4 do’s and 1 don’t of taking big risks

I loved talking with David Droga for an episode of Masters of Scale recently.

Across David's career, the legendary ad executive built Droga5 from the ground up and now leads Accenture Song . In the course of creating some truly memorable campaigns, David took some extremely bold creative leaps, which we get into in the episode (you can listen here ).

In re-listening to the episode, though, another important theme leaped out at me: 5 important lessons about risk itself. So I thought it'd be useful to cover them here.

1. If you’re sure a risk is the right one, don’t let others’ strong reactions knock you off course

Right from the start of his career, David was taking risks, including the cardinal sin for someone just starting out: quitting a “good” job to go to a startup. I asked him to talk me through how his family took the news — and what he did next:

DAVID DROGA: After school, I got my first copywriting job, a good one at an established, international agency. And yet, within six months I left it to join a startup. I still remember going to tell my father that I was going to quit this job after six months and become the first employee of a new startup with no safety net.?

He just couldn't figure it out. He's like, "Why would you leave a job for less money and less certainty?"?

I said, "Because I want to believe in something. They have a mission, and I believe in the quality of the work they want to make." I knew it was the right move, but I had to face the prevailing wisdom of someone who genuinely cared about me and wanted the best for me.?

It turns out, that decision had a massive influence on the speed of my career. I learned so much, and was surrounded by great people. It was one of the best decisions I ever made?

2. Recognize when saying “no” is a risk — and when it’s a necessity?

We tend to think of risk as saying “yes” to something — “Yes, I will jump out of this plane” —? but in business, an unexpected “no” can also carry a risk, like when you’re bringing in new business or assessing whether to start up a new project. Recognize when “no” is a risk, and remember to apply the same lens to that risk as you would to a “yes” risk. Here’s a “no” risk that David recognized he needed to take:

DAVID DROGA: I had a really interesting lesson in year three of Droga5, because we scaled. We were growing 30%, 40% a year, which for our industry is immense, and we had so much hype around us in the first few years that I remember thinking, "We're golden. We can't do anything wrong and we are going to win everything and do it." We were invited to so many pitches.?

Then we went on this losing streak for three months, where we just didn't win any of them.?

I couldn't understand it. Our CFO at that time came to me and I said to him, "Can you just tell me how many of these pitches that were going forward — which ones do we get paid for? Which ones do we say no to?" He came back with this very simple one-pager and he said, "Here's an interesting fact for you. When we don't get paid to pitch for something, we are winning about 25%. When we get paid to pitch for something, you are winning about 60% to 65%. When you say no to an opportunity because you're too busy, but you say we can continue talking, we are winning about 80% of them.

"Because when someone's paying you something, they listen to every word that comes out of your mouth. They don't necessarily have to agree, but they'll listen to everything. Whereas, when they're not paying you, then you're just filling a function, you're just ticking a box, and they just thought, 'maybe let's bring in this feisty creative new thing', without any intention of working with us."

When we showed that we were committed and discerning, people wanted to hear what we have to do. Now, we still get judged by what we produce and the caliber of what we create for them, but saying “no” just put a value on us. Once we learned that lesson, we politely, always politely, not arrogantly, would turn down certain things and we just grew, grew, grew.?

3. Something you should risk without a second thought? Your status symbols

This risk might feel like a no-brainer — or it might be exactly what you need to hear. I’ll let David tell his story:

DAVID DROGA: When we started Droga5, our first office (that wasn’t my house) was down on Broadway by Canal Street, and it was a long, skinny top floor with very, very slanted floors. If you had a chair with wheels on it, you would literally roll down, so you had to hold your desk a little bit when you were writing or working, or hook your leg around it.?

But it was fantastic. I look back on those offices, and as crappy as they were, they're some of the fondest memories I have. Every single thing about it was distinctive and important because it was ours.?

Our clients probably felt uncomfortable going up in a lift that was the size of a coffin. They had a choice to go to us or to some expensive corporate headquarters on Madison Avenue. But good furniture doesn't make for good work. So they would come down here, out of their comfort zone.

And there was just an energy in that space, from the slanted floors, from the furniture — a bravado and a confidence. We presented what we presented because we weren't thinking: "Well, we have to pay this big lease and pay for big furniture." Instead, "We're going to present what we've got. We're going to present what we believe."

I think clients liked that. They felt that we were forward scouts. A collection of oddballs and odd furniture.?

4. Don’t risk a great idea on poor execution

In our episode, David tells a couple of great stories about risks that, in the end, did not pan out. There’s an important “don’t” in his story of Honeyshed, which he expands on in our Complete Episode (available in the Masters of Scale Courses app ):

DAVID DROGA: Around 2008, we started working on an idea for a shopping platform that was native to the Internet and to youth culture — we talked about it as “QVC meets MTV.” It was called Honeyshed, and it lasted one and a half years.?

To this day, it was one of the best ideas I ever had.?

But it was also one of the most flawed executions of anything I did, because I built a terrible platform. The idea was, we create an online show where hosts — what we’d now call influencers — sell products to you. They’d all be experts: sneakerheads telling you about sneakers, girls of all different shapes and sizes telling you what jeans fit them, gamers talking about gaming.?

We had a studio in LA and we made content that was on the edge of being an advert, with budget to match. We'd make a show for $60,000 that, today, an influencer on TikTok would do it for $10. Pretty soon, I realized I'd started something that wasn't going to work because it was a little bit ahead of its time. The platform — the studios, the presenters, the tech stack — just wasn’t a fit for what we wanted to do.

(As a side note, one of the four presenters we hired, in his very first job, was the actor Michael B. Jordan .)

5. Look back on every risk with honesty — and a wide-open mind

The Honeyshed story — and another story about partnership that David told me — highlight one of the most important lessons of risk: Always look back. Always learn. And look for the learnings that come at your sideways.

DAVID DROGA: Not every risk pays off. Timing and luck always come into play, no matter how talented you are or think you are. The key is to look for the unexpected opportunities that arise from risk -- the doors you blew open, the possibilities you created.

When we partnered with William Morris, it was an unusual collaboration. I had no interest in doing a deal — I just wanted to have dinner with Ari Emmanuel. Right from the get-go, I liked him. He's so ambitious and bullish and I found that actually refreshing. The idea of doing a collaboration or a partnership became really interesting, because Hollywood touches all these different places that we don't touch, television, theater, books, literature, music -- they have people on the ground.

The more I thought about it, the more I thought, we could blow our whole industry up and change the dimension of it. At the end of the day, a client doesn't care what you call yourself if you're doing the right thing by your client across whatever industries.?

We did that deal for a minority share. And I realized, as the partnership went on, that there was more divide between our industries than we expected. It’s not better or worse. We eventually unwound it.

But it was a fruitful partnership. It was fascinating, but also: It freaked our industry out because they were like, "Droga5 is prepared to make alliances that we would never consider," and it suddenly opened up the potential of what could happen.?

I believe in creativity being asserted in different places. Why should we sit in a shrinking iceberg when we can make camps in other places? I really believe in the power of what we did.

(To hear our entire conversation, click here. )