Smart Design SF is shutting down

Looks like Smart is shutting down their SF office. It’s really surprising that a firm as prominent as Smart, and one that has designed so many iconic products over the years, is closing down.

I’ve read a few blogs posts on the subject and it seems there’s a growing shift towards in house design vs external agencies in the Bay area. I’m a recent grad and never worked in the area but I was hoping to get some perspectives on this apparent shift. Is there a current trend towards in house design?

Sad for the team at the SF office but lots of talented folk at Smart so I’m sure they’ll walk in to new jobs.

I did find it strange though that when they opened their London office during the summer there was no mention about what happened to the Barcelona office, it is as though it was wiped off the face of the Earth…

Here’s a few more blog posts on the subject.

This article has more to do with advertising but I think it can be applied to Industrial Design firms as well.

I had a professor in school who was a creative director at the New York office a couple years ago and I seem to remember him saying that they had no idea what they did over in Barcelona. Maybe the economic climate in Spain finally overtook them? I would expect the London office to do a bit better since it seems like there’s more of a design presence in that city.

The article sums it up, once you start bringing designers in house they are going to start to want to bring talent in house where the experience and knowledge gained can be built upon. Consultancies can often be a crap shoot where a great designer leaves and then the quality of work from project A to project B is not consistent. Not only that, but building upon domain expertise is important. Consultancies can bring a fresh outside perspective that isn’t tainted by legacy, but it becomes difficult to build up that educated workforce over time.

I also think while Smart may be shutting it’s doors, a large number of smaller design consultancies are thriving since they can be more agile. Corporations are also looking to buy up smaller consultancies to bring talent in house, just look at what happened with Facebook/Oculus and Carbon Design this summer.

Is it an overall trend or like the link, a SF/ Silicon Valley tech money trend?

If it’s caused by the growth in design work to make internal hiring more economical (especially with cashed up tech companies) overall it’s good for the industry.

(speaking of, the word “design” is auto corrected to “Design” in my Android powered phone, if it gets autocorrected to “$$$ Design $$$!!!” then my hypothesis will be proven)

There really is something to this.
Young, hungry and flush with cash tech startups will look for like-minded design companies to help realize their vision. This is why I believe that firms such as Smart have a hard time still appealing to those clients and they might start to seem a little like “your dads” consultancy. Also as such a big firm, your overhead is going through the roof and a small firm will most likely offer much more competitive pricing.
It really is a conundrum for the big, established firm and a challenge that has to be figured out in order to survive.
Sometimes a trendy, funky client might help you to rejuvenate the image and pull you out of the funk.

Or why not start a new studio under the umbrella of the old and established, offering guidance and protection but at the same time projecting that fresh, flexible and scrappy startup feel towards the clients.

I wonder if that’s what happened when Swedish Ergonomidesign with 40 years behind them, tons of awards, stuff in museums, and even books written about them… suddenly threw it all out the window and changed the name and all branding to “Veryday”.

Not an iron clad number, but I remember hearing that 7 new ID studios opened up in SF within the past year or two? That, and the fact that many more established studios here are still hiring and expanding, would definitely make me hesitate to say that the design consultancy has been made redundant by internal design studios.

I’d suspect we’ll see a few more consultancies spin out of Smart SF’s decision to shut it’s doors. And my guess is, there’s plenty of business to go around and the market will happily accept it.

Kinda of a rant:

My big takeaway from this is that major corporations can pay way more than consultancies can. And with the massive cost of living in these design cities (SF,NYC, Chicago) it’s quite effective at luring away talent.

Major corporations (Microsoft, Apples, Facebook, etc) can pay 6 figure salaries + great benefits to junior/mid-level designers. You can work 9-5 and never on weekends. Or you can be at a young/hip start up consultancies, work on cool products, but work 9-9pm during the week and 5-6 hours on the weekend for less pay and fewer benefits.

These corporations are sometimes paying consultancies $200+ a billable hour to the consultancy. So it makes sense they can just pay a fraction of that to there in house teams and retain the design talent too.

Now for companies that don’t have the bankroll to do this yet, they have there pick of consultancies thirsty for cool projects. (All under bidding each other and overworking there designers in hopes for cooler and cooler work.) They can get greta work at a low price from tons of new consultancies. Old school companies like frog, Smart, IDEO, Teague, charge more and thus are priced out of these smaller quicker projects.

Now there is something to be said about working on a variety of different projects and getting exposure to many different industries. But lately Ive meet quite a few designers that have been lured away from the fast paced consultancy life, by high paying corporate design positions. And while they may not be posting the coolest projects they worked on as much. I do see them surfing till 10am in the morning, traveling the world for inspiration, or spending there weekends on a mountain. So there is quite a draw for talent to make the jump.

Work =/= Life

Life = Life

I think it’s time to face the music that if you are an agency whose core offering is industrial design alone (ie designing plastic) chances are this service can be found elsewhere. Whether it be in-house design resource or outsourced overseas. You better be bringing something else to the table. UX, business innovation, commercialisation strategy. Something.

Having said that I think the point about creative talent migrating to corporations is a valid observation / trend, but I don’t think it is the reason behind Smart closing shop in San Fran. You are telling me they are closing an office down because they couldn’t hire and/or retain talent? Seems like a bit of a leap to me. They are not a start-up that dove in to the pool too quickly. What’s my 2¢ you ask? A result of a hit on revenue (losing bids they would have won in the past) combined with the fixed costs of maintaining studios in some of the most expensive cities per square foot in the world.

Shutting down an office is a slow-moving train wreck; everyone goes through slow periods and hopes for work to eventually pick up. Smart SF must have been experiencing a slowdown for some time.

I don’t think SF Smart closed cause of the not being able to get talent. Tons of people would love to work there. My main comments were based on the the Corporations putting a Squeeze on consultancies article.

I agree. Lots of others studios are able to under bid the bigger design houses.

You better be bringing something else to the table. UX, business innovation, commercialisation strategy. Something.

True, I think a lot of studios are trying to broaden there scope and piggy back on brand experience along side the hardware development. Designers are already doing a lot of this type thinking when designing the hardware to being with. So it makes sense that studios try and capitalize on this and get some more billable hours on items that are already being done by the design team anyways.

Taken from the comments.

If your offering can be, or is perceived to be, something that can be replicated easily by an in-house team, then the problem isn’t that prospective clients value what you do. The problem is that they see limited value in what you offer.

If your offering, looks and feels like that of many other design studios, then clients may opt for a cheaper or simply another option, or realize that they can hire a half a dozen people > like > the ones you hired to build an in-house team. The defense against clients moving away, in this scenario, is the relationship you’ve built.

This seems not to be the case(or less the case) for their other offices where Smart is being asked to deliver different kinds of insights.

The challenges are to offer something that is unique in its value to clients, difficult to replicated, and to communicate that difference.

In my opinion the only time you could sell anyone that a consultancy will have much more to offer is if you have a young and inexperienced internal team, or are trying to grow a new function within an existing team (such as UX or design research within a team that may have been very product focused).

Smart and the big guys got contracts from the mega-corporations who could afford their hefty price tag, and those are the guys who now have fairly large and mature design teams internally. Since many of their senior designers will have years of consulting experience already, it’s hard to say “you’ll get more” on the outside.

Maybe not more but “different”.
In my experience working for mid to large sized consultancies I have worked on quite a bit of projects for large scale companies that do have very extensive in-house teams. Mostly electronic giants.

These projects are of course almost always confidential, as to not embarrass the internal design team and make them look weak but lots of products had been concepted and designed at a consultancy, then re-figured internally and put into production.

I think that an in-house gig can run the risk of getting a little cushy and there might be a risk of the team getting stale. A consultancy, which most likely doesn’t care much about inner-company politics, powerstruggles and hierarchies, can come in with an opportunity to design a fresh product closer to the market in a more effective and efficient way.

Having worked consulting and corporate for a lot longer I have found the above not exactly true.

Consultancies can offer a good outside perspective but it often comes at the expense of deep understanding of the brand or any understanding of how things are made. thrybjust don’t have the day to day experience in many cases with factories and vendors. So you get a lot of excess design that is not producible and likely not aligned to the company brand vision.

Now, a lot of companies don’t have a strong brand vision, so this might not be an issue. Having built a strong in house team, I never go outside for “in-line” projects, projects in strict timelines and that need lots ifndesignbattention all the way through the production process. For companies who have not built a strong in house treat, they might not have a choice, but if you run it effectively an in house group will be much more efficient.

Where I go out of house to a consulting group is when we want to work on something much farther down the development patch and typically where it involves a skill set I have not built internally. Here the constraints of brand and producibility are not as strong. If we go out of house enough times for a certain skill set, some quick math will show it is more efficient to bring it in house and we have some good data to support a budget expansion to bring that skill set in house.

There are certain things in general a consulting group can do better and there are certain things an in house group can do better. In general, the same maxim runs accord both, run the group well and the results will be solid, run it poorly and the results will suffer.

…yeah, I did 20 years in consultancy and the last 15 in corporate in the US. There was a time when I’d have sworn I’d never have gone corporate, but now working within a mega-corp and occasionally hiring consultants of varying size and maturity, I’d say a there’s a lot of expensive bloat, padding and fluff that comes with the bigger ones. And yes “a crap shoot” depending on the talent that may be assigned to your project.

The other thing that comes with the older, top-heavy outfits is a trend to “redefine" their offering; A path to justify up-seling, higher hourly rates, often for tedious and complacent “strategic innovation" and branding pitches.

The motivation for going ‘outside’ is to breathe some oxygen into the sometimes stale corporate environment, and I’m now discouraging engagement with the big consultancies in favor of younger, more disruptive, guerrilla thinking.

I’m sorry, but Smart probably had it coming to them.

The above comments all make the generalization that consultancies work for companies as an alternative to using their internal resources. Rare is the corporation where different design initiatives are all organized and aligned under one design lead. Marketing teams usually have budgets >10x larger than product development and are more willing to throw big dollars at a name-brand outside agency to generate ‘fresh’ ideas for them. (The fireworks that go off when the internal designers find out about these alternative proposals are fun to watch.)

I’d assume that a good percentage - say 30-40% - of big name firm’s client contacts are not VP of product development or engineering types…instead coming from the ‘brand’ or marketing side. If there is a tightening of belts for marketing/ad dollars to spend then those big ticket jobs go away.

yo, can you comment on the mass exodus of upper management from frog over the last 12-18 months. Rolston, Lorenzo, Chipchase, Burton, and the list goes on and on. Did you see the writing on the wall?