[redelbee]

It’s interesting that you chose 2019 to grow, wasn’t that an off year for elections and political spend?

Either way congrats on starting your own agency! I was an early employee at an agency (not focused on politics but likely similar to yours in other ways) and when I started out there were fewer than 5 employees including two founders. It was very top-led in the beginning, but as we grew to 20 people or so that became unsustainable.

At that point it became about building a system instead of trying to get everyone up to the same skill level. At a basic level we decided that we were really working with clients to set expectations and then meeting (and hopefully sometimes exceeding) those expectations. We too had issues with last minute changes, until we changed our contract and statement of work language to specify the framework for making decisions (usually budget/spend/creative related etc) and how those decisions/changes would be implemented. Same thing with mistakes: part of the expectation from both sides was built in time for QA to catch mistakes before they happened. The more you can set up the framework for success early on in the sales/pitch/onboarding the better. And clients will probably like you more for setting up reasonable guardrails in the beginning.

The framework also allowed for some influence/involvement from the top, which was helpful in filling those inevitable skill gaps. We used some version of the framework until we got to about 45 employees, and then it had to change significantly again to fix some of the bottlenecks that were coming from the top down. It also opened up more time for people at the top to work on business development and sales.

I left out a lot of details but overall it took a “systems thinking” mindset to fix issues once we got to a level where the top-down approach was no longer feasible. The system was set up from top down, but once implemented it could basically run itself with a few tweaks throughout the years. Maybe you can focus on setting up those systems instead of trying to level up every employee to be a mirror of you and your partner.

Hiring/firing when there is a strong system in place also seemed easier: look for people who can grasp/appreciate the system and their place in it, give them agency and opportunity to grow within the system, and evaluate them based on the system and the expectations it sets. We almost never lost talent to other agencies and we rarely had to fire anyone. Maybe we were just lucky, or maybe the system did its job!

My two cents on growth/profitability for an agency: The existence of other agencies, however inferior they may be, means there is a limit to how much of a premium your agency can charge. At some point someone with control over the budget is going to balk at your price and go with the competitor who is also saying they can do everything you can do. Which means at some point you will need to grow your client (and employee) roster or be satisfied with stagnating profits.

[dillondoyle]

Thanks for the long and very helpful reply. I wrote back but it also got really long... -- Yeah we have 2 year cycles so 21 is 'off' 22 is on with some good work actually municipal or ballot measures in 'off.' we typically ramp up 3rd quarter of the odd year. We hired a new senior manager/client connector role early 19 and brought on the handful of new FTEs last half of 19. This year feels slow, not having census & new districts I think is hard.

YES. That's the exact same struggle we have! making that transition from partner lead, partners doing the work, to having a more distributed 'assembly line' delegation of work to more employees.

that's good advice on client expectations. It's a struggle politics is crazy - very hard to explain just how crazy until you've worked there which is a problem unto itself. democrats really lack technical skill (at the level HN knows) because even most startups don't seem as chaotic and they pay way better. candidates themselves at the Congressional level can be the worst in causing this crazyness.

another good frame that you mentioned is thinking more in an engineering mindset of systems design might help me thank you! micro-services haha.

UGH yes pricing is the worst. That lower margin, higher volume growth is what we're trying, but I'm not sure it might be better to stay small with higher profit margin. We made slightly less profit this cycle despite having over 2x the retainers. I'm money driven so always want more so it's a big decision for us. We're going to try again this cycle - it's not like I'm struggling here, I still am doing well!

Sounds like your experience is similar on pricing. there are so many people who want to do good, come in and start a digital agency and charge no joke $2k or $3k a month for a LOT of work. And candidates and campaigns are super super cheap but in a really dumb way. Especially Democrats. Republicans will pay a flat % of what you raise, in that case the free market really does work - though sometimes too much bad incentive lots of gross (fraudulent) tactics; read the recent Trump/RNC pieces on their fundraising pages.

An example differentiator that is hard to sell or explain is we use an ESP that I don't think any other political shop use because the political features / tooling doesn't exist. I built that on top to make it fit political needs - and some other cool things like real time data for wayyy quicker reporting. I see the value, clients usually don't but most still trust us.

That switch alone usually gives a 4+% open rate bump which usually equals more than the difference in cost.

We tend to fit best & win more work with clients where there is an existing human relationship of good work or from the parent committees where our work and reputation is good, rather than just cold pitching on price to someone we don't know - much harder to win an account cold.

One good sign that we're doing some things right I actually just saw a report comparing digital firms congressional ad revenue and was surprised to see much bigger companies didn't actually have much higher Congressional ad revenue than us. But those big guys have bigger non-profit clients.

So that's a key goal for us to get more advertising. which in itself is hard; TV firms fight to keep their 'primary general consultant' monopoly even if they have no digital experience. It's gross we sometimes have to do commission splits have to give a % to tv firms just to do the digital buying (they don't do anything we do the work.. they say it's because they made the TV spot, but after charging the campaign $40k in production you'd think the campaign owns it...) sucks. but tv guys are the top historically that's who steers the ship right or wrong.

Plus Democrats barely spends on digital. It's ridiculous like PG, Coke whoever gets it and follows eyeballs and $ quickly. Dems are SO far behind despite seeing campaigns that spend more on digital ads tend to win more!

And again thanks for your input and just sharing your story, it helps I think just to connect and know we're not alone.