With all the hoo-ha over laser-cut patterning and mid-century styling, it's easy to forget that design is a business. But is it a profitable business? The folks at Design Investors think it is--or can be with smart management.
Design Investors may be the first attempt to bring the tricky magic of venture capital and private equity to design. Will it bring the breath of life to design seedlings?
Started two years ago by Peter Sallick (left), the former CEO of Waterworks, the firm has so far invested in just three outfits: Rose Tarlow Melrose House, Twill Textiles and Waterworks, Sallick's former employer. Design Investors, which is based in Wilton, Connecticut, used its own funds and pooled with a dozen investors. (Sallick declines to say how much capital they have invested.)
As is often the case with VCs, success relies on bringing their management skills to bear. "We're the most active board members you can imagine," said Meg Touborg, managing partner, who serves as interim CEO of Rose Tarlow Melrose House. Sallick plays the same role with Twill Textiles.
Designers could use some help, particularly during this nuclear winter. Design and business seem to reside in opposing brain lobes, and some of the finest designers lack any notion of how to run a bankable studio. In most cases designers have financed startups through banks or ad hoc loans from friends and family. Design Investors takes a broad definition of design, and they're willing to consider anything from fashion to Web ventures. A candidate's financial structure matters less, they say, than an innovative idea and how it's marketed to customers.
Design Investors also runs an annual invitation-only conference, the Design Leadership Summit, which was held last week in New Orleans. The conference brought together 120 designers, all principals of their own firms, including some big names like Annabelle Selldorf, Thom Felicia, Kathryn Ireland and Calvin Tsao. "They've all achieved real prominence, and they're not seeking design inspiration," said Touborg (right). "What they crave is a better understanding of their industry--how to manage people, how to make good strategic decisions."
The mood was apparently not as gloomy as you might think. Many of the participants said they had received a small but noticeable uptick in work inquires over the last few weeks. "I wouldn't call it robust," Sallick said, "but people did feel that they'd turned a corner."
Related Stories: | Topics:Design, Michael Cannell, venture capital, Design Investors, Peter Sallick, Business, Venture Capital, Private Equity, New Orleans |
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Recent Comments | 3 Total
April 9, 2009 at 9:39pm by Alexandra Gibson
As someone who runs two businesses in the interior design industry, I am so glad to see an article highlighting the importance of "design as a business." As stated, "[d]esign and business seem to reside in opposing brain lobes, and some of the finest designers lack any notion of how to run a bankable studio." Our company works with interior designers across the country on helping them run more efficient and profitable businesses through teamsourcing (outsourcing to a full professional team rather than hiring in-house, thus turning fixed costs into variable costs). We are like left brains for right brains.
I am so glad that there are other companies that have similar visions for the industry. I am especially excited to see that there is a company that is bringing VC and private equity to the interior design world. This will only help breed more innovation. Way to go Design Investors and thank you Fast Company for this feature.
Alexandra Gibson
CEO
Gibson Design Management- www.gibsondesignmanagement.com
Twitter: @gibsondm
April 10, 2009 at 10:30am by Louis Postel
As a design writer, I see even the top designers and architects knocking themselves out for relatively little money. They could be in Architectural Digest every month, but as long as they are charging by the hour there are only so many hours in the day. A handful have been able to get out of this rut by licensing or branding product but this is practically another art form. I understand and applaud Peter investing in design houses offering home furnishings etc. but how does one invest and profit in a service business rewarded primarily on the basis of individual creativity?