This issue's shoptalkers: John Balduzzi, president of the Democratic firm the Balduzzi Group; Blaise Hazelwood, founder and owner of Grassroots Targeting, a Republican microtargeting firm; Margie Omero, president and founder of the Democratic polling firm Momentum Analysis; and Chris Russell, founder of Chris Russell consulting, a Republican direct mail firm.
C&E: When did you all start your own firms and what led you to that decision?
Blaise Hazelwood: I started Grassroots Targeting right after the 2004 cycle. I actually started my firm when I had another job. I launched the firm and then I got recruited to go to the Senate committee, so I did both. I was part of testing and implementing microtargeting for the first time at the Republican National Committee, so I wanted to go into that field. On the Republican side, it was a field that no one was really in at the time.
Margie Omero: I started Momentum Analysis in 2001. Before that I was at The Mellman Group as a vice president. I wanted to try something new and felt like I could grow more as a pollster in my own shop. I still service a lot of down ballot and legislative races, but owning my own firm allows me to branch out and get different projects, which is much tougher to do when you’re at a firm.
Chris Russell: I was a campaign guy from the time I was in college. I did every job there was to do on a campaign before I ended up getting into mail and strategy. I had a really diverse experience in campaigns and that let me figure out what I liked and what I didn’t like. In 2008, I managed a congressional race and lost like almost every other Republican lost that year. At that point I felt like I had limited myself by not taking a big chance and going out on my own. I never had any doubt about being able to do the work; the only doubt I had was whether or not I could go out and get work. Can I get people to trust in me? As soon as I did that and got some confidence, it became a lot easier.
John Balduzzi: My experience is really similar. I came up the ranks working campaigns and then I worked at Kennedy Communications before I decided to start my own shop. Through my contacts working at a large firm like Kennedy, I developed a pretty good base of pollster friends and other consultants. I knew there was a need for a smaller boutique size firm located in upstate New York, which is where I’m originally from. That’s really why I started the shop up there. Owning my own firm has always been a dream of mine since I’ve been working races. It was something I was thinking about all the way back when I was the low man on the totem pole.
C&E: Are more operatives willing to take a chance on their own firm now given the current environment?
Omero: I definitely think there are more smaller shops that are launching now than when I started. When I started my firm I was the youngest woman pollster, sole principle. That’s actually still true.
Russell: I think you see people who love politics and they think, “I can do this.” If you do have a network of people, there’s a ton of work out there. Fewer people ascend to the highest levels, but at least at the outset there’s plenty of work to be done. The local guy can grow into the national guy because they have a firm base of clients locally and if they focus on that, it’s easier to branch out from there. That’s the idea I’ve tried to model my firm after. I’m doing a couple of congressional races right now and things are expanding, but I still service down ballot clients—town council and school board. I still enjoy that, and I don’t want to lose those clients. Someone told me last year that the moment you stop enjoying races is when you should stop doing them. I’ve taken that to heart.
Balduzzi: I think this influx of money means the industry is growing and new firms are popping up all over the place. I also think candidates are getting a lot smarter with their money. There’s now more of a choice for candidates and they’re choosing to go with some of these smaller shops that give them the opportunity to work directly with the principles. That’s obviously one of my pitches.
Omero: The other reason you see a lot of people start their own shops is because of the fluid nature of the industry. You don’t need to have the mentality that you’re going to have your firm for 40 years. It’s not a law firm. You can come and go if that’s what you want to do. You can have a firm one cycle and then go run a race the next cycle. Lots of people do that now.
Hazelwood: I ran campaigns before I worked at the party committees, but I always say that running campaigns is like running a small business. That means we all have experience. The money that flows through big campaigns, and the budgets that we have to deal with on these races—it’s very similar.
Russell: I’ve always believed that campaigns in general are great training grounds for business. So many people are specialists in their field, but political people have to do many things well. If you’re a one trick pony, it just won’t work.
C&E: Do you feel like you need a business background to succeed with your own firm?
Omero: There are a few components to that. There’s the business and operations side of things, there’s the staff management side, and then there’s the marketing piece. You also have your main job, which is providing services to your clients. Those are not necessarily the same sets of skills. You could be really good at one, but not so good at the other. There are people who are great marketers, but they aren’t very good with staff. So when you start your own firm you need to have a personal accounting about which of those things you’re actually good at. Can you get to the point where you outsource some of this stuff? Sure. But you still need to get to a point where you’re comfortable with all of those things in order to really run your own firm well.
Russell: When you start your own firm, you come to the table knowing you’re an expert in your own particular area. I know the direct mail piece, but the business side is effort and trial by error. That’s the biggest challenge. The politics part feels like it comes naturally.
Balduzzi: That was my biggest worry going into all of this. I did have the luxury of running a U.S. House race. With a budget of a million-and-a-half dollars, it’s like running a business. I had to get healthcare for the campaign staff, manage the staff, set the schedule and monitor money coming in and out. That’s great experience. I’m still learning more about the business side of things. I can get you elected to the Senate, but I have a little trouble with accounting.
C&E: Is there a way to know that it’s the right time in your career to hang a shingle?
Omero: It’s important to understand that working on a campaign doesn’t necessarily train you to be a pollster or a media consultant. There are some people who work on a campaign, decide they’re good at messaging and then go into TV. But you need to know about video production if you want to do that; you might not have learned that as the communications director. There are definitely people I have spoken to who say, “I’m really good at message so I want to go into polling.” Well, that’s great. But it’s not that simple.
Russell: You need to learn success and failure in this business to be good at what you do. Some people jump into this without having learned that. Some kid interns on a campaign for six months and then all of a sudden thinks he’s the next James Carville or Karl Rove and is ready to hang a shingle. Good luck.
Balduzzi: The mistakes you make along the way are probably the best learning experiences. When I started my firm, I did have enough experience. I had made some great decisions; I had made some bad decisions. But I knew that I had enough experience to give my candidates solid campaign advice. Anyone who wants to go into business needs a track record of success.
C&E: What surprised you the most after starting your firms?
Omero: One thing I hadn’t really thought about is how quickly word spreads. Word gets around quickly and you know everybody’s business in a way that’s quite remarkable. I think it’s just the nature of this being a pretty small industry. Eventually you either meet or work with everybody. It’s amazing just how much everyone knows each other’s work and personal life.
Balduzzi: It was really humbling to me to see how many people reached out about working on certain races and projects. Having friends and former colleagues bring me onto their races was really gratifying.
Hazelwood: I know I’m about to sound like the cliché Republican, but the cost of running the business becomes a reality—especially when you’re budgeting for the off-years. How much are your taxes? You have to take all of that into account. I would have loved some business experience. The one thing I regret is majoring in political science. Why the heck did I do that? The business side was something I just wasn’t fully prepared for.
Russell: I was thinking the same exact thing. The first real wake up call for me, outside of doing the work, was the first year that I had to file my taxes. I remember talking to my accountant about how daunting that was.
Omero: Well, we don’t like the bill either. (laughter)
Russell: But that’s what made some of this come home to me more than when I was an associate. It’s a totally different feeling when you have something that’s yours and you’ve built it. It’s a neat feeling, too.
Omero: Someone gave me that advice when I first started out, actually. They told me to prepare myself for how much I was going to have to pay in taxes. Just try to prepare yourself. People warn you that you won’t be prepared, but you don’t really believe it. I remember talking to my accountant when I first started out and asking him how I could lower my tax burden. He told me, “Get married and move to Maryland.” I could have called my mom and gotten that advice for free.
C&E: Anything else you all wish you had been warned about before you started your firms?
Russell: I don’t think there was anything I was totally blindsided by, but that was because I had already worked at a firm and had at least seen a lot of what firms have to deal with. I don’t know how you could do this if you don’t have that experience. From my standpoint, the responsibilities weren’t completely shocking, but it’s good to be prepared for that.
Hazelwood: When I was working on campaigns and at the committees, I had a lot of people working for me. But it’s different when it’s your own money. The psyche of employees is different. They’re not operating like you’re operating. Now it’s about your business and your name is on the line. You obviously hire people who are loyal and hardworking, but they come from a completely different perspective. That’s something I’ve learned over the years, but sometimes it has been a hard learning curve. When I first started I expected them to work 20 hours a day just like I did. It doesn’t work that way.
Russell: When did that all settle in for you? I ask because I had my first employee last year. He was a great kid and did a great job for me, but I just didn’t know how to employ him properly.
Hazelwood: It took a couple of years. I needed to get used to the structure that they need. I come from such an unstructured background—running campaigns—that it took a while for me to realize they need structure. So it took a few employees and a few different personalities.
Omero: It’s difficult because you’re working with these folks and they’re also in your space. You have to be comfortable with sharing physical space and sharing emotional space. I know this sounds sort of metaphysical, but you have to be willing to let your guard down a little bit with your employees. That’s what leads to a good working relationship.
Russell: The hard thing for me was figuring out how to get the person to care as much as I do. The answer is that they won’t. They shouldn’t be expected to. That was the hardest thing for me. I wanted them to match my intensity and that’s a very hard thing.
Omero: A lot of that is giving your employees some autonomy and asking them for input. You need to make them feel like they are part of the process.
Balduzzi: One aspect of my job now that I literally never had to do before is dealing with a client that may be late with payment. In my previous positions I would always say, “You need to talk to the president or the principle.” And then the problem was usually dealt with. I was never the guy who had to play the bad cop, but I have had to do that a couple of times at my own firm. That’s something that I would have liked to be better prepared for. It’s a perfect example of something that you don’t really anticipate having to do, but it becomes a reality when it’s your own firm.
Omero: That’s always a tough one. When do you start? How aggressive are you? How much do you push? You have to do it a little case by case. Ultimately, this is where having a small business can be an advantage. You can say, “Look, I’m a small business.” That can be helpful. With a bigger shop, the client may trick themselves into thinking that a bigger shop won’t notice.
C&E: How do you know when you need more staff and how do you balance that against what you can actually afford?
Russell: It’s a hard tradeoff. If the firm is doing well and you’re making some money, in order to hire someone to get to the next level you have to give some of that back. That’s the part that I still struggle with. Where is that line? How do you make sure if you hire someone they’re not going to be just a negative on the balance sheet?
Omero: I’ve heard people tell me that you can never go wrong by having more staff. I don’t know if that’s true, but there are people who have the view that if you have more staff it gives you the opportunity to get more work. I think it’s better to err on the side of caution and have more staff rather than less. When you have fewer staff not only are you struggling, but the rest of your staff is struggling.
Hazelwood: My husband has a mail firm and he just hires people for the last four months of a campaign cycle. He just tells them that they’re done on a certain day. It’s in the employee contract. I think that makes a lot of sense, but I’m not really set up that way so I don’t do that. There’s just the pressure that if you hire someone, you’re going to have to pay them in an off-year.
Russell: Unlike other businesses, your client being around in year two, three or four depends on whether they win in year one. A couple friends of mine also own small businesses and I always talk to them about this difference. As I get closer to Election Day I get more and more stressed out, because I start thinking, “These people have to win.” The cyclical part of it is very challenging.
Balduzzi: When it comes to short term hires, we all have dealt with that. If you’re working on a campaign, you know that you may not have a job the day after Election Day. People in the political arena understand that.
C&E: Has the new landscape of Super PACs impacted these calculations at all? What has it changed the most for all of you?
Omero: It doesn’t affect my day-to-day business. For others, I’m sure it does. I do think it affects how voters view politics. Voters say there is too much special interest influence and too many ads all the time. But the voter perception is worse to me and it adds to this real sense that Washington in particular has gone of the rails. When you see that voters are less engaged, it’s bad for the process. Forget about the political consulting industry, this is bad for politics. It’s bad for leadership.
Balduzzi: Personally, I don’t agree with [the Citizen’s United decision], but it has helped my firm financially. It’s a unique way to answer the question. If it wasn’t that ruling, it might have been something else.
Russell: Strictly from a business standpoint, there’s more work and more money. That’s a good thing for people who depend on work and money in this industry. But when we talk about voter participation, I sometimes struggle with that. Your job is not really to increase voter participation, it’s to win campaigns. During the time I’m working, I just cut that loose and ask, “What can I do to help this person who hired me get to 50 percent plus one?” I’ve had a couple of people who have known me for a while say, “You’re too cynical now.” Maybe I am. But I try not to let my personal beliefs on anything get in the way of doing the best job I can for my client. But we probably all struggle with that, because it is so partisan out there right now.
Omero: There’s always money flowing to campaigns. It’s just a question of how it gets there. I hear what you’re saying and I agree that it’s not always about worrying about the coarseness of the dialogue; it’s about winning your election. I don’t listen to focus groups where voters say, “I just wish campaigns would stop running ads,” and then go back to the campaign and advise the campaign manager to take the ads down. Nonetheless, getting people engaged and having a tone that people can appreciate, while still providing a contrast of information, are both goals that you can have. You can think about the public good and think about having your candidate win.
C&E: If you had to give one single piece of advice to someone about to start their own firm, what would it be?
Hazelwood: Have some business lined up before you start that firm.
Omero: Make sure you have some training in a variety of tasks, not just the discipline you’ve chosen. Get some training in marketing, pitching, accounting and setting prices. Try to get as much of that experience as you can.
Balduzzi: I would tell them to talk to people they know and trust, and solicit advice, even from outside the political world.
Russell: I would agree with all of that, and the only other thing I would add is that you have to like what you do. It’s going to be most of what you spend your time doing, so don’t be miserable.