6 Lessons From My First 6 Months Building A Digital Agency
Christmas seems like an odd time to be writing my first blog post in several months, but it‘s sort of also the perfect time. I haven’t had much of a breather since my last post, as we’ve grown pretty fast to double-digit recurring clients and I’m also been building out a local team between NV and CA.
Given the holidays are the perfect time for reflecting and giving, I thought it’d be a good time for break down my first 6 months in business and share what I hope are some of the less obvious lessons.
1. Becoming a Partner Will Increase Your Lifetime Value, If You’re Willing To Lose Money Upfront.
This one may appear obvious on the surface. “Of course being a partner instead of a hired gun increases your value you dufus”, you say. Yes you name-caller, but my point is it’s a long-game, and one that’s worth playing.
Being that most of our clients are small business owners, they’re not used to paying extra for things like project management, product strategy, UX expertise. Their biggest priorities are getting a workable design in place, and then a functional product in place. Understandably. What I tell my team is that part of our job in the beginning of any engagement is education. We’re not trying to upsell these services: we’re literally educating them on all aspects of a digital product from how to write a good spec to how to do A/B testing on a new feature, to help them succeed. This leads to thinner margins in the beginning, but what’s been proven time after time is that as the client slowly gains more trust in us as partners, the lifetime value of that relationship is far greater than temporarily lost margins.
2. It’s All About Communication.
The lesson I keep learning over and over again. There are so many areas of communication in this line of business that can make or break you. Writing good specs. Being responsive. Negotiating conflicts when devs misinterpret what clients want, which inevitably happens, regardless of how good the spec is. Negotiating misunderstandings about billable hours. Spotting when client requests get out of scope and rejecting them professionally. Relaying unexpected delays. So on and so forth.
When it comes to hiring technical talent, contrary to what most people think, the market has plenty of it, both in design and development. What’s much harder is hiring solid communicators from top to bottom.
3. Upwork Is A Ruthless Marketplace, But It’s a Great Leadgen Tool (if you use it right).
We don’t have an in-house sales team or even a sales person. It’s something I’ve wanted to change for months, but as our business grew and I realized we needed to first hire in other areas to improve our product, I held off.
So for the last 6 months, I’ve been a one-man sales team. And even though I dislike Upwork’s draconian fees and price-cutting that drives down the value of freelancers that don’t know their true value, Upwork has also been where I’ve gotten some of our best clients. I’ll share my 2 key hacks in making this happen: selectivity and follow-up.
Selectivity: I use a combination of high budget, desired expertise, length of hire, and keywords (“health”, “react”) to create an on-the-fly list of high-quality leads that are looking for something we specialize in and are ready to pay closer to market value. This has lead to us building apps with budgets ranging from $15k — $40k.
4.Jury’s Still Out On Partnerships With Other Agencies.
Because I didn’t have time to build my own sales team yet, I hired out an outsourced marketing agency. What they do is guarantee 10 booked meetings with digital agencies that are likely to be good partners (either they offer something you don’t, or they have overflow work to pass on). The pricing is $2500. The experiment has been mixed. I’ve had good meetings, but no projects have come from them. Granted, 6 months is the average timeframe for any of these partnerships to bear fruit. In short, it’s closer to the sales cycle that you might expect for Fortune 500 clients.
Don’t get me wrong: if any of these 10 relationships actually gets nurtured into work, it’d be a gamechanger. A partnership would allow you to work with the likes of a client like Nike. Just make sure you’re not putting all your eggs in this basket. I’m actually glad I outsourced this entirely different sales approach, so that our internal sales process could stay focused on direct-to-client outreach, and anything that comes from this would treated as a bonus.
5. Invest In or Partner With Designers That Wow.
Initially we branded TopFlightDevs as elite engineers that offer Silicon Valley code quality at half the price. Big mistake, and not because we didn’t believe in the pitch. We actually ended up getting most of our clients on the strength of design. I’m not talking about our home page, but rather how our apps and design prototypes look. Clients won’t bother checking out our high-performing apps that don’t have wow factor. The market reality is that design, not code, is the proverbial foot in the door.
If you don’t have a good designer, either hire one (Dribble and Behance are great places to look) or partner with a design firm, as long as both of you can put the work in your portfolio. You’ll get much farther as an app development company this way.
6. You Don’t Need To Schmooze In-Person To Land Clients.
If you‘ve read some of my more personal posts, you may know that I’m disabled. It makes going out to conferences, which I considered speed dating for agencies, mostly out of reach (until I hire literal foot soldiers). I almost partnered with a few local biz dev folks that do this for a living, until I learned that they’d handed out over 300 business cards over the course of a month without landing even a single callback. This was a gamechanger for me that allowed me to double down on the online sales funnels that were working.
I’m not saying schmoozing won’t help, but for folks that have other reasons to be elsewhere (maybe you want to live on a beach in Thailand), I’m saying don’t let the FOMO on schmoozing be the thing that holds you back.
