Why most agencies are f**cked

28 Sept 2026 · 1 min

Watch on YouTube

1:10

In this concise video, Eric Siu argues that the traditional agency model—relying on labor arbitrage by hiring large numbers of junior staff to throw at client problems—has become obsolete. He introduces the "barrels vs. bullets" analogy, asserting that modern agencies need autonomous, high-impact talent (the barrels) who can execute without micromanagement, rather than a mass of low-level workers (the bullets). Siu warns that scaling with juniors demotivates top performers, leading to turnover, and that superficial perks like wine and dining are irrelevant if agencies fail to deliver tangible results. He concludes by urging a shift toward result‑driven operations and invites viewers to follow for more insights on AI, business, and marketing.

Chapters

The most controversial thing I'll say about agencies this year is that most agencies are fucked because they are stuck in a business model that no longer works. The labor arbitrage model where they could hire a bunch of people, hire a bunch of juniors, and then just throw people at the problem, that doesn't work anymore. In today's day and age, you have to hire barrels and you can't hire bullets, right? Barrels are people like cannons, right? Like you need, in order to fire the bullets, you need to have barrels, right? They make things happen. And they don't need to be told what to do. They're just very automatic, right? So we actually live in a world now where you can't have that many bullets. You actually need to have a bunch of barrels because the agents actually do the bullets' work. And so that model of just pure labor arbitrage doesn't work because again, you add more and more complexities and it actually demotivates your best people from wanting to work hard because they see how things are moving, right? And they ultimately all want to jump ship. It's not just about all this theater, all these smoke and mirrors around wine and dining all the time. That's certainly important to an extent, but what ultimately matters at the end of the day is are you driving results? And that's why I think most agencies are screwed. Follow for more on AI, business, and marketing.