After four rewarding years in business, Spoke is closing its doors.
This is not a decision that comes easily. As a small firm, each member of our team had a considerable influence on our company personality that our clients came to appreciate and love. I want to personally thank everyone who has poured their creative energy into this company over the years, and especially recognize the amazing cohort who helped us finish strong – Vince, Mallory, Elvis, and Tom.
When we launched in 2014, I scribed a set of values that we used to create a framework for our business decisions. Ultimately, those same values are what we had in mind when we decided to close.
Relationships & Craftsmanship
Our relationships with our clients, with our partners, and amongst our team were what set us apart from our peers. We knew that if an organization liked “us”, that we could continue to win projects and grow our company. Over the years, it was these relationships that drove our company’s success.
Craftsmanship speaks to the high standard of work that we held ourselves to across all of our services. It was this attention to detail, to best practices, and to innovative solutions that helped evolve Spoke from what started as a small web shop into a holistic brand and technology firm.
At the start of 2018, Spoke was moving forward quickly. We were accepting new projects and riding the coattails of an industry award that we received at the end of 2017. Outwardly, the business was looking good.
A tricky part of startups, and any business for that matter, is that it’s too easy to be complacent and let your foot off the gas when things are going well. In reality, even given these accomplishments, Spoke was very much in the early-stages of establishing sustainability and a depth in our pipeline of new projects.
Once the excitement around kicking off the new year settled, it became quite clear to me that our pipeline wasn’t at the place that it needed to be to continue to grow and scale the business in a meaningful way. We had an abundance of small projects that we were excited about, but too few of the bigger projects that can create the foundation of sustainability for a professional services firm.
At the same time, we continued to observe changes to the market — primarily, the absorption of creative firms and design talent back into in-house teams at large ad firms and Fortune 500 brands. The ability to carve out a piece of the market as a 5–10 person creative team, and attempting to compete with both in-house teams and large, multi-layered ad agencies, was becoming more and more challenging.
To compound issues, Spoke was founded as a boutique firm, where our intimacy and proximity to the work and to our clients were of the utmost priority. Our project teams and the work itself was organized in such a way that rapid scaling was in conflict with the values of the company. To be successful going forward, we would need to achieve what Geoffrey Moore describes as Escape Velocity, the ability to break legacy business patterns to attain new levels of growth and sustainability.
Looking for Outside Help
In the face of these changes, we began entertaining a short list of opportunities to sell Spoke, in part or in full, to a larger firm. Evan Williams, Twitter co-founder, describes three reasons a person should consider selling their company:
- The offer captures the upside
- Imminent threat
- Personal choice
We had received offers like this in the past but never pursued any of them very seriously because none of the above three criteria really rang true yet. We were enthusiastic about the growth potential of the company in the first three years and, while evolving and challenging, the market threats were not as stark when we first launched in 2014.
Upon reevaluating the above criteria, I knew the following:
- As Evan puts it, “every business has it’s growth limits”. Maybe Spoke could continue to scale with some changes that wouldn’t necessarily require changes to ownership. The value the time and energy required by my team, and especially of myself, to invest in new business development that this avenue would require, didn’t make it seem as feasible as it once was.
- Our awareness of marketplace changes had certainly evolved and were newly christened by recent changes in the DC marketplace of creative agencies that hinted at this threat growing closer and closer to home.
- Ultimately, there are personal reasons that anyone would want to walk away from the grind of business-building. Four years ago I wasn’t married and didn’t have a mortgage. The realties of adulthood required way more from me, both financially and from an energy-input perspective that made doubling down on Spoke now more challenging than ever.
These three factors all seemed to point towards a solution that did involve finding an acquisition opportunity. As it turns out, deciding that you want to sell and selling your company are two different things.
We reviewed multiple offers with various structures — some that involved me staying on to lead Spoke for some time, and others that were less clear about my role. During that time Vince and I had a lot of late night chats and planning sessions but, at the end of the day, the offer that we thought made the most sense did not come to full fruition.
Once it became clear that this final offer wasn’t going to come to a close as we had hoped, we found ourselves in the same financial position we were in months previous. The only change was that now the decision to double down or walk away was much more pressing and our runway continued to shrink.
By the middle of the summer I made the difficult decision to start sunsetting Spoke and began communicating our plans with the team. We were fortunate to have enough runway and project foresight to plan the ramping down process well in advance of any immediate business crisis. In this way, our team was able to plan ahead and begin transitioning into new roles elsewhere.
Many of us have found exciting homes at startups and design-oriented businesses and I’m excited that most of us will remain in DC.
If you’ve made it this far into my note, you are a true fan… Thank you for your support of Spoke and for contributing to the incredible comminity we’ve built in just 4 years. Stay tuned to Spoke’s twitter for news from former Spoke team members.
Love the process.