[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.