Being out of the startup world for a few years, I’ve struggled trying to figure out how to still be deeply involved in the community without being a founder or a funder. I love the people and the grind, but where could I fit if I wasn’t in the day-to-day? I stay involve in meetings where I can, like Startup Scaleup and the very interesting meeting I attended this week at JumpStart around #Blockland and the Entrepreneurial Ecosystem Node, but it wasn’t until a recent conversation with a multi-time founder that it all fell into place.
Marketing agencies sit at the crossroads of a significant win-win-win between themselves, enterprise clients and startups. Let me explain why this is a benefit for each party individually.
Enterprise – the size of enterprise business drives the need for structure, process and, in many cases, bureaucracy. This isn’t always the case, but when it is, it is the enemy of innovation. Silos get created out of necessity, communication across teams becomes difficult, and issues that no single team member has the bandwidth to solve creep in. This is all happening in an environment of significant market change that compounds the problem and turns the size and stability of a large company into a liability in its lack of agility. These are the perfect scenarios for startup thinking. See problem, fix problem. Innovation is intrinsic to startups and entrepreneurs and they are wired to pivot quickly to create solutions. These types of relationships can give enterprise organizations the jolt of new thinking they need with a limited resource outlay.
Agencies – I’ve always contended that agencies that have the best client relationships do two things:
1. The thing they were hired to do very, very well
2. Constantly lob new ideas at their clients that solve problems regardless of whether it directly correlates to work for the agency
There are obviously other components to these long-term relationships, but ultimately companies partner with agencies that push them. They want partners that are personal trainers (figuratively speaking) and curious learners that are digging around for what is next so they can stay ahead of their competition. To me, this is a tailor-made opportunity for agencies to inject the right startups into large organizations that have an appetite for what is next. Ultimately, agencies hold a trusted book of business, visibility into client budgets and a sense of the organizational issues that could be solved with the right thinking. I’m not a gambler, but I believe that is a trifecta.
Startups – Startups get the one thing they crave above all else: REVENUE. They also get to stress test their ideas in the real world on real-world problems. This allows for product iterations that ultimately lead to better commercialization, better scale and more juice in the ecosystem. Success begets success, and the only way a startup grows into a viable long-term company is listening to the market and not romanticizing their original concept.
This formula comes with some obvious caveats:
1. Enterprises need to buy in on working with startups, innovating and being comfortable with short-term failure for long-term success. It also helps if the enterprise views its startup partnership as an investment in their region/ecosystem.
2. Agencies need to have hardcore understanding of the founders and products they are bringing to their clients. Bringing in bad startups who cut corners — they do exist — could have a negative impact on the client relationship and no one wants that.
3. Startups need to be honest about what they are and what they are not. Not delivering to an enterprise client can have a ripple effect that does harm to your reputation. It’s one thing to be ambitious and aspirational, but don’t be reckless.
For an ecosystem to work as an ecosystem, it needs more than just founder, funders and mentors. It needs customers and agencies sit in a powerful position to deliver just that.