[03:15] So we’re in a very interesting period of time, economically speaking. Thanks to the pandemic, there’s a lot of undesirable things going on. A lot of people are losing their jobs. And you’ve got this thing called Launchpad that I want to talk about first. And so for the folks who aspire to start a business or replace a job in some way, shape, or form?Launchpad is maybe something they could use. What’s “launchpad”?
- Yes, so it’s not a product or anything. It is a phrase. I mean, it’s a concept that was… I was speaking with a guy named Andrew Wilkinson who actually owns a portfolio of internet businesses. And he actually started with his design agency. And they started doing really well but he realized that the revenue was not very scalable. So he basically started taking the profits from that business and started reinvesting it, or buying other internet businesses. And now collectively, his entire portfolio does over a hundred million dollars a year. And he’s not really into the day-to-day on these businesses. He just focuses on reading a lot. He focuses on strategy and helping the operators of these companies.
So the idea here is a launchpad business could be an agency, right? Or it could be like a drop shipping type of business. And then, drop shipping, there tends to be a—there’s a limit at a certain point. And you’re not going to become a billionaire that way. Let’s just put it that way. Right?
- Same thing with agencies. Typically what happens is you are going to cap out, or your business model just isn’t good for most agencies because for every new customer that you have to add, well guess what? You have to—a certain percentage that goes towards more employees, right? So it’s just not as scalable as let’s say software revenue, or maybe subscription revenue, like for memberships, or things like that.
So you want to continue to level up. So you start with a launchpad first and you get stronger and stronger. And then at a certain point, it’s like, “Okay, let’s think about products. Let’s think about building marketplaces.” Or you want to go all the way up to, “Hey, let’s start building rockets.” You can do that. But that’s the career progression that I think people can continue to level up.
[05:26] So to be clear then, for someone who is either looking to start their first business, or unemployed and looking to start their first business, an agency can be a great launchpad to get them going because it doesn’t cost a lot of money to get started. You can prospect for your clients, and you can deliver services either yourself, or as I like to do—you can hire people in non-US locations to take advantage of lower costs of labor and lower cost of living, to get them to execute all the work for you.
[06:01] Okay. So you bought a company called Single Grain for two bucks. What’s the story behind that?
- Yes. So I think this is in 2012 or 2013. So I was leading marketing at an online education startup. And this agency called Single Grain, which was an SEO agency at the time, was getting hit hard by Google’s big algorithm updates. So there’s an update called Google Panda and there’s one called Penguin. It basically changed overnight and rendered their business useless. And so I was tasked—because at that online education company we had a great product. We had a great CEO. We just needed to add great marketing and we’re able to turn that company around.
But the challenge here was this was a business where the main business no longer worked. And basically it’s like, “Okay, how are you going to turn this around where the business is not good anymore?” And it could very well be that the people are actually invalid for where we’re trying to go next. So, can I turn this burning ship around? I looked at the agency from the outside. I was like, “This is a house of cards.” And I was like, “Man, if I can turn it around, that would be great.” So they had me come in, and I came in at some number two for the company.
And basically what happened was, within a year, there were four other partners in the business. I own 10% at the time and they all decided that they wanted out. And they were just, “Hey, let’s just shut down the thing or whatever.” I said, “Hey, you know why don’t I continue on?” And actually, Neil—my podcast co-host—was actually one of the partners at the time. And he said, “Hey, you should get out. There’s no brand equity here. This is a sinking ship. You’re better off going somewhere else.” And it made a lot of sense. I think it’s very sensible. And oftentimes, I think you just have to go with your gut. I was like, “You know, I think I’m going to do it.” So what I did was I offered $1 for 10%, for Neil shares, and another dollar for one of his other partners with his other software business. And the rest were negotiated through—we’re gonna pay out through the profits of the company, with the contingency that if the company failed I would owe nothing.
So by the way, at the time, I had no idea what I was doing. I was 27 years old. So I was just coming up with all these random terms, but they accepted. And so that’s how I got Single Grain and I own 100% of the business now. And thankfully, we’re able to turn the ship around. But it was a lot of work so…
[08:25] So, where’s Single Grain today in terms of revenue?
- Yes, I mean, Single Grain’s revenues. I mean, we’re eight figures. The types of companies we work with would be like the ones you mentioned—a lot of tech companies, a lot of SaaS companies. And yes, I mean, in the very beginning too, by the way, the blog was getting about three or four thousand visits a month. Now, we get better traffic, about 350,000 visits a month or so. So that’s been a good boost in terms of lead gen as well. So we’ve got good volume.
[08:56] Okay, so you’ve covered a lot of stuff there. And I want to unpack some of it and go down some rabbit holes, if we may. So for someone who likes the idea of launchpad, and they’ve just heard what you’ve done with your agency, and they’re thinking, “Man, I would be super happy to have an outcome like that. So I want to start. I want to start an agency.” What would be your advice to the person who—they’re interested in marketing, obviously. Otherwise, you’re not going to start an agency. So they’ve probably been listening to podcasts, and reading blogs, and doing all that kind of thing, but they don’t know how to get started. They don’t know how to get the first client. And obviously, you’re not really in business until you have the first client. How do you get the first client?
- Yes. I mean, I think there’s a lot of things I can say. I think it’s much deeper than just one answer. So I’m gonna give a couple resources first. So there’s a podcast called 2bobs, it’s number two B-O-B-S. That’s a great podcast for agency people. And there’s another podcast called Build a Better Agency podcast, right? And we actually put together—you can just Google it. I think it’s still called Agency Accelerator or we might have renamed it to consulting school. But basically, once a month—and I did this earlier this week—I’ll actually hop on a call and help agency owners. So you can just—I think it’s consulting school now. You can pick that up if you want. And then there’s a great book called Win Without Pitching. So I’m consolidating a lot of these resources. I think a lot goes into getting your first client.
But what I would say is, look—if you are good at web design, or let’s say you’re good at running paid advertising—what I used to do when I had no clients, I had no audience, nothing, [10:37 unintelligible], which is I think it’s now defunct. But anyway, I’ll look for data sources where I can find a lot of emails. I’ll make my dream 100 list of customers that I want to reach out to. And what I would do is, every day I was making 20-minute videos on what they should be doing with their site, right? And now there’s a lot of different tech you can use. You can use hunter.io to find emails. You can use Loom and you can make five minute videos. And it’s just super fast, right?
And so I’d reach out to people and say, “Hey, these are the top three things that are wrong with your site or whatever. Here’s what you should do about it.” What ends up happening is people’re like, “Oh, I didn’t know that. Can you just do it for me?” And what you’re looking for when you’re reaching out to these people—whether it’s through email, or whether it’s through LinkedIn—maybe you’re looking to reach out to maybe 40 to 50 people a day. And you’re looking for maybe a 10 to 20% response rate, which is very much what one of our students is getting right now. And he’s like, “Dude, that’s been helpful. Like, that’s all I do right now. I reach out with, ‘Hey, here’s a couple things that are wrong,’ like a diagnosis. And then sometimes I might just offer like a free audit or something like that, and a lot of people bite,” so…
[11:47] So in the beginning, for the first one or two clients, do you think it’s more important to try and charge the money or more important to get a raving testimonial?
- I would—so what I would do and that’s a great question. I mean, there’s a couple ways you can play it. And I’m sure you know. So you reach out to people and you say, “Hey look, I’ll do this. I’ll work for you for free for a month.” But at the end of the month you can ask for a testimonial, or say, “Hey, at the end of the month, I want a contract,” or whatever. I think if you really need the money and you need to put food on the table, then I would do that. I think if you were going to safer route, and you had a full time gig, and you just started doing this, I would probably aim for the testimonials first. But I think it just depends on how you’re feeling with whoever you’re talking to.
[12:29] And do you think that all of the email outreach needs to be done by the founder? Or is that something that would be easily systematized and delegated to a worker outside the US that you can employ for three or four dollars an hour?
- It’s a nice tea up there. So I would say—look, I think in the very beginning, the founder led sales is where it should be at until you get the system down. And I’m sure you explain this. But you get the system down first, it’s locked in, and then you hand it off. It could be people that are offshore. You can arbitrage the price there. I mean, I think the number one mistake a lot of first time founders make, and sometimes I repeat this myself as well, it’s just not not verifying. Right? So Ronald Reagan says “trust but verify.” So I think there’s a lot of that that needs to happen. And you get the machine going, and you have a project manager running it, and they’re running with the other people, then great.
[13:28] So obviously, people who’ve been listening to my show for some time and following me for some time know that I’m a big believer in using offshore labor because it comes at a—if you’ve got great systems, it works exceedingly well. And it comes at a fraction of the cost. And the prospecting effort is really mind numbingly boring, it’s the same thing over and over again. And so I think that that is a fantastic way to start to get appointments in your calendar.
So in terms of service offerings, I have my view on this, but I’m curious on yours. If you were starting an agency now, what—because you don’t want to be everything to everybody. That’s a way to be nothing to nobody. If you had to specialize in one particular practice area, what would that be?
- So on the SIngle Grain side, they specialize in working with SaaS companies. So, very much they’re a SaaS marketing agency. And the work we do, it’s not like we tried to—we don’t say we’re full service or whatever. It’s just strictly we run paid ads and then we’ll do SEO work. That’s it. We don’t try to be everything to everyone. And that level of focus actually goes a long way because the conversations are—it actually gives prospects a lot of… They’re relieved when they hear that you specialize in SAS, and you can actually speak the language that they’re speaking. Right? Lifetime value, CAC and all these words. So that’s what I would say.
I mean, figure out what you’re actually interested in if you’re just starting out. And if you actually have some experience, what industry do you have the most experience in? And then focus on what you’re good at, and don’t try to be everything to everyone. Because the problem is—if you try to say, “I’m going to go build a billion dollar agency,” the problem is this. You’re going to get to a situation where you’re just buying other agencies. You’re playing the mergers and acquisitions game, and you’re adding other people, and you just have this Frankenstein culture where you’re just trying to make it a money machine. And to me, personally—I think it might be interesting to other people—that is not that interesting. So…
[15:26] I agree completely. I think, get your agency to $1 million in revenue, and figure out how you can maximize profit and a million in revenue, so that you don’t have to work there any longer. And now you’ve got cash flow freedom, and time freedom to go and figure out “how can I deploy that more effectively than simply growing my agency.” And we’ll get to that before we finish up today. But I do want to ask some more questions.
So let’s say that someone’s listening, “Okay, great. I’ve got a client, or two, or three. But they’re starting to bump into, you know. I can’t…I can’t do all the work as well as finding new clients.” There’s that challenge. So they need to start building a team, what would be your advice for them on the baby steps on getting started to build a team?
- Yes. I’ll just share what I did. And then people can take what it is whatever they want to take from that, and craft their own journey or story. So for us—so here’s what happened with Single Grain. A year into it, it was basically my worst nightmare. We basically dropped all the way down to one employee. And basically what happened there was like—we’re like, “Okay. Well, the outside accounting firm called us and said, “Hey, we might have to shut things down.” And so we’re down to one employee. And I think your ask is more around that the first hire, right? So that was very much the reset. And at that point, we were like, “Okay, how do we reset?”
So first, what we started doing was we started referring the leads out, and we started collecting good affiliate commissions. It was like three-four hundred grand a year or something like that, and that was all profit. But we realized these agencies didn’t do a good job of retaining these customers. So then we started working with contractors first—outside contractors that had experience that could manage the client as well. But then we realized they were very much mercenaries, and they were never going to align with the culture that we’re trying to establish. So the most important hire we made first is more so an account manager. That was kind of a hybrid, they can actually do the work. And once we made that full time hire, things started shooting up. And on my end, I could focus on closing. This was kind of the recovery.
And I would say the next big impactful hire is there’s actually a book called Rocket Fuel. And it’s written by this guy named Gino Wickman, who wrote Traction, which we might have talked about on this podcast. But the idea behind Rocket Fuel is that usually the founder is a visionary, and they need to find an integrator., right? Whether you want to call them operations person, whatever. Once we made that hire, we quadrupled. Right.? And at that point, we’re just like, “Wow, okay. This person is going to help implement every idea that I have. And they’re going to keep things organized. They’re detail-oriented person. They basically help compliment you.” So I would say, first on my end, what I did was, “Hey, let’s take the work off. Let’s take the account managing off.” And then the big time hire would be the integrator.
[18:30] So for someone who maybe is not an expert in SaaS marketing, what do you think of starting a Amazon brand management agency where you’re working with young brands who know nothing about the Amazon channel, and you’re trying and you’re managing their Seller Central account for them, as a starting place? Obviously, you could expand your service offering beyond that. Of all the things that a rookie agency owner could do in terms of practice areas, if you had to rate that one on a scale of one to 10, what would you give it?
- So in terms of opportunity?
- I think it’s a great opportunity. I think right now, you talk about Amazon. There’s a website called Exploding Topics, and you can see what keywords are trending up and like exploding. You think about Amazon. You think about influencer marketing as well. I think these are great areas to attack. And I think YouTube still is a very big opportunity. You see a lot of people talking about YouTube creators. So I think there’s a big opportunity right now, in gaming as well.
[19:29] Yes. I would agree.
And folks, if you’re listening, and that is of interest to you, I am going to be—by the time this airs—there will be a webinar that we’re going to be doing for that. So just check in the show notes. There’ll be a link someplace where you can register for that webinar.
Okay, so we’re off the ground. We’re starting to build a team, slowly. We’re working towards our goal of a million dollars, and we want to make sure that by the time we get there, that you don’t have any day-to-day operation in your business. So that you can do some of the other stuff that we’re gonna talk about here in a bit.
What are some of the other—because you’ve got hindsight to your benefit—what are some of the other things that you need to be aware of, or maybe some of the gotchas, or potholes that you want to avoid, as you’re scaling from where we’re at to the million dollar mark?
- I think one of the biggest back breakers is—obviously, you want to give people that are younger a chance to grow. But one of the biggest back breakers for me was promoting people too quickly. So if you promote people too quickly, you want to give people a growth opportunity. You obviously want to promote from within, and they understand your business the best. But in some cases, you’re actually better off hiring people that have the experience. Right? You pay more bucks, and you hire people that have more experience. So that actually might go against kind of what you’re saying with the offshore stuff. But I’ll give you an example.
One of my buddies, his agency in the last three years went from zero to 40 million a year. And it’s just because they were able to hire some of the best people and pay them four or five hundred—seven hundred thousand dollars a year. It’s worth it, right? If they’re able to come in, put in the right systems, the right processes, because they have the hindsight. They have the experience. Versus having someone on your team make the mistakes. Some of this stuff is high risk, and it might take you—that might extend it by two to three years or so, in terms of maybe where you’re trying to go.
So I think there’s—for me at least, every single time I’ve promoted somebody too quickly when they didn’t have the experience, their talents would cap out. When I knew very well that they would have excelled—they were excelling at their previous role, and you could move them up in that direction, more as an individual contributor. But they wanted the growth opportunity, right? They wanted to go for it. And it has—majority of the time for me at least, failed. That’s not to say I won’t continue to give people shots that are younger. Actually, it’s not my job anymore. But the CEO’s job is to do that. But I’ve given him the cautionary tale around that. So that’s probably the biggest thing I would say.
[21:57] Okay. And by the way, something I forgot to mention folks. If you are interested in hearing another interview, but with an individual who has launched and grown a very successful Amazon brand management agency, you can search for Episode 338. It’s one with a fella by the name of Mike Begg, and he actually runs his agency down out of Guadalajara. And then another fellow that I interviewed on this topic would be Steven Pope, and that’s episode number 332. Both of them have been very successful building their Amazon brand management agencies.
So I’m interested in your opinion, Eric. So you just talked about hiring rockstars versus promoting people too quickly. One of the things—I did a presentation recently where I looked at, and there was some data that was average length of time that people stayed at the company they’re at. And it was the who’s who of tech companies on this particular slide. All the names that we would all recognize, and the longest amount of time that somebody stayed was 1.8 years. Uber, the average was 1.12 years. So turnover, when you hire rockstars—yes, they can come in. They can make a big impact. They’re really expensive. They’re hard to find, but they’re not going to hang around that long. And so you’re going to have this turnover issue.
So I’m a believer that having great systems with slightly more talented than average, but not necessarily being dependent upon rockstars, is a way to create more stability in your organization. Do you have a differing view than that? And if you do, I’m interested as to why?
- I think I do. I think that’s not to say—so previously, I think I was more on your side. I think that’s not to say I won’t sway back in that direction. But I’m just realizing, over the past couple years, at least when I shell out the big bucks, and these people have stayed with me in—I can talk about the whole retention, constantly dating, and all that culture. But that’s the program that they’re operating on.
So my opinion on this is you hire someone that’s really good. They’re gonna just lift things. Right? They’re not going to be asking you questions, and taking time out of your day. They just want to go. Right? If you’re good, you just go. Right? That’s what the—some of the companies I’ve worked at in the past. It’s just everyone knows what to do. Everyone’s on the same page. We’re aligning towards one goal, and we’re marching towards it. The problem is, if you hire someone that doesn’t have the experience, and they’re not necessarily—they’re not people with high agency—they’re not necessarily people are gonna figure it out. They’re very good if you tell them what to do. Right? There’s just different tiers of people, and they’re all very important. But when you need someone to lift strategically, they’re worth the big bucks. Right. And I think there’s a time and place to have the people that are experienced mixed with maybe the formula that you have set up. I think that could be a very good setup.
[24:56] And truth be told, I’ve taken a hybrid approach too. I did, in my software company, just hire the most expensive hire I’ve ever had, who’s a VP of Marketing. So we’ve got one of those. But all the other positions, we are—not all but most of the other positions that are going to report to me or report to her—we’d really lean on making sure we have great systems.
So that in particular, as of late, I’ve been hiring people out of Mexico because they’re on the same timezone as us versus, say, the Philippines, which I love having them on the same time zone. Their written and spoken English is perfect because in many cases, they actually went to college in the US. But because Mexico is a lot less expensive to live in the US, the labor rates are about 25% of what it would cost me to hire the equivalent level of talent and experience here in the US.
All right, so now let’s transition to the final part of our discussion. So we’ve achieved our million dollar milestone. We’ve got an agency. Our launchpad is humming along. We’ve systematized things we’ve put people in place. So now we have two things that we didn’t have at the beginning of this journey. We have free time and we have investable cash. What next?
- Yes. I mean, it depends on what you’re interested in. It depends on what your goals are. But for me, I just want to keep learning. I want to keep teaching at the same time, and that’s just leveling up. Whether it’s leveling up myself or leveling up in business, I just want to keep playing the game. Right? Which ties in directly with the book Leveling Up. And so, for me, it’s transitioning more towards focusing on the highest leverage activities that I can do.
And I was talking with another guy, who’s actually built up a pretty sizable audience. You know, three in three years. I mean, his Twitter following is about 400,000, his podcast gets about 2.5 million downloads a month, and he’s just—he’s really well known in the last three years. And I was talking to him a couple weeks ago on my podcast, and then he was like, “Look.” I was like, “What does your day to day look like?” He’s like, “Look, the highest leverage thing I can do is to just create content, whether it’s talking to amazing people,” because then he might get deal flow, and getting ideas, and then he’s just pumping out content.
And because I have operators that run my businesses, I’m just focused on content right now. But that gives me opportunity to invest in tech, like this over here. Levels, potentially, right? Get to talk to the CEO, get to talk to a lot of cool people, and so that’s one thing—that’s deal flow. So that’s kind of one of the things I work on, what can I invest in.
And then also, how can I support the leaders on, for these companies, right? So let’s say I go buy a business. Let’s say I go to a website, like microacquire.com. I can find some SaaS businesses there. They got some eCommerce businesses. I’m gonna go buy it, right? And then plug it in, ideally, to the entire audience, the ecosystem that I have, because I’ve got a great marketing audience. So ideally, I’m looking for MarTech SaaS because that’s what I’m good at. So that’s the investment thesis. It’s very similar to what Berkshire Hathaway does with buying their companies, but on a much smaller scale. And then you have another company like Tiny Capital, which is what Andrew Wilkinson who I mentioned earlier. He’s just buying profitable internet businesses, and he’s not trying to do anything too sexy. So that’s what I’m trying to do. It’s just what I’m good at. I stay in that lane.
And the reason why I’m doing the book, by the way, is because I realized that audience is one of the biggest forms of leverage that you can have. So I got this marketing audience already. I’m going to be using Leveling Up to go build another audience, that should be a lot bigger, and these people are gonna get—these people are gonna be America’s or the world’s future. And then we got some other people that we can kind of continue to serve and support.
[28:38] So for folks, if you’re interested in learning more about buying businesses, I do have a couple of other episodes for you. Episode 220 with Shakil Prasla. He has purchased many businesses, Episode Number 347 with a fella by the name of Ryan Gnesin who is doing an Amazon brand roll up strategy. And then we’ve got one more. And I can’t seem to—just let me see if I can get the episode number—secrets to growing. It’s Bill D’Alessandro was the guy’s name so you have—I don’t know the episode number off the top of my head. It’s not coming up in search for whatever reason. So you will be able to find it if you type in…or there we go. Episode Number 275. Building a Portfolio of eCommerce Micro-brands with Bill D’Alessandro. Eric, have you ever met Bill?
[29:28] Super smart dude. Love his deal flow. He’s among the most clever I’ve ever heard. And he actually talks about in the episode so if you’re interested, check it out.
- Everyone’s gotta have to listen to it here.
[29:39] Indeed. All right. So I think we can probably wrap here. So people who want to know more, we recommend go on Amazon. Search for the book Leveling Up, right?
[29:53] Okay. Oh, one other thing before we wrap. You did talk about how you have massively increased your traffic to your blog. If you were to summarize your content and SEO strategy in a couple of paragraphs, what essentially is the strategy that you’re following?
- I mean, look, the two most important things when it comes to Google has not changed since the beginning, its content and links. Sure, they’re changing up a lot of stuff with SERPs. There might be some additional tactics you can do. But that’s what we did when the SIngle Grain blog was only getting 4000 visits a month. We just started cranking out more content, and we would use a job board like email@example.com. And then we would also—maybe that are influencers in the SaaS world, or maybe influential in terms of marketing. We would do a lot of guest posts as well, just to kind of build up our link authority. We don’t do that as much anymore. But we literally took that strategy where it just—we focused on content.
Really good content, by the way, will naturally generate links. But in the early days, you kind of have to reach out to people, so you kind of have to go beg.
And then with our new—I’m a part owner in the survival blog—and that website gets about five million visits a month. So we took it from zero to five million visits a month. And it’s purely affiliate revenue. And it drives seven figures in revenue a year. I think it’s like, what, a couple million bucks this year, which is great. But at the same time, that—it was more so focused on long form content because the industry or the niche was not—it’s not super competitive, right? So what Google’s always looking for is, how can I—how can we fill our index, right? Because they’re always asking how can we get more German content, more Brazilian content, right? Or Portuguese content? Because they just don’t have enough stuff indexed.
So if they see like, maybe you’re attacking something that’s brand new, then it’s like, “Well, okay. You might as well rank as the authority because you’ve got the best content there.” Right? So that’s kind of like a little arbitrage there. But yes, I mean, look. That’s what I would say around SEO.
But if you think about it, when it comes to any form of content, marketing—whether it’s SEO, podcast, YouTube, or whatever, I think, in a lot of scenarios, it’s 18 to 24 month journey. If you’re really good, you might explode in the first year, or maybe six months with YouTube, but that’s typically not the case.
[32:18] Do you use Brian Dean’s skyscraper technique?
- We do. He’s a good friend.
[32:24] Yes. He’s—purchased his SEO, the works course this year. It’s a very impressive course. So if you aren’t, folks, if you’re not familiar with Brian Dean, he’s from Backlinko. And if you don’t know what the skyscraper technique is, just Google it. And you’ll find the answer. And it is a very, very clever strategy for creating content.
So Eric, we’ll finish there. Thank you so much for making some time to come and be on the show. If anybody listening wants to get in touch with you to talk about a business deal, or partnering up on buying something, or selling something, or whatever, what’s the—is your LinkedIn profile the easiest way or how should they find you?
[33:07] Okay, terrific. It’s been a pleasure to have you on the show. If you want to get to the show notes for today’s episode, go to bright ideas.co/350. All the links that were mentioned in this episode will be in the show notes. If this is your first time listening to the podcast and you enjoyed the show, I would love it if you would take a moment in your favorite podcast listening app, and like, rate, and review the episode. And I look forward to seeing you back in another episode soon. Take care. Bye bye.
Thanks very much for listening to the Bright Ideas Podcast. Check us out on the web at brightideas.co.