How to Scale Your Agency to 7 Figures | Mario Peshev

All right, so we have a little treat for you. So this is a coaching call from the Agency Owners Association. This is a group that Neil and I have for agency owners to help you grow faster. So if you're in the agency space, you are a services business, this is applicable to you. It's a little preview of a call. It's probably 10, 15 minutes or so, and you get a sense for what it looks like to be in the group. If you want to learn more about the group, you can go to marketingschool.io/agency. Again, it's marketingschool.io/agency. Hope you enjoy the episode.

So Mario's the CEO and the founder of DevRex. He's actually a published author, an 18x angel investor, and he manages $1.65 billion in annual digital sales. And obviously, he's a fellow member of the AOA. A couple other noteworthy things I think will be relevant to you is he's actually bootstrapped and scaled 3 different businesses from zero to over 7 figures. He's sold businesses, led over 10,000 hours of training and consulting over the past 20 years. He's an investor, an advisor, and actually an angel investor in 18 different startups. So please give your full attention to Mr. Mario Peshev. Welcome, dude.

Oh man, that sounds, you know, no pressure, right? Well, hey everyone. First off, thanks Austin for the intro. Definitely super presentable. No worries. I mean, I'm not really surprised you're dealing with community management and stuff. You can make everyone shine bright like a diamond. So that's kind of what you did here as well. So thanks for that. So yeah, first, kind of as a heads up, everyone, you've probably seen me on other calls with Eric and Neil and kind of the group. I want to make sure, you know, this is not like a coaching moment. You know, the, the god came from the heavens and started with the 10 Amendments or any of that, right? So Just want to make that crystal clear. I'm going to share some of my learnings and kind of my experiences and kind of lessons I've learned along the way. I happen to be involved in kind of different, again, initiatives related to M&A. Right now I'm involved in a pretty big transaction with private equity for one of the businesses I work with. You know, I'm acquiring businesses, I'm a Flippa ambassador, and some of the other things that Austin also mentioned. So if any of that is of interest to you, please kind of drop it in the comments and it's something that we can chat in the Q&A section as well. So just pick whatever makes sense to you, and I'm going to try to keep it within, let's say, 20-ish minutes so that there's enough time for Q&A afterwards. So yeah, that's, that's pretty much it. Let me just find my screen, and I'm going to present some form of a deck in a way. All right, cool. So I haven't done like a super heavy deck or so, just drafting some notes so that I can follow through. Based on kind of what I also posted in groups, I'm going to kind of drop it over here. So yeah, Austin did a demo of kind of roughly what I'm involved with. So I'm not going to repeat that. Devrix is one of the agencies I'm famous for. I also have other companies and kind of equity in different businesses. I'm only enumerating that if you find something that's for yourself. Like if you're interested in investing, I'm an ambassador for Seedling. In M&A, I work with Flippa. You know, I have a bunch of different investments myself. So You know, just outlining some points if there's anything that you'd like to ask and kind of drop some questions or mention after the call afterwards. One of the things I often and kind of frequently talk about is I am a passionate educator. Like most of the podcasts I hop on lately, I'm trying to kind of bridge the gap between entrepreneurship and education. So this is kind of becoming more or less my mission in life. This is something I'm getting super passionate about. I've spent over 10,000 hours in training and consulting, like teaching at universities, private academies, SAP. Software AG, VMware, Saudi Aramco, whatnot. And this is why I'm also, again, an aspiring creator. So I'm spending a lot of time on social. I just enjoy educating and teaching people and helping startups and not just like pretty much everyone I can. So kind of my mission in life is making enough money so that I can do education and helping people out because it's not free and I can't get exposure without money. So that's kind of the vicious cycle I'm kind of busy with more or less. In terms of background, and I think it's important because a lot of the people that I work with lately, and I also have a community with kind of my own folks and kind of smaller agencies and whatnot, and I see that many of them are pivoting one way or another, right? They've been doing design or, you know, SEO services, link building, WordPress development, or kind of just site building activities and whatnot. And right now in the era of AI and with everything else that's happening out there, you know, helpful content updates on the Google side, limited reach on organic social, and pretty much everything that we've been seeing over the past year and a half or 2 years on the digital ecosystem. Many of them have been trying to pivot, move into new markets, develop new digital services, niche down and whatnot. And kind of my mission is, or kind of what I'm trying to do here is Spark some ideas and you know perhaps form some level of inspiration or or anything that may say hey you know I've been thinking of what should I do next or what's probably going to help the market right now or what's in demand right now or how to source the market how to talk to the market how to connect with potential clients what are open niches or opportunities and kind of this is why I'm also starting with the story and. More or less going through the the company story and my own background. So personally, as a kid, I was a nerd. You know, young, literally a kiddo tech nerd. My education is in tech. I studied software engineering as of high school and college, kind of university, even though I'm I never graduated at the end of the day. Always been a digital savvy person. I worked with like computer clubs and doing all sorts of crazy stuff before. Right in the early era of computers. So I started in media companies, in tech, joined, kind of jumped into freelance, made my first hire, and that's how I grew into a responsible adult. So the reason I'm mentioning that is I've always been in tech. Like this is something I'm passionate about. I've been one fairly early adopter in technology. It's really hard for me to just go in a different field. I've tried several times to work in different ecosystems. I work in a pretty exciting real estate startup once. Kind of a Boston Stars one. Tech-wise, it was amazing, but I was just not passionate about the industry. So one of the things I want to mention over here is when you do your pivots and when you kind of switch to something or want to scale, definitely make sure you have your ikigai set up properly so that whatever you push into, make sure that it's in the right direction. I just cannot stress that enough. Lots of people say, hey, you know, I'm running a tech company. Tech agency because software engineering is cool. It pays a lot of money, high rates, but then it's grueling, hardcore, tricky, crappy work. And I want to make sure that you don't do stuff just for the money because I've been there a couple times and it's not pleasant. In March, I sold— that's again just for context— I sold a Shopify SaaS startup. I was hired as an external CEO. So I started as an advisor. There were some changes in leadership, so I was offered the interim CEO role. Eventually, you know, it turned into a kind of, well, full-time or permanent CEO role. And I immediately jumped into the M&A conversations in order to sell it. I sold it to Shop Circle. They, I think their fund has $160 million or so. And I couldn't be happier because they're dealing with e-commerce and I'm not really an e-commerce person, right? So it was technically a B2B SaaS. But realistically, we had 2,700 Shopify stores. So I had to deal with merchants, with logistics, 3PL warehouses, things that I just really did not enjoy. So last year was painful for me. It's something that I eventually finalized the transition, went out of that. But the reason I'm again stuck on this slide here is make sure, figure out what you like, try to kind of map it out, create your SWOT or whatever it is, make sure you've Really understand what drives you, what you're passionate about, what you like reading about, people you like chatting about, conversations about, where did you like having? And many of them are rooted within your foundation with kind of how you started, your upbringings, your parents, your education. It's almost like therapy, right? Whenever you go to therapy, they start with, hey, let's start with your childhood. You know, who hurt you back when you were a kid? So it's kind of similar here. And That's kind of why I'm spending so much time on that slide. So in terms of the company, another lesson, again, it's kind of the trial and tribulations of this company, but I'm also bringing up some other examples from the others. So when I started DevRex, I often say that I started the company 3 times. The first time I tried to do that as a continuation of freelance. So I was doing freelance. It was kind of easier. You know, it's easier to pay the bills when it's just you. You can be frugal, you can be cheap and all that. I tried with only spending my time and it was painful. I was going to go out of business then. I really sucked and I'm going to talk about scope creep in a little bit. Then I joined that real estate job that I mentioned. It was very well paid, kind of VP of engineering type of role. Again, great, well-paid startup. So I was, you know, spending 10 hours a day there and then another 4 hours, 3 to 4 hours on the business. And, you know, just trying to fund it with money and pay a couple people to actually get the job done. I know a lot of people who have started this way, by the way, is kind of a mix of both or like the second option or kind of the founder hires a couple people and then works a very well-paid job like an SAP consultant or maybe a couple founders or 2 or 3 founders and 2 of them work for the money and one of them is actually developing the business. So it's not uncommon, but it really didn't work out. So eventually I had to get some savings and move to 100% focus. So what I've found out is that in many cases you can't really build something successful without enough funds to back you up in order to focus 100% on the business. And I know that many of you already have, let's say, businesses making $300,000, $400,000, $500,000, maybe $1 million, $1.5 million or so. So you've already been through that route. But again, it's a constant reminder that when you're doing a pivot and I'm going to talk about pivots here again. The pivots that we're doing right now, the last one and some of the services I'm going to bring up at the end, we had to spend about $700,000 just shifting to these types of services. So it was an investment unless we had that, you know, amount of money just saved for reinvesting. It's not something that would have been easier to do because essentially it means that you need to create a separate department like an R&D strategic labs or whatever it is. And get them to build a separate line of business and then retrain your people and slowly, gradually transition and then reduce both the profitability and the efficiency of your current teams. And all that's kind of adding up. And that's what makes it so tricky to kind of make work. So again, bottom line, kind of what we, what we did afterwards is I was going to go out of business because of one-offs. And I know many people who are great at one-off services. I'm not. I'm really great at selling something very expensive boutique just because of my consulting background. So I can explain how it gets done from start to end, cover all edge cases, risk management, like all the other things that you want to do in kind of an enterprise-grade project efficiently and get it started tomorrow. So it's the enterprise scale, but like start immediately and high quality. So not wasting like years to get it done. So This is again to showcase strengths and weaknesses. I, I'm really bad at making something efficient and kind of building a $500 one-off service that's profitable. I have a lot of friends. I'm also an investor in a couple other agencies that do productized services and they have one-off plan for $297 that's super successful or again a $499 plan that's super successful or doing the $5 a month hosting services. I would go out of business if I'm heading that ship, right? So again, that's to say that people have strengths and weaknesses. Again, just as you're going through your journey of reassessing yourself and kind of figuring out what you do best for a living, I knew for a fact that I was going to kill the business with one of sites and products and applications and everything else that we were building first because I was really bad at— I wasn't harsh enough. Against clients. I wasn't really pointing at the contract enough. I was like, yeah, sure, that makes sense. What you're asking for makes sense. Under normal circumstances, we would do that. Understand why you need it. So that's why we're incurring scope creep, vastly exceeding the scale of the project. So as a result, kind of what I learned back then is consulting and trainings was what was really paying the bills then. Really high-tier consulting, again, SAP, VMware, and a bunch of those kind of high-tier companies for technical consulting and training their own teams. Plus kind of standalone trading. So kind of this, this was kind of a pivot of saying, okay, I cannot make that business working. I love serving clients, but I cannot do that the established way of, you know, a website costs 2 grand, 5 grand, 10 grand or so. So instead, I need to figure out a way that starts with a consultancy. So probably just do consultancy first, or maybe even be a consultant with external hires. Or maybe work with freelancers and other vendors to bring consulting on top of that, maybe overcharge a little bit extra for the people I do like 10%, 15% commission. And that's how I kind of started initially. So once again, I doubled down on what I did better and I tried to stay away from areas where I really sucked. So yeah, another thing in the early days is as we were starting, I was definitely Well, maybe a general list is not the right thing to do, but I was a fairly capable developer for standard projects. I, at one point of time, I do remember I had— that's kind of a parallel activity. So I had a WordPress website to build. There was a CakePHP website, which is another PHP framework. I had a C++ application for for mines, you know, miners actually shipping gold with the cards. I had a set-top box assembler application and I had an Android app for something else. That's 5 different applications, 3 different programming languages, 5 different frameworks at the same time. So it is very unscalable. First off, I wasn't great at all of that at the same time. So that should have been clear. Second, it's really hard to hire this out. You can build a sustainable team if you do a a million things and I had to kind of simplify that. So one of my clients had different projects and his CTO disappeared, like he had some, you know, family issues and stuff, had to move, relocate elsewhere and whatnot. I was the lead developer for the project, so he invited me to become a co-founder for kind of some of the projects. So we founded WordPress Theme Shop together, which later on turned into that 7-figure theme portfolio. It's still on ThemeForest. You can probably find it, VampThemes, the business. I'm no longer involved. I haven't been for the past like 6 years or so. I sold my equity long ago, but spending several months deep diving and really bending WordPress above and beyond what it's possible made me realize that it's a pretty powerful and capable platform. We can do a lot of the— we can solve a lot of the issues with that. And that's how we just became a WordPress shop back in the day.

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So once again, another lesson is, especially early on, if you try to do everything, you're most likely going to fail. You're not going to be Super efficient in that. You're not going to be able to scale and whatnot. So, so the lack of focus is is a pretty common issue that that we're facing pretty much all the time. So that's another example of the big whale issue that we had. So another year or two later, maybe a couple years, we started a consultancy with the customer, then turned into like five hundred bucks, five hundred bucks a month maintenance. Into a two grand a month, six grand, seven grand. I think it was eight grand a month retainer plan back in 2014. So it wasn't a bad retainer back then, and we were a small team of like four or five people. It was most of them were actually outsourced, like two of them were in India, and it was it was paying most of the bills. And one day the client called and said, "Hey guys, you made such a great job with that project." That we have decided to hold all development for the next year and just let it generate 100% profit and sell it in a year. And in the meantime, we are going to rest and figure out what to do in a year from now. I swear I've always been advocating for high quality. This is the first time in my life when I realized that high quality can actually get you out of business. That doesn't mean that I've kind of given up on providing quality services, but it was one of the most ridiculous situations that I've ever I've ever faced. I'm not gonna, not gonna lie. This was absolutely insane. So at that point of time, what I did was first off, that followed a couple of different months of back-to-back outbound calls, staying a night to survive because we couldn't pay the bills. The next leads and everyone else that was kind of hopping on board, whenever, whatever I was pitching, no matter what, I was always saying, okay, so now we can do also maintenance and support and we can do quarterly reports and we can do this and we can do that. Whatever it takes to just bring recurring revenue and also spread it out across all of our existing clients and new clients. So that's how we actually decided to rebrand ourselves back in 2015 into the WordPress Retainers Agency. This was something that nobody was searching at the time, so it didn't have high SEO potential, but we managed to establish a brand. I spoke at events. I, you know, made a lot of noise about that. So eventually we trained over 100 agencies throughout 2017, 2019 on adapting the retainers. And we kind of established the model in the WordPress realm. Again, I'm not saying I coined anything or that I'm brilliant or anything. It's more about we needed a subscription-based business. We saw what the legal world did. They invented retainers. We said, okay, we need to package that entire model into the WordPress ecosystem, call it WordPress retainers, which is what it is. Then write a lot of educational content, give webinars and talks, work with smaller agencies to help them establish so that it's easier to sell to people and just really focus on the core value proposition. It's not leasing people. It's building an entire team, fractional team of experts for the things that you need. So you have the ongoing development. It's not a hit and run job, build once and disappear because of the crappy quality. It's not leasing people that you don't know what to do with them. And it also incorporates support. So someone's taking care of maintenance and brainstorming and creative thinking and whatnot. So this is kind of how we started thinking about business solutions within technology and also recurring revenue as kind of one of the bigger focuses of the business. So we're always advocating. I just had a conversation earlier today, by the way, for one of our products with someone. I had a bunch of interviews and someone said, yeah, you need to launch that on AppSumo. And I was Nope, I'm not gonna do that because they really incentivize lifetime deals. I do not want one of those, let alone lifetime deals. Lifetime is quick cash ahead of time and then you're, you end up with legacy. You cannot sell that business anymore because someone has to support these people for the rest of their lives for free instead of charging recurring revenue. So whatever it is, just recurring revenue is always being top of mind. So all that process and again, education and kind of developing that brand and focusing on WordPress led to building a lot of content, my passion for education as well. We saw some upticks in organic visibility, so I hired a couple people as content writers again abroad, and I know that outsourcing and hiring remote people is of interest to some of you. So if you want to chat about that, just ask me a bit later. So we invested in SEO, got certified with HubSpot, joined the agency program, and slowly and gradually started to offer services outside of tech. So Outside of WordPress development and servers and design and like just the technical stuff, a lot of our tasks became more marketing related, like marketing pixels, HubSpot forms, you know, lead generation, A/B testing, Hotjar conversion rate, like little bits and pieces here and there. And we were doing SEO in the meantime. We signed the HubSpot program. We went through the trainings. They kind of taught us, okay, here's how to think about marketing retainers here. Here's how to package a HubSpot retainer here. So we kind of use the best of both worlds and try to kind of bundle it together and slowly start to elevate to digital consulting because in terms of working with marketing, and that's kind of a lesson that I had to learn. In case of learning with marketing, you get more control versus someone assigning you a bunch of different tasks. It makes sense to most of you, I'm pretty sure, but if it doesn't, Well, if someone has to think about everything that they need to assign to you and spill it out to you and just oversee you, there's little creativity and it's pretty competitive and it's really easy to outsource it elsewhere and it's going to be a race to the bottom. So moving to the consulting end, so myself doing consulting with a couple other people in the team and teaching the folks to spend kind of do brainstorming sessions and research every couple weeks is something that started elevating us and helped us kind of retain business. So as a result, again, we went on niching down this time. So the 2 main audiences that we served, like 90%, were B2B SaaS and publishers. For SaaS companies, we were a digital firm, so they were engineers, so we were the marketing firm. For publishers, we were the tech firm. They were journalists, so we were the tech firm, funny enough. So the result of that, working with 2 specific niches, we actually outlined some clear winners. We accomplished several migrations, buildouts, and scale-ups for right now about 12 publishers, over 100 million monthly views, which is pretty cool scale-wise. One of them had 960 million views a few months ago. So pretty massive, at least in our experience. We dove deeper into layouts, quizzes, long-form arbitrage apps, and on the B2B SaaS end, the full marketing ops stack. Again, Salesforce, Marketo, HubSpot with all their quirks and forms and pixels and godfather objects and like everything else that you can think of. So what I've written here again is a reminder of myself. The home game was diversification and focus. So diversify, be able to have different options and sell like 3, 4, 5, 7 different services to a business. Yet again, focus, because if you do 1,000 things, you're no expert in anything. So this is the entire game is How to not be reliant on one single client, one single channel, only Meta ads, only Amazon revenue or anything else. And at the same time, you know, be able to be an expert in several areas at least. This is why I like the T-shaped marketer concept. So that whole thing kind of moved into our experimentation framework, which roughly looks like this. First one, my personal brand, like my blog, my site, my socials are serving as a testing ground. Then if that makes sense, we are moving to DevRel in-house. So the core team is testing that internally. Then we are moving to existing clients like, hey guys, do you want— we're doing some things here, want to test it out with us? Like, hey, we can pick up your SEO reports or like HubSpot migrations or workflows, lead scoring, whatever it is. And then when we have a couple of success stories, we just offer it as a service. So make sure you have a portfolio of clients, even if they're not super active, even if they're not ongoing, you just need the numbers. In order to be able to upsell, cross-sell, resell after.

The number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is, Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation. That also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would've in the last couple years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing. They've been a great asset for us, and I believe that they will be a great asset for you. All you have to do is go to marketingschool.io/hire. Again, it's marketingschool.io/hire to learn more. You can fill out the form there and we're going to place you with the best marketing hires that we can help you find.

So yeah, I think this is probably the last one or the pre-last one slide. But what's been happening kind of as a final step over the last couple of years is the transformation after the B2B collapse. What happened in B2B that many of you, I believe, have seen, especially B2B SaaS and highly funded businesses, mass layoffs, sales reps and marketing reps really losing their jobs, marketing budgets cut down, CEOs and CFOs, lots of scrutiny on kind of marketing budgets. So really hard to just sell the types of services that we used to. So we realistically lost business and we lost a few clients and clients that we didn't lose, some of them we just decreased the plans, moving from a $15K retainer to an $8K retainer or $10K to $6K. So the overall impact on ARR was pretty high and that happened more or less overnight. It essentially happened January last year. So we saw that early on. So we packed up and say, okay, we're moving with heavy experiments, which we've been doing, but not fast enough. And first off, we were impacted by the helpful content updates in 2023 later. So we said, screw it, we no longer rank for WordPress keywords. We're just rebranding to B2B digital, go-to-market and all that stuff first. Second, we just revamped the entire, like, all technical general services that we had. We pulled back and we just put on the shelves the types of services that are go-to-market, experimentation as a service. We productized everything that we can, like, hey, we do HubSpot retainers for X amount of money. Let's just do the top 3 things that we do are like lead scoring and attrition or building workflows or like connecting to WhatsApp and just productizing, building separate landing pages, put them on the side. So we worked on a lot of that. And surprisingly or not, that helped out quite a lot. So we recouped our revenue last year over the course of a month and a half just by rebranding our services. And even our existing clients came up and say, hey, we didn't know you do that, or like you're now focusing on that. So like, let's do that. Godfather offers to, you know, if you've read Hormozi or Sabri Sabi, Godfather offers are great, super helpful. So we literally just put in Claude or Gemini or ChatGPT Yeah, love it. Love it, Austin. We, we just plug in like, here, here's what we do. This is roughly how it works. Make it a Godfather offer. Like, follow the Godfather offer. I see Rebecca is asking, what's the Godfather service? So the Godfather offer is an offer that people cannot resist. It's a no-brainer. It's like you see that it has 100% guarantee. It happens immediately. It's as least of friction as possible. You know how much it costs and it's cheap. Again, 100% guarantee it's done in no time and whatnot. So we built a few of these, like we have a WordPress audit service or so that we do performance audits, speed audits, security audits, like competitor audit for $1,500 and you get it in 72 hours or something like that. I don't remember it anymore, but that's kind of what you can think of for like WhatsApp, HubSpot lead scoring service for like $700. So we use this as lead funnels because they're super easy to sell. And they work really well. And another thing that we do is the AI lead magnets. We got insanely crazy on AI lead magnets. We've built probably 30 of them, like GPT wrappers. We built 5 different micro SaaS services that we, you know, kind of sell as products and also use internally and also just use as a consulting kind of low-ticket offer. And yeah, we're in terms of next steps, we iterate really fast. We launch new things every month. And we are trying to stay afloat and kind of figure out what the business needs. So yeah, this is kind of the breakdown. All of these were kind of structured as micro lessons or micro learnings. I definitely want to make sure that it's super helpful and chatting with Austin last couple days ago, he mentioned some of the topics like outsourcing or community memberships like our participation in the WordPress community. Personal branding and my work as a creator, ongoing consulting, which is something that I still do, diversification, investing. So I'm just outlining some of the topics that are pretty common and, you know, get a lot of questions for. So yeah, I'm gonna leave that here. I'm actually going to stop sharing. Cool. I didn't miss the meeting, but yeah, gonna leave it back in here and yeah, we'll let you let you ask any questions that come to mind.

Mario, thank you so much for walking through that. That's, yeah, quite a bit to share in such a short period of time. So I appreciate you taking the time to do that.