Interview with Jim Lewcock, Angel Investor and founder of The Specialist Works
In 2003, Jim Lewcock sold the car he had just won for being the “Salesman of the Year” to start his own advertising agency, The Specialist Works. The agency specialized in producing print inserts at a time when the rest of the world was focusing on digital advertising.
The Specialist Works went on to become a multi-national company with 200 employees operating across 40 countries. After hitting £130m in billings, Lewcock sold his company and used a portion of the proceeds to launch a £10m venture capital fund, BLUE14.io, in 2018.
BLUE14’s name was inspired by the book, Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne. In a study the authors made of the business launches of 108 companies, 61% of the total profits were created by just 14% of the launches – those aimed at creating blue oceans.
We spoke to Jim Lewcock to learn more about his blue ocean mindset and how Blue Ocean Strategy has influenced his way of doing business.
When you started The Specialist Works, the world was focused on digital advertising. Why did you specialize in printed advertising?
When I set up the agency 15 years ago, the digital industry was really gaining momentum. Google had created the advertiser’s dream: only pay for the clicks. For a number of years, advertisers did very well out of this. But when everybody starts investing in the same channel, the costs naturally get higher.
There were hundreds of agencies specializing in digital, all fiercely competing for a greater share of limited demand – a classic red ocean – while also at the beck and call of Google. Digital is fantastic if you’re a major platform like Google or Facebook. But for advertising agencies, the digital landscape is a difficult place to stand out and be successful. It didn’t feel like a natural place for me to build a business.
What I find really inspiring about blue ocean thinking is that it challenges you to ignore what the industry is doing and just start thinking about what the opportunity is. As everyone was running for digital advertising, I had to think in a blue ocean way and find a channel that others weren’t considering. Everybody talks about the declining print industry, but people read papers every day. And because printing is not in demand, I could get really cheap rates. I found using print to drive online sales generated more value for client companies and for ourselves.
What’s the leap in value of print advertising? And how does it lower costs?
Printed advertising, especially printed leaflets in e-commerce deliveries, such as Amazon boxes, is a very efficient way to reach people. You get to their home and you are reaching potential customers when their intent to buy is very strong. It also appears that the advertisement is endorsed by Amazon, which is a great accolade. The open rate is all but guaranteed, and the response rate is higher than with digital. And as the e-commerce market grows, so does the distribution channel as more and more people receive Amazon purchases at their homes.
In terms of costs, because the print channel isn’t in demand, I can negotiate a much better price. Additionally, with the printed leaflets, the big delivery cost of getting the product from the factory to the front door is being taken care of, we’re just piggybacking that experience.
In this way, blue ocean strategy guided me to offer client companies differentiated, high impact – low cost advertising, while allowing my company to enjoy a differentiated, low-cost business model. A real win-win, which allowed us to profitably grow, fast.
Tell us about Goodwill Rocks, the platform you created in 2016 to help charities access unsold media space.
I’m always looking to use or repurpose unsold inventory. With Goodwill Rocks, the story began shortly after doing a charity mission with Richard Branson and the Virgin Unite team. I realized that, as a media buying agency, we could help charities get access to unsold media space. I contacted all the newspapers, TV networks and some radio stations and told them that I would use their unsold inventory with advertising material from charities.
Within five weeks, we had created advertising space worth one million British pounds that we then gave to 20 different charities. All of them had their advertising materials ready to fill the media space that the media owners were not selling. We were using unsold inventory for a good cause.
The knock-on effect was that all the people who worked for me found a new purpose for what they were doing. It was great for the morale of the business. Not surprisingly, we became very popular with charity clients, many of whom made us their media agency of choice for future campaigns. That was a very successful project.
Your venture capital fund, BLUE14, backs start-up e-commerce companies and performance marketing agencies. How does that work?
There are lots of investment companies that give you money and not much else. And working with investment companies can be a very mixed experience. BLUE14 is investing specifically in businesses that are, or have the potential to be, blue ocean companies. We select them based on their ability to create uncontested space and make the competition irrelevant.
The magic is in the model: providing both low costs and heightened experience to your customers (value & innovation). This is something that takes consideration and discipline, either at the company formation stage or making bold shifts when you find yourself swimming with the sharks!
We’ve only been running for six months but we have 11 investments and all the investments are interlinked. We are investing specifically in the e-commerce space, but the products have to do with something that is typically blue ocean. We’re also investing in performance media companies so that they can help other businesses grow.
Essentially, we provide money and mentoring to blue ocean consumer brands and performance media companies in the e-commerce space, with each helping the other to win customers in a ‘virtuous circle of growth’.