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How To Leverage Systems and Relationships To Scale Quickly

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Josh Johnston is the Founder of Hydra, a consulting firm that partners with digital agency owners to build and refine their operational systems, processes, and service offerings. He has a proven history of scaling businesses to multiple seven figures and beyond. Josh was the Chief Operating Officer for Welling Media which he helped grow to great success. After he exited in 2020, he launched Hydra to help other agencies scale just as quickly.

Here’s a glimpse of what you’ll learn: 

  • How Josh Johnston scaled an agency to seven figures
  • The strategies Josh adopted to quickly prepare a business for exit
  • Hydra’s approach to helping agencies grow and scale
  • The main challenges faced by small agencies
  • Josh’s tips for developing employees into leaders
  • How Josh uses events to build relationships and connections

In this episode…

One of the biggest challenges many agency owners face when starting a business is scaling quickly. Building a clientele, hiring great employees, and delegating work are some of the most common difficulties for new companies.

When expert Josh Johnston was brought in to help an agency grow, he started by building systems and processes. He also developed key connections and relationships in his industry that opened new doors. Josh advises agency owners to nurture great leaders and develop a leadership structure within their companies, implementing systems that will make hiring and delegation easier. Now he shows you how you can do the same

In this episode of the Innovations and Breakthroughs Podcast, Rich Goldstein interviews Josh Johnston, the Founder of Hydra, about how to leverage systems and relationships to quickly scale a company. Josh discusses tips for developing employees into leaders, the main challenges faced by small businesses, and how he utilized relationships to scale an agency to seven figures.

Resources mentioned in this episode:

Sponsor for this episode…

This episode is brought to you by Goldstein Patent Law, a firm that helps protect inventors’ ideas and products. They have advised and obtained patents for thousands of companies over the past 25 years. So if you’re a company that has a software, product, or design you want protected, you can go to https://goldsteinpatentlaw.com/. They have amazing free resources for learning more about the patent process. 

You can email their team at welcome@goldsteinpc.com to explore if it’s a match to work together. Rich Goldstein has also written a book for the American Bar Association that explains in plain English how patents work, which is called ‘The ABA Consumer Guide to Obtaining a Patent.’

Intro (00:09):
Welcome to Innovations and Breakthroughs with your host Rich Goldstein, talking about the evolutionary, the revolutionary, the inspiration and the perspiration, and those aha moments that change everything. And now here’s your host, Rich Goldstein.

Rich (00:33):
Rich Goldstein here, host of the Innovations and Breakthroughs podcast. Why feature top leaders in the path they took to create change? Past guests include Joe Polish, Roland Frazier, and Mitch Russo. This episode is brought to you by my company, Goldstein Patent Law, where we help you to protect your ideas and products. We’ve advised and obtained patents for thousands of companies over the past 28 years. So if you’re a company that has software or product or a design you want protected, go to goldstein patent law.com where there are amazing free resources for learning about the patent process. And you could email my team at welcome@goldsteinpc.com to explore if it’s a match to work together. You could also check out the book I wrote for the American Bar Association that explains in plain English how patents work. It’s called the ABA Consumer Guide to Obtaining a Patent I have with me here today, Josh Johnston.

Rich (01:24):
Um, Josh was, was the Chief Operating Officer for an agency that he helped grow to seven figures. Uh, after he exited in 2020, he launched Hydra, which, um, is a consultancy that allows him to consult with agencies around the world, um, digital marketing agencies that, uh, and that work on things like Facebook ads, TikTok, essentially anything digital marketing related. Um, and, um, he just hosted a first event, uh, his first event back in August. Um, and he’s getting ready to host another event this coming spring, and it’s my pleasure to welcome here today. Josh Johnson. Welcome, Josh.

Josh (01:59):
Hey, Rich. Thanks for having me. Appreciate it.

Rich (02:01):
Absolutely. My pleasure. So yeah, let’s, let’s talk about that. So like, kind of what did it take, first of all to get that agency from, um, from Zero or where you found it to Seven Figures?

Josh (02:15):
Yeah, absolutely. So, you know, when, when we started the agency, it was actually, uh, founded by, by the CEO and, and TBR at Solo actually for the first year. So a lot of people actually with our, uh, with our growth don’t really realize that, you know, the first year it was solo operated. Um, and so they thought like, we just had this massive blow up. But, um, you know, for us it was, it was one of those things where it was actually a solo growth than most people, most people thought, right? And so, uh, I came on in that, that second year, at the beginning of that second year of the agencies, uh, life cycle. And, um, you know, for us, the growth trajectory really came from a lot of the relationships that we built with, with other brand owners, other agency owners that allowed us to really get into the right rooms and be able to cultivate, uh, strong relationships with large brands.

Josh (03:03):
And so for us, um, you know, at the beginning it was Slope. Um, you know, we didn’t have like a very quick, um, like a lot of quick wins. Uh, we were still trying to find our, our niche, uh, which was the direct to consumer e-commerce space. And for us, it, it took some time before we actually got to a point of knowing exactly who we served, the specific avatar to, uh, the type of clients that we wanted to land, and the retainers that we wanted, um, you know, within our agency. But, uh, all of a sudden we started landing a little bit larger brands through, uh, through relationships, not because of any crazy marketing strategy that we are running internally. It was strictly, Hey, we’re gonna build the right relationships. We’re gonna attend Masterminds, events, uh, places where we know that our ideal clientele kind of lives, and we’re gonna start fostering relationships with these people.

Josh (03:51):
And, uh, yeah. So that was our, uh, essentially how we got started. And through that we were able to build it to a multi seven figure agency. Um, roughly 18 months after I, I came on board, uh, and fostered a team of about 25 people, uh, leaning in on, uh, on services such as content creation, uh, paid media, and, uh, social media management as well. So that was kind of the, the life cycle of it. And yeah, it was, it was, it was crazy when we did start a scaling because it was almost like a snap of a finger of like all this crazy growth happening all at once. Um, but like, it was a slow burn up to it, but once, once the rocket kind of caught fire, uh, it was, it was off to the races.

Rich (04:31):
Awesome. Awesome. And, and what was it like though jumping in on the second year then? Like, so, um, people already have their habits. They have their systems, sometimes pretty half air systems, right? But they’re there, and like, you’re jumping in and you are, you’re probably seeing some things that, that need to, to shift, um, you know, um, some blind spots that people had about how to set things up and like Yeah. You know, so kind of, what was that like, jumping in?

Josh (05:00):
Yeah. You know, it’s, it, it, it’s funny because, uh, there weren’t any systems coming into it, right? Mm-hmm. <affirmative>, like, it was, uh, you know, my best friend started the agency, uh, and he was like, Hey, I need a coo, uh, to come, come help me build this thing. And I was like, I don’t even know what a COO is, but that sounds cool, <laugh>, and I’m in. Uh, and so when, when we jumped in, I just, I didn’t even know anything about the position. Uh, I came in and I, I was running social, uh, social media accounts. I was running some paid ads here and there. Um, like I was a glorified social media manager, uh, with the COO title, right? I was doing a lot of fulfillment, um, when I first started. And so, but I think it gave me the necessary tools to help build appropriate systems and, uh, build out the appropriate process for each department, uh, to have success across, you know, every department that we were running, right?

Josh (05:50):
So, um, it was the very beginning. There was no, there was no glamor in it. Uh, it was very in the trenches, very in the weeds, uh, having to learn each position extremely well so we could pass off some of those fulfillment tasks to other employees, right? So, uh, yeah, like at the beginning, there was nothing, There was no infrastructure. So it was learning as, as we went. And like, I had to learn to become a coo because there’s not really handbooks on it, you know, <laugh>. So I had to learn from other people. I had to self teach myself, um, and, and just kind of figure it out.

Rich (06:25):
Awesome. Yeah. And, and, and so that’s that’s great though. I love it. Like, you know, what a COO was. Um, and, but it was just kind of like, Hey, I’m doing this thing. I’ve got this thing, and it’s, it’s kind of cool, and like, I, I need your help. And so, you know, really, it’s like he had already established the vision of what it was, right? Yep. Exactly. And CEO stuff, and he’s like, I need help to move it further to grow it, which is like COO stuff. Yep. Um, and so, and, and together that’s what you guys did. You jumped in and you, you helped create systems and, um, and I guess grew a team and then, um, moved it towards exit.

Josh (07:06):
Yeah. Yeah, a hundred percent. And honestly, we wouldn’t have been able to move it towards an exit. We didn’t, we didn’t build up the appropriate systems, uh, if we didn’t have, um, you know, cash flow in the right, right position. So it was, uh, it was very fortunate that, uh, we kind of, you know, built the way we did, uh, because we did position ourselves, uh, for an exit, you know, relatively quickly, um, you know, within the, yeah. Within the, the, you know, two years that we were operating. So,

Rich (07:31):
So what, what are some of the things that you think were crucial towards that growth? Like some of the things that, um, that you created, systems you created that kind of helped you move, um, that quickly from Yeah. Just you and him to, um, to exit.

Josh (07:46):
Yeah. For us, something that we, we kind of adopted very early on is kind of like the, um, you know, the, what you see a lot in, in California is like this pod structure, um, of growing a business, right? And so that’s something that we adopted probably in, in our second year of business, was our ability to recreate a certain amount of fulfillment tasks across a certain amount of people, right? And what kind of, what I mean by that is, um, you know, let’s take a, a creative for example of, you know, we would need specific people to do certain tasks within, within our, our creative fulfillment, right? So maybe that’s pre-production. So the ability to, uh, write out scripts, storyboard onboard a new client, right? There’s a lot of things that need to happen in the pre-production side. In order to do that, we need probably like, uh, a client success manager, account manager, maybe a head of production to come in there and start doing some of those things, right?

Josh (08:37):
Well, we also need to actually do the production itself, right? So once we’re done with the pre-production, we have to do production, okay? So we actually have to shoot the content, um, and make sure that the models show up, make sure the models are scheduled in, which is kind of pre-production, but make sure that they show up, make sure everything is on alignment with that storyboard. And then after that, we have a post production team, right? And that post production team takes that content that we shot in production, and it’s, it, uh, puts the final spins on it, any last revisions that the client might have, and then it gets delivered to that client. Well, there’s four or five positions within each step of that process, right? And so what we kind of realized was we were managing clients, all of our clients as like a checklist of like top down, where we had, you know, say 45 different clients mm-hmm.

Josh (09:19):
<affirmative> all on one list. Well, what we started doing is sectioning those that list out, right? So we would have, you know, say three pods of 20 different clients, uh, being managed in different groups. So it’s almost like a team structure where they have one team, they managed 20 clients, and they don’t worry about the other 40 clients that we’re currently managing. It’s just the 20 clients inside of that pod that they’re managing, right? So it allowed us to chop things up, apply KPIs to those specific, those specific pods that we are managing and saying, Hey, like these, this pod’s exceeding, this pod’s not exceeding. And what that did is it allowed us one to systemize, uh, our process, but it also made things, uh, extremely visible from a standpoint of scale, right? So we were able to say, Okay, we know that one pod can have X amount of capacity, right?

Josh (10:06):
So can handle 20 clients. Now, as we started to inch closer to 15, 16, 17 clients, cool, we’d look at bringing on a second pod to help disperse some of that fulfillment work that we needed in order to scale to our next pod, right? And so we’d start stacking those on top of each other, and that allowed us to, one, systemize everything, but two, be able to say, Hey, like this, this is when we need to bring on our next group of production specialists, post production specialists, copywriters, right? And, and bring them into the mix, uh, with, with our, uh, with our team, right? And so it allowed us to, to be able to look at it from a revenue standpoint too, and say, Hey, we know that this pod can generate X amount of revenue. Uh, we know we’ll get this much profit from them. Uh, and so this is a good time for us to expand into a new pod. So that’s kind of the stance we took on it.

Rich (10:56):
Cool. Uh, and it, it makes perfect sense now that, like then the next phase after this agency was, then you started consulting with other agencies to show them how to grow.

Josh (11:08):
Exactly. Yep. Yep. So now, now we, uh, work with agencies all over the world, um, teaching them how to grow their operational infrastructure. Uh, a lot of them will scale into some sort of pod structure at some point in time. Um, but you know, from the beginning, they’re not necessarily in that pod structure, but yeah, like, you know, we help with everything from, Hey, when’s the right time to hire? Who’s the right person to hire? Um, to, you know, hey, how do we get more leads to the door for us? How do we convert those leads into sales? And then once we have them as a client, how do we fulfill at a very high level, uh, when we have to bring on teammates? How do we create systems around our, our, uh, our current systems, uh, that will allow us to, uh, fulfill on the same amount of work? Cuz here’s the thing is like, the founders normally the person doing the fulfillment at the beginning. Well, chances are, are you need to bring someone on to relieve you of some of those things, right? So we need to have good systems in place to make sure that the quality of work stays at a high level. And so those are all things that we help with, uh, within our consultancy.

Rich (12:05):
Yeah, no, absolutely. And, um, uh, I think it, it’s interesting though, probably one of the biggest challenges that agencies face is growing and scaling. Um, it’s like you start out with, um, someone who’s really good at digital marketing, someone who’s got an instinct for like, what needs to be done for a client. And they probably generate great results for a handful of clients. And then they say, Well, I, I, you know, if I’m gonna grow, I need some help. And then how do I grow? And then how do I duplicate myself and my eye toward what needs to be done? And obviously, you know, can’t be sitting there editing videos and writing copy for every client, so have to find ways to, um, to delegate, right? Yeah. Even with an initial team. And then, um, ways to not be the only one selling the services, not be the only one bringing in new clients. Um, and then ultimately that like means like other teams, and it’s, it’s, it’s like a, it’s, it’s just a huge task. You see, so many agencies do great when it’s just one guy, or even when it’s a small team, but then it just gets watered down and diluted. Sure. And, um, and so it just, it sounds like you help people to, to tackle that among other things.

Josh (13:25):
Yep. Yeah. A hundred percent. And one of the big, big things that we see on the agency side is when agencies start to scale up, they always feel, Hey, I need to delegate things off my plate, which is 100% sure you need to delegate those things, but you have to still have the leadership with, with that group of people that you’re delegating to. A lot of times founders think, I’m gonna pass this off and we’re good, right? And, and the training stops there. Uh, it’s like, no, you have to continue to work with that team. And that’s the biggest disconnect we see from people going from say like a three to four person team, right. Into like a 10 person team, right? Uh, is that there’s no, uh, the pass up is like the assumption is made that there’s leadership and training continuing to happen, right?

Josh (14:07):
And that’s the biggest disconnect for us. And that’s what we need to tie back into, into scaling from a three to four person team to a 10 person team, is that ability to still lead the team, to still be on the front lines with them, get them trained, and then create more leaders within your organization. When you can create more leaders within your organization, that’s when you can really, uh, lay out the gas and be able to scale into a 30, 40, 50% team. Cuz now you have a leadership structure underneath you that thinks like you, that does fulfillment the same way that you would. Right. But if you’re not developing your leaders inside your organization to do the same things that you would do as a founder, you’ll never get to that large team.

Rich (14:47):
Yeah. And, and, and so how do you develop leaders? I mean, like, um, there’s, there’s the day to day developing leaders, giving people, um, giving people opportunities to step into their leadership. But like, do you believe in like kind of formal leadership training or like sending your team to, um, through some type of program or, uh, like, like what, Yeah. What do you see as like the real path to a developing leaders?

Josh (15:12):
Yeah. Yeah. Great question. Um, you know, it’s a combination of all those things. Um, yes, a hundred percent. Like we buy programs all the time. We buy masterminds, we buy, uh, coaching programs. Like, it’s something that we invest very heavily in, um, on our side. But it’s also from a standpoint of even having like, uh, having internal, uh, trainings with the team. Um, and for, for, for us, it’s like our CEO has a knowledge of, of, of, um, information that, that he needs to share with the team, right? Can’t just hold that, you know, hold that to himself and, and ex uh, expect the team to, to learn all of it by themselves, right? So there’s a lot that we have learned as CEOs, as, as founders of business that we need to pass on to our team. And a lot of those things can’t be taught through a program.

Josh (16:01):
Like a lot of those learnings need to happen from internal trainings. Right. You know, And, and that’s things like we, we have a very broke minded type culture where it’s like, hey, like, you know, we read and, and you know, we’re, we’re gonna be, you know, tackling books together. And, and these are, these are the things we’re that we’re going to do to get better at our craft. And that’s just the culture that we’re developing inside of our consultancy. It’s what we had inside of our agency. So it’s like, these are the things that we have to do on a regular basis, otherwise, uh, people get stagnant. Um, and the growth tends to stop, uh, and they get complacent within their position, uh, and that they’ll either stay where they’re at and not grow past it and not have enough opportunities for leadership, um, whether they know it or not, or they end up leaving because they feel stuck and they’ll move somewhere else that has a better culture, that gives them more opportunity and where they feel like they’re being challenged.

Rich (16:52):
Cool. Yeah. Um, and um, and, and speaking of, of kind of like, well, leadership is about people, right? It’s about, um, it’s about people and it’s about relationships and like, so you said a big part of the growth, um, of your agency was through relationships, through events, and through meeting people. Yep. So, um, so kind of tell me about that in like, in the way in which you created an event, uh, recently, um, this past summer. Um, and kind of like what was the value to your team in doing that?

Josh (17:26):
Yeah. You know, for us, uh, I wanted to host an event that allowed people to come into a room where they could have intimate conversations, uh, still, still have good curriculum and still have good, um, good like keynote speakers. Um, but the whole idea was to, if you’re in search of getting connected with someone that you need to be connected with, like, this is the spot you need, need to be. Um, and so for us, like, uh, the event was about 50 people, uh, so relatively small room. Um, we weren’t, we weren’t trying to host a thousand person event. The idea of it was that it was supposed to be intimate and that it was supposed to be, uh, a place where you go deep in conversation with your, uh, with your peers in the same industry. Uh, and you learn a lot about the tactics that they’re utilizing, whether that is, you know, lead generation tactics, how they’re leading their team, fulfillment, whatever.

Josh (18:15):
It’s right. You go deep with those conversations, you come in there almost with an agenda of like, this is what I’m looking for, right? And you know that someone in that room is gonna have the answer to the problem that you’re currently having. And so that was kind of the idea because so many times, you know, we go to events, uh, and, uh, you know, for me, someone that’s relatively introverted, um, sometimes it’s hard to put yourself out there and have an agenda coming into a, into, um, an event, uh, where you don’t just like sit on the wall or sit in the back of the room and do your own thing, right? And so we tried to foster a room that allowed people to get what they came for, uh, and then hopefully leave new partnerships. Cuz some of our best partnerships in the agency space came from, uh, other agencies that didn’t have specific services that we delivered, Right?

Josh (19:04):
And so for us it was content creation. Uh, it is very difficult to have a, a content studio in house, uh, have a content team that can pump out a high volume of content. So for us in 2018, that was one of our selling propositions, is like, we can create volume at scale and we can even do it for agencies. Uh, and so for us, we’ve partnered with certain agencies that introduced us to some of the biggest e-commerce sprints in the world. Um, and so that’s how we kind of got our start in the space. And it all came from a relationship built in a room similar to one that we were trying to foster, um, with our event. Right? And so that’s kind of the idea of us hosting events is, you know, bringing people in that can, that can build relationships like that where they can all make money together.

Rich (19:48):
Yeah. And so it sounds like the attendees were, um, all agency owners, um, and, uh, you did some masterminds where people got to share, uh, what they’re going through and got to get, um, got to learn from other people who might, might have been there last year or, um, Yeah. Which, uh, sounds awesome. And, um, what was the name of the event?

Josh (20:11):
Yeah, it’s called the Hydroco. Mm-hmm. <affirmative>. So just our, our business name and then, uh, just counsel at the end. So.

Rich (20:18):
Cool. And so what did you learn from that event that kind of, uh, is going to shape the next one that you

Josh (20:25):
Do? Yeah, yeah. A lot of takeaways, man. Uh, it was our first event ever. So coming into it, uh, you know, of course we have a high expectation for how the event event ran. Um, but, uh, for us, like we weren’t a hundred percent sure how it would turn out, but, uh, I guess like takeaways for us, um, uh, I guess essentially like, like there’s nothing that really went wrong, right? I would say like, like a few like minor things that we could have cleaned up, uh, on our end, um, was probably just a few less seats. So we kind of found that a lot of people gravitated towards the back. Uh, and like we had like some couches in there and stuff too, and like, people were like, but for like, the comfy seats, so putting like the comfy seats up front, if you’re ever hosting event, put the comfy seats up front, uh, you know, and have less chairs than you think are available. And if you need to add more chairs, uh, than you can, I think we had like 75 chairs set up in that room. Uh, and so it made it kind of feel a little bit more empty than it actually was, uh, because people were kind of spread out a little bit. Uh, cause the room was a decent size, but, uh, if you wanted to, if you want the atmosphere to feel full, uh, take away chairs, have less, and then add more in <laugh> as needed.

Rich (21:31):
I go to a mastermind where they start with the, a limited number of tables and chairs mm-hmm. <affirmative>. Yeah. And they literally, like, as they fill up, they add a table with a few more chairs Yep. At a table. So

Josh (21:43):
Super smart.

Rich (21:44):
Yeah, yeah, yeah. Like they’ve got people that are like literally standing in the back of the room waiting to add tables and chairs as people come in and so like, keep it, keep it tight like that.

Josh (21:55):
That’s right. Yeah,

Rich (21:56):
Exactly. People engaged.

Josh (21:56):
Exactly. And that, that was the idea is like, we want to keep people engaged. So the second day we actually moved a lot of the chairs, uh, in there and, and, uh, gave people less of an option to sit other places. So. Nice. And then I guess the second one would be, um, the second one was sponsorships. Uh, so, uh, apparently a lot of people sponsor events and so, uh, I guess sponsors are supposed to cover your hard costs of, of throwing an event. So if you ever throw an event, get some sponsors, people have plenty of, plenty of money for sponsorships. And so for us, we already have, uh, people lined up for our next event, uh, to sponsor it. So, um, which is pretty exciting. That’ll cover most of our hot co our hard costs. Uh, and then they’ll have a sponsor sponsorship slot, um, for our event.

Josh (22:40):
So, uh, those are like the two big takeaways. I, I would say, like, those are the two things we did wrong, um, you know, when it came to our event. But, uh, outside of that man, like our speakers were great. Uh, they were well vetted, uh, made sure that, you know, hyper had the presentations in on time, that way we could look through everything. Um, and then the other thing is just make sure that, you know, the topics really align with who your audience is. I’ve been to quite a few events where they’ve had a few talks that was like, Okay, like this isn’t really speaking to the room. Um, so that’d be the other thing. If you’re ever hosting an event, make sure that the topics really speak to the room that, that you’re people well. Um, cuz obviously that person is a representation of you and your company if, if you’re hosting that event. So.

Rich (23:20):
Yep. Absolutely. Yeah. That, that’s great. And so then you’re, you’re planning to do another one coming up this, um, this spring?

Josh (23:28):
Yep. This spring planning on doing another one. Um, we’re currently, we just rebuilt our, our regular website, but, uh, we’re looking at, uh, tacking in the hydro console side of things into our website as well. So, uh, if you’re an agency owner and you’re interested in coming, just be on the lookout. Uh, we’ll be, we’ll be having announcements on dates, probably some time, uh, during this winter.

Rich (23:49):
I imagine the people that sign up for your newsletter, uh, on your website probably will, will get to hear about it. Yep.

Josh (23:57):
Yeah. Yeah, a hundred percent. Yeah. So, uh, it’ll definitely be part of the newsletter. Uh, we try to be very value forward in our newsletter, but, um, at, at the end of the day it’s like, Hey, you know, like if we’re hosting an event, we’d love for you to be there. It’s a great room to be in, so.

Rich (24:10):
Absolutely. Um, and so people wanna learn more about you or get in touch with you, uh, how do they go about doing so,

Josh (24:17):
Yeah, so you can find us at workwithhydra.com. That’s our website. Uh, and you can connect with me on social media, most active on Instagram. Uh, and my tag is @joshykobyashi, uh, j o s h y k o b y a s h i. It’s kinda a mouthful, but, uh, it’s, that’s, yeah. Yeah. It’s another story for another day.

Rich (24:39):
Right. <laugh>. Sounds good. Well, Josh, I appreciate you taking the time to be on this podcast. Thank you so much.

Josh (24:46):
Yeah, of course. Thank you for having me.

Outro (24:52):
Thanks for listening to Innovations and Breakthroughs with your host Rich Goldstein. Be sure to click subscribe, check us out on the web innovationsandbreakthroughs.com and we’ll see you next time.

 

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