A level playing field

Kang Lufa lives in a 60-sq-m home and office where he runs a website called K68.cn. Unlike other website professionals who usually work hard to attract more visitors, his daily job is to see his website visitors work for him - from their homes.

"Every day, there are over 210,000 people who work for me at home via the Internet," he says. "We are a virtual company."

Kang's website is a place where registered individuals and corporate users post their missions or problems.

Those who respond can earn money by uploading their solutions or answers.

If a single solution is selected, its provider gets 80 percent of the reward, while the rest goes to Kang's website.

Missions and questions vary from logo designs to baby names.

"It's a useful and very interesting business model," says Li Bin, who runs a website that helps small- and medium-sized enterprises (SMEs) in the United States to enter the Chinese market. "It provides a very cost-efficient platform on which we can find solutions that we can't get at such a price through traditional channels."

Li discovered K68 six months ago. Since then he has posted over 20 missions with rewards ranging from 500 yuan to 4,000 yuan each. Tasks include designing the logo of his website, working out promotional plans and seeking contacts in Chinese companies that provide certain products or services.

Most of his requests have been satisfactorily fulfilled, Li says.

"Usually designing missions is done well on this website," Li says. "Tasks that need a wide range of respondents can also fit perfectly in this business model."

About 80 percent of the tasks on K68 are related to design, including for logos, websites, book covers and promotional materials. Rewards for these kind of tasks range from 50 yuan to 6,000 yuan.

"Most of our missions are design-related because they're the most suitable for being described, finished and delivered on the Internet," Kang says.

The process begins with an organization or individual posting their requirements on the website. Those interested in solving the task in a certain period of time upload solutions to the website. Those seeking answers then select - and pay for - the best solutions from the website.

"Most people who have posted solutions on our website are very satisfied with the results. They can offer rewards based on their budgets and select from a wide range of offerings tailored specifically to their requirements," Kang says.

China Development Bank posted a 6,000 yuan logo design challenge on K68 last December. In 12 days, there were 1,536 results uploaded by 962 designers.

Impressed, the bank launched a second request, upping its reward to 18,000 yuan. It picked the five best logos and split the reward between the designers.

"Among the winners was a 29-year-old primary school teacher from a small village in Central China's Henan Province who had to walk two hours out of the hills and mountains to the nearest town where he could get his payment from the single bank in that area," Kang says.

On K68, people who post tasks often come from advanced areas such as South China's Guangdong Province and East China's Zhejiang and Jiangsu provinces.

But the people who respond and get rewards are often from China's inland areas.

"There are people who live in China's least developed villages but are talented designers," Kang says. "It is the Internet that gives these people an equal opportunity to compete with even the world's top design companies, otherwise their talent would never be discovered."

According to Beijing-based IT research house CCID Consulting, more than 600,000 people participated in online challenges last year. The report said that number will surge to 7 million by the end of this year.

That booming participation has seen the number of websites like K68 increase to over 100.

"Last year, we received a capital injection from a US venture capital firm," says Zhong Conghua, CEO of Taskcn.com. "We identify ourselves as a service provider for China's millions of SMEs and plan to make an online business greater than Alibaba (China's largest e-commerce company)."

According to domestic research firm iResearch, the number of SMEs in China reached 31.5 million last year. The growth will maintain an annual rate of 7 to 8 percent until 2012, when the number will surpass 50 million. "In the future, every part of an SME's business process could be outsourced on our website, since we will serve as a labor pool for companies that do not want to maintain a large group of employees," Zhou says.

"By doing that, they could greatly reduce costs and focus on their core business," he says.

(Shanghai Start 09/07/2007 page8)