If you were going to build an agency from the ground up today, what would it look like?  For my guest Bram Warshafsky, it was an agency with a lot of technology and a workforce that was almost all contract labor. Bram and his team at 5Crowd don’t concern themselves too much with driving big brand strategy. They use their team of freelancers to take the brand strategy that already exists and find the best way to execute it.

Most agencies have augmented their team with some freelancers but many struggle with managing those resources and vetting the potential partners to find the right ones. In this podcast episode, Bram shares his experiences, the trial and errors and his eventual successes and insights that makes it work so well today.

Find the best freelance fit for you as Bram and I discuss:

  • Why Bram started his agency, and why he went with the freelancer model
  • What Bram’s internal team is like and how to work with freelancers to offset those positions
  • Why 5Crowd focuses on production rather than strategy
  • What a strong freelancer vetting process looks like
  • Why 5Crowd needed to build their own software
  • How being a production based agency has led to high client retention for 5Crowd
  • What good marketing looks like
  • Why you need to tell the story of how you save your clients money
  • The three questions 5Crowd asks to figure out if they will take on a project
  • Why 5Crowd has freelancers set the price
  • How 5Crowd picks what freelancer to use for the right project
  • Why you need to fully embrace technology to succeed
  • How to get started with freelancers

Recently named one of the Top 30 Under 30 by Marketing magazine, Bram Warshafsky is a Founder and Partner at 5Crowd: a Toronto start-up that provides on-demand marketing production to a growing list of clients like Labatt, J&J, Hershey, Twitter, Telus, and more. He operates a curated network of freelance professionals in over 150 cities through their own digital platform to help enterprise marketing teams bring their strategy to life, faster and for less.

To listen – you can visit the Build A Better Agency site (https://agencymanagementinstitute.com/bram-warshafsky/) and grab either the iTunes or Stitcher files or just listen to it from the web.

If you’d rather just read the conversation, the transcript is below:

Table of Contents (Jump Straight to It!)

  1. How Bram Started His Agency
  2. The Freelancer Network Model
  3. How to Find and Work with Freelancers
  4. What a Strong Vetting Process Looks Like for Freelancers
  5. How to Manage Multiple Freelancers
  6. How the Freelancer Model Impacts Client Retention
  7. The Three Questions You Need to Ask Clients Before Taking Them On
  8. Bram’s Insights on How the Agency Space Has Evolved Over the Last Few Years

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Build a Better Agency, where we show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew: Hey, everybody. Drew McLellan here with another episode of Build a Better Agency. Many of you out there are building what I call hybrid model where you have some folks in-house and you’re working with freelancers or contract labor, whether that’s on occasion or all of the time.

For a lot you, you’re still trying to resolve that challenges that come with hybrid workforce. You are going to love today’s episode. My guest today is a guy named Bram Warshafsky and he is the founder and partner at 5Crowd, which is a Toronto startup.

What they do is they keep their thinkers in-house and they have built this huge freelance network that they call The Crowd and then they built technology behind all of that to manage that relationship between this source of, I think it was 150 different freelancers in 14 different time zones that they are able to tap into for clients.

Some interesting things have happened there recently which I’m sure we’ll get into, but we’re going to talk all about freelancers, how do you vet them? How do you find good ones? How do you communicate with them? How do you stay in touch? How do you manage that relationship? Also, how do you manage client expectations around it? Sit tight because this is going to be a great conversation.

Bram, welcome to the podcast.

Bram: Yeah. Thanks, Drew. Thanks so much for having me on the show.

 

How Bram Started His Agency

Drew: What made you decide as you were thinking, “Hey, I have nothing to do this weekend. I’m going to start an agency.” What made you decide this model versus a traditional model?

Bram: Yeah, for sure. My background, I actually used to be a brand manager within packaged goods. I worked with all different types of agencies and I love them. They were really great at coming up with that sort of big picture, strategic, creative idea and I sort of thought of the problem that I had, which was actually more in that long tail of production.

What I realized is I had a really good architect coming up with blueprints and cool ideas and more and more, as the marketing landscape was shifting and the rise of digital, I just needed a construction worker to kind of help me version things out, adapt different assets across channels, across languages. I didn’t really find a partner that was sort of engineered for that efficiency. I started working with freelancers.

I realized it was amazing, but there was a lot of friction there and I thought, “Hey, I think this is a pretty cool problem to solve.”

After talking with a few other folks in the industry, I realized that there’s just a real opportunity here and so I decided to start 5Crowd in 2014 and we’ve just been growing the business ever since.

 

The Freelancer Network Model

Drew: As you were thinking about it, tell everybody a little bit about the model in terms of who you have in-house and on staff and then what kind of freelancers you are connected with?

Bram: Sure, yeah. We basically collaborate with freelance professionals in over 150 cities around the world. We do that through a proprietary digital platform that we basically built. We do it on a project by project basis. Our operations are very lean and efficient. We basically run sort of this scalable virtual production studio. There’s no production studio and host.

What it allows us to do is produce the kind of marketing execution that big brands are looking for, just faster, cheaper and in many cases, better than our traditional agency counterparts. Since we started in 2014, we’ve completed over a thousand projects for marketing departments at companies like AB InBev, Twitter, J&J and a growing list of Fortune 500s.

They basically call us up. We have an account person. We call them our client lead and then we have a team of project managers that are resourced by skillset. They then put the brief into the platform. A matching algorithm runs. We staff the right freelancers and basically manage the project right from that first draft with the client all the way to the final deliverable.

Drew: Okay, so you basically have in essence, your account service department, client facing folks, both the project management side and the strategy side in-house. Then your Crowd, as you call it, your freelance network serves as all of the creative ideation and creation, right?

Bram: Yeah, you got it. One of the other ways we’re a little bit different is, we tend to really focus on more of the prescriptive, tactical production projects versus the big picture strategic idea. There’s so many agencies that do that really, really well and it’s a very difficult thing to do and production is tough too just in a different way, so just to stay focused, what we’ve really tried to do with our clients is decouple that strategy from the execution.

Most of our clients either do strategy internally, work with different agencies, work with global counterparts. Once they kind of have those blueprints and know that they want to do, they would call us because we’re the most efficient way to bring that strategy to life.

Drew: Your client facing folks are not so much driving big brand strategy, but they’re really taking the brand strategy that exist and figuring out how to best execute, yes?

Bram: Yeah. You got it, Drew, and we basically hire the change agents from other agencies. We have folks that used to work at SCB and Gray and bunch of big agencies here in Toronto that now do that role within our company.

Drew: In other words, it’s interesting because we did a bunch of research where we talked to 500 CMOs and one of the things that they told us is, there’s a subset of them that really doesn’t want their agency thinking about their brand in that big strategic way. They believe they already have the right strategy and ideas. They just need boots on the ground to execute. So really, you built an agency to solve that problem.

Bram: You got it right. The mad men kind of Madison Avenue, like 1960’s business model hasn’t really changed that much. If you think about how much technologies change and customers have changed, marketing has changed, it just hasn’t really kept up.

One of the things that I often hear industry leaders say is, if they were going to build an agency from the ground up today, no one would come up with the model that we kind of use and that’s pretty widespread in AORs. We really sort of took that challenge of, hey, if we’re going to build a production company just from the ground up today, what would it look like? Where we landed was a lot of technology and a freelance workforce.

Drew: Is there sort of a scope of the kinds of projects you guys do? Like would you build a website? Would you do a lead generation campaign? Would you do a print ad, a TV spot? Do you play in all of that space or do you even narrow it more than that?

Bram: Yeah. The theoretical scope of what we can do is basically anything you do at a computer. That’s one of the coolest things about the new economy that we’re in.  If you can do it at a computer, now that we have ubiquitous high speed Wi-Fi and the world’s top talent is online, you can basically do it anywhere.

It’s out of cultural reasons why it makes sense to be in the office, but more and more, people are agreeing that at some point in time, one in two people, maybe the majority of people are going to work online. You go into any modern office building, everyone is just at a computer all day. No one really has to be there in some cases to get some of this work done.

That’s sort of the theoretical scope, but yeah, absolutely, like most of what we do is copywriting graphic design, video editing and more. But really just marketing production has been our focus up until now.

 

How to Find and Work with Freelancers

Drew: You decide you’re going to do this. You start with a couple of people in-house and now, you have to go find freelancers. How did you go about finding and vetting your freelancers so that you are confident in the product you are going to turn around and offer to a client?

Bram: Yeah, that’s a big question and a really important one, because we totally messed it up. When we started the company, we thought the first thing we should do is go and get a hundred freelancers and we spent a bunch of time and we did a whole bunch of vetting and we brought them into our system and then we had no work for them. We realized, “Okay, this is not going to work.”

Being a freelancer, you’re basically an entrepreneur of one. It’s really like tough going. The reason that people get into it is because they’re so passionate about what they do. I’m constantly amazed by the freelancers that we get to work with. They’re raison d’etre is to write incredible copy or make cool illustrations and own that craft.

What we realized through that experience is, we actually had to solve a lot of friction for those folks who, maybe don’t want to chase down clients for payment or do prospecting for sales. We actually kind of built our business around the freelancer rather than the client and along the way, really learned what that lifestyle is all about. That’s really what helps us vet for the folks that are going to succeed in our platform.

A quick example of that. One of the things that we actually did about a year-and-a-half ago is we kicked off a project where we just like flew around the world and met up with six of the freelancers that we get to work with and we just filmed the day in their life.

I just crashed on the couches of a few of these folks, all the way from Cape Cod to Croatia to India to Florida, here in Toronto. What it allowed us to do was really gather insight into this world and build a platform around that specific individual. We tend to look for people who are professionals at what they do.

They’re very, very strong. They’re available. They’re very responsive. There’s just a bit of a gap where maybe they don’t have access to the same work opportunity and they don’t want to do a lot of the project management. That’s an area that we can provide a lot of value.

Drew: They don’t want to do the selling and prospecting.

Bram: Yeah, right. Anyone who’s worked with like big companies navigating purchase orders and convincing clients to go ahead on projects, it’s tough. With our platform, we basically just send bottom of the sales funnel sales leads on projects that are going to happen. We automatically pay on time and we don’t charge our freelancers any fees.

 

What a Strong Vetting Process Looks Like for Freelancers

Drew: Do you have sort of a vetting process or if somebody gets in your radar screen or says that they want to be a part of your crowd, how do you know?

Because this is something all agencies struggle with is, here’s a freelancer who may or may not be in the same country, may or may not be in the same time zone and they’re looking for somebody to help them do their work, but how do you know that they’re actually good at what they do and that the portfolio they show online is actually their work and all that?

What’s your vetting process look like?

Bram: I’ll start off sort of just by saying, that is kind of the problem with freelance. Everyone talks about the rise of the freelancer and there’s these huge marketplaces online, but it’s tough. You don’t know always what you’re going to get and you really do need to do a good job vetting. It’s probably the biggest question that we get. We actually have a free eBook on it on our website called, “How to hire a freelancer online.”

That goes through a lot of the tips, because it is a very nuanced question and it’s difficult sometimes just to still it to the one thing. Some of it is our secret sauce, but basically, the way that we’ve set it up is, if you think about almost like an Excel spreadsheet, we just built the platform, but you could set it up yourself too.

If you have all the freelancers as rows, you can basically set up what your columns are. In our case, it’s registering, creating a profile, completing an nondisclosure agreement, doing an interview, doing a pilot project. Basically what happens is, freelancers view it from left to right and you end up with this great digital audit trail that shows what each person has done and if they’d made it to the next step. If you basically set up a funnel where not everyone is getting from the left to the right, then you’ll do a good job in vetting, but definitely, if folks out there are interested in learning more, check out the eBook. It’s free on the site and it’s going to be the best resource.Drew: Yeah, and I’ll put a link to that in show notes as well so folks can grab it.

Bram: Awesome. Yeah, cool.

Drew: Yeah, great. Okay, so you’ve got this small network of freelancers. It sounds like you started with a huge network of freelancers and then paid the price for that.

Bram: Yeah.

Drew: You’ve got this group of freelancers. You’ve got a couple of clients. Now, let’s talk about the technology side of it. For many agencies, the reason they don’t use freelancers is because it’s so easy to walk down the hall and say, “Hey, Chuck. I need a fill in the blank.”

Where it gets more cumbersome when the freelancers is in another place, in another time zone. Talk about your technology search and what made you decide to build your own platform as opposed to use one of the tools that’s already out there.

Bram: For sure. I think one of the ways that production is changing and we started to hear this pretty early with our clients, is that it’s really fracturing into a lot of specialized skillsets. The best example that I can think about is just the word “webmaster,” Drew. If I told you that 5Crowd had a webmaster, you might like kind of laugh at that, like that’s so antiquated.

Who is a webmaster these days? But it’s also brand new word in English dictionary, brand new, totally antiquated. It’s because I don’t need a webmaster now. I need a front end designer. I need a front end developer, a backend developer, a UX person, SEO copywriter. You need like ten people to do a website really, really well.

For us, it was just out of necessity that we couldn’t fit everybody under one roof as a startup, as a revenue-funded company. There’s just no way we could have hired all the different skills that we needed. That’s sort of why we went to the freelance model, but absolutely, the right model is probably some sort of a hybrid for most agencies where the skills that are very, very in demand, you have that Chuck who’s just down the hall from you, and then for everything else you freelance. But for us, it was really about proving the model and so, we’ve used a 100% freelance model.

 

How to Manage Multiple Freelancers

Drew: But somewhere along the way, you had to figure out how to manage and wrangle and get work through your system with the freelancers. There’s a million free tools out there, project management tools, so I’m assuming you vetted a ton of those before you decided that none of them actually did everything you needed to do and decided to build your own, right?

Bram: Yeah. I mean, building software is almost always a bad idea. It’s so expensive. It’s difficult. You’re probably going to get it wrong. It takes a long time. I wouldn’t recommend just building a platform. What we actually did is we launched on third party software. That allowed us to get projects flowing through the system, to get clients on one side, because we’re sort of a two-sided marketplace, Drew.

But then over time, what happened was we had a really good brief where we had built so many automations between some of these different systems that we were able to go to software developers and say, “We have like a working business. There’s real data flowing through this, but what we want to do is make it more scalable, add security. There’s a few features we didn’t have.”

At that point, it was really tight because we had data. We had known UX and it was a better brief to a software developer.

Drew: At the end of the day, you ended up with your own software. Now, the software, is it … take care of both sides of your marketplace so does the client interface with the software too or is that just you guys interfacing with it to interface with the freelancers?

Bram: It’s actually a big learning that we had. The freelancers, they log in. They use the whole platform. It goes everything from onboarding to getting new projects, collaboration, files, all the way to payments. We try to bring clients on and it just didn’t work. The learning that we had is, at least with enterprise, clients still want service. They want compliance. They want someone to call. They want kind of different things maybe than what Silicon Valley is sort of used to.

The best example I can give at that is Google AdWords. In my opinion, I think it’s the best technology product.  It’s a Google product. It’s been built by thousands of Silicon Valley engineers over like 20 years. It’s 98% of Google’s revenue, but I don’t know brand managers that really log into AdWords. They’d call up a search agency. It’s complicated. I want someone to manage it for me. I want that service and I value that service.

Having been a brand manager, that actually makes a lot of sense to me. Where we kind of landed with this tech side at least is, the clients are going to be able to log in and see their work and access it, but it’s very, very simple. By no means are they doing the work. We have professionals that do that on our team.

Drew: I think you’re right. Whether it’s Basecamp or you name the two of choice, every agency wants their client to log in and self-manage, but the reality is, very few clients do.

Bram: Yeah. You just got to imagine like the clients are doing so many different things, from managing their supply chain to HR, to finance. Even though to an agency, your client is 100% of what you’re doing, to them, the reality is that there’s just so much on the go, that to log in to another system is very, very difficult. I’d love to hear if anyone out there is doing it successfully.

Drew: Yeah. I think everyone thinks that, “Oh, it’ll be so much easier for the client.” Even if the client tells you that they want to do it, the reality is, they’re not going to, yeah.

Bram: Yeah, we definitely had that, yeah.

Drew: You and I were talking offline before we hit the record button a little bit. One of the things that you are getting ready to move into is making your project management or your freelance management software available to other folks somewhere probably in 2017, right?

Bram: Yes. With our technology journey, we initially just built it for ourselves to make our company efficient. We work so many people around the world that it’s almost a necessity. What started to happen was, other agencies started to call us. In some cases, they heard about us through shared clients.

In other cases, just through the industry or through some press that we’ve been really fortunate to have. All the phone calls kind of went the same way. It was like, “Hey, we heard you guys have this freelance thing figured out. We work with a lot of freelancers, but we don’t really know who’s good at what, who’s available, how to get them paid, who’s compliant. We’ll just work with you guys.”

Because we only work directly with clients, we just were like, “No, no, no.” I thought, “Hey, that’s kind of silly.” Maybe we should actually just license the technology and if it works for us, surely it would work for everybody else. We actually explored that path and we really went down it, but the big news on our end is, our company was just acquired about a month ago.

At this point, our strategy is sort of shifting, but absolutely, we were looking at commercializing the technology and becoming more of a software company, so lots of learnings over there.

Drew: Yeah, that’s for sure. It’s interesting to hear you talk about the idea that the Mad Men model is a little broken for today’s world. There’s so many agencies who are struggling to get to the C-suite, to get to the strategy table, to be part of the brand vision and you really have sort of flipped that on its other side and said, “You know what? Brands have that part figured out. They just need people to make them stuff and so, we’re going to be an agency that makes marketing deliverables,” right?

Bram: Yeah. It’s a tough time to be in the traditional agency business right now. They’re fighting a talent war with tech companies because guess who else is hiring for designers and copywriters and everybody?

Drew: Absolutely, right.

Bram: Yeah. Consulting firms are coming in and they’ve already been advising the CEO and now, they’re buying up agencies to advise the CMO. There’s folks like us that are finding a smarter way to do production. It’s just a really tough time and at least what we’re seeing is that, the agencies that are specializing in finding something to be a little bit different, whether it’s industry expertise or expertise in a certain capability, it’s just harder than ever and so you really have to differentiate.

 

How the Freelancer Model Impacts Client Retention

Drew: Absolutely. Talk to us a little bit about your model and what it does for you in terms of client retention. For a lot of agencies, they chase after the coveted agency of records kind of role, but they’re finding that those roles are pretty short-term.

Are you able, because of this sweet spot you found, are you finding that your clients stick around, keep coming back for more?

Bram: Yeah. Our clients have been amazing. That’s really where the whole business came from, with just a few founding clients. That’s what we call them, like founding clients. We actually look at them as though they were like a second or third co-founder. They’ve been with us since we started and we’ve been really lucky on the client retention side. I think part of the reason is that we’re a little bit more diversified.

With a typical agency and what I used to work with more agencies, you sort of sit down once a year and say, “Okay, how did we do? What was the campaign like? How did that perform? How did you support me in my business planning process?”

You go through like an annual review and then from there, something changes, but clients are under so much pressure right now. I’m sure, Drew, you’ve seen the stats on just the declining tenure of the average client agency relationship.

Drew: Absolutely.

Bram: What we’ve done is, we’re just delivering these quick projects, like high, high volume. What ends up happening is we build trust with a lot more clients a lot faster, because the conversations that we’re having are, “Hey, what you did for me last week, I got another project coming up. Can you take that on?” What we found is that those projects don’t just grow in volume, but also in the size and the scope of them as well.

We’ve actually never done RFP as a company. It seems to me, it’ll be this like speculative process where you might win that coveted status with one brand. We just started working with companies and so, we don’t work with any one specific brand. In fact in many cases, we don’t just work with marketing. We’ll work with the sales team.

In some cases, we’re doing projects with the finance team, the legal team. It’s been a bit of a different approach. Part of that is just out of necessity because as you know, the enterprise buying process is just … can take so long.

Drew: Right. How are you prospecting for new clients? How are you out there looking for the next project?

Bram: We really haven’t. We’ve invested a lot in inbound marketing. Like over a hundred blog posts, we’ve got eBooks. We’ve got videos. That’s been good. We do a bit of speaking and stuff, but it sort of sounds cliché so I don’t know. You’d know if it’s good advice, but for us, I think in this industry, just the best marketing is good word of mouth and good word for clients.

Nothing beats good work. I think one of the ways lot of the agencies have it wrong, is the top talent is always working on the next pitch and then it’s sort of his baiting switch and new folks go on to the business and then that talent goes on to the next pitch.

It just seems to me to be kind of a show game, we’ve just been trying to just pump out really good work. Culturally, we have sort of a mantra or we … It’s actually hashtag, but it’s just sort of a saying in our company of a 100% customer satisfaction. That’s not 99%. It’s not like 99.9%. It’s 100% and we really have that sense of ownership across the team.

What’s happened with us is that the same reason that the enterprise buying process can be challenging where people are leaving the company or changing jobs, that’s really helped us because with that turnover, folks don’t forget what happened in their last role or at their last company and they bring the agencies that supported them with them. That’s how we’ve grown. It’s just been through client word of mouth.

Drew: Well, my guess is that in some ways, because of how you’re structured, you get to sort of skirt around the RFP process because you’re not making them sign a big long contract and you’re not making them make a big commitment. They’re just buying a fill in the blank, whatever it is, a video, right?

Bram: Yeah, and you want to stay away from that. I call it the corporate immune system, right?

Drew: Right.

Bram: Where if anything is risky or tricky, it’s going to squeeze you. We had some clients that paid us on credit card for the first few projects. We all pulled out all the different tricks, but one of the things that’s really important is to have a really good story around the numbers. If you can demonstrate that you’re saving the client money by working with you versus a more expensive option, whether that’s because your process is faster or you have certain capabilities that they don’t have through a traditional partner, then procurement really becomes your friend.

I read so much about just the tension between agencies and the grueling role of chief procurement officers and it kills me because we have such a strong relationship with all the different procurement teams we work with and it’s just because we’re able to deliver things that are not more expensive than the next guy next door.

If you’re able to tell that story, that’s just another way to accelerate through that process.

Drew: The story for you is basically, because we have lower overhead, because we’re not keeping all these people on staff, we’re able to deliver a higher quality of product at a lower price point. Is that basically your pitch?

Bram: Exactly. Where our efficiency comes from isn’t even just the outsourcing, because we work with incredible talent, former creative directors that if we had them full-time, it wouldn’t be cheap, right?

Drew: Right.

Bram: It’s just that we’re able to hire them on a project by project basis and staff the right person on the right job. You end up getting the quality, but it’s without all the overhead to your point.

 

The Three Questions You Need to Ask Clients Before Taking Them On

Drew: For you, how do you vet a project and know sort of at what level freelancer you need? For example, a project comes in, you may not need the big name, former creative director of XYZ. You need a good decent copywriter. Do the clients help dictate that? Do you guys control that?

Bram: We give our clients three questions. Then basically we ask these three questions to decide if we’re going to take on the project. The first question is, it’s all about how prescriptive it is. Basically, if you close your eyes, can you picture what you need done?

If the answer is yes, like I can jot it down on a piece of paper or here’s an example of what we did last year. I like these competitive executions, we can probably take it on. If the question to us is, some people in this region think our brand is passe, we want to increase relevance and gain two market share points, what do we do? We’re just the wrong partner. We’ll be like, “Go over to your agency.”

We’ve been asked because we do build that trust fast. In one case, we were actually asked to do a brand relaunch for like a big brand and we’re like, “No, no. That’s not what we do.”

Because in other words, we’re not set up to do it. If the client is able to sort of deliver that piece, then the next two questions are, do you have the assets? You got to have sort of something to start with. Everything has got to be kind of an adaptation even if it’s just blueprints.

Then the third question is, do you know the end delivery specs? I need a video in these two languages, this length. These are the specs. Once we have those three things, we can put it in the platform.

Then from there, our project managers or producers build what we call a game plan where they answer exactly those questions. Should we have a junior designer on this, a senior designer? How many copywriters do we need? What kind of voice over? They answer all those questions.

Once we align in that plan, we actually automatically send the opportunity out to a short list of group of freelance professionals. They submit a proposal. It’s really easy so yo