I was interviewed recently on the subject of startups vs agencies and it got me thinking. What are the main differences between the two and can they ever be brought together for a greater good? In the first of two parts, I shall look at how agencies can be more startup, before examining what startups can learn from agencies, in my next post.

“A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed” — Neil Blumenthal, Warby Parker Co-Founder.

Startups and agencies are very different beasts and for good reason. But as technology drives more and more consumers in an ever connected world, can agencies become more startup in order to survive? The answer, in my opinion, is yes but not necessarily through acqui-hiring or setting up “labs” but, instead, by taking small steps which will positively impact the culture of the company, and therefore its work.

Dave Harrison joined digital agency Profero as its seventh employee in 1998. As Creative Director, he remained at the agency for five years, taking a Board position after four. As the company grew and expanded globally, he saw the shift in culture, from exciting, agile startup to a more traditional, slow-moving agency:

“As agencies become more grounded, the financial agenda often suffocates the creativity. The minute you start asking creative teams to approach briefs with a concern for the budget, a line has been crossed, and often, there is no going back.”

Harrison left Profero but his next agency didn’t have the startup culture he craved.

“It was a disaster from day one. They already felt too established to be flexible. The aim of my hire, to move them closer to the kind of sexy brands I had been working with at Profero, was simply blocked by an inflexible infrastructure.”

Harrison left to freelance before returning to startup world in 2010 when he founded Spicerack, a digital marketing agency. So what makes a startup so unique and inviting to a certain group, and why would agencies want to emulate it? The answer lies in its culture.

What defines a startup culture?

Company culture is about core values and whilst most employees at early stage startups see their work as a mission rather than a job, this is not the case at a lot of agencies where you will have bloated teams working to complete timesheets, rather than tasks.

Startups have a mission to create something meaningful; a product or service that translates long hours into disrupting an industry and serving its customers well. Agencies, on the hand, tend to focus on pleasing the client, with little or no desire from individuals to innovate or push the boundaries of what is possible.

It is also the responsibility and accountability distributed at startups which has a profound effect on culture — being able to directly contribute to the success of a business makes you work harder, and better, with a shared vision which is often lacking in big organisations where you’re working for someone else. As Harrison says,

“ My experience of working at Profero in the first couple of years was that I was put in an incredible position of trust. Within three years I was dealing directly with global brands, hiring team members, flying abroad to help with new offices, and working directly with four founding directors whose energy and drive was infectious. I never would have had exposure to such a buzz working at an established agency.”

Jason Goodman of London based creative agency, Albion, sees more similarities between the two, but only when agencies are run by true visionaries:

“Both business models are ultimately driven by the talent who are running the show. The most exciting startups and agencies are run by savvy, visionary leaders who can somehow see around corners and have a view of the future, and how to make it happen. If they can then translate that into business culture and hang in for the long-term, you then arrive at companies like Amazon and RGA.”

How can agencies be more startup?

After eight years of working in startups, and working with agencies, I definitely think there are lessons we can learn from each other. Here are some thoughts on how agencies can become more agile, more innovative and, essentially, more like a startup:

Get rid of layers — the more layers, the more barriers to innovation. Traditionally, agencies have mirrored the structure of big clients — but it’s time to change that and create a new way of working — less people and more transparency. Add value to teams rather than volume Employ risk takers — accountability gets saturated as teams get bigger but responsibility makes people care, and produce good work. Employ entrepreneurs and self-starters — they are the ones who will bring new ideas, push boundaries, and move your company further and faster Talk tech at concept stage — whether you have an in-house team or you’re partnering with a startup, get them in early so they can help you manage client expectations, budget and timelines better, and ultimately ensure your project provides users with a better, more seamless, overall experience across mediums Find your best story-tellers — and encourage them to work with your technologists in order to adapt stories to new and varied platforms. Your audience is more connected and more digitally savvy than ever before -without a good story, delivered in a timely manner, your message will be lost to your competitor Focus on the customer, not the client — Agencies bend over backwards to please a client, almost to the detriment of the end consumer. When you charge clients per person per hour, there’s no time for unbillable work so change that. Allow staff to research and develop campaigns which suit the customer. Your client may wear a suit but your customer probably doesn’t Forget Mad Men — You can no longer sell everything with clever print ads or TV spots, especially as the world is now mobile. Instead, look at building communities which encourage users to become your best spokespeople. A great example of this is Nike+ GPS which hooks into user’s social networks, thus seamlessly creating well placed ads in the form of user updates on Twitter and so on Try before you buy — A lot of agencies think the solution lies in buying startups but it’s important to understand the mechanics of startups before partnering with or acquiring them. Rent some desks out to local startups, co-host hackthons or share skills and financial security via investment. By working together in this way, you’re more likely to become friends, not enemies, during a buy-out and your clients, and staff, will thank you for it Understand failure leads to success — Startups don’t fear failure; they face it head on, even embrace it. Innovation often poses more questions than answers but don’t be afraid of that. Allow clients to come in on the experimentation process, rather than trying to create something behind closed doors because you need them to understand that prototypes are just that — they are experiments to educate.

When Harrison looks back to the early days of Profero, he says:

“Everything we did at the start was a potential for innovation. Campaigns could screw up and it wasn’t the end of the world. Amazing things could come out of experimentation.”

And when did you last hear an agency say that? “Amazing things could come out of experimentation.” Traditional agencies fear change, they don’t understand experimentation, and they are not allowed to screw up…

Until now that is.