There's a seemingly circular debate about agencies looking for new forms of revenue and getting paid more if their ideas to contribute to the bottom line.
However, it's hard to name your terms in a market where the suppliers exceed the buyers. It's difficult to find examples of success, even though a number of agencies including, Anomaly and others have tried it.
I am liking the approach Method has taken in formalizing a ventures division. While it's nothing more than a way to formalize partnerships with start-ups, it seems serious and full of good intent. Obviously, there are obvious risks involved in this approach, but isn't that the point of emerging investment?
"Method Ventures focuses on working with entrepreneurs on a hybrid fees
and equity basis to rapidly move them from idea to business. By
identifying promising entrepreneurs with ground-breaking ideas who have
recently raised seed funding and applying Method's best of breed
strategic and tactical expertise, Method Ventures helps entrepreneurs
and investors alike reduce timelines and thus risk. This "acceleration"
process leverages Method Ventures' network and extensive
entrepreneurial and venture experience to increase the odds of success
and allow portfolio companies to use capital more efficiently. Method
Ventures was formed in Q4 of 2007 and boxee is the most recent company
chosen to participate in the acceleration program."
boxee is a company that wants to make TV social. "boxee was born out of necessity. we
were frustrated by solutions from Microsoft, Apple and others. we spent
long hours brainstorming about what will be the ultimate media center
experience. as a first priority we thought it will be nice to have a
media center that actually works.. ;) but looking beyond that
challenge we came to the conclusion that social should be a big part of
the solution.
a truly connected experience means not just connecting people with
content, but also connecting people with people. so by making boxee
social we believe our users will discover new content, rediscover
forgotten favorites, and share experiences with friends, family and the
world.
the mobile phone is a social tool, the web is increasingly social, there is no reason for the TV to remain an isolated island.
we have lots of ideas on how to make boxee more social, but would
love to get your feedback on what social features you would like to see
as part of boxee."
This sounds like a very interesting start-up, just working with them you would learn a lot about the future of media and beyond.
Overall, I like the fact they formalized the ventures division and although it's a risk, the benefits look significant- learning, networking, etc.
More agencies should follow Method's example.
Posted by Ed Cotton
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Agencies/Method
I think this is much easier said than done with most agency models stuck in 1.0 world. Posted by Darren Herman on 07/16/2008 03:31 PM
Agencies
I think it's unrealistic to say that "most agencies should follow Method's example." Method is no more an agency than Stone-Yamashita or fuseproject is an Agency.
Agencies have an entirely different model with entirely different cost structures from firms like this.
Just because it works for someone like Method doesn't mean it will work for a true agency. Posted by malachi on 07/16/2008 06:26 PM
I think this is much easier said than done with most agency models stuck in 1.0 world.