After 14 years in the Bay Area, Smart Design is closing the doors of its San Francisco office. The design consultancy will invest resources into its New York and London offices instead.
A startup that goes boom then bust in Silicon Valley is no surprise. But Smart Design is no startup. The company set up shop in San Francisco following the dot-com crash of 2000, signed clients like HP and Amazon, designed landmark products like the Flip video recorder, and seemed to have carved out a healthy niche in the Valley. But as the Valley grew more fluent in design, demand for a traditional design firm dwindled.
"We had very steady growth for 12 years [in San Francisco]," CEO Davin Stowell tells me in a phone interview. "In the past two years, we’ve seen a deep decline in opportunities, and in budgets. We attribute a lot of this [to the fact that] a lot of work has been brought in-house by our clients, [who’ve built] really robust in-house corporate design studios."
Stowell says "an awful lot" of Smart Design’s work in the Valley was responding to the tech industry’s product cycles—a client needed the 2.0 or 3.0 version of an existing good or service. Given consumers' appetite for all things new—and corporations' relative lack of design expertise—Smart got a relatively stead stream of work. But many companies now recognize the value of good design. (No doubt, Apple's tremendous success paved the way.) So companies invest in their own design talent and embed those designers in their manufacturing chains.
"That’s where it becomes more difficult to be competitive. Companies are not as willing to spend as much money on the outside to do as many programs," Stowell says. "I think there are several San Francisco firms that have been experiencing the same thing we have."
Stowell insists that, the San Francisco office aside, Smart Design’s business is good and growing. In New York and a newly opened London office, Smart caters to a different type of client, he says. "The types of problems that clients come to us with [in New York and London] are much more open-ended," Stowell says. "They’ll come to us saying, ‘This is the type of problem we’re having. Can you help us come up with the solution?’" Smart Design has helped Under Armour design women's athletic wear and Gatorade quantify hydration through a smart bottle and connected app.
Businesses in the tech industry have a fairly set roadmap—products become thinner, lighter, and more cloud-connected over time. But Smart can take a more holistic approach to designing for the broader corporate world, combining digital strategy, product design, and business consulting. These clients aren't building their own design studios to juggle problems that stretch beyond the next killer app. "Technology for our client base here is a new challenge for them," Stowell says. "They aren't necessarily tech companies, but they have to deal with changes in the marketplace where their customer is very tech-savvy, and evolve for that customer."