, and very good designers who get angry at those bottom-feeding consultants for undercutting the more experienced people price-wise. But that's how economies work. Those shifts happen.
I did a consulting project for a guy who had a tree nursery, and he said, "The Russians killed the Christmas tree business." I picture Russian guys in those heavy Russian coats and the big hats (like the ones John Gotti and the other hitmen supposedly wore when they whacked Big Paulie Castellano outside Sparks Steakhouse a few days before Christmas, back in the day) using machine guns to take over the Christmas tree market. Of course, the nursery guy just meant that some Russian Christmas tree sellers undercut the non-Russian Christmas tree sellers on pricing and the margins went away.
I know that movie, because I worked in high tech (U.S. Robotics) for a decade and saw every product we ever launched lose half its average selling price during its life cycle. My friend Michael used to say "We'll be selling these things off pegboards before long." We built the drop in selling price into our forecasts, of course. It went with the territory, but the same phenomenon hasn't gone with the territory for artists and writers and photographers, over the last hundred years. Now, access to other vendors, including people who charge less for their work than you do, is part of the landscape.
When I left the W-2 world in 2001 to go out on my own, I learned that entrepreneurs create their own value. That sounds cheesy but it's true, because if you don't believe in what you're doing and if you can't spot and explore the value of your work to your clients, you really have nothing to sell.
When I was still working for U.S. Robotics, I started doing a lot of public speaking. A woman called me up and asked me to speak on a panel at an online media conference in Chicago.
The conference was in downtown Chicago, and I only lived ten miles away in Evanston, so I just got in my car on the day of the gig and drove down to McCormick Place for the shindig. The other speakers on my panel had flown in from out of town. I chatted with the conference organizer before our panel.
"This business is crazy," she said. "You're the designated 'color' person on the panel, because you're going to tell jokes and get the crowd riled up, while sharing some useful tips. The other two people on the panel are the empty-suit business guy and the industry expert." "How do you put the panels together?" I asked her, and here's what she said: "You are a godsend, because you're not charging us anything for your talk. The industry expert is getting paid five grand to be here. That's our only expense on the panel. The big corporate guy is likely to be a godawful speaker, but he needs the experience speaking on panels, so his employer is paying us to let the guy speak. They're sponsoring the panel."
"How much did that cost them?" I asked, and the lady said "Fifteen thousand."
"Whoa!" I said. "So you made 10 grand on this panel?"
"Yes, and I needed to," she said, "because it costs a fortune to advertise an event like this, and McCormick Place doesn't give away these rooms for nothing."
That day, I learned something important about content. The minute I left a corporate payroll, I started to charge for my presentations. I figured "I could speak for free for the next ten million years. No one is going to pay me to speak until I value it myself." Nowadays, I call any kind of content business The Antique Store. I compare the whole thing to an antique store, because in an antique store, the prices are just made up. The antique store owners hopes you agree with her that the French armoire is worth the $1,800 she's asking for it. You can't haggle at Target (unless there's a scratch or a rip in something) but you can dicker all day when the prices are just best guesses at what an armoire is worth.
Now that we have eBay and other auction sites, the prices in an antique store are undoubtedly less free form, but let's face it, if you see a gorgeous armoire in an antique store and if the owner is sitting right there and you say "This armoire is amazing, and I'd love it for my daughter's wedding; it's priced at $1800, and I wonder if you would accept $1,600 in cash right now?" there are tons of antique store owners who would do the deal. They'd do the deal even if they have a quaint hand-painted or needlepoint sign on the wall that says "No dickering" or "Prices are fixed."
The only reason those antique store owners have those signs up is that they don't want to spend the whole day in Arab-bazaar haggling situations. In that respect, the sign is more for their own benefit (to keep them from making low-margin deals all day long) than for any other reason. In the antique store (the real one or the figurative one) nothing is fixed. Prices are fluid, and based on the client's need, the availability of other vendors, and the vendor's need for work. It's a constantly moving game. That's where crowdsourcing comes in.
I feel personally sad for my photography and graphic designer friends who saw their livelihoods crumble away or shift into advisory services as creative services became available through online channels and flooded the market with service providers. On the other hand, I guess I'm a little too unpatriotic or something to think that American jobs are more important than jobs -- or, at least, incomes and quality of life -- for people elsewhere in the world.
This is the first in a three-part series of articles on the topic of crowdsourced work.
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