E006: Simon Penson

Richard Hill [00:00:07]:
Welcome to episode 6 of Agency Intensive. I'm Richard Hill, your host. Now in this episode, I'll speak with Simon Penson, exited agency founder, VCNed to agencies and SaaS companies. Now Simon ran one of the first content marketing agencies here in the UK, which he started back in 2009. Now fast forward to 2,020, it was integrated on the way and ultimately sold in 2020 for circa 37,000,000. We cover a lot of ground in this one, so buckle up. We cover the early days growing from 0 to 12 people, 12 to 50 employees, and so on until we get all the way to 250 people in his agency, maintaining a culture during those high growth years, the levers that Simon focused on, and the details of the deal structure that ultimately resulted in a £37,000,000 valuation, and so much more in this one. Now if you do me one favor, hit the subscribe or follow button wherever you are listening to this podcast so you're always the first to know when a new episode is released.

Richard Hill [00:01:07]:
Now let's head over to this fantastic episode. Well, welcome to the Agency Intensive Podcast. How are you doing?

Simon Penson [00:01:16]:
I'm good. I'm good. Thank you for having me. I'm in this wonderful studio as well. One of the better ones

Richard Hill [00:01:21]:
for sure. That's very kind. Very kind. So I think before we get into the nitty gritty of agency life and your journey, I think it'd be great for you to introduce yourself to our listeners and how you got into the world of agencies.

Simon Penson [00:01:34]:
It's a good question, and they're convoluted and probably a story behind it. I'm sure we'll get into it. But, I mean, if I if I start at the beginning, I I was originally a journalist, actually. I was lucky because I always knew what I wanted to do. I always had a fascination with the written word and, you know, how it how it had this kind of almost unique ability to kind of draw an audience. And I was alright at English, which obviously helps. Not very good at many other things, but alright at English. And, so I did some vocational training in that world and, kind of through a process of network, really ended up, moving to Peterborough and, working for a big kind of PLC at the time.

Simon Penson [00:02:14]:
And they were really big print publishing business called Emap at the time, then, yeah, Uncle Bauf. Many people know them. And I I rose for the ranks tower, I guess, relatively quickly. I was, sort of editing as a magazine business at the time, so this is sort of late. Yeah. Sort of early 2000 by this point. Editing magazines and, you know, really enjoying doing it. A lot of them specialist titles worked in all sorts of specialist markets like angling and golf and cars and Yeah.

Simon Penson [00:02:42]:
All sorts of things. Learned lots. Worked with some great, very smart people. Had some great bosses. But alongside that, I was always interested in how things worked as well. So I was sort of very, very early 2000, maybe even late nineties. I was building my own sites as well in Dreamweaver as was at the time and June eventually and all those kind of So

Richard Hill [00:03:04]:
we still got a few clients on that.

Simon Penson [00:03:05]:
Yeah. Perhaps. Yeah. Yeah. Still around. And I I did that because I said I had this intrigue about how things worked, but I was ultimately producing them so I could put content into them. And they over time, I mean, they were looked awful. They were terrible sites, really.

Simon Penson [00:03:22]:
You certainly wouldn't wanna go on way back now, but, they they did alright. And some of them failed. There were specialist niche sites, basically. So, I mean, we had had one in divorce and cosmetic surgery and kitchens and all sorts of stuff, where there was basically a fairly significant transaction in that market. Advice sites. And over time, I was running this kind of dual life of in the evenings Yeah. Sites Yeah. And learning lots.

Simon Penson [00:03:47]:
And, during the day, I was doing the day job at the corporate world's print publishing. These beautiful print products were going like that, however good they were. Meanwhile, these awful sites were actually going the other way. And it was a real budget in the mind shaft moment actually for me. You know, I could see that there was a seismic shift happening. It seems the most obvious thing to say now, doesn't it? Of course. But back then, we didn't quite know the impact of the Internet. And that really played out between sort of 2,000, let's say, and sort of 2,007, 8.

Simon Penson [00:04:19]:
I kind of had this dual life. And then towards the back end of that period, the business I was working in EMAP at the time, they by this point, I was actually working online, so I was actually helping them sort of take a lot of their bigger brands online.

Richard Hill [00:04:34]:
Yeah. We

Simon Penson [00:04:35]:
work with McKinsey at the time to try and understand where the kind of the money was and prioritize. Bauer came in and bought that business, and they were a big sort of family owned print basically dynasty family dynasty business. Mhmm. And they didn't wanna really, you know, really invest into the kind of digital world, which to me was crazy. So I kinda made the decision at that point to take a chance, run with the sites. They weren't making a huge amount of money at all, but enough to pay the bills.

Richard Hill [00:05:03]:
So you jumped ship at that point sort of thing and thought, right. I'll do my own thing.

Simon Penson [00:05:06]:
Yeah. I did. Yeah. And it felt like a big thing. And, you know, to begin with, we were, you know, selling possessions on eBay and all sorts of things, you know, to make the to make the Yeah. Numbers work. But, you know, they they were earning enough. And then so this 2,007 ish time.

Simon Penson [00:05:21]:
And then for a year, I did that. And they actually decide because I was on them full time, they did a bit better. Ended up selling a couple of them. Not a real exit, you know, that people would claim, but, you know, enough certainly to, you know, give me a good 12 month runway of things. Yeah. And did that, and sort of used really, I guess, what I'd learned from building those sites and building the audiences and the value in them to try and help businesses do it. And by this point, I said it's 2,000, yeah, 8, 9. And a lot of those people were were still not really ready, quite frankly.

Simon Penson [00:05:54]:
Didn't really understand the impact of the Internet. Most most spend was not digital for sure. Mhmm. You know, the the world looked a bit different. Like, Facebook was whether it was it was certainly live globally, but, you know, it was still really very unconventionalized, all that kind of stuff. So it was a different world, but and, obviously, I'd come from the content world, so I'm really pushing the content kind of, you know, view. And a lot of people wouldn't really get it, so we had to, out of necessity, really, build a sales and marketing first organization, which at the time was really hard work, but in the end meant that we grew really quickly and certainly scaled past some of the problems that other people come up against.

Richard Hill [00:06:33]:
Uh-huh.

Simon Penson [00:06:34]:
But we grew really slowly. So between sort of beginning 2009 when we officially launched to 2012 ish, we got to sort of 10, 12 people. Always bootstrapped, you know, always profitable, but, you know, slow growth, very ordinary agency. But we were really, really promoting this kind of content led ethos. And, you know, at the time, nobody very few of the people were. That kind of ethos really became this kind of content marketing kind of world that we all now know very well. Mhmm. And we were certainly one of the first, if not the first, to really champion that in the way that we'd know now.

Simon Penson [00:07:10]:
And, obviously, that helped us eventually. To begin, it was really hard work, but, you know, we we did a lot of work on sales and marketing, and we built a bit of brands. We refined and defined what it was that we actually offered. And slowly, brands came around and the spend started to move. And, you know, we started to pitch bigger and bigger business, and we then went on a real growth spurt. And so between 12 and sort of end of 14, we sort of got to 50 odd people. So we went from sort of 12 to 50 odd people quite quickly. So the chapter 2 Yep.

Simon Penson [00:07:43]:
Lots of lessons in that. You know, growth is good, but it can still be a challenge. And we that we we came across actually was one of the most frustrating periods in my professional life, I would say, in that we were by this point, we were decent size of 50 odd people. We were pitching for big brand work, but there was they were they were still not used to spending the money that they really need to spend. You know, sort of 20, 30 k a month retainers were not, you know, probably well known then at all. It was certainly harder to find in the content marketing world. And we were going into pictures. We were weighing hands down.

Simon Penson [00:08:21]:
The marketers loved us because we were offering something different. They were like, you know, where can we buy? But then at that level, you sort of start to bump up against procurement, and they're looking at us going, well, don't we usually buy IBM when it comes to, you know, IT? Was that kind of you? You know, well, who are these, you know Yeah. Who's this 30 year old CEO pretending that

Richard Hill [00:08:40]:
Just 50 people and something. Yeah.

Simon Penson [00:08:42]:
And that, you know, and that was really frustrating because it's like chicken and egg, isn't it? How do you solve that? And, you know, we we were still winning well. We're still growing quickly, but at the time, we were also, we were also getting quite a lot of approaches for, for acquisition. So, obviously, we were the, you know, the fast growth, you know, new kids on the block, so to speak. And, you know, I was certainly not in the world of wanting to do that because of the fact that we would, you know, still have a long way to play out. But one of those conversations, came from an agency in Leeds called Sticky Eyes, and lots of people will know. And the the conversation there really grew and grew. Really liked them, had a really great culture. They they'd kind of they'd had a slightly tougher period.

Simon Penson [00:09:25]:
I think it's probably not fair to say they'd grown. They started 99, grew really big off the back of old school SEO. Got some great clients and some great people, but they were Spanish more difficult as this content sort of thing was coming in. So over a period of time, I was a single founder, single founder of that side. We got to know peep we got to know each other, spent 6 months talking and realized that actually, 1 was 1 equal 3. You know, they had a lot of the unlock because we all of a sudden collectively, I think they were about 75, 80 people at the time. We were 50 odd people. Collectively, we solved the issue that we had.

Simon Penson [00:09:58]:
And, obviously, for them, we brought in content marketing. Yeah. So we had the sales machine, and we did that, and merged the businesses in August August 16. No. No. No. I'm sorry. No.

Simon Penson [00:10:12]:
May 15. Sorry. And, we by obviously, we came together. We were a 125 ish people, you know, 2 offices, put the news out. And, obviously, as you can imagine, the world sort of sat up, and, you know, we immediately actually had quite a lot of inbound, you know, acquisition kind of, opportunity come to us. And we weren't planning to sell. I mean, we'd obviously always chatted and saying, you know, we're gonna become a really interesting independent here. And that was always the goal, but we didn't expect it to happen so fast.

Simon Penson [00:10:41]:
So, you know, we merged in May 15, announced it. And by August 16, we've been acquired, through a process that ultimately ended in into public buying us. And we took a we I remember the debates around this. We do because we had obviously choices, and we took a, a deal structure that most people told us we're crazy for, which is kind of less upfront and a longer run out. And, obviously, most people tell you to do the opposite of that. But I think because we'd merged the 2 businesses, we had a we had a we'd really, really enterprise back office. We had a brilliant senior team.

Richard Hill [00:11:15]:
Mhmm.

Simon Penson [00:11:16]:
You know, much better than the size of the agency, if that makes sense. Yeah. Kind of, you know, overinvested almost. So we really backed ourselves to grow. I think we'd also figured out how to really commercialize account management and, you know, kinda land and expand. So we backed ourselves to do that and took a down out that went from August 16 to the end of 2020. And, yeah, we we grew really significantly. You know, I mean, we we end we we went into that business, you know, say, a 125 people, and we came out the other end.

Simon Penson [00:11:49]:
It's difficult to know because, obviously, then it was 2020. It was COVID, wasn't it? It was sort of 270 ish people perhaps. And, obviously, a lot of that had happened in the last year because we have access to the compound annual growth rate was really significant. I mean, we were probably tracking on to, you know, 10,000,000, EBITDA kind of run rate. We didn't hit that in a year. We were quite a bit down on that, but, equally, we were really growing fast to the end. And, you know, that hugely successful kind of, exit, obviously, in the end. Lots of people did great, which is fantastic.

Simon Penson [00:12:22]:
Learned lots. You know? Stress lots. Slept little. All of those things. Yeah. But thankfully, because of the seniors excuse me. For the because of the senior team, we we we spent a lot of I spent more and more time basically working on the integration as opposed to business because the business is really running. So I spent a bit of time on integration.

Richard Hill [00:12:45]:
What integration the different businesses together?

Simon Penson [00:12:47]:
Yeah. So with so Interpublic, really really interfacing within public. Because obviously through an earn out, the challenge is always that there's this kind of tension.

Richard Hill [00:12:56]:
Mhmm. It's

Simon Penson [00:12:56]:
not a brilliant way actually to do a deal because, you know, you've got well, actually, you know, we we wanna control our p and l. They don't wanna give you work even though they tell you that they're going to Yep. Understandably, because why would they give you a pound if they've gotta

Richard Hill [00:13:11]:
pay you

Simon Penson [00:13:11]:
7 or £8 for it? Yeah. So, you know, that never manifests itself. But we didn't expect it to either. So we very much kind of were masters of our own destiny. But, you know, there's this kind of weird situation where you're trying to integrate, but you don't really want to, and it becomes a distraction. So you want the team to just be able to work and get on with it. So I spent time, you know, interfacing there to make sure that that wasn't the case. And, yeah.

Simon Penson [00:13:36]:
Look, ended up probably last, yeah, last 12 months, very, very light touch, really, because it wasn't staying, Neither was the other founder. And, you know, the business was running brilliantly, you know, and the numbers were great. So, you know, very kind of board level, involvement, really. And that allowed me to spend and start leaning into, like, what is it that I wanted to do next? Because, you know, as we were talking before, this is important to have that plan because not enough people do actually, and it's a really big transition. And, thankfully, I by in 2016, when we'd seen some of the cash from the initial deal, I started actually investing into sort of b to b SaaS. And the and so the reason I did that really because it felt a little bit to me I mean, it seems ridiculous to say back in 2016, but I guess it is nearly

Richard Hill [00:14:24]:
That's a while ago.

Simon Penson [00:14:25]:
Yeah. That's that world to me really felt a little bit like the the the the, you know, the websites did back in the sort of early 2000 to me. Yeah. You know, it's this thing's gonna be big. And, you know, there was still a lot of opportunity in it. And I was fascinated by it and started to back a few founders and realized quite quickly actually that that world was broken. It's probably a bit harsh, but it was fairly inefficient because, you know, these people often were first time founders. They were often very technical and brilliant.

Simon Penson [00:14:57]:
Can they run a business? Do they have the commerciality? Mhmm.

Richard Hill [00:15:00]:
The sales and marketing side needed

Simon Penson [00:15:02]:
All of that. And, the answer was usually no. But what they did have is they've been given a load of cash. Actually, that all that did is make things worse. Because, you know, all of a sudden, you're like, well, I don't have to worry about a p and l and, you know, I'm just gonna spend it. And so, yeah, I realized that was pretty broken and, you know, started helping and supporting that a little bit and met again, the long story short, met sort of 3 other people with the same world view. We started investing together. And then sort of very organically, really, we kind of ended up, building a fund that invested other people's money, that business called Hatch, and, launched an SEIS EIS fund back in officially in 2018.

Simon Penson [00:15:46]:
And, yeah, we're a bit broader actually at the beginning. We are it is now the business is now very much b to b SaaS and is actually not just early stage, building later stage funds now. Now. But, yeah, to begin with, we were kind of a little bit broader, but now sort of really focused on a b two b SaaS. And and I think that was brilliant for me, particularly when I first left because it sort of did 2 things. It it won it started to validate the stuff that we learned actually because when you go through that journey, you survive it. It's probably the best way to describe it. You've never done it before, so I need that scale, so you are building the road issue.

Simon Penson [00:16:24]:
Yeah. Yeah. Right? Yeah. But then when you start to see it through other people's eyes, you it really becomes very validating for that journey. And, I I really, really also enjoyed it. Quite frankly, it didn't it still doesn't feel like work. And, you know, I think in that, you find the really important thing at post exit, which is actually purpose and understanding why you do it. Because, you know, I think you initially, when you're working, you obviously do it because you've gotta pay the bills.

Simon Penson [00:16:54]:
Now there's the financial pressures. But, obviously, when that burden is taken away from you, you know, through an exit, you it sort of strips everything back a little bit, and you have to really find the answer to that. And I found it really quickly in that process, and, you know, I'll always be thankful for that. And, yeah, I really enjoyed helping these founders and, you know, helping smooth the path a little bit and make it Yeah. Slightly less painful. And then, you know, that that business has really rocked on. It's a fantastic business led by a couple of great people called Scott and Fred now. And, I have, I've actually backed off that business in the last sort of couple, 3 months more so because I think what began to happen is that the kind of the the SEIS, EIS world is is really obviously limited by how much money you can put into these businesses.

Simon Penson [00:17:45]:
They're early stage, so you kind of really have to ensure that, you know, you're not selling them with pockets with too much cash, and you're not taking too much percentage either because otherwise whereas incentive for the founders to keep going because they're probably gonna wanna rerace. So you end up with a smallish amount of lots of businesses, and the business that fund has now got probably just over a 100 investments. Wow. Now at the beginning, when I first started it, we were, you know, into single figures. It was fantastic because I could spend probably far too much time Mhmm. Mhmm. With a small number of investments. How do you properly impact a 100? That's really difficult.

Simon Penson [00:18:22]:
And I think I I was lucky and the the re the thing that actually made me realize this a little bit was the fact that over the last year, I've started to do a little bit with private equity as well because they're increasingly interested in the agency marketing services world. And, obviously, they're brilliant financial investors, but they don't necessarily know the detail and the nuance of, you know, the agency world. And so they lean on people like me that have been there a little bit. I was trying to help them understand that. And so started to do a bit of work with them probably about a year ago, and I think through that process realized that actually this makes sense because they're putting much bigger number into a much smaller number of businesses. And therefore, you can really lean in and, you know, really help and get involved. And, yes, I really, really enjoyed it. And so really kind of starting to spend a bit more time in that space now and see where it leads.

Richard Hill [00:19:13]:
And What a journey, Simon. So from working at with a Spring Club an idea of, oh, it's content marketing thing. Just give it a try sort of thing. And then, making your first hire or 2, get into 12, hit the 12, then hit the 50, then merge with sticky eyes to 125.

Simon Penson [00:19:36]:
Yep. Then

Richard Hill [00:19:39]:
merged again or sold sold and then built to 3 would you say 375 or 275?

Simon Penson [00:19:44]:
Yeah. I mean, difficult to know, really. But I think that 270 I mean, we were revenue was over 20,000,000 to give you a Yeah.

Richard Hill [00:19:51]:
Sense. The 270, 20,000,000 and exited that. And then obviously set up your own investment brand portfolio and then built that to a 100 investments. And then now sort of that sort of runs itself ish. And then you're very much more now back. So working on the agency side, helping investors and your own interests in agencies.

Simon Penson [00:20:16]:
Yeah. Yeah. That's yeah. Yeah. A nice summary.

Richard Hill [00:20:19]:
So there's a lot to get into. So I think let's go back let's go back to that. I mean, I remember I remember quite well when I set up my agency and and, sort of looking at who's who and who's doing what. And, you'd look on moz.com, SEOmoz as it was back in the day and now moz.com. And I remember reading an article that that said something like the most viewed content or pieces of content on Moz was not Rand, was not other. It was you. So in terms of, really pushing that content marketing side, I mean, I think talk to us about that because I think that already resonate or should resonate with aspiring agency owners that are trying to scale to that with, you know, whatever point it is, trying to go from 10 to 20 to 20 to 50 or from 2 mil to 4 mil. Yep.

Richard Hill [00:21:11]:
So leveraging an area of marketing, you know, and in that case, very much content marketing, you know, and then leveraging, I assume, a platform like Moz to be able to do that. Yeah. You know, how how important was that? And what would you say to maybe an agency owner listening now that, you know, wants to leverage their expertise more? How should they

Simon Penson [00:21:33]:
go about that now? It's a good and it's a very big question. And it's also changed. Right?

Richard Hill [00:21:39]:
Yeah.

Simon Penson [00:21:39]:
I think, you know, in some ways, I had it easier. I think it's fair to say. I mean, you know, obviously, be perhaps didn't feel like it then, but looking back, it was, you know, it was less fragmented. The audience was less fragmented. But, you know, like, I think, you know, obviously, I understood the value of it being a journalist. And but, yeah, we we really built it through just sheer determination and hard work and doing the same thing over and over again for, you know, perhaps more time than most people think he's sane. And really, that that really consisted of that sort of work around, you know, on our own side. So guest posting as it was known has obviously taken on another meaning now.

Simon Penson [00:22:18]:
And then speaking a lot of events Yeah. They were the main two levers that we pulled. And, they really helped us, particularly when it came to, sort of allowing us to take the next step up to, you know, work with better brands. You know, a lot of the kind of initial conversations that we had with the bigger brands that we started to win came from stepping off a stage or Yep. You know, to your point, oh, yeah. I've read this thing on. It's really interesting. Would you I

Richard Hill [00:22:44]:
think I remember, like, I'm sure, like, a guide you'd written on, like, the penguin update or the pandemic going back. Yeah. And I think, you know, I'm pretty sure we saw modeled some of our sort of next steps. Oh, this is really good. You know, it's you. Yeah. Back Yeah. 12 years ago.

Richard Hill [00:22:59]:
Long time

Simon Penson [00:23:00]:
ago. Yeah. And then, you know, of course, the market, you know, you there's a bit of luck in timing in these things, isn't it? The market really played into my expertise, which is obviously really helpful. You can't legislate for that. You can only run with it. And I I remember at the time, I had a mentor, an American guy at the time, and, he he he'd sort of been a he was not from the agency world, actually. He was a Californian, an early, employee at Apple and all sorts of stuff. Very interesting guy.

Simon Penson [00:23:25]:
I remember him me talking to him one night on Skype as it was at the time and sort of telling him how we were doing and the fact that we're getting some traction. And he's like, Simon, I'm not gonna do the American accent, but you gotta stop and you gotta ride it like you stole it. Yeah. So the market is coming to you. Yeah. And so, you know, you've gotta do more and more of that, and that really spurred us on. And, yeah, I think and I also have the privilege now of, you know, because I work with a wider set of b to b businesses now because, obviously, I work through SaaS b to b. Obviously, I work through all sorts of different agencies, couple of professional service businesses, on a consultancy basis.

Simon Penson [00:23:59]:
And, you know, you you get to see through that lens, you know, a very privileged view in that what is working in b to b and how it is different. So I think going back to your, you know, initial kind of question around, you know, what what does the founder take now? And I think context still sits at the heart of it, and I think people lose that. But, you know, it it comes down to your ability to still produce great expertise led. You know, give it away and they will come. Yeah. It's really good advice. But then, obviously, then you've got to become a bit more proficient, and it is more complex in sharing that in the right places at the right time now. And you've got to repurpose a lot more across many more channels and all that kind of stuff.

Simon Penson [00:24:40]:
But it comes back to actually something that I've learned a huge amount from from SaaS, actually. Because SaaS is a world that is much more competitive. You have to be much more on top of your game from a marketing perspective, actually. SaaS are great at it. I've learned a lot through their eyes in terms of how you get that right. And, you know, it gets back to the very simple stuff stuff that an old publisher once told to me in print that, you know, stay close to your audience and you'll never be wrong. Yeah. Yeah.

Simon Penson [00:25:09]:
Truly understanding that and, you know, understanding ICP and understanding proper pain points. Yeah. Really focusing that content in on those things in a prioritized order and then proliferating that across the Internet. Right?

Richard Hill [00:25:21]:
So a lot more platforms now, but, fundamentally Yeah. Expert led content. Obviously, back in the day, there was no podcast probably back in for maybe there was. I'm trying to think 14 years ago. Yeah. No. Really? But, ultimately, knowing your shit, knowing what you're doing,

Simon Penson [00:25:38]:
and Yeah. Yeah. Yeah.

Richard Hill [00:25:39]:
Obsessing over quality content, getting it out there. Obviously, there's a lot more channels now, so you probably need There are. You know, you probably gotta put more time and more resource into the additional channels and work with people that have got those channels or that expertise, but, ultimately, similar to back then.

Simon Penson [00:25:57]:
Yeah. It really is. And, yeah, it is where it is more complex from a strategic perspective. But then, equally, once you've got the framework, now it's rinse and repeat. Mhmm. You know? There there is there is there is a smart way of working, you know, certainly putting CRM front and center, I think, is is a really Yeah. Great way to kind of work strategically now. And, like, as I said, that comes back to, you know, really owning your audience and staying close to them and, you know, then initially attracting them through something, whether that's a piece of content Yep.

Simon Penson [00:26:27]:
You know, lead Magna or whatever it is. Yep. Getting to know them through your CRM and then having, you know, what, you know, what we probably call SDRs, you know, but Yeah. They look a bit different now. You know, it's real nurture kind of people to help them along and give them more Yeah. Other content and get to know them as potential prospects.

Richard Hill [00:26:46]:
So we've touched on sales and marketing. Yep. You know, and I think, you know, we could probably talk about content marketing expert marketing for a whole episode, but I think there's a lot more to go at. So I think, obviously, you've gone you've you've started the agency. You've gone from 0 to 12 to 50. That's that's sort of stay there for a little while. Yep. And obviously going from, you know, working in your bedroom probably back in the day, you know, which is where where I think all of our listeners started.

Richard Hill [00:27:10]:
You know? And then, oh, we've got 10 people. Oh, we've got 50 people. I mean, it doesn't just happen. But, ultimately, that's a hell of a shift from working for yourself and I think a self proclaimed sort of wordsmith sitting and creating. And then all of a sudden, not quite all of a sudden, but quite a short period later, you got 50 people. You know, talk to me about sort of maintaining that culture during that or maintaining a culture during that very, very rapid growth in a matter of a handful of years going from, you know, 1 or 2 mates probably that you knew ish to then, all these people work for me now.

Simon Penson [00:27:45]:
Yeah. Yeah. It's a bit it is it's a very big thing. And then, like, when you're doing it for the first time, which I was, you do have to make it up a little bit as you go along. But I think well, what I think culture is a fascinating thing because, you know, how do you touch and feel it, and what is it? I think the the key thing for me, and I talk a lot to founders about this now, is that when you're in a when you're an early stage business, you you kind of have to have a really kind of mission or purpose led edict, you know, like reason to exist. Mhmm. Yeah. The Simon Sinek why stuff is really important in that that kind of, environment.

Simon Penson [00:28:18]:
Because quite frankly, you don't have a lot of the stuff that a bigger business has. Now bigger businesses have people teams, HR teams, you know, people to organize fancy days out and all that kind of stuff. Yeah. Not that that's culture necessarily, but, you know, they can also run performance culture, which we we move to because our culture changed and had to change. Yeah. That's definitely important to to consider. But the beginning, I say, you know, as a founder, you have to be the, you know, the the man or the lady on a white horse running up and down the line, you know, saying forgotten country in this direction, are you with me? Whatever that, you know, whatever that mission is. And people have to believe it.

Simon Penson [00:28:52]:
And so I think that belief system, you know, that inner belief system is the the most important thing to proliferate Yeah. Really early on and understand it first and foremost so you can talk about it, but also you can see it in others. And that allows you to hire the right people because I think we went through certainly did. We we went through an awful period where we hired some of the wrong people and had to make some really tough decisions quite early. Yeah. Because not necessarily there there weren't, you know, single bad apples spoils the orchard. There was probably a little bit of that, but more so we got it wrong. We'd hired the wrong type of people for the organization, the culture that we wanted to build.

Simon Penson [00:29:27]:
And it took us a while to realize that. But, eventually, we did, and we realized that, actually, we were hiring people more so for skill set than we were for, like, fit. Yeah. And we ended up looking for what we call, like, this kind of, you know, burning desire to learn, you know, kind of almost insatiable appetite, really, for learning. Yeah. Voracious appetite. And once we realized that, we started to hire you know, we almost didn't realize at the time, but we were hiring on that, and all of a sudden things seemed better. And we were we were aligned.

Simon Penson [00:29:58]:
And you see, we had the same belief system, so we fought for the same thing. So every time I did stand up and have sword in hand, everybody was behind me.

Richard Hill [00:30:04]:
They're backing you. Yeah.

Simon Penson [00:30:06]:
Yeah. And that but then interestingly, there is a point at which that becomes your problem in the scaling process. Because, you know, the smaller businesses need it. Bigger businesses don't need it. And, you know, eventually, there comes a time where and this court is out. You have to sort of evolve culture into much more performance led actually and look for high performers. Yeah. You know? Because by that point, it's not just the founder's voice and shouldn't be the founder's voice because that becomes self limiting.

Simon Penson [00:30:35]:
So then you almost need you know, you're obviously professionalizing the kind of, you know, personal development and the lines of management and all of that kind of communications, all that kind of stuff. And, you know, you you should go right, but you're account making them those people accountable for running those teams. And, you know, if you continue to be the founder that shouts too loudly, people are always looking back to you, or you want them to look at the people

Richard Hill [00:30:57]:
where they aren't take responsibility and ownership.

Simon Penson [00:31:00]:
Yep. Yeah. Exactly. And So what stage was that, do

Richard Hill [00:31:03]:
you think? Was that, like, a 20, 30, 40 people wish? That's quite quite a quite a range. Yeah. That's a

Simon Penson [00:31:10]:
really good question, actually. It was a long time ago now. I would say probably 50, yeah, 50 to 60 people is when it really stopped. Or we we at least I say we we we we actually realized. Yeah. Does that make sense? Yeah. Yeah. We we probably could've and should've put it right earlier.

Simon Penson [00:31:28]:
Yeah. But we realized at that sort of stage where the it was starting to become a problem because people weren't necessarily looking to line managers that were still coming further up the chain. Yeah. And, also, people can fight too hard in the end for the wrong things. And, actually, that transition is really interesting, and I I have this conversation, all the time. I had it last week, actually, with a client who you know, they're they're scaling. They're at that sort of level. A year ago, they were probably half that number of people.

Simon Penson [00:31:58]:
And the, you know, individual in the business was one of those individuals that we all have had where, you know, you think if they leave, we're screwed. You know, these sort of sleepless nights stuff.

Richard Hill [00:32:08]:
Everyone's got one of those.

Simon Penson [00:32:08]:
Yeah. Everybody's on their journey, haven't they? They really have. Yeah. And you need it. Yeah. But then equally, weirdly, those people can sometimes become as much of the problem as they were the solution because they don't necessarily grow with the business. Mhmm. And yet they're still required, and the the expectation is that they'll still be in a senior position and they can be overpromoted.

Richard Hill [00:32:25]:
That's a good one, isn't it? Yeah. I mean, quite often you see a business ready. You know, it's start with a group of people, but then the business grows substantially, and not all the original team are, you know, maybe got the skills, say, to to do what is required to go from, obviously, £1,000,000 to a 100,000,000 or whatever. Yeah. I'd be it's a very different proposition. And, yeah, that's yeah. I've seen that a lot. A lot of my businesses.

Richard Hill [00:32:51]:
Yeah.

Simon Penson [00:32:52]:
Yeah. I'm sure you have. I'm sure you have. And, you know, you need more experience in the business sometimes, don't you? And it needs to be alright to be able to bring them in at a level above people that might have been, you know, the one and only at one point. So, yeah, culture is a fascinating thing, and I think, you know, it's probably why I ended up because when I left the, the arrow and our business, my my view was because people from agency world were asking me saying, could you help us? Because great journey. Initially, I was not interested at all because I just wanted to run away a little bit. You know, I just sort of had my fill. Yeah.

Simon Penson [00:33:23]:
But you you end up coming back to it because, you know, I think if you've built a people based business, there's nothing quite like it either. Mhmm. It's the, you know, the the pain and the buzz all in that rolled into 1, isn't it?

Richard Hill [00:33:34]:
It's it's a special place. I think agency I I love my agency of the what we've created. I think, yeah, we are, I guess, growing not to that not to that rate, but I think, you know, as you're saying that, thinking, you know, where what you know, we will get to 30, 40, 50 people. It's inevitable. You know? And but, yeah, there are different people that are in the different seats. You know? Some will grow in to bigger seats. Some will move to the side and do different things. You know, then you think, well, you know, lay that piece around.

Richard Hill [00:34:05]:
As you're talking to me, you know, I know that I'll have about 3 or 4 Slack messages coming to me from different people that really they should be, and they know they should be messaging other people in the business now. Yeah. So I suppose we've just been a bit more firmer in terms of that structure that is is there is there, but because for certain people may have been here quite a long while, they come back to the founder or to somebody else. And They do. You know, obviously, agencies can scale at quite a rate. Change is usually the most difficult thing for some people Yeah. To to sort of, run with. So we've gone from 0 to 12, 12 to 50, and then you get a maybe an email or a phone call to say we're interested in possibly acquiring you.

Richard Hill [00:34:51]:
And I think most agencies get sort of emails like that most most weeks from my understanding, but, obviously, some are a bit more believable than others. But, obviously, you you got the call.

Simon Penson [00:35:00]:
Yeah. Yeah. Yeah. Yeah.

Richard Hill [00:35:02]:
So tell me through that. I mean, I think, you know, you you've been building building pop. You know, I'm sure it's it's you're just working your you know, going for it for, was it 5 oh, yeah. 5, 6 years at that point? A bit more?

Simon Penson [00:35:12]:
Yeah. So yes. Yes. It was yeah. 5, 6 years. Yeah.

Richard Hill [00:35:14]:
5, 6 years. Really carved this, content marketing niche. Got 9 speaking content, built 50 people, and then you get you get the call. You know, what talk me through the initial sort of, like, sort of processing there. Well, we could. And this just makes sense because as you identify at the beginning, we've maybe hit this. We're trying to get into these bigger firms. You know, we've got a very specialist group of people, very specialist skill set that with 1 +1 equals 3 as you put it.

Simon Penson [00:35:45]:
Yeah. Yeah.

Richard Hill [00:35:45]:
It's not a daft idea. Let's have a look at the let's have a conversation maybe. Let's have a look at the the numbers. Talk me through that. Maybe that month or 3 before you did the deal. Yeah. It took a while actually.

Simon Penson [00:35:57]:
And I so we we initially we started talking, and then we dropped it for a while. Yeah. And then we came back to it. So it's sort of 2 probably there was probably an initial month or so, and then there was a gap. And then there was probably 4, 5, 6 months. But, yeah, I mean, you were right. We weren't looking. Yeah.

Simon Penson [00:36:13]:
I remember there was an email. I remember saving so receiving the email, and I was intrigued because I think, you know, like you say, my mind was very much on the fact that, you know, we've gotta, you know, we've gotta really make a decision here in terms of, you know, are we gonna, like, really double down here and, you know, take a risk and start launching different channel teams and, you know, all that kind of good stuff Yeah. Which was gonna be our plan. But then, obviously, then this came along, and you're like, well, that's interesting because, actually, they seem like a really nice group of people. They've also got a problem that we can solve. Know, it was a very balanced conversation in that sense. Single founder about size, which made it more simple as well. Did you were you, like, a 100% shareholder of you at the time? I was.

Simon Penson [00:36:55]:
Yeah. Yeah. Yeah. I was. And, you know, again, we would have been changing that, you know, as part of the next phase. So it was like, you know, there's obviously risk in all of that change. So when you find something that's kind of ready built, but also not entirely going right, well, we're on the charge here and, you know, you we're gonna subsume you. That's it.

Simon Penson [00:37:14]:
It was very much kind of a look. We've got this. You know, we're great at these things, but we're not so great at these things. And, you know, we I was like, well, look. You know, we've just been growing so quickly that, you know, it's looks great, but there's there's a bit of chaos behind us because it's just been growing so fast. Right? But we've got this problem. And it was a very adult conversation about it, and, you know, that I said that went on for some time. But in the end, I think we realized that, you know, actually, can can we bring these 2 things together and be more than the sum of the parts? And the answer was definitely yes.

Simon Penson [00:37:44]:
Yeah. Independent agency, you know, that did content and performance really well, good list of logos Yeah. Great team in 2 locations. You know, it kind of had now we were probably yeah. What we were doing is sort of a couple of 1,000,000 just over a couple of 1,000,000 quid in EBITDA between us, and it was very sort of split either side. Yeah. And we were like, yeah. That feels like a really nice business to to run on with, and there's a lot of cross sell ups that we could do between the 2.

Simon Penson [00:38:14]:
Straight away, adding both your multiplier would be

Richard Hill [00:38:17]:
a lot more than just singling. So just a deal alone would have Yes. Out of another 20% or no or more. Yeah.

Simon Penson [00:38:24]:
Yeah. And, I mean, I think, you know, obviously, back then I mean, multiples weren't as good as they were now or they have been. I mean, obviously, there's been a little bit of a dip, but I think quality assets still gain, you know, getting really good multiples, but there were less than sale at the moment. But, you know, we I think we ended up getting, I think, 7 times or something like that. 7, 7 and a half times because it varied during So

Richard Hill [00:38:47]:
that's you merging in with with sticky with 7 or the actual final exit was 7?

Simon Penson [00:38:53]:
Yeah. That was the final exit. Final. Yeah. Yeah. The with the RPG deal, basically. And, you know, yes, there have been deals at that scale that are better. I mean, you know, I I'm kind of obviously privy to a few at the moment that are that are ahead of that.

Simon Penson [00:39:05]:
Yep. But it is what it is. And at the time, Pro X wasn't an option. They weren't in the market. Yeah. And I think had they been all here, I had had my time again, that would be the one thing that I'd do differently, particularly now because I can see on the inside of those deals. A lot of people think PE run for the hills, but, actually, I think they've done a lot of growing up over the last few years. They realized, particularly with service businesses, that they can't be the PE of old.

Simon Penson [00:39:32]:
Yeah. They have to be very collaborative, and a lot of them are very willing to do minority deals now and all that kind of stuff. And what they do bring is a fantastic set of skills around, you know, buy and build. They obviously bring good cash to the table as well, allow the founders to kind of take a bit of money off the table and derisk a little bit, which ultimately makes them better decision makers. Yep. And, you know, I've seen again enough of the inside of, you know, those that have been there to see that it would can work incredibly well. And, of course, you come out the other end of the cycle, and you've still got some of it. Whereas we, you know, we built a business that was worth a lot more than what we sold it for.

Simon Penson [00:40:12]:
In the end, I mean, you know, there's obviously positives and negatives to that because, you know, we did very well in the act the earn out works, which is relatively rare.

Richard Hill [00:40:20]:
Because because you normally say the word earn out, and it's it's not it's quite after a bit of a cold sweat in the in the rear, isn't it? There is. You were probably one of the minority possibly, Caleb.

Simon Penson [00:40:30]:
Yeah. I mean, we, yeah, we trebled during that period. Yeah. So, yeah, we, you know, we we really, really grew really quite significantly. And, yeah, it is a rare thing. But, you know, would I have still liked to have had I mean, let's say we I said we sold 50% up front, and, you know, we looked in again to another, you know, mid tier Yeah. House and still had

Richard Hill [00:40:54]:
So just step me through that then. You see, you've you've obviously had to had the call. You know, we've we've covered a bit of this, but just to clarify for the listeners, we've we've, had the call. We've had a chat. It's like, yeah. This is this is this is, I wanna do this deal with some of the sticky eyes. So there's a money exchange and then money exchange at that point, I was just putting the 2 businesses together.

Simon Penson [00:41:15]:
Putting the 2 businesses together. Yeah.

Richard Hill [00:41:16]:
Whereas the where you say 50%, that's when you when you met or sold to IPG. Yep. So you got 50% upfront of the valuation?

Simon Penson [00:41:26]:
Now we took I'm trying to remember now. Now the the the money upfront was actually significantly less. Yeah. I have to be careful. I said I it's been that long ago. I can't remember exactly how much detail we're letting we can say, but it was actually we took a deal that was less up front Yep. With the ability to earn much more on earning.

Richard Hill [00:41:44]:
So even though it might have been valued x, in 3 years, if it's, you know, it's you're right. That could be a hell of a lot more, which it was by the sound of it.

Simon Penson [00:41:51]:
It was. Yeah. So, I mean, basically, they they they valued it. I think it was 3 different points. Yeah. So when you went into the deal Yeah. And the the we had a multiple on that, but then we had also had, like, basically, a matrix that was margin and compound annual growth rate. Yeah.

Simon Penson [00:42:08]:
And depending on where in that kind of matrix we fell when they at the rate points of revaluation, which was, like, in the middle and the end, I think, so we're 2 separate payments, was dictated on that day, that EBITDA number, what the actual value value would be

Richard Hill [00:42:23]:
Yeah. Yeah.

Simon Penson [00:42:25]:
In simple terms. And, yeah, we we you know, in the end, we, you know, we we the the funny enough, I think one of the things that we were advised actually by somebody else that already sold an agency business, I remember at the time having this discussion, that basically said, look. We're usually in the paperwork, they'll put a cap on the total value of the the what they're gonna pay you. It usually feels like a really big number, but just take it out because, actually, it's a really easy negotiation point. Yeah.

Richard Hill [00:42:52]:
Because they think, well, they're not here that way, maybe.

Simon Penson [00:42:54]:
Or Yeah.

Richard Hill [00:42:54]:
And if they do, it's a difficult problem to have. Yeah.

Simon Penson [00:42:56]:
Yeah. But we didn't do that. And we would have, you know, to quite not yeah. Pretty considerably gone over the top of it. I mean, you know, it's a that's what a problem, of course, but I think it's a good tip if people are thinking about selling.

Richard Hill [00:43:11]:
Because because I think, you know, I speak to a lot of agency owners on on on the podcast and just from the nature of doing this for a while. And I think, you know, there's agency owners busy building their agency, busy doing, you know, the the business side of things or, you know, they might be, you know, obsessed with SEO PPC. But most agents, yeah, they're obviously busy building their business. And, ultimately, the back of their mind, depending on where they are in that journey or maybe their age and whatnot, they're thinking, well, you know, one day one day I might sell it. You know, one day I might sell it. And you've just covered a few things there. And I think, you know, speaking to the listeners, what advice you know, you've been in a few deals there, you know, and although probably one deal really for the for the agency, but, obviously, it was structured in quite a unique way by itself. Yeah.

Richard Hill [00:43:58]:
Yeah. You know, and a and a couple of deals along the way and the earn out. What would be maybe a few bits of advice for those? Let's let's pick a you know, I think we speak to a certain demographic with the podcast. Let's say you're an agency owner doing a couple of 1,000,000 Yep. A year. You maybe got a $500 EBITDA. Yep. You're thinking, you know, in a few years' time, I wouldn't mind maybe getting a bit out or a lot out, but I want options.

Richard Hill [00:44:25]:
I'm not quite sure. You know, quite sounds quite nice having a x amount in the bank and doing a bit less. But I might not do that, but I wanna have options. You know? What are some of the things that looking back, you know, obviously, you did work on or you would recommend to work on a bit more? You talked about, you know, looking at that sort of margin, the compound growth rate. What sort of things it was the obvious things around, valuations, but anything that need real learnings from your sort of almost 10 years in the trenches.

Simon Penson [00:44:55]:
Yeah. Do you know what? I remember what one of the most concern I've ever been was the first time we sat down with the corporate development people for IPG. Yeah. Not because they were awful people. They were, yeah, they were really great people, but they said they were talking language I didn't understand. Yeah. And, like, when you think about the fact that, you know, you're perhaps gonna do the biggest deal of your life Yep. That's a really concerning thing, actually.

Simon Penson [00:45:17]:
And I think it was probably that that that fear that kind of has kicked me on to then wanna go into building a fund and spend my entire life around m and a because I knew so little. And so I have learned a lot through that process, and the only reason way that you do that is by throwing yourself into it. Yeah. I think the good news is that if you build and you focus on building a great sustainable business, there will always be a buyer for it, and there will all equally always be a structure that will work for both sides. Mhmm. But, you know, you can be as creative as you want to be with that. And I think, you know, I I I and I obviously spend a lot of time with that with agency founders kind of really digging into this and, you know, spending a lot of time on it now. And, you know, one of the important things that always kind of is a bit of a leaning moment, I think, is going back to your example of the $2,500,000.

Simon Penson [00:46:05]:
The difference in multiple as you get bigger, as you kinda touched on earlier, it has a really, really significant impact. And, you know, if you're doing $500 at the moment, you know, you're probably gonna get 4, 5 times, I would say, something like that. And, like you say, traditional deal structure is Yeah. 50, 60% of that front. You know? The rest of it, deferred. Yeah. Combination deferred shares, you know, earn out, whatever that looks like. That's a very straightforward deal.

Simon Penson [00:46:35]:
But then, you know, if you say that you're growing at 25% and you continue for another couple of years, you know, all of a sudden, let's say you're at 7.50 to a1000000. And, obviously, the million is usually where it really gets starts to get interesting, but you're then getting sick. You know, on a 1,000,000 quid, I was I'm a client of ours, Had a had a deal on the table sort of 18 months, 2 years ago for you know, they were doing just dish just over a 1,000,000 quid in EBITDA, agency business, and they had a deal sort of 8, 9 times. Big difference. Big difference. You know, you're talking 8 to 9,000,000 versus Yeah.

Richard Hill [00:47:13]:
2, 3. Yeah. But which could be in, let's say, a couple of years later, depending on if you're focusing on specific levers around growth margin. Yeah. And so

Simon Penson [00:47:24]:
I think that that's always an eye opening when you actually write that down Mhmm. And work through it. I know, you know, a fairly fairly, you know, fairly okay, normal, achievable, you know, compound annual growth rate. You all of a sudden, you can create a lot of value. But then equally, you know, there there is a lot that goes into that decision and there's risk along the way and all of that sort of stuff. So, you you know, there's no right or wrong answer. Mhmm. I think understanding that and modeling that out is a really key first step.

Simon Penson [00:47:49]:
And then deciding what sort of, you know, life that you want to have for the next few years as part of that because, you know, are you not done yet? But this is about building a, you know, $100,000,000 top line business. Well, it actually probably is the right way because, you know, you have the ability. They're gonna expect you to stick around, and, you know, you're gonna be in a 3 to 5 year cycle, and then you're probably gonna go again. Yeah. But, you know, in the end, you could do very well out of that. Or, you know, are you at the end of your career, wanna do something that's, you know, completely different, is eating at you? You know, I know the business sold relatively recently where that was the case, and they took less because of it Yeah. From multiple specialists.

Richard Hill [00:48:29]:
Get out? Yeah.

Simon Penson [00:48:29]:
But they got 90% of their money up front. And Yeah. Yeah. They were happy. So it really comes back to, like, you know, what do you want out of this?

Richard Hill [00:48:37]:
Is it quite buoyant at the moment in terms of m and a for agencies?

Simon Penson [00:48:41]:
Yeah. If you've got a good business, yes. It is. So there's no dearth of buyers. Yeah. And, like, NDA and PE are are falling over themselves. Their pockets are so full. Mhmm.

Simon Penson [00:48:52]:
But, of course, for that world, really, you need to be, you know, at least a 1,000,000 quid bottom line really sort of kicking on towards for sale. Yeah. Yeah. Really. I mean, there, yeah, there are exceptions to that. And, of course, you know, increasingly, agencies are looking at EOTs now, so employee ownership for us. You see that more of all here? You do, which is an interesting model. Obviously, MBOs as well, you know, management buyouts.

Simon Penson [00:49:16]:
They're they're becoming increasingly popular, and they can work for lots of reasons. So when you did your so I'm intrigued to know, but from a personal point of

Richard Hill [00:49:28]:
view, so you merged with Sticky Eyes. So there's 2 founders. Yep. But did then you did you then obviously, 2 shareholders, but then did you then also with key staff members, did you sort of, looking for? Did you

Simon Penson [00:49:44]:
Do do we have options?

Richard Hill [00:49:45]:
Yeah. Options.

Simon Penson [00:49:45]:
Yeah. We had yeah. There was a lot particularly in Sikhi, actually, there was a large options pool already in existence. Yeah. So, yeah, the the senior team and you couldn't have done it without it. Right? Yeah. And neither should you. Mhmm.

Simon Penson [00:49:58]:
But, yeah, the the kind of the senior team there who were very experienced, had a nice chunk of the business, and it it was really that that actually, I think, really propelled us. And I think, interestingly, it was a ratchet on the EMI. So what that really means is that the the bigger the business grew, the more of the share of the upside that they got. Does that make sense? Yeah. So, you know, like, as a founders, you're you're protecting your first x, but then you're going, well, actually, if it's above x, then I'm happy to give them more. Yeah. You know, it's that kind

Richard Hill [00:50:29]:
of price. Incentive.

Simon Penson [00:50:30]:
Yeah. Yeah. Exactly. And, of course, what that does is it massively motivates them. And, you know, we we absolutely got there, and that's one of the reasons why, you know, we were able to sort of leave the business operationally, you know, halfway through the earn out and a bit further along for me. But, you know, early because we had such a most brilliant motivated team.

Richard Hill [00:50:49]:
But were they did they know that you were planning the exit? They were work they're all walking towards towards the exit.

Simon Penson [00:50:56]:
Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Everybody was very much on the same page there.

Simon Penson [00:50:59]:
Yeah.

Richard Hill [00:51:00]:
Yeah. Well, I have a feeling we could go on for a few hours, Simon. I feel like we're just such a such a we're just we're just getting going. But I think, you know, running an agency is not all smooth. You I think you've literally you know, you've had the story there of of literally, like it's almost like a fairy tale

Simon Penson [00:51:15]:
of of It wasn't that.

Richard Hill [00:51:16]:
But I can imagine some of those you know, I'd imagine they'll be founders listed and, you know, be included, you know, when some days are just a bit crap. You know? Some days are a bit tough. You know? You've you've done all the stuff we talked about. It's still maybe not going in the you know, we're sitting here in the middle of summer now. It's a yeah. It's it's maybe quite a challenging time, certainly, for a for a lot of agents I'm speaking to at the moment. You know, when things are a little bit tough, what would you say to the agency owners that are listening now? When things are a bit tough, what do you sort of what do you go to? What's your sort of inspiration?

Simon Penson [00:51:51]:
Yeah. I mean, it is not a straight line, is it? You're right. And you're gonna have those down periods. And, you know, I remember on a couple of occasions as, you know, having better war room kind of conversations because, you know, things were really bad. And, you know, we had a period where we lost 20, 30% of our revenue quite quickly and Yeah. You know, that hurts. And, you know, I think it's where I think leadership is the really the key here in irrespective of how that plays out. You've got to you've got to almost over communicate, I think, because whether you realize or not, your people see what you see.

Simon Penson [00:52:21]:
And, you know, if it is tougher out there, your people will worry, and they'll fill the, you know, silence with, you know, conjecture and all of those things. So I think we had a, like, radical transparency kind of view to communication, and, you know, we have an all hands weekly where I was really honest. Yeah. You know, we'd give it a bit of a shit sandwich as we call them.

Richard Hill [00:52:40]:
You know, they call it We use the same thing.

Simon Penson [00:52:42]:
Bad good. Right? Yeah. To make sure that nothing was a surprise. And, you know, everybody's an adult, aren't they? And Yep. You know, we, you know, we we took everybody along that. And, you know, there were occasions where we had to make difficult decisions and cut a cloth, you know, and all that kind of stuff because you have to stay lean and, you know, ready and all that sort of thing. And, you know, I think as long as you're really upfront about it, and you do that in the right way, it's how you do it. Mhmm.

Simon Penson [00:53:07]:
Mhmm. You know, that really matters.

Richard Hill [00:53:09]:
People appreciate that. Well, you know, they're on board as well, aren't they, if they know that they are, you know, that the founder is sharing. They're they're sort of almost warts it all to a degree. Yeah.

Simon Penson [00:53:18]:
Yeah. Yeah. Yeah. And then it's you know, ultimately, the the key thing there is it's a revenue challenge, isn't it, most often? Yeah. And, you know, then it's all hands to pump. And how do you how do you build a culture where everybody's willing and able to contribute to that sales and marketing effort? Yeah.

Richard Hill [00:53:33]:
Well, it's been a pleasure having you on the show. I've got a couple of final questions. Would you do it all again?

Simon Penson [00:53:40]:
I do know. I've been asked that several times, and I think the answer is no. I think the idea now of, you know, starting from scratch and, you know, winning your first £10,000 client is, I think, is quite difficult thing, unfortunately. But, you know, it's why I do what I do now, really. It's why I spend still a lot of time with agencies, you know, as a consultant on that or whatever. Mhmm. And, because you're still able to play a part, but without the having to do the first, you know, 1,000,000 quid of value, if that makes sense. Yeah.

Simon Penson [00:54:08]:
So

Richard Hill [00:54:09]:
Yeah. The heart of it.

Simon Penson [00:54:09]:
But, yeah, still love it.

Richard Hill [00:54:11]:
Yeah. It sounds like it.

Simon Penson [00:54:12]:
Yeah. Still love it.

Richard Hill [00:54:14]:
So what's the road map for you? Yeah. Obviously, you've talked there about the, obviously, your consultancy, but what's your sort of plans for the next year or 3?

Simon Penson [00:54:22]:
Yeah. I mean, I think, you know, whilst scaled was it kind of was very much born organically out of the fact that, you know, I I could see that the lived experience that I learned from over here was really helpful to, you know, remove some of that pain. So I think continuing to do that and, you know, sort of broadening out that to a wider b to b kind of audience, I think, makes sense. But, you know, also really fascinated in that, you know, the kind of the PE journey as well. And I think Yeah. You know, how because I'm gonna learn from that. So, you know, I wish I'd done that deal so I can see how it can be really, you know, kind of value accretive. And, you know, you can work with some really smart people, and, you know, I'm really looking to sort to sort of looking and diving into that.

Simon Penson [00:55:03]:
Mhmm. You know, particularly with agencies because it's where my main skill set lies. So being the conduit between the investor and the operator a little bit.

Richard Hill [00:55:12]:
Connecting with yeah. Fantastic. Well, I like to finish every episode with a book recommendation, Simon. Do you have a book to recommend to our listeners?

Simon Penson [00:55:20]:
That's a very good question. I do you know what? I always go back to it. And, actually, probably now, I haven't read it for probably about 15 years, but it's so it's probably really out of date. So I'm not saying read it. But, Boston Consulting Group did a did a book, probably back in the nineties now, sort of Boston Consulting Group on strategy or something like that. I remember it's a sort of red sort of cover. And I think it really the reason why I really like that because it really opened my eyes to the kind of the importance of good framework and strategy. And, you know, I think from that, it kinda led me to think quite differently about how to build business and, you know, how to separate just doing stuff from planning stuff.

Simon Penson [00:56:03]:
Yeah. Yeah. So, yeah, probably really out of date now. So I'm not saying read it, but I think because of what it was at the time that I read it, it made a big difference to my life.

Richard Hill [00:56:13]:
Yeah. I like that. I think that's sort of, planning actual real stuff. Doing the right things is usually half the problem for most agents just to get that growth because they're just busy doing something, but maybe not the right thing. Yeah. Same to their clients.

Simon Penson [00:56:27]:
Yep.

Richard Hill [00:56:28]:
Well, thanks for coming on the show. For those who wanna find out more about your journey and what you're doing at Scaled, what's the best way to do that?

Simon Penson [00:56:34]:
LinkedIn. Use your way. Right? So Simon Pence on LinkedIn or simon@scale.co.uk. Reach out. Happy to have a chat.

Richard Hill [00:56:40]:
Thank you. Well, thanks for coming on the show. Thank you. My pleasure.

Simon Penson [00:56:43]:
Really enjoyed it. Thank you.

Richard Hill [00:56:48]:
If you enjoyed this episode, hit the subscribe or follow button wherever you are listening to this podcast. You're always the first to know when a new episode is released. Have a fantastic day, and I'll see you on the next one.