Rally 2024 | Year 1

What we learned and earned in our first year as a design studio

Andre de la Cruz

Dec 31, 2024

Hello! I’m Andre. I run a design studio called Rally, with my partners Dan and Josh. Founded in NYC, these days we operate as a remote team across NYC, Chicago, and Vancouver BC.

This is a look back on our first year(ish) in business: our highs and lows, what we made and spent, and what we learned building a design studio from the ground up.

I want to acknowledge that we’re not the first to pull the curtain back this way. Transparency is trendy, and I love that it is. I hope it continues to be. These are the kinds of insights and resources I wish I had starting Rally.

If you’re a small business owner, I hope this encourages you to share openly as well, to lower the barrier of entry for others. If you’re someone who’s been thinking about starting your own thing, I hope this nudges you closer towards making the leap.

Contents

About Rally

Background

Year in review

Year in numbers

Year in pictures

Looking back, and forward

Thank you

About Rally

Rally is a brand and product design studio for growing startups.

As the leader of a startup, simply connecting the dots between what you need and what the right designer looks like can be a challenge, not to mention vetting, hiring, and onboarding designers with what they need to be effective. Predicting the skillsets and level of support you’ll need in 6 months can be even harder. Unicorn-hunting to find the designer that’s 100% everything in one person—that’s a needle in a very big haystack (especially in this market).

Enter Rally. We make it easy to plug into our established team of vetted senior designers, so you can hit the ground running. We believe crafting impactful, distinctive products require 1) assembling a tailored fit team and 2) creating the conditions for great design to happen. We’ll curate and deploy an adaptive team of specialists that will shape and reshape itself to best fit your team and needs, now and into the future.

We love building 0-to-1 brands and products, and embedding with existing teams to push what you have today closer to your ideal vision. This often includes:

  • Brand & identity
  • Website design & copy
  • Product management & strategy
  • Product/UX/UI design
  • Design systems

Background

It’s July 2023. I’d just lost my job, and Dan had lost his earlier in the year. The following week, I flew out to Chicago from NYC to attend Josh’s wedding. The 3 of us know each other from our Boston University days. We even tried to start a design studio 10 years ago, but our 9-5s were too comfy. In that decade though, we found every opportunity to work together on fun projects, while also honing our craft and gaining invaluable experience for running a business of our own.

Josh, Dan, and I are experts in product, brand, and UX, respectively. Josh did an MBA, launched some big name consumer products, and grew into a product and people leader, most recently at a large agency. Dan built his career freelancing, chasing exciting projects and crafting brand identities for both early startups and global brands. I’d spent the most recent half of my 15-year career in player-coach roles with startups: building and leading design teams, and in the trenches with founders and founding teams to take products from 0-to-1 and beyond.

Starting a studio this time around, we were ready for a change, eager to work together again, and committed to building something of our own, our way. The last few years, I’d seen entire design teams let go, at 3 different companies. We’d all seen sweeping layoffs and tightening budgets, but the work still needed to get done, and we felt particularly well-positioned to do it.

Our hypothesis: Businesses are still willing to pay for great design, but not at big agency prices. Businesses also still want the in-house design team experience, but can’t commit to hiring full-time employees or constantly vetting and managing freelancers. As needs change, they want a trusted design team that can change with them: a UX specialist now, then a brand specialist later, at 20, 50, or 100 percent capacity.

Our idea: An in-house design team experience for growing startups made possible through adaptive, fractional teams, managed by an expert partner who knows how to make design teams go—all at a realistic price.

Year in review

We launched publicly in August 2023, and had a tough first few months. Our network showed up and brought in leads each month, but we struggled to close. When we did close, we underpriced ourselves, and did more free work than we should have. We know design and design teams, but sales, marketing, and finding and closing customers—this did not come easy. By December, prospects went quiet, but we had a few verbal commitments and promises to circle back in the new year. Optimistic, we used the downtime to onboard a few trusted designers from our network, and contractors to support sales and marketing.

In January, circle back they did. We kicked off new projects that would span most of the half. Dan was full speed ahead on client work, and managing those relationships. After supporting us on an RFP, Josh officially joined as our third partner the month prior, which was huge: he tightened up our proposals and sales playbook, and got our books and legal side of the house in order, esp in preparation for tax season. This freed me up to onboard new clients and designers, and fully engage in sales and lead gen with our sales consultant. We launched our first cold outreach campaign and attended more in-person events in NYC. This didn’t directly result in signed clients, but we developed a few great relationships with VC firms and other small shops that would send us work later. (Clients referred by channel partners made up almost half our annual revenue—partnerships and warm leads are the way!)

By summer, we were busy. Our sales and marketing efforts had paid off. We won new clients, including a few more needing ongoing product design support. We sold larger projects and longer retainers. We’d built a core team of designers and a delivery model that would carry us through the year. We had a pitch that was easier to understand, prices we could sell confidently, and margins we felt comfortable with.

With the business in a better place, we revisited our roles: Josh picked up sales and account management, Dan continued to focus on client work but in more of a player-coach capacity, and I continued to oversee product design projects and focus on lead gen. We also took proper vacations for the first time since starting the business. Even though things were running smoothly, we also had more active clients than we’d ever had at once. We staggered our time off, so only one of us was ever out. Josh went for his honeymoon in Japan, Dan went for a cruise, and I took my parents to Greece for a few weeks. Coverage-wise, it wasn’t perfect, but we were able to return from vacation to find things running just fine. Paid time off! What a concept.

Business remained steady into fall, and our team of designers grew. While we had a few more projects come our way, we had capacity to take on even more. We noticed that, historically, almost all signed clients had come in as warm leads from our network. We were still experimenting with cold outreach through a new vendor, but we’d not seen much success with it in the past, and we were not optimistic. We’d spent a year trying all sorts of things to more predictably bring in new business, and we didn’t feel confident in how to best spend our time moving forward.

To prepare for 2025, we hired a marketing expert who specializes in helping agencies grow. He worked with us to firm up our positioning, tighten up existing marketing efforts, and develop a strategy and plan for the new year. The plan aligned with our suspicions about what does and doesn’t work for us, and introduced new insights and ideas we would not have considered otherwise. Most of all, he considered what we could realistically commit to, with consistency. It was a fun process, and we were thrilled with the result. (If you have a similar need, you should absolutely hire him too.)

As the year ends, we’re keeping a few projects moving, but otherwise having a familiar December of verbal commitments and “let’s circle backs.” I also made a big move from NYC to Vancouver BC last month, so I’ve personally had to slow down by necessity. With the downtime, we’ve shifted our focus to internal projects: content, case studies, revisiting the website, and, most of all, making sure we say our thank you’s to everyone that helped get us here.

Year in numbers

All-time monthly revenue since launching publicly August 2023

What we made

In 2024, we made $418,874.96 in total revenue, with a 70/30 split between product and brand work.

⚡ We made $301,206.17 from product design work

This is usually ongoing support with our designers embedded on the client’s existing team. Sometimes the client already has an initial set of projects and milestones in mind, including detailed requirements. Other times, we’ll co-create a product strategy, roadmap, and detailed requirements with the client upfront, led by a product manager and/or principal designer from our end, before we assemble the right team for design strategy and execution. Since we operate like an in-house design team for the client, these engagements don’t have an end date and usually last at least 3-4 months, with clients often going longer or pausing briefly and returning later.

🌟 We made $117,668.79 from brand design work

This is usually project-based with an estimated scope and timeline defined upfront. We focus on brand identity work, paired with a website design and build. Sometimes the brand work is more robust and includes naming, logo, guidelines, and more emphasis on exploring different directions with a designer, writer, and/or strategist. Other times, it’s more tactical, in service of getting a brand and website stood up quickly, along with marketing materials the client can use right away (deck templates, social assets, etc).

We also support ongoing brand and marketing design needs, similar to how we support with product design—in practice, it’s all just one design team, with different resources swapping in and out as needed. As an example, we’ll commonly add a brand designer to an established team roster of product designers, when the client finds they’re ready to shift gears from product to marketing priorities. Similarly, we find brand projects often lead to product design work.

💪 We sold $346,534.13 worth of work ourselves

This is work we sold as Rally where we own the client relationship as a studio, as opposed to us freelancing as individuals or studio collaborations where a partner studio sold the work then brought us on to support them. This is a big deal for us because, frankly, we were pretty terrible at sales. Early on, I even considered taking on a freelance gig that would have taken me away from building the business for three months. Even with a tough job market late 2023, it was still much easier to find freelance gigs and sell ourselves as individuals than it was to sell ourselves as Rally the studio and team, especially as a new business. With time, we figured out a v1 sales playbook, pitch, and pricing that got us over that early hump. We’re simply not salespeople by background, and there’s no substitute for experience. I’d say we’re just decent at sales now, but always getting better.

🤝 We made $72,340.83 through studio collaborations

These are projects where we teamed up with other studios to create something together. Our collaborators include studios similar to us who also do brand and product design, others who more narrowly focus on brand or product strategy, and even website and software development shops. We love team ups, and we’re keen to do more of these in the new year.

More fun stats:

✨ Most revenue from one client: $85,300

🗓️ Longest client engagement: 7 months

❤️ Clients that came back for more projects: 50%

What we spent

These were our biggest expenses in 2024.

💸 We spent $295,882.09 on salaries and wages

This is what we paid our team and ourselves. As co-owners, we set individualized target salaries based on personal situation, contribution to the business, and what allows us to show up each week excited and motivated to do our best. We also keep it flexible for the way life and work are bound to change throughout the year.

As for contractors: So far, we’ve built our business on hourly margins. It took time to figure out a price we could sell confidently that allowed us to 1) afford the kind of designers we wanted and 2) make enough margin to meet our target salaries, cover remaining expenses, and keep some money in the business. We primarily look for senior designers living in US timezones, and are native level english-speakers. They need to be strong client-facing, with a high degree of accountability, professionalism, and commitment to service (and stellar design chops, of course). The strongest members of our team tend to be freelancers with in-house and/or startup experience, and operate like business owners themselves (because empathy). We also make sure there’s coverage on our bench across brand and product skillsets, and experience across the industries that our clients are in. Hiring-wise, the market as it is, we’ll post a job, get 200 applicants over 2 days, and maybe only 5 are a fit on paper. This is a little bit why we’re in business.

A tangent on pricing: While hourly margins have been working alright for us so far, we want to grow and are interested in other models. We tried flat monthly subscription pricing early on, but we found it was confusing to most prospects during the sales process and didn’t offer enough flexibility for the way our clients’ needs changed over time. We’ve considered fixed pricing, value or deliverable based, for projects that are more of a known quantity. But for things like ongoing design support, or very bespoke products and features, fixed pricing feels risky. If you’re someone that’s already been down this road, I’d love to chat.

📢 We spent $30,613.36 on marketing

$30k…feels like a lot. I had to double-check the math. I have mixed feelings about this category. We experimented a lot this year and learned some valuable, and expensive, lessons. As mentioned before, we hired a consultant to develop a marketing strategy and plan; an investment we’re happy with. The smallest slice was experimenting with ads, which didn’t produce results, but I can see now how we could’ve executed better. The largest slice was experimenting with lead gen, ie hiring others to generate leads for us, with guidance from us. We wanted to see if we could bring in more business, beyond leads from warm outreach we were already doing within our network, especially during periods we felt we’d tapped it out.

We started with an experienced sales consultant, who did amazing work: thoughtful prospect lists and highly personalized messaging, based on deep customer research and a well-considered strategy—and he was a joy to work with to boot. In our brief time together, he booked severals calls with highly qualified leads; we met some great partners, and even signed a valuable client, thanks to his efforts. However, we found we couldn’t continue to afford his expertise, and explored more affordable options. We tried two offshore vendors that seemed promising, but got us nowhere. To be fair, they simply were not a fit for our business and the kinds of clients we wanted. But most of all, they lacked the personal human touch we hoped they could capture from our first attempt working with an individual expert.

🤖 We spent $11,704.05 on software

I know few who love tools, process, and productivity more than me. Our stack essentials include Slack, Figma, Quickbooks, and Google Workspace. Loom and Notion are less must-have, but our lives are less without them (I feel this way at least). I can also settle for “good enough” where having the best matters less. We use Clockify for time-tracking; I don’t love it, but it works. We also have paid Calendly accounts, but I’ve found sending a link feels too impersonal in most cases. I’m also very particular about my schedule, so I prefer to simply coordinate time manually these days.

Year in pictures

Our launch party at SPIN NYC
My old office in LIC, with very good boy Felix
Fun little calendar we sent out last Xmas
Special deliveries
Impromptu album cover shoot, Ucluelet BC
My going away party at Other Half Brewing in Brooklyn
Cubs game and first onsite in Chicago
Dan looking forward to 2025

Looking back, and forward

Looking back on our first year+, I’m proud of what we’ve built. I’m even more proud of how we built it, through well-considered decisions made together in service of finding the best path we can for everyone involved and keeping our business human. Personal relationships feel like the biggest contributor to any success we’ve had, and we take that to heart as we continue this journey.

Looking towards the new year, there’s a lot we’re excited about. We’re keen to grow the brand side of the business, and we’d love to do more studio collaborations. We’re kicking off new clients in January who are building some very cool products. We’re exploring a model that allows us to comfortably offer a cash and equity option to clients, as compensation for our services. We’ve also recently added new members to the team including a project manager and a design lead supporting more complex projects (multiple designers and workstreams). We’re working on case studies, a new website, and I’m hoping to do a lot more writing, networking, and in-person events in the coming months.

Thank you

If you’ve ever taken a chance on us—hired us, consulted with us, referred us, or simply liked one of our LinkedIn posts so your network could find us—thank you, from the bottom of our hearts. We wouldn’t still be here without you.

For all those interested in starting their own studio: come on in, the water’s fine. We believe there’s always enough room, and maybe we can work together.

For all the mid-career folks who feel they’ve missed their chance to start over—that building something new 10-15 years into a career is too late—consider the experience you bring to the table, and the network you’ve built. I don’t know your personal situation, but consider that it might actually be the best time for you to bet on yourself.

If you want to continue supporting us, client referrals are always great. We’re also looking for a design lead and a brand strategist, if there’s anyone you’d recommend.

If you’ve made it to this point, we'd love to hear from you! What did you find valuable or interesting? Is there something you’d like to hear more about? Let us know.

Happy New Year!

Andre, Dan, & Josh

PS: Being new to Vancouver, I'm eager to make friends and build a community. If you're in the area or know someone here I should meet, pls reach out!

Email me at andre@joinrally.co

Follow Andre or Rally on LinkedIn

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