Why it's hard for startups to hack brands and agencies for growth

Steve Cheney, in a good read about how to hack startup growth through building strategies with brands:

Avoid working with digital agencies. … The reason it doesn’t work generally in agency-land is deals don’t fly for anything nonstandard, which is difficult to get done with multiple parties. But the fact is in startups everything is risky and non-standardized at the early stage. Agencies don’t and will never take risks. Startups have to by default. … Instead you need to work with the experimental brands who are doing leading edge stuff.

Every day I talk to startups about how to build their businesses with brands and agencies, whether it’s at panels, mentoring sessions, or just one-on-one with entrepreneurs. Darren, the head of Ventures, has written about it extensively over the years, talking about the bad rap agencies get, the difference between startups and agencies, and much more in Digiday and on his blog.

And so it’s a question we get every day: how do I sell to agencies and brands? How do I approach them? Do I go to agencies or brands? It’s not an easy answer, but there are some tips.

Selling and business development are different challenges.

But one thing that’s important to point out is the difference between selling and business development. Steve notes it in his post:

There a few exceptions to the above rule, most specifically if your startup is specifically centered around selling media, then of course you will work with the agencies—but this is the minority of startups.

Selling is a clear-cut proposition: here’s the service, here’s what we can do, here’s how we compare, here’s what we cost. Agencies know how to evaluate products and services that they regularly buy, and can be great partners with startups to take innovative technologies to the brands they represent. It can be a long process and take a lot of followup, as agencies may like the startup and what they do, but not have the right fit for it at that time with a brand and their campaigns. The planning and implementation cycle takes time, and it can take time to find the budget and timing to make the sale. But it can work.

However, business development, the type of growth that Steve is talking about, it much harder. But it shouldn’t be a surprise: working with multiple partners around innovative and new ideas is always a hard process, and is true far outside the world of agencies and brands. But business development isn’t their job. They are paid to find innovative ways to use emerging technology to drive their clients forward, but most agencies don’t have the visibility or scope to work on the sort of broader business issues or integrations that real business development partnerships require.

All agencies aren’t the same.

Let’s remember that agencies handle distinct roles: some handle digital planning or buying, or traditional media planning or buying, or creative, or social, or CRM, or experiential, or any number of functions that are segmented across a brand’s business. The fragmentation of an agency’s responsibilities makes it harder for an agency to think holistically about a brand’s broader business goals, because it’s not what they are paid to do. They are paid for much more specific functional deliverables, and simply can’t efficiently drive forward efforts that span functions, departments, and other agenices. And coordinating business development deals across agencies for their brand becomes a nightmarish proposition for all but the most dedicated, coordinated, and deeply-pocketed startups.

It’s a game that’s really, deeply, truly hard to play. As usual, don’t hate the player, hate the game.