#38 - Truth about ad agencies with Brendan Gahan + Brainstorming with Daniel Gross

**Shaan Puri** (0:00)
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And I'll tell you why I wanted you on. So with this podcast, we talk about a lot of people starting cool stuff. And there's like three things or four things that like every person who graduates college, what they're gonna start. And it's like a roommate matching app, which I did. It's like a way to like buy and sell stuff from college kids. And then it's like an agency.
And interestingly, I've actually noticed that a lot of my friends who started companies and sold them, they're starting an agency, because agencies are interesting ways to make money while learning.
And so what I wanted to know, I just wanted to ask you questions about the agency business. And I think...

**Sam Parr** (1:07)
Yeah, and we had sort of a, we had a debate a couple podcasts ago where we were talking about VaynerMedia.
And it's like sort of, is this a good business or bad business? And so one thing is like, obviously it's not a shit business, in the sense that like, they have happy customers, they've got people, they employ a bunch of people, they make a lot of revenue.
But we, you know, we're sort of talking on our ass in terms of agency, like, is it, you know, what does an agency business model look like, right? I know what a software company looks like. I know what a restaurant looks like because I started one of those. I don't know what an ad agency business looks like. So I don't know, talk us through like very simple. You start an agency, you know, even before even maybe the one you sold before the one you're currently at, what is that? What is like the first level of success look like?

**Brendan Gahan** (1:52)
Yeah, yeah, yeah, all diving kind of like the typical agency model.
But I think that's a good place to start for sure. So when I started an agency, I actually didn't mean to set out and start an agency. I had joined a startup and left that. But throughout my like entire career, I've been like the YouTube guy. I was always pushing like let's work with influencers. You know, you've got to like implement best practices on your YouTube channel.
And this is starting back in like 2006 So when I left my job and I thought I was going to consult and stuff, it was like this is maybe seven, eight years ago. And it was like right, like I totally caught the wave of when all of a sudden brands and ad agencies were paying attention to influencer marketing. They all needed the strategy and like I've just been kind of hammering on that for years. So like kind of out of the woodwork, like all my old agency friends and friends that had been at brands were hitting me up and they're like, hey, can you help us with this project? Can you help us with this project? And so pretty quickly I just kind of realized there's a bigger opportunity than consulting. And so what I did was like I would take on these projects and hire on, you know, I hired on a few people over time and help them with really two services. One is influencer marketing. So I, you know, work with them on like developing a strategy in terms of how to integrate the brand into YouTube channels. I do all the influencer identification, contracting, all that. And then the other aspect of the business is basically implementing a lot of YouTube best practices for brand channels.
Brands spend a ton of time focusing on their Twitter, Facebook, you know, Instagram, but they don't really put a lot of time other than the video itself into their YouTube channels. So that was my model.
Is that a good summary, by the way? Do you want me to go and...

**Shaan Puri** (3:58)
Yeah. Oh, cool.

**Sam Parr** (3:59)
That makes sense. I'm curious, like when you get your first client, like with your other agency, how big was your first client? Were they a small startup or were they like an established company?

**Brendan Gahan** (4:07)
So pretty big companies right off the bat. Like one of my first clients was like Mountain Dew and Pepsi, Uniqlo, and I was a Bush in bed.