The Melbourne start-up focuses on the useability of technology and applications, rather than just merely its design.
One of the founders, Ollie Campbell, explains how the business came about.
What are the backgrounds of the founders?
There are four partners in the business, myself (Ollie Campbell), Marc Clancy, Brett Warren and Michael Trounce.
I have led design projects for some of the biggest companies in Australia and around the world. I have a degree in computer science and am currently studying postgraduate psychology.
Marc has a background in graphic design and illustration. He's managed large design teams, and created digital brands for many large Australian companies.
Brett has led teams designing user experiences for some of Australia's leading companies and institutions. His background includes user research, testing and design for web and mobile devices.
Michael has managed multi-million dollar accounts for large Australian brands. He has a background in project management, and has worked on projects locally and internationally.
What gave you the idea for the business?
We’ve been consulting for large companies to help them create better digital products and services for a long time.
Over the past few years, we’ve seen a big increase in investment in what’s called “user experience design”.
User experience design (or “UX”) is a design process which has a big focus on research to find out what people really need. This is done through interviews, surveys, watching people’s daily routines and other techniques.
This research helps the designer create something that will work for the people who use it. The design goes through several rounds of testing and improvement with the audience, and gradually the product evolves into something that people love to use.
In the last few years, many of the biggest companies in Australia are starting to see the value in a more rigorous approach to design, particularly companies like banks, telcos, anyone where people interact with the company primarily through digital technology.
For example, my only contact with my bank these days is through internet banking and ATMs, so these interactions are obviously pretty fundamental to my customer experience.
Because of this shift, we saw an opportunity to specialise in user research and user experience design.
We really believe in involving the end user in our design process, and we find it really satisfying to create things that make people’s lives a little bit better.
How have you differentiated yourself from all the other design agencies out there?
Believe it or not, most digital designers don’t do much research or testing of their work. It can be quite an old-fashioned industry.
There’s often not much rigour, and a lot of decisions are based on opinion and intuition. So the main way we’re different is our research based design process.
To support this process, we’re currently building a research lab, so that we can study how people use the things that we design.
It’s a room set up to observe the way people use technology. So it has all the latest devices like tablets, phones and PC, as well as microphones, cameras and special software to record what people do.
Of course there are a few other user experience and usability agencies around, but they’re generally pretty focused on functional design, often at the expense of aesthetics.
So our differentiation from those companies is a focus on aesthetics and visual craft.
How much did it cost you to start-up? Where did you get your funding?
Our start-up costs were around $65,000, including a few months operating costs.
We’re entirely self-funded. Since we’re a professional services business, our capital expenses were pretty low, and were mainly software and hardware.
We’re running an almost 100% cloud based software setup, so we use Google Apps for most things. You can get a really efficient, modern IT setup really cost-effectively this way.
We use Google docs for word processing and spreadsheets, Capsule CRM for managing our contacts, Dropbox instead of a fileserver. We also use Gmail and Google calendars.
We use Pivotal Tracker for managing work going through the studio, and Xero for accounting.
The last company I worked for gave me 400MB of email storage on an Outlook server. With Gmail, I get 7GB, an amazing search and it’s free.
We’re also using a subscription based model for our Adobe software, to move our costs as far into the future as possible. It’s a great option for a new design business.
Can you explain the planning process for the business – has the start-up phase been challenging?
We planned our business over a few months. We worked through a business plan template from the Government, which was a really useful framework. It was a time consuming process but really worthwhile.
We also put a lot of emphasis on establishing a shared vision and set of values between the directors of the company. Obviously it’s really important to write this stuff down and keep referring back to it.
Once we had a solid business plan, we talked to a business mentor from the Small Business Mentoring Service. It was really helpful to get an outside perspective at that point, and also get a bit of validation.
We wanted to plan everything really carefully, not many new agencies seem to do that. There’s a big temptation to get into sales mode very early on, and worry about setting up later.
But we basically took the opposite approach, because we know how difficult it can be to put work into your own company once you’re dealing with your clients day to day.
We figured we’d never get a better chance to set up our systems and processes, our tools, studio environment, etc.
So that’s where we put our emphasis, rather than running out to get whatever work we could find. We’d really recommend this approach to anyone in a similar position.
Because we have backgrounds in design, marketing and communications, the parts of our setup that related to branding, identity design, messaging, etc came really naturally to us. We probably have a bit of an advantage there compared to other businesses.
Finding premises was a challenge early on, but we had some good luck (on Gumtree of all places) and found a great studio in Flinders Lane which we’re really happy with.
On the whole, I’d say the start-up process has been really exciting and rewarding, and the challenges we’ve run into have made us a closer team which has been great.
What has the toughest aspect of starting up been?
While we don’t have any shortage of opportunities, I think we underestimated the amount of time it takes from project kick-off to money in the bank.
Luckily our planning has allowed us plenty of time to get our cashflow moving.
In general, our start-up process has actually been really smooth. I think we’ve been pretty lucky.
What would you have done differently given another chance?
Our timing probably could have been better. Michael has just had his first child, Brett has a nine-month-old, and I’ve got a baby due in November.
Brett and Michael were also selling their houses during the setup process. Starting a business on top of all of that was good fun. But you can’t always predict how these things will happen.
Other than that, we’re very happy with how things have worked out, although it’s probably a bit early to know for sure.
How are you marketing yourself? Who is your target customer?
Our clients tend to be from the big end of town, and mostly come to us through word-of-mouth or our personal networks. We definitely subscribe to quality over quantity when it comes to taking on projects.
We did a fair bit of market research before we started Navy. We ran a series of qualitative research interviews with senior people from companies like Lonely Planet, Telstra, CarSales.com.au, ANZ and iSelect.
In the interviews, we showed people early versions of our visual identity, our messaging and our presentations.
We tested some industry terminology to see which words people understood. We ran exercises to learn about which qualities are important to people in a digital agency. And we talked about the process of working with an agency from the client’s point of view.
This research was pretty much invaluable, we learned a lot from it. It was a really interesting process, and we think it’s made us a better company to work with.
Finally, what are your targets/ambitions for the business?
We’re pretty passionate about the potential good design has to make people’s lives a little bit easier. So we look for projects where we can have a real impact on the customer experience. That’s our main motivation for starting the business.
We’re really looking for projects where user experience design can have a transformative effect on an industry or category.
Medium-term, we have ambitions to grow to around 10 people, but no larger. This number would let us run a couple of design projects in parallel.
Our plan is to stay specialised and keep a very flat hierarchy, so that everyone you deal with at Navy is someone pretty senior and experienced.
Long-term, we hope to build up enough capital to invest in our own products and services.
There’s lots of opportunity to do that these days since distribution and monetisation of digital products and services is becoming so mainstream (Apple’s App Store, Valve’s Steam, Android’s Market, subscription based web apps, etc.). We’re already doing some conceptual work on a few of our own product ideas.
We’re also really interested in formalising some of the things we’ve learned over the years about how to create good digital work, maybe by writing a book.
But right now we still feel like there’s more to learn.