I Created A Youth Marketing Agency That Makes Over $2M/Year

Luke Hodson

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Published: September 7th, 2022

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Luke Hodson

Founder, NERDS Collective

$190K

revenue/mo

Founders

Employees

NERDS Collective

nerdscollective.com

from

started June 2012

$190,000

revenue/mo

Founders

Employees

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Hello! Who are you and what business did you start?

My name is Luke Hodson, and I am a Forbes 30 under 30, born and bred Londoner that set up NERDS Collective, a youth marketing agency based in London that specializes in big data, cultural intelligence, and gen-Z. I’ve always been determined to set up my own company, as I truly felt destined to be a leader. From a very young age, I was an entrepreneur, selling doughnuts and snacks in school playgrounds which transitioned into bigger hustles as I got older. Making money out of identified opportunities was my thing; I constantly asked myself the question, ‘why not me’. With low levels of conformity, working for someone else was never an option. Combining self-belief, grit, determination, and naivety meant I would always work for myself. NERDS was the first vehicle to make that a reality.

NERDS collective is a specialist agency that specializes in insight, strategy, and creativity. Our work is powered by Frontline: a dynamic cultural intelligence, consumer panel, and research tool that gets brands closer to consumer centricity with the global street culture youth consumer - 65% of all Gen-Z.

What's your backstory and how did you come up with the idea?

NERDS was forged in London's East End in 2007, formed around a common goal to champion underground sounds and support emerging scenes through a series of warehouse parties, club residencies, and festival takeovers that saw the brand break raw British talent to crowds of thousands across Europe working with Skepta, Shy FX, Rudimental, MS Dynamite, Tinche Stryder.

The journey started at 93 Feet East music venue in Bricklane, London. The multi-room venue was perfect for hosting our first event, and signature festival-style live music event format, showcasing genre-defining underground talent. Grime music events were getting shut down by the police in those days, so we had to camouflage grime MCs amongst other base-led sounds such as dubstep, jungle, garage and drum & bass. A huge part of the drive for Nerds was to spotlight grime artists we grew up listening to on pirate radio stations or grime DVDs bought at Wembley market on a Sunday morning. Mixing genres to keep under the radar from police gave our early events a special vibe and a unique proposition.

Our success snowballed as we moved up to hosting big London warehouse parties, always focused on bringing through the dopest sounds in UK underground music in raw, gritty warehouse spaces. Our events also had live graffiti battles and jerk chicken food. The unique event formula grew Urban Nerds a cult following, which was further cemented when we released our apparel range, which help iconize our infamous bandana face logo. Our clothing became legendary in the scene and helped perpetuate our fame. We also went in hard on a stickering campaign. No jokes, we put up tens of thousands of stickers across the globe which admittedly got us in trouble down the line. That said, the gorilla tactics we used at that time were unique, no one was implementing the promotional strategy we used, which again helped further separate us. Urban Nerds started relating mixtapes from featured artists at our shows and built a collective of DJ residents that helped rep the brand.

As the scene and community, we fronted grew NERDS were flooded by various festival promoters and brands looking to collaborate with one of the UK's hottest event brands that reflected a burgeoning youth culture.

Describe the process of getting the business off the ground.

In 2013 I officiated as a go-to youth marketing partner. I created an agency to apply my passion, youth insight, and cultural expertise to an expansive roster of global brand partners. Whilst it sounds rosy, it was a tough start. As a 22-year-old with little to no experience in the marketing agency world, it was an ambitious and incredibly naive venture. It took 18 months, living off £500 per month, living at my mum's.

Brands at that time only worked with big agencies, not a young lad who could barely spell, repeatedly hitting them up on Linkedin! I got banned from Linkedin three times for adding too many people that kept reporting me as spam. At 19 months, I landed my first job at Superdry, which came through a friend's intro to the company. Whilst it was only a 30K job, I knew the £12k profit made could keep me going for another couple of years. During those first few years, everyone except for my wife today suggested giving up a couple of times, and I remember locking myself in the toilet, rocking with stress about how I could keep the business alive.

My account handling is slap-dash at best, and I transferred all our cash reserves to the wrong account number and sort code. This was one of my lowest moments and left me facing bankruptcy! My girlfriend, wifey now, lent me her savings to cashflow the business, it wasn't a lot at the time, but I had no other access to cash. I knew I couldn't walk away. I believed in myself and the idea. I'm incredibly resilient, determined, self-sufficient, and refuse to accept failure. I constantly felt like giving up but had decided I would make it work, so I didn't give in to the self-doubt and fought tirelessly. By year three, I could afford to bring on my first employee, and by the fourth year, we hit just under a 1M turnover, subsequently growing year on year by 50%. In our faith year, I won Forbes 30 under 30 and campaigns under 30 marketer of the year, a significant milestone and recognition of my hard work. That said, the pressure is never off. In my experience, it never feels like you've arrived or made it. It's just walking through a door into new challenges.

The company's core services are focused on cultural insight, a skillset first developed through running underground music platforms in and around London. We understood how social influence worked, what constituted a thriving cultural community, and how cultural equity flowed up and down. Our proposition was a first of its kind at that time. A culture-focused marketing agency fronted by people with no agency experience was a first. We made inroads into the marketing industry and demonstrated that non-traditional heads could also play a critical role in advertising.

Our mission was to share our learnings with global brands and funnel investment into cultural communities that needed resources. Cool has always come from inner-city neighborhoods, and we wanted brands to win but give back to the communities that were responsible for driving their brand heat.

Frontline

As our proportion crystalized, we wanted to install a tech element to help automate and improve our services. So we developed the youth research and cultural intelligence platform 'Frontline'. Frontline is a big data analysis tool and portal that enables us to draw insight from our data lake around a specific query. This product development helped NERDS differentiate itself from competitors.

The platform was created to help analyze and segment thousands of data points and studies we had conducted to help understand patterns and trends. We initially took a Frankenstein approach, connecting various software solutions to build a makeshift product. We then realized we had to bite the bullet and start developing our bespoke piece of software. We had various failed attempts trialing different developers until we realized we needed to drive the data architecture in-house, with a statistical specialist developer doing the build. A tech product is never finished, but we have officially opened our doors to like-minded brands that want to use big data to understand the street culture of global consumers.

You must constantly evolve to stay in the game or risk becoming extinct. Tech is revolutionizing every industry, and we wanted to look at harnessing its potential to future-proof the business. Sharpening our core services and developing our proprietary research platform helped us corner a unique spot in the market and significantly increase our bottom line.

Since launch, what has worked to attract and retain customers?

Whilst we're ten years deep, the race never stops. We're constantly re-launching the company. We are always looking at new initiatives that demonstrate our unique insight, strategic thinking, and approach. Whether it be showcasing underground music artists through live events, investing and collaborating with new startups, or releasing a specialist podcast, we leave no rock unturned trying to drive heat for the brand.

We are a client-servicing business, and client retention is everything. We've just had our 112 projects signed off by Puma.

We have a rigorous new business funnel combing performance marketing, cultural commentary, podcasts, SEO, and Adwords collecting as many leads as possible. We tend to funnel channel prospectus clients through a free frontline youth workshop and then follow up with a diagnostic session to help pinpoint their challenges so we can identify their opportunities.

95% of entrepreneurs are paid less than minimum wage. So, this is not the path of least resistance. But, there is gold at the end of the rainbow if you're willing to strap in.

The best way to retain clients is by having the mindset you own the business you're working for. We're brutally honest and solution-orientated because we have the client's best interests in mind. We aren't interested in doing shiny work that sets outs to win awards; we're purely performance-driven. We only deliver work that's going to drive maximum return for the business, and we're straight-talking and candid with clients. We refuse to take the traditional supplier role and insist on a mutual partnership in decision-making and pathfinding. Clients can sense this ethos and our determination to help push the brand forward, and we often challenge our clients on their approach. That's how we built our reputation as considered, highly invested marketing partners - we just care more than the rest.

How are you doing today and what does the future look like?

Covid was a challenging period; the work tap suddenly turned off overnight, hitting our cash reserves hard, and we had to make lots of redundancies. But, I came into the agency game with nothing, so was happy to start again. I'm always happy to pivot and turn a loss into a win. Post Covid, we're more profitable than ever before, no longer pitch for work, and have made some wise investments.

Through starting the business, have you learned anything particularly helpful or advantageous?

My key learnings in starting a business are:

Never give up
Success is a series of failures
Make your company meet your lifestyle needs
Turnover is vanity, and profit is sanity

What have been the most influential books, podcasts, or other resources?

I was an alcoholic and drug addict that failed the first three years of university, so didn't have the most traditional route to starting an agency. I spent countless hours reading and studying marketing books to give myself a chance at success. I almost lost everything at a young age, so now I work tirelessly to ensure I hold onto what I get, which can only be achieved by self-discipline and ferocious study.

Advice for other entrepreneurs who want to get started or are just starting out?

My advice to my earlier self would be that most businesses fail. 95% of entrepreneurs are paid less than minimum wage. So, this is not the path of least resistance. But, there is gold at the end of the rainbow if you're willing to strap in.