What I wish I knew before I started my agency
Anyone who has started a business has their own take on what to embrace and what to avoid in the first year, but Simon Rutherford says step one is to avoid working with start-ups.
Running a successful agency is about finding a balance between vision and focus. You have to be able to focus and block out the distractions to achieve the vision you have for your agency.
I have learned so many things as the owner of an independent agency; however, if I was to share one lesson, and only one it would be this: don’t work with start-ups (unless they can prove they are well funded).
When we started Slingshot seven years ago, we were 10-feet tall and bullet proof. We were also incredibly entrepreneurial (or so we thought), and would take on pretty much any opportunity that came through the door.
To a degree you have to do that when you’re first starting out. I’m incredibly satisfied with what we have achieved; however, if I was to change anything it would be to take back all the time we spent working with other start-ups, because in reality we were just helping other businesses grow while taking the focus away from substantively growing our own business quicker.
its interesting that even more established businesses look to take risks dealing with small clients that cant pay – to chase their elusive growth targets.
owners of independent agencies know this as it directly affects their profits if clients dont pay.
in the world of multinational companies, local CEOs and managers in charge do not feel any pain of clients not paying, so they are free to take more risks. Some do so wit vigour
imagine brands felt the same about slingshot when it started in Sydney, and now in Melbourne.
“Let’s not work with them – they’re too speculative for now. Let’s wait til they have some real clients here.”
A very dismissive generalisation Simon …
Well, that’s their choice to pass on Slingshot. An agreement requires two parties to agree. If I was a business owner I sure as hell want to get paid. Simon made the right choice. And stay away from restaurants too. They are also a pain. And religious organisations.
I think this article is somewhat entrenched in the old models and ways of agency remuneration. The real, raw opportunity of working with start-ups as an agency is the opportunity to get involved and put real skin in the game from the very beginning. To also evolve your agencies offering outside of traditional comms remit. The success of that business should prove to be your own businesses success if you frame the relationship and opportunity properly. Sure, not every start-up works out, but if the up-side is your up-side as much as theirs, then I’ve no doubt you’ll be wanting to work harder for its success rather than looking at it as an opportunity cost.
What this really shows is a lack of judgement. Choosing to work with the wrong startups.
Well reasoned article, Simon. Some commentators clearly don’t understand the meaning of opportunity cost, or have never had to pay people’s salaries with their own money.
Another way to think of it: startups are inherently risky. So startups working with (or for) other startups just compounds the risk. In this case, risk shared isn’t risk mitigated – it’s risk multiplied.
Nice one Ruthers – it’s always going to be about balance. Some clients are worth taking the risk so you get the experience in their business, others pay the bills and want your experience.