Marketing that’s on message: How Joel Montgomery developed a winning email formula

Joel Montgomery tried three or four different business models before he landed on a winning idea. Drawing on his background in marketing, the 34-year-old Sydneysider founded email-based digital marketing agency Affiniti in 2008 but it took three years for the company to break even. The agency now employs 12 people and turns over close to $3 million each year.

At Affiniti our goal is to make it easier for big name brands to promote their products to businesses via a network of trusted advisers. For companies in the business-to-business space, it can be difficult for them to reach disparate businesses across Australia. Affiniti is one way to do it.

I was a marketing director at Dell until 2008. At the time, I asked my wife for permission to give it a go and start my own business before we had kids. We went from enjoying life—going out, renting a nice apartment—to moving back in with our parents for a year while I started the business.

I invested all I had in the business but I contracted back to Dell for the first year to help with cash flow.

The growth of the business was textbook. It took three years to break even. We’re in our sixth year now. From about year four onwards our focus has been to grow our profit.

I thought it was going to be a hell of a lot easier than it was. It was just me for the first three years and I went through three or four different business models. I guess I was a bit ignorant as to what it took to generate a media spend. There were a lot of different tests and trials.

With my first business model, I was trying to charge for a service that no one wanted to pay for. We were trying to be a broker for IT services. I think I made half a dozen sales in my first three months when I wanted to make 500. I wasn’t thinking about where the money was flowing.

My business plan was worth throwing in the bin. But it was a matter of persevering and being open to change.

One of the things it took me too long to figure out was the importance of having a good accountant, lawyer and bookkeeper. If I did it all again, I would make sure I am surrounded by three good people early on.

I find there is a lot of compliance required that I didn’t realise. And as the company grows, there is more and more.

Affiniti has three different products. The business was originally called PowerBuy and we still offer the PowerBuy.com.au product. For this, we work primarily with industry bodies, offering their members deals for IT products from our clients, including Dell, HP and Lenovo.

Our second platform is Tech-bit. What we do here is work with around 250 IT suppliers. We do their marketing for free and, in exchange, we promote our technology brands through them to their clients. It is another route to market through a trusted network of suppliers.

Our third platform is called E-bit. It is a similar model but for accountants. We help accountants send out regular communications to their clients for free, and in return we promote the IT brands.

I use a business plan but my plans are quite numbers-driven. I look at my Excel spread sheets more than my Word documents. Things only really make sense to me if I do the numbers. So when I review the finances for the business with my two financial advisers, we look at how our monthly performance relates to our yearly plans.

What I think about most in the shower in the morning is probably cash flow. Although this has really only been in the past year. It is because our revenue has grown a little over 100% year-on-year and we need to manage when the revenue comes in from our clients.

I also think about the people in the business. Sometimes I wake up feeling really happy about where things are and then there are times I think we need to work harder. It is usually about getting people to be more proactive.

When I was an employee I made sure every minute of my day was productive. So it is interesting to be an employer. You get a mix of people.

I find the most effective use of my time and dollars is through partnerships, and not above-the-line below-the-line advertising. If I can strike up partnerships I can get my message to market more effectively.

We’ve started expanding into Asia. We’ve got a partner in Singapore and we’re looking to bring on our first client for Tech-bit. We’re also doing feasibility study for expanding to the US.

I think there are two ways we could grow the business. Geographical expansion is our top priority at the moment but we’re also looking at other verticals our product might work in.

I really enjoying the building phase of a business, but I’m not so passionate about the maintaining phase. So as things get more established I do start to think about what the next thing will be.

But right now I am focused on bedding down the model and getting some growth outside of Australia. I’ll know it’s time to go when I’m spending each day on the day-to-day operations.

The most important thing to growing a business is perseverance, if I think about the number of times I’ve been knocked back or have not been important enough for a client. But if you get knocked down 10 times, you give it another go.

Even if the business model isn’t good, if the person has perseverance, they will find a way.