So there’s this table with three chairs around it. It’s a very old table. These same people have been sitting here forever. The guy who created a product sits in one spot. Across from him is the guy who buys the product. And then there’s that other chair.
We’ve sat there frequently. Basically, the
first guy pays us to find the second guy and convince
him to buy what the first guy is selling. It’s a
pretty important function, maybe the most important.
Without it, there’s just one guy sitting at a
table and nothing happens.
For performing this function, generally we are
contracted on a “work-for-hire” basis.
That’s nice and frequently lucrative. But, over
time, we’ve developed some problems with it. You
see, once we hand over our creative work we lose all
connection to it and immediately stop profiting from it.
If I were an actor and was cast in a potato chip commercial
I’d be getting a check every thirteen weeks for as long as
they used the film of me doing a simple “bite and smile.” But,
if I create a potato chip brand name and identity
system out of whole cloth for a corporation and they
sell millions of those salty snacks every month, I get
nothing beyond my original fee. Of course, I’m the one who made that
awful deal. It’s my fault if I enter into an
agreement that sells myself short. True enough, but
there is very little room for earning on the
‘residual value’ of creative in the
marketplace and it’s important to remember that
someone else will always be willing to charge a little
less than you to get the business.
Aside from all that, the client/creative relationship
can often be contentious and result in the production of
professional work that may or may not be effective and
more important to us, may or may not be great.
There’s nothing worse than sweating over a project
and then not wanting to show it to anyone after it’s
complete. No amount of money is going to make that feel
better.
It occurred to us about two and a half years ago that
there was only one way to take complete control of our
own destiny as creatives. We needed to sit at all the
chairs at that old table.
Like many small firms, we saw a lot of business dry
up in 2002. Marketing and advertising budgets tend to be
the first costs sacrificed in the face of a tough
economy. At the time, it seemed like we were being
conspired against. First one loyal client would get
bought and they’d hire someone else, and then another
would slash their budget to almost nothing. Long-term this was
a positive because it made us reevaluate what it means
to be “successful.” But it wasn’t much
fun.
If business hadn’t slowed down, who knows what would have happened.
It’s very easy to get caught up in the rush for new business and the need
to service clients and then expand staff and then have to chase more business to pay for that.
It happened to us because we didn’t
have time to reflect on the fact that we were producing art and copy we didn’t
love. We just couldn’t see any other possibility. Nothing will make you think faster or more
creatively than knowing there is less in the bank account on Tuesday than you need
to make payroll on Friday.
Frankly, we were tired of being at the whim of forces
that we could not control and we set a goal of
converting half of the studio’s revenue into
businesses we owned outright or relationships with
companies we believed in that would allow us to share
financially in the success of the work we did on their
behalf. And then we didn’t do anything about it
for a while. Except think.
On the plus side, we had talent, taste and enthusiasm
and a lot of knowledge about the crafts of design,
advertising and marketing. Plus, we had coudal.com, our
studio site, that we had been faithfully updating since
Halloween of 1999 and that generates thousands and thousands of page
views every day.
Hmmm.
At SXSW this year, I answered the question
“should my business have a weblog?” like
this. If you need to make copies of documents you should
have a Xerox machine and if you have information about
your product or service that needs to be updated
regularly then you should have a blog. But the really
interesting question is this, “Should my blog have
a business?”
The old idea is to create a product and go looking
for a market. “If you build it they will
come.” The minute we saw this equation from the
other side we knew what we had to do. Without realizing
it, we had already built the audience, now we needed to
create a product for it. “If they come, you will
build it.”
The people visiting our site seem very familiar to
us. They like what we like. They read what we read. They
buy what we buy. That’s why they come to the site
or subscribe to our feed and take part in our goofy
features and contests and write us emails and send us
links.
We’ve spent a lifetime trying to think like
“the target market” on behalf of clients.
That’s always a challenge, but this is different.
There’s an amazing freedom in building something
for yourself.
I’ll refrain from telling the whole story of
how Jewelboxing became our first studio business, or how a political dinner conversation became Lowercase Tees. And
the one about how we put The Show together in 72
hours is fairly interesting too, but what it all
comes down to is this. If you want to free yourself from
the tyranny of clients you have to become one.
We share more than just a loft studio and a mania for
simplicity and white-space with Jason Fried and
37signals. We share a lot of ideas about independence
and building big things with small teams too. 37signals
needed a way to manage communications on client projects
that was “stupid simple” so they built
Basecamp and thousands of other people just like them
needed it too. Jason said, “When you are your own
target audience you can’t help but make better
products.” Same goes for David Greiner, who, as
part of the Switch I.T. design firm in Australia, hated
the options available for managing email campaigns and
so they built Campaign Monitor, “We focused on the
features we needed and it turns out that thousands of
other web designers found those features just as
useful.”
There has been a bit of talk here and there lately
about “design entrepreneurship” and I guess
that’s as good a title as any. New tools and
technology have made it much easier for small teams to
run the manufacturing, financial and distribution side
of things. The cost of entry for a new business can
be calculated more often in hours of work than in sums
of cash.
Real value is found in creativity and in the
application of craft as it relates to marketing and
communications. I wonder, what kind of companies are
best suited for that sort of thing?
Disclaimer. When I refer to “clients” in the discussion of this matter it should be assumed that I am referencing fictitious people who bear no resemblence to real individuals, living or dead and especially not to current clients of Coudal Partners who are uncommonly generous, open-minded and insightful.
I’m not a Designer (God I wish I was … but I can juggle three rubber balls and I like hockey, so …).
I’m a developer. A code constructionist. A “head-down programmer for hire”. And I love it.
(And, I love the fact that despite high school teachers and college professors telling me ‘you should never start a sentence with the word “And”‘, I still get away with it! HA!)
Anyhow, as you mention, it is, indeed, lucrative to write code for hire. But it’s not fulfilling nor does it create passive income.
Thank you thank you thank you for this nudge in the right direction. I’ve tons of ideas for “developer tools” and such-like and have mentally toyed with the idea of creating them. Thanks to you, I’m now inspired to start.
Again, thanks. Oh … and I’m faster than Jason, no matter he thinks *wink*.
You said in your article that you sold yourself short. Why not make an article about it so that others will learn?
I would love to read an article that would make people realize that they’re always selling themselves short, even to themselves. It is a dreadful fact and we sometimes do not realize that we do it all the time.
I think the first rule in advertising or marketing (even encompassing self-esteem issues) should be “You are your own worst client. Sell yourself to yourself. If you can’t, how can you expect others to buy your ideas/concepts?” Ideas of self-branding come to mind.
Anyway, this is just an idea. Maybe you can explore it and share it to the world.
Charging “what the traffic will bear” is no way to price your services. It implies that there is no intrinsic value in the work itself and is at the core of our problems with work-for-hire. For us anyway, that system is broken. And don’t get me started on spec-creative.
Thanks for the great article, Jim. Although focused on the business decisions surrounding the shift from a marketing studio to market-driven producer, your writing underscores another important quality your studio possesses: *passion*.
When I had the chance to meet briefly with you at your Chicago loft earlier this year, I was struck by your fervor for top-quality products and creativity above craft. (Jim literally jumped out of his chair to show me the new, glossier stock they had sourced for Jewelboxing, and he claimed he would rather hire people with taste than raw skills, because taste can’t be taught–I suspect his staff has both qualities, though.)
Like his loftmates at 37signals, Jim and the crew at Coudal Partners are extremely passionate about their work, whether it be Jewelboxing, LowercaseTees or the beautiful TheShow recordings. It’s that passion that brings folks to their blog, makes them take part in their silly contests, and creates a fanbase of excited customers and friends like me.
Thanks again for the great article and the good advice. Thanks in part to our meeting (an in line with the ideas expressed in this article), you encouraged us at Free the Slaves to start a “blog”:http://freetheslaves.net/blog/#a002122 and to market our passion as strongly as we do our cause.
Being your own client is awesome. Every designer probably starts from there when he designs his own website. But not all of the designers come back to being their own clients after that. And in all the benefits described here i want to add one more – even if you’re not going to always be your own client, doing it once in a while helps to understand clients better and makes your life more rewarding and interesting.
Hi Jim,
like Don, thanks a lot for this fueling article.
“New tools and technology have made it much easier for small teams to run the manufacturing, financial and distribution side of things. The cost of entry for a new business can be calculated more often in hours of work than in sums of cash.”
As an industrial designer, I would be interested in hearing the differences you found between the development of a physical product like Jewelboxing and the development of a software product like Basecamp. Is it a misconception from my part to think that it’s easier to start a business with software products than with hardware ones, cost and marketing wise ?
You can have lots of ideas regarding hardware products and be as passionate as one could be, but when it comes to try to bring them to reality, well, there’s a lot of money to put on the table before you can have the result between your hands. To me, the nature of the tools you need is the problem, not only the time you would spend to build. For software products, the result is accessible faster, as building and enjoying the results are almost seamless (but I might be wrong here, I never worked on software products but primitive websites) and are happening at the same place.
merci merci merci
To be honest we didn’t think too much about this distinction when we got started, but we do every time a package gets lost or destroyed in transit. The upside of developing a thing as a product is that you’re forced to learn about shipping, supply-chain, currency conversion, customs, language barriers, etc., and while that all sounds like a pain, for us anyhow it’s been a blast. And more importantly, all that knowledge is transferable to the next idea and to client business too.
We built a little app that shows us the last several customers and where what they bought is going in real time, and right this minute the cities are Dublin, Athens, Pasadena, Bethlehem PA and Altrincham UK. It’s a lot of fun to know things are going everywhere and we’ve met a ton of people because of it. The Pixies are just finishing their set in Dublin right this minute, and we’re there with The Show, so that list, hopefully, will take on a decidely Irish flavor shortly.
I wonder what everyones thoughts are about keeping the business name for a product the same as the blog or seperating into another company.
For example: Campaign Monitor and Coudal Partners.
or
My Blog and My Blog Store.
I totally agree with Jim on the charging what traffic will bear as a bunch of nonsense. Working in a small market in Ohio, by that standard I’d make more at the local Radio Shack. We as creatives shouldn’t need to justify what we charge but when we do, we need to make it a value added proposition rather than a simple expense. Have you seen what plumbers/electricians/contractors charge lately?
I was rather hoping you were going to suggest some sort of deal or coalition to ensure fair pay for web designers, like the potato-muncher you mentioned.
Sigh.
…to get a residual check every 13 weeks your design was in use. But it aint gonna happen. There are lots of pricing guidlines and policies about licensing that seem fair-minded and make sense for all the parties involved but, in my experience anyhow, they rarely come into play for design and advertising.
Been there with mister: http://www.mr-edgar.com
Now, doing that with madam : http://www.madamedgar.com
I’ve never bought the idea that designers who go off to start their own products is because of “passion”, and I’ve been in web design a lot longer than the author of this article.
If you were so passionate about design, why stop doing it to produce a bunch of t-shirts or some cheap software? Why not keep designing?
*sigh*
We’ve heard it all before – “I was on six figures before the bubble burst” – “my clients betrayed me” – “nobody recognizes real talent anymore”.
Here’s the bottom line folks, and you probably won’t like it. Those of us with the requisite talent and who worked hard did very well out of your companies going bust, and continued producing the quality and functionality that our clients loved, and which your clients turned to when the chips were down.
Sorry.
You have a point.
Then again, it’s a survival thing.
Think of us the next time you’re revising the revision of the idea you presented but were sure they’d never approve. You know, the one with the unreasonable deadline and budget.
The idea was never to ‘stop’ doing design, it was to give ourselves the freedom to do the design we wanted to do. More power to you if you find that freedom consistently in client work, it’s a beautiful thing when it happens. We just found that despite our best intentions it doesn’t happen enough. Guess we’re selfish that way.
“Think of us the next time you’re revising the revision of the idea you presented but were sure they’d never approve. You know, the one with the unreasonable deadline and budget.”
We don’t do that. It’s easy to get around: we don’t present bad ideas and we don’t take on unprofitable jobs. If you do, you deserve everything you get.
As to creative freedom, I don’t believe that I’m too good for my clients. Whether they are international corporations or one-man startups, if they hire us, they get nothing less than 110% effort start to finish. It sounds from your posts a lot like you found that too hard, and quit to work for a client you knew you could please: yourself.
Am I wrong?
Creating our own products and businesses allows us to be very selective in the client projects we do take on. Nobody is too good for anything. We just want to strike a balance between running a successful business so we can all pay our mortgages and tuition for our kids and still do a wide variety of creative work that we enjoy and believe in. It’s pretty simple really.
Because of it we get to tour Europe with The Pixies, create features and competitions that thousands of people participate in, make movies, meet and share ideas with people from all over the place and get into interesting back-and-forths like this one.
Too often I see designers motivated only by the bad things and frustrations of the industry – difficult clients, long hours and so on.
If they want to hang out with models, name-drop bands, garner a cult following, be regarded as a “guru” or whatever, then they should go ahead and do it. It’s not difficult. I used to do it but stopped because it left no time for interesting stuff.
To be honest, if I was in your position I think I’d find it impossible to do anything useful. My motivation as an agency designer is external – the client’s needs and future. If I was only answerable to myself, I’d make a miserable boss and just bunk off to have fun all the time I reckon. What’s your secret?
😉
Great article, I’ve been in the web design industry now for about 2 years (full time) or 4 years all up. Coming from a trade background as a carpenter I thought it would be much easier than it has been to build the foundations for a solid business, but I have to say the design/new media industry is far more complex than the building industry.
I originally got out of the building industry because I love to be creative, and working off someone else’s plan just wont allow for that, funny thing is I’m now finding the same barriers with (certain) clients in this area of expertise (I’ve been building websites for longer than 4 years;).
It was only the other day after talking with some associates we all started to realise we need to do more than just design for clients, we need to start producing tools that we need and that we can give to others who need the same functionality. So we have now set out a new strategic plan that will hopefully do all of what you have clamed possible in your article.
I’d just like to say thankyou for this article, as I has inspired me to think even harder about this issue, and may just be the linchpin that has been stopping the progression.
Cheers!
Thanks Jim, well said.
I think designers can use their way of working to create great product companies. However, this does involve learning a little about marketing, sales, operations, strategy, etc… maybe unpalatable business stuff folks avoided by becoming designers. As long as we’re willing to pursue career growth it’s possible.
Earlier in the year I gave a presentation called, “Can we run the company?” that discusses this
http://noisebetweenstations.com/personal/weblogs/?p=1583
…and will be giving a short workshop in October in NY to try and seamlessly combine the product design and revenue design aspects of making a product…
http://noisebetweenstations.com/personal/weblogs/?p=1735
“We as creatives shouldn’t need to justify what we charge…”
I’m a little put off by this statement. If you can’t (or worse yet, won’t) justify what you charge, how do you expect your clients to justify paying you? In every business, no matter what you do, if you can’t justify the cost to your customers then you might as well start filing for Title 11.
Hope I haven’t taken this comment too far out of context, as I agree with the rest of the statement.
Not only, as Jason says, do you need to justify what you charge, but how about the product as well. I know people who sell things that they don’t beleive in. This is not a good idea!The customer will pick up on this faster than you think.
“Ally”:http://www.massageleader.com/massagechairs.html