Design Mode: Startup

I am a huge fan of niche serevices. At Athlinks, we service the competitive endurance athlete by aggregating his race results in one location. Period. There are tons of spinoffs that we could roll if we wanted, but let’s face it - its tough enough to nail this one aspect - let alone grow it infinitely outward.

I just read a Retweet of @f from @davemclure that said:

thinking about a model where a design company would always work for startup equity. trying to make this model work. /cc @davemcclure
about 8 hours ago
Retweeted by davemcclure

Of course!

It seems pretty obvious when you think about it. The risk - or deterrent - to starting a straight service business is that you never have a chance for residual income. Your revenues generally reflect last quarter’s sales - maybe some maintenance fees build over time, but design is a one-off business. As such, it simply doesn’t scale.

In order, then, for a good design agency to succeed, it must master the art of the sale in perpetual cycles. Look t any great design firm and what do they do better than anyone else? Nope - anyone can design. It’s selling that sets the great ones apart.

So - to @f’s point - what many startups lack is a good sales person. let’s face it - that’s why so many if then are out looking for VC a month after they launch their company - no sales.

So you take the agency with design and sales talent - and you marry it to the startup with the great idea, a chance for recurring revenues and a lucrative exit and voila! The design firm lends not only aesthetics to the product, but hard sales in between cycles in order to generate early revenues on both sides.

A true win-win.

This post was created on a freakin phone and so my thumbs are tired. You guys figure out the rest.

Updated 11/30/2010 @ 6:45PST

Fred Oliveira (@f) whose Tweet originally inspired this post has since posted two articles on his blog (helloform):

http://helloform.com/blog/2010/11/designer-as-investor/
and follow up:
http://helloform.com/blog/2010/11/so-what-is-a-designer/