The Technology Sector’s Negative Influence on Creative Firms

Guest Author – Blair Enns, Win Without Pitching (He’s on a roll)

No, this isn’t a rant about how things were better before everything was digital. Rather, it’s an observation on how principals of creative firms have borrowed some of the wrong things from the cultures of technology businesses and startups, in particular.

First, The Good
The buzz of innovation and deal flow coming out of Silicon Valley and other technology startup hubs is infectious. There’s so much that’s good about it and, in recent years, creative firms have borrowed some good things from tech:

1. They’re more open to exploring alternative business models
2. Some firms are launching their own start-ups or spinning off some of their internal innovations into other businesses
3. Principals are lifting their eyes to the horizon, being more tuned in to what’s likely to happen next, well before it starts to happen
4. Firms are fostering culture as a means of recruiting and retaining good people
5. Some firms have their own labs or R&D divisions
6. All great stuff. But I also see problems created by the wholesale adoption of some practices and viewpoints from the tech startup world in the culture of creative firms. There are two in particular that I think have been the most damaging.

Then the Bad

1. A Tendency Toward Productizing
Look at a few websites of firms that do some form of technology marketing. Many are taking too many cues from the SaaS companies whose marketing automation products they’ve aligned their businesses to. Specifically, they’re productizing their services in a bid for scale without stopping to consider the myriad of other implications of such a strategy. I’m a fan of Hubspot–the company and the technology–but I can’t discuss this topic without pointing out that the ecosystem of Hubspot partners firms is an egregious example of unnecessarily productizing what should usually (not always) remain a customized service: marketing.

Hubspot has served their partners well by providing so many resources to them to help them build their businesses, but the price seems to be that Hubspot has attracted firms that really want the model of success to be told or handed to them rather than those willing to innovate their own way forward in the quasi-paranoid, quasi-isolated way that is typical of an entrepreneur.  Hubspot partners, and other firms like them who resell other software, package and price their services like software companies, not recognizing that theirs is a dramatically different type of business requiring different pricing and business models.

The trade-offs between these business types are many. You can watch my talk at Hubspot’s Inbound Conference last year where I discussed it at length.

2. A Focus on The Exit
Is there anything more ridiculous than someone you’ve just met asking you, “What’s your exit strategy?”

As I’ve previously written, my exit plan is death, and I think yours should be, too. I can be talked into seeing the merits of a technology company spinning up and then selling so that their own little technology becomes a small part of some larger technology that takes over the world and makes all the players rich. But in truth, I think most (certainly not all) of those sales and stories are vacuous nonsense. Regardless, in an independently-owned, knowledge-based business, having one eye on the exit is about the best way to neuter your business. Watching a creative firm principal ease into retirement while the firm slides into irrelevance has always been one of the most painful things to witness. But now the young owners have this disease too, except their exit is a short-term sale.

Again, maybe if yours is a technology company developing a real proprietary technology, a short-term sale is something to shoot for. But if you’re still in the service or expertise business then a sale is unlikely. Build a great firm that allows you to go deep into your client’s problems on a customized basis and reap the rewards of such a business along the way. Having one eye on the exit in this business is the wrong thing to do, no matter what your age.

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