Here's one way to save a failing business.
(The following blog entry was originally posted on Blogger on 08/13/16)
The last time I posted to this blog was last July and I thought at the time that I'd start a series on epic client fails. Well, that sort of fell by the wayside. I still have plenty of material on the subect, and I hope I can circle back on that idea and post more Stupid Client Tricks.
Instead, I'm going to turn to developments in my business. It's been a pretty wild ride for the past year, hence the title of this post.
Around August of 2015 I felt like I'd done all I could do to keep my small design company afloat. The work we were being assigned wasn't very interesting or challenging, and was just a lot of low level, bottom of the barrel stuff that I hesitate to even call design work. It hardly felt like the kind of work a 15 year-old company should be getting. On top of that, during 2015, a series of corporate mergers and acquisitions, and business reorgs signaled the impending loss of nearly all of our top clients. And we hardly got any warning.
American Express Publishing (Food & Wine, Travel + Leisure, and related affinity clubs) and its consumer marketing group got sold to Time Inc. Shortly after that, Time Inc. was spun off into its own company, separate from Time Warner. Then Time Inc. laid off all its creative and production staff within the consumer marketing department. They outsourced it all to Tag Worldwide. Some people went to Tag and some got severance packages. It's a familiar story in the world of business.
By the end of 2015 the RFPs and ongoing client creative needs had trickled to zero. This is a common situation with small companies like ours, but that didn't make it any easier to accept. Over the course of the year, the marketing managers with whom we'd worked for so many years had either moved on or they'd survived the layoffs, but their hands were tied due to outsourcing contracts. The business landscape had changed dramatically — and for us, for the worst.
So, I thought, OK, maybe it's time to stage a career reinvention. Many people do this in their 40s and 50s. While I was down in Florida in September 2015 helping my mom through double-bypass heart surgery, I pondered the possibility of going back to school and getting my Master's Degree in design. I discussed this with my business partner one night, and I think it shocked him a little. It kind of shocked me too. We'd started our company in 2000, and we'd managed to grow it from a handful of referrals to a company averaging annual gross revenue of $500,000. I explained how I felt like I was done with the magazine publishing industry and all its turmoil and disruption. I thought we should get a valuation on our company and explore a sale, or merge our book of business with another company. At the end of the phone call he understood where I was coming from, and we agreed to start shopping our company around.
On the Master's Degree front, I reached out to a former professor of mine who was still teaching at University of Florida, my alma mater, and we talked about the implications of my going back to school. I was 52, but I felt I was still sharp and in step with design and media trends. I thought I could really offer a lot to a university design department. He thought it was a great idea and suggested I pursue it. UF was in a state of transition between department directors, so maybe there was an opportunity for me down the road if I got accepted into the program. So I went ahead with the idea. I started the ground work of requesting transcripts, logging into university sites and setting up profiles, collecting images of my work for online portfolio submissions, etc. It was a part-time job for a couple months. By the time I'd hit application deadlines, I'd managed to submit to School of Visual Arts, UF, and Virginia Commonwealth University. I should have sent out more apps to other schools, but I did what I could with the time I had.
On the business sale front, I started writing emails to industry contacts and companies that may have a need or interest in a small creative shop. I started my efforts in early October, and after a few non-reply emails, we found an interested party. A salesperson for a large printing company in Maryland put us in touch with his company's CEO. They just happened to have begun the process of spinning off their in-house marketing and creative agency. They had a nice stable of nonprofit accounts, for whom they produce direct mail and direct response emails. They were lacking depth on the creative bench, and they needed creative strategy and ideation. Our timing was excellent.
By the end of October, we had our first meeting with the business developers, as well as the venture capital group behind it all. We began to hammer out terms for a joint venture, to build a new agency that would pull together 8 different small companies, including ours.
Cut to February of 2016 and we have our first summit of the new agency team members down in Rockville, MD, at the site of the huge printing facility. We all give a short presentation of our respective small businesses and expertise, and we all seem to get along quite well.
Months pass. We agree to the joint venture terms, we develop a new company brand, build out the identity and collateral materials, rent new office space on Madison and 32nd street, and off we go. We moved in on June 1, 2016 and continued to develop the future marketing plans and positioning of our company, called Katalyst Partners, Inc. (KPI).
By the end of June, 2 of the legacy in-house team members in Rockville quit. They had been there a long time and we assume they simply got too riled up by the changes afoot. My copywriter/creative partner and I were immediately pressed into duty as full-time VP/Creative Directors within the marketing and creative services group, in addition to managing our own small business unit that provides creative services to the magazine publishing industry. Several trips to Rockville, and many, many 12- to 15-hour days later, we made the transition and adapted to the culture of a new company. I think it's one of the hardest things I've ever done.
When all the dust settles — maybe by the end of the 2016 — we'll be able to assess what happened with a little more clarity. For now, we've managed to think our way out of a difficult situation with regards to our evaporating client roster at my original company. While our core magazine publishing clients seem to be fading away, they are still sending projects to us. Only time will tell if that's going to continue or if publishing is going to pivot away from us completely.
As it turned out, SVA and VCU declined my Master's applications. UF had accepted me as an "alternate," but once the new company venture showed promise, I declined the candidacy.
So that's my story as of today. The tornado inside the hurricane is still swirling, but I think the sky is clearing. Or are we just in the eye?