With around three decades of experience running professional services firms, Don Scales understands first-hand how to make them successful. He is currently the Global CEO of Investis Digital, a global digital communications company that helps world-class businesses manage their corporate brands. Today this industry veteran joins us to talk about his experience in the business, the reasons behind failed mergers and acquisitions, and share some funny stories.

EDIT: We recently learned that Don Scales passed away unexpectedly in September 2021. Our team sends condolences to his family, friends, and the team at Investis Digital.

3 Golden Nuggets

1. If you continue to have to do it all, you’ll never scale. So many agency owners are at the million-dollar mark and wanting to get to the eight-figure mark. Don’s advice is to learn to delegate. Find people who are great at what they do and then get out of their way. You may make some mistakes if you do, but you’ll move on from that.
2. Building a team with staying power. Consistency is the key when it comes to leadership. Your employees won’t want to come to work every day if they don’t know which version of you they might encounter. Be consistent with your leadership style and make your decision-making process transparent, so they will learn to make decisions in that way as well.
3. Why do some mergers fail? If you look at what people really examine when they look at potentially buying a company, you’ll find that they don’t spend a whole lot of time looking at the value set of these companies that they’re looking to buy. So many times when a merger or acquisition ends up failing you find out afterward that the cultures were off. You need to spend some time analyzing whether there is compatibility and if the values align.

Sponsors and Resources

Agency Dad: Today’s episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit/ to get a phone call with Nate to assess your agency’s financial needs and how he can help you.

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Avoid a Failed Merger by Staying True to Your Agency’s Values

Jason: [00:00:00] What’s up, agency owners, Jason Swenk here, and I’m excited to have an amazing guest. Now, this guest has been in the agency world for a very long time. He started when he was one and he’s grown several agencies and the current agency that he’s, a global CEO has over 500 employees. They’re approaching $90 million in revenue and they’ve done over 40 acquisitions over the, his lifetime.

And I’m really excited to get into it. So let’s jump into the episode.

Hey, Don. Welcome to the show.

Don: [00:00:39] Hey, good to see you. Glad to be here.

Jason: [00:00:42] Awesome. Well, I’m excited to chat with you and learn from you because you’ve been in it for a long time and you have a lot of experience. So for the ones that have not heard of you yet, tell us who you are and what do you do?

Don: [00:00:54] My name’s Don Scales. I am the global CEO of a company called Investis Digital, which is a UK-based company. It’s private equity-owned by Investcorp. Uh, we just recently exited from, uh, a six-year relationship with the company called ECI out of London. Uh, so we’re very excited about our Invest Corp relation.

Then prior to that, I was CEO of a company, I’m sure you heard of, called iCrossing, iCrossing, we managed to take that to, um, some $140 million, exited several years back. So I was there for a good eight years, nine years. And then prior to that, I was CEO of a company called Agency.com, which is a pioneer in the web development space. And it’s one of the, if you will, one of the founding companies of web development.

So that takes me back all the way to 1999 in the digital age, that’s kind of like dog years. So I’ve been around a long time.

Jason: [00:02:00] I started our agency in 99 and yeah, I used to love those days. It was kind of like no one knew what websites were, and I could literally go through the yellow pages and go, oh, you don’t have a website here, so.

Don: [00:02:10] And in fact you’ll, you’ll get a kick out of this. Back in the day, people would send us RFPs and we, we’d send them an invoice for 50 grand just to read their RFP.

Jason: [00:02:25] I love it.

Don: [00:24:10] And that was good business.

Jason: [00:02:25] I love it  Well, I think we’re going to get along well, because I always looked at RFP as, um, you know, stands for a couple of things, Request for Punishment as one of them. Other ones, I probably won’t name on this show right now. I don’t know if I can talk to you that way. But, uh, let’s jump into that because that’s interesting.

Why would you send an invoice for 50 grand to respond to their RFP?

Don: [00:02:47] Because, like you said, you could go to the yellow pages. It was just such a demand, and we had very limited resources of people who could do those kinds of work. And so we had to make sure that, uh, every, every minute of every day was, uh, paid for in some way, shape or form. And so if the market would take it, and they did, and they’d pay, it would, we’ll invoice.

Jason: [00:03:12] That’s the biggest foot in the door I’ve ever seen. So I always believe in like, charging something as a slice off of your core offer, you know, in order to kind of see if they’re serious and also kind of prove like the relationship back and forth, but you guys have the win right now of the highest foot in the door yet.

And, and you guys said you converted too. That’s awesome.

Don: [00:03:34] Yeah, we did. And then, you know, then, then everything changed in 2000 and now it was like, it was. Just, the whole market would be evaporated on me.

Jason: [00:03:47] Well, that’s what helped us little guys back then when the market crashed, I was like, all these big guys going down, here’s our opportunity. You know, let’s get on what I call the strategy line, where everybody else is kind of cringing and kind of like they’re on that roller coaster. And that’s what allowed us to really grow.

Don: [00:04:05] You know, it was one of those times when there was so many bigger companies. Yeah. The biggest thing that hit people back down was when it got bigger, they all invested in real estate.

And then after that, you had all these fixed commitments and real estate, then the market just evaporates and they’re stuck there with all that office space.

Jason: [00:04:23] So, what’s the key…? You’ve seen so many agencies go from a certain size and just blow it up. And a lot of people listening, you know, they’re in the million mark, they’re trying to get to the eight-figure mark.

Some of the eight-figure guys are trying to get to the nine-figure and tens and so on. And you’ve gone through many, many levels. So what are some things that if you’re right in the middle of like, let’s say a $5 million agency, what do you need to do in order to really kind of, to accelerate your growth that you’ve seen.

Don: [00:05:00] Yeah. So I think there’s an evolution. So when there, when you get to the $5 million mark, and then when you’re a very small agency and you’re a founder, the biggest thing you have to learn in order to get to the next level is you have to learn to delegate. And so if you can find the right people and if you have, if you continue to have to do it all yourself, then you’ll never scale.

But if you can find the right people and you, and you’re willing to delegate and you may make some mistakes and, uh, if you do, but you, you can still move on from those mistakes and you’ll have a chance to delegate. And then beyond that, as you continue on, you have to bring in more discipline in your organization’s structure.

They, you know, there’s a lot of research that shows that most agencies sort of tap out either, one, right there where the owner has to start delegating, that’s, that’s one key point. And then there seems to be another flex point, right around 75 to a hundred employees.

For some reason, that’s when the organization becomes, uh, not as flat and it gets a little bit more widespread. And so you have different players involved. And that seems to be a place where organizations have hard times as well. Once you get past a hundred employees, I think you can scale up for, you know, you can do a pretty good job of getting scaled.

Cause you have the, if you manage to get the structure, you have the discipline and you have the management team in there and you’ve got a lot of the right parts.

Jason: [00:06:31] I always look at, in our agency mastermind, especially with the guys that are close to that, we’re always talking about recruiting and really, how can we make our leaders better leaders. Like, that’s our major focus rather than how do we make ourselves better. Right. Because we’re literally kind of replacing ourselves.

So what have you seen working well, or what’s worked for you in the past to make your leaders better? Like you brought them in at a certain level. How did you keep getting them up to the next?

Don: [00:07:04] First of all, you have to be willing to let them grow with you. So, like you have to give them something that maybe, that you know is not necessarily in their sweet spot, but it’s, it’s a growth opportunity and you have to be willing to let people might make a mistake if they’re going to make a mistake.

If you’re not the type who can deal with the issues of making a mistake or a client failure of some sort, then it’s going to be difficult because then you have to take these people, dust them off, tell them what they did wrong, pat them on the rear end and send them off and go do it again.

Eventually, they start building up a real good experience, basically, they can do this stuff on their own. And that’s how, that’s how you build a team. And then once you build that team, you stay with it. Now, I’ve found that the best way to build a team and hang onto the team is, I’m a firm believer that as an executive you have to be very consistent in your leadership style.

And so if you go to work every day and one day, you’re just, just a normal guy. And the next day you’re ranting and raving and you want to shoot anybody that walks in the door, nobody’s going to work for you. But if you’re, if people can say I know, I know Don, he’s always this way, you know, consistent and you’re, and you’re consistent in your thinking and you make decisions so that it’s almost transparent to these people, how you’re making your decisions.

Then they’re going to learn how to make decisions very much akin to how you make decisions. And that’s how you get a team that sort of has staying power.

Jason: [00:08:42] Yeah. I looked at it too of going, uh, someone shared with me many years ago, it’s called the one, three, one method, or I think it’s called that. But whenever your team would come to you and think about as you’re building an agency, your team’s always coming to you because, especially in the beginning, you’re like the toll booth everything’s flowing through you.

Whenever they would say, you know, hey, here’s the challenge? What do you think we need to do? Like they would ask me and I’m like, no, no, no. What are three options that you think we need to do? And then what’s your recommendation. If they do that enough, then they’re just going to stop coming to you for these things and they’ll start solving it.

And then they’ll do that with their team. Because I looked at our whole goal was. My job is to coach and mentor my leadership team. And then they should, it should trickle down. I love that you said consistency too, because I was talking to an agency the other day. I’m like, man, you’re all over the place. Like one day you’re up here, another day you’re a tyrant here and it’s just.

Don: [00:09:46] As an employee, you come to work and you don’t know who you don’t know which boss is going to show up today. That’s not the kind of place you’d probably want to work at for the long run.

Jason: [00:09:55] Yeah, exactly. Well, let’s kind of switch focus a little bit and talk about why do you think, you’ve obviously you’ve gone through, you know, over 40 acquisitions. Why do you think a high percentage of mergers or acquisitions actually fail?

Don: [00:10:13] Uh, it’s a great question. And it’s probably on page one or two of my new book coming out. I believe if you look at the diligence process that people go through and you start looking at what people really examine when they look at potentially buying a company. What you find is that they don’t spend a whole lot of time looking at the value set of these companies that they’re looking to buy.

So you don’t really have a good keen understanding of whether or not the value set of the people you’re buying is in alignment with the value set that your company has.

So I talk about in my, in the book, this whole thing called value compatibility profile. And what kind of alignments you see in these values, and then when these companies fail and if you go read in the press, you’re reading the literature, the first thing people say, well, you know the values weren’t in alignment, the cultures were off.

Well, It shouldn’t be a big surprise to anybody that, uh, these things failed. If you didn’t spend enough time on the front end that if, when they do fail, these are the cause on the backend. So my belief is that we spend too much time on the hard stuff, like the financial stuff, and we don’t spend enough time on the values, compatibility and the alignment of values, because that is going to dictate much of how these two companies come together.

Jason: [00:11:36] Yeah, I always tell everybody, and I did this when we were acquired. I wanted to sit in their office for a couple of days, like a fly on the wall. And I wanted to see, you know, are these people happy? Do they joke around? Like, I’m obviously not a corporate type. So if we were going to be acquired by someone, very corporate. It would’ve just been a complete, utter disaster.

Don: [00:11:59] Well, I had this good story I tell that back in the day, uh, when I was at iCrossing, there’s this amazing agency, AKQA that, uh, and Tom Bedecarré who used, you know, it was a CEO there for years. And at one point GA, who own them, and then, we had gone with some other people that they had this idea that we were going to possibly merge the two and it would create this really powerhouse in the marketplace, a creative powerhouse, like AKQA, and then a performance media powerhouse like iCrossing, you could bring that together.

And I think it would have reshaped some of the agency business. Well, so they were talking about merging it. And the first thing you have to do is you have to look at it and say, well, you know, can people get along and the CEOs even get along. So, uh, you know, uh, Tom and I get together and the board calls us up and says, look, we want to know if you guys can make this work.

We want you guys to, uh, take a weekend and go to go to Sonoma County or Napa Valley for a weekend, have some wine, just sit around and talk. So that’s what we did. We went up there and spent the entire weekend up there just to see if we even liked each other. I found out about his kids. He finds about my life.

At the end of the day, you know, I found out what was important to him. He got to know what was important to me and we, and we figured out a way to stay to the word. Now, but the deal fell apart for other reasons. But that part of I would I think would have worked its way through. And that’s just because we put in the time upfront.

Jason: [00:13:32] Yeah. Yeah. I totally agree. Now, outside of values and matching the culture, what are the numbers like when you were acquiring agencies? What are the numbers that really matter to you to make sure or what’s a good acquisition for you?

Don: [00:13:50] Well, experience has shown me that if… you’re going to get what you paid for, right? And, and so like, if you, if you’re looking to get something on the cheap, then chances are, you’re going to get something cheap, right. You’re going to be spending a lot of time fixing it. And so if you’re into reclamation projects, that’s a whole different world.

If you really want to grow. You don’t want to spend all your life fixing what you just bought. So I’m, you know, I’m a firm believer that you pay a fair price and you gotta be willing to walk away. So for me, it’s understanding what, what the true… and, I’m not into, since we’re talking about services businesses, it really has to be more EBITDA-based then it’s going to be revenue-based as opposed to a lot of these technology businesses that we see, but, uh, so on that base, you know, I know what multiples are to be in play.

So, you know, if, if people are willing, then what you, what you really find, and you know this because you’ve seen it, as many times as I have is that most of these owners think they’re the unicorn out there and they have, they want the one-off multiple that nobody’s ever seen before, and that’s just not going to happen.

So you have to get people to get, take a dose of reality, and come down to earth. And if they get real. Then you have the basis to starting at the discussion about getting something done.

Jason: [00:15:29] As an agency owner, it’s hard to know when you have to make those big decisions. And I remember needing advice for thinking like hiring or firing or reinvesting. And when can I take distributions without hurting the agency? You know, we’re excellent marketers, but when it comes to agency finances like bookkeeping, forecasting, or really organizing our financial data, most of us are really kind of a little lost.

And that’s why my friend Nate created Agency Dad specifically to solve these exact problems. You know, at Agency Dad, they help agency owners handle the financial part of their agency so they can focus on what they’re really good at. Nate has spent years learning the ins and outs of agency business. He understands everything from how to structure your books, to improving the billing process and really managing your financial efficiencies.

Agency Dad will show you how to use your financial data to make the key decisions, from making your agency more successful and most importantly, more profitable. If you want to know how your agency finances stack up to the rest of the industry Agency Dad can tell you how to do that. A lot of my listeners have already gotten their free audit from Agency Dad.

And if you haven’t yet, go to agencydad.money/freeaudit before August 30th and get your free financial metrics audit. Also, just for smart agency listeners, find out how to get your first month of bookkeeping or dashboarding and consulting for free. It’s time to clean up your agency finances and listen to dad, go to agencydad.money/free audit.

Yeah, I’m glad you mentioned EBITDA because that’s how we’ve always based it on. And I always used to love when people would say. Oh, we’re a $10 million agency. We’re a $20 million agency. And I’m like, well, what’s the profit? And they’re like, oh, we’re like a 5% margin. I’m like, oh, that’s horrible.

And I also agree with you too. A lot of times when we actually we at Republics, we started buying agencies. Like we don’t buy anybody under a million and EBITDA. There’s the same amount of work. A lot of people are like, especially when the pandemic happened, they’re like, oh, we’re going to grab up all these people that are struggling.

I’m like, I rather grab the people that are growing.

Don: [00:17:52] Yeah, you know, I’ll tell you a really, a really funny story was, uh, when I was at Agency.com and I was sitting in there talking to John Wren, who’s the head of Omnicom, and he’s bought more companies than anybody I know. And he’s, uh, so he was telling me one day he said, uh.

He said: Scales, let me give you a piece of advice on how to deal with acquisitions. He says until a company gets over a million dollars in EBITDA, he says, you just fly over, fly over the top and you wave to the airplane. Don’t ever go visit until get over a million dollars, then you’ll stop.

Jason: [00:18:36] That’s awesome. Oh, definitely so. Right, because I feel that businesses can hit a couple of million by accident, but to get to a million in EBITDA, it’s a little bit more challenging.

Don: [00:18:47] and they can lose a couple million by accident too. They can go both ways by accident, too.

Jason: [00:18:55] Exactly. What are the multiples that you’re seeing for, let’s say, one to about 3 million in EBITDA.

Don: [00:19:01] Uh, you know, I wouldn’t pay it from one to 3 million. I meant, like you said, some of that could be by accident. But I’d say probably it’s, it’s still single digits from me. Uh, you know, I’m not going to be paying at, I’d probably pay six to eight, maybe somewhere in there, but not much more. I can’t see much more than that.

Jason: [00:19:23] Yeah. When does it really start jumping up to the double digits?

Don: [00:19:27] I think one, when you get a little bit of scale to it. So, you know, once you get to a point where there’s not 50 other people that look just like you. So, I mean, if you get a, I can recall when we hit, uh, at iCrossing. And we actually merged with Proxycom and that got that, that took us over a hundred million dollars in revenue.

We were at, I forget, like 20 some odd percent on EBITDA. That put us into some rarefied air in the agency business. First of all, you don’t see that many agencies go over a hundred million and then you don’t see that many agencies making that kind of EBITDA. That got us, you know, we ended up making in the high teens.

And so it’s really the scarcity factor that drives it. So if you are a three or $5 million agency, Then you better have a real unique proposition is going to be able to get something in the marketplace is going to be differentiable because there’s, there’s a lot of those out there.

Jason: [00:20:34] Yeah. Do you look at specialization as something that separates agencies rather than saying know the typical we’re a full service “me-too” agency.

Don: [00:20:43] Well, there are two things that… One is, we’re a full service and two is, yeah, we deserve it because we have such great people. We have unique people. Everybody says that. So when I hear that, I’m thinking they don’t even.

Jason: [00:20:58] Or what is it? The three Ps: Process, Portfolio, and People.

Don: [00:21:02] Okay. But so when you start hearing that, then you wonder what their strategy and what their story is.

But if they cannot in a minute, if they have that 32nd elevator speech cold, and they can tell you exactly who their market is and what they’re trying to accomplish, then you pay attention.

Jason: [00:21:20] Yeah. So when you guys merged and you took. Your guys’ revenue, you guys became a hundred million and 20 million in EBITDA, right? How long did you guys have to stay merged together before you exited?

Because I found, and what we’re finding too is like, just putting all these companies together, you have to make it work for some time for a buyer to treat you seriously.

Don: [00:21:43] Yeah, I think what you, what you have is typically have, you know, right after something like that you’re going to take at least a year to get all the kinks out.

So you’re going to have turnover. You’re going to have this, you’re going to have that. You’re going to lose some clients. You’ve got all these kinds of issues you have to work your way through. And then you’ve probably got after that, you’ve probably got another year of sort of demonstrating that you can manage it and run it right. So you’re looking at, probably at least two years, uh, before you can really do something with something like that.

Jason: [00:22:16] Yeah. And let’s talk about kind of margins. Because a lot of people, especially on, on the lower end, the people that you’re flying over and waving to. I love that the flyover.

Don: [00:22:30] I love it. That is a great story, and he said it was such a straight face too.

Jason: [00:22:34] And he was a part of, uh, the CEO of Omnicom. Was that right?

Don: [00:22:38] Omnicom, Omnicom is, he’s probably done… He’s probably done past some acquisitions. I don’t even know.

Jason: [00:22:47] That’s hilarious. I love it. So the people that were flying over a lot of times, you know, their margins are at 10, 15% and they’re like, oh, that’s good. Or even 20%. And I look at that going that’s I feel that’s below average. So what do you think average is for profit margins?

Don: [00:23:06] Yeah. Since I, I spent enough time and Omnicom I’ll quote John Wren one more time I met John Wren used to say, if you really want to be an exceptional agency, then your overhead’s 20%, your direct cost is at 60% of your margins are 20. He said, then that’s what, it’s a very simple business, Don.

He said, you make 20% every year, he says, I’ll never, you’ll never hear from me. I’m happy and I will never bother you. So I mean, that’s kind of the way I looked at it, it was it’s. Uh, and you have to, you have to take that, but there’s so many CEOs that just don’t have that kind of. That makeup to focus on that number and be focused on that 20% or better.

And now, you know, over the years, because we’ve gone more from services and now it’s sort of this mix of technology and services. And now when 20 years ago, we didn’t hear about recurring revenue and now there’s all this talk about how much your business is recurring versus repeat versus, all of this.

It’s all the same, you know, now you have to be a little bit more focused and you do have the opportunity to get higher margins as a result of all this, but yeah, pure services business, you ought to be shooting for at least 20%.

Jason: [00:24:27] Yeah, I love it. And you kind of alluded a little bit to, you know, the reoccurring model, because when I did the first agency, about 85% was just project-based.

Like we would go into Lotus Cars and we’d go into Tochi and right. And just exactly, but we had a machine for our pipeline. Like it was predictable for us. Now going around it’s kind of a little different. I actually kind of love reoccurring cause it’s predictable, especially when we’re buying someone. So what’s your thoughts on that?

Don: [00:24:59] Right, and that’s where you’re gonna get margin. That’s where you’re going to get margin. So nobody’s going to pay you for project-based businesses. Now, even if you have, like you said, even if you have a machine that can crank out new opportunities. Nobody’s going to pay you because they, they can’t look forward. They can’t see it beyond a certain amount of time.

So what you’re going to have, what your business is, no matter how… you could have five years of great project-based business results. But because they can’t see more than three or four months in the future, they’re not going to pay you the higher multiple, but as you get more recurring, and a word we call repeat, which is meaning that, you know, you’re not necessarily going from contract to contract your own more or less 12 months kind of contracts.

They may be on auto-renewals, those kinds of things, where you’re not having to go out and renegotiate something every three months. Uh, then you can start, people are, you know, then people respect your business a little bit more than they value visible more highly.

Jason: [00:26:00] Yeah. And you know what I’ve always seen, especially when we’re going in and doing valuation of going well, you might get your valuation, but most of it’s going to be tied into an earn-out because there’s no predictability.

Don: [00:26:13] Yeah, exactly. No, that’s exactly right. And then depends on what the, if you’re a fan of or not, but.

Jason: [00:26:23] I was screwed by that one, I wish I read your book.

Don: [00:26:27] I’ve been screwed on both sides of that one.

Jason: [00:26:29] I know. I’ve been on both sides and, you know, especially what we’re doing it now is like, we’ve always structured the earn-out now to make it fair. And we’re like, we’re not going to base it on time. We’ll base it on when you hit this.

So like, if an agency comes to us and says, well, I’ll hold off, Jason. And you can buy us next year because I feel we’re going to be double. And we’ll be like, okay, well, if you feel that, why don’t we put an earn-out on that? So when you hit the double, we’ll give it to you. There’s no set time so we can screw you. Like it has to… like, it can be a win-win I’m tired of people taking advantage.

Don: [00:27:07] And generally takes them twice as long to get to double, right?

Jason: [00:27:13] Exactly. They’re just, I think they’re trying to buff up. And then they also where they tell us, they go, well, we want to stay on for long haul. I’m like, no, you probably be the worst employee. I know I was the worst employee ever.

Don: [00:27:26] I man, especially it’s really hard to you get a successful entrepreneur who started an agency, or started two or three agencies, uh, yeah, they make the, they’re not the best employees and the guy, the guy I had the most respect for. Started with that iCrossing and he could work for anybody else.

Jason: [00:27:46] Yeah, that’s, that’s me. Last question I have for you, Don is as a global CEO of one of the big agencies. What are your roles? Like, what do you look at as your role in the agency? Like if you had to pick like three or four roles.

Don: [00:28:15] Uh, I think really my role is to provide two things. One is depending on what the, you know, you have to articulate what the strategy is, and in some cases that’s a little easier than other cases. But I have to articulate what the strategy is and then I have to provide a culture and environment by which people can go accomplish, you know, accomplish those goals.

But you have to get people, you have to show them the direction. You have to give them the tools by which they can go do it. And you got to get out of their way and let them do it. And, those, those are the keys.

Jason: [00:28:41] Yeah. That’s, that’s kind of what I looked at when, when I started getting up in a little, the gray hair, as I started figuring out that part of like getting out of people’s way. And it’s more of…

Don: [00:28:52] Uh, and the good ones, you know, I have some people who’ve been with me here Investis Digital I’ve had people who’ve been with me for 20 years. This is their third company we worked at together and they’re, and they’re some of the best people in the world. And that’s the reason is because I’m smart enough to know when to get out of their way.

Jason: [00:29:13] Yeah. I always said I wanted to be the dumbest person in the room, at the company, and that was not hard for me.

Don: [00:29:22] I think Reagan said that too. One time. He said you want to be the dumbest guy in the room one time when it was, he said something like that.

Jason: [00:29:30] Oh, that’s funny. Well, Don, this has all been amazing. Is there anything I didn’t ask you before we tell people where they can get the book?

Don: [00:29:38] I think, uh, you know, I probably. You know, I thought maybe you might ask me, like, give me one funny story that came out of doing one of these acquisitions I had one before I was going to tell you. Yeah. So the first acquisition that I ever did at iCrossing was a company called NewGate Internet, it was in Sausalito, California.

And we had spent all this time and effort getting this right. We had dotted all the I’s and cross T’s and we wanted to make sure that the board was really standing behind this and. So we got all excited. We got this deal done. So, uh, we went out there, uh, myself and the CEO of iCrossing at the time we went out there and went to Sausalito.

And so we meet, we meet the CEO of NewGate Internet at the front door. We’re talking to him and I said, okay, is everybody ready? Yeah. I got the whole team together and we’re going to introduce you guys is going to be great. So we walk in and the. And the CEO stands up in front of his group, which is probably about 50 to 75 people.

And he says, well, uh, he says, uh, I have some news for you guys. He said, you don’t know this, but for the last six months I’ve been, uh, trying to sell the company and he says I’ve actually been successful at doing so. And so, uh, your new owners here, Jeff and Don they’re from a company called iCrossing. They’re going to be your new bosses. And today’s my last day.

Uh, I’ll be leaving as soon as I finished speaking here, it’s been great working with you for the last six years, and I hope to see you guys soon. And they literally picked up and walked out the fire escape and never came back. And Jeff and I are looking at each other like, holy cow, what are we going to do now?

So we had to figure this out on the fly in front of 75 people who didn’t even know they were being sold and we made it work this way through, but there was a, oh my God moment there where it was like, my gosh, what are we going to do next? Oh, wow. That was our first deals at iCrossing.

Jason: [00:31:51] It’s awesome. I mean, literally he got the mic, he dropped it and then just bounced and walked right out the fire escape too. Was he afraid that you guys would go to stop the elevator?

Don: [00:32:05] I think he was, I think he was so embarrassed about just pulling a fast one there. He just didn’t even want to wait to go out to the front door. He didn’t want to say goodbye to anybody, he just left.

Jason: [00:32:16] Wow. So was it a good acquisition or did you find a lot of skeletons?

Don: [00:32:21] Yeah, it turned out really good. I mean, they, they were really, uh, experts in paid media. Uh, and they really set the tone for iCrossing for years in paid media. And we got some really fantastic people out of that, but it was, it has bumps in the early days, that’s for sure.

Jason: [00:32:37] That’s crazy. I mean, literally like.

Don: [00:32:43] It was pretty funny.

Jason: [00:32:43] I can only imagine, like, I’m picturing, I know what you’re talking about a fire escape, but I, I see like the New York fire escapes, like him sliding down. With the ladder.

Don: [00:32:53] With the ladder and everything. They don’t have those in Sausalito.

Jason: [00:32:58] I know, but that would be. You should embellish that a little bit. Like be like, yeah, he just slid down like was James Bond.

Don: [00:33:08] I need to build this up a little bit more.

Jason: [00:33:10] Yeah, definitely. Well, you got to sell it, like your, sell it a little bit more.

Don: [00:33:14] Exactly. It is in the book though. You can read about it in the book.

Jason: [00:33:19] Cool, what’s the name of the book? And obviously, we probably can get it anywhere, right?

Don: [00:33:23] It’s from Forbes books. It’s out Amazon for pre-sale right now. It comes out June 6th and it’s called the M&A Solution.

Jason: [00:33:30] Awesome, well, everyone go check it out. And then, uh, what’s the agency URL so people can go and check out the agency as well.

Don: [00:33:38] The agency that I’m at right now. It’s called Investis Digital, and like I said it’s London-based and we just got bought by Investcorp, so yeah, check us out.

Jason: [00:33:50] Awesome. Well, Don, thanks so much for coming on the show. It was a lot of fun hearing some of the old stories. Make sure all of you go check out the book. Check out the agency as well. And if you guys enjoyed this episode and you guys want to be surrounded by amazing agency owners that are sharing what’s working now, so you guys can scale faster and really know that you’re doing it in the right way.

I’d love to invite all of you to go to digitalagencyelite.com. Check it out, apply if you’re right for us, we’ll have a conversation. And until next time, have a Swenk day.

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