Welcome to another edition of the Always Be Testing podcast with your
host, Ty De Grange. Get a guided tour of the world of growth, performance
marketing, customer acquisition, paid media, and affiliate marketing.
We talk with industry experts and discuss experiments and their learnings in growth,
marketing, and life. Time to nerd out, check your biases at the door, and
have some fun talking about data driven growth and lessons learned.
Hello. Hello. Welcome to another episode of the Always Be Testing podcast.
I'm your host, Ty DeGrange, and I'm really excited to talk to David Rodnitsky
today. What's up, David? How are you? Hey, Ty. Always good to talk to you. I think we've
probably known each other for about fifteen years at this point. Yeah. It sounds about right. It's been kind
of awesome to to continue to stay in touch, and we got a chance to
collaborate, you know, years ago. And you've you've obviously done some awesome things. I think our
audience will be really excited to talk about some of the learnings that you can share in in your
evolution in performance marketing. Heck, yeah. Yeah. What's the latest? What's been
new? How are you? I'm good. I'm good. I'm, I guess gainfully
retired from, running an agency, and I'm now sort of going back to
my early consulting days and trying to, find a way to to be a
one man show. So I love it. A little different. I mean, I don't have an EA anymore,
and I got to schedule my own meetings, but, you know, there's a lot of freedom too. I get to I
get to do yoga every day and spend time with my family, so I can't really complain. I love
that. It's so cool. I'm excited to dive into all of it and and props on the yoga. I think
it's, one of the best things you can do. I don't I don't do enough of it. So for folks
out there that don't know, maybe would love to dive into how did you get
into maybe just give us your background because you have a really interesting story.
Yeah. I mean, I'll I'll go back to even the nineteen nineties. That's how old I am. I
graduated from law school in nineteen ninety nine from the University of Iowa, and I came out to the Bay Area
basically because I had a my best friend was living here and because there were mountains and I had no
other plan other than just hang out with my best friend near mountains and I got lucky,
in two thousand and there was this was the first dot com boom and there were companies that were just
hiring warm bodies essentially And there was a dot com called Rentals dot com,
which was doing property management stuff. And they hired me to be manager of strategy,
which meant pretty much absolutely nothing. It just meant, like, do research papers and
do do analysis of the market, competitive research and stuff. And so I was doing all that,
and their director of marketing resigned and there was no one to do marketing. And these guys were
paying twenty five thousand dollars a month to a brand agency and twenty five thousand dollars a month to a PR
agency, and they hadn't even launched a product yet. And so I kind of sat down and I looked at this and I was
like, this is this can't be right. There's got to be something better than fifty thousand dollars a month to
these two agencies. And so I discovered a little company in Pasadena,
California called GoTo dot Net, I believe is what it was called. And the concept that they were
bringing to the market was rather than pay for an impression or pay for,
you know, a sponsorship, you pay per click. And so they have this search engine where you could go in and you
could type in any word, and you could say, I wanna buy the word house for rent or apartment for rent,
and it might be three or four cents a click. And so I took this fifty thousand dollar budget. I
just threw it all into to go to, basically. And, again, this is the very early, early days
of pay click advertising, and, you know, literally, we were paying for the the most
expensive terms out there were maybe thirty or forty cents, like, for the word, like, personal injury lawyer or
something like that. That company went belly up, when the dot com boom
became a bust. And I was lucky enough to, Shocker. What's that? Yeah. Shocker. I know. I mean,
they they raised, dollars twenty eight million from Sequoia and SoftBank, which, you know,
was a big deal, and they weren't able to ever sort of really release a product or do much of
anything, to be honest with you. So I ended up sort of having my exposure to to what
was later to become search engine marketing at that company. And over the next eight years, I worked at a
variety of startups in Silicon Valley. I worked at a company called Fine Law, which is a legal website, worked at a company
called Adteractive, which did lead generation, and then I worked at a company called Mercantilla, which did dropship,
e commerce similar to Wayfair. And when I was at Mercantilla, this was two thousand and seven. I'd now
been working at companies for seven years, progressively
getting more experience in online marketing generally and search engine marketing particularly.
And at Mercantilla, when we were just talking offline about kids, my wife was pregnant
with our first son. I was traveling to India once a quarter to manage a team,
and I just wasn't happy at the company for a variety of reasons. So in January of two thousand and eight, I
quit and just said I'm gonna do something else. And, my son was born in February of two thousand and eight,
so I quit a month before my son was born. I went down to a coffee shop in Pacifica,
California where I was living and I just kind of just let people know I'm not
working for other people anymore. I'm just trying to figure out what's next, and I had a bunch of different ideas for
what I was gonna build. Yeah. I literally I launched like a site of a wrinkle cream that was a
basically affiliate lead gen site and, I had an idea around,
you know, food website, bunch of ideas, but then I got people kept calling me and saying, Can you
help with search engine marketing at my company? And I I kind of followed the advice of a friend of
mine, which was, you know, if people are knocking down your door saying they want to give you money for something, then maybe you should at
least look into it. And so I did, and I started offering SCM consulting
and I, it was, it was, it was kind of bad timing in the sense that it was the Great Recession. It was that moment in two
thousand and eight where the mortgage industry collapsed and there were a lot of unemployed people
and companies weren't spending money. But I found that I was, I guess I was charging such a little amount of money that a lot of
these companies were like, I'd rather just hire David for two thousand bucks a month than have to pay for a full
time employee. That's awesome. I started doing that, initially as an individual consultant,
and then I realized that I had too much work to just do myself, and I brought in a partner.
And then, you know, we were able to hire a couple people. We got a small office. We went from
a coffee shop to a Regis temporary office to a six hundred square foot office and
then a thousand square foot office. And then along the way, we realized that,
to win bigger clients, we needed to offer more than just search engine marketing. So we hired experts
in search engine optimization and in social media, paid social media, video
advertising, mobile advertising, display advertising, analytics, conversion rate optimization,
marketing strategy. We even did some affiliate, believe it or not, Tai. I know that's one of your areas of
expertise. Amazing. Yeah. I can't believe it. I know. It's shocking. I can't believe it. I mean, inter
interlopers coming into the field with, you know, with little knowledge. Ask me?
Yeah. We're a jack of all trades. Alright. You know, sometimes they say a jack of all trades is a master of none, but
we we tried to hire experts. Yep. And he sees areas and, you know, we grew the business.
And so, you know, I can we could talk separately about how we ended up
selling the business and exiting. But yeah, before we got up to at our
height, we were at about five hundred people, managing about two or I think
close to three billion dollars of media spend for clients. So it's an amazing
accomplishment. That's the yada, yada, yada story at the end of the the growth
story. David, it's awesome to hear your progress. It was awesome to to witness
your growth. I mean, coffee shop and a one man show to five
hundred employees and billions managed is just is just unbelievable.
What were some of the moments you had along that way? I know
we've kinda talked about it and you you've written some really interesting things about your journey
with that. Like, what were some of the ahas that you like to kind of instill on
folks and and leaders and practitioners? A bunch of things. I mean, I think number one
is, you know, the importance of culture and not just,
saying that you care about culture, but really living a culture. So one of the things that we did
was we really were trying to be really deliberate about what we defined
as our core values and also what what we had defined as our core promises to the
team. So to give you an example couple examples. One was we really
instilled in the team what are the core values. We we we asked people to sort of memorize them and to think
about everything they did at the company from the lens of core values. So we we let
people know that you were gonna be promoted, hired,
and fired based on whether you lived those core values. You know, we also had this concept of core
promises to the team, so it's not just about values that we care about, but what can you expect as a team
member? And so we tried to live our live those core promises very
clearly as well. So as an example, you know, one of our core promises is was we don't work with
jerks, also known as the no asshole rule rule. We had a couple
instances where we had, in particular with clients, and if you work in a service business, you're in
you're inevitably gonna work with people who are not respectful
of the team, who treat you as a servant instead of a partner. And, we had some
situations with some really big clients who were treating our team like like they were servants.
And we, you know, talked to the client, gave them a chance to improve, and they didn't improve and we fired
them. And, you know, I think that as a general lesson around
growing the business, I mean, we were always trying to think about outcomes measured in years and not
in quarters. And inevitably, when you fire one of your biggest clients, you're gonna have a bad
quarter. You know? You're you're gonna see a reduction in your in your growth, and, you know,
you may have a hard time hitting your target goal margin margin goals, but in the long term,
you keep your people happy. So that's something that was pretty important to
us. You know, I think another thing and I've been sort of going through and I've been writing all this down at
my own newsletter just trying to remember the things that I think were important to us but there's a book called
the twenty two immutable laws of branding, and, I literally can only
remember one of the twenty two laws. The other ones are very good as well. I just don't remember them, but the law
that I remember is if you can't be number one in a category, create a category, you can be number one in. And so when I
started 3Q, I looked around and I said, like, what is where is it possible for me to be a leader,
for me to be number one? And I was like, well, I'm not gonna be the number one agency.
I'm not gonna be the number one agency in North America. I won't be the number one digital
agency. Probably it wouldn't be the won't be the number one SCM agency. I think we actually probably did get
to that point at some point. But then I said, you know, what I have experience in is tech Silicon Valley
startups, and I could probably say that I'm the number one agency helping Silicon
Valley startups. And so I sort of set that as my goal, and then I went about creating a marketing
strategy to achieve that goal. So I did some of the things that you would sort of every
agency does, you know, just network a lot, go to network events,
get connected through friends, have lunch with marketers. In Silicon Valley, I had lunch with a lot of investors,
venture capitalists, You know, we hosted local events. We had,
a client summit where we invited prospects as well. We did it at the Giants Ballpark couple times. We
did the forty niners ballpark. We brought in people like Barry Bonds and Jerry Jerry Rice to
shake hands and have that local flavor. And then we even did some things that were kind of crazy.
We did a a billboard campaign on highway one hundred and one in Silicon Valley, which
mostly you see billboards for Apple and Google and, you know, Snowflake and there's little three q digital
on the billboard. We did a campaign on NPR, marketplace locally.
So we just kind of tried to triangulate around, like, my my goal was that some start startup
marketing director would go and talk to their friends, say, who should who should I hire
for for online marketing? And and they should say three ks Digital, and then she'd go to some
message board, and she'd she'd see three ks Digital and then she'd ask her investor and they'd say three ks Digital and then
she'd drive down one hundred and one and see three ks Digital and it was at and that was at the point where I was like well if that's
happened then you know we did have these situations where invest a, potential client would call us up and basically
say I don't need the sales pitch I've been told you guys are the guys Just tell me how
much it's gonna cost, and let's get started, and we would sign a contract within a day. So I've
got I've got millions of other tips, but those are two that kinda come to mind as, like, sort of things
that that I think were was were pretty helpful in sort of helping us scale. That's
awesome. I love that. How did you kinda stay on top of the
ever changing game while managing people, tech,
clients? As you kinda referenced earlier, you know, you and I know, like,
channels rise and fall, and there's is a constant, like, race to address new
tactics and strategies. Like, how do you find how did you manage that in your
growth at three q? Yeah. I mean, on one level, I think I was just a voracious learner. So I was
just constantly reading everything I could. I mean, I used to back when, like, your my Yahoo
page was, like, the place that you went to get all your news feeds, your RSS feeds, I had
thirty marketing news feeds, and every morning, I was reading every single one. Search engine land, search
engine journal, you know, you name it. I had Brad Geddes. I mean, all these guys who are,
like, the providing great information about the the the space. I was reading everything
I could. The other thing that I did was I I kind of had an adage in my head, which
was when I heard something from a client, two or three two or three different clients telling me the
same thing, that was probably a sign that it's something we should invest in. And so,
you know, case in point, I mean, like, you know, in around two thousand and eleven or twelve, I had started
having more and more clients say, hey. You guys offer Google SEM. That's great, but what about
Facebook? And I was like, well, I don't know. I mean, it doesn't seem like it's not it's not in my wheelhouse,
but I should look into it. And so, you know, I realized and and in re researching it that
this was gonna be a major opportunity. And so we went out and we found the best expert we could externally who had already been
doing it and we created a practice. Awesome. So that's, I mean, I think the the number one
way that we sort of identify where to grow. I would would also say that, I mean, the flip side of that, I guess the negative
side, if you will, is as we scale the business, and this is common for almost
every agency, as you scale, you start to take on bigger clients. And bigger clients,
typically want one throat to choke. And so and it's and it's some of it's, you could
say it's, like, big company laziness or whatever, but some of it's just practicality. Like, if you're
managing a five hundred million dollar budget and you've got twenty different channels and ten different
softwares, you don't have time to have thirty meetings a week with your vendors. So you naturally
just move towards as few as you can. And so we lost a couple of deals
where we were doing incredible work on the, let's say, the SEM stuff for
a client. But some big agency came in, and the client would even say to us, like, look. We know they're not gonna
be as good as you are at SEM, but I just can't have all these meetings. I can't manage all these people. So we're going
with big clients, big agencies. So Yeah. That was also a forcing function for us as well, sort of
realizing that, like, I don't ever wanna be in a situation where I provide superior results and I
lose because of a reason outside of those results. And so that made that made us
change some things and go after some of these additional channels. How did you continue to
maintain the quality of that that expertise? It seems like there was was
something that was definitely part of it. The results were there. What was the kind
of somewhat of the how behind that in your view? Yeah. I mean, I think first of all, I,
I've always admired the Netflix culture deck deck, the original
one. One One of the things they say in that deck is, above average performers
deserve above average compensation. Adequate performers deserve a generous severance package.
And it feels kind of cruel, but it really is, I think, crucial because I think the lesson
that that I've taken away from managing people is that A players want to work with A players,
number one, and that B players, you know, not only do the A players leave, but they
oftentimes the A players who are who stay around have to do the work of the b players you know we had
a guy on our team who was one of our senior leaders who was a former semi
professional soccer player, and we were having debate one day about a
versus b players. He said to me, said, you know what? I think it's okay to have some b players because
maybe they're they're just nice people and, you know, they get along well with clients, and I I think it's good. And
I said, you know, you're a former soccer player. Let me just ask you from a soccer perspective.
If there's eleven people on the field and nine of them are A players and two of them are B
players, what happens? He goes, oh well, the A players have to cover for the B players and they can't play through
what their positions they're intended to play. And I said that that's exactly the problem. So we were pretty,
I guess, pretty relentless about, first of all, promoting great people and really
just trying to be proactive about giving them raises and giving them responsibility, not
waiting until they sort of their annual review necessarily, just saying, look, you're a superstar. We're going to keep pushing you.
And then also for people who weren't, for whatever reason, working out,
helping them find an opportunity somewhere else. I I would also say related to that that I,
really believe in the notion of trying to hire people smarter than you. You know, I just I try not to have any
ego, and I I've loved I've loved it when after a couple years in the business, there were numerous people in
the team who knew way more about online marketing than I did. And I think at our at our height as we scaled, I
mean we had I remember we had like twenty or thirty people on the team who had been with us for at least seven
or eight years. We may still, I don't I don't know. It's awesome. And, you know, you only keep those
people by, again, giving them lots of opportunity, surrounding them with A players,
and creating a great culture that they are gonna want to show up to to work for. I
love it. That's awesome. How did some of the maybe transitioning a little
bit? Obviously, there's so many learnings, you know, in building up something so large.
How did kind of your new opportunity come about? Maybe you can help, you know,
fill in that transition and and kind of what you're working on now because it's it sounds obviously
fascinating and, you've already written a book. A lot lot of things have happened and you've achieved,
but maybe share a little bit about that, some of those ahas that led to the
transition into what you're what you're working on now. Yeah. I mean, I think when I started
the business, I really just mainly just didn't wanna work for someone else because I I
had found that I kind of lose the political battles when I'm an employee, and I hate the politics,
and I lose. That's a bad combination. So I really just started, you know, just because I was like, if I'm the
boss, at least at least I can control the politics. At least, you know, I can sort
of in in the case of a tie, I win. Yep. But as we scaled, you know,
by twenty fourteen, we were up to about one hundred and fifty employees, and
we started getting inquiries from third parties who wanted to
to buy us. You know, for me, I never thought I'd be in this situation, but suddenly I
had this this question, which is do I just keep growing this thing and sort of
doubling down and, you know, betting it all on on red and see if I can turn this into a billion dollar
company? Or do I take some risk off the table to risk de risk myself
and work find a partner to sell the business to? And I felt
like I'm sort of a conservative guy. I guess I was I was sort of raised in middle class
Midwestern roots, and I was like, if I can find a partner that does three
things, does what's best for employees, does what's best for clients, and does what's what's best
for shareholders, I think that it's it's a good time for me to to make a move. So I end
up in twenty fifteen selling the company. I did not know after when I sold the company
that about two two and a half years after we sold it, the company that bought us
decided for a variety of reasons that they needed to sell us, and, they were not able to
find a a really good offer. So we ended up coming as then as a management team and buying the
company back from the company that sold us. And then a year after
that, we got even more interest from from acquirers, and we did another transaction where we sold to a
couple of private equity firms. And then a year after that, or actually I guess it was three
years after that, we ended up, selling to a large Dutch
agency called Debt. So from about twenty fourteen to
twenty twenty two, I was involved in in the purchase of one agency and the sale
of my own agency three times and learned a ton along the
way. Mergers and acquisitions is its own language, its own rule
set. You know, it's like nothing that you've ever experienced as a founder.
And so when I finally sort of left three q and I I looked back and I said, you know, I mean, obviously, I think I
can provide guidance to agency founders about an agency and founders in
general about how to scale a business. But the area that I thought was most interesting and that is maybe lacking the
most is finding guidance around this mergers and acquisition process. And
what I find so interesting is that for an agency founder, a sale of their
business is the biggest financial transaction of their life, and it's also a very emotional transaction. I
mean, it's one way to think about selling your business is you're selling your purpose and your identity for
cash, And I think a lot of people don't really think about that. So it's a it's it can be a big
windfall financially, but can also be emotionally very challenging. And for most founders, it's the
only time in their life they'll do that. And they're on the other side of the transaction are people who have done this, in some
cases, dozens of times. And so you're at a disadvantage both in terms of a lack of knowledge and
a lack of experience. And so I'm trying to start a consulting firm that
really sits, stands with the founder, puts kind of puts myself in their shoes,
and as they go through this process helps them sort of decide on these really important questions. Do I even
want to sell? How much do I need to be happy? Does this buyer
represent my core values, and will it be a successful transaction? Do I want to stay with the company after it after
it sells? If I don't want to stay, what do I want to do next? How do I transition out of the business? It's
just I think I actually created a list, and I think I came up with, like, one hundred and twelve questions that you really need to answer
while you're going through the m and a process. Someday I'll publish that in a blog post or something. And
so that's what I'm trying to do. I mean, I think it's a it's role that doesn't currently exist. There are people who are
investment bankers whose job is to sell your business. There's mergers and acquisition attorneys whose job is
to make sure that you're protected when you sign a contract, but there's not really that founder whisperer
role. And so I'm I'm creating something new. We'll see over the next couple of months whether
I'm I'm onto something or I'm just, crazy and and people don't need it. I love it. I
think there's definitely a a great great need and opportunity. And like you said,
you've been there, you've been through it so many times, and there's all these other parties that
have either done it a ton on the other side or kinda looking at it from more of a legal or contractual view.
And so to think about it holistically and and take into consideration the core values and
financials and what's best for the founders is really, I think, compelling.
What's the biggest mistake you see in founders thinking through this or
navigating the situation? And maybe what's the biggest, trap or or thing that
you think we might wanna caution folks to avoid? I think that it probably all comes down to
money in different ways. Number one is I think that founders don't really think about
what as I said before, do I wanna set trade identity and purpose for money? And then how much money is is
that trade worth? And so they sort of go into the M and A process
maybe with sort of a half baked perspective, well, I'll just go through this process.
I'll just see how much money people are offering me, and maybe it'll work for me, maybe it won't.
And it's a ton of time and it's a ton of commitment, and it's a huge emotional decision. And so I
think that like, there are for a lot of founders, the answer is that you shouldn't sell now and
for some founders that you should never sell, that you know your life will be negatively
affected even if you have all this money in the bank. So I think that's part of it. I think the other part of it
is when people are choosing the partner that they're going to sell to, there also is
the money factor can become very overwhelming. I mean, you might have one
company offering you ten million dollars one company offering you eight million dollars and one company offering you six
million dollars and the the obvious knee jerk reaction as well is go for the most expensive
seller. But this isn't like selling a used, you know, iPhone on eBay. I mean, it's
there's so much more that goes into it because you're gonna in most cases, when you sell, you're not
just you're usually the the buyer wants you to stay around for anywhere from two to four years afterwards.
So if you sell to someone who turns out to be a complete jerk, you've got four years of your life that you're
going to spend in misery. And there's also the chances that you sell to a jerk that
they do everything they can to prevent you from getting your full payment. So it's a lot of that sort
of just really trying to step back and look at the thirty thousand foot perspective on what you want in
life and what you want to do in the in the short term and the long term that I think people
don't really pay attention to. Obviously on the legal side there's all
sorts of very important clauses that you have to be careful about.
You know, if you've seen the movie, The Social Network, there's that scene where Oh,
yeah. Eduardo Severin gets told by the lawyers that his I don't remember
the exact number. It was, like, his thirty percent stake has been reduced to three tenths of a percent or something. It's,
like, they, like, reduced his valuation by, like, a thousand times. You know, at the end of the day,
I tell people, all you can do is do a deal with people you trust and work with great lawyers,
but you never know when you can do a deal with someone that you really love and then that person gets
fired three months later and a new person comes in and says, oh, I'm not honoring this commitment. So
having a legal document that really buttons up every scenario I like the phrase, trust in Allah
but watch your camels, you know, that's really crucial and, and can really trip people
up. That's a it's a great phrase. It's a great phrase. Yeah. Are
there things that you've seen that have worked well in the diligence process for founders
where there's a little bit of that validation or getting to know period to get
to in the weeds. But it sounds like that a cultural fit and that alignment and
that trust is pretty paramount in the process to determine if this
makes sense for a team to to sell or or founder to sell. What's the
anything you found that can work there to to get to that answer as opposed to rolling
the dice and just judging off of couple chats? Yeah.
Couple of things I would say is, first of all, I think due diligence on the potential
buyer is really important. And I would say, in particular, trying to do your own due diligence
and not just do not just looking at whatever the buyer has given you. So to give you an example, in
one of our sales, we were on the one yard line to sell to a buyer, and I
was pretty happy about everything I'd heard from the buyer and
felt like it was a good fit for the for the business. But I decided to call a friend of
mine who had sold his agency to the same buyer previously, and, I said what was it
like? He said well the buyer really cares about profit maximization,
and so they told us that we couldn't do any training of our team because it wasn't a profit driven
activity. I was like, wow. That is not
a good sign. I mean, that's a for many reasons, you know, you'll do a bad job with your
clients, you'll lose team members, You know, it's not it's not part of my ethos as a as a
founder. So because of that due diligence call, which obviously wasn't someone that the buyer had given to
me, it's someone that I had done my own third party digging and connecting the dots, we ended
up saying no to that buyer and choosing a different path. So that's that's one thing
that I think is really important the other thing I'll say just is it's kind of a legal
issue but you know when you're selling signing a contract the first stage
really to formalizing a relationship with the buyer is to sign a letter of intent or an
LOI. And the letter of intent is always non binding. It's not something that you
can point to in court as evidence that they promised me this or that. But but it's
a really good indication of how the buyer is going to treat you.
So if there's something in the you should I really recommend to people
to be to write very extensive letters of intent and really ask the tough questions
at that point and not during the negotiation period when you're actually signing the contract. So you could say, like,
hey, I'm gonna be a minority owner of this company. Are you gonna sign up to
have a fiduciary duty to protect my interests? Fiduciary means that you
act as if someone else's money is your money. And if the buyer says,
no, no way, and heck I'm in I'm in it, you know, you write a good contract and that's all that matters.
I'm not putting that in the LOI or the contract. You know, that's kind of a warning sign. You know, just seeing that
the buyer is willing to sort of address your needs in that early stage in the LOI, even if
it's not binding, I think it can be a really good indicator of whether this is gonna be someone who's gonna truly partner with
you or who somewhere down the road is gonna do a little bit of a left turn that you didn't expect where
it could be advantageous to them and not to you. No. That's amazing.
This is I can see you have so much value that you have to share and
it's it's pretty impressive similarly, you know, you you even wrote a book
and and that's kind of amazing. How did that kinda come to be and and is
that kind of part of the new venture or how do you view that? So I I was in
a, I had a group of, agency founders who had all all of us had sold
our agencies. So we were like the ex founders club or meeting for
founders anonymous or something like that. And, I love it. And we were all talking, and we were all
sharing these stories on the phone about, you know, what had worked for our deals, what hadn't worked. And at one point, I
said, you know, guys, no one has written a book on this. And don't you think it wouldn't would it have been valuable
when we were selling our agency if we had had a book that give us the step by step, here's what to expect next, here's the
pitfalls, and they all kind of shook their head in agreement. And one of the guys from the affiliate world,
Bob Glaser, I said, you know, Bob, would you like to go in with in on this with me? And he said, well, I can't
really write the book, but I'll be your sort of your executive editor, and I'll I'll put in,
you know, a lot of effort on the editing side. I said, great. So I I went about writing it, and then,
you know, Bob helped me edit it, and we published it. And, yeah, it's it's connected to the consulting idea because, I mean, at the end of the
day, I mean, you know, I'm charging fifty bucks for the book. If you're serious about selling
your agency or even your service business, fifty bucks seems like a no brainer. It's a lot cheaper than hiring
me. So it may be the case that, you know, in nine out of ten cases, people don't even need to hire
me. Just read the book and that will get you enough of the way down the field that
you'll be smart enough to make good decisions. But at the same time, I also know, as as
you do as well, that, there's a difference between reading something and doing something. And, you know, I
could give you a manual to on how to fly a 07:47. You could study it for a month, but you're
probably not gonna then a month later go and try to fly it. So I think it's at the end of the day, I
think it's a calling card for me. That's kind of the point of the book. I mean, I think people will read it, and hopefully they'll say this guy knows
a lot about the agency world. And if I'm gonna in the m and a world, if I'm gonna sell my business, I
better talk to him. I love it. It sounds like you've had some awesome, you know,
learnings and, you know, epiphanies through this journey, and, yeah, I love the
the reference you made previously. It sounds like some pretty cool world travel and
adventures with you and your family. You share kind of what's been some of the
best memories or trips or or adventures that you guys have had? Yeah. I'd say
two examples. One was when when COVID happened, we were all locked inside for a while, and and I
had really sort of stepped down as being the CEO. At that point, I was just kind of advisor, so I had a lot of free
time. So my younger son and I, in the course of about four months, once they opened
up, let let you leave your house, we did I think thirty eight parks,
hiking parks in the Bay Area, so we we literally sort
of almost any park on the map we did. We went to these like places where you can
jump off limestone cliffs into into fresh water and awesome my son's really into
snakes so we saw we did a lot of hikes where we found snakes then then earlier this year actually when I
was for my younger son again I've done stuff for my older son as well but my younger son is really an adventurer
we did a three week trip to Africa again his interest is snakes so
we were able to go to the Kalahari Desert and, on our third day there we, they
let us get out of the car and we walked up to a, puff adder which is the
deadliest snake in Africa and then we found out that behind it was a Mozambique spitting cobra which
can blind you from twenty seven feet away with its venom so my son was on cloud nine that
we were able to be within five feet of these two, two of the ten deadliest snakes in Africa
so that's a I don't know. For many people, that probably isn't an upside to having more free time, but
it is for my family. It's not gonna make everyone's bucket list. But for your
son, he was like, I'm good. Some people might kick the bucket after seeing the puff out or if there's they don't get out of the way.
Literally. Yeah. We, the things we do for our children. Yes.
So you'll get hopefully, you'll get this opportunity too, Ty. As your child gets older, he'll have specific
interests. He's just now crawling, so we we're enjoying this period while we can. Keep him away from
the the snakes if that's the case. Yeah. We've kept our head on a swivel a few
times in Texas, and I've had to I bet. Get one kill one already to
to avoid it from from hanging out with my daughter, but we've been lucky so
far. Well, I will say that I I in the last couple of years, I've learned a tremendous amount about snakes just
from walking around with my son, and they're actually very, they really wanna get out of your way. I
I mean, the rattlesnakes especially. For sure. We see this summer we've probably seen fifty rattlesnakes because we go on a trail where we always
see them and and they always act the same. I mean, they they have no interest in being anywhere near humans. The only reason
that they attack is if they're if you if you mistakenly step on them or you're cornered
Corner. Yeah. We have a separate podcast about snakes. I've got a lot of knowledge.
Part two will be all about snakes. I mean, when I I was a kid I feel like I was obsessed with
reptiles as well. I don't know. It I didn't like it wasn't a phase that lasted forever, but I
had a lizard and was all about reading about different salamanders and snakes
and and all that so They're pretty cool I have to say, you know? Yeah. For sure. They're
all cool. For sure. That's awesome. You know, you you kinda lived and breathed the
agency story, something back back to that. What are some
things that you think agencies are faced with now that maybe is different from a
few 05:10 years ago? There certainly seems to be more players in the space and it's
it's gotten more sophistication. I'm curious to get your perspective on like what
trans agencies need to be both pretty mindful of. Yeah. I wrote a I wrote a blog
post, like, eight years ago now called the Search Engine Marketing Agency is Dying and What to Do About
It. And I just sort of tried to point to some trends that I thought were worrying to agencies.
And you just mentioned some of them. I mean, number one is the number of competitors out there, the number of
the number of people who are trained as experts in online marketing. I mean, there was a point again when you and I
started, we're old hands. You know, there were you would go to a conference, there'd be two hundred people at the conference, and
that was the entirety of people who had expertise on a subject. Right? Yeah. I mean, if you went to affiliate
summit in two thousand and six, there were probably two hundred people there, and now there's twenty
thousand or whatever. Mhmm. So there's just more competition. That's number one. Mhmm. The second thing is that, you
know, prices continue to go up, for buying media or for
really if it's not prices, it's competition. I mean, getting ranked in search engine optimization is
harder. So So the sort of the arbitrage opportunity is gone to some degree, and that
just makes it harder to sort of justify your profit. I would say the the third thing that is a trend
is that the all the platforms are increasingly using,
algorithms, AI, automation to, on the one hand, make
things easier, but on the other hand, displace experts or to level the playing field. So
I think that, you know, my expertise is an SEM. I mean, there was a time in two thousand
and seven or two thousand and six when I created methods to upload
thousands of keywords a day very granular keywords with with very precise
landing pages and an ad text and bids. And, you know,
Google has simultaneously taken away a lot of that granularity. And
also, so so that gives it's a disadvantage for experts and also just created automation so
that average advertisers can do about as well as experts. So
one of the ways that I describe it when I think about paid media is when I started in the
business in the early 2000s, success was probably eighty percent human
and twenty percent technology. Today, it's probably eighty percent technology and twenty
percent human. And so I still think that that means that there's a need
for the humans because at the end of the day, if you can have a twenty percent improvement in your performance,
that's still valuable. But it's not what it was twenty years
ago or fifteen years ago where it was eighty percent humans and there were less humans doing it. So
I guess if there's good news, I mean, I don't want to be a completely Debbie Downer here. The good news is
that like digital marketing was under indexed from two thousand
to twenty fifteen, call it. People a lot of advertisers were still stuck in,
in some cases, literally yellow pages and newspapers and magazines. I got
my my mother-in-law gave me a subscription to a photography magazine, a
print subscription, and I the thing is, like, fifteen pages long now
because there's no advertisements anymore. It's like, no one buys print. So the good
news is that everyone's woken up to the fact that digital marketing is should be way more than fifty
percent of your budget. So that means the agency should continue to get pretty big
budgets to spend. And I think we still have a ways to go before
we've fully seen, you know, how much spend should be on digital marketing. It's
gonna keep growing. So that's that's an upside. Yeah. Yeah. I think the rising tide lifts all
boats and the industry getting better is certainly been something we've observed
generally. So it's like, while there is some of that challenging, you know, headwind
conversation, which is real, to address and prepare for, I think there's absolutely
still a lot of opportunity in this space in terms of how many good practitioners there
are, how many trusted practitioners there are versus how many new businesses are coming online,
how many businesses are modernizing, how many businesses are expanding their digital
marketing efforts daily. So totally hear you there. That's awesome.
Are you seeing anything interesting in terms of, I think we talked about this a little bit,
like, folks that are building out in house teams, folks that are looking to external, you know,
source. I feel like that trend kinda continues to ebb and flow and depends
who you talk to in the the situation. What are your observations there? Yeah. I mean,
it's it's always been a debate. You know, I think that there are advantages
to both in house and to agencies. I think the advantage to an in house team
is is always that that team is going to know your business so much better than
an agency. And so that means, you know, if you're a whatever,
if you're an online university, it means knowing that in January people
have New Year's resolutions that they they want to go back to school, and you better have your budget ready, and
you better have that sort of messaging in place. I mean, you just know that intuitively if you're working in house
at a company, and your agency may or may not know that. So I think it's important
to leverage the strategic knowledge of in house teams. By the same token,
agencies typically have much more knowledge of channels. So an agency
that's a search engine marketing agency is living and breathing Google advertising all day long, and they're usually
doing it every person in the agency is working with between, let's say, four and six clients. So
they're learning faster, not only because they're spending more time in this in the system but because they're getting
inputs from multiple clients what's working, what's not working. So to me, it's the answer
is really always that it's a hybrid approach. You need some in house people to keep the strategy,
lamp burning bright, and you also need some agency people to constantly be cutting edge on the
channels. I do think it's a little risky to sort of to do one or the other
for that reason. I love that. I couldn't agree more. That's I mean, seeing where that's
seeing that work firsthand on so many ways in house and as an agency, so I love that. You've
dropped some good book recommendations here. You've got your own book. But what is,
what's another maybe one or two book suggestions for for the audience? You've, you've got some
good ones. Yeah. I would say my standby is probably, Influence
by Cialdini, Robert Cialdini, Influence the Power of Persuasion. That book
just, just really sort of blew my mind when I first read it about little things you can
do to, to influence behavior. And then I would say a Seth
Godin book I like a lot is Purple Cow which, kind of goes back to my notion of if you can't be
number one in a category, create a category you can be number one in and, you know, he just talks about
how at some point whatever, you know, in a crowded market people can't differentiate. I I mean, you've seen
one cow, you've seen them all. And so how do you become a purple cow so that people really sort of you
stand out? That's a good one. Love it. I think, there was a recent brand
that I think went full all in on that, and I think they had, I wanna
say it was one of the credit monitoring. They had was it John Cena and a and a actual purple
cow in the ad? I've heard of this book, so I'll have to have to finish it. And, you know, he did a great when he
pro when he first released it, he sent it in a milk carton, a purple milk carton, which, again, is
just, like, living the brand. It's, like, how many times if you if you receive a milk carton in the mail, you're
gonna open it. Just a marketing whiz. That's such a smart move. Totally is. Love it.
Yeah. David, I feel like we could talk on this this stuff for hours. You dropped so much great
advice and information, you know, for folks that are interested to learn more about you and,
you know, some of the stuff that you're working on. Where where can people find you? My
website is agentic shift, a g e n t I c shift
dot com. And you can reach me at david at agentic shift. And then not really
I'm not really into x or, Instagram or anything like that, but I am on LinkedIn. And I have
a a newsletter that I publish on LinkedIn and another one that I'm publishing through the agentic shift website.
So love to connect with any of your listeners. Love it. Really appreciate you.
Always a pleasure. It was awesome conversation and look forward to more. Thank you, Ty. Always great
to catch up with you. You too. Thanks, David.