Why Startups Don't Like Working With Agencies

6 Ways Agencies Can Provide Value to Startups

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If someone was going to write a book about what startups think of agencies, it would be called, "They're Just Not That Into You." Agencies tend to think of themselves as startups' white knights, offering their access to clients, their years of experience understanding marketers' needs, and their shared disinterest in wearing anything more formal than J. Crew's summer collection. Startups fire back with, "Show me the money," even though many founders hadn't started grade school when "Jerry Maguire" was released.

Consider this humbling example from personal experience. A venture capital firm hosts a roundtable discussion where its local portfolio companies present. There's a lone agency executive kindly invited to take part. Each founder gets up in turn to discuss what he's working on and how he's been growing the business (yes, each was a "he"). The first couple of founders mention they work with marketers directly. Then the next ones are even more candid, saying they don't like dealing with agencies. The agency executive slinks back in his chair, playing Zombie Highway on his iPad while waiting for the misery to end.

Hearing the rationale from startups, the critique tends to be that agencies overpromise and underdeliver. Agencies say, "Look at this slide showing all of our amazing clients! We'll introduce you to them and then you'll be famous and your VCs will be so happy that they'll buy all of you new Razor scooters or whatever you kids are into these days." Then comes reality.

Of the 100 brand names on that slide, only 10 could potentially work with that startup. At that point, the exec follows up, then he shares information about that startup with the agency's account, strategy, media, creative, or project leads for those 10 brands. Five ignore the message outright, too buried with the day to day deadlines; they're overworked and not incentivized to explore new technologies that create added drains on their time. Four check it out but want to wait for a better time to present new ideas to the brand manager. One out of a hundred shares this with the client. The agency may not have described the opportunity well, and the client may not have the interest, context, time, or budget to act on it. So much for the white knight.

Startups can sometimes fare better. When a startup does break through and the agency partners with it to create a successful program for a brand, it often spreads quickly internally so that other brands line up to do something similar. Agencies can deliver economies of scale and cross-pollinated insights spanning accounts and verticals.

Here are six ways agencies can be more helpful to promising startups:

  1. Show up. Nick Pahade addressed this in a recent Ad Age Q&A. In discussions with agency peers, Pahade's plea doesn't only apply to his colleagues.
  2. Follow up. Look for the potential points of collaboration and dig a little deeper to see if there is an opportunity.
  3. Be honest with startups. Let them know who does what at the agency, mapping out where ideas and budgets come from. Show them what your agency does in relation to the other agencies your brands work with. If you're not the right person or shop, admit it, and don't waste anyone's time.
  4. Give startups something of value. That's not always a campaign or partnership. It could be insight into what matters for brands or clarity about your own pain points.
  5. Trust your clients. Marketers do need filters, and they need to understand why some startups and technologies are more promising than all the others out there. But they don't always need ideas perfectly packaged in a little bow and saved for a special occasion.
  6. Generate good karma. One great way to get ideas for startup partners is to foster your own network with peers at other agencies. It's tempting to be selfish so that your brands have a better chance of being the first mover, but there are always more new companies and offerings than anyone can act on. Create your own small, informal network and compare notes with others who will return the favor.

Startup executives can do plenty to improve how they collaborate with agencies, and mutual alignment is critical. Still, many agencies can make rapid improvements by simply treating startups and other potential partners like they (hopefully) treat their clients: set expectations, be honest, and respect everyone's time. That will make it possible to do great work together.

David Berkowitz is vice president of emerging media at 360i and spearheads the agency's Startup Outlook. .
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