Business Philosophy

Thoughts on Conducting Business in an Ethical Way

Shadow Element

Pipsqueak has resisted the temptation to grow larger as a company. We’re small and we like it that way. It enables us to give our personal attention to each project that runs through our shop. When you hire Pipsqueak, you’re primarily hiring the talents of its two principals. Most of the work we do ourselves—so if you like the work you see here on our site, you can be assured that the same people are going to be working on your project. However, we do have a loose association with other creative freelancers whose work we admire. We bring these people onto individual projects on an “as needed” basis, which allows us to quickly scale up in response to large projects and to hire people who have skills that we don’t.

Pipsqueak is noted for products which are effectively targeted to their audience and for an unstinting attention to detail. We’re project oriented and self-directed. While we do plenty of digital production work following a client’s precise instructions, we shine when given the freedom to craft effective solutions to particular communication problems. If we’re brought in early on a project, we can often save a considerable amount of time and money by using our design process and cognitive approach to quickly focus on an optimum solution. Once focused, we’re poised to execute.

True Costs of an In-house Project

We work on projects as independent contractors. Often, the charges of independent contractors are compared against the costs of doing a project in-house. There are a lot of hidden charges to work performed in-house which need to be included in such an analysis in order to create an accurate financial comparison.

There are a lot of hidden charges to work performed in-house.

Let’s say you decide to do a project in-house. First, there are the human resource costs in attracting and hiring people with an appropriate skill set, if you can find them. Obviously, these employees need to be paid a salary. Less obvious, perhaps, is the amount that health insurance, Worker’s Compensation Insurance, and payroll taxes add—it’s estimated that these costs can swell a base salary by an additional third. These employees need heat, light, office space, and furniture. They need training—lots of it. They need computers on which to work. Those computers need lots of software, some of which is quite expensive (consider the cost and time required to obtain and organize a font collection or stock photo library). And don’t forget the computer hardware itself: back up drives, uninterruptible power supplies, network hubs, routers, internet access, and robust file servers. All of which needs to be constantly maintained and occasionally replaced or upgraded. And all of which requires IT support. Those employees also need other internal support systems—telephone, copier, fax, and other supplies. And then they need vacation time, sick time, personal leaves. Most importantly, you continue to pay them whether you’re using their services or not. So you have to have projects for them all the time. With employees, it’s hard to scale down and it’s hard to scale up.

By contrast, we pay all these expenses ourselves. When you pay our hourly rate or our project price, you don’t have to pay for our equipment, vacations, training, and sick time. We only get paid by you when we’re working on your project.

When you pay our hourly rate, you’re getting more than just our expertise.

How Much Will a Project Cost?

We’d also like to address another issue. New media projects, by their nature, are usually not clearly defined at the outset. A website, for example, evolves during its creation. No one will know at the beginning of a project how many original illustrations will be required for the site, or how many photographs, or usually even how many pages. But we are often asked, “How much will it cost?” We’re like builders asked to bid on a house without seeing the blueprints.

How can a builder bid on constructing a house without seeing the blueprints?

Now a builder can make a bid without blueprints. If everything is kept in her control—choice of site, materials, floor plans, appliances, and the like—she can keep the costs down and, after adding a profit and contingency element to her bid, be reasonably confident of delivering a project for a set cost. On the other hand, if the home buyer decides after the bid that he wants granite countertops, copper pipes, and bathrooms with Jacuzzis, that’s going to have a marked impact on the price.

A fixed bid without detailed specs in a home construction project would reverse the appropriate incentives.

A fixed bid without detailed specs in a home construction project would reverse the appropriate incentives. The builder’s incentive would be to use the most inexpensive materials possible and to cut all corners to bring the project in cheaply. The home owner’s incentive would be to try to jack up the specifications as much as possible knowing that increasing the quality won’t add to the overall cost. This is not a recipe to build either a good house, or a harmonious relationship between buyer and builder.

To continue the analogy, the building of custom homes is usually broken into at least two distinct phases. During the first, the home buyer discusses his budget and requirements, and detailed plans are drawn up and agreed upon. During the second phase, fixed bids are made based upon the plans. The first phase has to done before the bids for the second phase can be made.

Our Billing and Design Preference

Our preferred method of working is by providing a rough “guesstimate” and then actually bill based upon time and materials. This way, we don’t assume the risk of a project taking longer than we expected and our clients don’t have to pay a contingency fee. It also puts the incentives where they belong—we don’t have an incentive to cut needed quality, and our clients don’t have an incentive to add needless complexity.

Billing on time and materials takes a great deal of trust between contractor and client.

But billing on time and materials takes a great deal of trust between contractor and client. It only works if we’re scrupulously honest and, no matter how honest we say we are on our website, we recognize the necessary degree of trust only comes through experience with us and the way we work.

One of the ways we’ve tried to bridge the trust barrier is to create project websites which catalog our ongoing work on each project and provides continual updates of our bills. That way our client can see precisely where we are in a project at any time—what we’ve accomplished and how much we’ve charged for it. As soon as an element or a design has been developed, our client can approve it or easily request a change in direction.

We also like a continuing creative process which allows the design and execution steps to be performed simultaneously rather than segregating them into discrete ordered phases. This approach allows for greater flexibility and results in better projects, primarily because it allows design inspiration (which often occurs during the execution of elements) to become incorporated into the project.

Fixed Bid Projects

Fixed bids require that the project is fully defined first.

Some clients have internal constraints which require fixed bids from outside contractors. In those cases, we break projects up into two formal phases—a design phase and a production phase. We bid each separately. This can be a cumbersome way to work which imposes an artificial barrier between design and production. It also makes it difficult to accommodate changes in the production stage. In our experience, those changes tend to be inevitable and they impact the cost of projects. But it’s a reasonable solution to the problem: first carefully define the project and then build it.

Tell Us Your Budget!

Building a $1,000,000 house is a different project than building a $300,000 house.

Clients are often wary about revealing their budgets for a project. We’d encourage this information to be shared early during the planning stages, however. It’s like the three bedroom house analogy. If you want to build a million dollar house, it’s a different project than if you want to build a $300,000 house. It’s awfully hard for the architect to guess which one you want. If we know what your budget is, and it’s a significant constraint, we can advise you more effectively about where money can be saved and which portions of the project can be safely left to a later date. If you have a large budget and you tell us (what a happy problem!), we can suggest intelligent ways of spending that money to increase the effectiveness of the final product.

Design Work for Free?

We’d like to mention one final point. Some people try to get design work done for free on a project by issuing a request for proposal which requires the bidder to submit project designs as part of their bid. It usually ends up costing more and can undermine the whole point of doing the project in the first place. It’s like asking an architect to draw up the plans for a custom house for free. Assuming you can talk an architect into doing this at all, how much energy and thought do you think he will put into understanding your needs?

In a new media project, how much energy will be put into understanding both the client’s desires and the audience’s needs? We’ve seen projects done in this manner and they nearly always fail—they either run wildly over budget as the client’s real needs filter into the design process (running up endless change orders) or they get built but, since they weren’t carefully designed to begin with, they fail in their purpose.

So be prepared to pay for the design phase of a project. It’s a false economy to think it can be had for free.

Some people try to get design work done for free on a project… It usually ends up costing more and can undermine the whole point of doing the project in the first place.

Good design pays for itself. The whole point of any project is to be responsive to the needs of the client and its intended audience. And that just doesn’t happen without thoughtful design.