And Now, For Our Next Act

We have made a big decision that in 2015, we will join Facebook and the Facebook Design team. This is a significant move for us, professionally and personally.

We are incredibly excited about the future. The things we will be doing at Facebook are amazing new challenges. The scope and scale of them are simultaneously thrilling and scary. The opportunity to make things that will impact over a billion people is extraordinary.

In a few weeks we will be moving to the San Francisco Bay Area. This will mean saying goodbye to family, friends, Toronto, and Teehan+Lax.

There has been a lot of thought and consideration that went into this decision. Since this will be the last thing we make as part of Teehan+Lax, we thought it was only appropriate to try and tell the whole story…


The Journey to Facebook

All companies are in a continual process of evolution and reinvention. Companies not going through some version of this are companies in decline. This is especially true for a company like ours. The fast paced nature of our industry means we always need to be staying one step ahead of our clients and our competitors.

12 years ago, Geoff and I sat down to discuss the kind of company Teehan+Lax might be. We didn’t have a business plan, nor did we talk about world domination. We just thought we could create an alternative to what were then the standard digital agencies in the market.

We imagined a different kind of company. One that was more concerned about the quality of work than billable hours. One that would allow us as partners to be intimately involved in the creation and execution of the work. One that was really good at making things people would use.

Over the years, evolution and uniqueness remained core values for us. But of course, business is not a linear process. It looks more like a series of steps than it does a straight line up and to the right. When we started out, these steps came pretty quickly and growth was a natural bi-product. But as we got larger and more established, we saw that we would need to drive growth in order to create the space to forge our own path.

If Teehan+Lax was to be successful going forward, we would need to find, what Geoffrey Moore calls, Escape Velocity.

We could see that if we wanted to keep making the things we enjoyed making, working with the clients we enjoyed working with, continue investing in R+D through Labs, attracting and retaining the best talent, and—perhaps most difficult—getting ahead of the business to imagine and implement future visions of Teehan+Lax, we would need greater and greater resources (both human and financial).

If Teehan+Lax was to be successful going forward, we would need to find, what Geoffrey Moore calls, Escape Velocity. Escape Velocity is the work and investment required for established companies to break patterns in their business to find new levels of growth and sustainability.

To compound issues, Teehan+Lax was imagined as a boutique. We had organized it in such a way that scale (in the way that agencies traditionally do this—more offices, more admin, more offerings) was in conflict with the values of the company. If we wanted to be successful over the long term, we would need to fundamentally retool how the company worked to resolve this tension.

We tried to imagine Teehan+Lax as a company at scale and it just didn’t feel right to us.


Moved into action

In January of 2014, one of our Partners, Jeremy Bell came to my office and along with Peter Nitsch, the director of TL Labs, and said they had a product they wanted to work on. They were very persuasive about why this was the time for them to build this product.

Building product isn’t a part time job nor can it be done inside a services firm. It became clear that they were going to have to leave Teehan+Lax in order to work full time on this idea. We agreed to a timetable for their exit.

Their departures were going to trigger significant change in the company. Jeremy had a large team of people and business he was managing. Peter’s work in the Lab had been important in the reputation and history of the company.

While Geoff and I are the most visible Partners in the firm, we are not alone. Jeremy had been an integral Partner for five years. Our other Partner, David Gillis, has worked at Teehan+Lax since we hired him as a student in 2004.

It was the first time in our history we contemplated that the future of Teehan+Lax might not look like the past.

Geoff, Dave and I met. We decided, for the first time in our history, that if we were about to undergo a large change in our company, we would take this moment to consider all available options. It was the first time in our history we contemplated that the future of Teehan+Lax might not look like the past.

We quietly began to put the word out that we were open to having conversations about alternative futures for Teehan+Lax. Joining another company felt like something we should consider. We’ve had offers over the years, but we never seriously considered them. None had gone past a phone conversation or a meeting.

We talked a lot about a post Evan Williams wrote. In it, he talks about when to sell your company1.

He arrives at 3 factors that could justify it:

  1. The offer captures the upside
  2. Imminent threat
  3. Personal choice

We began talking about these criteria but reframed them as:

  1. The offer captures the upside
  2. Maximizing our potential
  3. Personal choice

1. The offer captures the upside
In Ev’s model, this is when someone slides a number across the table big enough that you just can’t say no. While we all love to imagine this moment, it is rare.

2. Maximizing our potential
This is one we keyed in on. The question we asked is, “are we taking full advantage of our potential or could what we do be leveraged more inside another company?”.

Our business was very healthy. In 2014 we had the strongest financial year we’ve ever had. But we believed we had more potential than we were seeing in the numbers: value, both economic and professional, that wasn’t being captured.

In order to achieve these financial results, Geoff, Dave and myself were spending large amounts of time on new business. This meant extensive travel, time away from the office and lack of focus on the work. We felt that if we could find a situation where we were more focused on the work, we could be more valuable.

After all, the thing we loved doing at Teehan+Lax was the work. We were happiest when the products we were creating reached our standards. We were happiest when we spent time thinking about how to create the conditions and circumstances for this to happen. We were happiest when we were working with our team members.

What if there was a company that had a large volume of interesting product design problems but didn’t have the teams to accomplish them?

3. Personal Choice
We talked a lot about what we wanted from our professional lives. After 12 years, we needed to take stock and ask ourselves: what were the challenges we saw ourselves working on for the foreseeable future? We also needed to consider the impact on the people who work with us. If the company wasn’t realizing its potential, employee growth would begin to stagnate. Could another company give our co-worker’s greater professional and economic opportunities than we could on our own?

So we had determined some reasons why we might want to consider alternatives. Now we needed a framework to evaluate potential offers.

The three of us agreed we would look at 3 factors in every offer:

Professional
Were the challenges we would be asked to work on, professionally interesting to us? Did we like and respect the people we would be working with and for? Was the company a company we wanted to come to work at?

Personal
Were we going to be happy? We knew that this decision had personal implications on our happiness. Owning your own business has a lot of freedom. Would we be OK with losing that? What about our families and relationships? What if we needed to relocate? Would we be happy living somewhere else?

Economic
Was the economic opportunity greater than what we could do on our own? Did the economics of the deal capture the upside in a reasonable way?

We viewed and weighed these three factors as dials that each potential offer would be stronger and weaker in. For example, a deal that was less money but let us stay in Toronto with little disruption to our lives might rate low on economics but high on personal satisfaction. A deal that had very interesting career opportunities but required relocation would rate would rate high professionally but potentially low personally.

Each of us was coming from a slightly different place in terms of where we were on these dimensions. This framework let us separate out the issues and discuss them individually. It also gave us a consistent way to evaluate the options. With this in hand we began to speak to a range of possible companies early in 2014.


Meeting with Companies

It was at this time that we met Facebook. Facebook explained their plans for 2015 and discussed how they saw us helping them achieve their goals. What they presented to us was smart, compelling and ultimately convinced us to explore deeper.

It is easy to become distracted with deal points, but it’s more important to ask yourself “what will I be doing every day?” If the professional opportunity isn’t compelling, everything else falls apart.

Some questions we asked ourselves…

  • What will I be expected to do?
  • Will the immediate and long term of the job be interesting to me?
  • Do I like the people I will be working with?
  • Does the company’s vision interest me?
  • Does the company’s culture align with my values?
  • Does this opportunity set me up to do something interesting after? (i.e. will you develop a set of skills that benefit you long term)
  • Will I be successful here?
  • What would prevent me from being successful?

Making the Decision

So why did we choose to leave Teehan+Lax and join Facebook? It really came down to the professional opportunity.

The challenges that we will have at Facebook are challenges that interest us. They are primarily about making things that over a billion people will use… all over the world.

The opportunity to work on interesting and meaningful problems at such scale is very compelling. This may seem like a contradiction given our struggles with trying to scale Teehan+Lax. But scaling a services business and working on design problems and teams at scale are very different challenges. The former wasn’t interesting to us but the latter is very appealing.

The actual act of making the decision was something new, and very personal, for each of us.

Since we wouldn’t be selling the company but instead several of us taking on specific roles, we needed to go through a process of individual reflection and consideration.

We each had to evaluate the opportunity through our own criteria of personal, professional and economic factors. What we learned is that even though we needed to negotiate and decide as a collective group of business partners, we had to make the decision as individuals.

We also needed to ask these questions on behalf of our co-workers without them being involved in the process. This lead us to run through endless scenarios trying to balance the needs of those who would join us at Facebook and those who would not.

Since this would involve all of the dimensions mentioned above, we would be unable to anticipate each scenario, Instead, we tried to make decisions that provided the greatest number of options for people.

At various points in this process we were each in very different places, especially on the personal dimension. What we each needed from any deal was very different. Obviously, we were able to work it out, but reconciling individual needs from collective negotiating was not something we were prepared for.

Ultimately, the things we would get to do at Facebook, the people we would get to work with, the problems we get to solve were too compelling to say no to.

Reflection

Our decision comes at a time where there is a lot of public hand-wringing about the future of design services companies. We don’t doubt our decision will be seen as part of an ominous trend in this space.

But we think that there is a bright future for companies wanting to continue to offer services—it just may not look like it did in the past. There is a whole new crop of smart, talented, and innovative companies coming up, and we are excited to see what they will do.

After 12 years, we feel that Teehan+Lax has accomplished what we set out to. And to the extent that we have been part of a larger story about the evolution of our craft and industry, we feel very lucky.

Thank you to our peers—the designers, developers and those who make amazing things everyday. Your support has been crucial to our success.

Thank you to all of the clients that trusted us with the nearly 600 projects we worked on over our history.

Most importantly, thank you to the 100 people who have worked with us at Teehan+Lax through the years. You shared your talents, creativity, ideas, and careers to be a part of this. The words “thank you” don’t adequately convey the gratitude we have. We are honoured and privileged to have had the opportunity to build this with each and every one of you.

And now, for our next act...


Jon Lax Partner
Geoff Teehan Partner
David Gillis Partner

1 Although, we were ultimately not acquired by Facebook, this framework helped us, and key members of our company, make the decision to join Facebook.