VO Guy:
Hello. And thanks for coming along to, …And we have an office Dog. The digital agency podcast, where we talk to agency owner directors and learn more about what makes them tick. From the things that make them similar, to the things they’d rather have known sooner, where they’ve had success and where they’ve learned some hard lessons. All will be revealed with your host, Chris Simmance, the agency coach. And he’ll be talking to a different awesome agency person in each episode asking them four questions and seeing where the conversation takes us over the next 25 minutes. Okay. So let us begin. Over to you, Chris.
Chris Simmance:
Thanks voiceover guy. And on the podcast today we’ve got Jim, the co-founder at Threepipe. Hey Jim, how are you doing?
Jim Hawker:
I’m good, thank you. How are you, Chris?
Chris Simmance:
Not too bad at all. Not too bad at all. Thanks very much for coming along.
Jim Hawker:
Pleasure. No, I’m excited. I’ve seen lots of my peers take part in this series of interviews, so it’s nice to be part of it.
Chris Simmance:
It’s now FOMO for everyone.
Jim Hawker:
Yeah.
Chris Simmance:
For those you are listening for the first time, you’ll now want to sign up as an agency leader for the podcast. For those of you who have already done it, thanks very much again. So Jim, tell us first of all about Threepipe, who are you? What’s the thing? What’s the best part about it?
Jim Hawker:
It’s all good, it’s all good, Chris. We describe ourselves as a brand performance agency, but we’re really, we’re a performance marketing agency. We came about through the M&A of the various agencies over the last 10 years or so. So a PR agency merging with a performance marketing agency, acquiring a creative, and then an SEO agency. So we built out an integrated digital first capability, work with genuine deep expertise across the channels. We work for a lot of retail and sports lifestyle brands.
Chris Simmance:
So, what have you done that some other businesses that have gone through similar M&A processes over the years, but added on additional services and products that they haven’t done, that prevented from that kind of schizophrenic business that has lots and lots of different directions and purposes? What have you’ve done differently as you’ve been part of these?
Jim Hawker:
Yeah, it’s a really good question, I think. So, I mean the acquisitions that we made were strategically done. They weren’t opportunistic, they were gaps where we felt we needed some skill sets to fill. And also they were agencies that we’d already be working with across shared clients and I think that really helped for us to better understand what they did would fit in with what we were doing and also that on a personal level that it would integrate well and it made sense from the client’s perspective as well. So yeah, I mean I can’t talk for everyone else’s success or failures, but it wasn’t easy for sure. It wasn’t easy. It was a wild dance around each other, but I think in a way it’s got easier as work has become more and more integrated and less siloed and so moved away from having those separate teams, but more of the hybrid teams that make sense for different clients using all those skills across the agency.
Chris Simmance:
So, in a sense, the way that you’ve managed to align the purpose is by doing the acquisitions with a purpose, if I wanted to put it in some sort of marketing speak?
Jim Hawker:
And not just for purpose driven brands, no. But yes, yes, you’re right. Yeah, exactly.
Chris Simmance:
You see a lot of agencies these days, which are essentially M&A hoovers, aren’t they? They weren’t an agency in the first place. They just started buying chunks of agencies and slots them all together. And I can see the benefits of that. The knock on impact of that is obviously going to be that you’re filling a gap that’s in a business plan, not necessarily a gap that’s in part of a strategy, if that makes sense.
Jim Hawker:
Yeah, I mean I think you’re right. We see a lot of that happening and a lot of the time I think it’s driven by trying to drive cost efficiency in terms of we’ll have all the back ends in terms of finance, accounting, HR, all that sort of stuff. So, we can strip all that out of your agency, but we didn’t do it for that purpose. I mean some cost saving’s good and there was obviously some duplication in some roles, but really it was because we wanted to extend the depth and the breadth of work we were doing for clients. And a lot of this activity we were doing was a few years ago and some would argue ahead of the market, but now you’re seeing a huge amount of M&A, but the kind of agencies acquiring and being bought with the kind of work we were doing a few years ago. So yeah, I feel quite vindicated in terms of the decisions we were making three or four years ago in that kind of activity that we were running.
Chris Simmance:
So, over the last, as you say, almost 10 years, I think you said a minute ago, so over the entirety of your experience running Threepipe at least, what’s been one of the most enjoyable successes that you’ve felt you’ve had? Whether it be a client or an acquisition or…
Jim Hawker:
Yeah, we’ve done some amazing work. I mean we’ve started really small with some clients like England and Wales Cricket Board for instance, and have grown to become their lead digital agency and working on some really big campaigns like The Hundred, which is their new format of cricket, which launched last year and we’re now working on again this year. And that work has spilled into us working with people like the FA and UEFA as well, on say the Women’s Euros. So that that’s been really fulfilling.
But I personally think the thing that really sets us apart as an agency is everyone talks about what makes you different, but we’ve always thrown a lot of time and resources at developing our own technology. And I think that that’s been really rewarding to see us building out our own tech, not just for us as an agency to use, to help us be more efficient, but giving our clients a competitive edge in the market as well. And that really gives us a USP because when other agencies are using off the shelf kind of software solutions, I’ve got something unique and different to talk about and we’ve always placed a great deal of emphasis on that and you don’t have 100% success rate in everything you want to do, but we’ve put investment and time into creating new teams and technology, which has really given us a bit of a difference really.
Chris Simmance:
And I guess the stuff that you’ve been able to do with those agencies with those successes, like you say, it’s linked one thing onto another over time, that in and of itself I guess has been something that’s probably really helped in driving the decision to go through some of these acquisitions in the first place. So, you’ve worked with one company on one aspect of things, which has then driven a little bit of push into, I don’t know, into another area of expertise that you’ve had to just go for, right?
Jim Hawker:
Yeah, no, definitely. I think we’ve created two new teams in the last few years, which one is focused on Amazon and the marketplace and the other is focused on online grocery and retail media. So working with the likes of Tesco’s and Boots and Very and all that sort of stuff. And both those teams fell out of the previous acquisitions that we’ve done in terms of having SEO optimization skills as well as paid media expertise, but then pivoting those teams into a slightly different, what turned out to be high growth sectors for us in terms of marketplace and online retail media. So yeah, it has led to other benefits for sure.
Chris Simmance:
So, if you could go back in time though, right to the very beginning and speak to the younger version of yourself, is there something that you would advise yourself to do or not to do that would help you either get exactly where you are today but with fewer gray hairs?
Jim Hawker:
What are you saying?
Chris Simmance:
No, no.
Jim Hawker:
Yeah, of course. I mean, experience is massive. I started the agency in 2004, which is a long time ago, but it’s a very different agency to the one that I’m running today, which is what’s kept me motivated and excited about it. But yeah, I think there’s loads of life lessons. We’ve had some bad experiences as well as brilliant experiences and I think ultimately you learn to relax a little bit more and not get too stressed about the smaller details. They do tend to work themselves out and that comes with just experience and time. But without a doubt there’s been other major events in the agency’s development, which I wish I’d been better prepared for. But yeah, you take that into your next role or how you mentor other agencies with those experiences that you’ve had.
Chris Simmance:
Exactly. And I think part of learning is the mistakes, sadly. And I feel like a broken record when I say that running an agency is the most expensive MBA you’ll ever go for, but you could go back in time and advise yourself on something, but you might not have been ready to hear that and need to make the error in order to do something differently or need to do it at that pace at the time because that was the right thing to do. And I guess in a similar way to things like you say coaching or mentoring, you need to be ready for it and you need to know what the next thing is and when you’re ready for it, you listen better and you learn from that and things like that as well.
Jim Hawker:
Yeah, definitely.
Chris Simmance:
Is there something that you did early doors which you think really kind of keyed you up for this longevity?
Jim Hawker:
Starting it in my 20s gave me enough time to get through the amount of time we needed to run it, I guess. But yeah, I think you mentioned mentoring and I think that was massively important for us when we started, we’d had agency experience but not commercial, running a business experience. And so we sought out mentors, actually all clients of ours that had run and built their own successful businesses and we just said, please can you help us figure out how to read a P&L, how to forecast and literally the commercial side of running an agency, because we knew how to do great work but we didn’t know how to run a business. And so actually every few years we’ve always reviewed the mentors that we’re working with because you run out of things to say after a while.
Chris Simmance:
Yeah. And its perspective as well that changes and needs to change.
Jim Hawker:
Yeah, definitely. And I mentor a couple of other agencies and I say, look, you’ll have probably sucked me out for all the information I have over the next couple of years and you’ll need to move on to someone else for a different stage of your growth or whatever challenge you’re facing. And we’ve done the same and every few years we’ve freshened it up a little bit, depending on what we were needing to do at the time. But right at the start it was very much focused on how can you help us make sure we’re not one of those percentage businesses that go bust in their first year and avoid that trap really, which we obviously did.
Chris Simmance:
And quite a lot of that sounds like you started the agency with the view of growth rather than in some cases quite a lot of agency owners, they start out being very busy freelancers with the name agency and that then lends them into a decent level of cash flow but not really understanding what that means. And then obviously hiring is required and all the other things that are required and then that’s where the mistakes and the lessons get learned the really hard way. Whereas if you start with a business focus, like it sounds like you did, then you ask those questions early doors. I remember the first time someone told me about a P&L and I thought it was PNL and I was googling PNL and I was getting all sorts of business names. I was like, I have no idea what this means. And you just don’t know where to start unless someone helps you.
Jim Hawker:
Yeah. No, I mean we were really boring the way we approached launching the agency. We actually spent six months writing a business plan, which was hugely important really in terms of getting your thoughts down on paper, something about writing things down that help you think a bit more in terms of figuring out how you want to be and the kind of people you want to hire and the kind of clients you want to work with.
And so yeah, we did everything textbook, which was really, in a way some of the better agencies or best agencies don’t start like that. They start just because it was opportunistic. But we’ve always been very thorough and planning ahead. I mean, even if you never follow that plan, which often you don’t, but it’s very useful, especially if you have a growth mindset, which is something, as you say, we always did. We knew we wanted to win a certain award within three years and then tracked what every other agency had done to get to that award position, which meant what income we needed to be delivering, what kind of numbers, what kind of mix of clients, all that sort of stuff. And the first three years, the plan fell out of that really because we knew we wanted to hit £1.5 million income or whatever it was.
Chris Simmance:
Yeah, so you reversed engineered a business in a way and it took the time. I mean in a sense that’s what I do with a lot of agencies that I work with but whilst things are moving. So it is a moving target in a moving vehicle that you are saying, okay, three years time, where do you want to be? And doing what you’ve done there in a sense is, well, if you want to have 3 million turnover, you need this many staff, with this many clients, with this much incoming leads, with that little amount of churn and all those sorts of things. And it sounds like you built the business based, in a sense, on the back of a giant, very well written fag packet.
Jim Hawker:
Well, actually, do you know what it was? We used to buy rolls of wallpaper and roll them out across the floor and then start at the far end and say, okay, this is what we want the agency to look like in three years. And as you say, work back from there to the shape we are now to where we want to be in three years, and therefore every six months how does the team shape need to change? How does all the KPIs need to change to actually get us to where we need to be? So it wasn’t fag packets, it was rolls of wallpaper.
Chris Simmance:
It was a very big bag packet depending on… But yeah, no, I agree. I always say that the future comes first when you’re trying to build any business. And realistically, if you don’t do that, no strategy survives first contact with the enemy, but that doesn’t mean you shouldn’t have one.
Jim Hawker:
In your military history.
Chris Simmance:
In this game, you hear a lot of acronyms and there are a lot of people who say a lot of things and some of them sound pretty decent and stick, don’t really need to know what it means. Just say it.
Jim Hawker:
Sounded good though.
Chris Simmance:
Yeah, exactly. There you go. So if there’s someone listening to this podcast right now and they’re just about to start their agency and they’re in the throws of getting things going and they come to you and they say, hey Jim, give me one piece of advice, what would it be? What you’re thinking?
Jim Hawker:
It sounds really boring, but shareholder’s agreement. I am literally mentoring someone at the moment who’s a couple years into their agency and it’s all falling apart because they didn’t have a shareholder’s agreement between the co-founders.
Chris Simmance:
Yeah.
Jim Hawker:
It sounds like a really un-sexy thing to talk about. It was top of my mind, because I’m helping this guy at the moment. But that’s just some of the basic things about starting a business, especially with other people, is figuring out your share holding and those arrangements around it. And now he’s in a really difficult position because of it, lack of. And I think getting those basic things right is really important.
Chris Simmance:
I couldn’t agree more. I mean, it’s one of those things where you don’t want to think about the end of these things, but people’s lives change and someone might want to move on or someone wants to acquire the agency, but you don’t want to sell it. And so you’ve got to set lines right? And as well as that and accepted behaviors for meetings and things like that. And it’s one of those things where it’s a bit like when you take on a new client, you have to put in the termination agreement into the client’s contract, even though you don’t ever really want to be in a position to have it exercised or exercised on you. You don’t want to do that, but you have it in there to safeguard it on both sides that there’s some kind of continuity process.
Jim Hawker:
Yeah. And the thing is, so many people have done it before, so you just need to reach out. And what I find personally is every time I’ve reached out to someone and asked for some help, I’ve most of the time received it. And I think for anyone starting out, these problems have all been figured out before.
Chris Simmance:
More or less. Hope so.
Jim Hawker:
You think it’s so much easier to, especially with shareholders agreements, how you value businesses if it comes to that position, or you want to buy someone else or you want to sell the company. It’s like the formula you create to figure all that out has been done before by other people, but at least have a shareholder’s agreement and have a valuation process in there. But yeah, I mean some of that stuff, if you’re going to put all the effort in, do brilliant work, you need to be rewarded for it further down the line. You’re not there as a charity, not for profit, you’re there to better yourself, your family, and your career. And safeguarding all that stuff is really important.
Chris Simmance:
And I mean, every business should serve its stakeholders as a primary function. And if you don’t focus on something that’s going to do that, but also not be evil, then you are, you’re putting things at risk. And again, sometimes, like we said earlier, you can be methodical in setting things up where you can end up being that freelancer who’s grown into an agency with a couple of other freelancers and you’re a bunch of friends. I’ve spoken with an agency relatively recently and there are five founders. Five founders, and on company’s house, the address for the business has changed four times in a year. There’s two people who’ve resigned their position already and you just know that they might be great friends and that’s why they’ve started the business and it’s just without those agreements and without those structures in place, it’s a very costly expense in the long run.
Jim Hawker:
Yeah, I wasn’t married and didn’t have children at the time and was able to take a risk but still drop my salary by £60,000 pound in that year and re-mortgaged my flat to help pay for stuff. It was a commitment, and it was a big thing and I think you just need to protect yourself a little bit.
Chris Simmance:
Completely agree.
Jim Hawker:
And five of you, you just know that’s never going to carry on. People are complicated and it’s rare that even two people can carry on for so long, but five, ultimately that will fall apart. So, you need to prepare for that.
Chris Simmance:
Yeah, no. And as to your advice, which I believe and agree is excellent advice, you have to do the boring bit. You have to do the boring bit. It’s not a choice in a way.
Jim Hawker:
The thing is, if you don’t do the boring bit, you’ll never be around long enough to do the great work. And ultimately a lot of people are motivated by doing brilliant work, but the reality is if you can’t survive, your cash flow isn’t good enough and you go bust. What was the point anyway?
Chris Simmance:
There’s not an enormous amount of agency websites that say we could have won that award, or we could have won that pitch for that client. So yeah, you’re spot on and that’s fantastic advice to end the podcast on as well though, Jim. So, thank you very much for coming on.
Jim Hawker:
Pleasure. Thank you for having me.
Chris Simmance:
And in our next podcast we’ll be speaking to a different agency leader to find out their story and the lessons they’ve learned along the way. So, thanks very much for listening.