Designers starting businesses

Lets talk about entrepreneurship.

I see there are basically 3 options for a designer to make a living in this field:

  1. Become an in-house designer in a company, work 9-5 or more, possible corporate career etc.
  2. Freelancing, working on your terms on a project basis (+ licencing your stuff etc.)
  3. Find a market, design a product for it and manufacture/market/sell it.

I am interested in discussing the 3rd option. How many of you have done it? How many have thought about it but postphoned the idea or decided not to? What was the biggest motivator or deterrent?

I`m currently starting up my own side business while still working full time elsewhere.
Would like to hear about your experiences or thoughts about this subject.

Option three is the ideal situation, keeping in mind that a product that is selling it’s self continues to generate revenue vs freelance were you are always having to sell sell sell.

Also in the past you would need to raise your capital, or sell your soul and your design rights to get the money for tooling / manufacturing / sales / distribution, but that has all changed with Kick Start.

Ltr today I will walk through my first hand experience of a father and son owned Design / contract manufacturing company that tried / trying to get their project to market. Much of it when getting into details are things NOT to do.

there are several examples of scenario #3, some even regulars on this board ( This is a good thread about the good and bad by 6ix ).

One of my favorites examples… Mint Inc founded by Scott Henderson, among others, and maker of the Full Contact mortar and pedistal. (interview here)

At a smaller scale, a friend of mine in Austin makes these pop-out jewelery designs in very low volume runs and sells them at the Moma Stores.

There are bunches of people doing it, and it is 100% awesome if you pull it off, but you have to remember that its difficult to successfully run a business - it’s not just create a design, get it produced, then sit back while the bucks roll in. You have to worry about financing, shipping, distributotors, assemblers if it’s complicated, taxes and business protections, etc. etc…

I have another friend who inherited a small injection molding machine (cool huh?!). He made a very simple product, had a tool built, and now spends 90% of his time trying to get orders rather than designing more products. He does pretty well, but it takes a lot of effort for each big sale.

I’m surprised, I thought a lot more people would chime in because there are so many people who want to start design businesses.

Personally, I haven’t done it because I don’t feel as though I know enough. Any business needs a little bit of guesswork and there’s certainly a learning curve to it (not everything can be taught) that comes through experience. I’m hesitant because of the gaps in my knowledge, I don’t fully understand sales, marketing, PR, or advertising. I’ve worked with companies who use zero advertising but have a solid sales team and they grow year after year. I’ve worked with another company that nailed the PR and ad side but something was wrong with the sales/margins and they never seemed to get real far. It’s very easy to be dismissive of roles outside of design, but they are there for a reason, they do help when done right.

Also there is a lot of deal making that goes on that I don’t understand (probably because I haven’t been around it enough), you can sell to this guy, but if you do that guy won’t buy from you. Then there’s taxes and duties and freight costs that have to be figured out.

Additionally I don’t like the idea of doing something unless I’m really going to commit to it. Right now I have a great job and a fun hobby, so I don’t want to take away from either of those yet. I need to learn more and perhaps in a few more years I’ll have the knowledge I need to move forward. I guess it all boils down to cost and how much you’re willing to part with to get your company off the ground, time is money, I feel like my time is better spent learning second hand right now.

EDIT: Like Trav says above, you’re basically going to be doing everything initially and that can be really time consuming especially if you don’t know what you’re doing. =P

This is a really good thread! We did something in our final year at school where our thesis would end up either becoming a portfolio piece, or the preferred route to create a micro-business out of our concepts. I guess the issue was to take the finish to the next level outside of the school context.

Option #3

My personal approach was to work with a financial advisor (accountant “Friend”) and work out where I would like to be in 5 years if I had 0, 50k, 100k, planning all projected costs, and compare the returns to placing the money within a high yield savings account. As dry as this may be, it helps to at least balance between actual and projected figures. I’ve built the business plan, but it always came around to working out the financials. In the end, the plan would change to reflect the money put in/put out. It helps to have some non-designer friends help out in this end.

All of this is, of course, the tried and true moment revealing when I can actually jump ship and steer my own course…

Thanks for chiming in. Some good points being discussed here.

I think in the main advantage of making it yourself is being able to fully realize (if all goes right) your vision / dream.
Having that freedom and being able to manage the whole process is the main motivator for me.

One of the hard parts is overcoming the doubts. Like the big question: Is my product really good or is it just me being overly excited?

Be careful… It can be nice to manage the whole process but dangerous at the same time. I worked for a father / son company were the Dad was the ID and the Son who had a degree in marketing… Their product was the best in the world and any one would be stupid not to buy at least 10 or so the Dad thought because he had designed it and conceived it. The Son by his own admission new more about everything and anyone thus micro managed everything even though he had several top level people with great experience working for him. Managed to raise 3.5 mil in capital at the expense of giving up 40% of the company that the product was under. Ran through that money and needed to obtain more giving up another 20% all the wile not supporting the Dad’s Design firm with sales because this new product was going to make all the money and everything needed to focus on that.

After getting all the tooling completed and first order of the product (minimum order) 2 years later the product is still sitting in the warehouse… Everyone admits the product is a novel ideal, but no one wants to pay the price for it… And redesigning it to pull costing out is not a option because both the son and father designed it and it is “perfect”

There is far more to this story and much needless time and money was wasted during the design and development stage.

Chevis W.

My skillset and talent is design, so I want to spend as much time as I can designing things. So for me, #1 & #2 make the most sense.

Why does #3 appeal to so many designers? The above quote from Coffee87 is about having total control of your vision… but why is that so important? Why not just be an artist?

I’ve lived and breathed #1 and #2 for a little while now, and can see the attraction to “just do what I want”.

For #3, I think scale plays a big role, personally I’d lean towards small production, 100 or less?, of more hand crafted, soul satisfying stuff, as opposed to a new widget that I can fund via Kickstarter for example and have to build a company around. I want to focus on the thing, not so much the business end.

I see the appeal… as designers, we produce value in products through creativity - why not apply the same skills to our own products and reap the rewards directly. Me personally, I would love to do my own products, but the conditions would have to be ideal… specifically, someone else to do all the business parts that would take away from designing

There’s a good story about Joseph & Joseph here in the UK. It is run by two brothers, one a business major from Cambridge, the other a design grad from CSM. Together, they had the skills to make a great kitchen product company (though I think they outsource a lot of the design now)

#3 is tempting because us designers often see the mistakes made by upper management, unnecessary limitations executing the design and feel the pressure to make more generic/safe stuff. Also seeing how the new product line never takes off because there is no marketing plan for it and everyone is too busy micromanaging to take action where it matters. Sometimes you just feel like a machine pumping out ideas for others. All that creates the urge to try it yourself.

Other reason is the discovered market opportunity. Example: a designer works in a furniture company but has a great idea of a new toy or jewelry line. He then researches the market and comes to a conclusion that there is indeed a niche market for this idea. So now he can either continue working in that furniture company and do nothing, try to licence the idea to someone else (and depend upon that someone) or start making it himself. Looking at these options I`d say the last one has its pros.

And then theres passion and commitment that is a lot stronger when doing your own thing. Im also interested in the whole business aspect of this.

That is actually one of my greatest fears. Running out of money and never ending delays.
Even when planning everything carefully, there are always the unpredictable elements that could throw the whole thing off course.

So in that Father & Son company they overpriced the product, refused to change it and went over budget with development / tooling etc. Was there a target price set for their product that the market could bear (backed by some sort of research/testing)?

yes, really interesting thread.
And very current for me actually as I am about to start a design studio with two partners.

Somehow I don’t see though how we would fit into any of the categories mentioned by the OP.
We’'ll work with furniture and accessory design as well as interiors. The salone kind of stuff so to speak.
This means that we will work on commission and royalty basis.

Would we then be freelancers according to the list? That doesn’t really sound right when you have a Limited company.
I guess then we would be category #3 even though I doubt that we will ever manufacture, sell or market our products directly to the market but rather to the client.

I think another aspect to #3 besides having more control, is the fact that your efforts are SCALEABLE. You design it once and sell it a million times. Working for someone else, you design a million things and only get paid ONCE. The answer is simple, but not easy. Lots of other things obviously go into running a business. Most designers I’ve known don’t have interest in running a #3.

I think I would prefer #3 for myself since I have worked for a number of bosses who seem to look at designers as people who are born to give great ideas away at a salary that pales in comparison to the value of their ideas. That’s our job. “I want more ideas”,“I want to be number one in the industry”, “give me another groundbreaking idea already”. Just try to find a boss that rewards you according to your contributions.

Perhaps a bigger issue we overlook here is that designers do not get commission on their designs. Should we? Perhaps .5% of all sales for two years? Would that motivate the entrepreneurial designer to give more of those “golden ideas” away if they had a scaleable part in it?

one part of being a designer rather than a designer-manufacturer is that you create new produces but don’t take on the big risk to produce and sell it. In that sense, the companies that profit off designer’s ideas is justified by their financial gamble.

There are lots of things that can go awry, even for the smartest companies, and it usually takes a significant investment to produce products…

Entrepreneurial opportunities exist in many different structures. I would categorize the possible ID situations a little differently.

  1. B2B (Business to Business)
    a) Freelancing is the small scale version of this - 1 designer on his or her own
    b) Design studio is a larger version - Group of designers working together, may include professionals from other fields
    c) Manufacturer that sells products to other companies is the biggest version - can be either corporate designer or have design ownership
  2. B2C (Business to Consumer)
    a) Designing, manufacturing, and selling your own product start to finish - small company with design ownership
    b) Designing, manufacturing, and selling your own product start to finish - large company with “corporate designer”

Evaluating the best fit/goal for a designer is like determining an appropriate investment strategy - what level of risk are you comfortable with, and what are your (short and long term) financial goals? What level of detail do you want to be involved in and how much control do you need? Another factor is the designer’s personality - how well do you play with those in other fields, and how much variety do you need? Given these answers, your entrepreneurial dream could be to start a toy design studio that focuses on licensing, or it could be to start a B2C company that offers travel related products, etc. Entrepreneurs must look beyond a singular product design and structure a holistic business plan.

#3 is ulimately what I hope to do in the future. Currently I am majoring in ID but I hope to gain some additional know-how with a masters in business. This is an attractive option because I want to apply aspects of my ID knowledge to business.

With my design experience (at firms) working on consumer packaging/goods (P&G, Johnson&Johnson, Gatorade, Tylenol, and others) I then went to law school and concentrated on IP law (I also minored in Marketing). One year after graduating from law school I ventured into building my own lifestyle brand. More or less, I tried to follow the Christian Dior model by first creating a fragrance line.

I developed the concept and brand, designed the bottle and packaging, and developed the fragrance with a major fragrance oil manufacturer. I was also fortunate to have worked with a perfumer/executive who created Must de Cartier. The bottle was contract manufactured in Italy, the cap in France and the carton here in NJ. I also did all sales and distribution and had my fragrance in 70 Sephoras (1999-2003). The project was all self financed, and 50% of my time was also spent (stressing over) raising funds! But, with the 9/11 event and the internet bubble coupled with a major hit from a major client (I also made fragrance for an Asian brand as a contract manufacturer myself) when they pulled an Enron on me (declaring bankruptcy) my business took a knock out blow. I was owed mid six figures that was never recovered! This was the straw that broke the camel’s back! Fast forward to 2011, and I’m now planning on becoming a licensed manufacturer/distributor with a possible joint-venture project. I’m also working on another skin line.

Don’t ever underestimate the need for capital! This is the most challenging. I’ve made many mistakes, but also achieved memorable milestones in this journey. As an entrepreneur, the journey never ends. I’m in the process of getting back up on my feet after my first TKO! :mrgreen: If you are fearful and risk averse then don’t do it!

enigma - Wow, that is a GREAT story! Would you share with us your experience in raising capital (how you did it, lessons learned)? I’d also love to hear more about how you created a relationship with retailers. Thanks for sharing this!