The UBER PR agency model is coming of age. Agency coach Rob da Costa and Jim James discuss On Dem...

Welcome to today's episode of the Agency Accelerator podcast. I am really excited to have with me today Jim James, who runs East West PR. Now the interesting thing is that he is based in the UK but serves companies in Asia. So we talk about how he makes that remote model work and why he is a big fan of virtualizing agencies and moving to an Uber model. And in the episode, he'll explain exactly what he means by that. And that's interesting because because it's in direct opposition to what I often recommend to my clients. So this was a really interesting episode to give some different insights on how to run an agency. So let's get on with today's show.

Accelerate your agency's profitable growth with tools, tips, and value-added interviews with your host, agency owner and coach, Rob Da Costa.

Okay, so on today's episode of the Agency Accelerator podcast, I'm really happy to have Jim James with me. Now, Jim's been working in marketing just about as long as I have as well. We both go back to the '90s. Jim runs a PR company called East West, and they provide communications to help companies in Asia get noticed. Now, the interesting thing about that is that Jim is currently based in the UK, but he founded the agency in Singapore and then moved on to China to open offices. So welcome, Jim, to the podcast. Is there anything else you would like to add about your journey?

Rob, thank you. First of all, uh, I'm really delighted and grateful to be on the show with you. I'm a listener and a real fan. Uh, we've both got parallel paths. I think the only thing is that Over 25 years, I've set up businesses on 3 continents and I've run public relations companies, but I've also built other companies, including importing Morgan sports cars to China. So I've been on the client side and also on the agency side for over 25 years.

And what made you move around? What made you move from Singapore to China and then back to the UK?

Well, Rob, you remember back in 1990, we were seeing adverts of the 3 million people unemployed on the billboards under Thatcher and and the Saatchi brothers. So I went to Singapore to manage trade shows for a client in the music technology business in '92 and was just infected by the excitement and the energy of Asia. So '94, '95, I decided that I would sell up from my job and move to Singapore with a couple of suitcases and a borrowed laptop. And started EastWest Public Relations so that I could really take advantage of the growing desire for companies to sell goods and services into Asia. And at the time, there were almost no public relations agencies in Asia. So just the timing was great for me as an individual, young 27-year-old, and Asia, really the beginnings of the wonderful '90s.

In the current environment, it's kind of emphasized that we can work remotely and it doesn't actually matter where we're based. But if you're working internationally, how do you build relationships remotely, and how do you deal with some of the nuances and the differences between business practices and the culture between countries as well?

Well, Rob, I think first of all, how we build relationships as an agency is how we add value to the client. I think proximity and personality are less important than adding value with every communication. If we position ourselves as trusted advisors and the eyes and the ears and the operations that the client can't have, then I think that we can build a relationship based on, if you like, need rather than on emotion. So first of all, what I do is I work on ensuring that everything I do for a company Everything from the moment I had them as a prospect through to delivering. I keep them engaged in the work we're doing. So, for example, I have a podcast, Speak PR. I have a weekly newsletter called Cognition. But I'll also find news and information, for example, about a trade show or an editorial opportunity or a change in regulations, and I'll send that to people. So I think that the key part of building a relationship is about demonstrating value, because actually I'm not looking for friends, and frankly, nor are they. They're looking for someone to solve a problem, and I don't think that I have to be in the room with them in order to do that.

Okay, fair enough. And I know you work in PR, so how do you go about building those relationships with journalists? Because I imagine that must be quite different to building relationships with a London journalist than a Chinese one or one in Singapore.

Okay, so now we move on to, if you like, the international dimension. And I've been, you know, lucky enough to have lived and worked in Singapore. I then set up the company in Beijing in 2006. I set up a company in India in 2009 in Bangalore. And on any given day, EastWest PR will do work across Asia— Indonesia, Philippines, Thailand, Japan, China. South Korea. Actually, all journalists want the same thing. They all want a great story for their readers. So I think what we have to start with is the content that we're going to give the media. I think, by the way, this is just the same if we work in advertising. My first job out of university was in an ad agency, for example. We have to be looking at what the client or the media, the audience is looking for and where they are in that journey. So first of all, I start with, you know, what is going to be of interest. So that's where it does become more specific according to the context. So obviously the Japanese media have got Japan-interested stories and the Chinese have got Chinese-interested stories and so on. But then also each culture will have its own perspectives on non-context-specific ideas. So for example, how Japan deals with the environment and environmental legislation is quite different to how Singapore deals with it because they have a different history and they have a different geography and so on. So I think the real key to international public relations is about being sensitive to the local requirements. Then when it comes to dealing with the individuals, they all have very different personalities. If there is a common theme amongst all Asian media, it's a desire to learn. And the Asian media are always very well prepped when they come for media interviews and for press briefings. They like to know what's going on. You find this especially with the Chinese, the Japanese, and they see it really as a profession. And the second dimension is that journalists, because in Asia it's a non-confrontational society or a non-confrontational philosophy, and through this idea of Confucian ethics where people in authority would lead with responsibility, the view on the journalist side is that if you're inviting them to learn about your company or your product or your service, you'd be telling the truth. You know, why would you be asking them to collude in spreading something that's false? So my experience with working with media in China, India, Japan, South Korea, and so on is that the media are really, frankly, delightful people to work with. They want something that's relevant for their readers, but by and large, they're very humble and very keen to work with a client or an agency. So those would be my, you know, top lines, Rob.

Yeah, that's really interesting. So that is very different to how the media works in the UK and probably especially in the US as well, where they're probably always starting off thinking, you know, the other party's here just to sell something, I need to find the real story, I need to catch them out and, you know, get the real scoop, I guess.

Well, and Robin, there's a fundamental difference between the Western media and Asian media, and that is about ownership. So the history of Western media by and large is as an independent voice for the people, the publishers, and so on. So people like Lord Beaverbrook who has the Daily Mail and so on. But in Asia, the media by and large are still owned by the government. So if you look at Singapore, the Singapore Press Holdings owns the mainstream media. In China, Nobody can own an independent newspaper. In Japan, they are quasi-government owned. So there's a very different structural position of the media, which have on the whole been seen as really voices of the government as opposed to the voices of the people holding the government to account. So structurally, that's also why it's different.

Right, got it. Yeah, that's really interesting. And I guess there's pros and cons to both sides of that. Now, when you and I were talking before we started recording the podcast, you were talking to me about virtualization of agencies and moving to the Uber model, and I just wondered whether you could explain a little bit more about what you mean by that.

Yes, of course, and coming back to this original point about building relationships when you're not there, if the premise of an agency is that you're adding value, to a client and to the media, proximity isn't necessarily necessary, but also ownership of the factors of production is also not necessary. In other words, hiring people and having them full-time on the staff is not a precondition for them knowing how to add value to a client. If we start with that mindset, which is that actually Anybody who knows how to add value to a client in advertising, direct marketing, in any other way, they can do that regardless of the, if you like, the economic relationship, contractual relationship with the agency. In the past, I've had offices in Singapore, China, and India concurrently, and I found one of the biggest jobs that I ended up with was managing people. It's either managing existing people and their personalities or trying to find new people with both the skill set and the personality type to fit in. Now, I went down that path and I managed multiple regions with multiple staff, and there's some merits to that, and there's consistency of delivery sometimes for the clients and so on. But I actually think that where clients have got to in the last 10 years is they've got to a place where they're not looking necessarily for the relationship. They're looking for deliverables. And they're looking for deliverables because the economics have changed in the market. We used to have annual retainers, Rob. I don't know if you remember this, but even in advertising, you'd have an annual retainer. And people looked at the agency very much as a sort of an outsourced department. But now I think clients are looking for a a result against some of their own deliverables. And often those deliverables are driven by shareholder requirements. We work for a lot of blue-chip and listed companies and they have a quarterly target. And what happens is they would like to align their expenditure to their quarterly revenue. So this truncation, if you like, in relationship has led me to thinking that why should I have a permanent open-ended relationship with a member of staff when I do not have the same relationship with the client? It creates a structural inequality in the business and it creates risk really, Rob. So what's happening is you're buying with one set of commitments, but you are still only an agent. So you're an agent without any tenure, without any consistency, And you're often billing on the 1st of the month for payment on 30 days or at the end of the month for 30 to 60 days. And your margin may only be 20 to 30%. So then you end up with this terrible issue. You've got people that you've made a commitment to on an open-ended scale with X number of vacations, an office, a laptop, and so on. And then you've got a client who says, actually, I just want you to get this done and this is the budget. So from a commercial point of view, you build a business that fundamentally is at risk. So I changed that because one day I went to Singapore and I walked into the office from Beijing and the team was sitting there looking at their social media online and they just sort of said, well, oh, my computer's not working as fast as it could be. Can you fix it? Someone else said, oh yeah, no, I'm waiting for you to tell me what to do. And I went, you know what? I work too hard. I take too much risk to manage this kind of situation. So I let everybody go. I mean, they went on their way variously. And instead of hiring, I built a platform. And I think this is the key. There are 2 key elements really, Rob, about this virtualization or this Uberization model. One is that the client still has a known brand to go to with an established platform. So what I have is a brand in East West PR that's been operational for over 25 years, but also I use the Zoho platform so that anybody who works with me uses the same email address and they use the workflow that I have put in place within Zoho— document templates, quote templates, invoice templates, media lists. Everything exists in the same way that it would if I was a bricks-and-mortar agency. The second element then, Rob, is the relationship between me and the consultant, or the consultant and I, I should say. So I have a simple financial model which I can share with you where the agency has 100 from the client. 20% of that will go to the agency. 10% goes to the person that brings in the business, which may be the agency. We have a 10% buffer and 60% goes to the consultant. Now, normally the consultant only gets a third at most of what the client pays because the client Pays 100, the agency takes a third for the member of staff salary and a third for the operational cost and a third for the gross margin, which comes down to 15 to 20% after you've taken off tax. What I've done by getting rid of all the middle management that's required, all the desk office infrastructure that's required, you save about a third. And what I can do is I can share that with the person who does the work, Rob. They turn up with their own laptop, their own phone, they manage their own time. But also, and this is really what is the kicker for the client, they only work with people that actually want to be on the job. Now, any agency owner knows, regardless of PR, advertising, direct marketing, event management, whatever the agency, you end up deploying the staff that are available. Normally that means the best staff are already busy and you end up having to do the work with whoever's available. And as an agency owner, you often pick up the slack by doing a bit yourself. But with this model, you only work with people who know what they're going to do. And because they're self-employed, they're only going to get paid if they deliver on it. And it also means I've got an amazing amount of freedom, Rob, to choose the consultant that's best for the job. So, Uberization, or just like the Airbnb model, Means that as a company, I no longer carry risk, but as a consultant, they earn what they want to earn and when they want to earn it, and the client gets the best person for the job. So I think all 3 stakeholders will get something from this new model.

Yeah, this is a really, really interesting perspective, and I think it is the flip side of the coin that I talk to, because I often talk to a lot of my agency clients and tell them that it is very difficult to build a sustainable growing agency using freelancers because it's a bit like building a business on quicksand, because freelancers often have their own agendas. And if their agendas and their visions are not aligned to your agency's visions, then that can be very problematic. So it sounds like you're giving, you know, the other side of the perspective here and the reasons why that actually is a good model. But let me just ask you a few questions about what you've said. So let me ask you all of the questions and I'll let you kind of answer them because I'm sure some of them intertwined. So one of the obvious questions is how on earth do you find enough good freelance people, um, and how do you make sure that they can deliver to the quality and the consistency that East West PR promises their clients? And what do you— how do you deal with changes of personnel on an account? So if you know, one of your clients has got used to freelancer Fred working, and then Fred decides he's going to do something else. You've got that typical scenario that a lot of agencies struggle with, which is how to manage changes of personnel. So I'm just interested to hear your perspective on those sort of things.

Sure. I think first of all, just to address that issue about the vision of the agency, I think one has to look at what is the purpose of the agency, Rob, as well, because If the vision of the agency is to build something, um, what are you doing that for? Now, if you're building it as a vehicle to make money, then the agency may or may not be lots of people, because my experience is that when I've had 35 staff, I make less cash in my personal bank account than when I have no staff because the overheads are so great. So first of all, I think if we look at what a business is, it's there to create income for the shareholders. And my premise is that you can do that without a large number of staff. Now, do you build the same kind of creativity and culture? I would argue that actually you can do. You mentioned 3 areas there. One is finding people. Second is consistency of delivery. And the third is personnel change. My experience, Rob, over 20 years of running an agency with fixed staff, because it'd been the last 5 I've had this Uber model, is that I have all those 3 problems anyway. The difficulty in an agency is that you've employed those people and you're trying to find ways to change or manage them, which is why we talk about only hiring the right people, the Jim Collins get the right people on the bus. So I don't think that consistency and and continuity are hallmarks of an agency. I think they are just part of any business. How can you deal with that if you're running what I would call as a virtual agency? And I call it an on-demand agency. If we look at the parallel with making movies, you don't have large teams of people waiting to make a movie. You have someone has a script, someone's a producer, someone's the director, and people come together to create a movie. A PR, a campaign, an advert, whatever. The key to this then is to find people that have got credibility and credentials already. And I do that by a couple of ways. One is a lot of the people who work with me now are former members of staff. The second is that it's very easy to check people's bios out now. If you look at Upwork, Fiverr, There's like the PR cavalry. One of the amazing aspects of sort of the digital footprint we all leave behind is with a small amount of investigation, you can find out if someone's any good or not. And the irony of this really is, Rob, that if someone's being cosseted inside an agency, they could be rubbish and you don't know it because actually what they do doesn't get published. Freelancers are constantly looking for work. So they're constantly getting reviews. And if you look at Upwork, all those people have got testimonials. It's actually much safer, ironically enough, to be finding people. The second is about consistency. So this is where the methodologies and the processes come in place. And if you look at McDonald's or Starbucks, these are franchises, Rob. These are not full-time members of staff working for McDonald's Inc., Subway sandwiches. Now you may say, well, how does that relate to the sort of rarefied world of professionals? It's about having some processes. So we have a 5-stage methodology and we've now put that into the format of the Speak PR process. And actually the value of a business, Rob, is the process by which it delivers to customers and the money it makes from that process. So I think that's the second part is about creating a process and ensuring everyone follows that by, for example, using common email addresses, using shared work groups, having communication is often the key part. So using, for example, Slack or Asana. The third you mentioned is about personnel and the sort of transitory nature of personnel. My experience, and you tell me if you've got a different experience of it, and I don't think I was a horrible boss. Some people said I was good, some didn't, but people move on when they're ready. I had people that I would take great care of, but then they found a boyfriend or they got married and their wife wanted to move. People don't stay in the same place, and the only people that do are the business owners, and everyone else is passing through. So what I do is I, I make sure with the consultant that's going to take the job that they're committed to delivering for the duration of the agreement. And if they're not willing to commit to the duration of the agreement— because remember, Rob, I'm getting the agreement with the client first. So if I know I've got a 3-month, 6-month, 12-month engagement with the client, the conversation I have with the consultant needs to be on the same terms. And if it's on the same terms with some penalties for people not keeping to those and some upsides for doing so, I've reduced my commercial risk.

Yeah, yeah, it's really interesting. And as I say, it really is giving the other side of the coin about this. And I guess the key point you're making is to have the platforms in place to enable you to manage people remotely, enable you to create a consistent experience for the customer and all that stuff. And I guess if you can do that and you can find the people, because of course that's always been the challenge, I guess, whether it's a freelancer or an in-house person, it's just finding quality people. But if you can do that, it sounds like you're making it really work for you?

No, well, the one thing I was going to say is that I actually think that now it's becoming harder to find full-time in-house people than to find well-qualified freelancers. And especially in light of COVID I think we're going to see a growing number of people who need to work from a remote location who don't want a permanent full-time role. So I actually think that things have changed, and I think it's going to be easier to find high-quality senior people Yeah, for sure.

I think at long last, after a long time, it's become an employer's marketplace. Listen, Jim, we could talk for ages about this, and there's lots more stuff we could cover on this topic, but I'm conscious of trying to keep the podcast within our 30-minute goal. So, let me ask you the last question that I ask all of my guests, and that is, if you could go back in time, back to the 1990s and and give that young Jim who was just starting out in business one piece of advice, what would it be?

I would give you— I would give myself the advice that I took, which is to get a customer first. A business doesn't exist without a customer. It's a vanity project otherwise. The first thing I did before I went to Asia was I got a customer, and that is the advice I'd give myself and anybody looking to start a business, because without a customer, you've just got an idea.

That's very true. That's really good, actually. And I haven't had that piece of advice before. I think a lot of the time people give, my guests give kind of similar advice to each other, but I haven't had that one before. So thank you for that. That's a really good piece of pragmatic advice. I think a lot of times people give advice to do with, you know, their mindset or their self-esteem or their belief or that kind of stuff, which is fair enough, because obviously we all suffer.

Yeah, yeah, no, of course.

No, but your advice is very practical. Let me just ask you one more question. If people want to find out more about you and about East West PR, where would they go?

They can just come to our website, eastwestpr.com.

Brilliant. Okay, that's nice and simple. Great stuff. Well, it's been great having you on the podcast. It's a really interesting conversation and it definitely gives a flip side to the way I've talked about growing an agency before, so I really appreciate that, and I know our audience will find it as useful as well.

Rob, thank you so much, and, uh, it's wonderful to think we've got 2 different paths, but we're, you know, now later on in life able to share what we've learned. And thank you for taking the initiative to do so on this great podcast.

So there you go. I hope you found this episode as interesting as I did when I had a chance to sit down and talk with Jim. He He definitely has a different perspective and a really interesting perspective on how to grow an agency using remote workers. And of course, that's something that's very pertinent right now in the world that we live in. So, as ever, please consider leaving a review if you enjoyed this episode. Please share with your colleagues, and I will see you next Thursday for the next episode of the Agency Accelerator Podcast.

Bye.