Beware of Digital Agencies ‘Doing’ Corporate Innovation

Steve Glaveski
Mar 8 · 11 min read
Gold rush in Ballarat, Victoria circa 1850

Modern Day Gold Rushes

While mining for natural resources is still a lucrative business today, ‘gold rush’ has become synonymous with any rapid movement of people to a newly discovered economic opportunity. It shows up in myriad domains, from cryptocurrency to military defense contracts to digital transformation which organizations globally are expected to spend US$2 trillion on by 2022.

Snake Oil: Cure What Ails You

“We Need An App!”

‘Shitty Agencies’

Murat Mutlu, designer and co-founder of Marvel App, penned a post called Why Talented Creatives Are Leaving Your Shitty Agency, in which he surmised that conversations with his agency friends always end up in a flurry of grievances such as:

The Rise and Fall of Appster

Appster: Proof that a blazer, a pocket square, and spectacles do not maketh an ethical man
  1. Creates more capital and space to work towards something people will actually use if the initial market validation shoots blanks
  2. Your reputation wins and you win more referrals for it
  3. Your customer retention increases and therefore your margins, because you spend less time selling to new clients and more servicing existing ones

Pervasive Malpractice

Unfortunately, the Appster story isn’t an isolated case. In my own experiences at Collective Campus, where my team has dealt with almost 100 startups that have collectively raised US$25M over the past five years, whether through our accelerator programs or coworking space, I’ve heard horror stories from entrepreneurs who have spent big dollars on a so-called ‘prototype’ developed by various digital agencies (‘prototypes’ because they didn’t serve to test the concept’s underlying assumptions so they were in many ways redundant). And by big dollars, I mean $50,000 to $100,000 for an unusable prototype! Not only that, but the code was often dirty, the user interface often ugly, and the user experience left one frustrated. And when you look closely, you often find references to previous clients in the code, suggesting a lot of cut, paste, and bolt-on activity going on.

Relocating The Shovels

Digital Agencies Can Help, But…

Having said all of this, not all digital agencies are created equal, and like any industry, there are the good, the bad, and the ugly. However, you should only engage a digital agency after you have done the initial market validation pieces described above — unless an agency has proven that they can help you do this successfully and at a price, speed, and scale that is reasonable.

Questions to ask:

  • Do they push back when you propose your idea (or do unreservedly they tell you they love it and that they would love to be involved, so much so that they offer you a ‘discount’ on the spot)?
  • Do they ask you what you’ve done to validate your idea?
  • Do they say that a prototype will cost upwards of $20,000 to develop?
  • Do they know anything about the lean startup methodology, and about designing effective experiments to observe real-world customer behavior?
  • Do they propose a large up-front payment, with inflexible contract terms?
  • Are they truly agile and advocate releasing working, testable software in 2–4 week increments, so that you (with the help of customer feedback) can determine if you’re on the right track, and interject earlier rather than later?
  • Are they open to agile contracts whereby you can terminate at any time and only pay about 10–20% of the remaining contract value?
  • Do they know anything about the nuances of corporate innovation?
  • Which other large organizations have they worked with, and what have the results been? (arrange to be connected with at least three of them and try to determine not just whether the product was delivered, and what the quality was like, but what engagement company is having with said product)
  • Similarly, who has used them more than once?
  • Do they do work locally or is most of their work shipped offshore?

This Actually Matters

There are thousands upon thousands of people employed in the corporate world whose passion, energy, and ability go untapped, seeing them spending more time navigating the bureaucracy and playing office politics than creating value. The push within many large organizations to become more innovative is an opportunity to unlock that latent talent, especially amongst younger demographics, so that they can not only create more impact in the world but by virtue of that, lead more fulfilling work lives and ultimately become happier, more content, human beings.

Steve Glaveski

Entrepreneur. Author. Podcast host. Metalhead. Wannabe Surfer.

Steve Glaveski

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#Founder of @CollCampus, @LemonadeStandCC and @Future_Squared #Podcast host. #Author of Employee to #Entrepreneur. Visit: #MEL

Steve Glaveski

Entrepreneur. Author. Podcast host. Metalhead. Wannabe Surfer.