10 Lessons From Launching an Agency in the Middle of the Pandemic
A year ago I launched a content and digital marketing agency called Literal Humans with my friend Paul as a bit of ‘fun’ during the first lockdown. In that year we’ve gone from £0 to £500K+ real quick and learnt a LOT about how to run a business.
Below are 10 of the biggest lessons from an intense first year, enjoy.
1) People on LinkedIn lie about how much fun starting your own business is
Jesus #WorkPorn is tedious and LinkedIn is a lodestone for bullshit. Normally articles like this wax lyrical about how being your own boss and embodying the entrepreneurial spirit of capitalism are things you can’t put a price on, and that starting a business will give you the freedom to truly live your life.
The truth is 60 hour (minimum) work weeks and a level of stress that makes you truly appreciate the benefits of any salaried role that allows you to clock off at 5pm each day. There is nowhere to hide and no one to turn to when you own your own business — if work you or someone you’ve hired delivers isn’t good enough, it’s your fault and you that has to go back to a client and face the music.
Some people thrive under this pressure, but in all honesty if we hadn’t launched during the height of the pandemic when there was literally nothing else to do, I’m not sure I’d have been able to cope.
2) Distributed teams are the future — look after your freelancers
Perversely, launching an agency in the middle of a pandemic couldn’t have been better timing with regards to our available talent pool. Whether it was furlough or losing a full time role due to COVID, so many gifted folk who can do their job from a laptop with an internet connection suddenly found themselves entering the freelance market for the first time.
Coming from a freelance background ourselves, Paul and I had decided from day dot that one of the cornerstones of our agency would be looking after our team like family and so we offer superb hourly rates (at all experience levels), make our work fun wherever possible and guarantee everyone is paid on time at the end of each month like clockwork. We also fire asshole clients (see point 7).
The result of this approach is that we’ve quickly built a brilliant community of freelancers that I’d back to go toe-to-toe with the in-house teams of far larger agencies in terms of quality of work. It lets us build teams that are genuinely bespoke to each client’s needs and industries rather than rinse and repeat cookie cutter strategies, while also allowing us to avoid the quagmire of admin that comes from hiring full time staff.
The shift from physical to remote will be at least partially permanent. Pay your freelancers well, pay them on time and treat them like humans (literally). End of.
3) Referrals will always be your biggest source of business
While we’ve had some big wins with regards to cold outreach and our own content marketing, about 70% of our business has come from our clients (and freelancers) referring work our way.
It sounds obvious, but probably the biggest lesson I’ve learnt so far is that when you do manage to land work as an agency you have to move heaven and hell to absolutely smash that work out of the park from day one.
We work on a rolling monthly retainer model at LH, and weight our first 2–3 months of retainer so that we pay more to the team working on a new account to ensure they’re putting in more hours than necessary and our on-boarding and initial deliverables are as good as they can possibly be.
Sometimes the result of this is that we actually only break even or make a small loss from new contracts initially. The upside is that we hit the ground sprinting, with many clients referring new business our way after only a month or two of working with us. And once we get into the more regular monthly retainer work that requires a less intense concentration of freelancer hours, our profit margins become far healthier.
4) Being likeable is the best USP you can have
There isn’t a CMO in the world that doesn’t have a nightmare anecdote about some incompetent or infuriating agency. I’ve lost track of how many times I’ve heard ‘We were going to go with someone else but we really like your energy and approach’ on a call. (Translation: ‘You guys don’t seem like the usual agency ass hats, maybe working with you won’t be a total nightmare…’).
Our bread and butter is SMBs, but we’ve punched above our weight with regards to some of our clients simply by being likeable and exciting as a team. People do business with people they like, even when they’re running multi-billion dollar companies.
5) Imposter Syndrome is real but it can be useful
I’m good at what I do and I’m confident of that. Or at least I am when I’m in a good frame of mind, sometimes when I’m hungover or a client asks me a question I don’t immediately know the answer to I have an Emperor’s Clothes level of existential crisis and worry that I am a snake oil salesman with his private parts on display.
I don’t think you ever fully overcome imposter syndrome unless you’re a sociopath, but I’ve found it can be useful if you don’t let it overwhelm you. I work a lot harder because the idea of falling behind my industry or delivering subpar work is terrifying to me. The tricky part is using that feeling as motivation without letting it affect your mental health.
6) Landing work is easy(ish), landing good work is hard
This was a surprise to me — landing work as an agency isn’t that hard. Don’t get me wrong, it’s far from a walk in the park, but if you send out enough emails, talk to enough people in your personal network and do enough cold outreach on LinkedIn you are guaranteed to land a certain amount of positive responses each month.
What is very difficult is knowing what work will actually be worth taking. We had some early contracts where we were producing endless blog content for peanuts, and when we actually sat down and figured it out the margins were maybe 5–10% at best.
The big lesson here for me is that while these sorts of clients might seem like they’re good for cashflow and getting your foot in the door, they are a time and energy drain, meaning you have less time available to land genuinely profitable projects, and less resources available to do good work when you do.
7) Some people are fucking crazy
Another big revelation for me has been that one of the key skills of an agency owner is identifying nightmare clients as soon as possible and cutting them loose before they affect personal sanity and team morale.
Obviously we want to do amazing work for folk willing to pay for our services, but some people are just too nuts to work with. In only a year, we’ve had clients refuse to pay, refuse to communicate (and then complain the work isn’t the incredibly specific piece they’d secretly had in their mind from day one), gaslight us about conversations we’d had (and recorded*) or, on multiple occasions, kick off because we weren’t willing to do ten extra bits of work not covered in their contract for free.
At the start we were too nervous about losing work to stand up to these types of clients, but now we’ve learnt that the effort simply isn’t worth it and firing nightmare clients is as important as landing great ones.
*Not in a creepy way.
8) Hyper growth is hyper scary
In the first six months of the agency we were working off of scraps, executing contracts for a couple of thousand bucks and taking anything we could get. In the second six months everything skyrocketed, leading to an ARR in the hundreds of thousands, so much so that we had to stop accepting new work for a couple of months.
While this hyper growth was obviously a good problem to have, it was also terrifying. Suddenly Paul and I found ourselves scrambling to build new systems and processes, hiring new teams, onboarding multiple clients, managing multiple projects and just generally feeling like everything we were working on needed to be done a week prior.
People think successful business owners are entrepreneurial geniuses destined to win at life, but I’m increasingly convinced they’re just the folk that can hack crying into their morning coffee from stress before starting their work day.
9) Your initial team will make or break your business
We’ve been blessed with some incredible folk at the start of our journey as an agency — our core team includes some of the best designers, digital marketers and content creators I’ve ever worked with, and our wider team of freelancers are all seasoned digital nomads that just get things done.
We’ve had some real missteps though, and fortunately learnt our lessons with those mistakes quickly. One of the benefits of a distributed team is that when it doesn’t work out with someone for whatever reason, you can quickly move them off a project and bring in someone else. An especially useful tool in the world of content + digital marketing where, let’s be honest, there’s no shortage of bullshitters!
Also, quick shout out to said team: Derrick, Anabelle, Tafadzwa, Noelina, Christina, Gigi R + Gigi Z (Team G-Unit), Nina, Miguel, Mike, Dozie, Florian, Nneka, Amanda, Daniel and Lauren, you guys are absolute rockstars.
10) Never travel without a book to read
This isn’t actually a lesson from starting the agency, it’s just a good piece of advice a CMO once gave me.
Always have a book with you to read during the quiet moments of life — if you’re in the world of digital marketing you already spend too much time on your phone and laptop!
P.S. If you’d like to stay updated on how year 2 of Literal Humans goes, you can sign up to our newsletter here.
And if you’d like to follow my own personal journey into early stress induced grey hair, my LinkedIn is here.
