Marketing Agencies and Startups: Q&A with Brent Beshore

This post is part of the Insider Series, which is designed to feature professionals in our industry, offer business insight and discover new paths in the agency world.

Brent BeshoreBrent Beshore (@brentbeshore) is the owner and CEO of Ranking #28 on the 2011 Inc. 500, provides equity investments, marketing resources, strategic planning and operations management to communications-based companies.

Brent is also a regular columnist for Forbes and a venture partner at Gen Y Capital.

In this Insider Series, he discusses business lessons learned, funding and succession planning advice, and tips for working with startups. 

Q&A with Brent Beshore

MAI: What are the origins of What inspired you to create the company?

Brent: To be frank, was created out of perceived necessity. While I was in graduate school (JD/MBA), I realized I didn’t want to work for a big company or be a lawyer, but had no idea what I wanted to do. So I jumped (stupidly) into business without a good perspective and without a good business model. Big mistake. 

MAI: Your first two startups (Events Solutions and Pure) were both in the marketing and advertising services space. What did your experiences with these ventures teach you about the agency world, as well as about running a business?

Brent: I learned that the agency business is absolutely brutal, as are most custom services businesses. You’re always running for re-election. The causality between the work and results is tenuous at best. Customer satisfaction is largely based on perception and not reality. Innovation and creativity are thrown around a lot, but rarely practiced due to a barrage of unnecessary deadlines and fake emergencies. 

Those experiences showed me that I was more passionate about solving my own problems than my clients’ problems, leading us into the startup sector as the sole focus. 

MAI: You once wrote: “Service based business suck for young entrepreneurs,” because services are judged by their history of success. Can you elaborate on the challenge of perceived versus actual expertise, and your recommendations for overcoming it?

Brent: There are two issues at play. One issue is that service-based businesses are judged on the history and background of the person providing the service. Therefore, as a young person, everyone assumes that you’re less valuable because you don’t have 20 years, 32 Addy’s, and big client brands to help create the illusion of value.

The second issue is that experience actually does help you create value in a service-based business, because you’re drawing on all the mistakes you’ve made and things you’ve learned along the way.

So, there’s both a perception problem and usually a reality problem. My advice to overcome it is to get into a very specific sub-field of service providers where you can truly become an expert and create lots of value. Or, get out of the service-based business sector altogether. 

MAI: As an investor, what tips and recommendations do you have for agencies seeking funding—either to start their businesses or to propel them through a high-growth phase?

Brent: Agencies typically aren’t a great fit for large rounds of outside investment, and most agency growth is fueled around landing large clients. I’d recommend they develop an excellent relationship with a couple banks, get lines of credit, and only tap them when needed to float the period of time for accounts receivable to be harvested.

MAI: How important is an exit strategy for agency owners? What should leaders be considering now to plan for the future?

Brent: It’s critical to plan for it. The less reliant the agency is on the owner, the better. The more financially consistent, the better. The more depth at senior management, the better. The more niched, the better. The more networked in the industry, the better. All these things take planning. I’d advise everyone to start now. It’s not immediate, but it’s important. 

MAI: You deal a lot in the startup world. How can marketing agencies better position themselves to serve this market? What do startups look for in agency partners?

Brent: All clients (including startups) look for real, deep expertise. Unless you’re really a specialist in a very specific type of startup industry, don’t claim you can do the work. There are massive differences between startup marketing, growth company marketing, and established business marketing. There are also big differences between sectors. How you market a medical device startup requires a completely different mindset and skill-set than a tech startup.

This advice goes for all agencies: please don’t pretend you can do things you can’t. Just focus on where you can add real value, demonstrate that value, make your clients happy, and live a great life. Agencies tend to have both tactic creep (“sure we do SEO”) and sector creep (“of course we specialize in both banking and tech startups”) leading to client turnover, reputation loss and poor financial performance. 

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