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Note: An earlier version of this article was published by Design Management Institute and can be found here

Designers have historically had a passionate connection to their community and an eagerness to use their creative skills toward positive social change. In the last decade we have seen a proliferation of this activity, so much so that a new practice area of design-driven social change has emerged that many are calling social design. Despite this increased activity, however, many design businesses struggle to integrate social design—in a sustainable way—into their business model, or to build new models with social design at the core. At the center of this dilemma is funding, but other factors are important to consider as well. Whether they are addressing a complex global issue like climate change or a hyper-local one, like a community garden in an urban neighborhood, designers must figure out how to do this work in a serious and sustainable business way in order to have meaningful impact over time.

While the term social design is relatively new, the movement has a rich heritage that dates back at least to the 1920s and the Bauhaus, which had an explicit commitment to designing residential housing for the poor. This ethos was echoed by many of the great designers of the last 50 years, such as Samuel Mockbee, Tibor Kalman, and Milton Glaser, and continued by design leaders of the last generation, such as Bill Drenttel, John Bielenberg, and Valerie Casey, who have persistently worked to redefine the role of the designer in society. In the last decade we have seen the emergence of academic programs with a focus on social design, such as the Designmatters program at ArtCenter College of Design and the Master of Arts in Social Design program at Maryland Institute College of Art (MICA). Another indicator of the maturation of this discipline is the number of programs that recognize and support the best social design work, such as Ideas That Matter by the paper company Sappi, Design Ignites Change, Designer’s Accord, and AIGA’s Design for Good, along with conferences like Compostmodern in San Francisco, which has a thematic focus on design for environmental sustainability. Furthermore, the principles of social design align with many of the values that characterize the millennial generation, which comprises an increasing proportion of the design profession. According to a January 2014 Forbes article, “Millennials are focused on making meaning, not just making money.”

One important aspect of the evolution of social design over the last decade is that now designers are being invited into the problem-solving process at earlier and more influential points, whereas the historical role of the designer was often to create the brand, the campaign, the poster, or the website once the core problem was solved by the embedded experts. This trend of greater influence mirrors the increasing power designers are experiencing in many business sectors; as noted in a 2010 Businessweek article, “[Designers] help companies connect and establish a dialogue with consumers, thus enabling firms to innovate more efficiently.”[1] The emergence of human-centered design (or design thinking) methodology pioneered by global firms like IDEO and frog places a premium on design-driven research, divergent ideation, rapid prototyping, and iteration rather than a purely aesthetic focus. This unique approach is helping to position designers as problem solvers and drivers of change, and allowing them to make relevant, meaningful contributions at a much earlier stage than ever before.

What’s wrong with this picture?

In order to maximize this significant opportunity, the traditional business model for a design practice must be reconsidered. Virtually every design business and creative agency is built on the same basic “client service” framework, in which there is a single way to make money: through fees that clients pay in return for design services. For several reasons this model is not appropriate for doing effective design-driven social change over the long term. For instance, in social design there is often not a traditional client: the designer might be self-initiating the project, or there might be a collective of stakeholders, none of whom have the capacity to fund the project. The result is that most social design projects are either self-funded at a minimal level or done on a pro-bono basis. Hence, these social design projects usually get relegated to the periphery of the practice—they are the projects that get worked on after hours or on the weekend. An additional result of this lack of funding is that these projects tend to be done on a compressed time frame of days or weeks, when meaningful social change efforts—including research, assessment, planning, and execution—can take years or even decades.

The rapidly emerging area of online crowd-funding sites and communities like Kickstarter and Crowdrise offers a potential remedy to the funding dilemma. Crowd funding presents an opportunity that simply was not around only a few years ago, and it’s a significant one, with more than $6 billion donated globally in 2013. This is somewhat deceptive, though, because with a few notable exceptions, most crowd-funded projects receive in the range of $5,000-$20,000—not insignificant, but also not enough to stay on the project list of a top design firm for very long.

Another significant opportunity lies in funding from philanthropic foundations and non-governmental organizations (NGOs), which represent an aggregate pool of hundreds of billions of dollars in endowments. Gates Foundation, Rockefeller Foundation, and Robert Wood Johnson Foundation are all prominent examples of foundations with deep and established endowments; locally based organizations and family foundations also offer opportunities. Currently, however, design-driven projects are virtually invisible to these philanthropies, because design businesses are typically set up as for-profit corporations or LLCs, which are not eligible to directly apply for grant funding. This puts most design firms in the position of relying on partnerships with third-party nonprofits in order to gain access to funds for project work—a cumbersome arrangement, at best.

Designers are beginning to recognize this dilemma, and new practice models are emerging. Tomorrow Partners (Berkeley, CA), and Greater Good Studio and Firebelly Design (both in Chicago), are all examples of design businesses that are tinkering with the traditional model. Some are establishing themselves as a non-profit 501(c)3, and others form a nonprofit to sit alongside the traditional for-profit (IDEO and IDEO.org are examples of this); either option gives designers direct access to foundation money. A relatively new option is the L3C business classification, a hybrid structure that combines the legal and tax flexibility of a traditional LLC, the social benefits of a nonprofit organization, and the branding and market positioning advantages of a social enterprise.

Rich Hollant, founder of Hartford, CT-based Co:Lab, has intentionally built his staff to be positioned for foundation funding in a sustainable way. “Co:Lab is an LLC, and we access grant funding through collaborations with (c)3s and foundations,” Hollant says. “Our business development person has a nonprofit management background and has deep experience with foundations. She helps us advise (c)3s through the grant process as a means of subsidizing project funding. We also take a consulting role in the sustainability plans of community-based coalitions and help our partners optimize their in-place funds.”

One NGO that recognizes the potential of human-centered design is UNICEF, which has made a significant investment by building an internal innovation team practicing social design with a focus on children in the developing world: “We aim to engage and partner with the right organizations and individuals from the public, private and academic sectors to support us by co-developing user-driven innovations.”[2]

It’s time to open the door

As we reconsider our business model, designers must also address our methodological approach. Design has a stigma of being a mysterious and exclusive craft that would be contaminated—rather than enriched—by the direct involvement of clients or stakeholders, and designers have a similar rap of being control freaks obsessed with a perfect outcome. Social design, on the other hand, requires designers to open their process and to be inclusive, transparent, nimble and iterative. In order to understand deeply complex social issues and develop credible solutions to them, we depend on the active participation of experts in that area. This means that designers need to be developing networks in communities where these subject matter experts reside. It also means that a key skill for a social designer will be that of facilitation, since the format of the multi-disciplinary design workshop becomes key to drawing out the insights of disparate participants. AIGA, the professional association for design recently launched Facilitation by Design, a series of workshops to help designers build the skills to “successfully facilitate a diverse group and create effective solutions across a variety of sectors.”

These changes to business model and method are triggering reactions throughout the design profession. Many of the top academic design programs are taking on the challenge of building curriculum to train the emerging generation of social designers. At MICA, the one-year Master of Arts in Social Design program “prepares the next generation of creative leaders through collaborative practice-based learning opportunities, exploring social issues, testing processes & defining the future of design.”[3] Still, the career path for graduates of this pioneering program will be murky until the practice space matures in the years to come.

Whether in the studio setting, the academic world, or within large organizations, ambitious and forward-thinking designers are recognizing that social design offers a significant opportunity in an ever-more-competitive design market. They are also coming to terms with the fact that integrating social design practices effectively and sustainably in their business model—so this work contributes to the bottom-line success of a business rather than jeopardizing it—will be the key to long-term success.

[1] Ravi Sawhney and Deepa Prahalad, “The Role of Design in Business,” Businessweek, Feb. 1, 2010.

[2] http://www.unicefinnovation.org

[3] http://www.micasocialdesign.com

In the final installment of this three-part series, Michele Ronsen and I discuss the complexities of the entrepreneurial process, including the adjustments designers can make to our business model.

Picture 25A new report on the AdMob blog estimates that there are $200 million worth of iPhone apps sold on the App Store every month and that the average iPhone user downloads 18 new apps every month. The AdMob report compares iPhone app trends to Android, the upstart mobile device operating system developed by Google. Some of the other surprising numbers from the report include:

  • More than 90 percent of Android and iPhone OS users browse and search for apps directly on their mobile device instead of their computer
  • Upgrading from the lite version was the top reason given when users were asked what drives them to purchase a paid app
  • iPhone and iPod touch users are twice as likely to purchase paid apps than Android users.
  • Users who regularly download paid apps spend approximately $9 on an average of five paid downloads per month

These astounding numbers continue to validate why this exploding new market is such a ripe opportunity for design entrepreneurs and I’m hearing from an increasing number of communication designers who are testing the waters. My friends at the Minneapolis-based design agency HartungKemp are among the latest to bring an iPhone app to market with their drinking game WASTED? which is getting rave reviews from the app blogosphere. Without question, WASTED? fits firmly in the “novelty” game category of apps, but it distinguishes itself with cool graphics and fun copy to create a user experience not common in this genre.

In my conversation with HK co-founder and creative director, Stefan Hartung (audio podcast below), we discuss the impetus for delving into the app game, along with some of the practical challenges involved in the development process.

Here’s a video demo of WASTED?

Picture 7When I started writing this blog, I did so under the premise that there is a scarcity of entrepreneurial activity among designers and creative professionals. Well, in fact, I still think that—but I’ve also been consistently surprised and impressed by the new ventures I see popping up from our industry. This was the case when I got the announcement a couple months ago that Grant Design Collaborative—the fantastic Canton, Georgia-based firm, founded and led by Bill Grant—would be opening something called The Store at Grant Design Collaborative.

I’ve known Bill since we were both involved in AIGA chapter leadership a decade ago, after which we served together on the AIGA national board when Bill was the organizations national president. The main thrust of the Grant Design Collaborative business has focused on the commercial interiors industry—developing brand strategy, marketing, collateral, and trade show and showroom materials for clients like Herman Miller, Steelcase, and Geiger.

Picture 11A few years ago GDC began to make a shift from communication design toward product design by seizing the opportunity to create rug designs for a floor-covering client. This experience led to a gradual transformation of the firm, which culminated in the launch of the award-winning commercial wall covering line, Set.

So, the seeds of entrepreneurship were sprouting at Grant Design Collaborative long before the economy tanked. While GDC’s business has remained relatively stable through the downturn, there has certainly been an increase in idle hours in the studio. Coincidentally, a small street-level space had become available in the historic office building owned by GDC on the main drag of small town Canton. Rather than seeking a new tenant to fill this space, the concept for The Store began to take hold as a venue to sell GDC-designed area rugs, wall coverings, and furniture, as well as gift items designed by the GDC team and created from recycled and remnant materials.

Picture 10Bill humbly describes The Store as a “retail stream-of-consciousness for cockeyed optimists,” but I see it as a savvy business move in a time of extraordinary challenging and change. In addition to the obvious potential presented by The Store of adding a new revenue stream to the GDC business, I see a number of other upsides to this concept. At a time when the overall industry is sluggish and staff morale could easily sag, the GDC team have been put to work on a wildly creative and adventurous project—not only designing the retail experience, but creating the merchandise too. The PR angle is also pretty juicy; the retail space is obviously exquisitely designed and the opening comes just as the Canton main street area is experiencing a resurgence. Additionally, The Store has become a laboratory providing real-time data on sales activity and customer tendencies that can then feed back into the product design projects GDC is working on.

Thus far, all indications are that The Store at Grant Design Collaborative is fulfilling it’s promise. 100 people filled the tiny space on opening night in late June and the comments on the Facebook group page have been glowing. Best of luck to Bill and his team for continued success on this exciting project!

Here’s a podcast of a chat I recently had with Bill Grant about the design biz and The Store.

I’ve found the blog Boing Boing to be a lively, if a bit scattered, source for fresh takes on a variety of topics, from politics and pop culture to business and entrepreneurship—all with a vibe and voice that will resonate with creative thinkers. This video profiles a handful of entrepreneurs with roots in the creative world. It stops short of getting into the hardcore business stuff, which would have been interesting, but it’s well-produced and contains some inspirational stories about the journey from traditional creative biz to entrepreneurial venture.

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In other design blog news, the groundbreaking SpeakUp has ceased publication, and the outpouring of commentary on the closing post is a tribute to the profound contribution SpeakUp—and it’s founders and editors Armin Vit and Bryony Gomez-Palacio—made to the ongoing conversation on design. But before we could even come out of the mourning process, Armin and Bryony are back in the blogosphere with an intriguing new project called FPO: For Print Only, a blog dedicated to both the visual stimulus and the detailing of the development and production of printed matter. FPO asks: If print is dead, why are we still here? Check it out.

Firebelly Design is not afraid to take chances and mix up the conventional notion of how a creative business should operate. In addition to their outstanding creative output, Firebelly is also experimenting with some truly innovative business models, like Camp Firebelly, a 10-day summer immersion program for design students, and Reason To Give, a microfinancing operation that benefits the Humboldt neighborhood of Chicago where Firebelly is located.

On a recent visit to Chicago, I had the chance to sit down with Firebelly founder Dawn Hancock and lead strategist Antonio Garcia. In part 1 of this podcast, we discuss the origins of Camp Firebelly.

Here are some highlights of last year’s Camp Firebelly.

collinsA few weeks ago I wrote about Kurt Anderson’s TIME magazine story entitled The End of Excess (post: 4/10/09) in which the writer and radio host found surprising hope and optimism in our current gloomy economic straits. Anderson suggests that the unpredictability and flux that will come in the months and years ahead will be a time of fruitful opportunity for creative thinkers and entrepreneurs. I just came across an INC. magazine interview with Jim Collins, author of Good To Great and founder of the research firm ChimpWorks, and I found synergy with Kurt Anderson’s article. Collins and expands on Anderson’s theme in some intriguing ways—I particularly appreciate his holistic view of entrepreneurship.

“I take a broad view of it. The traditional definition—founding an entity designed to make money— is too narrow for me. I see entrepreneurship as more of a life concept. We all make choices about how we live our lives. You can take a paint-by-numbers approach, or you can start with a blank canvas. When you paint by numbers, the end result is guaranteed. You know what it’s going to be, and it might be good, but it will never be a masterpiece. Starting with a blank canvas is the only way to get a masterpiece, but you could also blow up. So, are you going to pick the paint-by-numbers kit or the blank canvas? That’s a life question, not a business question.”

Collins also takes a refreshing view on the notion risk, one of the great barriers to entrepreneurship.

“As an entrepreneur, you know what the risks are. You see them. You understand them. You manage them. If you join someone else’s company, you may not know those risks, and not because they don’t exist. You just can’t see them, and so you can’t manage them. That’s a much more exposed position than the entrepreneur faces.”

Doug Hall, a columnist for BusinessWeek’s SmallBiz offshoot agrees with the theme that our current economic flux presents an opportunity for entrepreneurs in his April/May column. “Small, incremental changes are considered a waste of time,” writes Hall, “Now’s the time to be bold. And by that, I mean that it’s time to be a radical innovator of products, services, and business models”

BusinessWeek is an excellent (and relatively design-friendly) resource for business news, and I’ve found the INC. Magazine website to be bookmark-worthy too…although the INC. blogs don’t seem to be as content-rich as I would hope.

craigdrivesmallPaul Irmiter and I go way back to the days when designers would actually hire photographers to shoot pictures (what a concept!). Paul and I spent countless hours making images for Target, Musicland, and Andersen Windows, among others. I was always impressed with Paul’s ability to be nimble and adaptable with his photo business: one day we would be building a room set in the studio with a full crew of assistants and stylists, and the next, it would be the two of us on location with a handheld camera; always with the same excellent results. So I was fascinated—but not surprised—a couple months ago to see that Paul’s business had morphed yet again with his latest project: The Craig Show, a hysterical web based show featuring golf coach, musician, and budding performance artist, Craig Teiken.

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Paul talked about the transition from still to motion photography in a recent email exchange: “I love photography and integrate it in into everything we do, but that’s a changing industry and often lacks the creative spark it used to have. So I came up with the idea for The Craig Show and I have never had more fun.”

Each episode is between 2-5 minutes long and usually revolves around Craig ranting about various aspects of golf and life. “I met Craig through some mutual friends, and after spending some time with him I felt he would be great on camera,” writes Paul, “he has an endless amount of information about golf, so we are never short on material. I tend to pull in some outside weirdness to keep things fresh and different. Jacob the main camera guy is mostly interested in what makes him and his friends laugh. Jacob’s responsible for my returning character of the Caddie…he just thinks it’s hilarious.”

So how do Paul and his partners plan to make this gem of an idea into a business? “We have the goal to build The Craig Show into a profitable business. We have some small advertisers and are looking to line up an overarching sponsor to help fund the production. We have not activated our Google Ad and Blip Ad accounts, but that’s an option too, if our numbers continue to increase.” TCS also serves as a marketing tool for Paul’s production company 612im. “It’s a great way to showcase our capabilities. The ultimate goal is for 612im to be a full time production company working on internet-only content. We also have some ideas for merchandise related to the show and we have a Flickr stream for some still shots related to the show”

One of the primary venues for TCS is a service called Blip.tv, an online hosting and distribution platform which features an expanding range of independently produced shows, video blogs and podcasts. Paul talked about the trend in TV viewing habits, “I am betting that in the next few years there will be little difference between broadcast TV and net TV.” He points to shows like Wine Library TV as an example of how this trend will play out with independently produced shows that target a very narrow niche audience.

I see The Craig Show and Blip.tv as excellent examples of the opportunities opening up in this time of economic, technological, and cultural flux. Compared to just a few years ago, it is outrageously easy and affordable to produce online content and exciting to see creative professionals like Paul Irmiter pioneering this new frontier.

newyorktimes_image This New York Times article is about D.Lite which produces solar-powered lamps to replace the dangerous and inefficient kerosene lamps that have been the primary source of light for many people in the third world. The D.Lite story is fascinating and inspiring and traces the classic journey of a visionary entrepreneur who experiences a critical social problem and develops a brilliant solution. But, the article goes beyond this story to sketch the outline of a new class of “social entrepreneurs,” AND importantly, to discuss how they build their ideas into viable businesses.

The article focuses on that pivotal point in the process of developing a business: figuring out how to fund it. There are many factors and forces at play here including time, control, amount of money, and level of risk. In the D.Lite article, there is an emphasis on the choice between the for-profit and non-profit models.

I hope to write more about this funding dilemma in the future—it is a critically important issue for new business ventures. In the meantime, read on and, please, post your comments.

And thanks again to Susan Bernstein for linking me to this great story (keep them coming, Susan).

participle1

Thanks to Susan Bernstein for turning me on to the great work of Hilary Cottam and her London firm, Participle. Hilary Cottam seems to have a really clear vision of how design thinking and methodology can be used—by designers and others—to solve a variety of social problems. Here’s a link to an excellent FastCompany profile.

What I love about this story is that, in addition to having a remarkably fresh notion of how a design business can operate, Hilary also believes that designers must work in collaboration with other smart people to solve complex problems. In her setting, those other smart people include anthropologists, economists, entrepreneurs, psychologists, social scientists, among others. In the experience Lisa and I had growing HealthSimple, we relied heavily on a similar network of experts. It was the strength of this network and our willingness to collaborate that allowed us to navigate some really challenging situations.

Here’s a link to Hilary Cottam’s website. Merge will be all about seeking out people like Hilary who are challenging the conventions of design business.

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