Brendan McDermott - Founder at FREEHOLD GROUP

Welcome to another Founder Wisdom podcast. We have Brandon McDermott with us today. Brandon is a founder and principal at Freehold Group. It's an agency that's located in the LA area, previously founder and CEO at Sebrand, also principal at Gallagher, an experience agency. So happy to have you on, Brandon. Tell us a bit more about yourself and what you're up to nowadays.

Happy to be here, Charles. Thanks for having me. Um, keeping busy. It's a busy time in the experiential world for us. Uh, we're kind of all over the place, uh, nationally working on projects for various clients. Uh, really excited about kind of what we have in the pipeline and what we've been up to this last year.

What's the experiential world? Let's start with that. I guess most people don't know what that is.

Sure. It's really connecting brands to their consumers. Sometimes that's a B2B play, but mostly it's a B2C, right? Nike shoe releases, you know, those kinds of things where brands really want to connect with their consumer, introduce them to their products, really create that brand loyalty.

How did you get into this?

Funny story, kind of by default or necessity, I guess. I was— I founded a real estate development company back in 2001. a syndicated real estate company. You know, we were from the very beginning looking to build a long-term portfolio. That quickly changed as the years progressed towards '27, '28. Banks were, you know, giving away money for nothing. Uh, sort of got into that wave, was young and experienced, and, and then, um, that whole sort of world came crashing down in 2007 and '08. And so, uh, I had to kind of unwind that business. Was obviously not finding jobs in that world anymore, so moved on to flipping some homes in the background, which I had done previous to this. Was kind of doing that in the Hollywood area, done a couple homes. And then a friend of mine had called me and said, hey, we're doing this project for Nike in Hollywood. Do you think you could help? And I said, well, sure, you know, I'm not doing a whole lot right now. So went in and did this project for Nike around a Kobe shoe release and sent an invoice. I mean, it was the first time in my career that I had sent an invoice and I was like, man, this is good, I can get into this. Speculative work is very stressful. And so Nike kept calling, they started calling me more and more and decided to sort of open a shingle or put out a shingle in Los Angeles. and partner with this, this, this guy that I'd known for a long time and really built the business around that, um, and formed the GDLA, uh, in LA. And then, you know, when COVID came, uh, live in-person experiences, which is where we were mostly focused, started to dry up very quickly. And, uh, wanted to kind of do something different. We were really stuck in the design-build phase, and I really wanted to get into more activations and productions and events and those types of things. It was a terrible time to do so, but ended up splitting with my partner and just basically took the team with me, took my clients with me. So it was more of a name change and a buyout than anything else. And that was Freehold. So, you know, went through a couple of really scary cycles and we were kind of in the wrong businesses at the wrong time during those cycles. But, you know, I really believed in what we were doing and believed in the team. and knew that COVID wouldn't last forever. So we pivoted and did a lot more online work, um, and kind of got through that. And as we came out the other side, you know, the team has continued to grow and we've put really amazing people into place. And I really learned a lot through that process. You know, I went from being very sort of like this, this idea of blitzscaling, kind of when you're young, and this— my real estate business, I was really trying to push the envelope, uh, and learned a lot of lessons from that and came out the other side with Freehold now and decided that, you know, let's, let's build this for longevity. Let's build this safely, intelligently, you know. Let's build a home for people to, you know, live and work. Um, you know, the agency business is a tough one. It ebbs and flows. And so I think finding, you know, uh, consistency in that world of the ebb and flow nature of it is a real challenge. And, uh, I think with the right team, it's been a real blessing for me to be able to do that and continue to move that, that forward in more of a conservative way than I was when I was younger.

Nice. And I see that Nike's been a client of yours for quite some time. Uh, what keeps them coming back and back again for more? Like, is there actual ROI that you can calculate from this, or is it, um, something that is still, I don't know, on the gut level?

Yeah, I mean, there's a bit, you know, uh, You know, they don't— companies don't really have that agency of record kind of thing much anymore. You know, there's a lot of us out there to choose from. And so I think what's really kept us in the game with Nike— they're a very tough client to have. You know, their demands are high. What they require is challenging, usually on timelines that are next to impossible. And we've sort of built our business around that. We've been around it for a long time. I think what keeps them coming back is our consistency, our transparency, our partnership ways in which I think new agencies don't have the value, right? We know the brand better than maybe some people that have been working there for 5 years because we've been working with them for 15. So I think there's a lot of, you know, trust in us to show up and to turn out and make sure things are perfect the way they're supposed to be time and time again with You know, zero failure, or certainly, uh, the dedication to make sure that it is right before those doors open.

And with experiential, is it, uh, still more word of mouth than the actual experience, or is it filming that experience and promoting it afterwards?

Experiential shifted, right? It started as true experiential. Before that, it was guerrilla marketing, which is kind of when I got into it, that's what it was. But now, you know, we have to pull permits and do things the right way. And it's really changed from that word-of-mouth experience to really social, right? Social trends, making sure that you've got the right influencers there to be able to push out the content, to make sure that that content shows up great on your phone and is delivered out to the world.

How big is the team and what side do you specifically handle out of these events?

So we're pushing, you know, 30 at this point full-time employees, and so it's an incredible core team we have. We're built in 3 silos. We have the accounts team, the production team, the creative team. We also have our shop and warehouse where we fabricate, and our installers work out of there. Have a huge network of freelancers. It's pretty common in our industry to have a large network, and so We keep them very close. There are people that we really have great connections with and will take our work over other work because they like working with us. I think that's really critical for us to make sure we have the right people. And we have just a really great network over the years of, you know, subcontractors that can handle AV, you know, all those kinds of things that we don't kind of handle in-house, logistics, etc. But, you know, I think what we, what we like to do most is handle everything from soup to nuts. So from strategy to design to fabrication, installation, and execution of the productions. That's where we like to be because we like to see that full 360 from start to finish. We will plug ourselves in with certain clients in specific areas. We'll just be a production partner. We'll just be a fabrication partner, a design partner. We don't have a lot of ego in it. At the end of the day, we're really just looking to make sure that our clients are super happy with our output.

Seems like rocket science, right, to make these things happen? Not only because it's events, but it's like lighting, camera, the set, right? Uh, this is how people dress up, their makeup. Dude, that must be crazy.

It's bananas. It really is, you know. And the timelines are so compressed that like literally We're putting stuff on a truck that's got wet paint and it dries on the way to the site. Like, we're sweeping out of the door, back door, as the front door opens. You know, it's, it's a lot, and there's a lot of, there's a lot of changes. I mean, brands want what they want. It's their brand. They want it to be perfect, and we're here to deliver that at all costs, you know. So if that means we're pulling 2 shifts or working overnights or whatever it is that needs to be done, that's just, that's the world we live in. So it is bananas. You know, it is. And it's what keeps it fun too, right, for everybody. I mean, we work really hard to make sure people have recovery days and they take their vacation and they— because you can't do this all the time. You'd go crazy, you know, you'd quit and want to go work somewhere else. But, you know, I think we've built something really special with our team anyway. You know, we've got really great retention and we've, I think, only lost one person, you know, in the last 10 years. So We're building on the team that we started with and we all believe in what we're doing and we're really excited about it.

And how big can these contracts go? Is it like multi-six-figure for just one event that lasts a couple of hours?

Some of them, yeah, absolutely. Some bigger. You know, it depends. The one-off events, you know, probably six figures. There are other projects that we've done that are higher that, you know, You know, roll out to multiple stores, 'cause we kind of operate, we see experientials not only in events, but we do a lot of retail too. So we'll do retail rollouts for, you know, at Fleet stores, those types of things. So those projects can also get bigger, but still tight deadlines, you know, a lot of logistics, a lot of, it's a different kind of crazy, but it's still pretty crazy.

Yeah, it's very intriguing. Do you get like also new type of business? Do you do like outbound or is it pure word of mouth nowadays?

Yeah, we've started to do more biz dev. You know, it's hard. I mean, word of mouth is the best way because, you know, people say, I've got this group, they're great, I've got a referral. We just started working with a client called Jellycat. They're an awesome client. They're all really great folks. They're based in London. We're having a really good time working with them. And that came as a referral from someone that we worked with at Nike, you know, and That is our, by far our best and, you know, best means of acquiring new clients. But we are doing some outbound, trying to do more of that, but it's hard to break in. You know, clients are afraid to take those 6-figure budgets and just hand them to some agency they don't really know without any sort of background. So it takes a while, you know.

Can they do these rollouts internally, these experiential events? Can't that be done fully internally?

I mean, a big company like Nike, they must have a department No, they have people who kind of oversee it and, and design it, um, and dream up what it looks like, um, but for execution, you know, they're not in the business of hiring lighting vendors and hiring, you know, making sure that the content ends up on the screen and that the fabrication gets built. Like, you know, it's much easier to outsource that to someone like us that specialize in it, that they know they can trust to get it done. Uh, they're in the business selling shoes and apparel, right? Right, and a lifestyle. We're in the business of bringing that to their consumers in a meaningful way.

What does an ideal client look for you? Like low friction, listens to you, is coachable, adapts their process, and it's not like always trying to make a big thing out of something small, not stressing you out?

Yeah, I mean, that sounds like a great client, but you know, there's a lot of stakeholders usually at these brands, right? So While we may be working with someone, you know, directly on a project, they've got 3 or 4 people they have to answer to, and, and there's just a lot of changes. Things move around a lot. I mean, an ideal client for me, yeah, would be someone that trusts us and lets us loose and knows that we can. And we, we've gotten there with certain clients. Certainly I know with some of our clients at Nike, you know, in the past they've been like, this is what we wanted to— here's a render, this is what we want it to look like. And then they show up a day before the event goes live, and it looks exactly like the render, and it's exactly how it's supposed to be because we work so much together that there was a high level of trust. You know, other clients, there's just a lot of pressure, uh, and, and there's a lot of, a lot of folks to answer to.

Right. Um, do you have like a scientific process once you have a client? Like, is everything like checklist, and this is outsourced to that person, and Have you been leveraging like AI to make this more efficient?

We've been leveraging AI a little bit, um, you know, to help with certain things, you know, to put together like a skeleton run of show or, you know, kind of scheduling, that kind of thing. Um, but really it's, it's experience that matters with us. We do have a pretty scientific approach to it. A client comes in, you know, we'll intake the information, we'll provide them back with a run of show basically for the entire project or schedule that outlines the dates and gates. We'll put together creative and then a budget follows that creative and we'll go through a couple rounds. So it's pretty methodical in how we approach it. It just depends on the time, the time that's allotted. Sometimes we have, you know, a much longer lead time. Sometimes it's more compressed and we don't have that luxury to, to go through 3 full rounds of design. It's a much faster process. But AI has become increasingly more— it's become increasingly helpful, but it's certainly not replacing the, you know, we are in-person events. So, you know, it's hard for us to leverage that to really change our business other than creating some efficiencies, you know, in workflows.

Yeah, have you seen an increase in demand and impact of your work post-COVID? Feel like humans really need now to get together and be like in person.

For sure. And, you know, things like the World Cup and the Olympics coming down the pike, all those things, you know, for us, we're based in LA, you know, it just— it's— we've seen a real sort of exponential curve since COVID I think when people first came out, people were a little trepidatious, and, you know, there was a lot of concern around people getting sick and, you know, all that kind of stuff. But since then, I think it's really, really changed. And I think with the advent of AI, I think people are really continuing to look for in-person events, um, and human interaction.

Yeah, for sure. Uh, do you have a right-hand man or woman, like a lieutenant, that just handles everything for you, including like the stress charge?

Including the what? Sorry, last, last part.

Yeah, the including the stress of it, right? Like if I would run your business, I would just be, I don't know, the money and the brains, and I would have someone handle all the fucking shit for me because Totally. It's very cool too.

I love doing what I'm doing right now. So for me, being involved and hands-on is important and I do the best I can to help educate the team. But I do have 3 lieutenants, those are the heads of each of the departments, Blair Zingale, Mike Mankin, and Ashton Trujillo. And they run the accounts, creative, and production respectively. Um, I have someone who helps me with the bookkeeping and financing in the background, but for the most part, you know, um, like I said, I've been running this pretty conservatively. I don't have investors. We're self-funded. We're well capitalized. I've been very conservative with that, making sure that we're, you know, not overtaxing the team as much as possible, although some things get crazy and spin out of control and we, we have a hard time with that. But, um, You know, certainly it's, it's more for me about now anyway staying really involved. Could, could the 3 of them run this without me? Probably, you know, all day long. They're, they're, they're super smart and they know the business inside and out. But I really enjoy being a part of this as it stands right now. So for me, the stress is, it's diffused because I've got a great team.

Certainly.

Uh, my real estate business before was extremely stressful. Um, so this is a nice change for me in the last 10 years to, to have such a great team and be doing some fun projects. You know, we don't— it's not like we make widgets all day in a factory, right? We're doing fun stuff. We're sort of on the cutting edge of what's hot and new, and we're involved with some really great clients. So we're very fortunate. Um, and that makes it fun just to be involved, you know.

Yeah, I was referring to like, I mean, in the real estate business, like the plumbing is off and you have like a disaster in your hands. The equivalent in your current business could be at last minute, right? Like at 1 AM in the morning, something needs to be fixed. You have that full part outsourced, you're not touching it, or are you still managing stuff at 3 AM from your—

I'm not, I'm not necessarily. It's things I choose to manage. Like last week we were doing our first install for Jellycat at the FAO Schwarz. We rebuilt their diner for them and I was there at night with the team. I wanted to be there. It was, you know, overnights. It was fun for me to be there. You know, there was some problem solving that was fun for me to be back in the trenches, but I can't be everywhere at once, right? We've got 6 projects, 10 projects, whatever it is going on at once right now. So I kind of pick and choose my battles. I do have the right people in place. Certainly my core team is amazing. Any of the subs we hire, you know, they know the drill. This is the business. You know, it's a— it can be a crazy business where things happen at 2 in the morning. And I think, you know, we've got great Subcontractors, not only subcontractors but also good vendors, right? Like the way we structure things and the way we're capitalized, when the job is over, I pay my vendors, right? I pay them within a week. Um, they don't get that from all the other agencies. What they get from other agencies is, well, the client pays me, then I'll pay you. So it's that 60, then to you. So we're very good about taking care of the people who support us. So, you know, there's a lot of vendors I could call to night at 2 in the morning, like, dude, we have a problem, I need your help. And they're gonna roll out of bed, and they're gonna come down with their crew, and they're gonna help us get it done. You know, there's, there's value in that. I think it's important to really take care of your people so that you can have those, especially in our business, you know, you can have that sort of support that you need. But no, I'm not— I choose to be involved. I don't, I don't have to be involved in every little decision.

Yeah, the adrenaline of it and getting hard stuff done is still like very fun and rewarding as a human being, right? Are Are you only in LA or do you also do other cities?

Oh, we're all over the place now. We rarely just do work in LA. We were in New York last week. We have a project in LA, but we'll do Super Bowl stuff, you know, All-Star basketball things. We do things for Jellycat. We're doing a project for them in Chicago. Yeah, so we're all over the country really. And that's where those relationships really play for us, whether it's labor, in those cities to help us install or put things up, or subcontractors in those cities to help, you know, keep down the hotel travel costs for clients and do the best we can to keep their budgets in check.

And who will you actually fly? Like, who can't you find in other cities, like key players that you will actually fly to the destination?

Yeah, certainly the, you know, our lieutenants, but then also, you know, the people we have underneath. So that's project managers specifically. Uh, we'll have some of our coordinators fly out as well, just really core team people that can help manage On-site, uh, hires subcontractors. We always have a good strong freehold presence at all of our projects, um, core team, uh, presence.

And the multi-six-figure bill you send, does that include hotels and flying, or is that paid apart from the client?

No, it's all part of it. I mean, it's all baked in everything that we do, you know. You know, we do a project for a company in Omaha. Like, you can't hire a company like us in Omaha. You've got to get our people out there, you know, in order for it to execute in a way that's meaningful. So, you know, it includes all that.

What are your main goals for this year?

Just continued slow growth. We had a really big year last year. We almost doubled in size, and this year we're we're, I think, on track for probably a 20% growth, um, which is great. I mean, it's, it's part of the market. Things are going really well, you know. Uh, I'm always a little bearish, you know. Growth is great, but, you know, I, I want to be here for the long, the long haul and the long term. So, um, so for me, it's about just being conservative with, with growth and making sure that we can service our clients in a meaningful way, you know. I don't want to spread ourselves too thin. We can't make it happen for our clients or fumble the ball. You know, it's a very competitive landscape, and I think there's a ton of agencies that I know of that are— that I'm shoulder to shoulder with or right behind me knocking at the door. I don't want to give them an opportunity to sneak in here and take any of my business.

Shouldn't you just acquire them?

Yeah, you know, I— as I sort of settle into where we are now, it's thoughts I've certainly had about looking to either acquire other agencies or, you know, you know, find ways to grow as long as it's strategic and meaningful. You know, I don't want to force anything that doesn't make any sense just for the pure purpose of growing, right? We're doing great. We do great. You know, the team is happy. We've got great clients. We're doing some fun work. You know, sometimes those things can be disruptive, and I just want to make sure that if that happens, you know, I'm 53, so I'm I'm getting older now. Uh, it's things I need to start thinking about, what that next step looks like and, and where it is, where it, where it comes from, you know.

Shouldn't Nike acquire you? Like, wouldn't that be a strategic move for them?

Right now, I think it'd probably be a great move. Uh, but, uh, yeah, I think it's just more than what they want to manage and own in-house, right? It's not their business. Um, like all these companies.

Brandon, thanks for being on. Where can people find out more about you?

Uh, Freehold Group on Instagram and freeholdgroup.com.

This is Brandon and Charles for another