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Jules Ehrhardt and The State of the Digital Nation

TWG's Andrés Aquino and Jules Ehrhardt share their thoughts on the future of the digital studio.

Sometimes an idea hits at just the right time. A conversation, a blog post, a tweet that goes viral, and suddenly it seems to be everywhere. Such was the case with Jules Ehrhardt’s State of the Digital Nation in the summer of 2016. If you were paying attention to the evolution of software consultancies, to the mergers and acquisitions happening within the consultancy space, or the turmoil within the global ad holding groups, chances are Jules’ post was all up in your social feeds that summer.

In an epic post that Jules later referred to as simply as ‘State’, the co-owner of digital product studio ustwo broke down what he saw as fundamental weaknesses in the business models of global ad holding groups and the ‘Big 5’ consulting firms. Technology and consumer culture was evolving much faster than these global behemoths could adapt. Predictable attempts to remain relevant by simply buying up newer, cooler design and product firms would inevitably fail, Jules predicted, as the ambitious and talented value creators chafed at the lack of autonomy and creative freedom.

The alternative model that Jules proposed in 2016 was the Digital Product Studio. He defined this new entity as a blend of consultancyventure and ‘own product.’ For example, in addition to standard ‘work for hire,’ the studio would invest in and work with emerging startups for an equity stake, thereby building up an investment portfolio. Digital Product Studios would also build their own products on the side. No surprise that this closely mirrored ustwo’s business model. In addition to enterprise work for the likes of Google, Samsung and BMW, ustwo made dozens of small investments in startups — typically services for equity. They also developed a number of iOS apps and games (most notably Monument Valley, which ustwo spent $2M to develop and has grossed over $15M in sales).

‘State’ was in many ways a distillation of the global hive mind at the time. The reason it resonated so widely and deeply was because Jules articulated what people in the industry were feeling — a creeping sense of dread and the desire for something new. For software studio owners, for the dissidents within the big agencies, for the digital creative class Jules wrote with an intoxicating clarity, an ability to connect the dots with a healthy dose of humour and righteous anger.

As it turned out, my initial ‘interview’ for a job at my current employer happened in the summer of 2016. Vacations were in full swing, and only TWG partner Andrés Aquino was available for the meeting. We ended up talking about nothing but State of the Digital Nation for an hour and a half. What Jules had written was completely relevant to TWG’s journey, and it was affirming to hear Andrés align Jules’ missive with TWG’s future.

So when we had the opportunity to bring Jules up to Toronto for a talk at TWG in May of 2018, it seemed only fitting to team him up with Andrés and have them relate and debate their respective takes on the digital nation as well as their visions for the future. You can watch the discussion here:

Fortuitously, our event coincided with the publishing of State of the Digital Nation 2020: Venture Road, the equally epic follow-up to the original post. Having recently departed from ustwo, Jules arrived in Toronto at the helm of a new venture, FCTRY, and a new idea: The Creative Capital Studio. So put on a pot of coffee and find a comfortable seat. Jules has something he’d like you to read.