John Gargiulo is co-founder of Ready Set, a leading performance creative agency. John tells us how six microseconds can make or break a Facebook ad, why he has a full time shipping and logistics coordinator, why he’d never take on Apple as a client, what drop shading is and why its a red flag for him, how he plans to scale to 3,500 people and maintain his culture, and how AirBnB reinforced its culture when employees swiping their badge to get into the office.
John Gargiulo is co-founder of Ready Set, a leading performance creative agency. John tells us how six microseconds can make or break a Facebook ad, why he has a full time shipping and logistics coordinator, why he’d never take on Apple as a client, what drop shading is and why its a red flag for him, how he plans to scale to 3,500 people and maintain his culture, and how AirBnB reinforced its culture when employees swiping their badge to get into the office.
The Everything Store book by Brad Stone
In The Plex book by Steven Levy
The Five Dysfunctions of a Team book by Patrick Lencioni
Who book by Geoff Smart and Randy Street
Scaling Up book by Verne Harnish
David Rodnitzky (David)(00:02): In this episode of Agentic Shift, we talked to John Gargiulo, Co-founder of Ready Set, a leading performance creative agency. John tells us how six microseconds can make or break a Facebook ad, why he has a full-time shipping and logistics coordinator, why he'd never take on apple as a client, what drop shadowing is and why it's a red flag for him, how he plans to scale to 3,500 people and maintain his culture, and how Airbnb reinforces its culture when employees swipe their badge to get into the office. John, thank you for being here today.
John Gargiulo(John)(00:32): Yeah, of course. Nice to be with you.
David (00:34): Yeah, it's great to have you. Why don't you tell us your founder story? How did Ready Set come to be?
John (00:39): So it's almost like 15 years in the making. I started my career in traditional advertising in New York at a firm called Cliff Freeman & Partners. They did “Where’s the beef?”, “Pizza Pizza”. But before that I was at an internship on Mercedes at another firm, and I had this creative director. And we had this circular sort of half-joking argument where I said, Jeff, how come I never hear any of the creatives talk about selling more of the products that we're advertising coming up with ads for? And he said, well, it's all about the creative. This is why, and it eventually gets to sales. I said, I know, it’s really funny. No ever asks how the ads did or anything. And we went around and around like this for a week and finally, he just said, okay, but sshh, don’t tell anybody. Isn’t this so fun? We get to make ads. And I thought, oh my gosh, this industry, something is off here if that's not the goal.
And parked that in my brain, and then 15 years later, I'm at Airbnb. And I saw the same division where literally the brand crew was in one building, the performance folks were in another, they both measured success completely differently and teamed up with Sam Makalou from Nanigans, and our thesis was these things should be one. First principles here, advertising should be about companies spending money and making more money back in new customers over time. And somehow traditional brand advertising lost its way, didn't care about payback or even understanding it. And performance marketing was making like pretty cringy gross ads that were ruining a brand and a brand is still important and they weren't even talking, but slowly they were coming together. That was what we saw happening, and that's why we started the company.
David (02:20): So just so I understand, when you were hired at Airbnb, were you being hired as a brand guy or as a direct response guy?
John (02:26): I led product marketing there, which is like a whole other thing, a whole other conversation of what the heck product marketing is and means in different places is. But I reported to our CMO who was very much a brand guy. So yeah, we can call it the brand side.
David (02:42): And were you one of the people then who argued to the CMO that we need to come up with a peanut butter and chocolate moment and put brand and direct response together?
John (02:50): Yes. My CMO is incredible, didn't need me to tell him anything, but I will say one thing you just reminded me of, I'll never forget the head of performance data, really smart guy, whose whole job was the analytics side of everything Airbnb spent on Facebook and Google. And they're building their whole neck of the woods, would always come back with we are getting 112% payback in 30 days and what's going on over here in brand world. And it was like well, we're hoping for 50% payback in three years or something like that because it's not as measurable. And he was saying, well, we're making a lot of money over there and faster and faster. And I said, but you're doing it because people, when they see an ad on Google or Facebook, they know Airbnb. They trust it. It's not Acme short term rentals, Spokane, or they're probably not going to click through so much or convert so much. So they do go together and I would always ask the question, have we studied the impact of brand and recognition and trust. I'd love to replace this word brand with credibility on performance. And they have been like a half triad at a few years before, but yes, I think that those things ought to be connected.
David (03:54): Yeah. Being a search guy, I'm sort of shooting myself in the foot from a monetization perspective, but I have always agreed with you on the brand keyword point, which is if someone types in Airbnb, they didn't magically wake up in the morning and say, Hey, I wonder if there's a company called Airbnb that does short-term rentals? There has to be somewhere where they got to that point. That said, it's also interesting that we have some big clients for whom we do incrementality tests, where we will turn off their brand keywords, paid keywords for a week and then let the organic run. And it turns out that it's actually incremental to run brand keywords, even if you're number one in the organic search results for some clients, not for all clients.
John (04:30): That’s interesting. I was going to say I've heard both sides of that. That's fascinating.
David (04:33): Yeah, definitely. The other thing I will say, you spark some thoughts in my head, you talked winning awards at Cannes. It seems like that has been the historical metric for brand agencies for success. I was even told, maybe this was the case at your brand agency, that some of these big agencies have full-time teams submitting for awards.
John (04:53): Yeah. At Airbnb, we had a whole ops team. I mean, it wasn't like 10 people. It was 1½ people that would do that that time of year. It was all those case studies. If you see the submissions to Cannes, they're substantive and it's weird. It's like what does that have to do with the first principles of marketing? It's super fun. I love funny ads. I read the USA Today rankings. I watch the Super Bowl commercials. It's what I love. That’s why we got into advertising, but as a part of business, it doesn't necessarily make sense that the metric for success should be going to France and handing each other trophies
David (05:23): I always wanted to create an ad and adage that says something like “3Q Digital, zero Cannes,1000% ROI for our clients.”
John (05:34): Exactly. And it's funny because you'll meet different people who will care about the different sides of that. I'm sounding cynical now, but I call it the CMO ad agency industrial complex, where it's like, if you're the CMO of a brand, you want to have that really funny ad or really heartfelt ad that people are sharing and you can show on your phone at Thanksgiving. And how do you do that? You hire the agency that does those kinds of ads and you pay them a lot of money and they get you that. And then the agency's happy because they're getting paid.
It's really when the CEO and the sort of new era type of CEO comes in and goes, whoa, whoa, whoa, wait, what? What are we doing? Are we trying to make more money than we spend with advertising? How does this fit in? But there are some CEOs who are old school and also like the pretty ads. So this conversation with you and me only on it sounds really obvious, but believe me, I have conversations with people who are smart and accomplished and they just look at me blankly.
David (06:24): I've heard this from other companies, and I want to hear your elevator pitch for the business, but companies that do a lot of video creative like what you do, these agencies would tell me like, yeah, we set up a video shoot for a half day and the CMO shows up every time. The CMO wants to be there. And I'm thinking like. I can't remember the last time a CMO wanted to join the performance marketing results meeting. Really, the clickthrough rate went from 2.5 to 2.7. Oh this is exciting. There are CMOs who are very heavily direct response focused. And of course there are CMOs who do both, but I thought it was interesting that this agency was basically just saying like, every time we do a video shoot, the CMO is there.
John (06:59): It's so true. There's even all kinds of controversy about will there even be a role called CMO in 20 years because of its legacy being so brand focused. And I just want to say, I believe in brand. Like I said, people will click on an Airbnb ad more than an Acme short-term rentals ad by far. That's because of the brand they've been over the long term. So it's important to build a brand. It's really what I would think of it as is important to build that trust and credibility. But yeah, some companies lean into it almost entirely.
David (07:27): The way that I described this dichotomy is that brand marketers need to embrace data and analytics and performance marketers need to embrace storytelling.
John (07:37): I love that. You just said it almost exactly the way Brian our CEO at Airbnb came into the room and said it. He literally looked at half the room and said brand guys, you got to care more about how it's doing. We can't have the low payback. You've got to be serious about how we're tracking success here at a little bit of a lower funnel metric. Performance guys, these ads are embarrassing. Like we would have the dreaded CEO forward of a screenshot of WTF is this, this is not Airbnb. These guys over here on this side of the room, the brand guys are creative. They know our brand. They know how to do something nice. This is really core to why we started Ready Set. I saw that and thought, boy, wouldn't it be nice if there was a firm out there that could understand and achieve both sides?
David (08:15): Well, that's a great transition. So why don't you give us the elevator pitch for Ready Set.
John (08:20): Sure. We like to say we make hit ads our clients love focused on Facebook, Instagram, and TikTok, and increasingly OTT. Everything we shoot is net new. We're not like a chop shop that takes stuff you already have. We really know how to shoot new stuff that's going to work. Part and parcel of this conversation, we like to say we're for growth marketers at brands that care about brand. So we work with everyone from SmileDirectClub, Weight Watchers, DoorDash. These types of folks just can't do that cringy gritty stuff. They really need something that's on point, and that's all we do. We're laser focused on that. And so far so good.
David (08:54): Is it 100% video?
John (08:56): We've started in static. It was 100% video for a long time. We're just very obsessed with the focus and getting that awesome. A hyper-efficient production and really becoming world-class experts at what works on Facebook, video, Instagram, etc., but increasingly we're adding static into the mix because we're seeing it work, especially with offers and Black Friday, Cyber Monday stuff.
David (09:16): Your typical engagement is you're performance creative for brands. That’s what I call it. I don't know if that's what the term is. So I'm DoorDash. I need to get more people to sign up for my delivery service. You go out, you create a unique video, probably sounds like oftentimes live action with actors and a real production. And then you are doing this all with the intent of making sure it's on brand, but also having very clear calls to action and having testable elements that you can move around to make sure the conversion rate goes up.
John (09:46): You've got it right. It's very modular test and learn. We call it CCI. Cumulative creative insights are very important, like not throwing spaghetti around the walls and hoping, but actually building knowledge through data over time and zeroing in on what works. And one thing I underappreciated, David, even a year and a half ago is how much intentionality goes into making a hit ad. We talk a bunch of buzz words that are internal to throw around. Like we think in microseconds. If a bit of an ad is six frames too long, it could mean the difference between a hit or not. Some of our ads internally before they get to clients have 44 notes in our internal software of things that need to change. DR Frameworks, direct response frameworks, best practices, everything's very intentional. It's not, I don't know, get someone to point the camera at themselves, hold the product next to their face, a bad DR. Worst practice by the way. No one actually does that in real life. And I'm sure it'll be fine. I think I underappreciated just the depth and breadth of direct response knowledge that goes beyond Facebook. We work with some people on our team who have experience in other TV, direct response in other areas. And we've learned a lot that we're really obsessed with being the best.
David (10:56): You mentioned a lot of process and a lot of data. I think that obviously as a departure from historical creative, brand creative anyways, I guess if you had to sort of put a line in the sand, what percentage of your business is process and what percentage of it is art?
John (11:11): This is where my co-founder, Sam Makalou, comes in. He's just an incredible, true COO. We have an incredible operations team. Our project management team is maybe one of the strongest teams at the company. But what I love about him is that we don't overprocess anything. It's just the right balance. I would almost say we're an operations company that knows how to make creative that works. Because you're right. Especially as we've scaled the company, I describe it as this growing machine. We're over 100 people now growing 300% a year that does this one thing really, really well, which is mainly paid social video. And that might sound simple and straightforward. But when you're doing it for tons of different clients who need tons of different videos every week, the logistics of that, studio space and UGC talent, and who's got this product shipped. We just hired a head of shipping and logistics, which has been really critical. It's endless. And so I think you do need really strong operations if you’re going to scale something like this.
David (12:07): What is the shipping and logistics person doing?
John (12:10): Literally, we shot with 254. This number's getting old now. I think it was actually four months ago. 254 people in US and Canada, a few months back, it's probably over 300 now. It's going up by a lot every month, where we ship them product either from our clients directly or now with our shipping logistics center, we have our own warehouse, we have our own cash of every client’s product, and we can FedEx things overnight. We have a source of truth of where everything is. We've got corporate FedEx account, not people walking and waiting in line at a FedEx store. I'm like obsessed with scaling in a way that doesn't break our people or our company. And so that's where that comes in. Not to mention, we work with NordicTrack. Their treadmill’s 462 pounds. Like who's going to get that thing across town to shoot at a set. So this person really owns everything end to end.
David (12:59): So we know that Ready Set will be a smashing success when you have the sort of Amazon-like logistics setup. You have Ready Set planes, Ready Set warehouses, those little sprinter vans driving Ready Set products to people.
John (13:13): I don’t know if we'll ever get there, but you know, it's funny. I was just on a walk with my co-founder and we came up with this great framework I wanted to bring up today called IDOC that he read about actually. It's looking at a person through an executive or a professional through a lens of IDOC, Innovator, Doer, Organizer, Connector, people connector. I'm not an organizer. Sam is the best organizer I've ever met. He's really the brains of the operation, MIT, Stanford Business School and all that. But what he said to me was something sweet on the walk. He said, what I like is you care about operations and execution. I think execution's one of the most underrated things at Silicon valley and especially if you want to scale a company. And so it goes nicely together. I let him run the whole show and just try to stay out of everyone’s way, but I really do care about it if you can't tell.
David (13:57): I had this idea many years ago of having our clients take Myers-Briggs tests and then aligning account managers with clients based which Myers-Briggs profiles match each other.
John (14:09): That's not a bad idea.
David (14:10): To your point, you get a client who's really into creative and could care less about efficiency or whatever. And you have the opposite on your account management team. You're going to have a failure, but you get people who are aligned personality wise and they can do wonders.
John (14:23): Yeah. We've kind of taken your idea in some sense in terms of the departments that we're building. So we'll have a leader of a department that when we are more and more frequently bringing up. Okay, IDOC, Innovator, Doer, Organizer, Connector, and we'll go, well of course this person is an incredible doer and they're actually an innovator. They have these new ideas and they're always pushing the ball forward, but they're not great with people. I'm making this up. I'm not thinking of anyone as a connector. Okay, well, let's have this number two from over here come in or let's hire somebody that fills that gap. And it works wonders when you put those types of things together.
David (14:53): So a little bit with personalities. One thing I'm thinking about is you are trying to be very brand compliant or brand positive. I don't know what the term would be with all your ads. Do you have an agreement that you get into before you sign a client that says, listen, this is the level of control that you have over this process, and this is the level of control we have. And I say this because, I'll use an example like Apple, let's say. Apple is obsessed with brand. If you don't have a white background on an ad, I'm assuming Apple's going to say go pound sand. So how do you deal with that with clients to make sure that everyone is on the same level of mutual understanding about who controls what?
John (15:32): It starts with finding the right fit in the first place. And we're really leaning hard into this right now because we're growing so fast, because we're booked out now several months, we're able to be really honest with clients about what makes sense. If Apple called tomorrow and said they wanted us to work with their performance marketing group, we would do definitely say no. Say I couldn't work with Airbnb, etc. I love Apple and Airbnb. I think they're clearly smart businesses who are growing quite well, but they don't care that much about making an extra $10 million from return on ad spend on TikTok as much as they care about, like you said, if 1 pixel is off, I've seen it up close and not really representing the brand, that's a bigger fail for them. So we're just not the right fit. You know, like I mentioned, we make hit ads our clients love. That means a fit for us is a client that wants to make hit ads. I even say it's 75% of it. The 25% is the love part. That's really where we're differentiated in our space is caring about it and making ads that clients love. But that's the first thing I ask every client. When I meet them, on a scale of zero to 10, with zero being blurry cats dancing holding our logo up in the air crushes it, 10 being like we're going to be talking about drop shadow waiting for 20 minutes on the call, where are you guys? And actually I'll tell you the most popular answer is there's a pause and a smile, and Susie says, “Well, I'm not sure what Joe will say, but as the performance person here, I'm fine with it too.” And Joe will say, “Well, it's not that we need to be a 9, but I'm okay with 7, but we won't take anybody above 8 or 9 or 10.
And then we do have some brands that do care. Like I mentioned, we have SmileDirectClub. They have an incredible Chief Creative Officer, 40+ per person Creative Department. We do take those 8s. They're actually also extremely data driven. And then you asked about how we get that alignment. I'm really honest about, look, we're not Pentagram. We're not [try a day]. We don't charge what they charge either. We're here to get hit ads that you love, and we don't want to ruin your brand for sure. As I said, brand, long term is important, but that's the bar. We're not here to go to France, like we talked about earlier, go to Cannes. And it can be interesting, David.
All times, because people want to work with us, they’re like that's fine. We know. We get it, but we're down getting down to being overly transparent maybe. But like we're getting down to the refining our ideal customer profile point where we even start to ask about this. Who's going to be the point person on the other end of our calls. If, and we've had this in the past, if it's a designer or designers or the creative director, typically it's not a great fit. If they're like, well, no. It's Susie. She’s our Head of Growth. She needs to double our numbers this year, and then there's going to be creatives on the call to make sure we don't go off the rails, that's a good fit. But like we've been gently led by the shoulders down the path of drop shadow waiting and the right coloring before and it never ends in a good place.
David (18:22): So the opposite end of that spectrum is what if both people on the call say, on a scale of 1 to 10, we are okay with the blurry bunny rabbits or whatever your analogy was.
John (18:30): I'll be honest with you, a year plus ago, we used to say, well, we're not for the zero to 2s either. There are other people in our space that are focused on that. And then we got pretty darn good at DR and knowing what works. And we do have a couple of clients now. They would say they're a 1 or a 2, cash being thrown in the air and all that for fintech. And it turns out that it’s not that hard. You get more flexibility. It's kind of fun for our creatives. We've been getting a lot of hits with those ads. So we're not so picky that we don't take those clients anymore. It's really the minority, I think most real D2C e-com and fintech brands, which is our bread and butter, they do get that they need to build a brand. We get a lot of clients that come from other past partners that say, we need to graduate from this cringy stuff to something a little bit more solid.
David (19:15): Do you measure brand lift and perception? Is that part of what you offer or is that a side effect?
John (19:21): No. We're not nearly that far on the brand side. We've had clients that do measure that, but our typical customer is that Head of Growth that's look to reinvent their performance on Facebook, especially in light of Apple's privacy changes and not get angry emails from their Head of Brand.
David (19:38): We have had a client that was doing brand level campaigns like a Super Bowl ad and also doing a lot on paid search. And they actually took the approach that they wanted to measure the ROI of their brand campaigns at the Super Bowl. But they also wanted to measure the brand lift of their search campaigns. Because, if you think about it, I mean even a text ad, if someone sees the same text ad 20 times for a company, that's frequency. That can drive lift and awareness. I actually think that there's an opportunity, as much as we were pooping the old brand world of not measuring direct response. I actually think there's a missing opportunity to measure brand in performance.
John (20:15): I agree with you. In fact, I had a client recently. I don't even know. She said something really insightful in a matter of fact way. She said a brand is really just a collection of impressions and there are all kinds of impressions. I agree.
David (20:27): One question I want to ask about your business, do you do the media buying for clients or is it only the creative?
John (20:33): No. Only the creative. Again, we're very obsessed with focus. We'd rather do one thing really well. I see agencies with literally 22 things listed on their site from event marketing to brand strategy to performance. We're really good at just performance creative for paid social.
David (20:49): So then you give the client a bunch of assets and then it's up to the client to figure out which asset is going to perform with which audience or however they're running the marketing. Is that how it works?
John (21:00): Yes, that's right. I found that on the media side, I have really smart clients who have strong religion about running 200 things a month and testing in this way and structuring in that way. And then I'll get on the call that afternoon with an equally really smart growth marketer friend who's like that's crazy. Like I can't test more than 20 things a month, and I do it a totally different way. So it is funny. This was the subject of the first ever coffee with my co-founder, which was, “Hey, you’re a media genius. Should I be getting into that game?” And he said, “No. It’s a red ocean. Stay out of it.” But anyways, I don't want to go jump in that ocean and have some strong point of view on it. I'd rather follow our client's lead. The main ingredient that we find they're missing is creative at scale that their head of brand doesn't vomit on that works.
David (21:47): I'm assuming that you get clients from time to time, potential clients who say we're looking for somebody to do creative and media and you just say no. I guess it's kudos to you. You’re at, did you say 100 people already?
John (21:59): Yeah, we've crossed 100 people recently.
David (22:01) I mean you're turning down clients because they're not a fit for you, but also sometimes you're turning down clients because you're not going to do what they want basically.
John (22:08): Yeah. It's funny. Maybe I've come to terms with this more over time. Maybe it wasn't as obvious two years ago, but it's very obvious to me now. As I say to potential clients on the phone, “Hey, like our job here is just to figure out if this is a fit or not.” A fit for you, a fit for us because in the very early days of Ready Set, when we were like, oh you'll give us money. We'll do whatever you need because we were bootstrapped.
David (22:28): Take out the garbage for you.
John (22:29): Yeah, literally. I mean we did things then that we definitely don't do now. We did TV early on for Clorox and public storage. Only now we're just starting to get into OTT. I think it's totally normal to just really make sure it's a fit because if there's one thing more important than revenue and finding new clients, in fact, I think it's 10 times more important, it’s retention. We are obsessed with retention. We measure NPS, we want to know in real time how everyone's doing, is this the value that you expected? Everything is about, in my opinion, not absolutes, but expectations versus reality. So we're very direct about what to expect, what we are, what we're not, showing lots of ads we've done in the past, insisting they chat with reference clients. I've never actually done it, David, but I've thought I should ask for references, too, of like who are a couple vendors you've worked with that I can talk with. So if it's a good fit and we retain them, you can build a great business.
David (23:22): That's some good swagger. If you go into a call and say, in order to be accepted as a client, I need to talk to two of your references.
John (23:29): I mean, it's funny. It's like pretty logical. You'd think that a firm would be yeah, sure. Okay, here are these two people, but I have not had the guts to ask it yet. And I've had a couple clients where I kind of have wished I'd asked it before. I bet they've not paid their bills with other vendors, too. I wish I'd asked.
David (23:43): Well, actually that's a good segue because I like to ask, how do you deal with challenging clients and what do you consider a challenging client?
John (23:49): Good question. So let's start there, I guess. There's different buckets of it. First of all, I try to just have empathy. Like it's hard. We have clients who are got boards breathing down their necks and growth is hard after iOS 14.5 and numbers aren't being hit. And so it's not like they're picking on us. It's that they're just struggling, and it may not be about us so much.
So that's one thing just to first sit with I find. Difficult can be expectations can get where we're really clear in the sales conversations. And then a new person comes in. This has happened before and is totally different expectations. In almost all those cases, the failure I'd say is on my part. We've had times where I tell clients, we don't have a magic potion. We're the best at this, we think, getting hit ads clients love on Facebook, but it's not like you sign us up and the first delivery is like double your control ad that you've been trying to beat for two years. Sometimes it takes time. I think we've done a good job of explaining that. We always beat it in the four month trial period that we offer, but that's been something we've had to acclimate to. Most of our clients are really nice.
I'm lucky Sam led client success at Nanigans, which was really well respected and well liked. And he's just a really reasonable guy. He doesn't get too high or too low. Meagan Rochelle who led the Disruptors Team at Facebook before it was called that for six years leads client success for us under Sam. It's just a really good team that are really intentional about staying aligned with our clients on what we're learning, what's coming, what our expectations are together. It's not all gems and roses, but we haven't had tons of crises where someone's like, whoa, this is off.
David (25:27): Yeah. Intentionality is kind of the word that's coming through to me in everything you do.
John (25:34): Yeah. It's not fun to have. Thank you. It's not fun to have a misaligned expectations. I think in life, like it's certainly in business, aligning expectations is important. We haven't talked about people yet, but we're obsessed with people and getting the absolute best people who are fit for our core values at Ready Set. I'm sure I could land more of them, more better ones if I promised them the moon and all kinds of stuff comp-wise and what their day to day would be like and seniority. But I'm the opposite. I tell them about the hard days and some of the challenges they're going to face because I just think it's important.
David (26:08): I can definitely relate. A couple years ago, we had a client that was a big client for us who was spending a lot of money with us and long relationship. But then they had a change of management, like you talked about, and the relationship started going south. I take the responsibility when I was the CEO. I wasn't paying attention as much as I should have. And I found out that over the course of about six months, we lost, I think, six people who resigned who couldn't work with a client. And then by the time I came in and tried to rectify it, we ended up firing the client. But by then it was too late. We lost a couple more people. And then of course the client on the way out, decided to not want to pay the full amount that they owe. There's a huge difference in good revenue and bad revenue. Saying no to revenue is one of the smartest things that an agency can do.
John (26:50): You just reminded me of another story relevant to this. Not all clients are equal in terms of their demands. Like we have a client spends $8 million a month on Facebook and our head of quality control did a deep dive on the average rounds of revisions we get from clients. It turned out to be like a third of what I thought it was going to be. It was 1.2. And this client had not sent a single revision for five months. Meanwhile, we have other clients that have like six rounds of revisions every time, and they do want to talk about the drop shadow waiting. And so we started being like, okay, if we're having these teams and pods and we're assigning clients, we can't act like they're all the same. So let's have this score. So if it's a 1, it's like, yeah, they're happy with pretty much whatever. And we're getting hits and everything's cool. If it's a 3, that's like much harder. And I was chatting with one of our creative strategists the other day. She said, well, this client's like an 8. I thought, oh gosh, maybe we did change the scale. But yeah. So when you say difficult, I think you were probably alluding to just someone being not so nice or just difficult, but also clients, even for the same revenue, can be four times the work.
David (27:52): Absolutely. Yeah. Both of those, I would say. I realize that I'm actually, on a scale of 1 to 10, I'm the 1, because first of all, I don't know what drop shadow waiting is. For this podcast. I use Fiverr for the logo design. It was only like two revisions. So it cost me $25.
John (28:08): Can I tell you, I love Fiverr. We actually don't even use freelancers. Everything is in-house at Ready Set, but when I was getting the thing off the ground, I sketched our logo. There's this three play buttons kind of overlapping on a napkin and took a picture of it, and a guy on Fiverr made our logo for like $40. So I'm all for that kind of scrappiness.
David (28:25): Yeah. I've been dabbling with Upwork, and I feel like you can get a lot of great people. There's really talented people. I mean, actually for the transcription of this podcast, I found a guy in Uganda, and he is fantastic. Super high quality, super high turnaround, like $25 a transcription.
John (28:41): That’s incredible, David.
David (28:42): The world is flat. So let me talk about a little bit more about challenges, and then I do want to ask you about your culture because I think that's really important. What were some of the early challenges you had in the business and then what are the challenges you have today?
John (28:53): Yeah. Starting at zero, the scariest thing is like is anyone going to want this thing? I remember talking to one of our advisors, Chris Pitts, a great guy who led growth at Kabam back in the day and been on the non-gaming side. And he said, well, obviously, people are going to pay you for videos. You'll get some customers. And I said, wait. Really? You think? Someone will do this? I remember genuinely just thinking like someone going to give me real money to make these things. And then of course it started to happen. And the early days, I think that first year, we're only two-and-a-half years old, so call it the first 6 to 12 months was because we were bootstrapped. It was just keeping the bank balance healthy.
Now, fortunately, we're a negative working capital business. So people pay us upfront, which helps. But as we just are figuring out, well, how much can we spend on production? And can we afford that new camera? And the very earliest days of sitting in that we were fully remote, but first Sam and I had a tiny one room, super gross dingy office with office furniture from the secondhand store on 25th Avenue San Mateo.
David (29:56): Didn’t know there were offices there.
John (30:00): Yeah, exactly. I remember one day, and this was like 6, 12 months in. We had several clients spending, I don't know, five figures a month with us, and we're going down the stairs. And I told you, Sam never gets too high or too low or too worried about anything. We were joking about something. And then he paused. He said “Hey, we should talk, by the way.” I remember we were on our way to lunch. He said, our bank balance is below $10,000 in Chase. And the way to build a business is to not run out of money. And so we were like, oh crap. And I felt like that moment was the lowest, but moments like that happened every other month, if not more. And that was probably taking up a third of my brain, just that sort of stress.
And so one thing I would say to anyone thinking about starting an agency or being at that point is sales and new revenue is really important. When those moments would happen, I would get up at 5:00 a.m., open my computer. I would go on LinkedIn. I would say, all right, who's leading growth ThirdLove or Nutrafol or whatever it may be. I would craft a personal email. It might take me 15, 20 minutes. And I would get 11 of those out, go have some breakfast, and maybe I'd hear back from one or two or zero and just grind it out to get that revenue in the door. You have to. You have to really love that part or at least do it. I think that was probably the earliest challenge we had.
David (31:14): I had the exact same challenge. We would distribute profit after every month. And then I realized one day, wait a minute, we don't have any money in the bank at the end of the month. If we lose a couple of clients, we're out of business. You obviously have a great network having come from Airbnb and having a lot of experience, but I guess just to reiterate what you've said in the early days of the business, you couldn't just rely on the network. You just had to be out there doing whatever you can to bring in business.
John (31:38): That's true. If I'm being totally honest, I did rely on the network early. This was actually a problem, at least something we are cognizant of the first year, was well over 50% of our clients were like friends, people that I had built trust with either at Airbnb or I was at BlueStacks for five-and-a-half years. Before that, we built a mobile marketing partner product that 80% of the top spending gaming companies and other apps were using at that time. And so I knew all of those folks from those days, running around all those conferences, and they would give it a shot. We were cheap and would do anything they wanted. And then I say concerned because it was like, this seems to be working. We're growing, but it's also all people I know. And it's funny. Now we've got a sales ops team and I was just going through with one of the guys, every client since 2019 ever, and all these old stories, almost nobody in the past year is a friend of mine. They're all just new now, which is nice.
David (32:29): And are those people coming in from client referrals and venture capital referrals or is your sales team actually going out and bringing in business?
John (32:37): Have no sales team. It's just me. No sales or marketing. So it's mostly referrals. One of our three objectives that our key results fall under is build a community of raving fans. And that was the thing we said and hoped for and literally built key results for the team and people built for themselves under. And then all of a sudden, it started to happen in waves in 2021. I have two really sophisticated senior growth marketers. You probably know them both at big companies that one of them called me up. He said, I left so-and-so, I'd got a job at so-and-so I, my start dates in a month, we're bringing you guys. Send me the contract. I want to start talking to them about it. And that's nice when that starts to compound. So I'm not going to say that's the majority of our clients yet, but it's nice that the word getting around.
David (33:20): Yeah. I used to refer to that as triangulation that you'd have someone who would get venture funding and the venture capitalist would say, “Hey, you should talk to this agency.” And then they'd go onto the message board at Y Combinator or something. And they'd say, who should I choose? Oh, you should choose this agency. And then they'd be at a conference. And someone from the same agency would be speaking and pretty soon, you get into this perfect situation where someone comes to you and says, okay, as long as we agree on price, I'm signing up for you. You don't have to gimme a pitch, nothing. Let's just get started.
John (33:47): I think it's so true. And the modern day, I forget what that Y Combinator board is called.
David (33:52): Hacker News.
John (33:53): Something like that, but now it's Eric Seufert. It’s a Slack mobile dev memo community. And it's nice. That question does get asked and people do say nice things. And to the point where they'll send me a screenshot, “Look, someone asked for a creative shop. I said, you guys.” which is really nice.
David (34:07): So what are the challenges that you have today?
John (34:11): Scale, scale, scale. Not effing up the culture as Peter Thiel famously told Brian at Airbnb is the number one thing. I think we're doing a pretty good job at both, but it's just different problems. Like the shipping logistics thing I mentioned. That's a new thing. I don't even know if there are agencies that have that department, but we're really big on thinking from first principles. And we're like, okay, we're going to need 350 people. And maybe in five years, it'll be 3,500 people to have these products in their hand. We need to be reliable. They're going to be shooting from their homes from Peoria to Toronto. And we need someone to own all of this. So let's hire someone who comes from that supply chain world. That's an example of like, oh crap, we have a giant problem. It's all falling on our project managers. They're not shipping experts. We have no space, think of photos of Director of Photography’s apartments that are full of boxes and smart ovens and stuff piling up. So yeah, I'd say scale in general. And there's all kinds of flavors of that we can talk about.
David (35:04): I guess one thing with scale is always the question of working in the business and working on the business. And so where are you in that continuum?
John (35:12): Great question. I read a quote that really stuck with me recently about scale. It was meant for CEOs, COOs, ask yourself, what do you do every day or what do every week. Write those things down. In five years, you won't be doing any of those things. Hang on to the 15% of them that you do need to still do, the things that are really strategic, and the other 85% get busy figuring out a solution. Either a person or a process, but you should not be doing those things.
So for us, it's, for example, recruiting. If we had this talk six months ago, I would say we have a tiny recruitment firm vendor that's literally was like two people. Now it's six. We're like their main client. They're catching up as fast as they can. They're 80% behind, not their fault. And so we found an awesome in-house recruiter.
She's incredible. She's hiring a team. We've got another firm that we're working with. Because otherwise, David, it was like, ah, we need that role and this role and that other role. And it's me waking up at 5:00 a.m. doing LinkedIn searches and sending InMails at a hundred plus people I shouldn't be doing. That's not working on the business. So yeah, I just loved that saying because it's a really good way for us to get out of the 85%. And not only that, also getting out of people's way. The whole point of hiring all these smart people is we tell them, we give them the keys to the car. I don't want to stand in front of the car or tell them how to drive.
David (36:29): Yeah. Delegate. Are you still involved with clients? Are you still involved with the strategy?
John (36:35): Yes, I am. So I also had another good rubric recently. You should be 50% looking around the corner as CEO, 25% day to day operations and just the day to day stuff that pops up, and 25% client success essentially. It's funny I was saying that all hands are something and someone pointed out that I didn't mention sales, and I'm the only person that does sales. So I'm like, oh gosh. I guess that's got to be part of it. Although, we're finally hiring for that now.
David (37:04): Means that you have to work 120%. That's all.
John (37:06): I guess so. But I think the 25% is really important. I remember hearing a story on a podcast or something. This was like three years ago. The story was he’s got a little startup. He was pitching to some huge corporation and he walks to lead him to the conference room to pitch this much bigger company. And he looks across to the other conference room and it's Marc Benioff in there talking about why they should stay or something.
And then I heard another podcast where there was this story about Jeff Lawson at Twilio. It takes tons of calls every day with their clients. You might think those two guys have not talked to a client in five years, but actually I agree. It's really, really important to stay in touch. I give them all my cell phone number. I find text is actually a good channel with folks. And I tell them the CEOs or CMOs, I want to be the first person to know if things ever feel like they're going sideways.
David (37:53): And really, if you're supposed to spend 50% of your time looking ahead, it's really hard to look ahead if you don't know what clients care about because clients won’t even tell you what’s coming or what’s going to be important to them.
John (38:03): That's exactly right. Well said.
David (38:05): Let's talk about hiring and cultures. Since you talked about how you've found a way not to be up at 5:00 a.m. spamming people.
John (38:12): I’m still up at 5:00 a.m. every day, now it’s 5:30 or 6:00 some days.
David (38:14): You can maybe do yoga or something at 5:00 a.m. instead of using LinkedIn InMail credits.
John (38:20): By the way, just so you know, that's how I met my co-founder. I sent him a LinkedIn InMail. I had never met him before.
David (38:24): I was hoping it was going to be through yoga, but okay. So first of all, what are the characteristics you look for in a new hire?
John (38:30): The biggest thing are a fit for our core values. This is something I learned at Airbnb. So I'll preface this by saying at Airbnb, what I loved about this was how, again that word, intentional they were about it. You swiped your badge at the turnstile, one of the core values was written above it. You applied for a job at the company, you met with your boss in the team interviews, and then you had a core values interview, which was all about you fitting the values. And the questions were obfuscated. I remember my guy asked me, what's the last gift that you got for somebody that wasn't in your family? That was probably testing me to be a host, which is one of their core values. So I just think they're so important. And I saw them succeed so well at that company at a larger scale.
Our five core values are hashtag get better. Nothing starts out perfect. We’re on a never-ending quest to improve the value we offer marketers. As long as we do that, we’ll be successful. So get better, solve the harder problem. Incrementality will not get us there. When there's a harder road that gets us to a better place, we take it. Be direct, be egoless, attack the problem, respect the person. We're all one team. That's especially important when you're fully remote on slack and these kind of mediums. If it is to be, it must come from me. This was something that Dan rather said at my college commencement. We're forever scrappy. If you believe there's something that ought to be done, it's up to you. I just tell people straight out sometimes just do it, ask forgiveness later. Spend it, hire it, do whatever you need to do. We trust you. And the last one, it will be okay. Startups are full of great days and challenging ones, embrace both.
So get better, solve the harder problem, be direct, be egoless. If it is to be, it must come from me, and it will be okay. And that's what I have an ear for when I'm talking to somebody first and foremost. I'm trying to think of something outside of those that I'm looking for, but it's like if you fit those values and not just because you tell me or you're really charismatic interviewer or someone refers you, but we're also very big on reference checks. I think it's vastly underutilized. I think most people are just, maybe not lazy, just they think, well, they're going to gimme some references and they're going to say nice things and I'll save some time. We go really deep on reference checks. I do hundreds of them a month. I'm obsessed with it. Just pulling out the one thing that's like, well, come on. Nobody's perfect. What's the one thing that person can work on? Well, they're mostly perfect, but I guess if I had to name something… and then you're going to get the one thing that definitely is going to come up and be an issue. So that's how we hire.
David (40:47): I think a lot of companies are paranoid about giving reference checks at all and some don't give them at all. And those that do, I would imagine, like you said, they never want to say anything negative because they're concerned about liability.
John (40:59): So it depends on the company. I think you're right. It's funny. I was interviewing someone who we didn't end up hiring, but I remember he had worked in video at Fox News for a couple years, and I got a total stone wall. They do not give references for those reasons, but I'd say 95% of the time, most companies are okay to talk about it. Actually you just gave me an idea. If I get a person who I call, I also call people off list with permission, but I say, “Hey, it's cool. You've worked for these five companies recently.” Give three or four, five people that you reported to that I could talk with. Do you mind if I just chat with some others that you may have overlapped with there? We always do that as well. And I'll get someone sometimes who says, they’ve worked here from here to there. And to me that's like, Ooh, something went really bad there. But you gave me an idea. I should ask is that the policy of the company that you have to say that and see what they say. But most of the time, they're happy to talk and share, especially if it's a founder calling.
David (41:56): Regarding your core values, how do you ensure that they are lived in the company? How do you do that on a daily basis?
John (42:05): That’s the biggest thing. So I tell everyone, these are not pat things, and I hope they come across the way. It's not integrity, honesty, those are things that should just be human givens. They're really us. They're really special to us and a few things. So I tell people they're not like a book of guidelines that sits up on a dusty shelf and no one ever hears about it again. We talk about them constantly. Another company that does this well is Amazon. I interviewed at Amazon and ended up choosing Airbnb. But I remember all my interviewers, I think almost unconsciously, they were using the, what do they call it at Amazon? The core principles or something. There's like 21 of them. They're pretty famous. I had never heard of them either until I was going up there. And they would use them in conversation all the time. We do as well.
It's encouraged, it's celebrated. I like the phrase catch someone doing something? If somebody does mention them, which is almost daily, I'll say awesome. That does do that. Or I'll celebrate an action someone took and cite the value. Every single employee every month with over the new batch of employees that month, we have a vision and core values interview where everyone introduces themselves to each other. And then I go through the core values in some depth, how they came to be, what they mean to Sam and I, and how they kind of play out day to day.
We have core values awards. I could go on. We're really obsessed with having them be part of the fabric of the company because there's employees I've never met beyond that initial call, and they need to be able to use these as a touchstone to make decisions. The company is going to grow and thrive if people have freedom and autonomy. That's how you get the best people as well. But they need to know, if they're asking themselves, is this the right thing for this company? Is this what John and Sam would want me to do? God forbid they slack you every day or you never scale. And so we really feel it's important for people to know these things so they know how to make decisions on their own.
David (43:49): I think you're using your brand marketing background because you're creating frequency around messaging of the core values. And so at every moment, multiple times, maybe a day, people are reminded of the core values and then it changes behavior.
John (44:02): Absolutely. That's a great point. I think of myself like a politician who has to make the same speech 5 different times a day for 40 days, the same exact speech every 6 weeks, soon to be 12 when we do our OKR. How do we all do? We go through it. We talk about the OKRs that are set for the next period. Every six weeks, we start that call where I go through our core values. So yes, repetition I think is a really important part of it. And you know what? There may be someone new who that monthly vision of values call hasn't come up yet. They've been here for three weeks and maybe we catch them on that six week thing or they see a Slack or people don't get sick of it. I'll do it until people tell me they get sick of it.
David (44:41): I'm sure you've seen the Netflix culture deck.
John (44:58): Yes.
John (44:58): They show a slide at the start that says every company has core values but few of them actually mean anything. And they show this core value slide that says integrity, honesty. And then they say, these were the core values of Enron.
John (44:58): That's really funny. I love that. Another two words that are really important to us that I tell everyone when they join and frequently is it's on Sam and myself to make sure everyone gets out of bed every day with context and clarity. Context, what is this company? What are we trying to do? Where do we want to get to? What's our direction. I say to them, if anyone's ever worked at a company where you feel like you don't really know what's going on or where we're going, like that's not here. That's not Ready Set. And so if you ever don't have that, I want to know.
And then clarity. What is my role in that? What can I do? What tools are available to me? One thing I would be remiss not to mention on this podcast, David, because it was an idea you gave me and I haven't told you this yet, you said to me, as we got bigger at 3Q, I set up 15-minute calls once a year with every employee and you add a different, slightly maybe different version of it. Mine is simply what's right. What do you like about the company, your role, give me the good stuff, and then even more important, I tell them what could be better? #getbetter. Where can we improve? If you ran the company, what would you do? Be as direct and egoless as you can with me. And then I take notes and I share them with Sam and it's been so helpful. And I'm really grateful for that advice.
David (46:10): Yeah. I found it helpful as well. I was always impressed at just in a 15-minute call, what ideas you would get from someone. And part of my philosophy on that is it's lonely at the top. Oftentimes you don't get to hear what people think two or three levels down from you. And those are the people who have the best ideas. Related to that point, I've also said that whenever I would hire someone, I'd say, listen, in the first 45 days of your job here, you're going to be new. There's going to be things that everyone else just does at a force of habit, but you'll have a fresh set of eyes. So this is the time that you're going to come up with the best suggestions for the company. So if you think something's wrong, say something because it probably is.
John (46:48): Yes, absolutely. I always say to them, this is maybe the most valuable you'll ever be to us at the company because you're not drenched in the Kool-Aid yet.
David (46:55): So you had mentioned the clarity of where the company's going. What are your aspirations for Ready Set?
John (47:01): Yeah. I think anyone starting something agency or anything out there should have a really clear view of this? If you don't have context on clarity, how can anyone who works for you have it. And we've been really clear about that from the beginning. Our mission as a company is to build a new advertising industry everyone can love. We really mean a new industry. We think there are massive parts of it that can be productized. Again, thinking from first principles of like, okay, if the goal is just to put money in, get more money out over time, get more customers, we just feel the mad men world is woefully inadequate for that still chugging along somehow. And so size-wise, we think this could get really, really big.
Sam and I don't have needs. We're happy. We were joking about this the other day. We have wonderful families and wives and we like our homes. We don't want to move. So it's not about that. It's just that I look at WPP group and publicists. If I'm being really honest and think we should be bigger than that. Like if we do this right, I can't imagine, and the world moves to where we think it's going to move and results are going to be trackable and matter. They're stuck in that corner like Kodak was when digital came out because of all the fees and percentages and middlemen and directors, reps, and unions, and God knows what else, all those layers that are just there buried under. They can't move. And we learned something recently. We're looking at all our clients. 85% of our clients didn't exist 10 years ago. And some of these are spending millions of dollars a month just on Facebook alone.
So when those companies become the P&Gs and large companies, we really feel like we could be right there with them. My heroes are the Atlassians and the MailChimps and those kind of guys. We've had investment interest from Sequoia and others. It's super flattering. I always take the meetings and learn from them and humble about it. But I think by virtue of our business model and the growth we're already experiencing and the way that we were trying to keep it healthy, that hopefully this thing will go all the way. I hope it's the last job I ever have.
David (48:59): One of my sayings has always been no one ever got fired for choosing a holding company, but then again, no one ever got promoted either.
John (49:06): That's great. I love that. Is that one of your blog posts? I think I had that in my head. That's from you. That’s great. I love it.
David (49:13): I've been an angry old man in my blog post for a long time really against the machine or the ad industrial complex, as you said.
John (49:21): Yeah. And I want to say, by the way, I have friends also run agencies that are very happy to stay the size they are and very happy to have an amazing business that they have. I think that's wonderful. I really do. I've considered it in the past. Like I have no begrudging of that. I think it's important for us to map out what we want to be and that's what we want to be with Ready Set. We think the potential is there.
We think the potential's there, not to compare ourselves at all, but I'm just thinking out loud, probably in the same way that Salesforce in 1999 thought there's some potential to be really huge. The very obvious everyone's doing it. There's no risk in doing it to your point way of doing sales software on prem, blah, blah, blah. Seems really hard to be, but we think it's going to bogus. I doubt he predicted anything like the things that have happened with cloud, any of the actual tactical strategic changes in the market that happened 10, 20 years later. And here we are more than 20 years later. So I'm not saying I know what the path will be, but I feel like it's very obvious to me that the current machine is just not built at all to solve this problem and we're going to find our way to building the new one.
David (50:29): Yeah. And at the end of the day, you're attracting clients who are open to change and who are innovating. And some of the bigger agencies attract clients who are afraid of change and want the same thing. And over time, your clients are going to grow and disrupt the market and you're going to grow with them. And the agencies that focus on the old school, stodgy clients are going to see their clients die and subsequently they'll die.
John (50:51): Exactly. That's our bet. We'll see if it works
David (50:54): What advice would you give to someone who is thinking about starting an agency or is maybe in that sort of 5- to 10-person stage right now?
John (51:02): I think at that stage, it's all about not going out of business. I just got an outreach actually on my LinkedIn yesterday from a guy who had a small agency that looked really cool and did some really cool work. And he is looking to go client side. He made a joke that his agency didn't work out, which sucks, but I think it could have easily been us. Like I think just pounding the pavement, grinding it out, whether you like sales or not, doing that, but then on the flip side, being equally obsessed with fit and retention and being clear to yourself of what is the value I bring, how am I differentiated? We haven't gotten into that, but like what are my comparative differentiators? What are my unique differentiators or anything only I do, only I have a team of people that live in my house that shoot TikTok creators or whatever, and then holistic differentiators, bigger picture things of the way you do business or things like that. Just to even consider those things, I think you're already ahead of the game, and not to fail or blame external factors because there'll always be things you can't control.
David (51:59): Yeah. I love the concept of if you can't be number one in a category, create a category you can be number one in.
John (52:03): I love category creation. I think it's really cool. And it's hard, too, and it takes a long time.
David (52:08): Yeah. Totally. Let me ask you just some more general questions since we're heading towards the end of the conversation. Do you have any favorite marketing or leadership books that are must reads in your cannon?
John (52:18): Just like how I love biography in my personal life, I like stories of companies. So like Brad Stone's written some good ones on Amazon called The Everything Store. There's one called In The Plex about Google that's really good. There's just not that many of these books that are written by a really star reporter that get deeply behind the scenes of, what was it in Google when YouTube sprung up and then they tried to do their own YouTube and stories I didn't know. That's one level. There's a great one called The Five Dysfunctions of a Team that I would highly recommend just around hiring and building a cohesive team.
Probably the number one book I would say is called Who. I've got to find it. It's incredible. We actually follow the whole model in our hiring that they map out. It's just around being really, really into hiring, talk to 20 people for any role, the questions you ask, not being like listen back in your armchair, just chatting and being like, yeah, he is a really nice guy. I think he'll be great. Having a set repeatable process that and the team ask these questions and the value questions. So I'd really recommend that one. I could go on there's another one called Scaling Up. I read a lot of these things.
David (53:31): Those are great. The Who one sounds fascinating. And we'll put links to all of this in our notes on the show. Any marketing influencers or Twitter accounts or people that you love that we should mention?
John (53:41): I really like following Jason Lemkin. We're on a podcast here now. I think he gets in the content that he makes the importance of like meat and potato and [Sasta] and Harry Stebbings does this really well also. He edits really massively, clipping people off and just moving and moving it, moving it forward. I just think the content that they offer is very useful and jampacked. So if you’re building a team, if you're hiring sales folks, if you're doing B2B marketing, he's worth a listen. And then on Twitter, I follow anyone and everyone who's doing creative or media buying in the paid social world. There's so many smart people. They're right on the bleeding edge.
David (54:19): Good recommendations.
John (54:21): And you, of course. I read all of your blog posts. I wish they were more frequent. I get excited when I see one pop up in my LinkedIn.
David (54:25): Yeah. I need to work on that frequency. See, I'm not a brand guy. So frequency is not a strength of mine. But I'm working on one right now about Ted Lasso. I don’t know if you've watched that show. It's about how Ted Lasso is using the Brené Brown, whatever her name is, vulnerability and transparency. That's basically his whole character.
John (54:45): Yeah. She has some great books, too. Yeah. I can't wait to read that one. You just reminded me of something I neglected when you said, how do you make sure the values of the company get across? Maybe it goes without saying, but I don't think so. It's acting on them. We made a really big decision a few months ago that was clearly to everyone on our team, short term financially not a smart move, but long term and for everyone's sanity and health, a really smart move. And the reaction we got from everybody really moved me and was amazing because in some sense it was a hard decision. In some sense, it was very easy to call because it was clear that we were running afoul of one of our core values. And someone said to me something that will always stick with me. He said that was the day I knew I was at the right company. That was the day I saw, oh my God, I'm so used to every company just orienting around the financials and squeezing more EBITDA, whatever, at the expense of the team and saying all the right thing in all hands and it's all BS. And then when you guys actually did that, it was really compelling. So that inspired me only to do it more. And I didn't need any extra inspiration because Brian and the founders at Airbnb have been a great exemplars of acting on their values.
David (55:55): That's great. I've mentioned this in the past, but there's this concept of the thousand-year company, which is like you're building a company that you want to be in existence in a thousand years. And so the decisions you make can't be can we increase the profit margin by a half percent next month. It needs to be what do we do to invest in people and in clients and in process so that we are building something that just scales forever. And never think about tomorrow. Think about a thousand years from now.
John (56:23): That's where our values solve the harder problem if it gets us to a better place comes in. And the way I describe that at one on those calls is if there's something you're like, okay, I see how we can hack this together. It'll be fine. It'll be cheap. Well, this guy is going to be working 60 hours a week, but he'll do this thing. Or we can have too many meetings, and a lot of people really think hard, make it an OKR for someone to be responsible for, and figure out a new system that could support this same thing when we're 10x our size. And we will choose the second one every single time.
David (56:50): I love it. My last point on that is I used to say that PPC stands for pay per click, but it also stands for people, process, and culture. And that's pretty much what everything comes down to in the agency world.
John (56:59): It’s so true and it sounds so easy when you just write it down. It's so hard hour to hour. I think a focus on it is required.
David (57:05): Everything in life is easy to do but hard to do well.
John (57:08): That’s right.
David (57:10): Well, John, this was really great. We could have talked for another 45 minutes.
John (57:14): Yeah. This was fun.
David (57:15): Really appreciate it. Like I said before, your focus on intentionality is what really comes through to me. And I think that's a lesson for everyone, whether you're in an agency or working at Toyota. So really appreciate the time and congrats on the success that you and Sam have felt. You've earned it.
John (57:30): Thanks man. It means a lot coming from you.
David (57:33): Thanks for listening to this week's episode of Agentic Shift, the conversation with John Garguilo of Ready Set. Join us every Wednesday for a new episode of Agentic Shift, and please sign up for our newsletter to get updates and exclusive content. You can find the signup link at agenticshift.com.
Links
The Everything Store book by Brad Stone
In The Plex book by Steven Levy
The Five Dysfunctions of a Team book by Patrick Lencioni
Who book by Geoff Smart and Randy Street
Scaling Up book by Verne Harnish