Two years, three markets later: Shadowboxer founders on playing in their own space and shooting from the hip

On the eve of its second anniversary, Stephen Graham and Konrad Spilva - two of the founding partners of creative consultancy, Shadowboxer - sit down with Mumbrella's Calum Jaspan to discuss the alternate approach the company is taking, and how it's paying off so far in its short existence.

Two years in and creative consultancy Shadowboxer is chugging along nicely.

In the last 12 months, the business has grown from seven to 28 permanent staff and recently placed its first boots on the ground in San Francisco, with entry into a third market, Manchester shortly on its way.

Led by former Isobar CEO, Konrad Spilva, and his partners Stephen Graham, Mike Fraser, Tom Ashmor, and Steve McGrath, the company has taken an alternate route to marketing services, launched in a timeframe that saw other industry figureheads such as Simon Ryan, Chris Howatson, and Aden Hepburn also leave high profile agency gigs to start up something fresh and without the constraints of answering to bosses abroad.

Speaking at the time of the launch, Spilva told Mumbrella the aim was to not just take on jobs for fees but to take equity in the businesses it worked with. This has now resulted in an equity portfolio valued at around $2.5 million, according to Graham and Spilva, speaking to Mumbrella recently.

The last 12 months has also seen $7 million in revenue through the door, a 133% rise on year one, and a maintained 25-35% profit margin across each quarter.

Founding partners Mike Fraser, Stephen Graham, and Konrad Spilva

During this period, Shadowboxer launched Tightrope as a joint venture alongside mate and former boss of Spilva, the aforementioned Simon Ryan.

Chatting to Mumbrella at a bustling South Yarra pub, he now thinks Shadowboxer is approaching it’s sweet spot.

“We’re around 30 now, and we’ll probably tap out around 30-40 people because we have a belief that is going to be where you’re going to still be able to maintain the integrity of senior cross-functional teams,” he says. “That’s where you can create lots of value really quickly for businesses, and if you try and go broader than that and you try for 100-200 people or whatever you sort of lose that integrity, and you’re probably going to make less profit, and we invest that profit back into the ecosystem.”

Over the last year, they say investment back into the start-up ecosystem has totalled around the $1 million mark.

“We’ve done really well for the first two years,” continues Spilva. “I’ve run service-based businesses for 20 years and to be able to maintain a really high level of margin is really hard.”

As it approaches a second birthday, Graham reckons Shadowboxer has redefined what a service business can be.

Graham says Shadowboxer is enjoying the fruits of marketing talent

“We’ve taken some of the best parts of the marketing and digital industry, all the wonderful entrepreneurial and creative thinking and thinkers, and applied it to early-stage ventures – which feels like a market that’s underserved by a lot of our peers, and certainly tricky to serve with conventional fees for service business models.”

In many ways, the pair believe a lot of the strategic advantage the company has comes from its deep agency and holding company pedigree.

“All graduating from big holding groups, being able to define an employee value proposition to attract talent has been quite an exciting journey too,” says Graham. He adds being in control of things, free from restraints, has allowed the company to have an interesting take on things.

“As a small business, we’ve been able to be really forward-thinking with our policies.”

These include a flexible working policy, an ability to work from anywhere in the world; a shadow-equity plan for staff, that being a profit-sharing scheme with a percentage of Shadowboxer’s profits being distributed across the team each year, which they can take as a bonus or reinvest in the business; a yearly review on parental policy; and a currently trialed program to employ entrepreneurs/founders with an idea to allow them time to build their venture, with access to the Shadowboxer team. The latter is also open to the existing team, should they wish to explore a venture of their own.

Who is Shadowboxer up against?

An easy way to define a company is often by looking at its competitors, of which the pair say they don’t really have any, due to the unique spot it occupies in a changing market.

Spilva: ‘We’ve become a lot more clear about what we do and don’t’

“We definitely come up against the likes of Accenture, or even some of the bigger creative design firms like AKQA,” says Spilva.

“Maybe the only other venture studio in the market that has got a similar sort of scale is Dovetail. They’re probably who we would compete with.”

“But it doesn’t really feel like we compete with anyone because we work with founders so early on in their journey – there’s not really anyone else they’re talking to other than advisors and investors. It’s only in the corporate venturing space, which we do a bit of, where we come up with the consultancies and their venture arms.”

The pair also agree the team’s wealth of experience, many of which followed the founders across from Dentsu’s Isobar, applied to a specific category in the market: early-stage business and building ventures from the ground up, has been found to be the best place to connect brands with strategy, business, customer experience and technology.

Spilva puts it simply: “it doesn’t feel like we’re necessarily competing with another firm or anything. We’re either working with someone or we’re not.”

Shadowboxer operates on a fairly flat structure, in the sense that “everyone is senior in the business”, which provides a “weirdly finite amount of resources” says Spilva.

Moving beyond that structure would dilute the offering, which is based on creating “great value”, Graham says.

Exponential growth just wouldn’t work for Shadowboxer: “It won’t work for our business model because the most unique part of our business is the innovation in our model.”

There are no time sheets as everything is outcome-driven they say. Nothing is time-based, and there is no need to deliver operating profits “to anyone other than the partners” they add, another reflection on their past life delivering to bosses abroad.

While the company may compete with the likes of BCG ventures on a number of different types of tech work, brand design work and delivery, Graham says “we still won’t be seen as competition because of our model, and the fact we don’t need to scale that way”.

He adds ambitiously: “We’re not profiting off each individual, we’re investing a percentage of our profits each year, and probably by around year five, we could be having years where we have investments paying off that mean we could go to market and just invest all our time and effort, and not actually charge any fees, while probably still turning a profit.”

“That’s the aspiration, at least.”

Shadowboxer has planted a flag in San Fran – Manchester is next.

Graham continues, one of his favourite aspects of the business is the combination of speed and creativity, which makes it a little “Wild West at times.”

“It’s super-fast, it’s a bit like shooting from the hip sometimes. But I far prefer a business where everyone’s smart and can trust their gut and instinct, rather than spend a million dollars on software to help my team estimate projects when you just know what the answer is already because you’re experienced.”

It is still a work in progress though, Spilva says. One thing is for sure though, Shadowboxer is certain about what they can offer prospective partners.

“We’ve become a lot clearer on what we do and don’t do since. For example, clients will come to us and say ‘hey, can you build us a website?’ and we’ll say no, it’s just not what we do. Although now we have built a new JV that can answer that specific need which is soon to be announced publicly.”

“We’re not the organisation that’s going to help you with something like that, but if you want to look at your next level of growth as a company, you want to look at a way you can go and diversify what you’re doing and building out other assets, or investing in other companies and creating a new venture in a complimentary space – that’s where we get excited,” Spilva continues.

Stijn De Vriendt, Spilva and Simon Ryan following Tightrope’s launch in 2021 – JV #2 is already operating

While they couldn’t dive too much deeper into details of the new joint venture (set to launch imminently), they told Mumbrella it is a “progressive web agency”, already operational in stealth with a $1m+ pipeline. The name and further details remain under wraps for now though.

For now though, it appears Shadowboxer has plenty on its plate. Checking in two years from now, Spilva says they’d like to be looking at 30-40 – that sweet spot – in each of the Melbourne, San Francisco, and Manchester markets.


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