Motion Sickness sweats for equity instead of cash

Motion Sickness sweats for equity instead of cash
Motion Sickness Studio launched a unique start-up initiative last week called 'MSS Startups', geared towards younger prospective clients, which will see the studio trading its services for equity, a move founder Sam Stuchbury says was a pretty natural step to take. Here’s a look at the new service and how it all works.

Motion Sickness Studio often has a lot of young start-up businesses approaching it for work, says creative director and founder Sam Stuchbury.

“We have a bit of an online following. People follow us as a brand as well, so we get a lot of young people and start-up businesses and tech businesses approaching us as well for work and often they can’t afford our fees.”

He says because of this, the studio saw a gap in the market for a start-up programme aimed towards a younger generation of people, so it decided to launch ‘MSS Startups’.

Basically, how it works, is that interested parties first apply through the studio’s website.

“From there we meet up with the start-ups that are interested and see if we are a good fit and see what they are after,” he says. “There are some that we are well aligned to and some that we are not. And we have had a really good response to it already,” Stuchbury says.

He says a discussion will then take place as to what the start-up wants the studio to do. “For most people it’s the whole deal, so a full-service agency approach. So we would literally do everything from their branding, marketing strategy, digital strategy, website, social media, launch campaign, and then we would equate that into how much equity we take from the business and then agree on that.”

The percentage of equity depends on the work, he says. “But as a gauge, [with] one of the businesses we are working with, we are doing a lot, and we were involved in the concepts and that was around 20 percent equity. But there are others where it’s much smaller and around five percent and it’s purely depending on the value of work we are doing, and the company.”

Stuchbury says he’s never really seen a programme like this before in New Zealand. “There’s other incubator programmes like The Ice House and some tech ones overseas. But I think ours is a different approach, as our studio is unique,” he says.

“Our style and the way we produce content and the way we brand things is very digitally led and I think that’s important for a lot of people. A lot of incubators overseas are about preparing the business for investment, but our approach is preparing the business to be profitable,” he says.

“ … because often the stuff they need money for, is the [creative work] we do.”

The studio already has one business running through the start-up programme, he says. “Then we have another one [business] which is an app, which is looking positive as well, and we locked in those before we even went public and since we’ve launched this week, we’ve had a really good response to it.”

He says often due to the nature of the business, when the studio gets a client it gets so intertwined in the company, it becomes an extension of sorts anyway. “And for us to be able to do that [the programme] for start-ups and have a stake is really rewarding. Having a say in the business and passing on everything we have learned will be really good for young parties,” he says.

“And we are a young team as well and enjoy working with creative people and start-ups so we are going to really enjoy it and sink our teeth into it as well.”

He says a lot of the promotion for the initiative has been word-of-mouth so far through the studio’s networks. “Then we’ve launched on our website and pushed it through our social platforms. So we have over 3,000 likes on our Facebook page, then we have quite a good mailing list too for people in the industry. But I think it will be more of an organic thing really.”

The studio also created some stellar shots of its ‘MSS start up team’, inspired by the awkward '80s photos of families and office workers circulating online.

“When we were designing [the programme and website] and doing the wording we didn’t want it to come across as anything too salesy and shady. We don’t want people to think they’re going to come in and lose half their company. We want to have a conversation and figure out what works best for both parties and what equity is going to work and what services will work.”

He says the agency will take on about a handful of start-ups per year, but it depends on the work each one requires. “There are some which might need everything but we might be able to take more [on] if it’s just a little bit,” he says.

“The other example which gave us the idea as well, is a company overseas called Sandwich Video, they do a similar thing with their videos and video production for new apps and tech products,” he says.

“So, they either discount their work through equity or do it for free through equity, but the ultimate goal for us is to build that brand as we have with our studio, so it would be awesome to be renowned for start-ups to come and work with us, as we have a record for working with successful businesses.”

The studio’s team has also grown, Stuchbury says, which has allowed the studio to allocate more staff to work on the start-up side of the business.

“We’ve been hiring a few new people already for the studio so we have just hired a new guy who will be leading all of our content which is freeing me up a bit more to do campaign and strategy. Since we have been growing the other side of our business, we have been able to allocate more of our team to the start-ups.”

The initiative is comparable to what occurs when a brand ambassador has a stake in or is part of a company, meaning they have a say.

For example, Lady Gaga was once the creative director of Polaroid, celebrity chef Nadia Lim is the co-founder of My Food Bag and Will I Am is the director of creative innovation at Intel Corp.

New Zealand company Invivo Wines also teamed up with popular UK talkshow host Graham Norton four years ago, and he owns a two percent stake in the business, meaning the success of Invivo is good news for him too. Norton drinks Invivo on the set of his show and has been involved in other marketing stunts for the wine.

Invivo recently launched a new wine blended by Mr Norton himself.

Kiwi fashion label Zambesi designed the Invivo label and has a 2.97 percent stake, while Invivo co-founders Tim Lightbourne and Rob Cameron own 35.59 percent.