Astro Studios, a leading San Francisco design firm for 26 years, has sold to the London-based PA Consulting for an undisclosed sum.
Astro may not be a household name, but it is a mainstay design firm that has worked with just about every big tech company out there, and it’s responsible for some of the most beloved and cutting-edge products and brands of the past two decades. Industrial design is its specialty, particularly of wearables and audio and video gaming equipment. Astro created Dell’s gamer-focused Alienware line. It contributed to the Xbox 360, Microsoft’s hit console that went toe-to-toe in sales with the PlayStation 3. It has also worked with HTC on its Vive virtual reality brand, and launched its own premium gaming headsets line with its spin-off brand Astro Gaming (now owned by Logitech). Astro was key in the development of the Nike+ Fuelband, the world’s most influential wearable before the Apple Watch.
Meanwhile, PA Consulting—itself owned by the $200 billion asset management firm the Carlyle Group—has 3,200 employees worldwide, and works on everything from the Virgin Hyperloop One to air decontamination technologies. It’s a consultancy that does nearly $600 million in revenue a year. Areas of expertise include business management, science and engineering, and assembly line production, largely in Europe. As Brett Lovelady, founder and CEO of Astro Studios explains, “They actually make things and solve problems.” And Lovelady says he wants to keep making things and solving problems for a long time to come.
Astro’s acquisition is part of a larger consolidation of the design industry, as big companies buy smaller, stand-alone design studios. Fuseproject, Lunar, Fjord, Matter, Adaptive Path, Argodesign, and Map have all been acquired in recent years. The business model, even for successful design firms, is notoriously tough, as clients pay by project and firms struggle to cover payroll quarter to quarter.
Lovelady got tired of the hustle. “My analogy for consulting is, having a really nice sports car that you take great care of—that you’re driving 100mph straight at a cliff,” Lovelady says. “And you hope that cliff moves. That cliff represents new projects and revenue.” For the past 25 years, Lovelady hasn’t been able to lift his foot off that pedal. “You get addicted to it,” he laughs. But going into 2020, the company’s 26th year, he found himself more open to something new. Big companies are increasingly hiring in-house design teams as they see design as intrinsic to their bottom line, which made it harder for Astro to find consistent, long-term clients. Along the way, Lovelady has tried to retain design talent only to see employees strike out for Google, Facebook, and other Bay Area companies with limitless checkbooks—a story we’ve heard from many of his peers in the industry.
After talking to friends in the design world who had been through acquisitions, he knew what he wanted, and what he didn’t want, for Astro’s future. He didn’t want to be part of a stock business consultancy that dished out advice without actually developing new products. And he wanted to be able to not just sustain Astro as a studio, but expand upon it, hiring more staff with specialities in engineering and UI/UX to build products and their complete physical/digital connection. That’s what he says PA Consulting gets out of the deal. Astro will serve as the company’s foothold on the West Coast as it eyes expansion into the United States. But Astro will keep its branding, its client roster, and its staff. All of the company’s two dozen designers have opted to stay on, while Lovelady hopes to double or triple his staff over the next few years.
As for the broader design landscape, as the number of purely independent design studios continues to shrink: It will probably be another few years before we know what this trend means for products and innovation on whole. Some partnerships are bound to work out better than others, but the overall effect is that an entire field of our best creative minds are answering to more managers than ever. Hopefully, those managers are listening.