Design in a downturn

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What happens to the design industry in a downturn? I am a little young to have much experience in this matter, but I recall having a terrible time trying to find a job after college in 2002 and ex-Sapient designers still grumble about how the creative team there was the first to be cut in the dot-com bust.

Perhaps, then, it is wise to follow the lead of certain design consultancies in opening up new revenue streams in order to decrease the risk of relying solely on in-house talent. Method Ventures is the VC arm of the SF-/NY-/London-based brand experience firm that buys equity in start-up companies in exchange for interesting and cutting-edge work. In a DesignWeek article, Chief Innovation Officer Chris Tacy affirms this business practice:

We realised that we could create a venture practice that provided the sort of design services that create the innovation and differentiation needed for start-ups. And we could do so in a manner that met their needs, would be affordable and which enabled us to find revenue streams not tied directly to head count.

Fahrenheit 212 takes a different approach with a royalties model: it puts

...up to two-thirds of our fees at risk, making them contingent upon the achievement of success. Our success is your success, and our reward is tied directly to very concrete, pre-agreed commercial milestones within the prescribed time horizon. These milestones are client-specific, typically mirroring the dates, gates and metrics of the company’s prevailing innovation best practice. This model…is about creating a seamless alignment of our client partners’ ambitions and our own. It ensures we run the project for success rather than cozy meetings. And it makes us the only innovation company on Earth that doesn’t get paid more the longer it takes to get somewhere.

I have written them to learn more about how this impacts their creative process and what kind of pre-engagement analysis is involved in scoping projects, and am waiting to hear back. (Anyone else know?)

Many other companies publish books, teach courses, and host events and conferences to bring in extra cash. IDEO additionally utilizes the vast body of architectural, anthropological, and sociological knowledge it has gained through research projects over the years to contribute to the tourism industry in its “IDEO Eyes Open” city guide series.


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