Arlen: 0:03

Welcome to the agency health podcast, where we dig deeper into key agency health topics, the what, why, and how mining actionable insights to build a better firm. This episode is part of a mini series on beginning with the end in mind. As we'll find building for your exit from the start helps create a thriving agency that delivers great value for you. Your team and your clients on this episode, I'm talking to Peter Kang of barrel holdings about optionality and insights from over 18 years in the agency space. The agency he and his co founder started in 2006 has grown into a holding company. Actively incubating, acquiring, and growing agencies. Peter has written extensively about his agency journey for years, sharing a wealth of in the trenches insight and perspective. So, there are so many options for where you take your agency, right? That any owner has to consider. Do they want to stay small or grow and go long? Or sell to your team? Sell to an outside firm or investor? Merge with another agency, and of course many agencies just shut down at the end. You've taken a different path building a portfolio of agencies on the foundation of your first, and I'm really excited, Peter, to dig into the lessons from your journey with you.

Peter: 1:31

Yeah, well Arlan, thanks for having me. Yeah, this is definitely a topic I'm always excited to talk about and you know, I think part of, you know, where a lot of the thinking around, you know, This holding company structure came about was, you know, when my co founder Seawook and I, so we started, you know, Beryl back in 2006 as the first agency, I was 23, he was 21, you know, just super green and just trying to figure stuff out as we went along. But, you know, I think around, you know, 15 years in, after we had a range of experiences and, you know, just kind of been through that kind of, you know, the, the fires of, you know, agency life, we, we wanted to kind of, you know, Take a step back and, you know, really ask ourselves, Hey, where do we, you know, want to go for the next 10, 15, 20 years? One thing we always were aligned on was, you know, that we want it to work together. We value our friendship and just, you know, the complimentary nature of our skill sets, our demeanor. Yeah. We're very much, uh, you know, We can say opposites in some ways. We work really well together. We just have a good time whenever we're collaborating on things. And so, yeah, we thought, hey, with that as the foundation, what's the structure in which we can keep this going? We wanted to make it interesting for ourselves. We wanted to make it challenging. We also wanted to, you know, really embrace the journey of it all. And so, you know, we, we cast about for a lot of different ways to do this. You know, we thought about, hey, like. Does this mean maybe we sell Barrel and, you know, with the proceeds of that sale, try to figure out something else we can do. Do something else you'd enjoy as a group. Exactly, maybe. But then, you know, the more we thought about it, and just remember this is 15 years in, and one of the things that we kept telling ourselves was, you know, we have probably made, and part of it is a function of like, having started, So young slash like inexperienced, we told ourselves, well, we had an expensive education where we've probably cost ourselves, you know, millions of dollars along the way of like making mistakes and being dumb about things and, you know, just not knowing what to do. But, you know, nonetheless, that's education. Those are, that's experience that we. We now have a knowledge that we valuable. Yeah, it's valuable knowledge. And so we're like, what if we were to distill this and apply it to, you know, another agency business from scratch? Like, what does that look like? I never fancied myself kind of going into the coaching side of things. Cause you know, that's another way that you can have impact and, and kind of share knowledge and learnings. It's just something about like my personality and Seawooks as well. You know, I think we're just too geared towards like. Hey, if we're doing something where we're, you know, leveraging our knowledge, like we want maximum skin in the game if possible and, you know, kind of see that. So yeah, we were like, what's the structure that kind of aligns with that kind of say risk profile maybe, and also allows us to really put our knowledge to work. And so that's where this concept of like, okay, maybe it is, you know, some kind of a holding company structure. Maybe it's something where we can launch or acquire new agencies. And of course, like just, you know, some organic developments like spinning out. Our first agency out of barrel, Valtadoc, uh, which was a web support and maintenance agency kind of gave us more confidence and to think bigger. But once we kind of had that kind of possibility in mind, and we, you know, we started going down the rabbit hole of like, wow, like if we had this holding company structure, we can make this kind of a permanent entity that we can then, you know, take the cash flows from the different agencies within it, and then do a lot of interesting things, incubate, launch new agencies, acquire, merge agencies together and make even bigger agencies. Do what we need to, and much like, you know, Warren Buffett and Charlie Munger, maybe we'll do this into our, you know, 80s and 90s, and, you know, it'll be a, it'll be a good time, so that's, those are all the things that we talked about, and so, yeah, that's where we,

Arlen: 5:09

yeah, that's, that's really insightful, and, and part of what I'm always curious about is, whatever approach you take, Why did you take that approach? And what can others learn to say, Hey, that might be good for me or not. And some of what I'm hearing you say is you had a group of partners that you really enjoyed working with. And so you wanted to keep, keep the good thing going, you know, keep working together. But you don't necessarily want to keep doing exactly the same thing for decades, right? It's hard to sustain interest in that. So you say, Hey, what's the next challenge? And, and you talked about how. You had this expensive education that you put yourselves through, right, building Beryl and, and so, hey, how can we leverage that? So other people maybe who, who have that same sense, we love working together. We have a good thing going and we've learned a lot about how to build an agency and maybe how not to build an agency. And so someone who ticks those boxes might also find this concept really interesting for them. Exactly. Yep. As you, as you think about that journey, you talked about The first company that you added to the portfolio that you had barrel and then adding vaulted oak, what did you learn from that first agency that set into your desire to do this again? You know what? What about that experience encouraged you?

Peter: 6:26

Yeah, I mean, I think first and foremost, it was just the uh, The immediate success, like that makes everything a lot more attractive. So, you know, the way we structured it was, you know, it was about, let's say 18 or so accounts, client accounts that we thought no longer fit barrels of focus, and we spun that out. One of our employees at the time, Jason, he became the co founder and, you know, basically the head of this new company. I mean, he's super capable, super smart, and he, like, right, right from the bat, like, you know, he had very clear ideas on, like, okay, this needs to be run different than Beryl. This process needs to change to kind of reflect the type of clients that these are, and so Yeah. He set about making these decisions and we, we didn't have to, you know, oversee any of that. And like, we just fully trusted his judgment on these things and where we were trying to be helpful was okay. Like maybe some of the back finance ops, back office stuff, maybe some of the recruiting stuff for key roles, you know, I'm definitely like bringing some lead deal flow to the mix. Those are the things where we help them. But then in terms of the ops itself, like, you know, he was able to run with it and, you know, in very short order he was able to double and then triple that kind of base that we were. I want to see business with and so seeing that we're like, huh, like maybe structure does allow for success to be faster, more quickly achieved. And so that's, that was a big catalyst for, for, you know, kind of going into the next opportunity.

Arlen: 7:46

Yeah. And, and two things stand out to me there that are really interesting. One is how you're describing when you got out of. Jason's way, Jason Wright for Vault A Doke, when you, when you kind of got out of his way, and he had space to spread his wings and to, to make an impact on that unique new agency, it sounds like he was able to do a lot that he couldn't do before in the previous company structure, or, or didn't feel empowered to do, didn't feel like he had the mandate to do. So that, that's really Intriguing, you know, why, why would someone create a new agency instead of just having more divisions under one brand, right? Like a lot of agencies, that's the approach they take. Let's have a bunch of divisions. Maybe we do have a practice lead or a lead for that division, but they probably don't have the kind of latitude or responsibility that someone does leading an agency in your portfolio.

Peter: 8:36

Yeah. And I think it's definitely depend on every situation and scale and all those things. You know, I, I do think. You know, for where the starting point was and definitely like the ability to move fast was, um, you know, something Jason really Needed and the funny thing was we did try to have a similar setup within barrel Yeah, it just never had the same velocity and they were always competing, you know Kind of interest like for example resources were always tied up in different ways. And so, you know not having Uh, the ability to kind of have dedicated resources to grow this thing made it just so hard and the moment things got busy with more, you know, kind of valuable clients, so to say, so to speak, that are bigger clients, you know, the, the smaller accounts would get, you know, the sacrifice and I think that made it hard for Jason to grow it internally.

Arlen: 9:26

Yeah. Yeah, that makes sense. So being able to make decisions and prioritize based on a different set of criteria instead of one that applied to barrel before, as you've been building this portfolio, obviously, selecting great leaders is really important, whether it's an agency that you're acquiring or one that you're spinning off and building. What are some of the principles that help you to select great leaders for your agencies?

Peter: 9:55

Yeah, I mean, I think really it's, you know, boils down to kind of like one word we always kind of fall back on is like, this person has to be proactive. There's a lot of hats to wear, you know, and these are agencies, you know, right now are small and growing, right? They're, you know, very boutique. Some are, you know, under 10 employees. Some are in that kind of like, you know, under 50 employees. And so You've got to definitely be comfortable changing gears a lot. You have to kind of, you know, think about, okay, like what are all the things I got to juggle in a day. And that only happens if you have that kind of proactive nature where it's like, okay, I'm not going to wait for the client to kind of ping me. Let, let me go ask about this. You know, I need to find out if, you know, the contractor that we're working with is, you know, going to complete this work. Let's not wait till the last second to find out that they maybe did it. Let's. Ping them and get that right now. It's that kind of energy of like always, you know on on on go go go And you know that could evolve in the future, but like for the most part I do think there's you know This we're like in that entrepreneurial phase. Yeah a lot of these agencies and so That level of proactiveness is, is key. And then along with that, like, I do think if you're going to be a positive, proactive person, you also have to be super organized. You know, just kind of make sure you can prioritize what you're doing. You know, you're able to follow up. No, no kind of loose threads or anything falling through the cracks. I think it's, it boils kind of down to those two. And then, you know, one thing we always emphasize is like, Yeah, speed of response just to emails, you know, slack messages, things like that. Like

Arlen: 11:27

good signals for you.

Peter: 11:28

Yeah. Kind of have to really show that, you know, you're on, on it, you know, in that regard. Yeah. It's always a flag when, you know, those things are lacking.

Arlen: 11:36

And how do you weigh when you're selecting a leader? How do you weigh past experience versus potential? The qualities you're talking about are, are more a personality and approach to work than experience related. Um, and, and so yeah, I'm curious about that build versus buy mentality for you. Yeah, yeah.

Peter: 11:55

No, and I So, you know, few of our, I mean, most of our agencies to date have been, you know, like started from scratch, you know, one that we acquired where the founder exited and then we brought on another CEO to run it for the most part, like the experience factor hasn't been as important to us in that regard, like a lot of this You're in that scaling phase, the growth and scaling phase of a, of an agency. And so, you know, for example, um, you try to bring it and we've interviewed folks that were like super experienced in season, but like, there's something about the degree to which they want to be scrappy, the degree to which like, Hey, they kind of got to get involved in the work for some of this stuff, hands on. Yeah, we need someone, we need people that, you know, are down to be hands on. And so I think that. Tends to make it like, Hey, like these are folks that could have been like senior, you know, kind of, uh, individual contributors, or maybe like early managers at some other companies. And then kind of, you know, are, has stepping into this leadership role in a more entrepreneurial way. Now, as we, um, look to acquire some larger agencies, that's going to change of course. And then even, uh, for barrel, the agency that, uh, you know, my co founder say, what can I, um, stepped out of, uh, earlier this year, you CEO who took over Lucas, I mean, he, he had been with the company 10 plus years. He had been. You know, our creative director, you've been our chief experience officer, so he's, he's had a lot of It's a

Arlen: 13:11

different season for that agency than a lot of these names. Exactly. Yeah. So

Peter: 13:15

that one we, you know, experience was important and, you know, luckily we already had that person in house.

Arlen: 13:20

And one other thing I was really curious about is the terms and the advice that you would give to agency owners who are looking to take a division, you know, spin that out as a separate agency, potentially, how would you go about thinking about terms for those leaders? You know, the way that they're incentivized the way that they participate in the value of the agency as it grows and develops. What advice would you give along those lines?

Peter: 13:44

Yeah, I mean, I think this is kind of related to your first question of like, what's kind of the exit it. Yeah. Yeah. Potential. Cause like, I do think, you know, it has to be clear, like, Hey, what is the, what is the end game? You know, what are we building towards with this spun out agency? Now, if you go, Hey, look, there's no like clear exit plan, but it's a longterm, you know, cash flowing agency. Then I think the terms with whoever's leading this has to be very, um, favorable on the, on the profit sharing side of things. Comp has to be very enriching for this person on a year to year basis as they Kind of unlock different, maybe revenue and profit milestones to get bonuses to like, so, you know, you can kind of structure in a way that they can make good money along the way if, if there's no kind of clear exit in sight,

Arlen: 14:28

that growth in value is there and they're playing the long game. Yeah, yeah,

Peter: 14:32

exactly.

Arlen: 14:32

And, and it was just a compounding thing

Peter: 14:34

there, but if, if there is maybe, let's say like a clear five, seven year plan of like, Hey, we're going to grow this. We're going to maybe, you know, do some acquisitions on top of this agency and we want you to really, you know. Press hard on the gas and grow this, you know, top line, bottom line, you know, then you might. You know, you might give them a good base with some profit share, but a lot of it is going to be deferred and, you know, reinvested so that the exit could happen faster. And it's really buying into that vision of like, Hey, you're going to get a nice, you know, chunk sum at the end of Participate

Arlen: 15:04

in that exit directly. Exactly.

Peter: 15:06

And, uh, and give them a very significant chunk so that they feel like, Oh, I'm a real, you know, important driver of this. We try to make it a point to, you know, be pretty fair on those terms.

Arlen: 15:17

So in general, just like with your portfolio overall, think about what are we trying to do with this agency? Where is it going? Is this a long term complement to the portfolio? Is this something that we might want to, you know, maybe it's an agency that you've acquired, and so you want to get it to a new milestone and then potentially sell it. And so wherever you're trying to take that agency, keep that in mind. Align the incentives really well with that leader or few core leaders of that agency.

Peter: 15:45

Exactly.

Arlen: 15:45

In 2020, looking back a few years now, you shared a great post on like a no exit way to think about building an agency. And I know your thoughts have evolved since then, obviously. But what made that appealing to you at that moment in time? And what do you think has led to an evolution in your perspective over more than four years since then?

Peter: 16:07

Yeah, it's interesting because like part of it, I think, was what I mentioned with like, There are companies, you know, that maybe you never get to that point of, you know, kind of life changing exit, uh, amount, uh, you know, like some kind of, you know, huge multiple on whatever you built and then you get out with a big payday. So, you know, I was thinking about like not all agencies are built to kind of achieve that you can work hard and you can build something great, but like, you know, sometimes like the nature of what you're doing or, you know, just the way you're structured, you know, as an org just doesn't. You know, you're just not going to get a huge, may not lend itself to a really attractive exit. Yeah, exactly. And so if that's the case, like, you know, I said, well, you could still structure it so that you're making, yeah, healthy, uh, sums and, you know, pay yourself a nice distribution. You could take that money home and you could, uh, you know, invest wisely, buy some real estate, whatever. And then like, you can really have this, you know, never having to exit, but you could still, you know, live a really. Great kind of, you know, successful life in that regard. Kind of a little partial exit every year, almost, right? Yeah, exactly. Yeah, yeah, yeah, definitely. And so. So, you know, I, I thought about like, look, that's always an avenue that's available. So you don't, you don't have to feel pressure, like, you know, just go with the flow and whatever. And, you know, if you embrace that, like with this longterm horizon, you know, you can kind of optimize, you know, the running of your agency to kind of fit that lifestyle. And, you know, I think people, you know, sometimes use lifestyle, uh, business pejoratively, but like, I'm like, I think that's, you know, like you could have a great outcome with a business that's kind of designed to match the lifestyle you want to lead and you're not. You know, sacrificing, you know, the lifestyle you want now, you know, while still kind of economically benefiting from that business. So that was part of it. It's funny because like, I think, you know, just writing that was helpful because, you know, now I'm like, Oh, in many ways I've like carried that, those principles over to Barrow Holdings because like, you know, now, you know, we've kind of designed this, um, situation where Seiko and I, we, we've been able to take ourselves out of the day to day of the business. You know, we still work hard, we do a lot of different things, but then we're also. You know, at a different stage of our lives where it's like, you know, we're not working around the clock like we once did maybe in our twenties and thirties, you know, just there's family obligations now that like really, you know, have shifted kind of how we They're important. Yeah. Yeah. And so prioritizing those a little bit. Or doesn't that, and we could design the work to kind of still be very, you know, productive and effective and high leverage. And at the same time. The time horizon is very long. And so that's that. The big part of it.

Arlen: 18:36

Yeah. So there's not that pressure. I mean, like you talked about earlier, you really enjoy the people you work with the teams that you're building. And I think a lot of people after they exit, they do feel pretty lost for a while, right? Like their identity, their, their team, all these things that are, and it might be a couple of years of transition, but at some point that's gone. And it can be hard to start something else that has that same meaning to them. So you've come up with an approach that allows your relationship with the businesses to evolve, but doesn't require that kind of stark, you know, finish line. Now, at some point, you can have that, right? That option is there. And that was one of the things that really interested me when I was reflecting more on your model is that unlike a single agency with a bunch of divisions in it, having a portfolio of smaller agencies, like the size of these divisions may be in a larger agency. Um, you like to use the word optionality, and I think that feels so true there because you can hold one of those agencies for a long time. It can be a great complimentary part of the business, but each one of those agencies can more easily than have its own set of options. Maybe, maybe it is bought out fully by the leadership team, or you sell it to someone externally, or It gets folded into one of your other agencies. There's so many options for each one. And it feels like when you have a single entity with divisions, it's probably a little harder to make some of those changes than if you've already created these separate agencies. What, what do you think about that optionality for your whole structure?

Peter: 20:18

Yeah, no, like that is the key word. And we, we always talk about it. You know, one of the things that. Like a lot of this goes back to and you know, what makes it so appealing for us in the long run is like it's It's really tied to like this if we talk about like what is the what is our purpose and you know Kind of what is kind of our mission aspect of it and and a lot of it for us is like yeah Helping to facilitate for you know Just kind of people to become successful and kind of realize their full potential and like we see Barre Holdings as the canvas for that because it's like we're You know, essentially creating these business structures where we can, you know, bring leaders in and really like set them up to really realize their full potential. And part of that journey is going to be, you know, a discussion at some point of like, Hey, you can continue doing what you're doing and, you know, continue to, you know, do well economically as well as, you know, just grow in your skillset, your, you know, the way that you're growing your client roster and, you know, the, the base of employees and et cetera. But then at some point they might also say, Hey, I got my fill of running an agency. Maybe I'm ready to do something else or a like I, I, I really think in my, in my story, you know, having an exit notch on my belt is very important. Okay, cool. Like we'd love to facilitate that. And that's optionality where we can kind of co create that future with agency leaders and, you know, help them kind of get there. Cause yeah, a lot like, and I think that's going to be, you know, something that we're looking forward to in the next, you know, honestly, three, five, seven years, which is like, you know, some of these agencies, they're going to. Where it's like, Hey, some people want to move on. Some people want to exit. Some want to push towards something. And, you know, we'll, we'll also be like, Hey, look, these options are coming from the outside. Are you interested in taking them up on that? And we'll have that discussion as well. So yeah, optionally, you know, I think it is wonderful to kind of have, you know, to be, uh, situated, uh, to, to experience that. And yeah, we're. Continue to optimize for optionality.

Arlen: 22:09

Yeah, I really love the way, over and over, you bring people back into the equation. That, yes, there are certainly economic and business benefits to the way you're structuring everything. But there's a lot of people benefits as well, you know, you're able to capitalize on the potential and capabilities of these leaders. You're able to help them to reach more of that full potential, have a more rewarding experience, you know, add more value to these, these teams that are growing, but are smaller than everyone put together, obviously, right? So you're able to do things with these smaller units from a people standpoint. And. And that optionality from the standpoint of your leaders, I mean, agencies are people businesses, right? So I think it's so neat the way you've, you've put together this model that capitalizes on that. How, how do you think about developing your leaders? Are there tools, approaches, habits that you've found? Really help you and building great relationships with them in their new role. You know, maybe you had a great relationship before, but establishing that relationship as people are are leading these agencies and developing them as leaders. Any, any advice or perspective on that?

Peter: 23:22

Yeah. I mean, it's, it's a combination of things. I mean, first and foremost, it's, you know, it's, it's just basically the way, you know, we conduct ourselves, myself and say, look, like, cause that is going to be set the tone for, you know, how we should be interacting amongst each other, you know, with our clients and all that. So the example you're setting, you have to be the example. You have to be the, you know, the, like you have to live what you want to preach. So like, you know, that's, that's super important for us. You know, we have weekly check ins and so I have like, You know, my weekly coaching coaching sessions with our agency leaders where we'll go through a number of topics, you know, stuff that's pressing, maybe more urgent. But then we also talk about, Hey, like, let's think about the future. Let's think about, you know, areas for improvement and development. So there's a lot of. That going on every week that, you know, helps to just help to progress in those ways. Every quarter, you know, all our leaders get together. There's, you know, sharing of, you know, kind of challenges and knowledge there. They're all in a Slack group as well to share knowledge as needed. And then do

Arlen: 24:19

that in person. Is that over

Peter: 24:22

quarterly meetings or

Arlen: 24:23

yeah,

Peter: 24:23

yeah. Quarterly meetings. Uh, yeah, it's a, it's a combo. Some people, you know, can't always make it so that we, we, you know, a lot of them, you know, we, we meet in person in New York city and then we'll, we'll also, you know, use the opportunity to go out to dinner together and just get to know each other better outside of the work space. So yeah, that, that, and it's always fun. Like just to hear like everyone's different challenges. And a lot of times it's like, Hey, same challenges. Maybe you guys would talk more about offline and, you know, just. They've all kind of developed relationships with each other, which has been cool to see.

Arlen: 24:50

Hmm. Super. One, one other thing I noticed about the portfolio is that the agency Positioning approaches is largely horizontal, and I'm, I'm curious your thoughts on that now, a few years in with a few agencies there, how that has worked out, obviously, that allows for maybe more complementary capabilities across the agencies. But, but yeah, tell me your thoughts on that and maybe how that shapes the risk profile a little bit of those individual agencies and the portfolio overall.

Peter: 25:22

Yeah, I think it's continued, continuing to evolve. You could argue, you know, for example, I mean, Barrel's a good case because, you know, I think we went into that like Shopify focused e commerce positioning for, for a good run, maybe, you know, seven, eight years. But, you know, last couple of years, we, we realized our Portfolio was skewing kind of heavy into CPG, especially food and Bev personal care, seeing the vertical develop

Arlen: 25:46

there.

Peter: 25:47

Yeah, exactly. And we're like, like, you know, how do we like, you know, we have some of the like really big names that you find, like, you know, walking through any grocery aisle, you know, across the U S like, this is, this is a strength. Like how do we play, play to that and continue to build, you know, something compelling there. And so, yeah, we made a decision, you know, actually. Like the decision process started over a year ago, maybe a couple years ago, but like, you know, this year we finally doubled down and so we kind of swapped it out. We call ourselves more of a CPG commerce agency, more than like a Shopify agency. So in many ways it's verticalized and we've had to, you know, just expand some capabilities to fill out that CPG vertical. So. That's been an interesting, um, like just experience because now we're like, okay, for some of these other, you know, more horizontal service offerings, like our Webflow agency or, you know, our, um, Shopify and WordPress agency, uh, like with like you actually, there's clusters of, you know, kind of sectors that we, we could go deeper into, at least in our marketing initiatives and such. And so, you know, it's going to give us a combo. And I do think like at the, at this kind of boutique size of agency, like having a. A combination of horizontal and vertical positioning is, could be a strength, you know, so it's kind of like if you did, yeah, like Shopify and just, you know, let's say fashion for it. Like, I think you can go really deep and, you know, offer something compelling and become actually a more attractive target for a potential acquirer.

Arlen: 27:11

Hmm. And, and some of that there might. Might vary based on the stage, like maybe that horizontal positioning allows you to figure out a good vertical positioning, so it allows you to have, have a point of connection, a point of specialization, uh, gets you started, but then you see something emerge like you have with Beryl that allows you to, to even strengthen your, your positioning more, maybe go after Even more at market, more premium opportunities, but you may not have known or have the portfolio to support that vertical positioning out of the gate might be a little easier to start in some cases with that horizontal positioning.

Peter: 27:50

No, a hundred percent. That's exactly what's happening with the bolster. Our brand design studio actually

Arlen: 27:56

have bolster up right behind me. I was just thinking about that. Yeah.

Peter: 27:59

And you know, we, we opened up with like, Hey, we'll do branding for anyone. And you know, anyone who's down to get branding work done. But sure enough, like with, and you know, we ran our omakase campaign where we're doing like free design sprints for, for companies. And, you know, quickly we were like, huh. I think that, you know, the, they're clustering on B2B, you know, they're clustering around either professional service firms or tech sass. And so like, okay, maybe we have to really develop, you know, understanding of how to serve those types of clients. And so, yeah, these things, you know, kind of naturally are taking shape.

Arlen: 28:33

So we've talked a lot about the companies largely that you, you've built and spun out a barrel or, or, you know, decided were a good compliment to the portfolio that you already had. What about acquisitions and how you think about that? What matters most to you when considering an acquisition and how that's evolving over time?

Peter: 28:51

Yeah, I mean, it's funny because like we've been like Breathing and sleeping, you know, like dreaming acquisitions for the last like six plus months, not much to show for yet, but you know, it's like, so we, we did one acquisition, you know, over the summer, uh, it was catalog product design agency and, you know, that was a great experience, you know, the founder wanted to exit and, you know, we brought in a CEO and, you know, just were, you know, it's a bit of a turnaround situation. So there's, you know, some things that we had to show up, you know, the income statement as well as balance sheet and things like that. So it's been an interesting challenge. We'll see how that. Yeah. I'm fairly, um, optimistic that, you know, we'll get it into shape next year. You know, that experience was great. Cause like, it was like, huh, like this is what it takes. These are the steps. These are things that we got to really think about. Um, and then, you know, it got us thinking even bigger, like, Hey, um, you know, maybe next time, you know, instead of a small eight person shop, we can go for a, uh, 30, 40 person shop instead. You know, what would that entail? And so, yeah, we've been getting a crash course on like, you know, all the ways, you know, deal structure, sourcing deals, working with, you know, a buy side, M& A advisory firm, you know, just all kinds of people in the ecosystem. Talking to agency, you know, owners every week about, you know, a potential deal. And so, yeah, it really has been like a lot of activity. And yet, like, you know, we're also going to be very cautious and careful. Like we, we do want to do a deal, but we don't want to do a deal for the sake of doing a deal. Like it's gotta be the right fit with, you know, especially if it's a, an acquisition where we're, we're kind of bringing that founder in to kind of help them grow the agency. But that's a very Different situation where, you know, we have to get that relationship, right. We have to be a good fit for each other and we have to really trust each other to, to kind of work together for the next, you know, three, four, five plus years. So that, so yeah, that that's, it's been fascinating and, you know, hopefully, you know, early next year we'll have some more to share on that. And then, you know, we've also at the same time, you know, like I wouldn't be surprised if there's a couple more agencies that kind of, that we launch, uh, from scratch, we're still kind of, um, Exploring that. Exploring that. Yeah. Yeah. There's like a, you know, it's, it's a, you can almost kind of think about it as like a venture studio for agencies that we don't have without the venture money, but, but definitely with, you know, kind of thinking about, Hey, how do we, you know, create some of these organizations from scratch and, you know, with AI and, you know, just some of the changes in agency, you know, structures these days, like, uh, you know, you can do a lot more without having a lot of people. And so, you know, there, there was an argument to me that like, Hey, maybe for certain types of work and services, like starting. From scratch isn't the worst idea.

Arlen: 31:27

You can be so nimble, your cost profile's low, you don't have 50 people that you gotta keep them busy or lay them off and kill your culture, right? So, gives you a lot of, goes back to optionality. You have a lot of options with how to, how to launch and approach your service offerings. And, and just, just back one more time to acquisitions and being choosy, which of course is, is important and makes sense. You have one acquisition that you've done recently, so that I'm sure informs how you're choosy. What are some of the characteristics or factors, maybe not comprehensively the, the full set, but what are some of the factors that feel most important to you when finding that right fit for, for maybe not in general even, but like your next acquisition that you make?

Peter: 32:09

Yeah. I think, you know, I mean, the ones that we're like progressing further into conversations with, there's like a sense of momentum, like there's, you know, there's this kind of growth minded CEO running the ship and, you know, this person might be, you know, like is ambitious and wants to grow the firm, but also has that kind of humility slash like, you know, kind of self awareness of like the limitations of their own skill sets and, and, Experience to, to seek, you know, help and are practically wanting to partner with somebody like. I think it starts with that because it's like, all right, like there's a growing agency, there's something there, you know, there's some tailwinds there and then like, you know, there's, there's this person that we can just, you know, click with because, you know, we just love their, you know, how they're thinking about things and then beyond that, like, yeah, the, the, the, some of the standard characteristics of a business, you know, we, we love to see kind of really great execution on, on their services. And, you know, that kind of manifests itself in like longterm client relationships, you know, just, you Clients that they've kept for a long time. It doesn't have to be retention. Yeah. Retention is important. Like it doesn't necessarily have to be a retainers. It doesn't have to be like recurring revenue, which I know a lot of people kind of over index on that. But like for us, it's like, okay, like have you kind of, yeah, retain a client and work with them year over year and maybe even grown kind of the. A lot of work you've done with them, uh, you know, kind of deep

Arlen: 33:30

demonstration of value that they're able to deliver. And exactly

Peter: 33:34

those things are important. And then also just like, you know, have they built up some infrastructure? Cause you know, I think where we've shied away from is like agencies where the founder is still kind of too involved in the client work or like just, you know, too much of the thinking and the kind of the quality is dependent on the founder, which, you know, to us signals like, okay, they haven't like really operationalized the delivery side of things and kind of made it a little bit more scalable. So. Yeah. The folks that have maybe hired kind of, you know, the, the, the second lieutenant, the lieutenant layer to, to kind of have them run, you know, delivery, that's, that's been an important aspect as well. So, yeah, like, I mean, obviously, like, you know, we're not going to always find the, the one that checks off every single box. There's going to be trade offs of course. And, but like, yeah, I think the, the non negotiable is like the fit with the founder and like, you know, we, we see that, you know. Early on is like, if it doesn't click, it's probably not going to happen.

Arlen: 34:30

Yeah. It goes back to people and relationships. And as I've enjoyed your newsletter and learning through the experiences that you share with the agency ecosystem online, you seem to have developed a lot of really fruitful business relationships. And that seems to be a skill that is really important to you and maybe your partners as well. with, with your partners, with complimentary agencies, you know, solo consultants, plus investors and P. E. You know what, what skills and principles do you think have fueled those successful relationships and that skill that you and your partners have?

Peter: 35:05

Yeah, I mean, I mean, it's the last few years have felt like a bit of catch up, honestly, because I don't think I fully grasp the concept of like, you know, kind of building up relationship capital and like, you know, there's nothing kind of nefarious about that. All it is is like, you know, how do we You know, act in a manner that like brings a lot of, you know, take actions that bring value to others and, you know, with no expectation of anything in return, but just kind of like just continue to make those deposits of like, Hey, I see something that someone else might be helpful, you know, find helpful, cool. If I think of somebody just reaching out and saying hi and just, you know, asking them how they're doing and, you know, from that different things might spring up, you know, where I can, you know, point them or introduce them to somebody. So it's, it's just that. activity of

Arlen: 35:47

like kind of constant investment in in relationships across the the board

Peter: 35:52

and yeah, and like it doesn't have to be, you know, like we're not like just not overthinking that either because I think a lot of times it was like, Oh, I have nothing to offer. So, you know, I'm not gonna do anything. It's like, No, you know, actually, just, you know, just saying hi, and like, kind of, you know, taking interest in what someone else is doing is, you know, is enough to get started most of the time. And I think even that getting over the hurdle of like, the fear of that, I think has been a big Unlock for for us and so yeah, we we you know And I've read about this a few times where it's like, you know start with two contacts many years ago and like just of like Reaching out to two people every single week and like, you know without fail and the kind of logging that and then you know over The years we've kind of ramped that up. So now it's on any given week It might be you know dozen two dozen like just if somebody comes to mind just let him know and then like just keep that going and Yeah, that, you know, it's like anything else in life, you know, that you get, you get out of it what you put in, and I think it's like, with relationships, it's been, it's been huge, and I just feel like there's still more room to be better and systematic and kind of do better on it, but like, I try, and you know, I feel like it's been helpful.

Arlen: 37:00

Yeah. You keep, keep investing, but recognize you're human, right? So it's okay to keep growing. And I think that's one thing that at least from the outside, someone who doesn't know you that well, doesn't know your portfolio that well. But I think the way you do share openly, transparently your journey, which I know a lot of that is, is for you, right? It's the help you process. But I think that that impacts trust. And I imagine that you live that out in more of those private settings as well, that people feel like, Hey, we, we know people. After he operates in a consistent fashion, he looks out for my best interest. And so I trust him, you know, and, and we can, we can work well together. So it's been 18 years, right? On this journey. If I've got that right, about 18 years, uh, since you take things off 18 and a half. Wow. Yeah. That's amazing. Congratulations. What, what keeps you energized and engaged all this time? I mean, you're talking about the decades ahead, right? So you're clearly not looking to wind this thing down in the next five years. So, yeah, what, what keeps you energized and engaged?

Peter: 38:04

Yeah, I mean, I think, yeah, first and foremost, I think it just kind of goes back to, like, purpose, mission, just kind of knowing that, hey, look, like, there's, you know, this idea of, like, helping others fulfill their full potential and just kind of, yeah, that, that. That kind of mindset, you know, that, that's a way that in itself is like, you know, a good motivator of like to show up every day because it's like, cool, yeah, I can help, you know, a friend kind of get to this or, you know, help, uh, uh, you know, a client get to this or another agency leader get to this or whatever it is. Um, so those are all things that kind of energize it. But then, you know, on top of that, I do know, like, I gotta, um, make sure that I'm investing in, you know, other aspects of my life to kind of keep that energy level high. And so, you know, there's, you know, there's, I, I put a lot of emphasis into the fitness side of things, you know, diet side of things, you know, spending time with family side of things and sleep and all, all the things that

Arlen: 38:54

keeping your life balanced and full and healthy across the board

Peter: 38:58

and, and it boils down to honestly, like it's, it is discipline, like, and I do truly believe discipline is freedom, like just, you know, having those kinds of core, uh, you know, I think of as foundational components to, to life, you know, in a good spot is going to create the base for which, you know, the energy, It continues to replenish and, you know, kind of show up in, in ways that helps me to do what I want to do.

Arlen: 39:21

Hmm. And looking ahead three years, Peter, if you're really happy with where things are then, you know, what, what has changed? What obstacles have you maybe overcome? What have you achieved in that timeframe?

Peter: 39:33

You say three years?

Arlen: 39:34

Yeah. Yeah. Say three years.

Peter: 39:35

Yeah. No, I mean, this is good because like we, we've actually thought a lot about the three year plan. And so, yeah, I mean. You know, first and foremost, like with our current, like existing portfolio of agencies, like we've helped, you know, through various initiatives, whether it's, you know, just really helping each of them to build very robust sales and marketing functions within, as well as recruiting, you know, support, like we've helped them to grow organically in a big way. So that's going to be important. I think, you know, for some of these agencies, if we can double them, you know, in the next three years, that would be fantastic. Some of them, I mean, the really small ones, hopefully we 5x it or whatever. So. Okay. Beyond that, like, I do think three years, I'm going to be looking back and be like, Oh, wow, we've built a quite a, uh, M& A, um, you know, uh, function, uh, you know, the muscle is strong there. We've done multiple acquisitions. Uh, we've, you know, integrated some into existing agencies, some we've, you know, built as, uh, standalones and grown those, maybe launched a couple of new ones as well. So, you know, we do have like the entire portfolio should be, you know, a few times bigger than it is now. So, you know, we have that, we've kind of plotted that for the next three years. And, you know, I think. I think just think about it from a personal and, you know, growth standpoint, like, yeah, I do think, you know, my own, you know, experience and ability to kind of assess businesses, to kind of underwrite them, uh, from a risk perspective, to kind of, uh, think about deal structures, I hope all those things have leveled up in significant ways and, and then, you know, learned a lot, practiced a lot in that area. Yeah. And also just from all this activity and, you know, continuing investment and kind of, putting out content and connecting with other, uh, entrepreneurs. Like, you know, hopefully the network is, you know, much stronger than it is today. So, yeah, I, I mean, it's, it's exciting the next three years. Amazing.

Arlen: 41:15

And, and what are the best ways for people to engage with you, Peter? Have ways that they can stay in touch, stay up to speed with, with what you're doing at Beryl?

Peter: 41:22

Yeah, I mean, the most frequent place, you know, that to find my thoughts is LinkedIn. So, you know, uh, PeterGank34. I try to post, you know, at least three, four, five times a week. And then. I do have a weekly newsletter I send, which, you know, folks can sign up at PeterKang. com. And then, yeah, like, the other two sites I drop here is Agency Habits is, you know, our kind of Media property where we take the lessons learned from Barrel Holdings and we're kind of documenting some of those things as, you know, bite sized articles and content and we'll have some resources and templates there soon as well. So agencyhabits. com and then barrel holdings. com is where you can find all the information about our agencies and our, you know, buying process of agencies.

Arlen: 42:03

Super. Amazing. I mean, I think it's a really neat and, and I'm sure not, not unique, but uncommon way to approach where you take an agency over the long haul, right? It's, it's really neat to see what you're doing and I'll look forward to following along and learning more about it. And it's been great to have the chance to chat today. Awesome. Thanks for having me. Thank you for joining us for this episode of the Agency Health Podcast. You'll find key takeaways and links for this episode in the show notes. If you found this episode valuable, consider subscribing and sharing. Take care, and be well.