There is a lot of talk at the moment about Growth Hacking and it’s very similar cousin Full Stack Marketing . The idea being that start ups need individuals with a full range, or stack of marketing skills, just like they need full stack developers who can create technology stacks from top to bottom including UX, front end , back end, database management etc. The full stack of marketing skills ranges from skills in the understanding of building brands, design work, social media, SEO and PPC, eCRM, analytics, banners, content creation and distribution and even dare I say it advertising.
It strikes me that all those skills exist within many creative agency businesses and of course across the industry as a whole. So how might it be possible for a cash-poor start up business to access those skills. After all, start ups, even those that are well funded, are unlikely to have the capital to spend on agency fees given all the other things they need to spend on to maximise their runway. An answer to that challenge is that start ups contract with marketing services companies or individuals with a sweat equity arrangement. That is nothing new, and obviously this is entirely possible at the moment on a one to one personal basis. There are plenty of people from the marketing and advertising community working with the start up community in this way already. But the problem on the marketing services supply side is that there is a limit to how many start ups you can work with, and therefore a great degree of uncertainty and risk as to whether the sweat will pay back with equity that is worth anything. As Ben Horowitz puts it “1% of nothing is nothing”. And so many players are forced into a part fee, part share of revenue and part equity arrangement, which adds friction into the system of connecting up supply and demand.
One possible solution is an online brokerage service that connects start ups who have marketing needs, with marketing services companies who can help them, and which automates the financial side, spreading the risk across multiple deals. The service would be part matchmaker, part legal service and part hedge fund. How it would work is that the start up would input their needs on the demand side, and the service would recommend the best partners on the supply side. The service would then allow the start ups to contract services in exchange for an equity share or a share of revenue. The service would take on the responsibility for the deal, and aggregate the returns across a number of deals when they reach maturity, and then pay out to the supply side companies a share of income. In this way the supply side is insulated from the risk of working with individual partners and can share in the overall returns, when as is highly likely most deals return little, and a very small number pay out big. The whole thing would work best at scale, 10s if not 100s of deals, and multiple partners. It isn’t going to make any one individual a millionaire, but it is a way for supply side marketing services companies to add a revenue stream, and increase the utilisation and productivity of its people, often on interesting, different and challenging projects. The service would take a commission/cut for its part in bearing the risk and brokering the deals.
So it’s a concept, no doubt the legal hurdles are substantial, but it would be incredible to connect up supply and demand in this way and do so at scale so that it is financially viable for everyone.
If you would at all be interested in something like this, and maybe participating in a trial or experiment if there is enough interest, you can sign up here – strata.marketing