A good investor should allow your business time for nurture and room for growth, along with advice and guidance, says Chris Downs.
There are no rules as to how you pioneer a new design discipline and a completely new kind of consultancy. But there are some very simple things you can do to grow and maintain a successful firm.
Five years ago, innovation and design in the service industry was ‘unproven logic’. Livework’s three founders – myself, Ben Reason and Lavrans Lovlie – decided to explore the concept of service innovation and design as a way to cure the world of its obsession with products. We wanted people to understand that ‘they are what they use, not what they own’ and to make our design skills more relevant to an economy to which services contribute 72 per cent.
Despite each of us having more than ten years of innovation and design experience, this was to be our first attempt at building and growing our own creative services firm. We established Livework by putting together a three-year business plan and by winning projects with Orange – our first client.
Having experienced the dotcom boom first-hand, and the pitfalls of rapid, unplanned growth, we decided that we should grow Livework organically. That meant we would set up without any investment, and we had to make every project profitable from day one. We also committed to paying ourselves properly from the start. Ben had just become a father and was leaving a well-paid job to set up the business.
Running a business is like bringing up a baby – it needs nurturing. Running a creative consulting business is like having twins – the business must be nurtured, while, at the same time, juggling continuous development of the intellectual and human capital – the creative service itself.
We challenged ourselves, from day one, to prove that service innovation and design, and therefore Livework, had a right to exist. We needed paying clients and our methods and processes to be adopted outside of our business. Finally, people should be educated in it.
We achieved everything in our three-year business plan by the end of the first year. The business was profitable and profits were reinvested for growth. We were establishing and teaching the discipline of service design. The business was gaining momentum, it was time to grow, and we needed help with this. We didn’t need financial investment – we needed someone to invest consistent focus, experience and confidence in us.
We were lucky to have great support, unlimited mentorship and genuine interest from Alan South and Colin Burns, then at Ideo, Robin Mackie at One North East and Hugo Manassei at Nesta. But we felt we needed a formal, ongoing relationship to help nurture the baby.
We shared our start-up experiences with other young businesses through Nesta’s Creative Pioneer Programme. It was through discussions with the programme’s founder, Manassei, that we came across Pembridge Partners, a business accelerator for creative services firms. Pembridge is unusual in its commitment to maintain the balance between creative and commercial value. It understands creative services businesses, but does not sell expertise. It provides advice and support in managing the business – the bit creatives are often not interested in, less experienced at or simply overlook. This way it ensures that both ‘twins’ are nurtured.
Pembridge partners Rose Lewis and David Prais quickly understood the content of our business and moved on to its context – the market, its people, our strategy and so on. It trusted us to take care of what we did, and they would support us in how we got to do it.
Another indicator of its objectivity, and one that appeals to us, was the fact that Pembridge only takes a minority stake in any business it ‘accelerates’. This ensures its focus is on developing the business and not tinkering or shaping the direction of the creative offer in the form of a heavy-handed executive board. Its motivations are to sow the seeds of success in others.
How do we describe what we receive from Pembridge? It gives us confidence and clarity. As we drive the business forward, day by day, it is right there behind us, for either encouragement, redirection or simply a kick up the arse.
Today, we have an international client list. We serve clients from two studios in the UK and we are planning to open our third in New York this year. We are still pioneering and it has proven the unproven logic of service innovation and design. We are now ready for our next phase of development, thanks to deliberate decisions, early on, to grow organically and sustainably. And thanks to the invaluable help of our investor.
Chris Downs is managing partner at Livework
What to look for in your investor:
Apart from a financial stake, think about how your potential investment partners fit in regards to:
• Advice and support in the management of the business
• Experience in understanding the broader context of your particular market
• Trust and incentives to achieve targets