Jon Morris - Turning $10k Into One of The Largest Independent Digital Agencies

Welcome back to the Casey Adams Show. Today I am joined by John Morris, the CEO and founder of Ramsey Innovations. Thank you so much coming on the show, John.

Thanks for having me, Casey.

Really excited to be here.

Absolutely. So your background of being in the digital marketing space goes back to your first company, Rise Innovations, which you sold after 16 years. How did you get into the world of business and marketing overall?

Yeah, so I actually started my very first company two days after I graduated college.

Company called Net Traffic.

Okay.

And the way that happened was I wanted to work for a major consulting firm. I applied to all the major consulting firms.

I made it to the final interview.

Of every major consulting firm and then got rejected by every major consulting firm. So I'm 22 years old, just graduating college, no job.

I decided to create a computer company.

I actually knew nothing about computers, but.

I thought I was nerdy enough that people thought I did and started Building websites since 1996, the ugliest websites you've ever seen.

But people kept on asking me, well, how's my website going to get found? And I didn't know the answer. And so I started researching it and quickly became one of the pioneers of digital marketing. So I've really been around pre Google, pre Facebook, all the major players that you use today were different players back.

In the mid-1990s and grew that, ended.

Up closing that business down. And then I went to business school at University of Chicago, entered their annual business plan competition called the New Venture Challenge, took second place.

I can tell you, 18 years later.

And still very bitter. It should have been first, but I won $10,000 in that. And that was the season when you start Rise Interactive, which I grew for.

16 years until I exited in 2020.

Wow, 16 years. When you started Rise, what was the, you know, talking about marketing, digital marketing, what was the initial game plan when you started? And, you know, you talk about being this pioneer of the digital marketing space. What did you see back then that led you to going all in on that sector?

So a couple things I. I used to do a lot of triathlons.

I use this as a good example.

And I was doing my first half Ironman, and it's in the middle of.

Nowhere, Illinois, and it is a freezing.

Cold September day, and the winds are like 20 to 30 miles per hour. And you're on one road, like in farm country, going 28 miles one direction.

And turning around, going 28 miles the other direction.

And as I'm biking, the first 28 miles was directly into the wind. I tend to average at that time period of my life, around 20 to 21 miles per hour. And I was going between 6 and.

8 miles per hour as I went into the wind.

And then when I turned around, I was going 30 to 35 miles per hour because I had the wind at my back. And when you think about business, I think the most important thing that you can do is pick the right industry. And when you think about how much money was leaving traditional advertising and moving into digital advertising, I was able to go 30 or 35 miles per hour because I had wind at my back. And so that was a big reason why I chose that. My initial goal starting out as one person was to create the largest independent digital advertising agency.

So I had very high ambitions from the very beginning.

And what I always explain to people, if you're in the professional service space, there's two versions of you. There's the expert in your field version and then there's the entrepreneurial version. And you have to decide which version do you want to be. Do you want to be the best marketer or digital marketer in the world, or do you want to be the best entrepreneur in the world? And I was very focused on the entrepreneurial side. So I happen to love digital marketing. I don't do that at all anymore. I help digital marketers in my new business, but I love the game and the strategy of business. I love being a CEO and thinking about how do I spend my time and money more intelligently than my competition and ultimately show that the income statement and the balance sheet are improving at.

A year over year basis.

That's awesome. And hearing that analogy too, the half Iron Man, I love that for sure. And when you think about business overall, right, you sell your company, which I would love to dive into in terms of like that transitionary process to Ramsey Innovations. You built a company for 16 years, you've invested so much time, effort, what led to the acquisition and then what was that transitionary process for you just now starting Ramsey Innovations?

So a couple things. I took a minority round in 2016 from a company called Quad Preassuming, Quad.

Graphics or the largest printer in the United States.

And I had the privilege of being able to work with them for a couple of years. Absolutely amazing people.

And in 2018, I sold majority ownership to them and spent two years in earn out before I decided to walk away.

The main reason why I left is there were some personal reasons I wanted to do so. But from a business standpoint, my favorite business day of the year is the.

First business day of the year, and I call it game day.

And the reason why is I spend months planning what the next year is.

Going to look like so that I have an amazing year.

And as I was putting my plan together for 2020, I thought it was a great plan. The only problem was it was the exact same plan of 2019. And it was the first time I just wasn't excited, you know, about, like, what I was about to execute. I didn't feel like I was learning something new.

And I had a new challenge.

And that's where it told me it was time to move on and try the next chapter. And so I decided in about October of 2019.

I told Quad in January of 2020.

I told the company on March 2nd of 2020. Ten days later, we went into work from home or Saturday, we closed the offices down because of COVID So I.

Gave the new CEO a very challenging start where they had to navigate Covid.

As I stepped out. But luckily, Larry, who's the current CEO.

Of Rise, was totally up for the challenge and probably did a 10 times better job than I ever would have done.

Wow. Talk about timing there, right?

Yeah.

Wow. That's so cool to hear that transitionary process. And for those that might not know about your new company, Ramsey Innovation, what is it that you guys do at a high level? And I would love to dive into this because I find it so fascinating, given your experience and expertise in the field.

Yeah. So when you think about Rise, my.

Last company, there's 120,000 agencies just in the United States.

So how are we able to scale from just me to one of the.

Largest independent digital agencies?

And my answer is that we did an amazing job as it relates to financial decision making.

The insights, the data that allows us to make better decisions to run the business.

And I thought it would be really cool to help other agency owners and eventually other professional service companies do the same thing. What we do is we help right now solely marketing communications companies organize their data, their financial data so they can.

Get better insights to run their business.

And we help them roll with their entire finances.

So we'll do all the ar, AP payroll, invoicing.

But the heart of what we do.

Is the financial planning and analysis.

So we'll close the books for them and then help them understand, well, how did you do against your budget? What was your gross margin overall? What was your gross margin by service? And ultimately, this leads to better decision making so that they can grow their business and do more intelligent things to scale and grow a business that's awesome.

So, and when did this venture start?

Started literally, you know, right after I left Rise. So if you talk to Larry, the.

Current CEO of Rise, the one thing he'll say that he's really disappointed in me and is I didn't take any time for myself.

You know, I spent 16 years and.

Then I immediately started my next venture.

Wow.

I'll tell you this. I. I think of business as a game.

I love the game of business. I wake up every day. I love what I do.

I love that. And I grew up an athlete for context and played football for 10 years. Lacrosse, hockey. And what really got me into this whole world of business and social media and tech was I had a neck injury when I was 16 where I almost got paralyzed. And for me, moving from playing sports at a young age to then getting into the business world, totally understand that perspective. And I've had lots of conversations with different former athletes turned CEOs and I'd love to hear your perspective on that when it comes to the game of business and, and really how you think about it on a day to day basis. Because as you said, and I can feel the energy from our conversation already, just your ability to be a great CEO and to lead a team. Right. Like I haven't worked in your organization, I haven't seen it. But I get your, who you are from this simple conversation or this short conversation thus far. And I'd love to hear like, how do you think about the game of business and what led you to have that drive for business?

Yeah, well, a couple things. One, I think it's the greatest team sport ever created. When you take a professional athlete, you.

Know that there is a shelf life to that athlete.

At some point, you are not going to be able to play football anymore. In my case, my sport was soccer. You're not gonna be able to play soccer. We could still coach and get more involved. But what it is that in business you can do it for decades, right? So there's, there's really no shelf life, which I think is one really cool aspect of business. But if you just think about, I'll use football, since you brought us an example. Think about your 11 starters on offense, your 11 starters on defense, your professional football team, you have this amazing resource to make sure that those are the best people you could possibly hire. And so you send these players to combines, you have them look at a doctor. After all this, they might get a job. And even then they're not always successful. You know, I can tell you as a Chicago Bears fan, it's been a very long road for us. But they also have coaches, you know, so there's a wide receiver coach, there's a offensive coordinator, there's a defensive coordinator, there's a head coach. So they're training people. They move people to their positions. Business is the exact same way. We have to recruit the most talented people. We have to develop that talent. We have to move them to the right roles, and. And when we make a mistake, we have to let them go and move on to the next decision. And so there's a huge strategic element that follows sports very similarly to terms.

Of how you grow the business.

But the other part is, you know, I always say the ultimate boss is the income statement, and it is a completely objective boss. You know, we have to make black and white decisions with gray inputs, with black and white outcomes. And the income statement tells you over.

Time, did you do a good job.

Or did you not do a good job? Did your revenue grow?

Did your bottom line grow, or was it flat? And what were the reasons why?

And so, you know, there is a scorecard, and that scorecard repeats every year.

Absolutely. No, that's very well said. And I want to talk a little bit about team culture and building the business. When you think about starting a new venture after selling a company, after working on it for 16 years, how have you gone about building team culture and finding those star athletes in the context of business in your world? And what do you recommend entrepreneurs do from your experience when they are looking for those athletes and early employees to believe in a vision?

So I'm actually going to start with one of the hardest things that you.

Have to recognize as a CEO.

Someone once asked me what it's like.

To be a CEO, and I said, it's like breaking up with your girlfriend every single day. And if you're doing your job right, you generally have to give constructive feedback or make tough decisions.

And I can tell you, as I'm.

In my current venture, I work with a lot of different companies, and a.

Lot of them really struggle with the tough decisions. So the first thing I just say is, if you're going to be a leader, you have to recognize that part.

Of the job is that you have to manage the talent. And I want you to think of the worst part of the job, which is having to fire someone that you love and you care about, and that's.

Been good to you.

But you have to make those decisions now.

From a cultural standpoint, you have to think about what culture is important to you.

I care deeply about My clients and I care deeply about my employees.

So I'm not looking to burn them out.

I'm not looking for them to dedicate.

Every single second of their life. But I do require intensity. When you're working, I want you to be working really hard.

I don't want you to be sitting idle. I want you to be thinking about what's next.

That's a really important part of my culture. The second thing is I'm a numbers.

Guy, and I put a huge emphasis on analytical ability. And so you have to be able to analyze data, make decisions off of that data.

And so those are kind of two attributes. And I would say the third one is going back to caring. I want to find other people who.

Also are caring people. I have a no jerk policy. I want to do right by people, and I want my employees to make sure that they're doing right by people.

And then you just have to evaluate on a quarterly basis, having a conversation.

With each one of your employees or.

Their managers have a relationship with their direct reports of how are they doing, how are they doing against the core value, how are they doing against their.

Daily responsibilities, and how are they doing.

In terms of, like, any major initiatives.

That they might be working on?

That is. That's so great to hear that your perspective on that. And you talk about auditing or reviewing, let's say, your employees or even what you spoke about earlier for the day, one game day. You do a lot of analyzing data, and you're preparing for the new year ahead. What goes into that process for you and what have you learned over time to help perfect that process? If you were, you know, thinking back to starting a business today and not having the experience, what would you tell younger entrepreneurs if they were looking to plan ahead from a financial aspect to make sure that they're actually doing the right things that are necessary?

It's actually a large part of what we sell today.

So it's actually a. I have a fairly solid answer to that.

I believe that every business, I don't care what business you're in.

Should have or goals. They should have a revenue goal, a profit goal, a cash goal, and an infrastructure goal.

So the first thing is revenue and.

Profit are generally what a lot of people think about. They don't think about cash enough.

You want to make sure that you're building a safety net and also reserve, because the more cash you have, the more you're able to do cool, fun, strategic things. Now, the infrastructure goal is really simple. January. It's right now January 2023, the years just started. I want my business to be better at the end of the year than.

It is at the beginning of the year.

So what are the investments that we are going to make to make sure that that happens? And those investments could be that you want to invest in your sales and marketing, it could be that you want to invest in your product or your service. It could be that you want to improve your recruiting. But I want you to be thinking ahead of time of these are the investments we're going to make. And have a real simple rule. It can't be a goal unless you.

Put budget against it.

And so we want to have a.

SaaS offering that takes clients data, that's financial data and allows them to come up with insights that they want to be able to come up with. It's budgeting software plus FP&A, you know.

So last year we hired an eight. We went from one two people to.

Eight people in terms of a product development team.

So that was our big goal. And we hired underneath our head of the whole group, we hired our head of engineering. And so we made our strategic investments. So going into 2023, we now are firing on all cylinders as it relates to our technology.

We actually have 10 people dedicated out of 30, 35 people right now to.

Just making our product and service better. Because that's what's really important to us.

Is another rule I have is never lose a client due to performance. You have to invest in your product.

And you have to invest in your service to make sure that that happens.

That's awesome. And I want to talk about the technology and what you guys are building on that front because for context, I built. My previous company that I sold last year was called Media Kits. It's a easy way for creators of all kinds, podcasters, musicians, social media creators, to create a media kit with real time data and analytics. And you can easily present that data to a brand and you never have to go back and update it. And just being that was my first tech venture, hiring the engineers. The, you know, we had a small team, eight people. And I learned so much from that process and, and I'd love to hear your thoughts as a CEO when it comes to recruiting from the tech side and what you've learned from, you know, building out a tech team and what that looks like in 2023 when you know, people are remote or people in person and things are shifting so quickly.

So I think the first thing I would tell people is it is really.

Easy to do it wrong. And at Rise. We built a technology we outsourced to a third party company, probably spent a million dollars on it. And when I eventually had someone analyze the code, it wasn't a scalable solution. We literally had to flush every one and zero down the toilet and start over.

Wow.

And the mistake I made is I took my best digital marketer and I.

Put them in charge of technology because I was like, they know what we want to build. And I didn't know about product owners. I didn't know about, you know, UX and engineering and all the different people and roles that go.

And so I was like, you know what, if we're going to do it.

Again, let's do it right. And so we interviewed for directors of technology. And just even in the interview process, I learned so much about how you build technology properly. And ultimately we ended up hiring a person named Brent Laufenberg, who's still the CTO of Rise. And it's just been phenomenal for them. And I learned so much about how you build product properly from him.

And so now in the second endeavor.

Building technology, I knew how to analyze and recruit properly.

So as I was looking for people.

I know that you need a product owner, a user experience person and an engineer to build something properly. I found an amazing head of our technology, Felipe, who just flat out is phenomenal.

That's awesome.

And so now we have this incredible team that is just cranking out code at a really rapid rate at a really high quality process.

That is so great to hear. Just like your learning experience and the pitfalls. I think I've dealt with that firsthand myself for sure. I'd love to hear your perspective on AI when it comes to what something like ChatGPT is doing from an engineering perspective and the ability to create code at a high level. It's so fascinating. And I know you've obviously been seeing it and I'm curious to know, have you guys implemented any type of AI process in your businesses? And just what do you think about it overall?

I mean, if you asked me five years ago, I probably would have had.

A very negative view on AI. I didn't see the impact it was having. If you ask me today, I have a very different view. I think it is going to be highly disruptive. I think it's definitely going to marginalize a lot of core industries that, you know, their bread and butter is going to be at risk. And I'll give you an example, content writing. We use a tool called Jasper, which is an AI tool for blogs. And I hired A content agency before and it's considered a best of breed agency. They would interview us extensively to understand what we're going to write about.

They then would come up with their.

First draft and they would send it to me and let's just say it was 80 to 85% right. But then I had to help them get to that 100%. When I use Jasper I find that it's like 95% right. Like I'm blown away at how good it is at being able to take my inputs and turn it into well written content.

And so the volume that we're able.

To write blog posts and content has just increased dramatically because of AI. I absolutely. When you think about the insights that we're trying to come up with, plan incorporating AI into our tools so that we can come up with financial data to give them insights of, you know, here are decisions that might take a human, you know, hundreds of hours to analyze to come up with an insight that take them seconds.

Yeah, no, no, Jasper is great and it's so cool to hear even the way you answer that question of like five years ago versus today and the innovation that has taken place especially over the last year in a, in a public setting like Jasper or OpenAI chat GPT. So very fascinating to hear your perspective on that. I want to talk about life outside of business. I know you, you know, every day is game day and you love the game of business but outside of, you know, working, where do you spend your time and how have you gone about just, you know, building a family and utilizing business family and not necessarily creating a balance but where do you spend your time outside of business?

So one of my mentors is a person named Dennis Jacazian is the former CEO of CNA Insurance and he had a kind of to me that really resonates. Life is a triangle and you have family, self and work, you get to pick two. And so I am all in on family and work.

So I have three amazing daughters, have.

An amazing wife and my time outside of work is dedicated that I'll give you an example. I still put my kids to bed every single night. It's something that's really important to me. I hope that one day they'll appreciate it and it's something I do religiously and I also rarely go out with friends, I rarely travel on my own. It's all dedicated to my family. Now I mentioned to you earlier, you know, soccer is a passion of mine. My middle daughter is a phenomenal soccer player so I provide coaching to her and, you know, so I try to incorporate things that I love to do with my kids, but it's all about being with my kids and my wife.

That is so awesome. I've never heard that ideology of the triangle. That's awesome. I love that. How old are your daughters?

8, 10 and 12.

Nice. Busy. Got to love that when you were first starting out as an entrepreneur. There's a lot of, as stated previously, younger entrepreneurs that are just getting a business today. If you were to give yourself advice getting into the world of digital marketing today, given that there's so many tools and new technologies that can help with these processes, but also a lot more competition, in a sense, what advice would you give to yourself and why?

So the first thing I would give.

As advice is digital marketing is a broad category. And I go back to my ironman example of where is the wind blowing within digital marketing to figure out the lane that you want to pick. You know, so for example, marketplaces, which is like advertising on Amazon, is really hot right now. And you know, print advertising is obviously not as hot right now. So it's like thinking about what's the lane that you're going to pick. And there's data out there that shows like, where things are growing, when things are not growing.

Second thing I would say is when it comes to differentiation, there are 120,000.

Agencies just in the United States.

Yeah.

And so I want people to answer two questions.

And if they can answer both of.

These questions, they have a real differentiator. If they don't, they have to think.

About what their differentiator is.

So the first question is real simple, what makes you unique or different? And you will typically hear answers like, we have more senior people, we're data driven, we have better customer service. And so it's the second question that they have to be able to answer that tells me that they have a real differentiator. And the question is, I just met.

With 49 other digital agencies that have the exact same differentiator.

They also are data driven. So how are you more data driven than them? Now, there are two ways to answer that question. So I'll give an example. At Rise, our vision was to be the leaders at leveraging data to help.

Brands make smarter marketing decisions.

That is a long, fancy way of.

Saying we're data driven.

So when you come up with the follow up question, 49 other agencies just said they're data driven, my response would be, well, first of all, I want to talk about data. There are multiple types of data. There is media Data. There is customer data, there's consumer data.

There'S pricing data, there's inventory data.

We chose to be the best at media data. We build an analytics platform that is an eight figure investment.

It connects to all of the major sources.

It's built on a big data platform that can answer questions faster than any.

Other platform that exists in the marketplace.

And that allows us to identify waste.

In media and redeploy it to scalable areas.

The second thing is in order to get a job at Rise, you got to take an analytics examiner at a 22% pass rate. And so we have highly analytical people getting access to data and insights that no one else could get access to. Now whether you think that's a good answer or not, at least you know, there's thought that goes into that second question answer. And so now we weren't always there, you know, but the idea is that if you're going to pick a differentiator, you got to go on a journey and you got to invest in that differentiator. So every year you are better and better at your core services than your competition.

Very well said. That was awesome. I have a couple more questions before we wrap up. John. Thinking about the transitionary process of business over the last two, three years when it comes to work from home. What are your overall thoughts and your thesis on work from home versus in person and how do you guys operate?

You know, it's interesting, there's an article, I think in the Wall Street Journal.

About the CEO of Citi is now.

Requiring some people to go back to the office. But the reason why was that there are a group of people who are.

Not good at working from home.

And so I personally, you know, my new company is a distributed office. We have about 30 to 35 people throughout Colombia, Mexico, Ecuador and the United States. And we planned to work from home for a long time. That being said, there are elements that I miss of being in an office and I think there are. I think you're never going to have a perfect solution. I think there's advantages to both. But I think that there is a reality that some people need that structure of being in an office. Some people have the ability to work from home. Some people also don't have a good home work environment. So I think my interest a little gray. What I think is interesting is my approach in for Rise was that we would have one office in Chicago and that I really wanted that scale. So there's a lot of my competitors that would have, let's just say 200200 to 300 people spread out through the United States. By having everyone in Chicago, you would walk in the office and you would just feel the energy. And so there's some cool factors you can do when you have the real estate to make that space feel vibrant.

And exciting that you just can't do.

You can't get a client to feel.

Energy in a remote workforce.

Yeah, totally. Last question before we wrap up. When it comes to this year, 2023, what are you excited about and what do you guys have? What are you looking forward to this year? Business, personal life. What's in the game plan? Yep.

So one week from today, we launch our budgeting software for agencies. It goes into alpha, so it's not actually going to the public yet, but a lot of our business is going to be transformed from a service oriented.

Company to really a technology enabled service company. And so I, I'm incredibly excited about seeing the impact the technology has for our clients. And if my thesis is doing right, it's really going to make their lives a lot easier.

And then we just closed around the funding and so I'm excited about putting all those investments to work. I have a really good plan in terms of sales, terms of marketing, in terms of taking the technology to the next level. So it'll be cool. See how the plan works by the end of the year.

Very exciting. And congrats on the round of funding, by the way. I know it's a hard environment out there, so congrats.

Thank you. I really appreciate it.

So for everyone that's listening, John, and for maybe there's people out there that are listening, that have agencies. Where is the best place for everyone to connect with you, to follow you and to learn more about your business?

So you can go to Ramsey R M s a y Innovations.com you can.

Email me at Jonamsey Innovations.com and you.

Can follow or connect with me on LinkedIn.

I actively promote or push content as it relates to growing businesses, specifically to agencies on LinkedIn.

Got it. And I'll be sure to link all that down below so everyone listening or watching can go check that out. And last but not least, John, I want to say thank you so much for coming on the show today. I really appreciate your time, Casey, I.

Really appreciate the opportunity.

It was wonderful talking with you.

Thank you.