Sean Low thinks designers should be the sun, not the moon

27:15And 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 a hundred, I'd be great. Well, then the other question is, well, how much does it take you to get that hundred? Do you need an office? You need help? What does it mean? And let's say, okay, I need to spend a hundred to get the hundred. Okay, now I have 200. And the only other question would be, how much do you want to work? Right? Do I want to do 10 projects a year?

27:44Because some, 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 flex? He has a lot of chateaus he needs to work on. No, there's only so many in the world. I mean, I love him so much. Cause there's only very, I mean, the way that you, yeah, but moving on. Right. 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.

28:24And 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. 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 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, you know, let's not get the picky ones about it. But if I had to work of the same projects every time, then, and I only want to work on four a year and it's 50 per project. That's what I need, right?

29:00And 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 for 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.

29:41At 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.

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30:45For 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 I can tell them, look, if you want to just do straight up, here's the fee, you know, it's a huge number, right?

31:34And 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 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? I'm going to get into so much trouble. I know I am. And that's why we brought you on. Is this a safe space, Dennis? Is this a safe space? This is, you can just tell everyone how you really feel. Don't worry. It's just you and me here. I 100 million percent hate it. 100 percent hate all of it. What? 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 um podcast with jeffrey i can say his name wrong bill hub you were bill huber yeah bill huber um and i love when he was talking about you he's only dealing with great decorators 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 you know and i'm like, yes, yes, yes, you totally have to be incredibly knowledgeable about the tools that are in your toolbox.

32:45You 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 why you get paid. You get paid because of your ways to take those toolbox and create something remarkable with them that 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.

33:24You're 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. Right. Meaning that you, 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. Right. So which one more valuable, right? 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.

33:58And 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 an 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 me. And so I understand that the business was what it was. and people could get what they get.

34:35And 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, that's my way. 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 a product 30 % and that's their model, what is it that you are suggesting they should do instead? If you're Tim Corrigan, not a freaking thing.

35:21Exactly 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 he has to be paid by the hour because he's spending all that time with you. 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. Right, right. 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.

36:03And maybe that's a fee-based thing. Maybe that's a person, 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. Right? 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.

36:38But 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 even if you're going to go make a million dollars in hourly fees and markups and stuff like 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.

37:14If you take a big old retainer against that, you haven't earned it yet. If you don't earn it, you've got to give it back, no matter what your contract says. So for me, it's like, well, that's a real number. Meaning like, and I have many clients that are six figures 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?

37:51Really, why are we here? And so for me, just something so simple, what's your engagement fee, right? And even if you wanna 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.

38:23And 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?

39:00So 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.

39:38I'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. But are there clients willing to do that today? 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 it. 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.

40:15Nobody. 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 from Vicente was the following. Most people think that Vicente is constantly upselling because he gets 35%. You know what the one thing that Vicente has never done in his 50 years of business? Ever. He's never upsold.

40:53Never. 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 real, completely real. But that is the challenge because 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? 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 for that 500 but that but he also believes in that right so he believes that he's the one who's supplying 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's been known for it for the jump and so that way yeah he's just telling you it's gonna be 500 it's never gonna be 499 it's never gonna be 501 and he's blown up this whole construct that most people don't get.

41:53And 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're going to get another$35 ,000, you're going to be lucky at the end of the day.

42:30At the end of the day, you're going to like a restaurant, you're going to be lucky to make 15%. So my point is, if at the end of the day, you're going to get another$5 ,000,$6 ,000, but you can't then charge a design fee of another $5 ,000 or$6 ,000 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, right? That to me is the work. So you want to have a flavor of what it is that I do.

43:03It's like getting people to really understand all money is 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 your typical 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 And maybe in my experience, they find that to be comforting, right?

43:47It's like, just tell me what I have to spend. Let there not be any surprises. Well, and that, see, right. So that, one of the words that's gotten so overused in our industry is transparency. Right? Makes me vomit. Well, okay. Because why? 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 did 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.

44:26You 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 did you pay for it? You never would ask the level of information 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. And if I could rid the universe of that self-inflicted pain of transparency, I would.

45:05Well, 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 freaking throw pillow costs, never mind 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 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 forever more 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.

46:20But 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. Preach, preach. And I think it's exactly right. And I think it's the, I think that is so incredibly true. And you're exactly right because it's also, it undercuts what is getting done. And the idea of like 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.

46:59And 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? And that's 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 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 sofa.

47:33How do you know that you don't want to pay$50 ,000 for the sofa? You don't know what that$50 ,000 does. All you see is that something looks similar to it for$25 ,000, right? And therefore, what's that mean? That you get to save$25 ,000? No, that you would reallocate those$25 ,000 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.

48:05But 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 it really was, for Vicente, it was hand sketches, maybe a pencil drawing of things and some material 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 and where you're spending it as opposed to just letting you spend it, right?

48:57Because 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 how I intend to spend that money. And please tell me how much you like it and 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, right? 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.

49:31And, you know, like I, you know, 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 a crazy amount of work, right? But to serve you the cocktail that goes with it, not so much, right? 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 just like, focus on the value of the food because it has to be, but the cocktail is what you're doing, right?

50:04And so I just want so desperately for people to undo the models that they've been done and been taught over and over and over again that they have to make money on the spend because it's just going to keep getting harder, 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? Yeah. You know, I wish, 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. is like, let's bring business discipline into this.

50:50The 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 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.

51:26You 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? 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 ,000 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.

52:04Then we're going to go down to 30%. So guess what? It's a$210 ,000 design fee, and then it's$30 ,000 a month until 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 one of four clients. This is the percentage that you allocate from me. If you don't like anything I'm talking about, you don't like any of this whole thing, just do that, right? of saying, hey, what do I want to make?

52:39And 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. But does that go back to the confidence problem that we were talking about earlier? Is it confidence? Yeah, I guess if you've been beaten down for long enough and been told that you're an artist and not a good business person and that 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 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.

53:35but 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 dear 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, the way they feel about themselves as they come home and eat dinner with their family.

54:17You 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.

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55:42My 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 going to change every other aspect of your life too.

56:35Yeah. That you're just going to 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. Well, that's expected. They have to do that. Right. That's the table stakes. But I love what you just said, and it reminds me, you inspired the story. And kind of like you asked me, how do I get the appreciation from this?

57:07Because 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 Kempton 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 as they shot it and as they're in the middle of construction. And he designed it, mind you. And they did a great job duplicating what he wanted. I 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.

57:38He was like, and so you saw the room. I walked in and he said, get out. Everybody get out. Close the door. 10 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 sing 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, someway, this whole thing has gotten corrupted.

58:19And I agree with you a thousand percent. 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 overcharge for that? No. But I think that you're entitled to make the money you want to make. And if you say that your firm needs a million, too, 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, right? This is how we do it. And let's just let me make the money. 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.

59:07Yes. Right? Yes, you're so right. 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. 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.

59:52I'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. Yeah. Everything is going to be better. 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 to earn you to earn your way through design. If the floor plan is everything to you, bet the farm, show up and bet the farm and say, hey, I know that floor plan is going to blow you away.

1:00:26Then I know the color story is going to blow you away. Then I know the whole design story is 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, right? So it's not interior design. There are amazing decorators out there. And it's interesting that obviously it's a it's a misnomer, but I don't think Jeff O 'Bilber is a decorator at all, right?

1:00:58He's a designer because a decorator can do one single room amazingly well. And 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, but 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 going to blow you away.

1:01:39And if it doesn't blow you away, I'm good not doing it. So like that bet on yourself. I mean, it's not even a confidence thing in the sense of like, because 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. Exactly. And you and I have talked about sort of making the bet on yourself and seeing how the bet pays off. I wanna, you mentioned AI and I wanna 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 the reasonable amount of money to tell someone who is thinking about coming into the field of design?

1:02:30What 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? I think 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're in the design business.

1:03:11If you're really talking about that critical core business, which is probably six people or less, of doing, let's call it, depending on your projects, five to ten projects a year for meaningful work, then you're probably looking at a business where the kind of work that we are talking about, the houses, 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?

1:03:45And 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, right? 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.

1:04:23Typically, it's 30 % to 40%. Of that million, five, 40 % will go to design fees, roughly. roughly, so somewhere to$600 ,000 or$700 ,000 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. 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.

1:05:04The design business for me is intellectual. It's a 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 1 ,500 ,000 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 later on doing commercial work, which could be hospitality, multifamily, restaurants, that kind of work.

1:05:42They could sell in product like a Vincent. that could sell a product to that work and ancillary revenue there. They could start to do things like Corey Damien-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. Because once you push past that million and 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 I'm one of five is just another thing, right? And that doesn't mean that you can't do that.

1:06:15I mean, obviously, you know, the WRJs of the world have 50 designers, and they do many, many projects, but that's their lifeblood, is 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 to be that million five, hopefully making about 40 to 60%, depending. Right, okay. Sorry. No, no, no, that's great. I mean, those are real numbers and that's understandable.

1:06:47So, 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. 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? What would, you know, 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.

1:07:30and 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 do right so if you can 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, Lil's McKenna on the expert and then say, Lil says I should do this, right?

1:08:15And then you have the AI saying, fill in the blanks, then yeah, you can have your Lil's McKenna house, right? In, you know, in no time, right? And so I love that because that's not a threat to Lil's 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.

1:09:05And 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.

1:09:38I worked with a lot of photographers as that transition was happening. And inevitably they were struggling with, well, how do we bill? 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 want to, no, no, no, know, 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 I ultimately, it's not going to be about your technical expertise. And I feel sad because you have to get technical expertise.

1:10:10And a lot of times you get that by just doing it, as Jeffrey would say. Well, 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. 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.

1:10:46And 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 like, let me show you an idea and how I would go about it and use AI. That I know that Jeffrey, the Jeffrey AI version looks like this. The Tim version looks like this. The, you know, the Lills looks like this. Barry Dixon looks like this. And let's just put it all 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 shouldn't certainly get you that$10 to your house.

1:11:48I'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 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.

1:12:18That to me is like literally the angel streaming from heaven. Yeah. That's the, that's the shift. I mean, I think that to the, to the conversation about the, the table stakes of being able to deliver the product and procure the product and all of that. I think if, if you're leaning heavily into that versus, versus the art and the storytelling and the soulful, I mean, all of that, I think that has to shift. 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? And the thing that the machine is already telling you it can do and already telling you what it's starting to learn about it to do or bet on the thing that the machine will never be able to do.

1:12:58Like, I think you're going to come to a crossroads if you're in this business where you have to make that choice, right? 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.

1:13:29No, 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.

1:14:07What'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? Well, I think the K-shaped economy for sure is real. And I think the upper set is the upper 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. 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.

1:14:47I think that business is going to get bifurcated in the sense of like those that maybe can't be seen doing that work just because of the environments they're in, you know, that they can't be seen creating a lavish home because it doesn't 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, right, to do the things 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.

1:15:17In 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 there's, you know, 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, right? That matters, right? 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, you know, 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, you know, vote with their hands in their pockets and just sit.

1:15:51And I feel really brutally bad for those designers that serve that market and have that because no matter what, you know, 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. 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 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.

1:16:28Are tariffs going to be won? 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$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 saying, well, we don't know. 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. And now my million dollars, I went and spent a million dollars. I could have spent 700. right i think that is such a that 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 volatility makes people sit on their hands and i think that is going to really hurt designers who are in that lower market in the sense i'm not saying anyone that's spending you know 500 million dollars a lower market but it is that those clients are probably just going to sit on their hands right and so and 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.

1:17:25They may not love their old sofa, but it's not like they're not going to be able to live without, you know, with that old sofa. So I think, yeah, I totally agree that the world we're in is that I completely believe in the K-shaped economy. 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're still worth$10 million, right? You're still going to do your 100, 200, 300, four five hundred million dollar project right it's when you know 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 are i think it's really i feel horrible for that um and i think that 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.

1:18:20I actually think they need to lean in more. I actually 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 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.

1:18:56Then I think that would have a great halo effect because 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. So we need the A-list designers to start charging a bunch more so the whole rest of the industry can catch up. 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.

1:19:33And 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 out. 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. Double down. 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 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.

1:20:12And I said, and your minimum is going to be 800 ,000. And we fought and we fought and we fought because he was like, no, I can't do that. No one would hire me. No one would do anything. You're crazy. So where do 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, Vincent raised his prices. And he said, I'm not for everybody, but if I'm for you, I'm the only one.

1:20:51And 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-plus 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. Maybe it's my bias because of what happened with Vincent. Sean Lowe feels we should follow the Vicente Wolfe model. And the A-list players need to step up. They thought they were charging a lot already, perhaps.

1:21:26But they need to raise it even more. For the benefit of the industry. I think you're exactly right. That's what I'm going to go with. I'm going to stick with it. That's the message coming out of this whole conversation. Sean, I'm so grateful for your time. Thank you so much. I can't even begin to thank you, Dennis. I just am so incredibly, I think you're an icon in your own right. I really, really want, I don't know how many times you hear that. 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.

1:22:06And you do it every day, all day, and I'm just very thankful for you.

1:22:37If 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 Nikolaos and edited by Michael Castaneda. I'm Dennis Scully. Thanks again for listening, and I'll see you next week.