This chapter is probably going to be one of the most important chapters you will read in my guide. Why? Because what I’m about to share are things that are not easily available online and has the power to completely change your mindset on the way you make your career decisions.
In short, there are 3 types of companies namely, product-based, design agencies, and service-based companies. I will talk about the pros and cons of working in each of those companies, but I’d like you to first watch this video on product design salaries on my channel to get a brief overview about salaries.
With that being said, let's dive deeper.
Service-based companies are primarily companies that provide external services to their clients. Providing design services is one of the many services they provide. But often times it isn’t their primary revenue stream.
Many times companies like Deloitte, Oracle, and Wipro also have their own division which act as design agencies to provide design services to clients. We all know that these companies aren’t known for providing design services. What this means is that, even if they stopped providing design services, it would barely have any impact on the revenue of the company.
This ideally means that design isn’t given as much importance as it should be and that’s ideally not a good thing for designers working there.
I’ve spoken and interacted with plenty of designers who have worked for service-based companies and a majority of them aren’t happy working there as they don’t see any career growth or the growth is fairly slow.
Based on my interactions with them, the only upside to working in those companies is that you get to work on a variety of projects that have very different problem statements and belong to different industries.
While there are of course exceptions, the disadvantages outweigh the advantages.
As a product designer, the industry expects you to be an all-rounder for 5-7 years of your career. You need to showcase multiple product design skills. You need to be proficient at everything. You don’t really have an option if you’re aiming to have access to many opportunities in the future.
One of the biggest problems of working in a service-based company is that it’s quite rare to get an opportunity where you get to complete the entire cycle. Starting the project with research and handing off designs to engineers is just a part of the cycle.
The cycle ends when you put the product out in the market, see how it performs, learn from data and customer feedback, and focus on improving the experience so that it meets user and business goals. The needs are often changing, and so should the product.
When you don’t own the product and don’t generate revenue from it, you don’t really care if the product is a success or miserably fails. You made a promise to deliver something within a set budget and timeline in exchange for money. It becomes a transaction.
Adding to that, often times you don’t get to interact with the developers. Either the client has their own set of developers or they hire another company to build the product for them.
If your work doesn’t see the light of day or the finished product doesn’t look and work the way you intended it to, your effort is in vain.
Learning to work with developers and having knowledge about how products are built is extremely important for designers. We do not work in isolation. We have to collaborate with plenty of teams and understand how they work.
Often times clients themselves don’t really understand the value of design or care about it. For example, many government and banking apps have really poor experiences because they don’t need good design as long there is a strong user need.
When was the last time you opened a new bank account with a bank just because they had a well-designed app? You open a bank account based on the trust you have in the bank, not the app!
So who is at fault here? The bank or the company designing the app for them? Well, it doesn’t matter. In the end, the bank gets the app, the company makes money and you as the designer are often at a disadvantage.
Other than designers, no one realizes that creating a good design takes time and needs an effective design process to be followed. However, clients often have very strict deadlines and dictate how they want the product to be designed. And if you’re a designer who is just listening to instructions and isn’t solving problems and making decisions yourself, then that’s not good for your growth.
A parent knows what is good for the child. A babysitter just listens to the instructions given by the parent.
While this isn’t always the case, it is quite often experienced by designers.
When you end up working in such an environment, you don’t get to showcase your best skills, you don’t get to follow a good design process, you don’t do enough research and testing to validate your design decisions and you don’t iterate enough to come up with the best solution because of constraints set for you by your company and the client.
I don’t have to emphasize how dangerous this can be for a designer’s career growth.
This brings me back to the original statement on closing the entire loop. It’s crucial that you as a designer see the entire loop being closed.
Finally, a common practice that is often followed in service-based companies is that there is often a dedicated person for each part of the design process.
There is a dedicated person to do research, a dedicated person to make wireframes and user flows, and a dedicated person to design the UI. This is very similar to an assembly line in a factory. You have very limited responsibilities, decisions to make, and very specific tasks to perform.
This itself is enough to limit your career growth. The industry wants and expects you to be a generalist with knowledge of the entire design process. Not just a part of it.
It might be alright today, but not when you feel like you want a better role, and want to switch to other companies. The industry wants more from you.
Now I don’t want to say that no one should work in service-based companies. At the start of your career, you should always take what you can get. But then depending on the gaps in your skillset, it's your choice to decide if you want to continue in the same company or move to another one.
And if you do choose to move to another one, do you have the skills needed for it?
When it comes to design agencies there is only one thing that differentiates them from service-based companies. A design agency’s primary source of revenue is from providing design services.
This means that it has no choice but to value design and hire the best designers it can. However, this doesn’t mean that the problems I spoke about service-based companies don’t exist here in design agencies. They do since they have the same business model.
But in my experience, I’ve seen that design agencies tend to have better chances for career growth. They have a better environment, access to a lot more designers and they are a bit picky when it comes to choosing clients.
I would always recommend designers to aim for product companies because that is where you have the opportunity to grow the most as a designer. Let me explain why.
In contrast to agencies, product companies have their own product that they generate revenue from. This means that unless the product is well-designed and solves a problem that users have, it isn’t going to make them money.
Hence, all the employees of that company are working towards making their product the best it can be. The stakes are very high and so companies often have the best teams to design and build a great product that will help them generate revenue.
But with that being said, it doesn’t mean all product companies are worth joining. There are many reasons for not joining a product company. I’ll talk about that in the next chapter.
But the biggest upside to working in product companies is that you get to complete the entire cycle. If you see a product or a feature fail, you have the opportunity to fix it. If it succeeds you have the opportunity to make it even better. The cycle never ends and that’s when you end up learning and growing a lot.
But of course, this is under the assumption that the company is being run by and you are working with people who are credible, smart and know what they are doing. Just because it’s a product company doesn’t mean you're going to reap all the benefits.
You also get to closely work with engineers to create the experience you want. You get to look at data and make design decisions. You get to do enough research you want to help you make the necessary design decisions.
Since the company is able to generate a significant amount of revenue when compared to agencies, you as a designer are also fairly compensated well. Hence the salaries are often higher compared to other companies.
Product companies need generalists and not specialists. So when you need to be a jack of all trades, you are given opportunities to expand your skill set which leads to good career growth. You are encouraged and expected to be the owner.
My advice has always been the same. Always aim for product companies in the early stages of your career even though they have a much higher benchmark than agencies and service-based companies.
But if you’re not able to get a job there, it’s okay to settle. Take what you can get. It’s okay to start your career in agencies and service-based companies.
If you’re expecting fast and long-term growth, give yourself 2-3 years to switch to a product company. The faster, the better. Can be even 6 months. Doesn’t have to be 3 years.
The most important thing to understand is that you need to find the gaps in your skillset and focus on learning them if the company you work for isn’t giving you the opportunity.
With that being said let’s now go to the next chapter and understand how to know if a product company is worth joining and if it values design as much as it should.