When Prakash Somosundram started the creative and digital agency with 4 other partners – he had no idea how big he wanted to grow the business, let alone leading an acquisition to WPP, a deal that is still being talked about as a successful story even till today.

In this interview, SeedIn talks to Prakash on how he led the agency from inception till exit and post acquisition by WPP, and how business owners from professional service can replicate the same success today.

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Marcus: Welcome to the show Prakash!

Prakash: Thanks for having me in the show.

Marcus: Let’s start off with a brief interview of yourself. Tell us something a bit of your background on how you started Yolk and all that.

Prakash: To be honest, I started my first company when I was still studying in SIM. The company’s name is Angel Dynamics.

It didn’t last too long when we started that, which is the end of .com. Beyond that, I took a 4 months break, found new partners and we all got together and started Yolk. Yolk was started in September 2001.

All of us really have the passion for design. Our first tag was born of design. We all came together because we have common personal aspiration to build a company that will be recognized in this region.

The reason why we chose the name Yolk is because we wanted something very generic. Something remarkably impactful. Something that is bright and represents life.

That helped us build a narrative. But we started the company with very very little working capital. To be honest, we started at around $7,500 which is pretty much enough to pay the down payments and the first month’s rental.

We really have to think out of the box on how are we going to work on it. What we did, our first marketing drive was to buy eggs which we spray painted them yellow. We designed nutritional facts sheet and talked about the different services that we offer.

That’s what we did. Imagine sitting in the office and this big Indian guy walks in on a hot afternoon and gives you eggs. You’ll sit up and give him some time to explain what he is doing. That kind of helped us get our first few clients.

We still have calls six months eight months down the road. When people see you walking they’ll say “You’re the guy with eggs, right?”. That kind of experience didn’t cost a lot of money and we speak to a lot of people.

They feel that when you study business you need invest a lot of money. If you think creatively , you’ll come up with ideas that will stick around and stand out. That was kind of how Yolk started out. The first couple of years were really tough.

To be honest, we didn’t pay ourselves in the first two years. That was a bit hard to come by during those periods. What we did was, we found a lot of time to do charity works. We are doing some works to increase our profile.

We also find time to do collaboration with other industry partners. That also helped us find more networks.

We’ve done t-shirt collaboration, we’ve done motion graphics for DJs. We benefit a lot because it helped us interview market people.

Marcus: Yolk is 12 years old this year, is that right?

Prakash: It’s 15 years old.

Marcus: Okay, 15 years. A lot of agencies don’t focus on building the business rather they focus on building within the business. Now, why is building on the business is so much more important especially in running an agency?

Prakash: For me, for an agency to work the client needs to trust you. It’s pretty much, the clients decides who are you going to work with based on how good you can deliver.

The craft or the skill of what you do is the key and also how we can build a narrative of what is the brand about and how you can connect clients to the brands.

The good thing about Yolk is we tell stories pretty well. The craft and building website is a very commoditized marketplace.

We cannot fight the price and at times we can’t fight technical expertise but if you can bring the craft and technical expertise together and communicated it effectively, I thinks that’s agency does very well.

That’s why I encourage the audience who are starting out to kind of build on, while you are putting food on the table look at different things that you can touch. It could be something of interest, it could be something like you want to make the world a different place.

Invest your time to that. We also do that with our staffs we give them time to let them do what they wanted. What we do is we will meet once a week or once a month. We’ve done web comics, we used to have a magazine called Hot Wall.

A lot of these ideas came from the time we actually let people do their thing. You’ll see people in the office reading and playing games. We need to let our people grow and redefine themselves.

Marcus: Which point in time did you decide to build an empire?

Prakash: I would say it took us 4 years. We looked around and ask ourselves, Is it something that we are going to build and we will pass on to someone. Back then was cheap partners and none of us really want to pass on to our kids.

I really see that we need to build something or a brand that should last forever. I think that’s something that we all really want to do.

Singapore is a really small place and to work around and be recognized locally is easy but to be recognized in the region is what our ambition. Getting an award and also being featured on the FWA awards really helped us get a recognition in the region.

We started venturing in Malaysia on our own and went to Thailand as part of joint venture. What is nice is, in the region we’re getting a lot of recognition because the company is an established Singapore brand. In the region people regard Singapore businesses very highly.

They want to work with us, explore new ideas and opportunities with us. We use the profit that we had in Singapore to expand regionally. Because we are expanding on our own in terms excess, context and also network we were limited.

That’s when we start considering that being part of bigger network can help us to achieve this goal or dream that we have for ourselves. We met and spoke to different networks and we chose WPP. We were acquired by WPP in September 2010. Since January 2011 we’ve been part of Grey.

Marcus: Some agencies don’t know how to deal with bigger voice. Tell us a story how you stumble upon it.

Prakash: What really helped us getting attention was having awards and that’s how WPP found out about us. But it is a long process, it took us 2 years before we actually decided and signed the deal.

Marcus: 2 years? That’s a very long process

Prakash: Yes! We were happy and ready for the position. To be honest, in the beginning most of it was done under one style but as long as we meet the months’ end and we are closer to the profit, we feel happy. But once you aline with a global network , the business needs to scale or level-up to new level.

It took us time in changing the things that has already been done. What I would advice, agencies that are looking for potential acquisition, I think the natural source would be the creative agencies will try to look for dynamic teams to kind of supplement their existing teams.

Secondly, I can see a trend that some non-creative agencies are actually buying from those agencies. Dynamics of the team is the one thing that is important. How quickly and how skilled your team is the key to differentiating factor.

When doing business also look at the team, not just the team you have in house but also the team on your extended network of suppliers, partners and collaborators that you have.

Marcus: After all you are in professional services. It’s very important to understand and get close to your own people.

Prakash: It doesn’t make a big sense to build a huge team her in Singapore. I believe that if you have networks, locally they can deliver the best work that you can because you guys work together.

It will be more effective and profitable to the business than bring all together in a team inside a room.

The more collaborations you do, like events together, something like that. Make sure that you work with a team beyond your hands and send a better story to the market.

Marcus: Coming back to the agency acquisition story. It took you 2 years to have it. Tell me the story about process.

Prakash: In WPP there’s always someone who heads up the acquisition. His name is Y K Leong. He is still looking out for promising acquisitions.

Marcus: I’m sure a lot of people right now after hearing it will be very interested.

Prakash: Yeah! The discussions begined by them tried to understand where we want to go. What we wanted was regional exposure.

We also want to get accounts that have regional lead for work. Being a part of a global network would mean we get to the roster of bigger brands.

Many times acquisition is back paying from X number years of hard work bloodshed and tears, things that people don’t see in public. Acquisition kind of puts somebody in your pocket for all that look. To be honest, it is also an exit plan.

It was a 5 year exit plan for us. We did the acquisitions with just the 5 of us. The 5 of us came from different backgrounds, dreams and we all need some forms of exit. it’s not a lifestyle and it’s not something that you can pass on to.

One of the key lessons that learned from being part of a bigger network, we saw business in a whole different dynamics. I think that was my biggest take away, learning how different business will help you.

Marcus: If you could restart everything again in starting Yolk, what would you do differently?

Prakash: What have I done different and what this industry is offering now is that a small team can deliver far bigger venue. Build networks.

Focus on business like performance marketing that still involves our digital experience and expertise but the business model will be very different. It’s giving venue to the customer and getting money in process.

Marcus: You can be damn good on what you do and you could charge a good premium but the clients are the mightiest in paying you. They will find somebody who is cheaper and is doing a better work than what you are offering. Eventually things will be commoditized.

Prakash: Exactly, you know these clients want results. They really like to pay for the journey and experience of working with you. I think things have changed a lot.

Like there a lot of tools now, dashboards that you can optimize to view your results. I think that’s what Yolk is lacking. The guys who are performance driven.

Marcus: What was the lesson throughout the many deals you’ve done?

Prakash: I used to mean thing as many alignment and preparing the business owner for the journey ahead. I think once you know the money in the financial aspects, it’s a number it’s a score.

At the end of the day, the human aspects of aligning people into something bigger.

And I mentioned how big and how exciting the future can be, people struggle to kind of manage with change and that’s kind of where a lot of work and time needs to be done.

Sitting down with individual business people, not just helping them aligning themselves on the long term but also from a business point of view. Things change from time to time, terms change, valuations could change but what we kinda help them understand that at that point in time, what’s best for them.

So these are things that we do, to make sure that the journey ahead is something smooth for them. And it won’t be something you walk with regret and sorrow.

I guess that to me is more work that I find personally more rewarding. It involves me sharing what was good, what could be better.

And also looking through their lenses, and seeing what's the best that they can get out of the journey ahead for them. To make sure the general terms of the relationship is good.

The exciting thing is that there are so many different opportunities now. You can be part of a network, you can be part of a few companies and do a roll up IPO, and so there are a lot of different options available. So I guess it’s what fits your dreams.

Marcus: So that’s what you do at Pealo right? Merging, IPOing, exits?

Prakash: So post-Yolk, what I did was I spend a lot of time with business owners. I start listening to their pain points.

I don’t think there’s an answer to labour issue, but with capital,

I find that a lot of business owners are not exposed to alternative fund raising like peer to peer, crowdfunding, etc. And a lot of them feel that going to the banks is the only options that are available to them.

And that’s the inspiration behind Pealo was – To bring together the best of breed in terms of alternative finance and fundraising and make it easily accessible to the average business owner.

So no matter which stage of business they are, they will introduce different funding options, from starting out, scaling their business to the next level and to eventually planning their exit.

So it’s kind of an end-to-end spectrum, but where we feel we bring the best to our clients is at the growth stage, we feel a lot of clients doing great work but keep running into the wall.

And that is where we excel better, we like to bring different options to them in a very customized manner. It could range from doing a merger or JV, or even a part of an acquisition.

It could even be part of a roll up IPO (which we’re currently working on with one of our clients), or it could be them looking to raise capital so they can raise capital so they can grow on their own.

Marcus: So what’s the best way for people to get in touch with you?

Prakash: Definitely check out our website – www.pealo.com, follow us on Facebook or email me at prakash@pealo.com