Internally at Job Portraits, we’ve always defaulted to transparency. Salaries are known to everyone, as are our core financials. But we’ve never shared much publicly—until this post. Honestly, I’m a bit nervous to hit publish, but on balance I think the pros outweigh the cons. That’s not because 2019 was an easy year; rather, I know the folks who care most about Job Portraits—our clients, partners, and even our families—are just plain curious. I suspect this material will inspire many productive conversations. So here we go: our top ten lessons from the year.
Side note: this post was born as an internal memo drafted and signed by Jon and myself (Jackson).
For context, these learnings, like our company, are organized by function:
The Studio: client-facing work
The House: internal work, i.e. everything related to our culture, our team members, and recruiting
Go-To-Market: sales, marketing, and business development
Notably, we have forth function, The Engine Room (bookkeeping, taxes, legal, and so on) but it was stable in 2019.
Learnings from The Studio
1. We took on a wider range of engagements than ever before and, broadly, delivered high-quality work across the board. We’re calling this out because, while most of us expect as much, we don’t want to take it for granted. This is a function of a few factors:
We hired folks who have skills JP didn’t previously possess. Specifically, Becca and Jenn brought top-notch copywriting expertise.
Existing team members gained new skills. Notably, Natasha stepped into the creative lead role, and Olivia massively revamped and expanded our video capabilities.
Relatively speaking, team members who do creative work are more senior and/or experienced compared to past years.
Team members across the company have become more specialized. There are pros and cons to specialization, but a definite benefit is that, in the creative realm, we’re minding the details better than ever.
Everyone is awesome :D
2. With few exceptions, margins in 2019 were significantly lower than targeted. Our average actual hourly rate across all engagements was $158 per hour. This rate has made it difficult to survive and caused us to take on debt. Other than a low average hourly rate, we’ve identified a few reasons margins were tighter than expected:
We did new things, which is inefficient.
We trained a lot of new people—and didn’t retain all of them.
We utilized senior team members who (rightfully) cost a lot.
3. In the last half of the year, we narrowed in on a complimentary, financially viable mix of services that our buyers actually want. In startup terms, we’re closer to product/market fit than ever before. Here’s the standard flow for a hypothetical new client:
First, we do a small project to gain trust with our buyer and show them why our work is worth the cost. Conceptually, this is an extension of the sales process; financially, we break even. Currently, we use the 1-Day Employer Branding Workshop, which results in an outline of the strengths, weaknesses, and needs of the company. We’re hoping to figure out an even more lightweight offering here, as workshops have a surprisingly long sales cycle.
Next, we do a strategic project to gain trust with many stakeholders at the company. Our Employer Brand Kickstart has the most traction. Our EVP offering has set us up for our biggest retainer deals. These are both 8-week sprints (on average) that require lots of time and attention from participants, but lay a creative foundation for what should come next. Financially, in 2019 we made a modest margin on these engagements; in 2020, we expect higher margins due to efficiency gains.
Finally, with trust built among our team and the client’s key players, we sell a content subscription. The creative direction is informed by the strategic project we’ve already completed, and this step helps us form relationships with even more people at the company. Financially, we make a healthy margin and have predictable payments hitting our bank account. Most of the profit we make from any given client comes here. We think of these engagements as long-term partnerships that are core to the stability and success of JP. By the end of 2020, we want these engagements to cover our monthly costs.
Learnings from the Go-To-Market
4. For the first time in our history, we proactively sought new business instead of letting it come to us. We still have a long way to go, but here’s what we’ve learned:
Traditional outbound sales, like cold emailing, will not support our business. Our target markets are too small for low-touch, high-volume campaigns that have very low close rates (less than 1 percent).
People buy agency work through recommendations from their networks. They don’t spend $30k or more on some dude who spammed their inbox. And we have proof: all but one deal in 2019 came from referrals. The larger our community, the more referrals we get, so we’re doubling down on growing our community in the new year.
5. We realized building a sustainable professional services business is less about building a predictable sales funnel and more about maintaining long-term, subscription-based relationships. Fortunately, our renewal rate is already exceptionally high—even though our renewal practices are inconsistent.
6. We explored low-cost packages for VCs, and partnerships with vendors and recruiting firms. Both initiatives demanded a lot of resources, and we still haven’t figured them out. While we’re not totally giving up on them (in fact, working with more junior creatives opens doors here), we’re much more prudent about having these conversations at all.
7. We began building a content marketing engine with a heavy emphasis on LinkedIn engagement. This is in large part the result of Nate’s successful “10x10” experiment on LinkedIn, wherein he left 10 comments and connected with 10 people every day for a month. Additionally, he wrote five original posts each week. This work has now snowballed and, at least in the short- and mid-term, we see LinkedIn as a clear winner for marketing and brand-building. It’s a powerful channel for sparking conversations with practitioners—including many prospective clients—especially folks at big companies outside the Bay Area.
Learnings from The House
8. We shifted internal focus from building The Neighborhood to selling Job Portraits. If you’re not familiar, The Neighborhood was our code name for an alternative business structure: the idea was to break off services into autonomous units and evolve into a network of 100+ micro-businesses operating on common infrastructure. Here are a couple reasons we put this on (indefinite?) hold:
Our core business, employer branding services, was not yet sustainable.
We realized we’d need to build a lot of expensive tools to create even a minimally viable system.
We were not able to design an incentive mechanism that could withstand the free-rider problem. In other words, the system we came up with would give away more resources than it took in.
9. We undertook a major mindset shift regarding internal projects, specifically:
Internal-focused team members are best suited to drive internal projects. This was not previously as obvious as it sounds! Client-facing folks are best suited to advise on internal projects, rather than lead them.
Success is contingent on ruthless prioritization and focus. Here in early 2020, we have less than half the active projects we did in early 2019.
10. We outgrew our operating toolset. After two years of business reporting and project management with a disparate set of tools, we’re switching to Mavenlink in early 2020. A few big drivers went into this decision:
Internally, Mavenlink will replace a substantial amount of time-intensive reporting and custom workflows.
The PM role has been a bottleneck for capacity planning, and it’s no longer sustainable for JP to have only one person (Natasha) in that role.
Mavenlink will give us new capabilities. In particular, it will help us make our client-facing processes more structured and transparent.
That’s it! Hit us up with comments or questions at firstname.lastname@example.org. And look out for more learnings in the future. As nerve-wracking as this is to publish, transparency provides a feeling of satisfaction, too. Most folks (yourself included?) know us strictly as professionals, but at Job Portraits, we’re humans after all.