How to build a world-class brand agency
✌️business philosophies with 'Renga' Founder Jared Henriques
The Come Up highlights successful business owners’ & operators ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews, this one, from June 2023.
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For the seventh issue - an interview with Renga founder Jared Henriques!
Renga Quick Stats:
🤝Business Model: Agency (Brand Strategy/Client Services)
📒Target Gross Margin: 65%
🧾Avg. Deal Size: $60-80k USD
👥Headcount: 6
⏳Time In Business: 6+ years
⏩Best Growth Channel: Client Referrals
#️⃣Businesses Started Prior to Renga: 1
Life before Renga…
It's a very atypical path to starting an agency.
I had no agency experience; I'm not a designer, and I still somehow started a design agency. So, for me, I was an entrepreneur at age 17.
I started my first thing. I always just had the idea of the attitude of “Why not? Why not just try and do something?” I was in school for engineering and was left with this expensive piece of paper and the question of “Okay, what am I going to do?”
I had learned pretty early in those days that my favourite thing was talking to other founders and entrepreneurs - I had a real knack and ability to quickly understand businesses and understand how small micro-decisions really affected the macro. I just knew I was always going to be working with entrepreneurs in some capacity.
So I decided to go work for Shopify in 2015, which was cool. I was on the support team, talking to entrepreneurs all day. It gave me a taste of making the decisions that matter in entrepreneurship, and I knew I needed to move on.
I was not a great role player, and am a pretty bad employee.
I left and decided to work for a legacy HiFi audio company in Canada that had been around for 40 years. They had always done their business through distributors and dealers, and they were trying to build out their direct-to-consumer business. I was there for 18 months, and knew pretty quickly that I was not meant to stay there, so I decided to finish my particular project and then move on.
In that time though, I came to appreciate how difficult implementing cultural and organizational changes really are. If I went from Shopify straight into consulting and doing the work that we do at Renga, I'd probably just be much less patient with clients, I wouldn’t have understood the challenges of bringing change through an organization.
That process gave me so much empathy and understanding. There can be a desire to change, but it is really hard - and requires a real holistic communication across the organization.
That said, one of the big projects I worked on was when they had three in-house brands, and I ended up doing brand strategy for one of those brands and simultaneously, there was an agency doing the same thing for their champion brand.
I found out that the agency got paid $500k, and I was making like $35k a year - so as soon as I found out what they got paid to do that work, I quit that day. laughs
Yeah, so I quit and started Renga with basically a diverse set of school skill sets and did any work for any legacy business that needed to transition to digital. So that first year and a half to two years was basically me doing any and everything in the “digital marketing realm” to get paid and then saved up enough money to hire my first employees.
Why start an agency?
I knew I was going to start something, and I didn't know what it was…
For me, it felt like starting an agency was a really good way to get paid to learn about a whole bunch of different industries, and experience problems, to become an expert in some of these different areas on someone else's dime.
If and when we find the right thing, we could transition the agency to launch our own product - that was always the thought…but over the last five or six years of running Renga, my thoughts have changed on that a lot.
I think I will still be doing some sort of product at some point, but I think to cannibalize an agency that you spent so much effort to get going doesn’t actually make much sense. Agency and product are so dramatically different - it’s hard to get one going while keeping the other alive.
So I think some of my future planning has adjusted, but the original thought was always, “This is going to be a good way to learn about a lot of different industries and build a team.”
That was the impetus at the beginning.
Thoughts on ideal client type…
I think our standard client is a VC-backed startup - usually around Series A…but really anywhere from Seed to Series B is generally where we interact with a lot of people; it kind of depends on the industry.
Building pitch decks, for us, are a way to showcase our storytelling chops.
Our design speaks for itself, but when someone tells you they're a really good storyteller - it’s kind of like having “New York’s best cup of coffee, right?”
Like, “Okay, yeah, 🙄I believe you” - you can’t actually know until you taste it.
So, for us, the pitch decks are that - the ability to take complex businesses and distill it down to the simplest narrative arc…something I'm really good at. The impact that that early work can have on their ability to communicate the value of their business is massive.
Doing that early pitch deck work has been a part of our theory for building a solid pipeline - hopefully, this high-quality deck can increase your valuation enough that you're going to pay us to go through the full process after you’ve raised a bunch of money, right?”
That's kind of been the theory, and it's starting to prove that a little bit, for sure.and is starting to prove to be true.
Thoughts on business development…
It was, and borderline is, the number one question all the time.
The thing we would always say to each other is: “We know we're doing the right things; we just have to stay alive long enough to actualize it.”
I still believe business development is really complicated and really simple at the same time, meaning I don’t think there's a shortcut for service-based businesses, I honestly think all you can do is be visible and do a good job - that's it.
We've tried, explored, and journaled probably every possible thing that we could do to improve BD, and it’s just really hard. The only way it really works is by earning the trust of the people that we work with now and using those testimonials and good reputation continue to compound over time.
Thoughts on service offering & specialization…
I think, for any agency, there's a way that people think growth is supposed to happen…
Freelancer to agency…
Agency to a specialized agency…
into a full-service agency…
But one of the early issues we had was the people we started hiring started determining the service offerings we provided, rather than us hiring for what we wanted to do.
We hired a VP of design who is an absolutely amazing person but came from a product design background - not a great fit when you’re a brand design studio.
We thought she was going to be able to help lead and build a product discipline, but the really great work we were doing was brand work - so despite offering product design, we’d get more referrals for brand work. Then she’s working way outside her area of expertise which created a less than ideal client experience, which reduced our referrals, and snowballs to the point where it starts working against us.
So, I think for us, we’ve really had to reclaim when we were operating at our best.
Something I said during the early days is, “We're building this in a way that's intentionally unscalable.” But at one point, I lost sight of that and tried to build it in a scalable way because I was getting tired, and I was trying to figure out how to build the business to allow me to remove myself from the process.
Then overhead increases and you get caught on that treadmill, suddenly trying to do anything to keep money coming in.
“Maybe we should do motion design because one person asked about motion design...
But I realized,
I know nothing about web development…
I know nothing about motion graphic design…
I know nothing about these other things.”
If we expand our service offering and give clients a subpar experience on some of these other offerings - then that becomes their baseline of what working with Renga is like - the complete opposite of what we really wanted. So for us, the question we really had to answer was, “What are we world-class at?”
…We’re world class at building decks, and launching brands…That’s it.
So why are we trying to do anything else?
Thoughts on client experience…
I think most client-agency-relationship breakdowns are when expectations were not clearly communicated.
That's it...
Two people had different ideas of what was supposed to happen, they both operated on those assumptions without clarifying, and they're pissed because they don't align anymore.
That's where 90% of it goes.
We've definitely dropped the ball many times in the past and caused those hiccups - and that happened when we were focused on shipping out the deliverable to collect the cheque. When you are approaching a relationship with a client where you set the table, you set the expectations of:
here’s what our costs are;
here’s what outcomes are important to you;
here’s what the deliverables look like;
…let's take it in stride and have an ongoing conversation about this, it always goes a lot better. And sometimes mistakes happen, but if you communicate it right away and you have the trust and reciprocity of respect in the relationship, it's huge.
We're not pixel pushers…
we're not designers for hire…
We're here to be with you and be thought partners - and I'm assuming you want the best work out of us, and we want to give you our best work, so we need to respect each other for that to happen.
…And so, if you're constantly delayed on getting us feedback, it's going to affect your end delivery date…
If we're going to change the scope, it’s going to cost more money…
Good communication can solve for 99% of all those potential problems.
How do you think about brand?
We’ve always considered what we do to be “brand therapy.”
I view brands as a framework for internal decision-making much more than a language for external communications. If you do not build your brand by creating clarity and alignment in that identity first, then you are building it for somebody else.
That's where you see all of the founders getting to a spot where, 3-5 years down the road, where they’re like, “I'm not proud of this business. It’s not even the business I wanted to start. I'm just going to look for an exit, we’ll hire and whatever, and try to move on, because I'm burnt out by this thing…”
You don't go to therapy to make the most friends - you go to therapy to understand who you are and attract the right people.
That's how I believe branding should go too - you need to have clarity and alignment on who you are, why you exist, what you do and the rules you want to win by. This is self awareness, clarity of identity.
Then there is social awareness;
What is the environment that you are communicating in?
What is the competition?
Who are the customers?
Who are these audiences?
But understand, you have no control over that, it’s dynamic, always shifting and changing.
For an agency to sit down and say, “We can build you a brand guide that will help you make every decision for the next three to five years,” is absolutely nonsense because you cannot anticipate potential changes to the landscape - like ChatGPT for example…
Things that didn't exist 12 months ago that completely change how the game is played.
But if you have a rootedness in your identity, the guideline becomes a compass and a lens in which to make decisions with, versus a map that prescribes the solution moving forward.
So that's fundamental to how we believe in building brands. And we hilariously and embarrassingly recently took our own medicine…as I reflected on things I realized like, “Oh, we also have a huge brand problem...”
Everything I preached, I hadn't been following because I've been in panic mode, trying to hit payroll, losing sight of who we are. But by going through the process, we started communicating with clarity on who we were and acting with that as our compass, so we started attracting the right people, and the right kind of work we can really excel at.
On building a streamlined process…
The whole “brand therapy” thing - it’s a repeatable process we do a lot.
But although the process, framework, and the activities are repeatable, it’s everything that happens within those moments that are the unscalable part.
It’s the same thing with real therapy…
In therapy, you sit down once a week for a 55-minute block, and in the first four to six weeks, the therapist is going to try to get to know you. Then they’re going to start to challenge some of those assumptions and build out some action plans…
Then you’re going to reflect on those, then you are going to move forward.
It’s a simple process…
Just because someone can run that process, doesn’t mean they’ll be a really good therapist - it’s about their ability to be present in that moment and act upon that.
So I have no problem giving away every "trade secret" or process we have because it is our ability to ask the right follow-up questions and pull on the right threads that makes us special. So it's nothing about our process - it's about our philosophy, our experience, and our practice.
On Renga’s most difficult days…
Probably the entire year of 2022 and the first quarter of 2023 - we grew too aggressively in headcount.
It really started when we developed a relationship with one of the big banks… They proposed a whole bunch of work for us to do in the year 2022 - far and above the biggest proposal we've ever put together - bare minimum $600k - whole scope $1.7M. That’s more revenue than we did the year before - all in a single contract.
They talked about start dates, we went through an eight-month MSA process, they got the contract together, got us as an approved vendor, and then hired someone new to run their digital product team.
We got a 20-minute call with that guy - he decided he didn’t want us to do any of the work - so we went from $1.7M to $0.
We had staffed up and hired people to train them in our philosophy and instead of laying people off, I went, “It's okay, we'll figure it out; we'll figure it out; we’ll figure it out…” I just started making some dumb decisions - not cutting people fast enough, not doing the hard thing fast enough, and being overly confident and optimistic that I'll be okay.
We burned through a lot of cash and started making some really ill-advised decisions - borrowing from our future selves and delaying HST payments and payroll remittances to make sure our employees get paid…just making sure everyone gets a pay cheque coming in, and that snowballed into a really bad situation.
Then, I guess it was March 2023, everything fell apart.
By March, my accountant just asked me “who are you laying off this week?”
So March 21st, the day after our 6 year anniversary and the day after my 31st birthday - I laid off four people, including one of my best friends.
Then, later that evening, my wife told me she was leaving, and right before I went to bed, I got a notification from the CRA that I owed them $170k. laughs
So that was a few months ago - an incredibly hard couple of months…
We still had to pay severance to some of those people…
I was separated from my wife for a bit…
I had just started a gym practice, and I think if I hadn’t developed that habit, I don't know where I'd be - it honestly feels like it saved my life.
What felt like a lot of lose-lose scenarios has miraculously turned into some wins.
My wife and I's relationship is better than ever - we’ve been going to counselling and are back together - the severance all got paid off, our monthly burn dropped, and the sales pipeline started coming through.
I think by the end of this week, we’ll be sold out until October with enough money to cover the rest of the year and almost pay off the entire debt.
And so, that's a miracle, but it's been a gnarly year.
Thoughts post-downsizing…
A big lesson I learned was that my threshold for eating shit, taking on debt, and far too much stress is high, but my wife’s tolerance is not as high.
I think I posted a tweet yesterday with a similar sentiment, which was like, “Your threshold for eating shit is not THE threshold…it's your family's threshold - anything more than that is actually just selfish, it's pure ego.”
It's just different being a founder with a family when you’ve got nothing to fall back on…
I think it's important to talk about the down moments as much as the wins, because the more we perpetuate the classic overnight success story, the more we alienate those that are not living that reality.
For the last year and a half, my job was almost exclusively business development.
It was not going well, and I was just trying to feed this beast, having meeting after meeting, and ‘drive-by’ creative directing only to go right back to sales meetings.
But with that layoff, we kept our four designers on, my co-founder, who's the head of accounts, and myself.
Now, myself and my cofounder do all the strategy and accounts work.
We have amazing designers, and our burn rate is so dramatically less that I don't need to be frantically out there hunting.
And I’m not actually a great salesperson at all, so I’m back in my zone of genius doing the creative work, and people are really stoked because when they find out I’m actually going to be the one working the strategy on the brand, it leads to a better experience.
So counterintuitively and ironically, sales have actually gotten easier.
Thoughts on building a personal brand…
I've always found it difficult to just shout to the masses, and transparently, it’s the last thing I agreed to do - I have resisted building a personal brand for a very long time.
There was a very real moment though, even a few months ago, where it looked like Renga was going out, and I just decided - it doesn’t matter if it’s cringey, I need to make sure my children are fed and my people have jobs.
I just decided, “let's share a little bit more unapologetically.”
Now I’m trying my best to not give ‘hot-takes’ - I'm just sharing my thoughts and my process and the things I think about. That's a lot different than being like, "Your business is going to fail tomorrow if you don't invest in the brand for these 10 reasons. Here's a thread…🧵 ”
I don’t want to create that kind of attention-seeking content; just more genuine and authentic thoughts to stay visible. And it’s hard to map correlation, but we've had a lot more inbound since I started doing it, and a lot of it's been inbound from referrals.
The clients we had three or four years ago have reached out like, "Oh, hey, I'm going to refer you to this person…”
And so, yeah, it's hard to measure ROI directly but seemingly, being more public is working. So, yeah, I don't know. Sometimes you gotta be okay to be a little cringe. laughs
Final thoughts…
I think I got too caught up in growing fast…
We work with all these VC-backed companies, but we’re dramatically different because we’re in a cash-flow sensitive business. I definitely got seduced by some of the vanity metrics and pursuing those versus actually understanding what a really great cash-flow business is.
One of my mentors grew a $150M agency and was working at one of the big tech companies, and there was another agency that sold to Twitter at the time, and I was talking to him as well.
He goes like, "Yeah, I mean, if you're interested in selling to a company like that, I'm certain I can find someone who would be interested in buying you guys."
And he said this little thing that was so innocent and innocuous but I realized it broke a a part of my brain:
“I'd be really curious to see what someone like you would do with $10 million dollars in the bank.”
Subconsciously, I started to optimize for valuation that changed how I operated for a while, because it definitely wasn't how I thought about things at the beginning.
I just always wanted to be cash-flow positive and then use the cash to invest in some other things, very similar to the Metalab, Andrew Wilkinson’s Tiny model. Insert COVID, a couple of kids - the thought of exiting started to feel really attractive.
I honestly think that shift is what led us down a bunch of bad paths.
For me, I’ve readjusted again…
Task one is to settle all debts and make sure we’re financially sound, optimize for employee satisfaction, and create the freedom of choice.
I just want to pay myself and my team above market, and do really good work.
So I've become more attracted to boring businesses—cash-flow-generating businesses—and I just think there's a lot of opportunity there. For me, right now, I'm thinking, “let's get this to the spot where we're consistently bringing in anywhere from 500k to a million dollars a year in profit, and then figure it out.”
And, if we can have six months of cash in the bank account and then do $600k to a million in EBITA, that sounds like a pretty nice life.
That's where my head's at now.
That’s it for issue no. 7!
To learn more about Jared check him out on LinkedIn!
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