Growing the Right Agency Team to Win Back Your Time with Jacob Baadsgaard | Ep #782

Growing the Right Agency Team to Win Back Your Time with Jacob Baadsgaard | Ep #782 Speaker 1: I want you to stop working for free. If you're tired of getting ghosted on proposals, the endless follow-ups and We'll think about it as a response. There's a better way. The top agencies aren't sending proposals. They're getting paid to pitch and close bigger deals way faster. I want you to grab this free resource I just put together at agencymastery360.com slash strategy. That's agencymastery360.com slash strategy and you'll learn how to flip the script if you want to get paid for your expertise instead of giving it away for free. Hey, Jake, welcome to the show. Speaker 2: Hey, Jason. Thanks for having me, man. Speaker 1: Yeah, I'm excited to have you on. Tell us who you are, what you do. Speaker 2: Well, Jake Baadsgaard. I think I have the record for most A's in my name, Jake Aaron Baadsgaard. I've got seven of them in there. Speaker 1: That is a record. And you're not Canadian. Speaker 2: Not Canadian, of Danish descent, but born and raised here in the States. And I've been building and growing my agency for the last 13 years, Disruptive Advertising. Speaker 1: Awesome. And how did you get started? What made you get into this crazy business? Speaker 2: I got a degree in information systems. And so I was more on the data and analytics side of things. And inevitably, I would help some of the largest companies in the world. I implement web analytics, integrate their back-end customer data, and then tell them what was or wasn't working with their paid ads, which was the easiest place to see what was working and what wasn't working. And I thought, man, if some of these biggest companies in the world don't know how to do this from a data standpoint, and they're billing me out at $300 to $400 an hour and paying me 90 grand at the time in salary, I'm like, I think, Jason, I think my way forward in life is to freelance and bill out at half their rate, but then make twice as much as I'm currently making. So that was kind of the idea. But then as I started doing a little bit more freelance and side work for some small businesses that were non-competitive with my full-time job to just see, does this play out? Does this work for smaller businesses? One of my first clients went from about 25 employees. It was where I worked at when I was in college. And I said, hey, let me just viability test and see if this data stuff helps your business grow. And we figured out exactly what was or wasn't working in their data. And they said, Jake, that's so cool. Thanks for telling us that. We don't have the bandwidth or the expertise to even know what to do with that information. Can you do that for us? And I said, sure, let me give it a shot. And so that's where I went from the data side to the marketing side of things. And long story short, they ended up growing from like 25 employees to 1, 2, 3, 400 employees and really took off because, and that was the idea of disruptive advertising. You don't have to outspend your competition. You just need to outsmart them by spending it where it works. And that was, that was how it got off the ground. That's where I kind of saw the opportunity transition from data and realize that as much as they might like the data implementing and acting on it was where. The value was, and so instead of just a data and analytics agency, it became more of a paid advertising agency. Speaker 1: What did you charge your first client? Speaker 2: Zero. Zero. I just wanted to see if it works. Just wanted to help someone I like. Speaker 1: When did you start charging your clients? And do you think when you first started figuring out what you were worth, were you charging what you were worth? Speaker 2: Not even close. I was doing a lot of this work pro bono, just A for viability, B. Cause these were people I knew and liked and wanted to help. And then once I saw how much of an impact it was making on their business, I'm like, all right, case study's over. You need to start paying. So my first one was $2,000 a month that eventually shifted to $5,000 a month. And my first couple of side gigs were in that two to $5,000 that I was charging for that. But I was managing advertising budgets that were a couple hundred thousand dollars a month. So as a percentage at the time. I was still a bargain. Speaker 1: Oh yeah, big time. Speaker 2: And I remember a couple of times saying, Hey, we probably need to renegotiate the rate. And they said, no. And I said, okay, well then go get some bids and come back and let me know. And maybe we don't need to work together anymore. And, uh, they went and got some bids and came back pretty quickly and said, let's figure something out. Speaker 1: What was kind of the first challenge that you had going from a freelancer to really creating your agency? Speaker 2: You know, it's funny, for someone that got a technical degree in college, I've always been better at the marketing and sales side of things. And so what really limited me from growing and stepping into doing it more full time was my ability to just get help on the fulfillment side, to make sure it was done, done well, executed well, communicated well. And so that's where I started and ultimately just grew my bandwidth by increasing my ability to fulfill on my contracts so that I had more time to sell. Speaker 1: What were kind of your first hires or were your first hires amazing or were they a lesson? Speaker 2: My first one was my high school best friend. And actually a pretty solid hire. He and I have always gotten along because we're very complimentary. He's strong where I'm weak and vice versa. And that worked out for a solid couple of years for both of us. But I did bring on a partner early on and he's, frankly, he's the one that kind of just gave me enough of a nudge to just go for it. But I realized two months in, it was not a good partnership and realized that we needed to part ways and that I could go ahead and move that forward. And that was definitely a learning lesson for me because there was a lot of red flags, but for some reason, like I just didn't quite have the courage to go for it on my own. Someone didn't push me over the edge. Speaker 1: I assume probably not. Most people don't. Did you already have kind of like a, an agreement between the two of you for like, in the event that you guys are going to split to agree on like an evaluation and a buyout and all that kind of stuff? Or was it kind of, Oh crap, I got in bed. This really nice friend and it didn't work out and we're kind of screwed and what was that like? Speaker 2: I give that younger version of me a big high five because I actually did do that. We sat down with an attorney before we signed all the documents and just said, okay, let's think through the beginning to the end and how we part ways if we do part ways. And so even though it was emotionally challenging, logistically, It was actually pretty simple. Speaker 1: How does that work? Or what were you guys thinking? You know, I've heard the shotgun clause of like, hey, if if we were both in partnerships, if you wanted out, you would say, hey, Jason, I want out. You give me a hundred thousand. But then I can come back and say, no, I don't think it's I want you to buy me out. And then you can kind of flip the clause on it. Walk us through kind of that detail, because there's a lot of people That, you know, have a partner right now that, you know, I always joked, you know, I've seen lots of agencies with great partners, but I always joke that you don't know the bad partner. You're the bad partner. Speaker 2: Yeah, you know, I've been just with my ownership in a variety of businesses throughout the years. I've used all sorts of different styles of buyout agreements. But in this particular one, I knew what I was bringing to the table from an ability to fulfill and execute the strategy for the clients. And so it was that the contract was actually pretty simple. I get to retain any clients that I bring to the table if we part ways and then negotiated that you can retain half your clients that you bring to the table because you're doing this. He was doing sales only and I was doing the fulfillment on it. And so we just said, here's how we'll divide clients if we end up parting ways. And the reason why it didn't work out is because he wasn't selling very much. Speaker 1: So right now you're sitting at around $25 million in top line revenue. What was the first challenge? Was it the million mark? Everyone's like, I need to go over the million mark. And then like, when was the no man's land? Like, because there's a no man's land in revenue as well. So what was kind of the first revenue hurdle that you felt like you, you kind of made it, you're a real agency? Speaker 2: You know, there's actually been a lot of those no man lands along the way. The first one I would say is just how do I grow beyond myself? And that was just hiring three or four people that could help me fulfill and execute on contracts. And that got me to a couple million pretty fast, Jason. Like it didn't take long. Because I'm just, I don't know why, I just care a whole hell of a lot and I work hard and we just went hard. And it wasn't until I ran into the limitation of, okay, they're doing most of the execution, but I'm doing all of the sales and anything that escalates is coming through me. And so that was kind of the next major hurdle that I had to solve was, how do we start selling without me doing all of the sales? And how do we help some of these clients that are struggling get the support they need from an escalation standpoint that's not always me as well? But what I started with on that one, because the escalations felt a little harder to solve for, I was on the sales side. And that was what I had to figure out. I hired a couple of expensive, been there, done that kind of sales professionals that told me they could come in and get things rolling pretty quickly. And it never worked. And I don't know if it was them. I don't know if it was me, to be honest. It's probably some combination of both. But what worked the best was when I just found someone that was young, hungry, scrappy, and wanted to just take things off my plate as soon as they were able to. And so they almost started, I would almost describe as more of a sales assistant and then follow up with all the busy work for me to where eventually they're like, let me have the first conversation. Hey, let me have the second conversation to where they started closing some of the smaller deals and then the medium sized deals. And it was really, they kind of just saw and experienced how I did it and then improved upon it rather than trying to come with their way of doing it. I found that didn't work well early on because I was kind of selling myself. Speaker 1: Hi there, agency owners. Let me ask you, are you ready to scale your agency without increasing your overhead costs? If yes, then you need to know about E2M Solutions. Now, E2M is the number one most reliable white label partner for agencies. 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That's e2msolutions.com slash smartagency. Go check them out and tell them Jason Swenk sent you. And then what was kind of the next no man's land? Because I always find like agencies from around a million to about six million are kind of, you know, in no man's land. That's what I found. What about you? Speaker 2: Yeah. I would say the next no man's land probably happened somewhere. Between that $8 to $10 million, the challenge became very different. We actually figured out the sales challenge, but we didn't figure out the target audience challenge, which is what was creating a lot of the escalations in the first place. And so we got to the point where we were churning as many clients as we were selling on a monthly basis. And that's kind of where we hit our next no man's land, as you're calling it. And that was right around that $8 to $10 million mark. Speaker 1: Is that because you were bringing on clients that you might not have thought about bringing on or was it the processes weren't as documented or systemized based on the industries that you're going after? What was the reason around that? Speaker 2: Definitely this is, is it A, B, C, or D or E, all of the above. All of the above. But I would say that the two that I would highlight the most is our success rate with proof of concept businesses was very low. And all of the headaches, if there was chargebacks, if there was bad reviews, if there was employee dissatisfaction, all of it was coming from these proof of concept businesses that were just Really expect a lot, but don't have a lot to pay. And that was the first thing when we kind of just took a look at a grouping of our clients and just said, look, this just isn't winning for us to work with these types of businesses anymore. So we didn't even get that much more specific beyond just saying we now work with viable business models. They're past the viability stage. And as a result of that, it actually did allow us to start improving our systems and processes around that as well, because we weren't churning through as many. Because those more mid-tier accounts, which is where we've always done the best, we could systematize around a lot better. But those proof-of-concept ones, man, it just felt like a whirlwind every time. Speaker 1: Yeah, those are tough. You know, I always tell everybody, and this is a good exercise for everyone listening, is, you know, if you think about if You are going to be paid on performance only and only after you deliver amazing results. What would you do for and who would you do it for? And you're only looking for those best prospects because at the end of the day, I always joke around with people is there's no such thing as a bad agency client. There's only a bad prospect or a bad process. And a lot of times we take on the bad prospect and then we have a bad process. Then you're talking to me about buying your agency because you were like, you want out, haven't figured that one important element out. And it's really around clarity because going back to your origin story, my origin story, it's kind of like we're accidental. We started doing something. We're like, people started giving us more money for it. We're like, all right, but we never really got that clarity. And that's what I always, I find in so many people and people just skip it because they look at, you know, they get a message on LinkedIn from some joker. Hey, I can, I can get you 50 leads. I get 50 appointments and they look for the silver bullet. When I can get you probably 50 crappy ass leads that would totally train wreck your business. Speaker 2: Well, Jason, there's there's three things we look for now, and it's actually you can argue we should still even be more specific. But we just say, are you viable? Which for us is your three or five million or more in revenue. That's kind of your past viability. Are you win-win minded, meaning do you only care about making money or do you actually care about your customer and employee? Because we don't work with you. If it's obvious, that's all you care about is making money. It's not fun for us and usually doesn't end well. And then the third one is, do we, to your point, do we believe in the first six months of working together, we can make a substantial improvement in their business performance? And if the answer is yes to each of those three, then that's when we say, okay, let's do this. And so that's kind of what we learned in that process of those are really the three things that we're looking for. Speaker 1: Yeah. It's kind of like a, a go or no go situation. And it has to, I like how you have it. We have to answer these three questions and they all have to be in the green. If any of them are not, then we, you know, move on. And, and I really feel that that's when a business is. Gotten to the next level because they have that clarity and then they can say no to the wrong shit. That totally distracts you because I mean, look, business is hard, especially agency business. You're going to have ups and downs. Like why make it harder? I like to try to make things a little bit simpler. Not perfect because nothing's perfect, but why is that? Speaker 2: Why do we like to make things harder than they need to be? Speaker 1: Because I think that's kind of what we've been programmed to be if you think about it, right? They're like, you only deserve things you work hard for. But I'm like, well, what about working smart? It's kind of like I saw this cool social media post. This kid was told to do the leaves. And so he takes the recliner at the top of the driveway, two leaf blowers on each hand, and his friend just sends him down the driveway. Well, I'm like, it's brilliant. He got two leaf blowers blowing the leaves off the driveway. You know, he did it very simple. But we want to like a challenge. I treat business as a game. Speaker 2: Yeah. Speaker 1: And sometimes I purposely make it a little bit harder. I don't know why. I just do. Speaker 2: I know. I ask myself that because I don't know, sometimes is it so I can feel good when I overcome the challenge or what is that? And but I've definitely noticed that tendency over the years is, oh, I think I'm making this harder than it actually is. Speaker 1: Yeah. You know, I was, you know, chatting with an agency doing work for us. And they were writing some copy and some ads and that kind of stuff. I said, you got to make it simple, like dumb it down. Why are you trying to make it so complex and tell everyone everything in just an image? I said, all we're trying to do is get their attention to look. And then look to the next thing. What's the milestones that we need to go through? Like, what are the phases? And let's just go, we're at phase one. Just talk about phase one. I don't want you to skip into phase seven. It's going to confuse everybody. Just keep it simple. So it's easier said than done. Especially when you try to do your own marketing, right? Like you do it for everyone else. Cause we're not emotionally tied to it. I think that's the point too. And a lot of times when people join our mastermind or work with us, I try to figure out like, what's the emotional decision and what's the right decision. And I can have them see that. And then we're like, okay. Yeah. I was like, what would you tell ABC agency? And they're like, I tell them this. Okay. Do you think you should do that? They're like, yeah, probably it's easier said than done. Speaker 2: Yeah. They can feel so personal when it's your own business. It's actually not, but it can sure feel that way. Speaker 1: Yeah. And especially when they get to ready to sell it, right. They feel like they're selling themselves. And I always tell them, and this is one thing I struggled with when I sold my agency. I always thought I was an agency owner and I associated my personality with that. So when I sold, I was an agency owner and then I didn't have any association anymore versus thinking I'm creative. I'm innovative. Like you can never, I can never sell that. I can't take that away. And so I think once people can start just associating themselves from that, then they can make better decisions, you know, whether it be marketing themselves or selling, whatever it is. Speaker 2: So, Amen to that. Speaker 1: Well, this has been a blast, Jake. I really do appreciate you, you know, coming on, you know, the masterclass and chatting with us and for everyone, you know, listening, if you guys enjoyed this episode, make sure you like and share and subscribe to the show. And if you guys want to be around other amazing agency owners who can see The shit you don't see because they're not emotionally tied to it. Make sure you go to agency mastery dot IO Click the little scale button and maybe we'll have a conversation and until next time On this weekday.