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Test and Learn: Startup Edition

  |  June 9, 2011   |  Comments

Two challenges to partnering with startups and two steps that will help you make more progress.

Last month I wrote about the importance of partnering closely with startups as a way to drive agency innovation. It was my least-tweeted article ever, but I'm going to keep banging on the same drum anyway.

The thing about these industry articles is they tend to be too vague. So for this post I'm going to be super-specific about how our team is thinking about partnerships with startups and entrepreneurial units within established companies.

I'm going to share two challenges that have come up, two steps we're taking to make progress, and as a special bonus I'm publishing an exclusive, behind-the-scenes snapshot of my bulletin board.

Challenge No. 1: Eyes Bigger Than Stomach

The other day, I felt like I was starting to lose track of all the companies I'd recently met that I'd love to work with, so I decided to post them all on a board outside my office.

Here's what it looks like:

cahill-board

The list is broken down into three categories: Things to Test (21 companies), Tests in Market (nine companies), and Core Partners (five companies).

I know that startups find it very frustrating to meet with an agency, have a good conversation, and then…wait. Well, it's frustrating on our side of the fence, too. We'd love to be making huge leaps forward every day, but the reality is that there are more great things to test than there are opportunities to test them.

Challenge No. 2: It's Hard to Test the Plumbing

As I look at the list, I'd classify 16 of the 35 companies as platforms. Now a big reason for that is media platforms are a specific area of interest for our agency (more below), but it still makes for a challenge in moving quickly through tests.

Testing platforms isn't like adding a new site to a media plan. Platforms are often the plumbing of the entire approach. Each platform comes with a significant learning curve, and once the test is up and running, needs a lengthy evaluation period, because we're not just evaluating program performance, we're also evaluating the tool itself, as well as the service and relationship with the company.

Plus, many of the platforms do the same thing, so they are for all intents and purposes mutually exclusive and the tests need to be staggered.

Now on to the two steps we've taken to try to make more progress, faster.

Step No. 1: No RFPs

As Darren Herman mentioned in the interview I did with him, request for proposals (RFPs) and startups are a bad mix.

The existing RFP process sucks the life out of startups, as they wait weeks or months for an opportunity to even get invited to complete an RFP, then get compared apples to apples to media properties that have scale and past results they can't compete with.

The RFP process is wrong for startups because it can't properly value what startups bring to the table. And what agencies need to realize is that startups are evaluating us as well. With limited resources and a desire to grow quickly, startups are looking to partner with agencies that can move them forward. Giving them paperwork sends a clear signal that you're not that kind of partner.

So we've bagged the RFP process for startups. Our approach is to evaluate the opportunity through direct meetings, decide if we think there's a fit, and then look for the next chance to work together. That might not come as soon as we'd like it to, but there are no hoops to jump through.

Step No. 2: Stay Focused

There's obviously a dizzying amount of innovation happening in our business. With so much going on, it's easy to wind up flailing, creating lots of activity but not in a productive way.

Our approach has been to focus our media team's innovation efforts in three specific areas: platform media (i.e., technology-driven buying, often in exchanges), mobile, and gaming. Side note: we have an established social media team, so while that's a very important space, we just don't classify it as an innovation area.

It's been a very helpful, clarifying exercise to go through. Understanding what we're trying to accomplish as an agency provides a filter for deciding which startups to pursue, to invest time in, and to work with. We waste less time on our end, and don't waste the time of startups that might be great companies, but not a fit for our goals.

When I look at the bulletin board, it becomes clear to me that a key to our success is throughput: identifying the right things to test, getting those tests in market, and determining who our core partners are moving forward.

Throughput isn't just about speed, it's also about discipline and execution. The idea is to move as quickly as possible while still making the right decisions about who our long-term partners should be.

I think we're getting there, but like everything else these days, it's a process in perpetual beta, and we'll be better tomorrow than we are today.

Appendix

Here's the list of startups/entrepreneurial companies we're thinking about or already working with. If you have thoughts about great startups we should be talking to in our three focus areas of platform media, mobile, and gaming, shoot me a note.

Things to TestTests in MarketCore Partners
Undertone
uKnow
Adkeeper
Visual IQ
Outbrain
Vizu
Google TV
Microsoft TV
Visible World
Triggit
Adnetik
Interclick
Tag Man
Skyword
Optimal
Simplifi
Legolas
Celtra
Social Code
TubeMogul
Trust Metrics
Bluefin
Peer 39
NBC UAP
Dimestore
OggiFinogi
Turn
MediaMath
DataXu
AdSafe
Meteor Solutions
Evidon

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ABOUT THE AUTHOR

Adam Cahill

Adam Cahill is the EVP, Media at Hill Holliday. You can connect with him on Twitter at @adamcahill.

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