Crossing the Chasm?

I have been sitting and wondering about the next steps of my company. We have a made it past the 3 year hump. In other words, we feel like we’re here to stay.

We’re a 4.5-man house (the .5 is our co-op :wink: ). We can handle the workload we have with a some outsourcing for some overload.

That said, we’re pondering what our next step is. Crossing the chasm, so to speak. I was wanting to see what other’s experience in the industry has been when they were at this point. Nervous about investing in new bodies to expand the business. How to fund those bodies at first? How to do the rainmaking so that you CAN bring on new bodies w/o taking away from the billable hours too much?

A whole pile of things to consider. Things that I knew would come one day but never really realized how nerve wracking it would be until I was here.

Would love to hear some war stories.

Dont know if this is of any help, but perspective from an employee who’s firm is going through the same process

The place im at currently is in the same position. One thing i have noticed as an employee is that they have a had a high turn around in staff by hiring the wrong people and trying to do a quick fix to cope with the volume of work comming in.

so that would be my first suggestion is making sure who ever you higher next is a definate keeper, not someone who is likely to jumpship quickly

Another thing noticed is that communication among our place is poor, As the numbers increased the MD’s seemed to find it a struggle to actually direct and project manage, causing HUGE amounts of frustration and in the end one new employee exploded.

Space is another issue, at one point there were 9 of us crammed in a 18m x 10m room, this as you can imagine was a nightmare, so much so there wasnt enough deskpace, and again we lost another employee because he had no desk for 2 months.

As a result our place hasnt expanded due to not overcomming these problems, and staff moral is extremely low due all of the above.

A good read is Tom Kelleys the art of innovation he losely glosses over design business practice in how to grow from a 4 man band to what IDEO is today, the key seemed to be staff moral

Affraid i cant offerr any insight into the mangerial implications of expanding

I can totally see the space issue being a problem.

I think part of my problem is that I am VERY concerned about growing the company organically and in a healthy manner. I am not interested in quick fixes, or hiring the “wrong person”.

Which is why I am here. Partly wondering how people approached this, partly wondering if I am too focused on doing it right and therefore not doing at all.

I recently took a job with a consultancy adding to a 4-man design team, business was looking good and promises of business coming in sounded even better…

6 months later, I was let go because promises are made to be broken, as well as management problems (the MD of the consultancy was, in short, beyond stupid). It turns out I was hired on the back of a promise from a big client to extend product lines etc., he got ‘wise’ (aka ignorant) and decided to deal direct with factories in HK to extend lines. As far as I know the other designers have also been told to start looking ‘just in case’.

I think your concern is justified. Given the current economic conditions (I’m not so up-to-date with the states of course) would it not be better to stay as busy as possible as a 4-man and, over time slowly introduce the ‘right’ person into the company? You could interview, and then contract the chosen designer for tester project?

Which is why I am here. Partly wondering how people approached this, partly wondering if I am too focused on doing it right and therefore not doing at all.

Part of the answer may already lie in your question.
But, perhaps, you should ask other questions, too:

As I can see through your corperate website, you already list an
impressive range of services. Even electrical engineering, which I´ve
never seen in a design consultancy before.

So, I would ask:

" Who are we ?"

" What are we to our clients ?"

" What do they like about us ?"

" How can we improve on what we are good at?"

" Would I (the owner) like to go into that direction, or rather open a surfshop in tahiti ?"

I hope these hints are helpful. In all due respect; it´s not easy to run a business through those early stages, so most people would be as puzzled, but few might admit it that readily.

Thank you for the insight.

Best regards


One thing that might help, too…

Do you have a good client who you frequently work with? Perhaps you could sit down with them (as long as you can trust them) and ask them how, if at all, you could improve service to them. How they could see you improving. Of course this has to be someone you have a good relationship with to start, but they might see it as a chance to get in on the innovation in your company and bring in more work…

Just a thought.

Have you considered diversifying?

I’ve seen some firms use their down-time (non-billable hours) to develop their own products and then partner with a manufacturer to get it to market. Both sides have equity in the product. Spec projects tend to be a high risk adventure, but it may be better use of your designer’s time than sweeping the shop floor when there’s no work.

The key to the success of this type of arrangement is the breadth of your network. Pairing great product concepts with great manufacturers is a black art, but if it’s done right you could possibly enjoy an annuity-type cash stream that could pay the rent. This comes with it’s share of headaches though. You’ll need to manage two businesses.

Just a thought…

I have a friend who is interning at a firm who has started their own product line, and from what I hear they are doing quite well.

A whole firm of designers designing a product line that they feel connected with doesn’t sound like a bad idea.

Lot’s of stuff to reply to here:

  1. Mo-i - We are a multi-disciplinary house, as you saw form our website. We believe that Design is not just a single discipline. Your point of getting more introspective is well taken. Figuring out our message.

  2. NURB - I like the idea of sitting down with our clients. Something that you would think was obvious, but I would imagine often overlooked. No one can provide you with a better insight to your company than those who you piss off every day :wink:

  3. Plastics - yes, we have absolutely considered getting into our own product line. The problem being time and finding the right product fit. And, getting back to the original question, how to fund and expand your business appropriately to do so. We are currently looking at the idea of creating our own product. We’ve gone as far as creating a product spec and starting the market research. But when you’re core business ramps up the 2nd one always takes a back seat. So its a vicious circle. How do you cross that chasm?

I like the idea of sitting down with our clients. Something that you would think was obvious, but I would imagine often overlooked. No one can provide you with a better insight to your company than those who you piss off every day

Someone once told me:

“Your best opportunity for new business is with your current customer.”

  • If you did your job right the first time they should come back the second time.
  • You can skip the painful selling phase.
  • You know each other’s idiosyncrasies.
  • Networks can build quickly using existing customers.

Well, so far, this has been our bread and butter. We have established a small handful of good, return clients. That’s what got us here, to that critical 3 year mark. But now where do we go? How do we get there?

If you don’t have a dedicated sales person, I’d invest in one. If you have one dedicated sales person, I’d consider in investing in two, or (at least) a support person for that sales person. But, most importantly, if you invest in a sales person you need to invest in improving your sales techniques. After not insignificant experience selling a variety of widgets and some graphic design services and print-- and after getting a degree in ID-- I began work for a 5-7 person product development firm that laid off three folks in my first month there. I was ostensibly hired to lead business development with the potential of some ID or graphics support. I then spent a year elaborating on the principals’ poor sales efforts and focused on a market that was intriguing but had no history of working with outside consultancies. Suffice it to say, in a four person shop with three billable people and after a year of failing to ever hit my sales stride, I was let go. Happily, I found another business development position at a larger (12+ person) product development firm in town that already had a dedicated sales person of 7+ years. How did they do it, and how are we still doing it with two (2) dedicated sales people and the need to hire more resources (still) to keep up? By working with sales coaches. There’s no question that selling intangible product development services is very, very difficult. But if you work on your message every week (and work with coaches who hold your feet and technique to the fire), then you can be successful. And it never hurts to make as many fricking phone calls as you can in as many different markets and industries as you can.

I hope that helped.


Awesome. Definitely something I needed to hear.

Would you think that a sales person is needed that has Design Field Experience, or do sales techniques transcend fields?

or do sales techniques transcend fields?

I would say the techniques will transcend fields to an extent. However, if your sales person had some aesthetic sensitivities and knew quite a bit about what they were selling that would be a huge bonus right out of the gate. Perhaps a former/current IDer looking to branch out.

That’s an interesting question. I would say having experience in selling services (and not widgets) would be a big plus, but I’m divided on whether one should have a design background. Techniques can help you regardless of the markets served or services offered, but they do need to be tailored via trial-and-error. My boss has been selling product development services very successfully for 7+ years with no design background; you could even say that there’s a certain benefit to not over-thinking or over-involving one’s self in the creative process if you don’t have a creative background and / or don’t want or need to.

In my case it’s just the opposite, but I also need some involvement in the creative process personally to feel most rewarded. I’ve only been (successfully) selling product development services for 1+ years, and in that time I’ve also been involved in some program management and heading up some user research efforts which inevitably ate up time I could have spent selling. The danger to doing more than just sales is, of course, not focusing enough on sales to keep pipelines full. If you bring on someone without a product development background, he or she is probably easier to keep inside their “Sales Box.” It just depends on how flexible you can afford to be regarding compensation vs. commission, dealing with overflow as you grow, etc. How is that for a non-answer answer?



Ha! I don’t expect hard answers for this. Guidance. “Stories from the Trenches”, etc.

This is great stuff…feeds my anxiety, for sure. But also helps focus a bit. It definitely goes along with what I am struggling with. Feeling that I need to take on that role of rainmaker myself but being scared shitless of not making payroll b/c my billable hours drop.

speaking of the whole design firm developing a product…
noticed that trend lately. Its funny how big corps have outsourced so much and now they are little more than access to capital, might as well be a bank.
sometimes it scares me how much people are willing to give up a core function in order to save a little cash. If a company outsources its design, engineering, testing and manufacturing, what do they do? they are importers and nothing else. lowest on the food chain imo. (sorry side rant)

on the positive side, we now have lean creative firms doing interesting work
astro design > astro gaming headphones
pentagram/brumner/ammunition > feugo grill and the Dr. Dre headphones
ignite (chicago) > contigo travel mugs
metaphase > some new bbq thingie
mnml (scott wilson’s new studio in chicago) > baby furniture + other stuff
fuse project has some stuff like this too

access to contract mfg and outsourcing fulfillment, call centers, etc means that you don’t need the red tape and baggage that comes with a large corp.

and i think we’ve all seen a million bad decisions in large companies because no one wants to be held accountable or they aren’t invested.

Better yet… go to your local design school and order up some fresh communications interns. Task them to first research manufacturers in your local proximity. Once they got that list task them to cold call into the companies to bark up the tree of design and engineering departments. One name leads to another to another…

Interesting topic.

1- I would say add some more work examples to your website. Also add a little personality, who are your people?

2- As mentioned above, get involved with your local ID school. Establish an intern stream. If you are involved at the school, then you will get a better crop of interns. Make it a steady flow. It is much easier to expand staff if you have interns you are always training. Plus, you are giving back to the greater ID world…

Agreed with everything above. I am actively working on #1. I have always strayed away from the who the individuals are approach…I guess its because our approach is team centric as opposed to a bunch of different disciplines/people…I will rethink that part.

I have been involved with the local school in the past. Got away from it for a while due to time constraints. But you make good points. I have also had some bad luck with interns. Much better luck so far with engineering co-ops.