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Business of Home Podcast
Sean Low thinks designers should be the sun, not the moon
01:23:01
Creative business coach and advice columnist Sean Low shares his take on the biggest issues facing designers today
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- [00:04]
Dennis Scully
This is Business of Home. I'm your host, Dennis Scully. Every week I'll be speaking to leaders and innovators from all corners of the home industry. My guest this week is creative business coach Sean Lowe. Sean got his start in the field running event designer Preston Bailey's company, but after working with Vicente Wolf, Sean began consulting more and more with interior designers along the way to taking on Timothy Corrigan, Kevin Isbell and Nate Berkus as clients. Today he runs a coaching business focused on helping designers reframe their firms for the better. He's also Business of Home's advice columnist. I spoke with Sean about the difference between transparency and clarity, why charging what you need is better than charging what you can get, and why designers should strive to be the sun, not the moon.
- [01:03]
Sean Lowe
Foreign.
- [01:08]
Dennis Scully
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- [02:43]
Sean Lowe
when it was Editor at Large.
- [02:45]
Dennis Scully
Well, exactly. Back before it became Business of Home, back when it was Editor at Large. And prior to all of that. Let's tell people a little bit about your early career and the different pivots that you've made along the way and some of the people that you've worked for. Where do we want to start?
- [03:06]
Sean Lowe
I was a lawyer by training. I worked for a couple years and I went to Wall Street. And then I had the great idea to start a business that delivered dinners to people who worked late because that was a great business. Not really for me, I found out too late. But it was right near the Trade center and so it was really effective when the 911 happened. And then I was broke and I needed a job. And so I knew somebody who knew Preston. And Preston at the time was deeply in debt. And he said, could you help him get out of debt? And with my banking experience and legal experience, I said, yeah, sure, why not, I'll give it a try. And I couldn't do that because he was, you know, he owed a lot of money to the government and stuff like that.
- [03:49]
Dennis Scully
And let's tell people who Preston is.
- [03:50]
Sean Lowe
Oh, he's. Preston is one of the foremost event designers on the planet. I mean, he does things that all of us can't even imagine. So he's that guy. Like he had, did Donald's wedding to Melania. That was him. And then many, many huge, huge weddings around the world. And so I couldn't help Preston get out of debt, but I figured out that I knew how to run his company and do things differently than he had ever done them before. And I think it was because I just didn't have the same. I wasn't a florist, I wasn't an artist. I was here coming in, hey, there's another way to do this. And it started me down this road of saying, hey, can we, you know, charge for creativity? Can we charge for, you know, doing things differently? Instead of, you know, making money on flowers, can we just get paid as an artist? And, and it took a while and, and you know, but ultimately I was right. And, and he, we fought and like cats and dogs.
- [04:47]
Dennis Scully
And, and because, because he didn't want to make some of the changes that you were suggesting.
- [04:51]
Sean Lowe
Oh no, definitely didn't. He definitely didn't. He. Cause I was saying make less revenue and more money instead of trying to make a lot of revenue and no money.
- [05:05]
Dennis Scully
So you mean revenue versus profit. So make more profit.
- [05:08]
Sean Lowe
Okay, yeah, yeah, definitely. Everything we did became fee based. So just to give an example, at his pinnacle, Preston did a couple weddings that if we had to know what they actually cost, I don't even know what they cost in the Middle east probably would have been 40 or 50 million dollars. And Preston just charged his fe. So he didn't make any money on that revenue. And that was left to other people, to the people providing all the services to that. And so I just became embedded into fee based stuff. And along the way I also learned how to run a brand. Preston is fun fact. Preston and Jill Cohen Are dear friends. So I met Jill Cohen. She was the head of Bullfinch at the time. So I met her in 2003, and I stayed friends with her since, just learning and learning, learning how to what that brand was. And so I started making a bunch of deals with Preston, and we were successful. And Preston is dear friends with Vicente Wolf. Right. They talk every single day and probably have for the last 50 years. Along the way, Vicente was like, hey, I don't need anyone to help you run my business. I'm really successful. But I would love to have somebody who can help me make these deals that are outside of my core business. He'd done hotels before, but he didn't have anybody to do that stuff. He had brands that were coming to him. We did things with Pittsburgh Paint, and he had commercial condominiums and residential condominiums, and it was like, okay, how do we do this? And so he knew that he could do it. But as he says, he's never met anyone more aggressive than him until I came along. And so Preston was very gracious, and I wound up splitting my time. And the only reason I did it was because I said to Vicente, he had to teach me everything he knew about the interior design business and how he did it and why he did it. And what's really great about that is I learned what he did and how it would not work. It would never work for other designers who wanted to take more time to do the work that they did. And so it really started me down this path of I loved creativity. And then 2008 came around, and the world blew up. But I was also planning on going. And I was thinking, like, I just wanted to spread my wings and start doing this for more people. I got so excited about the power of creativity and thinking about different ways that artists can lead the world, that I just decided, hey, let's start doing this for individual creative businesses. And I did. And then it really was pretty well a 50, 50 split between the event business and then interior designers. And then along, more and more, it kept mo towards interior design. And then along came Covid, and I was like, I think I was out there just being very. In all my columns and everything else I was doing, I was really pushing the idea that, hey, wait a second. The home is now no longer just a. Let's just have a nice environment. The home is, like. It was really meaningful and changes our lives. And so then my business shifted, and now I still do work for other creatives, but 80% of it, 85% is with interior designers, architects, things surrounding the home and all things interiors. So it can be commercial, too. But for the most part, most of my designers at least have some part of a residential practice. So I have a lot of designers that do both.
- [08:40]
Dennis Scully
A lot. So when you asked Vicente to educate you about how he works and what he does, what did you learn? And as you described, it sounds like it was. It wasn't replicable somehow. I mean, what did he teach you about his process? Because he's a brilliant designer.
- [08:58]
Sean Lowe
He's brilliant. And the one thing that I loved about Vicente, which is so fun, is that Vicente would be the first to tell you that he is wildly dyslexic, right? Wildly. So he literally learned to read by photographing his mind about this is what the word means. And because of that, I think he approaches the world with incredible structure. In order for him to make his way, he has to figure out how it will work for him and how it will go. And so his structure is so tight and so clean for him, that was really remarkable. His design process and the way it works, the decision making, the information that somebody gets. And most of his work is decorating, right? I listened to Jeffrey, and he, you know, they share it in that, you know, a lot of instance work. I don't know what he is today. I mean, we don't speak nearly as much. But when I was working with him and for the 20, 30 years before that is very much in New York City, right? So apartments, and fast and. And it's about getting done, you know, five, six months. And Vincent's done right from start to finish, and that's what he wants. And just learning that from him about how do you accomplish that without a sense of. Of like you're rushing a client, right? How do you really get them to understand that process? And it was so tight. And then what he does and how he does it, that I was like, whoa. And, you know, this was pre everything, right? So here comes Vicente with, like, you know, you get a book this thick, you get a book like 6 and 5 inches thick of like. And here's the design, down to your forks, and here's the design, you know, do you want it? Because I remember one time, he's like, yeah, I just decided to indulge this client to change out the blue couch to something because she just didn't like the blue couch. And I'm like, I'm never doing that again.
- [10:52]
Dennis Scully
I was willing to give that little tiny thing, but never again.
- [10:55]
Sean Lowe
So this is what I see for you do you want it or not? And this is how I envision it. And he's not everybody's taste, right? And I hear the criticism and he hears it too. It's like, well, you're just all, you're just. And it's like, that's who I am. That's what people want, right? And so I know who I am. I know the kind of work that I love to do and am I going to change? No. And I think there is an element of like, he is here to show you what his work will be and you want your Vincent Wolf house, right? So that or your apartment. And I think that is something he aspires to. And like he's built his entire business upon that. And then what was really fascinating is like, he's really good friends with Tim Corrigan, as we know. And so I got to learn Tim's business. They couldn't be like, literally every time I ever met with them, there's like they would share each other's company and enjoy each other to death. And then at the end of the night, they both are like, I have no idea how you make any money. None.
- [11:52]
Dennis Scully
Well, so what? And obviously we've talked with Timothy Corgan, whom I'm mad about, but as you say, he's got a completely different structure, completely different.
- [12:01]
Sean Lowe
And that was so wonderful for me to see because the way like Tim, everyone says, well, you hate hourly, you love hourly. But Tim has to charge hourly, right? Because he's the first guy to get on a plane and go shop with clients and spend time with clients. I mean, and I love, I mean Vicente is a lovely, lovely man, but he does not want to spend hours and hours and hours with his clients. That's not who he is, right? It's not going to work, right? But for, for, for Tim, he just loved it. And I was like, oh, this can work too. So whereas Vicente literally would take six weeks to do design, Tim might spend three years, right? And that's all good. Like it works for everybody. And I loved that. That was so exciting for me because it was like there is no one right way. Then it has to be grounded too. And like, you can't just be whimsical about it. It has to be grounded in reality and what businesses make. And at the core, when you talk about these core design firms, they make money just like a high end law firm, right? So we know what a higher and law firm in New York City is going to charge. We know how much money they're going to make. And so long as you're in that realm of reality, then how you go about doing it is yours to do.
- [13:11]
Dennis Scully
And I want to get into the specifics of how you come into working with a client and what you go through. But coming back to Vicente for a moment, I feel like. And you tell me your perspective on this, but I feel like Vincente represented and part of it is a time in history, but he was the kind of designer that, as he would say, you hire me, you know what you're getting, right? You want that aesthetic, you want that look, and I'm going to deliver it to you. But also, like, you have to take what I'm going to give you. Right? And it's not. I mean, he made the sacrifice with the one blue sofa, but otherwise you're pretty much like, don't be second guessing or shopping or all these other things that I think so many designers today have to deal with more. I feel like he was just, no, no, here's the design. And this is. This is it.
- [14:05]
Sean Lowe
This is what we're doing without not even, like, I think you undersold. There's no question about it. So he is. Right, right. He's like, I have a gift to see what you can't see, and that's what you're going to do. And I played with that. We talked about this so much, and it was really fun talking about that, because what it boiled down to me is, I love my metaphors, and if you don't, I'll stop. But if you think about what Vicente does is like, you come to Vicente and what he does is he looks around and he says, okay, if I were living here, here's what it would look like. Like, right? And then he shows you. Yeah, he's got basic guard rails with what you may or may not like and all the rest of that. But you wouldn't have come to him unless you kind of, like, wanted what he wanted. Right? So that's his house, Right. The way he would be prideful of it. And what's so fascinating about Vicente is like, no, he really has very big short term memory. Doesn't really have it. It took him forever to remember my name. Right. But the thing that's so fantastic is what he's been practicing now for 50 plus years, right. If you asked him what he did 35 years ago, he would tell you to the inch what he did. And it's amazing his recall of what he did, because for him, these are statements of art. And what I want to say is, like, A lot of other designers are actually not that. And what they are is that what they want to do is crawl on the skull of their client and imagine the world as if they were that client. Because then they can show them something that that client never could have imagined, but if they could have, that's exactly what they would have imagined. So it becomes this very much a artistic kind of living through somebody to give them a world that they didn't realize that they could have. That effectively improves the way that they feel about themselves. Because if they could have imagined that environment, that's what the designer did.
- [15:55]
Dennis Scully
Right.
- [15:55]
Sean Lowe
And so I think like, knowing those two things and realizing that you hire Vicente for what Vicente's specific vision is, versus you hire Pip for not necessarily what Tim is. Right? What he. Because Vicente is only putting things in your place that he loves. Tim may put something like, he would never have purple in there. I mean, maybe he would. But what I'm saying is if Tim hated purple and you love purple, he would do his version of purple. Right. So it wouldn't be about him. Right. And so I just think like, having those things is what shapes great businesses. Right? You can be both things. Right. And I love. Vicente is old guard. Old guard. Old guard that way.
- [16:35]
Dennis Scully
So between Vicente and Tim Corrigan, you saw two very different worlds, two very different approaches. And how did it make you think about what you wanted to then go and impart to other designers and how you thought yourself able to help them and think differently about their businesses?
- [16:55]
Sean Lowe
Honestly, it's so exciting for me because if those are the two poles, I'm like, you're not going to live on the 10 pole, and you're not living on the Vicente Pole. So what I loved about the idea is like, okay, where are you? Where are you going to be? And let's make sure that where you want to be on that spectrum is the best reflection of where you need to be. Right? And how to take all the things that I knew about business and what worked for Preston and for Vicente and for Tim and all of that and put that together and have it start to speak to that, that place on the spectrum that you want to live. And so do you love presenting? Right? Is that your jam? Do you love spending time? How does that play? Do you ultimately then want to be left alone? What does that look like? And so that you have this self expression that your business is telling the specific story that it boiled down to, hey, can your business tell that specific story that's going to make and nurture you and not the other way around. So that the business actually exists to serve you and not, you know, the other way around, which is so, so much so for God knows how many designers.
- [18:06]
Dennis Scully
What do you mean?
- [18:07]
Sean Lowe
That they're the slave to their business, that they do things for their business that they wouldn't otherwise do. A really quick example would be you charge hourly, you know, and you just want to be done with design because you think you're done with design. Well, your business doesn't want that. Your business wants you to charge more hours, right? So you have to keep working and keep doing and keep building and keep going, even though you're ready to be done. Right. With your design and ready to move on. But you have one rate. You charge the same rate for design as you do for production. And clients just want to see design after design after design, and you bill by the hour for it, right? But you, as the designer, want to be done. You're a slave to the business. The business is telling you what to do. So I'm like, why are we doing it this way? Why are you doing it this way? Well, and that's a lot of times I hear, because that's the way I was taught, that's what I have to do. And otherwise the client will run over. Over me. And I'm like, well, there's a lot of ways not to do that, right? A lot of ways to just make it your own voice and move through things in a way that works for you and still allows you to still make the money you need to make when you need to make it. I've given the advice and can't even tell you how many times which is more valuable, your design hour or your production hour. And inevitably, every designer I've ever met says, my design hour. I'm like, that. Great. Why do you charge the same rate then? Just something so straightforward as that? Well, I couldn't possibly. I'm like, well, why couldn't you? It's pretty clear when you're designing. Pretty clear when you're producing. Why couldn't you tell your client, if I'm designing, I charge you this rate, and if I'm producing, I charge you this rate?
- [19:43]
Dennis Scully
And ultimately, do you get designers to make that shift?
- [19:46]
Sean Lowe
Yeah. I've had my career, the ones that are adamant about charging hourly. I've had much more success than not, because they can explain it better to clients. It's actually easier for them to do that than to charge one rate.
- [20:03]
Dennis Scully
So you and I spoke recently, and I was talking to Bella, mancini, who has worked with you and Bella, describes this fierce loyalty to you and what you helped her to do, how you helped her to think about her business. And I wonder what it is you come in and do in the process, because she also articulated that it wasn't easy at first to sort of make the adjustments or to think differently, which is what it sounds like. A lot of what you're trying to get at is help designers to think differently, perhaps about how they value themselves or how they value their time. Take me through that if you can.
- [20:47]
Sean Lowe
You know, I. Most of my. Since I fell in love with creative business, and creative business is so driven by, you know, I mean, many, many wonderful artists. But I've had really the good fortune to work with so many women and gay men. Right? I mean, I'm incredibly prideful about that, and I think it's something cultural in that way, where whatever reason. And I know what I'm stereotyping, and I know there are outliers, and I'm grateful for them. But for the most part, the idea that you have to somehow hide, somehow be kind of less, Be demure about what your needs are is baked in. And when I met Bella, here's this remarkable talent, crazily good businesswoman who was really letting the client drive the bus, right, and telling her what she couldn't do, how she was supposed to make her money, being valued by the effort that she had rather than everything else. But Bella was really a watershed for me in the sense of someone who was so. Made her way doing that and was okay with that, but had such a thirst to just say, there has to be another way for me. And here it was that I was saying, it's like, hey, yeah, we can move it forward. We can move it forward where you go first, where a lot of designers are really accustomed to being the moon, to being derivative to the power of their clients and whoever they're working with. And I was really adamant with Bella. I was like, no, you need to be the sun. You need to be the sun. You need to go first. You need to be honored by going first. You need to be able to shift away from that. For her, floor plan is everything, like, where things go helps ground her. So I'm like, well, bet on that, Bella. Bet on that. Bet on the idea that you can show somebody that the floor plan. If we can't get the floor plan right, you can quit. And she's like, well, that's insane. Well, I'm like, yeah, they will have given you, but they have to invest in you, they have to invest in you because you've earned the right. You know, I mean, I always say that a design fee is your talent. It's your wisdom, it's your experience and your commitment to this process for these wonderful families you're about to help. You don't do it for a thousand times a year. You might do it three or four or ten.
- [23:05]
Dennis Scully
Right.
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Sean Lowe
But you're committing to it, and they have to invest in that without anything and meaning to invest it, and they may never get it back. And if you can wrap your head around that, that. That is valuable. You saying, I want to do this for you allows you to go first, and then. And if they don't love the floor plan, yeah, they lost, but they invested. But you lost so much more. You lost the balance of whatever monies you might make, plus you don't get to finish the project, plus you don't get the pictures from doing the project. I'm like, you're betting the farm, and you've earned the right to bet the farm, because you're not gonna be wrong. And Bella was not by any stretch the first that had done this, but she was really this watershed for me because she was so powerful in who she was before. Right. And just being able to make this switch over to, like, say, I can be this was so wonderful to watch her do it and to watch her just have that confidence and then watching her clients. Because Bella is also the kind of designer that does, you know, 1, 2, 3, 4, 5, you know, houses for her clients, and watching her change over for these clients was amazing to me. Yes. The new clients that came along, sure. But. But she did this for her existing clients, and they liked it more. And I was like, see, they want you to lead. They want you to go and do this. And I think that shift for her was like, oh, I can go first. And so it gave her that permission to say, and now we can rely on the floor plan to go to the next thing. Maybe it's color to the point where you're finally done with design. I don't mean to say all she ever did was a floor plan, but you understand the process of design. So that was what was so amazing to me about Bella and everything else. Of those that are exactly like that, I mean, Bella's by far not alone in that path, but just she was the one that really showed me. Wow. Because, you know, she had been doing it for a really long time and was super successful. And here she was. She upended everything and I think she's really grateful for it. So.
- [25:06]
Dennis Scully
She is. And what's interesting, and this is part of what I wanted to understand better from you and what you do and how you do it, is you gave her a newfound confidence. And we. And when I say we, I mean the design industry in general suffers from a confidence problem and a self esteem problem. That is fascinating to me. And you and I have talked about this a little bit here. Here are these wildly talented people who are capable of doing all sorts of things that you and I are not capable of doing, and yet they don't feel as confident as you and I do in some of our core beliefs about what we know. And so I'm fascinated by this process that you seem to take designers through where you help them find that confidence.
- [25:57]
Sean Lowe
Yeah, I mean, it's not about me being rah rah. It's not about me being rooting for them. I think what I really like, we all suffer from imposter syndrome. I certainly do, and all the rest. And I think a lot of it is grounded in the. The randomness of it all. And so if I'm getting paid by the hour, for instance, well, why $100 an hour, not 500? You know, you made it up, right? And why, if you're going to get a percentage on sales, why, you know, as a commission, why 30, why not 40? Why not 20? That just feels untethered to me, and it allows other people to judge where I think what I've really tried so hard to do in what I do is to create this idea that there is a gift that every artist has to give. And Vicente is definitely out there talking about this too, and many, many others, is that you see a world that nobody else sees, Right. If you didn't see it, then you wouldn't be doing what you do. No one needs what you do. You do it because you have the capacity. And so I go from a different perspective and like, what do you need? What would make you feel good? What would make you feel good? That you took care of your family or you had this idea of whatever it might be in the most random way of saying, okay, if I this much money for myself, I would feel good. And everybody has a number, right? You know, I'm not going to only have one great cup of coffee a week. I'm going to have it every day. What do I want to make myself feel good? That gives you a sense of pride, right? Of, okay, wait a second. If I got 100, I'd be great. Well, then the other question is, well, how much does it take you to get that 100? Do you need an office? You need help? What does it mean? And let's say, okay, I need to spend 100 to get the hundred. Okay, now I have 200. And the only other question would be, how much do you want to work? Do I want to do 10 projects a year? Because some designers love doing 10. Tim would be happy doing one every three years. Right. So it's up to you. How much do you want to focus on?
- [27:53]
Dennis Scully
He has a lot of chateaus he needs to work on.
- [27:55]
Sean Lowe
No, there's only so many of them. I mean, I love him so much because there's only. I mean, the way that you. Yeah, moving on.
- [28:07]
Dennis Scully
Right.
- [28:08]
Sean Lowe
But how much do you want to work is so important to me. So then it feels really grounded. Hey, I want to work five times a year. I need 200. It's not a confidence thing. It's a. I'm entitled to live the life I want to live. And this is. If I'm going to do this for a living, this is what I want. And I just think that's a lot easier than. I'm worth $200 an hour, and let's see how many hours I can bill.
- [28:30]
Dennis Scully
Right?
- [28:30]
Sean Lowe
And so more of it to me is like, okay, you start from that place of, like, this is what I need to feel nourished. And then once you have that, that's your number. Like, if you just. And I've. I've done this forever. So If I needed 200 a year and I'm going to work, and I appreciate it's not linear, and please don't. Let's not get in the picky uns about it, but if I had to work of the same projects every time, and I only want to work on four a year, then it's 50 per project. That's what I need. And so now the question is, can you get it and how would you go get it? It feels so much easier to me to do that and find what that looks like, because you can say, I want to live this way from my life, and I want to give this part of my life to you. In order for me to do that for you, you need to give me 50. And so. Okay, well, how are they going to give you 50? Because it matters to you, but it doesn't matter to your client. If your client knows that they're going to give you 50, then you can work with that. And then we work from there without going too deep into the weeds. We could work from there. Because what it does is it stops you from, like, chasing the dollar and trying to fit into these other things that never worked for you to begin with. At the end of the day, what I've found, too is it kind of doesn't matter how you do the math. You're going to get to the same place, right? You're going to get to what you need and it's going to be fair. And clients understand that, and you can bring your whole self to it.
- [30:00]
Dennis Scully
We're taking a quick break to remind you about Resource furnishings. For over 25 years, resource has defined the multifunctional furniture category with Italian made custom solutions. Their curated collection includes wall beds, transforming tables, flexible seating, and storage systems, all designed to make spaces more functional and beautiful. Visit their showroom in New York, Los Angeles, San Francisco, and Seattle to experience the remarkable transformations in person. Or visit resourcefurniture.com to join their trade program and unlock exclusive pricing and rendering support. And now back to the show. For better or for worse, a huge part of the country focuses very heavily on charging a markup on product, whatever that markup is. Right? As you say. And then, yes, there's certainly a school of thought that the hourly rate is very important and that you're billing and far fewer, or maybe there are many that have a design fee in addition to all of that, but it doesn't seem that most people work with just that design fee. I've spoken to some who say, listen, by now I know what a 20,000 square foot house costs. And, and I can tell them, look, if you want to just do straight up, here's the fee. You know, it's a huge number.
- [31:34]
Sean Lowe
Right? Right.
- [31:35]
Dennis Scully
And they, they tell me that sometimes they don't want to hear that huge number, so they'd rather hear me breaking it down and all these other, other ways. But where do you come down with that? Where do you come down on the markups and the fees and all of that? I mean, what do you think?
- [31:48]
Sean Lowe
I'm gonna get into so much trouble. I know I am.
- [31:52]
Dennis Scully
And that's why we brought you on.
- [31:54]
Sean Lowe
That's. Is this a safe space, Dennis? Is this a safe space?
- [31:57]
Dennis Scully
This is. You can just tell everyone how you really feel.
- [32:00]
Sean Lowe
Don't worry.
- [32:01]
Dennis Scully
It's just you and me here.
- [32:03]
Sean Lowe
100 million percent hate it. 100% hate all of it.
- [32:06]
Dennis Scully
What?
- [32:07]
Sean Lowe
Because I think that there's something to emotional intelligence and the quantity and quality of an artist. And I loved listening to you. Did a recent podcast with Jeffrey I can say his name wrong. Bill Hub.
- [32:22]
Dennis Scully
You were Bill Huber. Yeah, Bill Huber.
- [32:25]
Sean Lowe
And I love when he was talking about you, he's only dealing with great decor, not good decorators. And you have to know the ins and outs. And he spouted off things. I can't even, like, repeat what he's talking about, pleading and stuff like that. Yes. And I'm like, yes, yes, yes. You totally have to be incredibly knowledgeable about the tools that go in your toolbox. You have to be. I get all that. But what you're doing for that, that's not the value of what you're doing. That's the expected part that you're obsessed with the knowledge that you have to have in order to create. But that's not what you get pa. You get paid because of your ways to take those toolbox and create something remarkable with them that only you can create for the people you're meant to create them for. And so if all you're doing is getting your money based off of those tools and the ability to manifest those tools in some form, it's derivative to me. You're derivative to the value of the budget. Your derivative to how much effort you have. And I'm sorry, getting paid by the way of effort is a valuable way of getting paid, but it's so derivative and diminutive, meaning that there are some people who would spend hours and hours just at the showroom just going over and making sure that these are perfect specs, perfectly done, and there's only one second that's the right one, and walk out of the store. Which one's more valuable, I can't tell you and nor can you. So now if we're only getting paid by the way of effort, that's derivative. If we're only getting paid by that way, and it's like this huge ceiling that stops you from saying, this is what I need. This is what I need to create. And if that is for me to create twice a year, wonderful. And if it's for me to create 10 times a year, great. And you can have that energy of expansiveness and emotional intelligence in a way that's far more driven by you understanding what you need more than what you can get. And what you just described is what you can get. And trying to figure out what you can get. And it feels beggary to. And so I understand that the business was what it was and people could get what they. What they get. And I guess derivative worked then, but it doesn't work now. And the opportunity is to just be expansive and to know that what you get paid for is the ability to sit across from somebody and say, I can change your life. And that can't happen when all we're doing is being grounded by the budget. Right. Sorry. No, no, that's my way.
- [34:57]
Dennis Scully
Well, but so what does that mean that you do differently? So if right now the average designer is charging X amount per hour and they're marking up product 30% and that's their model, what is it that you are suggesting they should do instead?
- [35:19]
Sean Lowe
If you're Tim Corrigan, Not a fricking thing. Exactly that. Because you want to spend time with them so much, you want to dig in and you want to be related to them and connected to them, that
- [35:30]
Dennis Scully
he has to be paid by the hour because he's spending all that time with.
- [35:33]
Sean Lowe
Yeah, that's all he wants to do is spend time. The more time he spends, the better. Right. And he knows it. The clients know it.
- [35:38]
Dennis Scully
Right, right.
- [35:39]
Sean Lowe
But if you want to say I want to make my voice heard and so I'm going to present you an idea and I'm going to live by the value of that idea and my ability to use that idea to get to the next idea and the next idea, then you'll figure out how to charge a fee to get to that one place and maybe not get more money, but get permission to keep going until you get to the place where you have manifested design. And maybe that's a fee based thing. Maybe that's. If you love your hourly and you want to do it that way, you can charge an hourly rate. I have designers that are kind of in between. They want to just jump in every now and again. And so for them they charge one rate, but then when they're jumping into design, it's a different rate. So what's your self expression? What's it going to be? And something axiomatic for me that at a certain point you don't go second. So no matter what the value of a designer who has earned their way, if you're just beginning, you got to do what you got to do. But the designers that I speak to the most, I like to say it, that you are always ahead of the cash. Meaning that what is the investment of your project? What is the minimum it takes for you to get out of bed? And that number at a certain point for what we're talking about is not $5,000. Right. And if you're going to, even if you're going to go make a million dollars in hourly fees and markups and stuff like that, that if the price for you to get out of bed is $5,000, why would I want to hire you? Why would I want to have that energy as like, I can get you to start working for me for nothing, right? Even if you take a big old retainer. Let me be very clear. If you take a big old retainer against that, you haven't earned it yet. If you don't earn it, you got to give it back no matter what your contract says, right? So for me, it's like, well, that's a real number. Meaning, like. And I have many clients that are six figure just to get out of bed. And it's not because that's braggadocio or anything like that. It's just like we all recognize that this is serious business we're about to undertake. I'm about to undertake helping you change your life. And so if you can't find the way to invest in me money that you might lose, that will make me know that you are invested in this game with me, then why are we here? Really, why are we here? And so for me, just something so simple. What's your engagement fee? And even if you want to know, and I'm not speaking out of school because Vincent talks about it all the time. Vincent takes six weeks to do design. He gets a $50,000 deposit for him that you lose, and then he gets this percentage after that. He's been doing it for 50 years. If you don't like his design, he keeps the 50, right? So think about that. Like if you don't know what Vincent's going to give you. He got 50,000 because he recognizes that me creating for you before you ever see it is worth something thing. And so for me, start with that. Start with just that of getting yourself a significant engagement fee that has nothing to do with other than your talent, wisdom, experience and commitment. And then get paid in advance, then never have to ask for money. I loathe. Again, I'm getting into so much trouble, but I loathe the idea of designers having to go and ask for money after they did the work. After they did the work. So why do I have to, you know, get. And even if you forget about the hourly rate, but those that get a commission, well, the only way that you get a commission is if they give you the money for the product, right? So they have to give you the money for the product plus your commission in order for you to make any money. Think about that power that the client has to not give you the money, but you've earned it already. It's the right thing, right? So why should you be behind the cash? Why should you chase? In what way does that make it a better relationship for you? In what way are you healthier because of it? I just get so exasperated by it because there's no reason to do it. That's this construct that doesn't make any sense to me. Instead, go get what you need to do the work you're going to do and say, hey, I'm not actually in the value engineering business. I'm in the value maximization business, which means how I decide to spend your money is better than you could ever spend it for yourself.
- [39:47]
Dennis Scully
But are there clients willing to do that?
- [39:50]
Sean Lowe
All of my clients. Hundreds and hundreds and hundreds. In fact, more often than not, when it's really properly explained to clients that we are going to work out what my production spend is, and I will never go over it for a dollar, we will agree down the road, as we go down design, that this is the spend I do not make money on the. I will tell you this is what it takes for me to do it. No one would presume that you could get a Mercedes for the same price as a Toyota. Nobody. Once we understand what it costs to get the Mercedes, that's what it costs. That's it. And so we will design to that. And you will then allow me to put all those pieces together to tell you the certainty that would be spent. And that's the subtlety that people don't understand about Vicente. And the biggest lesson, if you were so far into this, but the biggest lesson I ever learned for Vicente was the following. Most people think that Vicente is constantly upselling because it gets 35%. You know what? The one thing that Vicente has never done in his 50 years of business, ever, he's never upsold. Never. Never, ever, ever has he. If he says to you, I'm going to spend $500,000 on product, he never shows you 510, ever, ever. And I love that because that makes the 35% he's going to charge really real. Completely real.
- [41:08]
Dennis Scully
But. But that is the challenge. Because there is this. There is this impression that there's a conflict there. If you're going to be getting 35%, are you going to be showing? Are you going to be upselling?
- [41:18]
Sean Lowe
And that's the brilliance that Vincent has, is that he has never done that. Never. Now Vincent has VW home, and he is going to say. I'm going to say of the 500, I'm going to try to sell you as much as I can from that 500. But he also believes in that, right? So he believes that he's the one who's flying the best product for you, and that's his model, and that's great. But the part that I want to say is, like, he's never going to upsell you. And he tells you from the jump, and he has been known for it for the jump. And so that way he's just telling you it's going to be 500, it's never going to be 499, it's never going to be 501. And he's blown up this whole construct that most people don't get. And the other part about that, I know I'm going way down the weeds, and I'm sorry for this so much, but you're fighting for the wrong money. Why are you fighting for that money? That's silly. Money you're fighting for. If you're fighting for the 35%, if you're trying to get clients to spend more money on that, you're fighting for the wrong money. Because it's not very. This is where you and I meet. It's not very profitable. It takes a whole lot of effort to manifest that work. Months and months and hours and hours and hours to get it right. And if you're fighting for 35% on, let's call it another 100 grand so you can get another $35,000, you're going to be lucky at the end of the day. At the end of the day, you're going to like a restaurant, you're going to be lucky to make 15%, right? So my point is, if at the end of the day you're going to get another 5, $6,000, but you can't then charge a design fee of another five or six thousand dollars where you're going to get 80%. It feels like to me you're fighting for the wrong thing. Right? You're fighting for. You should be paid well to do the work you're doing on the 35%. But you better be fighting for your brain, because your brain is worth what you say it is. That, to me, is the work. So you want to have a flavor of what it is that I do. It's by getting people to really understand all money's not the same and your brain isn't the same and you're not the same. And you're entitled to say things are different and how you construct that for yourself is really for you to do. Because it gives so much more clarity to a client that they don't have to worry that, oh, they're trying to sell me something so they can make more bucks. If clients know how much money you're going to make and they know how much money they got to spend, they're good. Whether they're super, super wealthy or they're even, you know, your, your typical, you know, really successful lawyer, that's something that wants to do over their house. If they know how much the money is and they know that that's not going to deviate, I think that they really find, maybe in my experience, they find that to be comforting. Right. It's like, just tell me what I have to spend. Let there not be any surprises.
- [43:52]
Dennis Scully
Well, and, and that.
- [43:53]
Sean Lowe
See.
- [43:53]
Dennis Scully
Right, right. So that one of the words that's gotten so overused in our industry is transparency. Right.
- [44:02]
Sean Lowe
Makes me vomit.
- [44:03]
Dennis Scully
Well, okay, because why?
- [44:05]
Sean Lowe
Because it's not about transparency, it's about clarity. Transparency is like if you walked into a, and I've said this many times, but if you walked into a grocery store and the bananas look too expensive for you, you're not going to go and ask, well, what'd you pay for the bananas? Because I think you're charging me too much money. That's transparency. But clarity is Those bananas are $5. You either want the bananas or you don't. Right, right. And people have gotten so lost in the idea. And again, it makes me so sad, really, I get really very emotional because why you would never walk into any store and say, what'd you pay for it? You never would ask the level of information that you. That justifies the value of what you're doing in order for you to be entitled to the money you're entitled to make. It feels so dismissive and patronizing to these amazing artists that I just feel like a self inflicted pain. If I could rid the universe of that self inflicted pain of transparency, I would.
- [45:06]
Dennis Scully
Well, but part of the challenge in that. And so many designers say to me, listen, if you've got some Wall street client, no offense to Wall street clients, but they want to know how much that sofa costs. They want to know how much the fricking throw pillow cost, nevermind the sofa. And so because they're going over it with a fine tooth comb and they've got other people going over it as well. And so this whole issue of transparency became, my client has this expectation that I'm going to show them where every dime went. And Part of the problem, I think, that has been created in that, and I think you and I feel the same way, is that many have begun to express that their value as a design firm is that they're so good at keeping everything transparent and showing you everything that's being spent. Instead of the value of my design firm is how I'm going to change your life with this incredible design that I'm going to create for you and the happiness that you're going to forevermore experience in your home as a result of the art and talent and love that I'm going to pour out of myself and give unto you for whatever the fee is. I told you I'm charging. But we got lost sometimes in the. Let me tell you how much the sofa that I bought yesterday cost and how much it's going to cost to ship.
- [46:28]
Sean Lowe
Preach, preach. And I think exactly right. And I think it's the. I think that is so incredibly true. And you're exactly right because. Because it undercuts what is getting done. And the idea of the confidence that a designer should have is that you have perverse incentives. If I get percentage on what you spend, if I get hourly fees or I get something related to the budget, then all I'm going to do is try to figure out how to get you to spend more so that you're built into this distrust. And where you get, where you and I meet is like, what if I just told you, hey, it's going to be 250 a square foot? What part of that don't you understand? And how I allocate those funds is why you pay me. So why are we going down the road of you telling me that I'm not allocating those funds properly? Because that's really what you're doing. The answer is, could you get it for cheaper? Of course you could, just not from me. So the idea of that, of that integrity that gets lost and the idea that a Wall Streeter or whoever would be able to walk in and say, I don't want to pay 50,000 for the social sofa, how do you know that you don't want to pay $50,000 for a sofa? You don't know what that $50,000 does. All you see is that something looks similar to it for 25.
- [47:41]
Dennis Scully
Right.
- [47:41]
Sean Lowe
And therefore, what's that mean? That you get to save 25? No, that you would reallocate those 25 to the chandelier that you kind of want. Well, then who's the designer? Why are they there? So for me, it's like what you're talking about, that transparency part of stuff is like, you're just giving a window into something that doesn't belong. And what I find incredible, too, is the world we live in. And we haven't even touched on AI and all the things that AI brings. But, like, if you think about even when I started with Vicente and PRESTON Back in 2005, the communication tools, the things that you had that you could show to clients, and, you know, it really was, you know, for Vicente, was hand sketches, maybe a pencil drawing of things, and some mysterial boards, which are amazing. But you fast forward today, and I'm not saying how anybody presents is how they present. I mean, I love Kevin Isbell, and he does watercolors, right? That's great. But the ability to communicate however you want to communicate your ideas has never been as powerful as it is today. And yet we're in this idea that we're going to nickel and dime over what things are, all because the client wants to call into question how you're spending their money. Money and where you're spending it, as opposed to just letting you spend it, Right? Because you agreed. You agreed to the ideas like, hey, I told you it was going to be whatever number it was going to be. Please let me spend it and show you, and show you how I intend to spend that money, and please tell me how much you like it, and I appreciate it. And so I get so exasperated by those that have been taught that, and there's only so much they could do. If you get a percentage about it, you got to do it. And I'm like, well, why are you getting percentage then? Because at the end of the day, what it represents is what it takes from you to get it from your head to their house. It's just a huge amount of effort. And for me, it's somewhat of a similar example, but it's like a restaurant, right? So a restaurant think about what it takes to serve you an amazing dish. It's crazy amount of work. But to serve you the cocktail that goes with it, not so much. So design is the cocktail. You kind of want to really focus on that because you know that you have to do great work. The work has to be special, otherwise they're not going to buy the cocktail, right? But the same energy is like, focus on the value of the food because it has to be. But the cocktail is what you're doing, right? And so I just want so desperately for people to undo the models that they've been done and taught over and over and over again that they have to make money on the spend because it's just gonna keep getting harder.
- [50:18]
Dennis Scully
Right. Well, so how can we do that? How can we put that genie back in the bottle somehow and undo how the whole industry at the moment seems to run?
- [50:29]
Sean Lowe
Yeah. You know, I wish. And I really, really, really, really wish that we can allow a change of perspective. And this is where I love what you especially do, but you and Fred do so, so well. It's like, let's bring business discipline into this. The part that I'm going to is like, you guys always talk about earnings. You guys always talk about what these firms make and how they want to make it and what they did. Did they make enough money? What were they anticipating? What did they do? And how do we put this genie back in the bottle? We start with the idea of. Of what's the revenue target for these businesses? Everyone has a revenue target. And to stop with not putting that out to the universe, if I could do one thing, you are obligated to tell your clients your revenue target, because every other business on the planet has to. Right? So you're not any different. You should be saying to your clients, my revenue target for the year, not profit. Right. Because we don't need to talk profit. How much money do I want to make? Make, meaning that I want to be absurd about it. I want to do a million, too. Well, what does that mean? Firm needs 100 grand a month. And even if we just blow up everything we've talked about today, and the only thing that a designer says is, how much do I get? What do I do for the amount of effort it takes me to get my 100 grand a month? You know, when I design for you, it's all hands on deck. It's everything we're doing. We're going to spend three months, and it's going to be 70% of our time. Then we're gonna go down to 30%. So guess what? It's a $210,000 design fee, and then it's $30,000 a month till we're done. If it was just that simple math. Simple math about you doing that stuff. And how would you change it? I don't know very many businessmen on the other side and women on the other side that wouldn't respect that. Your firm needs a million, too. I appreciate you're. I'm one of four clients. This is the percentage that you allocate for me. If you don't like anything I'm talking about, you don't like any of this. Who just do that, right. Of saying, hey, what do I want to make? And how much of my bandwidth do you have to take from me? And then you pair that. Maybe you pair that with the engagement fee. So if you needed a 210, you get 100. And so then maybe it's only a 33. 33. 33. Okay. It doesn't have to be any more complicated than that. But it starts with something so simple as telling the world, what do you want to make in a year? Because every other business has to do it.
- [53:05]
Dennis Scully
But does that go back to the confidence problem that we were talking about earlier?
- [53:08]
Sean Lowe
Is it confidence or is it. Yeah, I guess if you've been beaten down for long enough and been told that you're, you know, you're an artist and not a good business person and that, you know, you're not, you're entitled to make money the way I tell you, you're entitled to make money. And you come from a culture of having to be in, you know, demure and take that as you have over and over and over and over again, as women have and gay men have, like, yeah, I can see how that would just infect you. And you just would be like, I'm not doing it. But I don't think we live in that world anymore. It's just me. I just don't think we live in that world anymore. So I do think it's a confidence thing, but I also think it's a hope thing. And we talked offline about AI. My hope for AI is that it raises the floor high enough so that what really, truly happens to the interior design industry is that people recognize a la the expert, a la anything else that, due respect to Seth Kaplowitz, it is brain surgery. You are deeply impacting the way somebody lives their life on the daily how they wake up in the morning, how they walk down the hall, way they feel about themselves as they come home and eat dinner with their family. You are impacting all of it. And that gravitas is no. Do you have to spend 30 years figuring out how to cut into somebody's head? No, but what you're doing is equally as important and is as impactful. And my hope for AI is that it's going to raise this up to the point where the value is your ability to see somebody and give them the life that they aspire to, whoever that might be across from you. And I think that if you do that with the idea that I can do what I need to do charge how I want to charge and get appreciated for that. Then I think that that's the way out. That is definitely the way out.
- [55:02]
Dennis Scully
We're taking a quick break to remind you about Ernesta. Designers know that proportions make all the difference. And that difference starts with Ernesta. Find a custom size rug that elevates your vision. When you join Ernesta's trade program, you'll receive dedicated one on one support, preferred pricing, and unlimited samples curated for your project. To apply for membership to Ernesta's trade program or to learn more, visit ernesta.com boh and now back to the show. My frustration is often that designers have somehow been presented and sold as people who have access to product or people who can purchase and logistics and all of these other aspects of the mechanics of making this project happen, rather than the art and the soul. That is going to your point. And I was thinking so much since you and I last spoke about this whole brain surgery topic and this ability for designers to rewire your brain through the work that they're going to create and give you a different feeling in your home, to lift your soul and spirit. That's gonna change every other aspect of your life too, that you're just gonna long to return to this space that has made you feel that way, as if it's recharging you and giving you new life. And that's what designers need to be telling people they can do. Not just that, oh, yeah, by the way, I have this great workroom and I can make you this amazing sofa and get you whatever fabric you want and all of that, which of course they can also do as well. Sure.
- [56:58]
Sean Lowe
But, well, that's expected. They have to do that, right? That's the question. I love what you just said. And it reminds me, you inspired the story and kind of like you asked me, like, how do I get the appreciation from this cause truly, I can't start a stick figure. This is not my jam. My creativity is in business. But I did a project with Vincent. He did a hotel. It's now gone. It's not a Kimpton anymore in Virginia. And he did the model room that he designed. And so I went down with him. He let me go down with him to as they shot it and as they were in the middle of construction and he designed it, mind you, and they did a great job duplicating what he wanted. Literally, he's like, give me 10 minutes. I'm like, okay, fine, you're Vincent. Give me 10 minutes. He literally closed the door. I walked into the room. He was like, so you saw the room? I walked in, and he said, get out. Everybody get out. Close the door. Ten minutes. He rearranged the room with his stuff and walked back in. I'm like, what the utter f. This doesn't feel like there's all the same space. I don't know. How did you do that? And he was like, because I see a world you don't. This is what I do. And I believe that so much. And that way of what you just said, the heart, the idea of making this thing to people and make them feel alive, I think you hit on it so much and getting lost in the product and making a living and trying to be whatever it's going to be. Somehow, some way, this whole thing has gotten corrupted. And I agree with you 1000%. And there just is a better way, because I really do believe people want that. And do I think that you can be outrageous and ridiculous and overcharged for that? No. But I think that you are entitled to make the money you want to make. And if you say that your firm needs a million two, and I only work four times a year, why can't you make $300,000? Why can't you? And so that, to me, feels so grounded in the reality of, hey, this is what we do for you.
- [58:50]
Dennis Scully
Right.
- [58:50]
Sean Lowe
This is how we do it, and let's just let me make the money.
- [58:54]
Dennis Scully
Yes. And coming back to your analogy about the moon and the sun, if there is one thing, Sean, that I know for certain in this world, it's that people want to be led. Right?
- [59:09]
Sean Lowe
That's your story.
- [59:10]
Dennis Scully
Nothing is more absolute than people want to be led. And so who better than these talented designers who, as you say, just like Vicente, have the ability to see things that you and I cannot? Let's let them lead us. I would turn everything over to Vicente and say, absolutely. Create my home. Create my whole life for me while you're at it.
- [59:33]
Sean Lowe
And.
- [59:34]
Dennis Scully
Right. And knock yourself out. Or Tim Corrigan, too. Or as you and I have talked about. I mean, I came up at the feet of Thomas o', Brien, watching Thomas o' Brien create what he built and watched in awe. This man. And when he would say to me, oh, Dennis, I'm so frustrated when they won't let me buy the silverware. I'm like, won't let you buy the silverware? Like, I'm thinking, if I had the ability to hire you, I would let you into every nook and cranny of my. Have at it.
- [60:02]
Sean Lowe
Yeah. Everything is Going to be built. Ability to actually communicate those ideas the way you want to communicate those ideas, to get people to sign off on those ideas. And that's the part as a business, you're like, you know, I hope that people don't hear, oh, you guys just want to charge a bunch of money. It's like, no, no. I actually want you to earn your way through design. If the floor plan is everything to you bet the form, show up and bet the farm and say, hey, I know that floor plan is going to blow you away. Then I know the color story is going to blow you away. Then I know the whole going to blow you away. And you have the tools to present that. I mean, I don't know. I mean, due respect to all the architects out there, sorry, but I don't know very many interior designers that are not better interior architects without the name and the whole licensing thing. Because when you open the door, that's what an interior designer does.
- [60:48]
Dennis Scully
Right.
- [60:48]
Sean Lowe
So it's not interior design. There are amazing decorators out there. And it's interesting that obviously it's a misnomer, but I don't think Jeffrey Bilberry is a decorator at all. Right? He's a designer. Because a decorator can do one single room amazingly well. And though that room may or may not be related to the other rooms, but a designer is about the flow of space. Designer is about the inner relationship of everything to everything else and the ability to communicate what that is on every level today is just so easy in terms of the tools available. Hard, because you got to figure it out. And I could never do that, but, like, use that and create that. And so what the interesting thing about what I'm saying is that people say, hey, you just want to be paid. It's like, no, no, no. I actually want people to bet. The idea that I can show you how I intend to spend your money in a way that is gonna blow you away. And if it doesn't blow you away, I'm good not doing it. So that bet on yourself, I mean, it's not even a confidence thing in the sense of like. Cause if you're not worthy of betting on yourself, why are you in the business? Like, really? I mean, if you don't really believe that you have something to share with the world in this avenue, you gotta recognize that of yourself and get out.
- [61:59]
Dennis Scully
Exactly. And you and I have talked about sort of making the yourself and seeing how the bet pays off. You mentioned AI, and I want to talk to you about AI, but Before I leave this conversation, part of me wonders in all that you have learned, seeing how all of these different people charge and how they think about money, part of me has always wondered what is a reasonable amount of money to tell someone who is thinking about coming into the field of design? What can you imagine people can reasonably make for a living? Because so often there's this question of should I stay here working for this firm where I've got my nice 401k plan and I've got my benefits and I'm making whatever $150,000 a year, I'm just throwing a number out. Is it reasonable to think that it's much more open ended if you go out on your own and that's the reason to do it, or what's reasonable to expect?
- [62:58]
Sean Lowe
I think that, that if you pass doing 10 projects a year, that means you have to have a staff and that means you have to have, you're managing probably six or seven people, you can do that. But you're in the HR business as much as you are in the design business. If you're really talking about that critical core business, which probably six people or less of doing, let's call it depending on your projects, five to ten projects a year for meaningful work work, then you're probably looking at a business where. And the kind of work that we are talking about, the houses, the, you know, whatever it might be, we're not Talking about all 20,000 square foot houses, but we're talking about healthy, strong houses, 4,000 to 8,000, something like that. I think we're probably talking about a business that does somewhere between a million three and a million eight in billing, right. And of that, at the end of the day you're going to be doing the work. And depending on where you are in the length of a project, if you're doing a lot of construction projects, you may find not as much profitability on that million eight as opposed to you're really doing a lot of shorter projects where the design fees are up. But I think as a whole, just like a law firm, the target for the gross revenue of that firm is million two, million eight, let's call it a million five. Typical profit should be somewhere in the 50 to 60% on that money. We haven't talked about what the breakdown is on design of the million five versus production. Typically it's 30 to 40% of that million five, 40% will go to design fees, right? Roughly. So somewhere to 6 or 700 would go to design fees on your projects, of which Your margins are going to be 70% and then the balance. So the 900,000 would be towards production where you're going to make 20%. On balance you'll probably make about 50 to 60% of what you're going to ultimately make at the top. Right. So you, the designer as you got to that level probably is making on your core business that has nothing to do with commercial, nothing to do with product, nothing to do with other ancillary revenue, but just on your design business as a fee based business alone. The design business for me is intellectual, it's service business. It has nothing to do with selling product or anything like that. You're going to make about 50 to 60%. 50 somewhere depending 45 to 60%, let's call it at the bottom, 45% of which I'm terrible at quick math, but 45% of the million five is what you would take home. That would be what that core business is and that's what your aspiration could be. And if you get to that place, there are a lot of design firms at that level and they're comfortable and they're comfortable doing that stuff. Some of them layer on doing commercial work which could be hospitality, multifamily restaurants, that kind of work they could sell in product like a Vincent that could sell in product to that work and ancillary revenue there. They could start to do things like Corey Damon Jenkins with Masterclass and stuff like that. You can have a lot of that ancillary revenue. But I'm just talking about that core business really because once you push past that million five, you're starting to get to another level where you're trying to build something bigger than that and it's going to move past the expectation of somebody Saying Hey, I'm one of 12 versus on 105 is just another thing.
- [66:13]
Dennis Scully
Right.
- [66:13]
Sean Lowe
And that doesn't mean that you can't do that. I mean, obviously, you know, the WRJs of the world have 50 designers and they do many, many projects, but that's their lifeblood is that to do as many projects as they possibly can with the staff that they have. And they're great, I love them, they're amazing, amazing at what they do. But the typical firm that we're talking about today that if you were going to go out today and start your firm, where could you possibly get to in six or seven years it'd be that million fold, hopefully making about 50, 40 to 60% depending.
- [66:41]
Dennis Scully
Right, okay, sorry. No, no, no, no, that's great. I mean those are real numbers and that's understandable. So, okay, so that's the goal. Okay, so now let's get to AI because AI might very well change a lot of that equation for many out there. And I wonder how you're thinking about that, what you're imagining happening.
- [67:05]
Sean Lowe
I love AI. I think AI is. And I'm sorry for those that are trying to be the regular kind just. But bitter because I think we're not very far away from someone saying, well, what would Jeffrey do here? What would Vincent do here? What would Tim do here? Pick your favorite, what would they do here? And it would show you, right? And you would get that ubiquity of choice about how they might think about it. And, and that to me raises the floor up because somebody who wouldn't know would get that idea. And so then that takes away and then forget about all the logistics that it's going to solve all of the moving parts and everything else that AI is going to solve that is going to be, hey, not only can we know that this was going to be, but then we can start putting it in motion. I mean, I know I loved your conversations with Lee and how many happens? What do you think she's trying to, to do? Right? So if she can connect with that AI, then she can manifest that for you in a second. Right? And so if you could have a few conversations real time with, you know, pick someone with, you know, Lils McKenna on, on the Expert and then say, then she Lil says I should do this, right? And then you have AI saying, fill in the blanks. Then yeah, you can have your Lil's McKenna house right, in, you know, in, in no time. Right. And so, so I love that because that's not a threat to Lils at all. That's awesome because you're just getting the derivative version of who she is, the best derivative version. And so anyone who would be basically trying to become Lils is out and from every avenue, from a technical point of view, from logistics, even a design. I love that. Right. So the only thing that's left is you want Lils to relate, you want Lils to understand. And so I think AI is going to do a great service to so many in the sense of like the parallel to AI for me, for the design industry is what digital photography did to photographers. And if you think because I know just how many designers pay so much money to photographers and if it was about the image that they could take with their iPhone and then self correct with AI, they would do it. The reason they hire these photographers to do this work is those photographers and the way they see it and the way they capture it is special. And it's different. And more photographers make more money today than they did when they were actually having to produce images. And, you know, we all had to look with the loop and everything else like that. And the reason is, is because they've been unfettered. I worked with a lot of photographers as that transition was happening, and inevitably they were struggling with, well, how do we build? I'll just give them all the, you know, all my images. I'll let people see everything. And ultimately what happened was, like, people don't want that. They wanted them. No, no, you curate everything and show us what you see. And so I think that that's the parallel between AI. I don't know how you feel, but I feel like that's the parallel with AI and design today is because ultimately it's not going to be about your technical expertise. And I feel sad because you have to get technical expertise. And a lot of times you get that by just doing it, as Jeffrey would say.
- [70:14]
Dennis Scully
Well, so. So tell me how you imagine that same impact in the design industry. Because I get the sense that what many are concerned about is that there is a whole tier of designer that will no longer be able to practice in the same way, because AI will be good enough to replace that level.
- [70:35]
Sean Lowe
What I think AI is going to eliminate is value engineering. It's going to be value maximization 100%. And you're going to have to figure out how to make money with value maximization, saying, you're going to tell me how much money you need to spend, and then you're going to show me how you're going to spend it. And I think when that paradigm happens, then I think that designers will be free to express themselves at every level. Meaning, let me show you an idea and how I would go about it and use AI that I know that Jeffrey AI version looks like this. The Tim version looks like this. The Lils looks like this. Barry Dixon looks like this. And let's just put it all together, together. And I get how you love all this, but here's how I envision it for you. And that's going to happen not in weeks or months, it's going to happen in minutes. And you're going to get that information, and you're supposed to build on that information for clients. And I think that's going to be remarkable so that you're not going to get to make a real living by, you know, selling that sofa. You're not going to get to make a real living by kind of dumbing it down. And AI is going to eliminate any ability for you to say, well, I may not be the best at showing you how to spend 10, but I should certainly get you that $10 to your house. I'm really good at that. Like, yeah, we don't need you to do that anymore. Right. We have that. That's what Lee has built. That's what we have a whole lot of things that are going to do that for you and eliminate that from you. And I love that so very much because that is going to force designers to cut from the top and not the bottom. Everybody has to know logistics. Everybody has to be smart on this thing. Stuff. But not everybody can see the world the way you do. Only you can see the world the way you do. And you have to be. And if you're forced, that's the only thing you can sell, and that's the only thing that people are going to pay for. That, to me, is like literally the angel streaming from heaven.
- [72:22]
Dennis Scully
Yeah, that's the shift. I mean, I think that. To the conversation about the table stakes of being able to deliver the product and procure the product and all of that, I think if you're leaning. Leaning heavily into that versus the art and the storytelling and the soulful. I mean, all of that, I think that has to shift.
- [72:44]
Sean Lowe
Well, I think you got to bet, right? I think you got to bet on which place do you want to go. Do you want to bet that you're going to be better than the machine five years from now on the thing that the machine is already telling you it can do and already telling you what it's starting to learn about to do or bet on the thing that the machine will never be able to do. I think you're going to come to a crossroads if you're in this business where you have to make that choice. Choice. I don't think it's a thing that you and I can pontificate and say, I wish, I hope. I think the machine's going to make you right. So you can't imagine that. Think about where it is today. What's AI going to be like five years from now in terms of logistics and moving things around? I don't want to fight that. I don't want to fight the knowledge base that's coming that way. But I do have a confidence that the nuance of what goes where, why it goes where, is something the machine will Never solve. No.
- [73:31]
Dennis Scully
It's going to force so much change. I wonder, as we wrap up, Sean, where are we right now in this moment in time? And I wonder what clients are saying to you and how they're feeling. Here we are. Whether we want to call this an excursion, as the administration is referring to it, or a war in the Middle East. We've got the whole tariff issue and whether tariffs are ever going to be refunded or whether they're going to find some other way to just put the same tariffs back in place. The industry feels as if it's been through so much. We went through the years of business pull forward from COVID What's your sense of where we are? What are clients sharing with you? Is the whole K shaped economy notion that we have a real thing?
- [74:18]
Sean Lowe
I think the K shaped economy for sure is real and I think the upper set is the upper set set. And I think that we really have to define what we're talking about. And for people who want to, no disrespect for those who want to spend a million dollars renovating and furnishing their homes versus the person who wants to spend 6 million. Right. So where are we? And I appreciate that it's rarefied air. If you're having clients that are spending multiple millions doing what they're doing, I think that business is going to get bifurcated in the sense of those that maybe can't be seen doing that work just because of the environments they're in, that they can't be seen creating a lavish home because it'd be unseemly just like 2009. But then there's always those that are like, we're going to put it behind a bunch of walls just like 2009, and we're going to go spend a bunch of money to do the things that we want to do, to live the life we're going to live. And I think those designers that serve that element, I don't think they're going to be touched, to be perfectly honest. In fact, if I think anything, they're probably going to grow. Do I think that you get the step below that? I think that it's just going to be much more challenging because as much as we want to say, hey, things cost what they cost, someone who's going to spend a million now has to spend a million three. That matters. And now all of a sudden you can't create for 700 what you could do for a million because that was the right thing. And I'm not denigrating the million dollar project at all. It's just that that doesn't go as far and people are just going to vote with their hands in their pockets and just sit. And I feel really brutally bad for those designers that serve that market and have that because no matter what you need, what you need to spend to do what you do. And now so many things that are completely out of your control, whether it's tariffs or even the price of oil, which has impact on shipping, shipping. And so that whole notion of that uncertainty and those costs that honestly we don't know who are going to pay for them, how are they going to get paid. And it's not the actually increase in price for me. I don't know what you think, but I think it's about volatility. I think it's about, we don't know are tariffs going to be one? I mean, now the Supreme Court voted them down, are they going away? Are they 10%? Are they going to be 50%? Is oil going to be be $200 a barrel? Is it going to be $50 a barrel? What's going on? And that uncertainty of trying to then do someone's home for them. And someone's saying, well, we don't know, are we going to. Because nobody wants to be made the fool. Nobody wants to say, hey, I spent a million dollars and the war was over. And oh, by the way, tariffs are gone now. My million dollars, I went and spent a million dollars. I could have spent 700. I think that is such a, that tends to make people sit on. I mean, that's a whole other economic thing, but it makes people sit. And I think you agree right volat their hands. And I think that is going to really hurt designers who are in that lower market in the sense of not saying anyone that's spending 500 or a million dollars a lower market, but it is that those clients are probably just going to sit on their hands. The other thing too is that if they're staying in their house, they're doing this stuff. They have the luxury of being able to wait. They may not love their old sofa, but it's not like they're not going to be able to live with that old sofa. I totally agree that the world we're in is. I completely believe in the K shape. I believe that those who have means, those who are, let's call it, have net worths of 15. Even if you lost 20, 30%, you still are worth $10 million. You're still going to do your 100 200, 304, $500 million project. It's when you're worth three or four and you're really making this huge investment in your biggest asset, those people that would help those clients. I think it's really. I feel horrible for that, and I think that is a really place. But I also think that those that are not in that way, you've got to keep doing what you're doing, and you have to. I ultimately think that those at the top of the K actually need to get more expensive. I actually think they need to lean in more. I actually need to think they need to be the paragons, because quite frankly, where else are they going to go? There's only so many people that know how to do that $5 million job. There are only so many people with the capability of manifesting at that level. And if those people in this time in the industry were able to go and say, yeah, we are the experts. We are these people. We are these, these paragons. So you paid us 120. Things just got more expensive. Now you're going to pay us 180. Right? They start to be the leaders that they actually are and get more expensive. Then I think that would have a great halo effect to us. Hopefully we will go past this and they will lift up. And if they were really showing the value of that expertise, it might make it a little easier for those that are at the other end of the day.
- [79:10]
Dennis Scully
So we need the A list designers to start charging a bunch more so the whole rest of the industry can catch up.
- [79:18]
Sean Lowe
I absolutely, totally agree with that. I think that's 100% true. And by the way, so not to embarrass him, but so Vicente, he travels, as everyone knows, Vicente travels December 15th to February 15th. You can't get a hold of that guy. He's gone. And I love it. And I love that he travels. And remember in 2008, the world blew up in August. And so by December, the world was going around. And he's like, what do I do? No one was hiring him. It wasn't anything like that. He's like, should I lower my prices, Sean? What should I do? I don't think the business is going to get back. And so this is me. And you can get a window into me. I was like, double your price.
- [79:56]
Dennis Scully
Double down.
- [79:58]
Sean Lowe
I did. I told him, like, at the time, Vincent had like a $30,000 engagement fee. I'm like, you should charge 75. 75 to get started. You do your 35 and then your minimum you're only going to take on five projects and your minimum instead of being. Because at the time he would do like 400, $500,000 projects. And I said, and your minimum is going to be 800,000. And we fought and we fought and we, we fought because he was like, no, I can't do that. No one would hire me. No one would do anything.
- [80:20]
Dennis Scully
You're crazy.
- [80:21]
Sean Lowe
So where did we wind up? I'm not a shrinking violet, as everyone would say. And he's definitely not a shrinking violet. And it was his business. So we wound up at 50,600 minimum. And do you know that three year period, Vincent, were the three best years Vincent ever had ever. Because he raised his prices when every other designer was lowering his prices. Is Vincent raises prices. And he said, I'm not for everybody, but if I'm for you, I'm the only one. And I'm going to show you what it means to hire a true designer. And so in his own way, yeah, Vincent did. So I know you're being flippant about it, but. No. If a designers would all raise their rates today and show that we are the icons. We are, it would have a halo effect when the world goes back to what it's supposed to be. I firmly believe that. Okay. That's just my personal thing.
- [81:13]
Dennis Scully
I get it.
- [81:14]
Sean Lowe
Maybe it's my bias. Because of what happened with Vincent, John
- [81:16]
Dennis Scully
Lowe feels we should follow the Vicente Wolf model and the A list players need to step up. They thought they were charging a lot already, perhaps, but. Right. But they need to raise it even more for the benefit of the industry.
- [81:31]
Sean Lowe
I think you're exactly right. That's what I'm gonna go with. I'm gonna stick with it.
- [81:34]
Dennis Scully
That's the message coming out of this whole conversation. Sean, I'm so grateful for your time. Thank you so much.
- [81:41]
Sean Lowe
I can't even begin to thank you, Dennis. I just. I'm so incredibly. I think you're. You are an icon in your own right. I really, really want. I don't know how many times you hear that, and maybe you don't. Maybe you do, but you are. You bring such grace with the idea of we can be both things. Right. We can be tremendously creative and we also can run really great businesses and we can put those together and make change in the world. And you do it every day, all day. And I am. I'm just. I'm very thankful for you.
- [82:15]
Dennis Scully
Thanks for listening. If you'd like to keep up with the latest design industry news, visit us online@businessofhome.com where you can sign up for our newsletter, browse job listings, and join our BoH Insider community for access to all online workshops, a free print subscription, and much more. If you have a note for the podcast, drop us a line@podcastusinessofhome.com if you're enjoying these conversations, please leave us a review on Apple Podcasts. It helps others to discover the show. This show was produced by Fred Nicholaus and edited by Michael Castaneda. I'm Dennis Scully. Thanks again for listening and I'll see you next week.