Build like the buyer is already watching 👀 Luke Tobin

build the right people around you, build the right systems and processes. If you want to build an asset that's saleable, always be thinking in the mind of the buyer. Imagine you are going to buy your business and people don't do this enough. Put yourself on the other side of the table. What would you see that would be a risk? And the chances are, if you're honest with yourself, you'll be able to departmentalize what you need to do in your own business to make it more attractive. As soon as I started to invest in the structure and the support around me, so those senior leaders or those other managers, and if you give them the freedom, but obviously clear your expectation, it can just free you as a founder massively, massively. I actually got the bug in the end, like addicted to sacking clients. It sounds awful, but there is such thing as bad revenue, right? If your team members are stressed, under pressure, unhappy at work, it affects all of your good clients as well as that one or two bad clients you might have. So I used to find that team morale from one bad client could be completely decimated week over week, month over month. So if there was a client that consistently caused problems, Regardless of revenue, I would allow a kind of 3-strike rule and then we would sack them.

This week's Millennial Master is Luke Tobin, who's built and sold multiple businesses, including an international agency in 2022. His experience showed him what makes a company valuable before a buyer appears, especially how much still depends on you and whether the team can keep moving without you. In this episode, we talk about what buyers really look for, why some clients make the business worse, and how to reduce founder dependency. Luc, you've built and sold businesses, and I'm wondering, when you look back at the years before that sale back in 2022, when did the company first look successful from the outside? But it was still feeling much weaker when you were inside there in the middle of the action.

It's a great question. I actually think probably you're always holding on tight inside. So there was probably never a moment where I didn't feel like there was more work to do, or there was some risk. Certainly, as you reach a certain scale, and you have more senior leaders and team members around you, you do have some stability. I can remember, you know, it was only— it was a short growth from kind of 0 to 100 staff nearly in 5 years. So for a service-based business, it was pretty rapid and we were doubling in size every year. And with that comes lots of vulnerability as well, right? Because you don't have the systems or the processes to look after it. So honestly, it was always a bit unstable. I would say definitely a year before the sale was probably the time that I remember going, okay, we really got to get our systems right and make sure we're supporting our team members better because we were kind of winning more work than we could support basically internally at that time.

So just before the sale, what was growing the most? Was it revenues? Was it headcount, client numbers, or all three?

It was all three, actually. We'd had this, this quite unique way of approaching agency and it allowed us to hold clients for longer than the average. So the typical agency relationship with a client lasts about 12 months, 12 to 18 months. We were holding our lifetime value of customers for 3 years on average, if not longer. So we were doubling it. And the reason for that is we, we built really key relationships. We went and spent a lot of time in their businesses, not just a few hours, but a few days, if not weeks, often in their businesses to understand how they operated. So it was a very unique model. So not many agencies that do that now, because it's not always cost effective. But the way that we saw it was if we could double the length of the relationship, it was worth spending those couple of weeks upfront to have that longevity. So that's how we, that's how we approached it.

So were you doing those contracts from 2 to 3 years ahead at the signing time, or were the clients renewing after a year or a year and a half?

So, so we did two things on the contract side. We knew that going back and forth trying to get renewals is one of the ways that you Often put yourself back on the, on the meat block. So we created contracts that allowed us to auto renew, but we also, we did constant review and evaluations throughout the year and throughout the process. So we'd set a 12-month plan, we'd have quarterly reviews, and then we would have an automatic trigger where the contract would just continue. So our average client stayed with us 3 years. I mean, at the time of sale, there was quite a few that had been there the whole time as well, which is great, you know.

But you said 5 years.

Yes, exactly. It was, I think it was about 5 and a half by the time we actually sold. And then I was there for another 2 and a half before I left. So the whole journey for me was, was about 8 years in total.

So you stayed on with the business after the sale, which means that like a lot of the founders who have sold their businesses, you had a deal, which meant that you had to continue growing or reaching certain thresholds or points. And by the time you complete the sale?

Yeah, exactly. So it's very typical in service-based businesses to have what's called an earn-out. So it's a period of acceleration of your capital, or often you can earn a bit more than the headline figure of the deal if you hit certain numbers, but also you can earn less if you don't hit them. So it's a bit of a caveat. Now, I negotiated something a little bit different. It wasn't my first rodeo. I've sold two other businesses prior to that business, so negotiated that I would get some group-based stock in the larger mothership company that acquired me.

So that's an interesting point. So you, you can look at getting some of that as well as an extra to your earnout.

Yeah, exactly. Exactly. But I didn't have an earnout at all. I just had the headline figure. I cleared off majority of the cash upfront, and then I traded the other part of the value into group stock, knowing full well that if I wanted to exit, the group stock would be as valuable, if not more valuable, because they had a huge acquisition spree that they were on. So when I came to finally exit, I was paid out based on group value, not on my individual agency value, which actually, to be honest, was a good thing at the time because they'd grown as a group much faster than we did as an individual agency.

So at the time of the sale, was there a particular number which looked impressive, but say gave you false comfort? Was it the overall revenue of the business versus say the profit?

Yeah, we'd always had pretty strong margins actually. So we were fortunate and that's kind of bottom line profit. Our revenue was good and it had grown pretty well into decent figures. We were adding and pretty much doubling each year. So the revenue part's fine, but I think, you know, turnover's vanity, you know, profit sanity, as they say. So we always had a very healthy bottom line number, 25 to 30%, which again, for a service-based business is pretty good. The majority of agencies have about a 20% historically. Right now, I work in the space still advising agencies, you know, 15% is probably about average now. So it's dropped a lot and they're using and they're focusing on AI to try and push that back up now. But at the time, we, you know, we had almost double the average of what we see today, which was great.

And that was 2022. 2-ish, which was just before sort of like ChatGPT became mainstream. So just on the cusp of the general age of the AI. So just before that, I'm wondering, Luke, was there anything you say misunderstood about scale before you experienced it properly? You did say you'd had two businesses before, but this one was also your biggest one, if I'm correct.

It was, it was bigger by, by a big margin. So I had an exit in my early 20s, a 5-figure exit, then I had a 6-figure exit, and then I had this kind of 8-figure dollar deal. So completely different ballpark, although those early ones had taught me some of the principles of what it looked like. I think what I'd probably underestimated, and sometimes when you're just in the thing and you're growing, you're just learning as you go, aren't you? And you're kind of figuring it out and you think you've got some of your stuff together. But there's always stuff that you don't have figured. One of the things at scale that I certainly hadn't anticipated was just how difficult it would be to bring in the team members, support them, give them the structure. And I always talk about, you know, the kind of journey of having like a seesaw effect. So if you bring in sales, it leans on the operational team and then they need to try and counterbalance. And you've got this constant seesaw of trying to like bring sales, balance the internal work. And if one of those things doesn't do a good job, then you can have a leaky bucket over here, or, you know, so trying to support the team at that scale was difficult. I would say on average, we were bringing at least 2 team members a month. There was a few months where we brought 5 or 6 new team members. And it's hard to do a good enough job of like looking after those individuals when from a management team structure, we didn't always have it together either. So it was a lot of firefighting. I would say that was probably the hardest thing. It was exciting. The growth was great, but it was, yeah, it was a lot of firefighting and trying to backfill processes that probably if we had longer or more of a mature business, or if we'd operated at a similar size for a while, we would have been able to establish.

So how did you manage to get those bits out of your head and in a process or on paper, especially when you As you said, and in my experience as well, a lot of the time you make it up as you go along and use your best judgment and adapt it to each client and situation. But otherwise, to a staff member, you'd have to present it as a manual.

Yeah, exactly. Exactly. The key with doing this well is about delegation. It's about spreading across your team responsibility and having really clear clearly defined roles and clearly defined functions, and then basically creating operational manuals or SOPs or whatever you want to call them to back up all of those things. So it's like, we do this in this way. Now let's go and like build out the architecture of why we do it that way and how we do it and make sure that that's something that's trainable, that it's scalable. And then from that, you can create a system. And if you can create a system that's then supported through technology and people, you can repeat it. And if you can repeat things in a business that work over time, you're going to create more success. It's as simple as that.

Now, Luke, you've written on your LinkedIn— I was looking up a bit before this interview— that revenue on its own is a poor measure of business health.

Yes.

So are there any particular numbers you eventually learned to watch alongside the the revenue?

An agency business is quite different to a product business where you would look at slightly different metrics, but in an agency or service-based business, one of the key things you should look at is rather than top-line revenue, it's like revenue per head. So your employees, if you think about your billable employees, have to counterbalance for your non-billable employees, and they might be senior team members that don't do billable work. They might be salespeople, which aren't billable. They might be a headcount, admin, any of those functions become jobs that are a complete cost that must be carried by your deliverable team members. So that delivery team becomes, it's a really key metric to look at, like, how much are they actually billing per head? And a crude way of looking at it, say you're doing a million in revenue and you've got, you know, 5 people in delivery, you know, that's 200 grand a head in order to carry that. But is that realistic? For 5 people to be able to do $200K worth of revenue at your hourly rate? And then are the team overworked? Are they overstretched? And then this is something that I constantly look at. So it's like, what's the revenue per head? How many non-billable staff members do they have? And if they told me that, regardless of understanding the key numbers, I would know whether they were a healthy operating business.

So is that then where if you don't look at revenue per head, that you can lose margin without noticing?

Exactly. And often you have departments, services, or individuals that are seemingly busy or productive, but actually might not be making you any money or losing you money.

And so what would say a healthy month look like, for example, when you were doing Digital Ethos?

Yeah, so Digital Ethos, you know, again, we would always look at top line revenue, then we'd look at the margin, we'd always look at our EBITDA. So we want to understand how we're tracking for the year on our, on our key kind of EBITDA number, which is again, how you're valued if you go out to market. So it gives you a valuation number and you can look at that as a percentage of revenue or a percentage of profit. And then we would look most importantly at an individual and service line profitability. So like how profitable has SEO been this month versus last month? And is there an increase in efficiency there that's allowed us to get a bit more profit out of that? If we brought in another client, for example, that was another 5 grand a month account, but we didn't need more staff, well, that should be another 5 grand that's basically gone straight to the bottom line.

So before AI, did you have a particular, say, number of clients per, say, head or per account manager? I've spoken with a couple of other agency founders in the past, and that used to be maybe 1 to 5, and then AI maybe brought that one up now to 1 to 10, for example?

Yeah, it has, it has fluctuated and changed. I think it always comes down to the, unfortunately, people-based businesses always have to operate on a time basis internally. You might not sell that way because the way that service is like to sell is value. So it's like, hey, don't ask me about how much time it's taking me, just worry about what I'm achieving for you. And that makes sense as to why you want to do that.

Yeah, because you sell the deliverables and the outcomes rather than Your time.

Exactly. So it's outcome-focused. However, internally there's time and it's how many hours can you actually do in a working week? You know, you've got what, 40 hours or whatever on a typical week. You've got to allow for lunches, breaks, inefficient times, like how actually productive is somebody. And then you've got to look at, okay, well, out of that, what does the billable hour need to be in order to get the result for that outcome of that client? So that's the way you do it. And I think for me, I would always try to look if they're billable team members at a 70 to 80%. Billable utilization. And that's how I would do it. So based on a percentage score of billable time.

Is there a particular point that you can pinpoint when being helpful and let's talk about say scope creep starts costing you real money in the business? Or we can call it say overdelivery in order to satisfy and get better customer service.

Yeah, it's, it's, this is a really difficult one, isn't it? Everybody wants to keep clients happy. And that means that if the client that jumps up and down the loudest or makes the most noise is often the one that gets the most attention. It's not fair, but that is what happens. For me, there has to be a sensible buffer zone. And what we had at Digital Ethos was a 10% buffer where the team were allowed to go over by 10%. If they felt like they needed to go further, they had to raise it to their line manager, and then it had to be approved by management. And the reason for that is, obviously, we know that some months you'll need a bit more, and maybe other months you don't need as much, and it should balance out. 10% give either way, it will creak, but it will balance out and the margins will rebalance. If it starts being every month above that line, before you know it throughout the year, you're doing like another month's worth of work or 2 months worth of work for no billable. So all of a sudden that does hit bottom end margin. It's a tricky balance because yeah, I hate the fact that agencies are very much driven by the ebbs and flows of client demand, but that is just the way it works. And I think being bold and brave enough to push back on clients is something that agencies don't do enough and they need to do more of, you know, I actually got the bug in the end, like addicted to sacking clients. It sounds awful. But you know, there is—

tell me more about that.

Yeah, there is such thing as bad revenue, right? You know, if your team members are stressed, under pressure, unhappy at work, it affects all of your good clients as well as that one or two bad clients. Might have. So I used to find that team morale from one bad client could be completely decimated week over week, month over month. So if there was a client that consistently caused problems, regardless of revenue, I would allow a kind of three-strike rule and then we would sack them. So I think if I look back at Digital Detox, I must have sacked 20 clients for just being bad operators and bad business people. Just, they didn't fit our ethos. They didn't fit our mentality. And there was a situation I always remember. It was a $120K a year client, so decent revenue, $10 grand a month client. They'd only worked with us for 4 months, but I had 2 team members come into my office in tears because they were— the client was just not listening, was screaming down the phone, just bad business. So I called them and let them go. And, you know, it was a very liberating thing to do. I think it was good for the team. The morale went up. The outputs and outcomes then for the other clients arguably increased. But as a business owner, I think a couple of years prior to that, I'd never dared to do it. I was like, no, no, because you need the money. You're always chasing more retainers. You're chasing the— you want to see things spiking, but actually there is bad revenue and having the ability and the kind of guts and the bravery to make those bold decisions is the difference between leading or just managing, you know.

So besides late payments from a client and besides a client shouting down the phone at your staff and basically depressing them. Are there any markers that people should pay attention to for what you would call a bad client?

I think that it's difficult during the sales process because everybody puts on their best face. Everyone's in their kind of flirting mode.

It's on both sides.

On both sides, everybody wants to see the best. You can stress test and there are a few warning things that come through. So if they come in and they're complaining about their last agency or complaining about a prior situation, normally that's a bit of a flag as to, okay, well, let's try and understand why and where there might've been a gap and what the issue is. I think sometimes a little bit of knowledge on the client side can be dangerous as well. So, you know, if they come into the pitch presentation and they're quite demanding about the type of service or what they're expecting, rather than being open to strategic guidance, that can be a red flag as well. But typically it's very hard to know. Until you're in bed. And that's why it's like the whole hire slow, fire fast principle with employees. It's the same with clients. You know, if you bring them in and it's not a fit for either party, why, why stress? You know, 3 months before you didn't have them, so you can survive again. You can push on again. There is always more business, but you know, should you or your team be under that amount of pressure if you can avoid it? And I'm not saying that just give up because You know, we never did that either. We always, and I always recommend to people to give it a fair amount of time. But the key, I think, is expectation setting, isn't it? It's like from the beginning, being very clear on this is the line, this is how we work, this is, and just being, I think where it goes wrong in a lot of businesses is that people try to oversell to get the revenue in, but then they're going to underdeliver based on what they've sold. So you need those two things to come together. You need to be very clear and very honest about what you can deliver, your capacity, and the skill set that they're buying into, because if there's misalignment there, that's where it goes wrong.

So how do you know when a client sees you, say, as part of the business rather than another supplier? Because that will also have a key role in retention, I would guess.

This was our, I think, superpower at Digital Ethos. So my background prior to starting the agency was actually I ran an e-commerce business and I grew it to 1,000 SKUs. We were selling everything from car racing to hot air balloons, all experience day packages in the UK and Australia. And I'd been the client, so I'd worked with agencies and I'd had some good and some bad experiences of that. But I'd also started to teach myself marketing. So I was that annoying person that started to understand some of the stuff, but maybe not enough to do it. I then went and worked in a couple of agencies and what I found was there was this kind of gap between expectation, reality, whatever. And I thought there's got to be a better way of bridging that and genuinely like understanding what the client's trying to do, not just in the short term, but in the long term as well, like understand and ask the questions upfront about, well, what are your ambitions here? Like if it's the director, are you hoping to grow a business that's sellable? You know, are you hoping to sell this business in 3 to 5 years? What do you need to do revenue-wise, sales-wise? Profitability-wise in order to allow that to happen. Like, I think so many agencies just take on a project and never ask the bigger picture questions. It's like, okay, we've got this little bit over here we need to solve, but they don't go deep enough into like, what's the client actually trying to do here? So we built a business model that allowed us to— and it was the only way we would work— is when we onboarded a client, we told them that we wanted to go and spend at least 2 or 3 days in their business. So initially, that was just me. And I would go and I would sit in those businesses. I'd ask all the watercooler conversations, I'd go for lunch with the directors, I would meet the team, I'd understand who to go to for what type of question, I would have an onboarding process that was 3 or 4 hours where I would literally unpack from the directors what they wanted to do over the next 5 years. And I'm no, I'm just a marketeer. I'm a, I'm aligned business operator that gets them. And I'm also giving them kind of that more strategic level guidance than it is just, we're a marketing team, and we're going to do your SEO, the how and what the kind of how we did it is what mattered. But the what we did didn't really matter. We would then go back into our own business and into our office with that full understanding and with some of that relationship formed, and be able to do a much better job for that client. Because even when things went a bit wrong, or marketing campaigns didn't work the way they should, which is very typical, as we know, things aren't always going to go to plan. They would give us a lot more slack because they knew us better than just a supplier that had had a couple of phone calls with them. I mean, these days, so much business gets done without even meeting. Like, I would always, every quarter, make my team go and physically sit with, with these, these clients as well. Again, we'd always be there. And we'd invite them in and we did client days as well, which was a huge thing where every client once a year would get a client day where they'd come in, And even if we weren't doing all channels for them, we would present new ideas about other channels, things they could be doing. Did a whole competitor analysis ahead of that, and we spent 3 hours just dissecting their competitors with them. They love it. They used to absolutely love it. And again, it's these little wow moments and these things that you can do that separate you from the pack and the rest of the competition. And that's the key. I always say to people now, what can you do that genuinely makes you different to everybody else. And most service businesses are commoditized. We're in a space where it's like for like, the what you do is very similar. You do SEO, you do PPC, you do social media, you do design. Okay, great. The relationship and execution, that human element is more important than ever, especially in the age of AI where things can be kind of auto-generated and a bit kind of disconnected from the human side of the relationships.

You said something very interesting, Luke. It was in the sales process when you were talking to other founders and business operators, you were there speaking to them founder to founder, understanding their work and their reigns. And that was one of the key differentiators, I would assume, when you went into a business. But say if you have salespeople who might be senior and very good at the job, they wouldn't necessarily have that experience or be able to have that level of conversation with a founder.

Correct.

How did you move that knowledge and that system of selling to other people who did not have your experience, who couldn't have a leveling up lunch with another founder?

It's a fantastic question and observation, and to be honest, one that was a struggle. It was hard to get right. And actually, a lot of the work that I do now is on coaching founders to decouple themselves from being at the center of the business, because it's not a saleable asset if the founder is still everywhere. So it's one of the growing pains that you have to go through. By the time I sold the agency, we had 7 salespeople, all really good, you know, mix of experiences from, you know, SDRs through to business development people. And I sat basically no sales in the end, but it was trial and error. The thing that we still forced upon the sales team and made sure happened was that they still went and asked those questions about expectations, goals, future planning. Like they got very good at still having those. They probably couldn't do as much of the founder to founder stuff, but that didn't always matter. It was more about having the confidence to ask those more challenging strategic questions. Than a typical agency would. That was the key.

Yeah, because I'm assuming a business or a business owner might share with another business owner of, say, a marketing agency like you were at the time, what are their revenue goals or their current revenue or where they want to move it, but they would be less inclined to do so with a salesperson.

Absolutely, absolutely. But if that salesperson presents well and not as a salesperson, more consultative, you can mitigate it and you can, you can get around it. There is no perfect answer to this because the ideal obviously for sales is that you do founder-led sales forever, but you can't. And actually, even if, you know, if I was closing 60% of the deals that I sat on and the salesperson now only closes 30, it's still okay as long as you've got the scale. So the thing that you have to realize as a founder quite quickly is there's lots of areas where you can add real value, and it's the stuff probably that you're most passionate about and the thing that you enjoy doing. There's loads of areas that you should just systemize, get a good process in, and put somebody else in to do a good enough job. They might not do the exact job that you would have done, but can they do the job well enough and execute it well enough so you can go off and focus on things that are more strategic? And if the answer is yes, then just do it, move on. Even if it's 90%, not 100% of what you would have given it. But if it's good enough and you can get the result, get out of the way.

90 is a good number though. You initially said about like 30 to 40, didn't you?

That's close rate. So I was talking about a close rate. So now I'm talking about like efficiency of a job. So like if you're 100% efficient, you're like the best at it. If you're 90%, 80%. So, so before I was talking more about actual close rates. So like, yeah, 10 deals, you might close 3 at 30%, for example.

So have clients ever resisted being moved away from you to say an account manager or to another salesperson? How do you deal with that? Because my next question is going to be linked to this, which is what was the hardest part to hand over to other people from the business as the owner who also was leading the sales?

Yeah, I was fortunate in the sense that I never worked on the tool, so I wasn't doing the delivery, and I made that by design. So I focused very much commercially on bringing them in, And then there was always a natural handover anyway. So actually the only time I got re-engaged with the client was if there was an issue or maybe for some of the complaints, usually complaints, firefighting, you know, all of those things that we have to deal with. So yeah, that was the crux of it. And I was able to mitigate and work around it because of it. I mean, in the end, actually, as I sold into a much larger entity and sat on the board there, my role became much more strategic, focused on acquisitions, focused on much bigger picture stuff. But whilst building the smaller agency, you're still involved in all those strategic decisions and operational challenges day to day. So yeah, it changed over time.

So you, you mentioned the founder energy, and I know it from my previous experiences as well. And it can drive the business forward. You bring that energy into the office, into the business, into every call on a daily basis. But is there a point that you can move past so that the business doesn't depend on that energy when you won't be physically there all the time? Say, even if you go on holiday for a couple of weeks and things can totally slow down just because you're not there.

Yeah, it, it, look, it's challenging. I think in the early stages of a business, if you are that kind of force, that's, I would see it as like a, like a whirlwind, you know, you're at the center, you're the eye of the storm and you build this energy around you and you kind of pull in your early adopters and they start building energy and in the end what you want is to be able to let them go and they can then start creating their own energy pools. That's the key. So that really comes down to building enough team members and structure around you that you've got other people that could facilitate and support when you're not in the business. And actually what I do now in my companies, you know, I don't operate the businesses that I run or own now. I own and I try not to operate. So I hire really good individuals early on. And this is the gift of success and experience.

I want to say not everybody can start with that, or maybe in the first or even in the second business.

Exactly. It takes time to do that. But I've learned that by empowering others and bringing in the right people in those early businesses, it was the same. As soon as I started to invest in the structure and the support around me, so those senior leaders or those other managers, and if you give them the freedom, but obviously clear expectation, it can just free you as a founder massively. Massively.

Freeing yourself as a founder means you have to stop doing certain things. And that's going to link into my next topic because I'm wondering, Luke, what did you have to stop doing before Digital Ethos became more valuable in the eyes of a buyer or a potential buyer?

Yeah, the biggest risk for a buyer when they look at a business is too much founder dependency is probably the biggest, it's the biggest turnoff. So the thing that you must do is have individuals, specialists for each of the functions that are core to a business. So you think about the core pillars, whether that's operational, finance, you know, legal compliance, those sorts of things, you need somebody that owns all of those things in a business that isn't the founder. The founder should just be the visionary and the person that those people can report into. That's fine., but you also need to create a leadership structure that allows for if the founder was to be hit by a bus, God forbid, the rest of the team can still—

the typical hit by a bus scenario. Yes. Every, every solicitor, every accountant talks about that as well.

Yes, exactly. Exactly. You just need to have the COVID there and a business that can survive the founder effectively. That's really what it comes down to. So for me, it was all about putting the right people in the right place. I didn't always get that right, by the way. I hired a few people that didn't work out and like all of those things, like it takes time. And I was fortunate that I started doing this 2 years before I was ready to sell. So, you know, I started bringing in the individuals. I had a really, really clear goal to have my chief operating officer effectively, you know, as the MD or ready to be the MD. And I spent a lot of time coaching and putting my thoughts and talent into those individuals. And we had a board internally of 5 people. So if one of us fell over, the other 4 could still pick up. And that became more attractive at a point of sale.

Did Any of these key staff you brought in know that your vision was ultimately to sell the business?

Initially, no. When we started to get offers, so I never went out to try and sell the business, actually, we were on an acquisition spree, we just built our own group structure, and we thought, okay, we're going to keep going. But the opportunity and the offer that came through, we had 4 offers actually, in a short period of time, were too good to ignore. You have to be careful, and you have to be balanced about how and what, you know, you say to those individuals, but I always chose to be very honest. And, you know, I said to them, look, if this is, this goes through and I was 100% shareholder, this goes through and works the way that it should on paper, I'll look after you and I'll make sure, you know, you're well positioned, you know, that the negotiation that we have with the buyer strengthens your place in this new world. Um, and, you know, I live by that and stuck to that and made sure they all had, you know, a really good kind of package and opportunity as they move forward. So yeah, it's about Again, that's expectation setting. It's about, you need the support, right? For a sale process, it's really helpful to have a few people you can talk to, you know, that aren't just, you know, someone at home or whatever. You need someone that's in the business that gets it. And you also need the support from people in your leadership team because you need to keep things working as well as they have been. I see it happen time and time again where businesses try to start selling on and up or they'll go to market. And they lose a few key clients during the negotiation process, because this stuff takes 6, 12 months to get a deal done. You know, a lot can happen.

You have the earnout happening typically, so that gets impacted.

Exactly, exactly. So all of those things are like unforeseens, but if you get the support around you, and it's the same with running the business as it is with selling the business, you get the right people, right support, it can make it a lot easier.

So what would a buyer look at a service business and what do they see that clients don't? What's, what's one key thing behind the curtain that a client doesn't usually look at, but the buyer wants to know?

Yeah, so the client wants to see skill set, proficiency, case studies, and understanding that you get them and like, you can solve them, right? So if that's more sales, more growth, whatever it might be. So for a client, they're very focused on the people and the kind of how you do things. From a buyer point of view, they want to look behind the curtain. So they want to understand like, What's your operating system? How have you differentiated yourself from every other competitor that's down the road? How do you, how do you sell? What's your value proposition? What's your retention structure look like? How do you systemize, you know, complaints and processes and all of these things? So it's all about structure. A buyer basically wants to be able to buy a business and at the very worst case scenario for them, keep things as they are. So like, if it was just to stay as it is and they're buying that business, when they're looking at how much money they got to outlay, they're like, right, if it stayed as it is, I get my money back in 3 years or 4 years or whatever. But if we manage to grow by 10%, we get it back in 3 years. And that's, that's how they're stacking risk. So they're like, actually paying this amount of money for this business. And if we just stayed as it is, we're going to get our money back in 3 years. And then we've still got the asset. Well, all of a sudden that becomes a very attractive thing and that's how they do it. So, um, you know, typically buyers in and around the agency space will allow themselves up to a maximum of like a 5-year, sometimes it's a 6-year payback term. That tends to be, it can fluctuate if there's some technology and some other IP involved, but typically 5 years is about the top end. So they just want something that's been well systemized and well structured.

So here's a double-edged question then, Luke. What do founders assume that buyers will value, but actually that doesn't move the needle in terms of price? And then on the other side, what gets priced out because it can't be transferred once the founder moves on?

Okay. There's a lot of things from like public visibility of the brand. So it actually, like a lot of, a lot of founders spend a lot of time on building the business brand. Don't get me wrong. There is. A small amount of goodwill attached to a brand, but in the agency space, especially, or in the service space, it's minute. And actually, when it comes to the valuation, it's always just going to be on the hard and fast profitability of that.

And the accountant can't put that on paper either. It's my experience, regardless of how well you're known and how much brand recall you have.

Exactly. Exactly. And arguably, you know, having a personal brand from a founder perspective, I think is an important thing that that people must do these days, but it's, it's not going to, it might get you more potential buyers to the table, but actually it comes with risk, right? For the buyer, the buyer doesn't want to be buying your personal brand. And that's how all the leads are coming in because when you're gone, what does that mean for the business? So actually there's a careful balance there as well. Yeah. It's an interesting one.

So is that the part that, say, gets priced out because it can't be transferred? That was my second part of the question.

Exactly. Exactly. So, so, you know, the company I sold to, there was a couple of conversations because I was building my personal brand at the time I started building it of like, well, actually, can you not focus more on promoting the business than promoting yourself? And it was like a difficult one because I was like, well, I think they're one and they're connected now because the way the world is moving, I believe you need a personal brand in order to funnel leads. But, you know, it was a difficult, it's a difficult balance. And I think They're almost two conflicting areas that fight against each other.

I want to talk about people now, Luke, because you told me how you started hiring key people with key skills in key positions in order to develop the business and be able to sell it. And I've also read that you use the paid 5-day test before making senior hires.

Yes.

Walk me through how, how does that work? Because not a lot of people would be willing to say, give up their job, work a notice, and then do a 5-day pay test for you. And maybe it doesn't work.

We would never ask them to serve notice before doing it. We ask them to take holiday. We ask them to take holiday, but be paid. So they were basically getting double pay. So they were being paid by their current employer, but also paid by us. And we paid them based on their salary ask as well. So let's say, for example, they're currently on 40K, but they were asking for a 50K to come to us. We would pay them based on their ask. So that was always fair and balanced, but we typically would do, it would be for a, for a more junior role, it could be a day for a senior role or a board seat. It would be at least 5 days. Sometimes we did 2. And the reason for that is. I genuinely believe that the recruitment process across most industries is completely flawed. You know, everybody, and it's that like that same relationship piece we spoke about, everyone's got their best face on. Everyone comes across well in those first stages. You know, if you're articulate, you can present yourself. If your CV looks good on paper, chances are you're going to get a job offer and then you get accepted. But then actually, okay, what does the culture feel like? What's the alignment? What's it really like to work in this place day to day? And I think it's important from an employee point of view., but also important for the employer to know that actually that person can back up what they've said they can do on their CV and what they say in an interview, you know? So for us, it was a complete game changer. And I think it's still something that I don't see businesses doing, but I think it's like, it's one of these things. If I could own the process, maybe I should try and come up with a name for it and try and spec it into businesses because it makes a massive difference. You know, we went from getting it right, like one in two times. To getting it right every time. You know, it made a huge difference.

So tell me then about a hire where this test saved you from making, because I'm assuming you might have had people who say changed their mind after they felt that it wasn't a culture fit for them in your business, but it was also the other way around, possibly much more.

Yeah, it happened both ways a few times. Majority was us, I would say. What tended to happen at the end of the first day, we would sit down and have an honest conversation. And what we tried to do as well, the team became really efficient at this because they were used to seeing these people come in for these working days. And they, some of them have been through it themselves. Some of the legacy team members, maybe not, but as we went on and more and more people were coming in the same way, they would stress test those people. They knew, okay, they would be like, hey, should we go grab lunch? Or should we, whatever? Or can you help me with something? Or what would you do in this situation? And the team became really good at trying to unpack really quickly because they knew this person might become their colleague. But also some people like buckled under that. They didn't like it. Like we had some people come at the end of the day and be like, I don't want to come back tomorrow, you know, and that's fine. Okay. No problem.

You know, day 2 or day 3, they didn't even go for the whole week.

Yeah, exactly. Exactly. Whereas others were thriving. They're like, this is amazing. Like, why, why have I not had a job? Like, it's the best job experience I've ever, you know, been through. So for those that really thrived and enjoyed it, it was a, it was a It was a great introduction and I then had no doubt they could come in and fit in with the team and fit in with the culture and the structure. One of the most important things to us at the time as a people business was that people could get on and that they could collaborate and that there was that kind of creative nature there. So it was one way of really establishing that really early on. And it's something we still do in my businesses now. I coach people to try and do it. So many founders. Still lack often the courage to try it. But once they try it, they never go back. That's what I've found. If you actually give it a go and you start doing it, I don't know anybody that's put the system in place and then undone the system. So I think that says a lot for it.

Look, you mentioned legacy hires and the people who are with you from the beginning, and especially when you have a super fast scale-up process in 5 years, like, like you've done. What's your reflection on why founders would promote loyal people into jobs they're not ready for? And on the other side, how do you tell somebody who's been with you for years that they aren't the right person for the next stage of the—

It's a fantastic question because agencies and service businesses fall trap of this all the time.

So yeah, most businesses would do.

Yeah. Most bosses, just because you've got somebody there that you trust or you like or that you've built connection with and they've been in the seat for long enough, yeah, are they actually good enough to do the role? And more often than not, there's a bias there that you feel like they deserve it or they, you know, they will, you might lose them if you don't give them the promotion or whatever. And that happens a lot. I think that—

Or you owe them a debt because they were with you during certain tough and trying times when otherwise nobody believed in you besides them and the business as they, as you grew.

Exactly. Exactly. And also there's an element of whilst you're moving at pace, you, you need a job being filled and you think, well, it's much easier right now to take this quick road of promoting them and they'll be able to fill it and I can move on to other, solve other problems. What I've found through experience is that 9 times out of 10, that's not going to work. So when you put people into management roles that were not meant to be managers, it's going to upset the apple cart somewhere, maybe not the first month, maybe not the second, but at some point they might not support the team members the way that they, you wanted them to, or they might not be able to hit your expectations. And then all of a sudden you've got what was a good employee in the previous role, now a disgruntled or, or bad employee in the current role. And that becomes a real issue. So I think. Being able to do a formal interview process around a role is as much about protecting them as it is about protecting you and the business. Because if they're a good employee right now, that's just why you want to promote them. Just make sure that that next step is actually what they want, need, or what they're— they've got the skill sets to grow into, even if they don't have it right now, because otherwise that good employee may end up disgruntled and gone. I mean, it's happened to me. Time and time again. My first 2 years at Digital Ethos, all of our management team came from within, all of them. And I think by the 3rd year, pretty much all but one had left, just to give you an idea. So, so it just didn't work because they were not experienced, mature enough, able to deal with the business that all of a sudden was double the size the following year. Like, there just wasn't enough support structure there from my side to be able to train them and give them what they needed. So it's a double-edged sword. If I'd have brought in somebody that had been and done it before and dealt with a team, maybe double the size, and they came down and helped us grow into that, all of a sudden, by the time you get to that size, they're then ready for the next level themselves. So, you know, it's, it's about planning and forward thinking.

What about on the other side? Somebody who was with the business from the beginning applied for a senior role. But you knew that they weren't the right fit. How do you communicate that without, again, upsetting a key employee which has deep, strong knowledge of the business from day one, a lot of the time?

Yeah, it's a challenging situation. I've definitely been through it a few times. I think the only thing you can do is just be honest, transparent, be very clear about the job spec, what you're looking for, the interview process, and why, that they, that they can be involved in the interview process if If you know, cause it's always, again, you have to be fair and open and ethical and let them come through an interview, but have a, have a really clear scoring system that you can be honest with them on and explain why and where they didn't hit it. And don't get me wrong, it doesn't matter what you say or how you score, they'll always feel like it should have been their job, but by being very clear on why, what, and how you, you assessed it, that's what, that's the best you can do.

And Have those people then started looking at jobs elsewhere and you found that sooner rather than later, they then left your business because they held it against you that they weren't promoted to that role, which you found they weren't fit for?

Yes, it's happened multiple times. I think also early on, I was scared when people would come to me and say, oh, I've got a job offer. I'm going to leave. I used to always try to counter to keep them. I'd be like, oh my God, no, you know, they're too invaluable to what we do because you become very accustomed, very reliant. You know, it's your team. You have individuals that— you've got your A players, you've got your— you've got all that. It's like, you know, I put it back into like a sport analogy with football team. You've got a few people on the bench that you can rely on as well, but you still want your starting 11, right? You've got your main players, and if one of them all of a sudden is like, hey, I'm, I'm off, I've got a transfer, you want to try and compete to keep them. But what I've found is And I never do it now. I never try to counter, actually. If I haven't felt like they deserved a pay rise or that conversation along the way, and I'm very astute to this, I always try and stay ahead of the curve. And if that hasn't happened and they still then get an offer and they feel like it's the right thing for them to do, I always let them go with grace now. I don't try to retain people because I've found every time I've tried, they end up still unhappy 6 months later. And they still end up leaving, you know.

So some people you can never make happy, even if they're not the right fit for the next role.

Exactly. Exactly. Sometimes, you know, people serve, it's a business, right? It's not a marriage. There will be people that come in.

Even in a marriage, you can take those decisions.

That's true. That's true. That's true. You know, nothing's permanent in life, right? And, you know, some people serve a purpose for what you need today, but tomorrow they're not the right fit. And it's just as simple as that. And I think holding on too tight is a mistake as a founder.

Now, look, I want to move on to AI because we mentioned earlier on in our chat that by the time you sold Digital Ethos, AI was just about to go mainstream. And ever since, I've seen you arguing that AI has weakened the old link between time and value that was in an agency. So what changes then first for a service business that still bills by the hour when AI comes into play now, your reflection 4 years in?

Yeah, I think it's, it's, it's an important time for service businesses to flip to value and they have to sell based on value, at least optically, at least from a sales process perspective. So internally they're able to then manipulate that time to keep margins healthy. Let's, let's be honest, like AI is incredible for efficiency gains. It can be, if you can go person by person, department by department, and have a look at how you can take somebody's time and add on additional layers of time and structure for efficiency with AI, that's really where it comes from. And then really from an AI native perspective, look at like, what does that do to the bottom line? And how is that increasing? That's what buyers are looking for as well, by the way. They want to see how you're genuinely becoming AI native, not just, oh, we use GPT. I mean, I speak to hundreds of agencies every month. I'm like, how are you using AI? Well, we've got Gemini or we've got Claude or we've got GPT.

Okay.

Yeah. But how the team, well, we let them go off and do what they want, but like there's, there's not many still, which is, I think it's getting better with Cowork and everything else that's come out, but like people genuinely building like proper systems and agentic layers. Into their roles. And that's where you get the efficiency from. So yeah, there has been a shift. I think the smaller agencies that are always firefighting and have probably got localized clients right now are at risk of cannibalization, if not being killed off. I see so many struggling and it's a time where more than ever independent agencies, I think, need to band together, which is why I've launched Unusual Group. It's a collective of independent agencies to bring them together into an ecosystem where they get back office support, consulting, methodology, and structure adapt to this current world and reality.

Speaking of adapting then, if AI helps you complete the work faster in an agency or some parts of the work, why should the client pay the same amount and because the client would expect, say, efficiency gains to be passed straight back, right?

So the key with this is the efficiency gains allow the consultant or the team to do more work. It doesn't mean that they should be paid less for that work because they're just able to do more in the time that they have or in the value that they've proposed. So does that mean we can get to outcomes faster? Absolutely. Does it mean that you're getting more bang for your buck? It's not about taking prices backwards because there still needs to be an investment and businesses still need to make money and they need to be able to scale. It's about how much more can we do and how much faster can we move. And the other thing to keep in mind is unfortunately with AI being mainstream, everybody is using it. So that's, that's actually leveled the playing field. If it was just one or two agencies that had access to this thing, then all of a sudden, yeah, maybe it would drive prices in one direction or another. But actually, because everybody has the same access, the same playing field, whatever, for the most part, some of that gain is actually wiped off. So you need to do more in order to compete than ever before, which is where AI and the efficiency piece is absolutely critical. So Pricing shouldn't change. If anything, I think in future, potentially prices should rise because in order to step beyond the kind of base level of what everybody's doing and using in AI tools, you need more creative output. You need more human in the loop. So I just think what's going to happen is it'll be more senior level agency individuals supported by technology, which is nothing new, but obviously the AI agentic piece is new. And the results can be faster.

Is that why you now recommend outcome-based pricing?

Exactly.

And even though you use AI or not, but clearly everybody does and every agency does, the advantage is in how you help a client to reach their goals. And does that not make, say, for example, I hear a lot about revenue share deals with clients. Where do they become dangerous?

Yeah, I've never been a huge fan of revenue performance-based pricing, although having a component of it as a bonus or an uplift is attractive, of course, but I always have favored fair retainers that give you that, that ballast as an agency. I think that's really how you can build stability, you can hire good people, you can train your people, all of those things. But it always comes with a caveat. Obviously, a lot of bigger brands like to to do some performance-based pricing. I think if you can find a blend, that's the way to do it. But look, value-based pricing again is nothing new. It's just how it's positioned and actually delivered that matters. If you're, if somebody is looking for a 10% growth in sales, it's like, okay, they probably care less now than they did before about the, like, how you're doing it, what channels it is. Like historically, you know, agencies would go in and they would pitch channel by channel and they'd educate the client. Like all of that's a bit done. It's like, okay, well, actually, how do we genuinely grow your, your revenue? And like, what does that look like? And, you know, these are the factors in order to get there. So yeah, it's, it's an interesting one. And look, it's dynamic. And I have to say, there's a lot of change all the time. And some of the opinions on this is shifting and changing as well all the time. Because yeah, it's a fascinating time to be alive, isn't it?

You're allowed to change your mind as well as you go through this process.

Yeah.

So if we're going to be marking a point in time now in Summer 2026.

Yes.

Is AI making agencies more profitable or is helping clients squeeze them harder?

So it's a double answer. Agencies that are genuinely agentic-led and AI-native are 14% more profitable at the moment than agencies that aren't using or aren't yet AI-native. So there's already a clear differentiator.

How do you define AI-native for an agency?

Rather than using an AI chatbot, for example, to do some questions, you've actually built agentic agents or systems into the way that you operate. So it's like an operating layer within your business for efficiency. So that makes a big difference. So that's agents, you know, structure across the business. You've probably got an agency brain in place where, you know, you've trained the agency, the model to understand your business, understand your clients. You've got projects or GPTs in place for each of your clients that understand that client. You've got a lot of automations running through. And more importantly, you've got the Agentic layer actually sense checking the work you're doing as well. So you've got that, that each role has like a co-agent there helping you to be more efficient. That's something that we're seeing. And if you can do that well, and all the big agencies are moving towards it, I think Omnicom spent $1.2 billion already in building out their own systemization for this. I mean, it's unbelievable. But on a smaller scale as well, I see some agencies with 20 people doing the most incredible work with Claude. Like they've built in all of these amazing like sub-agents, they've got stuff going on from this, like a co-CEO basically built out as an agent that's doing loads of work all the way down to admin-based stuff. Like if you can genuinely get that efficiency there, you can gain back 10 hours a week, 50 hours a week, whatever it might be by different roles. And all of a sudden you've got more hours back in the pot to spend elsewhere, and that's, that's how you, how you drive up margins. So that's that side of it. And then there is a risk for agencies that are still not leaning into it. And I see lots of them as well, where their margins are being compressed. So they've gone from a healthy 20-plus margin to low teens, and that's only going to get worse and worse.

So you said about the agencies who are creating this operating system, having an AI-native approach to their clients. But when you said the same tools are available to everybody from £20 to, or $20 to $100 or $200 a month for Claude Pro or ChatGPT Pro, what's stopping the client creating their own agency GPT or agent and they don't need the agency?

I think a lot of clients are testing, you know, having agents in place and doing some of these things you can do. Some good, some good marketing outputs and some good outputs, agency level outputs. However, what is lacking is the human in the loop experience and that strategic experience across multiple campaigns, sector campaigns. You still need humans and you still need the agency depth and breadth of different skill sets. I think one of the beauties of agencies has always been that you've got multiple brains across different disciplines all in one place. And that creativity that that creates is really hard to replicate. Even if you had 50 or 100 agents all trying to do it, they all need prompts and they all need guides in order to work properly. Whereas humans can pull that stuff together and set it, you know, it's about the strategic piece. Let's see where we are in a few years' time, but a need to have that hybrid.

In a few months' time, who knows where we're going to be by the end of 2026? This is moving really quickly.

It is, it is, it is.

Now, look, I want to get a bit introspective in this final part of our chat, because I want to hear from you what came after the sale, especially when it was a big headline number, 8 figures, as you said, you spend years building a business that you're trying to make it less and less dependent on you. So How did it feel the first few months, not after the sale, but during the earnout, because you still had a lot of pressure on to bring the numbers up and then immediately after, once you finalize your role and you wouldn't go into the office every day.

Yeah. So it was multi-layered, I would say. So actually the event itself, when it happened, was a complete kind of anticlimax in many ways. Sounds bizarre. I've actually just written a book which will be out early next year, and I talk about it a bit in there. But effectively, we'd built up really good cash reserves. We had a couple of million quid in cash in the bank. We'd built a good— and I think I already felt like I'd earned or kind of hit this, this kind of, this number. The sale process took about 14, 15 months as well. So I had a long time kind of sitting with the figure. And then when the figure finally came, it was a bit of an anticlimax and a bit weird because it was a Monday afternoon. I was still at work. I had to go straight into a big presentation with the team, literally like an hour after the money hit my account. It was just the most bizarre. They didn't know, couldn't tell them at the time. I was like, Jesus.

So that's another key while you were for 15 months, you were negotiating in the background. Maybe one or two of your key senior people knew that. And otherwise the whole team was unaware of what you were working towards.

Correct. Correct. So you have to, you know, keep on a brave face and keep pushing, you know, because you don't know whether the deal is going to close or not as well. So it's important to keep the structure and keep the stability. After that, you know, the first few months were highly pressured. And I'd also had a couple of periods of quite bad burnout during the build because it was just always on, you know, I was working relentlessly 7 days a week, every week for years, not just for months, but for years nonstop. Wasn't taking breaks, wasn't taking holidays, and I had some bad burnout. So I felt like if I wasn't still holding on quite tight in those first few months, like the wheels on the bus might come off. And I'm like, you know, I need to justify the sale. That's how I felt, probably wrongly so in hindsight. But so the first few months were very pressured. And I really liked the team that I'd sold into. So I spent a lot of time, felt comfortable. I was in a co-CEO role. The other CEO was excellent, spent a lot of time getting to know him. And over time, that's me. And then we kind of went on this, this fun journey of trying to grow the business together, trying to change it, that the structure changed a lot within 4 months of selling, we completely rebranded the business completely that I'd built disappeared from the public eye, you know, we became this global entity, which I'd sold into, and all that legacy, all that work kind of just dwindled away, you know, on all the social media accounts just disappeared, that side of it was quite emotionally draining and strange, bizarre. I knew it was, I think it happened quicker than I expected. And then I was in this new world with 1,300 colleagues, all my team members, you know, were in this new world. They were in Brazil, you know, in South America, completely different kind of way of operating and doing things. And yeah, it was, it was bizarre, but, but an enjoyable process, I have to say, overall, and being part of that bigger entity, you know, it comes with challenges, but also I learned so much by having exposure to that structure and the things that they did really well was Another Apprentice contestant as well, Nick Holzer, also had a similar experience when he sold his startup to Samsung and then moved on into a much more bigger global company and operating teams globally and delegating it.

But you touched there on a point about how you, the company changed name, there was a new CEO, a totally different identity, but what part of your identity, Luke, disappeared? With the company sale.

Yeah, a lot. It's funny, you know, as a founder, you, you peg yourself to your business, don't you? It becomes a big part of like—

You become it. It becomes your identity.

Yeah, it does. It does. And actually, as an entrepreneur, you know, it was the thing that I'd built that I'd been most successful at. And it gave me that kind of validation, internal validation, external validation. I'd won awards, I'd done all these things. And all of a sudden, the brand's dead, it's gone. It's, it's so, so there is this kind of mourning process that you go through, um, trying to re— refine purpose. It is a really strange thing to go through, but you just have to keep reminding yourself that again, nothing is permanent. It is part of the process. And I always— I've always been entrepreneurial, you know, I've had multiple businesses now, so I knew I would go again and I'd do something, and it's just part of the story, you know. So you just have to keep reminding yourself that, but doesn't make it easy. It's a strange thing. You know, you're very grateful and humble and all of those things about the fact that you've managed to achieve something that most people do not. But there is some pain through the process as well.

What about the freedom afterwards? Did it feel as good as you expected with, you know, 8 figures in the bank, into a massive global company, your day-to-day pressures in a way disappeared, or they were still there, but they were distributed across a larger team?

I think it's straight—

Was it as good as people think? Do you just, you clearly didn't just go and play golf for the rest of your life or skiing, although you did move to Portugal and I'm going to ask you about that.

Yes, I did certain things. So I leveled up certain aspects of my life as you would expect. You know, I had maybe slightly more expensive, not always better holidays, but, and moved house. All those things that go with it, which is great, but they're all kind of materialistic. The kind of the reality of the spiritual side of it is that I was still working really hard. The company I'd sold into expected a pound of flesh because they'd spent a lot of money and they wanted a lot of my time, hours, and attention and focus and, you know, wouldn't allow me to take my foot off the gas and neither would I anyway. So it felt for 3 years after the exit, like still full throttle. It didn't feel— obviously I had numbers in the bank, but actually in the end, when you have that type of capital, you have to spread it across lots of accounts, you have to invest it, you have to make a lot of decisions, which again are quite heavy things to try and figure out. They're just different, different things you have to work out. So if anything, I felt busier than for that period. So when I came out of that, I had a few months and probably only allowed myself probably 2 dumb and too young to not do something again. But I should have had probably longer in hindsight. But I had a few months kind of moving to Portugal, you know, taking in some, some more stuff for me and trying to slow down a little bit. And then I just get itchy feet. I'm just entrepreneur. I think all again, we talk about purpose. I think deep down, I do a lot of soul searching these days. A lot of my purpose comes from what I do. It's, it's, it's a big part of who I am. And if I'm not doing something, then or building something that I feel like I'm, yeah, I'm lacking purpose.

Would you say then that selling a business leaves you feeling less successful than building it?

Ironically, yes. I think the thing that probably all founders want is an end result, right? And that's great. But like most things in life—

or you imagine the end result.

You imagine it. But like most things in life, when you finally reach the top or you get to something, it's not quite what you thought it was going to be. And the grass often feels a bit greener on the other side. So enjoying the process and actually enjoying the build and the day-to-day is all that matters, right? And, and, you know, having a bit more money or a bit more freedom and exposure, don't get me wrong, money gives you lots of choices, which is the one great thing about it. But fundamentally, as a person, it doesn't change. If you're chasing something for something about yourself, that's never going to change. Like I found in my talk, like, I don't think it would matter how many exits or how much, how many numbers in on the bank account, how many zeros. I need to build stuff for my, just my own psyche and the way that I work and the way that I do. That is just what I am. And that's, that's what I've learned about myself through the process. So I get a lot of my happiness from that process. And I think the end result is that I'm just building again.

That's unusual, Guru.

Yeah, that's a new—

What are you trying to avoid repeating this time round? Which is not your first, not your second, not your third business, but your business after you had the luxury of time and money to slow down, should you want.

Yeah, I've been fortunate now that what the one thing with the capital allows you to do is to try and avoid some of those mistakes that you have to go through or those, certainly those, those periods of having to do things on your own. And instead with Unusual, I've been able to hire really good operators and people into the business early on. So even before we launched, we had 10 staff to give you an idea. So I built the structure that I dreamed I wanted and been able to hire these people. And then we started bringing in clients. So very different to anything I've been able to do before. So that is a luxury, but it's certainly given me the freedom to then still stay strategic. Don't get me wrong, I still feel like there's days where I'm like, what am I doing? 14, 15-hour days, I should be out enjoying the Portuguese sunshine. But, you know, I'm not always doing that. But again, it's about that purpose piece. But I'm now connected to 5 businesses, and I don't operate any of them. You know, I own part of or all of them. And it's a fascinating thing. I love doing that. I love working with founders. I love working, trying to solve the problems that happen in day-to-day business. And I'm able to do that now at scale and in a completely different way. I always try and remind myself it's a privilege, isn't it? To have these opportunities and these problems and these things to deal with. It's a privilege to do it. And yeah, that's where I am.

Speaking of privileges then, Luke, to be able to do all this, what sacrifices you've had to make to be where you are today and be in this position, which most people would envy?

I mean, yeah, it's been a, it's been a ride. So I mentioned the burnout stages, which have been absolutely dreadful, you know, to the point where it genuinely was like in a deep hole of, of, of stress to everything. You know, I left home at 16. I've fended for myself since then, lost my mum You know, there's been lots of stuff along the way, and I've also had, I've had the 3 exits, which sounds great and really impressive, but I've had 4 other businesses along the way that didn't work out, a couple of which landed me in quite severe debt that I then had to pay off. And there's been, there's been lots of periods of, probably more periods of failure or falling backwards than falling forwards. And I think it's important to note that because when you see the the highlight reel, it always looks like just a linear line straight to the success and earning money, but that's certainly not the case. And I think also that's why—

and that's why I asked this question.

Yeah. It's the complete opposite of that. And even now, you know, my partner often says to me, you know, why are you still working like you're broke? You know, you still work like every day and I just don't know any other way, actually. I think it's this fear of— so I left home so young and I've had to fend for myself from a very early age. This fear of like, it could all be taken away. It could all— like, I still don't feel safe or completely comfortable. So I'm always chasing and always striving. And yeah, I don't know if that will ever end. But that's just part of who I am. So it feels that part of it does feel like a struggle.

So if there's one lesson you want someone running a growing service business to take from this conversation today, what would that be, Luke?

I think the key message would be to make sure those early adopters, early people into your business that you're hiring carefully and smartly, but also that you are— successfully. And also from, we touched on it all sorts in this, on this call, but like the recruitment process, like try it, like stress test people before you bring them in again. You can't get it right every time, but with the right model, you can certainly release a lot of risk there. And also just, you know, having been through those burnouts, okay, arguably a lot of people, when I say that, they're like, yeah, but you got an exit. It's like, yeah, I did. But I'm lucky that I did. I'm lucky that I had the leadership team around me at the time because my burnout would have crippled the business otherwise if it had all been on my shoulders when I had those burnout stages. The business would have no way been able to be sellable in the end. It's only because of the structure I put in place before that happened, thank God, that we were able to get there. So, you know, build the right people around you, build the right systems and processes. And one thing from a— if you want to build an asset that's saleable, always be thinking in the mind of the buyer. Imagine you're going to buy your business, and people don't do this enough, put yourself on the other side of the table. What would you see that would be a risk? And the chances are, if you're honest with yourself, you'll be able to departmentalize what you need to do in your own business to make it more attractive.

That's a very interesting point to wrap up our conversation today, Lou, because surrounding yourself with the right people and also letting go of people when the stages move on are some of the recurring themes that I keep on hearing through my Millennial Masters Conversations. So thank you for being so frank and honest and open about your experience and your journey so far.

Thank you. Thanks for having me on.

Thanks for tuning in all the way to the end of this episode. If you enjoyed it, please share it with someone to someone you think would get value from it. And don't forget to subscribe on YouTube, Spotify, or Apple Podcasts so you never miss an episode. For the best way to stay in the loop, head to millennialmasters.net. That's where you'll get all the latest features and new episodes straight to your inbox every week. Catch you next week.