Yazaroo has always been an agency with design at its core. Not surprising since I graduated from art school, but I have always seen it as a defining characteristic of the work we do: design first.
Over the course of time, I learned how to dev WordPress, how to manage and set up servers, and how to code on a basic level. This was through necessity: people wanted WordPress websites, and to design them I needed to know how to build them. This has resulted in my growth from graphic designer to full stack dev, which is, to my surprise, not what you are supposed to do, but has nevertheless proven to be a very profitable skill set.
One thing I am very rigid on is keeping track of where my money is coming from. To that end, I track accounts for design work, print, website design, website build, and so on, and have corresponding accounts for cost of sale in each category. This has allowed me over the past ten years to track the profit margins of different areas of the business and determine not only which section generates the most money but also which has the best margin.
This has had some interesting results, not least when you account for time spent as a cost of sale (which obviously you must). By far the least profitable was print. This could have been resolved by volume, but I was not running that sort of business. We printed the things we designed, but we were not competitive on price. Even so, the margins on print were tiny, and in fact most of the printers I know make money installing large format print rather than printing it, so enough said.
The next least profitable service we offered was graphic design, but not for the reason you think. Graphic design has an excellent profit margin if you look purely at the numbers, but the real cost is in headspace. To design properly, you need to set aside a day or two with no distractions and get into the headspace of the project you are working on. That is a rare luxury for someone running a small agency with website support. It just does not work. If there are issues on sites, they need to be addressed. And as is the nature of all small businesses, hiring someone to do one task is not ideal if you cannot guarantee the work: one day it may be a rebrand, but then we could have a run of SEO buildout, so that employee is not being utilised.
This margin data is why we cut print and graphic design from our services at the end of last year: I wrote about that decision at the time. This post is the working behind it.
Add to this that in recent years the amount of WordPress support and dev we are being asked to do has grown. We just don’t have the capacity to do both well. I think this is because the devs who used to do WordPress are getting into AI and moving up the value chain, leaving fewer people to manage the existing WordPress websites that businesses are using. This is great news for me, as it’s something we can just keep rolling with. The temptation is always there to go and dev out more technical things and experiment with Laravel and other platforms, but while there is a rich bed of WordPress sites that need support, we are already well placed to take on that work, and it makes it more profitable as we have already invested in the digital infrastructure and knowledge.
As a result, I have focused on WordPress dev, support and hosting for the past six months, and frankly the results have been better than I expected.
Another area within design that had really frustrated me, only exacerbated by the amount of dev work we were doing, was rebrands: businesses who want the service but don’t want to pay for it. I have to say £10,000 is probably scraping the barrel for a rebrand, but to do it properly will cost considerably more. A lot of businesses (not all) just won’t pay that much, let alone ongoing brand guardianship and development as the brand grows.
Add to these elements the rise of AI, and the bottom really has dropped out of the low-end graphic design market. Don’t get me wrong, it’s mostly shit and homogeneous, but a lot of people are using these tools for design, in the same way they are using AI to help them build and maintain websites. The difference being that when the design looks like garbage, they still post it online, but when they use bad code on a website and crash it, there is a tangible problem they need us to fix. I’ve written before about why AI is a lever, not a threat.
So where does that leave design for me and for Yazaroo?
Well, there will always be elements of websites that need to be designed. The systems and logic behind them are designed by default. UX and layouts supplied by designers for us to build can be improved in places, but the real opportunity is in venture design.
Rather than building two websites and designing four banners, for example, the time saved on the banners allows three websites to be built in less time, which works out at a much better hourly rate but also leaves extra time to work on something else. And if you have one brand to create over a six-month period, it actually means you are making more money for less work, and have more extended brainspace to focus on brand dev for one large project without the concern of billable hours for the client.
As we will be paid in equity, it’s more about future value than time spent, which frees you from worrying that the client has a budget and lets you focus on building the best solution to the problem. This is the thinking behind Yazaroo Ventures.
This is where we are winning with design.