Frank Lee is co-founder of Real Eyes Digital, a fast-growing social media agency based in Santa Monica, California. Frank spent almost two decades working at companies like Facebook and Yahoo before starting his agency in 2020. In this episode, he talks about his agency's unique "graduation" program, through which he transitions his clients in-house, he tells us about the four stages of partnership, why he wants to be more like a speakeasy than a Times Square billboard, and importantly, how he got invited to Paris Hilton's wedding.
Frank Lee is co-founder of Real Eyes Digital, a fast-growing social media agency based in Santa Monica, California. Frank spent almost two decades working at companies like Facebook and Yahoo before starting his agency in 2020. In this episode, he talks about his agency's unique "graduation" program, through which he transitions his clients in-house, he tells us about the four stages of partnership, why he wants to be more like a speakeasy than a Times Square billboard, and importantly, how he got invited to Paris Hilton's wedding.
David Rodnitzky (David) (00:02): In this episode of Agentic Shift, we talked to Frank Lee, co-founder of RealEyes Digital, a fast-growing social media agency based in Santa Monica, California. Frank spent almost two decades working at companies like Facebook and Yahoo before starting his agency in 2020. In this conversation, he talks about his agency's unique graduation program through which he transitions his clients in-house. He tells us about the four stages of partnership, why he wants to be more like a speakeasy than a Times Square billboard, and importantly, how he got invited to Paris Hilton's wedding. Enjoy the show.
Frank, thank you for joining us today.
Frank Lee (Frank) (00:39): Great to be here, David.
David (00:40): Yeah. It's awesome to have you. You are someone that I have known now for I think about 20 years. One of your claims to fame, and I know this doesn't define you, but I will say that the last time I ever smoked a cigarette was when I was with you in 2004.
Frank (00:54): You’re really going to throw that out there. I love it.
David (01:00): I didn’t say you were smoking. I just said I was smoking.
Frank (01:03): So well now it's definitely. I'll fast forward for the first 30 seconds.
David (01:10): Totally fine. All right. We start out, and why don't you tell us your founder story? How did you get to start RealEyes Digital?
Frank (01:18): You want this long version or the short version?
David (01:22): I think two to five minutes, if that counts as long.
Frank (01:25): So RealEyes Digital was started in January of 2020. My co-founder and I, Keith Wilson, we started. And really our background is we're just two old guys that have been doing performance marketing for 20 years. So my background, I used to run the SEM programs over Overture with the Yahoo acquisition, went startup for about nine years at a large SEM at the time, a Google shopping ad tech. And then in late ‘13, early ‘14, I joined Facebook to run the e-commerce advertising team out of Los Angeles. So that's where we worked with like the biggest e-commerce players out in the marketplace. My co-founder, similar background, Keith Wilson. He used to run acquisition marketing programs for NetZero. So he says he was so old, he was getting people onto the internet. He was at LowerMyBills, he was the Head of Marketing at the Bouqs. He was with me at Facebook and at the agency.
So last 20 years we've been in performance marketing, and we've helped so many businesses grow. And we've seen this common pattern where basically agencies are out there promising you the world.
To take a step back, over the last 20 years, we've just seen this pattern between agencies and advertisers. There's just been a lot of friction. Sometimes it's rooted in lies. Sometimes it's just inherent tension. What we see is on one hand, you have the agencies promising you the world. They're promising you proprietary software, great process. They promise you LeBron James as your account manager. And then when you sign, there's no process or you don't get LeBron. You get the bench warmer, and the bench has 30 different clients. So it just feels like a bait and switch.
On the advertiser side, though, same thing. Advertisers promise you long-term partnership, great collaboration. But again, once they sign, they can't help but question, are you really trying to solve my marketing problem? Are you just trying to collect fees or they're moving the goals around? And meanwhile, they have wandering eyes looking for another agency. And I know this is. When I was at Facebook, we knew that the average time a performance agency kept a client was less than a year. So it was literally like musical chairs. And so Keith and I sat back and said, All right, this is an insight. Here's our hypothesis. Advertisers really don't want to work with agencies. What they really want is long-term sustainable digital revenue streams. Ideally they want that in-house, but they just don't have the time or resources to build it in house. So they settle for an agency. It’s a Band-Aid solution.
So Keith and I, at that point, started RealEyes with the purpose of helping businesses and entrepreneurs realize and achieve their potential. And what we do and how we do that is a few things. Number one, we want to deliver on the scope of work that we commit to. I know there's a lot of agencies that cheat scope from their clients. We want to hire people I give my mom's money to get a 3:1 return, like folks that are good.
But where the rubber hits a road is, we launched what we call our graduation program, which basically does this. Let's say over the next two or three years, we work with a client and we get them from like X to Y in revenues. Like I want be able to look that founder in the eye and ask what they want do long term, and I want them to feel comfortable to say the partnership's been great, but we're at a level of scale right now where I think we got to bring this in-house. And so if that's the case, then we enroll them in our graduation program, which basically does the following. Like we'll build an operating plan. We'll help them kind of source and hire their talent, get them marketing stack integrated, and then we'll essentially graduate them off of our services.
And so our thoughts are, if we do our job right, our final deliverable to you will be a fully function in-house team. And so we think that really aligns with that purpose of helping businesses realize and achieve their potential. So that's kind of the 30,000 foot overview. We specialize in paid social. So like Facebook, Instagram, TikTok, Snap. We also do a lot of SEM work as well.
The last out there is, we also did an investment with some strategics. So the founder of Dollar Shave, Michael Dubin, founder of Honest Company, founders of Movement Watches and Revolve Clothing, also the founders of Applied Semantics, the ones that power Google Adsense, and then some notable venture capitalists like David Lee from Samsung and SV Angel and Carter Reum from M13. So these guys have all invested. And the reason why I think that's notable is these guys have been a part of building billion-dollar businesses. They see the problems we're trying to solve and they're willing put the money where their mouth is.
David (05:33): That's great. I saw that Carter got married lately. You don't see VCs in the news, but he married Paris. So that was notable.
Frank (05:40): He had like a three-day wedding and we went to the wedding and it was epic. It was awesome. Those two genuinely seem like true love and it's just great. We're so happy for them.
David (05:51): So you live in Santa Monica. So Hollywood weddings like this are pretty much every weekend for you?
Frank (05:55): No, not at all. I'm sitting in my office optimizing campaigns for the peak holiday season most the time.
David (06:04): All right. You spoiled my dreams of what it was be like to live in LA and work in digital marketing.
Frank (06:10): That's funny. I have dreams about Silicon valley and the jet setting life you must live.
David (06:14): Pretty much. Me and Zach, Larry and Sergei are playing ultimate Frisbee every weekend.
Frank (06:20): Sounds about right.
David (06:21): So let me just ask two follow-ups on your founder story. I guess the first question would be, why do you think agencies deviate from whatever their aspirations of doing great things for their clients are? Essentially what you're saying is you've seen that most agencies for one way or another are sort of disappointing their clients. And that's why the relationships last for about a year because there's a honeymoon period and the honeymoon period's over and pretty quickly the client says this isn't what I thought. So I've seen this as well, but I sort of assume that every agency starts with the best intentions, but something goes along the way. Do you have to why that might be case
Frank (06:56): There's a few things that are going on and play there. So I've swirled around agencies for the last 20 years as well. And so I've gotten either operated at an agency or advised other agencies or just in the center. And there's a few things. There's things that happen. One, it starts with what's your initial intention to like run an agency. And I've heard of few folks really see this as like an opportunity to make money. And that's fine. That's why you started business in many cases. But the intentions are inherently set. The tone is set where you're out looking for your own best intentions versus your clients. And so that immediately starts to celebrate certain things like increasing spend on media publishers. Like that's a win, if assuming you get some sort of percentage of spend deal structure. And that is like a misaligned incentive. What you really want to do is make sure your clients grow.
If your growth happens because of increased spend and your business reaps rewards, great, but it’s kind of a sequencing thing. You have to lead with like your clients' business outcomes first and foremost. So in that example, it's like, what's your initial motivation from day one. Then there's others where they do have the right mentality where they want to help their clients scale and grow and add value. But in the midst of the hustle, they start to grow really fast. The agency does. So like maybe the first cohort of people that are on the team are doing great work. And then you start to scale 3x, 5x, 10x, and agency business is a very linear business. The more clients you bring on, the more people you going to add on. And so you end up hiring people super-fast. I've seen in some cases, the quality of their staff goes down, and therefore the quality of their product goes down. I think that's probably some of the reasons why it leads to like high frequency of churn is just like employee number 45 or employee number 90 is just not as good as employee number 2 was or number 4 was.
David (08:55): I think those are totally reasonable assumptions and often true. I guess what I would ask you as a follow-on to that is you have this graduation program, which feels like it's highly aligned to the client needs, but what happens if you have built, grown 10 awesome account managers who are just killing it for your clients, and then two-and-a-half years later, all your clients are like, why wouldn't I want these people on my team? How do you scale your business if you are letting the talent walk out the door, essentially.
Frank (09:27): Our thoughts are the following. I don't think our business model’s particularly innovative. We're just creating transparency in the market. So, for example, whether advertisers know this immediately or down the road, at some point they want to bring this in house. At some point you get to a level of scale. It’s like using the agency is like an s-curve. Initially, when you're a new startup, maybe the founders kind of tinkering and Facebook or Google and they’re kind of scaling the business. And then they get to a level of certain size where they just can't handle it or they have too many things on their plate. So they want to outsource. Then you outsource, and if you continue to scale, then you get to a point where it just doesn't make sense. And so you want to bring this back in house. Nobody likes to admit that in the agency world or in the advertising world, but there's like this middle point where like agencies actually do make sense to help you get from- once you get from zero to one, which is where the founder might be managing the media buys and you want to start to get to one to scale, an agency can be very additive, but at some point we know there's an end date or expiration deal on that relationship.
So we're creating transparency. Like right, if we do our job right, you may want to bring this in-house. Number two, if you want to interview our account managers, you're more than welcome to. Why? Because you know there's backdoor conversations happening anyways. Why can't we just create transparency in the entire partnership? And if we can help enable their growth in a transparent way, then we feel that's a better entry point into the partnership from day one. Now, what does that mean for my business? This is where your training programs have to be really sound to be able to create a flywheel of bringing a new talent, train them on how to optimize media or build great creatives on a regular basis.
What's interesting, David, is when you and I first started in this industry, I think there was this tremendous loyal- I don’t know if loyalty is the right word, but like you would be doing a great job. And if you put a lot of effort into retaining your talent. And I remember I read somewhere the other day, this woman had two startups and her first startup, which she sold, she said she can count on one hand how many people left her company in that first company. In this new company, which she just recently sold, she was constantly churning employees. And at first, she was really hard on herself. She was failing her team and in terms of why people were leaving, but it does feel like it's just a little different.
The psyche's a little different in 2021 than it was in 2001. I think people employees, if they stay great, but if they leave, it's not necessarily because of the fault of the company or their manager or the founder. It’s just the time you live in. So I share all that in that I’m prepared to know that if people leave, they leave. We have a purpose of helping people and entrepreneurs and businesses realize and achieve their potential. That's our purpose. That's our mission, whatever we need to do to bring that to life. If clients graduate, that's just the reality. And that's a goal. That's a win. If some of our folks decide to join those companies after graduation, we should celebrate that, too. It happens in the outside world. If that happens in this situation, we should celebrate that.
Now, to counter that, we have to make sure, which we continuously do, is refine our training programs to make sure that if we bring somebody in new, they are ramped up as quickly and as effectively as possible. The example I make is, if you are a high-power college football team, if you were Alabama football, you get new players every few years, every year. And so it's the system that continues to keep winning. And so where you've built the system, and we continue to refine it, but that's the way we look at how to scale long-term.
David (13:08): First of all, I’m disappointed you didn't use Iowa high-performing college football team, but we'll forgive you. I think process, a hundred percent, I agree. I love the transparency that you have with your clients and the partnership. I guess the only thing I'd say there is every agency I think looks for that honest open communication. And it unfortunately sometimes happens that you think you've gotten into a partnership and you get the rug pulled out from under you, but the best clients are the ones where you can sit down with them and say, what are your plans for the next six months? And they'll tell you like, well, we want to bring this part in-house and we want you to double down here. This is what you're doing well, this is what you're not doing. That's awesome.
I think the other thing I'll say just as a stream of consciousness on this topic is, and I've heard this from other people that I've interviewed in this podcast, is that a lot of people believe that there isn't a direct equivalency between having an in-house team and having an agency team.
So, for example, agency people work on many, many accounts at once. And so in terms of your knowledge of Facebook, if you're working at RealEyes Digital, you're learning from 10 or 15 different accounts between you and your colleagues. You're learning very quickly versus if you're working in-house, you're working on one account, and there's a chance that you become myopic. So in some cases, when someone decides I want to bring everything in house, it may be the right decision, but it also may be a decision that stunts the innovation and growth that you've been seeing when working with your agency. So that's the in-house agency debate, one angle of it.
Frank (14:36): That's some of the biggest value I think agencies offer. Assuming you can solve for lever pulling and optimization and even strategy for your own business, but to work with an agency to understand what are the patterns that you're seeing in the marketplace, I think that's incredibly valuable. That's one of the biggest questions we get from our clients. Like CPMs are going up. Like, are you seeing this elsewhere? What are the patterns here? And so, yeah, that is incredibly valuable and effective. So not every client will graduate. Some clients very much want to stand their swim lane and work with us. And that's fine, too. We're just kind of giving the option and we're setting the right tone from day one, which really creates long-range planning to where we want to take your business versus this monthly, transactional mentality.
David (15:22): So you've been doing this now for about a year and a half. So you're actually a relatively new agency. First of all, how many people do you have on the team?
Frank (15:28): So we've been around for two years now, 30 employees. God, the time just has flowed by .
David (15:35): Yeah. Always does. And what were some of the challenges with scaling to 30? That's pretty rapid scale in two years.
Frank (15:44): You know, I think for us, what's been unique out of the gate is we started the business in January of 2020, and suddenly two months later, there's a global pandemic. And so like I freaked out. I was telling myself, I should have just stayed at Facebook. Facebook at that time when everyone was quarantining, social media went through the roof. And so like Facebook, TikTok that would've been like the most defensible jobs on the planet.
So the big challenge early on was just that, how do I really scale this business? How do I launch this business during a global pandemic where everyone's at home, everyone's quarantining, people are dealing with this virus. People are dealing with instability in the economy, with like social unrest. Like there were so many things that were just taking some much mind share. That was arguably one of the hardest things I've ever dealt with in my entire life.
And so how we dealt with it, we just stayed the course. One, we focused on e-commerce. And so there was this windfall. So as everyone was quarantining, they were still buying stuff. And online e-commerce went through the roof. In fact, I think in 2020, e-commerce probably accelerated 10 years just in that last 12 months. Like my mom was buying stuff online just to get perspective. And so there was a windfall there.
But it was hard hiring and interviewing people on Zoom. There were plenty of people we hired that we don't even know how tall they are. But we stayed the course, we continued to bring in new business, the team is phenomenal. And I think we have a very clear view that we don't need to be in the office five days a week to be effective at our job. The world has changed, and I think digital has already been a little bit more flexible in terms of working wherever you're at, but this kind of proved it. So the biggest challenge was that dealing with the scale and growth during global pandemic.
David (17:37): Was there any silver lining to it? You mentioned process earlier. Did it force you to put more process in place or was there anything else? Obviously the e-commerce spend increased? That's another silver lining.
Frank (17:48): Well there's a couple things. I think before at all the other companies I was at in terms of ramping up new employees, it was just shadow so and so. Like yes, there's some process here, but you'll figure it out. We definitely invested in our processes earlier on than maybe we wouldn't have had there not been a pandemic. Other silver lining, e-commerce was definitely silver lining. And the third one was, I was really concerned about how we'd get new business out the gate, not being able to meet people. I mean, David, you know me. I enjoy meeting people in person. I enjoy hearing people's stories and trying to solve problems and brainstorming. And I just didn't know what that would look like or feel like when everyone is quarantining, but naturally little by little, everyone started to realize businesses still needs to operate. And so we live on Zoom, we live on Google Hangouts.
So that was probably a silver lining. Like you ended up becoming more efficient with your time to try and get new sales because you just jump on a Zoom and you dig into what problem needs to be solved and whether or not we're the right agency for that advertiser.
David (18:50): So you mentioned that you were definitely someone who likes to network and get to know people. How have you gotten clients for RealEyes? Has is it been through your network. Has there been any other means that have been useful to you?
Frank (18:59): It really is customer referrals, our network. We haven’t put a lot of stock into like marketing our own business for advertising. I go back and forth. On one hand, obviously we believe in the value of marketing ourselves, but I don't want to be like Times Square. I don't want to be a talking head getting out there and everywhere. I want to be a little bit like a cool speakeasy or you got to know somebody. We have very high confidence in our ability to do a great job, and we want to have the right customers or the right clients to work with, not necessarily a volume game.
So basically word of mouth, customer referrals is probably the primary way. I don't know if that'll change in years to come. I hear a lot of agencies because they do great work. They get referrals and that's been kind of a primary source. In fact, I've heard several agencies say I've never hunted for new business. It's all kind been on the backs of the great work that we do and our reputation, which is great. That's the best way to do it, right?
David (20:00): Totally. And I think that is the case for agencies that are growing, that are young agencies. Very infrequently do those agencies through sales, unless they're dealing with very small clients that you could cold call to acquire. But if you're dealing with like a Dollar Shave Club-sized client, they're not going to just respond to a cold call and say, oh yeah, I'll give you all my business.
Finishing out the discussion of scaling of the business, if you could have done anything differently as you grew RealEyes, what would that have been?
Frank (20:32): Gosh, man, we're still scaling it. There's a lot of things I would've done differently, but I guess one thing that comes top of mind, there's a lot of marketing programs we launch and we drive good traffic. We have great creative, and it's that last mile of the conversion path or the user experience that isn't invested. I think brands don't invest in that as much as they could. And so maybe in hindsight, we would have launched a conversion path optimization group sooner than later because arguably, especially with rising cost and the publishers, that's one of the biggest things you got to manipulate. Like CPMs or CPCs are only going up 15% every year. That's the truth. It's death taxes and rising CPMs. So the big leverage you can try and influence are things click-through rate. How do I create great ads is going to drive more people to the site or conversion rate? How do I get people over the finish line to pull out their credit card once they come to the site or average order value. Those are like the three columns in a report that will really ensure that you continue growth year over year. And so that's probably an area that maybe we should have invested in sooner than later.
David (21:41): Do you find that there are clients that might have been able to successfully run campaigns on Facebook and TikTok and whatever five years ago, but today are priced out of the ecosystem. I mean, do you have conversations with companies frequently where you just say, listen, this is a very competitive market and you just can't afford to play in the market.?
Frank (22:01): Yeah.So to answer your question another way, 4, 5 years ago, 8 years ago, you could have got 3 or 4 things out of 10 things right and still made tons of money. Now you got to get 8 out of 10 things right to make money on advertising on Facebook and other channels. So it has gotten harder. The playbook definitely evolves every 18 to 24 months. And so there's times we will look at a new, and they're running a playbook from 2016. And so you really try and adapt to what's working now and they could make money that way. I think other rule of thumbs, like what we've told people is if you're a brand new company and you think Facebook advertising's going to be the Holy Grail that gets you to significant scale, especially in a post-iOS kind of ‘14 world, it's incredibly hard. And I've told several new brands, at a minimum, work around the peak e-commerce season. Maybe sometime in Q1, you should get in. But right now to try and jump in, it'll be too cost prohibitive. And so that's probably some instances where we'd say not necessarily don't do it, but if your unit economics has margin for you to advertise, then sure it's worth a shot. But also timing plays a role here, too. Right now, the CPMs are super expensive and super high given it’s holiday season.
David (23:30): So let me ask you about your team. We’ve touched on that a little bit, but let me go back to it. When you're hiring someone and you said you've hired people over Zoom for the last year and a half, what are the characteristics that you look for in a great hire?
Frank (23:45): A few things we look for intellectual curiosity. You have to be innately curious. We look for folks that are team-oriented. We have a very big team culture here at the company. So a mentality where you give more than you take, and someone that can really empathize with the other person. I think that's really critical. A couple pet peeves that I stay away from if I can. Obviously, interviewing is hard and the people always put their best foot forward, but it bothers me when people have a victim mentality when the world is just against them. Whatever happens to them has nothing to do with them. That bothers me. Probably a more trivial one, but it's very annoying is when you can't meet deadlines. I rarely give deadlines to the people I work with. I ask them, “When do you think you can get this done by?” And so A) it's something you're setting for yourself, but if you miss that deadline, it's just silly. At least let me know ahead of time. It just shows a lack of organization or thoughtfulness and planning. And so those are probably two things I try and avoid, but the curiosity thing is big, give greater than you take, and a team-oriented mindset. Super critical here.
David (24:51): And so then in exchange for that, do you have any core values or core promises that you state to the team that you're going to live up to?
Frank (24:57): A hundred percent. So that purpose I mentioned earlier with the company to help people realize and achieve their potential. That's not just for our clients; that’s for our employees as well. We do try and do a lot to invest in their growth. We invest a lot in training, on personal and professional development and mentorship to help our team members really achieve their own personal goals and ideally just be meaningful contributors to society. And so we take pride in kind of that thinking. We have core values here. One, be the hero of your own journey. No victims here. This is on you. We're big on D&I, be inclusive and empathetic. And when we say diversity, really what it comes down to is diversity of thought which comes from different backgrounds or different experiences. And studies showed diverse perspectives lead to better outcomes and better ideas.
Frank (25:49): And so we measure that. For example, I think our company is about 60% female, 42% people of color. We have an advisor that their profession is really trying to invest in the D&I community and tech. So that's really important with us, just be inclusive and empathetic. A third core value is to be agile and embrace change. If you're the person that eats the same turkey sandwich every day at lunch, you know what, get used to change because this industry is always changing. And then the final piece is just have a growth mindset. Ray Dalio said this a while back, like the worst thing you can be is comfortable. And there's two forms of pain in life. Pain of progress or the pain of regret. And so I'm just really big on having a growth mindset and constantly learning and growing.
David (26:36): I love that, pain of progress versus pain of regret. I guess I need to finish that Ray Dalio book. There were too many lessons in it. The pain of too many lessons was challenging me, but I love the notion of just not being complacent because I think when we talked earlier about big agencies versus small agencies, I think the biggest agencies they do become complacent and they do just get used to having the same turkey sandwich every day. And that's why startup agencies like RealEyes can take market share.
Frank (27:07): That's the hopes. Like you grew a large company, a large agency. Yeah. I presume you were very fixated on the fact that you didn't want to be complacent. You always want to challenge. Like you don't need to be sick to get better.
David (27:21): I've always said that as an agency, you have to be three years ahead of your clients in terms of what you're offering. We were talking earlier, before we recorded this, that you had just attended an NFT conference, and we're not going to get into the world of NFTs in too much detail, but I think that's a great example of sort of something where you're just like, Hey, I should just know about this because who knows? Maybe a client will ask me and then I'll be more informed than they will.
Frank (27:45): Absolutely. It’s that, but it's also like the last 15 years, we've bet on Zuck and Facebook to continue to win. And he's going all in on the metaverse. I don't know if this thing's going to be real in 3, 5, or 10 years, but I do believe it's coming in some form. And when you do, there's going to be a commerce requirement. So what role can an agency like ours play in that world? At least I got to learn more about the evolving state of that landscape.
David (28:14): Well, I bought my kids Oculus for the holidays. So that's my way of exploring the metaverse.
Frank (28:20): I hope they don’t hear this podcast before.
David (28:26): Fortunately, I don't think they’re the target audience. One more question about culture is how do you think your team members would describe your leadership style?
Frank (28:36): This is what I aspire to be. I love Brené Brown. I love the idea of vulnerability. I tend to try and get the core essence of things, ideas or people, but in order to do that, you got to be vulnerable. And so I figure if I lead with showing a vulnerable side of me, hopefully I get the same from the people that I work with so that we have a really common footing to get to real progress and growth. I like to think that I'm trying to be vulnerable. I like to think I'm empathetic to the team around me and what their needs are. I value hard conversations but with sincerity, because again, that's candor and that's truth.
David (29:24): That would be fantastic if they said that. I believe that they would say it. So that's awesome. You mentioned Ray Dalio and Brené Brown. Do you have other business role models that have inspired you through the years?
Frank (29:34): I mentioned Mark Zuckerberg. You know, what's funny. When I was at Facebook, it was hands down the best company I've ever worked for. Those were golden years, and it was golden years in that we were growing, we were being innovative. It was a different time and place 2014 to 2020, but it was a great company. I've never worked at a mission-driven company before. So Yahoo felt like advertising was the mission. Obviously, you go to an SEM company, it's ads and everything was ad tech. It's all advertising on the outside. I think people don't see this nor believe it. But on the inside Facebook genuinely believed in the mission of connecting the world. There was something really inspiring there. And I took a lot of these ideas of mission to this new company at RealEyes.
If I think about most recently, probably since 2016 with Cambridge Analytica, Zuckerberg's gotten so much heat. Facebook's getting so much heat. Mark Zuckerberg could have easily walked away, but what did he do? He completely goes all in with this idea of a metaverse. To lean in even further when things are getting this tough, that's inspiring. That's tenacity. That's grit. That's so much belief and passion with your business that you won't back down. That's really cool. He's probably somebody that I've always thought he's amazing.
David (30:52): Did you ever have a chance to meet him?
Frank (30:54): We never had an intimate meeting. He's done plenty of all hands and such. We did a couple meetings with Sheryl. Sheryl’s equally as impressive. We had a few client meetings with her and she's fantastic. Like Sheryl takes care of the business side of Facebook and Mark took care of the engineering side. And so that's why coming from the advertising world, we worked more with Sheryl.
David (31:15): From a client perspective, maybe this is a two-part question, but do you have any client success stories that you're particularly proud? You don't have to name your clients. And then the second question is, have you had a situation with a client that has been particularly challenging and how did you deal with it?
Frank (31:30): Success story. We had a brand that just recently graduated, which was a big win. We worked with them early on in 2020, and they were probably run rating to do about 10 million a year. And after working with them for closely two years, they're going to finish this year at a $100 million, a tremendous scale. So much fun working on that business. And the best part of that is from early on, we had a very clear line of sight on what their motivations and their interests were. So we knew at the end of this year that we were going to bring it in house. The conversations were had months and months in advance. And it's great because you see the fruits of their labor, the collective work. And we landed this plane as well as we possibly could with them.
And so that was a nice win. We're particularly proud of that one. In fact, I think Facebook may want to do a case study on that. They're intrigued with our graduation model and they really think that we're onto something here. Agency life could be a thankless life sometimes. We try and train our teams to really anchor on our purpose. Every new client that we sign on, we ask them to sign a code of conduct, which is like, here are five things that we commit to you as an agency, and here’s three things that we ask you to commit to.
So we try and set the tone from day one, we try and really get to true partnership. There's like four stages of partnership. I forgot what book I read this on, like accuracy, availability, listening, and advice. Once you get through the first three stages, that's the only time you can only get through advice. You can only give somebody advice. So we really put a premium on trying to establish good partnerships with our clients, but inevitably it doesn't always work sometimes.
And so we have no qualms with walking away. It's not worth it. The cost, whether it be time to service that client or the mental cost to our team of working with somebody that we don't see eye to eye with is really, really hard. So we've walked away from client several times and we have this thing called bad revenue. There's good revenue and there's bad revenue. And we have no qualms with walking away from bad revenue. I guess that goes back to that point. Like I don't want to be in Time Square screaming off the mountain to have everybody come work with us. Like we want to work with real true partners that want to create long-range plans.
David (33:39): Bad revenue. That is absolutely true. I've mentioned this in a past show, but there's a book called the No Asshole Rule, which talks exactly about that, that bad revenue drives team attrition, lawsuits, HR violations, all sorts of bad things that you don’t need. What are your aspirations for the agency.
Frank (33:58): That’s simple. Fulfill the purpose of helping businesses and entrepreneurs realize and achieve, fulfill the purpose for our team members. It's great because the entry point in our partnerships when we launch are very different because we lead with the long-range purpose. And even with our employees. Here's what I tell every new employee. I say, look, my hopes and goals here is four or five years from now, you look back and not even recognize the person you were when you first walked into these doors. I'd love for that entrepreneur, that founder to look back years from now and say, yeah, you know that performance agency, they were real catalyst to our growth. That's what matters. That's what we're doing here. And that's what keeps it fun.
And I think of the things if I look back and I talk to somebody that's starting an agency brand new, one of the things I tell them is if you're doing this just to chase a buck, it'll be a really hard road because there's a lot of ups and downs in agency life. Like I said earlier, it’s a total thankless job, but if it's rooted to deeper purpose, then the daily ebbs and flows are just part of the job. As long as you stay the course on what really matters, then you can handle that volatility. But if you don't have that deeper, richer reason why you're doing this, you can go crazy.
David (35:08): You have to have a thick skin for starters. I think that's a great perspective. I've been doing this now for, now losing track, 14 years, and it’s an agency. But I do find that most meaningful conversations I have are either with employees or with clients, former clients who say like, you may not remember this, but eight years ago we did A, B, and C and it completely changed the trajectory of my business or my life. And that's always so much more valuable than any sort of financial payout that you get from the work.
Frank (35:37): That is so awesome, man. I love it. I've heard of many kind of agency founders going out of their way to keep in touch with any and all current and previous clients. And I think that's such an awesome stage you could be at because at the end of the day, it's a small community. We're all just people, and we're just trying to get our jobs done. And this experience you have going through the trenches with your client or the client going with the agency, that's a big, hard journey. And so like always respect that. Always remember that.
David (36:07): One of the other things that's been odd for me actually is I remember certain clients as being particularly meaningful. Like for me, they're not always the clients from the $10 million to $100 million growth rate. They may be the clients that go from $10 million to $20 million, but then it still changes someone's life or you just have such a good experience with the client that you're just happy to have helped them in any way you can.
Frank (36:28): Totally. That was their purpose. They wanted to realize and achieve their potential, and you made that happen.
David (36:33): Let's talk a little broadly about agencies in general. I think you have a great perspective on how to build and grow an agency and how to treat people, which I love. Are you the future of agencies? What is the future of agencies? What do you think is going to change, where agencies have to be mindful of in the next few years?
Frank (36:47): One, I think we're onto the right model. I think in the traditional agency, advertiser relationship, the elephant in the room is the advertiser constantly question like, am I getting proper value for these fees, and the agency trying to hold onto that business for dear life. I really like the approach that we're taking because I think it takes a very transparent, pragmatic view to relationship. I joke, my co-founder hates it when I say this, but I feel like we like Bumble or match.com. Bumble finds love for two people, those two people are leaving the platform. Like if we do our job right and you get to a level of scale, then you're off on your own. So I think we’re onto something there.
The second piece in terms of future of agencies, we tapped into this earlier, especially with like large blue chip or big advertisers, they're not thinking about Web 3 or metaverse. So I think the responsibility falls on the agencies that are innovators or pride themselves to be innovators thinking three years ahead, as an example, to really start to shape some opinions there to inform our clients. So what does that look like? I don’t know, but as I said earlier, there could be a time when you and I are sitting in our virtual conference room, and then that virtual I'm going to have to buy virtual conference table and conference chairs. There's commerce to be had there. Like our kids already doing that.
My kids are on Roblox and they're asking me for money to buy a new outfit for their avatar. And I’m like, what are you talking about? I'm happy to go to Old Navy and get you a new sweatshirt. They’re just like, No. It's not what I want. So we're already in the metaverse in some form or fashion right now; I just don’t know how deep it will become.
David (38:29): My hope is that someday when we share reports with clients, it will be like that scene from Star Wars where the rebels are in their base and they're around the circular table that has like these three dimensional X-Wing fighters and moving pieces. So you can actually like drag and drop on a table all of the different metrics in 3D. That’s my dream.
Is there anything think that keeps you up at night that you worry about, things that could negatively impact the future of agencies?
Frank (38:59): I guess my worries aren't so macro. For me, I'm a first-time founder. And so having to deal with stuff that you dealt with 14 years ago when you first started your agency, those are the things that keep me up at night. Like trying to understand signal from noise, trying to not let the emotions run too high or too low and trying to stay even keel. I'm still dealing with a lot of firsts and trying to get some perspective there. Those are probably things that keep me up at night. We’re in the peak holiday season. It's chaos in this company right now.
David (39:30): You literally have to be up all night.
Frank (39:32): That's probably it. My mindset's not there to really think about how to shape and move the agency industry along right now. I'm just like in the thick of it.
David (39:43): That's a good place to be. You're living in the present is what you're saying.
Frank (39:47): Yes, yes.
David (39:49): Last two questions. Are there any must-attend conferences you recommend and any marketing influencers you particularly love that people should be following or reading?
Frank (39:59): So I don't know if there's a particular must-attend conference, especially in the post-COVID world, but I generally appreciate smaller intimate shows that have thought leaders in attendance because I always feel like you get up most of your learnings, not from what hear on stage but from the serendipitous moments, you run into somebody and have informal chats. That's where I think you learn a lot. So like back in the day, you remember like Search Insider Summit. That was a great show because it was like 7,500 people that knew what they were doing and knew what they were talking about. Last week, I went to Miami to go to a NFT IRO. It was a small, probably 7,500 people of like serious thought leaders in the NFT space. Like Samsung next sponsor that thing. That was a lot of fun for me.
Frank (40:47): I felt like it was 2000 again when I was learning the space all over again. The lexicon, the acronyms, it's crazy. It's a new world there. So that was a lot of fun, just having conversations and hearing from some of those thought leaders. So that's probably my opinion on the conferences. In terms of marketing influencers, not to toot your own horn, David, but I love what you've done. I love what you share, whether it be marketing or business. There were a couple things that you wrote or you posted on a little while ago that resonated. One was like, be stubborn about your goals and flexible about your methods. That resonated or sometimes fear doesn't go away. So we have to learn how to do things afraid. So that's probably one area. And again, you didn't team me up for that one.
David (41:30): It's all been a giant plan. This whole interview is about getting to the end where you would recommend my writings.
Frank (41:37): Exactly. The last one that just changed my world in terms of marketing was Clayton Christensen, Jobs to be Done. The Milkshake Theory, that just blew my mind. It always resonates and sticks with me now. Jobs to be Done, that was like the last three companies I've been at. We've very much anchored on that principle around solving for the job to be done.
David (41:56): All right. We're going to link to that in our show notes. Well, Frank, thank you so much for the time. This is really very interesting ton of unique perspective. I think you're definitely innovating the way that you run the agency and sounds like it's driving success. So yeah. Thanks again and congrats on what you've built already.
Frank (42:13): I appreciate it, David. This was a lot of fun. Thank you for having me as a guest.
David (42:18): Absolutely. Pleasure.
Thanks for listening to this episode of Agentic Shift, an interview with Frank Lee from RealEyes Digital. If you enjoy the show, please sign up for our newsletter and follow us on social media. Links available at our website, agenticshift.com. Talk to you next week.
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