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Digital Kitchen's Don McNeill on Identifying your Core Competencies

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Digital Kitchen's Don McNeill on Identifying your Core Competencies

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Even if you haven't heard of Digital Kitchen, you're more than likely familiar with some of the creative agency's output. It's done the opening titles for highly regarded shows like Six Feet Under, Dexter, and True Blood -- but that's not all Digital Kitchen cooks up. The company has made great efforts to push beyond that category and into doing broader consulting on commercials and ad campaigns for U-Verse, Target, Microsoft, Levi's, and many other big-name businesses. (You've probably also seen their Budwesier spots.)

That in mind, I gave Digital Kitchen's president, Don McNeill, a call to talk about how entrepreneurs can assure themselves similar mobility and how they've learned from their mistakes.

How important is it for companies to make transitions in what they do? Should people not over-specialize?

Don McNeil: One of the things I think we lucked into is very early on in starting the company we focused on transition and knew right away that you're likely as a startup to try to find one avenue that you can be really successful at. However, once you hit that, and if you do hit a home run, to capitalize on diversifying that success and using that to build in other genres? It always sounds good, and it sounds like Business 101.

But we were fortunate very early on in the main-title business. I think our first actual project that paid revenue was Six Feet Under. We won an Emmy for that and exploded into the main-title business because we also reinvented the main titles according to Hollywood.

At the time [credits were] really just actors turning and facing the camera, you'd see their names, and there were some shots from the pilot since that's all that was shot. HBO wanted to rebrand, so we were really successful in recrafting what main titles and brand could be.

What it did for us was whatever you do well begets that same thing. So the good news was our first project won an Emmy; the bad news was we really were trying to be an ad agency. An ad agency and a main-title company are two different things. When you do hit a home run like that, the world sees you as a phenomenon in that field, but that field is very narrow.

I think for startups that niche, you're really lucky if it's a broad niche. It's usually pretty narrow and you find somewhere in the cracks that the large companies aren't working in, that clients need but often don't know yet. When you first enter a niche or you're first pioneering in an alternative business segment, it's always hard to penetrate and expensive to create. Boy, it's so easy to get complacent, right? Because if you hit and you found a need for your clients to value, yet that's who called you, it's so much easier to pick up the phone than look in the mirror and say, "Okay, let's try that again." It's a pride-swallowing process, going through all the rejection. The early days of trying to carve any niche is so expensive.

It sounds like you're saying to not get complacent with your goals, to always be setting new ones. Is that fair to say?

Don McNeil: Yeah, really fair. When you are successful it's so easy to just repeat that success. I think so much of business-school DNA is if you do something well, you don't ever let go of it. I agree with that, but I think it blinds you to the speed of your competitors and the speed with which the economy affects your business segment. In my mind it really requires you to take that success and diversify.

In the main-title business, we don't even do that anymore. We've done maybe 35 or 40 in the 10 years, and we've won multiple Emmys. We've been nominated 10 or 11 times. We've had incredible success in that category. So people kinda look at us like, "What are you, out of your mind? You're leaving that category?" But there were so many competitors now compared to when we entered it that I think it was so smart of us to diversify.

I think all entrepreneurs should do this early on, is figure out their core competence and core discipline, regardless of the business niche they play in. You see some of these big companies fail to do that. But we were like, "OK, DK is storytelling, and advertising is storytelling." We really can communicate brands and brand companies well visually. We're basically branding TV shows with a 30-second snapshot. That's what we see with advertising.

When you're in ad agencies creative services, I think you tend to be more emotional. You have an emotional IQ and you think a lot about that kind of stuff and you do it for clients. But when you're other businesses, like technology or manufacturing, in general, particularly in Chicago, you're just so fortunate to be able to build a business in this economy that you attribute their success to their clients or their products, not their core competency.

How can you tell when you're being maybe too ambitious with your goals? Is there a way to tell before you set them, or do you have to embark on them to realize you might have to pull back?

Don McNeill: That's such a good question, man. It's unfortunately the latter for us. [Laughs.] The only way we can tell is through failure that it didn't work. [Laughs.] We get better. The more we fail, the more we experiment, the more we succeed, I think the more we get better at predicting what markets we can penetrate and when.

The other thing is timing is so critical. I spent a lot of money seven years ago trying to push this through, and marketers just weren't ready. We were pitching all sorts of interactive DVDs and the technology actually existed, however today that same exact premise is what's building our business so successfully. Clients have turned around the market in general and accepted and looking into digital communication and talking to young people in alternative ways. It's tough because you gotta try and fail and be willing to try again. You really gotta analyze the environment.

I think the things you try to do to handicap yourself and predict a little more whether you will be successful is to identify the market, but I'd say to be really self-aware. DK is good about looking back and saying, "I f***** that up, it isn't a market result."

Niche is such a sexy word and such an attractive proposition for any business where you're the only player. But I think it's dangerous because clients will come in and your tendency is to preserve. Look at Blockbuster. My God. They had the opportunity. If they had just said to themselves, "We're not a video distributor. We're providing movies to people outside the theater." If they were about the consumer-oriented mindset? They were approached by RedBox and Netflix, and they could've bought those companies. When you're so successful, though, sometimes you're so slow to act.

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