How the Designer Job Market Works (make more $ and be in higher demand)
Critical factors to consider when choosing a domain & niche to focus on as a designer.
The Goal of Design
Many aspiring designers have a fundamental misconception about what design is. They often conflate art with design. Art is about asking questions; design is about answering questions. They are not the same.
Good designers answer valuable questions; they aren't hired to design (create “art”) but rather to create “business value.” All businesses exist to earn a profit, and employees are assets used to earn a profit. In economics, the price for anything (including you) is a function of supply and demand. If you’re a generic designer, there’s a lot of supply relative to the demand. If you get good at solving problems within a specific domain niche, then naturally, there’d be minimal supply and proportionally high demand to hire someone like you.
Think of the demand as “what valuable problems can you solve with your unique skill set that nobody else can?” This sounds like an impossible question, but it's not. The field of design is a vast and deep field spanning multiple disciplines across numerous industries. The odds of other designers having an identical skillset as you are minuscule. Designers who don’t understand this concept jam their portfolios to the brim with design and research artifacts trying to demonstrate their skills. That’s not the point. People don’t hire designers to design; they hire them to solve problems that create business value; the “how” doesn’t matter.
The last post discussed domains and context; this post will focus on the importance of high-value business problems and how to find them. There are two components to consider: (1) market potential and (2) relevance to critical business goals.
The “market” refers to how many customers currently exist (and will exist) in the future within a particular space. You want to explore markets in which you have a unique domain context. If you studied a non-design major or worked a different career (even McDonalds has value here), those all count. However, try to avoid small or declining markets if possible. For instance, if your domain context is in newspaper publishing, the future business value you can create through design might have a limited timeline.
Conversely, you should look into markets that are exploding; any industry in a “war” right now would be a good bet, as the demand for relevant niche designers would be high. Two that come to mind are the “streaming wars” (Netflix vs. HBO vs. Disney, etc.) and “e-commerce wars” (Shopify vs. WooCommerce vs. Magento, etc.)
Alternatively, you could also look into markets that are being “disrupted” and raising a lot of startup capital. The point is, you want to position yourself as a unique designer that can solve high-value business problems in high-value markets. You can hedge your bets on an industry, a new geographical market, or even new technologies. For example, if you’re an established but “generic designer,” perhaps you’d invest in learning how to design for emerging technologies to anticipate future demand.
A Market for Your Niche
If you’re able to combine your design skills with “something else,” that’s the secret sauce to being unique. Every time you’re able to combine design with something else, you become an order of magnitude more “unique” in terms of skill set. This is the best way to create a career moat and generate magnetic luck.
“A career moat is an individual’s ability to maintain competitive advantages over your competition (say, in the job market) to protect your long-term prospects, your employability, and your ability to generate sufficient financial returns to support the life you want to live. Like a medieval castle, the moat protects those inside the fortress and their riches from outsiders.”
To illustrate this, being 99th percentile in general design skills is near impossible, but if you’re a 75th percentile designer who’s also 75th percentile in one or two other things, you’re automatically a 99th percentile designer in that intersection. Focus on making connections between design and seemingly unrelated things that you’re already good at or have a natural curiosity towards. If there’s a market for this intersection (as there often are), you’d be in an excellent position for prepared luck and magnetic luck.
You should be intentional about how granular you want to be in your niche. The more niche you are, the smaller the market for your skills, and the higher the price tag. For example, COBOL programmers number less than a few hundred, and the market consists of just banks & government. Despite the market being so niche, COBOL programmers can still command a salary north of $500,000. In other words, depending on your goals, a smaller market is ok, as long as it has permanence and the demand has high purchasing power.
Goals refer to the four critical metrics all businesses care about: (1) generating more revenue, (2) cutting costs, (3) acquiring new users, and (4) retaining as many users as possible. Most startups use the AAARRR framework, aka the pirate metrics (get it? because pirates say Arrrrrr!), to determine what metrics to focus on at various stages.
The top of the funnel focuses on growth metrics eventually converging onto profit metrics: awareness > acquisition > activation > retention > revenue > referral. With this framework, we can deduce that startups tend to value growth metrics (goals 3 & 4) while corporations and mature companies tend to value profit metrics (goals 1 & 2) more. Keep this in mind as you choose which problems to focus on within your domain. Your design needs to influence somehow at least one of these metrics for you to be “useful.” Otherwise, you aren’t solving problems businesses care about. Why would they hire you?
Profit Center vs. Cost Center
Peter Drucker (a famous management consultant) came up with profit centers and cost centers. Profit centers bring in revenue, while cost centers are required to support profit centers. A cost center’s value is hard to determine; this is why executives keep trying to figure out how to cut cost centers without impacting profit centers. For example, customer support is a common cost center and is often outsourced overseas, where labor is cheaper. Nobody in the history of business has ever tried to outsource or fire their profit centers; they’d get laughed out of every MBA class in the country. Good designers are attached to profit centers. It’s in your best interest to do so. You’ll get higher compensation, more respect, and more significant opportunities.
A Real-Life Example
I used to do freelance design work making $50-100 per hour. I thought that was good, but I provided a service at the end of the day instead of solving a problem. I spent the first several years of my career focused entirely on technical design skills. After a while, I figured out that most of my value didn’t come from the technical design work. Any new-grad designer could replicate 90 percent of my user interfaces, and nobody would notice the missing 10 percent aside from me. Once I had this revelation, I started doing problem-based design consulting and charged 10 percent of the revenue generated or costs saved.
For example, whenever I get approached to re-design a landing page, the real reason tends to be reducing bounce rate, which is related to customer acquisition cost (CAC), a direct metric for the “acquiring new users” goal. Articulate your value in terms of the four business goals. You’re not working X design hours to produce a landing page. You are decreasing their CAC and should be compensated proportionately (I usually ask for 10-20 percent). I smoothly went from $100 per hour to $10-50k contracts (working out to over $1000 per hour). Guess what? The clients were happier because instead of being a cost center, I was part of their profit center.
Never Be “Just a Designer”
Never brand yourself as just a designer who has worked for X companies and shipped Y features. Talk about your work in terms of business value created. Talk from a profit center perspective. For example, you didn’t just design an onboarding flow; you re-designed the onboarding to increase user sign-ups and reduce bounce rate, resulting in X more users per month (user acquisition). To do this effectively, make sure you have a system to track the relevant metrics before and after your solution is implemented. As you get more experience, create a brag document and keep it updated; trust me on this one.
Even if you’ve never launched a real product, you can still leverage these insights. Write out hypotheses (ideas) on how to move those four business metrics and create case studies around them. Your ideas are much more unique and valuable if you can leverage your existing context. These case studies should be public. You should strive to articulate how your designs created business value in a way that’s understandable to a bright eighth-grader. If you can get CEOs and founders within your domain interested in your case studies, you will always be guaranteed a job.
Despite what Dribbble implies, aesthetic design doesn’t matter much. The goal isn’t to create beautiful software; it's to move one of the four metrics—those are your only goals. Don’t bother learning specific tools because someone told you to; learn whatever you need to solve business problems. If you leverage your existing context to find a high-value domain, creating business value as a “profit center designer” becomes simple. The most important skills here aren’t technical; it’s communication and context.
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At the end of each email, I’ll also provide the single most impactful resource related to my topic. This week’s resource is “Don’t Call Yourself a Programmer.” Although it’s aimed at programmers, I found a lot of it relevant for designers as well. Read this if you want to understand the economics of our jobs and how to become (or at least appear) more “valuable.”