The “A” List: What the LinkedIn Top Companies 2021 List Means for Agencies Everywhere

Just wow. Two of LinkedIn’s 2021 list of the 50 best workplaces to grow your career in the U.S. are agencies. As a percentage, that may not sound super impressive, but in terms of cultural significance, this is huge. How huge? Well, I’m pumping my fists in the air, doing a victory dance for those who accomplished this coup d’état. With that out of the way,? it’s time to reflect.

How did we get here?

Last time I checked, agencies weren’t contenders for titles like “hottest startup in the country.” We’re talking about a business model that until recently, apart from digitization and the dot-com boom, has remained relatively unchanged since the Golden Age of Advertising in the 1950s. If these havens for niche creatives have changed to the extent that they can join the ranks of the fastest-growing companies and most coveted employers, there’s an itch here that needs scratching. Might there also be opportunities worth spotting?? Let’s dive in and find out.

Ambition in Overdrive: The Ascent of Fast-Growing Agencies

To overlook how quickly technology and digital business models are evolving would do a disservice to entrepreneurs – and to agency founders in particular. Because agencies have earned the right to the same epic aspirations as the most hyped tech and product startups. Their growth arcs can be every bit as impressive.

Why?

Because the pie is bigger now. There really is room in the market for meteoric agency ascents. The horizon is so vast that it can accommodate endless agencies, each chasing their own big, bad North Star Metric. It doesn’t matter what niche you’re in – there are hundreds of high-ticket businesses out there you can service.

But before you blitz-scale, you need to have a strong product-market fit. What does that mean for agencies, whose service model is as different from a product-driven startup’s as a fish is from a bicycle? This is where it gets interesting.

Because before scaling can happen, a foundation must be laid. Hyper-growth is built on a bedrock – one that we’re increasingly seeing at both successful startups and fast-growing agencies.

The Agency MVP: Do Great Work That Doesn’t Scale

Product-based startups have to cross a threshold to arrive at the sweet spot known as product-market fit.

That threshold is “Ramen profitability.” Simply put, this term describes the breakthrough moment in a startup’s lifespan when its co-founders can finally feed themselves from the revenue.

That sounds magical, even mythical, like so much startup lore. But don’t let the “cute factor” of the terminology fool you: ramen profitability doesn’t just happen. It’s the result of very specific efforts. To understand how startups reach this milestone, we need to expand the metaphor. Ramen noodles aren’t just what founders can finally afford to feed themselves on.

Instead, Ramen profitability is more like bricklaying. Imagine a mountain of Ramen noodle packages that has to be moved and stacked according to the target market’s needs. Package by package, stack by stack, the founders arrange their products to feed their market’s appetite. Eventually, if the market is satisfied, the founders have enough Ramen reserves to sneak in a few bowls for themselves too. The market’s hunger becomes a source of nourishment for the founders.

Feeding Client Needs: Getting Agencies from “Hand-to-Mouth” to “Word of Mouth”

But there’s a catch. Agencies are built not on products, but on services provided. To get to Ramen profitability –?to build a scalable model – agencies need a specific mindset. They have to forget about trying to eat those noodles themselves and focus instead on stacking up the best services. On piling up the value to maximum client perception.

In the words of Paul Graham, they need to “do things that don’t scale. ” A classic example of this approach from the non-agency space is Airbnb. While struggling to reach profitability, the founders discovered their main problem: the photos of their listings were awful. So they went door to door to photograph the listings themselves so that new users could “see” the value.

Did it work? 100%. Was it scalable? Not by a long shot. Still, it moved the needle enough to maintain 100% month-on-month growth at a time when the company’s user base was still in the hundreds.

Careful now: the same principle applies to agencies. In fact, doing things that don’t scale is arguably even more important for agencies than for product-driven startups. But – and it’s a big “but” – the application of the principle is very different.

Why? Because agencies, unlike the Airbnbs of the world, are often profitable from day one. In addition, agency hyper-growth is often tied to revenue from the very beginning. How, then, can they successfully deploy the “Do things that don’t scale” principle?

Here’s how: by doing one thing – one niche – really well. So well that it can’t be scaled. The core premise here: to grow as an agency, you first need to figure out how to beat every other competitor’s offer in the market. You have to become the absolute leader in your niche, stay in your lane, and amaze your clients beyond their wildest dreams.

As word of mouth kicks in, you can then develop processes that let you deliver that massive value at scale. Enter Ramen profitability. Because now you can stretch far beyond word of mouth to acquire more and more clients.

Niche to Sell You: Hyper-Growth at Exit Speed

In the current piping-hot M&A space for agencies, hyper-growth stemming from a strong foundation in one niche is generating outsized payoffs for agency founders.

That’s because for agencies operating in the post-pandemic world, less is more. Niching down is how you blitz-scale your way to an exit.

First you dominate your space by creating a competitive knowledge base. Over time, that forms a moat around you and attracts larger agencies, who then line up at your door to regale you with multiple offers.

At that point, that sweet post-exit life is right outside your door.

Agency Founders, It’s Your Time

And now, back to that list of 2021’s Top Companies . What does the historic appearance of agencies on this list mean for agency founders? Maybe there’s not so much a lesson to be learned as a wake-up call that you didn’t know you needed to hear:

There’s never been a better time to scale your agency.

So start stacking up that value. Outshine everyone in your niche, scale your topline, and join the “A-list” of agencies, because ramen profitability isn’t just for product-led startups anymore. And when you’re ready to exit, you know who to call. ??