Ok Now Let's ALL Do It....

This month in 3DWorld there is very interesting guide on starting a boutique studio. What is very interesting to me is that they only casually pass over the 'capitalization' phase of business planning. Paraphrasing the idea is [a loan is risky because you need clients to pay it off, and you need clients anyway, so best way to go is get lots of clients beforehand, and start with a full slate...]

That would be ideal, but there's a problem with 3DWorld's suggestion. What is strikingly obvious to anyone who has ever worked in a boutique is there is a lot of expansion and contraction as projects come and go. That is done to reduce overhead as much as possible when there are not checks coming in. Elementary. But that is not the only capitalization consideration one must consider. There is also the (in my mind) much more pressing issue of equipment and tech. A stupid Digibeta deck looks and works like an over sized VCR, but it costs 6 month's rent. Thinking of shouldering a project, but never rendered fur before, and definitely not at 2k? Your 10 proc farm ain't going to cut it anymore. So there the problem of being able to "afford" a project comes into play. A production has the choice to go to Studio A, who has everything they need already, or to Studio B, who has to build this software and equipment costs into a bid. Studio A could be up to snuff for many reasons; they could be an older studio, they could have been a well-capitalized startup, this could be their focus and specialty anyway, they could be quietly taking a loss on a project to partially offset equipment costs as much as possible and break into a new market with an established client. But as we sort through possibilities of why a certain studio can compete for any work, it starts to sound a lot like the rationale of starting any studio in the first place. 3DWorld made it sound like any schmoe who can talk his way into being the main CG vendor for a summer blockbuster has got it made. Far from it.

Just a quick aside, what the article also fails to mention is that for all the work that any person may be extremely skilled (may even be the best), starting a studio, and taking on group-sized projects are very different things. One is for people who have to have a higher goal in mind, the other is for people who are tired of working for someone else. It's well known that if the only reason a person starts a business is because they are great at what they do, that person is better off just sticking to doing what they love and are great at - they will be happier, they will make more money, and they won't end up being inundated with business minutia that ruins their passion. I have friends who dole out work to their buddies and hammer it out nights and weekends. That is not a business, but that is the best option for artisans who know their craft well. My goal has always been to create feature-length animations in house, and I keep my eye on that prize constantly (and I know that getting there is going to mean a HELL of a lot of "not-animating.")

I guess the way I would rather have read it, is if you are really going to try to start a studio, the best way I know is to VERY slowly ramp up in a reasonable, controlled manner. Do a freelance project with 2-5 buddies, and wait to bet the farm on opening CG shop, because nobody will want to be your first client knowing the entire budget is spent on a dozen Dells and matching Herman Millers, not the characters' performance...

-k

p.s. We're starting to get out from underneath the dust at the new space in LA. Check it out: