Can Agencies and Startups Get Along?

secrets of the agency-startup relationship

Big agencies working on national clients with massive budgets. Doesn’t sound like an ideal partner for a scrappy early-stage startup, does it? Definitely not on the surface.

But as it turns out, startups and agencies do have a lot in common. They’re both focused on solving problems and bringing big ideas to life. Some of the smartest people I know work for a startup or an agency. They’re generally working on interesting things.

On one level, the two seem like natural collaborators, but it’s rare to find an agency that knows how to work with startups, or founders who understand how to even conceptualize agency world. What gives?

I’ve come to characterize the relationship between both groups as two individuals standing back-to-back, facing opposite directions. In that configuration, the two are near to one another, indeed, within arm’s length. But while they’re close in proximity, their outlooks are totally different. They share the affinity for big ideas and solving crazy problems, but they apply themselves to different ends.

In my experience, though, it is in fact possible for both groups to realign, to share a common purpose, and to apply their strengths in ways that benefit the startup as well as their agency partner.

What follows are some lessons learned.

For transparency’s sake

I hope this article doesn’t come across as overly self-promotional. If I use lots of examples from our own work at archer>malmo, it’s simply because we’ve been intentional about working with startups for the past three years. We’ve worked with founders on the west coast and in the southeast. Some have raised their A round, others have been recent accelerator grads. We’ve done a good deal of brand work, campaign development, and all sorts of other executions.

So, if I talk about our experiences a lot, it’s because, well, I’ve experienced them. But I am confident that the lessons learned here are widely applicable to all sorts of startups and agencies.

Reasons agencies aren’t good at startups:

Agencies have been around for a long time, and their ways of thinking and working tend to become ingrained. Here are a few hurdles I’ve seen stand in the way of fruitful agency-startup relationships.

different paradigms of:

• timelines — traditional client timelines often extend months into the future. If you don’t believe me, attend any number of annual planning meetings that happen between agencies and clients late Q4 or early Q1. For large companies, where marketing plans execute against known strategies, long-term planning makes sense. But startups operate in weekly or monthly cycles. There’s always a vision of the future, but planning specific tasks 9 or 12 months out is ludicrous. The startup may not even be around in 12 months.
• budgets — it’s not uncommon for agencies to pitch multi-million dollar business and to develop strategies that include massive (by startup standards) media spends and production costs. For many startups, though, $10,000 to produce a killer direct mail piece can be out of the question.
• process — many agencies are organizational waterfalls. In other words, they adhere to strict processes of internal approvals that culminate in revealing work to the client from behind a magical curtain, then waiting for client feedback, fixing it, and moving on. Startup DNA is fundamentally more iterative, with their organizations built on cycles of testing and ongoing revisions. It’s not uncommon for a startup team to suggest getting the work 80% right, releasing, and iterating, rather than waiting until everything is perfect. Tt can take time for agencies to get used to that.
• success — for traditional agency clients, success may look like single-digit increases in national sales numbers, or some uptick in brand awareness. Success for startups is usually much more immediate. They need to develop a strong brand, or help coming out of beta and going to market. Now.

Tips for making it work

There are clearly challenges for building working relationships between agencies and startups. But it actually is possible to make it happen. And it can be really good.

relationship

Our most fruitful startup relationships have begun as friendships. This sounds incredibly sappy, I realize, but it’s true. Investing in the relationship gives both sides time to feel-out the chemistry and fit, understand how both groups think and work, and ultimately, establish trust.

trust

As with any relationship, the startup-agency engagement has to begin here. Startups needs to get the attention their accounts deserve, and their teams need to feel comfortable that this will be the case.

communication

By their nature, startups make decisions quickly, and begin acting on those decisions immediately. When things are moving fast, it’s crucial that both sides commit to an ongoing dialogue. That includes progress updates from the agency side, as well as timely input and feedback from the startup. The startup should also be transparent about upcoming developments that might affect scope, budget, or timeline.

knowing what you’re good at

Every agency has a core set of skills that are particularly relevant to startups. We happen to be a full-service shop, meaning we have creative, planning, media, PR, digital, and broadcast all under one roof. But are all of those functional areas relevant to startups? Maybe, maybe not, but we’ve found that we’re particularly good at brand development and campaign development. If the scope falls outside of those areas, we can provide value to be sure, but we’re transparent about what we’ve found to be our core capabilities for early-stage startups.

In addition to these general tips, there are several pieces of advice for both startups and agencies.

Startups should:

• start with a finite project — avoid situations where the timelines and deliverables are blurry, and begin with a finite, well defined project. Moving toward a long-term relationship is optimal for both parties, but we’ve found that beginning with a bite-sized project that has a realistic budget is the best way to get-to-know the teams involved without risking too much time or money.
• define scope as tightly as possible — make sure you understand what the deliverables are, and do the work on the front-end to define the challenges you’re facing and what kind of help you need. Keeping to a tight scope will help control both your budget and everyone’s expectations.
• avoid RFPs — someone on your board may suggest doing an RFP as a matter of best practices. They may even send you an awful template for you to blast out to dozens of agencies. Do not do this. RFPs create unreasonable amounts of work for the startup and for the agency, and really, the process won’t give you insight into how the agency thinks and works. RFP-mode is very different than starting with high trust and a strong relationship. And no one wants to begin a relationship with a laundry list of arbitrary to-dos.
• trust the feels — get to know the people first. You’ll really only want to work with agencies who have invested — time, effort, and money — to get to know you, or those who are putting out solid thought pieces about startup branding and marketing. So call up folks at two or three different shops and have drinks or something to eat. You’ll be spending lots of time with these people, so get to know them. As with any relationship, trust your instincts. If it feels right, go for it.

Agencies should:

• consider non-traditional compensation models — for pre-series A companies, cash-on-hand is king. Lots of times startups need agency help, but may not have the cash available to pay the fees. In those situations, it’s helpful if the agency can be flexible with how it gets paid. This could mean taking equity (we do convertible notes), deferred fees, or some sort of performance-based compensation.
• get to know the lingo — growth hacking, angel investing, runway, MVP, and myriad other terms are part of the lingua franca of startup world. Some are buzzwords, to be sure, but others carry lots of meaning. If your agency team is working with startups, it’s important to learn these terms in order to remove any barriers created by communication challenges. As a side note, I may do a separate post on startup glossary for agencies; let me know if that’s interesting to you.
• be prepared for nontraditional relationships — on one of our startup accounts, we work directly with the VP of Engineering, a couple developers, as well as the marketing director. In this way, we’re all able to provide feedback and iterate quickly without worrying about traditional layers of client approval. It also means our team is incredibly well-aligned with product development.
• invest in relationship building — as mentioned earlier, real relationships, i.e. beyond a LinkedIn connect, form the basis for any healthy agency-startup partnership. But you can’t build those relationships from behind your desk. We’ve found success through doing lots of mentoring, sponsoring and attending events, and generally just being present where startups are. And really, if doing that doesn’t get you absolutely amped-up, you shouldn’t consider working with startups in the first place.
• give first — the startup community is incredibly friendly and altruistic. It’s also keenly sensitive to hucksters and snake oil salesmen. To avoid coming across as opportunistic profiteers chasing the “trend” of startups, find ways you can provide value before ever considering a new business conversation. Mentor at an accelerator, do office hours, find startup conferences to speak at. As an example, we’ve developed the Brand Strategy Canvas to make branding easier for startups. We give this away for free, and do workshops all over the country.

Everybody should: keep the big idea front and center

Despite the technological upheavals in tech in the last couple of decades, the strength of a good agency is this: they’re really good at tapping the power of lots of smart, creative, connected people. The culture of the agency is one of big, amazing ideas. Of uncompromising dedication to truth and to producing great work.

As it turns out, startups are also relentlessly pursuing a big idea. The company is just the tangible manifestation of the founders’ and the team’s vision for the world. They’ll stop at nothing to bring it to life.

And this is where the agency-startup possibilities really get interesting: pairing unreasonable founders with an experienced creative team that’s hard-wired to think big.

Hopefully this brief exploration of the agency-startup relationship is helpful to founders and agency folks everywhere. If you have questions or comments, I’d love to hear your thoughts. Shoot me a tweet @patrickjwoods.

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Patrick Woods is the Director of archer>malmo ventures and creator of the Brand Strategy Canvas.