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Agencies as Training Ground for Entrepreneurs

Ryan Frederick | May 18th, 2020

I was doing a Startup Grind virtual event recently with Kevin Mack, CTO of BYBE and during the course of the conversation, because of Kevin’s background of having worked at an agency for several years, we discussed whether working at an agency might be one of the best training grounds for entrepreneurship. I think it might be.

I don’t believe that entrepreneurship can be an academic pursuit like many professions. There are certainly aspects of entrepreneurship that can be taught and learned prepare people with some fundamental awareness and skills. But entrepreneurship has to be lived and experienced for people to really understand what it’s like to deal with the endless problems amongst insurmountable odds and constraints. So, if entrepreneurship is best learned through experience and on the job training, how can someone begin to get a taste of it before they are ready to take the leap? The best way to gain experience as an entrepreneur without actually becoming an entrepreneur is to join an agency.

Working at an agency is the closest thing I have seen to being a Founder and running your own company. Agencies are high intensity environments often with unrealistic expectations of project scope, timeliness, and budgets. Agency clients have high expectations and can be very demanding. At the same time, they often have a very murky idea of what they want to accomplish and how to accomplish it hence why they are engaging with an agency. The agency takes on the responsibility of helping a client define the outcomes and how to execute to achieve them. The challenges an agency faces when working to solve unconstrained client challenges all within the constraints of a project while still focusing on keeping the client happy isn’t too far removed from building a new product from scratch. You are still iterating with customers and doing it all very quickly.

An agency environment, pace, and culture are not replicated in very many professional settings. I’m not saying agency environments and cultures are what an organization should strive because agencies experience a lot of team burnout and turnover as a result of this environments, but people who have worked at agencies and were able to perform at a high-level inside the pressure cooker of an agency have developed necessary skills and are better prepared to deal with chaos and uncertainty of a startup.

Most people who have worked at an agency also get exposure to the financial aspects of how the agency runs and whether it makes money or doesn’t. Billable hours and team utilization give every team member a sense, if not deep understanding, of the economics of an agency. The unit economics of agencies are different than that of product companies, but a basic understanding of the financial realities of how a company makes money and earns a profit are valuable lessons for someone who eventually starts their own company. The financial pressures and levers of business-like cash flow and profit margin can be learned in accounting books and classes, but living with the pressures and understanding how the levers actually work inside of a business is another story.

Agencies can be volatile organizations. Land a new big client project and a bunch of people get hired. Lose a big client project and a bunch of people get let go. As mentioned above, agencies can be meat grinders with a constant revolving door of team members even during times of overall stability. The grind at agencies is real and can only be done for so long by most people. Just as most people are not cut out for taking on the challenge of being a high performer at an agency and thriving on the grind, most people aren’t cut out to be an entrepreneur. The agency grind is a great proving ground for a person to know whether they are a grinder or a sideliner. Grinders have a chance to become a successful entrepreneur and to increase their self-awareness and skills while playing Triple-A at an agency before stepping up to the Major Leagues of their own company.

Agencies are a great place for someone just starting their career to ply their craft, learn about business, learn from more experienced team members, and to hone their skills much faster than in most companies. It is not uncommon to see someone start at an agency and quickly take on more responsibility and tasks. There are very few professional environments where this career progression happens faster, and this mirrors what happens at startups. The team at a startup has to ramp quickly on everything from their craft skills to their interpersonal skills. There is no time for a lot of hand holding and mentoring. It is go time. Go time at agencies and startups looks and feels very similar. People who have experienced agency go time will be more prepared for startup go time.

There is no ideal way to prepare for being an entrepreneur, but working an agency might be the best, closest thing.