Jasmine Star 00:00:00 Welcome to the Jasmine Star Show, where we talk about life, business and today we are getting into the nitty gritty of the most effective marketing. Yes, we are going deep. I am talking about real time amazing strategies, conversations, things to be aware of on the internet. That is terrible advice. And then obviously the best advice in the game from a near dear friend. Pure and absolutely brilliant mind. Welcome to the Jasmine Star Show, Eric Soo.
Eric Siu 00:00:25 Thanks for having me Jasmine.
Jasmine Star 00:00:26 I'm so happy you're here. Okay, so we're going to start with the tea, right? Personalized. Eric and I, we go back a few years. You come into the podcasting studio and parking here in Hollywood is really tough. And you're like, I love my credit cards at home, and I give you my credit card. And I was like, okay, put a couple bucks in the meter and you only put $1. But I was bummed because I wanted you to put $2 because you bought your agency for $2.
Jasmine Star 00:00:50 So I was hoping, I was hoping I was just like, did I just give Eric $2 for the hope that I'm gonna buy your agency? Okay, we're gonna get to that story in a little bit. It's like a little bit mystique. How is this guy doing millions and millions of dollars based on $2 to begin with? We will go back there. But let's start with like a real conversation. Let's land and hit the ground running when we get to origin story and all that good stuff. But let's start with value. We walk in, we land immediately, and you're like, I had a conversation with somebody and he said, these people are stupid because this information is just terrible on the internet when it comes to marketing. Let's start right now. Value add. What is the state of marketing? What is not working? How do we get better? What are the trends that you see? Let's just call them out. Let's just go.
Eric Siu 00:01:29 Yeah. Well, I guess the thing we were talking about was more business related, but we can come back to that.
Eric Siu 00:01:32 No, no, no.
Jasmine Star 00:01:32 Let's go to business. No, dude, the podcast is the business about business. Yeah. And you have an agency and you are in the business. And I want to see things from your perspective.
Eric Siu 00:01:40 I think there's just some irresponsible things I've learned over the years, and I've learned my mistakes. And so my podcast co-host Neil calls me yesterday, and then he just calls me complaining. He's like, I just saw so-and-so's thing and it's so stupid, blah, blah, blah. And we just started talking about it and it's like, yeah, like a lot of the stuff that's being pushed by, especially business influencers is not necessarily true. You know, we're talking about a little more. We're like, you know, the more influential you are actually when it comes to building your brand, it's less likely you have a really big company. And so I'll give you an example. One was maybe four years ago or so, everyone on Twitter was talking about hiring a CEO.
Eric Siu 00:02:15 You got to hire a CEO. You got to get out of the business. You got to work on the business. And then I just finished a book right now with J. Paul Getty so Getty Museum Getty Villa he was the richest man in the world for a period of time, and he has a chapter in there where he talks about the working businessman and he basically says, like, it's such a joke that people think that they can just hire a CEO and run like nobody's going to run the business as well as you are. They don't have the vision that you have. They don't care as much as you do. And I've just learned that over the years, any time I've tried to step away from the business completely, everything falls apart. It's happened multiple times, so I've seen the pattern multiple times. And yet at the same time, the people that I see on Twitter talking about how they have a holding company or they're hiring CEOs, blah, blah, blah, you just look a little deeper.
Eric Siu 00:02:55 If you have a little experience and you take a look at it, the businesses aren't that big and that's okay. It doesn't have to be that big. But I think it's irresponsible to talk about this stuff and act like your business is really big when it's not because you're actually not teaching what you actually know.
Jasmine Star 00:03:08 Oh, okay. Okay, okay. So let's go here. So, you know, I do some creep in every time a guest comes in I really want to know, like where they are, like head, heart, soul. And you had a conversation with Alex Hermosa around this idea that it seems really popular for people to have a holding company. And when you said that when somebody has a big personal brand or they're making a lot of content, it's probably not reflective of the size of their business. Is he an exception to the rule?
Eric Siu 00:03:30 I think he's an exception. So him and Layla, they're both amazing operators, and he's even said that recently where they focus on operating and growing the business.
Eric Siu 00:03:38 And he's even admitted that when it comes to maybe taking on leverage or, you know, things like that, that's not really his forte yet. Right? I think most of them are majority stakes, but also some minority stakes. And they've actually grown the business. And it's through sheer willpower, like actually being in there, operating alongside the founders.
Jasmine Star 00:03:55 Okay. And so then when you look at these like business influencers, get to me about the psychology of saying, well, you don't have a big holding company. What is the difference, the veracity or like street cred for them to be able to talk about it.
Eric Siu 00:04:07 So I think what the holding company thing and I've learned this, there's a whole bunch of threads like I'm reading it like a couple of different books right now, and it just talks about the more you tend to focus on one thing, the bigger it tends to get. And you don't necessarily need a place too much importance into it. And I was talking to my friend last week about this.
Eric Siu 00:04:23 We're just talking in 2020. I tried to force a lot of different things. Right. So in addition to doing two acquisitions, there's this software company over here. Oh, there's also this education thing over here. Oh, in the meantime, we're launching a book, too. It's just too many things and it's chaos. And he said the same thing. He's like, man in 2020. Yeah. We tried to force all these different product lines and we placed too much importance on these things. And the more importance you place on these things, the more it gets away from you. Same thing with the relationships to the more you try to chase, like, you know, the beautiful women, they run away from you because you place too much importance on it. And it applies to business. It applies to every single thing. And so when you do that, you create chaos and you ultimately you don't get what you want because, well, you created this inorganic desire and everything falls apart.
Jasmine Star 00:05:05 And so what about hiring? Well, isn't it solved by having a highly effective operator in like, let's just say you were doing the two acquisitions, the tech company, is it because the strength of the operator, or is it simply because the dilution of focus? Yeah.
Eric Siu 00:05:17 So I think it's both. So my thing with 2020 was we hired an operator to actually end up stealing from us. So that's a little different for us. But also at the same time, you know, my what did I say? That the road to hell is paved with good intentions. My whole intention with everything is like I've always grown up being like, if I can figure these things out, anybody else can figure it out, right? You can't do that. You can't expect someone else to figure it out on your dime. You have to be involved. And yeah, nobody else is. Again, nobody else is going to have the vision that you have. And I agree, Neal, now we're talking about this on a podcast we did Monday. And it's like nobody global company. Nobody could figure out what was going on with sales. His co-founder steps in and he's been in it and it. Problem solved. Right. The other thing is you can't move as quickly as you want.
Eric Siu 00:06:00 And what he was saying was like, they're sitting in like a executive meeting, and they couldn't figure out if they wanted to spend 10 to $20,000 on one thing. And for their size, 10 to 20,000 is nothing. Right. And then, you know, his co-founder Mike steps do let's just do it. Let's see what happens. Right. So it's like the more you get away from the business, the more bureaucracy is created and the slower you go.
Jasmine Star 00:06:21 Okay, so I should probably be very clear that I was not expecting for us to talk about holding companies. I think that I mean, Eric, here's the thing. I hate saying this, and it's going to make you cringe. And that's okay, because we're friends. And you could be like, Jasmine, I just got the ick. And that's totally fine. Like, I'm cool with it. I didn't even know what a holding company was until January 2023. I don't feel any at all. Well, wait. It's coming. Okay.
Jasmine Star 00:06:39 And actually, it doesn't even bother me. Like when people have IC. Like people had IC when I said I wanted to be a photographer and I didn't own a camera, then people had IC when I said, okay, I'm going to start creating content and scalable way and they're like okay like influencer. And then they had ECC when I said I'm going to create a membership. But then once we got to the membership, I realized I actually needed to build task. And I had no idea how to build task. And people were like, ick. And so to me, I was just like, icky leads to sticky. I don't know where that came from, but I'm going to be sticky. Yes. So icky works out for me. And I think that by sheer force of will, what I saw in my mind before I knew what a holding company was, and I know I don't even know how who you are. But like, literally, I saw this idea, this vision of like, almost like an octopus.
Jasmine Star 00:07:15 And I was just like, I feel like I'm being pulled to something that I don't even know what this means about my business, but all I, I inherently knew that I was outgrowing my capacity in the business. We put a president and she's killing it. And I'm like, okay, what's next for me? Yeah. And so then in 2023, I found out what this word holding company is. So then I go down this frickin rabbit hole and I'm like, Holy God, a holding company is a freaking octopus. And I was just like, all right, small bites, small bites. I think this is the thing that I am supposed to build. I have no intentions to give advice about it. I have no intentions other than to document my journey. So I think that this is super kismet because you can just come out and say like, just hold the crap, Jasmine, just do the work. And based on things that you have done in the past, so somebody is listening and they're nowhere near the size of your business, and we're going to get into the business of your business.
Jasmine Star 00:07:58 And they're nowhere near bringing in operators and doing acquiring. But what they are and what they might be interested in is singular focus on what it is they do. Knowing what you know now and knowing you've done a lot of research on holding companies. What are the things like, what are the advice for somebody who's coming in? And this is not even like a holding company, like you have a small business and you have like a lot of SKUs or multi revenue streams. It's like you're going to lose focus. So let's talk about focus. And then really the lessons that you learned from that before we get into the business of your business.
Eric Siu 00:08:24 Yeah. Yeah. So in my 20s read a lot of books right. It's like you see over and over in the books, oh you Warren Buffett, you know, focus, put all your eggs into one basket like you watch like a hawk. And I've said that before, and you hear from a lot of people over and over, right. You know, Bill gates, everybody.
Eric Siu 00:08:36 It's just like focus. And you don't really take it seriously until you get punched in the face. And I got punched in the face multiple times. And don't get me wrong, like, I like playing multiple games. I like doing multiple things. It just over a period of time, you just realized that doesn't really work that well versus like just focusing on one because you're spreading it. And the analogy I like to use is like success is like maybe like a circle, right? So maybe you start in the middle of it to get to the edges of the circle, I suppose. Right. That's success. But if you keep changing directions in the circle the whole time, like you'll never get there. But if you just went in a straight line, you'll get there. And that just tells me, you know, the entrepreneurial ad is very real. Yes, it's very real with me, I think it's still real. I don't think it ever goes away, but I've learned to channel that entrepreneurial ad into one business.
Eric Siu 00:09:17 And what I would say is if I were to break it down into just one thing, if I think about everything I've learned from like a Warren Buffett or Charlie Munger, it's just that all you need to do is stay on one business. You can do a lot of things within that business and not work on it for a year. Not five years, not even ten years, but multiple decades. And if you can do that for multiple decades and stay alive, then you will compound into something very big. And it's just to me, it's inevitable. Like you don't even need to think about the outcome. It will just happen no matter what.
Jasmine Star 00:09:44 this past weekend I spent time with a group of friends and that was the common theme is are you willing to have the guts and the dedication to focus on one thing and having a conversation and having the courage to strip away things because it either made you feel good, look good, but you're like there's a profit center in the business. And the less time that you spend with this, the more you're hurting yourself.
Jasmine Star 00:10:03 So let's actually get into the business of your business. And I kind of teased out in the beginning $2. There was a point in time for $2 I could have bought your business because that's exactly what you did. Let's start there, and then let's start just breaking it out.
Eric Siu 00:10:14 Yeah, yeah. So I bought the business and this was in 2014 or so. So the deal was the original founder wanted to step out and I still talked to the original founder. Neil was actually a shareholder as well. Okay.
Jasmine Star 00:10:26 So let's pause here. For people who don't know Neil Patel is good friend co podcast host. You guys both have agencies. Yeah. So Neil is a partner in in the company at the time. At the time yes. And you come from outside the company. And he experienced met you by way of tech? Yeah.
Eric Siu 00:10:44 I didn't really talk about this too much before, so I guess I'll share this story. And then maybe I'll also share this story about how Neil wanted me to become CEO of his current company and like, be like 50%.
Jasmine Star 00:10:53 Yeah, I'm a little bit tequila. Let's go. Yeah.
Eric Siu 00:10:56 So happy to talk about both. So the way it worked out was I was leading marketing at a tech startup, and I basically came into the company for a month, and Neil was an advisor to the company. The CEO a month into the job said, hey, if you don't hit numbers this month, we're gonna have to fire him. Like, I just got here, like with like just because someone else screwed up before me, it's not my fault, right? And I'm like, okay, I can either, like, you know, cry about it or I can do something about it. So I'm like, okay, you're gonna fire me. So I bet the entire company, I took all the budget and I just bet it on YouTube ads because I saw something. There's potential with it, but for whatever reason, they shut it down. So that was my claim to fame with that company. We went from acquiring less than 500 users a month to requiring like 5000 plus users a month.
Eric Siu 00:11:34 Got on Good Morning America, TechCrunch everything right raised our series B company companies saved. And then Neil's observing and he's like, hey.
Jasmine Star 00:11:41 What was the tech company doing? Like I don't need to know the company, but like what? Like online.
Eric Siu 00:11:45 Education. So we're teaching people coding and web design. Yeah. So that was.
Jasmine Star 00:11:48 Very hot back.
Eric Siu 00:11:49 Then. In 2010 it was super hot. Okay. Everyone should learn coding. Everyone should learn design. Right? Okay okay. Probably not. But so then Neil's like, hey, why don't you come help save this failing like agency? I was like, I work in tech. Like I'm too good for agent. I had already transcended agency before, right? This is I'm like 25 years old at this time. But then I was like, I thought about it. I was like, reframed it. I was like, but if I can save this crappy agency, I can do anything right? And so I come into the company, I come in as a chief operating officer, totally not an operating guy.
Eric Siu 00:12:17 But anyway, I come in, I take 10% of the company a year goes by company.
Jasmine Star 00:12:22 So I am a storyteller. Yeah. Where are you based? With the tech company, so I leave. No, wait. Physically, where do you live? I'm remote.
Eric Siu 00:12:29 So I'm living in LA. Still. I'm remote. Yeah.
Jasmine Star 00:12:31 So your remote with this company? Neil is an advisor to the company. Am I assuming that you're meeting Neal by way of the interweb because you're not having an office.
Eric Siu 00:12:39 Yeah.
Jasmine Star 00:12:39 So I how old am I? Like 87. The interweb, the interweb. Did you guys meet on AOL? Yeah. No. No, no. How did you guys meet? And then when he offers you this opportunity and then brings you on a c o o with 10%, like, what would it.
Eric Siu 00:12:51 Yeah. So I had met Neil probably when I was around 24 or 25. Okay. And I had actually the way I met him was I was calling him out from a blog post that he wrote because I thought he was BSing.
Eric Siu 00:13:00 And then, you know, usually when you call someone out, like you would just ignore that person that calls you out. Not Neil. No. And then he kept like responding to me. I was like, oh. And then he's like, hey, let's get on a Skype call. So he takes it deeper, like he's going in a totally different direction. So we get on a Skype call, we talk, and then from then on he just swipes me, hey, what do you think about this headline? So we're just kind of friends like that. And then he's finally like, hey, let's meet at Taco Bell, his favorite restaurant at the time. And then we end up meeting in like Orange County, Taco Bell. But he's like, hey, I got this, like, opportunity over here. So I interviewed and can we.
Jasmine Star 00:13:28 Just pause for a second? Yeah, I heard an interview with Neil and he said that he spends $250,000 a month. His living expenses are $250,000 a month.
Jasmine Star 00:13:37 He was very open and explained exactly where things went at the time. When you're meeting and you're 24 years old and he's eating at Taco Bell, what? How much is he doing?
Eric Siu 00:13:45 Like he wasn't close to that yet. Yeah. So he he was living in a one bedroom, like, apartment. He was making good money, but he was. He's very frugal, which is good. Yes. The apartments probably like 600ft² or so. He doesn't go outside. There's a bunch of spider webs and stuff, and then he has, like, an extra computer running like a follow Twitter. He just follows people on Twitter. And that's how his Twitter so big.
Jasmine Star 00:14:04 so yeah. Okay.
Jasmine Star 00:14:06 You meet at Taco Bell, you guys become friends. So now he knows you real, real human to human. Yeah. God.
Eric Siu 00:14:13 So he tried to hire me to join Krazy Egg, which is his analytics company. At the time, I wasn't interested. And then the agency thing was interesting to me because I would get shares in the company.
Eric Siu 00:14:21 Significant. 10% is pretty good. Yeah, it is, but then, like.
Jasmine Star 00:14:24 Can I ask.
Jasmine Star 00:14:25 When he offered you the 10% was it wasn't.
Eric Siu 00:14:27 It was his cousin that runs the company. So NIO only owned 10% of the company at the time.
Jasmine Star 00:14:31 So his cousin offers you 10% the same amount that Neil has in the company. Do you have to pay for it, or is it part of just luring you over from.
Jasmine Star 00:14:38 Luring me over? Oh, that's so good.
Eric Siu 00:14:39 And Neil actually vouches for me midway. He's like, he tells the founder that, hey, you're not going to keep him for 10%. So he's like, warning him that you're not okay. And so anyway, the original founder, he's he's great. So we actually had it was five people. It was one yellow guy and then four brown guys. It was four Indians. Right. So Neil and then you know his cousin and like his good friend and all that and then he's his partner. So a year goes by and then the original founder decides, you know, he wants to know he's done right.
Eric Siu 00:15:04 And then Neil tells me, because the company is still going down, like we weren't really recovering from just to get nerdy, the Google Panda update, the Google Penguin update. So back then, like it made it really hard. Like the work we were doing didn't work anymore. And and the.
Jasmine Star 00:15:16 Agency was were what specifically.
Eric Siu 00:15:18 We were doing SEO work for like Salesforce, Airbnb and all these companies. So a year goes by and then he decides, hey, it's time to shut it down. Maybe or maybe even sell it to me. And then Neil calls me on the side. He's like, hey, as a friend, there's nothing here, there's no brand equity, there's nothing. And then in my mind I'm like, I don't care like that. To me, the upside is unlimited if it works. But the downsides kept because I negotiated a clause saying that if the company fails, I would own nothing. So the deal was structured $2 out of pocket, $1 for nil shares, another dollar for his partner shares.
Eric Siu 00:15:52 So I took over their shares and then I was seller financing the rest. Right. But I was paying it through the profits of the company and I owe like probably I ended up paying out like another 100 grand or something. Okay. But again, if the company failed to own nothing and I don't even know what I was negotiating at the time, I was just like, whatever felt right to me.
Jasmine Star 00:16:06 Okay, so you get this failing company and you think the most I lose is $100,000. And you're like, basically the upside.
Eric Siu 00:16:16 Not even my money.
Jasmine Star 00:16:17 It's the company. Company's money. Yeah.
Jasmine Star 00:16:19 Oh, so you lose $2? Yeah. You lose a parking spot on Sunset Boulevard in Hollywood. Dang it. Yeah, man. Great time. Right place, right brain. Yeah. Okay, so you take over the business, and then I'm expecting to hear a success story overnight.
Jasmine Star 00:16:31 Success. No, I know I make it.
Eric Siu 00:16:33 I make it go from bad to worse. So we drop all the way down to one employee because I read this book called I take some of these books a little too literally.
Eric Siu 00:16:40 So I read this book called Let My People Go Surfing from the Patagonia co-founder, and then it talks about, you know, his people go surfing in the middle of lunch and I'm like, that sounds good. Let my people go surfing. So you know what I do? I disappear from the office and this is the whole thing. It's like, oh, I want to see people grow. It's like, no, like you need to be there. You need to be the annoying parent. You need to be the chief reminder officer. And that was the first time where I experienced me not being involved. Everything kind of falling apart. Got it. We dropped all the way down to one employee. Funny enough, I talked to that one employee yesterday. He's doing very well right now. He's like a he's getting married. Like we're still having conversations. I'm so proud of you. And you know, he's working at like a big agency, right. Anyway, we got lucky. So as I'm taking the business, we get as you're surfing as.
Jasmine Star 00:17:22 Yeah. As I'm surfing. Literally.
Eric Siu 00:17:23 Like figuratively.
Jasmine Star 00:17:25 Yes. Yeah.
Eric Siu 00:17:25 So we end up getting the number one ranking for digital marketing agency The keyword. So if you search digital marketing agency, we're ranking. So everyone's coming to us. Leads we can't fulfill anymore.
Jasmine Star 00:17:34 Because you don't have a team. There's no more team. Got it.
Eric Siu 00:17:36 So we end up sending the leads out. Neil is like, oh, I send these leads to this agency over here. They sold for 400 million recently, by the way. So then we started sending the leads there and we get like a 25 to 30% commission on those. And so we were just milking that ranking. And that was the gift that kept on giving for like two years or so.
Jasmine Star 00:17:54 Wow. So you essentially went from agency to affiliate, built up to back to an agency.
Jasmine Star 00:18:01 And fortunately we're.
Eric Siu 00:18:02 Like, we got lucky if we didn't get that. Like that dovetailed into hiring some, some key people at the right time. And I got lucky with those.
Eric Siu 00:18:08 And then I was really involved for the next 2 or 3 years or so. And then, you know, I drank the Kool-Aid on, you know, the whole Holdco stuff, which we can go into that evolution. But, you know, I think after the Holdco stuff, I really learned and now this year, we've grown probably the fastest we've ever grown, that you just can't beat an involved founder. Like there's something about found in blood but also like involved founder blood.
Jasmine Star 00:18:28 So what do you think is contributing to the pretty significant growth. I mean yes we're going to you know Herald Buffett and Munger and soo with your focus. Yeah.
Jasmine Star 00:18:36 What else. Yeah.
Eric Siu 00:18:37 So we've always been getting the leads that we've been getting I think the key thing for us and you hear this a lot when it comes to hiring is you hired people that have been there, done that. And it's not it's not. People take that lightly. Sometimes when you trust your team, you have to be micromanaging that. And what I mean is hiring people that have been there, done that, okay.
Eric Siu 00:18:53 Ideally they've been promoted not one time, but two times. That means the company really values them. They're not job hopping every year or two or so. That means they're probably not that good. So a history of promotions. Ideally they've worked for your competitors and for us, you know, coming down to the core values, again, our top core values to be improving obsessed. And that that keyword obsessed is really intense. And so we look for those examples. We look for those signals. So to me everything comes down to talent management and talent acquisition, which really isn't different in any company. How do you.
Jasmine Star 00:19:22 Measure for obsession.
Eric Siu 00:19:23 Yeah. So one question we asked, I did a webinar on AI today. It was a bunch of ypo people, white people, like one of those entrepreneur groups. Yes. One thing we do is we ask them, hey, like, what have you done with AI recently? If they're a little more kind of mid senior level, they're not junior in the career.
Eric Siu 00:19:35 What have you done recently with with I don't just say ChatGPT. Right. And if they can't give a really impressive example that's okay. Well we'll continue on that thread. We'll say okay well Jasmine tell me what's the most impressive thing you've done in your career as it relates to this role? Tell us why you consider it to be impressive. And they'll say, oh yeah, you know, well, we built this team over here and, you know, drove 10 million revenue for Hyundai or something, right. Well, what was your role in that? Well, you know, I was just an account manager or something. And it turns oh, it turns out they didn't really do much right. But they tried to take that credit. So two things you had to dive for that answer. That's going to be how it's working with them. You had to dig in for it too. It doesn't seem like they're not truthful. Right. So those are like two ways to kind of suss it out.
Jasmine Star 00:20:13 Got it.
Jasmine Star 00:20:14 Okay. So you make a few key hires. It changes the structure of the business. And when you get in and you realize I'm building an agency. The agency is still SEO focused. You are then getting those leads and you're turning them into customers. What has been the growth like? What has been the growth journey?
Jasmine Star 00:20:32 Yeah.
Eric Siu 00:20:32 So I would say it was it started with SEO, but the key with agency type businesses is and there's a really good book called The Seven Powers. It's called Seven Powers actually. It's a strategic book. And it talks about with agency specifically. The key thing that we have are the power of switching costs, meaning that the more services we can layer on, the more of a pain in the ass it is for them to cancel. So if we do a pretty good job.
Jasmine Star 00:20:54 On all the.
Jasmine Star 00:20:55 Icky turns into.
Jasmine Star 00:20:56 Sticky. That's right.
Jasmine Star 00:20:57 Okay. Yeah.
Jasmine Star 00:20:58 Okay, so you.
Eric Siu 00:20:59 Want to have multiple services and you want to do a pretty good job obviously.
Eric Siu 00:21:02 And then that grows the lifetime value of the customer. The retention goes up a lot more because we used to have Amazon before and we just helped them with paid media. We helped Amazon ads run ads. We helped with their Amazon Alexa not they're not the echo, but they had an SEO software. And we helped with another division, three divisions that could have expanded into something really big, but at the end they left and they're like, dude, we love you guys and we love all the strategic thinking you have, but you just don't have enough services. Same thing happened with Lyft. We had Lyft and we're helping them with enterprise B2B. And then it came time to they wanted to grow even more. But when we lost the deal ultimately. So we had them for like two years or so. But then they're like, dude, we didn't even know you guys had all these things. And so that to me was a big takeaway. How can you have multiple things and how do you have people that have been there, done that in all of those? And then these people will tell you what to do, but you just got to be there on top being really involved.
Jasmine Star 00:21:51 Okay, so I've known you. I actually met Neil at a dinner in L.A.. I had no idea who Neil was. I happen to be sitting across from him and I could not figure him out. Like, I sat there and I'm like, is he, like, intentionally being mean to me? And it was not that Neil is the most honest, kind, straightforward.
Jasmine Star 00:22:10 But he says.
Jasmine Star 00:22:11 Exactly what's in his mind. He doesn't give a rip what anybody says. So when I reached out and I attended one of your masterminds in Beverly Hills. I got a chance to see Neil again. Neil was 100% Neil, and I just freaking I like him, I like his vibe. I like that you know exactly where you stand with him. And I like that, you know? And it's not for everybody, I get it. But I like that, you know, 100% what he's thinking and pulls no punches. You both sat on a panel as part of your mastermind. You guys did a Q&A and you guys went on this riff that I found really fascinating around why owning an agency is the best type of business to own when a lot of people are running away from it because it's like, whoa mo money, mo problems.
Jasmine Star 00:22:48 It's like it's the people business. Yeah. So explain to me your big push for why you built an agency and why you still think it's. Or do you still think it's one of the best businesses to have?
Eric Siu 00:22:57 I think so when I took it over, I was actually ashamed of it because I cared too much about what others thought. Right? I like I came from tech like I come from like, you know, Asians are very into status, right? It's like status games, right? So it's like, you know, I'm up here, but all of a sudden, like I'm doing the service business, right? Okay. And so first I was like the first couple years. I think I was really annoyed that I was associated with it. Okay. And there's more of me problems more than anything. But what I've learned over the years, and this is what Neil and I talk about, it's every business sucks. Over time, like as you learn more about it, it just sucks.
Eric Siu 00:23:28 And it's just you decide how much pain you want to deal with. But the great thing about an agency is if you grow it really big, maybe you can cash flow five, ten, 15, $20 million. That's an exit every year. Not only that, if you do get it to like ten, 20, 30 in profit, you're multiple. Even today's day and age you can maybe sell for 15 x or so. Right. So 15 like people think agencies maybe you can only sell it for three x. So let's say you do $1 million. You can only sell it for like 3 or $4 million, which is decent right? But if you get it to 10 million, maybe you can sell it for 100,000,001 50 or maybe even 200 or so, even in a bad economy right now. So you can have a very nice exit if you want, or you can just cash flow the thing. And, you know, Neil and I had a private conversation a couple of years ago. I'm not going to give too many details, but he got a really good offer.
Eric Siu 00:24:11 Right? And I'm like, you already rich like you don't need like. Like, what are you going to do after? He's like, oh, yeah, you're right. I probably just do the same thing, Zach. That story to like, oh, you can sell it and get 250 million of the billion. And he's like, well then what would I do next? And so if you really like what you do and but everybody else is on Twitter is talking about selling all the time. But if you really like what you do, why don't you just do it for a long time.
Jasmine Star 00:24:32 He we.
Jasmine Star 00:24:32 Sat at lunch and he said that story and how it had an impact on him and how he moved to Vegas for a minute and then move back to LA. And part of the reason why he's willing, that same undercurrent of how much pain are you willing to endure? It's like taxes in California, specifically taxes in Beverly Hills. Yeah, they are not for the faint of heart. Yeah.
Jasmine Star 00:24:50 And so he said, how much pain are you willing to endure? Anything that Neal endures a lot of pain because he drives so much pleasure from the build and specifically where like building his home here in Beverly Hills and all the other pain that is associated with that. When you guys look at that growth structure, somebody looks at this business that you built tens of millions of dollars, and perhaps the way that you're running it, 10 to 15 x multiple, someone was like, man, that's the reason I want to get into. He started with nothing and was able to layer and grow. If somebody likes that idea and is like, maybe that's a skill that I have, maybe I'm strong operator service based, maybe I can build a team. Where do you suggest somebody who's listening right now? They don't have a lot of money and they don't have agency experience. I want to talk here.
Jasmine Star 00:25:31 Yeah.
Eric Siu 00:25:31 So one thing I mean, okay, a couple of threads here. So the agency the great thing about agency again is you don't need to outlay a lot of cash upfront okay.
Eric Siu 00:25:39 So that's great. Not a lot of startup costs. And then you can kind of learn at your own pace. We need. And we started this agency owners association group kind of like E or Ypo but for agency owners.
Jasmine Star 00:25:47 Oh I heard about this okay okay.
Jasmine Star 00:25:49 So right now you have to pay to be a part of it.
Jasmine Star 00:25:51 Yeah. You do. Okay.
Eric Siu 00:25:52 Now we've realized, oh, we probably only need we not only need, we want agency owners that are above six figures because that means they've already done something.
Jasmine Star 00:25:59 Oh, yes, you.
Eric Siu 00:26:00 Got it low, right. Got it. Anyway, so we started that. And we're learning from a lot of people. Like a lot of people. Okay.
Jasmine Star 00:26:06 But why did you start it. Just pure revenue networking.
Eric Siu 00:26:09 The real reason I mean, yes, there's networking revenue and like I like to build community, but long term, is there an angle for us to partner with some of these agencies or even by some of these agencies? Yeah.
Eric Siu 00:26:20 Yes there.
Jasmine Star 00:26:21 Is. Yeah. Oh my.
Jasmine Star 00:26:22 God. Yeah.
Eric Siu 00:26:23 It's funny because I brought this idea up to Neal a couple of years ago and, you know, you worked with someone for eight years.
Jasmine Star 00:26:27 You get to see all the skeletons because they want to share the skeletons, to beat the skeletons. But if you know that you have a skill set and you know that their growth and ambition is not trending towards squashing that skeleton, you're like, we can squash it. Yeah, and we could grow it. Dang.
Eric Siu 00:26:41 That's there's a beauty in that too, because there's someone we're talking to right now like they do a couple million a year. And I basically coached him up for a couple of years. And Neil, like we don't do coaching, but in this case we're kind of doing group coaching in a sense. And so we kind of get the benefit of it. And the ones that are doing 7 or 8 figures, we'll just do a mastermind once a year and then we'll meet with them in person, build more of a relationship, and maybe they can partner up with each other or whatever.
Eric Siu 00:27:01 But we're just trying to build community and eventually see what we can do there. But one thing I want to mention about Neal, going back to your question, he was really good at understanding that he's terrible with people. And you know, everybody knows that Neil. Right. So so he he's not good with people and people management specifically. The good news is, even though I didn't do to deal with him, he had Mike chemo, which is his good friend. So Mike he gave Mike some shares in the company do.
Jasmine Star 00:27:23 What deal with him.
Eric Siu 00:27:24 To start NP digital his agency.
Jasmine Star 00:27:25 His agency. Okay.
Jasmine Star 00:27:26 So you did not do the agency with Neil but Neil brought in somebody else.
Eric Siu 00:27:31 He had somebody that's been working with him for a while. So actually him, Mike and I were sitting at a hotel in SLS not too far from here, and this is probably 2020 17 or 2018. And then they're like, okay, well, Eric, you take, you take 50% and then we'll take the rest.
Eric Siu 00:27:45 Right? And then Neil understood that he needed someone operating boots on ground because he's really good. The good thing about him is he's either really good at something or he's really bad at something. Okay? And so he's really good at driving traffic. He's really good with numbers. He's his memory is exceptional, but he's really bad with like the nitty gritty around people management. So he wanted Mike and myself to take that over. And I think it would have been a great partnership. I don't think I was ready for that at the time, because I wanted to do all these different things because it was so fun, right? So yeah, it all connects. Yeah.
Jasmine Star 00:28:13 Okay. Yeah.
Jasmine Star 00:28:13 So you don't do the agency with him. You are building your own agency now. You guys have a group and then a mastermind for agency owners. There is possibility long play here to get possibly acquiring a company that does something similar to what you do. Expand your customer base and optimize. When somebody is hearing this, there's not a lot of startup costs.
Jasmine Star 00:28:33 You now know it's best to serve your customer at an LTV, make it more sticky for them. But somebody who's just starting out, I don't have a lot of money. What is one thing that you're saying? Okay, you could start an agency and be very highly specialized around one thing. Can we ideate and like, brainstorm around an idea? Someone's like, yeah, I'm pretty good with Canva or, you know, I'm kind of good with copy. Yeah. Let's start with building agency. Let's not let's make a way for people to make money with the idea of building an agency.
Eric Siu 00:29:00 Yeah, ideally it's something that's trending in the right direction. And there's a lot of demand right now. So I'll tell you what's in super demand right now is ad creatives. So someone that's really good with ad creatives because the ad creatives bring the KPIs down when you're spending a lot on ads. Community management's actually growing up, but I'm going to leave that alone for a moment. We'll just see ad creative and then organic social like those two areas.
Eric Siu 00:29:19 I would start there. Yeah okay. The community thing, it's like it's coming up, but it's like I don't think it's achieved escape velocity yet, so.
Jasmine Star 00:29:26 I'll leave that alone.
Jasmine Star 00:29:26 Okay. So let's just say somebody is really good with organic. What I see specifically in my niche of the world is people are good with organic. They take on 3 to 4 clients, they get extraordinarily burnt out, and then they get into the stuck in the minutia, and they're not making enough money to start abdicating some of the responsibilities within it. How do you overcome that? If you're like, oh, I want to grow.
Eric Siu 00:29:47 Yeah. So chances are they're probably not charging enough, because when you start out, like when I first started, I was charging like, I don't know, $20 an hour or something, $25 an hour. You underprice yourself because you're desperate.
Jasmine Star 00:29:56 For clients, right?
Eric Siu 00:29:56 But then as you're as the demand goes up, you just need to charge more. So raising your prices is huge.
Eric Siu 00:30:01 It's one of the highest levers you can pull. That's one thing. And then I think your prices go up. So you now have more margin to hire some people. Then you need to figure out, you know, I like make an Excel sheet. And then for each column you have $10, $100 thousand dollars, ten, $10,000. Just define all the tasks that you're doing right now. And your goal is to offload all the $10 an hour tasks as quickly as possible every every quarter. So you're offloading maybe 15% or so, and then maybe you're getting $100 an hour task. And so then all you're working on is a $10,000 an hour task, $100,000 an hour task, million dollars an hour task, like negotiating a deal or like some type of M&A thing.
Jasmine Star 00:30:34 So you probably get a lot of people pitching you. So I get a lot of people who will say, I will edit a short for you. I get a lot of pitches for I design thumbnails, I get a lot of pitches because I create so much organic content.
Jasmine Star 00:30:45 People come in and like, I want to shoot your organic content, like, I'll come to you. And then they charge a really low amount of money to me. I don't want to get into it because I can already tell you're not seasoned enough. What the advice that you have for somebody who, number one, is looking for somebody to help them, but then also for somebody who's trying to get pitched like, what am I looking for? How do I start scaling that?
Eric Siu 00:31:05 Yeah, go get Alex's workbook for $100 million offer. So again, not the book, the workbook. It'll just tell you what a good offer looks like. And then you, you work through the workbook and then you have a good offer. Right? Most people like what you're telling me, like you would never click on that stuff. I have people hitting me up. Yeah, I'll do it. Why don't you just do it in the first place?
Jasmine Star 00:31:20 Like, okay, slow down, slow down.
Jasmine Star 00:31:22 So we don't talk fast.
Jasmine Star 00:31:23 People listen slow. So when you say they send me something, but they didn't do it, let's go back. So I get hit up all the time. Like, can I repurpose some of the content from your podcast? Here are samples of other work that I've done. Yeah. And I'm just like zero. Yeah. And I am not watching that long form to see what kind of short form you produced. What they should have done was created an 11 second breakout from a YouTube video that they saw, because then I can immediately see how it works for me.
Eric Siu 00:31:46 And plus my blood boils too when I see that because it's like, that's the best you can do. You're trying to make it work for yourself, and that's the best you can do. So because it takes us back to the early days, right? I'm like, right, you could have done so much better. And now I'm even more turned off because that's the best you can do.
Jasmine Star 00:31:59 Absolutely. So people pitch me for thumbnails and I literally this is how like, I don't know how much I should be paying for thumbnails, and I don't know how much I should be paying for a good thumbnail designer.
Jasmine Star 00:32:12 Like get into the nitty gritty. If somebody is pitching me like, how do I know what's yeah, good or obscene.
Eric Siu 00:32:17 So the best offers I've seen and a couple of people I've gotten through in the last couple of years, like for example, our our AV guy that helps with the podcast he called DM'd me on Instagram and it was like, okay, here's a good offer. There's actually a thumbnail guide that he's like, I'm just going to work for you for free for a month. Here's an example of one. And if you like it.
Jasmine Star 00:32:36 It's been great. Yeah.
Jasmine Star 00:32:37 They get it. They get it. So he worked for you for free. He did a B testing of like how it improved after he changed the thumbnails.
Eric Siu 00:32:45 Yeah. And they didn't they weren't necessarily even better performing. They just looked a lot better. And that totally changed our art direction for our thumbnails moving forward.
Jasmine Star 00:32:54 Oh yeah.
Jasmine Star 00:32:55 If you're listening right now. And you want to work for other people, send them work.
Jasmine Star 00:33:01 But here's the thing. When I Google like average cost for a designer to create a YouTube thumbnail, they say anywhere from 25 to 35. And if this guy pitched me and he said it was 100, what kind of test can I set up? I'm like, okay, great, I'll test one thumbnail in my testing. Eight like from your agency perspective, how do we start going and judging the veracity of or talent?
Eric Siu 00:33:22 It's I mean it's worth it. If it's $100 versus 25, it just performs way better. But we had another thumbnail guy actually reach out and he did. I think he he's like, one's not enough. I'm going to do ten for you for free. And then after that it's going to be $75 per thumbnail. And I was like, that's a good deal. Yeah. And the first ten were amazing. We worked with him for a little bit, and then eventually the team was like, hey, we can just do this.
Jasmine Star 00:33:41 So the team just like.
Eric Siu 00:33:42 Took the style and.
Jasmine Star 00:33:43 Like that. Was it interesting? Yeah.
Eric Siu 00:33:45 So you also got to make sure that this is again, like if your work is not that defensible, it's pretty easy to copy. Then what do you think the business is going to do. They're probably going to just copy it and move on.
Jasmine Star 00:33:55 So so good okay. And so like let's play here again. So I get pitched for somebody to create content for me. But at the rate that they're like for me beyond time I think it's like such a low bar. It's just just be on time. Can you just give me the deliverable when you say you're gonna give me the.
Jasmine Star 00:34:12 Delivery, be reliable, be.
Jasmine Star 00:34:13 Freaking reliable. I don't even think it's that much to ask, but it's like, just hit your freaking deadline. And the people that we work with currently are editors and some marketers. They pitched me in my DM and we navigated that, and I think it's really good. How do we start setting a standard? Because when we're working with creatives, it's just like, how do you hit your deadlines and what am I holding you to? And in the agency you see this a lot.
Jasmine Star 00:34:32 So what do we do for our creative teams?
Eric Siu 00:34:34 So I have this Standards of Excellence document. So we have our internal wiki obviously. And one time I was so tilted this was during like the cleanup with the acquisitions. The last couple of years I was just like, man, we haven't defined what excellence looks like. So I spent one Saturday. I probably wrote like 4000 words that day. Just like here are standards of excellence. So every new hire, full time hire. I'll start with the full time people first. They are required to initial that document. You have to read the whole thing. You have to initial every page and that proves that you've read it. So you understand what our standards of excellence are. And that's what we're going to hold you accountable to. Whatever I can remember, I'm happy to dive into it. But we realized with our contractors we weren't holding them to the same standards. And so, you know, we did get amazing work from our full time people, but they get subpar work from the contractors.
Eric Siu 00:35:20 And so now when the contractors joined us, it's like, oh, hey, you have to read our standard of excellence. If it's not good for you, then that's okay. We don't have to work together. But that's raised the bar, and they know that we're holding them to the same standards that we hold our full time people to.
Jasmine Star 00:35:31 Okay. So they initial it. There's the standard of excellence. What happens when somebody becomes against that? An infraction. How like what is your barometer of how long?
Jasmine Star 00:35:41 It's quick.
Eric Siu 00:35:42 And by the way, the way we do things is we you know, people talk about criticizing in private. Right. Praising in public. So I praise in public, definitely. But I've kind of changed my stance over the last couple of years. Now, let's say I make a mistake in your company. Sure, that's on your dime, but I made the mistake. Why would you deprive the other people of the learnings? And so as long as you can be respectful about giving the feedback in front of other people, that's how we do it now.
Jasmine Star 00:36:07 Can you give me an example? Yeah.
Eric Siu 00:36:08 So we had this is when I was going too far. So we had a contractor recently and he was helping with our blog. And his job was to mainly focus on the AI assisted content from our podcast. And so he's repurposing a lot of content. And every week we'd go into the marketing meeting and then I sometimes I'd step in, I'd be like, hey, man, like, this isn't like I'm just gonna pause for a second, you know, so-and-so, I'm sorry to use it as an example publicly, but I want to give the learnings to everyone. Are you okay with that? He says yes. Right. So then I'm like, okay, look, this isn't up to our standards of excellence. The words you're using are from a couple of months ago. The phrase itself has has changed in this, this. So I was giving him like direct feedback. I was like, we need to back. Yeah okay. Here are the facts over here.
Eric Siu 00:36:49 And then this. This is how I feel. I feel like we're not going to be able to produce high quality work, and that's going to affect everybody here because someone's other people are going to have to cover for you. And he's like, that's fair feedback. Thank you for that. We did that for maybe probably another 2 or 3 weeks or so. And then after the.
Jasmine Star 00:37:04 Same person, same.
Eric Siu 00:37:05 Person. And then it was in front.
Jasmine Star 00:37:06 Of people, in front.
Eric Siu 00:37:06 Of people. And then we let them go. I was like, guys, we have to move on. And then my developer messages me on the side. The developer in that meeting, he's like, dude, took you long enough. So we have that. It's built in now.
Jasmine Star 00:37:17 Wow.
Eric Siu 00:37:19 We made a job offer to someone this morning and he's like, dude, I feel it in your culture. Like improvements in your water. Like, I want to drink that water. So I'm like.
Jasmine Star 00:37:26 Great, that's amazing.
Jasmine Star 00:37:27 And then also what it says for the people who are watching, like your level of respect for that person and then how long the tolerance is, and then the team can be like, yeah, thanks, chief. Yep. Took you long enough.
Eric Siu 00:37:35 And people hold me accountable to in meetings. Like they'll call me out straight up in front of everyone. And I love that. Like that's good. It's like I'm.
Jasmine Star 00:37:41 That's good. I write the checks.
Eric Siu 00:37:42 Right. And so like, I get there's a fear that's.
Jasmine Star 00:37:44 Like an example of something that somebody has called you out on that you really appreciated that maybe generally leaders would not want to hear it.
Eric Siu 00:37:49 Yeah. So one guy was like, hey, like, Eric, I think we're working on too many things right now, and I think we should focus on this thing. It seems like it has the best opportunity. I was like, and I pause for a second. I was like, yeah, you're right, we should do that because I talk really fast.
Eric Siu 00:38:01 I move really quickly. Sometimes I just need some people. Like I need to surround myself with people that would just not be afraid to call me out and not be afraid to slow things down.
Jasmine Star 00:38:09 I love that those are my favorite people on my team, people who like challenge me. And I think that the culture has become we challenge each other to make each other better, and I am not above any sort of like feedback or criticism. So okay, so we go back starting very simply an agency. Somebody has a skill set. If I was a copywriter, I should essentially be creating free copy to people as part of my pitch.
Jasmine Star 00:38:31 Yeah.
Jasmine Star 00:38:32 An overabundance that has been very specialized or personalized to that person or business. Yeah. Once you do that every quarter, you're going to be offloading 15% of the $10 an hour tasks, and then you start spending more time on the $10,000 tasks. Do you then say, if you're saying I'm building an agency, do you go deeper with the copywriting services to make it sticky? Or do you say, I did copywriting, but now I can take that copy and put it into a graphic.
Jasmine Star 00:38:59 How soon do you start expanding?
Eric Siu 00:39:00 You know what the number one cause of startup deaths are?
Jasmine Star 00:39:03 What?
Eric Siu 00:39:04 Premature scaling.
Jasmine Star 00:39:05 So so so.
Eric Siu 00:39:06 Oh, and I made this mistake many times. I still think I might continue to make these mistakes, but it's thinking that you're better than you are already and not going deep enough in that core service to make it super excellent and make it super remarkable where you're getting a ton of word of mouth. So the best agencies, maybe 50% of their customers are coming through referrals, word of mouth. That's when you know you have something really good. And then your retention rates may be like, you know, 80%, 85% annually, right. Because there's going to be churn every now and then. So if you're doing those two things and your your Net promoter score is very high with customers, okay, then you can maybe consider expanding and their clients will start to ask or say, hey, what do you think about this? We actually need really. We need a lot of help with this over here.
Eric Siu 00:39:45 You start to hear that more and more. That becomes a signal. And then maybe you start to test that with other contractors to start. And if it does really well, then you can think about hiring full time people.
Jasmine Star 00:39:54 Oh that's so good. Okay. So when you talk about I could possibly keep on making this mistake. Cool. Can we talk about a mistake that almost bankrupt your business?
Jasmine Star 00:40:02 Yeah.
Jasmine Star 00:40:03 And I just want to pause. I want to pause. I want to pause. I really want to like, say thank you for your ability to talk about these things, because you're not just talking about this big, amazing business that you've built and all the wins and successes. You're really saying, like, there was a ton of mistakes and it got very ugly. And I think it's so inspiring and powerful for people who are listening. So thank you. But yeah, let's talk about.
Jasmine Star 00:40:22 Yeah, it's not about that.
Eric Siu 00:40:22 I don't think enough people talk about these things. Like there are always I don't care what business you're there's always a time where you're going to come close to bankrupting.
Eric Siu 00:40:29 So in the very beginning, it was me not being involved enough. And I didn't learn my lesson the first time. So again, let my people go surfing, not showing up to the office, right? And then hearing from people, dude, like I had a guy that he actually taught me, digital marketing. He's like a little bit younger than me, but he's like, dude, you have your people coming in to work now wearing pajamas and slippers and watching family Guy and not doing anything right. That's where it got to. Okay. And even when that happened, I still didn't show up. Right. so it's on me because I'm like, no, you should. And my mom even called me out on this. She's she's not a business, right? She's like, you think they're just going to run the business for you? Who? Like, who do you think you are? Right. And I just had this rosy outlook anyway, so that happened the first time. Okay.
Eric Siu 00:41:06 That was within the first year. And then I would say probably 3 or 4 years ago when we're doing too many things at once.
Jasmine Star 00:41:13 Okay, let's go back to starting the business. Was how many years ago taking.
Eric Siu 00:41:17 Over the business.
Jasmine Star 00:41:17 Was.
Eric Siu 00:41:18 Ten years.
Jasmine Star 00:41:19 Ago.
Jasmine Star 00:41:19 So then like halfway into the journey of where you are now, a pattern revealed itself.
Jasmine Star 00:41:23 Okay.
Eric Siu 00:41:24 Yep. And then doing too many things again and then decided to step away and watch people do. I have this thing where I just want to watch people do it right? Like I can figure it out. You can do it too, right? Yeah. And then it doesn't work. I would say probably 3 or 4 years ago came close to bankrupting again. Okay. And so now what was.
Jasmine Star 00:41:40 The reason for that?
Eric Siu 00:41:41 Because I just wasn't involved. So you wanted.
Jasmine Star 00:41:43 To watch your operators operate instead of saying abdication like everybody goes surfing. It was like, I'm just going to step back and watch how good you are.
Eric Siu 00:41:48 It wasn't delegation, it was abdication. And and in.
Jasmine Star 00:41:52 Can we explain the difference real quick? And from your perspective as an agency owner, you're clearly winning. You're doing a lot of things great. That comes on the back of a lot of like punches in the face. Yeah. Describe the difference between abdication and delegation.
Eric Siu 00:42:04 So delegation is when you hand something off to someone but you're still holding them accountable and you're still kind of helping them where they need it. You still have your eyes on it. Abdication is you're handing it off and you're going off to do something else, right? So for me, doing something else wasn't like I was going to go like party or anything. I don't like partying. It was more so like I was just going to work on software and other things, right? Again, too many things. I was like, oh, you got it. You've been there, done that, you got it. Oh, and you read on Twitter, yeah, hire people, been there, done that and get out of their way.
Eric Siu 00:42:29 No, doesn't work like that. They like to think it works like that. But now the people that have been tweeting that from like four years ago, the chickens have come to roost and their companies are not doing well. And a lot of those CEOs have quit because, by the way, you need hired gun CEOs. I'm going to go into a little deeper here. You need hired gun CEOs, but you have to hold them accountable because they're just not going to care as much as the founder. Like there's a certain energy you have, there's a certain way you want things done, and you have this magic that you imbue into the company, and nobody can ever take that away. And I'll go to Neil for a second to he is calling his CFO like 15 times a day, right? Maybe a little too much. Right. But he's calling his people all the time. He's like, not necessarily cracking the whip, but he's on top of it. Got it. Hey, hey, how are numbers today? How are numbers today? How are numbers today? Everything.
Eric Siu 00:43:11 Good day. Right. Got it. That's what you got to do.
Jasmine Star 00:43:13 And so when you go back to 4 or 5 years ago, what happened at that point in time, it was just I stepped back. And then how long did you wait?
Eric Siu 00:43:22 I stepped back and even when I stepped back in, I was still hoping someone would step up. That took longer than it should have. But the moment I was fully in, everything was flying again. And I'm not saying like I'm amazing or anything, I'm just saying like, if you have founder blood in there, if you have multiple co-founders, that magic cannot be duplicated. And, you know, I used to think it was B.S. like, you can't have someone that's like a ten x or 100 x person. No, the founders are those ten x 100 x people, and rightfully so, because they're incentivized to do well.
Jasmine Star 00:43:48 So okay.
Jasmine Star 00:43:49 So let's go back to where you are now. What is the future version of you if you look at ten years first, kind of like gut punch second gut punch, full in focus, dialed in, holding people accountable, delegation not abdication.
Jasmine Star 00:44:04 What do you want in the next five years?
Eric Siu 00:44:06 I just want to keep playing the game. So I think a lot's going to change in next 510 years and we can talk about that. Yeah, but I want to play this until I die. I just want to keep playing because to me it's just like my joy. Everything I get. I had Neil take this personality test. Right. So for him it's really funny. So I'm what personality test? It's called principles. You have you taken it. No, no. Oh my God. Best personality test ever okay. So you take watch. We can compare results after. It's like 90, 95% accurate. I even use it in principle.
Jasmine Star 00:44:31 You as an university or you like.
Jasmine Star 00:44:33 Thank you.
Eric Siu 00:44:34 Okay. It's from Adam Grant and Ray Dalio.
Jasmine Star 00:44:36 I love Adam.
Eric Siu 00:44:37 Best thing ever. So go take it. Works for any type of relationship whether it's work your spouse whatever. Okay so I look at Neil's thing and it shows that he's like 1% intrinsically motivated.
Eric Siu 00:44:49 I'm 99% intrinsically motivated. And we talked about this on the phone. So he's like, yeah, I never thought, Eric you cared about money like ever like meeting you the first time. I don't care. Right. But at the same time like it's a nice way to keep score. And so like, you know, he's very money motivated and that's fine. That's his personality for me. I just want to keep playing this game. And I have no doubt in my mind, like I'm not tied to the outcome at all. But I'm like, yeah, I think we're going to build. It's going to be a great outcome, right? It could be could be nine, maybe ten figures. Who knows? Right. Like a lot of people in companies become that. But it took me once I got punched in the face 4 or 5 years ago. That was when I, when I really realized, like, I'm just going to focus on one thing.
Jasmine Star 00:45:25 So if I understand it correctly, you and Neil are competitors.
Jasmine Star 00:45:29 Yeah. How much of a competitor like. Yeah. Apples to.
Jasmine Star 00:45:31 Apples. Service to service?
Eric Siu 00:45:33 Not I mean, we have a couple of related services. They have other things, and we have other things that they don't do. So okay. But I would say that the main difference with us is that he's got this global operation right now, and he's focusing on just acquiring globally. He got a little too I knew he would get aggressive. And we talked about this on Monday. He's like, yeah, I got a little too aggressive. But it's global expansion for him. And for me I'm more focused on the tech of what's going to happen in the next five, ten years or so.
Jasmine Star 00:46:00 What do you mean the tech.
Jasmine Star 00:46:00 Like let's talk there. Let's talk about what's happening.
Eric Siu 00:46:03 So what I tell my team almost every single week right now, I was like, guys, we need to have a not just a high talent bar, but an unreasonably high talent bar. Unreasonably high. And the reason for that is because I believe that in the next five, ten years, we can only afford to hire the top 5% of people.
Eric Siu 00:46:17 And that doesn't mean everyone else is trash. It just means for us specifically, you know, someone like you, you're going to have a thousand, 10,000, 100,000 AI agents working for you or drop in remote workers, right? They will understand all your thought patterns or understand all the things you've done. They understand all your weaknesses. They'll understand all your preferences as well. And what you're lacking right now is just manpower, right? You're going to have infinitely patient robots that understand everything about you and the work way better than you. And so that's going to be a lot of leverage. And imagine if we have only the top 5% of people, they understand how to do all this stuff. That means that the business model changes. So for typical agency, maybe you're charging, you know, a retainer $1,000 a month, 10,000 $100,000 a month, whatever. Maybe you're charging percentage of ad spend. I think that model is broken. I think the way of the agencies of the future and a lot of businesses is you charge on performance or you charge on a usage basis.
Jasmine Star 00:47:07 So,
Jasmine Star 00:47:08 So what are you moving to.
Jasmine Star 00:47:10 Towards.
Eric Siu 00:47:11 Those two? Because I have a friend, two friends, actually, I'll call it two friends with agencies. One agency does a over a billion a year in revenue. And it's all pay for performance.
Jasmine Star 00:47:20 Meaning that.
Eric Siu 00:47:21 Okay, so if so, Jasmin, I buy ads for you, okay? You're not going to take on any risks. I'm going to spend. I'm going to take on the risk. If I perform, you pay me on each customer I acquire for you. That's it. Right? It's an affiliate model, but not many agencies do that. So that's one. I think the way we're going to be able to track.
Jasmine Star 00:47:37 Wait. Pause.
Jasmine Star 00:47:37 Yeah. Is that what you're doing now.
Jasmine Star 00:47:38 No.
Eric Siu 00:47:39 We're moving. Like there's a lot of things that we're building right now that are moving in that direction. I've always wanted to do that.
Jasmine Star 00:47:43 Do you think.
Jasmine Star 00:47:44 Because you probably be one of the first agencies to move one of them for sure.
Jasmine Star 00:47:47 Do you think you're at a competitive disadvantage for a point, or are you attracting somebody who is a lot more risk averse, or somebody who expects more? Do they get become resentful down the line when they're just like, they're making so much money off product and we absorb it cost that they don't?
Jasmine Star 00:48:01 Yeah.
Eric Siu 00:48:01 So I think a couple of things. So one, I would say if if we want to take a risk with like a newer service, maybe that's 10 to 20% of our portfolio. And then the other 80% is like stabilizers. So I can go out and take my shots. And in terms of the resentment, so the friend that does a billion a year, they work with the same companies. It's been the same companies over the last ten, 15 years or so. And then the other friend, they do 40 million in profit a year and they only have like 40 employees. Wow. So that's 1 million in profit per employee. That's that's huge.
Jasmine Star 00:48:32 Huge. Yeah.
Eric Siu 00:48:33 And so and they've worked with the same clients too.
Eric Siu 00:48:35 And so if you do by the way, let's say, you know your client decides to cut you out. Oh my God you're making too much money. Great. I'm going to go to your competitor. I'm going to tell them all the numbers and I'm just going to roll this, this, this over there. And that's exactly what the second friend does.
Jasmine Star 00:48:49 Wait.
Jasmine Star 00:48:49 So do you as an agency not have a non-compete or like, do your clients request that of you? Because could you not just use the same theory and apply it across the board?
Eric Siu 00:48:56 Typically there's no non-compete.
Jasmine Star 00:48:57 No. Okay. So even if.
Jasmine Star 00:48:59 You said, okay, that's fine, we're not gonna work together, but go to your competitor. Could you already not be working with their competitor?
Eric Siu 00:49:03 Well, you'd want to focus all your efforts on one you shouldn't do too many like you should have one pay for performance client per like niche ideally. So he he's focused on like the finance niche. He doesn't try to take on too many different clients.
Eric Siu 00:49:15 Yeah.
Jasmine Star 00:49:16 Wow I'm fascinated. Yeah. So if you had to guess time horizon to that what do you think?
Eric Siu 00:49:22 I think probably the next five years or so. So like we're building a product right now, we're building multiple products, but one is a product that will align your landing pages with your ad creative and your Google ad groups. And so that should lift conversion rates up. We might just give that away for free. And but the cool.
Jasmine Star 00:49:38 Thing is that away for.
Jasmine Star 00:49:39 Free to who?
Eric Siu 00:49:40 To anybody that wants to use it for themselves. Right. Any customers because it's going to generate leads for us. Right.
Jasmine Star 00:49:46 Do you? I do yeah.
Jasmine Star 00:49:47 I feel like my mind is being blown right now.
Eric Siu 00:49:49 And so if we do that, well, here's the other thing. Let's say that's just a feature. But all the enterprise companies or mid-market companies that connect their ad accounts to that, we're going to have a lot of data and we're going to be able to story tell with a lot of data.
Eric Siu 00:50:03 There's a lot of case studies we can make. Plus we can probably build other stuff that's tied to that data. We can see all the inefficiencies across different industries. There aren't a lot of products out there that have a lot of ad data.
Jasmine Star 00:50:13 Are you an agency that's really leaning more towards tech and your relation to investment and time spent with tech? How is it industry wide or do you head more in that direction?
Eric Siu 00:50:22 I tend to look a lot into the future. That's probably my strength. So Neil doesn't like Neil has said this like I'm really good at looking into the future. He's more about. He's like, he will look at whatever works and just go really deep on it. I like reading a lot. I like talking to a lot of people about the future and seeing what's happening. We can reprogram our bodies. We can Crispr ourselves, right? There's a lot of things we can do. Yeah, I try to stay at the cutting edge with that stuff. Yeah. Okay.
Jasmine Star 00:50:44 So as we tie things up, we went very high.
Jasmine Star 00:50:46 There's different levels of entrepreneurs who are listening. Let's go back to the person. Put yourself in the shoes of the gritty entrepreneur who has a skill or a talent who has. I think they have the ability, the desire to build out an agency. They're here and you say you want to build. What advice would you give them based on what you're seeing right now? Is performing what they should be doing? How do they spend their very limited time to get the maximum return? Yeah.
Eric Siu 00:51:09 So your question is more around how should they invest their time right now.
Jasmine Star 00:51:11 Yeah. Specifically in growth. Yeah.
Eric Siu 00:51:13 So I would maybe spend I try to read at least an hour to two every day. Let's just say an hour. So you're reading an hour a day whether it's your reading newsletters or you're reading books or whatever, you're just trying to get better, right? Because you're gaining outside perspective that way. Or maybe you're in networking groups or masterminds or whatever. So that's one piece of it. The other piece, this is something that's starting out.
Eric Siu 00:51:32 Yeah. Okay. So somebody is starting out. You should be focusing on getting you're out. You're the Jenner. You're doing everything. So you're out there getting business. So a lot of business development that's going to be a large chunk of your time. Let's call that I don't know. Let's say that takes 2 or 3 hours of your time. I remember in the very beginning this was before we had Lume or anything. I was taking people's I was making these 20 minute videos that took forever to upload, and I was just like analyzing your website, hey, here's all the things that are wrong with your website. And I would send like 20 of those a day. It was a lot. So let's see, I think I was probably spending like 4 or 5 hours on that per day. And I was also writing on Quora as well. I was writing on all these engaging all these communities. So you got to be scrappy, like, yes, you got to find an amazing offer. The move now is probably to DM people that you really like, and eventually you get that flywheel going, you know, maybe three, six months into it, you're going to start to convert people.
Eric Siu 00:52:19 I remember I wrote like an answer on Quora and then someone randomly reached out, hey, I saw this answer. Like this was like six months later, he's like, hey, we'll work with you $30,000 a month contract, right? And I was still working, like at a job anyway. So a lot of times spent on business development and then probably the rest of your time you're spent on fulfilling meaning that you're actually doing the work because you know, you're broke right now you have nothing. So you're trying to get better mentally, right? You are a fulfilling you're actively doing business development, you're doing outreach. And then the other thing, too, is you got to take care of your body, right? You take care of your body. I take care of my body. It's like you don't take everybody. You got nothing. And so some people just let themselves go. And that just blows my mind. I don't know how, right. But I think it's those four things.
Jasmine Star 00:52:57 Thank you so much for that.
Jasmine Star 00:52:59 And so knowing what you know now, there's a person who says, okay, I'm going to go in, I'm going to start with my biz dev, I'm going to be sending DMs, but they're going to be personalized. I'm going to show them what I can do. I'm going to be spending my time on the fulfillment of that. Where are they going for business growth? Let's go. Copywriter, thumbnail designer and organic marketer. What platforms are they going to?
Eric Siu 00:53:20 So wait, this is a thumbnail person. This is like a three.
Jasmine Star 00:53:23 Let's go.
Jasmine Star 00:53:23 No, no let's go to three different examples. Does the platform change based on the services that are rendered for a burgeoning agency owner? Yeah.
Eric Siu 00:53:30 So okay I guess we'll start with thumbnail person first. So thumbnail person, the first hire I would recommend is probably one person to take on the fulfillment. That worked out really well for me. And then the second one would be the executive assistant to take on a lot of the I hate admin work, I just can't do it.
Eric Siu 00:53:45 I'm like 6% detail oriented, I just can't. So so there's that. So one person take on fulfillment, the other person like an E to take on the admin tasks. And then what worked for us is we brought on that operations person because we had so many contractors. Once we brought on that person, his name is Daniel. Everything took off like because he's really good at recruiting people too. And he like we would just vibe on everything and he just understood people talk about the visionary integrator. Yeah, he was the integrator.
Jasmine Star 00:54:08 How did you meet him?
Eric Siu 00:54:09 Job posting. Got lucky?
Jasmine Star 00:54:10 No. Got lucky.
Jasmine Star 00:54:11 And did you use the word integrator because I'm creating a podcast episode on like what kind of word you should be using. And so obviously if you use integrator, you're very familiar with Gina Wickman. But is that like a subculture?
Eric Siu 00:54:19 No, no, he didn't even know what it was. But yeah, he he took a shot. And you know, thanks to him it worked out.
Eric Siu 00:54:24 Wow.
Jasmine Star 00:54:25 And how long are you guys working together?
Eric Siu 00:54:26 Well, he's not here anymore, but he, like, he'll text me every now and then, like, with other screeners and like, oh, my God, like, you know, and I, I apologize. I was like, I'm sorry I wasn't involved. He's like, dude, you were the only CEO we needed, right? I was like, oh, that's nice to hear, right?
Jasmine Star 00:54:38 Oh, so yeah, you know what? I couldn't think of a better way to round out this podcast, do the ups and the downs and starting and being extraordinarily gritty. And what you're proposing to people is nothing that you have not done yourself. Yeah. And so to have a former trainer come to you and say you were the CEO, that we needed at that time is a really beautiful testament to who you are. And five years from now, when you have really transformed the agency industry, but specifically your own agency, I think there's many people who people who say the same thing.
Jasmine Star 00:55:03 You were the CEO that we needed then, and you're the CEO that we need now for people who want to know more about you, learn more about you, perhaps join that agency mastermind that you and Neal are hosting. Like, where do people go and get the goods?
Jasmine Star 00:55:13 Well, thank you for that.
Eric Siu 00:55:14 One final thing I'll say both my my elementary school friend and I, like we grew up together. We're just like, we're really anxious. Right. And now as we're, you know, in our late 30s, we're just like, oh, you got to do to make it all work. Just surf the wave. You try to control it, you sink. Right. As long as you're surfing the wave, taking the ups and downs like you will build a big business. I think people just get too anxious and they give up too quickly to tap out too quickly. So that's the final thing I would say. But if you want to learn more about the agency owners association, just go to marketing school slash agency and.
Jasmine Star 00:55:42 Then we'll link it in the show notes.
Eric Siu 00:55:43 You can find me on all socials at OSU. So Instagram, Twitter and all the things. But yeah, thanks for having me I appreciate you.
Jasmine Star 00:55:50 Thank you so much, ladies and gentlemen. Thank you for watching and listening to The Jazmin Starr Show. My goal is to talk about the business of the business, to give you an inside look about things that we often don't talk about, and to see if there's resonance with you, or perhaps investing in some of the guests that you see here today. For more information, you can definitely check out Eric and be sure to tag us both on Instagram if you found this episode helpful or compelling. Again, thank you for watching and listening to The Jasmine Star Show.