Latest / GOOD CEOs / 100 hours of CEO convos in 37 minutes
Transcript
- Ollie: Hello and welcome to the Good CEO's finale episode of Creativity Meets Capital. So as an avid listener, you will know this whole season was about the intersection of creativity and capital. After being in this world for 15 years and beginning my career in recruitment, I used to recruit artworkers and then I went and started my own company and the whole thing grew and ba-ba-ba-ba. My world has really changed, but I think the world of creativity has also changed. There is an influx of capital in the world. I think there's $4.2 trillion of dry powder in P.E. that is sitting there waiting to be invested. And naturally, we have seen that permeate into our worlds of the creative economy. So our briefs changed, to be honest. Seven years ago, when Unknown was first launched, briefs used to be pretty down the line. It would be, I need to hire a CEO. I need to hire an ECD. I need to build a team of designers. And as we've grown, the briefs have changed as well. So what used to be I need to hire a CEO has now become, we're thinking about acquiring a business in experiential, or we're thinking about acquiring a company in New York as we expand our territories. So naturally we had to learn much more about the world of capital and much more about how the world of capital can help the world of creative evolve and grow. So this entire season has been about meeting people that have either leverage capital or they may be in the middle of companies that are buying each other or borrowing money to buy another business. And I wanted to meet the founders behind the companies that have been the most successful at doing that. Whether you are Natalie Graham at Uncommon or James Greenfield at Koto or Matt Lacey in the middle of these companies at Waypoint helping companies like OK Cool sell to residents. I wanted to understand why. Why do these companies do these things? What's in it for the founders? What's in it for the employees? What's in it for the acquirer? and what can we learn as people that are growing our own companies or perhaps aspiring to one day build our own company and maybe even leverage capital ourselves? What are the pitfalls? What should we be looking out for? And what should we be avoiding and doubling down on as we go into our own growth journey? So I wanted to do this episode because Not only have we had some incredible guests, we've had five or six different podcasts with different people in the last season, we've also had two good CEO meetings where we get together and the group is now 75 people. So we come together in a room, not always all 75 people, but some of those people will come together and we ask them one question every time, which is, what is the one thing that you are challenged with the most today? And the room is like this. wonderful, one candlelight away from a seance group therapy meeting where you could have a billion dollar CEO and a million pound founder all talking about different problems and working them out together. So I wanted this episode to be a reflection of the podcast that we've had and the meetings that I've had that we've not recorded. And hopefully I can bring you some insights from those conversations and we can sieve them. So if you've never listened to this podcast ever before, and you've never attended one of our good CEOs, IRLs, Meetings. Then you can learn from them. Then you can still have the insights. So that is what today will be all about. And I will tell you what I'm up to and what's been going on for the world of unknown give you bit of an update first. And then I'll move into the learnings of this season's Creativity Meets Capital. Okay, so in the last episode where it was just you and me and I was talking about Unknown and our quarter and how it was a soft Q3, I was speaking about not starting anything new and just finishing all the wonderful things that we had on. We've embodied that going into Q4. For those that are new, we had a really shit Q3. And after having our record breaking H1, we stormed into Q3, probably a little bit chilled, just a bit like, we cracked this. This is great. The market has switched on. Everyone is hiring crazy. Now the interesting thing is, if you look at our briefs alone, you would say that we were only getting busier and busier and busier. But if you look at our revenue, you wouldn't say the same thing. So Q1, we picked up 93 briefs. Q2, we picked up, I think, 97 briefs. Q3, we picked up 135 briefs. And yet the numbers didn't tell that story. So we went into Q4. knowing that our brand is strong enough, we're generating briefs, knowing that the team is here to deliver on these things. So we must stop starting any new marketing campaigns, any new podcasts, any new event series, any new models, revenue streams. And we just need to deliver on what we have in front of us, which is an unusual place for me to be in because I normally... I am a starter. I like starting things. I love the energy that goes behind starting a new project or winning a new thing, but that is not this quarter. And so I'm very happy to say that so far we are turning on and doing what we do best. And some of these briefs, I can't believe that they've landed. We've had massive brands coming to us saying, we have a hundred people that we want you to help us manage and bring more people into that group. And it's a huge brand. We've had companies coming to us and saying, we want to acquire five companies in experiential, in digital product, in social first creative. We've had quite a few of those &A briefs, which is really exciting, but it's also kind of daunting because you have to live up to those briefs and you have to say, right, I'm going to find you the best social first creative company or the best influencer creator. company in Ireland or in New York or in London. So now the work really begins. We have the potential to have the biggest quarter of our lives, but then we had that potential last quarter. So I just am praying with all of my soul and might that this is the one and I'm looking down the lens in December and I'm saying to you, it's all gone to plan. And that will be the next time I probably do one of these podcasts because I am plugging in. I've got to go to New York next week and I just need to do the things. So without further ado, that is the kind of unknown update. We're feeling positive. We're feeling excited. We've made three new hires. We have someone going on Matt Leave, who is a very senior person within the business. She runs operations. that's scary. But we're not scared because we've hired a client partnerships director and we have a managing director and now we have an office coordinator joining us. to deal with the things that this person usually runs and heads up. So the team are in place, we have two more hires to make and then we are locked and loaded for 2027. Okay, let's get into these learnings. So you may recall Mr. James Greenfield saying this wonderful quote, which was, AI raises the floor and creativity raises the ceiling. I think I have that saying right. James Greenfield: companies that want to stand out, that want to be successful are going to have to differentiate themselves even further and so I actually think the creative spend is going to increase at the medium and the bigger size companies that are aware to this and understand that they need to do that. There's that piece which is do you look at the floor or do you look at the ceiling? I think what AI does is it raises the floor. What creativity does is it raises the ceiling and I think it's going to be able to allow brands to do that. So to come back to the question you asked, PE is interested because they are understanding that it's an increasing importance of spend and so therefore they want to be where people are spending money. Ollie: It's interesting because a lot of the time when we do these good CEOs, IRL meetings, AI comes up every single time. And a year ago, AI came up with much more fear and it was much more people protecting their jobs and saying, no, I can't do what I do. you know, the work's not quite the same. I don't trust it. Now that conversation sort of died out and people aren't protecting their inputs as much as they used to. However, they are questioning the outcome that AI is generating and We had this brilliant quote that came from one of the CEOs, which was, work slot? I've never heard of work slot. But you've all been there where someone has sent you what in 2016 would have been a very impressive 25 page document. And they're like, I've just poured my whole life and soul into this. Can you have a look at it please? And you're like, for fuck's sake, what is it? Can this not just be five words? And sure enough, you go through the document, it's been pulled together by this AI and you go, this was an email. This was a five word subject line and you've turned it into all this work. So the question at the moment is, yes, AI is making doing things lot easier, but to what quality and to what effect is it doing that work? So we spoke a lot about that. We spoke a lot about how the efficiency of all of the AI that we're using. is being passed back onto our client and we're not taking the wins from that. I think a lot of clients from the CEOs that were in the room were speaking about how clients are now asking for AI efficiency and now they're also asking to reduce their fees too. So it's becoming really hard now we're moving slightly away from a time and materials model, where does the value of what we charge for start and stop? Where does the AI efficiency of creating that work? Is that us that take the higher profits or do you just pay us less and eventually our margin just goes back down to where it was. So lots of questions were coming up around what is the best way to price and again we're going back to that conversations with people like Caroline Johnson. Should we be moving faster at building outcome-based risk-based products and pricing structures and Should we be finally winning on the margin game? Because what we do is unique and very valuable. So I love that, five words, not five pages. Smart ideas in simple words, I love that. Rather than giving me a brilliant idea in five pages, please just tell me in five very simple words what this thing is all about. So I love that, that was from James Greenfield. Okay, the second thing that came to us was a stat. And that was 75 % of companies that get acquired don't work out. Not just in the creative economy, but globally, worldwide. That's the success rate of an agency acquisition. 25 % of a business acquisition. It has less or a quarter of a chance of being successful. So when I interview people like Matt and Natalie Graham and Ryan Honey, the thing I wanted to understand is what makes a successful acquisition carry on being successful and what makes an acquisition go the other way. I asked Natalie Graham because she sold her company Uncommon, took investment from Havas and they have not slowed down. They have made work that was better than their first year, they have grown and grown and they have retained what made them special. What was that? And Natalie said this brilliant thing. which was essentially sweat the small stuff, even the IT provider that you're using. Natalie: I think certainly when it comes to the structure of a deal, we were really, really clear that there were certain ways that we showed up that made us special and made us successful. And they're the things that needed to be written into the way that we did the deal, even down to our selection and choice of our IT provider. And I know that sounds quite ridiculous, but that stuff is how this deal would show up and how that this partnership would show up for a lot of our team on a day to day basis. And the last thing you need is for people to feel that. Ollie: I think there's something very interesting in that because... What got you here made you so special. And if you hand over the reins of your strategy for the business, of who you use to help you do good work, who you hire, how you do things, what has that company bought if you are a professional services business that relies on its people? Matt Lacey also said, protect the strategy, not the deal. Protect the business strategy, not just the deal. What he's talking about there is no one else really better than you. If you are in a position to be selling your company, you have made something that is uniquely special that you and you and your co-founders have created based on your strategy. You were the ones that rubbed two pieces of flint together and you made this business what it is. And you've got it through the three, four, five, six, seven years of just ideas that came to you in the shower or, know, let's go in this direction. And all of that work that you have done is now valuable to somebody else. So why do companies when they sell, sell their strategy with them? And they go, thank you for buying my business. I'm now lobotomized and I've had my strategic brain surgically removed from my head. And I'm gonna hand over our entire business strategy to you because you've got a bigger version of our business. When you say it like that, it's crazy. And again, why it is so important to sweat the small stuff. I'll play the Matt Lacey moment here, but I wanna link that to my Ryan Honey moment. So first of all, Matt Lacey. Matt: the reason that people are wanting to buy you is because perhaps they're not there or perhaps they're seeing it, but they don't have the capability. So the worst thing that you can do is compromise your strategy or try and fit it in to get a deal done. it's really easy relative to chuck a deal in one end, know, a mandate in one end and get it out the other end. But people aren't thinking about the future there. They're thinking about getting it across the line and let's see what happens. And I think that's probably a lot to do with where deals go wrong. Ollie: So that's interesting because it is a pure &A human being that deals with making deals happen. And he is saying to you right now, do not lose sight of what made you special. So if we get in my little time roller coaster and we move forward to Ryan Honey, who has built Residence, which is now way over seven or eight or nine companies now with, okay, cool. And it's nice that and began with Buck. They were going to sell. They were going to take their business and they were going to sell to PE and they knew how much money they were all going to make. And then they turned around and went, wait, what if we did this ourselves? Could we do it ourselves? And if we did, how would it look? Could we do this whilst protecting the souls of these businesses and what made them special, but then make them more powerful being part of this bigger organism? And the answer is yes. I know Jolionne Vali, I Liz, I know all the guys within that group. They are happy. They are happier now they're all part of this thing. So a brilliant, brilliant example of what happens when you keep the soul of a company and you align on the strategy together and you get there together. And Ryan has quite a way of testing whether he wants to invest in the company. he asks himself the question, would I let them sleep at my house? Have a listen. ryan honey: And then surrounding yourself with people who share your values. it's it's I we started off as three people and grew the business to four hundred and fifty at BUCK. And it's it's a constantly pivoting, constantly collaborating, no ego, which is to create great work and take care of each other. And I think that's that's permeated through all of the businesses. Ollie: So it's almost like the casting of, if you're going to join us, you can't be a dick and you can't have an ego, you can a class. ryan honey: Yeah, I always look at it like would I let them stay at my house? Ollie: Okay. Okay, my third, my third point that I have made quite a few times, but I'm gonna try and make it in a different way so it lands. When you are thinking of either buying a company or if you are selling a company, return to this question because this will help you figure out if the person or the people that are buying you or the people that you are looking to acquire have something of value for your company. And it is painfully simple. Who needs what you have and who has what you need? Who has a wealth of what you don't have and a poverty of what you do? We have had 10 briefs in M&A in the last three months, and they have come from companies that are sick of saying they can't do the work to their clients. That might be a design agency who has a wealth of receipts in brand identity, in logos, in brand creation, but a poverty of campaign work that moved the needle, that went viral, that advertised and communicated all of this wonderful brand identity work. And those branding agencies are getting sick of saying no, why? Because they have the best relationships with the client. The interesting thing about design companies is that most of their relationships are right at the highest level. They're CEOs, founders, not just CMOs. So we're seeing a lot of private equity going behind design companies and saying, right, we back you because you have the highest level of relationships. Now what we want you to do is figure out where it would make sense to your clients to be also working with them. Is that in website builds? Are you saying no to website book? Yes. Are you saying no to campaign work? Yes. Are you saying no to experiential retail design? Yes. Okay. Then very naturally we can see who has what you need and why would they want to join your business? Now, if you look at all of those companies, product design, experiential, campaign advertising, creative agencies, a lot of their relationships aren't as highly networked as a branding agency's relationships. So... The branding agency has a wealth of high networked relationships and they have a poverty of all of the things I've just mentioned. So if you are a social first creative business and you're sick of competing against other creative agencies and you're like, I wish our contact was higher. I wish we were better well networked. It is an interesting idea to be associated with a company that is high well networked. So again, that might be in the brand identity, but it could also be in digital transformation companies like huge. RGA, these types of businesses are also very highly networked. They're almost, they're networked like a consultancy would be, like Accenture or Deloitte, and they're going for that lunch. So you can see there how that in itself, one plus one equals three, if you had complimentary services that you could build onto those brilliant relationships, the pie gets bigger for everybody that's involved. So I wanted to talk about this because Lots of people come to me and come to Unknown to be like, who should we be considering selling our agency to? Who do you think is a strategically interesting business to acquire us? Look at the recent acquisitions. Okay, Fabric was quite traditional because it went to publicists. But if you look at OK Cool into Residence, you have Buck, you have these branding agencies in there. If you look at Amplify into Common Interest, you've got 21st Century Brand who are doing the strategic consultancy. Again, now the relationships are gonna be mapped out. If you look at RGA, huge, all of these types of companies have high level relationships and so they're very interesting places to consider. The other thing I wanted to mention was don't underestimate the power of a client that repetitively comes back to you. The land of the AOR relationship might be disappearing in the way that we know it. but buyers only really care about the wallet share of that client going up and to the right. So if you can prove that a client is coming back to you over and over again and increasing their expenditure with you, this sounds very basic, but I promise you it is very relevant. It shows that you're doing something distinctively different than the rest of the market. And that's the thing that matters. Yes, it's great to see a 20 % EBIT margin plus. Yes, it's great to see... your compounded annual growth rate being above 35%. Yes, we love seeing AOR relationships where you have five year long relationships. But the thing that everybody wants to see is a business that is distinctively different, that has created work that is bleeding edge, different, engaging, differentiated from the rest of the competition in the industry. That is the thing. And I know it's really easy for someone to say to you, do the thing that makes you different over and over again. I know there is a challenge when a client is coming to you and saying, can you do this thing? I know you don't normally do it and you go, fuck it. Yeah, go on then, the revenue makes sense. I know it's hard to say no to that. However, so long as you are saying yes to the briefs that you know will make you undeniably distinctive and different, and so long as the revenue is doing what it should be doing and the margin's doing what it's doing, you will be. absolutely an acquirable, investable business. So I just wanted to make that bit more human because I think we're seeing a trend in the land of &A in the agency world. There are going to be more and more options coming to the market. Jesus, if you are a social first influencer, creator business, you can go anywhere. You can go to media platforms. You could look at distribution companies. You could look at Vice. You could look at anything in that world of media distribution land, you could go to a branding agency where they have these incredibly high network relationships. You could go to an entertainment business like Lionsgate. You could go to art, talent management company like CAA. There are so many different ways that you could grow and evolve your business strategically depending on what you want to do with the next. So keep on doing what you're doing. Keep on fighting to be different. and make sure the margins are making sense as well. Of course, and all of the wonderful, finance stuff that I can throw out there as well. But the key thing here is be distinctive, be different, and back yourself. The next learning was from the wonderful Lisa de Bonis And this was about new models. For those who don't know, Lisa transformed huge in a book called Madison Avenue Makeover. And she basically took a huge business, mind the pun, and moved their model away from being time and materials into a suite of different products that some were outcome focused, some were, I mean, there was a whole plethora of different products. And we spoke about why she did that. more importantly for this, because I think every single agency founder, if you're listening to this, or if you're an agency leader, you will be thinking about changing your model in some way. If you're not, you should be. The thing that I got from Lisa's conversation is it resonates with me so much because we've just changed our model as well. And that is a model doesn't live in the deck. A model lives in the minds of the people that are using it. Have a listen. Lisa De Bonis: talk about a more commercial mindset, I talk about building capability, and I talk about a culture shift really. a mindset, we often talk about it's about mindset and model. if you don't change the mindset you won't change the model. Ollie: Yeah, I agree. Lisa De Bonis: let me do it in the or haven't thought about this in a while, but capability. So that process forced us or gave us I think the the agency to build new capabilities that would then help prove the value of design in that case and creativity. Ollie: What I get from that is the mindset and getting people around an idea is the key thing. I think you can do that in lots of different ways. I think you can do that with words and repetition. But something I learned years ago from a lady called Sarah Tate was this idea of artifacts, little artifacts within a business. It could be the back of your screen on a Zoom call. It could be... the words that someone says when they're closing a deal. It could be the foible of the CCO that makes them different. Whatever the thing is that happens, the email signature, the thing, like look for these artifacts of proof that the new model is working. Look for words that represent that this new model is working. And before you know it, linguistically, a business can begin to move on and evolve. You have to be, if you are trying to get change to happen, you have to be the evangelist of change. You have to be identifying tiny artifacts that prove that the change is working. Because you are, you are convincing a bunch of people around you to believe in a thing that yet isn't happening or isn't fully, fully formed or fully, fully true. So repeating what you're seeing and proof points within the business that are happening is super key. And I can 1000 % vouch for that, that the only way that we moved our model on is by routing for the model to be successful and to be cheerleading and spotting all of the brilliant evidence that we could see that was backing that up. However big or small, even if someone replies in a Slack channel with a new term that you're using for a product, you react to that. You go, yes, that's exactly the term that we use now. Remember, making rhymes about things. Whatever it is that means that the mindset is moving on linguistically, visually, just signposting is how you move that mindset on. Otherwise, change is really hard to make happen when you aren't doing that stuff. It doesn't happen by osmosis. People will always go for the path of least resistance. So you need to carve the path forward for them to go, actually, there's a lot of praise down that path. There's a lot of funny things happening on that path. That looks more fun. What's fun gets done and all that jazz. carve the path. And I promise that that will start to move your model forward. But I love that from Lisa. The last thing came from our IRL good CEOs two weeks ago. And this actually came from me saying that I had taken on too many things in years gone before. And somebody had come to the table and said, we have four different strategic bets. We want to do all of them at the same time. And I thought, wow, that sounds really similar to me about six months ago. And... I think the thing I wanted to land here, yes, of course, stop starting, start finishing, is how good are you as a leadership team at assessing your strategic bets and understanding which order they need to happen in? Because depending on who you ask, I think most people want to prioritize the thing that's most important or most exciting to them. So for us, we're prioritizing... 50 % of our revenue you want to become recurring. We want to land 10 M&A deals this year. We want to build this tech underpinning called Brian. We want to internationalize officially, properly. We are already 50 % US revenue, but we want to have more international presence. All of these things on any given day make more sense than each other, but they cost money and time. And you can't do all these things all at once. And it pains me because I really like to see things progressing and moving, not just one thing, but lots of different things progressing and moving. I feel like I can talk about different things and I'll pick the one that I want to talk about in the different conversation. But the reality is we're a small bootstrap business and we can't afford just to lump money into everything that we want to do at the same time. So we had this kind of mini exercise or conversation with this person to be like, Firstly, how's cash right now? And where are we on the scale of money to burn, money to invest? Secondly, where are we on selling and doing an event of some sort? If we're five years out from that, you know, investing, if we have high levels of cash, so long as we're not splitting our time too widely, it might be that you can do one or two or even three of them at the same time, if you have the bandwidth in the team. And sure enough, everyone has targets, everyone's nearer or further along on the journey than they probably are. We land on them needing to prioritise one or two of those things instead of the other five. And I found that a very helpful exercise because generally when you put money on something and say, is this going to generate an ROI within the next six months? Because that is the timeframe that you said is important to you. If the answer is no, then we have to bounce that down the line. And I've done that with my own strategic bets too. yeah, maybe if you're listening to this, this is helpful to hear. Like you are allowed to have lots of ideas. you will be thankful if you put them in an order and you prioritize the ones that are going to generate you returns faster. I don't know if you need to hear that. I need to hear that. I think I'm saying this to myself. So I wanted to say that because that came up in our Good CEOs meeting. Okay, my last thing that I'm gonna leave you with is the bet that I'm gonna put down. I'm laying down my mantle. Is that the saying? I'm putting my stake in the ground. And the bet that I'm gonna make is a commercial model bet. All right, sounds sexy. It is. There is nothing sexier than a one work stream. recurring revenue income baby. I'm talking movies. You make the movie, you put it out into the world and you get paid your royalties. You make a song, you're Robbie Williams and Kylie Minogue, kids, we all know the song. They recorded it once, they put it out into the world and I guarantee they're still earning the royalties now if they wrote it, that is. So licensing we can all agree for creative people. is fantastic because you get paid not once, not twice, not thrice, but infinitely. And I think because the value of what we do is increasing, because the shit stuff that everyone's copying is also increasing, the requirement for highly distinctive, engaging, attention grabbing, creative design, all of the words you can put under that roof will be more valuable. that I believe you'll be able to license that work to brands, to whoever, where you'll be paid on a usage basis and perhaps on an outcome basis, who knows? But I think people are gonna start getting smarter at licensing. I think that now that time and material, we are accepting that as an old model, it is going, that goes and what comes in, I think licensing is coming in. And we have some noises, some interesting noises of. proof that that is happening, is working and brands are choosing to do that. So keep your eyes peeled or do it yourself. I think I'll say, yeah. Okay, so that was my finale of all of the things I picked up in the last five or six recordings and two different Good CEOs meetings. We are in New York next week doing our first Good CEOs New York. Guys, we picked up 30 people already and from such an array of different places, from ad agencies to media companies, to design agencies, to digital companies. Mad, it's a really, really good room. The main thing is there'll be insights in that room that I'll be bringing to this podcast so you can evolve, you can grow, you can hopefully make the decisions that are gonna make you a wonderful, successful kitten. or whatever chosen animal that you'd like to be. I'd be a pygmy marmoset. Google it. Thank you so much and I'll see you very soon.