We wear our hearts on our sleeves by posting our business plan online. We'd love to hear what you think of it. It's covered under a Creative Commons license, so feel free to make use of it.
Because We Can is a new kind of architecture firm: a Design-Build Studio. That’s a mash-up of architects, designers, artists, fabricators, and builders. We not only design the project, but help build it as well.
We make Great Things for Great People.
What are the Great Things we make? We make buildings, interiors, furniture, and art.
What makes them Great? They are sustainable, creative, productive, high-quality, and human.
Who are the Great People we make them for? Businesses and individuals looking for something perfect and amazing that only comes from an intensively collaborative process, honest creativity, and depth of experience.
Because We Can is empowered by three big ideas (our secret sauce):
Art & Architecture
We are architects and artists first and foremost. We approach problems creatively, with the exuberance of life, a wealth of experience, a love of collaboration, and a responsible sustainable mindset. We fearlessly get our hands dirty, draw upon a multitude of influences, try new things, and are always finding inspiration in the amazing world we live in.
BIM & Digital Fabrication
Our digital tools allow us to build anything. Building Information Modeling & Digital Fabrication enables a shared unified model for design, analysis, documentation, and fabrication. Together they also allow for a higher level of collaboration, a reduction in errors, much more creative possibilities, and a higher quality project overall.
Lean & Agile Management
Modern management ideas give us the rigor and focus to produce real quality and meet our client's goals perfectly. Ideas from the lean manufacturing and agile software movements adapted to the building industry enables us to be incredibly prolific, efficient, and competitive.
Because We Can is a privately held Corporation in California. The company was founded by direct cash investment from it’s founders, and has grown purely from it's own cashflow, so there is no outstanding debt or loans.
The Company has two directors & main shareholders, Jeffrey McGrew and Jillian Northrup. Jeffrey is an Architect & CEO. Jillian is a graphic designer, photographer, and CFO. They are a husband-and-wife team that have been doing big creative things since they first met who throw themselves wholeheartedly into every project and love what they do beyond reason.
The Company has one tirelessly working Robot, a upgraded and modified Shopbot PRT-96 4G CNC router with 2.2 HSD Spindle and vacuum hold-down named Frank.
The Company works out of a 2,500 sq. ft. fabrication studio and offices, relentlessly optimized for speed, quality of production, quality of design inspiration, and joy for employees and friends. Located in West Oakland, it’s centrally located within the Bay Area, and well suited to awesome Quarterly open houses.
The Company maintains healthy connections with a large number of local artisans, designers, fabricators, and contractors such that it can pull upon a diverse and talented temporary / subcontracted labor pool as projects demand.
The Company also has one feline, named Professor Kitty. He’s responsible for rodent relations, important research, and biting the interns.
Since it's really about People and Process, we find the very best people we can to work with and then make certain we don't stupidly waste their time.
It’s true that the building, interiors, and furniture markets are rather terrible right now. Especially so in California. Architects, interior designers, and contractors have all had stunning layoffs and shrinkage in recent years. So conventional wisdom would deem it insane to be servicing this industry currently, let alone try to grow a business focused on this area. We must be crazy.
However, when everyone ‘knows’ something, everyone tends to be wrong. If we look at the numbers, there is currently over $610 Billon (yes, that’s with a ‘B’) of current projects within the California building industry alone according to RS Means construction data. While the market is recognizably bad, there still is a market there, and a large one at that. And while some within that market are certainly shrinking and/or failing, others are still surviving. A few are even thriving.
So this brings to mind two very important questions:
First, is all the doom and gloom really an opportunity? While it’s true that the market shrank in the last few years, much of that boom development was unsustainable anyways. Much of it done in inefficient ways because almost anyone could make money during the boom. The building industry is additionally one of the last ones to adopt new technology and ways of working. From our personal experience, we estimate that this presents at least a 20%-35% inefficiency overall. If a company could serve the core market efficiently and effectively, without wasteful traditional methods, there is still plenty of money to be made.
We are grateful, actually, for we believe it's a golden era in terms of personal empowerment via technology!
Obviously shrinking minimizes competition within the market too, but now that times are tough, existing companies are facing difficult changes, cultural shifts, and learning curves to work in these new, more efficient and profitable ways. So we feel a new kind of company, based upon more efficient and effective ways of working and using the latest in innovation and technology from the very beginning, in combination with raw creativity, intense collaboration, the energy that comes from doing what you love, and a sustainable mindset, could not only survive within this market but thrive.
Secondly, what can we offer the market that no one else can, or expand that market into new areas? Based on our personal experience, we know that are plenty of people who want more creative, sustainable, higher-quality and/or customized buildings, interiors, and furniture. Boring is Bad. By offering a more creative, sustainable, and customized alternative, we’ve found that we are expanding into new markets. Clients who wouldn’t have considered going with a designer or custom solution before are not only hiring us, they are engaged, excited, and very satisfied by what we can offer, and even willing to spend a little extra to get something they love.
So by offering more creative, sustainable, and collaborative services, and doing so in a more efficient, effective, and innovative way, we believe that we can re-segment the existing building, interiors, and furniture markets to create a new niche that we can profitably fulfill and control.
Our 'Great things for Great people' niche is pretty blue-water. People hire us because they specifically love what we do and love working with us. Our goal is to make the world a more interesting place, and to make a decent living doing it. We also know that we do a whole lot more than most, and for less money than most. So we figure, if someone would rather work with a different company, or buy something from a different company, well if it works out it's still great. We don't need to make others lose so that we win!
However, that said, there are other forces out there we indirectly compete with, such as traditional design-only Architects, traditional Builders with no in-house design staff, large companies who mass-produce things, and other artists / artisans.
We offer more value than other designers, Architects, and builders because of our in-house shop, experience, creativity, & skills. Most designers and Architects don't have the in-house capability or experience to actually build things. And most builders don't have the in-house design talent to design something great.
We offer more value than companies who mass-produced items, for the things we make you'll love forever.
As for other artists, well, we firmly believe that the answer is always More Art. We ain't starving, so we're very happy when we see the world become more creative and interesting, even if it's not us doing that particular thing.
While we can build anything, not everything is profitable, and not everything makes us happy to have built.
These various things we can do were made into a spreadsheet, and each were rated one-through-five within various positive and negative categories, with five being a big impact and one being a little impact. These ratings are from the gut and experience, and help measure more tangibly how ‘good’ a particular project type is for us overall. When tallied up and sorted, these four things floated to the top:
So that then gave us what to focus on: interiors, predesigned furniture, custom furniture, and consulting. The middle ones are good to do if we’re not busy with the top three, and the bottom three should only be done if there is some other compelling reason to do them (or we’re totally starving).
From that, we then created mock profiles of each of our typical past customers, and then plugged in the ‘goodness’ values from the first chart into each thing we could do for them. This gives us how ‘good’ each of these customers are for our business. Again, totaling and sorting this list, we can easily see which of these customers we should focus more on:
So we should spend most of our time talking with business owners, facilities managers, and developers. The middle people are good to talk to as well, as long as it’s not interrupting talking to someone higher up.
Finally, we took each of the ways we’ve typically reached out to each our customers, and scored where they are likely to be.
Multiplying the ‘client goodness’ values from above against those ratings, and then again sorting that list, we quickly can see what marketing activities have the highest return overall for the business: Our website, word-of-mouth, and social meetings.
From this, we decided that our marketing strategy should be threefold: make our website really great and google-friendly, be a really great design firm doing great work so we’re recommended a lot to others, and to get out more and meet more interesting people. Getting press and going to conventions are things we should do, but in moderation and not to the interruption of the top three. Events & Giving Talks should only be one when there is some other compelling reason to do them, otherwise they aren’t worth the time taken. We’ll still go to Maker Faire, because we dearly love it, but we won’t throw a ton of energy into it. Clubs are Right Out.
So by using a powerful & Google-friendly CMS (Drupal) we make a website that drives attention our way and clearly communicates what we can do and what we offer. By being a great firm, focused on our clients and the quality of the end results of our work, we’ll gain a reputation such that we get lots of return business and are recommended by our existing clients to new clients. By being more sociable, and getting out more, we’ll meet more people who are likely to hire us for their business or personal needs. Finally, we’ll keep doing our monthly open houses and giving talks, but only because it has secondary benefits (such as getting us to clean the shop!) and not because it directly leads to work. We’ll also spend a minimal amount of time and money on these activities.
Finally, in order to properly focus on our core business, while allowing us to do great work and be that great company we’re striving to be, we only take on projects and develop products that we feel meet these four criteria:
- Interesting. There has to be something fundamentally interesting about doing the Project, or the Project itself will be generally interesting to others when finished.
- Reasonable. The Project has to have a reasonable budget and a timeline, as well as not being too much of a challenge or involving too many unknowns.
- Creative. There has to be elements to the project that allow us to be very creative, or the Project itself will be very creative when finished.
- Sustainable. The project cannot put us our of business, be harmful to our health, our client's health, or to anyone else's for that matter. We have to be able to do this sort of project, or make this sort of product, over and over, without growing to hate it. The project must be made out of recycled or sustainable materials and/or be something that will be used for many many years and loved.
If it doesn’t meet these four words, we don’t take the Project, simple as that. Otherwise we either won’t do good work, or the Project in the end won’t be good for us to have done.
How we do that voodoo that we do so well
We also work rather differently when it comes to project management. Most project management technique assumes you've got a small to mid-sized team working on one large project. We, instead, have a tiny team working on a dozen projects at any one time. For us, managing Focus is vastly more important than traditional project management, so we invented our own system. We follow a Organic Self-Organzing Lean system we developed in house. This is how we’re currently doing things:
Things Rule Everything Around Me: TREAM: our highly specialized in-house wiki helps run our business.
- Clients are added to the System.
- Anything we’re doing for a Client gets a Thing page if it’s physical or a Design page if it’s not.
- Bigger projects are broken down into manageable chunks, and each chunk gets it's own Thing or Design page.
- Things & Designs track client's goals.
- They also track the amount of time budgeted for completion, the amount of time spent so far (and by whom), the amount of time left, and the total amount of money expected to be made by it's completion. This is clearly visible to everyone in the company.
- Thing pages help us manage & track the needed steps to efficiently produce the physical parts of a project.
- Design pages help us manage & track the needed steps to efficiently produce a design for a project.
- Anything that needs to get done is a Task. Tasks are usually single things that have to happen.
- Tasks live on the shared iCal Calendars, one Calendar per Client or Project depending, with a few for internal stuff, via BusyCAL as To-Do's or Events.
At the start of each week, the Weekly Planning meeting happens, or as it's known "The Coffee Talk".
- Each Client's Things, Designs, Tasks, and relevant e-mails are reviewed, new Tasks and Thing/Design/Clients are added as needed, and existing Tasks, Things, Designs, and/or clients are marked completed or revised as needed.
- Then priority and scheduling for all the Tasks is reviewed, discussed, and decided upon. As a company, we only focus on at most three Things/Designs, two for clients, and one for us. We all do everything we possibly can for those three things, together, before we move onto anything else. These three things become "The Things on Deck" for the week.
- Now, as the week goes on, things may be moved off on and onto Deck as they are completed or waiting on something, but there are never more than four things On Deck. Ever. Unless we're being stupid.
- Things or Designs that are in the future or that we are still promised to finish are set to be Upcoming, ongoing ones with no end (such as marketing or sales) are set to 'Stewardship', ones that are on hold for a while are creatively set to On Hold, and ones that are done are sent to Wrap-up.
- For the Things On Deck, time is estimated and then scheduled and blocked out on the Calendar for the week.
- Staffing for the week is also decided upon at this time, with Tasks being given to specific people as seen fit in the meeting.
- Cash is then reviewed, with any pending payments or invoices quickly reviewed.
- Last, a word for the week is decided upon to set the theme and tone of that week (such as “Be Big” or “Only Do One Thing at a Time” or “Laugh when things go wrong”).
As the week goes on, everyone eats lunch together everyday. We use that time to check in on things, talk about ideas, brainstorm on designs, and give short status updates.
At the end of each week, the Weekly Review happens, or as it's known "The Wrap Party".
- Everyone discusses what Tasks they did that week, shows off anything cool or great that happened, and brings up anything that didn't work so well or could be better.
- Everyone talks about how well (or not) the theme for that week fit for them.
- Ideas for future Tasks, as well as more immediate optimization Tasks, are added to the Wiki or Calendar as seen fit, while everyone enjoys a drink (the interns get soda and/or juice).
At the start of each Quarter, the Quarterly Review meeting happens, or as it's known "The Dinner for the Season".
- First, we do some housekeeping on the Wiki, Calendar, and file cabinets. We file our quarterly taxes.
- Then we make a big fancy dinner. We review the last quarter, how we did, how things worked, and what could have been better.
- We look at the Yearly Goals, and talk about how we're doing.
- We re-read the business plan, and make notes to make whatever changes are needed.
- New Personal Goals are decided upon and then toasted to the table.
At the start of the year & halfway though it, the Yearly Planning and Review meeting happens, or as it's known "The Splitter".
- We go out to dinner at our favorite Oakland pizza restaurant with the notes from last year's yearly planning meeting and the list of Big Yearly Goals that were set then.
- Big Yearly Goals are all the things we'd like to try to make happen that year.
- We check off any that were accomplished with a big red pen, talk about the ones we still want to do that didn't get done, and laugh at the ones that now seem very silly indeed.
- Then we make a new list of Yearly Goals for the new year: we come up with great things to try to make happen, and write then all down.
- Then we celebrate the start of another year working the best job's we've ever had.
Design Quality Factors
We’ve found that when we do mess up, it’s usually related to one or more of the same five issues. So we created these five Design Quality Factors, otherwise known as 'The TIKIS'. Failure to respect and pay homage to the TIKIS leads to bad designs, delayed projects, and general unhappiness.
Tolerances. Tolerances are time & money. We need appropriate tolerances certainly, but what's better is to design in a way that's forgiving of them.
Integrity. In order for something to be great, it has to work well.
Konstructability. We want to design things in a way such that they 'want' to be built.
Ingenuity. Brute force is for dinosaurs, we need to be the smart monkeys we are instead.
Shipping. Everything we make goes somewhere else. We need to design with that in mind, and to make it as easy as possible to get there.
Everything we fabricate goes through seven distinct steps. These steps have been woven into the Thing pages on the Wiki to help guide ourselves via checklists, reminders, and specialized note boxes for the important factors of each step.
Step One: Inspiration
Inspiration is where the initial impetus for the project starts. A client with a problem, an inspirational idea, or a new market opening up: whatever it is that gets the ball rolling. If it’s a client, at this stage we typically begin the project with a simple one-page getting started contract that sets an initial $1,000 deposit and sets our billing rates and such. Without the signed contract and deposit, we simply don’t being work. If it’s a product idea, we do some quick research to find out ASAP how viable our idea really is, and what people might be willing to pay for it ala Minimal Viable Product methods.
At this stage we’ll work in a wide range of media and talk ideas. We may do many rough estimates as well for the client to choose a direction or help define a project scope.
Step Two: Configuration
Configuration is where we’ve got the ideas and goals set for what we’re aiming for overall, now we’ve got to figure out how to meet those goals and make those ideas actually work. This step is where the Why meets the What. We’ll do preliminary plans, detailed estimates, design models, planning/zoning documents, and whatever else is needed to get to a more detailed project scope and configuration.
Step Three: Rationalization
Rationalization is where we need to take those design models & plans, and make them fully flushed out and ready for building. This step is typically only undertaken once the client has signed off on the detailed quotes created in Step Two, and a materials deposit has been given. Again, no payment no work. Design models are turned into Fabrication models and detailed construction/permit plans are made if required.
Step Four: Isolation
Isolation is where we now break down those fabrication models into exportable geometry for CNC production, part lists for ordering, shop drawings if needed, and timelines for production scheduling.
Step Five: Fabrication
Fabrication is where those isolated parts of our project are made real by both human and robot hands. Parts are toolpathed & cut and/or ordered, assembled, and finished.
Step Six: Installation
Installation is where those now-fabricated parts of our project are delivered to the project site or client and assembled. On a smaller element upon completion of this step is where we bill for the remainder of the estimate.
Step Seven: Utilization
Utilization is the final step, where the elements are used by the client / customer. We review how effective they are, how durable they are, how well our assumptions held up, and follow up on applying real time and materials towards the estimate. By keeping in touch with our client’s, and their use of our work, we can make certain they are happy and problems are quickly solved. We can also see about additional needs, or stumble upon ideas that rise out of the direct use of our work. This feeds back into step one.
We rely upon a in-house private Drupal wiki system for information and knowledge management. It’s got a number of different page types that are pre-made web forms. Client pages coordinate contact info, Thing pages coordinate project management re: the creation of things, Design pages manage Designs, and it tracks time for our billings. Note pages hold information on general items, like suppliers and how-tos. Need Sheets are a special web form akin to Toyota’s ‘A4’ sheet, where we can have a simple yet methodical process for problem solving. The wiki also reminds us of when projects are about to run out of time, how long it's been since a project has been worked on, and when a completed project's birthday is so we can reach out to old clients and reconnect.
While it’s not a trivial amount of overhead to have set it up and to keep it running, it has proven useful and flexible in helping to run our business. Usable via the web or iPhones, it keeps track of everything but our Tasks and Calendar, and is a vital part of our company.
Let’s take a moment and talk about what exactly ‘successful’ means in this context. The whole idea behind starting your own business (which is risky and most likely stupid) is that you’ll make more money and be happier with more freedom. At least that is what it means for us, our business isn't the kind you can easily sell and it certainly can't go public due to the laws concerning the practice of Architecture. So if the business provides a decent stable living for it's employees, and gives them a great life in the process working on things they love, that's our Big Win.
Jillian & Jeffrey could both get halfway decent day jobs, and probably combined make about $180k / year before taxes (that’s assuming a minimal amount, it could be more if one of them landed an awesome job). So in order to be wildly successful, they would need to clear more than that in overall value generated.
We made an epic break-even spreadsheet that calculates all our overhead and then tells us what we need to bring in. It takes into account both fixed costs that don’t change (like rent) and unfixed costs that do change as we bring in more money (like taxes). It also calculates the 'burden' for everyone, a concept from the general contractor world, where the aggregate fixed costs (like rent) and the management overhead / profit is calculated out as a an relative per-person hourly 'additional fee' on top of the required hourly rate that person requires to bring in to simply support their own wage.
In the end, we estimate that we need to bring in around $10K-$12K a month in order to have the lives we want if it’s just Jillian and Jeffrey working together. While that's not a 'going gangbusters' number, it's also more than a bare-minimum number, so it includes things like an acceptable profit and living wage (if not market rate) for Jillian and Jeffrey. If we add in our employees, assuming normal hours, and a lower burden cost (for it's spread out across more people) we’d need to bring in more around $12.5K-$15K per month depending on how busy we are and how many hours we'd need helpers to help with.
Since 2007, while things started off slow, each year has been better and better. Starting with zero debt, being extremely conservative in our growth, and paying under market rate to Jeffrey & Jillian for the first few years allowed us to survive the twin combinations of a weak market and the business inexperience of Jeffrey & Jillian. Starting small and slow allowed us to figure out how to make things really work, and a weak market forced us into having to be smart to survive at all. Now in 2012 we're poised to do $200K - $300K in business. This is well above our required 'break even' of $120,000 a year.
Currently we manage incoming projects to average being fully booked with work about three to four months into the future. This is just about the right amount of time; longer than that and we'd loose the client's excitement and passion for the project, and shorter than that and we'd get stressed with the pressure of landing the next job and thus not doing great work. While we could grow, and take on everything that comes our way, it would require us to compromise on the jobs we were taking on and by keeping to this three month booking we can insure that we can only take on the very best jobs that come our way. For we can turn down things that wouldn't be great for us to do, and we aren't so booked up that we can't jump on an opportunity when it presents itself.
So while we've yet to reach full parity of paying a market rate or better for Jillian & Jeffrey, we've been able to pay market rate to all of our independent contractors and part-time employees while never being late with a bill. Our epic break-even spreadsheet also shows that the reduced market rate pay, perks, freedom, stability, and theoretical value of our business (theoretical because we're not looking to ever sell it) itself is greater than the market rate pay Jeffrey and Jillian could obtain from working day jobs.