8: From Selling an Agency & Burning Out to Launching SaaS & Giving Away $1M Worth of Free T-Shirts

10X Your Agency

Sujan Patel is the co-founder of Web Profits. In this episode, we talk about selling an agency, why it’s important to get out of your comfort zone, and what happened when Sujan gave away almost $1 million worth of Free T-shirts to market his agency.

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Transcription

You’re listening to the 10X Your Agency Podcast Your Agency podcast where every Wednesday for the next 12 weeks, you’ll be learning strategies on how to scale up your agency and grow your client base from successful agency owners who’ve been there, done it and built a highly successful agency. You’ll learn how they attract clients, what their biggest causes of client churn were and what their challenges were at different stages of building their agency. My name is Marcus Taylor and I’ll be your host.

Marcus: Hey guys welcome to another episode of the 10X Your Agency Podcast. Today I’m joined by a very special guest, Sujan Patel who’s the co-founder of Web Profits. So I’m going to be talking to Sujan about the process of selling an agency, how getting out of his comfort zone and sky diving in his personal life, how that helps his professional life and also we are going to be talking about how Sujan gave away almost a million dollars worth of t-shirts and what impact that had on the agency. Sujan it’s a huge pleasure having you here on the show, how are you doing?

Sujan: It is going great, great to be on and excited to chat with you.

Marcus: So to kick things off, I was wondering if you could give us a brief overview of the past seven years from when you founded your first agency to where you are today and what you are working on right now.

Sujan: Yes so I’ve been doing digital marketing, that’s my expertise. Started off as SEO and then turned into kind of a t-shirt marketer and turned into a, whatever it takes to grow marketer, right? Had a marketing agency before, started it in ’09. It was pretty much started as an SEO agency and expanded into other channels very much focussed on top of the funnel and what not which is great. Built it up about 3 million annual revenue, 30 or so staff and couple of different locations. It was great and then essentially got burned out and sold it. I made a lot of mistakes, learned from them over the years after the sale. And I swore off consulting when I saw the business in 2014, like January 2014 and then mid 2015 I was like, I’m getting consulting deals, maybe I should take them. That led into a series of events that caused me pretty much to start a new agency called Web Profits and yes we’ve been different and we do two things really differently: one, my career I’ve been on the agency side of it, I’ve also been on the in-house side. I’ve run marketing teams and what not for companies. And I know the pain point. I know what happens really in the life of the person who is paying you the bills in the agency side. And so when you know that you can essentially solve their problem before they happen. Some cases we are a [sic] agency that is acting VP of marketing, you’re almost like an outsourced team maybe for early stage start-ups or late stage companies. I was going to say older but you can’t really be that old if you are an eight year old company. For those kind of companies we help them bring their mojo back. And I can say, the way we are different is that no longer are we only focussed on top of the funnel, not just channels, we do that but we also look at the conversion rate, CRO. We also look at the lead nurturing and also post customer marketing; meaning referral programs, delight. Like I say this all the time when I speak at conferences and people ask me, What’s your biggest success?î And I’m like the biggest thing for me is the things that I’ve done after customers arrived to help has been the most successful to bring more customers over and that’s having this attitude of like, I actually care about my customers.

Marcus: Got it, so I was doing a little bit of research before this interview Sujan, I have to ask, I read you’ve broken 17 bones, you’ve taken up skydiving as a weekend hobby and travelling around the world speaking at conferences to conquer your fear of public speaking. I was wondering how is this relentless approach to pushing your boundaries and getting out of your comfort zone, how has that approach in your personal life helped in your professional life?

Sujan: For me I think it’s one and the same. That’s the first thing that there’s no real line between the two. Everything I do professionally, personally, is towards what I want to do in life generally speaking. And so skydiving has been one of the most fun I’ve ever had. It kind of came from my need of going fast. As a kid I loved cars. I used to buildactually my first business was an e-commerce business selling after marquee car parts. Think like souping-up your Honda Civic, right? And it was fun. And I sucked at doing the business but that’s how I got into SEO. But then I moved into actually growing up. I can actually afford a nice car. So I actually started to going to race track and I never got into professional racing but I loved going to the track. I would go like 20, 30 times a year. I have hundreds of friends around that. And then I was like, You know what, cars are cool but what about a motorcycle?î And I started going to the race track in a motorcycle. And I took off two wheels. And then, I’ve been scared of heights, I went one time and I was scared Jesus out of me but I liked it. I was like, This is a really weird feeling, this is good.î And then I realised that what if I, instead of going and racing motorcycles, I just jump out the air? All in all I’m going hundred plus miles an hour, I’ve just removed the wheels and need for gas at least in my body. The plane needs the gas now.

Marcus: I know it added that extra excitement of plummeting towards the ground [laughs]?

Sujan: Yes. And I honestly I just had thisI grew up as an immigrant, came to this country, my parents didn’t speak English. I was three, I didn’t even talk much but I’ve always had an uphill battle. I was in ESL class, like English as a Second Language Class as a kid. I never really did well in school, I dropped out of college, more so flumped out of college, right? Dropped out is like a sexy version. And so to me, life has been full of challenges and things have gotten uncomfortable and I think it’s how you react when you’re uncomfortable. It’s how you react when you’re at the breaking point. It’s when you are at the edge of a cliff and they say, your back’s against the wall, what if your back’s against a cliff? And it’s the next five moves you make that, in my opinion, determine your trajectory and how muchwhether you fall off the cliff or whether you figure out a way to propel yourself forward. And so I work well under pressure but it’s because I’ve just lived that edge of the cliff for so long in my life. Skydiving and all these things have helped me. Like when driving cars and bikes, I’ve just learned to be more agile. I’ve learned to think on my feet and I’m just like,î Oh I got this.î It’s not even thought, it’s a thoughts, it’s like a half-thought but for some reason I have a clear answer.

Marcus: So you mentioned earlier that with the previous agency that you run you got into a point where you were at 30 or so staff, 3 million in revenue but you got to this point where you were tired and feeling burnt out, what was it then that made you then want to set up this second agency, Web Profits?

Sujan: Here’s the thing, at the first agency, we grew very fast and we didn’t include enough infrastructure. When I started the business I was 23 and I didn’t have an end goal. So first mistake I made was I didn’t have a goal I was going towards. I was just like, I want more, I want more, I want more. And when I started hitting millions in revenue, I was like, Oh, I could do that?î I remember when I first started it, I was like I wanted to make more money than when I was capped off at my job and I didn’t have a degree so being an executive was going to be tough and I hated politics and bullshit red tape, excuse my language. And so I was like I’m not going to be an executive in a large company. This is a horrible waste of time for me so anyways, what I learned was, have an end goal. So now we have an end goal and it’s huge and I’ll tell you about it in a second. Number two was, operations and processes and systems. We did it at Single Grain but we did it too late and things are changing and obviously what I learned is, in digital marketing, everything always changes. And so one it’s having these processes and then two it’s having like this grow team or set process outside of your process, right? And then three was just having the right partners and management and [fortunately] I started mine myself, got into about half a million in annual revenue. Brought on a partner, actually absorbed some of his revenue and gave him some of my shares of the company. And he and Ihis name is AJ Kumar. He and I quickly took the business to about triple and then we got stuck again and then we started interviewing more management and as an agency it’s all about margins and quality of work. Those are the two levers, right? Better margins ultimately sacrifices the quality of work. But we didn’t build the thing to scale, we built it to provide really good quality services but as we scaled things fell apart. And so what that meant was when things fall apart that just means it goes on my plate. And so I just had so many things on my plate and I was probably 28 and I was like, Okay guys I think I’m done.î And I just really started turning over to a point, I just didn’t like what I was doing. I didn’t like my job. And when I started not waking up excited about the day, was when I knew that this is over. So how we’re doing things differently, I apologise to the long-worded answer. We are doing things differently because one, Web Profits is actually a joint venture between myself and a [sic] Australian agency under the name Web Profits, I actually took up their name because they are a pretty big company. They’re an eight figure range. They have about a hundred person staff. Now it’s we have about a hundred person staff plus a few people in Austin which is the office I run. I run the U.S. division but essentially these guys have an amazing process and amazing team. They have capabilities that I essentially can plug into. Myself and the co-founders of Web Profits Australia business have extreme alignment. One of the founders is my exact in terms of personality except I’m apparently the more extreme version of him in terms of ADD and what not. So imagine that. And the other guy, his name is Paul. Paul is in operation, He’s a MBA. He’s the managing director. He’s the guy who I wish I hired at Single Grain when we hit seven figures. I don’t have to worry about process. All I have to worry about in life for Web Profits is how do we do the best job possible and how do we get more clients and how do we keep them happy. And so everything else gets, not necessarily taken care of but what I mean is, it’s not my brain power that’s leading it. I’m involved but not as the driver. And frankly, he always drives so many things.

Marcus: When you were looking at Web Profits as the Australian company, was there any kind of one or two particular processes that you saw that really got you excited about, Okay these guys are doing things right.î

Sujan: Yes again the first thing is this is the first agency I’ve come across and I was actually doing at the time I had quit my job, I was going to focus on my SaaS stuff and I had a few consulting deals, clients I was consulting for sorry. And I just never wanted to go all in because I was like I’ve done this before, right? And I was like, I don’t want to do this again.î But I kind of enjoyed working on it hands-on and what not but at scale is when things fall apart. So I met a lot of agencies because I was in Australia doing a bunch of workshops and so I toured around U.S. You know couple different locations. Did workshops and I ended up where people really wanted me to speak and talk was like other agencies and companies where I was just talking about marketing. And so I ran into like, literally I accidentally vetted out lots of different agencies and their processes. And when I met Web Profits I was like, Holy shit guys you actually know what you’re doing.î They have, again the two big things, where they already have a process to focus on the whole funnel and that’s mainly because Australia is such a small market in terms of growth for businesses themselves as well as their clients. So you can’t afford just have bank on traffic, you have to do all of it. So it was out of necessity. And then number two, we have this process called Fluid. And essentially what Fluid is, is that a company a client will pay us a retainer. We work in 90-day sprints and we actually put together of the hundred staff you know we have departments like SEO, paid search, paid social and social media designed C.R.O you know copywriting whatnot. We’ve put together a team based off of what’s going to help that company grow. And so I’m pretty much managing. Right now we have about eight clients- I’m just managing 8 teams individually and I talkI mean some of them overlap but I pretty much put together my own rockstar team within the agency.

Marcus: Interesting. So another area I want to talk about Sujan is I read on your blog that over the years I think you gave away over a million just shy of a million dollars worth of free t-shirts and I think this is something that across from some of your different SaaS tools and agencies you’ve done this several times. So can you talk through maybe why you gave away so many free t-shirts and tell us about what happened when you got on to the home page of Reddit?

Sujan: Yeah that was crazy, actually just out of laziness and my first company my first agency Single Grain, we made T-shirts and it was because you know we’re an S.F. culture of like you don’t wear dress shirts and frankly like I hate wearing fancy clothes and stuff. And so I just created ayou know if I wore black t-shirt or like a branded t-shirt I kind of look like a kid or like you don’t just look professional. So I was like if I wore a freaking branded t-shirt like this is going to work, people can’t say this is unprofessional it’s my own company, screw them. And so I just created black t-shirts and because we are in this small area in SoMa where most of the tech Internet start-ups are in S.F. where at least at they we’re at the time, we pretty much my team when we wore T-shirts withthis was just internal team. First it was for myself and then now I gave it to my staff and you know then we get and but when we would go to lunch and we walk around, you know when we had representation, I went to a lot of meetings and stuff all around town within like a two three mile radius people see us. And everybody’s like, I want a shirt, I’ve seen you and so we started giving our like influences or referrals are like our network t-shirts. And we started giving jackets. So pretty much we created this like very small penetration in an area where like a lot of our customers were, a lot of our friends were a lot of our network or business came from. And that started in my opinion a movement. And what ended up happening is that it penetrated within organizations like Intuit, Adobe, Sony where people would be like, Yeah I’ve heard of you guysî. And I’m just like, No you haven’t because we have not been around that long.î We are like, I don’t know how you know of us because we’ve done nothing on the marketing front.î And so it was all these types of situation and a lot of leads came from our friends visiting and we had you know guys like wearing our t-shirts and just because they are comfortable and whatever and they’re nicely designed not like overdoing it on our brand, which is the biggest mistake I feel like people do but very comfortable, simply designed and kind of elegant. People wore them into meetings. And so we ended up getting people with an organization’s employees wearing t-shirts and so that ended up sparking new business. So I took that over to after I sold Single Grain, I joined a client of mine when I worked, my sole goal was to get immersed in product. I was obsessed with SaaS. I’ve been around the company and so I helped grow it from 1 million to $10 in annual revenue over the two years I was there. But we also leveraged t-shirts. One of the things I’m a big fan of is customer appreciation, customer delight and really just showing emotion and showing that you’re a human being and you care to customers. So one of the ways we did that was thank you cards. So we started accompanying t-shirts to it and we designed this like cocky shirts. So when I worked as a scheduling software for hourly workers when you’re scheduled to work, so we designed a shirt called Get shift done. So it’s a play on, get shit done is get shift done it was designed accordingly. Just like there was kind of the start-up quotes shirts and so people wanted those. We made a website. We actually started giving them away to customers. It was a way actually to incentivize people to share their experience. We would give them a t-shirt. We ended up getting about 25% or so of people to share. Customers who signed up, 25% of them shared their experience with when I work on social media, immediately. And so it’s almost like getting 25% of customers to give you immediate reviews and evangelize your brand before they really even had an experience but what ended up happening was that we made this automated process to claim a t-shirt and then I wrote an article of 2012 about how I made about half a million bucks using T-shirts because I’ve calculated all the revenue I made from our consulting and essentially I added a link saying, Hey I’m no longer with this company.î Because people kept requesting it and they still do to Single Grain. When I work grab a free t-shirt like within hours, one of the readers submitted to Reddit and we ended up having a giveaway like I think like 10, 20000 t-shirts. Well we spent like a hundred thousand dollars on it so I think it was closer to thirty thousand but it was nuts. And then like we got Reddit twice. So it was nuts.

Marcus: Did that exposure pay off or was it just quite a big?

Sujan: Not from Reddit, no most of it didn’t pay off. But keep in mind, the business. Like if it was for Single Grain, it’s not in the market but we’re kind of working with SMBs and hourly workers so pretty much like hourly workers could be anybody and everybody right? So for us that was pretty decent penetration. I actually saw search volume as, you know kind of like trailing 2 months, searched volume for brand go up. Did it correlate into revenue? Probably not but it was you know it’s interesting to see that brand searches go up.

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Marcus: So Sujan before we jump into quick fire questions I just want to touch on Mailshake because this is a tool that you’re just about to launch I think for streamlining e-mail outreach. I was just wondering, what is it that’s driving you to build the SaaS tools in parallel with of running the Web Profits agency?

Sujan: Yes. One of things is that I’ve just been obsessed with working on SaaS and it keeps me a practitioner, right? So as an agency guy like I’m always like, Hey,î I come in and swoop in and say, here’s all the things you’re doing wrong, go do this this and this, talk to me later. Like a doctor right.î But when you don’t, or at least I like to think of it that way, but when you don’t see the outcome or you don’t experience the pain of doing things, you’re getting stuck, you’re just so out of touch over time. And so these first for most of these businesses I do, is it forces me to be a practitioner, be involved as a founder. So when I’m giving advice, I’m almost thinking about like, Hey, I’m going to give myself this advice for my own business, what would I really say, not what I want to say, what would I really say?î And so it helps me stay honest and stay sharp and think of these growth hacks and like really out of desperation, how do we maximize growth. But ultimately my goal here is on the Web Profit side is to help people with marketing share everything I know through our training and just speaking and all that stuff that’s kind of my mantra there; help people with marketing and share everything I know. And then on the other side as you’d probably tell all of our tools are themed in either sales or marketing. And that’s because those are pain points we have. I started building tools as a way just to test out my skills as a software founder and maybe at the time I was naive before I started Web Profits. go raise money and you’ll do all this stuff and then I realized I actually don’t want to raise money and all this stuff but we ended up building a few good tools, I fell in love and essentially we solved our own problems because they’re all in the sales and marketing world. There’s a lot of cross-promotion meaning we have customers of Mailshake. And so I get e-mails like support emails or even customers saying, Hey I’m a big fan I’m actually a customer of this this and this.î And so you know the LTV when you tuck up all three products actually is amazing. So you know that’s really why I’m doing it.

Marcus: Awesome. So my first quick fire question Sujan is what’s your number one book recommendation for business owners?

Sujan: Yes so my favourite book all time is Anything You Want from Derek Sivers. Amazing book changed my world view because it literally shows you how you can do anything you want. And after I read that book, I started doing whatever I wanted. And not justifying it, just kind of doing it because I realized like, Oh I know I’m running a business and growing this I have responsibilities but I’m still a human being.î

Marcus: Amazing book. I actually spent a bit of time with Derek in Singapore when he just wrote the book and for me it’s one of my favourites as well as a really good. Really good one. Favourite tool right now?

Sujan: Snapper.Io. So Snapper.io is a way to customize images. Met the founder last week so it’s top of mine but I’ve been using it for a while. It’s kind of like a low-end version of Canva. What I mean by low-end is like small fee. And what I found is when you add images and you add beautiful design to your content like for content marketing, your blog or whatever you’re doing any type of content you’re creating, make it look beautiful and all that takes is surrounding you at some custom images aka. take a crappy stock photo add a filter on it like make it the colour like add a blurred colour theme, add a banner on top of it and add some text and bam you have custom images. So you don’t need a designer and so Snapper is a great way for anybody to do it. And so yes I found great success for a tool that price so low and so powerful.

Marcus: Nice what’s one piece of advice that you’d give to an agency owner who’s looking to go from the six figures up to seven figures?

Sujan: Yes so the big thing I see is like, six figures, any agency anybody no offense, anybody in the world can build a six figure agency. It’s called getting a couple of clients, right? Like three, four depending on how much you charge or one if few charge the rates we do. But I don’t mean that in an offensive way, I mean that there’s a lot of competition. And what you’re doing as a six figure agency is you’re just a consultant and where you’re probably struggling is marketing, right? So funny thing is if you’re an agency or a marketing company you do marketing for clients. Do it for yourself like I’m not saying just do ad hoc but commit to it spend time on it. I spend probably, personally, for just my personal brand, I spend about 150k a year. Just on marketing of the things I’m passionate about. At the agency we spend around about 8k all in about 100k a year. And it’s just like spend it on marketing yourself whether that’s constant whatever. And number two is, figure out a way to be different whether it’s your approach whether it’s your personality whether it’s your branding whatever right? One of my favourite examples and who is a good friend of mine, he’s now actually a competitor, his name is Jonathan Dane a company called Klientboost klient with a K. They are a PPC agency based out of Southern California. If you look at their site they’re very funny. It’s a funny site it’s cute. It’s awesome. It’s powerful. There’s lots of designing and it feels warm and fuzzy and they use poop emojis. Like that who what agency uses poop emoji and gifts and like it’s really like great information but I feel like it’s in a different tone and different voice and like I feel like they’re doing something different than everyone else. I don’t know if that’s the right way to do it. I know that they built a two million dollar annual business in a very short period of time and that they’ve just focused on being different having their best processes. And so remember when you go from six figures or seven figures it’s not consulting, it’s not you. It’s the team, it’s the process and it’s your representation of yourself.

Marcus: Awesome. And for anyone listening we actually did an interview with Jonathan Dane on how he built Klientboost I think is episode three. So I’d highly recommend checking out as well. Sujan, what was the biggest cause of client churn in the early days when you were growing up the agency?

Sujan: To be honest probably a change in the algorithm and change inlike the early days we were doing SEO but really it was changing the environment, changing the economics. We can do the best job ever and then Google is like, Oh nope we’re going this way now.î And so like it’s just being prepared for that, being ahead of the curve and what not is the best you can do.

Marcus: What can we expect next from Web Profits, Mailshake, what’s 2017 looking like?

Sujan: Yes I mean we’re going to double down on the quality of content. Not the volume of content but you can expect much more stellar amazing looking content. One thing I’m just wrapping up the year been to about 25 speaking gigs. I’m going to do a lot more next year. More strategic but I’m on a mission now, I’ve kind of defined this year what I love doing which is sharing everything I know. I’m going to do that with a megaphone next year and in a lot better way because I am better at presenting now. But yes so it’s a lot more of that and probably a lot more SaaS tools for marketers and sales and for those of you guys who know what Mailshake is, our competitors who are kind of top market charging you know 10, 12k a year per person, we’re going to be moving that market. And so the fact that we charge 120 bucks a year, much much cheaper hundreds of that is going to be a pretty interesting kind of ride.

Marcus: Awesome. Sounds really exciting and Sujan it’s been amazing having you here on the show, some really fascinating stuff. If people want to learn a bit more about it your or learn more about any of these different SaaS tools, what’s the best place for them to learn a bit more?

Sujan: Yes. Check out Sujanpatel.com it’s my personal site. Like I said I share everything I know. And yes if you have any questions, hit me up on Twitter @SujanPatel. Or just shoot me a message through my website.

Marcus: Again Sujan huge pleasure having you here on the show. And thanks for coming on.

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More Episodes

Episode 1: How I Grew an Agency That Built 8 Online Ventures & Led to a TEDx Talk (Marcus Taylor, Venture Harbour)
Episode 2: How an 18-Person Agency Built 64 Startups With an ROI 10X Higher Than the Average European VC (Tim Morgan, Mint Digital)
Episode 3: How a PPC Agency Reached $250K Monthly Recurring Revenue in Under 2 Years (Johnathan Dane, KlientBoost)
Episode 4: How to Hire a Great Team, Attract Leads on Autopilot, and Scale an Agency (Eric Siu, SingleGrain)
Episode 5: How to Grow Your Niche Agency & Avoid Common Hiring Pitfalls (Danny Ashton, NeoMam Studios)
Episode 6: The Mindset & Beliefs Needed to Build an Agency (Paul Rouke, PRWD)
Episode 7: How an Agency Reached 100,000’s of Marketers by Building Software (Dan Sharp, ScreamingFrog)
Episode 8: From Selling an Agency & Burning Out to Launching SaaS & Giving Away $1M Worth of Free T-Shirts (Sujan Patel, Web Profits)
Episode 9: Agency Culture Hacking: How to Set Values, Work Remotely & Retain A-Players (Jonathan Anderstrom, Creed Interactive)
Episode 10: How to Scale & Sell a Multimillion Dollar Agency (Jason Swenk)
Episode 11: Running an 80-Person Agency After a Multi-Million Dollar Sale (Tim Grice, Branded3)
Episode 12: Building a £4M agency with 270 clients in 2 Years (Mark Wright, ClimbOnline)

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