Americans love entrepreneurs. The risk and drama of business keeps us watching shows like Shark Tank and putting innovators like Mark Zuckerberg and Seth Godin on high pedestals. We love the idea that anyone can turn an idea into an empire. We might adore pro athletes and gawk at celebrities. But we want to beentrepreneurs.
Entrepreneurism is on the rise, across all industries. According to a study by the Kauffman Foundation, U.S. entrepreneurial activity grew this year at a rate faster than it has in two decades. Some people are leaving the comfort of corporate to start their own ventures, and the rate of U.S. freelancers has hit a record 34%.
Some blame this entrepreneurial resurgence on the Recession. Those who lost work or couldn’t find it simply created their own path. That, after all, is the beauty of capitalism. There’s always room for more competition, as long as you’re willing to take some risks.
Still, the free market renaissance has come at a cost, especially to large corporations. In the last ten years, major brands have lost market share to entrepreneurial brands who know how to hustle. No longer is their biggest competition the number 1 or number 2 brand in the category. Now, they’re threatened by the dreaded “all the other,” a collection of brands that aren’t even listed by name on a yearly market share report, because they’re viewed as too small to matter.
Let’s be straight. They matter.
Craft breweries now account for 17% of domestic beer sales. Meanwhile, market share for Anheuser-Busch InBev and MillerCoors has been in steady decline. Gillette and Schick are losing share too—but not to each other. They’re losing to startups like Dollar Shave Club, Harry’s and Bevel.
Who’s stealing market share from Jack Daniels? It’s not Jim Beam; it’s thousands of micro-distilleries, with a dream and a bourbon barrel.
Even Jessica Alba is joining the fray, giving Johnson & Johnson a run for their money with her business, The Honest Company.
These are just a few examples from this decade’s wave of entrepreneurism. And the secret in American boardrooms is that no one knows how to compete.
Everyone always focuses on the little guy because that’s normally where you find the compelling story. But in terms of business strategy, let’s ask the controversial question: is there a way for Goliath to defeat a whole bunch of little Davids?
In the Bible story, Goliath was bigger. His weapons were massive and his name was known all over the globe. David, on the other hand, was small and agile, with enough faith to take huge risks. In the end, Goliath’s traditional weapons were no match for David’s quick thinking.
In the same way, many major brands act as though they can out-spend their entrepreneurial competitors with traditional marketing weapons. Last year, Procter & Gamble spent $2.4 billion on advertising, and yet, sales in the last quarter still dropped by 9%. All the fancy, expensive solutions in the world won’t make a difference because entrepreneurial brands don’t operate with massive budgets. In fact, it’s precisely a lack of resources that forces them to be innovative, reaching new audiences faster than ever before. They know they can’t out-spend the P&Gs of the world, so they do everything they can to out-smart them.
The irony, of course, is that at one point, the big guys were the little guys. Asa Griggs Candler was a farmer’s son and pharmacist who turned the recipe for Coca-Cola into a multi-million dollar business. William Procter and James Gamble were brothers-in-law who made soap and candles—two products that happened to be in high demand during the Civil War. Now as the incumbents, brands like Coca-Cola and P&G risk losing it all because the agencies they hire aren’t thinking (or advertising) like entrepreneurs.
It’s time for that to change. It’s time for advertisers to start behaving like entrepreneurs.
As it stands, advertising agencies act like vendors. A vendor is someone with something to sell. A template. A formula. And unfortunately, all too often—this is what brands buy when they hire an agency, big or small. The costs are high (measured in billable hours), results are unreliable (measured far after a campaign is complete) and overall strategy is lost trying to put out the fire of the day or chase the newest shiny object.
When we started BLKBOX our main goal was to establish an agency that operated like an entrepreneur. We see ourselves, not as an Agency of Record, but an Agency of Return. We don’t charge billable hours, but are incentivized to get things done as efficiently as possible. We measure ourselves against specific benchmarks in real-time. Ours is an exercise in trimming the fat, mobilizing vetted and competitive freelance talent, and never being afraid to take risks. In all we do, we’re putting the entrepreneurial spirit back into the heart of advertising.
So how do you know if the agency you’ve hired is entrepreneurial? Here are a few clues:
-Work as if every dollar is their own.
-Trim the fat from their budgets and their recommendations.
-Never force a client into a particular tactic.
-Build a strategy first and develop the tactics second.
-Mobilize talented freelancers to produce far more, for far fewer dollars and far less time.
-Maintain agility, malleability, and a passion for growth.
-Continuously use measurement to assess their own results and improve.
-Adapt and execute a client’s vision, no matter the circumstances.
-Remember that frugality isn’t a vice, but a virtue.
-View their work as intrinsically linked to the client’s bottom line.
-Charge only for what they deliver and, better yet, tie their compensation to specific KPIs or ROI benchmarks.
-Entrepreneur is a French word that is translated as “adventurer.” If there has ever been a time for adventure in advertising, it’s now. Modern corporations need advertisers with an adventurous, entrepreneurial point of view if they hope to compete. A sense of possibility, a willingness to take risks, the confidence to step away from the norm – that’s the backbone of competitive marketing, no matter who you’re competing against.
Brands that began as the best entrepreneurial minds in the nation can be that again. The door is open. The possibilities are endless. And the agencies that dream, think and behave like entrepreneurs will be the ones that drive modern business forward.