What are the thoughts around Flextronics selling Frog to KKR.
too choclatie.
it’s like adam smith using pro/e to design a GE plastic part.
Answering a question with another question-
Would the quarterly perfomance pressure of a huge equity firm simply squash them?
Sounds like it may be good for the folks at Frog… they might be able to get the resources to provide services others can’t… without downgrading other departments. (like the way some design firms have gotten rid of model shops, etc)
It will be interesting to see what (if any) changes they instill.
No thoughts other than I’m surprised at some of Esslinger’s comments.
Esslinger says working with Flextronics enabled frog to sell not only to design chieftains but to CEOs and COOs.
“We now know how to have a much higher-level conversation with customers,” says Esslinger.
Sounds odd to me that frog couldn’t have those kinds of conversations before the Flextronics purchase. I can only conclude that previously when they had to deal with manufacturing/business realities, they mostly ignored them. I’ve seen high-level firms ignore constraints before and do what they want.
Anyone else have a better explanation for what he’s really saying?
What kinds of products frog has done since the Flextronics merger anyway - if it did it help them gain higher profile projects, are there any examples?
I wonder if frog just turned into Flextronics personal sweatshop for quick turnaround, low profile electronics… or they are actually doing more interesting work on the ID side.
Does it really have anything to do with frog? Or is it merely one company selling an asset to another company.
And is that what we want to happen to the firms that we love and loathe?
Having worked for a company that was bought by KKR (Evenflo) I would tell frog to be careful. Those guys are accountants and any other language besides a spreadsheet is foreign to them.
I thought there were a couple interesting points:
- Design as a business is a pretty terrible proposition. The article says it has 300 employees, but only booked 37 mil in revenue / 4.5 mil in profit. Even IDEO which also has ~300-400 people only brings in 70 mil in revenue.
Compare that to the Moleskine, also featured on the Core 77 page. They have 13 employees and made 15 mil in revenue and roughly 4 mil in profit.
So looking at productivity per employee you have
$123,333 / per Frog employee
$1,153,846 / Per Moleskine staffer
So the company selling the 100 year old pads of paper is doing an order of magnitude greater than “one of the cutting edge design firms in the US”.
I don’t mean it as a knock against frog, they do great work, but the design for hire business proposition SUCKS.
- Is Rob Brunner serious? He gives these snarky quotes in all the frog stories knocking their relevance as a product design house, but all of the work on the pentagram website is a decade and a half old. Does anyone think of pentagram as an ID house? I always thought they were a GD house with an ID guy or two.
got to agree, there’s no way Frog is going to maintain that head-count. They can’t steal/attract major accounts with the Flextronics work, and unless they intend on self-producing on a massive scale, they wont generate the cash to justify hundreds of designers.
I think it pretty much a good thing that ID firms are being bought and sold rather than not. Companies in other industries get bought and sold all the time. I would think it signifies that people see the value in ID and are willing to invest in it. Whether it works or not I hope it’s a sign that the general business industry considers ID a viable investment gradually more so. ID firms hopefully will start to figure out how to package themselves, negotiate their positioning, offerings, etc… Does IDSA, DMI & APDF offer a course on that?
Frog was sold within a portofolio of assetts (note other assets were in unrelated industry; software development in India). To me, and in support of the analysis by JoeFlaherty, it would appear Flextronics dumped an underperforming division within a larger sale of more valuable assets.
The sale to KKR is not as important as what KKR does with Frog. Since the KKR press release does not even mention Frog http://www.kkr.com/news/press_releases/2006/04-16-06.html
Any news on this big Design industry happening?