Chapter 10. The day our agency changed forever.

Imagine, after living in the same place for a number of years, you decide to put your home on the market. You’ll probably think about putting a lick of paint over some of the more egregious cracks. You might even stage the place to make it look its most prepossessing. After not too long, hopefully a few people will perform whatever the household equivalent of kicking the tires is, and, with luck, one of those people will actually make you an offer.

You’ll do a bit of haggling. They’ll go up in the attic and jump on a few floorboards. If all goes well, the sticker will switch from ‘For Sale’ to ‘Sold’. 

Now imagine, instead of moving out, you still live in the house while the new owners move in. And you continue to live in it while the new owners redecorate around you. Imagine they slowly remove almost everything of what you think made the place yours and special, while imprinting their own ghastly taste. They will, after a while, even suggest what rooms you should enter and when.

Sounds absurd, doesn’t it? 

Yet this is exactly what happens when you sell your services business. A big(gish) company comes in to buy your little(ish) company and keeps you in it, while slowly changing everything that made it appealing to them in the first place.

If this happened once, I think we could all agree, you’d send all involved off to the nearest nut farm. But in the advertising industry it happens over and over and over again. Some of the people we prize amongst all others have built sterling reputations and vast fortunes (not to mention sterling fortunes, Sir Martin), by doing it repeatedly. Even as the profits and prospects of the companies they’ve bought inevitably dwindle.

I have a sneaking suspicion we’re not a dying industry, just a stupid one. 

Now, you may ask, why on earth would you sell your house in the first place, given that this is invariably the outcome? Why would anyone sell the property they have lavished love and attention on for so many years?

The money. Obviously. And why stay? More money. Or at least the promise of it. Obviously. 

It’s certainly not for the opportunity to work alongside some decidedly middling and meddling managers.

As I’ve written before, our ambition was always to sell the Brooklyn Brothers. Why? Because all of the companies I respected and all of the people I greatly admired in the industry did it: David Abbott, Steve Harrison, Martin Puris, Chuck Porter to name a few of many. Plus, it’s the only way to make any real money in this business.

Eventually, we would sell to a PR company called Golin – which I’ll get to in the next chapter - but the real story begins about three years earlier in a conference room in a salubrious part of London, where Paul Parton, David Watson, George Bryant, Jackie Stevenson and myself (the principal partners) were sitting down with our newly-hired consultant, Charles Fallon of SI & Partners.

Cue wobbly screen.

This was not our first conversation about selling the business. Chuck Porter, who was in the habit of acquiring businesses for MDC, had brought us a cherry pie about ten years earlier and suggested that, actually, we’d be better off not selling to him. We took his advice. A few years later, another holding company called The Engine Group invited us to dance but, eventually, we both came to the same conclusion: we weren’t Droga5.

So, we hired the urbane Mr. Fallon and his team to get a deal done. In the house analogy, Charles is the real estate agent. Although he also played pastor, cheerleader, therapist and midwife at various times. 

What Charles told us was fairly simple: our margins in NY were great, but our revenues were small. Our margins in London were terrible, but our revenues were good. He advised us that what we really needed was a single business with $20 million in revenue, 20% growth consecutively for three years and 20% margins over that period. What would also help was a catchy encapsulation of what we did and at least one account we serviced across the two offices.

It would take a lot of hard work and be a real team effort. Were we up for it? 

Things were different back then. For a start we were all speaking to each other (most of the time). So, as images of large French Chateaus on the Cote D’Azur and McLaren 570GTs filled our imaginations, ‘yes!’ we said emphatically. Of course, we were up for it.

Looking back, I realize that day was actually the beginning of my end at the Brooklyn Brothers.

It’s not that I’m not grateful to Charles and his team. I am. Exceedingly. They went over and above the call of their duties. I should also point out that throughout this process, I was a willing and active participant. But what we did that day was change our business from one focused on creative work to one preoccupied with completing a spread sheet. We went from a company inspired by ideas to one concerned with margins and growth. Instead of grand ambitions we had short-term goals. Instead of making the right decisions (like installing an established creative director in London) we made expedient ones (letting George do it).

In short, we went from building a business to selling one. 

Given that we were always intending to sell, you might think this shift shouldn’t have come as such a surprise. To which I’d say: good point - and that no-one likes a smart ass. 

However, it changed everything about us. From what we did to who felt like they were running the place. It was exacerbated by the cack-handed way we set up the UK/US shareholding and made worse still by the contrary way we ran the company. In the next chapter of this thrilling book-on-a-business-centric-social platform, I shall cover the strange and circuitous route you take to convince a holding company to part with many millions of dollars. And why I’m writing this from Brooklyn, not Cap Ferrat.

Cue dramatic music.