A discussion about the common pitfalls of running an agency and everything Nathan did wrong for 7 years when he was running his.
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Amanda: I’m going to explain why I look like this. You know when you get motivated to do something like go for a run.
Nathan: Rarely.
Amanda: Me too. Exactly. So, I got the motivation. And I was like, you can’t ignore this. This never happens to you. Go do it. But it’s 88 degrees outside. I mis-timed morning. And so anyway, that’s why I am bright red, so there we go.
Nathan: Here we are.
Amanda: I’ve already come up with a plan on how to avoid this situation happening again. I’m never going to go for another run.
Nathan: That was obviously the lesson to take from all this.
Amanda: Honestly, my fitness is the problem. And so we just need to be very solutions oriented.
Nathan: Focus on your business, chain yourself to the desk.
Amanda: Yeah. And that is my takeaway coming into this recording is no more outdoor activity. Inside only because that’s where I belong.
What do you want to talk about today? What was the best prospect call you had recently?
Nathan: Not yesterday morning.
Amanda: This recording is happening at an undisclosed time.
Nathan: Yeah, I was having a conversation with an agency owner and I could see a lot of value in using Blink. The agency side is very aspirational. “Yeah, I should, I know I should be tracking this stuff but I’m not.”
I think probably the best call was somebody who’s looking to track their funnel, He’s that visionary founder who doesn’t track anything and is effective. And he is now beginning to delegate to other people on his team. Like they’ve hired a salesperson to help with generating some of the initial leads and doing some of the very initial outreach and filtering to get people on a call and he was saying, Well, you know, I’ve never tracked anything.
But I need to track what they’re doing. I don’t have any sense of how they’re doing, how effective they’re being, where they could improve. And so he’s wanting to set up some of those systems because as you start to hand stuff off, you want to still know that it’s going well and when you need to kind of coach them or help them adjust their processes. And now they’re starting to instill some of those processes, delegate more, and preparing to grow and scale.
And so they need more of this stuff in place. And then for their clients, they’re offering, um, you know, marketing services and, and things that they need to be able to measure and quantify and show results for their clients. So they need it for themselves to kind of track their own sales pipeline and projects that are coming through, and also then to turn around and transparently show the results to the client so that they continue to be clients.
Amanda: We start to get into this multilayered conversation where it’s, what KPIs are we talking about for the agency itself? And then what KPIs are we talking about them sharing with their clients? And then what KPIs might their clients be interested internally outside of what the agency is doing? And they’re all kind of related.
Nathan: Agency KPIs are difficult because a lot of times there isn’t a process in place to actually do the measuring, right? If you’re not actively using a CRM, and a lot of agencies don’t use a CRM, they just don’t. They’ve got their email inbox, they get a referral from a friend or a past client, they reply in the email, you know, and they throw out a price and some bullet points and like that, that is, I have operated that way and you can operate for years that way. It’s very easy to kind of say, Oh, I can’t be tracked. It’s not, you know, every client is different. Every project is different. And then I’ve also gone to the other end where I have implemented more processes and track things more closely.
And one of the issues, like every project is different, that’s also sometimes a problem, like narrowing your offerings and saying no, and referring work out when it’s not your core area of expertise. Um, that is something that kind of naturally happens as you grow and get referrals, at some point you get too many referrals, you have too many offers for projects and so naturally you’re going to pick the ones that are a better fit.
And so I think with systems and processes, you can get there a lot faster and it’s a lot less, uh, chaotic or random feeling as it’s happening. Make it boring, make it fit into your system.
Um, I know that when I did, I felt more relaxed and I offered a better product and service to my clients.
Amanda: It’s tough because there’s a lot of excitement that comes from doing really bespoke, niche things for different people because you get to explore different areas that are new or fun . But to your point, You get to a certain amount of work where you look at everything you have going on and everything is a squiggly line. you’re like, I just want to see some straight lines and that’s having systems and processes in place. So yeah, it’s, there’s a lot of fun and excitement until the volume becomes overwhelming. And you’re like, this is chaos. We need a system. This is not fun anymore.
Nathan: Yeah. It’s really hard to see when you’re in the middle of it. Uh, but for years I operated my agency and it was. Really a struggle to grow and scale it at various points. And probably the best years of my agency was when I was trying to stop doing it. So I was getting interested in these products.
I was working on one of our first WordPress plugins, and I was trying to transition my time out of agency and into product work, and I was starting to work on my first SaaS business. And so I, uh, effectively doubled my prices for the agency work and didn’t lose many people, which was a sign. Oh, I could have done that years ago and the agency would have been much easier to run.
My, my focus, my energy, all of the creative, uh, energy that I had was going into the products, right? Like this is my future. This is the big problem I’m going to tackle. So I said, you know, for the agency, I need no surprises, no, big learning projects where we go 500 percent over budget and I’m not trying to get the next client or I’m not willing to take huge losses on these projects anymore. So I’m, it will only do boring things that we’ve done before and all my innovation and experimentation will happen on the product side and the agency, you know, over the course of a couple of months got infinitely easier to run and more profitable.
And I was personally less involved in a lot of the work because it was, you know, Like routine and repeatable processes and systems. And there was all those efficiencies and gains and then in retrospect, I said, well, if I just run my agency this way the whole time, and I was handing off responsibilities at the same time I set up a CRM for like the first time I’d operated for seven years without a CRM and then the last three is when I actually had CRM and was tracking things and I was just trying to sell two or three different, different things.
Things and I was saying no to everything else. And yeah, I wish I’d done that for the first seven years instead of, um, instead of just at the end, as I was trying to kind of offload and spin it down, uh, is when it became most successful.
Amanda: The thought that I’m having right now is about, you know, we have Blink as a product, which I think a lot of our focus lately has been growing Blink, focusing on getting customers into that repeatable onboarding process, which we have figured out, but then we also have the consulting work and sort of this agency side of the business, To your point, it’s also very exciting and new, and there’s a lot of opportunity there and a lot of interesting projects that we get to work on. But hearing you talk, I’m thinking, should we steer away from that?
Nathan: Our advice is for other people, not for ourselves.
Amanda: I’m just listening to you say that running an agency became so much easier and more profitable when you just had a process and you turned down work that didn’t fit within that process. That’s getting my wheels to turn a little bit.
Nathan: Yeah. There’s also stages, you know, your first six months of running an agency, you can’t. You can’t afford to be that narrow with it, and you don’t even know which thing to be narrow on, right? I don’t think you can on day one, just have it all dialed in. Like, you kind of have to have some experimentation and chaos, and then reign it in and refine it.
Amanda: Oh, that’s interesting that you mentioned that about agencies. Let me tell you about my friend. You know, do you do a job that brings you more joy or do you do a job that is easier for you, but might make you more money?
I just had this conversation last night
Nathan: Oh no.
Amanda: Oh, not about me. Don’t worry about me. We were talking about my friend who was at an established company doing the tech kind of behind the finance products and a piece of that job was marketing. And he liked the marketing piece of it kind of selling, selling the tech internally. Then he transitioned over into pretty much an all marketing role, which was a big shift. And so now he’s doing more of what he enjoys. But making less money. He’s grappling with this sort of, do I do something that I was proficient at and I made a lot of money, or do I do this thing that I enjoy more? It’s an interesting choice. It’s a common problem for agencies, for individuals, for companies. It’s an interesting thing to explore.
Nathan: Agencies get started because somebody is interested in an area and wants to work on it more and tinker, and like, there’s a kind of a tightrope to walk between like your hobby and interests and then what is like commercially viable and sustainable.
I definitely fell into that a lot in the early days and at the beginning, like you have to take whatever comes your way, you experiment and you figure out what to refine. It’s very tempting to say, oh, I want to learn. I’m interested in this area. I want to learn about it. And, you know, this project and client will subsidize my learning and I’d want to do it anyway.
So, um, like this is a great arrangement. In a lot of client relationships with agencies, you really should not learn on the job or at least be very aware. Of the risks of learning on the job and learning something new. We’re also having a client, um, who’s expecting a result from it.
Um, if you don’t have the right client that can, um, that can be really problematic. I had projects where I was, uh, learning on the job and I would kind of find some new technology or new stack or new service or something that I hadn’t used before. And then I would kind of match that up to a client and I would pitch them on it because I wanted to work on this thing.
And those were always like the least profitable projects. They were always very messy because I was trying to, um, I was trying to learn as I was going, I was learning on the job and along the way you discover like, Oh, this is actually much harder or. There are these constraints that come from this system or all these limits, but you don’t have the freedom to make drastic changes because I pitched the client on this, I gave them a price tag, I told them they were getting this result and now, you know, they paid their deposit and.
They’re expecting to get that result.
Amanda: Yeah. I’ve seen people on Reddit asking, don’t know how to do this, but someone, you know, reached out to ask if I could do this project, should I do it? And everyone on Reddit unequivocally says, do not do that project. They’re like, it’s unfair to the client. They could have somebody else that actually knows what they’re doing, they could do it faster and better for the same price. So like, why would you do that to someone? But then as I’m saying that, I’m like, sorry, that was Reddit being judgmental of the things that you did. Not me.
Nathan: Yeah, a certain amount of it is necessary. And at least if it’s an area that you intend to be in for a long time, and it’s at least in an area where you’re building expertise and focus, and there’s a strategic value to it, that’s. And you’re honest with yourself about that strategic value. Uh, I think it, it still is sometimes the right answer.
And if you have a very understanding client, if you kind of go into this open eyed for both of you and be like, Hey, like this is what I think is going to happen, but things may change, which is great. If it’s another vote for a retainer type situation where they’re paying you monthly. If you do a fixed scope where you’re like, you’re going to get items one through 10 and we’re going to use this system.
Like that’s what it gets really hard. Cause you’re really locked in there and you don’t want to renegotiate the whole project, you know, multiple times. Um, and they’re dead set on getting those 10 things. Cause that’s what you promised them. And they paid you half already. If you’re, if you go into this, like, I think this would work, but like, you’re going to pay me X dollars a month and then we can change the plan at any time.
As we learn things and you have that good relationship with the client, that’s much better. I had a lot of projects that ran way over budget and time that I would just eat that additional cost as I was learning. It wasn’t the client’s fault. Um, so I didn’t really pay for it in dollars, but it did pay for it in time for me to learn and figure it out. But I didn’t do it in a concentrated area, like because the clients were all different. The stacks were different. At least if it’s in a focused area, you will eventually.
You know, gain some ground. Um, but I basically repeated that in like four or five, six different, uh, sectors and projects and whatever, whatever interested me. Um, so that made it doubly worse. And I was doing it on fixed scope projects, which was triply worse. So you couldn’t do it worse than I did it.
Amanda: Yeah. Well, you’re here now. So obviously something you did along the way Successful, it’s all a learning process. And that’s just, that’s life, you know?
Nathan: Well, and the consulting work we do now is in the same area, right? It’s all about data. It’s all about APIs and integrations with third party services. It’s, you know, building expertise in the same set of services, like we’ve Done so many like tweaks and workflows and workarounds for specific CRMs or specific systems we’ve done a lot of learning ourselves though in a lot of those cases like we were implementing system for ourselves So we learned all of the edges And we had the flexibility to change our minds or cancel the whole thing entirely if it wasn’t worth it So then we learned where a lot of those edges and limits and constraints are so when a client comes to us
We know what is possible and what isn’t or what is extremely difficult and what is easy. And so it does make us a lot more effective if we’re doing these projects all circling around the same systems that we’ve worked on for multiple people.
Amanda: Yeah. Yeah. That’s true. All right. Well, I think that’s our time for today. Thanks, Nathan.
Nathan: No, no problem.
