Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz (Part 2)

Sramana: You started that website while you were in high school. What happened after you graduated?

Matt Mickiewicz: The business went really well up until the dot-com crash. All of our advertisers went bankrupt, which make me scramble to find an alternative business model. I turned to book publishing. I published over 70 books in 20 languages on our website for download. They were books about various web technologies. Eventually we sold those through Amazon and Barnes and Noble as well.

We had built a passionate community of web developers and designers. One of the things that emerged in our community was design contests. Designers would make up fictional projects and compete against each other. They were passionate about graphic design and they wanted to connect with other designers around the world. It also let them build out their portfolios.

Eventually some of the non-designer members of our community saw those design contests happening and wondered what would happen if they offered a cash prize for the design contest winner if the project for the competition was a design for their website. The designers jumped on the opportunity. That was the genesis of 99designs. It was a business that grew organically out of this community of developers and designers. Around 2008 we spun it off as its own company and team. It had a ton of traction despite a lack of marketing.

Sramana: In 2008 when you spun it off as a separate company, there was also a lot of activity going on with crowdsourcing. Where you the first in that category?

Matt Mickiewicz: I think we were the first ones to create a real software application. The design contest was happening in various communities, but nobody took it out of the competition mode and created a business around it where payment could be taken. We were the first to build a marketplace around crowdsourced design.

Sramana: Since you spun if out of another company, who owned the intellectual property? What was the process of spinning it out?

Matt Mickiewicz: We had two main shareholders in the business, myself and my partner. We kept that same share structure and rolled it into the new entity. We chose not to raise money. We built the engineering team in Melbourne, Australia, so we would not have to compete for talent in Silicon Valley. About a year later I opened a San Francisco office because we had such a large mass of customers here. Our early customers were Silicon Valley and New York startups.

Sramana: In terms of getting the business off the ground, what was that process like? It sounds like you were part of the designer community, so I imagine it was fairly easy to attract the designers.

Matt Mickiewicz: The community was already incubated with our previous company. We were charging people $20 per design contest. When we spun it off as a new company, we rolled all that traffic into 99designs. It was a relatively seamless transition. We had already proven the model and had the traffic. We generated tens of thousands of dollars in revenue.

This segment is part 2 in the series : Cool and Creative Serial Entrepreneurship: 99Designs and DeveloperAuction Co-Founder Matt Mickiewicz
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