The Consulting Growth Podcast
Joe O'Mahoney is Professor of Consulting at Cardiff University and a growth & exit advisor to boutique consultancies. Joe researches, teaches, publishes and consults about the consulting industry.
In the CONSULTING GROWTH PODCAST he interviews founders that have successfully grown or sold their firms, acquirers who have bought firms, and a host of growth experts to help you avoid the mistakes, and learn the insights of others who have been there and done that.
Find out more at www.joeomahoney.com
The Consulting Growth Podcast
Building & Selling a PR & Communications Boutique with Jessica Schaefer of Bevel
What does it truly take to build a PR and communication firm that stands tall among the giants? Today, we're joined by Jessica Schaefer, founder of Bevel, a strategic PR and communications firm that has carved a unique niche at the intersection of financial services and technology. Jessica's remarkable journey takes us from her start in the throes of the Great Recession, through prestigious companies like Moody's to the establishment of her own game-changing venture. Learn how Bevel's strategic approach of applying a hedge fund-based performance model to communications, coupled with a focus on quarterly KPIs and bonuses tied to client retention, set it apart in an intensively competitive market.
Dive into the heart of the challenges and rewards of creating a consultancy powerhouse with us. Jessica offers an insider's view into the delicate art of managing clients, nurturing talent, and maintaining a work-life balance while steering a successful firm. Our conversation touches on the factors that contributed to the impressive acquisition multiple on Bevel's sale, providing valuable insights into the business of PR and the nuances of selling an enterprise. Strap in for a thrilling exploration of the world of entrepreneurship that every aspiring professional should hear.
As we navigate through the rapidly evolving landscape of communications and technology, Jessica shares her perspective on the future of Bevel and its synergies with Avenue Z. The focus is also on their recent acquisitions and the increasing emphasis on digital marketing, PR, and influencer strategies. The conversation delves into the importance of attracting and retaining top talent and how Bevel's dedication to meaningful work and ownership has been a critical factor in their success. We wrap up with a deep dive into the benefits and challenges of being a young, female founder from a non-privileged background. This is an episode you won't want to miss. Tune in for a truly inspirational journey and invaluable lessons for emerging entrepreneurs.
Prof. Joe O'Mahoney helps boutique consultancies scale and exit. Joe's research, writing, speaking and insights can be found at www.joeomahoney.com
Welcome to the Consulting Growth podcast. I'm Professor Joe Omani, a professor of consulting at Cardiff University and an advisor to consultancies that want to grow. If you'd like to find more out about me and access some free resources to help your consultancy grow, do please visit joomanicom. That's J-O-E-O-M-A-H-O-N-E-Ycom. Thank you for coming back to us. It's Professor Joe Omani here with the Consultancy Growth podcast. I have the absolute pleasure today of introducing Jessica Schaefer, who started and grew a fantastic strategic PR and communications firm that specializes in financial services but also technology, and was recently sold to Avenue Z. Jessica, thank you so much for joining us. I realize you're going to be incredibly busy, especially if you're still in the earn-out period, but thanks a lot for your time. Thank you for having me. Could we kick off with you just giving us a little bit of an introduction to yourself and how your journey took you to starting Bevel?
Speaker 2:Sure. I started my career in 2008, right before the Great Recession, which was an interesting time to start in financial communications. It was a quick jolt and learning into what it meant to deal with crisis communications. Some of my clients were RBC, rbs which were undergoing bankruptcies. A lot of investment advisory firms were working with Bernie Madoff. It was certainly eye-opening, but it was the fastest way, I think, you can learn anything which is on the grounds in a very tense situation.
Speaker 2:Then I was doing my MBA and investing analysis. I wasn't really interested in going into communication. I wanted to be an investment banker. I thought the industry didn't attract the highest quality of talent. I set out to do that, but when I graduated, everyone was like what do you mean? You have so much personality and charisma. You are PR. You're meant to do PR. There are a lot of people who can sit behind a computer and do spreadsheets. I ended up joining Moody's, which is the ratings agency largely blamed for the financial crisis because of their subprime mortgage ratings, to re-imagine the brand, talk about regulations and what they had done, to change what they were doing. From there, I moved around that organization. I had a mentor, linda Huber, who's a CFO the most incredible woman I've met, who we would have conversations in the bathroom. That was what led to our early mentorship. People always ask how you find a mentor. I think, if you're lucky enough, maybe you could find one in the ladies room.
Speaker 1:If you're a lady.
Speaker 2:Whichever bathroom you're in.
Speaker 2:I don't know, but there could be. You could still have conversations about interest rates in the bathroom. Surprisingly enough, I went into sales selling our credit risk solution to Goldman Sachs. Then I ended up being recruited to 0.72, which is Steve Cohen's then family office, now $30 billion global hedge fund, really worked with him to reposition the company and build the brand of 0.72 and work on their comeback story, launched his venture capital fund, 0.72 Ventures. Started working with the tech founders and CEOs who all separately tried to recruit me out to be their chief communications officer. I thought, well, if one person says it, it's like a rumor of two people say it. There might be some validity. But if three people say, oh, you have to do this, then I thought, okay, why don't I start my own company? That's when Bevel was founded in 2017.
Speaker 1:Brilliant. Thank you so much. There's so many interesting things there. You have become very successful relatively quickly in terms of that journey. I see this journey a lot from founding to exit. But even having the chance to work where you did at Moody's, to work at 0.72 in the way you did, you could have stayed on that track. You didn't have a lot of founders I speak to have 20 years experience behind them. Even then they're scared about starting up by themselves. What gave you the confidence? Apart from what the clients are, one thing also running the company is more than just about clients, people and systems and marketing. What gave you the confidence to say I can do this?
Speaker 2:Well, it was a great track to be on and one mini would not walk away from most of the people who were my colleagues and peers. They're still there in the same job and it's a great job to have. But I really wanted to when I saw an opportunity there was so much money flowing into FinTech and I had already I had done it. I had changed the brand and it felt like we were about to embark on this like interesting journey in financial technology. At the time it was still called that there was no FinTech and you could see there were so many smart people and so much money flowing into this category. But also I wanted to create something different.
Speaker 2:There had always been this saying about PR firms oh, they're wasting my money, they're wasting my time, and there wasn't a place where really smart strategist could go and work in this field directly with CEOs. I wanted to create a platform where women and diverse talent, no matter how old you are. I think that the wins on the board count a lot more than the years in the job, and so we pay everyone at Bevel based on performance, and we've applied the hedge fund based performance model to communications. So everyone has quarterly KPIs that are tracking towards what their clients are looking for, so number of media interviews, number of stories, awards, conferences, podcast opportunities, and then if they hit those, then it triggers a quarterly bonus and we also pay based on retention of accounts. And so anyone who comes into the firm, no matter what their background is and their upbringing was, if they work really hard, they can make what they're worth, and I thought that was interesting.
Speaker 1:Yeah, my background and my area of expertise is really the management consulting industry, where it's relatively normal to have a set of KPIs similar not identical, to the ones you talk about in terms of reward that's from what you're saying. That's relatively unusual in the PR communication space.
Speaker 2:I mean in communications. I started out I was making 34,000 a year. I could have made more working at McDonald's Different kind of industry but I think you've seen more and more. Especially with all of these social channels and everyone being on their phone and everybody having access to a communications platform, your reputation matters more than anything in. Your digital footprint online is really important, and so we started to see that communications became a very valued career and it's something where, if it's done wrong, if you take a look at your work, it leads to the downfall of a company, and so the companies we work with, the CEOs who look at us as their trusted advisor they realize that and they invest a lot of time and their personal energy into it.
Speaker 1:Okay, thank you. And I presume that's a wonderful mechanism for attracting great talents, because if I'm a high performer and I'm not necessarily getting rewarded for my high performance, I'm going to look at someone like Beville and think, wow, you know, actually, here not only can I make a difference, but I'm also going to get paid for making a difference.
Speaker 2:I mean right away, at any point in your career. You're interacting with some of the top visionaries and leaders who we work with the founder of Enmo. We're working with people who have created technology that has changed our lives, and you don't have that opportunity everywhere. So we recruit people from Goldman McKinsey former entrepreneurs. We do recruit people from a PR firm, but I would say that's less where we find our talent from and people are really interested in that, and part of our payment is also for early stage companies. Typically, we'll work with a company from seed all the way through IPO or acquisition, and so we'll take equity in those brands and we've had multiple exits. So if you're one of those people working on building a brand, I think you should also have access to that equity and be paid just in the same way as if you were joining an early stage tech company.
Speaker 1:Okay, well, that's a really interesting point there, because one of the things that you hear very often in terms of advice for founders is know your buyer. You've got like this better than I do. You've got the whole avatar thing almost getting down to their psychological as well as business needs With a diverse set. If you're dealing with everyone from founders all the way down pre-seed, seed, first round, VC, etc. That's quite a diverse set of needs. So did you start off servicing one type of client and if not, and even now, how do you service all those different needs?
Speaker 2:We operate like Avenger Fund, so a certain percentage of our clients are early stage, a certain percentage are later stage growth. And then you are right, as we started taking companies public and we started working with public companies that required a whole other set services that, quite frankly, three years ago we didn't have. So we started to build those out. We started to build a larger team. We opened offices. I mean, offices for us were still a thing, because we're creatives and if you're a great publicity, you want to be around people.
Speaker 2:So there was no one who, during COVID, wanted to work at home. You know, we're not a team of engineers. So we have offices in New York, la, miami and London. And then we started outsourcing some of these things to other agencies and that's when the idea of a potential partnership or acquisition became really attractive. I had a number of competitors reach out to me with offers for the company and I had considered it, but they were the same, they were the same kinds of firms as us, and so it didn't really make sense to me. What I thought was attractive about Avenue Z is they bring a completely different skill set to the table.
Speaker 1:Okay, I'm going to get on to Avenue Z in a second. I want to talk briefly about the growth journey. Obviously, you'd had some really interesting experience. You'd got some great mentors, you'd worked in some large companies. You hadn't started up this type of company before, but you'd done your MBA. What were the surprising challenges that you came across when you were growing the company from one to 40 odd? What were the things that surprised you and how did you overcome them? How did you meet those challenges?
Speaker 2:Well, I think there were many. It's hard. There's no other way to say it than it's certainly hard. I think it took a toll on my personal relationships and as a founder I didn't take any outside capital. I grew the company. We were sort of a cash cow because immediately we had three clients. So we were this whole idea of not being a profitable company. We were profitable day one as soon as I opened my laptop and we had exceptional growth. I mean, you're growing at 100%, doubling, tripling. Covid was a great year for us because every single company that was in FinTech, no one was going to their bank, everybody was on their phone and so all of our retainers doubled.
Speaker 2:I think for me, finding talent in this industry and especially training them during COVID was incredibly hard. It was not easy, and so now we have a lot of training programs in place that we didn't have before. But managing that and also closing clients and working with I still do the PR for some of our top clients, that was a real challenge, and it wasn't until I would say more so recently that we really started building out the senior team in the last two years and that has been so helpful and I'm so grateful because now I actually have a personal life, whereas before I mean, if you're the founder and you want to build a successful company there is no such thing. I often hear these founders about work-life balance and all of these things, but I think if in the early stages, if you want to be successful, you have to be really selfish, and part of being selfish is sacrificing some of your well, most of your personal time.
Speaker 1:Yes, it is. I mean, it's one thing taking on a board but it's another thing getting them up and running. So even that, finding the right people, getting the systems, the governance, the structure of the decision-making right is a challenge in itself, but it is, I see it, a lot, because, especially that shift from kind of 30 people to 50 people, I think very often you start to formalize things, you start to delegate. As a leader, you can almost see the relief on people's faces when they don't have to do everything at a senior level. Yeah, so let's talk a little bit about the build-up to acquisition. So obviously, with your growth and I'm presuming, your margins as well, your clients are generally not short of what we would call in the UK a bobble-to you're going to be in attractive purchase or partner for many different types of organizations. How did you approach the equity event? How long before did you start preparing and what were the challenges that you faced in that process?
Speaker 2:So the process took about six months.
Speaker 1:Okay, good.
Speaker 2:But we had many offers before then, true, and then, once I saw that there was interest and there was some real interest, that's when I decided, okay, maybe it makes sense to look at this more aggressively, do evaluation of the company, work with a banker and really figure out what the market valuation was for the firm. The due diligence process was three months. That's actually pretty quick. Yep, no bad. We were really aggressive in terms of getting the buyer the potential buyer now what they needed, and so that took a lot of work, a lot of sleepless nights, I would say. But it's similar to anything else. It's building relationships, it's finding the right chemistry.
Speaker 2:There were a lot of offers that were more attractive than this one from a qualitative or a cash component, but what I liked about this team, and specifically Jeff Herzog, was he built a company. He was like the king of SEO and he had sold his company to Hearst Media for about $500 million. And I was at the New York Stock Exchange and this was when he and I were having a conversation and I met another woman at Hearst Media who knew him really well and she was just like, yeah, it was such a great deal and he knows how to build a really successful company and I always like working with people I can learn something from and I think I got the company as far as I could to the states that I could without completely giving up a personal life, and I didn't have a co-founder. So it's nice to have a real team and a support system so that now we can build the company and take it internationally and take it to the next level.
Speaker 1:Yeah, I was saying to Ali, one of your consultants, before you joined the call that what you did is remarkable for many reasons. I mean, I obviously speak to a lot of founders and a lot of people that have successfully sold their firms. But, number one, you didn't have any co-founders, which makes life hard. I mean hard psychologically as well as operationally. And number two, you weren't in an easy space. It's not like PR is a new thing, like AI that was just invented, and you had an expanding field to sell to.
Speaker 1:And number three, you hadn't got a black book of 30 years experience that you could just phone up and old friends that you went to school with or whatever you'd worked with over the last 30 years. And the fourth thing, it seems to me I don't want to go into the details financially, but it seems to me that you sold for a good good multiple, let's say, in an industry that doesn't usually receive high multiples. So obviously you overcame a lot of challenges there, whether you knew you were overcoming them or not at the time. What allowed you to be as successful as you were despite those challenges? So I'm especially interested in the multiple, because I'm guessing that you got a high multiple of your EBITDAR, which I'm guessing would have been good anyway, based upon your clients, but I'm interested in what allowed you to do that when so many other people would have struggled in your situation.
Speaker 2:Oh, yes, you are right, we did have a high multiple for our industry and it was based on even. A lot of that was because we have reoccurring revenues. So we're not a project based firm. We believe in building long term brands. If you look at our portfolio and our client list, these are companies that stay with us for a long time, which is very rare in the PR and communications world. Typically there's a high churn and that's just the nature of the business, but I really think it comes down to the team they're recruiting and how they're approaching the craft, because they just take talent from other agencies and it's bad data and bad data out. Not to say that, but if you invest early on in the talent and we have a great internship program, a great associate program Allie, who you mentioned, has been with the firm a long time. She created her own company, so she also understands what it means to be a founder and to build and to be in it with these tech entrepreneurs, and so that's something that they love about Bevel. We have that hustle, that we have the grit, and I think that comes from partly my upbringing.
Speaker 2:I grew up in upstate New York. I didn't come from a super wealthy family or a wealthy family, and I worked since I was 11 years old. I was a dancer and my mom said if you want to be in every dance competition which I did, of course, because I'm ridiculous and over ambitious in everything that I do she's like you need to teach dance and pay for all your own costumes. That's the only way this is happening. I'm a long-term cancer survivor, so I had an incurable form of cancer when I was young and I think that's something that shaped my outlook on life.
Speaker 2:I was always in and out of the hospital getting testing done, and it's different when you grow up like that. So my view and the people I've surrounded myself with I've always just taken everything as I feel really lucky that I've had this opportunity, that I get to interact with the kinds of people we get to interact with every single day and that we've created a platform where you have that access. I almost still can't believe it, to be honest. Just sort of how did this happen?
Speaker 1:Yeah, it is. I'm fortunate enough to see both sides of the equation because I obviously advise founders and then I'm with them with the sale. I don't deal with the financial transaction myself, but then very often see them on the other side. There is that state of disbelief, sometimes of like what just happened?
Speaker 2:I'm still asking myself what just happened.
Speaker 1:And okay. So this is a good point really to ask what's next? Obviously, the world of communications is changing and the world of tech is changing and obviously there's overlap as well between, obviously, all the stuff in the news about AI, generative AI and what it can do. So what's next for Bevel in its relationship with Avenue Z?
Speaker 2:So you might have seen, just yesterday we announced that we acquired an SEO content company with a focus on AI. We've also made another acquisition of a firm called Snow, which focuses on paid growth and marketing. It's really exciting because now we have these three pillars we have digital marketing, pr and influencer. With that we can really break through the noise for any of our clients. We're working a lot of public companies now working on their influencer and consumer marketing strategies, which is exciting. It's fun. We recently took one of our clients, publicbettercom, and their focus now is how do we tell investors involved in the company? So I think that's an exciting area to be in. Then, on the other side I mean historically, we've worked with a lot of hedge funds private equity, fintech, doe, web3. Now we have a much broader consumer product portfolio. So working people say they're the fun brands. Maybe they're the fun brands. I will always like the financial market because I think it's the most interesting, but we are working with a lot of those bigger consumer product companies.
Speaker 1:Okay, Really interesting story. One thing that stands out to me is I mean, there are lots of ingredients to your secret source. You're obviously one of them. I think something that really stands out is the way you crafted the employee side of things. I always say to my clients that you compete in two markets One is for clients but one is for people and what you do with them. It seems to me that you've built, you found great people, but you've also built a system internally and strategy internally that allows you to offer something, differentiates the company.
Speaker 2:Well, I think early talent that's coming out of college now and earlier stage talent they really want to work on things that are meaningful. I mean, we work with a lot of mission-orientated brands, but they also want to own something. I remember when I first worked at a PR firm, I was just working on media lists there wasn't a lot of opportunity to actually create and show that you were doing something. At Bevel, we put people in positions of power and we're also there. I think there's a lot of learning when you fail. Most of the team at Bevel they only fail once and then they don't fail again. But being able to really own something and see your work is really important. I think that's what attracts the top people at the firm.
Speaker 1:Yeah, great Again says a lot about you, because I have dealt with several founders who can't let go and don't want to delegate even if they know it's the right thing to be doing, which means they become a bottleneck and those bright, ambitious people tend to leave because they don't have the freedom.
Speaker 2:Yeah, I will say not to make it a gender issue, but there have been a lot of studies on that women. The reason they don't get past a million in revenue or 10 million in revenue is because oftentimes they don't delegate. That was something very early on. I delegate. I would say maybe sometimes I over delegate. But let's just say we had a separate finance department right away. I started hiring right away. I over-invested in the company and always paid myself the least amount possible to invest in the team because I felt like that was the only way we were going to grow.
Speaker 1:Finally, on that note as you bring it up, you mentioned the diversity thing. You mentioned just now, the female versus male thing in terms of delegation, in terms of being a younger, a successful founder, in terms of being female and in terms of not coming from a wealthy wasp family. To what extent has that been a disadvantage? Any of those things? Have they been a disadvantage? But listening to you, it sounds like some of them have actually been an advantage. Have they almost given you a personality that's driven to succeed? So is it a bit of both?
Speaker 2:Definitely a younger. I'm in YPO and I'm like the youngest person in many of the YPO groups especially this female and a lot of our clients really rallied behind it. Alan Patrikoff he is the grandfather of venture capital. He basically created VC. He's 88 and he was our third client and he said to me you'll never forget the person who gave you your first dollar, and this was like he didn't invest in Bevel, but he was. I mean, he's been a client this entire time and he's someone who just really put he saw something in me. There have been a lot of people who have seen something in me and he invested so much of his personal time really just shaping me, shaping the team, making sure we were aware to watch our bottom line when COVID was happening and watch the money that comes in and the money that goes out like a hawk and calling people at 7am making sure they're on it and they're calling their clients back within 24 hours. So there have just been a lot of people, I think.
Speaker 2:If you take, sometimes people look at being young as, oh well, I don't have it yet or I don't have enough experience and I hear this all the time from friends too. They might not still be my friends anymore because they'd be insane, but it's just like I think you need to. My mom she was someone who always instilled a lot of confidence in me and told me you need to work your assets, honey, and she meant something different by that. But you always need to work with what you have, and people want to help young people succeed. It feels good to give back, myself included.
Speaker 2:So if someone who's young and hungry reaches out to me, oftentimes I'll spend more time with interns or a junior associate If I see they really have that spark and that desire to win, because you can shape them into some of the best strategists in the world. So I don't think it was a disadvantage, the only thing that was. It's like you get to a certain age and as a woman I was like, oh my God, you haven't had kids yet. There's a lot of pressure in that vein to sort of do it all and do it at the same time. And in your 30s and early 40s, this is when I think your career either sort of stays the same forever, like you stay in that VP level and you don't advance, or you take off, and so I do think women have it tougher just because of that.
Speaker 1:Yeah, one of the first interviewees I had on here was Sarah Matthew, who was at WPP, started her own communications firm, eventually sold it, but when she left WPP, somebody who she wouldn't name, but we can probably guess who it was sort of in effect gave her a pat on the head and said you'll never make it by yourself, little lady. And eventually he came after her in terms of wanting to buy the company and she said it was one of the happiest days of her life when she had to turn him down and went with someone else instead. So I love hearing those Dutch stories. Jessica, thank you so much for your time. It's a brilliant story and congratulations on everything you've done with Bevel. Thank you, I really appreciate it. Again, as ever, thank you for listening to the Consultancy Growth podcast. This is Professor Joe Omani at joomanicom.
