This year has been an interesting one for the advertising industry. We saw traditional business models disrupted by technology, agencies consolidate and clients replacing titans of industry with more nimble technology focused agencies. With that in mind I decided to take a look at how agencies are adjusting to the new normal. I’m a huge believer in reinvention so I reached out to Paul Feiner of GoKart Labs, an agency that began as a startup, grew up as a technology firm and today helps their clients build digital solutions to human problems.
Garrio Harrison: Lets start at the very beginning, how did you guys get started?
Don Smithmier: AJ and I started GoKart Labs in the spring of 2009. The two of us have each spent our careers in the digital space, dating back to 1994 when we first became friends and started doing work together.
We started the business because we both felt there was still a big disconnect between what traditional agencies offer and what most businesses need in the realm of digital solutions.
Our idea was to couple the problem-solving and strategic capabilities of an innovation consultancy with the talent and skills of a digital agency or development shop.
We believed, incorrectly, that we could partner with traditional agencies to supplement their offerings. Instead we were immediately seen as competition. Oops! As it turns out, it was easier and more productive for us to just work directly with the end client.
Garrio: After realizing the relationship you envisioned with agencies wouldn’t work what was your next move?
A.J. Meyer: I don’t think it was really a scenario where it wouldn’t work as much as it was about staying true to our principles. In order for us to work with agencies, we would have had to ‘bend’, changing our belief system, our processes and (to an extent) how we were building our talent roster. We considered the options but weren’t willing to make that change.
Ultimately, the agency relationship conversation didn’t really matter because we were finding success with invention and disruption. Don and I co-invented the peer-to-peer learning platform Sophia.org and at about the same time, our (now) business partner Rick Kupchella approached us about BringMeTheNews.com.
GoKart Labs found its niche as a digital innovation consultancy, inventing, designing, building and marketing web apps and platforms that were disrupting traditional business models (education and news media, in the beginning). This (to us) was WAY more fun and more rewarding than simply executing on the creative being passed out to vendors from the agencies in town. Not that there’s anything wrong with that business model, it simply didn’t match up with our own way of thinking and the team we put together.
Garrio: Let us unpack the process that led to Sophia. How did you identify the opportunity and how did you introduce it to the marketplace?
Don: Like all good stories, this one began over beers.
AJ and I were sharing a beer and talking about online education. I was commenting that if you knew nothing about online education and someone asked you to create an online learning platform, you wouldn’t create anything close to Blackboard or the other leading systems providers at the time. Instead, you’d create a mash-up of YouTube, Facebook, Wikipedia and Google Docs, since that’s what everyone uses anyway. Wisely, AJ said, “That sounds fun. Why don’t we do that?” So we did!
We began prototyping Sophia with the notion of creating a “social learning” platform. Rather than long courses or lessons, we wanted Sophia to focus on smaller, bite-sized academic topics — or what educators would call “competencies.” So, not Math; not Algebra; but “How to factor polynomials.”
Our thought was that while only a small number of people can teach Algebra, there’s millions of people who may have a clever way to teach polynomials. We had a vision of using that fact to turn the student-teacher ratio on its head. 30 teachers for every student, not 30 students for every teacher. And we liked the idea of using game mechanics and gaming psychology to motivate, rate, and rank the teachers and students in terms of their contribution to the Sophia community.
We built the original prototype in 2009, then raised a round of investment capital from Capella Education Company. That allowed us to hire a number of key experts in technology, academia and business development and go much faster.
We introduced Sophia in private beta initially, then moved to public beta in March of 2011. It won the Tekne award for innovation in education that same year. Capella Education ultimately acquired all of the business from us in April 2012.
We remain tremendously proud of Sophia and the impact its having in K-12 and Higher Education. The company now has an incredibly talented, passionate staff that just continues to amaze us with how they’re building that business.
Garrio: Tell us a little about Iteration Zero and the GoKart 600. What are they, and how can clients benefit from them?
The GoKart 600 is the entire staff of GoKart Labs working under time and funding constraints to invent a business in 600 minutes. During the last 600 in September, we actually split the teams into two groups and created two business plans.
The previous GoKart 600 focused on beer. A beer app, more specifically. For your love affair with local beer.
From 10,000 feet, Iteration Zero pushes businesses to avoid wasteful spending while creating a product roadmap.
At ground level, we get our hands dirty right alongside our client’s team by researching their specific business problems. Our specialized team learns to think like their customers, their competitors, and measure everything against the very real process challenges they face. We work closely with them to assess risks. We especially look at an organization’s willingness to explore new paths and land on a realistic budget to bring new ideas to life.
After a few intense days of collaboration, we go away to build the plan through continued research, design concepting, and a lot of number crunching. We then present our clients with innovative, concrete, revenue-generating concepts to grow their business.
Garrio: What core values do you consistently see in top digital talent? What do they value in a place to work?
Don: We’ve spent a lot of time identifying our core values to answer that very question. It’s clear that there really are differences between the top digital innovation talent and the top talent in adjacent realms like agencies and development houses. Those folks are amazing too; just in a different way.
Obviously, the best innovators are a couple standard deviations above the mean in terms of raw smarts. They’re also hyper-creative. But those are pretty much just table stakes. Our people value purposeful innovation, not just creativity. What problem are you solving? Not “What’s your cool idea?” They have very high standards and excellent taste. They know what is good and why it’s good. They’re fearless — willing to fail and willing to own up to that failure for the purpose of learning. That requires true humility. The best ones know they aren’t always the smartest person in the room because there are many types of intelligence and none of us has them all. Lastly, I’d say the best ones are balanced, both emotionally and intellectually. They travel, they learn, they dabble, they take care of themselves and they experience the world. All of this shows up in their ideas, their interactions with our clients, and their relationships with one another. Our people are awesome. The best I’ve ever worked with, hands down.
Garrio: That leaves one more question, where do you see our industry in the next five years?
Jim Cuene: It’s going to be even more digitally centric: socially connected, video-centric, mobile aware, data-driven. We see a media landscape that is getting more fragmented, with an explosion of new platforms (e.g. Pinterest, Snapchat, Instagram) exploring revenue generation, new ad formats and an acceleration of native advertising. Its going to be easier than ever for people to avoid the legacy media providers and essentially roll their own playlists for news, drama, music and entertainment. As a result, brands are going to have to be more clear about their purpose and stories than ever to connect and “stick” with busy and distracted people.
There will always be a place for ads because they work well when they are done well. And, they obviously drive short term, targeted growth. But, partners like GoKart will be pushing brands to seek new, organic, growth via a post-advertising mindset.
We are excited about modern brands that are moving beyond simple “messaging” (i.e. ads) to actually making apps, services, platforms and utilities that create deeper connections with their current fans in more useful, relevant and participatory ways. New users, new buyers, will become aware of brands and business through the things their friends do *with* these platforms and the content. These investments in useful content and services create organic growth for brands, whether its deeper loyalty, sharing or even offline word of mouth.
All of this is going to put businesses in tough position: How do they navigate this crazy landscape? Bold leaders will get energized by the opportunities for innovation and we’re committed to helping them play to win.