AIA Show in SF observation

[Pechara]

Hey Everyone,

 

On Friday I went to the AIA expo in San Francisco just to check out expo floor and see what’s out there. In general it looked like a successful show, a little slower then I remember past shows, but still good. I spent some time checking out the architectural visualization companies that had booths there. I found 6 or 7. Here are some quick observing that Id like to share:

 

Observation 1: 5 of the 7 were based in china, had Chinese people in the booth and frankly I did not really understand why they were there. All spoke poor English and on display had mostly Asian/middle eastern projects. I understand that the AIA reaches far, but it looked to me like these companies have not really done any real work on US soil are trying to infiltrate the US market and are just not quite getting it right. The booths were a bit cheap looking and the staff was nervous and I had a hell of a time trying to communicate with them. I was a bit nervous about this invasion into the US market, but after seeing how few people were interested in even looking at them, im a little more at ease now. I met up with a few of my clients there and they told me flat out that they get pummeled by these Chinese and India companies left and right but ignore them because they are well aware of the communication issues. They tell me that having the USA based “go-to-guy” means lots to them.

 

Observation 2: I saw 2 very large American companies and met the owners. I will leave the names off as I know they are part of this forum. The owners were willing to answer some of the more private questions I asked. I was not aware how large these firms are! With the current economy sucking and they have very little work compared to the insane monthly expenses, I would be surprised if they can stay in business much longer. These people spend more money a month then I make in 4 years! Being a business owner myself, I know that all the profits from years past can be erased in a matter of 6 months for these guys! Very high stakes game they play. When I started 11 years ago doing this, I never thought that such large companies would exist. In comparison, I’m a tiny studio with essentially no expenses. Granted, I don’t do the giant projects, but I do have plenty of small projects that keep my busy. Anyway, I learned that it’s ok to be a small fish in a large pond. I think the next few years might be good for the small time operators.

 

Observation 3: The show seemed like a complete waste of money for all the 3D companies there. I know all about the trade shows. I did about 10-15 national shows including the AIA while I was an employee of a software company. I also have done 20 or so smaller shows with my own company over the past 10 years. I spend about 10 minutes observing each one of the company’s booths and saw essentially zero traffic in the booths. I know that these shows are expensive, and I also understand that you just need to get 1 or 2 giant projects to roll in and the show will pay for itself no problem, but it just looks like a huge risk with little pay off.

 

Observation 4: The Autodesk booth and Sketch up booth was overflowing with people. Literally lines of people waiting to get in. The rest of the CAD software companies it was like crickets. I saw one guy giving a demo to a 30 empty seats and honestly, 3 booths over, google sketchup people had 2 independent demos going with probably 60 people watching each, all seats taken back row people standing. This did not slow down at all during the day. Just wild! I wish we had that response when I used to do these demos with our software 10 years ago!

 

Anyway. These were just my observations. Our industry is defiantly at a cross roads. The 3D company booths were essentially abandoned for the sketchup and autodesk booths. It seems like architects are now going to 100% incorporate this technology into their office and will only go outside of the office for the few project that need that special sparkle. I think with what I saw with the demos of the new software’s, we are just around the corner to the “easy” button were the architect will not really need to know that much about 3D to be able to produce very nice work with very little effort. Perhaps not as good as the stuff I see you guys produce, but hey 90% of the work out there does not need the realistic or breathtaking images. Id like to hear other attendees observations if you are willing to share. All you small timers out there, keep your head high!

[EddieLeon]

Excellent observations. I think you are very accurate on some of your points. But, I had some different perspectives from my side of the booth.

 

First, the Chinese companies that were there get a ton of US work. Almost every architect that I spoke with said they are using Crystal CG. Granted, they don't like the communications issues, but they are all very happy with the prices. So, we should all be very worried by direct Chinese competitors.

 

This was the 4th AIA show that I exhibit at and it was by far the slowest. But, it wasn't always crickets. There were many existing and prospective clients that spent "quality" time speaking with us about their needs. Some of them were heavy hitters. So, you are correct in saying that one project can pay for the entire cost of the show.

 

Also, the direct market feedback that we received is extremely valuable. How do you put a price on it? Now I have a better sense of "today's" market. I realize the competition is fierce, but I also realize that no one has figured out the right business model for our market. There are many unsatisfied clients out there and I think it's a silver lining.

 

Thanks a million for sharing your thoughts! Did anyone else here attend the AIA Expo?

 

PS - Next year AIA is in Miami

[innerdream]

Let's see how the decision makers feel when the Architectural work that once put food on their tables is outsourced/given to China and India. I bet they'll sing a different tune, one of protectionism.

Edited May 5, 2009 by innerdream

[markw7]

...They tell me that having the USA based “go-to-guy” means lots to them... I learned that it’s ok to be a small fish in a large pond. I think the next few years might be good for the small time operators...

 

Fascinating. Thanks. I'm trying to get my own little business going out here too, so it's encouraging and helpful for sensing the climate.

 

I'm mad at myself for not knowing the expo was happening, though.

[1eo]

 

PS - Next year AIA is in Miami

 

Do you have a date?? (so I can mark it on my calendar )

[EddieLeon]

Do you have a date?? (so I can mark it on my calendar )

 

AIA Miami will be June 10-12. It's gonna be hot

[EddieLeon]

I'm trying to get my own little business going out here too, so it's encouraging and helpful for sensing the climate.

 

Good luck. San Francisco seems like a good market to be in right now. New York on the other hand is a bit of a blood bath. I'm curious about LA...

[innerdream]

Good luck. San Francisco seems like a good market to be in right now. New York on the other hand is a bit of a blood bath. I'm curious about LA...

 

LA sucks.

 

I'll elaborate. At least four major projects I know of have stopped cold due to financing issues. These are world class projects and I know for a fact the smaller projects budgets are slim for extras like viz.

[EddieLeon]

LA sucks.

I'll elaborate. At least four major projects I know of have stopped cold due to financing issues. These are world class projects and I know for a fact the smaller projects budgets are slim for extras like viz.

 

The budgets are slim, but they are still doing 3d. The problem is that they are either doing it in-house or going straight to CrystalCG. A lot of architects at the AIA Expo begrudgingly admitted they are using Crystal. I do agree they prefer a local "Go-to-Guy". The question is how can the local guy compete on price. My real concern is what if CrystalCG had a local go-to-guy? It wouldn't be pretty. My hope is that we can create a business model that can counteract that possibility.

[innerdream]

The budgets are slim, but they are still doing 3d. The problem is that they are either doing it in-house or going straight to CrystalCG. A lot of architects at the AIA Expo begrudgingly admitted they are using Crystal. I do agree they prefer a local "Go-to-Guy". The question is how can the local guy compete on price. My real concern is what if CrystalCG had a local go-to-guy? It wouldn't be pretty. My hope is that we can create a business model that can counteract that possibility.

 

Good luck with that business model, you're gonna need it.

 

A lot of architects at

the AIA Expo begrudgingly admitted they are using Crystal.

 

Once they have gone this route it will be very hard to get them to change. It's a luxury item that we provide not a necessity and price will trump service more often than not.

 

From my observation the money that is being made here on US soil is in the animation area. Sadly the animation work I see (for the most part) isn't very good - imo. I personally think if you're going to do this kind of work you should hire film people with experience in making commercials, advertising, film and TV if you want to have a business model that will be hard to outsource. It's the typical scenario in this profession, just as Architects think they can do it all a guy who can make a pretty picture all of a sudden thinks he's Steven Spielberg. LOL

[Frosty]

A lot of architects at the AIA Expo begrudgingly admitted they are using Crystal. I do agree they prefer a local "Go-to-Guy". The question is how can the local guy compete on price.

 

We just had our second competition project in 3 months go to Crystal. As much as I argue against it on a number of different levels, I cannot argue against the prices we get quoted.

[EddieLeon]

We just had our second competition project in 3 months go to Crystal. As much as I argue against it on a number of different levels, I cannot argue against the prices we get quoted.

 

Ah...case in point.

Have you been getting Crystal's "A" team or "B" team?

 

There is a huge gap between the price a top studio would charge vs Crystal. As a result, Crystal has been winning most of the time. This gap is like a layer of oxygen that their system feeds on. But, they are not invincible. We have beat them on bids before. We did this by getting into a "value range" that the client felt more comfortable with.

 

I wonder how much more a client is willing to pay for local, convenient, quality service. Is it 50%, 100%, 200% etc.? Would you be willing to tell us the price difference between the bids? I'm guessing it was higher than 200%.

[innerdream]

Ah...case in point.

Have you been getting Crystal's "A" team or "B" team?

 

There is a huge gap between the price a top studio would charge vs Crystal. As a result, Crystal has been winning most of the time. This gap is like a layer of oxygen that their system feeds on. But, they are not invincible. We have beat them on bids before. We did this by getting into a "value range" that the client felt more comfortable with.

 

I wonder how much more a client is willing to pay for local, convenient, quality service. Is it 50%, 100%, 200% etc.? Would you be willing to tell us the price difference between the bids? I'm guessing it was higher than 200%.

 

I have talked to VP's at Gensler in the past and without being too specific the prices of overseas vendors that they use come in about 50% +- lower than comparable US companies.

[Dan J]

Just when I thought I was about to leave this all 3d viz stuff behind, like waking up from years of an addiction and beating myself senseless trying to get the next fix,

 

then someone come along and give me new hope with a slightly different drug for a continued high,

 

then some one else comes along an mess's it all up again,

 

and now I'm having a really bad trip with little foreign folks of all nationalities running all over my desk and office jabbing me and poking me in the eyes and pulling money out of my wallet and I can't stop it. So stop it! Stop it!!!

 

Whew! Check please.

 

I know eveyone has been taking note of the continued outsourcing of jobs and services to foreign countries at all levels in the US, this is globallization for better or worse.

 

This shift of wealth that's occuring, is simialar to Europe during the industrial revolution and has been happening to us in the information age. It was inevitable and we just didn't wake up to it to understand its impact and now in a down economy we are feeling it. China is buying our debt wo we can have an easy life for our baby boom generation as the slip into retirement. With our policies clamping down on the number of foreign workers coming into the US and taking our jobs directly, US companies just setup shop over there.

 

I know everyone has noticed the increase of viz departments in firms and the colleges (now high schools) who are teaching the skills to arch student who are bringing those skills in with them as part of their tool bag and not a specialty.

I know everyone has noticed more and more individuals leaving the arch viz field for other or better career paths and an increase in arch viz firms closing shop or diversifying to capture other markets to stay alive.

 

Its good to hear there is some hope for what we do, but I don't think the freelancer or singular focused company will be around to survive over the next 5-8 years without diversifying.

 

Giving in to the dark side and becoming the "go-to-guy" stationed here in the US to interface and sell to clients, while all the back of the house work is completed over seas, may not be such a bad idea. I know there are a few of the large viz firms here in the US "Partnering" (outsourcing) with other firms in foreign countries for the modeling and grunt work, then sending it back to the US for "finishing/polishing", then outsource again for the rendering of the animation, then back for final editing/polishing. Dirty little secrets.

 

Personally- I'm on the fence between going to go back for my M.Arch & MBA to become an architect or trying to grow my hair long enough to become a game developer or cg artist on films.

[Chad Warner]

Speaking from my experience, we've worked with several architects who use or have used Crystal for renderings, and have since called us. The architects would rather pay more for better service and a better understanding of what the architect's intent is. And while I know Crystal can do some amazing work, the samples that we were shown were really nothing to be proud of.

[Ernest Burden III]

I know everyone has noticed the increase of viz departments in firms and the colleges (now high schools) who are teaching the skills to arch student who are bringing those skills in with them as part of their tool bag and not a specialty.

 

A traditional architectural education always included drawing, painting--rendering. It was only in the last half of the twentieth century that such a critical skill for doing the job or architect was routinely 'outsourced' to people like us. Its rather odd, actually. To communicate their design, they need to hire someone to 'speak' for them. Now those skills are being re-introduced to the people who need them most.

 

I know there are a few of the large viz firms here in the US "Partnering" (outsourcing) with other firms in foreign countries...Dirty little secrets.

 

I don't think its dirty or a secret. Little, however, perhaps not. I'm not going to get into another forum free-for-all on hiring foreign talent, but for better or worse it is a business model that some studios have used to survive, even thrive perhaps, in a changing world. Am I wrong to hire others to do my 'grunt work' for me, or only when those people are not in my own country? Which is the problem?

 

I'm on the fence between going to go back for my M.Arch & MBA to become an architect or trying to grow my hair long enough to become a game developer or cg artist on films.

 

I guess your not in this for the money, then. And if not, which career path do you want?

[jhiler]

Not all firms are going internal. The firm I last worked for basically all but dismantled the internal Viz group with the most current lay offs and they are looking at external options. There are still people with the firm that will do some of the work internally but the attitude is that internally those people can not produce the quality of work that the firm desires. There are also a few groups that will try and keep things internal but internal Viz for my old firm has become something of the past. They have used some overseas groups, but mostly have used local firms.

 

I've also heard that 3d imagery has become part of the documentation process there. Now not everything gets the sparkle and sizzle, but with Revit incorporating mental ray they are using simple images to get the ideas across to the client more often. There will still be projects that get the added treatment but now instead of having internal people on the project they can send it out and no longer have to worry about the man hours and just worry about the cost of the image.

 

Everything sounds like a mixed bag to me. This firm at least for now is keeping things somewhat local. The economy is more of the doom-n-gloom than the overseas thing at the moment. The overseas thing comes into play if a firm wants to find less expensive viz but is willing to deal with some of the communication issues. It is a tough time for everyone right now. Good luck to all.

[innerdream]

Not all firms are going internal. The firm I last worked for basically all but dismantled the internal Viz group with the most current lay offs and they are looking at external options. There are still people with the firm that will do some of the work internally but the attitude is that internally those people can not produce the quality of work that the firm desires. There are also a few groups that will try and keep things internal but internal Viz for my old firm has become something of the past. They have used some overseas groups, but mostly have used local firms.

 

I've also heard that 3d imagery has become part of the documentation process there. Now not everything gets the sparkle and sizzle, but with Revit incorporating mental ray they are using simple images to get the ideas across to the client more often. There will still be projects that get the added treatment but now instead of having internal people on the project they can send it out and no longer have to worry about the man hours and just worry about the cost of the image.

 

Everything sounds like a mixed bag to me. This firm at least for now is keeping things somewhat local. The economy is more of the doom-n-gloom than the overseas thing at the moment. The overseas thing comes into play if a firm wants to find less expensive viz but is willing to deal with some of the communication issues. It is a tough time for everyone right now. Good luck to all.

 

 

Do you work for a big firm?

[Frosty]

Have you been getting Crystal's "A" team or "B" team?

 

Now there's the rub! We are shown images from the A Team and the prices of the B team. I know Crystal can deliver imagery up there with what I consider the best. There is a huge difference between what is shown as sample images and what we received. Almost everyone involved is disappointed at the quality, but the price difference is up to a factor of 10 over our quote from the best in the biz. On a competition, where its almost completely at a loss, saving that much money means a lot.

 

I don't think the communication has been an issue for us as we have people fluent in Chinese. I certainly see how it could be a problem with any outsourced service.

[jhiler]

Do you work for a big firm?

 

Up until January I worked with a firm of about 1000+ people across all of their offices. Which is a fairly decent sized firm.

Edited May 11, 2009 by jhiler

[Ernest Burden III]

Almost everyone involved is disappointed at the quality, but the price difference is up to a factor of 10 over our quote from the best in the biz. On a competition, where its almost completely at a loss, saving that much money means a lot.

 

It's pretty common for clients who are competing or pitching work to ask for a big discount. We are free to say no, but also free to say yes and find a way to make it work. I have sometimes been offered a 'double it if we win' deal, or a promise to get more work on the project if they win. You don't accept those because you're banking on the win, you take them to make a friend or to simply keep your team booked. In those situations you can get the client to help on modeling, be super flexible on workflow and results. It's not always so bad, despite the low pay.

 

So I would suggest that any architects reading this to not assume your favorite local studios will laugh at your budget on a competition. Pitch them, make them a partner in the success of the project. You may be able to get the people you want and a fee you can live with at the same time.

[EddieLeon]

Almost everyone involved is disappointed at the quality, but the price difference is up to a factor of 10 over our quote from the best in the biz.

 

What if the factor was 3 or 4? Would they still choose Crystal?

[innerdream]

It's pretty common for clients who are competing or pitching work to ask for a big discount. We are free to say no, but also free to say yes and find a way to make it work. I have sometimes been offered a 'double it if we win' deal, or a promise to get more work on the project if they win. You don't accept those because you're banking on the win, you take them to make a friend or to simply keep your team booked. In those situations you can get the client to help on modeling, be super flexible on workflow and results. It's not always so bad, despite the low pay.

 

So I would suggest that any architects reading this to not assume your favorite local studios will laugh at your budget on a competition. Pitch them, make them a partner in the success of the project. You may be able to get the people you want and a fee you can live with at the same time.

 

Good advice. Get it in writing though. I've done the "you'll get x if we win" thing and then when they win I got 0.

[innerdream]

What if the factor was 3 or 4? Would they still choose Crystal?

 

My advice would be to open the dialogue. Your firm has a good solid reputation and if you were to say "allow us a chance to compete with the overseas vendors on price" you would probably get some of those projects. Explain that you want to make it a win win situation and give them reasons to spend a little more than the other vendors, e.g. location, time saved on communication, quality etc.

Edited May 11, 2009 by innerdream

[EddieLeon]

Thanks Robert! I really appreciate the advice!