Smart Yeti Creative Agency

Switching Careers And Starting My Own Digital Marketing Agency

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Jeremy Kanne

Founder, Smart Yeti Creative Agency

$8K

revenue/mo

Founders

Employees

Smart Yeti Creati...

www.smartyeti.co

from Chicago, Illinois, USA

started February 2015

$8,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

Adobe Creativ...

productivity tool-icon

Trello

design

Sketch

crm

Hubspot

Discover what books Jeremy recommends to grow your business!

📗

Want more updates on Smart Yeti Creative Agency? Check out these stories:

1. On Growing Revenue To $8K/Month By Pivoting Our Offering [Update] (2022) ➜

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

Hello! My name’s Jeremy Kanne and I founded Smart Yeti, a creative agency that helps technical companies in their messaging and marketing.

Our mission is to help highly technical companies message and market better. Our clients love us because unlike other agencies in the space, we build in technical backgrounds to our workforce. That means we can better understand what makes our clients’ valuable, why their customers benefit, and how to communicate this simply.

We offer fractional access to creative and marketing services so that growing companies can get the benefit of improving their marketing and sales efforts without hiring new employees. For some of our clients, we’re their entire marketing dept, for others, we partner on a la carte services across, design, photo, video, and digital marketing.

We’re still small and focused on exceptional quality in service, regularly taking in $8k/mo, but growing in revenues on average $1-2k/mo in 2019. This is thanks to technical companies loving that we speak their language.

how-i-switched-careers-and-started-my-own-digital-marketing-agency

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

I started my professional career out as a civil engineer. Six years into a lucrative career path, I was bored. I’ve always had a creative streak that balanced my analytical side - I started training in comedy improv at the same time I started my engineering major.

Most of how I developed the business is a synthesis of lots and lots of hard work across freelancing, working in teams, and gaining knowledge across lots of different services. Our service model is born from this experience and empirical knowledge rather than a traditional agency background.

One of the top lessons I’ve learned is being confident in saying “I don’t know” when I don’t know. This honesty and transparency when paired with a great work ethic, creates trust and drives successful partnerships.

Most people ask me how I made the switch from Engineering to Creative and I don’t have much to say other than “sheer willpower”. I could’ve stayed in engineering and had a financially stable career that I was good at. Would’ve I been truly happy? No. Would I have been fine? Sure. But around 3 years into my 6 year tenure as an engineer I decided to make the shift.

I wanted to do two really hard things at the same time: be my own boss and work in the creative arts. Both I had no formal education in. But I committed myself to it and set a path forward, originally working essentially two careers at the same time - civil engineering and freelance designing on the side. I did this until I had a modicum of a portfolio, at least one stable client, and then I jumped ship - knowing I’d take a severe pay cut for a good while.

I cut my teeth servicing clients in design, then teaching myself photography and servicing clients there, and then video. I started Smart Yeti as a video production house first - providing professional video at affordable rates by working to communicate where scope could be reduced and do only what needed to be done. It was my first product design of what’s now central to our mission - most technical companies don’t need to be super creative, they just need to be able to explain what they do simply and effectively.

After Smart Yeti the production agency grew slowly for the next few years, so did my freelance design clients I was still maintaining. Seeing an opportunity to serve both markets, I combined all my clients under one brand and that’s when we started calling Smart Yeti a creative agency.

After trying to market to everybody and taking a few business workshops, I realized our best clients were the ones who were very technical - clients in Fintech, Medtech, Manufacturing, etc. They appreciated my technical background and that I could understand more readily what they do and why it’s valuable.

With this realization, I chose to focus on only technical clients and structure our services as retainer. These were the two most important decisions I’ve made as an entrepreneur to date.

Take us through the process of designing your services and launching the business.

Smart Yeti has pivoted a lot over the years. We started out as just a video production house that served a section of the market that was really difficult to do - midrange video production.

I designed video production service that were professional quality, but didn’t break the bank. We did that by being able to communicate to clients what it took to do a video and helped them assess the scope and make choices so that they got a useful piece of video, but didn’t add bells and whistles they didn’t need.

We used to work with clients on a project by project basis. While this is usually attractive for clients seeking creative service - it limits price and scope - it creates headaches in needing to understand, often complex, scope upfront where the decision-maker is not always experienced in its pricing.

While we’re always happy to justify our pricing, we found that doing so repeatedly in project scopes created more friction than necessary.

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

Since launching, we have pivoted sizably about two times: video production agency with freelance designing on the side to creative agency that serves everybody to creative agency that serves technical clients. This expansion and subsequent focus was all driven by what I was getting feedback from the market on. Our best clients (longest relationships, most revenue gained) were technical in nature and kept using our services.

I saw a few main reasons why customers were maintaining work relationships with us. They appreciated the quality of work done. The work was of a design style that fit their aesthetic - simple, by effective. They felt like we readily understood their work product (which is often complex) whereas other agencies had failed to do so effectively. And we’re pleasant to work with - no ego, very practical. These value points became tenets of how we serve our customers and how we attract new ones. We look to be the creative agency that technical companies are best served by.

In addition to changing our industry focus, we took on a new service model in our product design - retainer engagements. Projects felt like a never ending cycle of hunting for the next project, even while working on the current one. No rest. We needed a way to ensure we kept receiving revenue from current clients (and serving them, of course) to provide a base for future growth.

Retainer engagements help solve this problem. It changed our target customer sizably though - now we only wanted to work with clients that had recurring needs for creative, not just one-off projects. However, the ones that valued this type of arrangement stuck around and have become great partners in growth together.

We’re a B2B business, or even more specifically, a B2B2B business. We serve Businesses that are B2B. As with our clients, our sales cycle is long (3-6 months) and is often started by referral. To maximize our referrals, we ask our clients for other companies they think could use our services. We do this relatively late in the relationship so our reputation of excellent service is usually enough to encourage/validate a referral.

We also create partner referral relationships with companies or people in adjacent industries/services. Our best referral partner is a marketing strategy consultant team that want to manage marketing execution, but not do the execution itself. They manage the client and Smart Yeti serves as a sub-agency. Other partners refer us as they have no desire to manage the services, but see one of their clients with a need for it. These partners has been people in other industries such as PR, Business Consultants, Insurance, larger Digital Marketing Agencies, and Investors.

There can be a lot of different failure points in our sales process, but a huge hurdle is getting to the first meeting. This is why referrals have proved to be so effective in getting sales for us. A warm introduction from a trusted associate gets us past the first question in a prospect’s head - “should I give this person my time?”.

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

Currently, we’re still very small - a founder and project-based contractors. This is by design as we’re still testing the market with our relatively new retainer product design. As we keep signing more retainer clients, we’ll have recurring scope and revenue to turn our contractors into part-time employees, then part-time employees into full-time employees.

Gross margins are very high (80-90%) as I still take on a large portion of the client work to be done. This simply ensures execution and quality by the fact that I’m doing it. By Q2 2020, all work will be done by contractors or part-time employees. At the point, I’m predicting gross margins will settle to 40%-50%.

Since we’re a service business, costs in producing our goods are almost all labor. We have some other overhead costs in licenses, business club memberships, and legal/insurance/accounting costs.

Our company started with a growth pattern of around 10% YoY growth and an average lifetime value of customer of $10k in revenue. After our subsequent pivots, I’m calculating our YoY growth to be 40% and our lifetime value of a customer to be $50k in revenue.

We don’t use our website for direct sales - it’s essentially sales collateral. As such, we don’t currently do any digital marketing to point people to our site and attempt to convert them. In the near future, we will be starting LinkedIn marketing campaigns, but they will still be based around 1-to-1 introductions into high touch sales conversations. In the middle-distant future, we’ll leverage social media and content marketing to grow our awareness and consideration to feed into high touch sales.

In the far future, I really believe our approach can disrupt the agency model in general. In its ideal condition, clients will better understand the creative decisions they’re making, creative workers will be paid fair wages, and that will lead to higher client satisfaction, higher company morale, and higher productivity.

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

I think one of the top lessons I’ve learned is being confident in saying “I don’t know” when I don’t know. This honesty and transparency when paired with a great work ethic, creates trust and drives successful partnerships.

The hardest lesson I’ve learned has been in hiring. As a young CEO, I hired a business development professional and set them to work trying to drive more revenue via new client sales. At the time, I didn’t have the industry focus I have now, therefore no specific target market, nor an outlined sales process to teach (let alone manage). What followed was a disaster in profitability, process, and service.

This failure taught me important lessons that are now integral to the business. It pushed me to figure out our target markets and to hire people to solve current business needs, rather than speculative growth.

What platform/tools do you use for your business?

In terms of software, we regularly use and love the Adobe Creative Cloud platform to execute our design, photo, and video creation. We also leverage Sketch for web design projects.

We’re still working on best integrating productivity and CRM applications into our processes. Currently, Trello and Hubspot have been beneficial even in the light capacity that we use them.

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

Built to Sell is a classic book that helped give me perspective in important considerations when scaling up. I had been told to read it for ages and thought it would be dry, informative.

Instead, it was very story-driven and described business challenges that I had personally experienced and offered progressive advice as they solved one problem into the next.

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

Be a good person. Do good work. Listen to your customers.

Always, always, always communicate your value from the perspective of your client/customer. They’ll ask how you’ll do it later - start out with why they benefit.

Are you looking to hire for certain positions right now?

Currently, we’re looking for contractors to add to our list of people to work with. Ideally, design generalists - people who really enjoy doing many different types of design work. Unlike most companies, we prize broad knowledge.

We’re also be particularly interested in finding people with technical backgrounds that either have an eye for design or have a strong desire to expand into creative work. Tired of your technical job and want to be more creative? We can provide that pathway.