By Chris Jefford, CEO and Co-Founder of Truant London
Walking into our new office (aka broom cupboard) to start our agency back in 2012, all four partners flipped open their laptops to be simultaneously greeted by the headline: UK sinks into double-dip recession. It was the start of ad land being hit hard by austerity, an era when business confidence was low and marketing budgets tight. Sounds familiar, doesn’t it?
Our future suddenly looked very precarious. But we’re still here today, nine years on, and we’re not the only indie in this position. Our competitors Joint and The Corner both started around the same time and appear to be prospering today.
Businesses founded at a time of great uncertainty are future-proofed because of their early focus on survival. It’s the route to building a business packed full of resilience, a strong sense of purpose and with an ability to flex with the times. Perhaps this explains why our latest crisis – the pandemic – has seen a surprising volume of new agency launches. From New Commercial Arts through to CoEX and Free Turn, several ad land talents have been brave enough to take the plunge.
Stanford economist Paul Romer once said: “a crisis is a terrible thing to waste”. And he’s so right. From Airbnb to Instagram, Uber and Groupon, we’ve seen some of today’s most successful companies spring out of economic chaos.
As noted by McKinsey in their Bubbles Pop, Downturns Stop report: “Your business context is and will remain uncertain. But if you get moving now, you can ride the waves of uncertainty instead of being overpowered by them.”
From the shock of the financial meltdown, to the rise of Trump, Brexit and now Covid-19, in our agency’s lifetime alone, we’ve seen significant Black Swan events thrown our way every couple of years. The idea that a contemporary agency could ever go through a period of relative calm seems like a fairy tale.
Businesses born out of volatility are built in the knowledge that the next drama is just around the corner. Like a Tokyo skyscraper having built-in earthquake resilience, recession-era start-ups are equally designed to deal with shock:
1) They worry less about annual finance planning. Instead, they place more emphasis on real-time monitoring and measuring of the basic business fundamentals, keeping an eye on building a buffer to withstand any shocks.
2) They have a simplified business structure designed for speed. Meaning they can take decisions quickly and cut costs where needed, when needed.
3) They have a fully digitised infrastructure. This doesn’t just mean remote working. It means being able to pivot service offerings to focus on new revenue opportunities, or dialling up and down others. This fluidity helps agencies ride the waves, rather than be wiped out by them.
4) They focus on people and culture as a point of difference. Netflix – another business that soared out of the last recession – is a great example here, preaching bottom-up business culture and empowering staff throughout.
In a strong economy, businesses have the luxury of time, access to capital and can be bullish about pricing. However, those that are forged from downturns experience life very differently. They are consequently better prepared to deal with the next inevitable shock. Even if that happens to be a global pandemic.