Entrepreneurs start their own businesses for a number of reasons. Some want to work for themselves. Others hope to get wealthy (since starting your own business is the only way to get really, really rich.)
And some just want to see if their ideas wil work not just in theory, but in practice.
Put Dan Granger of Oxford Road in that last category. Dan worked in radio sales for years before he decided to stop pitching ideas to his bosses and start his own company. Oxford Road, a performance marketing company, has worked with businesses like Lending Tree, Boll and Branch, Quip, Ring, Hello Fresh, Wink, Rent the Runway... and in the process become an Inc. 500 company.
So how did he go from successful radio salesperson to successful entrepreneur? And what can you learn about his approach to marketing and advertising that will help you startup succeed? Let's find out.
Oxford Road hit the Inc. 500 within a couple of years. How did you manage to grow that quickly?
We did come out of nowhere and go from zero to 100 in about 30 seconds, but that's not the whole story. A lot of people say that becoming an overnight success takes about ten years, and that's definitely true for me.
I started as a local radio salesperson for ClearChannel, which is now iHeart.
What was great about local radio sales was that was you got to function like an ad agency for your client. In fact, I wouldn't work with agencies: I figured it someone was going to mess up a campaign, it should be me. I didn't want to lose an account because of someone else's mistake.
While I was there I led the company in direct business with small businesses. When I approached them, every small business owner would say, "I want to spend the least we can spend to try this out... and then, if it works, we'll spend more." Everyone said that.
So I embraced the challenge: How do we make this work, knowing that if we're successful, the client will gladly spend more?
Of course there's also risk involved in that approach. You could do a great job, but if the product or service isn't well received in the market...
True. But that approach also let us turn companies no one had heard of into household names. And that's become our signature move as an ad agency.
Of course that meant a lot of trips to Silicon Valley and walking into people's offices saying I wanted to meet with them. That didn't work so well for a while; one guy even came out and said, "I've been in Silicon Valley for 20 years -- no one walks in without an appointment." (Laughs.)
But I kept showing up, kept grinding, managed to work with a companies like Reputation.com, Ring, new companies in the space that were starting to raise venture capital before everyone started to do that... and along the way I learned the language, helped companies with attribution and creative development.... and in the process started to build my own team.
Keep in mind I was still working for ClearChannel.
And then you saw an opportunity in the emerging podcast industry.
"Pandora for podcast" doesn't sound like a revelation today, but in 2006, it was. So I ambushed our CEO and CFO and pitched them "Talk Radio 2.0." I had a business plan for leveraging the emergence of the podcast industry and capturing the magic of Pandora in the spoken-word format.
They patted me on the head and sent me to talk to someone else. (Laughs.) He said, "Yeah, we're working on something like that. Thanks for your input."
They didn't think there was enough money in it at the time.
So about 5 years later I decided to give it a try, kind of on my own. I used my commissions to hire people to expand the work I was doing for those businesses. And fortunately ClearChannel let me try some of my crazy ideas.
So I decided to start referring radio business to help startups for other businesses, putting them on podcasts even though they weren't affiliated with ClearChannel. I started by doing some small tests.
For example, Adam Corolla was promoting the podcast he had launched a year before (which is now wildly successful.) He was down the hall doing a radio show to promote his show -- basically using terrestrial radio to try to build his podcast audience. I followed him to his car and said, "I have a lot of endorsement clients. Can you connect me with your team?" And I started handing off business.
One was Michael Dubin of Dollar Shave Club. He wanted to spend dollar one on advertising; he didn't have a business at that time, he just had his viral video. Michael had $10,000 to spend. I had a radio proposal, and a podcast proposal for Adam and said, "You might as well do them both."
He said, "I only have money for one." So I picked podcasts, even though I worked in radio.
And it worked fantastically well. We grew our billings from $50k a month in Jan of 2013 to $250k by April. The business was exploding. It was incredible.
Why do you think podcast advertising worked so well?
Basically, the market said, "We want someone to place advertisers in podcasts... and we'll reward them for great performance."
The purpose of advertising is not to express yourself creatively but to advance products and services you believe in, and to grow their sales. Creativity is only important if it serves that goal.
Ultimately your goal as an ad agency is to help your clients grow their businesses. Do that, and your clients will love you.
So how do you go from working for ClearChannel to starting Oxford Road?
When I went to the ClearChannel execs, I thoght it would turn into a Jerry Maguire moment. I said, I love you guys, but I'm leaving... and while I do have all these radio clients, if you'll allow me to service my radio clients and continue managing them on your properties, we can avoid any kind of tug-of-war and actually grow our businesses together."
And they said yes. Often when people leave to start an agency they get into a fight with their previous employer. The employer says, "These are our clients and you can't have them." That didn't happen in this case.
And that let us hit the ground running with around $700k a month or so in revenue on day one of opening the business. We never had to borrow money. I had two full-time employees and we couldn't keep up with all the work flooding in.
All of which raises an extremely important point. When you start your own business, try to find a way to keep the relationship with your employer positive instead of adversarial. Often there are ways to work together. Find those and it can really help you get your feet on the ground.
Which helped you focus not on battling your previous employer but on growing your business.
Absolutely. Over the next two years we grew at an insane pace. We worked with a Who's Who of the direct consumer brand community. We did the first offline campaigns for Dollar Shave Club, for Hulu, for Blue Apron, for Nature Box,for Ring... we work with 100 companies, and over a dozen of them have become unicorns.
Let's talk about your approach to business, and to advertising.
We see ourselves as agents of influence.
We don't have a product. We try to figure out who has the best product for the marketplace... and then figure out how we support them and help them grow in a measurable, persuasive, effective way.
Our agency has 3 disciplines. We call it M3: Media, Measurement, and Messaging.
At our core we're an ad agency; we plan and buy media. But for an advertiser to be successful, they need three legs, and media is just one.
Measurement is also critical, but it goes well beyond using a promo code in an ad. That's only one slice of a big pie. To actually attribute what drives performance, beyond the people that use the promo codes, to measure the silent majority responds that doesn't give you that visibility... using our analytics to triangulate to the total response is critical.
The third is messaging. We've developed a trademarked process called Audiolytics, which as as I'm aware is most comprehensive way to diagnose and score an ad on how it was built. We assess 9 key components and then 71 sub-components below those 9. We read and score every piece of ad copy to understand how it can perform better.
Add that all up and we'll bet our fees on head-to-head performance because we know we can drive performance better than anyone.
You grew extremely rapidly... how did you manage that growth?
Poorly and painfully. (Laughs.)
We didn't keep our heads above water -- we just held our breath. We couldn't hire people fast enough. We had two in-house recruiters working around the clock to bring in more people... an experience that taught me a lot about the downside of fast growth.
When springs pop off the machine and catch on fire and you're running around with the fire hose, you definitely see the downside. We went through a season of correction where we got to see the natural life cycle of when a startup matures... and we couldn't keep up with that cycle because we hadn't evolved our capabilities to match that cycle.
Since you were generating so much money, though, it was "easy" to just hire more people and hope you could get your heads back above water.
True. So we threw too many bodies at problems. We hired too quickly.
Part of my thesis was that we wanted to be the "anti-ad agency"... so I didn't hire anyone that had ever worked at an ad agency. But when we got into double-digit growth I realized maybe it wasn't all bad to have people around that had done this before. (Laughs.)
You don't want to be like everyone else... but if everything you do is contrarian, that means you have to learn a lot of lessons that other people have already learned.
Now we focus on managed growth.
And oddly enough that has helped us understand our clients better. The fact we went through rapid growth it helps us help companies that are experiencing the same thing.
There's a meaningful difference between being a self-funded startup and being VC funded. The "rules" are very different. In the beginning I got caught up in our rocket ship growth... and we were surrounded by other rocket ships... and thought I was like them so I was hiring ahead of where we were to get ready for where we were going... but if you don't go through a round and have $10 million in the bank, you have a lot less cushion. (Laughs.)
We had to figure out how we are like them... and yet also how we are different. Which is what every startup has to figure out.
Working with a struggling startup is also a lot different than working with a company that has taken off.
That's why we've evolved to the point where we have two groups within our agency to work with clients, both as they start and as they evolve.
When a new company takes off, at some point they have to balance performance marketing with long range planning that focuses on brand perception, brand planning, etc. Plus, a startup that goes through a successful funding round suddenly becomes a very different company.
So we broke our team into two groups. One takes a startup from 0 to 1. The other takes a company from 1 to 10, or 100, or 1,000.... we're able to take a business from "Will this this even be a thing?" to "How do I create a multi-year plan?"
The podcast industry obviously gets a lot of attention, but terrestrial radio is still a good business. Where do you see happening in the future?
Radio is eating the podcast world.
When I started my company I felt radio was moving too slowly. It wasn't keeping up with the needs of media consumers.
Over the last few years the majors have started to focus on podcasts, and the two formats are starting to merge. Podcasts will be a supplement to radio, and the two will be complementary in many ways.
It's parallel to some of the companies we've worked with. The meal kit companies disrupted grocery shopping; now they're being distributed in grocery stores.
In short, what's old is new. Disruptors are becoming part of the industries they set out to disrupt.
And that's what we're seeing in media. Rogue revolutionaries created a renaissance in audio content, but as radio gets a little younger and hipper and savvier, and podcasts get a little older and more traditional... the two become one.
For us, and for the people living in the marketing landscape, it's important to understand that we are dealing with the same people on both sides. It's not about choosing radio or podcasts: It's about understanding how the two work a little differently, and leveraging the opportunities that provides.
We'll also see smart speakers change the business. Podcasts came out of iPods, but it still took a decade for podcasts to become a "thing." The same will be true with smart speakers. Having speakers that listen to you will change the way we do creative, the way we measure results, the way we interact with customers who can now say, "I'm interested in this product" a lot more efficiently than going to your desk and typing in a web address and a coupon code.
You'll just say, "Hey, send me the coupon." Or, "Hey, order that product."
But what won't change is the need to know how an ad will perform, how you can connect with an audience... and how you can achieve your goals.
Every business wants to see better returns. That will never change.