fall in love with the business aspects of architecture practice and architecture business is not an easy business to run. Hello, and welcome to the Business of Architecture. I'm your host Ryan Willard. And today we have a very interesting episode because I was very honored and privileged to be a guest on the anti architect podcast, which is hosted by the fabulous Christian Giordano, who is the CEO of Manzini, Duffy. They've been on the Business of Architecture podcast a number of times once we had them, all of the partners on and we've had Christian on individually as well. And they're really an incredible, interesting, innovative business in architecture. And I really, really admire what everything that those guys are doing. And one of the media activities that Christian is involved in is this brilliant podcast, the anti architect where he interviews lots of very interesting people from the industry. So if you're not subscribed to that, go and check it out and hit the like and subscribe button. And he invited me on when I was in New York a few months ago. And I was very happily obliged to, to, to jump on the opportunity. And we had a very interesting conversation where we spoke about late payments. We spoke talks, talked about some of the difficulties that many businesses base with being able to ensure that their clients are paying them on a regular timeframe and the difficulties that many even sophisticated businesses like mansoni definitely the challenges that they face in making sure that they're being paid on time when and as per contracts. We spoke about podcasting and the opportunities that that provides in somebody's individual career for marketing of a firm, and we talk about more generally the state of the architectural industry and the mistakes that many businesses make when they first set up they make with their marketing they make with their keeping projects on on on target. And Cristian did a very well researched podcast and asked me some really pertinent and interesting questions. So I thought we'd share that interview here on this platform in case you're not already subscribed to the anti architect and you haven't come across the interview, sit back, relax and enjoy Christian Jia, Donna and myself in conversation.
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Hello, anti architect podcast listeners. I am excited to have Ryan Willard, all the way from England. Here in the studio as my guest on the anti architect podcast, Ryan began his journey in architecture with renowned firms like Grimshaw and RS HP before launching his own firm, t t h s architects. However, the challenges and financial stress of running TT HS drove him to delve deep into the intricacies of business management and learn everything he could about running an architecture firm. His pursuit of knowledge led him to interviewing leading figures in the AEC industry from all around the globe, which culminated in the widely recognized Business of Architecture UK podcast. Over time, Ryan expanded his expertise in areas such as marketing, sales, and the psychology of teams and individuals leveraging his relationships with industry experts, business consultants, and leadership gurus, Ryan has gained a profound understanding of the components that constitute a prosperous and influential practice. He currently serves as the Director of consulting at the Business of Architecture through the smart practice, which is trademarked, he has advised over 100 architecture firms, helping them achieve financial success, freedom and fulfillment. The Business of Architecture is among the premier podcasts in our industry. With nearly 500 episodes. It stands out as a definitive source for insights on the often overlooked aspect of our profession, the business side, I've had the privilege of being a guest on the show multiple times, and several of my partners have also been featured by Ryan and most importantly, Ryan is a UK based Bruce Springsteen fan. Yes.
You know, I was in New Jersey yesterday and I was in Princeton, and they've got a big flood. They've got a big statue of Bruce with his guitar and a big shoreline to get my photograph taken with
him. So that's great. Well, Ryan, thank you so much for being my guest here,
my absolute pleasure.
So, you know, I've been a guest on many podcasts, and not to offend the others. But my episode as a guest on yours on the business architecture, which I looked at all the way back in March of 2021, called transparency and leadership. Still, today, still to this day gets referenced by people, you know, you the reach of your podcast is pretty amazing. I will say, like, people have said, Oh, I heard you on business versus I heard you and and that, like, blows me away that you know, it's, it's out there, and people, people absolutely love it. You've also had my partners on, which obviously, we thank you what what has been the most rewarding aspect of hosting this podcast, things
like this, basically, just that I was walking around New York yesterday, and I was thinking, how privileged I am to be meeting all these amazing, interesting architects all over the world. We are we at the moment, we have about 80 different clients, who I work with very intimately. You know, I had a client yesterday, take me around Princeton, show me all of her buildings, her developments are projects that are these really kind of intimate relationships that have been getting gotten built. And the podcast has kind of opened up this enormous network of people that I would never have been able to get into contact with. And it's happened all from basically my little bedroom studio in East London. And you know, and even the relationship I have with Enoch, my business partner, he started off in his kitchen in Visalia, and everywhere and his two little rooms, opposite ends of the world, and have grown this amazing network and business has kind of organically grown from it. And we've continued to sort of invest in ourselves with business knowledge and education and leadership and kind of distill as much as we can from it and put it into a structured program to put to put architects Yeah, but I would never have, I mean, I only started the podcast for my set quite selfishly, because I wanted to know, what the hell are other businesses doing? Because, you know, I was running my architecture firm. And very quickly, it became, I thought I was good at sales, I thought I was good at talking with people. I thought I had, you know, a kind of sense for that sort of stuff. But there was an element of it that just seemed so ridiculously hard. And like I was almost had a handbrake on. And there were so many things about our I've been trained as an architect, and I had to, I had to do everything. And my kind of, I think my financial fluency at that, at that time was, you know, I was very cautious of it. I didn't understand how to budget project really, all of a sudden, I'm now managing clients money. And you're like, This is either grossly irresponsible, or did I miss the day that I sleep through those sessions at college? And it's like, no, you've never, no one has ever actually told you, or shown you and really gone gone deep with it. So I started the podcast out of that kind of frustration of not knowing how to do those things. And it just, you know, I just wanted to start reaching out to people who I admired was interested in, wanted to see what they were doing. And I was always been so touched of how architects all around the world have been so open to sharing, here's what we do. And you know, what, we struggle with that as well, you know, what, we don't have an answer, you know, what we've tried for the last 25 years. And it's been really, really difficult. And it was like, great, that's, that's really fascinating. And so, I kind of just became obsessed with with that, and kind of just fell in love with the the media side of it as well. And it also, you know, enabled me to implement things in my own business and to grow it. But yeah, certainly the the biggest thing from the podcast is the network and the relationships and the people that could never have imagined imagined that
was possible. You're right, that architects a lot of this, and there's always the ones that, you know, they know everything, and that's the way it is, but most that I come across and especially us here, you know, we're the first ones to go. I have no idea what how to even do this. We're where do we even begin? You know, luckily, we have this internet thing we can, we can look it up, listen to your podcast. So if you had to pick one thing, what annoys you about your fellow architects?
That's a good question. I have I have my annoyances with the industry as a whole. Because I feel sometimes the way that we view design is very myopic, and a bit blinkered and that there isn't enough appreciation for business and for profit. fit and making money. Again, I sometimes say this is there's a difference between US business culture and the UK business culture. And I find here as a generalization, entrepreneurship and business is more celebrated. In the UK, we pretend that it's not happening. And we sometimes pretend that you know, profit is a dirty word when that happens here as well, we insured within the architecture industry. But that, that I feel was grossly irresponsible. It's a culture thing that's developed from university. It's and I appreciate it's unintentional, there's no one at university telling us businesses bad, but through the negation of our education, which is so focused on a very specific part of design as well, it doesn't talk about how we're actually dealing with other human beings, how we're communicating and problem solving as teams. And the gestation period of an architect is unnecessarily long. And it means that we come out and we've been very deeply indoctrinated with a particular design philosophy, which then ends up hurting us when we start trying to run a business. And then we have the audacity to wave very meaningful and important flags of how we want to change society, sustainability, diversity, inclusive inclusivity, but yet, we're failing to be financially responsible in our own businesses, and actually feed ourselves before we can go off and help anybody else. Yeah. And it means that, that, that, that I, that just doesn't sit well with me. And, and it's frustrating. And that's part of the mission of the Business of Architecture is profit for purpose. Like, we got to get really serious about making money in the business, put it as a priority, learn the mechanisms that are involved in doing that, and have the culture of the business in where everybody is, understands where we're running, we're running an organization here, we're doing it for money, we're doing it for profit. And guess what we've got values and philosophy, that means that we can reward our team members, well, we can up level, the kind of, you know, the careers and the salaries of the team of everyone involved. And also we can use our profit to have agency to make a difference in the things that we want to do. So
very well said, and so how on the academic side, do we begin to change this? And that that part of the education process because I'm, by the way, I agree that I don't understand why architecture is five years long. Yeah, that I never understood that I just just to do one more studio, or whatever that might be, it never made any sense whatsoever. And now with college being more expensive, it's just more debt. Yeah,
exactly. It's an enormous length of time, I'm quite happy for people, you know, I think academic world should have, you should have a course called architectural thinking. It should be divorced from actually becoming an architect. I think architectural education is fantastic in and of itself. And there's lots of benefits of doing that. And academics will actively say, well, the purpose of education is not necessarily to feed the industry. Okay. Well, 10, tell your students that, because they're investing a lot of money to become an architect and academics quite proud in the fact that we're not producing thinkers. That's another sort of question that will, we can get into another time. But there is a there is an investment that students are making to become an architect. And architectural thinking and strategy is fantastic. And you can have it as an isolated design, subject, and you can do a master's in it and spend a PhD in doing it, that doesn't, that doesn't need to be the only way to becoming an architect. And you could very easily have a degree, which is three years long, or even, you don't even have to go to university. And I think actually having a more apprenticeship scheme, which we're starting to see happening by having people who are trained in practices, and certainly larger practices could start to have more of an active role in education. And guess what it should be allowed to charge people for education as well, or have it as another business revenue stream where you've got educational components that can be digitized, and people can be downloading it and they can be training themselves. And then that can give them access to then perhaps becoming employed as interns and things like that. Yeah. And, you know, there's lots of there's lots of lots of different routes into becoming an architecture but a lot of them all come from, first of all, let's just share the experience of being in an office and not remove the reality of the economic force that shapes architecture. Please, let's let's play with it. Let's talk about it. In academia, I struggle to understand why you become so well versed in being able to deal with all of the other forces that shape architecture from from imagined socio public To cool things to environmental to tectonic to philosophical to art space, but money is left to the side. And very rarely, even when we do something as practical as design a building to any kind of budget at university. That's insane. That's absolutely insane. How can we how can our clients be investing huge amounts of money, if they're talking to people who are not fluent in the world of finance, of course, we're not trusted as as we shouldn't be. Because we haven't been we haven't been trained in that I tried to explain my my parents, I come from a family a long lineage of accountants. And interestingly, I always fought against accountancy and now I'm kind of professing Professor the same things but in a very different way. And I have conversations with my, with my parents, and my mum was a, an accountancy teacher, at a kind of kind of colleges. And she was often like, we're, but she's in accountancy, when we teach, it's very different from the real world. And I was like, Yeah, but in academia and architecture, I think it's almost unrecognizable. From the real world, at least in accountancy, here, you're talking about theoretical hypothetical situations, and you're missing things out. In architecture, you can get into a world of complete fantasy that's tick completely not underpinned by any kind of real reality. Right? I don't want to undermine that completely and say it's useless because it does have its value. And what we're also starting to see is that a lot of the value is actually appreciated more in other industries, who require that kind of thinking. And then absolutely, we look at Tech platforms, they pinch very creative architects, and they start paying them massive salaries,
developers, construction side, there's a lot of people that pull them. Yeah, exactly. It makes sense. Yeah, I think about, you know, my architecture, my undergraduate and I was lucky at the University of Miami in Florida, they had most of the professors worked. They had either they worked at larger companies, or they worked for themselves, right. So there was a little bit of that, which was interesting, but you never talked budget, you never talked anything, as far as you know, how much would something cost? If you even thought that way? I remember we had a student who did a final presentation where his building floated, you know, and it was like, even ignored, gravity has not only budget for gravity, that's amazing. You know, I listened to it, it was cool. I get it, you know, and definitely got A's for sure. Yeah, right. But then you get into a situation where you have students that now are out of school, they come to a firm. And it can be pretty demoralizing and deflating where it's, you know, you're we're not doing that there's a budget, and they can't afford this, or we, you may have designed this or worked on it. But now we have to redesign it because the client can't afford it. Yeah, you know, I don't care. I don't care what architecture firm you work at. I mean, with maybe the exception of some of the black cape architects, budget is always part of the process really is, you know, and and that's what
I mean, what's interesting is, you know, a lot the work that we do with our clients now really puts an emphasis on them understanding the budget of the client, not just what the budget is, but how are they coming to that number? How are they devising it? Where is their money coming from? If you're working for developers? What's their investment cycle? Like? What are their financial cycles? Like? Where are they having issues with their own liquidity? How can you now start to structure your own offer, and design process that kind of complements, where they're, where they're, where they're having cat dips in their cash flow? Oh, and guess what, you can make more money by doing that and not actually provide any more additional service, you know, things like you recognize a client has a, you know, the, they don't have that much money for the soft costs upfront for a piece of architecture, then great, okay, then what happens if you start charging a base rate of fee, and then you negotiate an uplift or bonus type of structure on the amount of units that gets put onto a site? Or if approvals comes on, again, you're starting to play the game of taking risk, your business needs to be working foundationally to kind of start taking that kind of risk. Yeah. But we start seeing people who are now getting paid three times as much money as they would have done for a regular service, because they've understood and they've taken the time to absolutely just be fluent with their, with their client about how does it how's your budget working? Yeah. There's a design process there. And developers, we often think of developers not being very creative, but they absolutely are. Oh, absolutely. When it comes to deal making financing, how they're doing that kind of stuff. And that's, I think that's really fun, interesting. And there's a whole world of just talking about that at university where, you know, what, we could actually use the safety of university to be experimenting with these sorts of risk type structures, where you're not going to lose hundreds of 1000s of dollars. You're actually just are speculating about what kind of business model? Would you need to deliver this sort of project? Or what kind of business model would you need to serve the kind of client that you're kind of speculating about in your academic work? I think that's really interesting. And as you know, it just starts to give people a bit of hunger, about making money in architecture. And I, and it's interesting, because we on the podcast, we get a lot of students kind of contacting us saying, I want to set up my own business, I want to become an architect developer, I'm not learning anything about this at university, I'm worried about actually continuing with this this program, do I stick in university? Or should I go out and try and sell a product, start a YouTube channel, and we still this sorts of stuff. And I think that's really, the appetite is there for it, I don't necessarily think the academic world has the ability to necessarily serve it. And we also forget that the academic world, the universities are brands, and they are businesses themselves, and they need to get bums on seats, and they need to sell their own programs. And the way that they sell their programs is to ensure that it's the most sort of compelling, tantalizing, easy thing for them to market and perpetuate their own message.
So last question about just architects in general, why do you think architects give away free work so much,
because they don't know how to either. Partly kind of reflecting more of just what we were just talking about, I think the giving away free work becomes the only thing to do when there's a lack of other options. And it becomes there's, there's loads of stuff here, there's there's part kind of lack of self esteem to do with it. You've never seen a lawyer giving away free work, I was trying to, I was trying to get a lawyer to just to talk about my immigration status here. And I, I was emailing a few of them, and not a single one would even talk to me even look at my face without $200. And I was like, why am I surprised at being surprised about this? That's great. That's exactly like, as an industry, they've got that on lock. Yeah. And there's an industry, they're not afraid of making 40 to 50% profit margins. And that's what they are intent their, their business around. Architects, we're not talking about money, we're not almost that, again, the negation of it in university means that we don't, we don't talk about it, we don't focus about it, and we end up repelling it. And almost thinking that profit is a dirty word that's, you know, it will undermine our creativity. So we don't want to get involved in in talking about that. Yeah. So then we get into a habit of not talking about money, then we become we see a project, we really, really, really want it, the developers or whoever it is that we're working with. They're normally pretty sophisticated financially, they know how to negotiate. They also know how to leverage risk with consultants who can either pay late or they know that they can ask for free work, and they can dangle a carrot and do that in front of. And so we find ourselves in this in these situations have given away free work. And it's kind of undermining everyone else in the profession. But it's the only tool that we've got to be able to try and secure. Secure a project. Yeah,
listen, I have mixed feelings on it. Because I know that there are times where we've done let's say, a free study, you know, we a developer has approached us and said, Hey, there's a site, can you do a study of this, and we'll create a project. And we've gone and done it, right. And sometimes that project becomes a real project. Sometimes it never goes anywhere, they probably just kind of scammed us into getting some free work kind of thing. So it's a very difficult balance, right? And you don't want to not get that project. It's like, alright, if I spend 10 grand doing the work now. Well, I could make you know, 2 million if this, you know, giant residential tower goes forward. Right. Yeah, that's a great payoff. Right. Yeah. Part of marketing is how will always like, yeah, you know, bullshit ourselves, basically. Yeah. But then there's others where it's perpetual freeware. And I will say where we, you know, if you're not real, and you're not willing to kind of show us that you're real. We're not going to do that.
Yeah, kind of where I think there's, you know, there's if it's existing relationships with clients, there's a time and space for doing free work to kind of continue the relationship and, and there's also been a training, if you like, of the client, knowing that they're going to pay you. I think there's also kind of structuring services in what we might call like a low commitment consultation, where as long as there's some exchange of money, even if it's like a reduced exchange For a small piece of preparatory work, then great, we're still kind of maintaining that relation that there's a there's a trend a transaction to it. Yeah, I think what's very, kind of most exploitative I competitions in a lot of senses, I think only for the very large practices is that even a sustainable way of doing stuff. And I was at RSA hp, which is Rogers practice there that he, they did maybe eight or nine competitions in a year. And they were incredible designers, and they knew they had the chops, and they knew that the statistics, well, one of them comes off, then we'll set were set, they also had a process of kind of basically reusing the ideas from each of the different competitions and kind of like, you know, making sure that it was a more simplified process. But that can be enormously expensive for a practice to be doing, particularly for younger, smaller practices. I mean, the Guggenheim competition in Helsinki, a few years back was a absolute criminal disaster of having 1000s of young practices, just investing time energy, then barely getting much marketing collateral out from Guggenheim themselves, okay, sure. They've got some nice pictures, they've still got to generate traffic for it to be going to be to be seen. And then the pack and then the practice the the one the project, they get a stipend, they're not able to negotiate their fees fully. And then the project doesn't even happen. Yeah. And they have taken enormous risks to make that thing happen, because it could be so game changing. I'm sure, you know, that particular practice, they they did get a lot of marketing and publicity as a result of it. But there's a huge kind of this is so much risk,
unnecessary. I think some of those bigger ones are rigged, too, because somehow, you know, the, you know, Morphosis Gary Foster, you know, all those that are in with hundreds of others, somehow one of them gets one and then the next guy gets one and the next guy gets one. And, you know, it's like, Fine, you want those? Yeah, just hire them to react? Well,
I mean, this is it. I mean, I was chatting to somebody the other day on the podcast practice in London, does a lot of fordable housing on in the city, and the local authorities in London, have framework agreements. So you have to kind of submit a whole lot of information, you go through a preliminary set of interviews, and then you're put into a pool of sort of 20 other architects, and now you're allowed to bid for work when it comes up, doesn't mean that, you know, they're equally going to distribute it amongst that 20, which, I think would probably be a better idea. Because now you've got 20 Architects, they're all competing against each other, they all know each other, as well, they all think very highly of each other, and they all and then, you know, this practice I was talking to they did the numbers, and they were spending about quarter of a million quid sure doing, you know, proposal after proposal, a proposal in a period of I think it was two or two years or so. But it was an enormous investment of money. And it was like, Well, is this actually working? And if we're doing it, then all these other practices are doing it. We know them, we trust them? Why can't we just divvy up the work between us? Right? Absolutely.
So I just want to talk about your prior firm. So there are many consultants, you know, for architects, large firms, like Sweig, who have had on this podcast, PSM J. There are business operating systems, coaches, EOS scaling of Rockefeller habits, Jim Collins, I could list goes on and on, right. But I think what makes you and business architecture so interesting, is that you started and built and ran your own firm, for almost 10 years, basically. Just talk to me about sort of that firm experience, you know, and you know, what that was like for you sort of creating that firm, and then ultimately seeing and morphing it into what it is today. Yeah,
I. So I started off, you know, kind of came out of Rogers practice. And very quickly, had to kind of know, I was designing whiskey distilleries and museums and large scale stuff, and then suddenly, it's down to, you know, rear end extensions on people's houses. And that was a bit of a mental jump that took me a while to get into and you suddenly realize this big, this big void, and I think I did set I did set up my business quite young. I was 3132. And on reflection, I would kind of probably recommend or, I mean, it's all worked out really well now. But if I was giving advice to my younger self, I would, I would say learn loads more about business. Stay in one of these practices for another 10 years. And then build up good working relationships and then make good relationships with one of these clients and then do that and take some people with you. And then you can go off and operate a larger, a larger, firm much more much more quickly, right. But the, the initial days of running a running TT HS, were, you know, I was asking a lot of small firm architects, solo solo solo practitioners, how are you winning work? What are you doing? How do you set fees, and, you know, I wasn't only that great and money as an architect working in a firm, and then when I started running my own practice, then it really hit me, the pain of being broke. And that was a very profound and enlightening and enlightening experience. That got me very interested in the business aspects of it. And I hired a business mentor. And he was really instrumental in helping me understand business systems, learning, marketing, learning, sales. You know, modeling, the business that I wanted on other people's businesses, which is part and parcel with the podcast actually came from learning to outsource delegate, realizing, as a small, firm owner, actually, I can outsource loads or chunks of work, I'd have to do everything myself. Yeah. And, you know, we'll start finding people in places like Bolivia or in Latin America, and I could pay them, you know, a lot less than I could hire someone in the UK. And the work was was better, faster, quicker. And I didn't have to be the one doing all the drafting. And you're like, oh, wow, this became an you can go and sell your services. Yeah, exactly. Now, I can go ahead and sell my services, and I can market and now I feel more confident and being able to, to, to take on bigger things. And so that became quite a successful kind of small business operating model. And I did my last project, active project detail chest about two years ago, which was a private house in in Aruba. And there was a point where I was kind of, do I want to spend more time in, in the architecture? Or do I want to spend more time doing Business of Architecture, business architecture was really taking off and was a lot more of a compelling, a compelling vision to be honest. Yeah, for sure. That's
great. And so yeah, absolutely. So tell me a little bit about your origin story. You know, where did you grow up the joys want to be an architect?
Yeah, I grew up in South London. And so I'm pretty mixed. In terms of my heritage. My mum was Guyanese, which is a small country above Brazil, next door to Venezuela, of Indian origin. My dad is English. And in Tottenham, and I grew up in South London, and probably showed an aptitude as a kid for being interested in maths, physics and art and some bright sparks somewhere, so then you need to be an architect. And from a pretty early age, probably about the age of 14, I decided I wanted to be an architect, okay. And, you know, went to Barcelona and fell in love with Gaudi and all that kind of stuff. And, but never really, again, I think that's interesting. In as a kid, I was interested in art and design and stuff. But really, and this is something that I learned with a business mentor, was we started doing lots of personality profiling tests. And one of the things that came out was communication. And when I think in my own personal career as an architect, working in practice working for myself, one of the frustrations was, I want to be talking to people more. And architecture does have that as ability, but certainly working for somebody else. I was in an office, by myself drafting cranking away and cranking away. And I used to be the one that would go and sit with the comms team. What are you guys doing? You're on the phones all day, you're talking to people like you're out there, you're doing media based stuff. I would often ask like, can I present something can I talk with the clients you get that that that was very deeply frustrating. And working with a business mentor kind of pulled out because I will actually your personality is you're a communicator, you should be out with people on talking and doing this class as I know. So that that again, that was another thing that kind of made me shift career trajectories, if you like and to let go of architecture and be at peace with with letting go of the design work, which is for the most part for me personally, a lot of you know the I don't enjoy design that much, right? Even now we're doing our own little apartment in in up the road in Harlem, and I've barely been involved in the design projects. My partner she has done pretty much all Have it and I've been you need to talk to this person you need to meet this person he can help. She can help.
So have you moved to the United States now?
Not quite. Okay. Well, we're a work in process. Yeah.
So let's talk about the Business of Architecture. It's more than a podcast, obviously. I mean, you've referenced that before. And at the end of the day, it's a resource for, for for firm owners around the world. I guess my question is, what what are some of the? How do you choose your topics and your guests?
That's a very good question. Nowadays, a Nick and I have focusing more on doing interviews with each other. I noticed because we're able to craft a kind of more kind of curriculum, if you like. And we feed off a lot of the questions in the comments that we get from listeners. And so we've always viewed the podcast as being like a kind of conversation with the with the industry. And for it to be less one way directed of us talking, if you like, Sure. So even though that's what it is with the podcast, but you're broadcasting, but then you get feedback, you get engagement, and the conversations, the questions that people are asking, then informs how and what we're going to talk about next. So that's always been something we've been very cognizant of. And we've also a, it's a bit on a on a, in a way, there's a kind of a tension level. So when we look at our podcasts, and we recognize that people watch them, the ones that often get the biggest views, there's always certain words that are in the headlines, okay, low fees, for example, or architect developers, that one often comes up or career changes, or so they're often there are definitely sort of pain point topics that do really, really well that kind of that are, that are popular that we kind of use to curate what the what the kind of what the next podcast is going to be or what the next topic is going to be sure nowadays as well. Because the podcast has grown from being where we're interviewing lots of industry thought leaders and kind of distilling knowledge and understanding business innovations and what other people are doing. And now we've kind of grown into our own consultancy where we've got an active program with clients. We have a very immediate feedback loop, if you like to what are people dealing with? What are the pain points? What are the problems, how is the economic situation impacting businesses, so the complaints and the troubles and the challenges that are experienced on a day to day basis, actually talking with with architects I'm working with will often inform the podcast and the types of clients and guests that we that we have on the other. The other part of it is that that is how active people mark it to us to be on a podcast. So we have these days, we have a lot of people who put their name forward to do it. And so we have a process of screening, screening guests. Sure. And we get booked out for like, it's a bit ridiculous. Now it's kind of six months in advance, it takes too long. And we're trying to try to increase the amount of content that to me
was the weirdest thing when people reach out to me and say, Hey, I'd like to be a guest on your podcast. And I thought, Oh, wow, okay,
yeah, you start to see how it works. And that, you know, I have good relationships with PRs, as well. And PRs are fantastic. And they get a listening for the podcast. And they'll often, like a good PR, will, will contact me and say, I've got this client, they're doing this innovation in their business. Yeah, we think that make a really good story, here are some things that we could discuss. And if it looks good, and they've, you know, put it in a great way, I'll jump on the phone with the PR and talk a little bit more than their invite introduce me to their to their guests. And we can do that. I mean, nowadays, I'm you know, I'm kind of more interested in sort of leadership issues and topics and really looking at businesses that are doing certainly innovations with the way that they're structuring their fees, how they're how they're commanding and protecting profit margins, how they're negotiating and the firm's that are transparent and wanting to talk about that. I'll sign like some of my favorites. Yes. And you know, you guys for example, yeah, Oh nice to have the whole, the whole leadership team was was a fantastic unique experience.
And we're an open book for good or for bad. We share everything right. It's brilliant,
because what that that allows me to do as well when I hear that kind of stuff. I'll use that when I'm when I'm talking with clients go and listen to this podcast that I did with Manzini. Duffy. Because it's a it's a big difference when it's coming from an architect who's in the field doing it. And here's how they've, here's how they've, they've done it. And here's the story. And here's an example. So that as well, it kind of becomes very important that I'm very interested in speaking to architects who are actively engaged with business and who are innovating, and they celebrate it. Yeah, they celebrate. I mean, that's really the main if you want to run a business of architecture podcast, just celebrate business. But Simple as that. Really,
How'd you meet? You know,
LinkedIn? Oh, really? Yeah. In fact, I mean, in an economic we had a relationship. Digital online for many years before we actually met in person. Wow, probably for about four or five years. Wow. And I was just saying earlier, actually, I met in in California recently, and it was the first time we've been in the same room since 2019. Oh, wow. Okay. It's extraordinary. It's extraordinary, right? I was listening to his podcast originally. So he probably done maybe a year or so two years of business architecture out of his kitchen. And I wanted to interview people in the UK, and I found in UK on LinkedIn, and sent him an email and said, Hey, I'm in the UK, I want to interview UK architects. Can I put them onto your, on your platform? Or can I? Can we share it or something like that? He was like, absolutely great, jumped on a call together. He told me what he was doing in terms of, of interviews, and then that was that really? That's
great. That's great. So talk to us a little bit about the consultancy side of Business of Architecture. What size firms do you work with? You know, how big is your staff? At this point, you're consulting with a ton. It's obviously not you alone, you know, doing all of this work? How does the actual physical part work? This,
there's four of us in the in the team now. So we have three of us are consultants. And then we've got an office manager who deals with all of our communications and kind of liaising with with clients, we have a kind of an array of different services, the practices that are probably the sweet spot of between the five and 20. Okay, range, because there's, they're mature enough. They've got basic systems in place, they've got some ability to be winning work. And then there's a lot of there's a lot of good things that we can kind of build upon, and they're looking to go from good to great, and they're ambitious, and they want to make the business work. Right. We have a we have quite a few solopreneurs, and startups. And I think that's really great, because we often hear from the practices who have been in business for 30 years saying, I wish I'd done this, you know, right, right at the beginning, that's a slightly they have a slightly different set of needs and requirements. And normally, it's about getting money into the business as quickly as possible, building up a pipeline, which is reliable. And we set a kind of set of benchmarks, we have a thing called the 200. Club, which is what we would gauge a high performance business, which means that for every full time equivalent employee in the business, the business is bringing in $200,000 per. That's our metric as well. Fantastic. Yeah. And it really, it's a challenging one to get to, we'd like to push it to 250. Right. Yeah. Right. And it's, and it's great, because it's one of the one of the first things we do when we have any business Come on, is we do a very thorough audit for three months. Look at what financial processes and systems they've got in place, how are they measuring profit? How are you tracking profit into, in, in various projects? Where are you? Where are you leaky? How are you negotiating? And where are you with using this 200 metric? Because that will that's the doesn't tell everything, but it certainly gives us a good indication. And, you know, for businesses below 100,000 I'm like, Okay, well, we're not gonna do anything until we've we've built a pipeline, and we can see at least in theory, you could get to 200. Yeah, and it means we can start opening up. How are you setting your fees? What are you looking at? What are you tracking? What's your hourly billing rates? Where are you? What kind of profit margins are you? Are you having? Yeah, so we look at all we look at all of that, and we have a kind of the first benchmark if you like, is to become a core Rainmaker. So once you're a rainmaker, it means you've got a pipeline, you're able to win work, and you've got the bid At or you already are at 200,000 or 200. Club. And it's and it's amazing. You've got practices who I mean, I think the highest practice we've got is about $450,000 per full time employee. And for them, we've got one practice is striving for six hundreds, right? And they are they're focused on you know, they're out in California in the sort of Silicon Valley area. Lots of tech companies. And
I will say that the bigger you get, the harder it is to achieve that. Because yeah, you have all this other stuff, right? Yeah. Oh, group of non billable people exactly. Eat away at everything.
It's interesting, because there's these kind of shifts that happen in the business from, say, three people, we often do it in powers of three, so three people, then to nine people, something happens them of what you're doing at three people no longer works, what you're doing at night. Yeah. And then from nine people to say, 27, what you were doing at nine people now starts to break down. Yeah, and then and so on. And it kind of means that yeah, a lot of these things, the systems or the processes now need to evolve or, or adapt. So we work with businesses. There's a mixture of things where I might lead group sessions on training, a lot of people in one go, we have mastermind groups. And then we have businesses that are all kind of in that 200 Club, we have them kind of separated often in a thing called the Design Council where they are working with a gentleman very different set of issues, more leadership, people based problems getting teamed to perform, and also to start thinking long term future legacy and grow. Yeah, oh, yeah, our transition transition legacy retirements, even what that would look like building an asset portfolio. How might handover work? So I mean, I, personally, I really enjoy the transition conversations. And it's a really fascinating thing. I think it's very powerful. When a business starts to kind of build that into their culture of identifying the next generation of leaders, what do they need to know they need to get trained up in the world of business? And then, you know, the kind of exit strategies for the current current partners that gets them focused and starting to think about profit and money and the legacy that they want to leave behind. And, you know, kind of comes very, very meaningful conversations. So yeah, that's the kind of the sort of evolution that we deal with.
As far as some of the show topics go. You know, on I wrote down a few here that you know, I do listen to your podcast a lot. I mean, you've covered everything from negotiating to we talked about ownership, ownership, transition architect as developer growth strategies, compensation, client software, product management, design, marketing, innovation, construction, collections, fees, people purpose, recession, getting paid psychology, smart buildings, what success looks like for owners. And I wanted to pick a couple topics here, you know, I'll pick one and then maybe you pick one, as we kind of begin to wrap up. I was fascinated by this idea about getting paid. So of all the things we do great at Manzini, Daffy is I can tell you we can we can we obviously you're very innovative, we sell art, we, you know, we can sell our services, we win lots of projects, we're busier than we've ever been. We know how to grow revenue. We know how to make profit. You name it, we do it really well. I'm not saying we're perfect by any means. But the one thing that we absolutely suck at is collecting our money. And it's, it's a industry wide thing. It's a constant pain point. We feel like broken records to the project managers. And you know, I can You can tell you hear it in their head, like, oh, here we go. Again, I know. We're going pencils down. We're not doing this, you know, we're putting a lien on somebody's property. There's all of that. But what I found fascinating about one of your conversations was that you you really encourage people to have that conversation about getting paid separate from the fee, but actually physically getting paid like that check with your clients before the project starts. Yes. So talk a little bit about that. Yes,
yeah. Well, I mean, so I mean, this. The reason why we really got into this as a topic was because this was the one of the biggest problems we were seeing with practices. We had a practice. I did a I did a survey most time clients of how much outstanding AR people had. Sickening. I was shocked. I was shocked. I mean, it was it was more than 50% for most practices.
It was it was crazy.
When we had one practice, who the the worst of the worst I've ever seen was they had about $2 million of outstanding fees that hadn't been paid. ate. And their annual revenue was only about 1.25. Yeah, this is causing some serious late nights and stresses. Yeah. So you kind of what was interesting was it was always the 8020 rule of distribution as well. So the sort of the bigger numbers were with 20% of the, of the of the clients and most people, most people, on average, we had around about 50 $50,000. If you average it out amongst the group, this is still an enormous amount of late payments and New Yorkers, just the worst place, working with the developers, and it became very clear. And I did some interviews with some developers here in the city, who were kind of discussing about how developers leverage their risk. And they know that they're very aware that architects are not going to have those kinds of negotiations upfront with them about payments, they also know that the architects are not going to preempt late payments, in terms of, well, I can know this developer is going to be late the payment, because that's what their business model is, they're waiting for mine to come in. So how can we turn that into an extra revenue opportunity, so that I am now I'm consciously engaging in the risk that developer is taking, and I'm going to be renumerated for it. So structuring a deal where, okay, if what we can do here is you can pay me on time. And that means you pay me at the beginning of every month, and we're doing like a kind of flat billing method or subscription billing method. And we're not going to start any work until we've got the fees in and that will cost you, let's say 100 grand to do that. Or, I know that you in our conversations, you've told us what your business cycles are that you haven't got liquidity at the front end, or the soft costs, we can postpone until here, when we get approvals in place, and then you'll be able to get more money out of it. And we're going to charge you 150 grand for that service of us being a bank, basically, we're going to cashflow it, yeah, so that becomes a little bit of a different way of sort of approaching it where we're now we're starting to preempt it and preempt the cycles. Or you could take it even further to it being risk, we've got one client who she takes a base level of pay from the developer upfront, and then she'll get paid on a bonus structure per unit per, per what they can get onto the site. Now she has a very specialist niche where she understands a very specific part of her community and town and is very confident has even been involved in actually writing zoning laws in the in the area. So she it's not she knows she knows the risk that she's she's taken to bear to do that. But then she gets paid, you know, maybe two and a half three times more than she would what she would have gotten paid she's protected herself with, with getting a base rate that's coming in, that's on a kind of flat billing subscription model, we like to call it where no one does any work until the money's come in. From and it's paid upfront. And that's what we do. And we have that as a conversation at the very beginning. You know, we do a thing called the permission step in the sales conversation. And one of them, one of them is you say, two reasons why some people may choose not to do business with us. Number one, we're very expensive. Number two, we take x amount of fees upfront, and we build like this, but either there's gonna be a reason for us not to continue this conversation. And so it's it's right at the early stages of a sales negotiation. And it invites the objections there and then, and then it's there. It's tabled. And you don't have to answer everything now. But you've kind of you've thrown that out there. And you can gauge what the response is. And if it's a complete deal breaker, then you're now you're in a situation, where do I want to do much you want to work with this kind of person, then because it's such a risk for us to take on these kinds of projects not get paid, when we're not getting paid by this one client. That means that we can't hire we've were mucking around, it's draining resources on the team. It's stressful, where no, we're not able to, we charging interest on it. It's just a whole big issue where that energy time resources money could have been spent working with another client or finding other clients who would be more profitable, more efficient for us. So that that kind of principle of in the negotiations earlier upfront, to have that conversation to bring it up. And to have a kind of, it's not always the pleasant part of the conversation. It's very hard and it's, it's, you know, well, we'll rehearse these conversations with clients, like we'll sit down with them and that's great and, and do them so they're practiced, and then you know, we're throw curveballs at them. What happens if they say this? What happens if they say that and just practicing it gives a lot of kind of grounding and confidence and then people can, you know, they come back the next week. They're like, Oh, my God, I did it. And I said it. And the developer looked at me and said, okay, all right. And that's it now, and then we've got it. And then but then that's only the first part. Because now we've got to reiterate this mechanism that we put in front of a payment schedule, and keep training the clients to it. So we have another thing called expectations meeting. So before the project actually begins, we have another meeting, which is going through the agreement that we've already we've come to how the payment schedule works. Ideally, we're divorcing the payment schedule, from deliverables, okay, so that we can continue to always notch on and get paid, which means that the project keeps its own pace, and it keeps the client under under control, we have another client who invented a thing called a completion bonus. So this is a practice up in on the West Coast work with lots of high net worth individuals, and kind of they were riffing off this idea, this idea of making sure we get paid on time. And they negotiate a percentage of their fee, which gets put into an escrow account, every time they receive income from a client on a particular project. And so they might take, let's say that they're charging their child around sort of 15 16%, quite high fees on kind of, you know, beautiful $5 million houses and above, on that northwest Pacific Coast. And now take a kind of a slice of that 16%, maybe 1% of the total construction budget, and put it into an escrow every time the client pays them. And they call it a completion bonus. And at the end of the project that the client has behaved themselves, and has paid them on time, and they haven't had to chase for any bills, if they've given them permission to publish the project and take photographs, if they've done made decisions in a timely manner, then they get that money back. Yeah. And often the clients totally forget about it. And he was given an example of, you know, they came to the end of the project, they wanted to take photographs. And the client said, Nope, we want absolute privacy. We don't want anyone taking photographs of that. And they were like, you might remember our completion bonus, we've got quarter of a million dollars sitting here in a bank account for you. We're gonna hold on to that, then you've you're forfeiting, what time do you want the photographers come around, we'll make tea for them. But it's kind of like, the important part here is to negotiate and to identify the leverage the leverage points that we can have with the with the clients and also to stick to them. Because that's the other difficult thing. I mean, I always remember it Rogers, they had one partner whose sole job was to enforce contracts. And he was a he was a bulldog. It was absolute Bulldog. And I remember we worked for worked on a project. And the client didn't pay. And he just stormed downstairs. And he said, Nobody touched anything to do with this project until they paid, go outside, go walk along the river. Coffee, we're not doing anything until the client pays. And it was that was like, right, you know, and he had a, it was him. And he had two lawyers on his team. So it was very, you know, kind of through.
So as we wrap up here, is there anything we haven't covered that you want to tell our listeners?
Probably loads.
We could go on for hours, for sure. I think my
main message is always to really fall in love with the business aspects of architecture practice. And architecture, business is not an easy business to run. There's lots of complexity with it. There's lots of people that we're dealing with when it often dealing with really financially sophisticated clients who know how to negotiate they know where they can push on leverage points of their consultants, they know how to leverage their risk onto us as the architects, and it really is a kind of industry wide effort that we must become responsible with the business aspects of because it will benefit everybody. Yeah. And it will reposition the architect to, you know, being the ones who are truly deeply trusted advisors in the construction process, and it will make everything a whole lot a whole lot better.
Sounds good. So one more thing is you have to promise me you'll return to the US next summer so we can go to the Bruce Springsteen salute jersey, back on tour for sure. So, Ryan, thank you so much for being my guest here on the anti architect podcast. And honestly, thank you for a great podcast that you guys host and it's a great service for our industry. To learn more about Ryan, and the Business of Architecture, check out Business of Architecture comm. Ryan's LinkedIn is Twitter and obviously, listen to their podcast because it's better than mine.
Thank you so much Christian, absolute privilege being here. Awesome. And that's a wrap. And one more thing. If you haven't already, please do head on over to iTunes or Spotify and leave us a review. We'd love to read your name out are here on the show, and we'd love to get your feedback. We'd love to hear what it is that you'd like to see more of, and what you love about the show already.
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