1: The Overarching Problem…

… a stagnant economy with slow growth and little confidence.

(A continuation of this post where I’m exploring what positives can come from starting a business in a recession).

By the summer of 2008 when we left school and went full time on the company, shit had well and truly hit the fan. No need to reel off the stats or reminisce over the headlines. It was bleak.

So what positives can we draw in hindsight? I think there are four…

1 — We could be more competitive.

Global turmoil meant every business was on a mission of survival. The outlook was grim, forecasts were downgraded and cutting costs was deemed the most viable route to keep heads above water.

So follows redundancies, slashed investment and, most challenging for us at the time, a drastic cut to marketing budgets. (It would seem a common practice when sales look shaky is to stop marketing— surely a paradox, but perhaps a discussion for another time!).

We were suddenly pitching to stressed Marketing Directors whose priority above all else was holding down their job… while simultaneously reaching for results with half of last year’s budget. Not an ideal moment to prance in with a new way for how they could spend their money, perhaps, but it did mean they were actively looking for discussions on how to save it. Everyone in town was reviewing relationships…

So when two teenagers with no overheads (and, frankly, no idea of what they were worth) were willing to grind out and deliver for thousands of pounds what incumbent agencies, even once they had massively slashed rates to keep business, were charging ten times for… brands leant an ear.

As young upstarts with little to lose, we could be ultra competitive on price at a time when the pressure was on to cut costs. And that got our foot in the door of places we would otherwise have never had a look in.

2 — We had to get real good at communicating our value.

As companies trawled through budgets looking for anything and everything to cut, the emphasis on pitch conversations shifted quickly from output to value. There was no scope to try innovative new things, take risks or pursue vanity projects… every pound of every line needed clear and cogent validation.

This caused us some difficulty, at first. We were new on the scene, young and with an unproven (yet innovative) approach… we were a roaring risk. We had brilliantly positive conversations with brands, they loved our concept and ideas but, to quote one particular CMO at the time, “this is really fascinating stuff, I love it, but it’s just not mission critical right now”.

So we worked incredibly hard to define our proposition. Being “fascinating” was fun but it didn’t help sell any work. We had to shift our pitch from “interesting” to a compelling business case. We had to become “mission critical”… or die.

That’s a tough discipline, but has become a rigorous habit that now dominates the strategy behind our agency businesses. Being interesting/fun/new/innovative/exciting can get you through the door… but now more than ever, demonstrating value is what sells business.

I still think most agencies struggle with this.

3 — We grew sustainably.

Growing in a hard market meant we grew slower than we wanted to. It was definitely harder to sell work, fee negotiations (when they came) were savage and long term commitments scarce.

But… when we did win, and as we did grow, it was on really solid foundations and not whimsical fantasy land.

If we could create and grow a business in a recession… things could only get better! Had we had an easier ride, we could have got carried away and built a team and agency on looser footing and I’ve no doubt that would have bitten us on the arse further down the line. The recession gave buyers the discipline to ensure we were providing value, and gave us the discipline to build an agency that repeatedly delivered it.

In turn, we‘ve doubled turnover every year since we were founded and are on track to do so again this year. Start from the bottom, and you can only go up!

4 — Suppliers needed our business.

As the market turned, and everyone was scrapping for business, we were suddenly able to leverage deals from suppliers and contractors who wouldn’t previously have answered the phone to us. Any and all business was fair game, and suddenly our small pockets became important pennies.

This was a crucial step forward that allowed us make use of the tools and resources often only available to bigger agencies. So not only were we more competitive than them, but we had the keys to their armoury too. We just needed to learn how to fire the guns…