A starter for a 'co-op' agency model

This was a business concept created in collaboration with my friend Jamie Zigelbaum in 2015. We socialized it quite a bit but ultimately knew it wasn't the right solution at that time. 

But there is great thinking below. So, Voila, Published.

Read, Steal, Enjoy! I hope you can take something away from it. You may also download here @ this Google Doc.

=== PREAMBLE ===

In 2015, we weren't the first to speak about this. Clearly, many agency networks exist - whether financially tied or via ICOM, or Worldwide partners. And there were many decks floating around circa late 2014. Today, we're seeing a few more pop into the foreground.

If you are exploring building or joining, here are 5 things to consider… 

1. Who is at the helm? 

Everyone needs to have deep faith in who runs this model and orchestrates the talent. A few models allow the central company to make decisions on allocations of work to different teams. In those instances, trust is crucial. In any model you consider, really take a look at who is at the helm. Ask them questions or run them through sample projects, needs, SOW's. Do they truly understand the business, the craft, and needs of a marketing organization today? If you needed this person to fill in on a project or step into a working meeting, could he or she?

2.Spot the magic maker 

Many models may be focused on driving new business and scaled services through the collective group. The person who takes responsibility to do this has to be magic. Ambitious. 24/7. It’s not enough to have someone with experience and past relationships, this is a hungry, clever, and fully knowledgeable person. They could fill in as a CMO brand-side, and innately feel and understand the workings of an agency. And ideally, they come from outside a big structured agency as that's muscle memory that may be hard to shake.

3.The Ambition 

Is the ambition of the organization simply to make a profit? Or is it to build sustainable businesses? Increase the satisfaction of talent? Make sure there is alignment.

4.The Operating values 

How you will operate and resolve things as a group is important. Whether that be investments, dividends, or simply how each person represents the model in public forums. Make sure you all share in the same values as a business and as people.

5. Who is the counselor

Any marriage or working relationship needs one. It’s a great thing to include for support, arbitration and for tough conversations. 

Alright, now onto our idea.

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The Model = Better. Together. 

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Caveats: Written in 2015. I am not saying this model is right for now. It was a concept.

Would I personally bring this to life as is for 2020?

No. But that’s another post :) 

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Part One: Our Manifesto

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First, we wrote this manifesto-like e-mail to begin to speak to friends and colleagues about the premise. 

Hello friend,

Are we better together? 

It’s something to think about. 

Over the past years, we’ve divided our time consulting with brands who want to be connected to the best talent, but want scale, efficiency and ‘grown up’ operations - and talent who want to stay independent and nimble, but need help, advisement and a trusted network along the way. 

We’ve heard the same challenges from talent over and over again. And the same need for services like business development, legal, financial advisement, access to research tools… things that come with the comforts of a big agency or holding company that feel unattainable to do well as a small operator. But what if we had a partnership model that could make those things affordable and available when done at together?

We’ve heard over and over from brands that they want innovative models that get them to the best work with the best people. But they need process and opportunities to buy at scale. They need teams that scale quickly in an organized way vs looking around for partners or alliances to bring in once a project sells. And they need a common culture of their agency roster that fosters collaboration across specialists. What if there was a way to design that type of networked solution? 

Sunday Dinner + Midnight Commercial have been lucky to work together on several projects in the past year. We were able to take on projects of massive scale as a small team that found a way to build trust with legacy brands in our ability to creatively deliver - but as a highlight - to prove an operational maturity that afforded us a seat at that table. 

Along the way, we continue to think… are we better together? 

We’ve designed a concept for a model that we feel strongly could provide a solution for leading independent talented folk like yourselves … and the brands that want to partner with you. 

We would like to extend an invitation to explore it with us over dinner with other like-minded entrepreneurs. 

We hope to see you there. 

LS + JZ

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Part Two: The Concept Overview

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What we believe

For Brands: Brands want to build innovative models that get them to the best work with the best people. The ecosystem is overwhelming. Putting together pieces is complex. Where can they find one specialty or those who can quickly expand to more if the brand doesn’t have the ability to orchestrate? There are things about Holding Company deals that bring scale, safety, and cost-effectiveness. What if there was a way to satisfy those needs while providing access to the new talent marketplace? 

For Talent: Being an independent agency operator in this marketplace is tough. Selling to a HC has a lot of downsides, but brings support in all of the areas that constantly plague a small creative agency. Selling to others who don’t REALLY know the business can bring cash, but at the end of the day isn’t the best partner. We believe that we can create a synergistic network of collaborative talent that has a backbone of operations & services to help small companies operate, look and act like sophisticated companies. 

The Concept 

>> Introducing our Co-Op. 

The agency Co-Op offers independent teams some of the benefits of a holding company network without being ‘owned’ and operated by an entity.  

What it is: An organization that offers members benefits and access to services designed to support growth of their creative business. 

Who is in it: A small set of members that offer complementary services as they pertain to advertising and marketing services. 

Why it exists: See market & opportunity notes. 

Benefits to Brands

• ability to access specialized talent in an organized way 
• preferred/pre-agreed rates (potentially)
• scale when scale is required 
• groups who have chemistry and have worked together before 
• a new solution for servicing modern needs

Benefits to Agencies 

• drives business growth and leads to all co-op agencies 
• diversification 
• ability to scale and add resources 
• scale where needed
• access to tools 
• ability to see smart financial growth without selling 

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Part Three: The Market & Opportunity 

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• Digital innovation is causing a disruption that is changing the business landscape and expertise required within both agencies and brand marketers. Faster, better, stronger.
• The dearth of talent is huge both agency-side and client-side. We need to upskill and build stronger talent on all sides. We can do this together in more collaborative ways.
• Clients and agency dissatisfaction with digital is at an all-time high citing core issue of value delivery in reference to agency pricing and in-house digital expertise ( This includes digital content and overall implementation of mar/comm tech)
• Brands want specialists. There is an increasing trend for brand marketers to augment their roster of partners with specialist vendors and bringing resources in-house.  
• Consolidation controls pricing & creates disruption. Mergers and acquisitions by large holding companies in an effort to control client pricing. In turn, this is creating pricing battles and frustrations that are pushing talent to develop new smaller companies and brands to seek out that expertise and less complicated operational structure.
• The continued rise of the agency entrepreneur. Wildly talented 30 - 40 yr old agency execs or creatives all know that they can do it better, leaner, cheaper and get to better work by working directly with a client outside of an agency. But once they secure one client, they get more.. and more.. and then they realize they have a business and don't know how to manage it, how to position it and how to offer a brand all the things they need. 

And in turn - Project-Based work is on the rise.  Brands are reconstructing their agency rosters to work with a variety of project-based methods to address the shifts in the market.  

But this comes with several issues 

• Too much is being placed on the brand to orchestrate. 
• Small agencies are not sophisticated agencies in numerous ways. 
• Cash flow / Talent ( all the things)
• Too many agencies means there is a ‘master of none’ approach happening 
• An emerging mentality of building custom teams takes time and costs money to onboard people to the brand 

As we explore, be sure to look at these networks and their member benefits

https://taan.org/#membership

https://www.icomagencies.com/icom-benefits

https://www.aminworldwide.com/

https://thenetworkone.com/

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Part Four: What does membership mean?

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What you are offered as a part of the Co-OP

Member Benefits: Core members pay a membership fee to get access to common services. This we believe should be minimal $3500 a year. 

Custom Paid Services: Available to Members 

Extended Network Members: If you are a friend of the co-op and we use these people sometimes on projects - they get some benefits. Not a highlighted item, but just want to make sure we have this defined. 

Here are a few ideas we have:

Open Elements to think through

• If the Co-Op takes on any projects how do we deal with taxation or cash requirements
• Conflict - to be discussed. This is sticky. Do we really want to bring in new business leads to the network? Or is that an evolution down the road - we don’t believe clients are ready for it and we need the teams to be gelling together first and getting benefits to their business. However, we could staff really rockstar business PEOPLE that could help ( see above ) in times of need 
• Selecting members by setting vision and defining capabilities required 
• Management of client quality 
• Legal structure of the co-op 
• End goal? 
• Working capital? 
• Equity?

Should we have a building? What if we bought one and it was an investment as well for the companies. That could be a great upside for them. To explore

• Space / Sq footage 
• Location 
• Amenities
• Growth Areas 

To discuss next 

Send the dinner invitation out to everyone we adore and may want involved. Considerations:

• People in the Co-Op 
• Founding Members 
• Tenants 
• Board

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Closing

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That’s where we left off! It was fun to explore and this thinking should be out in the open. Thanks for being a partner on it JZ.

If anyone reading has any questions or is curious where I might take this model today, you know where to find me.

Best, Lindsey