‘I thought I was going to go bankrupt’: Jonathan Sands looks back on 40-year career

The industry veteran is moving on from Born Ugly and Elmwood after four decades. Now, he wants to build a new creative community.40 years ago this week, Leeds design agency Elmwood brought on two additions to its team. One was a 21-year-old Jonathan Sands, who was hired to gin up new business, and the second was a fax machine. “You could smell the vapors from it,” Sands tells us.The fax machine eventually went the way of the dinosaurs, but Sands ended up running the place. And now, after a 40-year career steering Elmwood (and then Born Ugly as its Leeds business became) into one of the UK’s most respected agencies, he’s stepping down as chairman this week. “I didn’t want to pass my sell-by date.”It’s a period that has seen massive change for agencies, not just in the way they work but what work they do and where they do it. The latter point will be occupying Sands’s time for the foreseeable as he plans to keep himself busy with an agency consulting practice and a new property business.‘By the end of year one, my sales were double that of my boss’Sands began his career in the early 80s at Mancunian B2B house IAS, but found his feet with a gig at Elmwood (then part of Charles Walls) when he was hired to hunt for new business (both IAS and Elmwood are now part of MSQ, as it happens).“I started on six grand a year and a gold Ford Escort,” he recalls. The pay may have been low, but a year later aged just 22, Sands found himself with responsibility for running the business. “By the end of year one, my sales were double that of my boss. He decided to leave and set up his own agency and I was given his job.”Later, as Elmwood became more established and the fortunes of its parent firm soured, Sands organized a buyout deal from Charles Walls. It was a big gamble. “At the age of 28 I didn’t really know what a management buyout was. I was just married, we’d had our first kid and I borrowed half a million to buy Elmwood.“Elmwood was turning over £1m a year, with profits of £100,000. But it only had £900 of assets. I had to borrow half a million pounds to buy a company that had less than a thousand pounds of assets on paper; if memory serves me right, interest rates were 16%. There were a couple of months when I thought: ‘I’m going to go bankrupt, I’ve bitten off more than I can chew.’”To stay ahead of repayments, Sands waived his own salary, maxed out his overdraft and sold personal assets. At one point, he remembers, the only asset he had left in the world was “a knackered old speedboat“. “I sold that for £1,200, which paid my mortgage for a couple months until we got a few more sales in. The moral of the story is a lesson I learned very early on: businesses don’t go bust because they don’t make profit, they go bust because they run out of cash.”‘Harder, faster and more frenetic’In the 90s, Sands developed Elmwood from a specialist agency into a fully fledged design and branding concern with reach far beyond Leeds, opening offices in Sydney, New York, Singapore and London.Plenty has changed in that time. For clients, he notes: “Marketers have got a much bigger role, and a much more complicated role, because they are managing across multiple territories. The budgets are tighter because procurement departments are involved.“It’s harder, faster and more frenetic. Marketers today are far more sophisticated, far brighter than they ever were 20 years ago – let alone 30 or 40 – because they have to manage a plethora of technologies, a plethora of cultures, with a disparate marketing team spread over the globe.”That requires a more exacting approach from their suppliers, he says. “Agencies have to be far more sophisticated than they ever were and they have to be much more specialist… you’ve got to have a real killer proposition to cut through because nobody wants a generalist any more.”In 2021, Elmwood was broken up into three businesses, with its original Leeds component becoming Born Ugly. Having helped establish the agency, he has decided it’s time to move on. “Some of the excitement of working directly with clients, working with creativity rather than big data and procurement departments ruling the roost, was less fun that it used to be and more stressful. So I felt that now’s the time to hand it on.”Sands has tried to set up Born Ugly for a prosperous future, with an equity share scheme. A huge portion of his 85% equity stake in the business has been divided up among all of its employees. By basing the valuation of his shares on the agency’s historic value rather than projected future earnings, the transfer is cheaper for the staff too. While he’ll still keep a “little” stake and remain landlord of the agency’s premises, he says “every single person in the business is an owner”.‘Good and bad learning from pandemic’Though Sands says advertising is a less “personal” industry than it was, he’s adamant that physical spaces are vital for creative businesses. Alongside a consulting business he’ll be running for Born Ugly and other agencies, he is also planning a property development firm, dubbed Third Pig after the famous fable’s last swine left standing.“There has been good learning and bad learning from the pandemic. The way we work has changed forever. We’ve realized you don’t necessarily need to be in the studio to do good work; in fact, in the teeth of the pandemic in 2021, Born Ugly had an amazingly successful year.“But on the other hand, people need direct interface with colleagues, especially the more junior members of the team. They need to learn through a process of osmosis, through peripheral vision. You can’t tell people’s body language when they’re working in their bedroom and you’re at your kitchen table. You need to be able to witness.” There is also, he argues, financial components that can mean working from an office is cheaper for staff, while in some cases it can beneficial to team motivation and mental health. So, inspired by London’s Groucho Club where there are “people with laptops in the day, who in the evening stay to socialize with friends and have a drink or something to eat,” he’s aiming to launch an ‘Ugly Club’ in the same Leeds building that hosts Born Ugly.“It’s sort of a hybrid of the Groucho Club and WeWork… a place where we have events, maybe we’ll have ‘Ugly Conversations’ where we’ll invite inspirational people to come along and talk. We’re playing around with the idea of a space with a purpose beyond being just a design studio, a place where people can pop in and have a drink on the way home from work.“We’ve got to find spaces where people want to go to work, rather than have to go to work,” he adds.As well as the co-working space-cum-private member’s club, Third Pig will invest in “creative spaces” that provide better working environments to the creative industries. “It’s about creating an environment that has a soul. It’s not about pool tables… this is about creating a community.”

‘I thought I was going to go bankrupt’: Jonathan Sands looks back on 40-year career

By Sam Bradley | Senior Reporter

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