David Crow

Connector of dots. Maker of lines. Rider of slopes.

Articles

Do Great Work, Repeat

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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.

https://twitter.com/mustefaJ/status/558374585117466624

https://twitter.com/mustefaJ/status/558382377375129600

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.

Prototyping science fiction

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“The future cannot be predicted, but futures can be invented.” –
Dennis Gabor

Tiago Forte wrote a great piece about “What I Learned About the Future by Reading 100 Science Fiction Books“.  The article is one of the more inspirational posts about how to imagine, define and build a future for humanity. So much of what we as designers do is try to imagine a future. The devices, the interactions, the business models, the behaviours and the implications of choices played out on different timescales.

I also read a lot of science fiction (you can see what’s on my Kindle) but I had never thought about it as providing a near or long-term impact on to my speculations on the human condition. Here are a list of books including the Briand David Johnson book identified in the Tiago Forte piece that I need to add to my library and reading queue.


Photo credit: Ron Brinkmann CC-BY-NC-SA-20

Stories about a future worth creating

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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 Brown, Nathan Shredoff,Lucy Suchman, Herb 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

Trying to understand the marketing technology landscape

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MarTec 2015 Marketing Technology LandscapeScott Brinker has published his 2015 Marketing Technology Landscape. The landscape is shocking/impressive. It is an almost 2 fold increase in the number of companies from the 2014 landscape. Understanding the changing marketing technology landscape is interesting for companies entering the market, for marketers choosing technology and for investors. John Hurley’s piece for Radius is a great start to understanding this market. (I also loved that I found Influitive, LookBookHQ and Vidyard  on one of John’s images for demand generation).

MarTec landscape is growing

What is happening in marketing technology?

  1. The market is growing
    The number is probably greater than the 2x increase in companies that are listed in the landscape. There are a large number of solutions available to customers. There is vertical segmentation by provider activity (analytics, events, e-commerce); there is additional segmentation by customer size or data volume (small business, enterprise). More people doing things online means more opportunity for tools to reach them and capture their attention. Internet advertising is set to increase between 21.5% (mobile) to 23.8% (Internet). It is incredible growth that is trailing adoption.
  2. The lines between marketing and advertising technology have blurred
    Marketing and advertising technologies are blurring. The transition to a digital, always on, always connected panopticon has allowed a blending of the techniques and technologies between advertising, marketing, CRM and other industries. The focus of marketing is shifting from communications to understanding and delivering the customer experience. The goal is to get closer to understanding what behaviours, content and tools allow companies to reach and engage their audiences and generate revenue. As this moves closer to making real-time decisions about predicting customer behaviour, it feels more and more like the DSP of ad tech in particular the DMP allowing companies to use their internal data and tools to build behaviour segments possibly based on a customers location in the sales funnel.
    Benedict Evans - Mobile is Eating the World - More time spent consuming mediaImage from Benedict Evans: Mobile is Eating the World Oct 2014
  3. Sales funnels are compressing
    The sales funnels are being compressed by technology. Customers are able to move through very quickly. And the desire of marketing groups is to show strong attribution of customer behaviour to purchase. This is the holy grail. And it is about to get worse as e-commerce players add customer acquisition and attention capture tools. You can see the pending battle for where customers spent their attention. With Alibaba, Facebook, Rakuten and Amazon all building different parts of the customer purchasing and attention stack. Customers are able to make purchase in a tweet, timeline, maybe an ebook in Viber, etc. It is about being able to provide potential customers the opportunity to complete purchase in the appropriate channel when they are ready.Being able to better understand customers and customer behaviour and the likelihood to purchase in real-time will be critical to marketing departments. But it will be the conversations between people that matter most. The people that have a problem that needs to be solved, the people that have solved problems using your software/service. It is tools that build trust and increase the connectedness between customers are quickly becoming most important. This was a big bet at Influitive in 2010, and it seems more and more having a strong, honest, viable community of customers is the best thing for any company.
  4. There are multiple big acquirers across multiple industries
    The market is extremely fragmented. Fragmentation is not a challenge in a market with no incumbent leaders and with the spend increasing at >20% CAGR. It is likely that we will continue to see more companies, new technologies and evolutionary improvements, basically, it’s a crowded space and it’s going to get more crowded.The technology is changing quickly. New technologies are being adopted at all points along the stack. These changes and the situational awareness of optimal uses has made it very difficult to have a robust understanding of the marketing technology landscape, the technologies and customer needs. It also means that there are a large group of varied companies that continue to look to fill gaps in their customer base, their technology stack and in capturing attention (think social media, messaging, etc.). For a startup, there is a need to spend time with the investment banks and boutiques like LUMA Partners to make sure you are aware of how potential acquirers are thinking about the landscape and to make sure that you are part of the conversation.

    [slideshare id=14347180&doc=strategicbuyerlumascape9-19-12-120919114611-phpapp02]
    There are other players that are consumers of the technology that are looking for advantages and tools for reaching, engaging and connecting their customers.
    Benedict Evans: Mobile is Eating the World - Tech is a small industry
    Image from     Benedict Evans: Mobile is Eating the World Oct 2014

  5. Community is important

    “if we want to know the truth about your products, we’ll find out from one another”

    Doc Searls & David Weinberger

    It will be amongst others of our tribe that we find the answers to what pieces of this puzzle work. In what situations did you use this or that? Writing, connecting in person, sharing, attending events and meeting others interested is one of the best ways to learn. The way we move beyond being cattle, something thing that consumes only to be used for our by-products or meat, is to realize the conversation is ours. People aren’t just consumers, they are people. And supporting a community of individuals is more than just marketing. Don’t believe the hype.

I love this space.

The local product design economy

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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 Venn, Pivotal Labs, OK Grow!, Isle of Code, The Working Group, BNOTIONS, EndLoop Studios, Unspace, Rangle.io, People & Code, Digiflare, Functional Imperative, Metaware 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.

Building Media Empires

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Is it possible to build a new Canadian media empire?

I’m not even sure what a media empire looks like. People still want content. And content needs distribution. It feels like the majority of distribution in Canada is controlled by a small number of players:

  • Postmedia
  • Torstar Corporation
  • Rogers Media
  • Corus Entertainment
  • Astral Media
  • St. Joseph Media
  • Now Communications
  • Blue Ant Media
  • DHX Media (thanks @johntoryT0 for the correction)
  • plus more

I still don’t really understand the economics of distribution and monetization of traditional media. But this seems like a start to understanding about the Canadian landscape. In 2014, there was a lot of VC money (yes, yes, VC dollars is not the only metric of success) going into journalism companies (I  really like the CB Insights description of fat content companies): Buzzfeed, Vice, Huffington Post, First Look Media, Pando Daily, Vox and others. Canada seems to be stuck in the online properties of traditional media outlets.

We produce interesting/engaging content including YouTube stars:

I want to build a better understanding about content creation, distribution and monetization in Canada. Where should I start?

/me goes to spend more time consuming CANADALAND.