Saturday, June 27, 2009

invest early or wait for profit with small clients

I had an interesting conversation with the CEO of a new startup last week. We were discussing how I might be able to help them reach a known set of potential customers (they had a database of contacts with known demographics and buying patterns). As the discussion progressed, the CEO kept mentioning how many great ideas I had on how to improve their strategy, as well as execute on the immediate tactics. I was thinking "wow.. this is great, this deal is a shoe in, we're a perfect match".

We continued to talk for another 10 or 15 minutes and notes were being taken on the ideas we were bouncing around (not all me by far, he was an amazingly experience and knowledgeable technology exec), and then he said that he'd like to keep in touch with me and meet again in about 3 months. I asked him why we'd wait 3 months, when he'd said that the campaigns needed to run and be completed in the next 6 weeks? He said that we sounded to 'big' for the mode they were at and didn't want to make us think that although they might have champagne dreams, the definitely had two buck chuck budget.

We went on to talk a few more minutes about this issue and I assured him I understood their position, and that our/my goals were to work with interesting people, with good ideas. When these opportunities came along, budget was obviously a necesity, as we all need to feed our families, but as a company, we wanted to do engaging work, and work with interesting people as a primary objective. He continued to be concerned about leading us down the wrong road, so we agreed to speak again in a few months, which is when they thought they'd have the traction to engage with us.

I really appreciated to honesty of the conversation, but am defintitely contemplating who was right? I certainly like the idea of working with a young startup from the very beginning and help them grow, but I've certainly seen what he's talking about, where we come to an agreement based on what they can afford and then into the engagement they want more because they can now see more possibilities, and it's just not profitable or wise for us to do more for the same budget. You'd think this would be straight forward and it's a simple math problem of either they can afford the cost of our offering (they can't) so we should move on, as he indicated. But the beauty of being a human is that I get to reason, and make exceptions. when I find that special connection in a potential client, it might be worth doing a bit more and help it blossom into something great that we'd be proud to say a few years down the line, 'we've been with X since the very beginning'.

I dont' have an answer, but am defintiely pondering what I've learned, and would I do something different next time.


Steve said...

I think what you are pondering, and what your prospect was clearly debating in his mind, is a question smaller agencies face time and again. Are budgets 'big enough' to make this relationship a productive one?

And there is no 'right' answer. It's not a simple math problem. Instead, it's all about judgment and placing bets. At our shop, like at yours, we want 'to do engaging work and work with interesting people'. It's not always easy to assess that potential until you really get to know the client. We ask ourselves, are they 'idea enthusiasts'? We don't always get the answer right; in fact, we have been burned. But we think it is a good screen.

In the end, the opportunity to do engaging work warrants some risk - on both sides. Sounds like you and this prospect had some good mojo working. I hope he comes back around, and you both have the chance to see where it might lead.

Keith Pape said...

Thanks Steve - great insight and obviously some of the same challenges