Things I’ve Learned from Starting My Agency Business

In January 2022, I founded the3rd, the marketing and branding agency, with zero capital in the account and zero client base. By March 2023, we made over 800k in net profits and had 16 clients across Europe and Asia, including 5 well-known global brands. For a startup just a year old, this achievement is gratifying, from which I have gained quite some valuable experience and insight that is worth sharing.

1. Don't be afraid to fail. Starting a business, whether it's an agency or any other type, can be tough. It's important to be brave and not let the fear of failure hold you back. Challenges will arise, but you should face them with a can-do attitude. Nobody is born with all the knowledge and experience, and neither do I. At the3rd, we provide various marketing services covering website design and development, SEO & paid social, offline events & campaigns, OOH advertising, go-to-market solutions, etc. But these are not what we can do from day 1. The website design was the only thing we could do at the very beginning. I still remember the days when clients came to me and asked: “Hey Wansong, can your team do this for us?” I never said no right away, instead, I evaluated the projects, and if the value of such projects was so high that we could leverage them to gain more experience and resources, then I accepted. I answered:“ I want to be honest that we don’t have previous experience or resources yet, but we’d love to try, and we believe we can deliver high-quality results to you. Here’s why you can trust us, and here’s our plan. And since it’s our first time trying, we are happy to offer you a much lower quotation for thank you for trusting us.” What are the results? Now we have designed & developed 30+ websites with an excellent internal and external UI/UX design team, website development team, and copywriting team. We've designed and implemented 6 offline events and conferences with a reliable team of creatives, interior designers, installers, and decorators. Additionally, we've placed OOH advertising all over Berlin for various clients, thanks to our rich resources and good prices. All of these resources and experiences form our agency's indestructible core competencies. They didn't come out of nowhere but were a result of our can-do attitude and not being afraid of failure.
2. Keep learning and learn fast. As a founder, especially when your business is just started, please do not avoid getting your hands dirty. No matter how impressive the previous professional experience you have, you still can’t say that you know and can do everything. If your ultimate goal is to be an expert in certain areas, working for an organization till retiring, there is nothing wrong with staying focused on a specific thing. But if you want to start your own business, keep an open mind to do and learn everything, and more importantly, learn them fast. And then? Find the most qualified people to do it for you. Only when you’ve done the work, you know how to do the work and what are the key points while doing the work, can you select the most qualified right person to do the work for you, not the other way around. When the3rd was just founded, in the first 6 months, I do almost everything: company strategy, accounting,?financial plan, fundraising, team management, process management, sales, account management, account execution, suppliers management, marketing – everything you can imagine. Reason one: I had to reduce costs to ensure better cash flow at least to survive the first six months of the most difficult period of a startup. Reason two: I wanted to do everything and learn everything myself so that I could identify people with insight and select the right people to do the right job. And the result turned out to be successful: I learned every function that is needed in an organization quite fast within 6 months, then I hired a few people who proved to be the most correct decision that I’ve made, and they’ve become the core of our team.
3. Be agile and adaptive. I was once told a story by a friend about painting a facade. Initially, he planned to paint a red elephant, but halfway through, he realized it looked more like a fish. So, he changed his plan and painted a fish on top of the original painting. As he was almost finished, he noticed that the lines of the fish perfectly fit the shape of the waves. He then added blue paint, and a beautiful, vivid sea wave appeared on the wall, which received many compliments. My friend never expected to end up with a blue wave when he started painting the red elephant. If he had only imagined it in his mind and didn't start painting, he would never have had the chance to create something beautiful. This is similar to starting a business. No startup knows exactly what the right direction is from the beginning, and that's normal. What's important is to keep an open mind and adjust your approach based on feedback from the market and clients. When we first founded the3rd, we worked for a number of German-based clients. At that time, we positioned ourselves as a marketing agency based in Germany and focused on the German market. Our German clients were relatively small companies and brands, which we thought was normal since we were also a start-up. We didn't consider exploring overseas markets until global, well-known Chinese clients asked if we could help their brands enter the German market. It was then that I realized that, as a Chinese, I had a cross-cultural advantage that I could leverage. Now, we're serving well-known Chinese brands as well as smaller brands with huge potential. We're not only a branding and marketing service provider, but also a 360-degree go-to-market strategy consultant, which adds even more value to the service we provide.
4. Protect the enthusiasm and creativity of your team. your team is the most valuable asset. It is crucial to keep your team motivated, engaged, and creative, particularly for creative agencies that rely heavily on creativity and high-quality work. While the essence of the agency business model, as known to everyone (not pleasant but real) relies on labor work with profits coming from the difference between employee wages and project income, it should never compromise your team's creativity and job satisfaction. A business model that relies on high-intensity labor with low wages is a trap, and any agency that falls into it may experience a vicious circle of a heavy workload, low creativity, poor-quality work, loss of customers, and low-value projects, leading to high staff turnover, training costs, and a lack of capital. To break free from this cycle, visionary leaders should prioritize employee creativity and invest in their team's growth by listening to and understanding their needs and helping them achieve their goals. Additionally, leaders should bear more of the employee's costs upfront to ensure reasonable compensation and benefits for everyone. Your team is worth investing in. By doing so, you can turn the vicious circle into a virtuous circle that leads to business transformation, higher value-added projects, and benefits for both the business and employees.
5. Harness the power of word-of-mouth. Keeping a good reputation can be a game-changer, especially for agency businesses. At the3rd, we have experienced firsthand how word-of-mouth can drive sustainable business growth. By consistently delivering high-quality work, meeting deadlines, and offering reasonable pricing, we have gained the trust and loyalty of almost all the clients that we’ve served. They are happy to recommend us to their network and connections, which has resulted in a steady stream of new projects without us engaging in any active sales or marketing. This organic growth has allowed us to focus on what we do best: delivering exceptional results for our clients.
6. Manage your client’s expectations. Do not over-promise and under-deliver. While it's important to convey enthusiasm and determination to your clients, it's equally important to not over-promise. Managing your client's expectations is key to building a successful agency-client relationship. It's not always about doing a good job, but rather communicating effectively about the project's possible risks and obstacles. Be realistic about what you can deliver and express your commitment to delivering the best work possible. At the same time, be transparent about any challenges and keep your clients informed throughout the process. By managing expectations and building trust, you'll ensure a smoother and more successful project outcome.
7. Give before getting. At the3rd, we understand that new clients may be hesitant to trust us and our capabilities as they have never worked with us before, therefore they do not understand our ways of working as well as our professionalism. In this case, we always suggest starting with a tiny project as a test. We also offer a relatively lower price for the test project to demonstrate our professionalism and quality of work. The “giving before getting” approach lowers the cost for new clients to choose our services, which gives us more chances to demonstrate our abilities and professionalism, and that helps our clients to gain trust and confidence in our abilities, which often leads to long-term partnerships and higher-value projects. However, giving does not mean being unprincipled. It's important to note that some clients may have ill intentions from the start and may try to take advantage of your work with reluctance to pay a fair price in the long run. In these cases, it's crucial to set clear boundaries and stand firm on your principles to protect your business and your team.
8. Be thankful and give back. Please, remember your first client who trusted you even if you have no track record, and give back. I still remember our first client. In February 2022 when everything just started, the client gave us a chance to design and develop a website for them when we had no references before. We treasured the project so much that we worked day and night on it despite the challenges we faced, and in the end, we delivered a good result that led to a long-term relationship. This client is still working with us today on many projects. We take each project seriously, especially theirs because we know that without their trust, we wouldn't be where we are now. Even as we have grown with several projects going at the same time, I assigned all the other projects to our account managers, I still keep my promise and follow up on all of their projects on my own and always prioritize them – even though my capacity is nearly full. We also give them the best price and deliver the highest quality work, as thankfulness is one of our values, and I believe it will lead us further to a higher level.

Now, the3rd is ready to automate its operations, thanks to my team. With more time and energy on my hands, I am working with another team to incubate a new startup, which will be launched soon. This exciting venture is a tech company that designs, develops, markets, and sells sex tech products (both software and hardware). My entrepreneurship journey will never end, and I'm looking forward to sharing more insights regularly on LinkedIn. Please stay tuned!