The Agency Trap How to Avoid Wasting Money Ep 623

In the episode, the host shares insights on leveraging agencies to rapidly grow an audience and build valuable businesses while avoiding common pitfalls. The host, who is behind acquisition.com, recounts his experience of expanding his audience by millions through organic content and agencies. He emphasizes the importance of balancing time and money, preferring to invest financially to gain expertise quickly. The host outlines a three-phase process: starting with basic agencies to grasp fundamentals, progressing to premium agencies for nuanced strategies, and finally internalizing processes to surpass agency capabilities. The host advocates for a transparent relationship with agencies, aiming to learn and eventually bring operations in-house, thus increasing enterprise value. He also discusses his upcoming book, "100 Million Dollar Leads," and encourages listeners to share the podcast to support entrepreneurs.

• Speaker A discusses combining the best elements of agency work and enterprise building.
• Emphasizes the goal of selling more products to more people and creating businesses worth owning.
• Speaker A is documenting their journey with acquisition.com, inspired by the lack of documented journeys from Bezos, Musk, and Buffett.

"And this is what I believe has married the best parts of agency and the best part of building an enterprise and making a valuable business, and avoided the agency trap that so many people fall into."

This quote outlines the speaker's belief in blending agency work with enterprise building to create a successful business while avoiding common pitfalls.

• Speaker A has grown their audience by 5 million over 24 months, with 4 million added in the last year through organic content.
• They achieved this without personally posting on platforms by leveraging experts and agencies.

"Over the last 24 months, I added 5 million people to my audience across all platforms. And in the last twelve I added 4 million. And that was all from organic content."

The quote highlights the significant audience growth achieved by Speaker A, emphasizing the importance of organic content in their strategy.

• Speaker A prefers to pay for expertise with money rather than time due to having more of the former.
• Initially ignorant of who was skilled in various social platforms, Speaker A hired agencies to gain basic knowledge.
• The goal was to set up profiles correctly and establish a posting cadence based on what worked well for the agencies.

"So rather than try and learn it all myself, I went to experts."

This quote explains Speaker A's strategy of using experts to bypass the learning curve associated with social media platforms.

• Speaker A describes a three-phase process to mastering new platforms: starting with a basic agency, learning from top creators, and eventually creating in-house content.
• They emphasize the importance of not overspending at the beginning due to a lack of context.
• Speaker A would document the advanced agency's processes and aim to create content that surpasses the agency's quality.
• The in-house team should ultimately outperform the agency due to more time allocation and brand context.

"And so what happened is like phase one is I get what I would consider a basic agency."

This quote introduces the first phase of Speaker A's three-phase process, where they start with a basic agency to learn the fundamentals.

"Then I work with the much better, more advanced agency who works with the top creators to learn all of the more nuanced pieces of the platform."

Speaker A discusses advancing to the second phase, which involves learning from a more advanced agency that works with top creators.

"Eventually, once your team has the same amount of expertise or more, they should be better because, one, they have more time because they're going to fully allocate their time to you, and secondly, because they will always have more context on your brand than an agent will."

The quote explains why an in-house team, once properly trained and experienced, should outperform an external agency.

• Speaker A applies the same three-phase process to other areas such as paid ads and cold outbound.
• They advocate for learning from those actively engaged in the field rather than from coaches who may not be up-to-date.

"So I always want to attack whatever a new platform or method is by doing this kind of process."

This quote underlines Speaker A's commitment to using their established process for tackling new platforms and methods.

• Speaker A expresses a preference for learning from agencies over coaches, as agencies are typically more current with industry practices.
• They suggest that agencies should anticipate clients eventually internalizing the agency's expertise.

"Agencies tend to be better a lot of times at doing the thing than the coaches are because a lot of times the coaches did something a while ago, had some successes, and then they market those successes, but they don't stay up to date."

The quote contrasts the practical, up-to-date experience of agencies with the potentially outdated knowledge of coaches.

• Many business owners aim to gain independence in managing core functions of their business.
• There is a particular emphasis on the desire to control advertising and lead generation internally.
• Brand-driven businesses, especially those focused on growth, often prefer to have more control over their advertising efforts.

"So eventually you can do this on your own because that's ultimately what every business owner wants."

The quote highlights the goal of business owners to be self-sufficient in their operations, particularly in the context of advertising and lead generation.

• Advertising is crucial for businesses to attract more leads and grow.
• The speaker's next book, "100 million dollar leads," is presented as a resource for effective advertising strategies.
• The book is a result of extensive work, with 2000 hours spent on writing and editing through 19 drafts.
• The credibility of the book's content is supported by the speaker's successful registration of over 200,000 people for an event through the advertised methods.

"When I was a baby, my father used to rock me to sleep at night, saying, it's hard to be poor with leads banging down your door."

While the quote is presented humorously, it underscores the importance of having a steady stream of leads for business success.

• The speaker introduces the concept of the "agency trap," where businesses become dependent on agencies for advertising and lead generation.
• The speaker details their personal experience with agencies, starting with a positive encounter followed by multiple negative experiences.
• The cycle of agency engagement typically results in diminishing returns and increased costs for the business.

"So the thing is that agencies are actually incentivized to only do enough to keep you paying, which sucks."

This quote explains the perceived misalignment of incentives between agencies and their clients, suggesting that agencies may not always work in the client's best interest.

• The speaker had a realization that the tasks performed by agency workers could be done in-house.
• This led to a strategic approach to agency relationships, with a focus on learning and internal team training.
• The speaker advocates for setting a purpose and deadline for agency engagements to avoid long-term dependency.

"I, too, could pay someone $20 an hour to work on my account and not pay you to do that."

The quote reflects the speaker's epiphany that they could hire and train their own staff for the same tasks performed by agency workers, potentially at a lower cost.

• The speaker outlines a strategy for working with agencies that involves a clear intention to learn and eventually internalize the agency's processes.
• The approach includes a six-month learning period followed by a transition to a consulting agreement, allowing for continued support without full dependency.
• This method is aimed at building enterprise value and creating an asset within the business rather than relying on external parties.

"I want to do what you do in my business, but I don't know how. I'd like to work with you for six months so I can learn how you do it."

This quote captures the speaker's proposed approach to agencies, emphasizing the desire to learn from the agency and then transition to a more sustainable and independent model.

• The speaker emphasizes the importance of a business owner protecting their interests when working with agencies.
• Learning from agencies is highlighted as a key strategy for long-term business growth.
• The speaker's approach involves hiring agencies, learning from them, and then internalizing the processes.
• The speaker discusses the progression from basic to premium agencies as their needs and capabilities grow.
• The strategy is applied across various platforms and content types, including YouTube, TikTok, LinkedIn, and podcasts.

"But if you're the business owner, then you can protect both of you."

This quote underlines the speaker's belief that business owners have a responsibility to protect their own interests as well as the interests of their agency partners.

"If you actually teach me how to do this, and I'm not going to expect you to save my business. I just want to learn how you do it."

The speaker values the learning process over dependency on the agency, focusing on gaining skills and knowledge to improve their business independently.

"I didn't know anything about YouTube. I didn't know anything about short form content, reels, any of that stuff."

The speaker admits to initially lacking knowledge in certain areas, such as YouTube and short-form content, which sets the stage for their learning journey with agencies.

"So I'm going to break down how I got to new platforms. I knew nothing about in short and long form content."

The speaker intends to explain their process of mastering new platforms and content formats, highlighting their commitment to continuous learning and adaptation.

• Committing to a regular content creation schedule is crucial for engagement on platforms like YouTube.
• The speaker started with a basic agency to handle the initial content trimming and basic edits.
• As the speaker's understanding of the platform grew, they sought higher-quality edits and more sophisticated content.
• The progression from basic to premium services is a strategic move to improve content quality and audience engagement.

"Getting into YouTube, the first step I did was I hired what I would consider like a basic level agency."

This quote introduces the speaker's first step into YouTube, which involved hiring an entry-level agency to assist with content creation.

"And the main objective of that first phase was just giving me the basics of just getting me involved in the platform and forcing me to create content on a regular cadence."

The speaker's initial goal with the agency was to establish a presence on YouTube and maintain a consistent content posting schedule.

"And so we started editing stuff internally, but we still felt, even though we were better than the basic person, that we weren't better than the top creators."

This quote reflects the speaker's drive for continuous improvement, as they aimed to surpass the quality of top content creators even after moving content editing in-house.

• The speaker's strategy involves a transition from external agency support to internal team development.
• This process includes hiring an agency, learning their processes, and then matching or surpassing their content creation capabilities.
• Consulting agreements are used to maintain good relations and facilitate knowledge transfer during the transition.
• The speaker's approach is designed to optimize quality and output while reducing costs.

"And then by six months in, we say, okay, we've understood the sops, we understand the process, and our team can now surpass your team in its creation of content or at least match it, and then we can get those cost savings."

This quote describes the transition point where the speaker's internal team becomes capable of matching or surpassing the agency's content creation, leading to cost savings.

"I'm still on fine terms with the people who are there, and if we had questions, we could do that."

The speaker stresses the importance of maintaining positive relationships with agency partners, even after the business relationship has ended.

• The speaker discusses the approach to short-form content, starting with an agency that reached out and offered to repurpose existing content.
• The director of brand's experience with short-form content allowed the speaker to bypass the need for a premium agency.
• Transparent communication about intentions to bring processes in-house is emphasized as crucial for a good working relationship.
• The speaker's belief in the internal team's ability to produce higher quality and output is a core component of their strategy.

"So I didn't understand TikTok at all. I didn't use it, I wasn't on it, et cetera."

The speaker acknowledges their initial lack of understanding of TikTok and short-form content, setting the stage for their learning and growth in this area.

"And so I actually got kind of like bought the sops automatically, and we were able to massively scale our output on short content within six or so months of working with that original agency."

This quote reveals how the speaker was able to quickly scale short-form content production by leveraging the expertise of their director of brand who had agency experience.

"And that's fundamentally what we did there. And that process is how we approached LinkedIn, how we approach podcast, how we approach paid ads, how we approach new methods, all."

The speaker summarizes their overarching strategy of learning from agencies and internalizing processes, which is applied across various platforms and methods for business growth.

• The speaker discusses the benefits of combining the use of an agency with building an in-house team.
• Short-term wins are achieved quickly with an agency, creating momentum for the team.
• The in-house team sustains long-term momentum and growth after initial agency support.
• The speaker emphasizes the importance of enterprise value and control over business processes.

"I run the same playbook, and this is what I believe has married the best parts of agency and the best part of building an enterprise and making a valuable business, and avoided the agency trap that so many people fall into, myself included."

The quote explains the speaker's strategy of merging agency benefits with in-house team development to create a valuable business while avoiding common pitfalls.

• Building an in-house team contributes to the enterprise value and wealth growth through tax-free compounding.
• Reliance on external agencies is seen as a risk to the business's cash flow and reliability.
• In-house operations are under the owner's control, reducing risks for future investors.

"I want to build enterprise value because it is the fastest way to grow my wealth is tax free compounding of enterprise value, okay, in the business."

This quote highlights the speaker's focus on increasing personal wealth by building enterprise value through in-house capabilities rather than relying on external agencies.

• The decision between using an agency or building an in-house team depends on whether one has more money or time.
• Agencies can provide faster results than learning in-house but require a financial investment.
• The speaker has shared their agency selection process and agreement framework in their book.

"So how do you decide if using an agency is right for you? First off, do you have more money or more time?"

The quote presents the fundamental question to consider when choosing between hiring an agency or developing an in-house team, based on available resources.

• The speaker advises talking to many agencies, including expensive ones, to gauge quality and depth of knowledge.
• Being an informed consumer leads to better, longer-lasting decisions and avoids being swayed by overpromising sales tactics.

"Talk to a lot of agencies. I would recommend talking to the most expensive ones."

This quote suggests that speaking with a variety of agencies, especially the more costly ones, can provide insights into the quality of services and help in making an informed choice.

• Setting a clear deadline for transitioning from agency to in-house is crucial for expectation management.
• Deadlines motivate the in-house team to learn and match the agency's expertise within the set time frame.

"Next, you want to make sure that you have a clear deadline for when you want to make that transition."

The quote emphasizes the importance of having a clear timeline for moving from agency support to an independent in-house team.

• If the in-house team does not match the agency's performance by the deadline, it may indicate a need to change personnel or a lack of proper training.
• The speaker believes in continuing with the agency until the in-house team's performance is on par.
• Transitioning to a consulting agreement with the agency provides a safety net before fully cutting ties.

"Once our team matches theirs, then I drop it off. We downgraded to a consulting agreement just for insurance."

This quote outlines the speaker's approach to ensuring the in-house team's competence before reducing reliance on the agency, using consulting as a transitional step.