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[speaker]: All right, welcome back to Agency Journey. This is
Gray MacKenzie from ZenPilot. I am your host for today, but

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[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

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[speaker]: Pilot House, which is an awesome agency, and you'll
be able to tell where they're located or where they're headquartered.

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[speaker]: Here just a second, once I welcome Andrew aboard, put
their friends from up north. Andrew, welcome to the podcast.

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[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

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[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

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[speaker]: on EOS and have gone through that implementation process
or in that implementation process. And it's been funny as we've

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[speaker]: been having those conversations. Some people are super
pure play, EOS. Like we do everything down to, you know, if it

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[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

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[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

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[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?

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[speaker]: Who do you serve? Yeah, great. So No, I'd personally
been in marketing for over Around 15 years. I started out as

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[speaker]: a media buyer Way back in the day really in with affiliate
marketing, I guess. So that's quite unique to Victoria where

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[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

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[speaker]: marketing space and serve does, I guess, like a university
for marketing for a lot of folks around here. But with that,

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[speaker]: you know, essentially that's kind of traffic with offers
that are paper conversion. You know, a great learning ground

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[speaker]: to get your hands on performance marketing in the truest
spirit of things. And so that's where I started, but from there

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[speaker]: I went into running nearby teams, consulting, even
working within brands themselves.

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[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

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[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

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[speaker]: place to take all those learnings and experiences and
kind of build something truly truly great so yeah that's awesome

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[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,

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[speaker]: had their roots in affiliate marketing and before there
was Tim Ferris, now and for his down, running affiliate sites

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[speaker]: or telling supplements over the internet. Exactly.
And there's real commonality there. And pilot houses in the GDC

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[speaker]: space too. So walk us through what you all do looks
like a pilot house. Yeah, for sure. So, uh, palliades started

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[speaker]: in 2019, but there's been a group of us kind of working
together, longer than that. Uh, palliades has four partners,

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[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

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[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

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[speaker]: a unique model and approach. We wanted to focus solely
on performance and solely on growth. And the way we did that

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[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

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[speaker]: focus on, you know, return on ad span or profitability
and all those messages metrics that true business owners and

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[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.

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[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

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[speaker]: us to maybe punch a little higher in terms of the weight
class. When we were going through those pitches and our regional

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[speaker]: portfolio clients, And, you know, I shouldn't say clients,
we really consider people partners because we are partnering

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[speaker]: with them in exactly what they're looking for. And
the model is about alignment and a lot of alignment through incentives,

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[speaker]: through, you know, from the client partner to the agency.
And even just as importantly or even more importantly, like the

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[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

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[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.

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[speaker]: Right. Yeah, which, you know, to put that in perspective
and, I guess, 2020, everyone, you know, looks to the start of

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[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,

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[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

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[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,

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[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

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[speaker]: some relationship before and we've had Dean Deutreau
from Worthy Commerce, who's acquired by SmartPug Media, some

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[speaker]: similar story. I mean, Ryan two partners who'd been
working together can loosely and then built an agency and scaled

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[speaker]: to 50 people in three years or whatever, you know,
it was structured with Nick Shackleford and Chase Diamond and

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[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

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[speaker]: a commonality. I think it's worth pointing out for
people that sometimes we put so much pressure on ourselves as

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[speaker]: entrepreneurs sense of like, oh my goodness, this is
my fifth, four people, 270 people in three years or four years

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[speaker]: or whatever it is. And there are some, there's a commonality
there when you bring people together who have some influence,

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[speaker]: have some meaningful experience under their belt. And
if you're looking for a partner, that's something that we should

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[speaker]: probably be looking for. But honestly, it's not just
four people who had a network who all of a sudden, magical way

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[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

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[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

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[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

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[speaker]: integral in this vision He essentially wanted something
wanted a place for Growth-minded people to build something and

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[speaker]: I'm not talking about you know, just the four partners
from the very start are kind of culture evolved where we looked

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[speaker]: to bring on entrepreneurs. We looked to bring on growth-minded
folks that just, you know, have this spirit of winning and sharing

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[speaker]: in those wins. And I think that's just carried

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[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

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[speaker]: it so there's no other direction then growth.

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[speaker]: Um, it's talking to teams like, uh, jump 450 or Hawk
media about how they're running incentive structures for their,

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[speaker]: it sounds like it's something that you guys have also
implemented. Where there's a percent of revenue. So clients are

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[speaker]: paying, it sounds like if I'm here, you're right. The
clients are paying, you know, a percentage of performance. There

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[speaker]: may be a retainer fee. You know, I'm sure there's a
mixed model there. There's probably a mixed model there

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[speaker]: clients are earning a percentage of that revenue coming
through as well. Feel free to clear up anything in terms of like,

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[speaker]: hey, how does that? What are the general? Yeah, I can
explain it just like quickly, you know, quite simply, we are

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[speaker]: model started out with, you know, a retainer that covered
salaries of the teams, the team that you had, pretty much in

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[speaker]: totality. And then we would build up and sensitive.
Originally, like I mentioned, based on Rhoaz, a return on adswind.

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[speaker]: And that was when Facebook, and I'm speaking about
Facebook or meta first because that's where our roots started.

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[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,

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[speaker]: quite an easy thing for us all to align would take
that percentage of Rhoas and then it would, a Porsche that would

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[speaker]: go to the team directly. And in that way, the partners,
the client partners would kind of only, if they were doing well,

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[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

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[speaker]: positioned as an internal marketing team to your brand.
And I can speak more to that. as well. Yeah. So I think that

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[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.

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[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

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[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

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[speaker]: and meetings and things like that. It is more of a
collaborative partnership where they're 24 hours a day. We are

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[speaker]: eating completely transparent with our challenges,
with the opportunities that we see, and the whims that we're

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[speaker]: seeing and they just see it right behind the scenes
kind of thing. Very little communication happens behind the closed

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[speaker]: curtains, which I think is, you know, I can't remember
one of our advantages. Yeah. By the way, since you brought up

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[speaker]: tools, let me just slack and share it slack. I was
talking with somebody the other day about their super afraid

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[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

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[speaker]: our case, that's how we're managing customer support
and pretty much every agency. It's like 92% of our clients totally.

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[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.

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[speaker]: And when we're done working together, it integrates
well. We click up and all works together. One tool recommendation

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[speaker]: is a relatively new tool. It's called Dispatch. I think
the domain is Dispatch.do. Do you superhuman? Have you relifted

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[speaker]: superhuman for email? I've heard of it. but not, uh,
middle and off, potentially. There's just like, how can we turn

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[speaker]: what charge email productivity and just a tooling built
on top of, um, your email client to run faster? We need this,

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[speaker]: like, the superhuman for Slack, like a whole bunch
of, oh, cool. It makes it really easy to kind of turn Slack.

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[speaker]: Hey, I've got all these client questions to answer.
I'm able to use that, like, turn into, uh, multiplayer mode where

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[speaker]: we can kind of assign stuff. It's almost like, uh,
ticketing thing built on top of Slack. Mm-hmm. Plus, you know,

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[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

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[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

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[speaker]: thing that you said earlier was like, hey, we've got
this, since the beginning, we fired really entrepreneurial people.

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[speaker]: Going from four to 15 with entrepreneurial people,
sounds not that crazy to me.

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[speaker]: is a real big challenge in terms of building the sourcing
pipelines and how do you find me tonight and screen the right

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[speaker]: candidates and then onboard people and filter out the
folks where we got it wrong. What have you put in place like

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[speaker]: what's made that possible to keep the entrepreneurial
spirit as you've gone through so much growth? Yeah great great

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[speaker]: question so you know I would say the

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[speaker]: it had the exact sort of the partners were heavily
involved with every single hire. And maybe even beyond that,

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[speaker]: but essentially, maybe this is where I can tie a little
bit of Yossin into the conversation. And that wasn't, you know,

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[speaker]: we didn't start with that framework or that system,
but around that same level, we did bring it in core values, established

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[speaker]: quite early on to circle around this idea of hiring
entrepreneurs. And with that, we have used it in the recruitment

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[speaker]: process as a kind of a engaging tool to make sure that
we're hiring for the right culture. Our recruitment process is

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[speaker]: roughly a culture screen being the very first touchpoint.
after filtering out other folks, that culture screen was, yeah,

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[speaker]: actually another thing about probably up to 100 people,
that culture screen, finally, that was done by our CEO. It was

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[speaker]: so important and it is so important to our agency,
the people that are running it, helping us

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[speaker]: And so right away that would happen, the culture screen,
then we would have a team screen where it wasn't structured per

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[speaker]: se, but essentially the individuals, regiance, you
know, seniority from people who are new hires to management.

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[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?

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[speaker]: What curiosities are kind of directing that conversation
and then some sort of project and then ultimately used to be

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[speaker]: an end with an exact screen. And those are always a
lot of fun, partly just grilling people, but other part was just

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[speaker]: again confirming that culture piece, which is so important.
And these days we've

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[speaker]: and a little more defined process and actual HR department
and things like that. But yeah, somehow it's been maintained.

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[speaker]: That being said, the other thing that has happened
a lot is referrals internally. You know, we we rely so heavily

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[speaker]: on people just living and talking at this culture and
just believing in it so much so that they want to bring people

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[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,

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[speaker]: you know, a huge part of our hiring. That's awesome.
You mentioned plugging in on to perennial operating system or

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[speaker]: EOS. Where did that happen in the journey? Yeah, I'd
say again around that 40, 50 mark, people

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[speaker]: still running like a startup. We were also this in
terms of timeline was maybe of month or so into COVID. And so

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[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

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[speaker]: point, no one really knew what the timelines were.
But what we did was lean into,

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[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

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[speaker]: maybe stalled out a little bit or pulled back, whereas
we kind of did the opposite. We just hired more and built our

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[speaker]: network, our pipeline and invested in that. just gobble
side track there. But EOS was introduced to me through kind of

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[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

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[speaker]: myself into. And

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[speaker]: it was something that the execs tried first. We weren't
looking for this formal this adoption that I think in hindsight,

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[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

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[speaker]: weaknesses that we're finding with our communication
or organization goal setting. This could be a solution and let's

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[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

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[speaker]: discussion in our strategy building, our meetings,
and we just saw the value pretty much immediately and decided

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[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.

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[speaker]: Is it all been self-implemented or did you wind up
working with an implementer from the outside? Completely self-implemented,

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[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

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[speaker]: intertwined that with our kind of approaching and culture.
What is there anything off the top of your head, Andrew, that

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[speaker]: is like, hey we tried this or we looked at this and
we threw it out right away or we tweaked it?

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[speaker]: Yeah, good question. I think that...

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[speaker]: principles like the vision track, traction organizer,
we've certainly gone through that process and that that really

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[speaker]: helped us establish a few things like our core values.
But we really unfold through with that. It's not something that

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[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

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[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

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[speaker]: using another you know another framework for it Yeah,
but it sounds like you have something homegrown. It's that's

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[speaker]: working. Yeah, essentially um the The the thing that
we've kind of started leading towards Recently and it's it's

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[speaker]: not like new to the organization, but it's kind of
what we stumbled across Hey, we're actually doing this called.

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[speaker]: And that's a whole accuracy. We've kind of brought
in some of those frameworks just very recently, like officially,

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[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

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[speaker]: entrepreneurs, we hire self starters and people that
just want to want to grow. And We basically try and empower them

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[speaker]: and provide them with tools and some guidance and frameworks
for them to really achieve the objectives that they're that do

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[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

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[speaker]: across the board. you know, traditional roles and responsibilities
and things like that. Haven't always felt the best for us. We

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[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

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[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.

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[speaker]: Yeah. That's amazing. gospel of holocracy in Canada.
This is like the third company based out of Canada who's told

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[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

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[speaker]: I'm not that familiar with the principle and I did.
Yeah, that's cool. Is there somebody like where do you remember

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[speaker]: where that idea came from? Yeah, I did the stuff question
because yeah, it was I think it was something we came across

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[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.

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[speaker]: So we should actually, you know, invest some time and
learn about the framework behind it, try and take some of those

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[speaker]: principles and intertwine them with what we've already
built. So yeah, no particular person other than, I wish I could

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[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.

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[speaker]: Obviously that order, whenever. Cool. That's awesome.
So I want to make sure that we wrap up on time here. But you

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[speaker]: mentioned how important referrals were from a growth
perspective in terms of scaling the team. How about from a business

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[speaker]: development perspective? I'm sure there's a bunch of
referrals. But what are the main I would imagine people hear

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[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

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[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

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[speaker]: still today, it's heavily been based on referrals.
The art model centers around us doing great work achieving success

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[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

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[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

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[speaker]: a newsletter direct to consumer.co. But we started
about two years ago, really with this sole purpose originally

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[speaker]: of kind of value creation, which is that's one of our
core values, but value creation for our network. We are impressed

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[speaker]: and surprised and genuinely excited about the work
that our teams are doing every single day. whether sometimes

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[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

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[speaker]: and the affiliates, networks and companies that, you
know, I talked, I kind of referred to originally there's always

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[speaker]: been this culture of sharing and

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[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

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[speaker]: just accelerate that and so that newsletter was started
in that vein You know, we want to bring in knowledge. We want

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[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

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[speaker]: 150,000 subscribers of anyone touching marketing or
direct consumer, you know, commerce brands, we have agencies

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[speaker]: and, you know, just a great network that's been built
up through that. And with that, you know, the inbound referrals

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[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

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[speaker]: to bring out I'm glad that you mentioned it The podcast
and the newsletter site Zoom room favorite forms of marketing

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[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

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[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

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[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

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[speaker]: favorite kinds of marketing, where you're interviewing
your best customers. You know, I'm just scrolling through the

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[speaker]: pages here and who are we pulling in? Like all these
folks who are either allies, the people who make referrals to

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[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

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[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

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[speaker]: percentage of these folks have come through and said,
oh, that's interesting. This is fun talking to these guys. We

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[speaker]: need a new partner at some point in time. Let's hire
them directly. Probably the more impactful thing is you're highlighting

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[speaker]: them. They want to share that with their network. You're
just continuing to be seeing

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[speaker]: the folks who you associate with in your marketing,
that's the level of those folks is the level that you're perceived

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[speaker]: as a brand. And so you're getting into that network
and creating a lot of leverage by marketing with your pulling

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[speaker]: in your customers to market with you or the people
who should be, usually you want to be your customers to market

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[speaker]: with, which is a really good, and it's a commonality
of a lot of the fastest growing brands out there too.

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[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

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[speaker]: creation. It's just an immense learning experience
for the network, so subscribe to direct consumer, but also internally

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[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

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[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

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[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

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[speaker]: of learning getting here cool new ideas Oh, this is
cool pilot house has this inside of model I wonder if that would

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[speaker]: work well. You know, you just get exposed to so many
helpful ideas, so Yeah, I think you're bringing the good guys.

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[speaker]: I will cut you off go ahead No, I was just gonna say
Eric Decker

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[speaker]: direct to consumer has just done a fantastic job Accelerating
us through that so during yeah, that's awesome. Well shout out

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[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

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[speaker]: follow along We already mentioned the direct to consumer
that co site the other place that obviously we should point to

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[speaker]: is pilot house Co the website is there anyone anywhere
else that we should ask folks to go connect with you or follow

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[speaker]: follow your story places, you know, we're in the midst
of updating our website, pilotos, but you could follow me on

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[speaker]: LinkedIn if you so choose, but those are definitely
the best places. Awesome. Only for that's in the show notes.

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[speaker]: It was a bit super fun. Andrew, thanks for coming out
and joining us today on Agency Journey. Yeah, great. Thank you

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[speaker]: so much. Really appreciate the opportunity to chat.