My Framework For Building My Agency To $100M In Revenue Ep. 1

So we're going to talk about the right way to create the right agency strategy to scale to $100 million in revenue and beyond. So I'm not just talking about valuation, I'm talking about revenue and also why you must be close to your product. So I'm going to go through a framework that you can use that you can literally swipe and deploy if you're in the agency industry, but also if you're really in any industry at all. My name is Eric Siu, for those that don't know me, and I'm literally doing that with my agency Single Grain right now. So we've been to 6 figures, been to 7 figures, been to 8 figures. But now the interesting piece is how do you go to 9 figures in revenue, and I don't think anybody has actually shared that journey online, and I'm going to, I'm going to do so. I'm going to first take you over to my handy dandy little, my, my little tool over here, my little ChatGPT to go through a prompt that's worth thinking about. And the prompt that I'm using here is, hey, you are an expert on multi-billion dollar agencies. What are the multi-billion dollar agency holding companies like WPP, Omnicom, Dentsu, and Publicis doing that smaller agencies aren't doing? The reason why this even matters is because you are looking for patterns. And usually if people that are bigger than you, they all have the same patterns and you're not doing some of those things, then it's worth thinking about how you can integrate those strategies into your playbook. If not now, maybe you would break it out You've bucketed out over a time period, right? So you can't say you want to build a world-class M&A team if you're only at 6 figures, right? There has to be— there's levels to all of this and there's a timetable to all of this. And the Charlie Munger quote that I like is, you know, just because you impregnate 9 women doesn't mean you're going to have a baby in 1 month. It's a lot of things take time to develop. And so I'm going to go ahead and ask this question. And I would just say those of you that are watching, even if you're not in the agency space, think about how you can use this for software too. What are people, multi-billion dollar software companies doing that you might not be doing? And then you can figure out what you want to do from there. So you can see ChatGPT's starting to answer here. So again, WPB, Omnicom, Dentsu, Publicis, these are all multi-billion dollar companies. And so I'm going to go through the ones that stand out to me and perhaps I'll skip the ones that maybe I don't think are as relevant. And so I'm going to start off with mergers and acquisitions over here. So I'm highlighting it. And mergers and acquisitions. So it says over here, aggressive M&A strategy, regular acquisition of smaller agencies or startups to expand their capabilities and market presence. And 13, it says integration of acquired companies. So efficiently integrating acquisitions to enhance their service offerings and maintain consistent growth. So one thing I want to talk about, so my podcast co-host Neil, he has a 9-figure revenue agency and there's a, There's a good checklist that he uses here. So one, when you're looking to buy agencies, ideally they have services that you don't have. So they're complementary to what you do. Number 2, these are, hopefully they have a couple of global accounts. So just say, let's say you buy a smaller agency in Singapore or a smaller agency in Brazil. That's okay. I mean, even if they have small accounts for Pepsi, if you have the ability to expand these accounts into other areas, because if they're global accounts, they probably have other regions. that they need help in that maybe that agency can serve. And if you actually have the capabilities to serve those other regions, then you have global expansion, right? And another side note here is that's why you should be willing to take on these smaller accounts, even for $2,000 or $5,000 a month, because there's potential for these accounts to expand. And that's going to in turn expand you as a company at the end of the day. Number 3, regions that your agency might not be in. So You want to, it's basically the reverse, right? So you want global accounts to pitch, you want to be able to pitch in regions that that agency's not available in. And then also if the agency's in regions that you are not in, well, that gives you more global reach at the end of the day, right? So that does kind of align with the first point here, talking about expanding capabilities and market presence. That's what it is at the end of the day. So expanding into Japan, expanding into Italy, expanding into Spain, Expanding into all these areas. That's what these companies are aggressively doing. But also just because you acquire them doesn't mean that the work is done. And I learned that the hard way in the past where there have been— where the acquisitions actually work. The only times they've worked is when I've been very involved, right? And so if you're the founder of the company, you just need to make sure there's at least one of the co-founders super involved with integration because that's where things can fall apart. And the work doesn't go down Once you do the acquisition, the work actually increases once you do the acquisition. And so instead of working 8-hour days, you might be working 14-hour days, to be honest. And so you have to have the stomach to be willing to do that. And it might be for the next couple months or so, you just got to make sure you get this right. Because the worst is if you get locked into this deal, and I'm sure when you sign a deal with someone, there's going to be different terms. And what you don't want to do is you don't want to— if you have a note, you don't want to default on that note. Yeah. And you don't want to get into a bunch of legal issues, right? So all that stuff can compound at the end of the day. It's just better for you to make sure that you get the integration right. And that also means that going back to the mergers piece, that you're doing a lot of due diligence, that you're making sure it's a good company, it's a good company culture fit. There's a really good book called How to Make a Few Billion Dollars by Brad Jacobs. And in there he talks about the way that he does due diligence. And the way that he does due diligence is that he focuses on talking to the top 15 people at each company and he talks to them each for about 90 minutes or so. And then you have a good sense for where he thinks the company's at. If people actually like working at that company, if people think that company has long-term potential. Once you talk to 15 people, it's going to be very hard for them to— if they wanted to lie, it's hard to keep that lie consistent, right? So it's really important that you do that. And then that actually ends up saving a lot more time. And still even 15 people in 90 minutes, that's 13, 15 minutes, right? So that's about 22.5 hours. That's basically an entire day. Yeah. entire human day, right? So that's a really good book. And he talks a lot about mergers and acquisitions. Interestingly enough, for one of the companies, I think they looked at 2,000 deals and they only swung on 18 of them. So that's 0.009, right? So that's not a lot. That's almost 1% basically, right? And I think it's really easy to read Twitter when people are talking about how successful their holding company is, how they've done these acquisitions. And we saw that in 2020 where a lot of people were boasting about how well they'd done with acquisitions. And in 2024, a lot of those deals haven't worked out. A lot of those people that were bragging and kind of shouting from the hilltop, those people, their companies aren't doing that well anymore, right? So just keep things in mind, stay grounded and just focused on keeping the main thing the main thing. Don't focus on trying to get famous or anything. Just focus on, hey, let's make sure that we're getting a good deal. And number 2, the team is prepared to do to do a good integration. And there are good books out there on this, but I think really nothing's going to beat the actual experience. You can read Buying a Small Business by Harvard Business Review, Agile M&A, that's also a pretty good one as well. And then the one I just mentioned, How to Make a Few Billion Dollars, that book is, a lot of it's about mergers and acquisitions. So take that into account. If these bigger companies are doing it, and largely I would say the main thing is they're driven by M&A strategies. And the other thing that I really like too is that this is a consistency that I see. So I believe Publicis does this. And if you look at their stock, you can see here, and this is interesting, you can see in the last 5 years, Publicis has continued to move up in terms of their stock price. And their market cap is $27 billion and 18 PE ratio, right? Which is pretty good price-to-earnings ratio. And so they're basically doing $1.43 billion in earnings, right? Now, when we look at Omnicom, let's take a look over here at the last 5 years or so. On the comes up and down, up and down, up and down. And you know, for them, seventeen billion market cap and an eleven p e ratio, right? And so let's go over to WPP. I just I'm interested in looking at all of these. And WPP has kind of you know been flat. And so Publicis, the reason I call them out, if you look at five years, they're doing better in the last five years versus anybody else, and they have the biggest market cap. Why is that? Well, the reason is they have been the best at integrating technology and. Data analytics. And this is actually a point that's brought up in ChatGPT over here. I actually don't think the other ones do this as well, and someone can feel free to correct me in the comments. If you go back over here, you can see advanced technology and data analytics. So investment in technology, they invest heavily in cutting-edge technology such as AI, machine learning, and data analytics platforms to enhance their service offerings. Proprietary tools, development of proprietary tools and platforms for data analysis, customer insights, and campaign optimization gives them a competitive edge. And so I've seen a lot of agencies that are maybe smaller. They tend to think about, oh my God, I need to make a tool right now. But you only, if you have the resources later to acquire these tools or you have the resources, the people resources to go ahead and create these tools, by all means, definitely do it, right? Because that does build more value. You are creating more of an edge for your customers later. But just keep in mind, still at the end of the day, you're an agency. And even if you build this technology, you still have to manage it for the customers. And that's still much more— Yeah. of a managed service. It's not like your technology, from my understanding, from all these other agencies that build these different tools, nobody says, oh, I need to stay with that agency because they built this tool, right? Remember, these are agencies first and foremost. Secondarily, they might think about technology. But when you think about SaaS companies out there like a Salesforce, their technology is the value first and then a managed service that the actual people helping them with it, that's a secondary thing. So don't get those two twisted. A lot of people like to get the two conflated because they look at, oh my God, the margins in software are so sexy and it's so much more sexier to talk about software. And I got in that trap too. And I built different software in the past and I realized, oh my God, even though the software was starting to make money, it would still be a while before we became profitable. And so I just decided to focus on the agency more. So in the very beginning, I would say maybe you're at 6 or 7 figures or so, just make sure you're locked in on making the main thing work before you try to do all these other things. I think a lot of other agencies, fail because they try to do too many things and they get distracted by other things. And then they complain about agencies being hard. But the reality is, no matter what you do in business, it's going to be hard and it's going to get harder as you continue to climb up. And just remember, the air continues to get thinner as you continue to climb the mountains. I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of quotes. Couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Aliyan, he says, the ability to really post whatever I want and need, and the group responds. Great experienced members. Getting a lot of insights from conversations with other members. Getting a lot of value from sessions from Eric. Getting advice from others as well. And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created. And our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. The other thing I'll say too, with the advanced and technology and data analytics, they also are very good at integrating these, these teams. Okay. So you can see it says integrated services over here. Full service offerings. They offer a comprehensive range of services including advertising, media buying, public relations, digital marketing, data analytics, and consulting, which provides clients with a one-stop shop experience. Cross-disciplinary teams. They can create integrated teams that bring together expertise from different disciplines to offer holistic solutions to clients. This number 5 is very important, and this is what I believe Publicis has done. Sure, they've done really good with making sure they're on top of technology and data analytics, but they've also created different teams teams that can work together and make sure that they're bringing the best possible solutions for clients. Because if you just say you're a paid media agency, maybe you just do SEO, at the end of the day, the client's going to cap out and their client's going to need more as they continue to grow and their demands are going to continue to grow. But if you can't keep up, also keeping in mind that most likely with a big company, it's going to be an employee that's your main point of contact. And they need to de-risk themselves. They're looking for a promotion. They're looking to look good. If you can't deliver, they're going to move on to another agency. It doesn't matter if you just did really good on paid media or SEO. So you do have to continue to think about, okay, how can I build this integrated experience that covers all things? Because one of the problems I'll say that we have right now is oftentimes I'll talk about on the Marketing School podcast, I'll talk about a lot of strategies that we're doing for ourselves. And then sometimes the clients will listen to the podcast and be like, hey, Eric talked about this stuff. How come you guys can't do it? And that actually is a problem. So these people clearly want that service, but we can't do it. And so what do we need to do? Well, that means we need to have, one, we need to have the talent. Okay? We need to acquire the talent. 2, you want to have cross-functional teams that understand, and you want to have a leader that understands where the customer's target audience is hanging out. Because that's marketing 101. If you don't understand where the customer's hanging out, you won't understand the right strategies to deploy. And oftentimes the answer isn't paid media. Oftentimes the answer isn't SEO. The answer might be influencer marketing or it might be email. It might be a combination of different things. But if you don't have a strong strategist for each pod, each team, then how are you supposed to get to the next level, right? Full-service offerings matter quite a bit too. So again, if you just have paid media, If you just have SEO, that's not enough. You're going to have to continue to expand over time. Maybe in the very beginning, let's say you're 6 figures right now, you focus on one service, but then as you get bigger, you expand into other areas. What else do your customers need? What else do your customers need? You pitch some strategies. They say that, hey, that sounds good. You say, hey, I'm going to do a pilot for this right now. And upon— if we do a pilot, I'm going to give you a discount on the pilot. Maybe I'll just charge you cost for it. If it goes well, then we'll continue to ramp it up, right? That's how you can— you can start to crawl, walk, run for trying to become more of a full-service agency. Now, a couple other things over here. I think this is important too. So scale and resources. So global reach. These large holding companies have extensive global networks, allowing them to serve multinational clients seamlessly across various markets. That's true. That's why I mentioned all these companies that I mentioned up here, they're all international. They're all global. Financial resources to invest in technology, research, talent acquisition, and client services. So Again, you don't want to put your— and I made this mistake before. I put the cart before the horse and I wanted to do software. I wanted to do— I want to hire all these people. I wanted to work on all these different things. But even though you have your ambitions, your ambitions are up here. If your resources can't map up to it, your actions can't map to your ambitions. And so that's what I would keep in mind. Economies of scale. So their size allows them to negotiate better rates for media buying, software, and other services, reducing operational costs. That's a big one too. If you can reduce your cost by 5%, by 10%, and when you're thinking about it on a global scale, that's hundreds of millions of dollars and that's a lot of efficiencies that can be gained. And then you can take that money and deploy it somewhere else to help the company continue to grow. All right, quick note. This is about my company. It's called Single Grain and Single Grain is an ad agency where we're focused on driving innovation. And so I want to talk about a couple of new strategies and if you need help with marketing, great. If not, here are a couple of new strategies that you should try out. One is programmatic CRO. So we are doing programmatic conversion rate optimization on our site. We're building products that will automatically optimize your site to increase conversion rates. We're also auto-optimizing, auto-updating from, from an SEO standpoint. And we're constantly thinking about what else we can do in terms of enriching the visitors that are hitting your website, and also tailoring custom messages for them using AI. And so there's a handful of things that we're doing from a marketing standpoint. And our mission is just to drive more innovation. So if you want to learn more, just go to singlegrain.com, grain like rice. So singlegrain.com to learn more and we'll see you inside. This one works for all levels, talent and leadership. Let's just focus on top talent acquisition first. So top talent acquisitions, their financial muscle allows them to attract and retain top talent from around the world. So if you want to grow anything, any business, I don't care if you're a product, I don't care if you're a service, if you don't have amazing people, you're not going to be able to get to the next level. And Steve Jobs has talked about this. He says, look, if you have a taxi driver, the best taxi driver in the world, maybe they're 2x better than the regular taxi driver. Maybe they get you to your destination 30% faster. So it's not that big of a difference. But in an organization, in a business org, in most business organizations, or maybe I'll just say in technology organizations, a really good employee, a really good A-player can be a 50 to 100x increase. And so you always want to look for the people that are 50 to 100x. And that's why you want to pay a lot of attention to your talent acquisition pipeline, how you go about doing things, how you vet people. Ideally, you're very involved, maybe until the first 100 people, you're closely involved and maybe you can let loose a little bit. But from looking at Jeff Bezos or looking at the CEO of DoorDash, these people all remain fairly close to the hiring process until in some cases over 1,000 people, in some cases over 10,000 people for DoorDash, right? And so you decide, maybe you're more involved in the beginning and then maybe you move yourself over to the end of the hiring process, but you want to stay as involved as you can. And you don't want to let up on the types of questions that you ask and you want to continue to refine how you go about recruiting people. And you want to trust your people team, but you want to verify because if this starts to go off the rails and I've made this mistake before where I trusted, but I didn't verify when it came to our people team. Well, we started letting in a bunch of other people that shouldn't have made it and having to clean up that mess on top of the mess that I made with acquisitions in like some acquisitions in the past. That's something that I would go back, if I were to go back in time and tell myself, hey, one piece of advice, trust but verify. And the other thing I would say is if you're going to do these acquisitions, do a lot more due diligence in the beginning because you want to make sure that they fit your culture. You want to make sure that the people are willing to go to battle and you want to interview the people on the team before you do the acquisitions and you want to talk to some clients as well. So take a little more time with the mergers piece and then take more time definitely with the integration piece. And you definitely want to be involved if you want to build a very strong team. And you as a leader, you are the chief visionary officer, you're the chief reminder officer. So you always got to say the mission over and over and over. You have to communicate the vision over and over and over. And the vision, sometimes it changes over time, it shifts over time. You got to be the one that upholds the core values of the company. All this stuff is I used to think it was baloney, but if you want to get to 8 figures and then 9 figures, I'm telling you, this is the way to do it, right? And so I'm just looking at these things over here, continuous innovation. Okay, sure. Agility and market changes. This all comes back down to your culture, how strong your talent pipeline is, how strong your talent is. Because if your talent doesn't want to get on board with continuous innovation, they don't want to get aboard with agility and market changes. Well, guess what? You're going to spend more time having to clean things up. You're going to end up having to make stupid rules for your B and your C players. You're better off just really honing in on having as many A players as possible and being very intolerant of subpar work. And you have to build in the systems and the processes to continue to monitor that. And not only that, One thing, love him or hate him, one thing I like about what Elon does is every, maybe every quarter or so, he does this thing called the surge. And so, with SpaceX, and I'm not telling you to do the surge, but I'm just saying sometimes you got to restart the system. You got to jumpstart the system. And what Elon would do is he would go to the SpaceX office in Texas at maybe, I don't know, 8 or 9 PM on a Friday, and he wouldn't see enough people working hard. And this is because he's hardcore, right? And I'm not saying you should have your people work till 8 or 9 PM on Friday, to each his own. But his whole thing is, oh, it looks like we're not working hard enough. Okay. Florida team, California team, SpaceX, you're all coming to Texas. You're all coming in, I think in the next 2, 3 days or so. You got to figure out the lodging on your own. Or more so like his people team had to figure out lodging for people. He got everyone together to build camaraderie, to work them, to also like to align people and to get them all to understand, hey, this is what it's going to take for us to fulfill our mission. And that's a level of intensity that maybe is the highest level. But think about how you can have, you can build in something like the surge where you're resetting every quarter or so, so your team's not getting complacent. Every quarter, every half year or so, how do you reset to make sure that people are still aligned, people are still putting one foot in front of the other, and that's how you're going to get better. All right. Strong brand equity, brand reputation. So, I mean, yes, when you're a publicly traded company and you're one of the large agency holding companies, you're going to have strong brand and it's robust financial management. From what I know, their finance teams are extremely strong. And so how would I apply this to me? So we are looking at buying other companies. We're looking to potentially partner up with other companies. The one thing I'll say is even starting the Agency Owners Association, which is the agency peer group, if you just go to marketingschool.io/agency, you can learn more. But the whole thing with the Agency Owners Association is Neil and I, we both have this group is we want to connect other agency owners, but we want to see who we can partner up with. We want to see who we can send leads to, but we also want to see, hey, who can we potentially acquire in the future? Who does it make sense to do a deal with in the future? Could be a minority acquisition, could be a majority acquisition, but this gives us a view of who's out there and we can build a relationship with these people at scale, right? So that helps with the M&A piece of these. And then on the integration of acquired companies and the talent piece, from my end, what I've been doing is I've been talking to a few COOs, CFOs that I've been working with in the past. One guy, he works in private equity right now. And so he understands this game. And the main thing I would also say is I have trust built with this guy because we worked at a company together in the past and we had a great relationship. And so I would say another thing, if you're going to hire talent, if there's someone that you've worked with in the past and there's trust that's established, and if it's for a role, that maybe they haven't necessarily been with, but you have the trust, sometimes it's worth rolling the dice. Not all the time, but sometimes it's worth rolling the dice, okay? So that's what I'd say. But look, all this other stuff, mergers and acquisitions, client relations, advanced technology and data analytics, integrated services, scale and reach, guess what? It all comes from talent and leadership at the end of the day. So on my mind, I'm like, okay, COO, CFO, that sounds good. How am I going to build the ultimate talent team? And I'm going to have to be very close to this talent team. How am I going to continue to drive the vision? Okay. So the vision to help us stay on top of advanced technology and data analytics, that means I have to stay involved. Okay. And by the way, you don't have to do this. I'm just saying, if you want to get to $100 million in revenue plus, this is what the people are doing. And so now I'm crafting a plan right in front of you to say, hey, this is how I'm planning to attack this. And then I'll break it up into different buckets, right? So that's that. I think the final thing I'll leave you with over here is you have to break things down into a crawl, walk, run. So for me, the crawl right now is I'm focused on talent and leadership. Even though I'm having these conversations with mergers and acquisitions, I'm talking like you have to have these conversations ongoing all the time. Okay? But I'm more focused on making sure we get things right on the people side. And then I'm having conversations around M&A already. Okay? We started the Agency Owners Association group. So, that's moving. That's the crawl. But we want to make sure that any deal that we see that seems like a right fit, we want to swing. We'll wait for the right pitch and then we'll swing. And constant innovation and adaptation, that's something I'm continually pushing on the team right now to make sure that we're doing good work. And that's what I'll say. I mean, that's the crawl. And then eventually, the walk will be, okay, let's start to integrate these companies. Let's start to move towards more integrated services over here. And then the run would be the— I would say the walk and the run would be advanced technology and data analytics, and then scale and resources. This would be run. So that's how you would break it down from a crawl, walk, run perspective. And this type of strategy works for any business. If you want to build any business to $100 million plus in revenue, one, I've seen so many people do it. From my YPO friends to my EO friends, there's a lot of people that have done this and these people aren't necessarily smarter than you. It's more so that they've accumulated the wisdom from other people, whether it's through just using ChatGPT or talking to people and asking what they do and asking how they go about structuring deals, asking how they go about building their people teams. I actually know a guy, he combined a bunch of agencies, he's rolled up a bunch of agencies and I think he took the thing public and At its peak, it was worth maybe $4 or $5 billion. And I think he just sold the thing. His model was just, hey, I'm just going to roll up a bunch of agencies and we're going to do this cost-plus model. And I would just say, look, he came from an entrepreneurial background and this was his angle. And he just did it for a very long time, maybe 20, 30 years or so, and decided he didn't want to do anymore. And that was it. But anyone that wants to build to 9-figure revenues, And more. And by the way, when you're doing 9 figures in revenues, you can sell for a couple hundred. In some cases, you can sell it for over a billion or so. But the numbers seem crazy. But when you look at the playbooks, when you hear what other people have said, it doesn't seem that crazy. And so I believe that you can do it. I believe that I can do it. And that's why I'm documenting this right now. So by the way, if you want to go learn more about the Agency Owners Association, want to grow faster there, you can go to marketingschool.io/agency. Don't forget to rate, review, and subscribe to this video. And that— with that, we'll catch you later. Bye.