i/o360

i/o360 is an interactive media design company founded by a few recent graduates of Cooper Union that has done very high-profile work for some of the largest and best known companies in the world, including Bellcore, Sotheby's Auction House, Viacom New Media, and Pathfinder's Virtual Garden.

What has enabled this gang of twentysomethings to win the hearts and minds of these plum clients in the face of stiff competition from major advertising agencies and established design firms? I spent a few days speaking with them recently, and I'd have to say that what separates them from the rest is a deep and unique understanding of how people interact with electronic media. They are first-rate graphic designers, but their talent goes beyond making sites that look good. They are able to work with programmers and information engineers to make sites that are intuitively easy to navigate and use.

i/o360 was started in 1994 by Cooper Union grads Nam Szeto, Dindo Magallanes, and Arek Banasik, and venture capitalist/manager, Bob Clyatt. Clyatt invested $100,000 of his own money to give the young talents a place to do business and the necessary overhead. Nam's architect brother Gong joined them in 1995. As CEO, Clyatt has brought them from nominal revenue in 1994 to $1.3 million in 1996 and a projected $2+ million in 1997.

Initially, they worked on CD-ROMs and games like "Shadow Warriors" for 3DO. They got into Web development in 1995 when they worked on the Riddler game site. Soon they were being contracted by advertising agencies to work for Sotheby's and Bellcore. They designed the Dow Jones and Company umbrella site and two departmental Intranets for Reuters. When the Reuters CIO saw what they had done, he decided that it could be the standard for the entire Reuters Intranet.

The creative partners think of themselves as designers who are also "tech geeks." They believe that you can't understand interactive projects from just one perspective, and that if you want to understand what works in the medium, you must understand what goes on technically. Gong Szeto puts it this way: "The medium is about the marriage between the engineers and the visualists."

To this end, they expect all their designers to write meticulous HTML and believe that if you really want to control the look of a site, you have to know how to write the code. What's more, they write it on the server command line with a text editor like vi or emacs--not a high-level authoring tool. The designers find this empowering rather than limiting because it removes the mask of the graphical user interface and "feels more like using a computer."

Unlike many of their contemporaries, i/o360 is not planning to go public anytime soon, and they're not trying to raise money in order to expand. They're simply having quite a nice time doing what they love. Now they have a lot of freedom and are not beholden to investors anxious for them to double their revenue every year.

i/o360 has only 20 employees and do not plan to grow much bigger. Clyatt says you can't run a company like this with more than 40 people. When you get that big "it's not as much fun." Clyatt knows this from years of working for information industry giant Reuters, and he clearly loves commanding this small but dynamic company.

What are his challenges? "The problem is how to manage work to profitability. The worst thing that can happen is to bid on a job wrong and have it get out of control. "It's about project management." Clyatt counts hiring project managers to "mother hen" their projects as a big step in i/o360's development. His project managers, Joan Obra and Elana Grossman, are both recently out of college with liberal arts degrees. Why not technical or design degrees? He thinks liberal arts majors possess a "big intelligence" that enables them to deal with ambiguity and draw clarity from the chaos.

How do they price their work? "Pricing is a very complex matter, and it's easy for design firms to lose money by underpricing. You must be able to accurately estimate just how many days it takes to do something." On a typical project Clyatt will budget as follows:

Personnel
Creative Director	$850/day x 23 days =	19,950
Project Manager	$400/day x 23 days =	9,200
Designer (s)	$550/day x 29 days =	15,950
Programmer	$1000/day x 5 days =	5,000
Writer	$500/day x 9 days =	4,500
Subtotal		54,200
Production Fee/Overhead 17%		9,200
Monthly Billing		$63,400

They anticipate revenues of $2 million in 1997 by keeping three teams like this working all the time. The metric they like to use to measure their success is $100,000 in billings per staff member per year.

They've also recently hired Naomi Moriyama, a young Japanese woman with media industry experience in New York and Japan to handle business developement. She's agressively developing opportunities for them in Japan--a market they perceive to be 12 to 24 months behind the U.S. i/o360 feels they're in the right place at the right time, and that they will get a lot of Asian business in the years ahead.

The future looks very bright for them. They feel that the Internet is currently witnessing the second wave of Web site design. Sites that were originally designed for the first generation of browsers are now being redesigned to exploit the newer features such as tables, frames, and interactive components like Java, Shockwave, and ActiveX.

Another important new development is dynamic content, i.e., sites being generated on the fly. These designs are template based--with graphics and text being combined in the delivery process rather than installed on servers.

These developments make i/o360's understanding of the "big picture" in Web design even more fundamental as design moves away from designing individual pages and toward designing "user experiences" in a free-form way that is not tied to the particular content of a static page.

Past installments of Multimedia Web