Starting A $500K/Month Social Media Agency Before Most Social Media Platforms Existed

Jim Tobin
$500K
revenue/mo
2
Founders
37
Employees
Ignite Social Media
from Cary, NC, USA
started July 2007
$500,000
revenue/mo
2
Founders
37
Employees
271K
alexa rank
998
followers
22.5K
followers
market size
$111B
avg revenue (monthly)
$350K
starting costs
$11.7K
gross margin
90%
time to build
210 months
growth channels
Word of mouth
business model
Consulting
best tools
Hubspot, Instagram, Verifigator
time investment
Full time
pros & cons
39 Pros & Cons
tips
3 Tips
Discover what tools Jim reccommends to grow your business!
social media
productivity
Discover what books Jim reccommends to grow your business!
Start A Social Media Marketing Agency

Hello! Who are you and what business did you start?

I’m Jim Tobin, the founder of Ignite Social Media (2007) and Carusele (2015), but I’ll talk here mostly about the original business. Ignite is known as “the original social media agency” because we were the first social agency created out of whole cloth in the United States. To this day, we’re considered among the very best social media agencies in the world.

While other companies have pivoted over the years to add web development, digital marketing, or some related field, we’ve stayed true to our roots. This has helped us build a reputation as the folks who really understand this specific space.

starting-a-500k-month-social-media-agency-before-most-social-media-platforms-existed

What's your backstory and how did you come up with the idea?

The concept of a social media agency came to me (literally) in an epiphany. I was actually sitting in church and my mind started to drift to some things I’d been thinking about at work. Suddenly, it felt like the phrase “social media agency” was injected into my brain.

I think one of the great lies of entrepreneurship is that you have to be a “risk-taker.” That’s not it. To be willing to launch a business, you have to be comfortable with uncertainty, not risk.

I immediately knew it was important. I didn’t really know what it was, what it would sell exactly, or who would buy it, but the concept felt right. Ironically enough, when I was jolted back to the present, I realized the church members were all actually signing, “Hallelujah, Hallelujah.” About the only thing missing was a lightbulb over my head.

This was 2006, just after Twitter had launched, but the world didn’t yet know Tumblr, Pinterest, or Instagram. Facebook had just started allowing photos to be uploaded and didn’t have any brand pages. Paid advertising on social media was still 4 years away. So we were very early. There was one agency in Canada, called Social Media Group, that did it first and I was fascinated by them once I found them.

I sat down with a friend to flesh it out and then brought it to my business partners in the advertising agency for which I worked. One of the partners and I decided to fund it and we were off to the races.

Take us through the process of designing, prototyping, and manufacturing your first product.

The first list of products we put up on the website was fairly ridiculous in hindsight. I remember “Friendster Profile Creation” as one of the potential services we offered. We never once did that.

What we did do is hire a team of two others besides me. One handled the technology side of things and the other joined me on most other things. We put up a website and started to blog about what we were learning, what we thought of different platforms and tactics, and more.

Our first three clients came from the agency where I was still a partner. For one, we built a blog talking in-depth about their area of technology. We had to utilize their engineers for the knowledge and then translate it for our target audience.

For a large labor union, we built a site where people could submit the charitable efforts their local was involved in. Like Dell’s famous IdeaStorm website, you could vote ideas you liked up, but you couldn’t vote them down or comment at all. It was all designed to get engagement but mitigate any chance for trolls to disrupt it.

But mostly it was learning on the job. Our clients knew they were early movers in the space and they knew they were taking the ride with us. Because of that, there wasn’t any expectation of guaranteed outcomes. Just a focus on doing interesting things that we felt would be brand building.

starting-a-500k-month-social-media-agency-before-most-social-media-platforms-existed
The Ignite website in July of 2008, right after our first birthday

Describe the process of launching the business.

I think one of the great lies of entrepreneurship is that you have to be a “risk-taker.” That’s not it. To be willing to launch a business, you have to be comfortable with uncertainty, not risk. I did everything I could to mitigate risk. But even today, I have no certainty about the next 12 months. I’m fine with that.

My business partner and I wrote checks that matched our shares of ownership. We then had that seed money to run on. If it ran out, we’d shut it down unless we made a conscious decision to invest more.

I kept my day job at the ad agency, working an agreed 70% on that job. For Ignite Social Media, I could work 30% of my hours, plus however long I could stay up at night. The two people we hired could work 100% of their time on the new business.

I remember three months in, turning to one of my team members and saying, “We have to make this work. This is so much fun.” Even though I’d always dreamed of being a partner in an advertising agency one day, and I’d made it, social media was just much more energizing for me. I think it fits my personality somehow. Whether that’s good or bad, I’ll let you decide.

Since launch, what has worked to attract and retain customers?

It’s interesting. Our first clients came to us because they were reading our blog. These were big clients, like Nature Made, Microsoft, Intel, and more. We had no outbound sales process and we still don’t.

Today, our main source of business is still our blog/website. Organic search is a great driver of leads for us. Now that we’ve been in business for nearly 14 years, our other major source of business is referrals. Clients who we worked with at one brand take us to another, for example. Or they recommend us to their friends.

I think one of the reasons for this is that one of our core values is #clientsuccess. We’ve always believed that if we make our clients successful, we’ll be successful. Thinking that way sometimes means we have debates with our clients (and internally) over what will actually drive results for them. But when everyone wants the same thing (#clientsuccess), it works out very well.

We also don’t worry about sharing knowledge on our blog or webinars. We do it constantly. If someone wants to take that learning and do the work themselves, they were unlikely to ever hire us anyway. But our key prospects can see in our sharing that we know what to do, and that gives them great comfort in choosing Ignite Social Media.

How are you doing today and what does the future look like?

In 2020, a lot of budgets shifted away from experiential marketing and traditional advertising because the world was changing too quickly. Much of that budget moved to social media and influencer marketing. As a result, we grew and added to our team in 2020. So far this year, the momentum seems to be, if anything, stronger. It’s a busy time.

With social media, however, nothing stays still very long. Currently, Facebook and Apple are fighting over data tracking in iOS14 and Google is getting ready to block all third-party cookies from Chrome. This impacts what we can track and how we can report success to our clients.

But that’s the best and the worst part about this job. It’s constantly changing. We drove over 1.5 billion organic impressions for one client one year. Then the algorithm changed and paid advertising became much more important. If you don’t like change, a future in social media marketing is probably not for you.

Through starting the business, have you learned anything particularly helpful or advantageous?

I think the most powerful lesson for me came from a book called The Origin of Brands, by Ries and Ries. In it, they argued that divergence is the most powerful force in the universe, but humans naturally attempt convergence. Just as the “phone business” split into a mobile phone business, a business phone business, a VOIP phone business, etc., marketing agencies have split from generalists into specialists.

That concept helped me start to Ignite Social Media. By being a leader in one area of marketing, we work with some of the world’s largest, best-known brands. If we had tried to be a social agency, a digital agency, an ad agency, a PR firm, and more, we’d have no differentiation. There are tens of thousands of similar agencies in that space. Obviously, you can make a good living doing that, but it’s hard to breakthrough. Just today we turned down a request for a proposal that really needed a full-on digital agency. Not our thing.

If you can’t figure out why anyone would pick your service or product over the next one, it’s likely going to be a tough slog.

What platform/tools do you use for your business?

It surprises people that we most often use the native social platforms for both organic posting and media buying. We’ve tried countless tools over the years, but they all seem to involve compromises. And when one of the platforms makes a major change, these tools usually take 3-6 months to catch up. We don’t have time to wait.

But in terms of running the business, we really like Hubspot as both a CRM and as a marketing/tracking tool. It’s easy to use but also powerful.

We also use Slack nearly constantly as a way to communicate. This was important before the pandemic but now critical. It’s hard to believe we used to email each other 50 times a day.

That’s today’s answer in terms of tools. My team will tell you that I’m constantly looking for the next tool. It’s energizing to me to imagine the possibilities, although I’ve learned that’s not a universal reaction to my futzing about.

What have been the most influential books, podcasts, or other resources?

In addition to the Origin of Brands book that I mentioned earlier, I can’t get enough of the podcasts How I Built This and The Pitch.

How I Built this looks back on what worked for successful founders. The Pitch looks forward to what might work as founders try to pitch venture investors. I find them both surprisingly energizing. In fact, one of our new product ideas (coming soon) was inspired by an unrelated business on The Pitch.

Advice for other entrepreneurs who want to get started or are just starting?

It’s natural for an entrepreneur to imagine all that can go wrong pre-launch. And you should. For me, it was helpful to know what I would do in the worst-case scenario. It wasn’t great, but it also wasn’t terrifying so it allowed me to proceed.

But the thing that many entrepreneurs don’t do is to imagine success. What does it look like if you get what you want? For me, it meant much more travel than I anticipated. It also meant hiring people, sometimes many at once. It meant learning more about leadership and financial management while keeping up with social media marketing.

If your project is successful, would you hire and do it all internally? Contract out key parts? Which parts? What tradeoffs would that entail for both the business and your personal life?

Ignite Social Media is pretty close to exactly what I outlined in the business plan I wrote in early 2007. If it’s possible to wish something into existence with hard work, then imagining how you’d get there is an important part of the process.

Are you looking to hire for certain positions right now?

Currently, we’re hiring for a social media strategist, a data analyst, and a community manager. These people typically have experience using social tools to drive real business results in their particular area of expertise.

Since social media includes strategy, writing, photography, videography, community management, media buying, influencer management, and much more, we look for best-in-class talent in their respective subdiscipline. We then put a core team together for each client that matches their scope of work.

The latest openings are always listed on our Careers Page.

Where can we go to learn more?

By all means, keep in touch through any of these methods:

If you have any questions or comments, drop a comment below!

-  
Jim Tobin   Founder of Ignite Social Media
Pat Walls,  Founder of Starter Story

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