We'd love to be able to tell you that shopping for a managed design services firm is as easy as buying a car. Find the best deal, get the options you want, and drive off the lot. I’m sure there are companies out there that shop that way for managed design services, however, they could be in for a rude awakening if they don’t pay very close attention to key details of the relationship.
I founded USA Firmware over a decade ago because I wanted to help companies big and small bring their innovative and smart ideas to life. It hasn’t been easy, however, the relationships we’ve built have been rewarding.
We've done hundreds and hundreds of projects with all sorts of companies of all sizes, from Fortune 5 to startups. And as one insurance company advertisement states: “We know a thing or two, because we’ve seen a thing or two.” That’s what I’m here to offer you today.
Signing on with the right managed design services company can be a very rewarding and fruitful relationship for a firm and the client. If you handle it right. Let me share with you some lessons USA Firmware has learned which can be helpful in your search for the right managed design services firm.
Things to look out for when choosing a managed design services firm.
(There can really be unpleasant surprises if you’re not paying close enough attention.)
- Who owns the Intellectual Property?
If a firm is telling you that they can do the work for a fair price yet retains ownership of the intellectual property (IP), you better be careful. I mean, honestly, you really should think twice about that. It certainly helps them. I’m not so sure it helps you.
It may get the price point down a little bit, but you give up CONTROL.
You also potentially give up long-term product success. What happens if something goes awry or your relationship with the design firm goes sour? You run a great risk of that firm NOT sharing the IP with you.
Imagine this. What if you have a key customer who is upset about something, say a defect, and you’re not on the best relationship terms with the design firm? This is not a good place to be. We've seen situations like this where companies come to us after this has happened and ask us to fix the situation. Do we love having the business? Absolutely! However, your company is compromised, and you’re faced with cleaning up a mess and possibly paying more than you had originally planned. If I were in your shoes, I wouldn’t like that.
Should you end up in the situation where you don’t own the IP, and I’m sure there are situations where you may need to go this route, I would recommend pausing the discovery process to have very in-depth internal conversations with your teams to see if it might be worth the extra investment to go with a firm that will let you own the IP.
Before entering into any agreement, ask the question about IP ownership. Make sure you have full clarity about the benefits and pitfalls of not owning your IP and then make a clearly informed decision. Please understand that going in this direction can hamstring your company and the project.
- Clearly understand what you are buying.
Part of the clarity you need to have when selecting a managed design services firm is whether it’s selling its own off-the-shelf products, or will it work with you to create something unique to your needs. There’s nothing wrong with firms having their own products to sell. But if the conversation always navigates back to, “yeah, we’ve got a solution for you, but you have to use our products,” that can be a problem. The concern is this: If the firm’s products are the only solution being offered, can it truly be unbiased and offer you a solution that is right for your needs? Maybe. Maybe not.
If a design firm’s business model requires it to use its own products to make a profit and be successful, then it will be a challenge to give you a finished solution that is truly in your company’s best interests.
Be very careful. Don't just jump on that bandwagon.
I’m raising a major red flag here! Not owning your IP and being directed into using off-the-shelf products which may not be totally suited to the solution can be big problems. At USA Firmware, we don’t own your IP and we don’t have our own product that we try to sell you.
We don't need it. We don't want it. We don't want to tie your hands. We want to make sure that what we develop for you is all yours, not ours.
That’s the definition of a true and trusted partner. Listening to your needs and designing a smarter product that you own and can truly leverage for maximum market value and success. This is an important observation we’ve learn from over the years.
- What does the managed design services firm’s engineering team look like?
A third key question you should ask when selecting a managed design services firm is; what is the composition of the engineering team that will be working on your project? It is very important to understand the ratio of W-2, consultants, and independent contractors who will be working on your project.
It’s all about transparency, accountability, and confidence that the firm has a well-balanced team that can continue to optimally function should team members move on and off the team.
Why? It’s about control and continuity.
If the team is filled with mostly contractors and consultants, these are folks that are used on a temporary basis and can leave at any time for better opportunities. And, you hope the design firm has great relationships with them as to not jeopardize the continuity of your project. Also, do they have components of their team that are offshore? This could be perfectly fine, however, if they don’t disclose this until you ask, you know that's a red flag.
If your managed design services team is out of balance with too many contractors, the control you have over the project is weakened. Make sure there is a solid ratio of W-2 employees and management supporting the project to help ensure stability to help get your project completed and commercialized on time and on budget.
Key Factors to a Successful Partnership with a Managed Design Services Firm
- TRUST
I will start with the most important success element: TRUST.
I repeat: TRUST.
When engaging with a managed design services firm it is imperative that you both earn each other’s trust if the project is to be successful.
Trust isn’t earned overnight.
One key way to earn trust is transparency. Like we’ve been discussing in this blog: transparency about things like IP ownership, off-the-shelf vs. organic solutions, and team make-up are just a few of the many items, that when discussed professionally and openly, can lead to a very profitable relationship for you and the managed design services firm.
- Both parties need to win.
And speaking of profits, another key to a successful partnership is the attitude that both parties need to win.
We're both in business to make money and be profitable. So, let’s devise solutions together, transparently, that will make both companies money. This is a team effort and we’re working for you to help you design the best solutions possible. If you win, we win.
Believe it or not, I had a customer once tell me he didn’t care if my company made a profit on a particular project. How would you feel if I said that to you as your newly-hired managed design services firm? “We don’t care if you are profitable? I’m sorry, I didn’t hear your answer over the noise of you hanging up on me.
I think you get my point.
Hiring a managed design services firm is about a true partnership, based on trust, transparency, honesty, and a willingness to create dynamic, solutions where we both can enjoy the fruits of our labor.
I would love to hear your thoughts on this. Tell me your horror stories, your success stories, and anything in between that helped or hindered your relationship with a managed design services firm. We can all learn together. Follow me on LinkedIn and send me a message. Let me know what you think.
I’ll dedicate subsequent blogs to this very important topic and look forward to sharing your ideas as well.
Have a great day.
Bob Scaccia
Bob Scaccia, President, CEO and founder of USA Firmware, formed the company in 2011 out of his passion for the art firmware design. Bob graduated with a BSEE in Electrical Engineering and quickly built a career that would lead him to become an expert in his field and a visionary entrepreneur in the industry. His past work experience includes design management and leadership roles in firmware with organizations Raytheon, Philips (formerly Picker International), Keithley Instruments and Thermo Scientific. Bob was working on his MBA in Business Management at Baldwin Wallace University earning a 4.0, when he founded USA Firmware. Since that time, Bob has grown the organization from a $200,000 per year business to a multi-million-dollar, award-winning business today. In addition, Bob is a firmware influencer and powers the world's largest embedded firmware group, as well as a firmware contributor with articles and podcasts on embedded.com. He's also published several articles including, "What a firmware curriculum would look like" and has been interviewed by various radio personalities on the topic of firmware and the embedded future.
