What I Learned When I Started a Design Studio

Earlier in the year, I wrote a bit about the design services industry in two blog posts: first, I wrote “The End of Client Services” in July, which outlined my thoughts on why the best interaction design is done outside of the studio/agency model. Then in August I followed up with “In Defense of Client Services,” which expands a little bit on why I believe services is such a difficult way to earn a living as a designer. I had meant to write a third post, but getting Mixel out the door got in the way. Over the past several days I was finally able to find the time to hammer out this follow-up.

Actually, I’ve been making notes for this blog post all year long, because it was ten years ago that I co-founded an interaction studio here in New York City, partnering with some colleagues from a previous employer. I stayed with the studio for four years, and I learned a lot in that time. Building that business significantly changed my outlook on the design industry, but I haven’t written too much on why. A decade later seems like the right opportunity.

What still strikes me the most about that experience was how little my former partners and I understood at the outset about what it takes to build a successful services business. In the years since, I’ve met lots of designers who have either founded or had the ambition to found studios or agencies of their own. Most of them, it seems to me, are laboring under misapprehensions very similar to the ones that hobbled my former partners and myself.

So here are a few of the key lessons that I learned from co-founding my own design studio. The usual caveats apply, of course, in that everything about business is contextual, and so your mileage my vary.


People

Far and away, the biggest lesson I took away from co-founding a design studio was that almost nothing matters more than people. How well a team works together, through good times and bad, day in and day out, is a bigger determining factor in building a successful business than the contracts you win, the work that you do, the press coverage you get or even the money you make.

The way to form a good team is to gather people of complementary talents and temperaments and unite them under a single vision. By contrast, my former partners and I started our studio primarily because we were thrown together by circumstance — in the fall of 2001 and in the aftermath of 9/11, with no one hiring, we had almost no other choice but to form a company of our own. But our disparate attitudes, approaches and visions for the business inevitably led to strife, and before too long I could no longer answer the question “Do you like working with these people?” with a “yes.” If you’re going to undertake the hard work of building a company, the answer to that question should always be a resounding “yes.” Life is too short for it to be otherwise.

Clients

You cannot succeed in design services unless you really believe in your clients and your client’s products. Just as it’s essential to enjoy working with the people you form a company with, working with clients that you like is essential too. I liked some of the clients I worked with, and I flatly disliked many of the others.

I did my best work for the former, and I did a disservice to the latter, most of whom had hired us to help further businesses that I felt no passion for, or was outright skeptical of. For years, I thought that my disinterest was immaterial, that I was such a talented designer that I could do a good job for anyone. But before long it became apparent to me that unless I was fully bought into a client’s vision, my work would always be subpar. If you’re trying to build a design studio based on a reputation for doing phenomenal work, taking on assignments from clients you don’t believe in is a waste of everyone’s time.

Client Work vs. Products

I’ve known lots of people who got into services thinking that they can use the income from clients to bankroll their own product ideas. That is not an impossible scenario — it’s been done before more than a few times, and it’s a beautiful thing when it happens. But it’s very, very difficult to pull off. To do services, you need to wake up in the morning with a different approach to life from the way you wake up in the morning to do products, and only a few people have the skill — and stamina — to juggle both at once.

If I were to start a new studio, I would square with myself — and my partners — that we’d be in the business of providing services to our clients, period. It’s so hard to do a good job for clients, and so hard to build a sustainable business in client services, that I wouldn’t want the creative and emotional distraction of trying to build products of our own, too.

Vision

The funny thing about design services is that it’s relatively easy to get started, but very tricky to make work. Lots of companies need design help in some form, so if you win one or two clients — which is actually fairly easy to do — suddenly you have a business with real revenue. The really challenging part is whether you can turn a handful of jobs into a financially lucrative client roster that consistently brings you creatively satisfying work. That’s a lot harder.

What is required more than anything is vision — articulating your goals and creating a plan to achieve them. Even more important is to make sure that the vision is mutually held by all of your partners. It’s hard to underestimate how valuable it is to agree, up front, on how big you want the company to grow, what kind of clients you want to win, how long you expect the company to survive, how you might exit the business — and even how hard you want to work each day. It’s easy to disagree about the answers to these questions at the beginning, but it’s incredibly stressful to disagree about them after the business has started to assume liabilities.

Marketing

Most clients, when they hire a design studio, take the attitude that the studio is lucky to work with them, that they selected them from a plentiful pool of design companies bidding on their business. To many clients, design studios are, in a sense, interchangeable. So if you don’t want to do something the client’s way, if you don’t want to let them integrate their staff on your team or hand over your development files mid-way through a project or make certain changes to your approach, well they can easily hire the next studio to do it exactly the way they want it done instead.

This is a deadly position for a design studio because it essentially commoditizes the studio’s value. It forces the studio into a mode where it’s essentially selling units of its time and not its unique creative expertise. The only solution is to upend this equation, and create the circumstances under which clients instead feel fortunate that a studio is willing to work with them. It’s a critical difference, because it informs every event within the relationship between the two parties.

How do you make this happen? There’s only one way, and it’s not to do good work, which unfortunately is the answer that many designers prefer. Good work is a core part of what makes a successful studio, to be sure, but even more important is marketing yourself — relentlessly. It’s my belief that at least a third of the investment and/or revenue of any new design studio should be devoted to getting great press coverage, creating attention-getting publications, running advertisements, sponsoring events — in short, creating insatiable excitement around the very idea of the studio. The only way to do great projects on the terms that you want is to make the possibility of working with you incredibly special to a prospective client.

Saying No

At one point during my tenure at my old studio we were talking about strategy and one of my former colleagues recounted all of the many new business opportunities then available to us (the market was doing very well) and followed that summary with a declaration that “We cannot afford to say no to any of them.”

Few things struck me as so fundamentally wrong and inconsistent with my vision as that statement did. Even then, what I had already learned running that business was that saying “no” was incredibly important, that turning down bad clients and bad projects — the ones that were outside of our expertise, outside of our budget, outside of the kind of work that would make us happy — was the only way to avoid the trap of working long and hard on miserable projects. This doesn’t just go for ‘established’ studios; due to the time, effort and opportunity cost of saying yes to bad projects, I believe it’s also a surefire way to make sure young studios never get to say yes to good projects. In the services business, sometimes “no” is the most powerful, effective and beneficial tool that you have.

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20 Comments

  1. Fabulous, fabulous post. I’m preparing to leave a large agency and set up for myself, so this is invaluable insight and advice. Thank you.

  2. Great post. I’ve had a very similar experience, and have come to some of the same realizations. You’ve outlined them here quite clearly. Thanks for sharing.

  3. Perfect summary of how tricky it is to run a small design business. After doing this for several years now, I too learnt that saying “no” is one of the most important ways to shape a proper studio, and create a work/life balance. Interesting point about marketing, most designers including myself are probably too shy or tired at the end of the day to pursue press, speaking engagements, etc. but I can see how important that can be.

  4. Great post, Khoi. We started our services agency about 6 months ago and participated in the debate following your past post about client services. Yet again, I find myself slightly worried that your experience outweighs my vision — that of combining client services and internal products. We’re already finding it tough to find the balance between the two but ultimately we believe it will pay off in the end. Other people have pulled it off before, right?

    On saying no to work that won’t further your agency I totally agree. It is difficult, especially where we’re at in the evolution of our agency, but essential.

    Thanks for your insights!

  5. I loved this post and agree with almost all of it; from my vantage point of having left a top design firm to starting my own fledgling studio to going back to work for another top agency.

    The one thing that I would add is that there is more than one way to make the client believe they are lucky to be working with you. There is more than just marketing yourself. I think the client can realize their gratitude when they trust you enough to let you tell them “No” to bad ideas.

  6. This is a great post, Khoi. With 12 years having grown my own studio from the ground up, I have to second all the findings here.

    I’d actually like to reference back to your “death of client service” article, which has comments closed now. While the points you make about the “death” of client services are valid. Mule Design does a good job clarifying the counter argument, as you pointed out.

    One thing I noticed as lacking is that too often content development–messaging, content strategy and the like is left out of the mix. I realize it’s all client service, but too often in the new “designer-entrepreneur” environment, people with great ideas and outstanding design capabilities find themselves in the position of developing compelling content along with their UI and UXD. I don’t think it’s quite so that easy for a company to nurture this “triple threat” of strategy, design and content under one roof without extensive bumps and bruises along the way (not to mention potential brand damage). It’s taken me over a decade to get it to where I want it to be, and that’s all we do!

    With this in mind, the single greatest thing I’ve ever learned in growing my studio is that being a strategic consultant first and a designer second is the best position to be in. You have to have this seat at the table up front that you’re referring to when you are the owner and designer.

    Unfortunately, too many design schools place this sort of thinking, found commonly in liberal arts programs, in favor of refining design problem solving using traditional design tools and methods.

  7. Wow, couldn’t have said it better myself. Our business (also launched in the aftermath of 9/11) just hit its 10 year mark.

    We’ve learned many of these same lessons over the years. Perhaps, the only other lesson I would add to your list is the need, and willingness, to adjust your business as the market evolves, especially in this world of ever-emerging technology.

  8. Wow, reading the article was just as listen to my own inner voice. I’m struggling with most of the problems you’d described. And I came to the same results :)
    Thanks God, me and my new partner are sharing the same goals and visions. That’s invaluable. Maybe the most important thing among all mentioned. When you know your purpose, the way will appear.

  9. Incredible post, Khoi, and I couldn’t agree more with it, especially the part about working with the right people and the right clients. In any creative industry, in any service based industry, you have to be surrounded by people that you connect with otherwise your work is going to be sub-par and always average. Rising above mediocrity and producing incredible work is, what I believe, the key to becoming a very successul agency.

    Your points on marketing were also really interesting too and I think it’s something our company should focus more on. After all, delivering great products is all very well but you need to get your name out in order to have the opportunity to gain clients who can afford to pay you the price it deserves.

  10. That’s a great article Khoi.

    Uncomfortable reading though as your “marketing yourself — relentlessly” point hits home. We’ve come to the same conclusion but it’s not easy is it?

  11. As a partner at a 4 year-old interaction design and development studio in Toronto, this post deeply reflects our experience and advice. I almost feel as if it is something we would write word for word in the very near future.

    Thanks Khoi, for sharing these insights and validating the realities of running a creative studio. For anyone starting out on a similar venture, this advice should be heeded greatly.

    I recommend reading ‘Positioning for Professionals’ by Tim Williams for anyone considering running a design studio. It lays the foundation for building a professional services business and expands on the many great points Khoi has made here.

  12. Very useful tips. I absolutely agree with most parts, especially the last part ” Saying NO”. We experienced the same here at kasra design. Turning down a bad client and bad projects is sometimes the best choice.

  13. Tom Scully of Sandler Training here in Cleveland aptly emblazoned each side of a column in the middle of his seminar room with “NO IS OK” in big black letters. That we would have the guts to live by that motto on a consistent basis!

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