Ad Exec: When bright startups become all-fall-downs
by Tom Fels (@thomasfels) At a New York conference, where almost every speaker was from a shiny creative tech startup, one message stuck out as poignant: in a world of VC-boosted growth, angel investors, IPOs and game-changers that represent the pinnacle 1% of the game, Basecamp founder Jason Fried said, “It’s interesting to start new things and that’s what gets people fired up, but keeping them going is the harder part and that’s ultimately what I’m more interested in.”
There was a knowing realisation that, in the excitement of the exploding ad-tech economy, he had a point; there is a lot of wisdom to be gained from those who have demonstrated the ability to endure.
On the up
Our local creative industry is ignited by entrepreneurs, many of whom step off the conveyer belt of large agencies and start something fresh. Some grow incredibly quickly. I’ll never forget when, in 2006, The Jupiter Drawing Room Johannesburg famously won a triple-crown of three significant pitches (Absa, MTN and Sasol) in a single week. Now that was rocket fuel for growth in an already-enviable business! Over the better part of a decade, the agency was tough to beat on any terms.
Startup to maturity
With the hype surrounding any business on the up, a halo of invincibility attracts talent, clients and, no doubt, envy. The risk that any team needs to manage is that the hype gets too far ahead of the reality for, as agencies speed from infancy to maturity, they have to change the way they work. Solid process and a consistent product are vital to retaining any business, new or old. And in this, the unlocking of a new phase in the agency lifecycle begins, one that put pressure on the magic that got them noticed in the first place.
All your eggs in one basket
For every agency intent on growth, there are a handful of client wins that change their fate. A single massive telco, financial services or retail appointment may change the size and output scale of an agency in an instant. Handling this type of rapid expansion is not easy and, while some bed down and move on, others falter. Either way, an agency needs unicorn clients to leap-frog growth yet, at the same time, cannot afford only one or two pillar clients once they reach scale. Most look to a suite of 4–5 anchor clients to ‘de-risk’ the business operations over time.
Walking the long road
I’m deeply impressed by the likes of Ogilvy & Mather, TBWA and FCB (among others) here in South Africa, simply because of their ability to regenerate and stay at the top of the game. The duration for which they have sustained their notable excellence in scale, quality of creative work, ability to win and operationalise significant clients and then, most importantly, keep them for decades holds many lessons for those newer entrants to the market.
These are the lessons that startups should be seeking to learn, rather than drinking their own Kool-Aid and risking an eventual all-fall-down.
With over a decade of local and international experience in leading brand consulting, design, shopper marketing and integrated advertising roles, Tom Fels (@thomasfels) has gained a deeply relevant understanding of the dynamics of agencies. His skills are put to work daily as group managing director of Publicis Machine. He contributes the monthly “Ad Exec” column to MarkLives.