Architecting Success
business philosophies with Paddy Harrington!
The Come Up highlights successful business owners ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews.
Know someone who would make a great interview? Nominate them here!
For this issue: Paddy Harrington, founder of Frontier Design!
Frontier Quick Stats:
📊 Business model: Agency client services
📈 Profit margin: 50-30-20 rule
💵 Average deal size: ~$60k
👥 Headcount: 9
🚀 Best growth channels: Client referrals
🏢 Years in business: 10
😓 Times almost quit: Twice
Before Frontier…
My background is in literature and architecture - an undergraduate degree in English literature and a master's degree in architecture…I clearly had no idea what I wanted to do with my life until I was in my mid-twenties. laughs
I kind of floated until a friend of mine said, "Hey, I've got this summer job at a place called Bruce Mau Design. It's a Frank Gehry project they're working on, and they need help building models for it.”
The reason I went to architecture school was actually because of Frank Gehry.
I thought, "Oh my God, of course I'm going to work on a Frank Gehry project."
So, I went in for the summer job and discovered this place I didn't even know was possible — a design studio that did everything.
Graphic design, strategy, exhibition design, and even things related to architecture, though not directly architectural work. It was super exciting to me because I didn’t even know such a place could exist, so I basically spent the next two years of my academic career trying to get in there.
And it took me, I guess, two years out of school before they had an opening — an opportunity to work on the New York Jets/Giants stadium in New Jersey on what they called the “fan experience.”
I didn't even know what that meant at the time…
The whole idea of experience design was still emerging, but really, what it ended up meaning was how do you tell a story in three dimensions that enhances the experience of going to a football game? — which was like my dream brief.
So, I did that, and I had a brief hiatus — I went into advertising for a change of scenery, but I only lasted about nine months before I went back to Bruce Mau Design and ended up spending something like six or seven more years there.
Eventually, I left the company as the executive creative director.
By the time I was winding up my career at BMD, I wanted to see what it was like to be inside a company. As a design firm, you're always helping companies with their mission, goals, or strategy, but I wanted to see the other side of it.
So, weirdly, Bruce Mau — who had actually left his own company — called me and said, "Hey, do you want to come work with me at Indigo?" I'd wanted to go in-house for a while, so I jumped at the opportunity.
We did that for a year, and what I really discovered there was what I was good at and what I wasn’t good at.
On launching Frontier…
I came away from my experience at Indigo thinking, I want to do something that gives me a chance to really express a point of view in the world. Maybe it isn't all about just selling services as a design studio - maybe it's more than that.
I don't know what it's going to look like, I just know I want to do something different.
So, when Frontier started, the idea was that it was going to have three pieces:
One was a design studio — the world I knew, working with clients.
The next was a media entity that was going to design and publish original content. We published three print magazines that we wrote, designed, everything.
And finally, a product arm. And that’s really our team using our skills as designers to bring something awesome into the world on our terms.
The pragmatic view was to build a portfolio of clients that would give us the freedom to experiment a bit.
The product process, which took on a whole life of its own, was 18 months or something. Not because we were 18 months head down working on this one product, but because that's the amount of time it took between other things to carve out space to do the product.
We learned so much from that, too. Fee for service is a business model - It's one I know. And product development is a totally different business model that I don't know. So, I think I've learned a lot there, and we've kind of applied those lessons to other product ventures we've been doing.
But I think the actual transition itself was motivated by the need to test my own voice in the world and see where I could go. I'd worked with some pretty incredible leaders and seen how they did it, but of course, even then, you're still supporting their vision and what they want to do.
I was fortunate to have had the opportunity to work with these incredible people and learn such amazing things — but you also want to sort of test yourself out and see where you can take it.
So, it started organically…
My first client was actually Bruce himself because he had his own clients on the go and needed some support, so I jumped in and helped him. That was a very important part of me getting my start.
Salim Teja from Mars, who I met at Indigo, who was running Mars Commons at the time for startups — he gave me space at Mars to work in the beginning.
It was really just finding any opportunity and accepting support and help from people who were supporters to cobble together the beginnings of a business that you then just slowly grow.
Growing pains…
In retrospect, I realized getting three print magazines done over the first four years is actually a small miracle. I could’ve not done it and taken that profit for myself and been more financially secure, but I felt that if you're going to really commit yourself to an experiment and see where it goes, you just have to commit and do it.
It wasn't like there was a straight line; I'm not sure anyone could tell you there is a straight line.
Some entrepreneurs, you see them - they start a company, and then two years later, they're huge - I guess that's a straight line. *laughs* But even then, it's all over the place as they experience that massive growth.
Our growth has definitely been more incremental.
I imagine myself in front of a console with like 100 different levers, and each has to be kind of tweaked slightly at any given time.
Sometimes you have to put down the costs from your team…
Sometimes you have to crank up the new business development efforts...
Sometimes you have to take a project that you don't necessarily want...
Sometimes you have to take on three projects at the same time, even though you're not sure if you could deliver them...
Sometimes you have to watch your reputation and do some reputation building...
There are so many different dials that you're always kind of operating at any given time.
I think just being aware of what the dials are to begin with is a huge part of it. If you start a company very young, you often don't even know what variables you have to account for, but because I started my company when I was approaching 40 — and had been a leader in a bigger design firm — I already knew a lot of the things to be mindful of.
In terms of particular pitfalls or unexpected things, I would say the most significant one is just managing cash flow effectively.
Being a design studio, we operate on a fee-for-service model, which means we might do work and not get paid for two months based on the client's own billing cycles. So, the income that's coming in can be inconsistent, but the outflow of income isn’t.
It's the same every two weeks…
The landlord is coming for you,
the software companies are coming for you,
the bank is coming for you.
I’ve always found it frustrating.
Here we are as a small business, trying to make a go of it, and we just have all this stuff stacked against us. So, the most unpredictable aspect was getting through those points where it's like, “Oh, shit, are we going to make it through to the next payroll?”
And then somehow it happens.
Things like an operating line of credit help support and buffer you in case you don't get paid right away. Suddenly, you get paid three things, and they cover you for the next two months. I wish it were more predictable - you always have to be on high alert. But, as much as I'd love to have a bit less stress in my life, I realize that part of all this chaos is what keeps me motivated, excited, inspired, and interested.
Thoughts on goals…
I mean, I wouldn't say there's been any.
We have financial targets, for sure, and we know what our break even is, and we know what the target margin or the target profitability that we want to hit.
Paul Lavoie from Taxi once told me that the rule of thumb in his mind is 50-30-20 - so 50% is your staff, 30% is your cost, and 20% should be profit. That's kind of the golden rule that I attempt to follow.
Also, starting my company when I was in my late 30s meant I had clients who are more mature.
You've earned a lot of your experience, and that has value, so you have clients who will recognize and pay for that value. When you're a small team like us, this means you have excess cash flow and a bit of room to play with it.
But it’s still a tightrope, for sure.
I think the bets have gotten better over time, too.
In retrospect, the magazines were fundamentally about advertising that we were a new agency in the market. We had full autonomy, which is deeply rewarding, because we were able to experiment with the business model to see what kinds of opportunities there are beyond simple fee-for-service. But three issues in, we were like, "Okay, this is just too much outlay and not enough income, cash-wise, even though it has all these benefits from a team awareness marketing side. The costs are too much, and we've kind of run the course on it like we have learned."
So then the evolution became this thing we called Live magazine, where it was more of a service offering. We could go to events, do a pop-up studio, and build a publication on the spot.
We did three of those, and those were more neutral cash flow projects. We went from that to what we’re doing more recently, where we have a digital magazine that has paid subscribers.
The world of publishing is so deeply broken right now that it's still a long investment to invest in, but we've tried to offset it by having editorial content and a person — Brian Sholas, who's our editorial director — develop content on a regular basis. That sets us up for more consistency, which is what that industry needs.
You need more consistent publication of content for people to be aware of you, to then follow you, and to support you. But I can tell you even that's an experiment. And it's tough because especially over the last six months or four months, five months, the market is so messed up.
It's so hard to know what's happening that we're actively always responding to the market conditions, adjusting on the fly, changing our team composition, just making sure that the basic baseline — which unfortunately has to be cash flow — is being met.
On building products in-house…
Right now, there are three projects that I would also categorize as product projects.
For one, the brief we set for ourselves was to make the world's best toque, which was kind of a play on the world's best coffee in New York. It’s a bit tongue-in-cheek, but in another sense, we’re setting the bar high. If you're saying that to the world, you better deliver something good.
So before we even launched, we made 100 tuques. We discovered this incredible material called Quiviut, which comes from the Arctic Muskox. It’s softer than cashmere, warmer than sheep's wool, but it's incredibly expensive, especially because we harvested it sustainably and had a master knitter produce them.
From there, it was all an experiment. We'd never done any of it before, but we knew that the quality was there and that it had a great story, so we believed in it, and hired an independent PR person just to get the word out.
I remember distinctly, we put this thing out on our Shopify site, and I'd get a buzz on my phone whenever we’d make a sale.
For two or three weeks leading up to the official launch, I'd get a buzz and it’d say, "Hey, we sold a toque!". And I'd look at the sale and go, "Oh, it's my aunt."
Then, like a week later, my phone would buzz, I’d see it and go, "Oh, it's my cousin."
Then one morning in November 2016, I woke up and I looked at my phone, and there was line after line of sales. I was like, "Holy shit, what is happening!?"
Turns out we'd made the front page of Apple News because of a story in the Toronto Star. We sold the rest of the 100 toques within 3 hours just because of the attention.
But then it kept going: Outdoor Magazine, CBC News, Fast Company — they all covered it.
And then Sergey Brin's office in California reached out and said, "Hey, we want to buy 50 of your toques." We're like, "Oh man, you're the founder of Google. Why our tuques?"
And his answer was, "Because they're cooler than Patagonia."
That, to me, proved that we can do things that have a global reach. That it's all about the quality of the experience and the story. That you can believe in something that's sustainably made, ethically made, and have success.
The downside of that, and the big lesson we learned, was that we had no idea about the supply chain — about the kind of capital required to stand up a business at that time.
We've learned from those lessons ever since, so that subsequent projects or products we’ve developed have incrementally built on that success. But it's iterative. Should I have just done a tighter agency?
I’d probably have more money in the bank if I did that…
But at the same time, I want to be giving us an opportunity for a home run within as safe a context as possible - and I think that's what we're doing.
We have a couple of things now that are putting us in a better position to do that. But they're leveraging all the learning. We've gotten to this point so that we are setting ourselves up for a higher chance of success for these future opportunities.
On balancing digital & physical product offerings…
I can't help but be iterative in my approach.
At the beginning of Frontier, I felt like there was space in the world for a design office. And I felt there were precedents, too - like Monocle, for example.
They do a magazine, but they also have a shop - they're this multifaceted thing.
Frontier was always meant to be that.
I don't want to be driven by a fee-for-service business model — I want to be driven by the best ideas that lead to the most interesting outcomes. And I feel like if we do that and we're true to that, then people who believe in that same vision will find us.
Thoughts on growth…
The lessons I've heard on this are that the quickest path to growth is mergers and acquisitions, but I feel like that situation has to be exactly right for it to work.
I've had opportunities in the past to merge or acquire a business, but I think if you're in that kind of world, you're best suited to leverage those kinds of opportunities with the expertise of someone who understands it better.
Within the newest product venture we have called Projectory, it's basically an enhancement to live events where we're adding this layer of interactivity, content, data analytics, and experience to what are — frankly — often super boring events.
And that's with two partners. One is the content partner who worked at Singularity University. His name is Jeffrey Rogers. He has a company called Possible Futures, and he's the speaker as part of the offering that we have. And then Oren Berkovich, who has his own company called Be Possible. Oren's an event guy - that's what he does.
Between the three of us, we have this unique set of skills that actually gives us a better chance to scale in a way that I could never do on my own, partly because of the nature of the business I'm in, but also partly because of who I am as a person.
That’s all a roundabout way of answering the question, but to directly answer it: I had the privilege of working with Bruce Mau for many years, and so much of that was reputational.
He broke through in a way that very few people do, and I almost took that for granted.
It's like, "You start an agency, suddenly you're working with Coca-Cola - cool, I’ll go do that"
And then you start doing it yourself, and you're like, "Oh, shit."
You realize what a unique, amazing situation you were in and just how incredibly talented people like Bruce are. The opportunities that came as a result of that, I think even he would say that luck plays a part, too.
I love that show, "How I Built This" with Guy Raz on NPR. He always asks founders how much of their success is luck and how much of it is skill, and a lot of them say it was half of each.
So, I think if you're going to scale in a business like Frontier, luck does play a factor.
Obviously, geography plays a huge factor, too.
We're in Toronto, which is a big market, relatively speaking, but not a big market for companies that do the kind of work that Frontier does. So you have to kind of be in LA, New York, London if you're going to be hoping for the big swings with this kind of stuff.
That said, you can make really respectable, great relationships with super incredible leaders in real estate development, for example.
There are two ways I think about it. One is you have to kind of build the reputation to expand to a point. So much of this business is reputation-based. They have to trust you and know you like your work. You have to be actively doing outreach, speaking at conferences, writing in articles, doing work that you promote appropriately.
And then the other side of it — which is more the everyday, hardworking side — is just having a coffee with every single person you can, because you never know where it’s going to lead. The past three or four months, the market's been such a wild, convoluted mess that doing that has been my strategy - just talk to absolutely everybody.
And it works.
We had a relatively quiet fall, but it's starting to pick up again. And that’s really a result of tons of one-on-one outreach.
Navigating uncertainty…
This past fall was as stressful of a time as I ever remember having as a business owner - including the pandemic - and that’s because we were heavily invested in the real estate sector.
We were working on some great longer-term projects, and then once interest rates went up, we had about six months' worth of work get paused overnight.
So we went from the strongest month we’ve ever had to crickets…
The thing about this business is there's always an echo, right?
The problems you have in September, you don't feel until January because of the way cash flow works, so it was super stressful. And then in January, I had this moment where I was like, “What's the opposite of what I'm feeling right now?”
The opposite was security…
things being happy…
things are smooth…
Then I had this realization like - is that even what I want?
And I'm not sure, honestly…I think that it's easy to get complacent when things are too easy.
I may not enjoy the stress I had in the fall, but it helped me understand that I also don't want it too easy.
I think you get less sharp when things are easy.
You're offering less hunger and — frankly — a worse service to your clients.
I'm coming to terms with this feeling of always being a bit hungry. I just finished reading something for another project. It was a memoir by Ernest Hemingway called A Moveable Feast.
Hemingway talks about the feeling of being hungry, like, literally hungry, and how for him, it was like he felt he worked better if he was at a certain level of physical hunger.
I would say that I feel the same physically, but particularly mentally hungry — you need a bit of fear to keep you sharp.
So I’ve reframed stress and think it's not necessarily a bad thing. Urgency that is often interpreted as stress actually could be a great motivator and a significant source of energy.
On future plans…
I want to be the best story design company in the world — that's what I want.
And what does that mean?
Doing work that's really meaningful, that people recognize and they want to partner with you on, because that means you're doing great work. It means the work is recognized to a point where you get inbound — people just want to work with you because they see the value you create.
People often think it's a meritocracy. That great work means you get recognition, but you have to work at getting your name out there, and I don't think that most design firms are really conscious of — or good at — doing that.
That's one category.
Another is financial - I would like to be able to live without debt. That’d be the baseline.
But on top of that, of course, I'd love to be able to travel without having to think about the cost of travel.
I don't want to be a billionaire, but at the same time, want things that many people will consider real luxuries— like another place in the country or whatever.
No debt, enough money to afford somewhere else to live, and travel without having to worry about cost. Anything on top of that, to me, is gravy.
Legacy, in some ways, is a fundamental part of all this, too. I just want to help people see that design is more than what we traditionally think — which is just the look and feel of something.
When I went to architecture school, I learned that design is more about organizing the world and creating better experiences — essentially making the world a better place.
That means both from the human experience perspective, but also environmental sustainability, social sustainability. I don't think that those things should be seen as a drag. You shouldn't think, "Oh, sustainability, I gotta drive less," or, "Oh, I gotta hire differently to make sure I'm covering DEI requirements."
No, there are benefits if you do those things; you can actually have a better experience as a person, as a human being. And I believe that's how people should see design.
They should see design as a way to help us get there, which, if we do, will make everything better. So that’s the legacy side of it. How do we help people define and tell their stories, in a way that's inspiring, exciting, and that improves the world?
But in terms of getting acquired or anything like that?
I don't want to ever retire. I want to have more flexibility in my schedule, but I want to work till I'm dead.
On almost quitting…
Really, the pandemic was such an incredible strain, personally, financially, professionally, that it was almost too much. You're responsible for a team and their livelihoods, and within a context of a market that is holding on to everything because they're nervous themselves.
That was the main reason. And then otherwise, I would say, because opportunities came up that were tempting, but I just decided I'd rather be my own boss.
On what you’d do differently…
That’s a hard question because I would do everything again - I've learned so much in the time we've done it.
I guess if I were to boil it down to one thing, I’d try to understand the mechanics of raising capital more, because I think there's a lot of discipline required in terms of narrowing in on your idea when you are spending someone else’s money. When you're accountable to someone else, it forces you to be clear about the things that you're doing.
So I think that's probably the thing I would do more — just increase my awareness of what capital raising looks like so I could give myself more discipline around these ventures that we've done.
Beyond that, it’s like that classic saying: I don't think I'd change anything, but I'd change everything.
That’s it for issue this issue!
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Interview by: Alex Tribe
Edited by: Angus Merry