How (not) to start your own agency

Running my own design consultancy for the past 6 years has been an adventure. In the end, it never grew into my original vision of a full-fledged agency; now it’s time to turn my energy and focus towards other pursuits. For those of you considering starting your own agency, here’s some of the things I learned.

Before I begin: This advice does not really apply to those thinking about going freelance; my experience is that freelance is a gateway to starting your own agency or returning to work for an employer; it is not a long-term position.

Start with 3-5 partners

This will be the most important advice I will give you.

From my experience, having 3-5 partners at the beginning is optimal. A team of this size means you can accept larger and/or multiple projects from the onset; since you are all partners, you won’t have to worry about payroll and everyone will work their ass off to make sure things go well.

Trust me on this one; the I have seen very few 1-2 man shops “cross the chasm”, grow and prosper; almost all the successful agencies I know started from this 3-5 person starting point.

Share a common vision with your partners

Closely related to starting with the right amount of people, everyone needs to have the same long term vision for the company. This can change over time, but all the partners need to align on this matter. This sounds so obvious as to not merit saying, but it’s so easy to make the wrong assumptions about what others are thinking. Some of the things that you need to be clear on:

End goal

It’s always good to start with the end in mind. Do you want the agency to stay small? Grow big? There are other options for design agencies these days; you can create a product and/or be acqui-hired. It’s important to have clear ideas about this at the beginning.

Workplace

Choosing where the team works is important. Will everyone be remote? Is an office the way to go? Is meeting at a coffee shop every day sufficient at the beginning? It seems like there is always a lot of discussion around this topic when starting out.

Culture

I’ve contracted at a lot of different agencies over the years, and each has its own vibe. What do you want yours to be like? Business-like? Hipster? If you have an office, will it have cubes? An open floorplan? Do employees use laptops? desktops? All of these decisions have a huge impact on culture.

Plan for growth

“We want to stay really small. We want to be a boutique shop and deliver quality work”. I’ve heard this a lot, and it’s an admirable ethos. The problem with staying small is that you’re not building a business, you are the business, and your income ends the minute you hang up your mouse. You’re not always going to be that young, cutting-edge designer. You’ll want vacations. You’ll want to retire one day. You have to think about the long game.

Your definition of “big” will vary from others, but it’s important to have clear thoughts about how your agency will grow over time and how you imagine leaving it when you’re done.

Read books on business

I read Design is a Job last year and it’s the book I wish I had years ago. If you want your agency to succceed you’ll need to learn about taxes, contracts, bizdev and managing employees. Inevitably, you will do less design (maybe even none). If you want to do design full-time, don’t start your own business. The book “The E-Myth” talks about this at length. If you want to design, work at the best agency that will hire you and let others take care of the business stuff.

Don’t focus on pure UX work

When I started 6 years ago, I did a lot of wireframes and heuristic reviews for startups. The last 2 years, not so much. When I think about why demand for purely UX work has declined, I have a few ideas.

Lean Startup Methodology

The “Lean” Startup practice eschews design and emphasizes testing. I fully support testing, but in lean-circles I’ve realized there is a popular idea: that KissMetrics makes engineers good designers. The bottom line is that I’ve gotten zero-work from any of the companies in Austin that practice lean. I doubt that I’m alone in this regard.

Responsive design

Responsive Web Design is rendering static wireframes and PSD comps less relevant every day. Designers need to work closer to their medium, and for web that’s the browser. In fact, that is the reason I built this site; I wanted to become proficient in coding again.

More competition

When I left frog 6 years ago, there were very few freelance UX designers or small agencies; now there are tons of them. During this time, the amount of UX work seems to have remained fairly constant. Every time I talk to friends in the business, it amazes me how many of us are gunning for the same gigs.

Wrapping Up

Owning your own business is awesome and I highly recommend it if you have the desire. If you do go out on your own and want to start your own agency, hopefully something I’ve said here will be useful. The most important things are to start off with the right 3-5 people and have a common vision. Sounds easy, right?