Drew McLellan: Reluctant Entrepreneur…Twice

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“There are lots of ways to be an entrepreneur,” reflected Drew McLellan, owner of McLellan Marketing Group (MMG) and nationally recognized guru of all things brand. “Twenty years ago I did it the traditional way by starting from nothing and just grinding it out, this time I bought an existing business,” he said of his acquisition four years ago of what would become Agency Management Institute, a wholly owned subsidiary of MMG. McLellan made his comments as the featured guest of the July rendition of the Business Innovation Zone (BIZ) luncheon.

The marketer of record for the BIZ from its inception and a much heralded annual speaker, typically on the latest trends in marketing, McLellan spoke this year of his own highly successful experiences as a start-up, a topic which has come to take center stage in the BIZ sessions with the burgeoning Des Moines start-up community. Under initial questioning from Mike Colwell, Executive Director of the BIZ, and subsequently from the capacity audience gathered at Start-Up City Des Moines, McLellan reflected upon the challenges and solutions of his personal entrepreneurial experience, and found some time to comment on the state of marketing trends as well.

“I’m a reluctant entrepreneur actually,” explained McLellan. “I always thought I would run an agency some day, it just never occurred to me it would be my own,” he confided, adding that in retrospect, like many entrepreneurs he is fairly opinionated. “In all fairness I was probably not a great employee and today I would be the worst employee known to man, in fact I would fire myself,” he said invoking humor while giving expression to a subtle but quintessential element of the entrepreneurial spirit, the conviction that you can do it better if given the freedom to try.

Like many talented individuals who set off to find their fortune under their own banner, McLellan admits to his close encounter with the e-myth syndrome where the reality of the entrepreneur’s lack of business acumen threatens to de-rail them early. “I didn’t know anything about running a business,” he recalls, “and learned the hard way for a couple of years.”

Noting that many people go into agency work because they find the business side of business repugnant, McLellan shared what for him was a resource of the highest order. Colwell and McLellan both extolled the virtues of peer forums and networking organizations that bring together leaders in a particular field or position whose companies are not in direct competition and encourage frank and open conversations and sharing. Whether CEO’s from different fields or from the same field and different markets, the shared wisdom and the honest feedback can ameliorate the inherent risks of entrepreneurship.

McLellan was fortunate to find such an organization led by a former agency owner and joined a recurring roundtable of his peers from across the country. With a well-established and successful agency and with McLellan becoming a brand in and of himself on the national speaking circuit it would have seemed that MMG had successfully transitioned into a stable post-start up position when opportunity arose. The owner of the association opted to retire and offered the business to McLellan. Soul searching, consultation with fellow members of the association and the advice of a business acquisition expert led to his purchasing and rebranding the business as Agency Management Institute in 2011, bringing it under the umbrella of MMG.

“It’s exciting, it’s fun and rewarding and it enhances my existing business,” he says in retrospect, and with an eye to the future the institute, which is not itself a full time job, beckons as a transition into a distant retirement.

Inevitably when an audience questions McLellan the topic turns to brand and marketing trends, and such was the case with the balance of the hour long session. Among the highlights:

Branding: The most successful brand will authentically represent who you truly are while at the same time resonating with your “sweet spot” customer.

Agencies and Start-ups: Recognizing that budget and time constraints as well as other factors are a challenge for most start-ups McLellan urges a phased approach. He suggests an initial consultation with an agency might be wise to help sketch out a plan as well as to introduce an outside perspective. While many start-ups can implement their own marketing, the perspective an agency can bring is often worth the investment of a quarterly or annual review and consultation.

The current blend of traditional and digital marketing: “Today, most of the agencies that did not choose to engage in the digital space no longer exist,” he said of a scene that is trending to 75% digital and 25% traditional marketing. While a few years ago the trend was to exclusive digital marketing, an equilibrium has emerged that maintains a traditional component and those agencies who sprung up only to service the digital realm have had to make adjustments to meet the needs of the market.

The changing face of agency staffing: Along with the trend toward digital and hastened by the impact of the recession on the agency business, contract and remote employees have become fairly commonplace. “I have one employee, whom I know very well, but we have never met face to face,” shared McLellan, observing that in response to the recession many agencies have utilized contract workers as a means of moving their largest fixed cost, labor, to a variable scheme.

The view of Des Moines: In what has become a common theme of these luncheons, perhaps owing to the perspective of the BIZ, the question of Des Moines’ place in the start-up world arose. McLellan, whose business found him on 125 planes last year is something of an ambassador for the community and can reflect on its changing image across the country. “There has been a concerted effort to put Des Moines on the map nationally,” he said of the work of the Greater Des Moines Partnership and others. “And I do think the world is changing its view of Des Moines, for the most part thinking of it as a hip and happening community.” As well it should.

Dwight Stewart Talks of People and Products at the June BIZ Luncheon

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“I’ve been doing technology for as long as I can remember, my dad gave me a programing book and I’ve been at it ever since,” recounted Dwight Stewart, serial entrepreneur, Founder of Igor and the June interviewee at the Business Innovation Zone’s (BIZ) monthly luncheon and networking session.

Working towards a Computer Science degree at Iowa State, already with literally thousands of hours of programming to his credit, Stewart would launch the first of his many technical endeavors in the form of CollegeRoute.com, a social networking site similar to another then upstart network called Chegg. Choosing to incubate his product while keeping college his primary focus, Stewart fell behind the rapidly evolving Chegg and struggled for some time after his launch to catch the rising star which has since gone on to great success.

“The experience taught me you have to have the right support system. At that time mine was telling me to stay in school and get a degree so I could get a job working for someone else,” he told Mike Colwell, Executive Director of the BIZ and Stewart’s questioner for the first half of the program.  The lesson of support systems, networks and relationships would weave like an Ethernet cable throughout Stewart’s message to those gathered hoping to learn from his experience.

While CollegeRoute.com was a less than stellar performer, it would be the exception to the rule and Stewart’s next endeavors would earn him serious credentials in entrepreneurship, technology and sustainability.  Quality Attributes Software(QAS), which he co-founded, would achieve international brand recognition as a software as a service product that monitored and managed the green and sustainable  aspects of buildings, claiming such distinguished clientele as the U.S. Government  in Washington D.C. where every building except the White House was managed by QAS.  After leading the company to the multi-million dollar level, Stewart and his partner exited and Stewart looked for the next enterprise, which would come in the form of Igor, a revolutionary plug and play lighting system that combines control and power over internet. Continuing Stewart’s commitment to sustainability the product can cut energy usage and costs as much as 60 to 70 percent in commercial lighting applications.

With Igor rolling out and Stewart soon off to the CleanTech Open, known as the American Idol for clean technology entrepreneurs, he sat down with Colwell and shared during an informal hour-long conversation.  Among the themes:

People, People, People.

Throughout his comments networking, relationships and connectivity were cited as critical components to business success.  “In real estate its location, location, location, but with business, it is people, people, people. It is the people that form your team, your support system and your customers,” imparted Stewart. Partners and investors are extraordinarily important, he would share, noting that if you are going to release total control of your company, you want to truly understand and be compatible with those to whom you relinquish that control. “Having the right people, with whom you are compatible and conversant is so important,” he would reiterate in driving home the importance of a support system.  “Whenever you are panicked, that is when you want to have someone to talk to first before you take action,” he said suggesting one should never act on emotion.

Building a team is no less critical. “I think about aptitude, attitude and character,” he explained, observing that the necessary knowledge is a moving target in the technology industry, but those three traits form the foundation of a team that will find or make the path to success.

Imitate Nature

Arguably green since before green was fashionable, Stewart looks to nature as a metaphor for business development.  “Things that are allowed to happen organically are probably following the easiest path,” he explains. Offering the example of a sapling that evolves into a tall tree he argues that, particularly with a product that has a physical component, rushing to market and growing tall before the roots go deep can have negative effects which will in turn impact unfavorably a company’s brand equity, which once damaged is very difficult to repair.

Working among the Giants

QAS worked with such large companies as Johnson Controls, Cisco and Siemens. “When you are a small mouse dancing with a not so gentle giant, you have to stay a step ahead so that you don’t get stepped on,” Stewart offered. He also suggested that the small company, once through the door, should remain benign and non-threatening while offering a value-add ancillary to the large company’s space. Finding a sweet spot that does not threaten or appeal as a potential absorption but that does add to the giant’s margin is the key to survival and success in those relationships.

B2B or B2C

Igor partners with established lighting companies to serve as sales, distribution and implementation agents for the software. While this means relinquishing a significant percentage of the final markup, Stewart cautions against failing to see the upside of these arrangements. The need to hire and manage a sales force, while waiting for it to develop the relationships and networks that are needed in the appropriate vertical markets can cost far more than the percentage yielded. In addition Stewart points out that as you add partners and their individual sales curves grow, yours begins to grow logarithmically.

Des Moines

Although not a native Iowan, Stewart hails from the Midwest and speaks well of the region and his adopted Des Moines as a place to incubate a business.  Both Stewart and Colwell argued that Des Moines was replete with individuals that could well play that support role that Stewart so highly valued, and do so with a genuine friendliness that might be absent on the coasts. Beyond the abundance of talented people to build a team and a support system, there is an appealing culture. “If you want to build a company on a Midwest culture, then you come here. If you are looking for a fast paced cut throat culture, there are places for that too.”

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