News, Insights and Stories from the Australian and New Zealand tech ecosystem.

Don Draper and The Lean Startup

The opening scene in Mad Men reveals Don Draper working at a bar, iterating on taglines for Gold Cigarettes. He is looking around, focused and observant. He is a student of human behaviour; picking up cues from the people around him.

A black waiter approached – he would have been “colored” in those days – and shyly took Don’s drink order. Don gently probes him about his smoking habits, not as a researcher but as an equal. “Hey, do you have a light…? You’re a Golds man, Lucky Strike man myself…” He smiles. “Can I ask you a question? When do you smoke Old Gold…?”

To a black man in 1960s America, being heard –  his valued and counted – must have meant the world. In startup language, that is proto customer development. Don Draper would have given Eric Ries a run for his money.

I’m a recovering advertising lady myself. My last “big gig” was at Enfatico, a Young & Rubicam spinoff announced to great fanfare as the “biggest startup in history.” Backed by a reported $4 billion dollars in client services for Dell, Enfatico debuted in 2007 and set up local camp at 35 Clarence St. At the time I was largely unaware of what a startup was and hadn’t yet learned to be weary of long corporate startup runways. So the idea of joining this team was quite alluring. It was internally called the “dream team of advertising.” 

The dream didn’t last long…

That world came to an end abruptly in 2008. The GFC hit and the walls came tumbling down. I was running the HR for the agency in Sydney so I was quickly summoned to the Managing Director’s office. David Breust is probably the best boss I have ever had. I remember always leaving his office much calmer than I was when I went in. But that morning he looked up as I slid into the chair in front of his desk and quietly shook his head. It was all over. Ninety days later, half the agency was gone. A handful of months after that – the whole thing was shut around the world. 

The shock of it all shook me to my core and the reaction propelled me as far as humanly possibly from the volatile model of advertising. I quickly landed on the first organising team for TEDxSydney, then at Tribalise and finally at Pollenizer – which was my startup bat mitzvah. It was a rough and bumpy ride but I have never looked back.

That is my Wolverine startup origin story! From wide-eyed advertising lady to lean startup mentor.  This journey has made me a tiny lightning rod for friends and acquaintances for how “make the transition” from advertising to startup. These conversations have been racking up lately.

If the media is any indicator, we are going through another “death of advertising” and many are  jumping ship. Whether than jump is wise or premature, it is too early to tell. But asking me how to go from advertising to a startup career is like asking me how best make a transition from dermatologist to emergency room doctor. I see how you think it makes more sense than it actually does…

THE DAY I GOT A/B TESTING MANSPLAINED TO ME

Four weeks ago I join an old advertising friend and his new business partner for lunch and had such a conversation. This friend had started a boutique agency and wanted to attract startups as clients. As the conversation went on, nothing seemed to fit right. Towards the end, the partner – seeing that I was drifting off – swung this last straw out:

“We’ve developed this revolutionary new way of deploying campaigns!”

“Really? That’s interesting…”

“Yes. It’s a real game changer. You see, instead of just deploying one campaign, we come up with two different ones to go live at the same time. Then we observe which one does better and use that one.”

“So you’re doing A/B testing…?”

“What’s that?”

“What you just said. Split testing customer acquisition strategies. It’s called A/B testing. It’s a very common lean startup practice.”

“No. No, you don’t understand. We just invented that a few weeks ago.”

Check please!

To be clear, I only refer to this as “mansplaining” because I have yet to have one of these “game changer” conversations with any women. As much as I know that this is 100 percent anecdotal, these chats do remind me of the larger problem of the “mansplainer.” Presumably I was being asked for advice as an expert on the subject matter but argue with me the whole time because they already know better – “I’m pretty sure I know what the client wants, I just want you to validate the point I arrived at all by myself.”

It was evident they hadn’t worked with any startups before and largely hadn’t talked to anyone actually working in one. That didn’t stop them from scheming up a big deployment plan and talking to providers to help them service startups. They were ready to launch!  Launch and then get busy acquiring startup clients.

That is counter to any lean startup methodologies. Any lean practitioner will tell you that there are no facts inside your building. You have to go out and test it – not just plan and talk about it.

Understanding the basic premise of “everything is an experiment” would be a great start. You can no longer plan, research and launch.

STARTUPS LARGELY DON’T CARE ABOUT YOUR BIG CLIENT

Another gem in this advertising-migration chats is “You know <<INSERT BIG HUGE IMPRESSIVE COMPANY HERE>> is one of our clients, right?”

Two things. First, I worked in advertising long enough to know that “client” is a catchall for “project”. If you say so-and-so is your client it could mean that you did anything from the global marketing strategy to a local supermarket catalogue insert. So let’s clean that slate.

Second, just because you worked on a project with Marriott doesn’t mean that Airbnb will want to work with you. Startups and large companies, especially impressive global conglomerates, operate in very different ways so “big clients” are not necessarily a badge of honour. In fact, it may play against you. Working with large operations often means delays, approval processes and long meetings for consensus. A startup by definition is continuously experimenting, often with their business model and acquisition strategies. The currency in lean is time so there is none of it to waste!

It is far more impressive to startup companies or incubators if you have worked with other startups or at least other founders. That means that you speak their language and understand the world they live in. That is the kind of customer empathy, integral to a startup learning cycle, that is only build through lived experience.

WE DON’T MEASURE WHAT YOU MEASURE – Problems v Demographics

A few years ago I took a job with a digital research company, ostensibly to help them acquire startups to as client for their measuring tool. The tool itself was wonderful – it gave you very rich profile information of online users. It was affordable, simple to use and built on a robust, scalable platform. Why wouldn’t anyone what this?

The big problem was that it had been built for traditional advertising agencies. That meant that the segmentation for users was done by typical demographic data: gender, age, suburb…the uptake was fantastic when it came to agencies but when we took the product to startup founders they would inevitably come back to us with, “this is amazing tech but it doesn’t tell me about the problems these people have.”

Case closed. Startups typically don’t measure by demographics, at least not in the traditional sense. Uber was not built for a certain gender with a certain income bracket in a certain suburb with a certain marital status and statistically precise children. It was built for people who wanted a pleasurable private ride with a more reliable and affordable experience than a cab could provide.

Once agencies and advertising professionals understand what startups want to measure – they will be able to share a report card and align services. Until then, this misalignment is going to cost them a point of entry.

SIZE IS NOT THE PROBLEM

The problem will not be solved by creating a smaller version of a model that is inherently not working. Agencies grow by headcount – that is the nature of having billable hours. That is a fine model and one that has proven successful for other industries such as management consulting. That is patently an employment-agency model. It’s a bunch of qualified freelancers under one roof with a singular set of overheads. Again, this is a fine model but not one built for lean startup speed. I have never heard anyone say “Gosh, if we only could find an advertising agency boutique-y enough for us to work with all our problems would be solved!”

The assumption some of the advertising-migrants are making is that startups are wandering the world in search for the “right fit” in advertising agencies. That is an unvalidated assumption. Largely because no one has been brave enough to test it. The reality is that most startups, especially those in the lean camp, will turn either internally or to other startups for acquisition and brand solutions. With services like 99Designs and Canva, the immediate branding problems of a startup can be solved quickly and efficiently.  

Uber’s logo was infamously created by their CEO on what looks like MS Paint and literally looks like a butt. It was mocked to no end by creative agencies and designers online. And yet, Uber is not making any less money or growing any slower. They are way too busy fighting governments to update legislation and changing the transport industry forever to care about the tone and voice of the brand. This is not to say that those things are not useful and even necessary. It is to say that the approach is now very different to the traditional agency model and therefore, needs to be drastically transformed.

Startups are actively building robust teams of customer development managers and designers trained to build, measure and learn. There is no need for external  briefs or meetings. They just need to get to the next logo to experiment on. I have seen brands last only for an experiment cycle, as little as a week.

Unless these new “boutique agencies” can match and surpass those solutions, they will be dead in the water.

SO….WHAT CAN WE DO?

Don’t fret! I do have good news for those communications and campaign creatives out there! Far from discouraging fresh creative talent from entering the startup ecosystem, I mean to stress that the solution is not to simply jump to a smaller ship but to build a brand new vessel. Startups don’t need a new take on the advertising model – we want to see it disrupted! Who better to do so than those who know it inside and out!

Here are some interesting things to explore…

PR and branding services

Just scroll through the FAcebook group pages for Sydney Startups and Like Minded Bitches Drinking Wine and you’ll find multiple posts enquiring about event coordination and PR professionals. To succeed, startups need to be flexible and nimble. That means that specialised knowledge will still need to be outsourced, particularly through the efficiency stage which is when startups will have a little more money to spend. Enter the good news for PR agencies and more traditional marketing professionals.

A more careful reading of the posts in those groups will uncover a wealth of great agencies and individuals who truly understand that need of starts and what they need to measure. They have done their customer development work and it is evident that PR and formalised marketing are an avenue to work more closely with startups, if you choose to make the leap.

Productise a process

My good friend Nick Prowse has worked in award-winning campaigns in big advertising groups here and in Europe. He is about to make the brave leap into his own venture over the next few weeks. We’ve been having long conversations about what the future of the industry could hold. What I like about his approach is that he’s not aiming to miniaturise a current model but to productise a process that agencies would traditionally do themselves. I won’t go into much detail but the idea is this: Take a process that is typically a pain point to your customer and make it a simple, joyful experience – much like Canva has done with graphic design.

Startups will still need to come up with logos and brands and communication strategies. If you’re an advertising industry expert, you will know these pain points better than anyone. So take the traditional pain out of it. You will quickly find a scalable business model that will quickly attach itself to startups built for speed!

Pull a Don Draper (and sit with your customer)

“Have you worked at a startup before?” “Nope. But I’ve read The Lean Startup, so I get it.”

Ok… I just finished reading a biography of Catherine the Great. Does that mean I’m primed to reign over Imperial Russia? Nope. Will reading Winnie the Pooh turn me into a bear? Don’t think so.  It’s not enough to read about it. You have to live it to understand it.

More than anything, the innovation ecosystem needs smart, creative people. So come and join a startup and see how it operates from the inside. You’ll understand the real pain points and what challenges startup people face daily. You’ll find, like I did, that the learning curve is steep but fun!

SOMETHING TO THINK ABOUT

On February 29, I met the OG Pollenizer team to celebrate their 8 years in business. It was a lively party with fancy finger foods and an open bar. I make this observation because  when I joined them in 2012, I had to lobby the CFO for an extra $40 to spend on cheese when they celebrated their 4 years anniversary. They have come a long way and should be proud of their impressive journey.

Their current model is a result of 8 years of learning from the market and iterating – not strategy planning and stealth launching. Pollenizer is now located at the super fancy Publicis office, formerly Publicis-Mojo, the agency that created the iconic “Shrimp on the barbie” campaign. The space has an in-house cafe, glass-paneled windows and state-of-the-art meeting rooms. It is an uncanny but timely partnership. Looking around the fancy digs, with champagne  flute in my hand, I was amazed at how these two worlds of mine had collided.

The following week, Mojo closed shop. Was there a correlation between Pollenizer’s success and Mojo’s demise? Probably not. But it was a pointed reminder that we have to make companies built to learn and mould to the changing realities. As we move forward in these changes, I hope that the advertising industry find the switch into a more malleable business model. It will take courage and resilience, but brave creatives is what the world needs the most. Ask Don.





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