Alley Group founder, Nick Lavidge

Driven by risk: how Alley went from zero to $3.5 million in two years

Sam McKeith

Some people don’t take risks. Nick Lavidge is not one of them.

The 30-year-old entrepreneur founded Sydney-based marketing agency Alley two years ago, with just $8000 in capital.

Fastforward to today, and the company’s current turnover of $3.5 million is set to increase to a record $10 million for 2016.

Not afraid to take chances, US-born Lavidge attributes much of Alley’s success to challenging what he calls the “broken agency model” of traditional advertising.

“When I got out of uni I started my own company and this is my second go, it’s kind of like riding a rollercoaster; it’s really scary the first time but the more you do it, it’s still scary but it gets less and less.

“I’d been in the industry for 10-plus years with probably over 50 different advertising agencies and digital marketing agencies, and I thought it was a horrible broken model.

“It really hasn’t changed since its inception, it’s selling people’s time, it’s very similar to a law firm – and it’s not tied back to results.”

Lavidge says Alley doesn’t view itself as an agency in the traditional sense – he doesn’t even bother attending many mainstream industry events.

Lavidge’s ambition with Alley was radical – to “do everything completely differently”.

Using big data and predictive algorithms, Lavidge’s team discovered it could get online customers faster with less budget and a higher yield. 

His next innovation involved billing. Instead of charging clients on a time-based model, he uses a flat fee for some parts of the technology and in some cases, a percentage of media.

Lavidge says Alley doesn’t view itself as an agency in the traditional sense – he doesn’t even bother attending many mainstream industry events.

And when it comes to hiring, Nick specifically takes on people with client-side experience.

“They have usually run their own eCommerce store or have worked for large online retailers so they’re versed from end to end,” he said.

“It’s important to me that they have hands-on experience on every part of the customer sales process so they can be effective strategists as well as specialists.

“They also deeply understand our clients’ needs, because they’ve been the client and in their shoes.”

For entrepreneurs starting out, Lavidge’s advice is simple – show clients you’re good.

“The first part is really difficult, getting that traction, but once you get that traction and you have a good product, good service and good team, then the rest becomes a lot smoother after that,” he said.

Sam McKeith

Sam McKeith is Sydney-based media professional. He has contributed to many leading publications including The Huffington Post, The Australian Financial Review, The Australian and BRW Magazine. He was previously a senior reporter at the Australian Associated Press where he covered national affairs. 

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