'Our growth strategy in a highly competitive industry'

Ever wondered what goes into making advertisements, and how much those graphics cost to produce? The founders of one visual effects business reveal how they stay ahead in a highly competitive industry.

Humble beginnings

Brisbane-based Alt.vfx was born in 2011 out of a need to evolve the visual effects industry, according to its founders Colin Renshaw and Takeshi Takada.

“The way visual effects had been done certainly had stalled or plateaued, and we had some new ideas and a new business model that we wanted to try out,” explains Colin.

“We wanted to be a responsive, small, creatively driven or creatively focused kind of company. We wanted to go above and beyond – get behind ideas and make good stuff.

“In order to do that, we needed to change the business model to be able to work faster, to iterate faster and to innovate faster.”

Even as a new visual effects studio, Alt.vfx won the pitch to produce the effects for the Tooheys Extra Dry 'Nocturnal Migration' advertisement.

“It was our first project, our first baby,” recalls Colin.

“We made it under very trying circumstances as a fledgling company, and we did a great job.”

Those circumstances included the lack of an actual studio in which to work.

Screenshot of Tooheys Extra Dry Nocturnal Migration advertisement“When we got that project awarded, we actually didn't have an office,” explains Takeshi.

“We had six of us setting it together, waiting for us to move into our office, and testament to our team, we pulled [off] one of the biggest visual effects projects of the year, and we actually collected a lot of awards all around the world and made our DNA of the company, and we still carried through.”

Colin adds: “We've done a hundred great jobs since then, even more technically challenging, with better results, but I would still say that will probably be my favourite. Just because you always love your first.”

What are visual effects?

In Colin’s words, visual effects are about making the unreal real, “whether it be creating a 50-foot lava monster or it's being able to make a stunt that would be impossible, possible”.

To be more precise, visual effects combines live-action footage with computer graphic animation, “to make a seamless image that your average person couldn't discern from something that's actually shot for real”.

“To run a visual effects company in this day is not a licence to print money, that's for sure.”

The price to pay

While it may sound simple, you would probably be surprised at the expense such projects can actually entail, and the level of work involved to get them looking as life-like as they do.

A visual effects project can cost a client anywhere between $200,000 and $1.5 million, according to Colin.

“Any business that involves technology, especially cutting-edge technology, you have to expect that there's a high cost for maintenance and research and development and capital expenditure,” he says.

Besides the technical side of things, Colin says employees are Alt.vfx’s biggest expense.

“It's a very competitive industry because it's driven by talent, and talent costs money, and good people cost money, and you need to look after good people,” he says.

Despite the high costs to clients, Colin says that running a visual effects company isn’t extremely profitable. Instead, it is a business he operates for the love of it.

“To run a visual effects company in this day is not a licence to print money, that's for sure,” he says.

“You don't do it necessarily for the money, you do it because you love it, and that's why most people are attracted to visual effects.

“You want to get into it because you want something that's creative and technically challenging. And you can do stuff that nobody else can do.”

Alt.vfx today

Since its inception Alt.vfx has been expanding, taking its team from the founding six to more than 60 employees, with revenue increasing “tenfold”. Yet despite this growth, there is still a sense of closeness between staff.

Colin Henshaw and Takeshi Takada, Alt.vfx“Even though we're a much bigger operation, we're thinking in small units, that we're subdividing into small teams so that we can keep that really hands-on, bespoke approach to every project, and not get sucked into a factory mentality or 'just getting it out the door' mentality,” says Colin (pictured on the left) .

Most of Alt.vfx's clients come through word of mouth, making the company's reputation and quality product delivery its keys to future revenue.

“People get attracted by the best results, so that's something we've been focusing on from day one,” says Takeshi (pictured right).

“Reputation is about everything in this industry as well, so it's not only about who we think we are, it's about people.

“We've spent a lot of time making cool films and cool commercials, and at the same time we've been winning a lot of awards all around the world, especially in Australia, and that's endorsed by top creatives all around the world. That validation is what we do.”

It's not all new clients, as a lot of projects come from repeat business.

“Part of our success is the fact that we've cultivated really strong relationships with very creative people who trust us,” Colin says.

“They keep coming back to us with new projects, new challenges, because they know we're not going to let them down, and when things get hard we'll be in their corner.”

“You need to be innovating and inventing new techniques, and that's the key, you can't just be waiting for someone else to do it.”

Creative as a business

Competition is plentiful in creative industries, and the visual effects industry is no exception.

Trying to maintain the best employees can be difficult, but the business’ reputation plays a large role in not only winning clients over, but employees too.

“You need to create an environment that attracts good people,” Colin says.

“A lot of time and money is invested in creating an environment where people like to work there and be part of it, and the other part is, again, attracting good clients to bring good work to keep those people interested and challenged.”

Wowing people with good visual effects is one thing, but to really ensure employee retention, new methods need to be developed too.

“You need to be innovating and inventing new techniques, and that's the key, you can't just be waiting for someone else to do it,” says Colin.

“A lot of time is invested in research and development, exploring new workflows and new techniques.”

Those techniques, while vital to Alt.vfx’s existence, also are a point of frustration.

“We often used to say when we started, the problem with visual effects is we never get to make the same job twice,” Colin says.

“We spend all of this time and effort in R&D developing new stuff, and then we'd never [make] two ads with a polar bear in it, just one.

“So we made the world's best polar bear, we never get to use it again, or we've made the world's best deer, we never get to use it again.”

Although this can be viewed as a curse, Colin also sees it as a blessing as it always provides a challenge and a chance to innovate.

“You're always inventing. You're always moving forward. You're never treading water, and that's a cool thing,” he says.

While Alt.vfx is based in Brisbane, it produces and exports work for clients around the world, including in New Zealand, the US, Canada and parts of Asia. In particular, it sees a lot of clients from Japan.

The company's most recent creation is the Japanese Pepsi Strong Momotaro commercial series, which recently aired its fourth episode and features actor Jude Law and a giant animated lava monster.

“With our reputation, with trust so far, [the] relationship with us and the client, we were asked to pitch on the project,” says Takeshi.

“We had to pitch against massive … players all around the world, but we've managed to win the pitch because of our reputations and the trust that we can deliver.”

Screenshot of Pepsi Strong Momotaro, Episode 4 advertisementAfter developing concepts, Colin and Takeshi had to attend the shooting of the footage, which took place in Las Vegas, Los Angeles, Chile and Rome, among other places, which shows how internationally renowned this Brisbane-based SME is.

“But it's not only this Pepsi campaign; we've been fortunate to work on other global campaigns in the US markets and big markets all around the world,” says Takeshi.

“People might think we might be an Australian company, but we deal with all the clients all around the globe, and that's who we are and we want to taker it further than this.”

“My nine-year-old son often looks at my work, and I show him something, and he'll say to me, 'Is that finished?'. He now has a really keen eye for visual effects from watching Transformers and Jurassic Park and Iron Man.”

Editing the future

People in many industries fear that automation will streamline their work at the cost of jobs, and despite it being a pretty technological industry, the threat in visual effects is greater than ever.

“One of the things our industry's struggled with – again, it's a double-edged sword – it's the democratisation of technology,” Colin says.

“You can do more on your iPhone now than you could do on the most expensive computer you could find 10 years ago. With every year, the bar raises. The average man can now do the equivalent of [visual effects] with little or no experience or real knowledge that professionals used to have to do.

“My nine-year-old son often looks at my work, and I show him something, and he'll say to me, 'Is that finished?'. He now has a really keen eye for visual effects from watching Transformers and Jurassic Park and Iron Man.

“You've got to keep raising the bar and get smarter and smarter and more and more realistic.”

Colin explains that the “holy grail”, the highest point of visual effects mastery, used to be water, then fur, and is now photorealistic humans and expressions.

“Every year the bar moves and there's a new challenge,” he says.

But even with numerous awards and many different advertisements developed and exported, Alt.vfx still manages to stay humble.

“The question I often ask myself, and no one can really give me a definitive answer, is, 'Am I doing it right?', because it's kind of an amorphous thing, running a business,” Colin says.

“The bigger you get, the challenges change, you feel like you've got that right and filling in a different space, and no one really has an answer. So that's probably the thing that I'm always struggling with: 'Are we doing it right?'.”

Fast facts:

Business name: Alt.vfx
Industry: Visual effects
Founded: 2011
Location: Brisbane, with an office in Sydney
Employees: Approximately 60
Customer base: Australia, as well as international customers, primarily based in Japan and the US.
Last financial year’s turnover: $20 million



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