Design agencies and creative studios are increasingly developing their own digital products and services – instead of just creating them for clients – to feed a voracious app market. Here you can learn from the best advice from those already making a success at it, including ustwo, MPC and Strange Thoughts.

ustwo is one of the most successful examples of a creative companies creating their own commercial digital products by engineering a startup culture within their ranks, having recently produced the million-selling game Monument Valley (below).

According to MD of ustwo, Scott Ewings, that market is currently the hottest place to be.  

“People who have created digital products, the people who have got scars, they’re the most in-demand talent in the world right now,” he says. “Banks are after them, retailers are after them, startups are after them; they’re starting their own companies. The people who have got those kind of skills are massively in demand.”

The ustwo UK studio has over 100 people occupying three floors of The Tea Building in London’s Shoreditch, as well as sizeable satellite studios in New York and Malmö - over 200 personnel in all. As well as its game products, including Whale Trail and Monument Valley, it delivers work for corporate giants including Barclays and Channel 4. Scott, who has previously worked for the likes of Fjord (leading up to its sale to Accenture) and Vodafone, says the company has really been creating products all along.

“It’s always been about the craft and beautiful execution,” he says. “Until very recently the journey was from UI on small screens to a more broader UX concepts for all things digital. So it’s not been a huge leap for us to move into product. We’ve been doing experimental work for a number of years. It’s just got pointy and above the line now, a lot more.”

He continues: “The difference between a product focus and a pure UX focus has been the concept of team, assembling a bunch of passionate believers until it hits market and beyond. We’ve been experimenting with that at ustwo, getting things out there, iterating them; if it doesn’t work pull it back, if it does work, accelerate it, react to the market. That’s something we’ve done in a 'fail-forward' experimentation way for quite a few years now. I think our focus right now is to accelerate that, because that’s what our clients are asking us for.”

Monument Valley

“A lot of the companies we work for are big corporates,” he explains. “They are big, matrixed organisations that need and want to innovate. Most of the innovation is taking place around digital services, digital products. That also drives organisational change on their side. It’s all ‘how do we get a piece of that startup action where we get products to market really quickly?’ They’re as interested in launching brilliant products as we are.”

That product strategy is multifaceted. “Going into 2014, we deliberately set our sights lower on our profit margins so that we could do more venture-orientated activity this year and beyond,” says Scott. “We are pushing very hard now that we are prepared to take some amount or risk. Not just to recoup the money – we’re commercially orientated of course – but we’re just as interested in what that does for the team.”

Ustwo is different from a traditional venture firm, however. “We exchange our time and talent for equity in startups for interesting new products that we feel passionate about,” Scott explains.  “We’re essentially diverting core talent onto that product. Products that we feel are going to make a difference, that are going to disrupt a market, going to solve a big problem or solve multiple little problems.”

Scott said that a digital product strategy requires a culture where you have people who have loads of ideas.

“If you’re in design, you know you have no shortage of that, but you also provide an environment where it’s also important to bring one forward,” he says. “We rotate people on this thing called invent time. For four weeks they’ll get to work on a product experiment. That may or may not turn into something. It’s a way of keeping people fresh, but we also have a backlog of ideas that we run through.”

Concept drawings from Monument Valley

Ustwo also has a scheme – Scott calls it Ventures – whereby if someone internal is passionate about a venture idea they’ll be provided with a panel and a way of pitching that idea in.

“We may or may not reward that with money, just like we would do with someone approaching us from outside,” he explains. “I think people’s ambitions are as important as the skills they have.”

Underpinning all ustwo’s initiatives is the 'sharing pot', where profits are regularly shared to everybody in ustwo, regardless of which studio they’re in. “It just means that everyone one is as interested in everything else,” Scott says. “It’s very much about the family.”

Scott  observes that if you are a client/service-oriented business, you have to make choices all the time based on pipeline, on what you work on.

“We’ve got some very loose criteria for our acceleration into product,” he explains.  “Does it change things for the better somehow? Our vision essentially is that we want to work on products, services and with companies that genuinely make a difference to the world.”

According to Scott, the games studio, with a team or around eight, is essentially the most mature ustwo venture.

“For a good number of years now we have run Games as pure investment,” he explains. “It was setup as a creative-first vehicle. They generate their own ideas and work through their own gating process to greenlight things. We wanted to prove that you could take games out into the marketplace that were about quality and creativity and craft and beauty, as opposed to the more commercial ventures, that are almost designed to feed an addiction.

“Our hypothesis from a business perspective was that if we carried on with that focus, the money would follow. Monument Valley has proved that in spades to us. It was our first big proof point, that’s why we’re delighted that it paid off.

 “Suddenly the door is not just opening for our games team, but it’s also opening for the other areas of the business. We were approached by a super-huge corporate business a few weeks ago, which had deliberately targeted us because it was interested in what we had done with Monument Valley. That I think is a very interesting place to be.”

Helping hands

It’s not just larger agencies that can produce their own digital products. Bristol-based Strange Thoughts is a creative agency and has also been developing beautiful and quirkyprojects. Among these is ChallengeOff, a picture challenge duel platform where players try to outdo each other with images that are judged by other players, and Homer, a mind-controlled beer-pouring robot.

“As an agency we love building campaigns and interactive products for clients,” says MD Seth Jackson. “However, there is often a feeling that a single use campaign, activation or product represents a piece of untapped potential. Creatively it is often frustrating to see such a short life cycle. Commercially, the management team are strong believers in building tangible value in the business over and beyond our client list and reputation.

“Since the creation of the business, we have worked with inventors, creative technologists and start-ups and utilised their talent for brand campaigns.  The move into developing our own products and supporting early stage start-ups is a challenging but rewarding next step.”

Seth says the most challenging aspect is being brave enough to assign the budget to speculative R&D and devoting the time to working with the start-ups.

“There is no doubt it is a gamble, but one which we believe is worth taking. The government support for this kind of leap has also helped us mitigate some of the risk.”

Such support includes the R&D Tax Credit and the West of England LEP match funding, but Seth also cites various TSB funds, such as IC tomorrow and Creative Catapult  that are helping.

Nor are even the most quirky products just a fun punt, as Seth explains. “It puts us in a position where we can offer more cost-efficient campaigns for clients, as we can build on our own technology rather than starting from scratch each time.”

MPC builds apps for Cannes

Prominent VFX firm MPC has also been busy creating products from its technology, drawing on talent from its effects, digital and interactive teams in London and New York. Popular apps include Cannesappé (above), the 'official unofficial' app for the annual Cannes Advertising festival.

The latest MPC product is version 2 of DataCalc Pro, which calculates the amount of storage required for each stage of a film project, from pre-production to shoot, post and delivery. According to creative technology consultant Chris Vincze, the technology was originally developed by MPC’s data lab, because nothing on the market did what MPC needed. “The idea of releasing it as an app proceeded from there,” he says. “We thought surely if we use it so much there would be other post houses or camera techs that would need it too.”

MPC produced the app design in-house and initially employed a freelance developer for the first version 1. “For version 2 we did the development in-house too,” explains Chris. “When it comes to our digital teams developing app-based creative solutions, they also take a mixed approach to resourcing, depending on the complexities of the final product.”

“The app market continues to grow and enhance the ways that consumers interact and engage with content,” he adds. “So it’s a good time to explore how it will work for your core offer.”

Ustwo’s Scott agrees. “Start experimenting. If it’s not working, kill it. All of that stuff is not hard to do, you just need the cojones to actually do it.”

“Make sure your core business is solid and you can pay your bills before you embark,” suggests Seth. “It’s hard enough to run a single product start-up with funding, let alone run a service business, whilst developing your own products at the same time.”

“Work out very clearly what you want the app to do, and what the scope of the project is first,” advises Chris. “Be aware that the demand for good developer talent, particularly in Android, far outstrips supply, so factor this resourcing time clearly into any project planning.”

Scott Ewings also stresses you have to look after your talent. “Get a bunch of people who actually, passionately, want to deliver a brilliant product,” he says. “You’ve got to be prepared to take some risk and get your criteria right, but without that passionate bunch of people who really want to be along the journey with you, helping you and supporting you, it’s going to be pretty tough. Focus on the love and the talent and the environment first. It’s irreplaceable and it’s not something you can retrofit very easily.”