Innovation is absolutely essential to the success of any business. The moment you become "one of the many", you have to compete. During the Oscars this year, the visual effects industry came together in protest to create awareness of the financial struggles many companies are facing due to heavy competition both locally and abroad. One studio in particular, Rhythm and Hues, plans to file for bankruptcy despite having won the Oscar for "Best Visual Effects" for their work on Life of Pi this year.
Over the past few weeks, I've seen several friends change their Facebook profile images to "chroma key green" in support of the industry, and just as I was about to join the movement, I took a step back and thought, "How is this different from any other business in America?" This country has been losing jobs overseas for decades, and in efforts to survive, companies undercut one another until the value of their industry is reduced to virtually nothing. The bottom line is that nobody will value what you do more than you do yourself, and if you want to survive in any business, you need to stop competing and start innovating.
I'm always shocked when I come across solid young freelance talent and ask them what their rates are and they are about half of what I expected. They don't know any better because no one has told them otherwise, and their living expenses are low, so they work for what they need rather than what they're worth. This is where the problem starts, because taking advantage of that talent allows those shops to undercut their competition and increase their profits; it’s a vicious circle that leads to developing talent that thinks this is the best way to do business.
Ten years from now, these artists may decide to go into business for themselves, and their concept of fair compensation will be totally skewed, contributing to a negative market shift and a decrease in the value of the industry as a whole. It's our job as the business owners to educate artists about their value. Whenever I'm shocked by an artist's personal undervaluation, I always let them know what I think they're worth. Treating artists with respect and compensating them fairly for their efforts pays huge dividends because it enables us to secure top talent when we need it.
Artists undervaluing their own talent is only part of the problem. There's nothing wrong with working at a fixed bid as long as you clearly define scope at the start of the project. With a fixed bid, both parties know the parameters of the job from the start, and if issues arise that are out of your control, you already have a framework in place to help determine any additional costs. You'll always be up against other businesses that are willing to undercut your prices, and if you get in that game you'll never get out. Competition driven by fear is a losing battle.
Make it a priority to develop relationships built on mutual respect, and don't be afraid to walk away from clients who want to take advantage of you. Avoid falling prey to the "We'll take care of you on the next one" mentality. I don't think I can ever remember a time when I've been able to take a bite out of a carrot that was dangled in front of me... The key to running a successful business is no different from the key to a satisfying life: it's all about good relationships, and when you build them on trust and mutual respect, everyone wins.
Neo-Pangea is a small boutique, but every year we take on few internal projects and push ourselves to do things we have never done. Last year, we wanted to do something with Phidgets microcontrollers and robotics, so we created the INTERN ABUSER, a two-day experiment in technological insanity. Online participants had the chance to fire three Nerf darts at various targets that triggered different booby traps on our intern's desk; it was absurd and fun, not to mention a huge success. The project was an amazing learning experience for us and was a finalist at the 2013 SXSW Interactive Awards against the likes of Atari and Microsoft. Innovation, creativity, and passion go a long way when you're trying to set yourself apart from the pack. Fear drove the VFX industry to this point, and as shops close their doors, those who are left will have the power to reshape the industry for the better as studios are left with fewer top-quality VFX providers.