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How to start an architecture firm with a house of cards

Mar 10 '14 18 Last Comment
grneggandsam
Mar 10, 14 9:24 am

I've been thinking about how backwards the profession can be.  So many egos involved makes everyone seem to desperate to prove themselves.  It almost makes me want to give up and take another approach.  I think this is how Firm owners get their firms started:

Step 1:  Find lots of great designers with huge egos.

Step 2:  Find a project to get things started (much easier said than done)

Step 3:  Over-hire and pit the designers' egos against each other.  They will be willing to go to extreme lengths to prove that they are better than the others.  This results in a situation in which they might be doing $200,000 worth of work, but only making $50,000 a year.  They will accept it because of their desire to be the starchitects they will never get recognition for.  Ironically, giving up your ego as the firm leader will get you further than being a great designer ever will by allowing other designers to do your work for you.

Step 4: Divide and conquer.  Never be too reliant on one person for one job.

Step 5:  Take the recognition and build client relationships.  While there is an endless supply of designers and fresh college grads willing to starve themselves to prove they are worth it, a firm with a great reputation and relationship with clients is in short supply.

 

Perhaps I am cynical, but this in my opinion is why the management at firms sometimes makes 10x as much as the average employee.

 

curtkram
Mar 10, 14 9:54 am

i certainly agree many in our profession would benefit from a little humility and learning where their place in the process is really supposed to be.  i'm not so sure people set out to screw up their firms the way you suggest, but sometimes it does happen.

here's a longer list if you want to peruse. 

http://www.forbes.com/sites/ericjackson/2012/07/27/31-telltale-signs-you-are-a-horrible-boss/

grneggandsam
Mar 10, 14 10:35 am

I think great managers avoid all the "horrible boss" attributes outlined in the Forbes article while subtly following the process I outlined above.  The best bosses reward those who deserve it, but many always keep the lion's share for themselves.

The most difficult thing is to get all the egos to work together to produce great projects.  Its almost as if a manager has to be there to provide the hierarchy (while taking half your paycheck).  I sometimes wish the process was more democratic, but that would probably result in too much chaos.

toasteroven
Mar 10, 14 11:13 am

The sexy front end of project stuff is typically a loss-leader (all it does is get clients in the door) - if this is what your firm focuses on, then you need cheap labor on the early design-side.  It's hard to get career-minded people to work for peanuts and do good work, but if you can cultivate an certain image within academia and the fashion elite, you can be assured a constant churn of fresh graduates willing to put in a lot of effort for little pay in order to "prove" themselves to gain access to this "lifestyle."

bowling_ball
Mar 10, 14 11:22 am

grneddandsam, while I think you're being a little cynical, the point I take is that once you're the boss, you can run your own company however you'd like.

grneggandsam
Mar 10, 14 11:27 am

I used to do rendering for a very successful medium sized firm in Washington DC.  I didn't like it - I felt I had to always be brownnosing people to continue having work to feed off of and the politics of the situation were difficult to deal with.  Now I work for a design-build firm and produce construction docs.  Its certainly not as flashy as rendering hundred million dollar multi-family apartment buildings, but I like my boss better and feel more necessary.  I still get bored with the work and feel like I'm in a dead end from time to time, though...

gwharton
Mar 10, 14 12:34 pm

Toaster,

The "sexy front-end" or design phase is where the architect provides the most value for the project. If you're doing that as a loss leader, you are doing it wrong.

Miles JaffeMiles Jaffe
Mar 10, 14 12:35 pm

The front end is where all the dough is. It's the back end where you lose money.

toasteroven
Mar 10, 14 1:43 pm

so... Marketing and competition work (also marketing with a chance of a huge pay-off) aren't loss-leaders?

 

And how many hours do you and your staff put in during the design phase and how much do you actually bill out?  If you have staff constantly pulling 60-70-80 hour weeks and you don't compensate them, then they are the ones effectively eating all of "value" you are supposedly generating for your client.  This is what I mean by "loss-leader."

 

Although - maybe your firm is different and you can crank out magazine-quality designs purely on your experience and excellent time management skills... and if people work past 40 hours, you compensate them and bill out for their time.  if so - awesome on you.

gwharton
Mar 10, 14 2:16 pm

Marketing is a loss leader, but you don't give lots of value as part of marketing. And if you're really clever, you can figure out a way to do marketing and get paid for it too. Competitions are a really bad idea unless you're getting paid to participate in them. Doing them gratis is a mistake.

We charge an appropriate price commensurate to the value we provide in the design phase (which is a lot, and worth every penny), and don't do much beyond DD. We also don't price based on how much time it takes us to do something, because that's retarded. Do we work long hours in design? Yes, most of the time. Do we make money on the design phase? Definitely. Lots of it. Because we price based on the value provided.

Contract Documents work is quickly turning into a commodity service now and there isn't much margin in it anymore. There's always somebody who can do it cheaper and faster, and you don't want to wind up competing with them. It's way better for us to farm that out to those who are competing in that space. But the design part will never be a commodity, and that's where our market and price leverage is.

tl;dr - you should be charging more for design than CDs. A lot more.

curtkram
Mar 10, 14 5:22 pm

you have to prove you're good at design before someone pays you for it though, right?  if you're with SOM or a big company like that, you have enough history and examples to show what you're capable of (or what your predecessors within the company were capable of, or what the guy next to you is capable of...).  for a smaller company that's looking into growing into maybe new project types, how do you show people you can design the project type they need, without designing it?  i suppose you could fill a website with all the renderings of projects you didn't get.  personally, those always kind of annoy me, like putting the 13.1 sticker on your car.  so close, but you didn't quite get there.

gwharton
Mar 10, 14 6:39 pm

how do you show people you can design the project type they need, without designing it?

A few ways:

1) Show them other examples of stuff you've designed, matched with stories about how awesome the people you designed it for think it and you are,

2) Buy a portfolio and/or expert from somewhere else,

3) Go work for or partner with somebody who is doing that kind of work and get some experience doing it yourself, and/or,

4) Be a phenomenal salesman.

enggmodels
Mar 18, 14 3:39 am

Unique and creative artictechure designs are key of entering into new market.

mightyaa
Mar 18, 14 10:19 am

Something to remember.  Your bosses have been there too.  And they too swore they wouldn't become like that.  Yet, most of the employees that come in aren't at all thinking about the firm; Just themselves.  Time and time again, they'll leave, stealing client networks, bashing your firm, whining about the pay, and claiming you are taking credit for their work: Um... the firm, your employer is taking credit for the work that comes out of the office.  Add a couple decades of employees leaving you hanging, becoming your competition, etc. and you'll also see them differently.  Act like a ronin without any loyalty, and you'll be treated as such.  It's harder to distinguish those who aren't like that because what your bosses hear are the same words your 'what about me?' co-workers say.

There is also a generational difference too creating vastly different work ethics.  Hate to say it, but my Gen-X screwed it up with the 'bigger, better deal' and massive job hopping seeking ego and money.  My father's generation (baby boomer), who's also an architect, often started and retired with maybe only two jobs on their resume.  Basically, there are cultural differences and values between the bosses and younger staff.  It's hard to merge and blend it all together so everyone is satisfied.

curtkram
Mar 18, 14 11:13 am

the jobs changed.  your father's father's generation (before the baby boomers) had pensions and retired with a gold watch or whatever.  there was incentive for them to stay.  their bosses were focused on building strong, stable, lasting businesses.  they tried to teach the next generation how to lead, and how to do better, then tried to put them in a position where they could do better.  of course that's mostly speculation on my part.

the baby boomers took that away.  they think they're entitled to have everything handed to them, and believe their employees are just cattle born to serve.  their businesses are built on taking as much money out of their business, and out of their employee's paychecks, as they can, often times while doing as little work as possible themselves.  that's certainly not universal, but if you're concerned about a business where everyone leaves after a couple years, or even a few months, there is a pretty good chance something like this is happening.

if you don't want your employees to leave, you have to invest in them as people, not as cattle.  give them a reason not to quit, and they will be less likely to quit.  give them opportunity to learn how to be better architects, and provide them opportunity to get more responsibility and authority.  if the only way a gen-x employee can improve their livelihood and grow out of an entry level drafting position is to leave, what would you expect them to do?

Alien 8
Mar 18, 14 12:00 pm

^ Here's the extended version of what he said. 

grneggandsam
Mar 18, 14 1:36 pm

Curtkram,

As a gen-xer I agree.  It seems no one in the business has any loyalty- employees to bosses, bosses to employees, and the result is terrible for those trying to start.  You learn to race to the bottom in order to stay employed, yet you have no way of competing with the mess that exists and feel like a rag doll getting tossed around.  Without a license and without anyone really there to support you getting a license, you can't do anything about it.

mightyaa
Mar 18, 14 1:58 pm

grneggandsam,

Agree.  The horrible part, as a boss, is that I do treat my employees as humans and part of my extended family.  I still get screwed fairly regularly by employee's.  And some don't.  They remain loyal to the idea that we are in this together.  I can't tell them apart easily. 

And clients aren't much better.  Treating companies they hire as so much cattle that can easily be replaced.  Can't tell you how much work I've lost to some low bidder.  Others stay loyal.

You just can't tell easily anymore whom you can trust and whom will abuse you.

grneggandsam
Mar 18, 14 2:54 pm

True - I will say you have to give employees an incentive if you want them to stay.  whether it is a bonus or a commission for bringing in projects, if you want them to feel "in it together" then they need both sides of being in it together.  If you feel you have no chance of being paid more as an employee, you have a lot less reason to try to bring on new work or keep with the same company.

Also, I imagine employees would respond well to a creative outlet.  Chances are most people didn't enter this profession because they were dying to enter internment camp offices where they feel constant pressure to pretend to be working. Encouraging employees to explore creative marketing techniques, such as designing pamphlets and brochures, creating a blog, or engaging in product design might help them feel like they are doing something constructive while adding value to the company at the same time.  Just my two cents.

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