The “three circles” planning exercise in Jim Collins’ Good to Great has, for me, stood the test of time as a powerful business compass for anyone contemplating corporate strategy for a company of any size. That coupled with the “BHAG” (Big Hairy Audacious Goal). A goal, in fact, doesn’t have to be all that big to be pretty audacious when your company is tiny or small. But it’s definitely the case that you can benefit by non-delusionally attempting to position and steer yourself towards interested markets — even very big ones — instead of just “taking what fate hands you.”
Although I and our fledgling agency, Page Zero Media, were pretty well known as subject matter experts early on starting around 2000 (and not just for PPC, but related concepts as well), it’s a lot harder building a real business than it is to be a “blogger” or to “get a few speaking gigs”. Early “success” doesn’t mean you’ve got the capacity to build a business. Taking on a few clients is just that. It’s a start.
Page Zero did a pretty weird thing from 2001 to 2006: it focused 95% of its client work on just one thing: managing PPC accounts (AdWords, etc.) and related paid, performance-based online media.
That was working out pretty well. I made the decision to focus so narrowly based on about three factors: (1) As a tiny consultancy starting up, we met a bunch of people, some of whom became clients. Those who came to us for SEO behaved less professionally at the time. Those interested in PPC were not only innovative entrepreneurs (and/or established companies), they put their hand up and said “I have a budget”. We chose the “rational” “budget-based” route over the “low rollers” who wanted search engine magic to make them rich. (2) I thought PPC would become huge. Turned out to be true. (3) I’d read Ries & Trout and those other various books about positioning. Seth Godin had some good ideas there as well. The idea that a FedEx could take what was perhaps perceived to be a tiny sliver of the market, master that, and then branch out later, was very compelling. Indeed, that’s a classic case study in positioning. Go narrow when you enter a field with established players.
So like I said, we did that — for approximately those reasons — for about five years, and did well out of them. They were good choices, and a bit lucky. I’d rather be lucky than good.
But with more people joining our agency, and the industry becoming more complex, I was becoming sensitive to all the water cooler talk that looked at all kinds of different services. Many agencies did just the opposite of what we did. They offered tons of other stuff. Were we just plain wrong to specialize? It was worth asking the question from time to time.
So, in 2006, I went back and re-read Good to Great by Jim Collins. The planning exercise in the book also helped me to draw the three circles for co-workers and new people.
His questions are roughly:
1. What can you be the best in the world at? Makes sense. Competitive advantage won’t come from being 30th best at something. “Top of mind” wins customers, and “RC Cola” wins nothing.
2. What are you passionate about? That’s a nice question because it makes it clear that work isn’t just about rational actor models and making profit — it has to be built on the fact that these environments run on the passions of real people. Maybe you can be unpassionate about something 400 days in a row, and keep coming into work. But on day 401 you’ll check out. Clients can sense who is and who isn’t 100% committed to their field. I subsequently read books about workplace motivators by smart authors like Daniel Pink.
3. And finally, what drives your economic engine? That one really stands out for me. I’ve seen so many experts and small agencies running after 1 and 2, but still not succeeding. Some activities and some subject matter simply don’t translate well into businesses. They keep you busy, but they don’t easily translate into sending a bill. That’s just the facts. That’s the difference between Hugh McLeod, who eventually did turn his art into a thriving business, and the millions of starving artists who simply wait tables to survive. Also, I’d grudgingly left a passion-filled chase for a PhD, and that had already left me starving. I had entered the business world at least in part to put solid food on the table. Building a sound economic engine is good for the clients, too. It means you’re a solid business with continuity, that they can rely on. Sort of how they want their own business to operate. B2B means “Business to business,” not hobby-to-business.
Here’s what emerged from the analysis.
1. This was pretty easy. From the accounts we’d already worked on, from the book I wrote, and from the interplay with other global thought leaders and conference audiences, I was pretty darn sure we could be second to none at Google AdWords.
2. On passion, I thought a bit more deeply about what made people tick around our shop. Of course, we loved the nature of the new digital marketing world because of the promise it offered of key principles of accountability, transparency, data-driven, flexibility, and a host of other amazing and revolutionary changes to the way businesses spent their marketing dollars. But we also had pioneered (in our own way) a way of working remotely, avoiding bureaucracy, and other flexible workplace routines and informalities that actually could facilitate us working harder and better (not less). People were passionate about escaping a corporate cubicle or a meeting-based culture and embracing the empowering feeling that a client could come from anywhere, not just our local area. These seem like easy questions to answer now, but it’s all too common for platitudes about client satisfaction or some detail of a particular industry to be substituted in as answers to this question. I’m glad we dug deeply when answering that question, because it gave us a strong sense of who we are, why we want to be here, and consequently, what we bring to the table.
2a. Answering those questions frankly scares a lot of people (though fewer now), because people mistake form for function, ritual for success. If you don’t “look” like people used to “look” in the “corporate world,” how can you possibly gain “corporate clients” like Postmedia, Capital One, Direct Energy, Torstar, Careerbuilder, and so on (as we have done)? The reality is, life has changed, and “corporate world” is just a stereotype held by some people. We were hired by one of the above companies because the new marketing manager went to bat for us, fresh off reading a couple of my recent blog posts. He pointed to one particularly edgy one, and I thought “Oh no!” – because he seemed pretty buttoned-down and corporate. I told him that style was necessary to stand out, and that deep down we were pretty conservative in how we do business. He dismissed my concern, returning to the subject matter of the blog post. Regarding the style, he said: “It works for me!” Authenticity is increasingly a tool for winning business, not scaring it away, as we’ve seen of late. (And it shouldn’t have taken a read of The Naked Corporation by Don Tapscott to convince you or anyone of that.) At the extreme end of the trend towards authenticity and openness, we see people like Rand Fishkin posting the annual (private) financials of his company, SeoMoz (now Moz). The numbers look pretty impressive now, right? But the ballsy thing is, Rand posted those numbers a long time ago, too… when they were fairly anemic. Many of Moz’s current fans might forget that it wasn’t that long ago that it was an incredibly lean operation where the CEO made $26,000, then $38,000, per year. Believe me, all of us have been there. (Eventually, if you keep growing, it’s got to be someone’s job — like your accountant, or peer, or an expert VC investor who says that eventually “salaries must normalize so anyone can put a true valuation on this business,” to stand up and force the owner to be paid properly, lest the whole point of running a business for profit be lost in the pep talks about passion etc. So in a scalable business that is fast headed towards the $20 million mark in annual revenues, I hope Mr. Fishkin now makes over $200,000 a year, despite his equity position or any partial exits that VC investment may have facilitated.) … And guess how the marketplace has responded to all of Moz’s reckless openness? It says “Works for me!”
3. So what was, realistically, driving our economic engine? Was PPC doing it? Could it continue to do it? The answer we came up with in 2006 was: “Keep doing what we’re doing.” Although established agencies were doing well offering many services, we also saw a lot of people failing after they hung out their shingle, struggling to grow past one or two people when they started dabbling in everything clients were asking for. But we did have reservations to how well the model worked… for us. It wouldn’t work with the smallest accounts. It would work better if we did a better job of positioning ourselves. And it would work better if we kept adding top talent to the team. So we worked on all of those things. We also made the decision to begin selling SEO and those kinds of things to existing clients, quietly.
Today, we’re seeing significant growth in our Findability division, which focuses on the interrelated prongs of SEO basics, Social integration and strategy, and content strategy. We’ve always had strengths in those areas, but it’s taken some time to work out how we can best help our clients succeed. Again, the primary challenge going forward is to “add top talent to the team” so that we can ensure the best quality results for our customers.
We’re now aggressively expanding our mandate beyond PPC and paid media, but we’re very pleased with the stable growth we’ve enjoyed by not trying to be all things to all people. “Know thyself” is pretty important for individuals, but just as much so for businesses. I’ll always be grateful to Jim Collins for the epiphany, and also for the concrete planning method attached to his concepts. Avoiding the negativity of those who see the world otherwise, who see convention instead of business wisdom, has sometimes been a challenge. We’ve taken inspiration from others who have gone on similar journeys… and from those, like Daniel Pink and the folks at 37 Signals, who have been good enough to put some of that inspiration in print form.
We’re in the business of helping our clients grow. It’s been important that we also have our own house in order as we do so!