Daniel Pearson is founder and CEO of Bamboo, one of the world’s leading mobile commerce agencies. Bamboo is almost eight years old, has 70 team members and has helped scale juggernauts like Uber, DoorDash and Coursera. In this show, Daniel opines on why fast-growing companies should never choose just in-housing or just agency support, why growth marketers should probably leave their jobs more frequently than they actually do, what it means to be in “Hero mode” at Bamboo and how too much Hero mode can turn into Zombie mode, why he never calls his team a family, and why companies that don’t focus on life time value are destined for failure. You’ll also find out why Daniel sent Warren Buffet more than 50 letters and why Buffett eventually responded by demanding that Daniel pay him for two postage stamps.
Daniel Pearson is founder and CEO of Bamboo, one of the world’s leading mobile commerce agencies. Bamboo is almost eight years old, has 70 team members and has helped scale juggernauts like Uber, DoorDash and Coursera.
In this show, Daniel opines on why fast-growing companies should never choose just in-housing or just agency support, why growth marketers should probably leave their jobs more frequently than they actually do, what it means to be in “Hero mode” at Bamboo and how too much Hero mode can turn into Zombie mode, why he never calls his team a family, and why companies that don’t focus on life time value are destined for failure. You’ll also find out why Daniel sent Warren Buffet more than 50 letters and why Buffett eventually responded by demanding that Daniel pay him for two postage stamps.
The Snowball a book by Alice Schroeder
The Almanack of Naval Ravikant a book by Eric Jorgenson
The Goal: A Process of Ongoing Improvement a book by Eliyahu M. Goldratt
David Rodnitzky (David) (00:00): In this episode of Agentic Shift, I talk to Daniel Pearson, Founder and CEO of Bamboo, one of the world’s leading global commerce agencies. Bamboo is almost 8 years old, has 70 team members, and has helped scale juggernauts like Uber, DoorDash, and Coursera. Daniel opines on why fast-growing companies should never choose just in-housing or just agency support, why growth marketers should probably leave their jobs more frequently than they actually do, what it actually means to be in hero mode at Bamboo, and how too much hero mode can turn into zombie mode, why he never calls his team a family, and why companies that don’t focus on lifetime value are destined for failure. You’ll also find out why Daniel sent Warren Buffett more than 50 letters and why Buffett eventually responded by demanding that Daniel pay him for two postage stamps. Enjoy the show.
Daniel, thanks for joining us.
Daniel Pearson (Daniel) (00:52): Thanks for having me.
David (00:54): I would love to start by just asking you if you could tell us your founder story. How did you start Bamboo?
Daniel (00:59): Yeah, of course. I started Bamboo coming off of working in-house at a few mobile commerce start-ups. Bamboo was started in 2014, so it was kind of early mobile app days and I, just out of pure luck, my first job out of college was as a marketing generalist working at this non-gaming mobile app, one of the first non-gaming mobile apps, and obviously there are many that rule our day-to-day lives now, but yeah, I realized, yeah, this is going to be a really big thing and folks are going to need help scaling mobile commerce brands. So we started up an agency to do exactly that.
David (01:41): So how long did you work in-house before you went to the agency side?
Daniel (01:47): I started my career in 2011, and I started Bamboo in 2014, so I guess it was about three years, where I did some marketing generalist stuff, I did customer support, I did conversion rate optimization, I did email, I ran some ads. I ran the gamut on the marketing front in-house, but I started Bamboo three years into my career.
David (02:12): You said you saw an opportunity. Were there any particular catalysts that made you think I got to do an agency?
Daniel (02:18): Yeah. Definitely I saw that mobile apps were very, very early on. I can’t remember when the app store was launched, but when I started working in mobile apps in 2011, there wasn’t any scaled mobile app. And I think everyone knew at the time that that would happen. So I knew I could grow with the stream, if you will, versus against it. And also I was fortunate to be in a position where I was running some of the first ever Facebook mobile ads, and I just had this aha moment, like wow, the quality of this inventory is so much better than all the other random mobile display network we were buying at the time. And so I wanted to make this bet that Facebook and Google were going to monopolize a bunch of the more ad ecosystem. So that led me to focus Bamboo on non-gaming mobile stuff and also on just search and social, which just at the time was novel.
Now I think there’s lots of partners in our space we can talk about a little bit later. Those are the two things I just really saw the opportunity to kind of make a namesake in that nascent space.
David (03:30): I feel like there’s some commonality in your story and my story because I started in advertising around 2001, right about the time that Google Ads came out, and I just kind of saw this new thing coming, and I was like I got to do this. And I guess, I’ve always wondered, if I had started 10 years later, would I have been in a totally different category. Do you think that there was just something that the excitement of the new was that drove you to mobile or was it just you got lucky and you got hired by a mobile in-house team and you rode the wave or where do you think that ends up?
Daniel (04:03): I think it’s a lot harder to find excitement level to start something that is already scaled or on the end of its growth curve. As a growth marketer, it’s exciting to work on something early and scale it, and scale with it from really, really small to really, really big. I think that’s where best economic opportunities are. Even in-house going to an earlier stage brand that’s growing really fast and getting paid in equity and benefiting from that on the other end is the most exciting thing to me and probably always will be. I always recommend that path for folks on the Bamboo team when they leave.
“It’s a lot harder to find excitement level to start something that is already scaled or on the end of its growth curve. As a growth marketer, it’s exciting to work on something early and scale it, and scale with it from really, really small to really, really big. I think that’s where best economic opportunities are.”
-Daniel Pearson
David (04:40): So what were some of the early challenges that you faced being a new and young agency in 2014?
Daniel (04:46): Early days, just the overall work volume and managing that well, we talked about that. We were in a really high-growth zone, and all of our clients were just exploding in their own growth, even outside of the work that Bamboo was doing. I think we had to design our teams and our workloads and all that stuff around managing that growth. One of the concepts that we introduced really early days at Bamboo is something that we call hero mode, still today, which I know you’ll be really familiar with. It’s like when the team has to do more than should be expected of them and just keep the wheels on the bus. So now even it’s culturally normal at Bamboo to talk about, Hey, are you in hero mode right now? Where do you need help? And it’s sort of celebrated, but also, we can’t keep people in that mode as a permanent thing. So yeah, definitely just managing the demand of the business and growing well versus just growing super, super fast was our biggest challenge early on.
David (05:46): I love that concept of hero mode. What’s the limit to hero mode? Is it weeks, two months? At what point do you have to stand down and heroes take a break?
Daniel (05:57): Yeah, it’s a good question. There’s no hard-and-fast rule, and it actually is pretty personal. Some folks just want to have a higher workload, and they want to use that to level up into more senior roles, and they feel good about pushing themselves. And there are other times where life comes at you fast, as we all know the last 18 months, where you just can’t withstand that level of stress. So it’s really just a personal conversation between managers and team members about, Hey, how are you doing? We do things to track hours. As like a corporate rule on our side, if someone is really overloaded for longer than a quarter, we probably did something wrong in terms of forecasting or basically enablement of that person. But yeah, it just depends.
David (06:45): That’s interesting. I think one of the things that I’ve always said is as an executive or a founder, you can only expect your team to work about 90% of the hours that you work. I wonder if you think that’s true because if you have people working on hero mode for a quarter, that means that you’re working on hero mode nonstop as a leader.
Daniel (07:03): Yeah. Definitely. If someone is in that mode, you should be at that mode too to get them out of it. But yeah, it does depend, though. Sometimes like early days we had Uber as a client. We had DoorDash as a client. We had Coursera as a client, and all these companies went on to IPO and just be massive, massive businesses. The teams who worked on those brands, they loved it and were along for the ride. In some ways, hero mode can be exactly as it sounds, but that joke that people make internally is that also it can turn into zombie mode very quickly. So if you’re feeling like, okay, I’m a zombie now, I’m just logging onto ads manager every day and I have no life, that’s really, really bad. It is personal, though.
David (07:49): It sounds like a good screenplay with the zombies. Someone turns into a hero and rescues the zombies from their fate. That’s awesome. So in the early days, it sounds like, I think one of the answers here might be staffing, but I’ll just ask the question. If you could have done anything differently in the early days of the business, what would you have done differently?
Daniel (08:09): Well, I kind of don’t recommend this to others, so I’ll caveat with that, but I wish I would have been less conservative on basically investing into our trajectory more heavily. Even in the last like year is when we’ve gotten a lot better at forecasting, and we’re 70 people full time. So in my opinion, too late to get good at forecasting. We should have done it a long time ago. I wish I would have invested ahead of the team and brought people in and have them run faster before the client growth came. Our biggest driver of growth at Bamboo has always been existing clients growing really fast. So by definition, our existing teams are going to be busier next quarter than they are this quarter, and I wish we would have done a better job investing ahead of that growth.
That would have benefited clients more, that would have benefited the team more to keep them out of hero mode. And it would have benefited Bamboo more because we would have been much bigger than we are now, even though we’ve grown really, really fast. So I think that’s something I would have done differently. All that said, when you’re in the trenches, you’re trying to make sure you don’t run out of touch and you’re trying to make sure you protect your team in all these intangible ways versus just like their workload. So you want to keep their jobs and you want to keep the business stable. We’re always kind of balancing those two, but that’s definitely what I would have done differently, I think.
David (09:26): So when you’re at 70 people and you hire 1 additional staff member, I’m not good enough at the math here, but that turns into like a 1.3% increase in your payroll. When you’re at 5 people and you add 1 additional staff member, that’s a 16% increase in payroll. So is it even possible at the early stages of an agency to hire ahead of need and not break the bank?
Daniel (09:45): Yeah, that’s a good question. Early days for us, we always had really high cash flow numbers, and I think we could have a little bit more than we did. We really invested to like yesterday’s or one month ago’s need back then. I think I could have pushed a little harder, but you bring up a great point. If something would have gone in another direction, we would have lost a critical client or anything like that, then I do think I’d give us the best chances of survival as a firm, but yeah, I’m not sure.
David (10:16): I think it’s a challenge that all young agencies face, and I think that a lot of agency founders basically take little to no salary and invest in the business just because you have no other choice if you want to scale the business. So give us the 30-second or 2-minute elevator pitch for Bamboo.
Daniel (10:37): Client pitch, really we have three pillars at Bamboo. These are like our three areas of focus. You can imagine like a triple Venn diagram. First we have our client focus. Bamboo was founded really to help mobile commerce brands. So if you’re a mobile app or you are an eCommerce, direct to consumer, or marketplace, Bamboo is going to be a great agency fit for you. If you’re a mobile commerce brand, if you like are a marketplace and a mobile app, then we’re really, really good. Then we have our channel focus, which is our second pillar. We have been largely search and social focus to date. So we do think of ourselves as channel specialists. Google is our biggest channel. Facebook is our second biggest channel. We do buy across TikTok and Pinterest and everything else on the search and social side.
And then our third pillar, which I think is why clients come to us and why they stay is basically our KPI or our metrics focus. We’re very lifetime value centric over the funnel. We have this really strong belief internally that funnel optimization, while it can be useful, is really short-term metric. And you want to make sure that any optimization you do is improving lifetime values and making customer relationships stickier and improving actual payback metrics. Those are kind of our three pillars on the client side. I think the last one is really what differentiates Bamboo from other shops.
On the team pitch side, we’re definitely extremely team first. So in that kind of long-term value or lifetime value view, we have that same view of team members. We pay growth marketers comparable to in-house growth marketing roles. And we try to get our team off of this like typical agency, daily CPA treadmill that they end up on at times. So we want to help our team grow into marketing leadership roles, where they learn how to manage long-term oriented growth marketing programs and long term oriented teams and get away from this arbitrage mindset. I think that’s the growth hacker side of marketing, which we try to stay away from. That’s the two elevator pitches.
David (12:52): So from a client side, let me ask about the LTV because I love LTV. Do you just use whatever technology the client brings to the table or have you built your own? Do you have a hybrid approach? How do you make sure that you’re capturing the most accurate LTV?
Daniel (13:07): We help clients level up infrastructure. We don’t sell any of our own tools. We try to use whatever is best in class at the time. So mobile apps use a certain stack and web clients or more web heavy clients tend to use something else. But internally we have this basically, we call it our client development plan and it’s like outside of the day-to-day, week-to-week metrics, how are we helping them improve? And having good insight into that stuff is a big part of that. Leveling up their analytics capabilities is something that is like an evergreen thing for us throughout our client engagements.
David (13:42): And if a client comes to you and says, look, just buy the media for me. Don’t worry about the LTV. I’ll take care of it. I’m probably being a little bit bombastic here in this, but is that sort of a red flag for you? Is that an example where you say, look, if you’re not going to let us really understand your metrics, then there’s not a partnership here. We can’t really work with you?
Daniel (14:01): Yep. Exactly. Any client that has sort of like arbitrage or like lead gen, like, oh, we just want the cheapest customers imaginable isn’t going to be a great philosophical match for us. We think that Facebook and Google are going to monopolize more and more of the ecosystem over time. Maybe that has come to its logical conclusion, but I think there’s still more to go. And with that, costs will rise. That’s been a truth probably since you started 3Q, CPMs go up every single year since 2001. And that’s been true on Facebook since they launched. So if your goal is cost minimization, you’re rowing up a waterfall and you’re not going to do well. So yeah, we don’t tend to take on that type of work.
David (14:45): Yep. I often use the example of how Amazon can get a new customer to become a prime user and they’ll make on average, I think, $2,000 a year from a prime customer so they can literally buy the word "pencils" on Google and pay $50 to sell a 30-cent pencil if they know that person’s going to convert into a prime customer. And that’s just like, when you have that sort of LTV advantage and someone’s just trying to arbitrage the word pencil, you can see who wins that race.
Daniel (15:12): Yep, exactly. And that theme on Amazon in general, I think Jeff Bezos talks about that a lot about how, if you’re focused on the next year and he’s focused on the next 10 years, then he’s going to win every time.
David (15:25): That’s why he has a 500 foot boat and a 50 foot assistant boat. I guess since the topic came up, do you guys do anything with Amazon? Is that an area that you think is important to your future as a company or not a focus?
Daniel (15:40): We do work with commerce brands that do quite a bit on Amazon and Amazon has been a client of Bamboo on and off different lines of business. Are you asking about Amazon ads?
David (15:51): Yeah. Amazon ads because there’s a mobile aspect to Amazon ads for sure. So there’s some overlap there, right?
Daniel (15:57): Yeah, we haven’t done any Amazon stuff to date. Actually this kind of aligns with our methodology around focusing on long-term value. I think Amazon sets up, especially if you’re doing on Amazon like marketplace stuff or the same with Walmart or I think Target and there’s a bunch now, basically what you’re doing is renting a customer from them. You don’t have access into who that customer is and it makes repeat a little harder to drive because you don’t know who customer is. You can’t build a long-term relationship with them.
All of that said, if it’s profitable and you can do it really well, and you can reinvest that into long-term customer relationships, there’s definitely advantages. So Bamboo might get into that stuff, but I think it’s really important to look holistically at your whole mix. And if you’re just solely dependent on renting customers from Amazon or any other marketplace, I think you’re going to be in a much tougher spot.
David (16:53): I guess that relates to another question, which is iOS 14.5. And I’m certainly not an expert here, but it feels like Apple is making it harder for advertisers to know exactly which customers are coming in and tracking that LTV. Is that accurate or am I off on that?
Daniel (17:09): I think it’s accurate in the short-term context. So I think what at iOS 14 and all of the responses, there’s basically like a platform war going on between Apple and Facebook and Google. And they’re all responding to each other, again, because they’re all trying to get a bigger market share. But what the changes recently do to us is they make attribution hard. So you can’t see as well where customers are coming from, which obviously doesn’t impact Apple or Facebook or Google as businesses because they have every customer already. They have billions of monthly active users. So it really just hurts smaller brands. All that said, it doesn’t do anything to first-party tracking infrastructure. So if you do have a direct relationship with your customer and you can monitor how much those customers buy over time, I think that product analytics, tooling like Amplitude or Mixpanel, or even just like really good looker databases are going to become very important to marketers over the coming years. Whereas in the past, I think they were mostly used by product managers. So yeah, I think it makes the third party reporting hard because it breaks a lot of third-party integrations. But if you’re good about first-party data, then I think you’ll be in a lot better of a spot, and we’re helping a lot of clients navigate through that.
David (18:29): Let me ask you a couple more questions about the early days or your role in the company. I think every founder of an agency starts out working on every single client and at some point has to delegate. And so what’s been your journey from working in the business to on the business.
Daniel (18:47): It’s definitely a yoyo over the years. I’ve been more involved or less involved in day-to-day client stuff, but we made it a point really early on to let other people have the opportunities as we scaled. So as soon as we thought people are ready and we give them opportunities to manage their own clients and then manage their own book of clients and manage multiple books of clients, we really prioritized that career progression for the people who come to Bamboo. So because we took that path, it was a lot easier for me to shift from being like the individual contributor to being more of like a coach of others, which is important for any agency CEO to make happen. Because ultimately, if you can’t coach other people to do you’re doing and ideally better than you were doing it, then you’re not going to be as successful. You’re going to be an independent contractor. and you’re not going to be a successful agency CEO.
David (19:46): Do you still feel like you have the in-depth knowledge to be able to really understand what’s going on in the space or are you getting to the point with 70 people where you’re starting to have to manage a lot of HR and finance and maybe not as in the weeds?
Daniel (20:00): I like to think I could still do it pretty well on the IC level. Of course, I’m not as good as my team at like some of the day-to-day like uploading things via like power editor. So I would be much slower at that. But yeah, right now I’m mostly focused on HR and finance and more of like the back-of-house functions to enable the team well versus the day-to-day client work.
David (20:32): Let me ask you about the team. First of all, do you have core values or core promises that you deliver to the team?
Daniel (20:34): Yeah, we do have a set of values that actually I can talk through how we set these, and it was a really, really fun process for us. We had a really strong culture early on in our first few years. We were in this really exciting high-growth space, but we never had to put anything to paper around, like what is our value system that we want to teach others when they come in. And so one of our early team offsites, we took the team to Palm Springs to hang and do this kind of values workshop. And we voted, basically we surveyed the whole early team. I think we were probably 15 people full time. By the time we did this exercise and everyone submitted what makes Bamboo special to them and what they value and was important to them that we retain. That kind of shaped our values. Then we kind of rolled them out after doing some editing and cleanup work on everyone’s survey responses. Yeah, we do have some core values. Do you want me to talk you through what they are?
David (21:31): I would love to hear them.
Daniel (21:34): We have six values. First one, probably most prevalent is connection. In our survey, the team surveys, a lot of people talked about Bamboo being a family and how everyone’s in it together and how they really value that human element to the company. I was the one who personally edited it to connection and not family because I don’t think businesses are families. I think people have to be held accountable and it’s bad for businesses to be families or messaged that way.
David (22:06): You can’t fire a family member.
Daniel (22:09): Yeah. Everyone has a family member who they would fire if they weren’t family. So we settled on connection, and that really is persistent at Bamboo. Even it’s really helped. I think that’s the single thing to helped us get through the pandemic, if I’m being honest. People really care about one another and they try to build real personal relationships that last beyond their time at Bamboo. They do that with clients and they do that with each other.
Next value is the work. The work is not just like, oh, we are doing our day-to-day task list. It’s more about why we’re here. We’re here to grow ourselves and we’re here to grow the clients we work on. So if you lose sight of like what’s important, then that would be really detrimental to the business. So the work came out of that. Everyone talked about how they loved their clients and how they actually really felt like they were innovating in the space. So that’s our second value.
Candor is our third, which I don’t need to explain. Just being matter of fact about what’s going on and treating everyone as equals and being candid with others and also expecting candor from others.
Fourth one is no ego, making sure you’re putting the team and the whole in front of yourself and being humble about where you’re at. Because if you succumb to ego, it’s really hard to learn, and learning is a huge element of our culture.
Fifth one is owner mentality, and I sometimes call it own it. Owner mentality is just taking real ownership over your own stuff. So when I talk about handing off individual work to others, when we do that, we expect them to own it as their own and Bamboo as their own business because all Bamboo employees have equity shares. So we want them to treat this place like they own it.
The last value is sort of a dual value. It’s called roll with it. We call our teammates pandas internally. Our company name is Bamboo. We call our employees pandas. Roll with it is a dual one because pandas do this really weird thing where they tumble around, and no one knows. They don’t know if they’re playing or if there’s some sort of utility to it, but that’s a really weird behavior. So it’s like have fun as you’re going along the journey. And also it’s a comment on adaptability. Like when you’re really scaling companies that are going to go onto IPO, I think Reid Hoffman, the LinkedIn founder calls it Blitzscaling. Like when you’re in that mode, you really need to be agile and be fine with things changing and be adaptable. So that’s our last value.
David (24:33): I love it. I was hoping roll with it was a reference to an Oasis song, but the fact that I’m older than you by about 10 years, that’s okay. Actually own it is also one that we have at 3Q, and one of my favorite quotes is from Hannah Arendt, the historian, and she says, the definition of bureaucracy is ruled by nobody. And so much so in big organizations do you have people pointing figures saying, oh, that wasn’t my responsibility. That was your responsibility. And that’s the worst thing for getting anything done or having accountability. How do you take these values and use them in hiring, firing, and promotions? Is there a clear connection for you and how you operate?
Daniel (25:13): Yes. We do have what we call like values fit screens and interview processes. We don’t call it like culture fit because we want people to be additive to the culture versus like fitting into what we already have, but it is important that people align with our values. For example, if someone is interviewing with us and we ask them pointed questions about gaps in their resume or just things that don’t necessarily seem great or even just don’t align with the job requirements, if we’re getting answers from them that are like sugar coating or pacing over things versus just saying like what actually happened, then we’re more likely to not have them come on because that would be a behavioral pattern later. And also just like making sure that they’re coming for the right reasons that they actually want to own real work. And they’re coming here to learn and do those things. People who have those values are celebrated internally. We have lots of ways for you to shout people out throughout your time here. And you always attach a value to it and promotion docs and stuff. People are calling out those types of value fits. So yeah, it’s very persistent throughout the team.
David (26:22): Let me ask you about your leadership style. If I ask one of your team members to describe your leadership style, what do you think they would say? And I might just go and do this, so your answer has to be accurate. I’m just kidding.
Daniel (26:43): I honestly do not know what they would say. Some folks I know really well, some folks I know less well. I hope that what they would say is that I’m very team, like human oriented and transparent to everyone, even when things aren’t going well or if I don’t know. I’m pretty open about this is being my first time being a CEO of a company this size. And I also am pretty open about how I care about the team more than I care about like the corporate entity that is Bamboo. So hopefully that’s the thing people take away is just no matter how well I’m doing or poor I’m doing, I’m going to be straight up with everyone about that.
David (27:11): That’s great. I guess one other question just about your team would be curious to hear about this. You said that everyone on the team gets equity. And I would say that my sense is that’s a rarity if you might actually be a unicorn when it comes to agencies and everyone getting equity. And so how did you decide that that was the right thing to do? I assume you feel like it’s been a good investment for the business.
Daniel (27:32): Yeah, it has been, and we’ve had to hone it just like any other benefit. We want to make sure it’s of value. There are times when we would give too small of grants, too big of grants or whatever, just like any process to hone. But I think the spirit of making sure that everyone knows they’re along for the ride and there’s not like this like owner of the agency versus non-owner of the agency dynamic.
It’s great for us because we really have just three stakeholder groups. We have our team, which we want to help them long term get better and be the best growth marketers and leaders in the space over time. We have our clients, which we know what their goals are. They’re focusing on long-term growth with us. That’s why they sign on with Bamboo versus someone else. And then we just have Bamboo. And if we can make Bamboo the team, Bamboo as a corporate entity, I mean, if we can make that more and more the team, instead of just like one individual being me, I think that that’s culturally super healthy. So yeah, that has been a really great investment on our side. And we just continued to make it better. Especially as we scale, we have more surplus to go around. We can have people benefit financially, too, which is awesome.
David (28:40): Let me ask you a little bit about Bamboo today, just as a business. I think I know the answer to this one, because I think you mentioned it earlier, but I want to just ask there’s a book called The 22 Immutable Laws of Branding, and I can only remember one of those laws. And that law is if you can’t be number one in a category, create a category you can be number one in. So when you look at Bamboo, and I ask you, what’s the category you’re number one in as an agency?
Daniel (29:03): Yeah. I hinted at this earlier, but I honestly do you believe we are number one in sort of the center of that triple Venn diagram that I talked to you about. If you’re a mobile commerce brand who wants to focus on lifetime value optimization versus cost minimization and you want to scale really fast, then Bamboo is your partner. That’s it. We’re pretty, pretty great in each of our bubbles, but if you’re an overlap of the three, that’s our grand slam zone.
David (29:35): Yeah. You hit the cycle. Let me ask you this, and without giving away anything proprietary, how do clients find you or how do you get clients? Are you completely word of mouth? Do you have any marketing components?
Daniel (29:48): We are purely word of mouth aside from, in the last two years or so, we’ve really started to invest in kind of partnerships where we intersect with clients. So working closer with analytics firms and venture capital firms and other service providers or capital providers in the space, but still those folks are either referring to us or not. And at the end of the day, if we don’t do good work for the clients, then those referrals will dry up. So we have purely word of mouth, or I guess there’s like a little bit it more like we’re systematized things on as we scaled, but at the end of the day, it’s just people referring to us because they trust us.
David (30:29): What are the challenges that you face today? What’s most pressing for you as a business?
Daniel (30:35): We still have the same challenges that we had early days where we have way more demand and way more growth than our existing team can handle, which is obviously a great problem to have, but it’s a problem, nonetheless, especially when you’ve had it for eight-plus years running, whatever. I think February next year will be my eighth anniversary of building Bamboo, but we also have more problems that are coming from our scale and going remote during COVID has accelerated, I think the feeling of us being bigger with 70 people. So now we have things like making sure our org structure is structured well so that people actually can own the things that they need to own without having like tons of layers of approval and whatever else. I forget the quote you used earlier, but yeah, like managing nothing.
David (31:23): The definition of bureaucracy is ruled by nobody.
Daniel (31:23): Yeah, exactly. So Bamboo started as a matrix organization where people were working on everything and at 70 people that has really started to break down. So we’re thinking about how do we compartmentalize challenges and make clear owners and do that kind of stuff. So all great problems to have, but definitely dealing with some more like problems as we scale. I personally find it really fulfilling to fix them and make sure that our values persist versus our structure persisting. So it’s been fun for me to work through, but yeah, definitely growth problems, too. You need to have a more beefed-up HR team and recruiting function and all that kind of stuff nowadays, whereas before, it was, like you said, you add one person in, and it’s a 16% growth of your team. Now, it’s just a different- we need to be a little bit more systematic about some of the core functions at the company.
David (32:15): You mentioned remote work. So I believe you started in San Francisco and then moved the office to Seattle a couple years back prior to COVID, right?
Daniel (32:23): We founded the company in San Francisco. We had a little office in north beach for our first few years. And then I personally moved to Seattle. We did open an office in Seattle, but we’ve always had a presence in the Bay and we still do have about 25 people fulltime in San Francisco. And we’ve just grown outside of San Francisco as well. So now have a good group of people in LA, we have a good group SF, I think maybe 30 people or so in Seattle and remote people, too. We have people in New York and all over, I think similar to you guys.
David (32:56): So how has the 100% for the remote for the last year and a half impacted your strategy and how did you shift the business to make sure you were delivering great results and keeping clients and the team members happy during that time?
Daniel (33:08): It’s definitely impacted us, primarily through like the training and onboarding lines. Bamboo has about doubled since the beginning of COVID. And that’s been our normal growth pace since we started the business. We grow like 30% or 40% per year since 2014, but this year in particular, when you add, like we were talking about 40% on top of, I think our team started as like sub-30 people at the beginning of COVID and now we’re 70. So it’s much harder to train people when you can’t look over their shoulder and see their hands on the keyboard and ask follow-up questions. So we had to build out much better processes for onboarding folks. And another thing we had to do is basically cut back our- we have this kind of natural flywheel where we bring people into the company, we train them, and enable them super well.
And then the clients are successful because of that, because of their work, and then the clients grow, and then we repeat that cycle, but our client growth really outpaced our ability to like bring people in and ramp them and enable them well. So we’ve capped new business and done some things to slow down other steps of our loop throughout COVID to help people more with like mental health and stay out of hero mode and that kind of thing. So yeah, it’s definitely been a process to get through. COVID it’s great that we have like the tailwind of that it’s helping us grow, but growth comes with its own challenges.
David (34:32): And are you planning to maintain whatever mix of remote in office that you have now?
Daniel (34:38): We’re just going to let people decide what they want personally. We have an office in Seattle. We have coworking setups in San Francisco and LA. Some people like to come in one day a week, two days a week. So we’re just going to let stuff naturally rebalance. People have been going into the office a lot more as of the last weeks or last month and a half. So maybe we’ll see some more in-office staff drive, but on a company level, we’re making sure that we can handle distributed workforce and enable everyone really well and make this still a great place to be.
David (35:11): Let me ask you about clients. I’ll ask the tough question and easy question. What do you want first? Tough or easy?
Daniel (35:19): You choose. I’m fine with either.
David (35:21): We’ll start with tough. So we’ll start on the difficult and end on the positive. Every agency has challenging clients at some point in their history. What is your strategy for dealing with challenging clients?
Daniel (35:33): Can I ask a follow-up?
David (35:35): Yes.
Daniel (35:37): Challenging as people or challenging as a growth trajectory?
David (35:40): You’re not supposed to be asking me questions here. I would say mostly it would be a cultural misfit, a client who either is a jerk or who doesn’t understand metrics or is unreasonable in expectations. My definition would be you could have the greatest results in the world, but your team is just not happy for one of those reasons about the relationship.
Daniel (36:08): Yeah. This one’s really straightforward for us. I talked about kind of values alignment or like our focus on long-term growth. If a client doesn’t think that that’s the right path forward, then we’re either recommending them to find a new partner or we’re outright firing clients. If they really are abrasive to the team and not wanting to kind of go along with our playbook, which does happen, even though we pitch this and we’re super clear about it upfront, you still have changes in direction. And especially with early stage start-ups, you might have a total change in team amid engagement. So that’s sort of normal for us to navigate, but we are fine winding down engagements that don’t work well for us and for the client, too. It’s best for everyone to find a better fit.
David (37:00): Is there any way to turn a client around who’s challenging? Is there a conversation you typically have to try to give them a second chance or do you sort of feel like if this is a toxic relationship, it’s time to move on no matter what?
Daniel (37:12): Yeah. I would say the average situation is turned around on our side. A lot of the friction that we deal with clients is building this shared belief and shifting from this like day-to-day. Oh, like what was our- purchased our CPA yesterday, shifting from that mindset to, Hey, did we bring in good customers? How quickly are those customers going to pay back? What did we learn to make the next cohort of customers coming in better than the last, like build this process around growth and belief in it? That stuff is like sort of our core challenge in every engagement that we have. And it usually goes pretty, pretty great, but there are exceptions to every rule. So there are times when we have to wind down relationships because of misalignment, but it’s not common.
David (37:56): I found from time to time that we work with a client, we help them to scale. We have a very metrics-focused team, and then the company gets so big that they bring in leaders who don’t either understand the metrics or don’t care. They want to sponsor a college football game instead of buy more efficient Facebook ads. And that’s what very challenging for us. I mean, it’s disappointing to have a metrics-driven relationship, and then inevitably a giant agency comes in with a really nice office on Broadway in New York and takes the business over. Does that ever happen to you or am I just alone in that?
Daniel (38:32): That maybe you guys have had bigger clients than us over time. I think you tend to have like a lot of bigger clients. Our specialty has been like clients who are series B through like the period where media budgets start to stabilize. I would say Bamboo’s biggest competitors is in-housing, competitor in quotes. We can talk about in-housing later, but when clients leave us, it’s usually either not a fit and we choose to wind down either mutually or wind them down or they build out in-house functions. That’s another thing you see in-house leaders want to do. I think there’s a, for whatever reason, like a attractiveness to it. I guess incentives align. If you’re a director of growth and you have no team who you are directing and you have an incentive to build out your own people that you can manage and it’s career progress for you to do that. So I guess I understand the incentive, but we see that more than we see. We don’t really get beat out by like WPP. Actually, that has happened to us yet.
David (39:41): I think in-housing is an interesting topic, so let’s talk about that. This wasn’t going to be the easy question. We’ll get to the easy question in a second, but on the in-housing side, how do you have that conversation with clients and when you think it does make sense for a client to bring stuff in-house?
Daniel (39:56): Yeah. Well, I kind of have a mental model that I like to use for this stuff about like agency versus in-house. I don't think there's like a hard-and-fast rule. So I'll preface with that. It's very situational, but the way I'd like to think about it with Bamboo is this idea of stability versus volatility. So businesses that have volatile growth plans or needs, they do super well with agency partners because agencies can staff dynamically. They can add folks to the team. They can remove folks from the team. And I would say like, if you go all the way up the spectrum, like using DoorDash or Uber or someone like that, as an example, those are like the most volatile brands. Although it's upward volatility, they’re scaling so, so fast. They actually need as much resources as possible. So they need in-house teams and agencies. And even the combination of all of that is still not enough. Everyone is in hero mode, the in-house team, all the agencies, everything. It’s just like complete mania. It’s really, really fun, but the agency versus in-house question is a bit of a trap. If you’re scaling that best, the answer is get all the best resources you possibly can.
And then I would say the last bucket is the other end of the spectrum where you just are either managing decline of a business or you're just stable. And in that scenario, you can do cost optimization, I suppose, bringing stuff in-house. So you save a little bit of money per year and that can be a smart thing to do if that's your situation. So yeah, I think about it as like stability of needs versus volatility of needs.
The other thing I'll add is if you're a growth marketer, you never, ever, ever want to work at a stable business. That's the worst possible opportunity. We’re in the earliest phases of all commerce going online, you are in possession of the skillset to scale businesses really, really fast. What you should want to do is go to a company that you can have equity in, use your unique skill to scale it as fast as possible and get rich from the equity of that business. I never understand why truly great growth marketers go to work at stable businesses when you're paid for upside volatility, it's best to go into the fire and manage it. Taking these in-house opportunities where you're just managing a stable ad budget is not the way to use your skills to the best of your ability, I don't think, as an individual growth marketer.
David (42:26): I think that's a great point, and a thing that I think about a lot, the three areas that I've been involved in in my professional career have been marketing, law, and journalism. And all of three of those are interesting because you're always working on a new project. You're always moving on to the next client in marketing. In law, you have a new case that you're working on. In journalism, you're writing a new story, and I think people who are in those three professions are drawn to the diversity of experiences. So to that end, it totally makes sense that you'd want to keep bouncing around because you're learning new things.
Daniel (42:58): Right.If you’re uniquely skilled at growing an enterprise, like you're uniquely skilled at scaling this business and you're acquiring good customers that are super sticky and will pay the brand forever and you own equity in that business, that's a way for you to build wealth from your skill versus managing the decline of a business or managing that type of structure. So I think it's a really, really special time to be in growth marketing, in digital marketing in general as more of the GDP goes onto the internet, and you should try to build the best skills you can and be an owner in the true sense of the word in some of that upward volatility.
David (43:39): So if companies didn't already have enough employee mobility, now their team members are going to listen to this podcast and leave even faster. So they have you to thank, Daniel.
Daniel (43:49): Unless they're growing fast and they give their team a chunk, then I think I think that's a fair path.
David (43:54): Fair enough. Makes sense. Everyone should become a mini VC basically and just take a lot of hot agencies or hot clients.
Daniel (44:01): There is an exception. If you're really early and you need skill development and you don't have that skill yet, agencies can be a really great place to build those skills and learn as much as possible. So when you do interview for the most competitive high upside roles, you win them.
David (44:17): Yeah. I don't think you can learn any than an agency because you're working on three or four accounts at once and all your peers are working on different accounts. I feel that people who work in-house are experts at that particular business, but people who work at agencies or experts at the channels.
Daniel (44:33): Yep. Agreed.
David (44:34): Let ask you the softball that I was going to ask you, which is, can you share your favorite client success story?
Daniel (44:40): Ooh, favorite client successor story? I won't share one in particular just because I would want to ask them, but I definitely have like a favorite breed. I always think about what's the best long-term value for clients, for the team, and for Bamboo. So engagements where we start with a brand super, super early, like they just raise their Series A and they have product market fit and they’re focused on cost per purchaser or whatever. And we evolve their program to be, they always know when their cohorts are going to pay back and they scale and take over the world. They work with us for years and all of our team learns from that. They learn how to actually do it. They learn how to take a company from the beginning to that level. So our team learns a lot and Bamboo benefits a lot from all the fees as we continue to scale. And everybody's happy on the other end. Those are definitely my favorite wins because we can reinvest all that into more team and more wins on the client side. So I like engagements that complete our full loop.
David (45:40): What are your aspirations for the agency?
Daniel (45:45): Day to day it's exactly what I've been talking about throughout this. It's making sure that Bamboo teaches the people who work these really, really valuable skills and enables them to generate wins for our clients. And I think that that will always be true. I want Bamboo to be the best in our zone, and it takes continuous work to do that.
Long term, I think there's a lot of cool stuff going on in other channels that we don't cover because we have this lifetime value focus view. I'd be interested in us doing more stuff on the CRM, like first-party CRM side like email and push notifications. So yeah, TBD, but there's infinite upside still to come, and I'm still really enjoying the work.
David (46:30): What about generally for the future of agencies? What are your predictions for how agencies might shift, and is there anything particular that you're worried about?
Daniel (46:38): Future of agencies? This is a good timely question. Our leadership team just did this independent SWAT analysis. Everyone submitted their own separately, so we didn't influence each other. The threats that came up pretty consistently were all around the Apple versus everybody to battle around measurement and attribution and algorithmic optimizing. So I would say that's probably the thing that our team is worried most about. It's just an unknown. So I think it came up a lot. I personally think that those things could be threats, digital marketing agencies, but I also am a really big believer that we're still in the early innings of all commerce going online. I think we have this huge secular wave where agencies and in-house teams, like it's an and not an or, are going to be more and more needed over time. The demand for what we do is just going to continue to rise.
I think that all this battle between Apple and even just being more privacy-centric, if you want to take the view that all this stuff is like great for consumers, then this is a really, really great opportunity for agencies to take a more long-term holistic view to measurement, basically focusing the way that Bamboo does and helping brands focus that way now, even though they should have always been focused that way. It opens up an opportunity for good agencies to help clients see what's going on with their business overall and how all of these tactics and channels and so on influence the long term customer journey.
So I guess the biggest threat is also a great opportunity given that I think brands have leaned a little bit too heavily on how much data and insight Facebook and Google and third party analytics vendors have been able to give them over the last few years. It's time toget over that.
David (48:30): And start collecting your own data and getting your own data advantage basically.
Daniel (48:34): Yeah. And stop thinking about your job or your mandate as a growth marketer as like this arbitrage or this like growth hacker and start thinking about it as, okay, let's see what our customers are actually doing. Let's see who our best customer groups are. Let's find more of them. Let's build more alignment between our customer groups and our brand and let that benefit the business long term versus trying to find these short-term wins that I personally believe are bad for customers, bad for brands, bad for marketers and so on.
David (49:05): To close out this interview, I got a couple more questions, just more generally, do you have any business role models that you like to follow inspire you?
Daniel (49:17): Yes. Probably too many, but my favorite is by far is Warren Buffett. In I think my sophomore, junior year of college, I wrote him a letter. I can't remember when The Snowball came out, his biography, but I wrote him a letter every week for about a year. It was like maybe three semesters or something. I sent him stuff I was doing entrepreneurially and just wrote him, wrote him because I knew they had a really small office, and eventually his assistant responded to me and said, “Hey, Warren, doesn't usually do this, but you seem like a nice kid.” And obviously, I was just annoying them sending a bunch mail. I wasn’t that nice of a kid. And he said, Warren will sign your book for you, but you have to pay the postage. And so this guy who, whatever, maybe has 200 billion now or he's giving some of it away, he made me send postage each way, but I have his biography that's signed by him, says to Dan, signed Warren Buffett. No one on earth calls me Dan, but still one of my prize possessions.
David (50:20): That's awesome. I thought that this was going to end up with the restraining order. You totally took that in another direction.
Daniel (50:25): I have received quite a bit of cease and desist from brands but no restraining orders yet.
David (50:31): That's awesome. Well, the whole thing about the stamps is on brand for him, right?
Daniel (50:36): I know. I loved it. It's so funny. I mean, he knew that that 25 cents was going to compound over time for him. He didn't want to give it up.
David (50:44): Yeah. That's awesome. What about favorite marketing or leadership books that have inspired you?
Daniel (50:49): I'll share my three favorite books. So first is The Snowball, which I talked about Warren Buffett. It was a great biography of him and it has really great and untold models about life and how you can let your success compound over time. Great, great antidotes. And it's just a great American tale.
A second one, The Almanack of Naval Ravikant just came out. My friend, Eric, who is my ex-roommate, basically wrote a summary of Naval Ravikant, who is founder of AngelList. He summarizes all of his tweets and blog posts and all this stuff over a lifetime. And there's tons of great wisdom to be had in that book. I love skimming that book whenever I have time to soak up more ideas and mental models to lead my life by.
And the last one is called The Goal: A Process of Ongoing Improvement. Have you ever heard of The Goal?
David (51:42): No.
Daniel (51:56): It's a book that was written in like, it's not of our time. I think it was written in the 1980s about basically Kaizen or like a continuous improvement method.
David (51:54): The Japanese Toyota approach.
Daniel (51:56): Exactly. It's like a case study on Toyota factories and how they uncover this advantage that helped them take over the world. And I think that that's a really great book for any individual contributor or any leader to read, to give you a way to think about your work differently versus thinking about outcomes. You start to think about inputs a lot more. And I think those three are the most wisdom-packed into books you can possibly find.
And then the other thing I'll say on business and leadership books, my wife, I drive her absolutely nuts because any book that is like remotely interesting to me, I buy and have piles and piles and piles of books. But I would say if you do buy business books, you should abuse them and just go right to the section of the book that intrigues you because every business book could be a blog post and every blog post could be a tweet. Just go to the section of the book that you like, soak up the material, and skip over everything else. Save your time. I do that with just about every business book I buy and have zero regrets about it. Nothing in the business book world needs to be read like a novel.
David (53:06): I absolutely agree with that. I will say this American life did a two- or three-part series on Kaizen and how they tried to apply it to Ford in the ‘80s in the US and how it was successful, but the bureaucracy basically destroyed it because they didn't want to change even though it was massively successful. And then regarding Naval Ravikant, the last company I worked at before I started my agency, Naval was on the board. I think all of his wisdom probably came from my conversations with him during those board meetings.
Daniel (53:36): Great. I’m looking forward to your almanac.
David (53:38): Well, he probably just dedicated it to me. I haven't seen it, but those are great suggestions. Are there any conferences that you particularly like and are there any influencers that you follow?
Daniel (53:49): My favorite influencer in our little focus area, it's not little anymore, obviously all advertising online is mobile but Eric Seufert of Mobile Dev Memo. I think he's just the best thinker and writer in the mobile growth ecosystem. Like bar none, he's just incredible. And he's very passionate about the space, and I think his [motor? 0:54:11] shows that. He's just so plugged in even after working in the space for so long. I have a ton of respect for him and try to read every single sentence he writes as much as I can.
And then for conferences, Bamboo isn't really big on the conference circuit if you're asking about like drumming up business, but Grow.co.They have an MAU conference has been a staple for me personally. I just love going there and trying to learn as much as I can. They run a pretty good program since the beginning. So that's probably my favorite conference, but I'm not a big conference attendee and Bamboo generally isn't either. We don't see a lot of new BI success from conferences or trade shows.
David (54:52): Yeah. Shout out to Jay Winetroub and Adam Lovallo right at MAU. They do a great job with conferences.
Daniel (54:59): They also have great newsletters to talk about, to give them a little shout-out, the Grow.co weekly newsletter summary, which includes often a lot of Eric Seufert’s content is pretty solid as well.
David (55:12): My last question is what advice would you give to someone who's starting an agency today?
Daniel (55:16): I guess it's similar to what you and I started the pod off on, which is one, choose a specialization. Don't try to be a mile wide in an inch deep. I don't think it's good for clients and it makes it really hard to build a culture around what you do. I would say be special. So Bamboo is like very specialist. We have channel specialization, client specialization, even KPI specialization, and all three of those things matter to us to find fit. So do that.
And then the second thing, which you and I kicked off the podcast on, is choose a space that you can row with the stream versus against it. Try to find areas where established agencies aren't focused or there isn't specialists yet and become that. You can bootstrap a business really well if you're riding like a secular wave. You talked about Amazon earlier. I know there's countless agencies that started doing like Amazon shopping placements and are now hundreds of people full time. And they kind of rode that wave. People did that with email, people did that with push notifications. You did that with paid search. I think I did that with paid social. So yeah, choose something that you're not rowing against the stream. Try to focus on something that you're rowing with it.
David (56:33): That's a great piece of advice. I definitely experienced that as well. I had like six businesses I was working on when I went independent, and people kept calling me for the SEM stuff. At some point, I realized, why am I beating my head against the wall trying to convince people that these other businesses are good ideas when people are throwing business at me. So I love that.
Daniel (56:52): Growing with the stream and finding paths that can carry you paste over a lot of your mistakes and learning lessons along the way. It's really, really helpful thing to do.
David (57:02): Well, Daniel, this is great. I really appreciate you taking the time, a ton of really good content in here. Again, we'll link to all of Daniel’s and Bamboo’s social media links.
So Daniel, thank you very much for joining us today. Really appreciate it.
Daniel (57:17): Thanks so much for having me and also personally, thanks for being a great mentor and help to me as I've scaled Bamboo. I think I got into your email inbox in our first year or our second year. I can't remember. And now we're in year eight. You always respond within a few hours and have been a great coopetition. You've been the epitome of that, and I really appreciate it.
David (57:43): Thanks for listening to this week's episode of Agentic shift, an interview with Bamboo’s Daniel Pearson. Join us next week when we talk to Adam Lovallo, Founder and CEO of Thesis Testing. In the meantime visit our website at agenticshift.com where you can get additional links and resources or follow us on Twitter or LinkedIn. See you next week.
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