Doritos did it. Vitamin Water did it. Champion did it (disclosure, a client). Don Tapscott and Anthony Williams wrote a (the?) book about it. Businesses such as Crowdspring are springing up around it. More and more brands are doing it. It, of course, is co-creation, collaboration or crowd-sourcing. Brands enpowering their fans and the community to create content, advertising, products and word of mouth. However, its always felt a little…one way. Brands get a lot of work and thinking for essentially close to nothing and the participants, the community, gets nothing in monetary terms (relative to what the work could have gotten on the open market) but a lot of social currency.
However, the announcement from MDC Partners (the majority shareholder in Veritas Communications, my former employer) that it is soliciting business plans for a $1m investment in a start-up agency got me thinking. The incubation model, which VCs and technology firms have been employing for decades is far more mutually beneficial to both parties than pure co-creation because it puts some skin in the game for both the investor and the community.
For $1m, MDC gets to attract world class talent to its agency portfolio. It gets 51 per cent of the company and it gets a slew of new ideas, break-through thinking and motivated entrepreneurs. As Chuck Porter says in the New York Times:
“At any given time, a third of the people at any agency are making plans to leave and start their own joint”
And its true. I know of an almost conceived social media agency which was likely a few redundancy packages away from happening. What if those senior people had had access to MDC’s pocket book? Rather than have to lure away high priced, entrenched agency folks from one agency they don’t have a stake in to another agency they don’t have a stake in, MDC can now simply bankroll their start-up. For three or four highly talented and motivated entrepreneurs, $1m is the security blanket they need to up sticks and start something on their own. Moreso, you get to start an agency at a $2m valuation – how many people can say they’ve done that? It’s a brilliant idea.
Don’t ask the community to co-create; put some skin in the game for real innovation, not flash in the pan creation.
Some more great quotes from the New York Times article:
Start-ups are “how the industry has grown; it’s the juice of the business,” Mr. Porter said, citing agencies founded or co-founded by the likes of William Bernbach and David Ogilvy. (NOTE – and Frank Palmer, here in Canada – founder of Palmer Jarvis which became DDB, my employer).
The sole criteria for submitting a plan, Mr. Nadal said, are that “you do brilliant work, you want to make brands famous and you want to drive results for clients.”
“Some will say, ‘It’s a scam,’ and some will say, ‘Let’s spend our lunch hours for the next three weeks putting something together. There are always ambitious people who say, ‘I can do this better’ and want to go try it.”
Mr. Nadal said he was considering the timetable for the competition, adding that those with ideas would probably have until the end of October to submit them. Participants will be asked to send proposals to MDC at this e-mail address: firstname.lastname@example.org
Get your business plans out! You can follow Miles Nadal, CEO of MDC Partners, on Twitter.