April 24. 2019 | A conversation with Pinaki Kathiari, CEO, Local Wisdom
In recent years and especially in recent months, we have been under pressure to produce more rapid design outcomes. Whether it is for a startup looking to quickly make progress on its MVP, a technology company requesting concept screens for investors or marketing, or a larger firm needing to inform a design with user insights, we are witnessing a demand for significantly shorter project timeframes.
One approach we are seeing in the marketplace is for agencies to package services into “design service products” that can be launched quickly to respond to client demands.
The advantages of these design products are undeniable:
Faster response during the sales cycle
Faster project initiation because processes and protocols are already in place
But the downside should not be underestimated:
We need volume in order to make a business thrive on small engagements.
One-size-fits-all is less than perfect for some engagements.
Short timeframe engagements can’t address truly complex software application requirements.
Will we get bored by always doing the same thing? We are designers after all!
At UXL, we are proud to offer a flexible approach to our design engagements. But is productizing a more cookie-cutter approach the way to go for the agency of the future? Is productizing services a compelling and sustainable business model? How is it working so far?
A product is easier to sell than a service because the parameters are clear.
Productized service lets you create a business that you can replicate, teach other people, and grow.
If your service is productized, it makes your business worth more, easier to sell, and easier to move on from as a business owner.
Productizing means you have a set process, timeline, and niching.
Stay true to what you're offering. There might be some ability to customize, but you want to stick to your process.
If you are trying to do too many different things, you will dilute your message and your brand.
Keep the magic and the spark in the evolution of your product and your business. Don't get stagnant.
Don't make changes too quickly. Use data over time to inform process and product changes.
As design services become commoditized, figure out how to compete and sell better while still offering a quality product.
Julie Fortier: Ed and I have been thinking a lot lately about productizing our offerings. Pinaki, you seem to have gone in that direction with your business. We would love to hear about your experiences and talk about the pros and cons.
We have put together three different “Accelerators.” The longest one is a 3-week UX Design Foundation. Another of our product offerings is a diagnostic of your product in a 1-week Heuristic Evaluation. The last offering is a 2-day UI Concept Workshop to demonstrate the value proposition through illustrations of a professional UI to share with investors, prospective users, or others interested in the product.
I feel like everyone wants everything a little bit faster. Rapid is the word of the moment. I wonder, are these sales tools or are these actual products that we become experts at, and that we replicate, so this becomes our business model? How many of these short-term projects would we have to line up to have a business?
We like the idea of these product offerings, but at the same time, we’re asking ourselves, “Where are we heading? Is this the value that we really want to bring?”
Ed Guttman: When we've talked before, Pinaki, you've positioned this and other things like it as ultimately more about marketing and lead generation. The real purpose is to pave the way for a much more long-term, high-quality, in-depth engagement with clients. I have to assert that if it's not that, then all is lost.
There are a lot of simple apps out there that maybe you can design fast and it will be good enough. But we're in the complexity business here. We're dealing with really sophisticated software applications and complicated workflows. You're just not going to figure that out in 2 days, a week, or a month. It's just not happening.
Pinaki Kathiari: I think you are right. These are all great points.
Here’s the way this came about to me in my world. I have been in the service world all of my 19-year career. About five years ago, I launched my first SaaS product on the Salesforce ecosystem in a licensing model.
That was the first time that I sold something other than a service. As I was making the sale, I realized that it was just so much easier.
In the services world, your profit curve is very much related to the amount of business you bring in versus the number of people you have because people are your number one expense.
A client says, "Can you add this into the mix?" and you are like, "Yes, sure" because you want to keep the client happy. You have a long-term engagement, but on the other hand, you have to balance that work with the people. That's where things get tricky. You sell $50,000 worth of services. You then have to do $50,000 worth of work and pray that it's not $75,000 or $100,000 worth of effort in reality.
On the product side, if the customer has an ask that we simply can’t do, we get to say, “No, we can't do it. We'll put that feature on a list, and when it's available, we'll let you know.”
This really simplifies the sales process. It’s a yes or no scenario. And that's where this started to take shape in my mind. Then I read a book called Built to Sell that was recommended by my COO. The book comes at it from a business perspective, not just as a sales proposition. It talks about how to decide what kind of business we really want.
As business owners, we start out by doing the work and taking the hits because we see this future in it. Eventually, we start hiring more people. We're still doing the work, but looking to move toward using more of our time to manage the company. Doing both at the same time is a tough, tough thing. It's hard to work “on” the business and “in” the business at the same time. You want to create a business that you can replicate, teach other people, grow. Eventually, you want to get out of the actual production work, but keep the Julie and Ed magic sprinkled on everything. It’s still the UXL way of doing things. That's where I started to come up with this idea.
Built to Sell talks about it in the context of selling your business. When you’re in the service business and don't have a way of productizing it, it's very difficult to sell your business. If you do sell your business, it's not going to be worth as much and you'll be indebted to working with the buyer for a period of time to make sure everything runs properly. If you could create your services around a productized model, Built to Sell says that makes your business worth more, easier to sell, and easier to extricate yourself from as the business owner.
That’s the why. The next question is the what. As you were explaining in the product offerings that you created, there's a set process, a timeline, and there can be specific niching in what you offer or who you offer it to. I feel like productizing is a combination of those three things. How do you take the best of what you've done, turn it to a product, and sell it?
What they postulated in the book is that it's an all-or-nothing scenario. I'm not sure if that's true and I'm not trying to go that way myself at this very moment. He essentially says that you pick your productized framework and run with it. You don't do anything else, because if you mix services and productized services, it dilutes the brand within the customers' eyes. You're back to the square one where if you're not a product or service, then you're just a service, and then people come back to you and say, "Can you just add this? Can you change this? Can you bend it to the way I want it?" You may have a really tight and perfect process that you know will be successful, but then through other forces like client needs and wants, you change that framework and deliver something that could have been stronger.
Ed: I wonder, can any service be productized? I think the creative services business is historically and inherently bespoke. Now, as soon as I use the word bespoke, it makes me think about tailoring. You can have a custom suit made, and that would be considered bespoke, but there are formulas by which the tailor will price it. The tailor breaks it down to choices like fabric and level of quality. So this implies that as long as you can break down the services, it can be productized. But maybe this example is too simplistic.
Pinaki: I think it makes a lot of sense. You can add customizations to it and select different fabrics, but there is a systematic way that it is priced out so that you are not questioning that tailor. You might, but the average person figures, "This person knows what they're doing more so than I do, so I'm going to trust them to do that." The reason why we trust that tailor is because making suits is all that tailor does.
Take a restaurant…there are certain things that are processed out and standard, but they will cook different, marvelous and creative creations in that same kitchen.
I think we can have both the bespoke type of service solution while still productizing and creating it within a certain standard. There is something to say about standing our ground when someone wants to tweak and change.
Julie: The example of the tailor is very potent to me because, you're right, we don't question the tailor because we don't know how to do what they do. That's it. A bit of our problem is that people think that they know how to do what we do.
Ed: The advent of design thinking is promoting that idea.
Julie: We wouldn’t go to a tailor and say, "You don't need to do that." We might say, “I need the suit today," and he will say, "I can’t do that." Somehow we feel the pressure to say yes because maybe there are tailors in our industry that are able to do it faster by cutting corners and we’re not willing to do that.
The tailor brought to life to me the idea that no matter what, there is a process. You're making a suit. You're doing it probably one, two, or three different ways depending on the tailor. Yes, there's some customization that happens along the way.
In our case, user research is part of our process. We can do it in different ways, but we definitely do it. It's not something we skip. We can do it faster by doing just a few interviews that you schedule for us, or we can do contextual inquiry and that might be a little longer, but that's up to you. You can choose how we do it but not if we do it. Maybe it's all about the positioning. We shouldn’t say we prefer to do user research, but if that doesn't fit in the budget, we can skip it. That is sometimes what happens because our clients are like, “Do we really need it? We can give you a BA or this guy who has been on the trading floor for 20 years. He knows exactly what these guys want, right?”
Maybe that's the thought about how to approach that customization. The menu of choices is not about everything. The menu is about the elements of the process in the order that is prescribed by what we feel is best for the product. I don't know. What do you think about that?
Ed: It sounds good in theory. The question is whether it works in reality. If we were to say, “Okay, from now on, UXL specializes in reframing mature software applications for the mobile workplace.” Then we build a process formula around that. In order to do that, this is the kind of research we have to do, this is the amount of time we need to design it, and it always works this way. Just by framing it as a mature enterprise software product, we can make some assumptions about the number of workflows and screens and states in those screens so that we don't have to get into this whole thing where it's like, "Are there 20 or are there 50? How complex is it?” We already said it’s complex. That's the offering. We can break it down and get it sold faster. I'm just convincing myself that this is even possible.
Pinaki: You're selling me. I'm like, "This is going to be awesome.” There are probably people reading this that would be like, "That's perfect."
Ed: Does that even sound possible? Does that sound true, Julie? If it does, by the way, how do you keep it from being boring?
Julie: That's the second part of my question. I'm wondering if that's something we want to do. I take your point, Pinaki, that you can make these processes reproducible, and then you can train people to do them for you. That's great, but then do you learn anything? Do you continue to grow and evolve? Or do you become stuck as a one-trick pony? "This is what I do. I make logos."
Pinaki: I make logos. The best logos for wrestlers that you've ever seen.
Seriously, it's a valid question. How do you keep it fun? I think that's part of the magic that you have to bring into the mix. In three weeks, I'm going to do a workshop on communication strategy design, but it's going to involve people creating and throwing paper airplanes in the room. There's a way to put fun into the actual process, and I think it's necessary, and you're going to do this too.
If you think about any product, it never stays stagnant because there is always customer feedback, like, "Hey, it would be great if it could do this.” You collect that information and say, "Alright, this is a customer need that keeps coming up. How do we put it into the product or add a new product or start another business?” There's useful data that I'm getting out of it that I could now put into something else.
I am not changing up my product on the fly all the time. Another pro for productizing and having the discipline to stick to the process is, if you think of your process as an experiment that's constantly going on, then you want to continuously test multiple times and run that experiment multiple times in the same way in order to test its validity. But if you're changing this little portion or that little portion, you really can't then say that this same way works every time. There's something to be said about being able to methodically test your process to see where it gets strained. Does that make sense?
Julie: Yes. What I took from this is, your product doesn't stay stagnant. It’s going to evolve over time but carefully because you want to be methodical about how you're testing. You’re not making changes on the fly. Also, it may feed into something else…new versions, new products, or other offerings. Maybe you get a spark like, “I really want to get into another industry,” or “develop my own product.” We do see a lot of different clients with a lot of different ideas and products that get us energized about the type of work that we'd like to do in the future. I like how you said that's part of the magic.
Can you tell us about the paper airplanes? What are you doing in your workshop?
Pinaki: I'm trying something totally new. In this workshop, I'm almost productizing a framework for creating a communication strategy for any type of communication department. In the first part of the exercise, we’ll walk through defining a problem and audience. Everyone will write that down on this big sheet of paper that they’ll then fold into paper airplanes and fly. Everyone will randomly pick up an airplane, and then work on the next phase of the process for that problem and audience. We then fold it up, fly it again, pick up random airplanes, and then work on the final phase. At the end, the original person gets theirs back. I could have just taught the whole thing step by step, but I I wanted to add a level of fun, interest, and mystery by introducing randomness into the equation.
Julie: That's adding to your brand, right? You're adding to the excitement.
Pinaki: Yes, exactly. There is something about my Pinaki brand that's adding this element of spontaneity or randomness. I'm thinking of different ways to add randomness into the equation to help me shift and think in a different way. It works.
We were talking a little bit earlier about productizing…there are tools like Canva that give you a whole set of design templates. Of course, they're all templated and you can't get crazy creative on it, but that type of competition is coming at us regardless. I think sooner or later, this is going to seep into all different facets of what we do. Productizing is a way to start inching toward that. If you create a really tight and interesting productized service, you can see how you could totally commoditize that and make it into a digital form, if you want to go that way. To get the algorithm, first, get it tested then automate.
Ed: For those of us who have been or about to be disrupted, commoditization is a very frightening and bad word. What you're essentially advocating is getting out in front and being the commoditizer. I get it, there's a part of me that's also like viscerally repulsed, because the other thing that commoditization tends to equal conceptually is a lowering of quality and a lowering of personality, let's say, or personalization. One has to make a decision, a) whether they think that it’s true; and b) if they think it's true, do they want to be the harbinger of that?
Pinaki: Yes, I think it it is true, and I don't want to be the harbinger of that, but I do believe that it's coming and the only way to change the game is to play in the game. Let's see how we can make a commoditized productized service while still making it fun, interesting, and creative. I think there's a way. I haven't found it. We’ve only actually started the process of talking through that and working that out. It's going to be a little bit of a long road for us, but it is one of the big initiatives for us this year.
Ed: If I am saying and thinking that by definition those 50 logos that are designed in a week all suck, that if I want to play in that game, I need to find a way to make it still happen, still be commoditized but not suck.
Pinaki: Yes. Maybe it's one logo and two weeks that is awesome, but that's your thing. I think that's what it is. I think the commoditization business has been run by people who are just trying to say, “How can I get the most money out of the littlest thing? How can I go after this specific market?” I think we have to define what this niching is. What is the market that you want to play in? What is the product that you want to offer? What's that special thing?
I want to say, “Yes, we have a process that is super-creative and it's super-efficient at the same time. We could get you things faster and cheaper than other people, but I am not going to lower my quality or lower my standards for that.” Part of that sales process and part of that offering is saying that, “this is the way it's going to happen. You could have it this way. Or you could not have it this way. If not, it's cool. We can go our separate ways.” Because there is enough work and enough people out there. That's the idea behind it. Most commoditization has not been good and has been cheapening the bespoke nature of what we do, but I've seen some elements where it has turned out really well. Even the tailor example…I've been to Second Button, which I think was a startup that came out of New York. They were productizing the tailoring business. I've gotten a few shirts from them that I still wear. I think it is possible.
Julie: Any final words of wisdom for us as we close this conversation, Pinaki?
Pinaki: A few words on customization or how can we remain flexible in a process. Take the example of a building. We want it to be able to sway with heavy winds, but at the same time, we can't make it sway so much that it's going to start cracking. We want to make it flexible in a way that has certain confines so that it doesn't break.
As for the team, in a football game, when the ball is hiked, everyone knows what's going to happen. When one person doesn't or is unsure, that's when the play fails. It's a way to create a tighter team. It's a way to scale. Once you have a process and a framework, it scales much easier, and you're able to separate sales and product production. Salespeople are really good at selling and production people are really good at doing production. Just let the experts do their job. Being able to articulate this to both is key.
And a quick word on framework vs. process. Framework is a branded thing. It's like saying that this is the UXL method of taking antiquated web app software into a mobile development framework. It's creating it in your own way like Edward Tufte's method of doing data visualization. The framework is branding or naming what you do.
Julie: We have a lot to think about!
Château Miraval Côtes de Provence Rosé
“With the nose, it has macerated wild strawberries, confectionary sugars, and strawberry or raspberry PEZ, like the candy. In taste, the varietals it’s made of—grenache, etc.—make it slightly acidic on the palate. It’s very pretty on the olfactories—rose petals and confectionary sugar—but a little rougher on the palate. But it’s a very serious wine.” – Restaurateur Joe Bastianich for Vanity Fair
"Excellent, actually." – Julie Fortier
Basil Hayden's Dark Rye
“Deep, rich amber with ruby undertones. Oaky notes balanced with dark berries and molasses. Complex blend of caramel, dried fruit, and oak with back notes of spice and a rounded mouth feel. Lingering dried fruit with a hint of sweetness and rye spice.” – Basil Hayden
“It feels good.” – Pinaki Kathiari
About Pinaki Kathiari, CEO, Local Wisdom
With this level of expertise, Kathiari has taken the reins and is positioning Local Wisdom as a platform for people passionate about design and technology to infinitely create services and products. As co-founder of Resource Hero, he has created a 5-star-rated Salesforce app aimed at helping small and large companies make the most pivotal business decisions around profitability and employee workload. As a natural disruptor and innovative mind, he has created the 7 Do’s and Don’ts of Co-Creation, a top-rated, mind-bending workshop and go-to model at conferences around the globe.
At close to two decades of experience working with global Fortune companies, conglomerate interactive agencies, and startups, Kathiari has mastered skills in audience awareness and employee engagement to boost brand reputation, sales, productivity, and quality. As a force in digital culture, Kathiari is very much driven by his ability to harness the collective wisdom in a corporation.
This newly minted CEO and international speaker is revolutionizing how women are represented in the world of business and technology, and is reshaping his world to reflect inclusion across the board. His genius “Paper Airplane” demonstration is illuminating conferences around the globe and single-handedly blowing apart major misconceptions about human behavior. This kind of CEO is rare!
When he’s not doing all that, Kathiari enjoys spending time with his lovely wife and two children, fitness, being a gamer, listening to audiobooks, and honing his dj’ing skills.
About UXL Inc. | User Experience Lab
UXL solves complex user interface and information problems. We specialize in strategic design of data-rich, process-oriented applications across platforms and devices. Since 2005, our diverse clients rely on us to hone their vision and design better user experiences. Our expertise is especially deep in financial services, healthcare, and insurance, and runs across the product design lifecycle. From research and requirements to strategy, design, and validation, we work flexibly and collaboratively with our client teams onsite or in our own design studios based in NYC and Westchester. Learn more: uxlinc.com