Closing an Agency Is Harder Than Starting One

8 Signs It's Time to Pack It Up From Modernista's Gary Koepke

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Gary Koepke
It was 1999 when Lance and I walked into the warehouse at 109 Kingston Street in Boston. Months of lunches had led to this day, when we opened the door on a 5,000-square-foot, sun-filled warehouse space with tall, wide windows (you know the kind -- the hallmark of any loft space that artists and bands and other bohemian types like to inhabit).

Stepping into that blank canvas, it was impossible not to feel the potential and the energy. We had $40,000 and that was all that we needed to begin this thing. Now we can only look back and remember what it was.

When Modernista was born in January 2000, it was the waning days of an era when big TV, print and out-of -home were still the main media messaging.

In a sense, opening up the agency, particularly at that time, was easy. The dot-com bubble had just burst and websites and digital-marketing had seemingly failed at an attempt to creep into the big ad dollars.

The ad biz was still mired in the past, but here we were, attractive to many because we were new and because we were anything but risk-averse.

Young men and women came to work at Modernista from some 30 different countries around the world and, almost immediately, 13 different languages were spoken in the office. Then the clients came. Within a year, Gap hired us. And then came the Hummer, MTV and Napster accounts. And Cadillac, TIAA-CREF, Converse and Project (RED).

There were parties, clowns, trips to Amsterdam, flags, basketball teams, yoga classes, fezzes, pets, rings, babies, acrobats, magicians. We had fun and we made stuff, good stuff. By 2006, we felt like we had arrived. Not in the Wieden, Goodby or Chiat sort of way, but in our own "Look, something good is happening there" sort of way.

But looking back, I'm convinced that at the moment in which we arrived, we most certainly had lost something along the way. We had grown to a comfortable place, maybe too comfortable.

The industry had changed, with the interweb growing as a destination for consumers to spend their time. Midway through our existence it had become obvious -- thanks to the popularity of Google and the advent of social media and the emergence of smartphones -- that the communications world was about to get much more sophisticated. We adapted by expanding our repertoire. We created apps, websites and rock 'n' roll videos.

It worked -- for a time.

But the recession and client bankruptcies made marketing budgets incredibly tough to manage. The tension began to grow. Change was hard on all parties, and we had the feeling we were suddenly being labeled as that old stuff, as were a lot of agencies. Digital shops wanted to offer branding, and brand agencies wanted to offer digital -- a battle that still goes on.

The calls stopped coming. Was it us? Had we gotten bad at our jobs? Perhaps we didn't schmooze the industry enough?

We were working hard and we wanted to create big ideas for clients; the media formats didn't matter and we were ready to do it all. But the calls weren't coming, despite great people, great intentions, a love for the business.

It seemed that a 180-person agency could not go to 20 people and still be relevant, or so the advice went. The trickling out of people and trickling in of business became like Chinese water torture and took everything out of what made Modernista a once thriving place.

Take it from me: It's really, really hard to shut down a place that has not only had success, but also fostered a culture of talent, internationalism and creativity. In fact, closing an agency is harder than starting one.

But not closing shop would have been the wrong thing to do. Because it was no longer Modernista. That chapter needed to close and a new one needs to begin. And everyone that worked at the place has something great to offer this industry.

If you're an agency owner and you find yourself in a situation where your gut instinct tells you it might be time to close up shop, but your heart's not letting you -- here's a list of signs, from my experience, that it's probably best to do the former.

1. Nobody wants to admit things are bad.
2. Staff begins to depart for other agencies.
3. Your 8-year old-daughter asks "What's wrong?" every night.
4. Projections aren't being met and overhead is tipping greater than revenue.
5. In pitches, other agencies tell the client you're going out of business.
6. When you do win business, it's often only the smaller fish, not the big ones.
7. You start having conversations about M&A or bank loans.
8. You have this nagging feeling things aren't getting better and it doesn't go away.

All that 's left to do is to finish off what was started 11 years ago. It's sort of a cleaning up -- or a doing of the dishes after a great feast, so to speak. I am sure you've all been to a great party at someone's home and, upon leaving, asked, "Can I help with the dishes?" It's always an awkward feeling because when the host says, "No, absolutely not," I often wonder if he is telling the truth. But this time I know the truth. The truth is that the host truly does want to finish this job and not only because someone has to do it but, by doing so, he has the opportunity to sift through the memories of a great period of time, to think back to the good, and truly hope everyone did enjoy the party, the work, the fun, the laughs and new friends.

And then we go do it again.

Gary Koepke was the founder and executive creative director at Modernista.
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