Luke Smith is chief exec at performance marketing agency Croud, which he founded with Ben Knight in 2011. The business has recently gone on an M&A ‘charge,’ acquiring both luxury marketing agency Verb and New York-based analytics company Impakt Advisors in December. We sat down with Smith to talk about leading the team through inflection points of growth and investment – and his billion-pound moonshot goal.
Every agency in the world will claim to be “not like any other agency,” but when boss Luke Smith says that about Croud there are at least two things he can point to in support of his claim. For one thing, the agency has been part-owned by its workers since its inception, having distributed 30% in equity to employees by the time of a £30m private equity raise in 2019. For another, the agency has been serious about decentralization, gig work and remote working since day one, with a global network of contributors they call ‘Croudies.’
With recent acquisitions, Croud’s in-house staff sits at over 350 – but work with them and there’s a good chance that you’ll be tapping into their signature resource: a global network of around 2,500 “on-demand digital experts,” the Croudies.
That network is core to Smith’s vision: “A digital agency that taps into a flexible model that enables us to deliver more work at speed, at scale, at a lower price.” It’s been a part of the offer since the company was founded in 2011 – back when Uber was still called UberCab and available only in San Francisco. “We wanted to build an agency supported by a gig economy,” says Smith. “Although, when we launched in 2011 the gig economy wasn’t really a thing. That was challenging because clients were like, ‘what is this thing? Why are you outsourcing all this work?’”
These days, he says, about 40% of their work is handled through the Croudie network in a way that “to any client it looks like a standard agency engagement.” A decade of work with internationally distributed specialist teams was a boon when shifting to the pandemic paradigm: “Our model was so well-suited to Covid: the way we worked with Croudies, the way we have all of our processes sitting in our own technology, enables us to flip to remote working seamlessly.”
Big name on campuses
Gig work wasn’t Croud’s only early decentralizing move. Founded in London, the company still has a base there but made an early shift of power toward a purpose-built ‘campus-style’ facility in Shrewsbury. Modeled on the campus hubs of tech giants like Smith’s old employer Google, the Shrewsbury campus is now the base for 170+ workers.
Smith recalls the smirks he’d see in the early days of the Shrewsbury office – could an ambitious, growing agency really attract world-class talent to a sleepy Shropshire market town? “They’re not laughing now,” he says. “Just look at how the market’s evolving – decentralizing away from relying on having all your people in London.”
The M&A ‘charge’
In Smith’s own words, Croud has been “slightly later to the party with M&A than some of our most obvious competitors.” Why? “Because we’ve been very particular about the types of businesses we want to engage with.” Too many simply get it wrong: they lack a clear plan post-acquisition; they don’t find a cultural fit.
The too-often-overlooked questions are about people, he says: “How are they going to feel about it? How are we going to empower them? How are we doing to avoid reducing their entrepreneurial natures?” Croud’s two recent acquisitions have clear strategic motivations too: Verb focuses in luxury, “a vertical we under-index in,” and Impakt pushes forward his mission to “put data at the heart of everything,” while also developing their expansion into the USA.
The £30m moment (and £1bn dream)
With each new acquisition, Smith is committed to making every new worker a shareholder, “no matter how fiddly it becomes.”
Historically speaking, fiddly is an understatement. When it comes to giving employees share in the business, “my one piece of advice is: get it right. Get loads of advice. It could cost you a lot of money – we learned that the hard way.” The UK scheme, he says, narrowly avoided falling over; an early iteration of their US scheme collapsed because it was set up incorrectly. “We didn’t take enough advice; we were amateurish,” he says; the upshot was that he, alongside co-founder Ben Knight and then-chairman Tim Ward, personally paid out “the best part of $1m” to make good their financial commitments to workers.
The flipside of all that strife, though, is that it feels pretty good to share the spoils of a big success with your friends and colleagues. “We always had a goal to have a moment in time when we realized some value for everyone in the business,” he says. So their 2019 £30m private equity raise meant millions in a collective windfall for staff. “That feeling where everybody wins and two months later the car park’s full of new cars ... It’s absolutely brilliant.”
But that moment was far from the final jubilant release of, say, a sale. As the recent “charge” of growth shows, Smith isn’t keen to slow down; his moonshot vision, he says, is to be a privately-held (with investment) company worth £1bn by 2030. The time is ripe. “In the digital space, we’re so blessed that we’re in this new digital world with all these tailwinds. It’s about making the most of it, going on a charge and having a good time doing it. There’s so much more we can do. It still feels like we’re only just getting started. We’re still having such a good time.”