Mastering the Marketing Battlefield: Insights from Bill Rice

All right, welcome to Hack to the future with Kyle Roof. I am Kyle Roof and today we have the founder and chief revenue officer of Kaleidico, Bill Rice. Bill, thanks for being here.

Hey, it's a pleasure. I appreciate it. I'm looking forward to the conversation.

Right on. So my crack research team found that you started in counter-espionage with the Air Force. My first question is, is digital marketing all a front, and are you in fact, Jason Bourne?

I wish those are some of my favorite books and movies. But yeah, I always kind of so one it's always interesting when somebody does that deep research, I kind of leave an Easter egg in my LinkedIn around that to build intrigue but as I always say, it's always more interesting on the outside than it is on the inside. I spent most of my time in that role in bureaucracy and trying to get operations approved and things that you would think would be relatively simple are challenging. As you can imagine, there are all kinds of constraints around that activity, but it was fun.

I came out of the Air Force Academy, and originally did some flying, but ultimately didn't get the plane, so to speak. And so went into, I was looking for something interesting. I'd always dreamed of being a pilot. It's kind of a lesson, an early lesson learned is like sometimes our plans don't always play out. And I went through, you know, when you're in the military and the Air Force, you have to have a job and you have to find a thing. And so when that didn't work out, I was kind of thrust into like, okay, I got to find something. I got to find something that's interesting. So originally wanted to be a combat controller and there were no openings for that. And so there was this little organization called OSI. If you've ever watched the $6 million man, that's kind of our claim to fame. It's a really old TV show, but he was in OSI.

I have. I'm old enough to know.

Yeah, yeah, so I'm not the six-million-dollar man. But anyway, had a unique mission where we did counter-espionage, you know, we were in counterintelligence as well. It started my journey of just kind of being interested in human behavior and, you know, how we kind of guide and direct that. And so that was a little bit of like a chess match as we were working against, you know, other intel agencies even transitioned out of that when I got out of the military, kind of went through the revolving door and did that through some different consulting agencies and worked with different intel agencies. So that was, believe it or not, I always say there is a threat to marketing and that's kind of where I started. So yeah, so I spent a lot of time in there, did some of the first, and this was in kind of the mid-90s, so the internet was just becoming a thing. And so did some of the early online operations, which got me fascinated with the internet and digital marketing and again, sort of that thread. So it was fun, it was a formative, you know, a portion of that. I think the military is always kind of interesting because they sort of toss you in. They teach you, that you have to work with whatever you're given. That was kind of an interesting thing too. Unlike sort of corporate America, we don't get to choose our team. We're just given a team. And I was an officer. So, you know, with that team, you have to make the best of it. And so that was really an interesting piece of that learning as well and they threw you into a lot of challenges and so it also gave me a lot of confidence that regardless of what the messy situation is I can take what's in front of me Making something out of that and work with the team the situations are constraints I'm given and produce so that's kind of to the military question to counterintelligence That's probably kind of a big building block for what made me the entrepreneur and business person that I am today.

I would imagine there's a lot of project management to that and kinds of prob problem-solving here and we need to get there. And that's a huge part of what marketing is and digital marketing is. It's taking the resources you have, putting them in an organized way, and then getting from point A to point B. I imagine that's a lot of what you learned through that experience.

Yeah. And we had to do, and to your point, we had to do a lot of planning, you know, so in that context specifically, you know, every move has to be planned. You don't have to anticipate expectations. A lot of times the plan, you know, falls apart, as I say, all plans are good until first contact. And so, so that was, that was good as well. I think digital marketing is a lot like that. You know, we're going in. We're trying to formulate a plan, particularly in the agency world. We have to go in front of our clients with a plan, and expectations. We're usually spending their money. And so there are some parallels there to try to kind of formulate a plan to give reasonable expectations to then sort of track that feedback loop and see whether or not we're getting closer or further away from the objective, I think is, yeah, there's some parallels there.

Now, Kaleidico is, would you say it's fair? It's on the lead generation side of things as a lead generation agency. how will it give me the 30-second pitch on what, on what Kaleidico is?

Yeah, we very much describe it as a lead generation agency. That term's been co-opted a little bit by sort of the less scrupulous LinkedIn people who are building connections and stuff like that. But we do like to talk about ourselves as a lead generation agency, which means two really important things to our clients. One, we're always focused on lead generation. So we're going to use, so.

Sure.

A lot of times people will refer to us as a full-service agency. So we'll use a variety of different channels, always focusing on digital in our context. But we're always focused on the highest level of KPI is the number of leads and the quality of leads that we generate for our clients. And then the agency thing is really important to us as well in that we are always looking to build an asset as an agent of our client. And so sometimes agencies mischaracterize who they are and what they do. And so agencies or people who describe themselves as agencies more and more are providing proprietary solutions, solutions that are, that are, that can't, or ultimately are not owned by the client. And so the moment you stop sort of paying that agent, you have nothing of value or it all disappears, you know, all that history, all that capability, there's no asset there. So, for Kaleidico, we embrace both of those terms very specifically and tightly. And then we do it for, and we niche based on industry. So we're only focused on mortgage lending, law firms, and senior living. And again, like everything, I love patterns, and all three of those industries, believe it or not, have some sort of structure, especially organizationally. They're largely sales driven and often they do not have a marketing team or a significant marketing. So they might have a marketing director or something like that. So we can come in there as a turnkey marketing department and give them some value.

So now you've had this agency for quite some time. I think you told me about 2004, is that right?

Yep, that's 2004, 2005 is when we started things up.

And I assume it's just been smooth sailing straight up from the start.

Yeah, not at all. And I think this is important because I'm passionate about trying to help agency owners. First and foremost, I think agency owners shouldn't, we don't necessarily compete. Like I can't, you know, rarely do we run up against the same agency. So I think there's a lot to be given and contributed and collaborated with across the agencies. And I want agency owners to understand and learn quicker than I did. So first, we came out as a software company, believe it or not, in the lead management space, because I had come out of a lead generation world, but I saw how problematic it was for organizations to, at that time in 2004, 2005, internet leads were becoming a new thing, and organizations didn't have the tools or the capability to manage high volume internet leads. They had always, especially the organizations that I worked with, had traditionally worked on a referral basis or interacted very closely and deeply with individuals who were sort of referring clients to them. Internet leads changed all that, right? All of a sudden we're what we now characterize, we didn't have a term for it, I don't think at that time, but consumer direct, all of a sudden all these consumers are coming directly into them, they're managing a full spectrum of where they are on the kind of closing curve. Anyway, so. So I saw that problem, I tried to address it with software and we did that pretty well between 2005 to about 2007. At that time we were 100 % all my experience based on mortgage lending. And so we were focused, I've always believed in niches, we were focused on that. We were focused on the emerging space for that industry which was the large call centers because they realized all these internet leads, all of a sudden they had to staff out loan officers and the call centers to be able to handle all the volume. And so our software made that lead routing allocation and sort of tracking, which was a new thing. CRMs were there, but CRMs were very static. They were kind of like enhanced Excel spreadsheets and a lot of CRMs are still kind of there, right? So, lead management. Anyway, long story short, in 2007- 2008 the financial crisis hit mortgages first and hardest and, literally all of my clients went out of business. So 65 % of my invoices returned in bankruptcy notices in 30 days. And so we tried to kind of figure that out, but ultimately there was no sort of recovering that software position, learned a lot about that but ultimately pivoted to what we are today. And then I would tell people, that I probably spent 10 years in an agency before I figured out how to make an agency efficient and highly ptabportable predict, to predict more than all the things that an acy should do that was because, you know, we probably spent the first six months to nine months going out to clients and, you know, offering to help generate leads for them and having no idea that we were an agency. I always tell people, one client at one point, and I think this is a common agency owner story, we were an accidental agency because all of a sudden one client said, or Prospect probably, is like, are you an agency? And I'm like, sure, if that's what you want us to be, we're in that do anything for money phase. Exactly. And then ultimately, I started investigating that.

What do I need to be right now to get this sale? What do you need to hear from me right now?

I'll get the name wrong, but it was the agency blueprint, I think. And I was like, that made sense to me. I was like, okay, apparently I'm an agency. I need a blueprint from it. I read that book and it gave me some, context and we started to kind of improve from there. But yeah, kind of wandered around in the wilderness for like 10 years before we got effective.

Once you figured out that you were an agency, is there something that stands out in your mind that then you were able to put into practice? Like, okay, now, as you said from this, like the agency blueprint, for example, or some, some of those concepts that you said like, okay, that crystallizes what we are. And now we need to do this, you know, instead of what we were doing, it was there any kind of those moments as you were then realizing we're an agency and we need to now function in this particular way.

Yeah, for sure. I think probably the things, there was a series to the journey and I think there are different pieces that need to be in place for you to be an effective agency. So the first thing I figured out as an agency is like, okay, we deliver services. That's kind of obvious. And I didn't have a lot of people, it was me. And so first I had to figure out what services I deliver. And so that was the first phase, which to me, I had some technical skills, so it was essentially websites and those sorts of things. There was this amazing thing at the time that came out. I don't think it was originally called Studio Press, but it was Brian Clark's thing, and he gave you 10 templates for like $1.99 and I built a whole business on that. I was like, I'll give you a custom website. And I was a good salesperson. That has always been kind of my gift and an unusual one for an agency owner is I was not necessarily creative, but I was a good sort of sales and business development. And I understood business and working in that way. Then the second thing I kind of had to figure out was, whether was I going to be essentially a freelancer or solopreneur or was going to build a true agency that had a team. And I decided I didn't have the skills to do anything but that. And so then I had to figure out how to build a team. And how do you, this was probably the hardest thing for me to figure out. And I think a lot of agency owners get stuck here, how to bill for human services, right? And so how to make that efficient, how to give a fair price to your contractors and your full-time equivalents, but at the same time, make something profitable and valuable to the client that is X percentage above the fair price for the work. And so kind of understanding that, understanding how business finances work, cash, I'm not original here, but for business cash is oxygen cash flow is critical. So anyway, I would just convince people that like, hey, you want one of these 10 designs. And so we kind of started there. So I immediately started sort of productizing services, which made a lot of sense to me because I came out a little bit out of the software world. And so that was the first thing. So I could do it efficiently. I was delivering the same product over and over again. So that creates some efficiency. Most New business people don't understand cash flow because they're used to managing their checkbook and your checkbook is much different than sort of cash flow and business finance. I mean, it's amazing I've even worked with some people inside of my organization who don't understand when we do the work when we bill for the work, and when the cash comes in there's, there's time differential in there. And if you get all that right, you can be making a lot of money, a lot of revenue, and have no money to make payroll. Right.

Yeah. I mean, there's the idea that accounts receivable will never make you rich, you know,

Right. Yeah, and and the fact the matter is some people don't pay you or pay late And that changes the whole dynamics of things So I think the finance thing was the next thing to learn or the people thing the finance thing. I think was different and then from there Just kind of systematizing the whole business and getting you know operations defined and what I always refer to is, and I think this is probably what happened in the last five years that made us attractive for additional investment and acquisition and stuff like that, was just running a tidy business, right? So that's kind of the last step is you get everything kind of working and then sort of tidying it up. So it's easy to observe and understand, it becomes predictable. I think sales and business development is also probably another pillar that I never struggled with, or that most do, is like, how do you make sales and business development predictable and consistent such that you can invest in the business? I think a lot of people who have agencies never truly invest in the agency. This is why I think there's also not necessarily a lot of people, a lot of, there's no VCs for agencies per se. Now there is outside funding and we can talk about that, but there are no VCs for agencies because, and I think a lot of it's like that most agencies are not predictable revenue generators.

I'd like to get into that just a little bit more, but before I get there, I want to hit the segment of our show where we say, where does Bill like to vacation? And when you go on vacation, are you mountains or are you beach?

Oh boy, probably tend towards the beach, but I like mountains a lot too. So I like the backpack and in camp. My wife would tend more towards the beach. So as we've gotten older, that's probably our tendency.

We talked beforehand that you would like to go to Italy. Do you hit the beach in Italy or do you kind of go around when you're there?

Yeah, when we're in Italy, actually our favorite place, believe it or not, and this is counter to that is Rome. So and so we spend a lot of time in. Yeah. Yeah. And then we ventured out into that. But we do a fair amount of cruising. So that's when we get the beach aspect. So we cruise around the Caribbean. We're getting ready to cruise all around England, Ireland, and Scotland this summer. It's not beachy, but anyway, that's where we get kind of closer to the beach vibe.

Rome's hard to beat.

So getting into like the VC stuff or investment or an exit, for example, I think most people think that agencies can't be involved in that. And I would say that you would disagree, but maybe that's a thing that you think that most agencies back? I know you listed some things that need to be done, but is there something that stands out to you? This is maybe the biggest thing holding an agency back from looking at investment or looking for an exit.

Yeah, I think first and foremost, some people might get a little bit distracted by the VC world and software. And I think generally most agencies should be bootstrapped because there isn't as much leverage in them. And I think if you do take money early on, you can get into trouble, right? It'll be hard to return. I think especially from zero, it'll be hard to kind of quickly return that investment.

Yeah, so you can kind of dig yourself a deep hole. Having said that, if you bootstrap and you kind of follow those steps of systemizing and creating a tidy business, creating predictability, then I would say the agency market is probably one of the most liquid markets. So if you have a good, tidy, valuable agency business, you can walk out. You know, at a million plus, now it gets more liquid when you get to kind of that $10 million level, but at a million plus, you can walk out and you can get liquidity. You can get somebody to buy your business, right? You can make a million bucks, right? Or something equivalent to that. So then I think it's very interesting. So I think agencies, you know, for building wealth can be, you know, very valuable. I think the point in time when you take money, so I think one,

if you do kind of everything right and you're in an area that has high demand and those are all things that you kind of need to figure out, but you can do pretty quick and easy market research. There's a ton of market and you can make yourself a lot of money just on a cashflow basis because agencies run correctly will spit off a lot of cash. And then you can use that cash to do other things or reinvest in the agency.

So that's one opportunity is that you just make a lot of money as an agency owner if you do a few things well. And then I think the liquidity part is interesting. So you can run an agency up to a million, $5 million level and you can get a lot of interest in that. And then that can give you a life-changing amount of cash and that could be interesting. And then there's also the private equity version. So once you get to kind of that $10 million level, private equity kicks in and what private equity likes to do is they like to roll up businesses and agencies are always a nice bolt-on, right? Because they have the services aspect that maybe the software doesn't have or needs and stuff like that. So there's a lot of opportunities in that regard. So there's a, yeah, there's a couple of different ways that you can take on. I always suggest to people you take on cash or outside funding for at least in my experience or belief only a very few specific things. One, for liquidity, you've been doing it for a while, then you want to cash out. So that's a good reason. Two, you want to kind of go to the next level, then you may get involved with private equity and do a roll-up that allows you to have some more cash to grow. But usually transitional type things, maybe a management buyout. That one I think makes a lot of sense too. If there are a few of you involved in the business or maybe you've come into an agency, where there's a legacy owner. I think management buyouts can make a lot of sense for somebody coming in. That way you don't have to start from zero. You can kind of just take it to the next level. And agencies can be, again, given the right understanding, can be taken to the next level pretty efficiently as well. You can take a million-dollar business to $5 million. Sometimes you can also unlock it.

This is something that we're kind of exploring as well as some a lot of times inside of that agency There are some valuable components that private equity loves to do this to that you could spin out From that business, so that's that's worth looking at it could be software. It could be a standalone service It could be a different level of service So that's interesting as well. So there are a couple of different scenarios So funding is available. Just have to be careful with it because it comes with you know strings always.

Of course, dealing with a PC is always a lot of fun. My final question is, so in your title as Chief Revenue Officer rather than a CEO kind of position, is that a mindset title? Does that push you towards something or is there something else behind taking that title rather than a CEO-type title?

Yeah, well in the case of Kaleidico that was, so I sold a significant stake in Kaleidico. And so that was a shift in roles and my strength and my focus have always been on real revenue, sales, business development, and to some degree product development, which is a weird kind of concept inside of an agency, but I had always thought of services as being better if they were productized. So I love building products. In our context, those are services, right? And so when I sold that stake, the individual who bought it took the CEO role, which I loved because the things I hate about agency, which seems strange for my sales and business development guy, but I hate collecting money.

So I love to sell, I love to share the vision and to build out projects and that kind of stuff. But when it comes to like chasing down invoices and stuff like that, I wasn't a big fan of that. And then quite honestly, the other kind of thing that I've never been really strong at, which is again, probably uncommon for an agency owner, I've never been a great manager. And so I love to mentor, I love to coach but like the management, the day-to-day management of people and tasks and projects and stuff like that has not been my strength. So this allowed me, not only with that acquisition, allowed me to kind of focus on what I'm better at and to kind of allow some of those other tasks that weren't as fun to me or interesting, or I just simply wasn't as good at. I ceded those to the new partner. He became CEO and I became chief revenue officer. But to your point, maybe to tie it out a little bit, if you're an agency owner, even if you're starting, revenue does have to be your primary focus. So if you put your head in the sand, create great work, and hope for people to show up at your door and your phone to occasionally ring, which I did early on, is not a fun lifestyle. It's full of stress, right? So figure out how to build predictable revenue early and agency work and ownership will be so much more fun.

You know, it's really funny, the path that I went through, you hit all the points and then it kind of led them to my exit. So I couldn't agree with basically everything you said more. Bill, I want to thank you so much for being on, the podcast is there a way that people can contact you if they'd like to get in touch?

Yeah, absolutely. So you can, you can still find me at Kaleidico.com if that's interesting have billricestrategy.com where I'm also building out and like that strategy component. So I've got a second agency that focuses more on that area. And so there's a lot more writing around the concept of strategy and the thing that agency owners. So if you're an agency owner, that and the newsletter associated with that, it's probably gonna be a little more interesting than Kaleidico. If you're a mortgage lender, law firm, or senior living community, then Kaleidico will be a lot more interesting for you.

Right on. Well, again, thanks so much, Bill, for being on, and thank you everyone for listening and we'll talk to you next time. Take care.

Thanks.