Working With an Agency: The Pros and Cons Startups Should Consider

2016-06-30-1467297835-6885820-JimShook.pngBy Jim Shook

Between product development, public relations, operations, advertising, content, design and hiring, there are so many to-do's and so little time and money. That's the life of a startup.

Prioritizing these efforts can determine the success or failure of your company, but how can you possibly get all of this done? Do you ask your current team to take on new tasks? Do you hire more people?

Through working with over 40 companies, our agency, Dozen Digital, knows firsthand some of the advantages and disadvantages of working with an outsourced partner. The key to making a good decision about whether or not to work with an agency is to understand the following dynamics:

The Pros

They're flexible. As a startup, one of the best reasons to hire an agency is the need for flexibility. Agencies work in a variety of models, but typically the timing and pricing will be flexible depending on your needs. Launching a new product update? Hire a PR agency for a few months to get it the attention it deserves. Need some additional resources to build a product extension? Hire an agency to build it and maintain it. The ability to scale your efforts up and down with an agency allows you to pay for work only when you need it.

You don't know what you need yet. When you hire internally, you're committing to a particular need. While your startup is still trying to figure things out, you may not know what you need yet. Hiring an agency can keep you from making a hire that you'll regret later, not because your new employee isn't good at what they do, but they may not have the skills you thought you needed.

They have multiple skills in one place. Agencies hire people with different skills. A good marketing agency will have people from a variety of backgrounds and experience, allowing you to leverage them selectively. Thinking about expanding your offering to a new market but not sure what that market might think? Ask if anyone at your partner agency knows about this new market. Working with a web development firm and need extra hands on a new technology? Ask your agency if they have employees that have experience with it.

They can help you make better decisions. Agencies work with many clients across a variety of industries and company stages. Working with them gives you the benefit of learning from their past successes and mistakes. On their end, the tens or hundreds of companies they work with gives them a breadth of experience that can help you avoid costly mistakes and take advantage of new opportunities.

They act as a second set of eyes. When you're heads down on your startup, it can be helpful to have someone with whom to review strategic decisions. A good partner will question your assumptions and help you think through your plans in a fresh way.

They can connect you to other potential partners. Lastly, because agencies have many clients and are often connected to other agency partners, they can be a great resource for business development purposes. Their other clients could be potential partners for an email marketing campaign, or they may be able to make a key introduction to a venture capital firm they've worked with in the past.

The Cons

They have higher per-hour costs. As I mentioned before, agencies work on a variety of pricing models. Agencies are businesses too, and have overhead costs and a profit margin to make. Costs can vary widely but they're often more expensive on a per-hour basis than if you hired internally.

They don't always move quickly. Startups need to work quickly. Agencies that work with startups know that a lot of their value is tied to both the quality of their work and the speed of their work. Having an agency work on something new is not as easy as tapping your coworker on the shoulder. They typically have a variety of projects to manage, and you may have to put your new initiative in the queue.

Spontaneous ideas are less likely. Some of the best ideas come from unplanned meetings and conversations. When working with an agency, the chances of having that water cooler conversation that leads to a breakthrough are harder to come by. The best agencies feel like a part of your team, but when you're not working in the same physical space, serendipity is less likely.

They choose your team members. When you work with an agency, you typically agree to work with whoever the agency decides to staff on your project, and you may not have control over them. Be sure to meet and speak with all the team members who will be working on your project beforehand.

They're seeing other people. Agencies typically have multiple clients at any given time. Even though you want everyone involved in your startup to be all in, understand that an agency will usually be working on a variety of projects at once.

Like any decision, working with an agency comes with costs and benefits. If you do end up working with an agency, it is important to know how to best leverage the new partnership. Don't be shy about asking for advice, and be sure to clearly indicate your expectations and needs. As with most relationships, communication is key, and the startup agency relationship is no different.

Jim Shook has been a digital marketer for the past six years, helping over 40 startups and small businesses expand their online presence and convert visitors into customers. As the founder of Dozen Digital, his goal is to help great teams get their products and services in front of the right audience, at the right time.