4 ms·
It's just concrete numbers to help the reader visualise. And as a reader who's worked at agencies before, he's right. The only part he's missing is that most
by jalapenos 3y ago
It's just concrete numbers to help the reader visualise.
And as a reader who's worked at agencies before, he's right.
The only part he's missing is that most agency owners grind on with this because of personal (psychological) limitations, and thereby get stuck. They get mentally capped out, so they can't move forward, and they form the core of the business, so they can't sell out. All they can do it stay locked in grit-your-teeth mode, until age and/or health fixes the situation for them despite their will.
Agencies cap out very much like this, because of their fundamental scalability issues, but that's also why people enter that market. Easier to enter, because no one person can dominate it like a Google or Facebook.
The number they cap out at is very tied at the intelligence, work ethic, etc, of the founder, but it always caps out in that asymptotic graph kind of way.
The only way I've seen them successfully break out is to know this effect, and to use the cashflow to cover a product company offshoot that gets traction - basically a self-funded startup. But it's a rare case, because they we're attracted to the immediate and certain money lure of agency, vs the valley of death gamble of product.
- 3np 3y agoI also imagine a fair share of owners are actually content enough at ~$50k MMR. If you have expenses under control and not too much staff that can work out to a decent profit/salary.
- interactivecode 3y agoagree. From my experience I’ve also noticed that agencies usually have a shelf life of 10-15 years max. At the start they are the young fashionable agency doing great work. At some point due to a combination of great employees leaving for bigger jobs and the company getting bogged down with stable but boring long term clients, the company dies. Sometimes they end up cashing out and retiring. Most often they go bankrupt or get bought out by a consultancy looking to brand themselves as fresh. It’s fun working in ad agencies on the uphill. You’ll be able to do great work and learn how to ruthlessly prioritize quality output. On the downhill it can really corner you with little career growth and little pay.
- JimDabell 3y ago> And as a reader who's worked at agencies before, he's right. I’ve worked at a load of agencies and I don’t recognise what he's saying at all. What agencies sell $2k/mo packages? They are all either much larger finite projects or they have much larger retainers. What would you even sell for $2k/mo? That’s not going to cover anything beyond absolute basic maintenance to keep the lights on; it’s certainly not where agencies are making their money.