Italians spark electrical aviation records

In aviation circles, the span of time between the two World Wars is remembered as the Golden Age. A global race to speed, range and performance records pushed the limits of technology and pegged countries and manufactures against each other.  It was a great run for Italian engineering too, culminating with the 1934 Schneider Trophy speed record that Francesco Agello established on a Macchi MC 72. His 709 km/h (440 mph) remains the fastest speed ever attained by a piston engine seaplane.

As an an aeronautical engineer, I was very excited to learn that, on June 12, 2009, Maurizio Cheli established another speed record and aviation milestone on an Italian built craft. Continue reading “Italians spark electrical aviation records”

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Breaking down a crowdsourcing business model

Logo Tournament Social AdI have been in looking into crowdsourcing business models for the last couple of months. Personal and professional interest. As often the case, when a subject is on your mind, you stumble upon it. So, when ads like this one started popping up on my Facebook page I clicked through.

The ads send you to Logo tournament (LT), a crowdsourcing play on logo design services. It’s quite straightforward. Company needs a new logo, it submits a “contest” to LT and sets a price. Designers send in one or more designs. The best design wins and the designer gets paid.

I tried to figure out how a business model like LT’s would look like.

Revenue

LT charges designers a 15% transaction fee. Companies set the price they are willing to pay in advance, with a minimum allowed of $250. Paypal transaction fees are passed on to customers.

Note that LT will take the money from companies in “escrow” and select and pay a winner at the end of the contest even if a company does not select a winning design. That means that if a contest is listed, the money will be paid and the commission earned.

LT lists all open and closed contests at any given time. I counted about ~165 open concurrent contests with an average age of 5.1 days and ~1,800 closed contests. I sampled 100 contests at random and calculated an average prize amount of ~$315. Assuming a steady flow of contests, that means about ~1000 contests a month (i.e. 30/5.1*165=971).

With commissions at 15%, that adds up to a monthly revenue of close to $50,000. The estimate is obviously highly sensitive to the monthly contest count estimate. Here’s a back of the envelope revenue estimate (with lower and higher estimates to test for sensitivity).

Logo Tournament Revenue

Continue reading “Breaking down a crowdsourcing business model”