Living the Hard-Knock Startup Life
You did it. You became ECD, CCO or VP Grand Poobah of a large agency. After years of working your way up the ladder, balancing endless toil and late nights, and amassing shelves full of shiny award hardware, you became a big fish in a big pond. So, what’s the next challenge? Maybe it’s time to jump into the abyss and start your own shop.
But, do you know how to incorporate? To secure financing? To set up a company 401(k) and health insurance? Do you even know how to fill out an invoice? This is the daily reality for the industry’s newest entrepreneurs. They’ve broken free from the hassles of agency life, but also its comforts and conveniences—and its safety net.
Lately, there’s been a flood of new agencies starting up. What’s behind the trend to jump ship and chart an independent course? I chatted with seven new-agency leaders to discuss their motivations, their biggest challenges and what they’ve learned so far in their quest to be the next Droga.
Let’s start with the reasons behind starting your own shop.
Rizuto: I was feeling a bit disenchanted with some of our industry’s business practices becoming too bureaucratic and out of touch. At the time,
I didn’t see any other place I’d rather be, so I decided to stop whining about it and start my own thing.
What other industry trends spurred you to start an agency?
Miller: My partners and I realized that the traditional agency model was broken and losing relevance. In addition, management consultancies were encroaching on agency turf by acquiring creative shops. The challenge we saw is integrating the analytic culture of consulting with the creative culture of agencies.
Gross: We wanted to build a successful business from the ground up with our rules, our philosophies and our creative vision. We saw a need in the marketplace for a nimbler agency that is adept at dealing with adversity and change and delivers outstanding creative and strategic thinking, sans egos and attitudes.
There are egos in advertising? Get out of here! Seriously though, it’s a boom time for agency startups. What’s behind the trend?
Miller: Small is the new black. Both clients and agencies see the limitations of big. Clients are switching from traditional retainers to project-based relationships, which favors small over big.
Rizuto: A bunch of people weren’t happy with the way things were at their agencies. Also, clients are more receptive to a more nimble and agile agency, with less processes and overhead. A couple of months ago, I was talking to a very prestigious chief marketing officer of a very big company, and he was complaining about how only 30 percent of the money he pays to his agencies goes to creative, which is the only thing that adds value to his business.
Ramos: The bravest clients in the world are totally open to independent agencies. They buy bold ideas. They buy passion, obsession, trust and commitment. And we can totally deliver on it. As an indie shop, you can partner for any capability they don’t have in-house.
All of you came from big agencies. What lessons learned from those big shops do you put to use now?
Gross: I grew up at DDB and have tremendous respect for the organization and what it stands for. DDB’s founder Bill Bernbach is a legend and my personal hero. There are three rules of his I use to guide my own career: The most powerful element in advertising is the truth. Hire good humans. Advertising is persuasion, and persuasion is not a science, but an art.
Ramos: Don’t have clients; have partners in crime. That’s the most important thing. You need to be 100 percent aligned with your clients and share the same ambition.
Rizuto: This one I’ll steal from Sir John Hegarty: In big agencies, you get to work with big clients. You are exposed to how businesses work from the inside out. You get to spend time with super smart chief marketing officers and chief executive officers from all kinds of industries and help them move, and you sometimes shape their business with creative solutions. This is better than any MBA.
What kind of research did you do before starting your agency?
Hodges: I actually interviewed more than 400 people in and out of the industry before I officially launched the company. I sat down with everyone from Lee Clow to my grandmother. It was a grand education in what truly matters, which is ultimately one thing: people. At the end of the day, you’re building a place for them to come together and dream. Everything else is just a by-product of that environment.
How are you planning to make your agency different?
Miller: We’re designed as a creative consultancy and ad agency. About half our clients come to us for pure consulting projects, and the other half for full-service campaigns as their AOR. The biggest difference is in the way we hire and work. We hire seasoned talent along with fresh young minds and eliminate the middle. Instead of briefing three to four teams on a project, we brief one to two teams. That way, everyone feels accountable and has the opportunity to shine. The result is better ideas, faster.
Hodges: We don’t have a binary approach to what kind of partner we are. We’re comfortable working as an AOR, working alongside an internal creative group or working on the right kind of project. We’ve found it best to be flexible.
Agencies love to roll out a unique internal process when pitching new clients. It’s often a snazzy acronym or a catchy tagline. How important is it to have one of these when pitching new business?
Miller: The process is only as good as the outcome. I don’t know if clients care about the process, but they certainly want better work and greater efficiency.
Robinson: It’s very important, but only if you live up to it. Otherwise, it’s just bullshit in a rhine-stone jacket.
Rizuto: We can come up with a bunch of processes and gimmicks, but at the end of the day, it’s all about people—strong partnerships and the passion you bring to the table. No bait and switch. You genuinely have to have the clients’ interests at the core of what you do. They can smell it if you don’t.
Hodges: We don’t really have an agency process for pitching other than being honest about what we think will be the best solution for the problem. We hop on a phone or a plane, do a lot of listening, and then share a bit of our own story and perspective to see if it might make sense to work together. We have the words “We’ll figure it out” written on a huge wall in the middle of the office, so maybe that’s the closest we’ve come to defining it at this stage.
Gross: Processes and tools position strategy and creativity as scientific and clean. Great clients know that neither is true. The process of getting to magic in the strategy and creative is often messy and sometimes involves unexpected steps as we chase down the things that can move the business forward. In my experience, the muddier things get, the more magical the outcomes are for our clients. Rules are meant to be broken. And so are processes.
Now that you’ve been at this for a short time, what’ve been some of your biggest challenges?
Fitzloff: How do we service the business we have while developing new relationships for growth? How do we forecast when a fair chunk of work comes from projects? How do we do Wieden+Kennedy-caliber work without the bench strength and support of a machine like that?
Ramos: The biggest challenge is the financial. We don’t have daddy anymore. We’re on our own. We decided to be 100 percent independent. We had some considerable offers from investors and rich friends, but we decided not to take them. I got a second mortgage on my house to help finance the operation. I’m staying at motels, with a capital M. My next paycheck will be in March 2019. But I think it’s all worth it.
How do the day-to-day stresses of running your own shop differ from working for an agency?
Gross: Simple. Owning a business versus working in a job. Yes, I’m a creative director, but I’m also making significant legal, financial and personnel decisions to grow our company.
Robinson: There are very few moments of your life that you aren’t thinking—in some part of your brain—about the business.
Hodges: At the end of the day, all tough calls land on my plate. That’s the biggest difference. I do, however, know a lot more about 401(k) administration and health insurance than I did two years ago.
Miller: We worry about keeping the lights on—literally. If a light bulb goes out, we have to get a ladder to replace it. Strangely enough, we don’t worry about keeping the lights on metaphorically. We just focus on doing the kind of work that brings in more work.
What advice would you give to someone who’s working at an agency and thinking of starting her own shop?
Fitzloff: Wherever you are right now, go to school for the business before you leap. Before you try it, learn the business model and the financials and anything else they’re willing to teach you. If you can pull it off, do it without funding from another agency.
Hodges: Don’t wait. And maybe do it in a place that you would actually want to live for the rest of your life. You’ll find a reservoir of patience and courage that you didn’t know existed within yourself.
Gross: The business leadership side of the coin is just as important as the creative output. Ultimately, if you like taking risks, building something from scratch, overcoming challenging obstacles and being your own salesperson, I say go for it.
What do you want your agency to be known for five years from now?
Gross: I’d like for all of us to feel like we’ve built something that’s helping to restore advertising’s luster.
Miller: To be regarded among the best creative thinkers in the industry.
Rizuto: I want TBD to be known for its work. Work that promotes brands and inspires people. I really do believe that creativity has the power to make the world a little better, and brands have the responsibility and, most importantly, the means to improve society.
Hodges: If we could be known as one of the most talented and kind places in the business of ideas, I think we’d all be pretty proud.
Robinson: We hope to be seen as a creative company that continues to innovate through the kind of work we make and the way we make it.
Ramos: I want GUT to become the go-to agency for brave clients.
Fitzloff: I’d like Opinionated to be known for its amazing culture and as a safe haven for creativity that is free from politics, where people can be themselves and work at a place they really believe in. But I’d settle for being the second-greatest creative story out of Portland, Oregon. ca