Do Great Work, Repeat

The title is from Greg Story‘s article The Future of the Digital Design Agency in the United States.

I have been thinking about design firms.We can call them agencies, studios, evolutionary consultancies, or whatever. They are the firms that have unique skills, competencies and perspectives that it is difficult to capture or justify inside a company. Sometimes the value or impact is so important that it is better to have the resources in house. We are seeing this tension between agencies and in-house design being played out. Capital One acquired Adaptive Path. TeehanLax shutting down and the principals joined Facebook. SmartDesign shutting down. The misconceptions of working in-house.  This is compared to a bright future for design firms to compete on mindset. To build a new operating model to evolve at least as fast as the world around them.

The design firm is not going anywhere. The design firm, like a startup, has speed as their advantage. Being able to evolve the practice, the processes, the mindset, the tools, the outputs faster than the market while still doing great work is what defines the firms and people.

But there is something in the back of my mind that makes me think the business model is broken. This is most likely just a hangover from my >15 years of thinking about startups, venture capital and growth as the narrative of impact and success. The conversation to me is reminiscent of conversations I have with product companies and founders. It is probably just co-incidence.

Six months to two years of cash on hand is when the “studio is the VC for the org”. This is eerily reminiscent of funding for emerging companies. And it triggers a lot of questions for me:

How should design firms invest their profits? Should they invest in growth? Culture? New companies? Should the new companies come from inside the design firm, i.e., growth by attrition? Is the role for the design firm on that is like a General Partner (GP) at a venture fund? Is it one that is closer to a  Limited Partner (LP) that invests in funds managed by others? Are the skills and people that are capable of growing a design firm that is capable of having both growth and 2 years of operations in profits the same people to build emerging companies? Do skunk works and labs projects generate new businesses or new insights that can be incorporated into client work? Are their alternative monetization strategies and business models for design firms?

For design firms it is clear. Do great work, repeat.

Stories about a future worth creating

Updated: Adding Tobias van Schneider’s The Agency is Dead, Long Live the Agency and Ben Cline’s Design Studios are Not Going Away to list of 

The conversation around the shutting down of TeehanLax has been very interesting and insightful. For me, it has really shown the dominance of the venture fundable, highly scalable startup narrative in relation to technology, design and the human condition.

I have been focused on this narrative. We can call it venture fundable, we can call it scalable businesses, it doesn’t matter what we call it. Being able to build a company with 32 engineers that can surpass an entire industry is seductive. It is the American dream. Anyone can build a company with the scale, wealth and impact of The Social Network. It has dominated the conversation.

But is it the narrative that will allow us to tell stories about “a future worth creating“?

I remember the moment in 1995 where my role models changed. My role models had always been designers and commentators. People like Bill Moggridge, Don Norman, David Kelley, Brenda Laurel, Bill Buxton, John Seeley BrownNathan Shredoff,Lucy SuchmanHerb Simon, Stu Card, Abigail Sellen, Paul Dourish and others. (BTW this list is by no means complete). Designers of experiences and the explainers of behaviour. The moment was the Netscape IPO. It started to shift to David Liddle, Kelly Johnson, Ben Rich and the people that started the research labs and product development groups as companies. Then I was introduced to C. Gordon Bell’s High-tech Ventures: The Guide For Entrepreneurial Success. This was the first time I had read about venture capital and the types of company that can be built. It was eBoys: The First Inside Account of Venture Capitalists at Work about Benchmark that solidified it. I wanted to be a venture capitalist. It was the thoughtfulness, the wealth, the prestige and impact of this group of investors. It was Jim Breyer, Vinod Khosla, Mike Moritz and others. Because the story about new technology, new wealth creation and the ability to change the human condition were compelling. These were companies that affected my own behaviour. And it is still true today, I find myself reading David Skok, Mark Suster, Bill Gurley, Marc Andreessen, Mike Maples, Boris Wertz, Tomasz Tunguz, Reid Hoffman, John Lilly and others.

But is it the narrative that will allow us to tell stories about “a future worth creating“.

The Future of Design Agencies

“The future of design agencies lies not in their ability to become more like their in-house counterparts, but their ability to become more unique. They need to see, speak, and act differently. Their value lies in their ability to describe the changes they see in the world with new language. This, in turn, makes it possible for people to imagine the future differently from the present.” – Matthew Milan

I have not worked agency side in a long time. My only thoughts have been about the economics of scaling a linear business, and this is probably an artifact from a venture fundable view of the world (also see Jon Lax’s talk Let’s Kill the Billable Hour). It is time to start thinking about different narratives. It is  time to look to a new group building new models for inspiration.

I’m looking forward to spending more time listening and learning about different models for impactful businesses. What are the businesses and business models that inspire and intrigue you?

Feature Image – Photo credit Guigui-Lille

The local product design economy

Update: I changed the verb acquiring to joining. A lot of the chatter has been about how this is not an acquisition. And I agree. It is not. As the post states at the top, TeehanLax is shutting down. It is reminiscent of the Smart Design closing (see Dan Safer’s post) and some of the reasoning behind the Adaptive Path acquisition by Capital One. It sucks. But I’m not planning on leaving Toronto, and I’m celebrating my friends like a wake and trying to understand the implications. 

TeehanLax is shutting down. This is getting a lot of coverage:

Why so much coverage? Well it is because TeehanLax was one of the best design firms around, if not the best in Canada. They designed 2 of my favourite apps: Prismatic and Medium. You could see the tension between the services side of their business and the desire/pull of being a product company.

BarCamp Toronto

I first met Jon and Geoff back in 2004. It was after the release of their PVR report comparing the user experiences of the Bell and Rogers PVRs to TiVO. They had an interesting approach, doing interesting work, just trying to build a different kind of company. That was evident when Jon agreed to host BarCamp Toronto in November 2005. It was a different approach than Sapient, ModemMedia, Scient, Viant, Razorfish or other agencies in Toronto were taking. It wasn’t a client development strategy, it wasn’t a recruiting strategy, it was an offer to participate in the conversation.

Photo by John Lam https://www.flickr.com/photos/john_lam/67605248

Photo by John Lam

The shutting down of a company that I described last week as a “building big, impactful [indie] company” is interesting. Jon, Geoff, David (Jeremy, Peter, Tamera and the entire team over the years) you built a company that I respected. And I am very happy that you’ve made the best decision for you and your families. It’s your company, you get to make the decisions, so don’t listen to the naysayers.

Photo by Tom Purves https://www.flickr.com/photos/thomaspurves/3328461206/

Photo by Tom Purves

Here are a couple of observations about one of my favourite design firms shutting down in Toronto.

  1. Short term: design talent availability
    There is a bunch of design and development talent that is available for other Toronto companies to hire. These people have been trained in one of the best design cultures in Canada.  They produced an environment that produced some of the best products in the world.  If anyone from the TeehanLax team needs connections to interesting companies please drop me a note and I will do my best to connect you.
  2. Short term: More people evaluating Toronto companies for acquisition
    This is the third Toronto design and development company acquired in the past 24 months. JetCooper acquired by Shopify. Xtreme Labs acquired by Pivotal. Now TeehanLax shutting down and joining Facebook. This is important. Toronto is a great place to acquire talent. Hopefully there is an equal respect for the design and development work being done here. (This excludes the amazing talent like Mike Beltzner, Mike Shaver, Scott Boms, Sam Ladner and others).
  3. Longer term: The loss of a gravity centre for design talent
    There are other places that are gravity centres. Pivotal Labs is a great place for engineers and designers to learn the power and efficiency of paired environment. Farhan and team are doing wonders to explore and implement a very powerful cultural tool. TeehanLax built a culture that produced great digital products and experiences.

    “We were happiest when the products we were creating reached our standards. We were happiest when we spent time thinking about how to create the conditions and circumstances for this to happen. We were happiest when we were working with our team members.”

    It will be interesting to see if the T+L diaspora can have an impact on the ecosystem like the Trilogy diaspora in Austin or IDEO diaspora in Palo Alto.

  4. Services firms are not destined to be huge companies
    The back of the napkin math I use to calculate a services business is approximately $200k in revenue per employee. Sold at under 5x EBITDA (given a 20-30% margin and averaged revenue of past 2 years plus forecast using error correction of previous forecast, lets say 1x revenue). There is great business, it’s just a hard business to scale nonlinearly. And when “someone slides a number across the table big enough that you just can’t say no”  a product company that is scaling like crazy is likely to be able to slide a bigger number than a services company. It feels like we’re seeing that ceiling being hit by XtremeLabs (sold to Pivotal), TeehanLax (joining Facebook), JetCooper (sold to Shopify), maybe BNotions (AK has departed for Gallop Labs).
  5. Opportunity in the product/design/user experience space
    TeehanLax was a design firm. It was a design firm that respected technology. There are other firms in Toronto that are a mix of product, design and technology including Normative, SayYeah, BoltMade, Nascent, TailoredUX among others (including those with a more technology focus VennPivotal LabsOK Grow!Isle of CodeThe Working GroupBNOTIONSEndLoop StudiosUnspaceRangle.ioPeople & CodeDigiflareFunctional ImperativeMetaware Labs).  TeehanLax showed that it was possible to build a world-class design shop in Toronto. I’m hoping someone realizes this is the combination of the caliber of the output, the process to build the culture and the requirement of building the business/revenue streams.

Interesting times in Toronto. Congratulations to Jon, Geoff and David. Thank you for being amazing. And the best of luck on your journey.

Scotch tape, safety pins and spaghetti – SMB marketing automation

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I was talking to a friend who runs a >10 person distributed professional services firm. He was looking for better tooling to automate his customer processes. He had recently dropped Salesforce, not because it was too much or too expensive, but because the configuration and usage was too complicated for his non-enterprise sales staff. We’ve been talking about his constraints and what he’d like the software to do.

It is part CRM, part project management, part marketing automation. Similar to the “Poor Man’s CRM“.

Constraints

  • Must access the FreshBooks API – All client billing is done in FreshBooks. It works. His staff is familiar. It is easy enough to send, track and account for with FreshBooks. They are not replacing this.
  • Preferably cloud based.
  • Must work with Microsoft Exchange email.
  • Costs <$150/person/month – this is an all in cost. However a preferred cost is $6000-12,000/year.
  • 20,000 contacts
  • 5,00 active clients
  • Prefer commercial offerings to custom development, and modify workflow to fit new processes.

Work Flow

It’s a pretty standard workflow. From lead capture to opportunity identification. The opportunity is defined by multiple stages, each stage has a series of tasks that usually result in an email being sent or a web form needing to be completed or a signed document. The workflow is pretty linear with clearly defined actions that move a opportunity through each stage of the engagement.

The majority of the business is referrals and business developers sourcing leads (50%). New business from existing clients (30%). And the remaining 20% is from web contact forms.

Possible Solutions

We’ve been talking about both CRM and marketing automation solutions, particularly those that are able to match both an organization or a person to their FreshBooks contact information. The goal is to be able to show outstanding invoices before a new project kicks off.

CRM/Project

Web Forms & Electronic Signatures

Email Automation

Scotch Tape, Safety Pins & Spaghetti

I keep leaning towards solutions I have used in the past. But I think they are not the right fit, given that I’m going to have to automate a number of webhooks using Zapier or itDuzzit, which are amazing, but the complexity scares me given the friend. It’s starting to feel like my advice is going to end up with scotch tape and safety pins holding together a spaghetti of web services.

I have no idea if it is the professional services aspect, or the hand off from lead generation to sales to project management. Maybe it is because of the FreshBooks integration (which I have never done). But I’m unclear about what the best options are. I keep finding more interesting solutions. Maybe it is that the past 3 years I’ve been deeply immersed in inbound activities for SaaS offerings that makes me drool over HubSpot and Performable. But I’m just not sure where to go from here.

Thoughts? Guidance on where to look next? I’m stuck.

 

reply, Reply All and bcc:

There is a difference between small ‘r’ reply and a big ‘R’ reply all. There seems to be a group that insists on the “me too”, “count me in”, “+1″  emails. This existed in grad school, it was particularly prevalent at Microsoft, and seems to continue. Maybe it is that I use 3 email address, the first I started using in 1994, the second in 2001 and the third in 2004. Email addresses 1 & 2 forward to email address 3. I get a lot of email. And the “count me in”, “+1″ behaviour adds zero signal to email conversations when used with the “Reply All”.

The other thing that has been driving me a little batty is the Introduction. I am trying to follow the advice of David Cohen and Fred Wilson, aka The Double Opt-In Introduction. On blind introductions, I try to ask each person to “opt-in” to the introduction to the other. This requires additional email, but it also requires that I separately compose an introduction email with relevant information (think LinkedIn profiles, Twitter accounts, URLs, etc.), my reasons for why I think the connection is valuable to both parties, my expected action from the recipient, and an expected/requested timeframe for action. Once both parties have “opted in” I add both to the “To:” line of a message and include the previous information, my reasoning and the desired actions and timeframes.

(Okay, I don’t always do the double opt-in. I don’t do blind introductions. But there are situations where people ask for intros to friends, and if I know the friend has an open policy on these introductions I will do a bit of diligence and make the connection).

The breakdown that I’m seeing is post introduction. When the 2 parties reply to each other. They continue to reply to or include me on the cc: to the conversation thread. What I would like to see instead is the initial respondent move me to the BCC: line. This provides social proof that the individual has received and  acknowledged my request/introduction. But allows me to not participate in the ongoing conversation.

Reply to Introductions & BCC: the connector

What are other email tips?

My current tools

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I always found looking at the tools that others used a little voyeuristic, but often insightful. Check out the what Michael Arrington used in 2010. Here is my list, but I’m curious at what the indispensable tools and applications that John Lilly, Adam Nash, Mark MacLeod, Jevon MacDonald, April DunfordAli Asaria, Dan Martell, Dave McClure, and others. What are you using?

My List

  • Sparrow – Best GMail client for the iPhone hands down.
  • Calvetica – Great minimalist calendar replacement for the default Calendar app on iPhone.
  • Tweetbot
  • Evernote – It syncs across the iPhone, MacBook Air and Mac Mini I use regularly for notes and to do lists. Though I’m having to add more personal structure to my to do lists to make this work.
  • Dropbox – Feels like a shared file system between the different devices.
  • Rapportive – I have switched back to the GMail web interface solely because of the Rapportive integration.
  • WriteThat.Name – This is best behind the scenes application. It automatically updates your Google Contacts with changes in people’s signature lines.
  • Boomerang – Bring it back to your inbox. Need I say anymore.
  • Alfred – I switched from Quicksilver in the past year – see the LifeHacker review. I hate when I don’t have ⌘-SPACE mapped to Alfred.
  • RescueTime
  • Prismatic – This has replaced Summify for me. It is simply the best discovery application I have used.
  • SublimeText2 and TextMate though I’m very interested in Coda 2.
  • TweetDeck – I am underwhelmed with TweetDeck experience and performance. I am looking at Engag.io and Bottlenose as replacements, but neither offer exactly what I’m looking for.
  • Twitter
  • LinkedIn
  • WordPress – I have blogs hosted on EC2, VMFarms and DreamHost.
  • Hipstamatic – It posts to Twitter, Instagram, Flickr, Facebook, Tumblr and other sites. The lenses, films are just enough to make it look like I can be a fake photographer.
  • 1Password – I have been using the free version. I probably just need to suck it up and spend the $14.99 on the Pro version.
  • CardMunch – I try to upload every business card I receive before the end of the meeting.
  • Kindle – I seem to read 90% of my content in the Kindle app or on the Kindle.

There are a number of other tools that I’m enamored, but not currently using with including:

SMASH Summit in NYC

SMASH Summit East 2011Dave McClure and the 500 Startups folks are producing a great looking conference focused on “hack-tics” of customer acquistion. They ran a similar event in April 2010 in SF. – check out tthe presentations on SlideShare and the feedback. At the event speakers provided examples based on real usage and data. David Cowling provided a list of the social media statistics by different speakers (stats current as of May 2010 — so you hope they are crazier 14 months later), they reinforce the power of mass media platform and while fragmented the web/mobile is a great way to reach people (customers, prospects, leads, fans, haters, almost everyone).

  • Twitter has 105,779,710 users. 300K new users per day. 600 million search queries per day. 175 employees.
  • Salesforce thinks that their Youtube channel has the ROI equivalent of 35 super efficient sales reps
  • Facebook says sites that have added Like button have seen triple growth of fans
  • Stumbleupon 2010: 10 Million users, 115,000 Facebook fans, 600 Million stumbles/month, 1 Billion ratings, 45 Million URLs, 50,000 discovers/day
  • Top 5 countries after the US for Facebook usage/traffic: UK, Indonesia, Canada, France, Turkey
  • 70% of Facebook traffic comes from outside the US, 10% increase in the last year alone
  • 37% of tweets originate from mobile devices
  • Most of YouTube’s views are from videos older than 6 months old, invest in a content strategy.

I am hoping that Michael McDerment might apply to tell the FreshBooks metric story at the SMASH Summit. He first gave this talk at DemoCamp back in 2007 but he continues to evolve it based on the FreshBooks business. It’s one of my favs. And given the updated focus on both acquisition and retention it makes it a perfect opportunity for FreshBooks.

SMASH Summit will feature presentations and case studies on strategies, tactics, and “hack-tics” used in successful internet campaigns across multiple platforms—from search to social to mobile. Led by both tech geeks and savvy marketers, you will walk way with new tips and tricks for pumping up your customer acquisition and retention. In 2010, SMASH Summit debuted to a sold-out audience including speakers and attendees from Facebook, Twitter, YouTube, Apple, Google, Virgin America, National Geographic, Mint, Twilio, Sony, Slideshare, and many others.

I am hoping to attend because I want to see some of the approaches used to acquire customers for $0 dollars. Why? I spent part of Monday, in my role as EiR at VeloCity, asking students and entrepreneurs how they could get to 10,000 (or 100,000 or 1,000,000) users in 30 days with a $0 budget. I’m curious to see both the tactics and the tools that other high traction startups are using to attract and retain customers. Apparently I’ve been spending time understanding marketing and sales automation (again).

Great list of speakers including the infamous Dave McClure (@davemclure), Charlie O’Donnell (@CEONYC), Victoria Ransom (@wildfireapp) and others.


The Science of Word of Mouth

The Evolution of Social CRM

The team at GetSatisfaction are really nailing the infographics.

They released a great infographic tracking The Evolution of Social CRM. It does a great job explaining how Social CRM should really just be CRM, but isn’t. Social CRM represents a change in attitude and approach that is fundamentally a cultural change for most organizations. This is a challenge for organizations that are silo’d and very transactional in their measurement and engagement. The change to customer-centric processes on the sales, marketing, support tools. The cultural shift from the organization to who the organization enables is big change.

GetSatisfaction: The Evolution of CRM v2

Impact of Social Media on the Sales Funnel

The team at GetSatisfaction have put together a great overview on the impact of social media on the sales funnel. It’s an interesting evolution  in my understanding of the buying process:

Awareness » Interest » Trial » Evaluation » Decision Attention » Interest » Desire » Action

The simplification of “Decision” to “Action” makes perfect sense. I’m guessing that the goal of the “Evaluation” phase is to drive “Desire”. It’s different than my experience with the Diffusion of Innovation and the 5 step process presented by Everett Rogers. I need to spend some additional time thinking about how this impacts the customer focused sales funnel described by David Skok (@bostonVC).

The rise of social media and the lowered social capital expenditure and effort it has evolved to:

Attention » Interest » Desire » Action » Advocacy

The goal is to build happy customers that want to spread the company’s message (whether you call them brand ambassadors or citizen marketers or just advocates). Great job by the GetSatisfaction team on helping to evolve the understanding of the social involvement in Customer Lifetime Value (CLV).

Infographic from GetSatisfaction: Social Media's Impact on the Sales Funnel

Recommendation Engines

Photo by http://www.flickr.com/photos/good_day/41798369/
Photo by good_day

I started using Netflix and I’m both impressed with the recommendation engine and curious. Amazon does a great job using a combination of items and behaviour to present thing I might like to purchase. I find the Netflix Canada content recommendations good but not quite as good. This could be the difference that my Amazon history dates back to June 24, 1999 with my @davidcrow.ca email address. I started thinking about how simple these recommendations seem, i.e., basic inputs and outputs but potentially very powerful business implications. You can see recommendations at Amazon, TiVO, Netflix, Pandora, etc. It’s a great tool for discover and can potentially increase sales and business metrics (back in 2006 Amazon was reporting 35% of sales come from recommendations). Recommendations can be incredibly valuable business drivers (see Digg Recommendation Engine to drive traffic) and I was very curious at how others had  approached this problem, specifically if there were methods or techniques that I could leverage. (I’ve been following the creation of a taste graph or interest graphs by companies like Hunch and Quora and Gravity). The other interesting spot where I see a lot of people discovery is on dating sites, however, I think the success metrics of profile matching for certain dating sites is very different (think eHarmony vs Ashley Madison).

There is a lot of really great tools. I built a Hadoop instance and had Mahout up and running on my MacBook Air in about an hour. It’s not as fancy as the backend at Backtype (check out all of their tech). I’m curious at what others like EventBrite are using to power their social discovery of events and Chomp for mobile apps.