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EPISODE 14: The Alternative to Agencies (w/ Designer & Founder Anthony Armendariz)

The Startup Stack
EPISODE 14: The Alternative to Agencies (w/ Designer & Founder Anthony Armendariz)
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Anthony Armendariz is an agency guy — even if, by his own accounting, the agency model is broken. 

So when he was faced with two options, to work in-house as a design lead or return to agency life, and both ideas depressed him, Armendariz created a third. He and his wife started Funsize, a service and design shop that acts as a bridge between in-house and agency design experiences. 

Seven years later the company has grown to more than 25 designers, servicing powerhouse clients like Volvo, Capital One and PayPal.   

He shares more about that journey, this week on the podcast. 

“The biggest thing for us this year was figuring out if we could put our money where our mouth was. How much are we willing to grow, to meet our clients needs?”

Anthony Armendariz

🎙 Highlights Include

  • Design basic: What is service design? What is experience strategy? What is experience research? 
  • What to expect when hiring a design agency to work on an existing product. What to expect when hiring a design agency to work on a new product. 
  • Why legacy brands are often ill-equipped for digital-first design challenges.   
  • What to ask before hiring a designer. Red flags to look out for when hiring a design agency.
  • A survey of the latest design trends & how COVID-19 has affected the way products are designed.

This Week’s Guest

Anthony Armendariz of Funsize

Anthony Armendariz

Founding Partner & Lead Designer @ Funsize

Anthony Armendariz is a founding partner and the head of design at Funsize, a digital design studio based in Austin. He hosts his very own podcast, The Hustle, which is all about design.

The Startup Stack’s Host
This image has an empty alt attribute; its file name is louis-1024x1002.png

Louis Beryl

CEO, Co-Founder of Rocketplace

Rocketplace is a curated marketplace of high quality professional service providers. A 3x founder, investor, and board member, Louis began his tech career as a partner at Andreessen Horowitz. When he’s not working or podcasting, Louis enjoys cooking for his family. His pizza, he’d like you to know, is incredible. 


Full Episode Transcript

[00:00:00] Louis Beryl: [00:00:00] How many designers does it take to change a light bulb? 

Anthony Armendariz: [00:00:04] Hmm. A hundred different perspectives on how to, how to change the light bulb or what kind of light bulb it should be? 

Louis Beryl: [00:00:10] So the designer says, does it have to be a light bulb because I have other ideas. BABOOM! Hello and welcome to The startup Stack, I’m your host Louis Beryl. Designers. They’re a special breed. Sleek, neurotic, obsessive. We wouldn’t have products without them. And yet, so often there are enigmas. For example, Rocketplace has head of design is obsessed with jean cutoffs — shorts that is. Are all designers this way? Enter Anthony Armendarez, a designer turned founder. Anthony’s company Funsize creates design solutions at scale for big established brands like Volvo, PayPal, Groupon and many more. His team of 25 designers embed themselves within a company’s product and design teams effectively creating a bridge between the traditional [00:01:00] agency experience and hiring in-house. It’s a new model and Anthony thinks it’s going to stick. We talked about that, cut off jeans and much more in this week’s podcast. I would really love to know how Funsize came to be. I know you were living in New York and you left New York to go to Austin and you started Funsize. And I’d love to hear about the beginning of that journey. 

Anthony Armendariz: [00:01:25] Well, I’ll, I’ll try not to bore you with the details, but I’ve been a designer for about 23 years. And I’ve spent, um, most of that time being self-employed Funsize, the second agency that I’ve owned. Um, but the rest of it has been a lot of, a lot of independent consulting. So when I moved to Austin, I took a job at Evernote to go in-house for the first time, the first time I’d ever been in an in-house design role at a tech company. I just had a, you know, I think it’s something that like, I was seeing all of my peers and contemporaries like sell their businesses to companies like Twitter and Facebook and go in house. That was really when, [00:02:00] you know, around, you know, 2009, 2010 people really investing in in-house design teams. And I thought, well, okay, I guess that’s what I should do. That’s the next rung on a ladder for me when I got in-house I realized, Oh, I actually learned a lot about how you should build products. That’s different than the old agency model that I was accustomed to. But I also realized that I was an agency person. I went through a lot of depression to figure out like why I was unhappy, but I just realized, okay, love, uh, love agency. I gotta, I gotta get back to doing that. So I went pennant my wife. It was my rock. It’s really awesome. You know, she said, give it six months and if it fails, go get another job. Like, what’s the worst that can happen. You’ve done this before, give us six months. I’ll cover our expenses. And I was like, okay, then let’s do it. So I did that. And to a point where I had, um, the very first employee at Funsize was a guy named Neil Barrett, who is a guy I grew up with. And he was not inexperienced designer. He was a, like a, an apprentice, if you will. Like, he would come over to our house and we would do [00:03:00] we’d work on the kitchen table, but it got to a point where there’s so much work that I was turning down and I couldn’t do it all on my own. So I went to my wife and I said, hey, she was interviewing at other companies cause she was remote working and alone. I said, Hey, look, how about instead of taking that other job, like how about you give it six months with me and let’s see if we can accomplish our dreams. Both. In work and finances by working together. So at the moment where she said she was joining that’s when we registered the company and we had a long list of names, potential names for the company. And she said, well, I’m only going to do it if it’s called Funsize. And so Funsize was the name of the company. 

Louis Beryl: [00:03:37] And tell me at the beginning, it sounded like you were getting work. You were very busy. How are you finding those first clients?

Anthony Armendariz: [00:03:43] Well, I think number one, you know, in the way that I work. Uh, I’ve always approached work with the relationship first perspective,because I know that. The people that are likely to hire you tomorrow are the people you’re working with today. You know, I’ve, I made it a [00:04:00] point. 

Louis Beryl: [00:04:00] That’s a great line. We should all remember.

Anthony Armendariz: [00:04:02] You know, in this community is really small, right. So if you don’t do good work for someone, or if you don’t treat them the right way, whether it’s, it could even be a junior designer that junior designer is going to hire you for a project. Sometime I’ve always just had an ingrained to me to spend a lot of time developing those relationships, constantly talking to people on Linked-In, Twitter, old colleagues. And so I was just really lucky. You know, when I went out on my own, I had a rolodex finding businesses never really been that hard for me because I, I have the relationships that I need previous and now, and I just cultivate them constantly. I think what most people don’t understand is how much time that actually takes. A lot of designers that I know that like, I’m going to start my own business. I don’t think they realize that they will are likely to spend somewhere between 10% and 50% of their actual day doing a relationship development and sales. 

Louis Beryl: [00:04:47] So it sounds like relationships finding new business. That was one of the easier things for you and starting fund size. What were some of the more challenging things? 

Anthony Armendariz: [00:04:55] Uh, some of the more challenging things were like defining our own roles, [00:05:00] as you might imagine, things change when you go from two people to four people, to eight, to 16, to 32, which is like where we’re at now. And you have to find a way to scaffold and you have to find a way to stay connected to what you love doing. But also what the needs of the business are. But the biggest challenge for me has really been like, what am I doing? And what is my wife doing? Natalie made it very clear to me. Like, look, I will go on this journey with you, but I’m not on a management or management track. I’m going to be a designer.

Louis Beryl: [00:05:26] And did you and Natalie have different specialties? 

Anthony Armendariz: [00:05:29] Yeah, Natalie is always, we’ve always had like common product design skill sets, but Natalie’s t-shape is definitely digital design and mine is definitely like UX designer, experience design, or interaction, design, whatever you wanna call it. Nat, like when we were small, that worked out really well, but we had to find a way to keep scaffolding and it’s difficult. Keeping Natalie happy is like mission number one. Uh, the hardest parts for me were honestly coming here terms with my identity. Am I a designer still? Or am I a salesperson? Am I an owner? Am I CEO? Like, what am I [00:06:00] in? How do I define like who, who I am and, and making sure that I’m. Filled. And how would you define that today? I very much much still identify as a designer, but the types of design that I do now are different. It’s like business design, service, design team building, designing, designing operations, and systems for our in-house team, ladders, rubrics, things that designers need to be successful, but I haven’t designed a digital product and at least three or four years. 

Louis Beryl: [00:06:24] So let’s talk a little bit about Funsize specifically. Maybe you could tell us a little bit more about it, the services that you offer. You know, I know that Funsize is known for his design at scale, you know, working with some larger companies you’ve mentioned. Um, I know you’ve worked with companies like Volvo. You know, you really embed yourselves into the design teams there, which is interesting in contrast to what you were saying before, about a lot of the designers, you know, we’re going in house and you’ve created an agency that, that almost does that a little bit. So tell us a little bit more about Funsize today.

Anthony Armendariz: [00:06:57] The way that we described this is that like [00:07:00] we’re a bridge between in-house and agency, because we believe that older agency models definitely were broken a long time ago. They don’t really work for the way like engineers and product teams need, need to work with, with design. And so you, you kind of have to bring your ideas to the table, but be really effective. You really need to be adopting the cultures and methods of the people you’re working with, but I’m getting too far ahead. Uh, we’re a service design and product design agency, we will help companies conceptualize businesses and help them get them to market.

Louis Beryl: [00:07:32] And that’s what you mean by service design?

Anthony Armendariz: [00:07:34] Yeah. Or we will support and iterate on and work with existing teams that have existing product in the market. And then we help those teams like built future. So we’re we do like, very simply we do; experience research, experience strategy, experience design, visual design, with a focus on digital services.

Louis Beryl: [00:07:56] And tell me a little bit more about how, how do you structure the team at [00:08:00] Funsize? Is it based on specialties and you have kind of equal size teams or is it, you know, designer generalist? How do you think about creating the right teams to work with all these large clients?

Anthony Armendariz: [00:08:11] In some ways we have, have it easier than other agencies because. Almost our entire team are designers. So we have like 25 we’re we’re about a 30 person company, but we have 25-ish designers and then a lots of independent consultants that are pretty much part of our family. Yeah. So we have a lot of designers to pick from like, those are competitors, if you will like that do design and dev, usually they’re making their revenue on development. So typically most of their staff would be engineers. So we have a wide range of designers to think about. So we over-index on designing experiences for the people that work with us. There’s certain aspects of this that we think about. Number one, there’s no tried, one tried and true way because all of these engagements are different. Like some of our accounts, we may have seven plus people working on another initiatives might be one person. But even before COVID, but especially now post COVID, we really [00:09:00] don’t want where anyone working alone. So we try to staff things and an increments of whole designers that are working on projects. Plus design leads, which will work behind the scenes to mentor them and augment their skill and help with critique and review and other sort of design rituals and cadences. A design director is usually involved at like 20% capacity. And then you’d have a design manager on top of that at about a 5% capacity to help. Partnering with clients on roadmap, strategy planning, and making sure that the staffing scenario works. It kind of depends on the perspective of like, if we’re, if the mission is like go design this product and then go take it to market. We have a playbook for that. If it’s like augment an existing team, we have a playbook for that, because if we’re augmenting the existing team, we’re plugging in designers or different teams of designers into different PMs. One account might have five different work streams in five different PMs and five different design leads. And so it’s really not at any level consistent. 

Louis Beryl: [00:09:56] And, are the designers on your team when they’re working with [00:10:00] companies? Are they doing small bits of work and then rolling on and off projects? Are they staying with, with a particular company for a very long time? 

Anthony Armendariz: [00:10:08] In the augmented design kind of work that we do with enterprises, they, they are typically on fairly long rotations, which would be like how long up to year I think. And sometimes it could be longer. They might go from being fully engaged, to partially engaged and start mentoring someone else’s taking their place. Yeah. It’s long enough to understand the business, how the business makes money and how to take accountability for design decisions and work at the same capacity than in-house. Designer could, but still in order to maintain long relationships, in that case, we have to rotate because we have to make sure people that are getting the experience that they came to Funsize to get.

Louis Beryl: [00:10:47] Yeah, I get this question all the time. I’ve built several teams, digital products. And hiring designers is a big thing. And I, you know, I’m really proud of the design teams that I’ve been [00:11:00] able to build at my various companies, but, you know, you’ve got a huge amount of experience. Building design teams, hiring designers. You’ve got a team of 25 today, which is enormous. What advice do you have to people out there in hiring designers? I mean, folks are like, Oh, I don’t know. Yeah their work looks good. They seem like a good designer. I mean, you know, how do, how do you really qualify if someone’s going to be a good member of your team?

Anthony Armendariz: [00:11:25] Okay. Uh, unpack that a little bit. I would say number one, advice for designers who start businesses. My advice would be really recognize what you’re about to embark on. Because once you start growing there, you really can’t stop. In most cases, it doesn’t make sense to stay small. In most cases, it makes sense to grow. It’s  usually the easiest thing to do. And if you have a culture you’re proud of, and you want to distribute, like growing is often the easiest way and sometimes the smartest way to do that. I wish I’d known that because. You can need to negotiate with your role changing from designer to manager, et cetera. So, uh, with that [00:12:00] in mind, like point number two is assuming that you’re going to be a manager. Then you got to get ego out of the way you got to hire people that are better than you, or that you think could be better than you, or that you want to be better than you, right? Like you, you got to really bring in people that, that you want to see grow in, especially if you want to retain them for periods of time, because with the industry, the way it is like. You know, some companies, you know, sometimes designers will jump every year. You don’t really want that because if you find those kinds of designers that are gonna leave every year, then you’re constantly turning and burning, right? Find people that’ll stay with you for three, four, five, six, seven years and keep them engaged in growing constantly. If you’re going to build a design agency as a designer, you have to recognize that you, unless you hire someone to manage your design team, you’re not going to be a designer anymore.

MUSIC INTERLUDE [00:12:52] Louis Beryl: [00:12:52] Hey, do you like our show? I do too. If you want to support The Startup, Stack the best way to do that is by subscribing and rating us on Apple [00:13:00] podcast or wherever you listen to us also sent dad jokes. Or if you have them actual good jokes to podcast at Rocketplace dot com, feel free to send us feedback there too. Wanted to ask you a question about if you could give advice to clients. So I imagine, you know, you work with a lot of large companies. They must be thinking. Should I be building a design team in house. Should I be working with an agency like Funsize? What are the things that they should be thinking about when making those decisions? What are the questions that they should be asking when meeting new agencies potentially in order to evaluate whether or not that’s going to be a good fit and meet their goals?

Anthony Armendariz: [00:13:39] Yeah, I think that my personal opinion, but I think it’s what we all believe here at Funsize is that larger companies that are trying to do work at scale. You know, you have like two different kinds of companies, right? You have like the Facebook’s of the world and the Twitters and the Googles who are always hiring. They, they have a [00:14:00] fairly mature or very mature design organization and there’s always more work to do. Then they have the capacity to do, and they are always dealing with certain amount of predictable turn. Those companies, in our opinion, always need a design partner. Some are more successful at recruiting than others. So I kind of guess it depends on the recruiting, but like not every company is a Google or Twitter that can just constantly attract people. Yeah, that’s the other type of company like that is like an a hundred year old company, like one, honestly like a bank or whatever, like has relied on certain ways to get work done. And now they’re like embarking on doing that internally and have a roadmap to say, hire 200 designers over three years. Let’s get real, like, look at how competitive the space is. How long will it take to hire 200 really good qualified designers. Never the answer is never, right? Like the recruiting will happen constantly, right? Because you’ll hire some people then a year or two later, some of those, those, those leaves. So we, we believe that if you’re an enterprise and you think. The answer is we’re going to do this in [00:15:00] house. You’re wrong. Cause like you can’t, you just can’t do it all in house. You can, I guess, you know, in our opinion, it’s not ideal. Like you need ways of like, you know, helping to make the whole thing work. 

Louis Beryl: [00:15:10] And that totally makes sense. Okay. So I’m convinced I’m a, I’m a large enterprise. We don’t have a big in-house design team. We want to work with agencies. How, how should we go about finding the right agency?

Anthony Armendariz: [00:15:24] That was on a desk recovery call today. So like, just to give you an idea, like the kinds of questions we’re asking are more about the right, how is this product team staffed? Who’s the PM your skill level, what’s their experience level? What’s their maturity level. Is there a design lead? Okay. What’s their DNA? What’s their skillset because in those kinds of mode of operation, we’re trying to figure out where they are in their design maturity scale. What will feel like for our company to work with those people? And what are the, the biggest challenges they’re facing? Is it bottom of the pyramid kind of work or is it top of the pyramid? Top of funnel kind of work enterprises should be concerned if agencies [00:16:00] aren’t asking those kinds of questions. What is your org chart? What are your rubrics? What are your design ladders? What’s where are you in the mud on the design maturity scale? Do you have a design language system? Will we be using that? Will we agree? Creating it? Like it’s, those kinds of questions were very different than like, you know, maybe the startups, we try to help them determine if they even want to be in that business. We, we will engage with people and we’ll facilitate conversations to help entrepreneurs go through the process of understanding the scope of what they’re about to embark on and whether or not that’s something they want to commit to. And so, you know, sometimes if it progresses into an MVP, we’ll help them do that, but it’s also a win. If we can convince that a startup founder, they like that they don’t really want to be in that business where they really don’t want to be constantly dealing with these challenges. And so it’s just like completely different conversations that we have. I just think that like where we’re at right now, like most of our stuff is like with these enterprise or high growth teams, we are trying to educate teams that external partners are [00:17:00] critical. And it’s not just about doing the work it’s about helping them create a megaphone, like. We’re not a part of our client’s organization, but we can help promote their company and help them fill those internal roles. We can be a small net, not a vast, we can help them build in, create excitement and do events and do and do things. We can help be a part of their journey. External agencies can sometimes last, I mean, not all the time, but if it’s done right, agencies can last longer than an internal hire. 

Louis Beryl: [00:17:28] When you’re working with clients, meeting clients, what are some of the biggest misconceptions that clients have about what a design agency is and the kind of work you do?

Anthony Armendariz: [00:17:37] This is changing a lot. It was different for us, like in our earlier years, but I think some of the more common misconceptions is that it like does design would be done in a silo. And it would be like in a traditional process and lobbed over, right. It’s impossible to embed and work integrated and stuff like that. And some people have seen that. And so now they’re starting to, you know, [00:18:00] expect that of their, of their vendors while others, like really haven’t seen that work it’s stuff that you cannot communicate in a case study or a portfolio piece. Or even convinced on a phone call, you have to like, see it and feel it it’s softer. Right. And a lot of people are scared of like getting involved in scenarios where they’re paying for design and there’s not enough collaboration. Or the communication isn’t like intertwined. It’s not a synchronous. Does the vendor really understand the business and the problems because it’s true, right? Like a design agency just can’t come in and solve a problem. Right. That the internal stakeholders are the ones with the knowledge. 

Louis Beryl: [00:18:37] Let’s talk about that for a second. Maybe, can you tell us about a project that you’re really proud of that Funsize did. YOu know, and, and what was it that you accomplished and how did the client come to you and were there misconceptions you needed to dispel?

Anthony Armendariz: [00:18:50] Yeah. I mean, since you mentioned Volvo, I’ll give you a Volvo case study because this is something that’s launched and that we can talk about.

Louis Beryl: [00:18:56] Would love to hear.

Anthony Armendariz: [00:18:56] And it also ties everything back to relationships. There’s a gentleman named [00:19:00] Thomas Stovicek, who, uh, we started working with, uh, when he was at OpenTable who worked at the OpenTable and then he left OpenTable. And at the time we were working with Facebook, so we tied some dots. We helped him get connected into Facebook universe. He took a job at Facebook and you know, when he’s at Facebook, he had a good experience with us. So he called us and we worked with his team and Facebook, and then he left Facebook and went to Volvo cars. Right. When Volvo cars were starting to do design in-house. And we’re embarking. And they’re like the first few weeks of having a San Francisco practice and he called us and said, Hey, I, you know, I have, we have really smart engineers and PMs over here, but they have no design. Our PMs are doing mock-ups and Microsoft paint seriously, and we think they need some help. So this was a two week project. 

Louis Beryl: [00:19:42] And can you break down just for a second for some of our listeners, when he says they have no design. You know, our engineers are doing mock-ups give us a, give us 10 seconds on design for dummies. What is it that he means is lacking at the organization and what he needs help with?

Anthony Armendariz: [00:19:58] Oh man. IN the, in the nicest way [00:20:00] possible, like non-designers making design decisions, people that understood like the business and the technical aspects really deeply, but did not have the right training to align stakeholders on the vision for a brand or a product, uh, did not have the experience level to journey to do user research and journey mapping and things like that. Not necessarily that designers saved the day, but like really no design capacity at all. 

Louis Beryl: [00:20:25] And I imagine if you don’t do that, what happens? 

Anthony Armendariz: [00:20:28] I suppose you can launch product and I suppose it can go to market and I suppose it could be successful, but it may not. And it might be fine, but it also may not be as smooth and, uh, or, or as good or getting as collaborative. And I don’t know, like that’s why I think that like engineers, in my opinion, I’m kind of old school. You know, my career started out like doing front end engineering engineers that can designer in an ideal scenario. Cause you know, without engineering, it’s just an idea. This particular team. Just really wasn’t able to get done [00:21:00] what they needed to do. They had done either. They had…

Louis Beryl: [00:21:01] Well tell me a little bit more about the project. 

Anthony Armendariz: [00:21:04] Yeah so the project was care by Volvo. Uh, it’s an alternative to leasing or buying a vehicle. So it’s a car as a service, lots of work to do there because it’s not just product design. It’s about how do you, how do you help people that are in the market for a premium vehicle, decide that they’re going to pay a monthly fee versus buying a vehicle? How do you convince them that they should wait so long to get it? Like, there’s an educational component of this, and there’s also a product component of this, but, uh, you know, this is something that is really critical for their, um, for their company transformation. And so this, you know, you know, we had to start by proving to them. I love this team. So Beck, if you’re listening to this, I’m saying this with a lot of love, but like my first meeting with this guy named Beck the PM was like, Hey, um, we set up our shop in San Francisco cause that’s where the best ah, talent, design talent in the world is at. And my colleague, Mike, my colleague, I could have murdered at the time, but [00:22:00] he said openly, why are you talking to? [Laughing] and, and the reality is it’s freaking competitive. They had job openings for a long time. They couldn’t feel so. We had a lot of trust building to do right to, to prove that like an external design partner. Could be just as good or could it be better than hiring internally? What could you get if you hired an agency, could you tap into the brains of. Many, many people. Could you maintain the work over many, many, many years versus one or two years? Like how could you do that with a very, very small little husband and wife own agency versus like a global consulting company. And, you know, that ultimately ended up into something which has now been a multi-year thing, but I feel like we’re a partner and, you know, we’re invited into their culture, into their annual and quarterly planning in, in Sweden. And they see us as a part of the team. And I think we see them as a part of our team as well.

Louis Beryl: [00:22:57] That’s awesome. So I want to move [00:23:00] a little bit to what, you know, 2020 and what the year’s been like at Funsize. We’ve had some huge things going on. COVID-19, Black Lives Matter, conversations around diversity and inclusion, a Presidential election. I mean, the list goes on, but tell me about the year at fFunsize and where do you see 2021. What’s going to stay the same? What’s going to change? 

Anthony Armendariz: [00:23:23] Uh, honestly, it’s hard to even complain cause just cause it’s been terribly gear for a lot of people though, in my own conversations with agency owners they all pretty much say the same thing. This has been a great year for business.

Louis Beryl: [00:23:35] Yeah, we hear, we hear that from tons of agencies that have been busier than ever. 

Anthony Armendariz: [00:23:39] Yeah. The biggest things for us this year, there was like figuring out if we could put our money where our mouth was, if people were believing in us that we could do these things that we just talked about, how much are we willing to grow, to meet their needs? For those companies that need to hire 20 to 200 designers, like how much can we help actually really [00:24:00] help? How much are we willing to grow to do that? How would that impact our culture? And so, you know, we had a, you know, a big theme for this year was figuring out, okay, what’s better for culture, stay small or get bigger. That was like one big thing that we had to like really wrangle, which, you know, for a husband and wife owned. Business was a really hard thing to like work out. And then the secondary to that is like, okay, well, depending on the direction you go in, like, what do you need to do that? What kinds of, you know, additional people do you need to hire in order to make sure that you have like us like three or four discrete practice areas that you want to have staffed and how can you do that? Right. In order to have like a director at each of those service areas, a principal, a lead, a junior, like to make sure that we’re actually able to. Fully fulfilled those kinds of practice, this desire to have these different practice areas. How are we going to do that? How we, how can we keep our people safe? Because when COVID first started, I mean, I’ll just be really honest. Like day two, we lost a million dollar [00:25:00] contract. And assigned work that we were actively working on, not a pause, a complete cancellation, and then all of our startup work evaporated. Every, every startup that we were working with had to stop spinning. And everyone that we were talking to in pipeline just disappeared. You know, I think we’re in a way we’re lucky because some of the companies we were talking to like really needed to get work done in the meantime, and it enabled us to save jobs at Funsize. I was really nervous about. Jobs at Funsize. I was doing everything that I could to like, make sure that like, we didn’t have to let people go. We’ve never let anyone go. We never want to have to do that. So it, this year has really been about like protecting our, our designers, but still being really thoughtful about their experience because costs are expensive. Like how do we make sure that two people are working together when money’s a concern? And how do we, you know, that this question of growth, this question of like, you know, what would we do if all of our important client [00:26:00] partners, assets to keep growing, to meet their needs. Like it’s been the biggest growth year that we’ve ever had for some companies going from like 15 to 30 in a year is not a lot, but for us, that’s a lot. That was a lot for Natalie and I. 

Louis Beryl: [00:26:14] And are you expecting that same type of growth in 2021? 

Anthony Armendariz: [00:26:19] So there’s, especially where we’re at regionally, right? Like even before COVID like Austin has become a definitely not San Francisco and it’s definitely not Seattle in terms of volume, but it’s right behind Seattle. But now that COVID has happened and people can work anywhere in the world. They want to work like now flip a switch, you got Google, all the big companies here in Austin doing product work, which did not exist nine months ago. You know, for maybe some of those companies didn’t exist at all before then. And I think that the companies here and I think companies in general have maybe learned some lessons, like number one, we should be okay with remote employees. Number one. And then if we’re going to be okay with remote employees, we should also be not makes it a little bit easier to hire [00:27:00] agencies cause they’re usually not going to be remote. And so I think that’s one of the reasons why overall it’s been a great year for agencies because the pandemic kind of solved. One of the problems that all freelancers and small agencies have always had is people hire us based on where our offices are at. And I just don’t think that really matters anymore any more or as, as much because of COVID, you know, like I said earlier, like some companies are pandemic aside are just going to continue to grow, but there are a lot of companies that, you know, their hiring plans might what they thought they were going to do in 2020 and 2021 are a little bit different in terms of budgets, hiring plans. So I think those companies are, are even more reliant on individual freelancers, small agencies, maybe even big agencies. And so I, I do think it will continue to grow that way. I’m hopeful that it will, uh, just like everything else. You don’t want to count your chickens before they hatch, right. It would be too dangerous to assume that it’s going to keep going in this direction. I think a lot of people that I know that run agencies are all, [00:28:00] we’re all kind of solving the same problems. We see where the demand is. A lot of the dollars are coming from in-house teams.

Louis Beryl: [00:28:05] Are there the types of projects changing or they’ve been, you know, this year or are they similar? 

Anthony Armendariz: [00:28:11] For us? They’ve changed. I don’t think it has anything to do with COVID though. I think it has to do with, I didn’t really realize this until recently, but it makes total sense. We were talking to. Someone in the procurement team of one of our clients is that’s a gaming company. And they were like, Oh, I’m really glad that you called me because the last time we touch base was 2017 and you were like 12 people. And yeah, we make decisions on agencies to work with sometimes based on their size. And you know, like that’s a, that’s just a small bit of data, but I think it’s useful. Like sometimes people will make, they, they will kind of segment their vendors based on some of these predetermined scenarios. Like all these companies are too small for us. These are too big, whatever. I think that things that we’ve done, we just think we started to, hopefully, I don’t know. I say this on the most humble way. I think we’ve, we’ve done the work. We proven [00:29:00] that we can holistically serve design leaders and their teams and really mean it and put our money where our mouth is. And I think the word in the brand is spreading and I think people trust us. And so I think more and more companies are coming to us for month by month, quarter to quarter, like with bigger and bigger problems to solve than maybe we had in the past where it was maybe more product design, right. Like, I don’t know what it’s called, but there’s like a diagram that I saw a while back. And it’s like a pyramid. And it’s like, you got at the bottom, you got product design and you have service design, then you have business design, then you have like transformational stuff. So yeah, for our early years, all the work we were doing is at the product design level still important, but in terms of the overall impact of the business at the bottom of the pyramid. So we’re seeing that, like we’re seeing the the initiatives getting higher and higher up on their importance level too at large. 

Louis Beryl: [00:29:49] Yeah. And that’s awesome. Final question. If you could go back and give yourself advice, you know, as you started the Funsize journey, what would be the advice that [00:30:00] you give to yourself as an entrepreneur several years ago? What would be the advice you give to the other entrepreneurs out there thinking about starting agencies.

Anthony Armendariz: [00:30:09] Oh, let’s see. Uh, number one, outsource accounting and finance on day one. 

Louis Beryl: [00:30:14] Yeah go to rocketplace.com you can find outsourced accounting and finance. 

Anthony Armendariz: [00:30:18] Yeah, you just. Unless you want to be doing that work and not designing you, you better outsource that. Yeah. That’s, that’s important in the early year earlier, you can start a relationship with someone, the more they know about what you’ve done and how you’re growing, the better they can advise you and on decisions you need to make to grow. That’s one number two, like to my earlier point, I would really try. To have some clarity on what your goal is. Are you setting this company up to be acquired or are you setting something up to never be acquired that might change year to year and that’s okay. But have a perspective because that will drive decisions like, uh, when people approach you with acquisitions and all that kind of stuff, whether you have bringing other partners, like that’s an [00:31:00] important thing to think about for us. We’re a family business that never wants to sell we’re aggressively independents. We make decisions with that. An exit strategy is me dying. That’s our exit strategy, me, me or Natalie dying. 

Louis Beryl: [00:31:11] My co-founder at, and I’ve been used to joke that our only exit is death.

Anthony Armendariz: [00:31:15] Yeah. I am never going sell this business to anyone for any amount of money because no amount of money is worth having a boss.

Louis Beryl: [00:31:22] Well, um, I tell entrepreneurs today. I was like, the problem with selling your company is then you’re like, then you got to go find a new job. God, I got a job. I like, I don’t want to have to find a new job. 

Anthony Armendariz: [00:31:32] And it’s okay if that changes, but that will drive the decisions you make and who you work with. I think a lot of agencies are also so like having to evolve by investing in startups and all those things impact the, the structure of your small business and how you do do things both in client services or in ventures or whatever. And I think that the third one, which is, I talked a little bit about this earlier, is that. You have to either really decide to be smaller or grow. And the [00:32:00] decision that you make on that front will ultimately impact what you do. So that’s why I think it’s just important to understand that if you’re going to create an agency and you’re going to take on work, it likely means. And even if it’s slow some growth and you will eventually, you know, may be, you will eventually be me who is no longer designing, but you are really critical to growing designers. And that that’s an important job design job too. And some people can, you know, stay in the business and design forever, like my partner, Natalie, but you have to make those decisions. I guess if there’s a fourth thing, I would say, if you’re not, if you’re not a sales person, and if you don’t have a rolodex, then you either need to wait to start your business until you do have a rolodex or until you’re willing to spend 50% of your time doing sales, you know, you need to have partners like Rocketplace and other places that can help you augment the inbound. Like when you start a business unique, this becomes a machine.

Louis Beryl: [00:32:52] We hear this all the time. One of the reasons we started Rocketplace because discovery is a huge problem for both sides. 

Anthony Armendariz: [00:32:58] You start a machine, [00:33:00] you’re going to have to feed that machine forever. And that machine gets hungry and hungry every year. You really have to think about that because it’s too idealistic to think, Oh, I’m just going to be a designer. I’m just going to design and it’s going to be as simple as that. That’s what we thought.

Louis Beryl: [00:33:12] Well, on that note, this has been great, Anthony, thank you so much for all the time today. Really appreciate the insight, hearing more about Funsize. It was really fun. Thank you. 

Anthony Armendariz: [00:33:21] Thanks for having me.

Louis Beryl: [00:33:22] For more on our conversation today. Visit www.rocketplace.com/podcast. We upload a new episode every week, so if you haven’t yet make sure to subscribe to The Startup Stack in Apple Podcasts, Spotify, or wherever you listen to them. Thanks again for joining us. See you next week. 

Announcer: [00:33:41] The Startup Stack written and edited by Hannah Levy, produced by Leah Jackson.

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