Eric Karjaluoto

The 30/30 Principle

You have a plan. Instead of schlepping along endlessly, working for clients, you will build something “on the side.” People will enjoy using your product, and you’ll design it the way it should be, rather than succumbing to what a management team dictates. The best part? Your creation will generate passive revenue. Ahh—how sweet it will be, to focus on making something good, while the money trickles in.

I know this dream because it’s mine too. And from all the conversations I’ve had with other designers about this topic, I’m not the only one. From my approximation, there are just seven designers on the planet who do not share in this fantasy. (Six of these seven work in porn, and are therefore otherwise preoccupied.) Is there any wonder why they gravitate towards this idea? Designers love to build, but are not as enthralled by the tactics, negotiations, and maneuvering required by many design projects. The possibility of creating design free of any encumbrances is a seductive one. This way of working isn’t without shortcomings, but that’s a different discussion altogether.

For all the conversations I’ve shared with others on the topic of developing one’s own products, a low percentage of designers/studios ever get these projects off the ground—even fewer see any success as a result of their efforts. This is because the notion of freedom is seductive, but adhering to the disciplined action required to make such ideas real is far more difficult.

Although this perspective is based on anecdotal observation, I suspect my views are quite accurate. Creative people have lots of ideas. These sometimes lead in tangential directions that overlap. This divergent nature can result in designers getting tripped up by their many interests. On the other hand, developers seem better at shipping products. When I survey all of our service-based peers and ask which companies have successfully created their own products, I find the answer skews heavily to development shops.

So, I posit a theory: This theory commits that those running creative firms—and have aspirations to generate products of their own—need discipline more than ideas. Moreover, given the flighty nature of many creative people, these studios need to enable some kind of mechanism to help enable a culture of restraint. Just like financial planners argue that you need to pay yourself first, those developing products must commit to putting aside time for their own projects.

Few can just walk away from client work and not feel substantial consequences for having done so. Those in their early 20s can, because their living costs are low and they might be able to subsist on credit cards for a short while. (This many be the reason startup founders are young: the actual risk they face is negligible.) However, by the time most studio owners contemplate side-projects, they’ve worked for clients for a few years already. In this time, they’ve married, bought houses, made babies, and so on.

Should these individuals decide the risk is too great and let their aspirations fade away? I’d argue an emphatic “no.” I’d also stress that life circumstances can’t be ignored, even if you’re trying to create a new startup/product. Therefore, if you fit the profile I’ve just described, you need to find a way to manage your bottom line so you can take care of your family, and squirrel away enough time to build your product in a consistent fashion.

This is a huge departure from how I’ve approached many side-projects. I tend to take them on when there’s a dip in client work. I then become so completely absorbed that the new product is all I think about—which means I fail to service our core business. However, once client work builds up again, I’m forced to abandon our new project so that we can maintain our commitments. This results in a kind of binge and purge approach to startup creation that is rarely fruitful. Put another way: You grow a garden by tending to your crop every day, not by drowning the land for a week, and then ignoring the garden for a month.

Consistent, disciplined, and manageable work habits are at the heart of The 30/30 Principle. This approach is a time-management tool that divides hours between two important aspects of your work. The first half goes to ensuring financial stability; the second half is an investment in your future. While selling billable hours is a fine way to make money fast, this approach can be susceptible to the ebbs and flows of the market, and can lock you into a mode that’s difficult to ever take a break from. This 30/30 approach is a way to leverage service hours immediately, and establish a less volatile way of making money.

For those working jobs, a 60 hour week sounds like a lot, but any person running a studio puts in this kind of time regularly, without much sweat. The effectiveness of these hours can be variable, though. For those who aren’t careful, a large amount of that time can end up going into managing a firm’s social media efforts, preparing submissions for award shows, reading blog articles about design, or any number of other interesting—but non-essential—tasks. The 30/30 Principle is dependent on your ability to cut out some non-critical tasks so you can make greater overall advances.

Each week, you start by putting 30 hours into standard studio time. I suggest reserving 5 hours for operations (E.g., project management, housekeeping, systems administration), with the remaining 25 hours going solely into client billable work. You need to bill each of these hours out out at your full rate or higher just so the basics are covered. Doing so results in a modest to decent income that will pay your mortgage, child care expenses, and perhaps even leave you with enough left-over for a holiday.

Think about this equation in this way: at a low billable rate of $100 an hour (what an agency bills a junior designer out at) you will generate $2,500 a week, or $130k per year by taking this approach. You’d probably agree that this isn’t a bad income, even when you factor in expenses like workspace rental, software licensing, insurance fees, and so on. Get your billable rate up to $250 an hour, and you’re golden.

30 hours isn’t an awful lot of time. You can easily spread these hours over three mid-level intensity days. From there, the rest of the week is yours (this leaves you with three whole days, on a six-day workweek) for your side-project. Although this isn’t as much time as you’d have if you ditched your studio and joined a startup incubator, this construct is more viable to maintain. And this ability to stick with an effort over a longer period is what’s most important. I’ve seen many ideas that we started with, and abandoned due to limited hours, prove a great success when others stuck to the same plan. Startup folklore favors stories of instant success, but scratch the surface of these tales and you’ll find that such incidents are few and far between.

Maybe you take a year to build something that you can finally release; perhaps you need to wait three years before you’ve acquired enough customers for the product to start recuperating all you’ve invested. Honestly, though, how long did you work at building up your design studio before it started to become profitable? Unless you left a big agency and took some clients with you, my hunch is that you were living lean for at least a few years. Isn’t it reasonable to expect it to take at least that much time for you startup/product to start seeing some traction?

Of course, no venture capitalist wants to talk about this sort of business or approach. They’re more interested in lottery tickets. If they buy enough of these tickets, they’re bound to end up with a winner. But a lot of us aren’t so interested in being one of their “almost-rans.” I’m just as uninterested in being a part of a startup that goes ballistic and becomes part of a feeding frenzy. While such notions may be attractive for others, the whole idea intimidates me. I just don’t understand that world. And if I ever got so lucky, I’m sure that someone else would just end up eating my lunch in the end.

I’m employing The 30/30 Principle because I don’t believe in lucky breaks. I believe in work, consistency, and reasonable expectations. I’m not building the next Instagram, nor am I aspiring for our agency to be the next Ogilvy. I just want to build things. And I want to do that directly with those who use what we build—instead of needing that interaction to be mediated by investors or an employer. For clients, I’ll do my best to ensure they are outfitted with the very best design solutions our studio can deliver. Meanwhile, I want a little time of my own to plan for the future, and keep some of my own skin in the game.

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