Is The Subscription Model in Industrial Design’s Future?

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19th February 2024
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7 min read

Last Saturday I had a conversation with a retired (and wealthy) businessman that got me thinking about the subscription business model.

His background was software. It was pretty clear he had little idea how industrial design worked, especially in medical devices, but he delighted in challenging my assumptions all the same. Rather than disregard his ideas, I thought I'd open my mind a bit and try the thought experiment.

Specifically how the subscription model could or couldn't apply to Industrial Design.

Subscriptions

The subscription business model isn't new by any means: pay a certain amount each period, and receive goods or services for that period until the subscription is cancelled.

In the past, a well-known example would have been newspaper or magazine subscriptions. And it's quite possible you parents or grandparents had a subscription for the delivery of their milk each day/week. In both examples the amount you pay is proportionate to what you receive in return. Pay a fixed amount monthly or yearly for your magazine or milk, receive a fixed amount of magazines or milk in return.

Today, however, there's a turbocharged subscription model. One where you pay a fixed amount each month for unlimited services. Netflix is the archetypal example, and virtually everything has followed suit.

It's popular for software too. Adobe famously turned their Creative Suite into Creative Cloud with steep monthly subscriptions. On their most popular tier you get access to the entire catalogue of software (but guaranteed you only use a few). Many CAD packages like Creo have moved to subscription too, as well as rendering package Keyshot.

Slidebean's video on Why Everything Became A Subscription is an excellent breakdown on why this is the case. The short answer is they make more money. Adobe's revenue quadrupled since they introduced Creative Cloud in 2013.

A key enabler for the 'smorgasbord' subscription model is digital content delivery. Once the software is developed or the content created, the cost to duplicate and deliver it is very low. Something impossible to do with milk or magazines.

Subscriptions in Design

There are many different ways to price design work:

  • Hourly rates
  • Milestones
  • Fixed fees
  • Royalties
  • Equity
  • Retainers
  • or a combination thereof

And now we have subscriptions.

It's worth quickly defining the difference between a retainer and a subscription in this context. Retainers in many ways are like subscriptions of the past. A contract for a certain amount of effort, over a certain amount of time, for a certain amount of money. Where as subscription here means, unlimited effort for an uncertain amount of time, for a certain amount of money.

Perhaps the pioneer in the subscription design service space is Design Joy. I first heard about this graphic designer running a subscription design service on The Futur's podcast some time ago.

Unlimited designs, unlimited revisions, quick turnaround.

I scoffed at this when I initially heard about it.

One of my main complaints with subscription for design is the commodification of the design work. If you think about what subscriptions have done for music, movies, and TV shows, the same also holds true for design. When you can get unlimited shows on Netflix, how much are you now willing to pay for any individual show? The show itself has effectively become valueless. What has value is the service of those shows.

A design subscription can make a lot of sense in certain scenarios.

I just don't think Industrial Design is one of them.

Subscriptions in Industrial Design

To be clear, subscriptions for Industrial Design services already exist. Sushant Vohra points to Bang Design as one such example. I do believe subscriptions are here to stay, but I don't think they make a good fit for Industrial Design.

ID isn't high-churn

Think generally about the needs of any company. Advertising campaigns, email newsletters, etc are constantly being produced, and expire, and created new. Especially in the information age where none of those things need to be printed, the churn rate can afford to be high. Lots of graphic design work always needs to be done.

Conversely, new [physical] products usually aren't being released at anywhere near the same rate (unless you're Zara or Shein). A company may develop and release only a few new products a year. Maybe one a year. Maybe one every several years.

Project timelines are long and often broken up into different stages with different scopes. Industrial Design may be required for key activities throughout development. The difference between streaming whatever is available on Netflix, vs paying for a specific movie you really want to watch on YouTube.

I don't see how, from a business perspective, it would make sense to subscribe to an Industrial Design service when the needs of design for each project are specific and sporadic.

ID isn't open-ended

Unlike software or streaming services, once the product is in the market, there is little need to provide updates or maintenance. There would be no incentive for a business to continue paying for an ID subscription when no further value can be provided to a device already in the market.

Even in the context of medical devices, post-market surveillance would not require a high burden on Industrial Design. With the exception perhaps of a complaint or recall precipitating a design change.

In physical product development, there is a very clear endpoint.

ID is R&D heavy

Lets be honest, there's not a lot of R&D in graphic design. Even in web design I would think the R&D component is low. There may be lots of experimentation in both, but not on the technological level. At least not for any graphic designer providing a subscription-based service.

Industrial Design in contrast is often involved in complex projects that are heavy in research and development. As such there are many unknowns, and many dependencies on other parties within the development team.

As such, each unknown may be broken up into specific work chunks to solve specific problems. These work chunks will each have their own deliverables which may not fit into a standard 'template'. More, the work chucks may stop and start as development progresses. In may not make economic sense to be paying an Industrial Designer to sit on their hands while the engineers are reworking their tech.

ID doesn't scale

This goes for all of design. If the same thing needs to be done twice, simultaneously, you need two people to do it. Unlike software or content delivery where scaling is very easy to do, in design the output is very closely linked to the number of bodies you have.

If two people want to listen to the same song at the same time, the song only needs to be created once and delivered twice. If two clients want newsletter collateral at the same time, the collateral needs to be created twice and delivered twice.

Without doubling the manpower, what happens is the two clients receive only half the total available effort. Four clients means a quarter of available effort, 10 clients would make it a 10th. You can see how quickly the quality of deliverables would drop.

ID is high-stakes

Injection moulding tools can run to hundreds of thousands of dollars for a single project. My personal record for a single tool was $250k. You kind of want to get those things right the first time. Both because of the initial investment, and reworking the tools can become expensive too.

For this reason, a product release can make or break a business. Unlike graphic design, which is usually more transient, and can be pulled if it doesn't hit right. As a business you'd want to be certain that an Industrial Designer is taking all the care in the world to understand a company's needs, and deliver to the best of their ability.

The Future?

No, I really don't think subscriptions are the future of Industrial Design.

I do expect they will continue to exist, and agencies will experiment with ways to make them work. However, I expect they'll be confined to the bottom-of-the-barrel goods that are more commodity than valued item. The physical goods that are low risk, low investment, and high churn.

Like everything, you get what you pay for.


I post every week on the topics of design, medtech, and my journey in it. If you'd like to follow along, feel free to subscribe to the newsletter, follow on LinkedIn, or subscribe to the RSS feed with this link.

Tagged: business · consulting · design

ⓒ Lincoln Black 2024

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