About two years ago I went to work for a startup. To make a long story short, the startup fizzled. We were successful, just not successful enough. Or, put another way, there came a point where even really big breakthroughs didn’t justify throwing good money after bad.

After a little more than a year of burning the candle at both ends, we pulled the plug. It wasn’t an easy choice.

Am I glad that I gave up the relative safety of my staff job for the high risk of a startup?

You bet.

Would I do it all over again?

In a heart beat.

But there are a few things — ok, more than a few — that I would have done differently, if given the chance. The startup I went to work for was a digital publication, rather than an agency. But in many ways, the experiences translate. In fact, those experiences also translate to the business of being a freelance writer.

Freelancing for iMedia, I get to interact with a wide range of businesses and individuals. I speak with people who work at brands, and people who work at large agencies, as well as technology vendors. But some of my favorite people to talk to are the folks who struck out on their own and started their own agencies. There’s just something really compelling about the energy, creativity, and commitment that goes into a startup agency. These enterprises require great work, long hours, some money, and more than a little luck to succeed. But even the ones that do succeed make mistakes — sometimes very big mistakes.

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I reached out to several agencies that were startups not so long ago. I asked them to share their candid assessments of what worked for them in that first year, and what they could have done better. So, before you quit your day job, tap into your savings, and strike out on your own, you may want to consider the advice from these agencies. And, as always, please use the comments section to share your two cents. If you worked at a startup and have something else to add, let the community kick it around. Or, if you’re contemplating the launch of your own agency and you have a question, put it out there. Who knows, you just might get an answer that can make the difference between success and failure.

Bad economy, bad move?
It’s a terrible time to start a business.

You’ve probably heard a phrase like this at least a hundred times since the economy nearly fell off a cliff back in 2008. I began work at my startup in the fall of that year, and I have to admit that even as I was packing my desk, excited about my new venture, I couldn’t help to think that I was making a huge mistake. After all, this wasn’t just a bad economy — it was being compared to the Great Depression! So why would anyone in their right mind chose this time to take the biggest risk of their life? I mean, you’d have to be an idiot to make a jump like that, right?

Well, that’s not how Traction CEO Adam Kleinberg sees it. He started his agency in 2001, which — if you remember — was another “worst time” to start a business.

“I always joke that it was the worst time in history to start an agency, but that’s not true,” says Kleinberg. “It was the best time. When we moved into our first real office, the economy was in the crapper so we were able to get a dirt-cheap lease on a beautiful office in a beautiful building. As the economy started to turn around, rents went up.”

While rent was one factor, other costs like labor, supplies, and just about everything you need to run a business tend to be cheaper in a down economy. But that doesn’t mean that you should dive in with reckless abandon, either.

“You have to be careful not to over commit,” says Kleinberg. “But at the same time, you have to realize that opportunities arise from chaos.”

The business cycle
Whether you work for yourself or at a larger agency, you probably know that getting someone — anyone — on the phone after lunch on a Friday in the summer is a dicey proposition. Actually, getting much of anything done in the summer tends to be harder than it is any other time of the year. Ditto for Christmas and Thanksgiving.

As an employee, you might feel especially good about these periods. After all, there’s something nice about an occasional lull. But if your name is on the door, that lull can be a disaster.

“The one thing I wish I had known when I started this business was the cyclical nature of it,” says Kleinberg. “For instance, summer months are often very slow. Early on, I’d think the world was coming to an end by August, but just as I started writing my own obituary, the phone would start ringing. If you’re starting your own agency, you are stepping on a roller coaster ride. Beware.”

Obviously, you can make financial plans to cope with the feast/famine cycle, but it’s just as important to have the right mindset to make it through the lean months, especially if you’re in that critical first year.

Stay healthy, stay working
When you begin a startup, things you once took for granted, like sick days, go right out the window.

“The one thing that we distinctly remember about the first year of business is that we rarely got any sleep [and] we also got sick often,” says Tynicka Battle, CEO of ThinkTank Digital. “It sounds like an old adage, but you have to take care of yourself. Important things like health and family can fall by the wayside when you are so focused on deadlines and growth.”

Consider your partnership
Chances are, you’re starting out with at least one partner, maybe more. While you obviously need to have trust and chemistry with your partners, it’s also a good idea to build partnerships that are diverse.

“Our backgrounds were fully seated in creative,” says Elissa Gjertson, co-founder of Frank. “If we could do it all over again, we would enlist a strategic, innovative tech guru to join the partnership right out of the gate.”

Focus on core competency
Starting out, it’s always tempting to say yes to any business. After all, you need to make money and if the assignment is vaguely within your field, there’s a strong push to take the job. But while taking a job outside of your agency’s core competency can have short term gains in terms of cash flow, it can hurt you down the road.

“[If we had the first year to do over again] we would have pushed harder to be really focused on a specific target,” says Gjertson. “Our service offering was all over the board: ‘You have a budget, we’ll get it done!’ While we created a ton of great work this way, it sometimes made it difficult to communicate our true strengths because we just did it all.”

When do you hire that first employee?
Here’s the bottom line on hiring that first employee — there’s no right answer. Seriously. The question of when to make that first hire is so specific to your business that any attempt at presenting a rule of thumb is almost doomed from the start.

Here’s an example of what I mean: Tynicka Battle of ThinkTank Digital says they waited way too long.

“We did not hire any help until our ninth month of business, [which was] about eight months after becoming wholly and completely overwhelmed with work,” Battle explains. “I would strongly recommend hiring out as soon as financially feasible to increase efficiency, and to allow for the all important ‘step back’ to see what needs adjusting.”

But Aaron Maass, managing director of MaassMedia sees it differently. He had the benefit of beginning his Web Analytics firm with a major client on day one. But even with that kind of financial certainty, he’s not so sure early hires are a great idea.

“Originally I thought that by adding staff I would have more time to develop new business,” says Maass. “This was true, except that any new business we won was unique enough that it required a lot more of my time than I anticipated which diverted my attention from building more business.”

According to Maass, hiring those first few employees is a “chicken-and-egg” dilemma with no easy answers.

In hindsight, Maass says he may have considered more strategic partnerships to leverage his ability to take on new business without having to train new employees. But even that solution, says Maass, may have its own perils.

“Obviously entering into a partnership of any kind can have its pitfalls, which is the main reason I did not consider it,” Maass explains. “But in retrospect, the risks of a partnership failing may not be as great as the rewards of it succeeding.”

Brand yourself
Sometimes doctors make the worst patients. Sometimes lawyers make the worst clients. And sometimes ad agencies do a terrible job of marketing themselves, even when they excel at doing just that for their clients.

“Your external image is extremely important,” says Alex Moazed, CEO of Applico. “All of your touch points with clients should have the same branding and feel. I would have spent more time making sure that our deck and website portrayed the same message to potential clients.”

While it sounds basic, Moazed’s point can’t be underestimated. After all, a new agency — even if its founders are well known — is still a big question mark for clients. It’s not just about branding to raise awareness about a known quantity. Instead, it’s the more difficult task of making that first impression. It has to be great and it has to be the right image for your agency because — if a million other small details go your way in that first year — you’re going to own that brand for a very long time.