Taking that first step from working as a freelancer to making your first hire and becoming an agency is an exciting but daunting step. In this talk I will explain how I accidentally started an agency and strategically grew my WordPress specialist agency from myself to over 40 people over the course of 5 years with minimum staff turnover.
I will cover:
- How and when to make hires
- Where to find new employees (from developers to operations)
- How to create a company culture
- How you can ensure your employees are on board for the long run
Video
Transcription
ALICE STILL: Morning.
We have got David Lockie talking and he is talking about, sorry. He is talking about growing his agency from freelancer to agency owner and yes. Crack on Dave.
DAVID LOCKIE: Thanks. Good. Thanks windows.
So good morning. I am David Lockie, from Pragmatic. Today I will talk to you about how to grow from freelancer to digital agency. So I will talk about how I am doing it. Then I will tell you what is has been the highlights and low lights along the way, then I will talk about the other kind of how as in how you might want to do it or how to actually do it then from where we are today as an agency what is next, what does that look like? Because an agency is never finished then I will try and leave a good amount of time for questions and answers at the end as well.
So starting at the beginning. I grew up with David Attenborough watching trials of life and the series on TV, inspired me massively to love nature and the beauty and the complexity of life and everything that they talked about. So that is what I wanted to do when I grew up and I went to university, studied zoology and spent a lot of time running around jungles catching frogs and snakes and lizards and trying to work out whether I could be a zoologist. During that time, I kind of got interested in computer as well and actually the final year I was out at the research centre I was responsible for managing the IT there so we had a little hut in the middle of the rain forest with an air conditioner about 15 different workstations all running windows 98 on an ether net set up which was interesting when they installed the air conditioner the wrong way around, so trying to cool down the rain forest! Heat up the computer room!
So this is kind of really before I got into digital at all. During that time I kind of worked out that, zoology was fascinating but not a great deal of career choice, there is a lot of politics in science, I figured I would spend my time dealing with bureaucracy and funding proposals, that business people do, but much less chance of making money at the end of the it, I thought I might as welcome out and make some money and then go back at a later stage.
I went with friends, wanting to change the world through fuel tech, hydrogen, I remember the developer at the time telling me right, when you right your html text, make sure you write them in capitals and this was tables and inline styles.
Over the years of eating beans on toast and making the business work, I got more involved with the website, I got more frustrated that we couldn’t make it do something useful because it is written on dot.net. I pretty much could build a website end to end by then, I was getting married and skint. I started to build websites to a scrape the money together for wedding rings. After all the wedding craziness settled down, that worked okay, why don’t I do that? Because it was something that I could do, I didn’t have to commute. I was actually probably making more money building websites in my spare time than I was doing the day job, day-to-day. I didn’t have to live with all the decisions I was getting increasingly uncomfortable with.
Apologies for the stupid words on the slides, I thought I would try and theme the versions of my agency with things that might be jazz songs. So WordPress has jazz artists as their versions.
So I basically just started being a bit of a freelancer building websites for anyone and everyone during that time being lazy I realised it was pretty stupid to have to update the same line and the same like 8 different html files on the website. There must be a way of templating this stuff. I looked at Drupal and WordPress and WordPress was the only thing to get running on the windows laptop at the time. I thought I would give this a go.
Then every website that came to me, well, probably just going to be quicker to build it in WordPress because I can just use what I did before and change some stuff around.
That is pretty much how I went actually. For a couple of years just you know, obviously getting a little bit better at building sites as well. I ended up with like about 100 sites I was hosting on, don’t judge me, hundred sites hosting on windows virtual server and one day I woke up and they had all been hacked, every single one of them with some like sneaky mail ware redirect thing, that only presented itself to search engines.
I had been involved with the local WordPress meetup and there was a guy there who reached out to the group and said, look, I have been made redundant, anyone got work? Yes, I now have a lot of work to get some help with. So, I asked him to come and help for a few days and then that turned into weeks and then months and I started a business. Mainly for tax efficiency purposes. I didn’t have any employees but I was still trading under like my stupid university nickname domain and it wasn’t a very slick organisation but I thought you know, look, there is a hundred sites here, we have got to get this fixed, got James helping me now and let’s professionalise a bit. The accountant said you can save a bit of tax if you form a limited company. So I did that. Around this time as well I had also kind of been thinking about startup ideas you know, how can I create a product or a service or do something that is not just me writing CSS for money and I came up with a good idea I still think it is a good idea which is like a, like a big data tool for WordPress sites to you can put your site in and tell you all about it. Tell you how to improve it, page speed, plug ins all up to date all that stuff. Also build up a database of all the sites that had ever been scanned and go and rescan them continually, eventually get to the point where we could tell you which themes tended to be the faster loading or which plug ins seemed to work best with each theme. So I kind of started the business and had James here helping me and eventually James became an employee about the same time that I started this other business as well. Got a bit of startup, sorry, angel funding and thought well I will give that a go. I met a guy that could help me who was a wicked developer for actually awkwardly working for the business whose owner gave me the funding to start the business. So I took his money and one of his best developers which was, then he gave me office space, like a supernice guy!
(LAUGHTER). So, then I had like 2 businesses that I thought well, got to give them both a good shot. Spend 6 hours a day on the startup. Six hours a day on the agency. You know, all through this time you know, pretty much since I started working for myself, I would be like pretty happy to work 12 hours days and smashed through stuff, I liked making money and getting things done. There seemed to be unlimited sort of like vastness of work to do as well, that was everybody wanted some WordPress, I was good at getting out and working in co-working spaces, I don’t mind talking either, people got to know I did WordPress sites and right place; right time. There was sort of everyone, oh WordPress a pretty cheap way of getting a website together. So yes like lots of long days and really interesting process you know, this was sort of I guess at the start of the, the trend for doing startups as well. You know, we are kind of we are a little bit beyond peek startup now. But I think this was back a little bit before where it was all kind of, you know, all big news and it was really exciting and because this, my business partner on the startup was a very experienced software developer, so he did sort of java during his day job, but also good php developer and he came in and looked at what we were doing you know, because I was doing sort of you know, I would build the marketing sites and he would build the crawlers and the engine and the business system behind it. He was like, what are you using, subversion 4, why aren’t you using package management or dependency controls or? Or all this stuff? You know, puppet, vagrant, all the things like I was just doing child things and you know, putting websites together at the time.
He really opened my eyes to actually what professional software development and DevOps looked like, the back end monitoring stuff too. I ran really hard at both businesses for 18 months along the way we hired like a front end developer for Pragmatic as well. So basic Pragmatic was paying the mortgage and the bills, putting my money into the startup with the hope that I could spin it into a good business model, we did a couple of pivots but then it folded for a few reasons. I started to get some business coaching because I was feeling a bit conflicted an I was putting time in the startup and I didn’t know what to do next. There was government funding at the time. Get 3 and a half grand worths of business coaching for 800 quid. One of the rare situations where the government gives you money, I will do it because I can get money from the government that seems like a good idea.
That is when I was forced to really think about what I wanted, you know, why was I doing all of this? Deep down you know why you are doing it. But, often you haven’t really thought about it. You have just kind of found yourself doing it and it has been interesting, so you have kept on doing it and you kind of blindly head down doing stuff and look up and turn around, well, okay, 2 people working in the business and I have got all these clients and you know, we are doing all the stuff. But what is the point?
And the coach helped me think about that stuff. What is it you want to achieve? Why are you working so bloody hard? There has got to be something driving you to do it, if you don’t know what it is, let’s find it out and write it down. When you know it, it will help you do it.
That was an interesting process and challenging when you are used to be heads down and smashing the keyboard, having to step back and think about purpose and meaning and values then, for me anyway, it was pretty challenging. Took me actually 2 or 3 years to, to come out of that cycle and really understand. But pretty immediately he made me understand that what I was trying to achieve with the startup, life style, financial security, purpose, helping other people, creating value, I could actually do doing an agency as well. So I kind of you know, archived all the virtualboxes and you know, put that startup to bed. I put my time and attention back on Pragmatic full time. Yes, came into it more energy like more understanding about what I was doing and why.
Ended up with a business that was 40% Tom. So, I hired the people that I came across that I knew that I liked and that I thought were good and 3 out of 7 of you were called Tom at the time right? Yes, there was, yes there was potential for mutiny in the ranks and renaming the business and I stuck hard and eventually managed to hire more people and make them the minority again. I guess this is a tale about when I put my focus back into the business and looked around at the people I knew and people I thought could have helped, then you are quite a diverse mix as well. The Toms! You know, there is a guy that did marketing and sales and I thought it was really good with people, then there was another one that was like superserious back end, api guy and then there was another kind of young keen whippersnapper as well, but all playing a different part although they were all Tom. They were all quite different as well.
So the team started to grow basically because we I was lucky enough to find great people to help me grow it.
Eventually we got so noisy we got kicked out of the sharing space, apparently it was too disruptive to sole traders and microbusinesses. We left this cosey cacoon, forced to find an office space of my own. I was worried, will we go crazy, is there enough energy in the business to survive in this room? We found a, some office space on the top floor of a nursery, so you would be, like every 2 hours the kids would be let loose and screaming and running around everywhere. Just interesting but, served us really well actually and you know, there was enough energy and momentum and we had a great time. The culture was good and you know, we could play our music loudly. Nobody could tell us what to do.
The, I think we all gained quite a lot of confidence from that, having your own keys to your own place and even buying your own desks hanging your pictures on the wall and playing your own music. I was fearful of what would happen without constraints but then actually really loved what happened without constraints as well. The business kind of gets to settle into itself a bit and shape itself.
That was, that office space was really lovely while it lasted which was all of 11 or 12 months? I think we moved in 6 people and we moved out with 16? Or something in the year. That was a bit intense.
But really amazing, quite frustrating actually because you move everything in and in the back of the car and then you have to move everything out in the back of a massive transit van and we had to find another office space and kind of start again. But we did that.
It was about this time that, and in fact this must have been 2 years ago at WordCamp London was starting to get like frustrated with 10, 15 grand projects and when you have got 10 people you know, the salary bill starts to look sort of a bit cheeky and you know, you kind of want a little bit more financial horizon, you want to see what is happening in 3 months time, not just this month hard to do that when project sizes are small. People expect them to be done quickly. So, I had met Jim who you should all go watch talk next. I can’t remember how we met? But anyway I said to Jim. Like how do you get these big sexy projects through the door. I want to win a 6 figure projects. That was my ambition. Jim was like, talk to these non-execs I use, a company and they basically fly in and MD and FD, they are really experienced with digital agencies and they are there to help you, well they won’t bring you sales leads but help you be positioned for the business, if you work hard at the network, they have this network. That is how we got our first 6 figure deal. Right, sign me up. Introduce me. And, so this sort of layered on top of the coaching, the coaching was there for me to help me understand what I wanted out of the business. Then the non-execs came in and really blew away and, what my pretensions of the business, there was lot of business agencies, SEO, site core, whatever.
It is easy to think we are a WordPress agency and it is unique and different but we are a digital agency. The stuff we do and has been done by loads of other businesses. There is, there are agencies in London that have like all the floors of huge buildings on the Southbank you know, the, the craft of what we do you know, WordPress is different and unique and it has a very special culture but the trade of being a digital agency. It is well beyond WordPress and they really opened my eyes to that.
So, anyway, the more help you get and the more great advice that you follow the busier you get and eventually we got to be total sardines in this office and we moved out into a new office which felt like a really big step up at the time and we moved in with 14 people and kind of move into half of it because the other half was still being renovated and like a year later we’re again like sardines in this place and joking about do we really need – you know do we really need a meeting room or can we just fill it with more desks? Silly stuff. But it’s one of the biggest challenges I think. If you are growing an agency and it’s growing quite fast because a commercial lease is like 3 years in length. I don’t know where we’ll be in 3 years time. Will we be the same size? Triple the size? Now we’re at a point where I’m not quite sure what sort of office to look for.
And we’ve really transformed since we moved. It kind of started at the end of the last office that we’re in and we picked up the phone call and it was a massive enterprise client and they were like we’re looking for a WordPress agency, are you interested? And being on the short list and we eventually won it and it turned into like pretty much a 7 figure programme of work in a year, like absolutely vast, and put a hell of a lot of pressure on the business to try and keep up with things. Everything from the statement of work through to the ways of working, the documentation, hiring QA managers project managers, programme meetings, documenting the URL strategy for web-sites like you know where do different pages live? You know really intense levels of detail.
I guess it put a bit of a rocket up the agency. We couldn’t survive without a QA manager and keep the client so we had to grow, bring in these skills and run pretty bloody hard to keep up – sorry for saying that word but I’m really proud for stepping up and doing it and we’ve come out of the year with really hard work together and we’re starting to see the rewards. That programme is running smoothly and we’ve got a ton of transferable knowledge and skills we can run out to other work we’re doing and that’s catalysed into other enterprise enquiries along the way. Thanks, Jim. Turns out you were right.
But also at the end of last year we definitely hit a ceiling. We got to 43 people or something and suddenly everything stopped working you know like projects were over burning on hours. Clients were pissed off – clients were upset {laughter} – 2 members were getting stressed I was getting pretty stressed as well and it felt like everything was difficult, it felt like I was in the middle of 4 horses running really hard in opposite directions so there was a lot of burning rubber and not a lot of actual miles travelled.
So again I lent on the advice from the non Executives and they were like you are at that time you need to structure it like this so now we’ve changed the way we work, put the business into 3 mini agencies and made accountability structures very clear, given everyone a much better defined role rather than here is Tom, he’s a great guy let’s see what he can do. We’re like looking for a project manager with these capabilities to work with these people and those are the KPIs that come out of it.
I mean we had to make that transformation otherwise we’d have imploded but it’s really different. You start off hiring because you meet somebody and they seem really good and I’m sure we can make this work to having a very clearly defined set of what you need everyone to do.
I’m blabbering on. You get to this point where everything is working super smooth then you hit crunch times where you have to do fundamental reshaping of the business to go through to the next point.
So, that was how we got here. I will talk about what we are going to do next but that was my journey to now really.
So I want to talk about the things that made me mad along the way. Retrospective, as Jim will tell you, you do mad, sad, glad, things that have made you feel angry or upset or really pleased. In a project or in a programme or anything. You can do this in your life as well.
So, I was thinking about it, my journey up until now what’s made me mad. Clients have made me mad. Sure it’s up to us to set expectations and manage them well, but client can also just be like awful people. You know? Just because they’re paying you money doesn’t mean they’re nice. So they’ve made me mad.
Team members have also made me mad. Like I feel I did a heck of a lot of drawing up check lists and processes and when you see that heard work has been ignored and someone has gone out to the client and it’s not been done it’s infuriating because those are the lessons hard won with blood sweat and tears and when you see your project disappear because someone hasn’t bothered to do a check list – it makes me mad!
Business model also makes me mad. I feel we create so much value and there is so much we do to help businesses. The fact that we’re billing out people by the hour just doesn’t seem right, it doesn’t stack up and it’s one of the things I continue to battle with.
Quality makes me mad. So if we send something out and it’s just not up to scratch if I look at it and I’m like that’s pretty whack which happens a lot less now we’ve got a QA manager who busts us for doing it but that also used to make me mad. We should be proud of the work we’re doing.
Adherence to process. I was talking about these things, process is key and if we don’t follow it we stitch ourselves up and project management also made me really mad, not having the right people doing the right stuff on the right project at the right time getting and them done in order to make profit.
The things that have made me sad are sacrificing stuff. Time for me, time for my family, time for my friends. It makes me sad that I have lain awake at night worrying about paying people or what a client is going to think. That makes me sad. I don’t know why I put myself under that pressure.
It makes me sad meeting people that have been burnt for digital projects whether it was us or somebody else – usually someone else but it makes me sad people put their trust in digital technology partners and come out like with busted up businesses and really bad outcomes.
Financial systems make me super mad, it’s like, oh! – gets so complicated, the whole thing, all the taxes, all the – that makes me really sad.
Tools, processes and systems make me sad as well. Just how to keep on top of them the whole time, you have to reinvest every step of the way to keep your documents and processes there. As soon as you’ve done one it’s like I’ve had a great idea on how we can improve that! Uh, just stick with one work flow and do it that way!
Losing great people from the team, we’ve been really lucky not to lose too many, I know I am totally over running here I’m sorry, I’ll wrap it. That’s one of the saddest things. When you bring somebody into the business and you are like you are really good I’m so glad you are here, then they’re like yeah this isn’t working for me. It’s kind of heart breaking. Or used to be. Now I’m just hardened to it. No, it does hurt every time. You put a lot into trying to make people happy and when it doesn’t work out, it’s really sad.
And the same with clients. Putting the extra mile. You do everything you can, sacrifice profit and then they still walk away at some point.
Things that make me glad and then I’ll talk about the questions and answers.
So, finding purpose has made me really happy. I never set out to bring Pragmatism forth into the world and help people. I just liked building web-sites but along the way I feel like I have really found what I want to do in life and that is worth a lot.
I have been really pleased to get great advice from inspiring people and I am immensely proud of having a very capable team behind me and the work that that means that we can do. We’re no longer horses running in different directions. When we all point the same way actually we have quite an incredible capacity to manifest the change that I want to see in the world and watching that happen is a real rush. Really incredible.
R and D tax credits make me really glad as well so if you have a business and you are not claiming those you should definitely look into that.
And being able to work in the world of digital and be inspired by what’s happening. These are heady times and we should all be grateful for being able to learn so much and interact with the world that’s going on around us. WordPress sure but beyond that as well. AI and bots and like – it’s powerful things that we do beyond creating web-sites, something big.
So, sorry, I’m not leaving many minutes for questions here. But these are the things that I want you to think about when you go about deciding whether you want to grow a business and how. It’s not just how. How is work really hard and hire people. That’s how you grow an agency if you want a simple formula but it’s such a cheap answer its about the strategy vision purpose. So do you want an in house team, do you want a trusted outsource partner, do you want a network of trustworthy contractors? all those are totally valid and very different models for an agency.
What’s your purpose in life? What do you want to achieve, why do you want an agency? Unless you know that you can end up with a beast that is controlling your life. You need to make sure you are the dog and the agency is the tail otherwise it’s easy to end up out of control.
And if you don’t understand the lifestyle that you want you won’t build the right business. Human made have an amazing remote agency. For me I get a buzz off working day to day and seeing people face to face. That’s why I have a building that costs lots of money and a team that sits together. So these are all really important and valid choices.
So, when you think about growing an agency, think about how it’s going to support you and what you want out of life, what you want to achieve, what your lifestyle is going to be. Think about how much risk you want to take on and how fast do you want to get there? Do you want to do this alone? Do it with a business partner? Do you want to do it at all? It’s not like a super relaxing thing to do. It hasn’t been in my experience any way.
And I was going to talk about what’s next for Pragmatic but I would rather shut up and listen to your questions and try and give you some answers.
ALICE: Do we have any questions for Dave?
FROM THE FLOOR: Hi, I really liked hearing your story. I was interested to hear you were pitching for 10, 15 grand projects with 10 people. I’m currently at the stage where it’s myself and a co-director and we’re subcontracting and trying to pitch for those 10 grand projects and are not getting them. Is that stupid crazy is there a way round it to get them? Any advice?
DAVID LOCKIE: No, no, times change, right? If you are not winning pitches, then something is not working out, but there are a million reasons why that can be and it’s definitely not that you are the size that you are.
FROM THE FLOOR: Okay, that’s good to know.
DAVID LOCKIE: Have confidence.
ALICE: Any other questions?
FROM THE FLOOR: Can I make an observation? Sage Europe said at a conference a couple of years ago now that of the people who have a mentor or a coach a large proportion of them – there are only 15 per cent of businesses that do that – a large proportion of them have survive 5 years. Of the 85 per cent that don’t, a very small proportion of them survive 5 years. So, it’s actually doubles your chance of survival from 35 per cent to 70 per cent, so the step you took was a very good step.
DAVID LOCKIE: I mean there are 2 ways to learn business lessons, right, either you make the mistakes yourself and the hard way of blood sweat and tears or somebody says you’re about to make this mistake here is a template you should use to avoid it and you have to learn some stuff yourself to really understand it, but there is a heck of a lot of stuff that’s just waste. I think the waste that I’ve – the waste that’s happened in the business through not getting or not taking or not realising we needed advice soon enough and acting on it, you know – I don’t know there are very clever people in this room, may be you are doing something new, unique, and totally novel, but it’s a very big wide world out there and I used to have a lot of disdain for business books and – I kind of started the agency because I was sick of business bureaucracy and the way things were and all that nonsense and I have really had to eat my words the last 6 months. I’ve developed a bit of listening to audio books, when I’m at the gym or in the car and some of the stuff I don’t know it’s like why didn’t I do this 2 years ago? It would have saved me so much heart ache. Honestly it makes you cry a bit. You have a realisation and it’s like oh God! Learn all you can. There are amazing people out there that you can learn from, from the books, and you can pay for their advice, but yes don’t try and learn it all yourself. It’s pretty tiring.
ALICE: Any other questions? One at the front next as well.
FROM THE FLOOR: Just quickly seeing as you mentioned what audio books are you recommending?
DAVID LOCKIE: They’re relevant probably to a size of organisation rather than a freelancer but one I’ve recently enjoyed recently is called get a grip, or traction, I can’t remember which one it is called? But it’s a story about you get to a certain size of business and then you realise you are not having a lot of fun because everything is a lot of hard work, horses in different directions analogy and just breaking down what you need to do to underpin a business at our stage so things like understanding your core values and why they’re important, how to apply them to hiring performance reviews, firing, how to communicate them with your clients that they understand where you’re coming from, understanding your core focus as a business, not just services you offer but what’s your brand promise, what are your competitive advantages? What’s the secret source that let’s you be like – I mean they’re so American and I apologise that it’s going to come across that way, not that I dislike Americanism but what’s the thing that makes you worth 10 or 100 X? What is that thing? How do you identify it and how do you leverage that? There is a lot of interesting stuff. It’s a great book. It kind of shows the path ahead and sometimes knowing what’s down the road helps you understand whether you want to go down that road as well.
FROM THE FLOOR: My initial question was the previous question, but I have another little more back up question yes. You thought that you would go a little bit on WordPress development then come back to zoology. Did you come back to it?
DAVID LOCKIE: That’s a good question and in a funny way I have, right, because what’s the word we have in digital, algorithms and intelligence and eco systems. So, yes, kind of. I apply the things that I learned in zoology to the way that I think about the business and it’s an organic thing. There is a lot of parallels. But I don’t yet create the time in my life to go and wrestle frogs to the ground again. Maybe one day.
ALICE: Thank you, Dave. Really inspiring. {Applause}.
We’ve just got a room change now then back in here as Tom J Nowell is talking about varying vagrant vagrants.