Being Connected. Being Old.
The world is obsessed by new stuff – it’s all about the new – but really cool are business that survive and prosper for decades.
It’s very easy to start a new business, but working out how not to go out of business is a little bit special and takes vision, a big dose of learning and some sideways thinking.
Survival relies on profit, not turnover – on stability, not growth. Sustaining profitability over long periods of time (we’re talking multiple decades here) has to be figured out in the early days otherwise the business will go to the wall. Getting new business (growth) is the easy part, building a sustainable business model that doesn’t drown is much harder.
This is especially true in the digital agency space where there are very few agencies that reach their teen years. Clients want, need and deserve long-term partners but are often forced to choose between 3 agencies with a total of 10 years under their belt. So you have this odd relationship whereby the mature client is forced to rely on the young, naive and unstable jack-rabbit.
There are a lot of drowned rabbits lying on the side of the road to growth.
Why is this important?
In the early days of a business the business is chock full of start-uppedness – this is a heady brew of long hours, cash (or loans), drive, appetite for growth and low tickover (baseline) costs. But this does change for the better.
As companies move past the age of 5 the world outside changes, and the people in the company change too. This must be addressed if the business is going to be sustainable longer term. And clients can smell this going wrong, too (it’s a faint whiff of “wannabee” as the company tries to act like a startup when it’s no longer one).
It might seem obvious, but you’d be surprised at the number of companies that just don’t make the transition and stay in the workhouse world of startups. And how many years can the founders tolerate the long hours, or the rapidly increasing tickover costs whilst still trying to grow and compete in a market that has already moved on. It’s tough.
When you’re not new anymore then you need to behave and act like you are old. Businesses, like ours, that have lived through 3 decades of the digital world have worked out how to survive in a world that craves the new. And prospered.
// @MartinDower
// Founder and CEO of Connected, Est 1996. And still alive and kicking.
