About This Episode:
Welcome to our 29th edition of the Agency Profit Podcast! This installment features Keith Scandone, of O3 World and 1682, sharing his inspirational (if a little unorthodox) beginnings, enduring the 2008-2009 recession, and the importance of being cordial with the competition.
This episode to dissect all one needs to know about growing an agency of three people into a team of 50 awesome employees
About Keith:
Keith Scandone is the co-founder and CEO of O3 World, a 15-year-old Digital Product Agency with a team of 60 people. He is also the co-founder of O3 Ventures, which is a spin-off of O3 dedicated to investing in and partnering with existing Digital Product companies to help them accelerate their businesses.
Keith is busy go-getter, he is also the co-founder of the Forge Conference, a 300 person UX and Design conference that ran 3 years. And co-founder of 1682, a 125 person invite-only Business of Innovation Conference. And last but certainly not the least, he co-founded the Philadelphia chapter of the Awesome Foundation and have sat on many boards and committees, most notably and recently, the Philadelphia Global Identity Project, to help position Philadelphia globally.
Want to See More of Keith? Follow him Online:
- O3 World
- O3 Ventures
- Keith’s LinkedIn
- Keith’s email: keith@o3world.com
Time Stamps:
Intro 0:00
Keith’s Unorthodox Beginnings 2:43
O3 World’s Business Culture and Services They Offer 7:00
Growing Pains Agency Encounters and How to Overcome It 12:00
Importance of Properly Manage The Agency’s Cashflows 16:20
The Importance of Knowing Your Strength 19:27
The Importance of Being Aware of Your Competitions 24:05
Decision Making and How to Properly Execute Strategic Changes 30:01
Scaling Your Agency 35:12
Outro 47:22
Surviving and Thriving Through a Recession with Keith Scandone – Episode 29
Everyone can start a business, even those without a degree. Keith Scandone is a successful partner of O3 World and co-founder of 1862 joins our podcast to talk about his humble yet unorthodox beginnings, the challenges that the company faced during the recession and how did they overcome it, and how to understand your company’s strong points in building a successful niche market.
Before Keith found success, he was truly passionate about acting. He was a college student at Loyola University Maryland when he was a cast in a play. That infectious and memorable experience drove him to move to Los Angeles, California to pursue his acting career.
However, after 7 years in showbusiness, Keith realized that he prefers to work behind the scene instead of working in front of the scene. He then packed up his bags and went straight to Philadelphia then he was initially hired as a marketing consultant in a small online entertainment city guide.
Through working in this small city guide, he met his soon-to-be business partners who are freelancers in the same company. The company that Keith and his partners were working for, refuse to work for bigger clients. Keith knows that he wants to do more and work with bigger clients. Which is why Keith and colleagues decide decided to put up a company. 15 years later, O3 World is stronger than ever!
Keith is humbled and proud for surviving in the industry for 15 years, which is a tough feat. Being involved in a tech-related industry means that you must be able to adapt to fast-phased changes which can really be challenging for any tech agency owners. He said that it is quite mind-boggling to look back and see that the businesses that he used to look up to before no longer exist today.
O3 World’s Business Culture and Services They Offer
O3 Wold currently has a team of 50 full-time in-house talented employees. Keith Scandone said that culture and their collaborative nature plays a huge role in doing the quality of work that they do.
The company prides itself on being an innovative company. That being said, their company is used to adapting to new technological changer and career opportunities. And their company culture mirrors the services which they offer.
O3 World always pushes its boundaries and raise the bar higher in everything that they do or accomplish. From brand communications, identity development for small websites, API development, custom integration, account strategy, and even digital content strategy, Keith stated that he and his team make sure that they stay on top of their game with regards to new business and opportunities.
Keith said that “We don’t really like working project to project. We want to have more impact and influence on the work that we do.”
They like to work with the clients that they have and keep on working with them. I personally think that this is a better strategy than jumping into one project to another which has a slimmer chance of client retainment. Having a go-getter and detail-oriented office culture is important.
Another insightful thing that Keith stated that I think all agency owners must keep in mind is that instead of looking for new clients try to build a meaningful long-term partnership with your existing ones.
But how are you going to do that when your project is over? Great Question! Keith shared that by reaching out to your current client/s on what other services you offer. They built an account strategy layer that was built to actually sell into clients which turned out to be a successful venture.
Growing Pains Agency Encounters and How to Overcome It
Unfortunately, we live in a world where there are no shortcuts. I can’t think of an agency that never encountered difficulties and challenges. In fact, facing difficulties or challenges in your business is normal, it actually depends on how you will handle it.
Just like how Keith and his partners survived the recession back in 2008 and 2009. Keith Scandone recalled one of the toughest experiences. He shared that he almost ran out of business. He remembered him and his partners sitting down, looking at each other, and without any idea on how they can get additional money for their payroll.
It is tough to raise a business, however, it is a lot more challenging to do it while the country is experiencing a recession. Not only will there be a difficulty in finding new investors or clients, but it is also tough to risk the money which you have left into your business.
Luckily while one of Keith’s partners is looking into their bank account, all of a sudden they saw a newly deposited amount of $5,000.00. This was one of their referral fees that they were able to get that they had no idea it was coming. And according to Keith, that was the absolute closest we’ve ever come to being out of business.
According to Keith, when you start a business, people usually play on their strengths; whether they’re a great writer, a great designer, or a great developer while fiding the right and qualified people who they are willing and comfortable to work with.
“Most people don’t realize that running a business is a lot of the things you don’t like doing.”
There are a lot of operational pieces, and one obvious thing is finance. It is important to manage your finances appropriately, legal documents, and staff benefits. And you have to understand the scope creep that every agency deals with.
“The only way you get better at managing your agency is by getting burned by it a bunch of times.”
The other thing is that being spend time, energy, and money on making sure that we have the right people in place that are in non-billable roles. And I think that’s something that a lot of agencies really wait on as long as possible. I think the biggest thing to always hire a project manager which will help you keep track of the progress in your business.
Importance of Properly Manage The Agency’s Cashflows
Having a successful agency means that you must be smart in both taking risks and managing your cash flows. You must be critical and objective when working with clients, on how you are going to do the job successfully while being able to try and put a real budget on a certain project while trying to manage it how our clients would. Manage your resources appropriately and strategize ahead to have solutions readily available when the project would experience setbacks.
The importance of financing and cashflow is really critical, which is why you need to be smart to have as much runway as possible. It’s normal to have ups and downs but try to protect yourself against the downs as much as possible so you don’t have to lay people off as such.
It is also important that you hire someone who has a great background in finance and operations so you can properly elaborate on the different strategies that will work well within your agency while being smart about it. Again, agency owners’ goal must not just make money and pay money, but really there is a lot of metrics essentially associated with knowing when you should hire people, when you may have to lay off people.
Side note: our Agency Profit Toolkit is a one stop shop for you to be able to outline some of these crucial profitability numbers to a potential buyer. Spreadsheets, templates and training videos, you name it, it’s all in the toolkit. Grab yours free at the link below:
The Importance of Knowing Your Strength
Another thing that agency owners must consider according to Keith, is to be completely honest with yourself in what your strengths or weaknesses are.
Too often, people are afraid to not make the client happy or they’re afraid to lose the business. But often saying no is a better way to maintain that relationship than saying yes.
It’s important to learn how to communicate what you can or can’t do, and understand that saying ‘YES’ to everything is a good way to put yourself in a situation where you’re underdelivering to the client, and losing out on margin along the way.
The Importance of Being Aware of Your Competitions
Finding the right balance in scoping or scaling your agency can be a tedious job. Did you know that being open to working with other agencies will help you find that balance? In fact, this is such an effective method that you have to be comfortable with.
Keith stated that they partner with a lot of complimentary agencies so they can work on things that they’re not really much experienced in. Keith and his team have no problem being brought in and worked with different agencies as long as there’s a level of respect and a clear understanding of who’s doing what or the fact that we do development. It’s very, very helpful for them and helpful for us and vice versa. That’s also an aspect of not being greedy. Sometimes we’re okay not coming in and have to be the only agency. As long as, we’re respectful of one another.
I think it’s important to know what stand for or what your differentiators are. In general, it important to be friendly with a lot of agency owners in town and actually outside of town, and be open with the opinion with one another.
And that’s what Keith did. He has his own leadership philosophy, but also I’m still inexperienced in a lot of things in life and in business. Keith then tried to meet with other people that basically give him either inspiration or ideas that I can add on top of what I already have.
I have spoken to a lot of people who are from the same field, and personally I think it is great to keep the conversation and connections open so you can navigate through your niche. Through this, you will be able to further understand your strength and use it to your advantage by creating your very own niche market.
“A lot of is also kind of stay ahead of the competition to some regard and kind of continue to create our own niche.”
However, as time goes, your company evolves and so are your competitors. This is why it is very important to be able to adapt to new technologies and changes while still being open to your competitors.
Decision Making and How to Properly Execute Strategic Changes
“I don’t think there should just be like the end of the year thing that you focus on. It should be ongoing.”
According to Keith Scandone an agency owner must implement strategic changes or decision making on an ongoing basis.
“Everybody should be curious. They should be curious about how they can do things better, how they can do things differently, how they could make their clients happier, and how they can make each other happier.”
Before you start implementing changes it is important that business or agency owners are mindful with regards to:
- Client engagement; Are they satisfied and happy with the end-product of the project which you guys have collaborated with?
- Revenue; Were you able to bring in additional revenue? Do I need to hire a person who has a great background in finance?
- Employee Satisfaction; Do your employees still enjoy working with you and your company? Are they well compensated?
- Employee and Company Performance; Did your company deliver and accomplished your client’s expectations? Do you need to hire additional employees who are experts in certain fields? Do you need to acquire new technology (software, tools, or machinery)? Do I need to train my employees?
Answering these questions will astronomically help you in deciding what’s the next step that you as an agency owner must take which can be both beneficial for you and your team and agency.
Radical changes do not only start with one person or even a small group of people. It’s teamwork and a combination of keeping your eyes and ears to the ground and be aware of what’s happening inside our organization, what’s happening with our clients, and what’s happening in technology in the industry. All of these things must be ongoing.
Agency Profitability Tool Kit
If you’re looking for more resources to help you improve your agency’s profitability, then check out the Agency Profitability Tool Kit – it’s full of the same templates and checklists we’ve used with consulting clients to help them improve their profitability by over 100% in under 60 days.
[/et_pb_text][/et_pb_column] [/et_pb_row] [/et_pb_section]
0 Comments