Experiences converting in-house arch-vis to stand-alone business unit

[scottfolts1]

I'd love to hear peoples $.02 on spinning off an existing arch-vis department into an entity that offers services to outside, non-competing clients, as well as, continuing with in-house support.

 

 

Do you think an autonomous identity helps or hurts? (name, logo, etc)

 

 

Any successful examples? failures? Any anecdotal info would be helpful.

 

 

Thanks

[Chris MacDonald]

Back during the recession when the graphics/3d at our practice were up for redundancy we were asked for any suggestions, no matter how silly or far fetched they were that could mitigate job losses and this was my suggestion, though it was turned down on the basis that "if a project comes along that we really need you to work on, but you're already predisposed for a fee paying client then this could cause us problems as a practice".

 

I guess it stems from the fact that not all of our (3D) work is paid for, sometimes we'll do it to sweeten a deal, or impress someone that could potentially result in a lot more work, etc. I am forever being hauled from project to project to make sure things go out of the door on time and management often expect me just to be able to shuffle my workload around to accommodate for pressing deadlines, etc.

 

If however your position is different to mine, I'm sure you could make it work.

[RyderSK]

Bit off (not even archviz concerning..), but I thought this might somehow interest you too:

 

http://snohetta.com/

 

I am kind of thinking Snohetta Design originally only worked on preseting their internal own architectural projects, but now they just offer that service to anyone outside under Brand category.

I always found it interesting and different to what others do.

[Scott Dombrowski]

I believe Ayers Saint Gross in Baltimore spun off their viz group to ASGVis. They developed the V-Ray for Sketchup plugin and were eventually acquired by Chaos Group. I'd say that worked pretty well for them. My info is purely anecdotal, so if anyone has the full story I'd love to hear it.

[Devin Johnston]

I worked for a firm that tired this once without much success, in the end they weren't able to attract enough clients and the spinoff failed. They didn't invest the time necessary to develop a client network, they thought mailing out brochures (this was in the early 2000's) and cold calling was going to be enough but it wasn't. I'd suggest coming up with a game plan that details how you’re going to go about attracting clients to your business, I suggest that face to face meetings be a big part of that.

[Justin Hunt]

I agree, that it has to be able to generate its own money, almost to the point where even if it is an in-house project then there should be a fee, either out of the architectural budget or a separate fee. The bosses should see this as an other service to sell to clients and not just a design tool. It also has to have direct involvement of one of the directors, one who has a vested interest in making the venture work.

[Tommy L]

There's a couple of things I would add.

Firstly, you have to run the 3d dept as a seperate entity. The arch dept can either have you on retainer or pay per job, but they are technically just another client.

Secondly, most companies start as a result of getting a client, or a few clients. I dont think many people start companies without a client. The arch dept doesnt really count, so I'd probaably see if you can win a client first and then start putting the other pieces in place.

[CliveG]

Yeah, I'm afraid I've also seen this - not work.

 

For a start, no architects or designers would bring any business to the new entity because it was known to be part of the old entity. No matter how good their work these practices just weren't going to give their "secrets" (?) to people who used to be competition or part of their competition.

 

Also no matter scrupulously and independently the management of the new entity tried to be in running their business, the old practice still treated them like their old in-house resource and would kick-off big style if they didn't get to queue jump and still enjoy special treatment. (They'd obviously helped launch the new entity so they felt "owed")

 

In the end it became "like what's the point?" and everything pretty much went back as it was, though some of the best people had to leave, because they'd never have re-integrated.

[neil poppleton]

Strong management is needed and it will work. I ran a similar 3d company in the past linked to a large design group.

[Scott Schroeder]

I think it can work, but often for reasons outside of the business itself, it often fails. First and foremost is that it has to be treated as a separate entity as stated by many other folks in this thread. No poaching workers on either side for jobs. If the firm constantly pulls people away from the studio, then the studio will slowly die off. There has to be separate management. There has to be separate cost/billable accounts. The support system from the main firm has to be cut off completely so that the studio runs and feels like it can sustain itself.

[Chris MacDonald]

Which all begs the question; why not just start up another company?

[Devin Johnston]

I think in most cases a start up without the funding of the parent company would be looked at as a tremendous risk for most people especially without a solid client base.

[Scott Schroeder]

Which all begs the question; why not just start up another company?

 

Well in some cases it still might be better to still be a part of the parent company's reputation. If Scott's Awesome Architecture firm has a great client base and solid reputation, then Scott's Mega Awesome Viz Studio should carry the same reputation and not have to start from scratch.

 

An example would be if say, Neoscape split and did a product viz only studio. They would carry the reputation of Neoscape so you know you'll get a great product. At the same time, that studio would function independently of the original arch viz studio.

[Corey Beaulieu]

I think that when you are talking about starting a studio it's all about a balance of financial situations. You have to be willing to bring on extra mouths to feed.

 

I work at Neoscape and we have a whole host of people that don't create product per se and eat into the profit line of the artist. We have to as artists understand that without these people we would face the same struggles that Devin mentioned and ultimately fail. A sales department may not be the most well-versed side of what we do, but their blurred definition keeps us inventive and in business day-to-day. They offer an unbiased acceptance of the clients wishes and have the faith in our artists to deliver a quality result.

 

If you are considering a studio on your own you have to remember that your price is not tied the egos we all carry as artists. Overhead is a bitch and clients expect us to be able to work along side them. You need solid IT, Solid Sales, Solid Client Facing Managers, and above all Solid Artists. Reputations can be borrowed from a previous endeavor, but you need to spend the upfront money to stay current with software and maintain machines that can keep pace with sales. Annually you cannot just consider salary and profit, but the many thousands of dollars required to stay relevant.

 

If Neoscape spun off a product line we would undoubtedly see initial success for our trusted name in the render world, but if we could not deliver the same level of quality and service then we would absolutely fail over time. The people that the founders have hired to insulate the emotional aspects of being an artists and to keep business coming in atop the production happening are expensive, but crucial to our survival.

 

I think like any business endeavor, your model is king. You have to spend money to make money. Our founders were lucky enough to start thier business in the early days, but make no mistake, it has been their flexibility to market change and an intelligently designed, experience based strategy to the business side of the render practice that has kept them in the top end of the industry.

 

I have no idea of the actuality behind our finances, but I can tell you that our founders have poured the their heart, soles, and wallets into the business. They didn't do it to get rich and in many senses have allowed their business to grow in spite of getting rich themselves. They do well, but if they cared less about creating a business that functioned as well as I feel we do, they would only do well for a time before our business would suffer.

 

If I were you, I would look start my own studio. I would throw it all on the line, take out a loan, and buy the essentials for market relevance. I would then search high and low for any level of client, take the highest fee you can negotiate without losing the deal and allow all profits to stay in the business for as long as possible. Hire as quick as you can, non-artists that can keep the business rolling in while you produce images. Over time you can hire more artists, but be prepared to work horrifying hours and develop a reputation. 20-30 years into an industry, your foothold is going to either be built on an angel investor (unlikely) or the sweat of your own efforts. Scalability isn't as easy as being a good artist on your own. It is about being an attentive client manager and that is, in my experience, the hardest part of being an artist type.

[Francisco Penaloza]

I had a similar experience, but with a twist, I was freelancing and this Architect offered me to use his Office space, Secretary and several computer as render farm, I give him a better price to his renderings and he would get a small percent of my income for office use. What happened is it was very hard to get new Arch firm to send me work because they heard his name, and some of my clients got very picky regarding send me more work because there was this architect by my side that could compete with them. I did try for a few month and as soon as I saw all these problems the deal was canceled.

so from my experience if your umbrella is an Architectural Firm or Engineering, it will be very hard to reach similar clients because, if you work for A Architects, and ask B Architects to send them their plans to render, you'll hear a big NO. The only way that similar companies trust you is to show them a complete separation of your umbrella company, and in that case, just get out of there and try your own. Maybe it can be better get a investment deal than still being employee of them.

 

Now if your main company it is an TV motion graphics and then you want to dedicate some men power to do Arch Viz, there will not be interest conflicts there, and that can actually work.