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How do world-class agencies continue to grow profitably and hit their goals, even through the choppy waters and challenges of agency life?
How do leaders like Tiffany Sauder, Marcus Sheridan, Jay Acunzo, Shama Hyder, David C. Baker, Nikole Rose, and Zeb Evans think?
Join Agency Journey host Jakub Grajcar as he interviews agency operators and leaders to share insights, actionable tips, and hilarious stories from the builders who live in the agency trenches.
Each episode focuses on crucial aspects of growing an agency like building the right team, delegation, project management, client success and retention, and operating frameworks like EOS.
Brought to you by ZenPilot: we help lead your agency through the final project management implementation you’ll ever need. Book a call to learn more at ZenPilot.com/Call.
Don’t forget to rate + follow the podcast if you enjoyed it!
[speaker]: All right, welcome back to Agency Journey. This is
Gray MacKenzie from ZenPilot. I am your host for today, but
[speaker]: the person you actually want to listen to is my guest.
I've got Andrew Stern on with me, who is a partner and COO at
[speaker]: Pilot House, which is an awesome agency, and you'll
be able to tell where they're located or where they're headquartered.
[speaker]: Here just a second, once I welcome Andrew aboard, put
their friends from up north. Andrew, welcome to the podcast.
[speaker]: Yeah, thank you so much, Gray. Yeah, I'm really happy
to be. How been a child with you? Yeah, I'm sharing whatever
[speaker]: I can. So we've been doing a little series here on
the podcast. I'm trying to talk to the top agencies who are running
[speaker]: on EOS and have gone through that implementation process
or in that implementation process. And it's been funny as we've
[speaker]: been having those conversations. Some people are super
pure play, EOS. Like we do everything down to, you know, if it
[speaker]: was in the book, it's happened in here. We're just
making it and modified it more. So we'll dig in on that. But
[speaker]: as we're starting out, Can you I'd like to have you
share two different stories The first one is just like how did
[speaker]: you wind up at pilot house and and what does your role
look like today? The second one is who is what is pilot house?
[speaker]: Who do you serve? Yeah, great. So No, I'd personally
been in marketing for over Around 15 years. I started out as
[speaker]: a media buyer Way back in the day really in with affiliate
marketing, I guess. So that's quite unique to Victoria where
[speaker]: I'm located and where Palatis is located. We have a
number of companies here that we're kind of big in the affiliate
[speaker]: marketing space and serve does, I guess, like a university
for marketing for a lot of folks around here. But with that,
[speaker]: you know, essentially that's kind of traffic with offers
that are paper conversion. You know, a great learning ground
[speaker]: to get your hands on performance marketing in the truest
spirit of things. And so that's where I started, but from there
[speaker]: I went into running nearby teams, consulting, even
working within brands themselves.
[speaker]: on the training and education side of things when it
comes to marketing and all of that has kind of led me to where
[speaker]: I am today in the agency world which is kind of one
of the last places I thought I'd end up but it really is a great
[speaker]: place to take all those learnings and experiences and
kind of build something truly truly great so yeah that's awesome
[speaker]: I think you know so many of the people who are now,
kind of the marketing icons and most well known faces out there,
[speaker]: had their roots in affiliate marketing and before there
was Tim Ferris, now and for his down, running affiliate sites
[speaker]: or telling supplements over the internet. Exactly.
And there's real commonality there. And pilot houses in the GDC
[speaker]: space too. So walk us through what you all do looks
like a pilot house. Yeah, for sure. So, uh, palliades started
[speaker]: in 2019, but there's been a group of us kind of working
together, longer than that. Uh, palliades has four partners,
[speaker]: uh, who for the most part all come from a very similar
background on the affiliate side. And the way pilot us was was
[speaker]: really, uh, born was, you know, an answer to maybe
what's wrong with a lot of So we, at the time, you know, quite
[speaker]: a unique model and approach. We wanted to focus solely
on performance and solely on growth. And the way we did that
[speaker]: was through true, true alignment. So, you know, get
rid of all a percent of, you know, ad span or rev and like really
[speaker]: focus on, you know, return on ad span or profitability
and all those messages metrics that true business owners and
[speaker]: brands at the end of the day, but that's what their
goals are as well. So, yeah, you need business all the time.
[speaker]: I think a lot of people are doing that now in the agency
space, just have to. But with that approach, I'd say it allowed
[speaker]: us to maybe punch a little higher in terms of the weight
class. When we were going through those pitches and our regional
[speaker]: portfolio clients, And, you know, I shouldn't say clients,
we really consider people partners because we are partnering
[speaker]: with them in exactly what they're looking for. And
the model is about alignment and a lot of alignment through incentives,
[speaker]: through, you know, from the client partner to the agency.
And even just as importantly or even more importantly, like the
[speaker]: team. So we kind of have that win-win-win. structure,
but kind of gives us an edge. So that's fascinating. I think
[speaker]: we should talk about that. But you can forward that.
What's the team size today? So today we're at about 170 people.
[speaker]: Right. Yeah, which, you know, to put that in perspective
and, I guess, 2020, everyone, you know, looks to the start of
[speaker]: COVID as a, as a good kind of marker in time. And we
were 15 people, I think, time locally in Victoria and from there,
[speaker]: you know, now we're, we have people all around the
globe and out of 170, it's pretty, pretty wild to think about
[speaker]: that. Yeah, that's it's such quick growth. And I, yeah,
I think there's a pattern with some agencies who grow that quickly,
[speaker]: but I want to talk about what else is in post that
you mentioned, had four partners who were all, you know, we had
[speaker]: some relationship before and we've had Dean Deutreau
from Worthy Commerce, who's acquired by SmartPug Media, some
[speaker]: similar story. I mean, Ryan two partners who'd been
working together can loosely and then built an agency and scaled
[speaker]: to 50 people in three years or whatever, you know,
it was structured with Nick Shackleford and Chase Diamond and
[speaker]: some of the glass there. Chase has been on the podcast
and there's some similarity there. So that's one thing that is
[speaker]: a commonality. I think it's worth pointing out for
people that sometimes we put so much pressure on ourselves as
[speaker]: entrepreneurs sense of like, oh my goodness, this is
my fifth, four people, 270 people in three years or four years
[speaker]: or whatever it is. And there are some, there's a commonality
there when you bring people together who have some influence,
[speaker]: have some meaningful experience under their belt. And
if you're looking for a partner, that's something that we should
[speaker]: probably be looking for. But honestly, it's not just
four people who had a network who all of a sudden, magical way
[speaker]: to 170 people, that should do it. And gotten right.
And I'm certainly a lot of things that you've tried and didn't
[speaker]: work in them But why is it the model and the network
that you guys had? What's led to that kind of growth? Yeah, it's
[speaker]: a to greek question. I mean it's certainly a number
of things Our CEO Dave Steele, you know really at the start was
[speaker]: integral in this vision He essentially wanted something
wanted a place for Growth-minded people to build something and
[speaker]: I'm not talking about you know, just the four partners
from the very start are kind of culture evolved where we looked
[speaker]: to bring on entrepreneurs. We looked to bring on growth-minded
folks that just, you know, have this spirit of winning and sharing
[speaker]: in those wins. And I think that's just carried
[speaker]: But we can't lose love and every and believe that so
we just keep growing and in that in that sense, you know, like
[speaker]: it so there's no other direction then growth.
[speaker]: Um, it's talking to teams like, uh, jump 450 or Hawk
media about how they're running incentive structures for their,
[speaker]: it sounds like it's something that you guys have also
implemented. Where there's a percent of revenue. So clients are
[speaker]: paying, it sounds like if I'm here, you're right. The
clients are paying, you know, a percentage of performance. There
[speaker]: may be a retainer fee. You know, I'm sure there's a
mixed model there. There's probably a mixed model there
[speaker]: clients are earning a percentage of that revenue coming
through as well. Feel free to clear up anything in terms of like,
[speaker]: hey, how does that? What are the general? Yeah, I can
explain it just like quickly, you know, quite simply, we are
[speaker]: model started out with, you know, a retainer that covered
salaries of the teams, the team that you had, pretty much in
[speaker]: totality. And then we would build up and sensitive.
Originally, like I mentioned, based on Rhoaz, a return on adswind.
[speaker]: And that was when Facebook, and I'm speaking about
Facebook or meta first because that's where our roots started.
[speaker]: We do a lot more than that these days. But when their
reporting was, you know, as good as it was, that was, you know,
[speaker]: quite an easy thing for us all to align would take
that percentage of Rhoas and then it would, a Porsche that would
[speaker]: go to the team directly. And in that way, the partners,
the client partners would kind of only, if they were doing well,
[speaker]: we would share in that win if they weren't. It was
just covering team cost. And that was kind of the way we were
[speaker]: positioned as an internal marketing team to your brand.
And I can speak more to that. as well. Yeah. So I think that
[speaker]: is actually maybe let's let's stay on that for a second
because then I went into a couple of other questions. So yeah.
[speaker]: So essentially one of our tools is Slack that we've
kind of used right from the start. But we have our clients in
[speaker]: unique in the sense that we're communicating to them
in like a real-time basis. It's not solely based on weekly updates
[speaker]: and meetings and things like that. It is more of a
collaborative partnership where they're 24 hours a day. We are
[speaker]: eating completely transparent with our challenges,
with the opportunities that we see, and the whims that we're
[speaker]: seeing and they just see it right behind the scenes
kind of thing. Very little communication happens behind the closed
[speaker]: curtains, which I think is, you know, I can't remember
one of our advantages. Yeah. By the way, since you brought up
[speaker]: tools, let me just slack and share it slack. I was
talking with somebody the other day about their super afraid
[speaker]: of bringing clients into slack and what can happen.
I was like, no, you should. If it's our, it's all shared. In
[speaker]: our case, that's how we're managing customer support
and pretty much every agency. It's like 92% of our clients totally.
[speaker]: Lex, they're already on it. They're on paid Slack instances.
We use Slack Connect. Everyone can keep a copy of the conversation.
[speaker]: And when we're done working together, it integrates
well. We click up and all works together. One tool recommendation
[speaker]: is a relatively new tool. It's called Dispatch. I think
the domain is Dispatch.do. Do you superhuman? Have you relifted
[speaker]: superhuman for email? I've heard of it. but not, uh,
middle and off, potentially. There's just like, how can we turn
[speaker]: what charge email productivity and just a tooling built
on top of, um, your email client to run faster? We need this,
[speaker]: like, the superhuman for Slack, like a whole bunch
of, oh, cool. It makes it really easy to kind of turn Slack.
[speaker]: Hey, I've got all these client questions to answer.
I'm able to use that, like, turn into, uh, multiplayer mode where
[speaker]: we can kind of assign stuff. It's almost like, uh,
ticketing thing built on top of Slack. Mm-hmm. Plus, you know,
[speaker]: can be ways to, uh, as a reminder, or whatever else
you want to do, but that's crazy. Yeah. Simple. And you've got
[speaker]: slack, and you've got, click up on the PM side. But
if we steer away from the click up, so the comp model, and one
[speaker]: thing that you said earlier was like, hey, we've got
this, since the beginning, we fired really entrepreneurial people.
[speaker]: Going from four to 15 with entrepreneurial people,
sounds not that crazy to me.
[speaker]: is a real big challenge in terms of building the sourcing
pipelines and how do you find me tonight and screen the right
[speaker]: candidates and then onboard people and filter out the
folks where we got it wrong. What have you put in place like
[speaker]: what's made that possible to keep the entrepreneurial
spirit as you've gone through so much growth? Yeah great great
[speaker]: question so you know I would say the
[speaker]: it had the exact sort of the partners were heavily
involved with every single hire. And maybe even beyond that,
[speaker]: but essentially, maybe this is where I can tie a little
bit of Yossin into the conversation. And that wasn't, you know,
[speaker]: we didn't start with that framework or that system,
but around that same level, we did bring it in core values, established
[speaker]: quite early on to circle around this idea of hiring
entrepreneurs. And with that, we have used it in the recruitment
[speaker]: process as a kind of a engaging tool to make sure that
we're hiring for the right culture. Our recruitment process is
[speaker]: roughly a culture screen being the very first touchpoint.
after filtering out other folks, that culture screen was, yeah,
[speaker]: actually another thing about probably up to 100 people,
that culture screen, finally, that was done by our CEO. It was
[speaker]: so important and it is so important to our agency,
the people that are running it, helping us
[speaker]: And so right away that would happen, the culture screen,
then we would have a team screen where it wasn't structured per
[speaker]: se, but essentially the individuals, regiance, you
know, seniority from people who are new hires to management.
[speaker]: They just want to get a feel of how you fit in the
culture. What are your mindsets like? What questions you're asking?
[speaker]: What curiosities are kind of directing that conversation
and then some sort of project and then ultimately used to be
[speaker]: an end with an exact screen. And those are always a
lot of fun, partly just grilling people, but other part was just
[speaker]: again confirming that culture piece, which is so important.
And these days we've
[speaker]: and a little more defined process and actual HR department
and things like that. But yeah, somehow it's been maintained.
[speaker]: That being said, the other thing that has happened
a lot is referrals internally. You know, we we rely so heavily
[speaker]: on people just living and talking at this culture and
just believing in it so much so that they want to bring people
[speaker]: to it. They want, but they want to bring the best people
because they know how much time I've heard. So it's certainly,
[speaker]: you know, a huge part of our hiring. That's awesome.
You mentioned plugging in on to perennial operating system or
[speaker]: EOS. Where did that happen in the journey? Yeah, I'd
say again around that 40, 50 mark, people
[speaker]: still running like a startup. We were also this in
terms of timeline was maybe of month or so into COVID. And so
[speaker]: we were working remotely and we just weren't really
used to that. And I think we were doing a great job, but at that
[speaker]: point, no one really knew what the timelines were.
But what we did was lean into,
[speaker]: kind of anomaly, taking that bet, but DTC brands would
be in a growth period with it. And I think a lot of agencies
[speaker]: maybe stalled out a little bit or pulled back, whereas
we kind of did the opposite. We just hired more and built our
[speaker]: network, our pipeline and invested in that. just gobble
side track there. But EOS was introduced to me through kind of
[speaker]: a network of people in some other businesses as something
to look into. At Patana, I really had no clue what I was doing
[speaker]: myself into. And
[speaker]: it was something that the execs tried first. We weren't
looking for this formal this adoption that I think in hindsight,
[speaker]: you know, how it's really can be beneficial for a lot
of organizations. We just said, hey, you know, there's a certain
[speaker]: weaknesses that we're finding with our communication
or organization goal setting. This could be a solution and let's
[speaker]: just try it at the tops first. And so we went through
about a quarter or two of that and just it revolutionized our
[speaker]: discussion in our strategy building, our meetings,
and we just saw the value pretty much immediately and decided
[speaker]: to start kind of pulling it in two teams, one by one,
and that's what's kind of where it started. Wow, that's awesome.
[speaker]: Is it all been self-implemented or did you wind up
working with an implementer from the outside? Completely self-implemented,
[speaker]: and that's why it certainly isn't complete in the traditional
sense. We've kind of cherry-ticked some of the principles and
[speaker]: intertwined that with our kind of approaching and culture.
What is there anything off the top of your head, Andrew, that
[speaker]: is like, hey we tried this or we looked at this and
we threw it out right away or we tweaked it?
[speaker]: Yeah, good question. I think that...
[speaker]: principles like the vision track, traction organizer,
we've certainly gone through that process and that that really
[speaker]: helped us establish a few things like our core values.
But we really unfold through with that. It's not something that
[speaker]: we kind of go through on a quarterly basis. We've replaced
that with, you know, another really kind of informal way of setting
[speaker]: goals. But yeah. Oh, you're reading my mind here, which
is yeah, hey, if you're not doing that are using Ok hours are
[speaker]: using another you know another framework for it Yeah,
but it sounds like you have something homegrown. It's that's
[speaker]: working. Yeah, essentially um the The the thing that
we've kind of started leading towards Recently and it's it's
[speaker]: not like new to the organization, but it's kind of
what we stumbled across Hey, we're actually doing this called.
[speaker]: And that's a whole accuracy. We've kind of brought
in some of those frameworks just very recently, like officially,
[speaker]: but we've really always had this mindset of, you know,
not having a high up to old structure of, you know, like we hire
[speaker]: entrepreneurs, we hire self starters and people that
just want to want to grow. And We basically try and empower them
[speaker]: and provide them with tools and some guidance and frameworks
for them to really achieve the objectives that they're that do
[speaker]: line up to our goals, type thing. And so we've now
gone through a bit of a process to get dynamic job descriptions
[speaker]: across the board. you know, traditional roles and responsibilities
and things like that. Haven't always felt the best for us. We
[speaker]: didn't know why. So this is feeling a lot better. And
then we built out a full set of rules and engagement that kind
[speaker]: of provide a code of conduct for us. For our leaders,
just play team players to go and achieve what we need to get.
[speaker]: Yeah. That's amazing. gospel of holocracy in Canada.
This is like the third company based out of Canada who's told
[speaker]: me about this in the last month. I can't. The first
sound I was like like maybe I can spell that word. I don't like
[speaker]: I'm not that familiar with the principle and I did.
Yeah, that's cool. Is there somebody like where do you remember
[speaker]: where that idea came from? Yeah, I did the stuff question
because yeah, it was I think it was something we came across
[speaker]: and not just spread like wildfire through our management
layer and we're just like, oh, you know, this is what we're doing.
[speaker]: So we should actually, you know, invest some time and
learn about the framework behind it, try and take some of those
[speaker]: principles and intertwine them with what we've already
built. So yeah, no particular person other than, I wish I could
[speaker]: remember them. Yeah, that's my somewhere in set. Yeah,
exactly. I didn't know I believe it's the founder of that. Yeah.
[speaker]: Obviously that order, whenever. Cool. That's awesome.
So I want to make sure that we wrap up on time here. But you
[speaker]: mentioned how important referrals were from a growth
perspective in terms of scaling the team. How about from a business
[speaker]: development perspective? I'm sure there's a bunch of
referrals. But what are the main I would imagine people hear
[speaker]: your story and they say, my agency, I'm fighting to
grow 25% a year. And you guys are blowing up, what are they doing
[speaker]: that I'm not doing from a sales perspective? What are
the main pipelines for you? Yeah, it's so in the early days and
[speaker]: still today, it's heavily been based on referrals.
The art model centers around us doing great work achieving success
[speaker]: for our partners. And so without, you know, we have
our NPS scores right of the top and people love to kind of just
[speaker]: spread the word about what we do for them. So that
is a huge piece of it. Another piece is actually DTC. We have
[speaker]: a newsletter direct to consumer.co. But we started
about two years ago, really with this sole purpose originally
[speaker]: of kind of value creation, which is that's one of our
core values, but value creation for our network. We are impressed
[speaker]: and surprised and genuinely excited about the work
that our teams are doing every single day. whether sometimes
[speaker]: they know it or not, they're leading edge a lot of
the times in what they're doing. And it's just, I think Victoria
[speaker]: and the affiliates, networks and companies that, you
know, I talked, I kind of referred to originally there's always
[speaker]: been this culture of sharing and
[speaker]: Isn't that kind of competitive secretive nature of
things like the it's always kind of We all can win so why not
[speaker]: just accelerate that and so that newsletter was started
in that vein You know, we want to bring in knowledge. We want
[speaker]: to share knowledge and Let's give you try in a newsletter
format and so with that two years ago or or more to today over
[speaker]: 150,000 subscribers of anyone touching marketing or
direct consumer, you know, commerce brands, we have agencies
[speaker]: and, you know, just a great network that's been built
up through that. And with that, you know, the inbound referrals
[speaker]: also continue to grow and grow and grow. We tend shows
and things like that. Yeah, that's amazing. I think so I wanted
[speaker]: to bring out I'm glad that you mentioned it The podcast
and the newsletter site Zoom room favorite forms of marketing
[speaker]: so if you go to direct the consumer.co You'll see you
were recording list and there's two hundred and seventy different
[speaker]: episodes of the DTC show The latest one is I'm looking
on here is your neighbor in Victoria, Andrew Wilkinson I'm just
[speaker]: built tiny and a bunch of other things. And so that's
a huge volume. I've worked you out there, but it's one of my
[speaker]: favorite kinds of marketing, where you're interviewing
your best customers. You know, I'm just scrolling through the
[speaker]: pages here and who are we pulling in? Like all these
folks who are either allies, the people who make referrals to
[speaker]: you, you've got a handful of those. Really, all of
these could do that. But some who are also, you know, they're
[speaker]: or a lot of these are also just D to C brands and folks
who are running that. So there's some value that I'm sure some
[speaker]: percentage of these folks have come through and said,
oh, that's interesting. This is fun talking to these guys. We
[speaker]: need a new partner at some point in time. Let's hire
them directly. Probably the more impactful thing is you're highlighting
[speaker]: them. They want to share that with their network. You're
just continuing to be seeing
[speaker]: the folks who you associate with in your marketing,
that's the level of those folks is the level that you're perceived
[speaker]: as a brand. And so you're getting into that network
and creating a lot of leverage by marketing with your pulling
[speaker]: in your customers to market with you or the people
who should be, usually you want to be your customers to market
[speaker]: with, which is a really good, and it's a commonality
of a lot of the fastest growing brands out there too.
[speaker]: Yeah, I mean, yeah, it's a win-win situation, but like
I said at the start, it's for us to centered around that value
[speaker]: creation. It's just an immense learning experience
for the network, so subscribe to direct consumer, but also internally
[speaker]: we just learned so many things from all these people
that we're talking to. Right. Oh, yeah. Here's what I mean this
[speaker]: is and you guys have done it way faster word about
the same number of episodes into our show But we've been doing
[speaker]: it since 2015 you've been doing it for a couple years
You guys are pumping it out at a wear volume and so that rate
[speaker]: of learning getting here cool new ideas Oh, this is
cool pilot house has this inside of model I wonder if that would
[speaker]: work well. You know, you just get exposed to so many
helpful ideas, so Yeah, I think you're bringing the good guys.
[speaker]: I will cut you off go ahead No, I was just gonna say
Eric Decker
[speaker]: direct to consumer has just done a fantastic job Accelerating
us through that so during yeah, that's awesome. Well shout out
[speaker]: to Eric Shout it to you Andrew for the will to come
on and chair today. This is a bit super fun if folks want to
[speaker]: follow along We already mentioned the direct to consumer
that co site the other place that obviously we should point to
[speaker]: is pilot house Co the website is there anyone anywhere
else that we should ask folks to go connect with you or follow
[speaker]: follow your story places, you know, we're in the midst
of updating our website, pilotos, but you could follow me on
[speaker]: LinkedIn if you so choose, but those are definitely
the best places. Awesome. Only for that's in the show notes.
[speaker]: It was a bit super fun. Andrew, thanks for coming out
and joining us today on Agency Journey. Yeah, great. Thank you
[speaker]: so much. Really appreciate the opportunity to chat.