In today's interview we take a look at a successful Los Angeles design-build architecture firm, Modative. Founded in 2006, this firm has grown leaps and bounds in the past few years. The firm melds a focus on design with an all-inclusive delivery model that includes construction services. Today we sit down with the firm's principles to discover the lessons they've learned about running a successful architectural practice over the past 7 years.

In today's episode we discuss:

• Promoting a hands-on approach among your staff.
• Creating a process to help your clients believe in your brand.
• Learning to say “No” and staying focused on your firm's goals.
• The benefits of showing your clients an open and honest process.
• A design-driven website vs an informative website.

Show Notes

• See their work at Modative

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Interview Transcript and Members Only Resources:

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Enoch: Today is a first – my first on-location interview. Late last year I dropped in and visited with the Principals of the modern architecture firm Modative in Los Angeles. I encourage you to go check out the video because we have some great high-definition video that we shot with a DSLR while we were down there – me and my camera man. So, go check it out and let me know what you think.

These guys have been an inspiration to me ever since I started researching how to start a firm way back in 2006, which is when they founded their firm. Now, since then Modative has been doing some very progressive designs in and around Sta. Monica. In this interview I get the inside story on how they built a successful, modern architecture practice that continues to grow year after year.

Here's the show.

Derek: Okay. Derek Leavitt. I was actually born and raised in Los Angeles. I feel like one of the few.

We started the firm in 2006. We all graduated from USC. We all felt like there were different strengths and weaknesses between the three of us that we, kind of, made in to a really good, cohesive team. Other than that, I mean, we have really similar and yet diverse roles, I think, within the office. So, kind of, let everyone else what their roles are.

Enoch: Awesome. What’s your role, Derek?

Derek: I guess, other than just general project management, I’ve sort of taken on a lot of the marketing side of the company. Then, I’m the licensed architect, so dealing a lot with the architecture side, although we all deal with that, but project management, marketing – those kinds of aspects. But, I feel like all of us, kind of, have our fingers in just about everything within the office.

Enoch: Gotcha. [Inaudible] a little bit.

Christian: Hi, my name is Christian Navar. I also went to the University of Southern California. Originally from Sunnyvale, California, which is in basically the heart and soul, kind of, valley in Northern California.

I run mostly the operations in the business. So, out of the three of us, I probably touch the day to day design work least now that we have built up our staff and basically in charge of that aspect of it as well as most of the strategic planning in regards to tying in the design, the building process, and then our venture out in to the development world.

Enoch: Okay. Right now, how is your client load or your project load as a firm?

Christian: Heavy. Really heavy. I mean, we’re strapped, big time and everybody’s working a lot and thankfully we have a great staff who are committed. We’re definitely not… It’s not a slave labor type firm. We’re really big on organization and being efficient, but nobody’s sitting around with any down time.

Enoch: Yeah. You just said you touched on company culture.

Christian: Yeah.

Enoch: We talked a little bit earlier about the company culture about Fridays in the office. Tell us a little bit about Fridays in the office. Give us some flavor of Modative.

Christian: Well, I mean, Fridays is 80s Fridays. We’re known for that. It’s technically between 9:00 and I’d say after lunch. Then, we sort of turn… 3:00 we turn in this more club music, and say the fridge opens up and, you know, people grab some beers, and some wine, and wind down the week.

Enoch: Nice.

Christian: Outside of that I’d say that one of things that we’re really strong-minded about is the business aspects of our firm. So, we really make it a point…

Enoch: How do you think that affects the firm?

Christian: At the end of the day, I think, it’s a positive thing. Mostly because it allows the three of us to put our staff in a situation where they can talk with our clients on a one-on-one basis through the project not just on a design level but on what’s most important to them which is the business of development.

Enoch: What things do you do… You mentioned letting your staff talk with the clients. Are there other things you do to nurture them in that entrepreneurial aspect?

Christian: You know, most of the time they’ve been able to do it themselves. They took it upon themselves, in their own education, to sort of break away from that Architecture world in their undergraduate or graduate education, and splinter off in to taking courses in business and development. We really reach for people like that.

They usually come in to us with a good mindset, and then we try to nurture it from there. We definitely have what we call a sink or swim mentality here. You come in and within week one, you’re presenting to our clients as if we were. We really try to put people out there.

Enoch: To make them sweat.

Christian: Yeah. Make them sweat. For the most part, they all do a fantastic job.

Enoch: They swim.

Christian: Yeah. It makes it a lot easier on us.

Enoch: Yeah. Now, you mentioned that right now slammed with work. You have a lot of projects, very busy. How has that affected the firm?

Christian: I’d say that our coffee intake has gone up significantly.

Enoch: Okay.

Christian: I think our budget used to be $200 a month. I think we’re pushing $300 a month now just on coffee.

Enoch: Yeah.

Christian: At the end of the day I think people are really excited.

Enoch: Yeah.

Christian: Specially coming out of such a slow period.

Enoch: Sure.

Christian: It’s definitely taking some getting used to. There’s an extra added level of stress that comes with that, but I think at the end of the day based on what we’ve just gone through – it’s a good thing and people are happy to be part of it.

Enoch: Then, how does that affect your financing your firm in terms of vetting projects? Tell me a little bit about that, how that allows you to pick and choose projects, or how you deal with that overload of prospects and leads.

Christian: Well, it allows us to be in a position where we can definitely concentrate on the future and our goals as a firm for our future by only selecting projects that, sort of, fit what we’re trying to do as a firm. I mean, we really are working hard to be, sort of, a one-stop shop. We do have, sort of, a design-build structure.

Because the market is so good, we could pretty much demand that we’re only going to take projects on where the client is going to allow us to build. It’s really what we’re pushing for. Four or five years ago that wasn’t the case – you’d take just about anything.

But, we really want people to come to us who believe in the brand and believe what we can offer them. For us, that’s a seamless process from start to finish, so we can be really selective about that now.

Enoch: I’m going to ask you a question. You can tell me who’s best suited to answer this one – maybe Derek.

Derek: Yeah.

Enoch: You know you want to push the construction side of the business.

Derek: Yeah.

Enoch: When they come in for design services, how do you get them on board with the idea of you guys being involved in the construction?

Derek: Yeah. I mean, the easiest way, for sure is… I mean, this has been, sort of, the beauty of the arrangement we’ve had of being in this area. We’ve had two projects under construction that we were building over the last two years about two blocks away from the office. So, there’s no better sales thing than to say at the end of a meeting, “Let’s go take a little walk.” You walk them over there. They see that we can actually do it. They like the product. It’s a sale from there. That’s a huge part of it.

The other part is there’s a lot of stories of what happens when you don’t go that route, which is why we got in to this to begin with – the build side. We had plenty of projects. Some were fine, but there’ve been plenty of experiences, and I’m sure most architects have had it where: Not a good contractor, everyone pays the price – the client, the architect, everyone – you know, that triangle of love and hate that sometimes happens in that relationship.

So, I think between sharing those stories, and then at the end of the day showing them what we can deliver by showing them actual product and saying, “If this is the product you want, the only way we can truly deliver this is if we handle the architecture side and the construction side,” because otherwise, there’s too much of a loss of communication.

Enoch: What are the typical objections? Do you get any typical objections?

Derek: Yeah. I mean, a lot of times people are very set in this sort of traditional method of “We have to bid it out. That’s the way we’re going to get the best price possible.” But, at the end of the day, what we tell them is that our goal is to work with them. So, let’s just be open and honest about everything. Tell us what your budget is.

These are development projects for the most part. They have very set budgets or the Performa doesn’t work. What’s the budget? Then, we worked to bid that out amongst subcontractors and negotiate among subcontractors to give them the best price.

So, at the end of the day, we are bidding it out. We’re just the general. We’re bidding it out to subs, or we’re negotiating with our common subs that we use to get the price to where it needs to be. It’s a very open process, very open book. We’ll show them any bid they want to see. At the end of the day there’s no fluffing numbers. They know what our profit is. They know what our overhead number is.

It’s a very different way of getting people to think and they’re not always open to that, but those that do, I think, really see the benefit of it pretty quickly.

Enoch: Okay. Awesome. Now, just a general business question for you, Derek.

Derek: Yeah.

Enoch: If you had to go back in time and try to figure out the number one thing that’s led to your success – the success you’re having now…?

Derek: I think, for me, it would come down to having a good business sense. But, I think more than that it’s been focus. We’ve constantly – once especially the market got better – we’ve been extremely focused on small lot subdivision in general.

While that seems like it’s easy to do, it’s actually very hard because as the market gets better and your name gets out there more, people will come to you with all kinds of distractions. “Do this commercial building,” or, “Will you do a condo for us?” or, “A single family home,” or this or that.

Well, sometimes that’s good. By us staying focused and focusing on the fact that we want to start our construction wing, and only build projects that we designed, and just staying focused, focused, focused time and time again, I think has really helped. Then, also saying “No.” Saying no to bad clients, to bad projects, and staying focused on what we want to do as a firm.

Enoch: Okay. Now, you guys were also early adopters of web tools.

Derek: Yeah.

Enoch: Using HubSpot. How important was that to your current business?

Derek: I think it was really critical. What we saw in other firms’ websites at the time – I know a lot have changed since then – was architects seemingly design websites for other architects, and to showcase their work to other architects, which…

Enoch: What do you mean by that? Give us some insight.

Derek: I mean, mostly design-driven. So, the website was all about “Look at me. Look at me. Look how cool my designs are. I’m a great architect.” For us, that just seem like such a terrible approach because it wasn’t really servicing your true client, not what your client really cares about.

So, tying that in with our focus, small lot subdivision, which was a new ordinance in L.A., started around the time we started our firm, we started out website more as a teaching tool. How can we teach people? Whether it’s the basics of architecture like how the architectural process works or we can teach them really specifics. How does a small lot ordinance work? What can a developer do? What kind of lots do they need to look for to do this type of product?

We found that, I think, by being helpful instead of just showcasing what we do, it turned in to a good thing. So, there’s always this fear of giving away information. Are we giving away the farm with this? But, at the end of the day, it really helped.

Enoch: Paid off.

Derek: Yeah.

Enoch: Yeah.
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