Growing up Quirky
At Quirk the interns appoint their own replacements. It’s part of a culture that thrives on empowering staff, getting the best out of them, to the benefit of clients. These guys are more than digital, they are the future. By Herman Manson
Quirk sold itself as an advertising agency before web developers thought to brand themselves as such, before ad agencies thought digital might win the marketing budget war and thus force them to become ‘integrated’ (translation: look we got digital too), before, founder and Group CEO Rob Stokes admits, there was a market that understood its service offering.
Which is why as recently as 2007 Quirk was a respected but smallish operator in the digital agency space with around 17-20 staffers. Based in Cape Town, Stokes had opened a London office as well, where he spent six months of the year, flying between the two cities every two months.
Stokes still jokingly refers to his companies early days as ‘my poor days.’ Quitting his last pizza delivery job on Christmas day of 1998, Stokes launched Quirk six weeks later, while still studying Business Science Marketing at UCT, initially selling everything from hardware to networking services over the next two years.
His thesis on email marketing, completed by the end of 2000, would propel the business into a whole new marketing orientated direction, and Quirk the agency was born. Their do it yourself email marketing software would start Quirk in the marketing game, flimsy as it was initially, it would direct the business strategically to invest in marketing related technology and expertise.
Craig Raw, the group’s Chief Technology Officer, joined Stokes in 2001, and remains Quirk’s second biggest shareholder. He rewrote the email software, originally written in Perl, to Java, in fewer than 22 days, transforming its capacity from 400 emails a minute to 40 000. They could finally chase decent sized clients.
Stokes describes his own ‘lack of deep IT skills’ as one of the biggest challenges Quirk faced as an enterprise. Raw’s talents filled a gap in Stoke’s own, a point Stoke doesn’t mind admitting. Many of his subsequent appointments would flesh out organisational and management expertise Stokes could not bring to Quirk himself. For Stokes this is a point of pride and translated throughout the organisational culture he has built at Quirk.
Take the company’s much vaunted intern programme which last year attracted three of the top five business science graduates from his former alumni. The six month programme, followed by a six month internship, allows the interns to interview and find their own replacements. Stokes says they tend to hire kids of their own already high standard, and often up, but never down.
Stokes describes himself as ‘unemployable,’ a point many entrepreneurs make, and one of the reasons he pushed on with Quirk even at its most desperate times. He also hates nanny state environments and it shows at Quirk. The culture is very much about empowering staff to grow in confidence but also to support and help those around them. So yes, interns pick their own replacements, and every month the groups’ financials gets put onto a slide and shown to staff during a teleconference between the three offices (the company has a profit sharing scheme going – it pays around 20% of its profits out on a quarterly basis – and the exercise gives staff a stake in understanding the company financials on an on-going basis).
Stokes expects his staff to innovate, push at barriers and have no fear of new ideas, because for Stokes the only bad ideas are no ideas. Stokes calls the company culture an ecosystem of innovation and love. Seems word got out in the marketplace – Quirk shifts through 3-400 CV’s a month and hires around 10 – that’s around one staffer every three days.
His need to build a business his unemployable self would want to work for also informed the identity of the business. Quirk, Stokes explains, was named for his desire to be different. “There is very little which is ordinary about Quirk and we needed a name to reflect that,”
says Stokes. “I dislike doing things because ‘that’s how it’s done’ or ‘those are the rules’. When I started Quirk I wasn’t entirely sure where we’d end up, but I did know that I wanted to build a company that I would want to work at and that likely meant we would be very different from the rest.”
So Stokes and co has been selling Quirk as an agency since 2001, but nobody was interested in much more than building websites, and web development shops thrived at the time. It wasn’t until 2004, says Stokes, that business shifting their thinking towards a more marketing orientated (rather than IT/tech) approach to digital platforms, that the market for Quirks’ services really started to develop.
Since 2005/6 all the digital players have started pushing themselves as agencies, and all the agencies are pushing themselves as having worthwhile digital capacities, while at that stage Quirk has had five tough years of being a digital agency behind its belt. And boooom goes Quirk. Sixty to 150 staffers in 12 months, while coming within a spitting distance of doubling 2010 revenues to R100 million this year (80% from the agency side, 20% from the education, IdeaBounty and BrandsEye businesses), with no sign that growth is about to come growth is about to come to a shuddering halt. Stokes expects 200 staffers by February.
The agency services a roster of high profile, high value clients, including Capitec, Warner Bros’ European business, SAB Miller, Investec, FT.com, Woolworths, Pam Golding (which Stokes spent seven years chasing down), DSTV, Sun International, Liberty, ADT and a number of Distell brands. Growth areas include social media management and video.
Stokes believes the rise of social media and services like Facebook and Twitter has brought home to many marketers to what extend digital has infiltrated in our daily lives. This in turn lead to a mind shift in how they view digital and goes some way to explain the increasing share of the market digital is grabbing. It’s a market share Stokes sees growing from 5% of the ad market today to 15% in five years.
Before the boom came several near busts, and Quirk nearly went belly up more than once, admits Stokes. During its first year in business Stokes’ mom lent him the rent for his first year (to be repaid with interest) and soon he felt left behind on the career ladder as former class mates scrambled up the corporate ladder. While he never missed a payment staff salaries the directors sometimes had to wait five months to get paid, and once, in an emergency shareholder meeting, it was decided to give the business two weeks to find a new paying client or close down. A week later they landed a R70 000 website which tied them over and kept them going to fight another day.
The only cash injection Quirk ever received was from Raw’s brother four years ago to develop BrandsEye for which he took 7-8% in equity from Quirk. In 2006 Quirk sold 25% of its business to Clicks2Customers, then run by Vinny Lingham, but bought back most of its shares after Lingham left that business.
It opened a London office in 2005, because Stokes and his team were already servicing some clients in the UK via Cape Town, and a staffer was heading there, so somewhat naively, the team grabbed the opportunity to become “a tadpole in a shark tank” as Stokes describes it. They suddenly found themselves in a sophisticated market not buying on price, and soon Stokes was spending two months very two months in London, managing client relationships and trying to grow the office (the London office, remarkably, still retains its first client to this day). For nearly three years Quirk London ended up being little more than Stokes on his own, with his service team backing him up from Cape Town, and would only turn around with the appointment of Nic Ray (today Ray is a significant shareholder in Quirk).
Ray, a former classmate of Stokes’ at UCT, had worked at Ogilvy in Cape Town and had been head hunted by Ogilvy London to work as a business director on Ford of Europe. Ray quickly stabilised the London business, turning it from a one man show into an office with 20 staffers, and building valuable relationships for Quirk with players like Google and Facebook in Europe. His appointment brought home the value of “hiring giants” to Stokes. He would now make a point of hiring high value (if pricey) talent to help turn his business into a success.
His next major hire would be Mary Mzumara as Managing Director of the Jozi QuirkStation. Stokes and Ray head hunted her in London where she had worked at the agencies Dare (named Campaign Magazine Digital Agency of the Decade in 2010) and XM London (part of OgilvyAction). Like Ray in London, Mzumara turned around the Jozi business, creating a new sense of equilibrium at Quirk.
Today Stokes is splitting Quirk into two businesses. On the one side is Quirk the agency, now run by the widely respected Justin Spratt, who left Dimension Data’s Internet Solutions to join Quirk in September 2010 as CEO. On the other stands Quirk Labs, “a seed fund and accelerator programme for marketing technology, ecommerce, and Software as a Service (SAAS) start-ups” under GM Caryn Walker. It draws in several existing Quirk subsidiaries including online reputation management firm BrandsEye, marketing crowdsourcing platform IdeaBounty and Quirk Education.
Labs will roll out new businesses dreamed up by Quirk’s staff but will also look at ideas from outside entrepreneurs. They currently go through around 2-3 pitches a week. Stokes, while retaining involvement with a number of clients on the agency side, will now primarily focus on growing the businesses housed and launched by Labs. Its culture of innovation, he hopes, will also find its way back to the agency side where the tools developed by Labs will be utilised for the benefit of clients on the agency side. So in short Labs basically serves as an R&D hub that solves client problems and create new businesses for Quirk.
As a self-described ideas guy the new role will suit Stokes, who suffered near burn out at the beginning of the year after 12 years in the driving seat at Quirk, and having successfully managed the recent growth spurt of the company. He gets to do what he does best, be a maverick entrepreneur, and the smaller businesses probably come with fewer rules and new challenges, aspects of life Stokes finds gels with his personality.
On the agency side Spratt is properly taking charge and implementing a broader management structure in accordance with the organisation’s size. It was one of the initial difficulties Spratt faced – Stokes had pretty much made all executive decisions up to the time Spratt came on board – running the business “through singular talent” as Spratt puts it. Spratt has since decentralised decision making, created internal communication channels and created a management structures in line with the needs of the company. The whole organisational structure has become much more scalable and adaptable says Spratt.
This does potentially affect Quirks’ corporate culture of course, of which Spratt says he is careful to preserve as much as possible, given the power it gives Quirk in attracting talent to the organisation. At Quirk it’s important to attract and acquire the best talent – and then to inspire them, says Spratt.
Spratt sees Quirks’ technical competence as a point of differentiation not yet fully exploited – Quirk employs 7 Java engineers and another 7-10 front end developers – and few agencies can compete with these numbers head-to-head says Spratt. He believes Quirk has the best engineering competence in his sector.
They are especially useful when it comes to Application (app) developments, which requires exceptional engineering requirements which also naturally lead into the larger mobile development environment. The technology, underpinned by heavy analytical competency, allows Quirk to do special work in this space, says Spratt.
According to Spratt mobile is a major growth area for Quirk – some 30% of the work in the engineering funnel comes from mobile at the moment. Quirk has also been developing its video – or really motion graphics – competence. The group has just produced its second TV ad to be flighted on DStv. Digital agencies like Quirk can create motion graphics at a fraction of the costs production houses can – Spratt sees them as definitely under threat – and optimise those same videos for digital search and sites like YouTube.
The supersonic growth of groups like Quirk serves as a clear indicator that brands are shifting spend to digital media channels. So what the future of adland? Stokes sees it this way – by 2020 there will no longer be any digital agencies – only agencies that get digital. The rest will be dead.
This story was first printed in the September issue of AdVantage magazine.