She Found $50,000 Hidden in an Agency’s Billing System | Nikhil X Jhana

What is the number one killer which is actually hurting the agency so bad?

I call it the leaky bucket problem.

Like, how do you deal with these situations? How do you fix that type of business?

It costs you nothing to just get more efficient.

Why is it important to operationalize?

Spend the cost of your operator's salary, close all of the gaps in the bucket, and keep that water in in the form of profit.

Tell us the science of getting things done.

You would go into the backyard and you would play like backyard family soccer. I'm going to think you have the ball, you think I have the ball, the ball's going to go through.

How do you fix that type of business?

You put yourself in this kind of churn and burn vicious cycle, and it's a hamster wheel that's hard to get off of.

What is a playbook for that?

Strong onboarding processes on average 3x employee retention and increase employee retention by 72%.

Help us realize how actually ops make more money.

It's time to hire your operator because they're there, right? For the cost of $4,000, their salary. AI is really exciting, but when we actually look at how most people are using it, What's going on?

What's going on, everybody who's actually listening to this podcast? First of all, guys, welcome back to another episode of The Nikhil Sai Show, which is hosted by me, The Nikhil Sai. And guess what's going on today? I'm back with another amazing, incredible guest. This podcast is going to be quite different because I met this person when I was at a very interesting summit, and this was a summit with all these people with gray hair. And if I should mention, we were probably one of the few young people there, you know, trying to merge with these people. And, you know, we were all talking about like nerdy mergers and acquisitions stuff, buying businesses, selling businesses. And I was there to learn primarily about how to actually package a business and sell it or how to acquire a business. But then I ended up learning operations and how important that is. And I built and scaled companies, you know, with up to 80 people on the floor and it's insane the amount of people you have to have and the systems you need to handle that scale. And I never saw somebody talk about operations with such passion and such compassion. And not just that, but also super clarity on what they're talking about— operations. That's why I'm bringing the ops girl, the magic ops girl in the digital space. And let's welcome the founder of Spyglass Ops, Jana Lee. Hey, Jana.

Hey, thank you so much for having me, and thanks for that nice intro.

Yeah, I mean, excited to have you on. We had such a fun time and you were speaking at the event and, uh, so cool. And, uh, I mean, I would really love to geek out and nerd about all the ops stuff. And everybody talks about just sales and marketing, just get more sales, Hermosi stuff, right? Make offers, make money, like Saka, set appointments, close appointments. But you really cover other piece, like how to actually increase lifetime value, how to create operations and structure in place where You can scale. Now, before we get into the meat and potato, talk to us about who are you? How did you get into ops in the first place? And tell us a little bit about your backstory.

Yeah. So I like to say that before I found operations, I was quite literally directionless. I was living full-time in like a converted van. I was van lifing my way through North and South America with a now ex-boyfriend who was the CEO and starting a digital marketing agency. So I was watching him build and scale this agency and through a series of odd events, I stepped into his team to like, you know, fill in for someone who had left and I kind of whoopsied my way into becoming the COO of that agency. So that was many years ago, but I like kind of cut my teeth in operations in the agency model and in the agency space. I went on to become the COO for a company called Agency Lab, which was a coaching program that was coaching, you know, 500+ agencies, helping them scale through 6, 7, 8 figures. So I got to be the operations coach. Looking at hundreds of agencies every week. They were coming to me with all their operational problems, and I got to learn really quickly what does it take to actually scale the operations of an agency as efficiently and as profitably as possible. So that's where I got my start. I started my own company about 4 years ago, helping other agency owners grow and scale through the things that I learned, uh, and learning from my mistakes so that hopefully they're able to get there faster, easier, and more profitably.

Yeah, I mean, such a cool thing to do and very nerdy as it sounds.

Very nerdy. Yes.

So, I mean, I remember you were showing so many numbers and data points on like the board. I was like, holy smokes, do we even track this metric? Oh shoot, we don't. Like, let's write that down. It's crazy. Like, talk us through when you see the agencies, right? And probably there's tons of agencies listening to this podcast. What is the number one killer which is actually hurting the agency so bad? Like, what do you see like the most common mistake which is happening in front of their eyes, but they fail to realize, they fail to fix it? What is that common thing you observe when you're talking to agencies?

Yeah, so the biggest problem that I see, I call it the leaky bucket problem. So I want you to imagine for a moment your business is a bucket and sales and marketing is responsible for like piping water into the bucket, right? That's the pipeline of cash flow and revenue that's being brought into your bucket.

Okay.

Every single bucket has cracks and gaps and holes. And these are the operational inefficiencies that are costing or leaking water out of your bucket. The bigger the bucket grows, right? Like, so the more we scale and grow our business, the bigger these cracks become. And because as founders, we're so focused on the pipe, we're so focused on sales and marketing and bringing more money in, we often lose sight of, we literally just don't see the cracks and the gaps in our bucket that are costing us all of the water that we're working so hard to bring into the bucket in the first place. What's cool about this is that sales and marketing is a game of spend more to make more, right? Like you have to spend a lot of money on ads and on sales commission to bring that revenue and bring that water into your bucket. It costs you nothing to just get more efficient. It costs you nothing to find the gaps and to close them, and you get to keep all of that water in the bucket for free, which means that it drops straight to the bottom line in the form of profit. So while sales and marketing drives revenue, operations drives profit, and it does that by finding the inefficiencies that are costing you all of your time and all of your money and all of your energy and closing those gaps, keeping that water in the bucket and building the most profitable version of your business.

Geez, I love that. That's so cool.

Does that make sense?

Yeah, yeah, totally. I mean, The way you explain such a complex concept of operations and how it actually increases net margins in layman language, it's incredible. I mean, you know, like somebody very famous mentioned—

Clearly I've talked about this a little bit.

Yeah, yeah, totally cool. Now let's talk about this, right? Like what are like the few profit activators when you go into a business, right? And I see this thing there. I talk to so many agencies and they're all having this acquisition problem. Like, hey, I just need more leads and more sales is going to Save my business. Like, how can I get more? And I look at their margins. I'm like, okay, you're processing $2.3 million a year, but your net margins look like less than 8%. Like something has to be fixed here. They're like, no, no, no, it's just sales. I just need more clients. I'm like, no, you're like, okay, let's like, how do you deal with these situations? How do you fix that type of business in the first place?

Yeah, 100%. So we have to find the cracks in the bucket, simply put, right? And it depends on the stage of growth that an agency is in. So the smaller the company is, generally the, the big cracks in that bucket are going to look like inefficiencies in their systems, inefficiencies in their team, uh, and inefficiencies in their strategy and their pricing. Once we have kind of like figured all that stuff out, the cracks change as you grow. And as you scale, the inefficiencies start showing up in your leadership. They show up in your data and they show up in your strategic decision-making. So you tell me, Nikhil, where do we want to start? Do we want to start like sub Million dollars, sub-seven figures, or over seven figures?

Let's, let's start sub-seven figures because that's what the most audience would be. So I would love that fact and then we will go up.

Perfect. So if you are just starting out, your bucket is small, which means the cracks and the gaps are small. The operational inefficiencies are not actually costing you that much money yet, right? When really small business owners say, hey, I need to outsell this problem, I need to figure out acquisition. You're generally right, right? Like at, at an early stage of growth, what you lack is product market fit. You need to figure out how to market to your ideal client, how to get them to buy the thing. And there's any systems or operations required in the business should be focused around doing that. The operations that help you get more appointments on the calendar and close more appointments on the calendar. But that stage of growth only lasts up to like $20,000, $30,000 a month, right? As soon as you start to exceed that $20K to $30K per month revenue mark, your operations need to now start shifting to the backend because what starts to cost you a lot is client churn, right? We're working so hard to bring all of these clients into the bucket and then they're just turning around and they're churning out 3 months later and you put yourself in this kind of churn and burn vicious cycle and it's a hamster wheel that's hard to get off of. So now our operations need to shift towards what are our backend systems? How do we manage these clients so that we can manage them as efficiently as possible so I, the founder, can keep my focus on sales and marketing? How do we manage these clients as well as possible so we do a really good job? They don't churn out due to like stupid mistakes and dropped balls that were totally preventable, and they actually just stay with us longer so that I don't have to put so much pressure on always acquiring the next client.

Hmm. Yeah, totally makes sense. I kind of see this as a very common pattern. Most agency founders I know are like, Either they're doing like this big ticket deals that they personally be involved in the client with where the retention is good, and then they lose out all the smaller clients where they're managed by project managers and stuff, right? Like they can't replicate the client success at scale. And how do you operationalize it where like a CEO could be confident that, okay, my client success head can keep similar, if not better retention?

And that is, it's such a good question. And that's where we get to the critical bottleneck that I would say holds most people back from reaching the 7-figure mark, which is team. Do you know how to build and hire a team? Do you know how to equip that team with the systems and processes they need to replicate your level of performance and your level of success? It's a, it's a skill set, right? We have to learn how to hire. We have to learn how to train and onboard. We have to learn how to manage. And if we do this successfully, our team will be able to start to perform exactly like you said, better than we could, right? We get to hire experts who theoretically are better at their job than us. Because while we're the Swiss Army knife having to do everything in our business and do all of it just okay, they're the scalpel. We get to hire experts for specific roles where they get to be better in that position than we are. If we know how to find them, if we know how to hire them, if we know how to unlock their highest performance. And that's where it actually comes back to leadership. Do you as a leader know how to build a team that can perform better than you can?

I mean, that word is pretty scary for most entrepreneurs. Like, leadership. Oh my God, are we getting corporate now? Like, we don't have board members. Like, what do we do, right? So talk us through, like, in layman's language. Like, when I talk to an agency owner, right, like, they would comfortably spend another $10,000, $20,000, $30,000 on marketing to get more leads. When it comes to hiring an ops person or a client success manager, they're like, nah, we have Philippine teammates. Like, let's just $3 an hour, let's keep it that way. Like, how, how do you go? What's the mindset shift and what is the process to actually find the right operator? Let's talk about that.

Great question. Yeah, so you mentioned I like numbers. I'm gonna bring it back to the numbers just to help put some dollars and cents behind this. So on average, high performance teams, A-player teams, are 2.1x more productive than your average team. So what does that mean? It means for the same exact labor cost, right? I can pay my team the exact same amount, And just by getting A-players and leading them correctly, I can double the revenue and output from that team. So if we're using an agency example, right? When I was the COO of an agency, the average, you know, client success manager for the average agency could manage between, let's say, 30 to 40 accounts. My client success managers were managing between 80 to 100 accounts each. So at scale, this really stacks up. My team was literally 3x more productive. Than my competitors, which means that I got to keep my team a third of the size for the same amount of output. I got to save— I think I ran the math once— I got to save $350,000 every single year on labor costs, people that I didn't have to hire because my team was just better. They were just producing a higher result for the same cost. And that $350 grand, again, it's a leak in the bucket. It drops straight to the bottom line in the form of profit. So if you want to scale as profitably as possible, one of the highest leverage skills that you can acquire is how do I build a strong team and how do I lead them well? Because the bigger and bigger your company grows, that profit is just going to stack in your favor over time.

I mean, I love that so much, and the fact that how you operationalize it and increase your profit by just keeping your team effective. Now this comes down to actually having motivated teams and talented teams and having their best interest in your company, which most of the time I don't see that with the teams and the structures. And you know, the, the value system doesn't exist right now. Let's go step by step. Like, let's start with the hiring piece, right? Like, if we have to completely create a strategy, a system for somebody to listen in today and be like, okay, now I know how to hire my best teammate or best operations head or best client success manager, What do they do? Like, do they go on LinkedIn or do they just hope and pray or do they ask friends or do they hire their best friend? Like, what's, what's the step here? What's the best step to hire such a quality person first?

So I always say hiring A-players is not about fishing in the right pond. It's about using the right fishing rod. So what does that mean? It means your fishing rod is a hiring process, right? We have a hiring process. We give our clients an 8-step step-by-step hiring funnel that they build every time for every role that they need to hire for. Now, that sounds like a lot of work, but what happens is that you are able to drop a process that good into any pond, right? I can drop that process into LinkedIn, into Indeed, onto Facebook. I can put it everywhere. And the process will pull out the A players. I will literally attract the right person for every role every time. No matter where I hire from or the budget that I have to work with for that role, because the process guarantees that I get the A-player. So most people when they're starting are like, okay, thoughts and prayers, I'm gonna put this job description out on my Facebook, and then I'm just gonna hire the first person who says yes, that seems somewhat competent. That's not a process, right? And so sometimes you'll get lucky and you'll get somebody awesome, but most of the time, by the time we come in, 'cause we work with 7 and 8-figure businesses, by the time we come in, We have to come in and help our clients fire a bunch of people because they hired the first people that were available and competent instead of hiring the person that was the right A-player for the role. And that becomes a very expensive mistake that we have to go back in and correct for later.

I mean, I could see that happening every day in every business I kind of talk to because they have this initial set of people that they can't get rid of. Now those people would basically pull the team spirit down and now the companies Morals down and like the whole, the whole shebang happens overall. It's a painful vicious cycle to find right people. Now, once you find the right person, right, using the operationalized hiring system you mentioned, and you create a funnel like that and you attract clients, onboarding them with the right expectations and having them do the work is a different set of skills. And trust me, probably one of the most stressing thing like I go through when I hire a quality person, I'm like, okay, this person is good. Like I know the track record. but can I hold them similar or better standards in my company? Can I onboard them with expectations? Can I get them to do stuff that I want them to do, right? What do you do in this case when you onboard them? What, what's the best playbook for onboarding a person?

Yeah, so again, really quick, back to the numbers before people click away being like, I know how to onboard people, you just toss them in the deep end, they learn how to swim. Strong onboarding processes on average 3x employee retention and increase employee retention by 72%. So just by getting the right 30 days, first 30 days in the role, just by doing that correctly, we are able to keep our team 3 times longer, which means we don't have to replace them, which is really expensive. And for, again, same exact cost, we get an automatic bump of 72% productivity. Why is that? This actually goes back to our client churn. If you are experiencing extreme client churn right now, chances are it comes down to your onboarding. When we nail client onboarding, clients stay longer. It is exactly the same way for your team. When you nail team onboarding, your team stays longer. Why? Because human beings just be human beings. We respond to the same things. We need clearly agreed to and set expectations. We need alignment and we need clarity on what is expected from both of us and what's the direction that we're going to run in together. We need to be like well organized and well structured and set up for success. So that we can do our best work, right? This is just what human beings need. And so when we take the time to create that structure around our team, I have like a 5-step onboarding process in the first 30 days. When you run that play, you immediately unlock higher levels of performance and higher levels of retention, just in the same way that if you were to dial in your client onboarding, you will immediately unlock higher levels of client lifetime value and retention.

Hmm. Makes a lot of sense. Following that simple standard, and it's insane, like 70% retention and higher productivity. That's crazy. Yeah, that's crazy. Like, I mean, I don't have to— I have to pay half the price to hire the same amount of people. That's kind of how I hear it. I'm like, oh, that's 100%.

And again, it's free. It costs us nothing to just onboard somebody correctly, but by investing the time to do that, we produce this measurable increase in productivity and ROI. It's free profit just waiting for you inside of your business.

Right now, let's talk about— this is, I think, probably one of the most stressing pains I see with people, right? When they have a team, a set of people, right? And now they're no longer one person talking to the client. There's many things, right? Like 15 different balls being thrown at them, and now they're expecting people to do. And here's the problem. There's a saying, like, when there's a snake in a room and 15 people standing and looking at it, like, nobody's actually trying to, like, kill it. Everybody's just looking at it like, somebody take care of it, right? Like, that's it. That's it. So everybody's waiting on somebody else to get things done, and it kind of becomes hard. Walls being dropped, communication errors. Then I see founders jumping onto tools. Oh, now we're using Trello. Oh no, no, no, we are on Asana right now. ClickUp, that's what's all the problem. No WhatsApp, get on the Slack. No audio calls, schedule Zoom meetings, morning cadence, like all this stuff. Then we realize, hey, you're spending like 2 hours a day on team rituals, but actual work productivity is down. Like, it doesn't make any sense. So tell us the science of getting things done when you actually have people. Let's say we followed the right process to hire them, right, right process to onboard them, getting things done, making sure that things are communicated well, done well. What is a playbook for that?

So I love this question because all of the things that you talked about, all the systems, all the tools, while those are important, none of those solve the problem that you're talking about. The problem that you're talking about comes down to one thing and one thing only, which is role clarity. So the metaphor I use for this is like, do you remember in like family reunions when you would go into the backyard and you would play like backyard family soccer with your mom and your brother and your dad? And it's like 2v2 and like the goalpost is just like a shoe in the grass, right? And backyard soccer, every person plays every role on the field, right? Because there's only 2 of you. So if the ball's over there, everyone's offense. If the ball's over here, everyone's defense. If the ball's near the goal, everyone's goalie, right? When we start a business, we are playing 2v2 soccer. We don't have a lot of people. We have to fill every hat and every role on the field with the people that we have, which means that we, the founder, end up wearing all the hats and playing all the roles. Then our company grows, then our team grows, but we don't evolve our thinking. We keep playing the game like it's 2v2 soccer, except now it's like a National Soccer League FIFA World Cup size field. And we have 11 people on this field. But we're still running after every ball. If the ball's over there, everyone's offensive. If the ball's over here, everyone's defense. And what happens if you try and pack 11 people into a goal so everyone plays goalie? They're gonna step on each other's toes. I'm gonna think you have the ball. You think I have the ball. The ball's gonna go through, right? These are why dropped balls happen in our business. So the answer isn't more systems. The answer is that we have to evolve our thinking about our team. We have to establish roles on the field. That's role clarity, right? You are the goalie. Here's what it means to be the goalie. Here's the area of the field that you're responsible for. Here are the measurable outcomes that you are responsible for. Block 90% of shots on goal, right? That's a, that's a metric. That's a key KPI, a key performance indicator that I can put and transfer ownership to this person to build this role within the business. And then what happens? That goalie gets to spend all of their time becoming the best fucking goalie ever. They don't have to worry about any of the other balls. They get to just dial in and become an expert at that. They also no longer are stepping on other people's toes, getting confused about what balls are theirs or what balls are mine. When you create role clarity across every single person on your team, you become more efficient because now not every single person is chasing every single ball. And the person who becomes the most efficient is you the founder, because right now, let's be honest, you're the MVP on that soccer field. You are running after every single ball. If we build a team to cover the field, what do we unlock for ourselves? We offer ourselves the opportunity to step off the field, to step away from being the MVP and become a coach on the sidelines. And what that means in your business is freedom. It means 20-hour work weeks. It means a self-managing team. It means a team that can get their own jobs done without coming to you for everything or solving all their own problems and making their own decisions. So, role clarity is really important for like productive and profitable team, but it's also really important if you, the founder, ever wanna get yourself truly out of the day-to-day weeds. Does that make sense?

Yeah, I love that. Like, I, I mean, it's really disheartening to even realize, okay, I, I still don't have a few people in my team who have clarity on their roles. So, It's something for us to work right now, right? So it's quite interesting to even think about it from that frame, right? We have the good-looking name titles, but that's not it. We have to have clarity, the KPI, and, you know, the accountability for the tasks they need to do. Now, I really had this issue when I'm scaling my own company, which is a bunch of friends or people who started with me, the, you know, the old-school people in my company, right? We grow, we grow at a fast pace, and the balls get dropped. We see people no longer fit the requirement or they don't evolve to the scale we want, right? And then there is a very intimidating situation, and I see this with founders every day. They hire somebody they like, know, or trust. They believe in, or they stay, have a long relationship, or they're just hired. Now they're like, okay, they made a mistake. Should I admit? Should I not admit? Or if I admit, penalize them and do a pay cut? Or should I like scare them off, get on a Zoom call and do some cussing? Like, what should I do? Or should I just fire them? Or like, should I hire an alternative? Like What is the best way to deal with situations like this where you have people, you tried your best, you have set clear expectations, but the balls are being dropped, the quality standards don't exist? How do you deal with this?

Yeah. So my baseline for this process actually came from Leila Hermosi, who was one of my first Ops mentors, and she calls this manage up or manage out. So manage up or manage out means there is a performance gap, right? We need expectations and performance to be all the way up here. The person in the role is performing down here. What do we do? The very first step is that you immediately address the problem immediately, right? Generally, we as founders, it's such an uncomfortable thing to have to talk about it. And it's generally just like easier and faster for us to just get in there and fix it ourselves that we let these things slide. But the challenge is that our team has no idea that they just fucked up. No one is a mind reader, right? So while you're over here getting more and more frustrated and more and more resentful, Your team has no idea that they're doing something that's pissing you off. Our job as leadership is to offer them clarity around where is the performance gap. And this goes back to role clarity, right? If we have a clearly defined set of outcomes and this is what success looks like in the role, then we have something that we can fall back on and say, hey, these are the expectations. Plot twist, in my onboarding process, you give these expectations to your team member on day 1. Hey, these are the expectations. This is your job now. These are the KPIs we are going to hold you accountable to. So now down the road, if my team is performing, I can pull that back out and be like, help me understand, 'cause we agreed that these are the expectations of the role you're performing down here. So help me understand where this gap is coming from and help me understand what you are going to do to close the gap. When you set a performance conversation that way, a couple of things happen. The first thing is that your A players get really motivated, really clear on where they have a growth opportunity, and they will level up. That's the managing up. Your B and C players will be like, oh, I hate all this pressure. I hate all this accountability. I want things to go back to the way that they were. Things were so much chiller back then. And they will quit. They will literally manage themselves off the bus because they are no longer a fit for the high-performance environment that you're creating. But your process as the leader is exactly the same. And what it becomes is a filtration system where only your A players stay and level up. They get managed up. Your B and C players will self-select off the bus, and now you have the opportunity to replace them with A players.

I mean, I love that. Just understanding the fact that you can do this, it's just so calming and relaxing that, okay, you can talk to people when some things go wrong. You don't have to stress by yourself and you don't have to cuss at your own self, you know, by hiring. Totally delayed. Like I had a bunch of people running around. They were dropping balls and I was just like trying to do the stuff they were missing, then getting frustrated. But in fact, I should have just addressed it in the first place, and that's probably the best thing to do. And we moved on and we got better at this, but I could just see how many more entrepreneurs would relate to the situations I've gone through. So my next question to you would be, people have this mindset that, oh, marketing and sales, they make me a lot of money. What about ops? It doesn't make money, it's just an extra expense if I'm hiring operations head, client success manager, a few more project managers. This is just additional $10,000, $20,000 a month in expense. Why would I do that? Right? Just spend more on marketing. Help us realize how actually ops make more money for a business.

100%. So I'll go back to the leaky bucket, right? Sales and marketing, spend more to make more, drives revenue. Operations, spend the cost of your operator's salary, close all of the gaps in the bucket. And keep that water in, in the form of profit. So an ops manager, which is the entry-level operator hire— when I say an operator, I'm not talking about like some multi-six-figure COO with 10 years of experience. I am talking about an ops manager that you're paying in the US $4K or $5K a month for. They're responsible for like your basic systems, starting to build and hire a team, starting to get the right processes and SOPs in place. It's like $4K a month right now. Do you believe that you have $4K a month of operational inefficiencies in your business across all the clients that are churning and across all the hours that you are wasting, running around, dropping, like picking up dropped balls and figuring out what the heck is going on and managing your team and cleaning up systems and doing all of that? Do you think that you could make $4,000 additional a month with that time if you freed it up and you got it back? Okay, the second to the, the answer to that question is yes, it's time to hire your operator because the ROI is there, right? For the cost of $4,000, their salary, I'm going to free up all this time, all this energy. I'm going to save all this money. All of these clients are not gonna churn out. My team is not gonna churn out because we have the proper hiring and onboarding systems in place. My team is going to perform better. I'm gonna use my time more effectively, right? Like you get all of these benefits. Do you think that's worth $4,000 a month? Okay. Then go ahead and hire your operator. For the agencies that I work with, generally that stage of growth happens at around the $50,000 to $75,000 per month mark. That's when I recommend the agencies have a dedicated ops manager and it's worth the full-time salary to bring it in. Most agencies that I see wait until like the $100,000 to the $200,000 per month mark. And you can do that, but it's just going to cost you. So much profit. It's going to cost you profit and it's going to cost you speed. Because if you'd gotten that profit earlier, what do you get to do with it? You get to reinvest it back into marketing and sales. You get to grow faster. So the sooner you recognize that the gaps in my bucket are costing me more than it would cost for me to hire an operator, the sooner you get to reclaim that profit back, the sooner you get to reinvest it, the sooner you get to grow and hit your goals.

Yeah. Makes a lot of sense. I mean, it's very clear if, if, if the cost of the teammate you're hiring can help you even decrease that amount of churn, like it's, it's really a rational decision to make, but it's hard for our founders to just sit down and even do that math for a moment. So they're like, totally just for sales typically.

Totally. So that generally comes down to two things. Number one is, again, your eyes, your focus is not on the bucket. So these things are costing you, but you literally don't see them. You're just not even aware of them. Like the first company that I stepped into, the very first project, I cleaned up their merchant process. Processing system and I found $50,000 in revenue that was just leaking out of the bucket because they had a sloppy billing system. They had no idea. They had no idea it was costing them $50,000 a month, right? Like, that is a huge crack in the bucket. So just because you don't see it doesn't mean it's not there. And we need to have the awareness as founders to be like, all right, what are my blind spots and how much might those blind spots be costing me? That's reason number one. Reason number two is that especially at early stages of growth, founders undervalue their time, right? So we need to understand what is the value of an hour of my time? What is the growth that I could bring into my business if I had 5 to 10 hours freed up every single week? How much faster, how much bigger could I grow? Okay. That is very real revenue. That is very real revenue that could be brought into your business, but isn't because you're spent like picking up dropped balls and putting out client fires and like being stuck in the weeds with your team. There's very real ROI that gets to be freed up and unlocked when you free up your time. So we as founders need to treat our time as a measurable, valuable resource within the business. And we need to understand that our time appreciates as an asset. It literally gets more valuable the bigger your business grows and the more leverage you unlock. So when you're just starting out, sorry, your time's not worth very much. You have no leverage. But once you cross $50K a month, $100K a month, $200K a month, your time becomes exceptionally valuable and it no longer makes sense for you to be spending your own time on these low-value tasks when it would be so much more ROI positive for you to just hire in an expert who can do it faster and better.

Yeah, I agree. And I mean, it's just not the time and the money and the speed aspect. It's also the sanity aspect of it. Like an entrepreneur, not having to go through the burnout and all this client conversations and the difficult stuff. They could just be more strategic and that extra time they could push into attracting more clients, building a better product or hiring another teammate that can totally turn the game around. So that's really, really helpful. Now that was really an operations masterclass. Like you just broken down like finding a leaky bucket, how to hire. Like now people might be like, oh my God, I have so much stuff to do now. Like I'm writing a big to-do list. If you have to write a simple playbook. Where to start because mess is everywhere. Like everybody can agree, even the big businesses that I've dug into, they have crazy operation issues as well. So it's a problem that scales as we scale. So talk about for someone who's listening to this podcast, where do they start? What are the first few steps? What are the next few steps? Talk us through the playbook. Yeah.

So if you're above $50K a month, then the first next step is just hire an operator, right? My permission slip. To everybody listening is that you are an incredible visionary founder. Your focus is on sales and marketing because that's where you're exceptional. That's where you're going to be able to drive the most amount of growth into your business. You should keep your focus on sales and marketing and bringing more water into the bucket. But like we've established, that doesn't mean that your bucket doesn't have gaps. It's just not your job. To close them, right? You will bring more growth and money into your business if you stay in your zone of genius and do the things that you are best at, and then hire out an expert who's an ops nerd like me to come in, find those gaps, and close them for you. So if building an 8-step hiring process and relaunching all your SOPs and migrating over to ClickUp and learning how to onboard people correctly, if that sounds just like needles in your freaking eyeballs, Great. Don't do that. Don't do any of that. Hire one person who knows how to do all of that, who will do it better, who will do it faster, who will bring those systems and just install them inside of your company without you having to figure them out so that you can keep your time and energy focused on where it's going to drive the most amount of growth. For the best visionary-operator founders, or like pairs that I see, the visionary is focused on revenue and growth. The operator is focused on expenses and profit, and the widening gap between those two becomes the profit margin that you're able to stack as you scale.

Wow, I love that. Now I could clearly see a differentiation on why these two roles are so key. I think these two separate tasks require two different type of brains, right? Like, this is like— totally, yeah— like a sales and attack mode, like let's get more money, and like it's not pay anybody, let's try to be super effective. Yeah, these are two different skill sets because I've seen people who have employees that they pay huge salaries to, but they're like, you know what my time worth is? I don't even have to talk to them. I would just rather go make some sales. I'm like, yeah, but if you talk to them, you know, they will— the two different problems. Yeah, makes a lot of sense. Now let's talk about—

let's—

we talked about the operations from a team standpoint and a company standpoint, right? And you've been an ops person, you've handled and retained a lot of clients in your life and you already have this system, I'm assuming. Share us the playbook for a dream client journey. Most agencies, I like, they really suffer with the churn. Like even though they have a good product, the communication happens in a bad way or the expectations are in bad way or, you know, there's so many issues, right? Like sometimes the outsourced team doesn't show up on time or things that clients don't really want to engage with. And resulting in 2 months cancellation, most likely an average of 3 months cancellations. It's crazy. They're spending thousands of dollars to acquire the client and they're barely breaking even after doing the work for the first 3 months. And these are what I call the nonprofit agencies. They are technically running a nonprofit organization, spending all the money and paying all the employees overseas and in-house, but ending up with no margins. They're the nonprofit. How do you fix this problem? Give us the dream client?

Yeah. So if there were two things that I could call out as like, if you only have time to fix two things, fix these two things, it would be this. The first is that you need alignment between your front end and your back end. Simply put, can you actually deliver on the promises that you're making?

Right?

So we all read Alex Hormozi's book. We all now have these incredible $100 million offers that promise the moon and the sun and the stars. And the honest to God reality is that not all of us are good enough to deliver on it. Right. But client happiness comes down to the gap between expectations and reality. Okay. That's why clients stay. They don't stay because you're the best at what you do. They stay because the expectations of what they thought they were going to get are a match for the reality of what they actually receive. So we have two variables to work with. Expectations and reality. We can either change reality, which means get better, right? Grow, level up, hire better people, perform better, improve your product. Great. We should all be doing that, but we can also change expectations. We can lower expectations so that they are an actual match for the reality that we will deliver. And then your clients will stay longer. The challenge that I see is that the front end is promising insane expectations, and then the back end is delivering a mediocre reality. Even if the backend is delivering a solid reality, like it's actually pretty good, but the expectations set on the front end are way too high. The gap between those two things will still create a negative psychological experience for your clients and they will leave. So that's the first thing, front and backend alignment. Does that make sense?

Yeah, it makes total sense.

Cool. So that would be number one, right? Either lower your backend expectations or level up and get better on the front end. And then number two is client onboarding. So we talked about this with team onboarding. Again, client onboarding is the same thing. Back when I was the COO of an agency, we took our lifetime value, our client retention, from 6 months to 11 months. And the only thing we changed was onboarding. We changed a bunch of other stuff. We tested all this other stuff, but what we found out, like the actual only thing that made the difference was onboarding. That's how important it is.

Crazy.

That's how important it is. It's crazy, right? Like for us, that was an additional like almost $10K or $10K in client lifetime value. Like it was huge, right? So just by dialing in onboarding and what do we do in onboarding? We set expectations, right? I like rebuilt our client success manager's launch call presentation like 10 times. Set the right expectations, establish the right behaviors, the right agreement, the right patterns at the beginning, and then nail it. If you nail it in the first 30 days, right, you get their campaigns launched. Perfectly on time, as quickly as possible. If you overperform and overdeliver in the first 30 days, you create so much goodwill. You create such a positive client impression and client experience that you buy yourself grace down the road when shit does not go as well. You start on such a high note that you give yourself room to fall versus what most agencies do is like, we are just scrambling because onboarding is such a shit show and it's such a mess. That we barely get the thing out. It's got a bunch of holes. Our clients are not that impressed. Trust has been broken because we dropped all these balls. And so you're starting at just above the break-even line. You've given yourself no room to fall. You have to be perfect. Otherwise they're going to leave. And let's be honest, nobody's perfect. So if you're going to focus on one area, focus on onboarding, set it, set those first 30 days up for success, and you will automatically unlock client retention and lifetime value. I promise.

Wow. That's such an unlocker. I mean, Doubling your client, you know, like retention time by just changing onboarding. That's a huge lever. Like, if somebody's looking for a better sales script, like stop, just look for a better onboarding. Literally. That's what matters the most.

Yes.

Totally see how it plays out. Like if they're staying 6 months and they're paying $1,000 a month, the acquisition cost might be $2,000 or $3,000. They might only make a couple thousand profit, but if they're staying 6 months, no acquisition cost, the margins can go really high.

Like, correct.

And this brings back to the actual, like, like the operationalizing of business. Why do we even have to operationalize? Can't we just run by the hustle hustle, right? My real reason is to learn to sell businesses, and we are already in the process of selling multiple businesses, acquiring a bunch of them, building a portfolio and whatnot. And that's one of the reasons why I was at the M&A summit we were in the first place. Talk us through, first of all, why is it important to operationalize and how can you bring the value of a business to life? Because most people, They have this assumption agencies can't be sold. Like these are one-person businesses. There's no value. There's no enterprise value. I mean, after selling some companies, I'm, I'm being transparent. Like there is value, but if you have to build predictability, that happens through operations. But give us a little bit of M&A and ops playbook here, which we can learn from.

Love that. So this applies even if you never intend to sell your agency or have no idea if you're going to sell your agency, right? The reality is, is that operations Works the same, whether you want to sell or whether you just want a highly profitable lifestyle business cashflow machine, the operations that you're going to need are exactly the same in both cases. So you might as well build the ops and then figure out what you want to do with it later, because operations is the unlock. I love the word that you said, which is reliability, right? Operations is what takes you from like a one one-person genius just figuring stuff out every single time to a repeatable profitable machine. That profitable machine is what has enterprise value. That profitable machine is what somebody would come in and spend money for. What they're not going to spend money for is a 60-hour work week where everything's a shit show and it relies on you to keep the whole thing going. Nobody wants to buy that, right? And you don't want to run it. It sucks. So if we instead install the right operations, right, the right team, the right systems, the right finances, we just clean things up. Two things happen. We free up our time and we go from working 60-hour weeks down to, you know, we've had clients, we took a client from 60-hour working weeks to 4-hour working weeks, right? All through operations. So great.

Are they now?

Yeah. No, literally. And then they exited the business and now they're launching other companies and they're acquiring other businesses. Because what would you do with 56 hours of your week back, right? You can do whatever you want. So number one, like they also could have held onto that business because now it's running on 4 hours a week. So why wouldn't I hold onto it? So you give yourself optionality versus what we most often see is that without operations, it becomes so frustrating to run your business. It's so annoying. It's so exhausting. The client fires and the team questions. You fall out of love with your business. You burn out on it. And then you're going to sell it for whatever you can get. Because you just need to get out and that's where you are going to get the least amount of money for your agency, if anything. Right?

Yeah. That's crazy.

So operations is the unlock. It's the unlock to go from bottom of bottom dollar to top value when you go to sell. And it's the unlock for the optionality. It's like, maybe I don't even need to sell this thing because I love running it. It's spitting out profit and I'm just doing, you know, 4 hours a week of what I love to do the most. Sure. I'll hold onto it. So if you want that choice, then operations is how you get to either option. Without operations, you don't get either of them.

Yeah, which is what my next question is about. Like, I've seen founders who build these huge companies, like fast-paced, zero to like million dollars in such a short span. Like, I would be like amazed, like, oh my God, what have you achieved in such a short span? But then I realized they're crashing it down. They don't want to run it anymore. They want to close it down. Like there's so many things like, I don't like the clients, I don't like the team, I hate running this company, and they just shut it down or they sell it for like pennies on dollars. Like somebody else will take it, right? Burnout that we talked about, how to avoid that or how to make sure we are not getting into that situation in the first place and how to deal with that if you're in that situation where you're like, everything is crashing down and I'm so burned out, I just want to be on a beach and, you know, get some money. I don't need this business, right? Yeah, totally.

So I also know Many of those founders, because they all become our clients, right? Like at that point, they're like, goddamn, I gotta do something. Jhana, tell me about operations.

I'm finally ready.

Maybe I can't outsell this problem. And my invite for you is to not let it go that far. You don't have to wait until you're at the point of burnout and frustration and full chaos and your company has stopped growing and clients are turning out like crazy. That's optional. You literally just don't have to go there if you install the right systems and team from the beginning. If you're proactive about this problem instead of reactive, then you get to just skate by that and never have to deal with it, right? So that's why I advise bringing in that ops hire earlier. $50,000 to $75,000 is that sweet spot where you can afford a good operator and they are going to save you so much pain when you start getting into $100,000 a month, $150,000, $200,000 a month, right? So the first thing is just be more proactive. Look down the road and understand that this is what's gonna happen unless I figure this out earlier. And the sooner you figure it out, the faster you grow, the more pain you get to avoid. So that would be, I think, the, the single biggest hack that I can offer someone. If you're already there, if you're in that state of burnout, if you're in that state of frustration, the good news that I have for you is that it's all fixable. It's entirely fixable. But you need to be willing to invest in the right systems and the right team and the right support to fix the problem. Because otherwise you will burn out on this business and you're either going to scale it back down, you're going to exit it, and then you don't get any of the enterprise value that you have worked for years to stack up and build. And so it is worth the additional marginal investment of getting the right operator into the role, which we do, right? We recruit operators or getting the right— even just like the right consulting. We'll come in and we'll do an audit for you. It takes a week and we'll tell you exactly why this is happening, exactly what you need to fix, and then you can go off and you can fix that, right? It is worth closing the knowledge and the skill gap to unlock sustainability and scale within your business.

That's really helpful. Thank you so much for walking us through. Now, last but not the least question, AI in ops. Now we are living in a world where AI agents are kind of doing some crazy things, which I never thought are even possible. And companies are cutting down, not hiring many engineers and even other roles. Many roles are technically being abolished with AI getting so smart, do you imagine like an AI ops person, like just running the company? And like, if somebody wants to start that kind of process right now in 2025, what are the first few steps? How do you use AI to build better ops systems?

Yeah, good question. So, two things on this. Number one is operations becoming AI. Is AI the name of the game? Yes, absolutely. Right? And if you're gonna go and find an operator, the challenge is, is that AI is so new that like nobody knows what the fuck is going on and how to do this, right? So, the solution there is upskilling and training, right? We train our operators on how to utilize AI within businesses. We partner with AI experts to give them that education and that coaching. So, you might have an amazing operator and the, and the work to be done is not replacing them with some magical unicorn operator that knows everything about AI. It's about upskilling this person to grow and learn as your company does. That would be number 1. The second thing I'll say is that AI is really exciting, but when we actually look at how most people are using it, it's the new big shiny toy that is not being utilized correctly to drive profit, right? At least as of right now, AI is still only as good as the people who are using it, as the ideas they can come up with, as the strategic thinking that they have, as the problems they can solve. So AI bottleneck is still fundamentally a team bottleneck. If you have a bunch of doers that you're trying to now like superpower with AI, you're not actually going to see a result to your bottom line and to your P&L. We still need to know how to build a world-class team and then support those people with strategic implementation of AI. Otherwise, you're going to spend a ton of time and money on it, and it's not actually going to produce a result.

100%. I agree with you. And I think we would live in a world in the future where that one person can produce so much results who's smart enough to run the company using AI. I think we could totally get there. Now, if somebody is interested and they wanna nerd with you on their company and their ops, then what, how do they get in touch? What's the best place to connect with you?

Yes, absolutely. So I would say just check out our website, spyglassops.com. You can see what we do. There's a link to apply to work with us and we can reach out to you if you're the right fit. If this was just helpful and you want more free value add and you want more education around this, I would direct you towards my YouTube @thejonnalee. I come out with like 2, 3 videos, totally free operations training every single week. And that would be the next best place to get started. If you're not yet at that 7-figure run rate, but you wanna get started on this work, go to YouTube. If you're at 7 figures or above and you want our support and you want my team's expertise, just book a call.

It's pretty cool, guys. Hopefully you enjoyed a lot. I know there's a lot of information, power-packed podcast today, and you know, a lot of nerdy stuff, and I'm definitely going to rewatch this, and I will encourage you to do the same. And don't let just this be a masterclass that you learn from. Execute something, because information doesn't change anything unless you put it into action. So operationalize this podcast and start adding that in your to-do list and start getting it done. And hire an ops manager if you're at over $50K, you need help, connect with Jana. And Donna, thank you so much for jumping on once again. It was really fun hanging out with you back in Nashville and here as well on this live podcast. And so fun to have you on. And we will probably have you again in the future, you know, once we get the AI to a stage where we now have to talk about AI operator or something like that.

We should love to.

We should do another. And guys, hopefully you enjoyed the podcast. I'll be back with another amazing guest. Please, please, please, one small request. Share this with every agency owner you know. even if they're at a very small scale where they're trying to build their company, or even if they're at 7-figure level, this podcast will operationalize. Operations has been the biggest back burner for me. It really, like, it cost me, if not millions, to, like, learn and get where I am. It's, it's really hard problem to solve. Like, I have— I had to go through crazy things. Don't get there. Build operation system. And if you need help, uh, rewatch this podcast, and I'll be back with another amazing guest. Stay tuned for the podcast. And this is me, Nikhil Sai, signing off with Janna for now. Thanks.

Thanks everyone. Oh, that was