The creative agency business model remains unchanged in more than 100 years. Clients with a problem hire in agency expertise and typically pay on a fee or project basis.
Nick Band is on the hunt for alternative models in the UK. He’s put up £100,000 of his own money to invest in a new business.
The project is called Agency 2014. Nick, founder of Band & Brown, Brando and now Berlin, has assembled a team of industry heavyweights to help him with the task.
Agency entrepreneur Mark Borkowski, Gorkana CEO Jeremy Thompson, The Foundry’s founder Lynn Beaumont and PRCA CEO Francis Ingham have all signed up.
We caught up recently to talk about the project and how the search is going. With two weeks to go Nick’s had two firm proposals and around 20 conversations.
He says that he’s yet to hear a truly disruptive idea and instead conversations fall into one of two areas, around how the £100,000 will be invested, and the risk appetite of candidates.
Investment vs equity
Agency 2014 initially faced some criticism around the level of equity expected in return for the £100,000 investment.
Nick is clear that he’s expecting that his cash will buy between 30 and 50 per cent of a business, leaving the founders clearly in the driving seat.
The level of investment will be based on the strength of the business model, the team and risk.
It’s a lot of money.
In theory you could start a public relations business with a laptop and a credit card. But the benefit of starting out with a substantial investment is that it limits risk, and creates a platform for fast growth.
There’s a related point. When Steve Earl and I founded Rainier PR is 1998 from the basement of serviced offices in Covent Garden in London, we arrogantly expected all our clients to walk with us. They didn’t.
Instead they waited to ensure that the agency was a success before giving us work, and putting their own reputation on the line.
Agency 2014 tackles this issue head-on, providing a substantial chunk of working capital and the experience and credibility of Band and Borkowski.
Attitudes to personal risk
Band’s goal is to unlock a team from an existing agency or communications team, to start out on their own. There’s no doubt that £100,000 is a substantial key.
Yet Band says that many of the conversations he’s having with would-be founders are around their personal appetite for risk.
Every entrepreneur has a story about the risk they took to start out, and the challenges they have faced on their journey.
The question you need to answer is what you’d do if it all went wrong. My hunch is that you’d almost certainly be able to find a job that would cover your basic living costs.
Agency 2014 isn’t asking you to invest your own money, although that would show real commitment, instead Band is underwriting the risk for the founding team with his own reputation and money.
The risk is actually low but ultimately bravery comes from within your soul. It’s not something you’ll learn from Agency 2014 but £100,000 and Band’s backing will go a long way to help.
You can connect with Nick via Twitter @NickBand.
Podcasting is a relatively new thing for me. I’ve started recording short interviews like this with people that I meet or who are part of my network. You can access it on Soundcloud, via your favourite podcast app, or iTunes. Let me know what you think and thanks for listening.
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