The Next Big Thing close

David Hart
David Hart
In Musings
16th May 2013
The Next Big Thing

Everything’s changing and I don’t feel the same.

When Codegent started, 9 years ago, our life seemed so much simpler: someone needed a website, we knew how to make one and they didn’t so they paid us to do it for them. But so much has happened in the interim: social media, the unprecedented growth of mobile, mobile apps, the ubiquity of APIs, HTML 5, the discovery of ‘digital’ by agencies whose heritage is elsewhere, the commoditisation of code, outsourcing, the recession…. All these things and more have transformed our industry and now provide some interesting opportunities, too.

Digital product design

For us, as we’ve evolved, it’s harder and harder to say that we ‘design websites’. I mean, much of what we do is accessed via a website, but it would be like describing what car manufacturers do as ‘design chassis’. The days when our job mainly consisted of laying out content in an attractive way for viewing on a PC are long gone.

So maybe it’s time to describe it as digital product design. Typically a project will include a responsive website that optimises itself seamlessly across computers, tablets and mobiles, it might include an app, it will almost certainly want to integrate with social media, it might deliver a service or act as a utility. It could be something that people want to white label, or get people to subscribe to. It effectively is building a utility or a service; in other words, a product.

So what?

Who cares what name we give to what we do other than ourselves? The interesting thing, though, is now we're no longer just designing websites, what happens next? We think the answer to that questions is: a new wave of agencies like us, using their expertise to develop and publish their own digital products and for those products to become a central part of their income.

Why are agencies, and more importantly, the people who work there, so interested in this? If you ask anyone here why, I’d say it comes down to a few things:

  • The freedom to innovate
  • The space to work on something that is genuinely new
  • The autonomy to shape something
  • The opportunity for kudos and respect from their peers
  • The potential that something might really take off

And, after all, surely the guys who spend all day doing this stuff for a living are in a great position to invest in their own R&D to create the products that are going to shape our lives in the future? Wouldn’t you want to bet on the people who sweat over the tiny stuff that makes the difference between great and adequate day in and day out, to be the ones that produce the next wave of great digital products?

Well possibly, but possibly not. We think it depends on who you are, what you are doing and why you are doing it.

Generalising a little bit, but I think it would be fair to say there are two types of digital agencies out there at the moment. I mean ones that are actually doing good work for good clients:

The first might be owned by a larger group and their main raison d’être is to deliver a margin back to their parent organization by servicing large client accounts. As an account director, you may have one client that you work on exclusively. There will be a lot of retained work and the fees will be huge. And for them it’s about having some great talent in-house to define the strategy, and then pulling contractors in as and when they are needed, or outsourcing work altogether to India or Eastern Europe.

The issue for this group is that they are probably too addicted to the cash from their large demanding clients to innovate on the side. Especially if they are under pressure to deliver margins or need to get corporate sign-off higher up the chain for any self-funded R&D. Why spend six months working on a hunch that might deliver nothing, when you’ve got clients with money now who demand all your attention?

The second type of agency is like Codegent. Smaller, independently owned, with more project-based work than retainers. All of our design and build is done in-house with permanent members of staff. Most of the people here work on multiple-projects for multiple-clients. We’re not under the same pressure to deliver such big margins and so we tend to want to experiment with ideas that we think are worth our investment of time (and therefore money).

But for us, it still isn’t straight-forward. It’s still quite counter-intuitive to turn down paid work when it’s being offered and turn your attention to something else that may or may not make you any return at some undefined time in the future. It’s hard, but it’s not impossible.

Shouldn’t consultancies just concentrate on consultancy?

We have always been interested in dreaming up different ways of doing things. And we know that producing our own products at the same time as creating brilliant projects with our clients is a good idea.

How do we know this?

Well, firstly, we know that a lot of other people see the potential. We get probably two to three emails a week from someone with what they believe will be a brilliant, disruptive idea that nobody else is doing and, if we’re prepared to design and build it for free, will earn us a minority share in their future business. The trouble with that is, we’re not actually short of ideas ourselves and if we develop them ourselves, we also get to keep 100% of the future business.

Secondly, and allied to the first point, we probably know a lot more than most people about what will and won’t work. We’ve now had over 7 million downloads of our mobile apps and a number of Software as a Service (SaaS) products out there that are doing really well.

And thirdly, ‘eating your own dog food’ means that, for our clients, we’re not just pontificating about what they really should and shouldn’t do: we absolutely know what they should and shouldn’t do from first-hand and, at times, painful hard-fought experience.

Why isn’t everybody doing it?

Because the theory is a lot simpler than the practice. At Codegent we spent years knowing that we wanted to develop some of our own IP but it took us actually to have the balls to move some of our team from paid work onto our own products, before it actually worked. And there’s still a long way to go.

This year, our own products will account for approaching 30% of our turnover. This is from a standing start 2 years ago and with very little in the way of marketing spend. Will we launch the next Twitter or Instagram? Highly unlikely. But we think that the next few years will uncover new and innovative ways to provide value through digital products and we want to be there as it happens. We want to do this for ourselves and alongside our clients.