Grow Without Hiring

[00:00:00] Ken: Most people dream of building a big agency, and as you've heard me have these conversations, I had that. I had a team across the world because I went remote, well before remote was a consideration, especially for agencies. I had Fortune 500 clients that were paying me multiple hundreds of thousands of dollars a month.
[00:00:22] Ken: I had the $5 million a year business, but along with that came people problems, high payroll costs, and constant stress. I can remember a lot of Friday nights where I'd hang out with my kids, hang out with my wife. We would all probably fall asleep at some point way too early.
[00:00:43] Ken: Used to also always wonder how my mother would fall asleep at eight o'clock on the couch. Now I understand it all these years later. Right?
[00:00:51] Ken: Digression relative to what can I think about now as I would wake up and start to say, what problems [00:01:00] can I go solve in the business? Because there was always a stack of problems. I am a big fan of saying that you will always have problems in your business.
[00:01:08] Ken: You just want better problems. But a lot of the problems I had then they weren't good problems. Client issues for the client that's paying us a lot of money, people problems for the person that is a key employee or key person on the team, not finding ways to repeatedly get the kind of client that I wanted to get.
[00:01:28] Ken: Talked about that in other episodes as why you want that locked into place before you ever even consider hiring. And beyond all of those very glaring issues, there was the problems of being the boss who. Would be a great boss to everyone else I know. 'cause I had retention of people staying in a small business for five plus years. People would choose to come work for me instead of going to Apple people.
[00:01:52] Ken: Then also would get all of the best things, including things that no other businesses would have, but especially not a [00:02:00] small business.
[00:02:00] Ken: But as a result of all that, I wasn't a great boss to myself. I became not a person that was a person who started the business because I loved building technology, but rather a manager of people and a manager of people related to clients and also related to my team. And I'd have to not only get leads, I'd also have to ensure that I got.
[00:02:22] Ken: Candidates into the pipeline.
[00:02:23] Ken: Obviously I had people helping me, but ultimately I cared the most because I was the equity owner and no employee is ever gonna work as hard as you. So all through this time, I can tell you I've been to the other side, which you've heard if you've actually listened to some of the other conversations.
[00:02:39] Ken: And today I am largely building. In the way that I'm building because of those experiences, just like I actually built my last business because of my experiences in a company who said that remote was not a possibility and basically wanted me to move back to New York. When I said [00:03:00] that's an old way of thinking, obviously was proved right, but a lot of the things that I did in my last business were a result of those previous experiences, and now today again.
[00:03:08] Ken: I'm taking everything here and looking at what it looked like to be and what I will now call Agency 2.0 to show you what Agency 3.0 looks like. So we are gonna step through it briefly. I'm not gonna spend multiple hours walking through each era of Agency 1.0, agency 2.0, and Agency 3.0. But I can tell you this, I have always been right on these things because I am the person who lives on the edge, the dangerous edge, frankly, of whatever's coming next.
[00:03:42] Ken: I legitimately have a few LinkedIn recommendations where people say, Ken is the person you want to follow, if you want to know what's coming next. So I was ahead on remote, I was ahead on apps, I was ahead on talking about. Really what I'm describing as Agency 3.0. But over the last few years I've [00:04:00] helped so many consultants, fractionals agencies, understand how to pivot and begin to eat the lunch of the big typical advisory or the big consulting firm, in certain cases, legitimately international in size to beat them and to begin taking business away from them.
[00:04:21] Ken: And we're gonna be hitting this even faster than I expected. And I was very reflective, by the way, in my last agency in seeing some of the problems there. And I had these conversations with my team members back then and I said, Hey, this isn't just about remote. We have to change the way that we work. And we use that to win more business because people are tired of what we'll describe in a minute.
[00:04:44] Ken: The agency 1.0 model. So as we kind of get through this, there are two real big things for you to kind of keep in the back of your mind. The first is that this model is simply just a requirement. If you want to be in business by 2030, I would say arguably [00:05:00] that it's being shifted because of AI even faster than that.
[00:05:03] Ken: The second is also just about your health and happiness, because I have never been happier and healthier than I have been in the last few years building into what I'm calling this agency 3.0 model. And again, it doesn't matter if you're an agency, it's just sort of a broader way of describing the way that you have to do professional services, coaching, advisory work.
[00:05:27] Ken: So really make sure that is in the back of your head as we have this conversation today. And I'll step through now what each of these eras kind of look like, because if you don't understand where we have been, then you cannot understand where we are going. And again, funny enough, I actually used a lot of agency 1.0 to sell better in Agency 2.0.
[00:05:48] Ken: So we'll start there. And one of my favorite things that I would talk about in my pitch and why we worked the way that we did, as what I would call an agency out in the open, is because of the [00:06:00] 1950s to, let's call it the 1990s era of a traditional kind of Mad Men style business. Now, full disclaimer, never actually ever watched Mad Men for a lot of different reasons.
[00:06:11] Ken: But I felt like the Mad Men era was precisely around this old school traditional advertising agency model, which really kind of pushed agencies to being a more popular thing, where it was very much like this.
[00:06:28] Ken: We go after work, we pitch hard for work, we disappear for a long period of time. We pop back up and say, client, hope you like this all while, you know, being behind closed doors, smoking hard, drinking hard, all the things right? And that model is really what biased people. I'm not saying good things didn't come out of it, but that is what really biased people against agencies and why people.
[00:06:52] Ken: Burned through agencies and why agencies would lose accounts, win accounts, lose accounts over and over again. And [00:07:00] in some ways they became almost like these little widgets. I'm not saying that never happens today, by the way, but it was precisely defined by a lack of transparency, a lack of collaborative nature,
[00:07:14] Ken: and a lot of what came into, especially that next period, was partially informed by that, but it wasn't universally fixed because I know I won against other agencies because I talked about how we work together in the open, almost like an open source model. Everything that we did in the agency had full exposure to.
[00:07:39] Ken: Our clients, which also my team members were looking at me when I said, we're rolling this out. And they said, are you serious? Like the client's gonna see the actual GitHub repo, the client's actually gonna be in the Figma file with us. And I said, yes, we are gonna work out in the open, and this is gonna create a level of interaction and collaboration that no one [00:08:00] else is doing.
[00:08:00] Ken: A lot of people are doing that today, but not everyone. And a lot of that, by the way, as well, in Agency 1.0 and some of thisstill is prevalent depending on the kind of deals you're selling, but it was very relationship based. That's why they would take the client out to lunch.
[00:08:15] Ken: That's why they would take them out to the golf course. That's why they would possibly try to put something under the table, right, to get the deal. But as we go into Agency 2.0, here's really the shift that was happening and let's just kind of call it, and these aren't obviously scientific. I'm in some ways writing the history of this right now, the 1990s to the 2020s.
[00:08:33] Ken: Part of what also began the shift was what we would just call the digital era, and later, especially as we got into the late 2010s into the 2020s, was this. Terminology, which I had a love-hate relationship with of digital transformation because digital by itself was a transformation, but digital was not embraced by a lot of companies until they were forced to, especially the largest [00:09:00] companies in the world because of the world being shut down by COVID.
[00:09:03] Ken: But that wasn't the only thing that created Agency 2.0, a lot of 1.0 was. These smaller independent shops. That did grow over time, but really what happened next was a major, major consolidation boom, especially from the two thousands to 2010s. And I remember it happening because I've pretty much always been an agency guy.
[00:09:27] Ken: We have talked a lot about the industrial complex and why we have things like the nine to five workday, go back to listen to those episodes and conversations. Bigger factories, more people, so on and so forth. But really the bigger is better mentality got defined. During this time, we had complex holding structures, multiple offices.
[00:09:48] Ken: Oh yeah. Well we have the San Francisco office, we have the Chicago office. We have the New York office. You know, they'd put these places in really key areas next to big accounts, especially. And then also you'd [00:10:00] have sometimes a rotation of, this person's now working for agency. This person's back on that client.
[00:10:06] Ken: That person left and came back to the agency and oh, they went and landed that account again .
[00:10:10] Ken: There was also this element of saying, we are gonna go buy the digital agency. We were a traditional agency that was focused on print, radio, TV advertising. Didn't really go into that as much in 1.0. But that was obviously the mediums at that time. And then said, we're gonna combine that traditional focus with digital capabilities and we're gonna put it all in one place.
[00:10:33] Ken: But there also was a focus on just certain digital only agencies growing and growing and growing and consolidating together.
[00:10:41] Ken: During this time, we also had things that happened like. The cloud. We also had things that happened like apps. We had e-commerce, we had just building websites, right? People don't remember it, but I remember when we didn't have any of that stuff. So now you really did go from, okay, at least I [00:11:00] had a relationship with a person that I actually know, probably knew the founder, owner in Agency 1.0 and Agency 2.0 it's some low level account executive.
[00:11:09] Ken: That really didn't know anything and got assigned to the account once the higher end person sold it and you had all of this situation of super high exorbitant markups and hourly rates and saying, oh yeah, well you're gonna get junior designer B, or you're gonna get this or this, and here's what our rate card looks like.
[00:11:29] Ken: That's what a lot of 2.0 was driven by, including projects and deliverables and all of those kinds of things that ultimately put the agency in a very difficult situation and is precisely again, what I positioned against when I sold my own deals, including even by the way. Me being in the software industry and telling clients we don't have an hourly rate, we don't really do it based on projects.
[00:11:58] Ken: We focus [00:12:00] on different engagement tiers based on the capabilities you need. And what we do is an assessment of how this work would look. And we kind of give you a good faith estimate and we build in a collaborative agile type way. We bill you based on a monthly basis for the capabilities that you're engaging, and this is a much better model for you, by the way, miss Client, Mr.
[00:12:23] Ken: Client, because you like to make changes so we don't have to do a hundred change orders. And also it's fair for us because if you come back and then change the requirements a hundred times, you've been in agency work for any period of time, you know this. We have the flexibility to adapt to that for you, but it may impact that we're gonna take a little bit longer to get this work done.
[00:12:45] Ken: During that time, for me specifically, I was pushing forward an idea that we weren't just hiring down the street, but I would say during Agency 2.0 that was not common. Right. I'll get into that more in a moment. In Agency 3.0, I'm just [00:13:00] saying that during that time I was trying to teach people. Why would you just go build a hundred different offices, or even five or 10 offices?
[00:13:08] Ken: Why would you only hire the person down the street versus hiring the best talent? This thing called remote is really possible, and especially as bandwidth became a thing that just allowed us to connect all over the world, and we didn't even have video by the way, but we started to have some tools like Slack and so forth later on in that era that made communication a lot easier inside the business.
[00:13:29] Ken: So that wasn't there either. It was mostly if you're within the four walls, here's how things get done. And the Chicago office might be pushing against the New York office. And we did have this problem of inner office dynamics, but ultimately this is part of what started to drive, if you were a focused company that was doing local business.
[00:13:50] Ken: Those costs got really, really out of control. And ultimately, you could argue to say it wasn't actually cheaper to work with the agency because. Their prices were so high, you might as well just hire [00:14:00] someone in-house to do that.
[00:14:01] Ken: So let's get into Agency 3.0. And it's something again that I feel like I've been defining myself for probably 10 or 15 years, but things are rapidly progressing to the extent that I believe this is being redefined almost overnight. And I would say that if you don't adapt this model, there is a very high likelihood that you aren't gonna make it to 2030.
[00:14:24] Ken: I've been writing about this, talking about this for a long time, but I think that this is being pushed up even more than I expected.
[00:14:32] Ken: So for better or for worse, this was in some ways pushed forward by 2020. During that time, I kind of let people just survive 20 20, 20 21. But by 2022, I was starting to talk a lot about remote work because I had done it for 15 years, especially in a model that wasn't typical and I talked about it then as most companies having been remote forced versus remote first.
[00:14:57] Ken: They were driven to become remote and they [00:15:00] just didn't understand how to actually build remote, especially agencies who have to really build a lot of good systems, process SOPs, understand the culture. How do we replicate that culture and that brain space remotely when there's not a whiteboard in front of us?
[00:15:16] Ken: That was . One of the biggest problems, frankly, is not having a whiteboard. I understand there's Miro and a lot of other tools out there, but they're just not exactly the same. There's pros and cons for sure. what I've been talking about a lot for the last five years especially, and I wouldn't say that, it's not that I cared about this in my period of running an agency.
[00:15:34] Ken: I was really almost running Agency 3.0 in some ways, but really this idea of not growing. Always with another body, not growing, always with another client. And what I've talked about in the past is if you want to actually grow by having a person on your team, then you gotta take advantage of that. You've got to be able to get to a spot where it makes sense.
[00:15:56] Ken: 'cause you have critical mass. It's not, I have two people, [00:16:00] it's, I have enough people to justify having brought those people on as full-time employees. And building culture and building some of these things for two people doesn't make sense. If they're just two contractors that are churning things out for you and they're not really strategic and they're easily replaceable and they're just working through your systems, completely different story.
[00:16:19] Ken: But a lot of people don't work like that. I did, and I said I got to seven figures without actually having any employees, but a lot of people think those first people are hires. So systems over headcount, remote first operations, a global talent pool, solopreneurship on the rise again, during this time, and I think a big thing of agency 3.0 is that we are looking at the trends, especially in the US where over half of the workforce, especially into the 2030s, are going to be independently employed. They're not gonna have a W2. It's gonna be a wild time for sure. And I don't even think that the current [00:17:00] procedures and process, especially at a taxation and government level, are ready to accommodate for that.
[00:17:05] Ken: But that's where we're going. And if you look at. Especially Gen Z. Gen Z does not wanna work for anybody. Not saying millennials and Gen X and baby boomers and so forth didn't care about this, but just based on the stats, they especially do not want to work for people. Then this little thing has come along, which was kind of cool and fun when Chat GPT was almost like a better Google search box, but today you can use it for. Building end-to-end systems and we're also moving into this time where we're gonna have agents that are doing work around the clock or that make it as simple as type something in a natural language box and it's gonna go off and do a bunch of work.
[00:17:44] Ken: There are people who are technologists that are doing even more amazing things than this, but I just came across a tool this week and I always try to be careful not just to show you the new shiny, but I am looking at a tool right now that literally can show you what I call lighthouse clients [00:18:00] by in natural language describing something and you see all of the data populate in front of you matching specific criteria that you give it in real time and it looks like magic.
[00:18:10] Ken: And then you can put that in any number of different things to follow up with those people. You can obviously do some automation, some outreach and so forth, but it was magic. Still early on, still have to put it through its paces more. But in this time, if you think that you have to go have a person that is helping you do outreach, and you think you have to have a person that is gonna do all the deliverables, and you need to have a person, so on and so forth.
[00:18:37] Ken: Clients are just gonna say no. I think they're gonna really look at it more as, I'm almost gonna build my own little agency and it's gonna have this person here who's really good at this one thing. I'm gonna have this person over here who's really good at this one thing.
[00:18:52] Ken: And those particular fractionals, solopreneurs, consultants, advisors, whatever they are, may have their own fleet of [00:19:00] me. As I've described in other episodes, and they may have their own systems, which they actually use to describe during the sales process and say, here's why you'd wanna hire me. It's not just me, it's me and these three really highly customized agents that I've built, or it's me and this set of AI tooling that I've built.
[00:19:18] Ken: Or here are my systems, my playbooks, and so forth. And the reason why you want to go with me versus any number of agencies who are just gonna drop you into. A really slow model. You're not gonna have access to the actual experts. There's gonna be an account executive. You're gonna be dealing with the overhead costs that they have to put into the rates because they have a a hundred thousand dollars a month office space, or they own office space, or because they have high priced executives who are getting paid a million dollars a year.
[00:19:50] Ken: I have had agency owners. And talk with agency owners as well, who basically say, yeah, I take a million dollars a year as a draw out of the business. [00:20:00] Okay, if you want to do that, how many people do you need to do that? If you aren't actually priced in a way that's about being an advisor? Oh, well, how many people Ken, does it take you to get to that spot zero besides me?
[00:20:14] Ken: Oh, that sounds really amazing. How do you do that? Yes, it's taken a lot of work. But it's part of what I'm saying about Agency 3.0 is I have been ahead of the curve on this and I have made some decisions that not all of you can make by the way, but I also had the ability to make those decisions. What do I mean by that?
[00:20:30] Ken: Well, I had a little bit of a runway because when I left the other agency, I got a little payout. It wasn't a, as I said, life changing amount, butbut it was enough to gimme some time to decide what kind of business I wanted to build. And it took me a little bit of time, took me longer than I really wanted to.
[00:20:45] Ken: But part of what I've built here for a lot of people now and the offerings I have is to help them get to where they want to go faster. So it was all worth it in the end., So if you're someone who's sitting there today and you're saying, yeah, I still have a bunch of people on [00:21:00] payroll and I've got an office space and I am really reliant on one or two accounts and so on and so forth. You're operating in a model that is quickly dying, and it's not just about firing all your team, and it's not just about being remote. This is why I really do talk about the community of expert peers.
[00:21:22] Ken: This is why I really do talk about having a highly diversified client base. And this is also why I really focus on making sure you have a scalable way to get business independent of when you make your first quote unquote hire.
[00:21:35] Ken: It's also why I talk about the word hire. Had a whole conversation in another episode about this, that hiring is not always about people. Some of you are just barely using ChatGPT or Claude. You're asking it some questions. You're just getting some basic things done and you don't understand how to push it deeper into the business.
[00:21:53] Ken: You don't understand how to actually offload some of your delivery work, or take some things that are [00:22:00] manual and begin to have a way to use those tools to help you. I have an unfair advantage as a technologist. I was actually a computer science major all the way decades ago. Never actually programmed personally, but that has given me an advantage in working with engineers over the years.
[00:22:17] Ken: It's also given me an advantage to being able to do some basic technical things like putting together a website, right? If I wanted to do that. And those things now, especially in the low-code, no-code environment are advantages. Do you need to learn how to become a technologist? No, but I do think it's worthwhile for you to invest into understanding these things beyond a surface level.
[00:22:37] Ken: And by the way, I don't even offer that itself. I just kinda get people straight to the end system. But I'm not even a person that's training people on ai, at least as it stands today.
[00:22:46] Ken: So if we really think about Agency 1.0, there still are agencies out there that look like that. Agency 2.0 and the consolidation that's happened in some ways. I rejected that myself and why I didn't continue to do [00:23:00] what I was doing. you need to be Agency 3.0 independent of calling yourself an agency in terms of what that model is gonna look like, because Agency 2.0 and 1.0 are gonna die a very quick, painful death. They have been dying slowly, but they're gonna go straight to zero if they don't embrace what I've been talking about here over the last number of discussions.
[00:23:24] Ken: And ultimately, really what I wanted to almost think about in this conversation was the why behind what I'm doing today. But it's also important to talk about the how and to look back a little bit. But here's sort of that why, as we close the conversation for today, in terms of me being happier, healthier, feeling like I have a more robust business model that can't be impacted by one client going away overnight, that allows me to never have to reschedule something to see my kids when they get home, or having to quote [00:24:00] unquote make time for their activities.
[00:24:01] Ken: I pick them up after school. I watch what they're doing. Sometimes I even do something fun with them. Staying that expert and honing my craft, really making sure that I have that scalable way to get leads. That's not gonna be turned off because of algorithms or because of things outside of my control.
[00:24:19] Ken: Being a great boss to me first, right? Having more discretionary time so that I can actually work on the business, not in the business. And knowing as well, and this is important, especially if you're sitting there saying, oh my gosh, I really don't think this business is sustainable. But knowing that this is just one business and it's business.
[00:24:39] Ken: I learned so many things from my last agency that I built, But the biggest thing that I really believe I've taken away from it is that businesses come and go. I re-invented myself a hundred different times in some ways over the last two decades, but a lot of that identity still was wrapped up in an agency, even as the agency evolved a [00:25:00] little bit, going from building iPhone applications to Android and so on and so forth.
[00:25:04] Ken: But I didn't think about what comes after this, and I didn't ever think that. I might say, you know what? This isn't the right business. Even with some small pivots, I really just need to stop doing this. I really need to just do what's best for me and do what's best for my family. And at some point I made that decision, but I also made that decision way too late on lots of different businesses and I have shut down businesses for sure, small businesses, big businesses.
[00:25:31] Ken: Businesses come and go, but yours is gonna go in not the positive sense, and it's gonna go to zero faster if you do not embrace agency 3.0 systems overhead count. Not just saying it's ai, but definitely beginning to think about how AI can help you in ways that you haven't used it yet. Having that community of expert peers.
[00:25:53] Ken: Having a rejection of office space, office politics, growing with [00:26:00] people, This is what it looks like to be an agency 3.0 and it's coming faster than I ever expected, and I hope you hear that and take that to heart today.
[00:26:10] Ken: So as always, appreciate having these conversations with you. I know this one was a little bit deeper, a little bit more philosophical, but we have to have these conversations too sometimes.
[00:26:21] Ken: If you learn something today, if you got any nugget ratings and reviews are appreciated. I also always love to hear from you, so feel free to reach out in the show notes if you're not already reading my weekly briefing.
[00:26:32] Ken: Highly encourage you to do that. And if you are not following me on LinkedIn, that's the main place that I'm on social. Please hit me up there and send me a connection request. Make sure you mention the podcast so that I know that you're listening there. 'cause I do share information there typically three to five times a week.
[00:26:48] Ken: So that is gonna be where we end our conversation today. Thanks is always for hanging out with me as we learn how to grow without hiring.