How To Make More Money. Or, The Most Valuable Lessons I learned While Running Internet Startups and Advertising Agencies

Ah, make more money. A quick story. I was once in a cooking class in Chang Mai Thailand. One of the very funny chefs told us that she could charge more for her stir fries if she cut the carrots into star shapes. This was a very smart strategic decision to easily add a little bit of chutzpah to a dish that could be had all over town. A simple addition that, in the end… “made more money.”

Allow me to state the obvious… Not all businesses are created equal and not all bother to make star shapes. Some have valuable products and services; some are run by charismatic leaders; some are uber creative in their approach; some have a fabulous culture; some are strategic; and some are local, even neighborhood, market leaders.

Regardless of each company’s strengths, to survive in a world of thousands of companies (i.e. consumer options), they all need to be:

Well-Managed.

These insights and strong personal opinions on how to run a profitable business come from my thirty years in global and local advertising agency management and ownership and  CEO and founder of two internet companies.

I spent my first sixteen years in advertising as a senior account director, general manager and business development director at Dancer Fitzgerald Sample (New York’s largest ad agency) and in New York and London at Saatchi & Saatchi Advertising Worldwide (the world’s largest agency.) I must have been into large.

In left advertising in 1995 for seven years to be founder and CEO of two Internet publishing and technology startups. To put it mildly, it was great fun to learn how to build websites, invent ad units, grow large traffic and to monetize the first set of Internet advertising programs. Microsoft bought our natural language processing company ActiveBuddy (then called, I’m sorry to say, Colloquis). Millions of people knew Activebuddy for our snarky and smart SmaterChild chatbot.

After my digital sojourn, I moved to Oregon in 2002 to buy a regional advertising agency. In the ten years that I ran the agency, we bought the sports marketing agency Citrus; rebranded and repositioned the company; expanded to two offices and added national clients like Dr. Martens, Harrah’s, Legalzoom, Nike and the U.N.

The following is what I learned during my tenure as a businessman, global account director, big agency business development director, buyer and seller of three agencies and, most importantly, as a small agency owner.

Have A Marketing Plan.

Many (most?) companies do not have an active / current marketing plan. In fact, most don’t have a business plan. Yikes! Having both of these will put you way ahead of your rivals.

My Oregon agency’s business plan helped us grow our account list and increased the agency’s valuation through acquisition; the opening of a second office; the development of an efficient and very creative new business program and the addition of Nike AOR business (which helped us gain even more desirable clients like Dr. Martens, Montana Lottery, and Legalzoom).

Note to the 45+ crowd. The plan also acted as a framework to begin to position the company for an eventual sale.

Be Different.

Create a brand and / or product positioning that differentiates your company from your competition. Right on, you’ve heard this one many times. Good. This just might be the most important thing you can do for your brand and people.

The drill here is to have a distinctive and memorable brand positioning – it’s really a sales proposition — that actively attracts and stimulates interest from the right new clients and customers. This is the important part: 
Just trying to find yet another new way to say “digital” or “full- service” agency or pizza parlor, just might not be good enough – and its really difficult to find a new way to say the same old, and generally non-competitive thing. 
Instead, it might be time to think through some business models and products 9or, how you describe your product) that will more effectively get you to that truly distinctive and compelling sales proposition.

Watch Your Costs.

You are a business first. Control all costs. Cost control just might be the only thing you can totally control.

This sounds obvious, but it is critical in an increasingly low-margin service business like advertising. My metric was that every dollar I paid to someone else was a dollar I couldn’t hand to my kids, staff or pay off the 1992 Porsche 911.

Stare At Your Numbers.

We advertising people are visual so my Citrus Agency CFO created financial dashboards as a graphical management tool. We had detailed monthly financial dashboards tied to our P&L, balance sheet, accounts receivables and owner compensation (this one tended to focus our business decisions.)

We also used a real-time SWOT (Strengths, Weaknesses, Opportunities, Threats) assessment for all major company decisions like mergers and acquisitions, go-no on RFPʼs and to help manage and assess existing accounts and staff.

Only The Best.

Hire only exceptional people – that’s what Google does, so why not you? Do not rush to fill a position. You will often pay for your speed to hire in the long run.

I realize that we are now in a relatively tight labor market. Finding the best, most experienced people is getting more difficult. Here is one of my hiring mantras… [Read more…] about How To Make More Money