Brexit; concerns about the leaving the EU

00:00 Hello and welcome to Perspective. This is a show by founders of small indie creative agencies giving our perspective on starting and running our own companies. The aim is to provide useful advice and inspiration to others as well as learn from each other and others we get to come talk on the show. This is our 13th episode. My name is John Dark. I'm a director at Every Interaction and with me in today I have Dan Ghent from Lighthouse London. Hello Dan. Hey John, how's it going? Not too bad. How are you? Yes, not bad. I missed a few episodes there. I was trying to find other podcasts to be on but no one wanted me so I'm back. It's great to have you back.

00:40 It is good. A lot's happened since you've been gone. It has. A lot of 2016 continues to confuse.

00:50 I think it started with David Bowie dying. I think that was like the first thing in the series of things. There's been a string of celebrity deaths that probably only people of our age will know who they are. That's true. I do wonder whether the same thing happened to our parents when they were about our age and all the people that were famous when they were growing up just started dying because that's just this natural wave of people of that age starting to disappear.

01:19 And they just didn't have Facebook to all go on and be like oh my god what's happening? The world's ending. Yeah exactly. They had to read it next week in the newspaper. No but absolutely a lot has happened. We've lost a European football tournament. Yeah big time.

01:36 We've won a tennis one. That's true. Though we might lose the country that that winner came from. Yes. We'd be there for retrospectively also lose those tournament wins. Yes absolutely. And of course we voted to leave the European Union. We did. Well done everybody. Yep thanks. And what we wanted to talk about today is what lessons we can take from this. What we can do as small business owners to sort of plan for what's ahead I guess. Yeah. At least try and speculate around that because I don't think anybody really knows what's ahead. No absolutely. And hopefully this won't be too European centric. I mean we're going to talk about specifically Brexit and the issues around it but I think there's lessons to be learned here for anybody who owns a business anywhere in the world because you need to be thinking about what happens when market conditions can change and they can change quite suddenly and you do need to have ideas or plans in place if a downturn occurs. And so just to start with were you like instantly worried about business when it happened?

02:54 I was definitely concerned. Before it were you like oh no this is this could be bad. I voted to stay and one of my reasons for voting to stay was that being the business owner that I am I was concerned about what effect it would have on business both on existing client relationships and the amount of new business that might come in over the short to medium term. I personally couldn't see a result where that leaving the EU would improve that situation at least in the short term.

03:23 I think I didn't worry too much about it. I think generally I just always think everything's going to be fine and so it was pretty shocking when it happened and my theory of let's just carry on and everything will get better. I think it's like the first thing that's happened certainly whilst I've earned a business that like hasn't gone in line with that. Like I just I just thought well surely everyone knows that eventually we're all going to like form the singularity and become one huge brain and you know the road there clearly doesn't involve like leaving Europe. It involves joining Europe onto the rest of the world turning ourselves into computers and you know living forever. But you know there's obviously a couple of bumps in that path now. But yeah no I think since it I suddenly thought oh no you know I'm this has happened and I'm grown up you know this is not if if this causes a recession and it's very likely that it will I think it will be the first one with us as where we are with with businesses not just being like freelancers or something small you know it's like okay things are going to get difficult and yeah I think as that dawned on me I was like oh no better whilst John wants to do. Well I imagine there's a lot of people in the same situation yeah you're right we haven't been through a downturn of the severity since we've been business owners. I think the last one we can think of in our working history was probably a dot-com crash that we worked our way through under the employment of other people and I I saw that's the agency I was at at the time a massive round of redundancies happening soon after I joined and you know a sizable percentage of the workforce being laid off because of it right and that wasn't a nice experience to go through and we very well might see similar sorts of effects happening as a result of this which which uh it's obviously not a great thing no but however you voted you know whether you think leaving the EU is a good or a bad idea it is an idea that is now upon us and longer term it's unclear nobody really knows what's going to happen I'm of the opinion that you know it's very possible in a decade we could all look back at this time and think wow you know as a country we all got together and we did the right thing and now we're in a much stronger and better place just look at what happened to the rest of Europe or imagine what happened if we stayed in and we could have been brought down with them as something bad happens in the rest of Europe or it could go the other way I think nobody really knows it's really a large and complicated problem with a lot of variables and moving parts and I think making long or even medium term predictions at this point is pointless it's literally you know 50/50 flip a coin who knows what's going to happen yeah there's absolutely there's two there's like I say too many moving parts I mean I completely agree you know I don't think it means that everyone should prepare for complete collapse of of the economy or anything like that but as you say it's it's the that's the longer medium term you just don't know it's the short term just looks a bit more a bit more gloomy and so it's a case of well how'd you deal with that yeah whatever you voted to stay or leave there is no denying that in the short term that things are going to be a bit more difficult the value of the pound has fallen through the floor some large employees in the country are threatening to pull out the country and move the workforce elsewhere there's no way this is going to be resolved quickly it's going to take time to turn things around get the economy back on track and put us on a trajectory that's going to make everything better for everybody so what are the potential things that we we need to be prepared for I guess as small business owners to try and reduce the impact it's going to have on our businesses and try and ride out the storm and make the best of the situation yeah well I suppose I mean I suppose there's two places you could be right I mean I expect there's some people and thankfully not one of them who a direct result of this caused something tangibly bad to happen to their business like a contract went as something they were about to get and were banking on wasn't there anymore I'm I'm kind of with the opinion that a lot of the problem is it's a market and a market just is in some ways is like a mood you know I mean if everyone if if the market thinks things are going to be bad then things start going bad and actually I think small businesses like ours can probably find ways to you know thrive in this like I don't not everyone does badly in a you know recession you know I think it largely depends on where your clients are and where where your business comes from I mean at lighthouse what are most of your clients in the UK yeah I would say historically like 75% have been UK based I guess if you're a business who has clients in the EU then suddenly you're going to look a bit cheaper to them yeah absolutely I think the exchange rate thing I mean some hosting company kept emailing me telling me it was a great time to buy lots of servers because they they could do it they could do it all with some trick of the exchange rate which I thought was a bit off a bit opportunistic but absolutely like if the pound's going to stay low we are going to people aren't going to assume that London suddenly hasn't become like a hotbed of talented designers developers and in some way you can go to get good work done and people who like to like to take an opportunity might say well I've got a new project I should be searching in the UK in London for for the team to build that yeah and that's definitely a positive we can take from this is assuming you don't put your rates up to try and match the the difference in the currency that exists and therefore take away that advantage if you have clients abroad suddenly yeah you've gotten a little bit cheaper from their perspective although you would still be making the same amount of pounds so yeah that could work out really well I guess we've got to try and find a way to make sure that we still look and appear as if we are a hotbed of of talent and and services that people from other countries would like to employ and some difficulties I see maintaining that is to me one of the really concerning points is the freedom of movement in EU and what's going to happen with that so at the moment it's very easy for people from the EU to move to another country to work there's literally no barriers whatsoever hop on a plane get off the other side find somewhere to live get a job no documentation needed yeah that is really useful in our industry and every time we've posted a job we've had applicants from all over Europe apply and we have employed several people from around Europe and also around the world it is difficult to find talent in our industry it's the the roles are very much in demand especially designer developer types who are particularly talented and so having that that honeypot of talent from across a much wider across the whole of the EU is very beneficial to businesses like ours yeah and if if they can't make those same deals about freedom of movement with the EU that we had while we were in it then that's definitely going to restrict the available talent pool to UK businesses and that has me a little bit concerned that absolutely can't be good I suppose there's potential that some of that talent pool might be made up by hiring a little further field in England I suppose it's exactly what the people that wanting to leave would would want to happen is the you know talent from within England is actually utilized a bit more but yeah you can't say in a marketplace that restricting the supply of good people is going to have a net positive effect it's um it could be problematic absolutely and if and you're right if London loses or I keep saying London this is exactly why people vote it's Lee because everything's too London-centric because everything's too London-centric but um if England stops looking like somewhere where there is opportunity for that then that you know that's not just going to affect a couple of people saying oh I don't think there's an opportunity there it'll affect like the story of London and the end of the UK as somewhere you can go and do that and that's probably going to be quite hard to to turn that narrative around especially if somewhere else springs up um somewhere else around Europe to start you know that that silicon roundabout that we've that we've got that thing there's nothing special yeah there's nothing there's nothing so special about England to say it can only happen there no no rightly so but it does take time to accumulate you can't again make another silicon roundabout or tech city style accumulation of services and companies in one place overnight it does take time to to turn these things around and I guess if the UK looks like it's less of an enticing prospect even if we can make the same deals with the EU that we have today if our economy is taking a hit suddenly perhaps UK looks like a less less tempting place for people to work because they can't make as much money as they could previously I'm also a little bit worried about the education side of things I know a lot of educational institutions gain a lot of funding both from the EU directly which we can supplant with UK funding yeah but they do rely quite heavily on a lot of foreign students coming in to study here and those foreign students aren't entitled to the subsidized fees that UK citizens get so they pay the full fees and that in turn helps fund a lot of these places I mean even when I was at university a while ago now a fair percentage of our class being made up of people from elsewhere in the EU yeah and that was a really great thing to have but those those those people paid to be there and that money won't be there for those educational institutions as much which has me a little bit worried I just don't want to see the the talent pool drying up over time that if these universities and colleges can't get the the people into the courses and get enough money from people being there then the teachers can't get paid as much the teachers aren't as good courses start shutting down or start getting merged becoming less specialized more generalized and it has a bit of a with an overall effect on the new talent pool rising up and yeah the sort of people we'd be looking to employ once they're ready to graduate no absolutely I mean some of that is the the medium long term you you know you were talking about before and that you'd hope even though this decision has been made there's still people in charge who actually don't want to see the UK tank into completely and the whatever's put in place tries to keep some of this and then you're going to find out if there is anything special about England you know that's like this this current kind of short term downturn I think is just a you know it's a shock it's a it's it's a market going well this is uncertain now and markets hate uncertainty and when it stabilizes then we're going to find out this if there's something special about England or if actually we're not that special after all and you know and who knows but um yeah I agree if you're just going to call it on what the people who wanted to leave want not all of them if the general rhetoric around it then yeah it's it's not going to go well but those you know the people in charge whatever you think of them their job is to make sure that doesn't happen that's how it matters that's how they appoint someone in charge you can start making decisions completely that that's that's that's step that's step number one if they want to um if they do you know want our advice uh this has been like therapy Dan I'm quite enjoying this well I this are we on the negatives at the moment yeah yeah yeah we are yeah okay there are some positives but the list is a bit smaller I've seen the list fine okay well okay tell me some more then what else you're scared of John so when I was a child I think investor confidence in startups is a bit of a concern for me I think we work with a lot of startups and I think the same could be said for you guys you know that's definitely your focus and that's the confidence in startups would just mean that if they don't see as many as much opportunity to invest in a UK startup because the economy seems down perhaps that doesn't seem as many opportunities for them the instability in the market makes investing all the more perilous it's possible that we might see a bit of a flattening out or even decrease in the amount of funding ending up in startups hands which therefore means less work for the types of studios like ours who do tend to work with them quite often yeah agreed agreed it um it will mean that but sometimes that's it's not necessarily such a bad thing startups are at their best when they're doing things you know in the lean way right that's why they wrote the book and I suppose this was a point I was going to come on to but maybe I'll make it now is I just think one of the things for businesses or any business really is that now you've got to really focus on why you exist you know why why you provide value because like that's now the thing that's going to save you is proving that you're worth being there and I think um if an agency who has just been taking a load of startup money building wild and wonderful things and you know essentially wasting it that actually isn't going to survive you know that approach isn't going to survive in a way it shouldn't survive you know that's that's waste so I'm not you know I'm not saying this is kind of we need some kind of cull or something but what I'm saying is like it it's going to force businesses to say what is the thing I do that when people pay me for it I provide more value back in return and what's the what's the stuff I'm doing which I just do because I do and and I never you know people have just paid for it well that that money might start drying up so you've got to make sure that you're a better business really like it's got to turn you into someone's more focused on providing value for the for your clients because that's how you're going to keep them it just I think it's like I said I think it just will focus people down on why they exist and and cut some of the the you know the extra bits that people do that aren't that just aren't necessary for anyone and that's not to say there's not going to be more less money going around which of course will reduce the amount of work and the amount of money that everyone makes but that medium long-term effect you don't know with something like this you know the dot-com bust you know those startups were ridiculous yes the ones now aren't ridiculous but it's never bad to have to become more efficient so you see this as a bit of a bit of a cleansing opportunity yeah hang on hang on now we're getting into the sort of rhetoric that will get me charged with hate speech no it's it's a it's a chance to I think look at why why you exist as a business the things you do well and make sure that you're providing value and that can't that can't hurt yeah yeah I absolutely agree I mean like we said when we started this podcast and it's the drama I kept beating about specialisms and having one and just making sure you're focusing on what you're good at and that is going to help make you a really successful business you know the short the short there might be short-term pain like like some of that for some businesses that's going to involve going okay I need to get rid of some people or you know I need to get rid of some harsh term you know I need to scale down a bit get back to what I what I do best like you say that's how things that's how innovation happens those circumstances are ones that produce the innovation like having plenty having loads of money loads of time doesn't create as much innovation as having restrictions and and boundaries and and targets that are hard to get to so again we'll find out how good the whole scene is I suppose and how much of it is just people having a having a lovely time doing startups that just aren't necessary yep I agree yep it's going to largely depend from an agency perspective what you were doing before I guess and what your trajectory was based on what your outlook is looking like you're going to have to make some decisions if you were in the process of of scaling up and growing before all of this happened and now you seem to have too many people you know you may need to look at downsizing you know shedding some payroll costs in order to ride out the storm make sure that your company survives we've certainly looked at the balance sheet and tried to see where we could be saving some money but also we've been looking to see where we can invest to try and turn things around and try and increase the amount of interest that we're getting in in our business so we've definitely started turning our hand to marketing a bit more and trying to accelerate a few things that were just on the back burner for a very long time website and uh oh is it coming now yeah refer back to episode six a long time ago is it going to have like it is it going to have a you knew jack of it now british british ux for british people there we go love it and looking at looking at other advertising and marketing activities that we could be doing in the interim just to try and stoke the fire a bit and to see what turns up putting up some eggs in some different baskets and and trying a few different things that in good times you sort of don't bother with because you're too busy dealing with all the work sitting back and letting it all happen because it happens easily and you kind of let these things slip a bit i think in these these kind of times you just need to to double down on the communications making sure that people know what you're up to just making yourself visible and hopefully if somebody has an opportunity that comes up where they think they need someone with your services you'll be front of mind they'll pick up the phone and give you a call uh that's that's the best advice i can give to people right now yeah well you're i mean i think one of your original remits for this podcast was your kind of assertion that now was the time of the sort of small medium small agency up against the kind of huge um full service giant and something like this it's going to pay to be small and nimble and be able to change your offering quickly and yeah i mean hopefully not have to downsize because that's horrible it involves people losing their jobs but if you are downsizing one person compared with a department of 20 you know something that that's the opportunity i think is if there is less money and people are starting to look at cost well we are an option that people might start looking at who before would have gone we you know we never worked with an agency there's less than 50 people now might be saying oh hang on maybe there is some value to be had at that smaller agency level you know maybe maybe we should be going to them with bigger projects and and bigger challenges and we can get some value out of it and i think that's if people are looking for value again that's not a bad thing for an industry to have to deliver you know that's exactly what you should be delivering that's that's how you stay good yeah i i do see this this type of movement just contributing to that theory of mind that we spoke about beginning that the smaller is the time of the smaller agency and i think smaller agencies are in a position to to weather this storm much better than larger ones yeah you're not going to get bought by a large one anytime soon that's it yes yeah don't rely on on uh suddenly being bought by a much larger agency that wouldn't go well um yeah like for example i was speaking to someone i know who runs an agency quite a bit larger um they have a whole team here in the uk but they also have a reasonably large team in the us and suddenly that team got 10 000 pounds a month more expensive yeah which is going to really affect them and it's going to make them have to make some difficult decisions if the situation doesn't improve quickly or they're going to need to try and adapt but the bigger you are the bigger the ship the harder and slower it is to turn and slow down yeah you've just got all this momentum so it does bode well if you're a smaller agency owner i believe in these situations at the same time all of the brexit stuff was happening i think way before that the wheels had started turning on a movement in our industry where there's going to be a bit of a squeeze in the middle and by that i mean that's all of the larger agencies are being made redundant now by clients taking their teams in house and realizing they need to have the specialisms rather than hiring really large teams in really large agencies for really large amounts of money to do all this work for them so those larger agencies are some of them starting to move a little bit more towards the mid of the market and target the clients that we might ordinarily go after and similarly at the bottom end of the market where things were traditionally a bit more commoditized and people who were working on simpler projects for smaller budgets are feeling a squeeze from the platforms that are offering websites out of the box that are all completely diy give you everything you need for a handful of dollars a month platforms like square space that are largely making the need for small independent designers developers working on small scale projects a little bit redundant so they've got a requirement to try and move towards the middle going up the stack looking for larger clients who need more of a custom solution and all this is happening before brexit and i feel like the financial pressure is being put on the company's at both ends so just going to accelerate that squeeze towards the middle which is going to make the area where we exist today with that little bit more competitive yeah completely i mean we've changed our offering as it were you know several times in our lifespan and it's always a case of saying let's try let's try offering this do people want it and that you'll find it tricky if you don't pay attention to what people want from you you know if you are that template website agency what you're going to find is that you sort of need to spend time being good at something that isn't like a specific solution really you just need to get good at saying well here's the sort of problems i'm good at tackling having a vision for the business is probably more important than ever i think you know being able to say here's why we're here here's what we here's what we do and here's why we do it that that'll help because you can just you can stick to that you know that's not going to change as long as you make sure that that's something that people want then you can hopefully steer steer through it yeah so we go into the positives list now that was the positives wasn't it no that was me turning your investor confidence in star starts reduced into a positive okay dragging it dragging and dropping it onto the other list well i mean in my positives list i had the the rents might go down which is which i guess it's worth it i would have voted leave by knowing that um yeah that's all i got well i think that's i think that is that's where we're at at the moment isn't it that what is this represents to me there is the current mood on this thing and i suppose one key thing about this whole whole thing is like not a lot of the things you've got on those lists other things you actually have much control over it and i think what's really important now is to say this is happening but what can i actually do you know do i sit there reading the news and worrying or do i say well do you know what i've still got some work to do and let's just get going let's get a month down the line let's get two months let's see what starts happening but if you take your foot off the pedal in those two months uh sitting around going oh everyone stop what they're doing and and worry about this unless you're one of those unfortunate people who this is actually directly tangibly affected like that contract's gone now you have to act like there's something you have to do if you're like us where it's more like the rest of the market everyone's just a bit like well it feels like it's going to be bad if you stop and go oh okay let me try and imagine how bad it's going to be actually no just like sort of keep going you know i can just make sure that you're doubling down on the things that you're good at but you should be doing that anyway there's a sense of there's some of this stuff it's better just to turn the news off and carry on keep trying to sell stuff and keep trying to improve because that if you don't do that then you'll get too much down the line and you know you'll have a bad quarter because you thought you were going to have a bad quarter that's that's what we're seeing at the moment that's that's all the market is it's a lot of people thinking the same thing and you can think it and ignore it you know at the same time you know you can just just carry on with things i'd say that is my assessment of the disproportionate size of your positives list yeah that is good advice yeah i think if you don't have a specialism try and find one focus on something try and market yourself as as being an expert in something and then target a certain type of client who might be looking for that exact thing and then you know shout it out to the world let everybody you can know about it and hopefully you might be able to turn this around a bit and find a bit of a niche or something else that all your competition aren't necessarily focusing on give yourself a bit of a leg up in the market and hopefully give you enough momentum to be able to ride out the storm fingers crossed everything will work out all right and in the medium term we should see financial situation improving longer term fingers crossed all we can hope for is that you know that this does actually work out better for the uk yeah absolutely and we are you know we as a as a nation are not the same as you and me with our businesses you know like some people will do well some people won't this is just a new environment for that to play out in you can make it go bad by just agreeing by assuming it's going to go bad you know like what you're doing is looking at doing marketing looking at all those sort of things that's that for me is the right thing to do the thing not to do is be like we're going to be short of money soon i'm going to stop spending money on promoting myself or you know i'm not going to try and sell this thing now because i just don't think anyone's going to want to buy it everyone no one's going to have any confidence start if startups have got less investment then find ways to get them more for that amount of money that still makes you money you know that's like innovate something like try doing things a different way and if you get good at that then you'll be able to negotiate anything really and when times are good you'll be you'll be even stronger yeah and look further afield i'd say now that the economy is down like we said earlier it is an opportunity you will now be more affordable for clients outside of the country where our pound is weak so start approaching people start trying to find some contacts do some marketing in places abroad and see if you can use that to your advantage absolutely i think i'm going to set up a twitter campaign about something along those lines dirty london web design yeah it worked i'm sure and maybe all those employees all those employees that have to lead the big agencies you know that's where that's your new talent pool you to go shopping in yeah that's a good idea yeah swimming in if it's a pool that's awesome well i feel that we started off quite negatively and we finished feeling like this might be the best thing that's ever happened to to us and to and to good england and all that sailing here very possible dan i'll give you 50 50 on that yeah but um yeah everybody try and make the best of it uh this does cause problems but it does create opportunities so um let's do what we can to try and make britain great again absolutely wow excellent there you go maybe i should run for prime minister that's yeah that's the most political we're going to get on this um i hope god i hope this is the most political anything gets i'm so bored of the politics yeah facebook is a disaster zone but i'm considering deleting all new sources of out of my life just to kind of do something else like read the next game of phones novel when that comes out you know something like that just yeah just just just uh make it all stop i'm happy i'm happy now yeah i had my my series of angry tweets and facebook quotes in the immediate aftermath and have since uh diffused that a bit to um start focusing on those positives and try and make the best of what we've got to work with awesome nice well if anybody has uh any other concerns you know you know where to hit us up we're on perspective.fm on the webs leave us some comments and feedback there uh we're also on twitter at underscore perspective fm i've been john dark at dark john on twitter from every interaction at every interact and dan where can people find you uh so you can find me on the tweets at gentus maximus you can find lighthouse at we are lighthouse and the website is we are lighthouse.com fantastic and send all of your political opinions to down there absolutely please do thanks everyone we'll see you next time