Starting your own thing
So you’re thinking about starting your own agency, firm or company. What does it take to make it happen and what can you learn from the people who have done it before you? In a feature that first appeared in Encore, Matt Smith finds out.
Scott Nowell, Justin Drape and Mark Green were working for Sydney agency Saatchi & Saatchi when they decided it was time to leave. They had their own ideas and projects they wanted to pursue. The timing felt right to strike out on their own.
“We wanted to do things like short films that could run online, more immersive content for clients which seems like an old-hat idea now,” Nowell says. “Back then it was seen as a distraction from the main product.” In 2004 the three created their agency, originally called Three Drunk Monkeys, and spent the first year working out of the back of a coffee shop using free internet access from nearby unsecured wifi. They initially invested $10,000 each in the business and took home a paltry $27,000 each in the first year.
Nowell says there were many times when he was tempted to run back to the safety of an agency with its perks and reliable income. He says: “It’s hard to stick with it when the bank is on your back. It takes a while, but if you work hard enough, the money will come back. It’s one of the big reasons why most people don’t want to try it.”
Almost a decade later, the persistence has paid off. The agency now known as The Monkeys no longer calls a coffee shop home, taking up the top floor of a building in Sydney’s Surry Hills with 110 employees on the books. Nowell says: “You never start an agency for the money. You do it because you have a hunger to shape your own destiny.”
There’s no denying that starting your own business is a challenge. No matter what sector of the industry you work in, the process of building something from scratch takes time and won’t be glamorous, at least not in the early days. A plan and vision, like-minded people, and sufficient funding is needed if you’re going to have a chance of success. The payoff is the freedom to be your own boss and the ability to define how you work, an alluring prospect for many. This was the point that Damian Damjanovski reached when he made the leap with three colleagues from Ogilvy & Mather to form their own agency Common Ventures. “We wanted to try something different,” he says. “Everyone was joking and making silly side comments about forming our own agency, and those progressively built. Ultimately we decided we wanted to focus less on making ads and more on making product, so thought we’d give it a go.”
Common Ventures officially started the week after the quartet finished at Ogilvy. On the Monday morning they met to start work in Damjanovski’s kitchen. “I’d turned my dining table into a workbench and stocked the kitchen with soft drinks and coffee,” he says. “I turned my one-bedroom apartment into a fully functional office.”
“We opened our laptops like we had something to do. We sat around reading the news, updating our Facebook statuses – you know, the normal morning work routine. At that point we thought we’d better figure out how to make some money.”
Two months in they moved to a warehouse space which they still occupy a year later.
Damjanovski’s best tip for starting your own thing is to be prepared. He says: “Good preparation is great. The right people are crucial. But just start something. Procrastination is a killer, so you need to start something and have the momentum to carry it on.”
But the award for most creative agency beginning goes to The Works. When Kevin Macmillan started the company with Damian Pincus back in 2002, they ran the business from the back of a kombi van.
“We were both 30 when we started our business, with no money, a kid each, and mortgages,” he says. “We had found the right partner, though. We wanted to change the way that agencies did business with clients, and have the creatives at the front from the start.” Macmillan says that if you’re planning to start your own thing, you need to do it for the right reasons.
“If you start it for money that isn’t usually a great principle. You have to have a passionate belief in what you’re trying to do. The next challenge is sticking to that because a lot of people will tell you that isn’t right. It’s quite easy to derail.”
The first big success for The Works was securing Australian Apple stores as their client. Macmillan says they drove their van/office to every Apple store, uninvited, to come up with ideas on how to address the lack of foot traffic. They filled a sketchbook with ideas, which eventually won them the account. The agency has had steady growth since and now employees 53 people. “We’ve come a long way in the decade since we started, but we took a risk,” says Macmillan. “We borrowed a bit under $100,000 to start up The Works, and running it out of a van meant minimal overhead. The loan was enough to cover our mortgages for six months. We figured if we could repay that and make enough to live on in that time then we were on to something.”
Nick Cummins and his partners set themselves a similar deadline when starting creative agency The Royals in Melbourne. While he can’t recall the exact start-up costs, he remembers selling his house to fund it.
“We decided to give it a year,” he says. “We moved into quite a large warehouse and outfitted it. If it wasn’t successful in that time we’d run back to our well-paid jobs at large multinationals. We ended up working without a wage for a few months, but not for as long as we thought.”
The Royals is Cummins’ second baby after founding digital agency Sputnik in 1999. He believes a point of difference is crucial when building a new business, and The Royals achieves this by being what he calls a “creativity and technology club”.
STARTING A PRODUCTION COMPANY
While adland is awash with startups that have made good, times could be considered a little more tough in the film and TV sector. Many startup production companies spend years working on single projects before the eventual pay day and there’s no such thing as a regular paycheck. Nicole Minchin of Melbourne’s High Wire Films, known for the ABC series Lowdown and Agony Uncles, says working with the right people and strong material is crucial in keeping the company going.
“Amanda Brotchie, Adam Zwar and I got together to produce the pilot of Lowdown using funding from a Film Victoria pilot fund,” she says. “We knew from this that we worked well together and when the series went into production we thought we’d make it official and form a company.” The team is currently venturing into a drama series and a feature film and while there’s a number of projects on the horizon now, Minchin says it wasn’t always that way. It took several years before they were confident enough to rent office space.
“We worked out of random spaces for a few years, depending on the project,” she says. “There was an office assistant working at my place and with each new project we were finding a new place to work.”
“Only when we were reasonably sure that we had two years of projects mapped out did we get the office. You need to be cautious with the cash flow in this business, and at times the bank account becomes a bit integrated between personal and business.”
“There are peaks and troughs in this business, but sometimes you just have to go with it and run on adrenalin,” she says. “You certainly don’t get a regular weekly wage or an hourly rate, but it’s show business, and great things can happen. That’s life.”
GETTING CASHED UP
“There’s no easy way to raise capital, especially in a service-based industry like a media or advertising agency,” says Rob Antulov, executive director at Venture Advisory a corporate advisory, firm that helps businesses to, among other things, raise capital. “Building up your business, living hand to mouth for 12 to 18 months and getting yourself enough growth and a track record is the only thing that is going to make you attractive to an investor.”
Antulov has first-hand experience with startups. In 2007 he was one of the founders of 3eep, a social network aimed at sporting teams. He says the best way to get established is to start with a product or piece of intellectual property as it is a more effective platform for raising capital than establishing ideas. Another route is to pitch your startup to those you trust who know what you’re capable of. Antulov says: “If you don’t have something other than a creative mind and ideas to invest in, you need to find the right frog to kiss to make a prince. And there are a lot of frogs out there.”
Scott Nowell’s parting piece of advice is not to let the prospect of startup money slow you down if you can help it. He says: “When you sit down with people who have started businesses, everyone always has war stories, tales of the people they would have hired and parties they shouldn’t have thrown.”
“Most businesses are strings of mistakes that succeed out of sheer force of will. The best things you can have is a will to succeed, a fierce entrepreneurial drive, and a hunger to shape your own destiny.”
This story first appeared in the weekly edition of Encore available for iPad and Android tablets. Visit encore.com.au for a preview of the app or click below to download.
Got to love the power, passion and perseverance of ‘the shapers’. Great stories.
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You need Luck too…. plenty of great people who work really hard they just didn’t get the Luck. The Monkeys won Foxtel out of really fuckin hard work…. and a little luck.
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It’s great having the drive and passion – they are the extraordinary gifts that fuels risk taking and achievement. My 2 cents worth would be to include in your team a person or process to keep an eye on the finances. Pricing is a fine balancing act and the trick is to ensure all activities with a project are costed in + an allowance for overheads – which when you start is really low. However, you don’t want to set a price expectation that is not sustainable as you grow. If you’re going to delegate the accounting to part-times / outside people – get really detailed in their selection (just as you would a graphic artist or someone else in the team). Spend a couple of hours initially checking and re-checking their work so they are clear on your expectation. Then you should be able to back-off and manage by exception.
It’s just an area, if done well initially, it should run easily, however if you let it get out of hand it can become frustrating and zap your energy.
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