The hiring process of big agency M&A, and World's richest man on being a 'working boss’

I remember one time I was interviewing for, for a job, and then this one they were gonna pay like 7 figures a year, right? 7 figures in bonuses. And, um, here's what happened. So they put me through the wringer. It was 10 hours of interviews on a Monday, okay?

Wow.

The next day was another 10 hours, okay? And it was nonstop. And they even dragged in management consultants in there asking me like, oh, you know, how many How many tennis balls can you put in a plane? I'm like, what the fuck? And so, 'cause you just wanna see how you think about things, right? And I do agree. I think you need to do this for people that are way more senior. And I think you can have like a lighter version for people that are 50, 60 grand or so, 'cause you still wanna keep the talent bar high. That's my opinion. But if I were you, I'd just go figure out how we can hire some of these people from Andreessen Horowitz, you know, and run that process. Because I think what they did was they probably just hired the best of the best recruiters in the world.

Yeah.

'Cause they're Andreessen Horowitz, you know what I mean? And they also know they can do that 'cause they're Andreessen Horowitz.

I totally agree with you on just poaching their people. The hard part is, is like you just said, they're Andreessen Horowitz. They manage so much money that their pay for some of their people, it's going to be hard to compete.

It's probably in the millions for the best recruiters.

A16z, AUM. So let's see how much they have under assets. They say $42 billion. Like, I don't know how much of that is active, but if it's, $30 billion that's active, they're collecting $600 million, you know, in management fees. On the 2%. Yeah. That's assuming it's active, they've deployed the money. That's so much annually. You know, let's say Mark and Ben take $200 each, that's $400. You have a remaining $200 million divided up to, let's call it, 300 employees. You can pay each one roughly $660,000.

Well, hold on. So I went a step further. I typed in a16z recruiter salary. So you have the talent partner at Andreessen Horowitz, which is like a more mid-level role, $110,000 to $192,000 per year. And then you have, um, there's a, there's one where it's like $215,000, which is 301% higher than the national average. So maybe—

301%?

Yeah. The $215K for a talent partner.

Right.

So you have to assume maybe their best ones getting paid probably like $500K or $600K a year. Yeah, but it's still worth it.

Totally agree with you.

But you do it first and let me know how it goes.

I think we're a few years away from that. I think eventually we'll end up getting to that place. The main reason I— it's actually not the money. The main reason I don't do it, if I look at our best hires, it's come from our executives who have performed really well and they've given us most of our amazing talent and leaders.

You know, I really like this too. It's because The people that are really serious are going to go through it. The people that are kind of tire kickers, they're going to tap out.

Totally agree with you. But what's funny is if you just hire someone from your competition, like our president, our CEO managed, I don't know, 7,000 employees. I'm making up a number, but it was something large like that.

Gullickson?

Yeah. So he already knows because he worked at a direct competitor, literally a direct competitor, apples for apples. They do what we do. He knows in our space who's great and who sucks because he worked with so many people over the years that It's like, oh, there's not much risk with just hiring those people.

Yeah.

And we have a few of those people who came from, he came from Dentsu. We have some amazing people like that who came from Omnicom, WPP, Publicis. So, and a lot of them have each managed thousands of employees. So you pull it all together. Like our Spain leader, Luis, was just like from day one, he's like, I want to hire this person for SEO, this person for paid, this person for sales, this person for account management. I just want the budget for this. I don't care. I want to do this from day one.

Yeah.

Right away, started pulling in accounts that were paying hundreds of thousands of dollars.

How did you react to that? Knowing you, how did you react to that?

I didn't mind.

Oh, you're just like, okay, let's do it.

Yeah.

Really?

We actually are very lenient with leaders who want to expand faster and grow.

But he had built trust with you already?

No.

No?

No.

Wow. Well, I mean, you should do that. He is an executive that you hired early.

So— He's an executive we hired for that country. And we said, what did you lead up? Uh, I think he came from Dentsu. He's like, I let up all of Dentsu Spain.

Okay. That makes sense. That makes sense.

Right. So he's just like, I let up, you know, call it a division that was doing $100+ million in revenue. And he was just like—

Because otherwise, why are you hiring him if you're not going to let him do his thing? Yes.

He's like, look, I can do it slowly or I can hire the people that I know can just bring revenue.

I was like, okay. Oh, that was the keyword. Had he said— yeah, the keyword was slowly. Once you heard that, you're like, oh no, no, no, no.

F that. It's actually not slowly. It was revenue. I can hire people that can bring revenue. We're actually big believers in hiring people that can generate revenue. If it doesn't work out, I'm a big believer, you just fire. I know that sounds bad, but you just fire if it doesn't work out.

Neil's really good at that.

Yeah. When you look at entrepreneurs, an entrepreneur's job is to take risk and make more money.

Take care of the business.

No, the entrepreneur's job is to take risk and try Crazy random things to grow. That's the personality of Mike, Camo, and me. A job of a CEO like Mike Gullickson is to provide stability and growth in a gradual, comfortable way without risking the farm and causing, you know, too much pain.

There should be a push and pull. You still went crazy with the acquisitions.

Uh, actually, no, we don't do more than one a quarter.

No, no, before, like in the very beginning, you said you went hard.

We still haven't gone hard.

You said you learned your lesson earlier in this podcast.

No, in going on adding regions, not acquisitions.

Okay, got it.

When adding regions, we were just adding tons and tons of people. The problem with acquisitions is, if you look at any company, it is hard to do more than one acquisition a quarter. What you do is instead of doing 20 acquisitions or 30 acquisitions, you just do bigger acquisitions. I looked at a company in Italy. I'm not going to name their name. We negotiated the right amount for what we're going to buy the company for. They agreed to it. I met up the founders in Spain. All right, when I was in Europe, I had them fly in with our leader from Italy. I told my co-founder right away, dude, they were speaking English. And then my Italian managing director, the person who leads up Italy, was translating their English for me. All right, there was a disconnect. Yeah, that doesn't mean it's a bad company or not. I just wasn't getting good vibes, like something was off. And what I mean by that is like when I was looking at this company, and again I won't mention it, there was some funny stuff they did, did in taxes. So we're like, all right, we want you to take on liability. So then they come back, they're like, oh, we bought a building. And then they're like, yeah, we'll sign your LOI, but we want you to pay for €70,000, I believe it was. It was $70,000, $75,000.

Yeah, euros.

Somewhere around there. It was either euros or dollars, but it was somewhere between $70,000, $75,000 to change the name of the landlord or the person leasing from our company to your company once you buy it. I'm like, wait, wait, but you guys bought the building, you own it. Why would I pay $70,000 to do a name change? It doesn't cost $70,000. Then they're like, oh, we bought $500,000 worth of camera equipment. We need you to pay for that. I'm like, I'm buying your business for profit.

You've bought this equipment a long time ago to run it.

your business.

Yeah.

This is your guys' problem. They started changing the deal. Oh, we did funny stuff on our taxes. You know, you're going to give us X million upfront, and then you're also going to give us payments. If there's bad stuff, just take it from the payments that you're going to give us. Well, if I do that, then there's no incentive for you to just keep staying with the company and working. But culturally, there was just an issue. I'm not talking about the Italian culture versus the culture we have here, or, you know, I grew up pretty much in America. I'm talking about culturally, Forget regions or religion or language. I'm talking about the way they operate and run a business is very different than we do and our values. And I was like, this is not just going to align. I don't care how much, how low their churn is, how much their growth is. I just don't get along with the team and the founders. It's not a cultural fit. That kind of stuff you don't get to know over one meeting or trying to do a deal in 3 months. It takes so long to get through those phases and have tons of calls and meetings in person that you just can't buy these companies so fast. Due to the time it takes to do proper diligence.

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 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 Ollie, and 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. You know what Warren Buffett said? He said, you can't make a good deal with a bad person. Not saying these people are bad, it's just more so saying that some of the things maybe they did from a business standpoint might just not align with how you think about things, right? So, it's just better off to walk away. And Neil brings up something interesting too where it's like you had to meet them to really understand the vibe a lot faster. That also applies to working in person too. Right?

Yes.

You just, you tend to get things done faster in person. And so sometimes I remember reading this Jason Lemkin thing where it's like, you know, if you want to retain a customer sometimes, or get a good deal done, you just got to get on the jet and fly over. This was back in the day when Groupon was really big. And Jason Lemkin, the EchoSign founder, he flew over to Groupon. This was like in the winter of Chicago. So it's cold, right? And then as he was walking into the office, he saw another CEO sitting in there. It was Marc Benioff from Salesforce. And so you just got— sometimes you just got to get on a jet and meet people.

Dude, you're spot on. And I also agree with you. It's like, you got to meet them and not just meet them, you got to get to know them. And it's hard to do that over an hour or 2 hours. You do that by multiple meetings because people's true colors come out. The other big lesson, funny enough, talking about M&A, and this was a more recent lesson, if you do deals often enough, you'll notice that people's projections on their financials aren't always what they're going to be. That I knew. But my corp dev guy, Carlos, he's like, we drag on deals. I was like, why do we drag on deals? He's like, we drag on deals to make sure that people's projections are actually accurate. You'll actually see if they're going to hit their numbers or if it's full of crap.

Yeah.

Because if they're going to hit their numbers, you got a good business. If you're buying a business based on past financials and future projections, But their future projections could be totally off and made up and you close the deal too fast. You could be left holding, you know, the bag, which sucks. So when we drag out deals, we also see, all right, are they hitting numbers? Are they not hitting numbers? Oh, your profit's half of what you're supposed to be. And it was this way for 3 months consecutively. Something's wrong.

You typically do it for your diligence for 5 to 6 months, right?

Yes. It takes us 6+ months to buy a business.

Yep. Lesson from me for all you to learn, don't do your due diligence too quickly. Otherwise you're not even doing due diligence. 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. 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. So it's building products that will automatically optimize your site to increase conversion rates. We're also auto-optimizing, auto-updating 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. You know, you know J. Paul Getty, right?

J. Paul Getty?

Yo, you don't know who that is, huh?

No.

He used to be one of the richest guys in the world. So, you know Rockefeller, obviously.

Yeah.

So J. Paul Getty, his dad was like an oil tycoon, and then he eventually took over the estate.

Yeah, I know the Getty family. The Getty family. They have 2 things in Bel Air.

They have the villa and then they have the center. So he has 2 buildings.

The Getty Observatory, right?

Yeah.

So there's 2. The Getty Center or whatever it's called.

Yeah. And then the villa is actually where he used to live in Malibu or like Pacific Coast Highway. So anyway, my point of saying this is—

Wait, he's a guy who wouldn't pay for the ransom for his kidnapped son or nephew or something like that?

I don't know about that. I think he was also like a guy that didn't want to give his money. Like he wanted people, he wanted his kids to earn the money just because his dad was also very tough on him too. Um, cause he was already, his dad was wealthy, right? So his dad was an oil tycoon. He's like, hey, like, you know, I'm not going to help fund your business completely. Like I'm going to take 70% of the profits. Um, and you know what?

Yeah. When J. Paul Getty refused to pay his grandson's ransom.

Oh, cause he knew that if that happened, he would, they would do it across the board to everybody else and it would become like a kidnapping business.

Yeah.

Yeah. So I don't know what happened to the kid before I go on here.

I saw the movie. I just forgot what happened, but I'm pretty sure the kid was okay at the very end.

Okay. So basically, J. Paul Getty, former world's richest man, he talks about being a working boss, quote unquote, right? And this is something we've been talking about recently. And the whole concept of this is you have to be involved in the business. And he's involved with the details, right? Even at the very end when he was about to die, he had the Getty Museum on Pacific Coast. did a deal with Saudi Arabia. So he lived in London at the time. So, you know, the oil in Saudi Arabia and all that.

Yeah.

Um, but he saw the bill, the, at this time, air conditioner that was invented, right? And they're spending like an arm and a leg on air conditioning at this Getty Museum. And basically it was like 170 hours a week with the AC on. And even then he's looking at the light item and then he's reaching out. He's like, guys, we're spending way too much on air conditioner. We need to cut it down. So he's involved with the details. Maybe more than he should be, but that's also how he got to build the company that he built and got to be as successful as he was. Because I think back in the day, when he first took over his dad's company, I think it was like worth $15 million or so. I think by the end it was worth $30 billion or something. I could be wrong on that, but that's a pretty big number because $1 billion is $1,000 million. So that's $30,000 million. Yeah. What are you looking for?

Getty agreed to pay $2 million for the ransom, which his lawyers advised him was the maximum amount he was allowed to write off on his taxes.

I like it. What movie did you watch?

I forgot what the movie was. This is an old movie.

He's got 2 good books. One's called As I See It. Um, there's another one on Mark Wahlberg. He has another book that I think you would like reading. It's called How to Be Rich.

It's called All the Money in the World, and I think it was Mark Wahlberg who was in it. I could be wrong.

Ah, interesting. But Neil, would you read that book, How to Be Rich, written by The richest man in the world?

Uh, why not? Yeah, and yeah, it was Mark Wahlberg movie.

Oh, you're friends with Mark Wahlberg?

I'm not friends with Mark Wahlberg. I don't know him at all. He just bought something.

Yeah, Neil, uh, Mark bought something from Neil. Yeah, it's a good deal. So that is it for today. Please don't forget to rate, review, and subscribe, and we'll catch you later.