He sold his agency for 8 figures (ft. Luke Tobin)

Ladies and gentlemen, welcome to EntrepreneurCast. Today I have Luke Tobin. He's a serial entrepreneur, investor, and the founder of Tobin Capital. Luke built Digital Ethos into one of the fastest growing agencies in the UK, scaling it internationally before selling it in a massive 8-figure exit. Now through Tobin Capital, Luke is investing in acquiring businesses, helping founders scale and position their companies for long-term success. He's also a Virgin Startup mentor. It's a program established by the Richard Branson where Luke gets to share his expertise with the next generation of entrepreneurs. So if you're looking and if you're a founder looking to scale, sell, or attract the right investors, I believe this is the right episode for you. So let's get into it. Welcome to the show, Luke.

Thank you. Thanks for having me here.

I am so thrilled to speak with you. And this is something that we were talking about before we hit record. You've been in the agency space, you understand the service-based business so well. So I wanted to start with your story, Luke, because just to give people a little bit of context where you came from, um, and if, yeah, if you could share a little bit about your story.

Yeah, absolutely. So I've been in and around, I think, the agency world now for 15 years. Prior to that, I had 2 or 3 other businesses which were in completely different industries— hospitality and e-commerce— and I built those and exited those. Off the back of that e-commerce business, I found a love for marketing, and you need to learn how to market your own website when you have it. So, um, spent some time in and around different marketing agencies working in them, and one thing that I found really quickly was there's a bit of a kind of, uh, a gap in what the client expects and what the agency can deliver, almost like this no man's land in the middle where the agency needs to retain the client for as long as possible because they need the revenue and they want the revenue. Um, often the client's expectations are quite warped versus what the agency's doing. And I, and I felt like there was a way of kind of building a bridge across those 2 relationships and doing it a little bit differently. So, um, in 2016, 2017, I, I spun out and started my, my first agency, um, Digital Ethos. And, uh, you know, our, our method was to go and physically spend time within those businesses, so to integrate ourselves properly. And I don't just mean a few hours. We— I would go and sit in the office for a week sometimes and spend time with the owners, spend time with the individual teams, understand how the business operated. Really, you know, we, we took that like integrated marketing to a different level, I think. Um, and then as I started to bring on team members and scale it, you know, our ethos of integration stayed the same. And I think in a commoditized world, which agencies is now— everyone's selling the same stuff, right? You know, you can, you can dress it up however you want and you can price it however you want, but basically we're selling the same services. Um, how you do it is what makes the difference, and I think how you establish those relationships is, is key. And that was, um, that was what worked for us.

Interesting. And I read it somewhere that you actually started with £100. Is that correct?

Yeah. So I mean, look, there's, um, there's a marketing play in that, I think, because I, I was, I was already, I would say, reasonably successful to that point, having had a couple of exits, but It is true that I spent £100 on a landing page and that was it. And then I basically started just hitting the phone and, uh, you know, I didn't invest anything else and I never, I never took on any external investment. You know, we, we grew into the fastest growing marketing agency in the UK ever in the time frame. Um, you know, we went from kind of just me in the first year or so to, you know, nearly 100 people 2, 3 years later. And we opened in Germany and we opened in Canada and then we were acquired. So it was a really fast growth to exit story. Um, but the, the kind of key to making that work was, um, making sure that you could retain clients in a happy format and keep them, keep them engaged.

Interesting. I love, I love that you say it because this is true that the agency space is quite saturated and you have a couple of players, you know, having the same service. How do you stand out? And agencies have the stereotype that their service, you know, they're very slow, uh, not very immersive. So interesting that you mentioned immersion, um, as one of the things that did set you apart. What was your niche? I'm curious, like, what was the niche and what, what was the service exactly within marketing?

So that was— that's even more strange when you think about the, the growth that we had, because, you know, if you're a specialist agency, you can charge more, but we were very generalists. So we, we ended up— to start with, I think we would take, take revenue and money from any, any industry as long as we were able to get our head into it. And there's a lot of industries that came along that we, we hadn't worked with before, and we had to pivot and learn. But in the end, I think really we ended up with more of a B2B-focused agency.

Okay.

You know, we were, um, we did e-commerce and we did the, you know, the typical consumer stuff. But what I found out really quickly was there's huge demand and competition in that space with agencies. Everybody wants the sexy brands and the big names.

Yeah.

But, but what I did is I flipped that on its head and I went and won the Unilevers and, uh, the big brands, but from a B2B perspective. So I wasn't doing the consumer-led part of it, I was doing the backend B2B bit. And actually, I found really stable revenue in that.

Interesting. And was it paid advertising, or it was pretty much everything that one could offer in marketing?

It was, it was, I would say the core services were SEO, paid, and we did an element of creative as well. I mean, we touched on being a full-service agency, but I think really 90% of the revenue came from 2 channels, really.

So did you eventually just— I'm just asking questions, as you say, on the fly, but so did you double down on a couple of services? Because you said that majority of your revenue was coming from, you know, SEO, or I forgot the other one.

Yeah, I think I was fortunate enough at the time, um, SEO was still— I think it's a slightly tougher sell now, but at the time it was still you know, still everybody felt like they needed it, and it was that longevity piece. And, you know, arguably they do still need it. However, um, it's changing at a rapid clip, as we know, for all sorts of different reasons, from AI to, to everything becoming more pay-to-play. Um, but at the time, yeah, it made sense for us. And also there was the, the thing I liked about SEO as a, as a channel was the longevity. You know, you could pitch it as a long-term strategy, whereas most other marketing channels, as we know, Indeed. People want results month to month to month, and if you hit the bar a couple of months, you're gone. So, um, I liked the fact that SEO was this building the strategy in a long-term way, um, and then everything else we layered in in a similar format. So like, okay, yeah, cool, we can run some paid ads and we can do some tests and some A/B testing, but the stability of SEO was still there, and, and that kind of— that scaled. Um, towards the end of the agency, there was definitely more and more demand for performance and, and quicker performance, quicker results, and, and that was more on the paid side.

I see, I see. So you were kind of tackling both, but also being able to retain your clients by having this long-term approach. I somehow feel this is coming back into the picture. I don't know if you've seen, but recently, you know, people have been talking about how organic wins over paid because, you know, your performance stops the moment you stop paying. And I see that kind of message coming back again. Out there.

So I agree. And I think, I think content, um, layered in. And if you think about like the rise in personal branding performance and people focusing on their, their own individual brands as well as their business, and actually them being pretty interlinked and coherent with each other, um, I think the production of content around organic has become— and social organic as well— has all become quite muddled in. And with the way digital PR has amplified, um, your own brand, um, as being as good as a backlink now— of, you know, you used to input keywords and you try and rank them, but now if you just have a strong brand, it pushes the elevation of the website, which lists your keywords anyway. So all of those things, I think, are— you're right— are coming back into the frame. And it's about how do you amplify the message through organic, and that's a mix of all of those tactics we just spoke about.

Sure, I'm glad you get this. And as a founder, you know, now you've got a huge team. So tell me about it. How do you see— because a lot of founders, I believe, are still fixated on, you know, quick results. Where's the ROI? Putting a number next to everything. How do you perceive organic today, organic content? And how do you— what do you expect from your team in terms of the results they bring in?

Yeah, founders get lost in new sales, new revenue. Always thinking about that instead of thinking about how do they build assets, how do they build long-term balance sheet items and, and, you know, credibility. And I think, um, over time, like, there should be a shift towards, okay, look, how— I get it, early on you need to draw revenue and you need to make more money, but over time, like, how can I start to build out more IP, more assets around the brand, more assets around, um, the, the credibility, the case studies, all of those things? That should be more of the focus, I think, from a founder perspective than just chasing the next sale each time. But it is difficult. There's a balance. Um, but for me, you know, very quickly I tried to put the right team in place, and now I have a great team of leaders that individually have their own OKRs, their own focuses they need to deliver on, which allows me to be much more strategic and high level on those bigger picture things, which are like building actually intangible and tangible assets that in the long run is actually what adds the value to the business.

Building their IP, I love that you say that. And also, I think you come from a marketing background, so you understand that very well. There's always this conflict, you know, how people perceive marketing and how they perceive sales.

Yeah.

And marketing is always that department that gets starved of, you know, any budget whatsoever. So it's good to see what your perspective is with regards to that. And I certainly think I have more questions on that, but later. Before that, I wanted to ask, why did you choose service-based business? Because before that, you had other businesses.

What made you choose the agency model I think I'm, I'm probably, um, a sucker for punishment. No, I'm joking. Uh, no, I think, I think I've always been very people-centric, and I think at the heart of any good service business, it's about people, um, having good people to work with, but also working with clients and wanting to build those, those relationships. So I think it was kind of a natural affinity for me to fall into it. Um, but, you know, I often do question myself now whether it was the easiest way to make money. Probably not. But, um, But, you know, it's, uh, service-based businesses I think are unique in the sense that they have also something else which I think is really, really amazing. It's this lifetime value element that you can have with clients. So you can have retainers, you can have repeat customers, you can, you can, um, separate yourself as a service provider by just doing small tweaks. And also the thing I love about service businesses, you don't have to go out and invent the new wheel or, um, be the next Apple. to do a good job. You can just look at what's working and refine, put your stamp on it, put your spin, your personality, and have a great business. And that, I think, is fascinating. You know, not all of us are made to be big disruptors and innovators, but can we run really good solid businesses that add value? Absolutely. So that's what I like about it.

That's a good point. Yeah, I think, um, the entry to market can be relatively easy, provided you can find, you know, what makes you special and and, um, add more to it.

Yeah.

Um, interesting. There's— I, I've heard this in my journey that a lot of people say that you should niche down, and I wonder what your perspective is, uh, with regards to niching down, um, in the service-based business.

It's definitely an easy way of carving out, um, targeting and making it a bit easier for— I personally, I think if I was starting again now, I probably would niche.

Okay.

Just because there's a lot of noise. Obviously we know that. And if you niche, you can very quickly get the case studies, get the credibility, get the, um, get the references to allow you to, to win more of that type of business. I would pick a, a sector and maybe even a niche within that sector and start there, do a good job, and then maybe move to the whole sector. And I'd start maybe looking at regional, national, then international, and, and work up in those ways because As specialists, you can charge more because people, um, will, will be drawn to it if they're in that industry. People always care about the kind of 3 C's, right? So customers, costs, and competition. So if you're working with people in their industry, people will always be intrigued to have a talk to you, even if they're not ready to buy yet. You know, I think you can easily open doors and pitch more. So yeah, I think there is benefits to niching for sure.

That's an interesting take. And out of the 3 businesses that you've built, you said, so one is service-based, real estate, and what was the third one?

Yeah, so, so I had a hospitality business actually initially. So I was doing, um, kind of bar hires at events. I had, uh, I ran some kind of concert bar hire units, but, you know, I was doing probably those 20,000-25,000 people over a weekend, you know. So it was, it was full-on. I had quite a big operation doing it. Um, and then on a smaller scale was importing wines and distributing those in the UK. So that was interesting. Sold to a competitor that wanted the contracts that I had. Then the next business was a, was an e-commerce store selling experience day packages. So things like car racing, hot air balloons, paintballing, whatever. Um, I had teams in shopping centers around the UK and in Australia, and then an e-commerce store. Um, and that's really when I kind of got my, my buzz for, for marketing, as I mentioned earlier. But that one I actually exited to Virgin some years ago now.

Oh, okay, it was Virgin. Interesting. Um, okay, okay, I, I see what you mean. Um, today, if you were to start as an entrepreneur, if you're just, you know, getting into entrepreneurship, would you recommend, um, agency space or service-based business as a model that people can look into?

Um, absolutely. And I think a lot of people do. A lot of people kind of come out of uni or a marketing degree and go, right, I'm going to set up an agency. And that's great. Um, I think it's, it's good that the market allows that kind of easy entry point. What I would say though is do your research, um, and try and find something that separates you, even if it's just in the service type of delivery or what you're offering, the way that you systemize with AI, the way that you— whatever it might be, um, just have something that's a little bit different. Because so many copycats out there, what tends to happen is most people come out and go, oh, that agency looks really great, I'm going to build a website that looks just like them, I'm going to sell their packages, I'm gonna do— and it's You know, I would say that's 90% of the market. The 10% that do the best are the ones that take those learnings and go, right, how do I make it better? I think business is all about improving on things from before. So don't just copy and follow, you know, lead.

And what about, let's say this is somebody who's just, who's just started and has no case study, nothing, nothing to prove, nothing to back How do they position themselves? Let's say they figured out what separates them, but they don't have a solid case study or something to prove that they have success. What would you say to them?

I think I would probably do a bit of pro bono work, you know, go and find who's your perfect client and why, and go and ask them whether you can, you know, do some work for them for a couple of days a week, or just in exchange for a case study, can you do a bit of work for them? Can you understand, you know, Go and, um, go and spend time with people that work in those types of businesses. Ask them what their pain areas are, what they're struggling with. Go and message people in those industries that are in the marketing departments and ask them to collaborate on a white paper that you want to write about the industry. Get their feedback and their input in that white paper. Then all of a sudden you've got something that you produce, some IP of your own with input from people in that sector. Then all of a sudden what you can open doors with that when you contact the people in that industry and say, hey, I produced this, which is all about your industry, that's really relevant, and look at all these top 10 people from your industry that have commented in it. Would you like to see it? Yes, please. Boom. All of a sudden, you don't need a case study, you've got a door opener.

I love that. That's a very proactive approach, and certainly, yeah, never thought about that, but yeah, that's—

You can have that one.

Yeah, that's a good one. Like, really, I never thought about the white paper angle of it, but yeah, I think people would be interested in it. You bring something to the table, they'll bring something to the table, and voilà, you have something that builds credibility even if you don't have a client.

You're just leveraging. If you're starting with nothing, you leverage other people's credibility, you leverage network, you leverage knowledge, right? And if you can then create something that's valuable for somebody else, all of a sudden you become valuable.

Yeah, 100%. You have an investment background as well. So what is the biggest mistake you see founders making as far as the business model is concerned?

Um, I think there's an element of— I always say to people, like, sometimes just get started. But I think there's a, there's a piece at the start where you do need to understand your product-market fit and, like, what problem are you solving. And I think a lot of, a lot of people get a good idea and they have this kind of confidence bias and go, oh my God, this is the one, and they just run forward without really thinking or testing or speaking to potential clients. Or so I would just, just say, you know, if you have a good idea, awesome. Just take at least, even if it's like a day or two, and just stress test a little bit more. Like, um, and that doesn't mean going to your friends and family who will be biased. Um, they'll either be biased negatively or positively. I mean, it can go either way with friends and family. Um, but go out and ask strangers and people that are in that space, or, you know, find who the person is that is like the leading competitor and go and just interview them and just figure it out. Understand like what, what is working, what isn't working. I think that will just set people up for for success. And also, when things start to go wrong, which inevitably they do— business is all about solving problems, right? And that's, that's what I've learned, solving problems to other— either for people or problems that come up in the business. Um, put yourself in a position where you're able to help people with that, and you'll do well.

I, I was speaking with you, I, I catch this, that you've been someone who's been extremely proactive, though. be it, you know, getting in touch with people, getting to know what it is. And it's true, I mean, when you have the product-market fit, I mean, you're not going to waste your time, and it's, it's going to help you build a minimal viable product. Let's, let's put it this way.

It's all about energy, right? Basically, business at the start, if you're getting going, is all about energy. It's about momentum, and it's also about not getting too distracted. So I see a lot of founders get an idea, it starts to work, and then they start trying to do 5 other things. at the same time, or launch too many new services. Like, if one service is really working for you and you're growing and you're being able to sell it, go and sell it 1,000 times, then worry about everything else. But just do that one thing really, really well. Earn the money. New revenue will fix all problems. Then invest in other stuff or bring in team members that can help you with that. And like, yeah, I think that that's the thing, you know. There's a— it's very easy to get distracted.

Mm-hmm.

But what happens is if you stay laser-sighted, You get momentum, you get energy. You as the founder create this whirlwind effect where everyone else kind of comes with you on this journey. You get your tribe, you get your team, you get this vision, and you can move forward with power. Um, but don't start splitting off that energy into different places because in the end it all comes down.

Yeah, not, not splitting the energy. And, uh, one of the points that you said I really liked, you know, sell it 1,000 times before you make a decision that it worked or not. It's It's very similar. It's very similar to how you send emails. You know, you're not gonna send 10 emails and say, ah, nobody has responded, so I'm just gonna let it be. You need to try, and it's a numbers game at the end of the day to make success. Exactly.

One thing I see a lot is people create like pitch decks. Yeah, they'll go and pitch it once and they'll go, oh, that didn't work. And they'll go and reach and they'll change it again completely, or they start messing around. They spend hours or days of their months messing around with pitch decks. Just create one with like a package or product or a way of presenting the data and go and try at least 10 times before you change it.

Mm-hmm.

Like, because allow yourself to get into the flow, allow yourself to test it, stress test it, and then naturally there'll be small things you need to change. But just, I think people just want like everything to happen instantly, and that's the problem. Like, it doesn't happen like that. You need to create energy, you need to create momentum. So Um, you know, that's a real hack. I used to say to my sales guys, just try it for at least a few times till you know whether it's working or not. Like, you can't just take one or two nos and go, oh, that's it, I give up, I'm going to try something completely new and scrap, because that, that might have been the winning formula. You just had two bad experiences.

And I think that's, that's a very analytical approach as well. Yeah, you'll be able to— the data never lies. So try it enough times to be able to make a decision. Were you a solopreneur? Did you start it all by yourself?

Yeah, I've always actually, um, to date had businesses on my own. Yeah, I did try a business with a co-founder when I was 18. It was a modeling agency and it was, you know, I think—

Which agency?

It was a modeling agency.

Oh really? Okay.

Yeah, I think it was more of a vanity project at the time. It didn't work. We lost money basically. It was a failure. Um, but, but we struggled, you know, we clashed a lot and had different ideas and it kind of put me off. So I think since then I've kind of been a a solo operator. Not to say that that's not a, you know, I see a lot of successful businesses have co-founders, and it's very trendy to have multiple co-founders these days. Um, it's just not something I've ever done.

Interesting. I, I didn't, I didn't know that it's trendy to have multiple co-founders.

It's certainly in technology, right? If you go and look at a tech business, like, they haven't even made a sale yet and they've got 5.

Oh yeah, I have actually seen that on LinkedIn a couple of times.

Yeah.

Yeah, looking for a co-founder and there's nothing. Nothing exists.

Yeah, yeah, yeah.

Very, very true. I love that you mentioned vanity project. Was it a vanity project in terms of the industry that you chose, or you think people have similar kind of patterns going after vanity projects?

I think I, um, I landed on what I thought was an opportunistic business. The guy I went into business with, he, he was already operating in that space and Um, I think he liked my character and thought I could bring something to it. Um, but the model I didn't understand. I don't really know where, if I look back now, my value was really coming other than the sales side. I was doing a lot of the selling. Um, and I just don't think commercially we'd really thought the business plan through before we started just trying to make it work. And then we were spending money and we were just, we were just caught up in this, um, in this, in this thing that didn't really have— didn't really know what it was. And I think that was the, that was the, that was the problem. We didn't have any direction or Um, and certainly not a unified direction together. So that was why I call it a vanity project now. And I look back, I'm pretty sure with a few more years of experience, um, I could have done okay with it because I've often thought about, oh, I wish I'd done this, I wish I'd, you know, but it is what it is. It's, um, that's, that's such is life.

Well, well, you've done great. I mean, uh, you've built one of the fastest growing agencies, and I was wondering, you know, what separated your agency from all the other agencies that exist, you know, because a lot of them stay small. So what did you do differently that allowed you to scale? So you did mention what allowed you to perform better, which was, you know, having more personalized approach and more immersive. But how did you manage to scale Digital Ethos that fast?

I think it was, um, a sales mentality. So my, my background has always been quite commercially minded. I'm, I'm, I would, I would say I'm a, I'm a good salesperson, but I also empowered other people in the business to become great at selling, um, and, you know, incentivize them. Everybody had a commission, like, it didn't matter what job you were doing, everyone could earn the commission across the business, which I thought was a really nice approach. Um, so you could be in the delivery team but still earn commission if you helped upsell. And, you know, all of that just built a real commercially minded entity. Um, and then the other thing, which is the key, is just finding great people, you know. Um, again, it's a people business. A service business is all about the people. If you find great people to do great work you're going to have a good business. It's as simple as that. So, um, you know, I, I, I— if you can bring the, the sales in and then you can service those clients well, people are going to be happy, stuff's going to work. So I recruited well, and I had a recruitment system that I think, um, again, is, is reasonably unique. So we would do like an initial phone call, then we would, um, do a video call or an in-person meeting, competency-based stuff. Then we would invite them in, paid, for 1 or 2 days to come and physically work in the office. And often if they had a job, they'd take the time as holiday, but we'd pay them so they get a bit bit of extra revenue. And they came and they immersed into the office at the time, you know, it was before we were all remote. Um, but even when we moved to more remote, we still did it. So they would have tasks to deliver over 2 days. They'd get a chance to meet the individuals they'd be working with. And culturally, we knew within 2 days whether they were gonna be a fit or not, and they knew whether they wanted to work with these individuals or not. So actually, we saved ourselves loads of time with hiring the wrong people, putting months of money and work and energy into them to get nowhere.

So you kind of bring people in that space to be able to see how, how, how, how the relationship works with, with the others.

Exactly.

Oh, that's a good way to hire because most of the times I think that hiring managers just think of the compatibility aspect. We do not consider the team dynamics. It's good that that was your approach to hiring. And it's good that you mentioned it yourself because I've heard it a lot of times that if you, if you don't hire well, It's, it's a, it's a recipe for disaster.

Oh, I want one bad hire, and I've had them, don't get me wrong.

Oh, really?

One, one bad hire can destroy the whole dynamic, the whole culture, right? Can poison the well. And, um, you owe it to your team members and to yourself to take the time on an interview process. I think that there's a natural tendency that if you've got a gap and there's some hours not filled in a service, which you're like, oh, I just need somebody for the role, like, their CV looks fine, they interview okay, If your gut tells you not 100%, you still need them. A lot of people just hire them and go, I'll figure it out. If it doesn't work, I'll replace them. But it doesn't work, I'll replace them doesn't work either, because 6 months later you're letting them go. The team are seeing somebody leave. You know, it's that whole dynamic they've had to carry. That it's, it's just, you've got to get that hiring piece right, um, from the beginning. You know, great people make great businesses.

100%. Do you also look into their CVs? Is, is that your thing?

Um, I do, but I, I'm a big believer you should hire for attitude and train for skills. So I've had some really good people, like I've had people come from big industry leaders, you know, like the Googles and Metas of this world and Amazon, and thought, oh, you know, on paper these guys are going to be amazing coming into my agency, like they're gonna have all this. But it's not always the case actually, because maybe the, the character of that person wasn't 100% right, or the cultural fit. So You know, train for attitude— sorry, hire for attitude, train for skill is a huge thing to always keep in mind. You know, if you get a good person that's willing to learn, that's eager and motivated, that can go so much further than somebody that just thinks they're worth X amount and they just want to come in and do a job 9 to 5. Like, you know, picking the right people, especially at the start, makes all the difference. As you become a bit more mature, you can afford to take a few more chances on people and, you know, you'll get it right. Some of the time, some of the time you won't, but at the start, if you pick badly, it can make or break the business.

Yeah, I think the motivation factor that you mentioned is very true. I mean, if somebody gives you a chance based on your attitude and your motivation, and obviously they can see that you, if trained, you can perform well. Yeah, that can be a huge differentiator in the long run. Definitely.

Hmm.

You expanded internationally with this agency. So my question to you is, what was your biggest challenge when you were expanding and scaling across markets? Because, you know, you've got to understand the markets. How was that for you?

It was really challenging. So in 2021, actually, I had this, um, this brainwave. We'd grown the, you know, coming out of COVID 100-150% or something. We had this amazing growth spurt, and I thought, oh, we've got this spare capital, let's go and acquire a couple of businesses. So we started looking overseas, and in the end, we did 2 acquisitions in the UK. Um, a creative agency and a dev agency. But I decided to then invest in— well, let's, let's not buy in those countries, let's just launch in those countries.

Okay.

Um, so we launched in Germany, which with the language barrier was a challenge, but we found a partner there who was a production company and we thought, okay, well, we can leverage their sales team, leverage their language skills. We had a couple of people in our UK arm that could speak German, um, and we gave it a go. I mean, look, we got half a dozen clients or something. It was very challenging. In the end, I would say that failed, you know, we lost money on that rollout. But I learned a tremendous amount. At the same time, 2 months after the German thing, um, or launching Germany, we launched in Toronto. And I went over there and actually found myself working there for a month, 6 weeks. And that kind of founder-led energy on the ground, like, I was door knocking, I was phoning again, I was like, you know, hustling basically to try and find those early customers. And we did sign, I think, in the first 6 months, 12 13 clients, something like that. And then that kind of trickled into— in the end, we had maybe 20, 25 clients there before I ended up exiting the business. So, um, yeah, it was a success, but it, it took a tremendous amount, again, of energy and focus. So I had a good leadership team in the UK. I was like, guys, you need to run the UK business now. I need to go and focus on this startup, which is basically what it is, and like just do that high-energy, high-impulse stuff.

I love that you treated the other market as a startup, and then you went there yourself to, to feed that energy Yeah, that's, that's an interesting theme that you've been mentioning energy quite a bit. And I think that's an absolute essential, especially when you see the founder himself, you know, being so much involved in the business. It just keeps the motivation. And I've heard it from other founders as well that when they haven't, it didn't pan out that well.

Yes.

And the ones that did, it did work well.

Exactly. If you just expect others to, to lead without direction or to pick things up at the same pace, that's not good. What you should do instead is find the bit that you're really good at and where you do bring the energy. Energy and you bring the skill. And then all the other areas, find better people than you could ever be to do it. Simple as that. And that's how to— you know, Richard Branson talks about this a lot. You know, he's— he always says he— everyone talks about him being a great businessman. He's like, he's only a great businessman because he finds everyone else that's better than him to do all the jobs that he doesn't want to do or can't do. It's as simple as that. And he said, in the most respect, that's nearly every job. He's like, basically, when he starts a company He goes and hires great people to do every role, including the CEO role. He just then is a chairman, you know, because there's probably better people. But, you know, it's about enabling the best people to come in. It's simple as that.

Do you think it has more— it's just a thought that comes to my mind, like, you're a founder, so when you begin, you have to work in the business, but as you're scaling, you have to work on the business, which means that you need to let people manage their respective domains, and you have Let that go. You have to let go.

You do, you do, which is hard to do early on, right? If you're a first-time founder especially, like, you, you find it incredibly hard. But the one thing I would say that I think second and third time and what multiple founders are able to tell you is delegation is freedom. So the sooner you start to do it— and don't do it too early and in the sense you haven't even figured out like how it operates yourself, like you've got to be smart about this— but like as soon as you understand like Actually, I can systemize this now. Somebody else can run this. Pass it on. Like focus on something else. Mm-hmm.

100%. Also, shout out to you. I think you share some really good, interesting stuff on LinkedIn.

Thank you.

A lot about leadership, which definitely speaks a lot about you as a leader. I wanted to go back to this question about scaling. You did exit, and there's a lot of there are a lot of people that say that in the agency space there is a cap that you can hit, and then. the game is over. You need to move forward. You need to go. What is your take on that?

You mean in the sense like you hit a brick wall and then you need to sell basically, or you need to—

Yeah, there's an end to it. The agency game, you cannot unlimitedly scale it. There's a cap.

Yeah, I think, look, the first glass ceiling, as I would call it, happens between, well, up to $500K and then a million, like there's a lot of Agencies, I say, I think it's something like the statistics crazy, like 92% of agencies never go above a million turnover, right?

Interesting.

So if we think in the UK, there's 26,000, I think globally there's over half a million agencies, 92% never get over a million in revenue. So the other 8% are the ones that are doing the, the million plus revenue. Out of those to go on and become like acquired by the network agencies, I think in total it's like a couple of percent of those then are actually like acquisition targets. So you are right that most people run out of steam or hit these ceilings and can't break through it. Um, that's not to say it can't be done though, because it's been proven time and time and time to become— to be done. But it really comes down to the leader, the team, the people, all of those things. Um, and often, you know, if you look at the success that Rob Pierre had at Jellyfish, for example, you know, he grew an incredible business over 20 years, 18 years or so. Um, but it was through a lot of acquisition. It wasn't all organic, right? At some stage, to keep getting those growth numbers and keep elevating, you have to be willing to take risk and take on debts. And not every founder or entrepreneur has that in them. So I think, again, that's another glass ceiling. Like, if you realize your organic growth to keep speed and keep pace with the industry can maybe only get you to $10 million, but then if you want to get to $100 million, you're gonna have to go and start acquiring other $10 million businesses. That's not for everybody, but can it be done? Yes, it can be done.

Well, you, you, you did that.

Yeah, it can be done, but you've got to be willing to take chances. Simple as that.

I see, I see. Let's, let's talk about— because I think this is, uh, this is a great moment to pivot to your investment background. You know, you invest and you— I would like to ask this question, you know, how should founders choose the right investor? Oftentimes I've seen people They just think about money. All they want is money, but they do not factor in who is helping them at the end of the day.

Exactly.

So what is your— what do you have to say about that?

I think, um, strategic investors are always, you know, better. So there is, there is an element of what they call in the industry like dumb money. So people want to just give you money and then they're just going to disappear and hope to get a return later. Okay, cool. But early on, actually, what you want are strategic investors, like value-add investors that have network introductions, um, ability to even help you raise more money or get more clients, whatever. So I think it's, um, it's about looking for people that bring added value, I think, is the key. And if you're in a sector that you want to open more doors in, try and find an investor or a non-exec or somebody that has had that experience before. That will make a huge difference. And For example, at Tobin Capital, we only invest in businesses where we're able to add an element of kind of advisory as well. We don't invest in any business where we can't offer advisory services, or sometimes, like, you know, it's pro bono, it's not always charged, but it's like, we want a board seat so we can come in and help give you some of our knowledge, our experience, so you can maybe just— even if it's avoiding one or two road bumps, like, even that in itself could be worth a lot of money. Um, that's the value add that we try to bring. And obviously the marketing background, the growth background, all that stuff really helps, um, because all businesses need that.

So yeah, I, I agree. I agree with that. So you, you are specializing in service space, or it's other industries as well?

It's been quite, quite, um, agnostic actually. I've been pretty, pretty, um, diverse. I would say now as my experience in investing— because I wasn't from an investing background, right? I've had to learn this stuff. What it all started because I had wealth managers managing some of my money and the results just didn't feel like they were any good compared to the benchmarks. And I was like, you know what, for a year I'm just going to take my cash and I'm going to invest it myself and I'm going to see how I do. And I think in that first year I did 2 or 3 times what they'd managed to get me for 5 years before.

Oh, really?

I was like, oh my God, these guys are crooks, what's going on? You know, and I don't think they were, they were meaning to be, but like, um, the fees and everything just ate into the returns. So then I've carried on. Here I am, fast forward 6, 7 years, and I think I've become intermediate level, maybe expert some would say, at it. And I enjoy managing my own money. Um, so then I just decided to start deploying capital into other businesses, and I just, you know, I've got a real passion for it. And I think it's about finding, um, Finding the businesses and the opportunities that you, you have passion for, and then investing in those and supporting those founders with making the right decisions, basically.

I see, I see your point. How about, um, so this morning I was having a conversation with a founder and he said people should understand when is the right time for them to, to seek an investor, or if it's even needed. So what is your point? What do you have to say? When is the right moment, or when should one seek an investor? Because there's a myth that you need to have an investor because you don't have money, but do you?

Yeah, it's, um, it depends on the industry. If we're talking about service industries and agencies, I don't think so. I think you just need a lot of energy and hard work, you know. And, uh, you can go and knock on doors in your local town, and chances are if you knock enough, you're gonna find your first client, right? The problem is nobody wants to get off their ass and go and knock doors. And what they want to do is send a few LinkedIn messages and hope someone responds, and then basically they're like, oh, I've got an easy catch here. Not many people anymore are willing to do whatever it takes to get those first sales. Um, we've all become too accustomed and hidden behind technology and reliant on it. So I think, like, if you are really eager and keen, like, you can do stuff without money. But most people want to hack it and do it faster. So they're the ones that go and they start raising capital before they've even launched their idea or before, you know, and I hear so many people come along and they have no idea when they're going to get to profitability. I get so many pitch decks, maybe 20 a week sent to me through Tover Capital. And I look at them, I'm like, okay, but when do you break even? When do you make money? Like, I'm just not interested in businesses that have no idea or founders have no idea when they're actually going to make any money. What's the, you know, it's, there's a strange, um, tendency, I think, at the moment for businesses to like try and emulate the big businesses and be like, right, well, okay, I've got this great idea, I've got this new slick AI idea, I'm going to roll it out and we'll make money on year 5 or 10, but I'm just going to borrow people's money for now and keep it back. It's just, it just, it works for a few, but I guarantee it works for like 1 out of 1,000, right? So all of those other ones, I think actually statistically it's only 4% of tech products ever make it to year 3. So, you know, it's just, uh, it's about being smart. Get out there, hustle. If you don't want to borrow money early, I would suggest build a business that's already profitable, then go borrow money, because at that point you get a better valuation anyway and you're not getting eaten up by, you know, investors. So there is a real place for investors, but I think it should be at the right time and it should be strategic and it should be When you actually have something to offer the investor as well.

Interesting. You mentioned 4%, only 4% of techs.

Yeah, actually make it to year 3.

Yeah, yeah, that's a crazy number.

It is, it is.

And it's, uh, it's funny that you mentioned that a lot of them, you know, don't even mention the break— when, when, when would they break even in their pitch decks? Because I had this question for you: what are the red flags? Because you are so used to looking at pitch decks, people pitching their businesses, and what is an absolute no-go for you that I'm not gonna venture, I'm I'm not going to go beyond what I'm reading right now.

First, first and foremost, again, it's people, right? I'm a people-centric person. So if I meet the founder and they seem very bloody-minded or stubborn on stuff and not malleable or open to other suggestions, like, you can tell quite quickly. And I have a, a way of questioning them to try and see how open they would be to ideas and concepts. Um, that's a big red flag for me. So person first. Then I think about the idea. Is it simple enough for me to like, actually, do I get it? So when I see the pitch deck or I hear the 60-second elevator pitch, do I actually get what they're doing? Because if I don't, and I would say I'm reasonably, you know, rounded on new ideas, um, if I don't get it, a lot of people won't get it, which means the sales process is probably gonna be complicated, which means it's gonna be hard to scale. And actually then I'm out.

Right.

So I can make those decisions really quickly. Also then, do they know their numbers? Do they understand how they can get to profitability? How are they gonna spend the money? You know, when people come in and they start saying, well, I've got all these wages to pay, I've got this and the other, It's like, okay, yeah, but that's cool. So we're going to pay for you to have a job for a year or two, but like, where's the— where's the, um, yeah, where's the focus on actually getting to that money? So they're the 3 things really. And I can— I can— I've got pretty good at it. I can establish that probably in 10 or 15 minutes, you know.

I'm curious what people say when you ask them, you know, where, where does the focus go when, when you get the money? What, what do they say? And What is that answer that makes you think, oh, I know that every case is different, yet what is that one approach or mindset when they say this is where I'm going to invest my money to begin with that makes you wonder?

Hmm, I think if they're trying to build something that's defendable, so if it's like, you know, I don't know, they've got a product or a service or something that, um, they're putting money into building assets, so it's going to be IP, it's going to be a patented product, it's going to be You know, all of a sudden that's got like longevity to it. That makes sense to me. And I'm like, okay, well, that's a good investment.

Mm-hmm.

Um, what's not a good investment is, you know, they haven't even finished the product yet and they want 50% to go on, um, staff costs and keep building the products or whatever. Like, get an MVP ready, go out, test a bit of marketing, get the user feedback. Like, just, just sense— it's about sensible approaches to business. That's all it comes down to, basically. Um, there's millions of great ideas out there and millions of great founders, um, and lots of really smart ones as well that never get businesses off the ground. And, you know, investing and, and having access to investing can be all the difference and make all the difference to those individuals. So, um, yeah, I think if you go to pitch an investor, just make sure that you are clear on how you are going to get your runway to a point of profitability. and where the value add is, what the assets are going to be of that business at that point, because all of that builds confidence in the investors.

For sure, for sure. And, um, I love that. And this is going to be my, my last bit that I really wanted to cover with you. You mentioned longevity, and I see that you practice it yourself for your own brand today. What do you think about founders building their own brand? You know, there's this recent surge, everybody's talking about personal branding And you have a massive brand, and what would you tell to founders out there? And what is the strategic— what is the strategic way to build that brand?

I think it's, um, it's pivotal, actually. You know, if we think about the biggest brands in the world, you think about the CEOs as quickly as you think about the brands themselves, right? They are one and the same. They are intertwined. Whether you think of originally Apple and Steve Jobs, or you think of Bill Gates and Microsoft, it's like like, you know, everything is interlinked. Or, you know, even now, like Tim Cook with Apple, like all of it is— you can just, um, and that on a big scale has started to filter into the SME world and this mid-tier world. But it's happened since COVID and it's happened at a rapid rate. Um, I think it's super important. I mean, personally, the opportunities that have come through my businesses, and for me, me literally as a, as an individual since focusing on my personal brand have been profound. You know, I, I get 4 or 5 really interesting opportunities, I would say, every month, which I filter through. I'm probably getting 500 things come through my desk a week, but it's like, you know, picking the right ones, the really good ones. But that has all happened because of amplifying my profile. There's also this thing about if you want to be taken seriously as a business or a leader, like, share. and help others on their journey. So a big part of what I do now, you know, I've got my Success Method newsletter where I share thoughts, feedback, like ideas around building, scaling, and exiting businesses, how to have a strong mindset. Um, I'm also quite heavily involved in, you know, looking at some of this personal brand piece for people and thinking all C-level individuals should be investing in this. I really think it's a huge thing for them to do. So big advocate, as you can tell, big advocate for it.

Yeah, sure. I think you, you practice what you preach, actually. So I, uh, I have no doubt in that. So if a founder— and that's my last question— the founder wants to position themselves as an industry leader, what's the first step they should take to build their personal brand?

First things first is do the stuff that's free, right? So, so I always think, think about like what your interests are, you know, is it, you know, personal interest, business interests, and then start creating content that talks about that. And start sharing who you are on the free social platforms. You know, start a blog, start contributing to even just the LinkedIn articles. You can do that for free. Start putting your voice out there, start putting your message out. Um, you know, go and message other people of influence in your, in your space or in your chosen space. Go talk to them, ask for feedback. That kind of information that you get from them, or podcasts like this, spin it, put it online. You know, credit that person, but start building credibility that way. And it just gives you leverage. Um, and I think the main thing I would say about personal branding is be consistent. So don't put a post out once a week and, you know, then forget about it and think, oh God, I got 2 likes. Or just be consistent, keep pushing your message, and eventually people will hear you. Simple as that.

Yeah, and anybody listening to this, literally be consistent. And again, Luke, you practice what you preach. I see your post, uh, quite often. And as I said, you've been motivating others. So I hope people get some inspiration from our conversation together. It was a pleasure having you today, and I really hope I can get as much as I can. And I'm a subscriber to your newsletter, by the way.

Ah, good, good. Perfect. Perfect. Well, any feedback would be great, and any topics that you'd like me to cover, please just always DM me and I'll pick them up.

I do have many in my mind, so we'll certainly do. Let me know. Well, Thanks for joining me, Luke. Have a wonderful day.

Thank you. You too.