What are the benefits of working with start-ups? David Warschawski, Managing Director of W Ventures and Founder and CEO of Warschawski, discusses how he utilizes his agency’s marketing and communications skills to build revenue and drive employee engagement. David also reveals his pet peeves about the communications industry and suggestions on how to make it better.
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HOST: DOUG SIMON
GUEST: DAVID WARSCHAWSKI
DOUG: Can PR professionals help start-ups grow and reap the financial benefits in the process? Our guest has the answer, David?
DAVID: You really need to know how to be able to do great due diligence upfront to make sure you’re picking and going to ride winners. And then you have to be willing as an agency to wait 5, or 10, or maybe even 15 years for the payout for the work that you did. So, if you can figure out how to do those two things on the back end, then I’d say go for it.
DOUG: Yeah, and that’s why you started W Ventures alongside your PR agency, which is unique in the field?
DAVID: Yeah, there were really two experiences that we had that led to that concept. The first was, we would help so many of the brands that were clients, grow and build their brand very quickly in order to have an exit, whether that was a merger or acquisition or whether that was an IPO. And we said, “Wait a minute, we didn’t get any of the exit for all the work that we did.” So, we wanted to see how we could participate. The second was we were often working with VC firms on their early stage investments, and about 80 to 90 percent of the time they just did not have the funding to be able to invest in quality marketing, communications. And those two things together we said “This is silly. Why don’t we raise our own fund, work with the types of companies that we believe we can add rocket field to to ensure that they get very quickly and effectively to a good exit?”
DOUG: Yeah, and even so, I guess it’s fairly well-known that it’s pretty challenging for a start-up to start and grow big. What would be a hoped-for success rate? Obviously, you hope every one of them works out, but realistically, how many start-ups do make it, and do they benefit the ones you work with by having that marketing, communications knowledge early on?
DAVID: In my mind, there’s no doubt that if you’re working with a great marketing, communications team, there’s so many things that you can help them accelerate and do on a much more professional level that’s going to get them to the end exit much faster than if they’re trying to do it on their own. I will say one of the struggles that most early-stage companies have because they have limited funds for marketing, they end up using someone who doesn’t really know how to work with them and get them the best results. And that’s expensive money that’s being put out and ultimately doesn’t allow them to get to the exit that they and the person who has put in the time and money wants them to be able to get to.
DOUG: So, let’s say you’re a communicator who’s working with this start-up in a more traditional way. You’re not trading it for equity, etc. in a future payoff. What are some of the best practices for working with start-ups most effectively?
DAVID: So, the first I would say is we test almost all messaging and images today through digital marketing early on to see what’s getting us the best ROI. So, it used to be we did that sort of in reverse. We came up with what was the brand image, what are we going to say about ourselves to entice our target audience to interact? Today we say, “Well, let’s talk to the target audience and let them tell us what they think is going to move the needle for them.” Once we have that learning in place, we can really improve what we call the CAC, their customer acquisition cost, significantly through that process, and only after we have that fundamental building block in place do we begin doing some of the more traditional things like public relations, like social media, like SEO, etc.
DOUG: Yeah. So, obviously, you’re doing groundbreaking work here. And just separately, you’re one of the more optimistic people I know, and even with that, I hear you do have some pet peeves about PR. What might they be?
DAVID: Well, if you’re in the industry for as long as you and I have been right, what is it been 3 or 5 years that we’ve been in the industry?
DOUG: There you go. Yep.
DAVID: Then, of course you do. I would say one of my biggest pet peeves is we’ve become not just in PR but in the entire marketing, communications world, incredibly siloed. So, you have people who are too focused on PR. You have people who are focused on digital. You have people who are focused on web development. You have people who are focused on social media, and you can go down the list. That is a very unhealthy way for us to grow the future talent pool because the way the target audience responds today is in a 360-surround sound environment. They may see it in social, they may see public relations, they may see it through an SEO search. They may see it through a search engine marketing approach. You need to understand as an agency how all of those things fit together. And we are doing a disservice to our young folks by pigeonholing them in one silo and not showing them or teaching them how all of these things hang together, and that can have a real bottom-line impact over the long term. So, if we can figure out how to expose our younger generation across the spectrum of things, they won’t have to be perfect at all of them, I think our profession will be that much stronger.
DOUG: And one of the surprising things about this we’ve discussed is it’s really been a great way to keep your young talent at your organization fully engaged.
DAVID: 100%, today, the talent wars are so strong. So, we want to do whatever we can to keep really good, young, talented folks in our agency and help them grow to be the types of multiplayer tool, employees that can help us with all of our clients. So, having them work on early-stage companies exposes them to many things that they never get to see with a longstanding, or long-term, or existing powerful brand. It’s gotten to the point where often we’ll say to a more junior team member, “Hey, you could work on this established, well-known brand name as a client, or you could work on this start-up.” And overwhelmingly, almost every one of them says, “The start-ups are more exciting. Let me work on that one because I really get to sink my teeth in”. So, it has been not only a good recruitment tool, but it’s been a great tool for retention and education of our younger folks.
DOUG: So, it sounds like you’re putting in a question, even though our companies made it through 36 years because we’re specifically focused on using video to get people media coverage. We need to be more diversified. How do you find the balance between specialists and those, the rare examples like yourself that cover a broad area? Is it because you specialize so specifically in the start-up realm that you’re able to give multiple effective approaches to them?
DAVID: That’s a great question, and it’s not easy, I’m just going to say that upfront. It’s a very difficult balance to strike, and you really have to believe in the non-siloed approach to make it successful. You have to hire great multipurpose tool players. You have to train and educate them from a young age to understand how all of these pieces hang together. And then you need to find clients who actually want that. Now, if I were to extrapolate to what you’re saying is for an agency that does great work like yourselves, you have partners who are helping you in other areas and you’re aware of how they all work together.
DOUG: Of course.
DAVID: We have an agency where all of those things are under one roof. And certainly, having worked with so many start-up companies that there’s a hammer. Most agencies have a hammer and everything’s a nail. While in the start-up world, it can be a tack, it can be a screw. And you have to be able to deal with those situations a lot more flexibly than you do for established companies.
DOUG: Yeah, and I think it’s such a great point because one thing COVID has taught all of us is you have to be ready for rapid change at a given moment. You’ve got to be flexible to really ride out the times. I’m glad I was able to break through in a different silo to have this conversation with you. Thanks so much for your time.
DAVID: Oh, it’s my pleasure. It’s always a pleasure talking with you, Doug.