Are You Stuck at the Second of Three Stages?

You can broadly define your experience as the principal of a digital, creative, or marketing firm in three phases. You might be stuck at the tail end of the second stage and I'd like to inspire you to get unstuck.

Stage One: Starting

In the first phase, which was last year for some of you and twenty years ago for others, you are really trying to fill your dance card. Any opportunity or sign of interest on a prospect's part is welcome. It's a validation that someone with money thinks it would be a good investment to have you work on their behalf, building their product or brand. You've put on a brave face, but you're still privately thrilled, and maybe a little surprised, at your reception in the marketplace.

You work extra hours and hire cheap people with good attitudes, training them in your way of doing things. You long for the day when you can have a stronger team that can stand on its own, but it's too soon. It's still in a big ol' validation stage. It's Minimal Viable Product all the way and you're just happy to find paying clients.

Stage Two: Existing

The second stage happens quickly. Word spreads, clients take you with them to their next gig, and your confidence grows. Prospective clients smell that confidence and you charge more for the same thing. It's not like you didn't know what it was worth before, but you were too quick to discount your fees so that you could tell certain stories and put certain logos on the wall.

You're a full professional at this point. You understand the craft, you can afford to hire beyond the "tabula rasa" types that you teach, instead finding willing people who immediately hit the ground running and in fact teach you things. Best of all, they are successful without your handholding and now you are freed up to do what the business needs from you, specifically.

You're six people or thirty people or eighty people now, but it's all pretty much the same thing. You have a great business, but it needs careful balance. The pressures are pretty much yours to carry.

The ups and downs fade into the past and you're better at anticipating workload. The existential challenge of meeting demand and supply levels out a bit. Sometimes people are sitting around, but never for long. And sometimes they have to work extra hard, but everyone understands that this is what it takes to succeed.

You've relaxed a bit. This business is eminently viable. The crew is the best it's been. There's a little bit more predictability in where your business comes from. You've found a few really loyal advocates and you don't stumble around when a prospect asks harder questions.

You could do this forever. You love working with carefully chosen people, the money is good, and you don't have a boss. It seems like a pretty fair exchange: clients get real expertise and you get good money and the ability to design your own world.


Salaries are layering higher. You've started to see a few cracks in the foundation. Maybe one client has gotten too big. A key employee is tough to work with at times but you put up with it. You're losing a little more work than you like. When you get in front of a prospect, your batting average is great but you need more of those opportunities.

You've built a bigger machine that needs to be fed. You've gotten attached to these people, and during the little downturns here and there you keep the team together. Your own pay hasn't risen all that much. You can tell the difference between a great client and a good enough client, and...if you are being honest...two thirds of your clients are great, but one-third expect too much, don't give you the feedback you need, aren't respectful of the staff, or whatever.

But you keep those clients because not having enough for people to do feels worse to you than a simple compromise here and there. They are still paying and you're earning every penny.

You're stuck in that second stage where you have a machine to feed. It's way better than the first stage, but it's not the utopia you lie in bed thinking about at night. The demand isn't outstripping the supply, usually, and when it does, you quickly build out the team further to meet the demand, eager to hit the yearly YOY goal you set as an ELT.

This latter part of stage two is where most of you are stuck. You aren't in charge yet. You're around for the ride like a Student Driving Instructor with an extra brake pedal but no steering wheel.

Stage Three: Thriving

This healthiest of the stages is characterized by one thing: having more opportunity than you can meet. But there is only one way to create and maintain this ongoing balance.

You have to resist the ever powerful pull to grow bigger, or at least to do so too fast. It's fun to sit around a campfire or at a bar and explain how successful your firm is, but it masks some truths that can tell a different story.

In this third stage, the gap between your capacity and your opportunity comes from a most uncomfortable realization: you're going to have to begin leaving opportunity on the table. For the truly entrepreneurial, it's actually more painful to say "no" to extra opportunity than it is to face a roster without enough work.

Wasting opportunity is like wasting vaccine doses in February. It feels wrong. You've dreamed of the day when you were "wanted" far and wide.

Like I noted above, we know when a new client isn't quite right. They want to see a very specific case study that mirrors their situation exactly. Or they are kicking tires at several used car lots, stringing the players along. Or fighting a price, not because it's out of line, but because that's what you do with "vendors". The scope isn't all that clear until you've got $185,000 in the dev project. You're already heavily invested and you need to go along if you don't want to walk away from all those sunk costs.

Stage Three is very simple. You're not intentionally working with any bad-fit clients. You've done this long enough to know what it takes: leadership, organization, transparency, and goodwill. Sure, there's a surprise here and there, but they are rare.

What's changed?

  1. You don't rush to take on every opportunity, training yourself to quit acting all scarcity-like. You've carefully built the right capacity so it won't kill you to turn something down. Everyone knows—because you've put it in writing—what a good client looks like, and they'll kick your a$$ if you compromise after sounding off at the last company-wide meeting about client criteria.
  2. You are a lot more careful to date the right people and be honest with yourself at every turn. Your instincts are usually right. You have a deep belief in your value and you're just not going to compromise. You'd rather go out of business than undersell yourself time and again.

If all of us had the courage to act on our well-honed instincts with new clients, we wouldn't have these dip$hit clients who waste our time and just give us orders all the time. But we don't, and so the only antidote is to give yourself two options for every one opening. More supply than demand. In that scenario, it doesn't take any courage to choose the better of the two candidates.

Yes and no. Courage and choice. Supply and demand.

If you can calibrate the supply and demand equation by regularly using the leverage that comes from options, I don't think there's any other challenge you can't solve. Here's what Stage Three looks like:

  • You are not interchangeable in the marketplace of competition.
  • You know exactly what characteristics are important in a prospective client.
  • Your pricing doesn't vary based on how busy you are.
  • You're building your own world rather than chasing how someone else defines success for you.
  • Your lead generation plan isn't accidental. You know exactly what'll happen, over time, if you turn the dial up.
  • Your team feels respected and cared for.
  • You are making a difference.

I'm very hopeful that this is becoming more and more true for you.

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