‘Nobody disrupts anything anymore’: RocketMill’s CEO on growth and employee ownership
Sam Garrity is chief exec and co-founder of Brighton-based digital agency RocketMill. Earlier this year, he and his brother sold most of the business to their workers, making it employee-owned. As part of our Founders’ Syndrome series, we sat down with Garrity to talk growth, sale and sticking it out.
The earliest incarnation of Sam and Ben Garrity’s business was Elevate Local, an early 2010s digital marketing business that worked with small local businesses to make a name online.
Talking with Sam, ethical stewardship of a business is never far from his mind. As he puts it, that business was born from the ashes of brother Ben’s previous work at an online directory service in the early Wild West days of SEO, when not all shops were clear about what they could do for their clients. “Seeing these clients essentially get turned over was the embers of us creating the agency.”
Instead of offering smoke and mirrors via directory, they built websites for local businesses before running AdWords campaigns and handling technical SEO. It was a level of service that bigger brands weren’t used to. When they discovered that this full-service approach would attract big names, RocketMill was born.
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RocketMill’s growth since then has been organic and steady, including 41% growth during the first year of Covid-19.
That’s not to say that the pandemic wasn’t a trying time. Here again, Garrity’s stance on the ethical responsibilities of a business owner reveals itself. “I was talking to a number of people externally [when Covid broke] and I was hearing things like, ‘this might present an opportunity to get rid of dead wood and lower costs.’”
Garrity’s distaste for that way of thinking couldn’t be clearer. “We serve our team, not the other way round,” he says. “If you start with the team, if you make every decision through their lens, you ask instead, ‘what’s the situation our team are in? How are they feeling?’ They’re going to be scared for their health. They’re going to be scared for their family. They’re going to be terrified of losing their jobs.”
So instead of laying anyone off, or embracing the furlough scheme, they committed early on to guaranteeing every job. “What we asked for in return was for them to step up and inspire loyalty from our existing clients and win any pitches that did come up.” After an immediate dip in revenue, that led to a string of successes and growth in the summer of 2020.
The culmination of this leadership philosophy came earlier this year, when the business became employee-owned. Though never proactively looking for buyers, like any successful agency, they had received offers and approaches. “One in particular was exceptional culturally, strategically and financially. But when push came to shove, the reality of it dawned on us: Ben and I would potentially become quite wealthy, but nobody else would.” The pair still owned 98% of the business.
So, selling then didn’t feel right – but then they discovered employee ownership. “From the moment we discovered it, it felt instinctively like the thing we should do.”
Sale to their employees means that the pair will extract some value from the business – the sale sits as a debt on the business from which the brothers will be repaid over time. But it also “creates the corporate governance that guarantees our business has to be run for the value of the team,” developing a more cohesive social contract.
The possibility of outside investment remains on the table, but now “it won’t be Ben and I that get the big win, it will be the team. It’ll be a trust that makes that decision, believing that it will be in the best interests of the team.” Now, 51% is owned by a trust; 31% is in an EMI scheme; and the brothers have kept 5% each.
And employee ownership hasn’t hurt sale prospects. “Since going very public with our move to employee ownership, we’ve received more interest than ever before.”
Stewardship and disruption
Here again, Garrity’s understanding of the relationship between a business’s founders and workers is abundantly clear. “I’ve always viewed it as a legal entity that I’m bound to protect and nurture and look after.”
On that score, he says: “Silicon Valley frustrates the life out of me.” Look at Instagram. “The billion that was paid for it looked like an outlandish sum of money, but imagine if they didn’t sell. Imagine if they were hellbent on disrupting Facebook.”
Many other buzzwords have since fallen by the wayside, but ‘disruption’ remains totemically significant for startups. For Sam, though, “nobody disrupts anything anymore. What these people are trying to do is disrupt to the point of being able to sell. Nobody ever really remains truly hellbent on being independent and upsetting the status quo.”
Decisions to sell (or not) are of course hugely important to workers and their futures – but for founders, they’re also personal. For Garrity, selling to his employees was a moment of personal as well as professional significance. “Up until the very most recent years, I was trying to be what I thought the market expected of somebody in my role. What I’ve learned is that to be as effective as possible I needed to be me. To be more profoundly and absolutely me.”
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