10 tips for agencies wanting to work with startups

With all the disruption going on in business, today’s startups are set to become tomorrow’s anchor clients for marketing agencies.

Agencies cannot assume that today’s cornerstone business clients will continue to dominate in the future. A hypothetical client roster from the last decade that included Angus and Robertson, Yellow Cabs, Video Ezy and Dick Smith would look very out of touch in today’s market thanks to disruption.

Just looking at my backyard here in Brisbane, there are clients like Ladbrokes, Youfoodz, ComparetheMarket, Nimble, 5.4 and Youi that any agency would love to work with, yet they didn’t exist in a meaningful way 10 or even five years ago.

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The problem for agencies at the moment is that they don’t know how to work with startups as clients.

So if you own, or work for a marketing agency this is for you.

Here are my top 10 insights into how to work with a startup.

1.     Projects, not retainers
A startup budget is typically described as a runway. At the end of the runway they are broke, and every day they are heading down that runway. In other words, long retainers just don’t work for a company that probably doesn’t have the cash in the bank to last that long. Chances are the company will be conducting a funding round before then, but applying long-term views when your client is looking short term is a doomed relationship setup.


2.     Avoid percentage of media spend
Startups typically don’t spend enough money on marketing to justify this model; they also tend not to spend a regular amount. It is not unusual or a Startup to spend more on the management fee than on the media.


3.      Discovery, not optimisation
For the majority of startups you work with, they are going to lose money in their marketing campaigns. This means that the startup is not as much looking to optimise their campaign as they are to discover the ‘who, what and when’ of their marketing. Taking a slow and steady optimisation approach will never work for a startup client.


4.     Educate, don’t outsource

Most startup founders will be more than happy to do some of the heavy lifting for their campaigns. Founders are not looking to outsource; they are looking for expert advice. You should use this to your benefit. Rather than spending hours optimising campaigns, teach the founder how to do it.


5.     Help with their decks

Agency folk are among the best PowerPoint salespeople around. Use this skill to your advantage a win over a Startup founder by helping with their investor deck.


6.     Collaborate, don’t pitch
Startups are not looking for a long pitch. Typically, if they meet and like you, then they will want to start working with you. So don’t blow all your hours on a flawless pitch because you are going to need them for the campaign. Founders will monitor any marketing campaigns daily, if not hourly. You will put your client hours in during the campaign, not before it starts.


7.      Prepare for change
Startups pivot their business model often. Some are big changes and some are small, but you need to expect this. When you quote for your work, make sure you’re ready for the curve ball. Expect the unexpected.


8.     Move quickly
Founders are not going to muck around with your advice, and there are very short (if any) approval chains. If you recommend a website change, it is more than likely that your startup client will edit the site live from the meeting room.


9.    Don’t over report
Startups do not want pretty PowerPoint decks with lots of justification for their finished campaigns. The campaign either worked or it did’t. The startup will have a primary metric, and that is what they want to see. Founders are not looking for post-campaign justification as they do not have a boss they need to explain themselves to. They might have investors, but they will be even less in interested in a post-mortem justification. 


10.  Align your goals
Both you and the startup want this relationship to grow. As the startup’s agency your focus should be to help the startup achieve their business vision. If you do this, then you are not only helping your client, but you are increasing the potential revenue from your client. While the above is true of most clients, with a startup, the business vision is critical as they don’t have an existing business with profitable cash flow to fall back onto.


The hard reality for an agency is that most startups will not be significant revenue-generating clients. The good news is that this smaller client could turn into your next whale and without the need to go to pitch. 

So find yourself a startup and view them as a client of the future and have a little bit of fun working with a client that is both flexible and responsive.

This post was written by Gerard Doyle – founder of Fractal.com.au a Startup marketing consultancy