Lance Loveday is the founder of Closed Loop, a performance marketing agency based in Sacramento, CA. Lance tells us why he decided to build his own technology, what it means to have an anti-fragile organization, why he believes in the power of no, how assuming the best in people reduces his stress, and how he evaluates candidates based on the GWC methodology from the Entrepreneur’s Operating System.
Lance Loveday is the founder of Closed Loop, a performance marketing agency based in Sacramento, CA. Lance tells us why he decided to build his own technology, what it means to have an anti-fragile organization, why he believes in the power of no, how assuming the best in people reduces his stress, and how he evaluates candidates based on the GWC methodology from the Entrepreneur’s Operating System.
Traction: Get A Grip On Your Business, book by Gino Wickman
Rocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business, book by Gino Wickman and Mark C. Winters
Simple Numbers, Straight Talk, Big Profits!: 4 Keys to Unlock Your Business Potential, a book by Greg Crabtree
David Rodnitzky(David) (00:02): In this episode of Agentic Shift, we talked to Lance Loveday, Founder of Closed Loop, a performance marketing agency based in Sacramento, California. Lance tells us why he decided to build his own technology, what it means to have an anti-fragile organization, why he believes in the power of no, how assuming the best in people reduces his stress, and how he evaluates can based on the GWC methodology from the entrepreneur’s operating system. Enjoy the show.
Lance, thanks for joining us today on Agentic Shift.
Lance Loveday (Lance) (00:33): My pleasure. Thanks for having me.
David (00:34): It’s great to talk to you. I’ve known you for probably a decade. So maybe we could start with tell us your founder story. How did Closed Loop come to be?
Lance (00:45): Well, I wish I could tell you that it was the result of a grand vision that I had all along or something, but the reality is I was pushed out of the nest. I got my start in tech working for HP in the late ‘90s, and then jumped out and joined a startup, which was very fashionable at the time that I got laid off in the.com crash, which was also very fashionable. And I needed to make an income.
And so I started contracting because I had some contractors that worked for me previously at HP. And I sat at my kitchen table there in Cupertino and scratched out company name, ideas, and did domain name searches, and came up with Closed Loop marketing. And it was available with the dashes at the time, which was horrendous to have to type out, turns out. But I was just a lone wolf freelancer for a number of years and consciously decided to maintain that lifestyle and not grow an agency while a number of my contemporaries at the time were growing agencies in this very fast growing space.
And after a while, I had some opportunities come my way that were going to require me to grow. And at that point, I think I had matured to the point where I was ready and decided to go ahead and build an agency. I’ve been fortunate to work with a bunch of great people and to grow ourselves organically over time. And unfortunately, I didn’t have the big vision early and probably missed out on a bunch of opportunities to grow something more sizable, but I don’t really have that much in the way of regrets either.
David (02:12): So you said that you initially started out as a consultant and then you eventually got dragged into the agency world. What was it about consulting that was a conscious choice of yours? Why did you want to be a consultant and not have an agency initially?
Lance (02:24): I mean at the time, I had come out of corporate environment and then got to spend a little bit of time at a startup, but I still had this mindset imbued in my head that managing people was a pain in the ass and something to be avoided, and I still valued doing the work hands-on. And anything that wasn’t resulting in measurable output was bullshit. I really bought into that at the time.
I told myself I didn’t want to manage people. It’s a pain and it’s not worth it, blah, blah, blah. And like I said, after a while you mature, and I got past that. And quite honestly, my first hire, I got lucky and I hired someone who was really amazing, and that I was really compatible with, and we complemented each other and we made one plus one equal three.
That opened my eyes up to what was possible when you keep the bar high on who you bring into the organization and surround yourself with. So that completely helped me make that 180 that I needed to make in order to adopt the mindset necessary to build a company.
David (03:29): Yeah, it’s interesting because I actually agree with you that if it’s just you doing work for someone, there’s no transactional inefficiencies. You’re just delivering work and you’re getting great results. And whenever you’re in an agency, inevitably, you end up having overhead and a bunch of people that you have to pay for and you end up having to pass the costs on to the client. So it is inefficient in that respect. But the flip side of that is you just can’t manage a Hewlett Packard with one person. The bigger companies just need tons and tons of people.
Lance (03:58): Especially now as the digital channels have proliferated so much. it was one thing to pull this off in 2004 when it was really just paid search. Now you’ve got search and it’s gotten obviously more complex. You’ve got social, it’s come up in a big way, even for B2B ,and then displays have this massive resurgence. And now you later in video and CTV and contents indication, and you’ve got all these other channels that really do require some degree of specialization to be truly great at it. So you’re right. It’s to put together a team now and be world class in all those channels. One person can’t possibly do all that.
David (04:35): An expert in everything is an expert at nothing.
Lance (04:38): Yeah, exactly.
David (04:40): How many of people do you have on the team today?
Lance (04:42): About 40.
David (04:43): Are they all in offices or you embraced remote working?
Lance (04:48): No, we’ve been remote for quite a while. And so we’ve got a decent nexus here in the Sacramento region, but spread out really all over the country and one or two international.
David (04:58): So what would you say is your elevator pitch for Closed Loop? The way I would maybe ask this also is how do you differentiate yourself? We both know there are a lot of digital agencies out there. So what’s the Closed Loop advantage?
Lance (05:09): In one respect, I like to think we’re the Goldilocks size of agency. So we’re not so small that we don’t have any sophistication or our own data or infrastructure tools, and we’re not so large that we’re a holding company and it’s that whole game. We’re still founder-led and there’s some passion that comes with that, I think and care for the quality of the work itself. And at a more concrete level, we have built our own data tool and infrastructure that does help us differentiate on helping to squeeze better performance and really do a better job of doing deeper funnel optimization.
David (05:48): You built some version of a tool many years ago, if I remember.
Lance (05:51): This is the evolution of that tool. So it’s called Forager and we have continued to improve it and enhance it. And it’s really become instrumental in our success, both as an internal tool we use to help get more performance out of the campaigns and to help power our reporting and connect with our clients backend systems so that we’ve got that full funnel view.
David (06:15): I’m curious just about how you decided to build that. There’s a pretty strong argument to be made to say that the third-party tools seem to give away their software for like pennies on the dollar. And so what drove you to build your own technology?
Lance (06:28): At the time, nothing existed for it. And it still doesn’t oddly. So I, for better or worse, decided to make a big bet and invest a bunch of money and resources in developing a tool that would pull data from their platforms, not settling for the superficial costs in clicks and level metrics and not so much that it was going to choke our data warehouse, but figuring out how to craft the queries in a way that gave us a depth of data that was useful and valuable, but not so much that we would choke on it.
It turns out that just that exercise is a lot harder than you think. And so we built a tool that allowed us to do that, pull the data into our own data warehouse, where we could manipulate it and importantly recombine it. So we’re pulling multiple reports from Google, for example, and then we’re recombining it into a single table, which is really powerful as well. And then we’re doing that for all the ad platforms and then normalizing so that we can do cross platform analysis and then we can run custom queries against that. And I like to think, and this sounds a little over promising, but I like to think that it lets us shine little bit of a light into the black boxes that the platforms like to give us
David (07:43): That actually raises a good point/question, which is as you’ve built this tool, whatever it was, a decade ago, and at that time, to me, at least it felt like there was more data being given to advertisers than there is today. I feel like there’s a lot more black box, a lot more reliance on algorithms and AI.Have you experienced that? Do you feel like there are use cases that you used to have for the technology that maybe aren’t as applicable today because there’s not as much data or is that just my perception?
Lance (08:15): I think for me, it’s a yes-and response. So certainly yes. We had to ride that wave through this growth of machine learning and how it’s been applied in the digital ad space. And we’ve had to really adapt our whole approach to our work from back in the day.The focus was on maximizing control and granularity of data and so on. And that worked for a long time, but our view on how really to get the most out of these campaigns has shifted over time as machine learning has improved. And then the machines finally learned. And so it was overhyped for a long time. And then at some point it tipped and started actually working. And a lot of people still thought, oh, it’s overhyped. And we realized, oh crap, it’s actually working .
And so we had to really make that shift. The way that we approach the work now is less about trying to really be control freaks. And now we think about the work as internally, we joke around. It’s more about how do we ride the beast? How do we set the guardrails so that we make sure that we’re staying on the road, but also empowering the algorithm to help get the most out of these campaigns. Our data tool has evolved over time to help enable that.
So we’ve shifted the focus from maximum granularity and control now more to, we may not have that level of control, but at least let’s understand what signals it seems to be optimizing against so that we have some better understanding and aren’t having to settle for whatever comes out the other side. And we can use that intelligence to target the ad dollars a little better and that platform, and maybe it gives us some intelligence we can apply in other platforms, too.
David (09:58): That makes a lot of sense actually. I have often felt that good technology in the world of AI is basically heuristic on top of the existing AI. It enables you to feed in some variables in a smarter way, so the AI can make smart decisions in many ways. Would you recommend if there was a guy starting an agency today? Knowing what you know now, would you say start building your own technology or would that access change now?
Lance (10:24): It depends. I think there are multiple ways to be successful. It really comes down to what your goals are. And if you’re trying to build a big differentiated agency and you want big, more sophisticated clients, then yeah. You’re probably going to need to do that in order to achieve that objective. If you are comfortable building a smaller agency and maybe a bit more of a lifestyle business and maybe servicing smaller or less sophisticated clients, then I don’t think it’s a necessity at all. So that’s how I would think about it.
David (10:58): Going back to the early days of the agency, one question I would ask is what were some of the challenges that you experienced starting your agency and how did you overcome them?
Lance (11:11): It seems like I have to learn everything the hard way. Maybe between this we can help others save some money. I don’t know. I feel like I made every mistake in the book. You say yes to everything. Say yes to things you shouldn’t do. You say yes to clients that you know are going to just drain your soul and your pocket book because you feel the pressure to generate an income. And so you chase that short-term dollar even though you know strategically it’s not the right thing. I did a lot of that early on. I confused business with good business. There is such thing as bad business.
I’ve always been fortunate on the employee front. And I say fortunate. Some of it is by design, but that’s an area that we’ve always done really well. But on the client side and taking on requests and working for really thin margins and letting myself be out-negotiated instead of saying no and yielding the power of no and really having the confidence of my convictions to do that, I wish I’d done that a lot more.
David (12:14): Yeah. I think that is a great learning. And I have also used the term good revenue and bad revenue. And bad revenue can either be revenue that’s not profitable or revenue that comes with a price in terms of having to work with someone who’s jerk usually is the definition. I totally agree with you. When you’re starting the business, you just have pay the bills. So someone comes in and it's like, well, this is questionable when I’m doing to work with them.
I remember I had a guy who was a friend of mine come in and say, “I really need your help. I can only pay you $250 a month. Can you please do it?” And I was like, “I don’t really have the time.” He’s like, “Please, please, please.” And I said, “Fine, I’ll do it.” And I started working with him and about six weeks into engagement, he said, “You know, I really don’t think I’m getting $250 of value from this relationship.” And I said, “You know what? Frankly, it’s not even worth $250 to send you the bill. So let’s just call it a day.” I guess a related question, how do you deal with challenging clients? How have you dealt with challenging clients in the past? And I think challenging could be defined as either being jerks or having unreasonable requests to the team.
Lance (13:14): I’ll tell you this, and this may come back to haunt me. I have a framework I’ve come up with that I’ve shared internally, which is you can either be incompetent or an asshole but not both. Obviously, given the choice of working with clients, we want to work with competence, goodhearted, kind people who are going to treat us like partners and so on. But I’ll deal with you and I’m totally fine dealing with the competent assholes, quite honestly, because at least there’s some shared framework for what success looks like there. We’re not prima donnas. You don’t have to stroke our egos and be super nice. I can handle that.
But what we can’t have is the incompetent asshole where you’re both unreasonable and treating us poorly. And obviously there are certain lines you just can’t ever cross because at that point, we just fire people, and I’m notorious for firing clients. The team talks me down quite often, but that whole ‘power of no’ thing got to my head for a while there.
To answer the question more directly, how do I deal with challenging clients? I think in our world, there can be a temptation to focus on the work itself and the metrics and assume that it speaks for itself. And I learned the hard way that’s just not the case. You’ve got to represent it. You’ve got to make sure that your definition of success actually is aligned with what the client’s definition of success is. And that may not be the headline KPI either. Their definition of success may be deeper. And usually there is some qualitative measurement for that. And it is something, for example, like, “Hey, I want to look like a rockstar to my management team.” So “Yeah, you’re putting up good numbers for me, but the Excel spreadsheet you’re sending my way is so damn ugly. I can’t put it in front of them and have it reflect well on me such that it meets my qualitative goal of looking like a rockstar.”
So I think there is some qualitative more human level work that you have to do to understand what success really looks like. And it has more to do with knowing how to work with people, communicate well, and read the signals again at a more qualitative level than just putting up numbers on the scoreboard for folks. So for me, that’s always been an aha because been around the block as you have for a long time. And there are clients that I look back on that I feel like we told ourselves the story that they were just assholes, but the reality was in retrospect, we didn’t read them right. And we didn’t understand what success looked like to them. And so we told ourselves the story because we fed our own egos to believe that they’re just assholes and they don’t deserve to work with us. In fact, I think had we just approached it with a different mindset. We probably could have salvaged the relationship and done some great work together.
David (16:04): You have said a lot of interesting things there. I’m unpacking it in my brain. First of all, I think one thing that I’ve always said is from a client retention perspective, a great relationship and bad results is better than a bad relationship and great results, which is sort of sad in a way. But to your point, people want to work with people they like. And as an agency, you can be single handedly driving a company to their IPO, but if you don’t get along with the stakeholders, they would rather just roll the dice and work with the devil they don’t know than work with the devil they do know. So I think I agree with you on that. I think you can be incompetent or an asshole or not both.
I think I actually disagree with that a little bit and here’s why. The problem with incompetent clients is that they’re unpredictable. You can’t guarantee future employment with an incompetent client because they don’t know if you’re doing a good job or a bad job, which means that someone comes along with a shiny object and they’re like, oh, well that looks good, and then they leave. The problem with an asshole client is that you run the risk of losing your team and other terrible things can happen.
In certain instances, an asshole client will work with you for six months, will be three months late on paying the bill, and then fire you and say, I’m not paying you for the next three months. But I think you’re also right that sometimes as an agency, you perceive someone to be an asshole, but the truth is it’s really just a communication issue. And if you deliver to them what they need, which I love your example of, just give me a spreadsheet that I can share with the boss so that I look good, they’re actually not assholes. It’s just really a communication breakdown.
Lance (17:28): You’re right. My example is a gross oversimplification. People don’t sort themselves cleanly into these camps. The reality is we’re all difficult at times, but it’s an easy framework. And if someone fails both tests, it is easy. If there are behavioral lines someone crosses, then nothing else matters. You’ve crossed the line at that point and you’ve got to go. You stay the right side of the behavioral line, we can make things work. And I think there matters of degree maybe on the incompetent side, too. So you’ve got to be sufficiently competent and sufficiently not an asshole.
David (18:10): Let ask the flip side of the challenging client. Do you have any favorite client success stories or examples of relationships that you think exemplify a client success story?
Lance (18:24): Yeah. We’re fortunate to have a number of really good relationships ongoing now. And one in particular comes to mind where I love this one because it didn’t start off great, and it was speculative in my mind. I was like, I don’t know how this is going to go when we started it off, but it was good lesson that you need to take multiple shots on goal in order to have some really go through. And this was one of those that felt speculative. I wasn’t sure at the time, but it has just blossomed into this beautiful relationship where we’re doing great work, the client acknowledges, appreciates it. It is a partner. We’re partners toward this together. We have grown it over time, and we’ve provided them some great strategic guidance along the way. And the really cool part for me is they’ve provided us some great strategic guidance back.
And so we’ve got such a great relationship with this client now. This guy reached out to me a while back and he said, “Hey, I might be overstepping here, but I found a guy I think you should hire.” And I was taken aback. I was like, “Wow, that’s not normally the type of thing that I’ve heard from a client and honestly not the type thing I’d typically open to, but I respect you so much on the strength of our relationship. And you’ve never said anything like this to me. So clearly there’s a reason that you’ve had this thought.” And so sure enough, I talked to this guy, and I got it. I was like, “I understand why you wanted to make this connection.” And I’ve hired the guy, and it’s working out beautifully.
That’s a great example of great qualitative win. And here’s this thing that has further cemented our relationship. He had the boldness and the courage to make this recommendation. I had the open-mindedness to at least listen to him. We both made ourselves vulnerable, which I know is a very buzzy word, but we really did. And it’s worked out to both our benefits beautifully and in a way now that our level of trust with the each other is only that much higher. I just love that.
David (20:13): That’s a great example. To me, it speaks to partnership. I think sometimes you have clients who see the agency as a servant and not a partner. And when you have a great partnership, it’s trust, it’s vulnerability, it’s somewhat rare that you get a client that just proactively reaches out and says, “Hey, I just want to say, you’re doing a great job.” Usually when a client calls you and says, “I need to talk.” Something’s wrong. That’s great to have a client that reaches out proactively and says, “I want to help you hire someone who’s going to be great for your team.”
Lance (20:41): And this person, to his credit, he says things like, “I want to be your favorite client.” And to even bring that spirit to an agency, client relationship, is so rare and refreshing. I can’t help but love the guy, to even say those words and how hard is that for you? It’s not. To his credit, it is completely genuine. He is trying to create the environment for the greater team, his team and my team, to be successful together. And I think he’s just very enlightened leader that way. And he sees that as that’s what success looks like for him. It’s creating the environment for the team to be able to be successful and to be thought of that way, brought in as a partner, and to be able to communicate at that strategic level. I love it.
David (21:24): It’s interesting also. This is probably a good transition to talk about core values, but there are a lot of companies that have very strong core values, some of which are respects and treat everyone as a partner. And then you have an interaction with them as a vendor and you don’t get that experience.
I can tell you that we once were in an RFP with a company, a company that I respect a lot. I actually was a long-time customer and went to the RFP, spent a long time submitting a detailed document. And then we heard nothing for a month. And I wrote to the Head of the RFP and said, “Hey, is there any update?” No response. So then I wrote them back again and I said, “Hey, both our companies are really very interested in the concept of net promoter score and creating brand advocates. I know because when I look at the NPS forum, you’re one of the sponsors. And I submitted an RFP. I spent a month on it and no one has ever bothered to even acknowledge that they received it. I don’t think that’s good NPS.” And the person wrote back in an hour after that.
But still, every interaction is an opportunity to either live your core values or not live your core values. And anyways, it sounds like your client is someone who just is living those core values in a great way.
Lance (22:34): You’re spot on. It’s funny you say that. I’m actually leading with that as a filter and a qualifier more and more from a new business perspective. Now, just to understand where people are coming from and to the extent we can work with people who share our core values or at least shift the mix more and more toward those types of clients, it’s going to help us be more successful. I think it’s going to increase our client tenure, and it’s going to increase the enjoyment of my team and their teams working together. So I’m attuned to that from pretty early on now, and I use that to help prioritize which accounts we want to go after and which we don’t.
David (23:14): So let’s talk about that. Do you have defined core values or core promises that you make to the team?
Lance (23:20): Yeah, we do. We really have been very conscientious about that over the years. And for me was a tough exercise because in a world of infinite possibility, how do you distill down only five or some artificial number that you cap yourself at and say, these are our core values. And you do it in a way that’s authentic and it doesn’t sound like everyone else’s core values.
And so I think there’s a lot of nuance that goes into that, but we did go through a process where we really distilled it down to identify what they are for us. And it’s less about the headline terms and labels we put on them and more about the examples that we use and how we live them for me. But it’s things like stewardship. Obviously, we’re spending tens, hundreds, and millions of dollars of our clients’ money every year. We better be good stewards of those dollars and of their values and their brands. So that’s just foundational to the business.
Honesty and authenticity sounds good. You can paint it on your wall, but we’ve got to live that. And along with that, that kind of the no-asshole rule kind of lives under that one. By the way, on the employee side, you can neither be incompetent nor [crosstalk].
Impact. But you might have this great phrase. Envision the goal before you roll. Know what it is you’re trying to accomplish and prioritize intelligently on the fly. And I always encourage people to be running a real-time prioritization process and asking themselves, is this the highest and best use of my time? Know what’s important to get done now versus what can wait until later, what can be delegated with oversight, but doesn’t need to be done by me. And team first is a huge one for us. And along with that, the way that we treat each other and the way we interact with our clients.
The phrase that always stuck with me is assume the best intentions. And it’s amazing to me how powerful that can be when you can. I use it as a reminder all the time. So when a client reaches out and wants to talk, it would be so easy to tell yourself stories about, “Oh shit. What does this mean? Are they going to fire us?” And you can get yourself so spun up. And then you get on the call, and it’s just because they wanted to shoot the breeze or something. But you went down this whole emotional, crazy rollercoaster journey on the basis of nothing.
I’ve learned to short circuit that now by asking that question, “Okay, how would I respond if I assumed the best intentions? What are the positive stories I could tell myself about this to help counterbalance the negative ones from a human nature perspective we can’t help but start with?” So that’s a big one. Assume the best intentions. And we try to apply that internally in terms of how we interact each other. And then yes, externally interacting with clients and the outside world in general. That’s, for me, just a very powerful phrase.
David (26:15): Human nature is fight or flight. So when you hear a ruffling in the bushes, you assume it’s a lion. It’s hard to overcome that, especially when the client sends an email that says “Quick chat?” Those are great values. Two follow-ups to that. If I asked one of your team members, if I locked them in a room and interrogated them and said, how would you describe Lance’s leadership style, what do you think they would say?
Lance (26:40): I think it’s evolved over time. Right now I think they’d say pretty hands off. Pretty empowering. At least I hope so. I’d like to think they would say that. I’d like to think they’d say that he’s more of a quiet leader maybe. He prefers more to lead by example than with his mouth. He tries to do the right thing and let that guide his actions and his interactions with people. On the downside, I think people would probably say that I’m a little over analytical, maybe a little robotic at times, don’t engage enough on the emotional front interpersonally. So I’m being really honest. I think that there’s probably that perception out there, but wants to do the right thing would be my hope.
David (27:21): I think you can be an emotional leader leading by example. You don’t have to be Tom Cruise jumping on Oprah’s couch to express emotion.
Lance (27:30): Well thank God because that’s not going to happen.
David (27:32): That’s not you. That’s not me either. So I guess knowing about yourself and your core values for the team, what are the characteristics that make a good hire? You mentioned this great hire that your client brought you. What are characteristics that you know are going to become successful for people at Closed Loop?
Lance (27:48): Hiring is such an interesting art and science, and we’ve done well with it, and I’m so grateful for it, and I continue to be grateful for it. And there are all these frameworks that we use for it. But one of them we adopted from EOS which is simple scorecard for each job. Does the person get it? Do they want it? Can they do it? GWC.
So what I find is someone’s not applying for the job. They’re not coming in if they don’t want it. Usually, and then we test to make sure that they can do it. So those are relatively easy, I think, to filter for an interview process. The harder one for me is this idea of get it. Does this person get it? And for me, some of that goes to values. And I think you can pick that up in the interview process and by looking at someone’s track record. What’s their trajectory. Is there a history of promotion and being given more responsibility and a clear desire to want to grow and improve oneself?
If you’re brutally honest with those types of questions and evaluations, you can get pretty far, but then there’s still for me, this X factor that you can only get from really interacting with someone, and you can’t pick it up by asking trick interview questions about manhole covers or whatever. I think you just need to have a conversation with someone to understand a little bit about what makes them tick and do they really understand the nature of the job and what the key levers really are, especially if it’s in a client facing role.
If someone’s totally wooden and mechanistic and super analytical and can clearly do the work and loves doing the work, that might be great. But if that isn’t what the job requires, if the job requires relationship building and some amount of empathy and strategic thinking and communications, well, they may want it, they can do it on paper, but they don’t really get it. For me, you got to have the whole package. For us, we’ve just been fortunate to have our employees help us a lot, both in the interview process but also in terms of referrals, too, and identifying those types of people that are going to be right fit for us.
David (29:53): I like the GWC framework and I’ve been through EOS training a couple times. Now, do you use it across the whole company or is it really just more of a leadership level?
Lance (30:02): No, we do. We use it across the whole company and we actually had our company meeting this morning. And so we talked about, “Hey, here’s the review of last quarter’s rocks and here are next quarter’s rocks.” And then there will be team level rocks as well that will report up. And so we really bought into it. We even approached from an org structure perspective because my COO saw when we read the books initially, I saw him and said, “Yep, I’m the visionary.” And he said, “Yep, I’m the integrator.” It’s like, “Yeah, good.” That’s how we’re already working together. So we got lucky and backed into this somewhat already, but it was really empowering for me because it gave me permission to really customize the role more to how I’m wired and to how he’s wired. And so it allowed us the freedom to all do the things that we’re best at, do more of the things we’re better at, and less of the things we’re not as good at.
David (30:51): Well, I’ll make a point to link to. I guess it’s Traction: Get A Gripis the name of the book that Wickman wrote about EOS. I talked to a lot of agencies that are using it. So clearly it works.
Lance (31:03): The first one I read where they really go deeper on this idea of visionary and integrator was Rocket Fuel. So that’s part of that book series, too. And that, for me, where they talked about how this idea that really there are two entrepreneurs, and as founders, we wear both hats to start. We’re both the visionary and the integrator, but over time, if you really want to grow, you really do need to think about separating those roles and figuring out which of those you fit into. Because they put forth and can buy into this, that you’re born one way or the other.
David (31:30): I find that the word visionary feels a little pompous.
Lance (31:34): I totally agree.
David (31:35): But the point is someone who is the person who’s thinking about three years in the future is different than the person’s thinking about how do we make sure we pay the bills this month and hire ahead of need. It makes sense. Again, I hate saying it, but I was always the visionary.
Lance (31:54): I like this idea of ideation. I prefer that title and the ideator.
David (32:01): Sounds something like that. Well, speaking of ideas, what are your aspirations for the agency? Do you have a sense of where you want to be in three years?
Lance (32:12): Yeah. It’s funny. It’s something I’ve grappled with over time. I’ve never been comfortable with growth for the sake of growth and I’ve wanted to tie it to some bigger whys. And now we’re on this great trajectory where we are growing and we’re exceeding our own goals, which is great. But what gives me more juice than headline growth numbers is the idea of, hey, we’re increasing the profit sharing pool for our employees. We’re increasing the opportunities for new roles and promotions for our employees. We’re creating more capabilities for our clients. We’re doing more good in the community, both with volunteer hours and direct financial charitable donations. We’re making more of an impact.
So this idea of growth as a means of enabling all these other things for me is much more exciting than just revenue was up X percent this year. That I’ve found a way to attach it to a bigger why is empowering for me. And that’s a progression I want to continue having gotten the taste of it recently and this idea that, hey, we really can do more, make more of an impact, put a bigger dent in the world, do things the way we think they should be done. And we’re having fun doing it together. So why screw that up? Let’s just keep doing that. So three years, yeah, we want to continue to grow, but it’s less about the headline revenue number and more about the impact and delivering on our promise to our employees.
David (33:39): Yeah. There’s that movement that I think was started by the founders of Whole Foods and The Container Store, the Conscious Capitalism Movement. That sounds like what you’re embracing in a way.
Lance (33:48): Yeah, and we’re pursuing our B Corp status. I’m a big believer in this triple bottom line concept and doing right by our employees in our community in addition to our shareholders. And it’s just kind my belief system and I’m a capitalist, dyed in the wool. But I like the idea of that being table stakes. Obviously, we run commercial entities. We’re in a business to make a profit. Tim Westergren from Pandora had a great line. He said, “Profit is the oxygen that enables us to fulfill our purpose. And so that idea of tying profit to purpose for me is very powerful.”
David (34:22): So is there anything in the future that worries you for agencies or that you think we need to be planning for?
Lance (34:27): It’s interesting. I don’t think any of us could have called two years ago how things were going to go or certainly could have anticipated that COVID was going to result in this massive acceleration of digital media and growth for us. So I’m trying to crystal ball things as best I can here, but I’m also open to the idea that the biggest levers that are going to impact the industry are probably things I can’t predict at this point. So I guess I’m a proponent of black swan theory, I guess.
And so I’m focused more staying with tele. I’m wanting to make the organization anti-gradual and say how do we ensure our success for the maximal range of potential outcomes here? And one of the things I can control are obviously making sure that we’ve got plenty of cash in the bank and can survive a rainy day. I can control that. That gives us a backstop. I can control the people that we bring into the organization and keep the bar high. And that’s going to create all kinds of additional upsides potential for us and help protect on the downside as well, quite honestly. I can continue to reduce client concentration and that’s going to help strengthen us as an organization. I can continue to enhance the breadth of our service offering and diversify our revenue base that way. That’s going to make us stronger.
So I don’t want to be pollyannish. There are things that worry me, but they don’t animate me in the same way. I try to stay more focused on the positive and say what are the moves I can make that mitigate risks more broadly than try to over focus on any one monolithic potential problem out there.
David (36:01): That makes sense. I love the positivity.
Lance (36:04): As I’m hearing myself, I feel like I sound a little naive.
David (36:07): No. I mean you control what you can control, makes a lot of sense. Yeah, you’re absolutely right. No one could have predicted COVID, couldn’t have necessarily three years ago predicted that TikTok would be as big as it is today. Maybe our 14-year-olds could have. So it is hard to predict the future. For me, I think that I’m always interested/concerned about the continuing rise of technology. Many years ago, I wrote a blog post that said, search engine marketers dream of electric [ship].
Lance (36:35): I did read that. That was a great time ago.
David (36:36): Many years ago. My foray into sci-fi. That’s always the question for me. It’s like I think that agencies provide a ton of value right now and they will in three years, but some of the value that we provided five years ago is not the value that is necessary today because it’s been automated.
Lance (36:51): Yeah. So to that end, you’re right. I think there will continue to be a shift, and I’m an encouraging this among the team. Just think more about being the architect of these campaigns and these systems and less about filling in the cells in the spreadsheet. How do we architect these ecosystems that we’re responsible for to produce the right outputs, and let’s think about defining success that way. And it’s more about collectively working toward these outcomes and less about being the person doing that hands on work for it. And that’s the importance of prioritization and some of these other things that we talk about on the value front.
But I don’t buy into a lot of the doom and gloom about agencies being obviated, because as I’m sure you do, we have a front row seat into all the things that can and do go wrong all the time and that are necessary in order to take maximum advantage of the algorithms and all these great technology. There’s a fair amount of care and feeding and appropriate configuration, and yes strategizing that needs to happen in order to make all this actually work for you. This idea that we’re going to have push button marketing campaigns, I just don’t buy it. And I wouldn’t trust you.
David (38:04): Yeah. Historically I’ve always assumed the demise of trends faster than they actually happen. So in 1998, I had an eBay business, but I said, who cares? It’s going to be done by 2000 and eBay won’t even be a thing. So I agree. I’ve written articles in the past that talked about how SEM is dying and whatnot and being bombastic about it. But yeah, there’s plenty of work to be done by digital marketing agencies and it’s going to change, but we’ve had a long ways to go in this business model for sure.
Lance (38:29): I think so.
David (38:31): Yeah. I feel pretty comfortable with that. A couple more questions, and I think we are going to be out of time. Do you have any favorite marketing or leadership books that you recommend? You mentioned Rocket Fuel. What else you recommend?
Lance (38:41): There have been a number of them. One that was meaningful to me earlier on but has actually had sustaining power is called Simple Numbers. It’s kind of under the radar, but it’s about financial management and how you think about just setting up the right financial system and processes within a small business environment. And I just found that to be eye-opening, wise, very practical. It really gave a system for how to think about making financial decisions and budgeting decisions which I am a big believer that if you want to see someone’s priorities, look at their budget. And that certainly holds true at the company level. And so that helped to align financial management with broader company values. And that was really empowering for me.
David (39:27): To the point of challenges that people have when they’re starting an agency, most agency folks are really good at marketing. They’re not good at finances.And probably a lot of would-be-great agencies have disappeared from the face of the earth because they didn’t know that they had to have cash reserves or anticipate a rainy day. I could say for myself personally, there are moments in time when my lack of financial acumen did not help the growth of the agency.
Lance (39:49): Yeah. I would definitely have to acknowledge that as well. Grateful to have a phenomenal COO who also has worn the CFO hat for us and has helped us make far better decisions and talked me out of some really stupid ones sometimes, too.
David (40:07): Any conferences or marketing writers or anything that you particularly love that you should recommend?
Lance (40:15): Gosh. The coolest conference I’ve ever been too, and this may sound a little cliche, but it was South by Southwest in like the mid-2000s. For me, it was like Lollapalooza for geeks. It was just you had this energy and intensity and blend of web and music and art, and it was overlaid with this whole possibility of the internet in general. And for me, I just loved all the collisions between all these different things and you’d go to a talk and you’d see- I met Tim Ferriss before he went big and he gave a talk with a venture capitalist and a couple other people. And they talked about how they managed their day-to-day lives. And it was just really insightful and fascinating to me. And then the next hour I was talking about some deep sci-fi thing. The cross-disciplinary nature of that, I just found really interesting. And I feel like a lot of conferences have lost that. I feel like they’re little too focused now and somewhat less fun and intellectually stimulating as a result.
David (41:17): Probably including South by Southwest is probably kind of jumping.
Lance (41:19): It’s funny. I’ve been afraid to go back, partially for that reason. But I suspect you may be right.
David (41:26): See, I’ve never been in the first place because I have a theory that as soon as I go somewhere, they will jump. And then that’s why I’ve never been to Burning Man as well. Since I go to Burning Man, you might as well just have Burning Man sponsored by McDonalds.
Lance (41:40): Fair enough. I may use that excuse.
David (41:43): I guess the last question I’ll ask, what advice would you give to someone starting an agency today? What’s the one thing you would say?
Lance (41:51): Based on my experience and my journey, my advice would be to do the work up front and have the discipline and the honesty to know what it is you want out of this. And again, if what you want is a small but mighty lifestyle business, that’s a completely legitimate choice, but that is a different path than deciding, no, I really want to build something that’s going to be bigger here and it might outlast me. And there are many other paths in between and beyond those two, but figure out what it is you want, know your values.
I think to your point, you have some really questions there, and then do the work to try to get it all in alignment. For me, I feel like I spent so many years in the wilderness with these different attributes that were out of alignment. I wanted to have a bigger company, but I wasn’t really willing to have the financial discipline and sacrifice short-term dollars in order to really invest in a way that would allow me to do that.
I wanted to work with big sophisticated clients, but I kept taking on small, less sophisticated clients. And so I worked and I’ve lived with this dissonance, these different dissonances for so long that it took me a long time, longer than I feel like it should have, to get aligned with values, with financial management, with goals, with clarity of vision and where we’re going so that I could be honest with myself about it and then turn around and relay it to the team. And I feel like in the last couple of few years, now that I’ve finally started to figure this stuff out, everything has gotten so much easier, and I wish that I had done the work and had the brutal honesty with myself earlier. And I could have had that many more years maybe of this sense of the flywheel really starting to turn now. It’s a long answer to a simple question, but be brutally honest and seek alignment and know what its you’re trying to accomplish and get that clarity early as opposed to being opportunistic. I think I was opportunistic instead of strategic for too long.
David (43:47): That’s a great answer. And I think what you’re uncovering is that a lot of people just don’t even ask the question, to begin with. They just doing stuff and stuff starts to happen and clients start to come in and they start to hire people, and suddenly they wake up and they’re like, “Wait a minute, what part of this makes me happy and what part of this doesn’t?”
Lance (44:03): Right. Yeah, you’re dead on. And like I said, I backed into this. I fell into it. And then I finally outgrew the lone wolf thing and I was like, well, okay, I guess got no choice but to start an agency now. And you’re right. It really wasn’t by conscious design, and I didn’t have the vision. I was so contrarian early on and I still am that I wasn’t comfortable with growth for the sake of growth. I saw the people building agencies and I didn’t want to do it. Why?
David (44:29): You must have been a punk rock fan when you were younger or something.
Lance (44:35): I had my own version of that, I suppose, in the ‘90s. That will be a different podcast.
David (44:41): What band was it in the ‘90? Was it a band or was it something else?
Lance (44:44): It’s in poor taste now. I’m not going to-
David (44:48): All right. We won’t go there.
People who are listening to this, reach out to Lance, maybe in a private conversation, he’ll tell you whatever it is. I’m thinking it’s something like you were really into Kenny G or something. It’s the only thing I can-
Lance (45:01): No, that would be really embarrassing. No, it more along the gangster rap side of things.
David (45:09): Fair enough. Well, that’s beyond my musical knowledge anyway, so I wouldn’t be able to even ask questions about it. With that, we leave it on suspenseful note. Thank you, Lance, for the conversation. Congrats on finding your way and growing Closed Loop. We will continue to root you on and maybe talk to you in a future episode.
Lance (45:28): I look forward to it. Thanks so much, David. This has been a lot of fun, man. It’s great catching up with you and fun to talk about this stuff. There aren’t too many venues really out there to talk about this agency.
David (45:37): Hopefully, this is the first venue to do it. A new episode of Agentic Shift drops every Wednesday. Subscribe on your favorite podcast platform or visit agenticshift.com to see the latest episode.
Links
Traction: Get A Grip On Your Business, book by Gino Wickman
Rocket Fuel: The One Essential Combination That Will Get You More of What You Want from Your Business, book by Gino Wickman and Mark C. Winters
Simple Numbers, Straight Talk, Big Profits!: 4 Keys to Unlock Your Business Potential, a book by Greg Crabtree