Breaking out on their own…

Despite imperfect economic conditions, new agencies continue to rise. Maja Pawinska Sims asks what motivates the start-ups

'When I started in PR with Quentin Bell in 1990 I remember asking him why he founded his own PR company,' recalls former Band & Brown CEO Gerry Hopkinson. 'He replied "Because, dear boy, I'm unemployable".'

Hopkinson, 41, like most PROs has spent his entire career employed by others. But that was before launching his own agency, Unity PR, with his former board colleague Nik Done in July (see below). While he does not share Bell's  reasons for going it  alone, he is just as pleased he did.

Hopkinson is just one of many former agency or in-house PROs who have upped-sticks recently to launch their own PR agency. Angie Moxam did it in 2003 when she sold Le Fevre Communications to launch 3 Monkeys Communications, which won this year's PRWeek Award for Best New Consultancy. This year alone start-ups include Switch PR – founded in September by former Joe Public Relations managing director Matt Wood and Porter Novelli associate director Paul Doran; a yet-to-be-named agency by former Razor Public Relations head Debbie Perriss; and, launching this week, Brighton-based Man Bites Dog PR, set up by former Red Consultancy divisional director Claire Mason. These follow Champollion, which was set up in August by Simon Buckby, formerly campaign director at Britain in Europe.

Apart from being 'unemployable', the most common reasons PROs give for wanting to leave the security of their agency or in-house worlds include doing things their way and having greater flexibility and control.

The catalyst might also be their agency changing hands, as in Hopkinson's case. PR industry sell-ups, MBOs, mergers and acquisitions are fertile ground for start-ups.

Experienced PROs may also feel they have reached a ceiling in their own agency or sector and need a new challenge. Or they might simply think the time is right to do their own thing.

Commitment to difference
But the one consistent factor that unites all start-ups is a commitment to be different and better than other PR providers in the market. Start-up founders believe their agency will have a better and more transparent relationship with clients; that accounts will be handled by senior directors; and that they will take a more integrated and holistic approach to communications.

CIPR president Chris Genasi left Weber Shandwick to start Eloqui Public Relations with three colleagues in 2002, and says he recommends the experience of going it alone. 'The big advantage is the excitement and the thrill of building your own business. It is very empowering,' he explains.

There are no official statistics on the number of start-ups, but Genasi estimates that around 20 launch every year. According to the CBI, one in three new businesses fails after the first year, but Genasi argues that well-run PR agencies buck this multi-industry trend, adding that it will be a long time before the PR industry reaches saturation point: 'There are virtually no barriers to entry – you can set up easily and quickly and make a reasonable living. Each new agency has something different to offer, and the market continues to grow.'

Genasi advises would-be start-up founders to work out early what their aims are for their business: 'What's the exit plan? Do you intend to grow it, sell it, expand it, float on AIM or be small for 20 years?'

Most start-up founders are experienced in PR, but some  entrants do come from a non-PR background. Journalist Jon Barnsley, for instance, left the News of the World this summer after 18 years as travel editor and showbiz columnist to run a holiday chateau in Normandy, Le Castel, with Thomas Cook Signature head of PR Nick Hobbs. Through the chateau, they plan to run their own PR consultancy.

'I'd been on the receiving end of PROs for so long,' says Barnsley. 'Most were mediocre; others were appalling, so I only work for what I believe in. The only downside is that people no longer jump when I say so.'

Ex-Kaizo director Tom Herbst managed to avoid the shock of going completely cold turkey when setting up his eponymous agency by striking an unusual deal with his old boss, Crispin Manners. Herbst worked for Kaizo for a decade before he got the itch earlier this year: 'Crispin and I have a great relationship, and we talked about me setting up on my own. Kaizo is now my client, and I manage Kaizo accounts for Palm and Foundry Networks .'

But what are the other motivations behind some of the most recent start-ups? We talked to three new agencies.

Agency to agency

Unity PR
Founders Gerry Hopkinson and Nik Done (right), former Band & Brown directors
Launched July 2005
Clients at launch 1 – Capita Insurance Services
Clients now 5 – Capita, Crisis, Bee Telecom, Zest (restaurant), Vio (IT company)
Monthly turnover circa £20,000

When Band & Brown was bought by Canadian marketing services group Cossette Communications in September 2004, board directors Nik Done and Gerry Hopkinson saw an opportunity to do their own thing. Using cash and shares from the deal and their own savings, they launched with 'a blank sheet of paper'.

'We'd reached the top of the tree at Band & Brown and while Unity may be a start-up, we feel we've done this before as the B2B division at B&B was a business within a business,' says Done.
Hopkinson says they asked themselves tough questions before launching: 'We thought hard about whether the world needed another PR agency, but we saw a polarisation between strategic heavyweights, and very creative teams. We thought it would be possible to do "whole-brain PR", which balances both.'

Of their first client, the insurance division of Capita, Done says: 'It loves having senior agency talent for a dramatically lower cost, and accepts we can't scale up because of resources.' The agency is forming partnerships with other specialist providers and trusted freelances to get round this.

Both feel a sense of accomplishment with their own agency: 'You feel the highs and lows much more,' says Done.

And homelessness charity Crisis was so taken by Unity that it recently outsourced PR to the agency for a project for the first time.

In-house to agency

Parkhill Communications

Founders Leslie McGibbon (below), former communications director for InterContinental Hotels Group, and Andy Collingridge, former communications director for Hilton UK & Ireland
Launched August 2005
Clients at launch 2 – InterContinental Hotels, Visual Media (photographic agency)
Clients today 5 – City Equities, The Clever, Relish Inns , InterContinental Hotels, VM Monthly turnover Undisclosed

Hotel PROs Leslie McGibbon and Andy Collingridge pooled their vision of offering quality PR to the hospitality and tourism sector. Their first client was McGibbon's employer InterContinental Hotels, whose CEO Andy Cosslett says he was delighted to support the venture: 'Leslie has a great relationship with our media and works hard.'

McGibbon says their biggest motivation was quality: 'We're passionate about a straight-talking approach to communications. We wanted to take our experience of the FTSE in-house life and apply a small-company work ethic to deliver the quality work we used to expect as clients.'

Collingridge says the experience has lived up to expectations: 'It's great to have freedom and autonomy. When something needs to be done, we make a decision between us and off we go.'

McGibbon says big clients are open to talking to start-ups: 'With big clients, all you've got to go on is your personal reputation. But people will always pay for quality, and the feedback we've had from our clients and the media – our customers – has been very positive so far.'

The challenges have included longer hours and more stress than working in-house, although Collingridge argues that 'it's a much more positive type of stress when it's your own firm'.

The Parkhill team is reluctant to talk about finances, and McGibbon says money is not a motivator: 'Obviously we want the business to do well, but the driving force is to do a great job for our clients. If, in a year's time, Parkhill is seen as a quality agency that delivers what it promises at the pitch, we will know we are on the right track.'

Freelance to agency 
Name Louis de Rohan PR
Founder Louis de Rohan (right)
Launched June 2005
Clients at launch 4
Clients today 6– Heidi Klein, The Wellbeing Manager, Compass Box Whiskies, 42 Below Vodka, Cusquena Beer, Pampas Plains Beef
Monthly turnover £18,000

Louis de Rohan previously launched London wine attraction Vinopolis at Peretti Communications, and worked for Thomas Pink, TAG Heuer, Harvey Nichols, Gordon Ramsay and Tiger Beer before going freelance in 2002. He was on a beach in Australia last Christmas when the owner of fashion brand Heidi Klein called to ask if he would take over the company's PR. He now has a team of four 'pioneering brands' in the luxury, beauty, food and drink and retail sectors.

'There will always be work for talented PROs, irrespective of the economic climate,' he says. And de Rohan has an end in mind: to sell to a large media player within eight years. De Rohan says 'the fun part' is getting ahead of bigger and less nimble agencies. 'We're terriers, nipping in under the feet of the competition,' he adds.

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