On my journey of discovering how other agencies are growing From Zero To Agency Hero, I started to explore other niches of professional services (IT services, creative, media production, branding, content, and others), learning from them and sharing my learnings with you, dear readers or should I say listeners?
These agencies have left us the guideposts that we can follow on our journey to greatness!
In this podcast series, I am interviewing the Best 100 Professional service companies according to Clutch 2023 Top 1,000 Global to find out:
What’s your agency's core business model, and how has it evolved over time?
What’s the UVP of your agency?
What’s your ICP and why?
How does your agency's 'DNA' or core values manifest?
Foundational metrics: year-to-year growth, CAC, LT, LTV, Churn, most promising marketing channels, sales closing ratio, sales cycle length, Cost of Service, EBITDA
Each episode will include audio and video versions of the podcast, shorts with my commentary, and other thoughts on the subjects discussed during my conversation with the guest.
I am not being paid to promote these agencies, nor am I paying anyone. All these great agencies have been very kind to get involved and share their knowledge.
Thank you, and enjoy the podcast edition of this newsletter!
My guest today: You are launched
Position in Clutch rating: #89
Location: Ukraine/Cyprus
Size: 11-50
Years in business: 8
Type: Full-cycle Software Development
Full Interview with Ivan
Key Highlights
You are launched are “client success driven”
As I've mentioned in my newsletters several times, being focused on client delivery is the best way to build the best agency in your vertical.
The focus should fall on:
How you can get the best people to service your clients.
How you can build good processes that will allow people to make fewer mistakes.
How you can bring in only clients that you can deliver for.
Develop “packaged services”
Thinking about what Ivan said here:
1. Instead of presenting himself as “we are a software development agency servicing startups,” he instead said “we are launching startups.” He incorporates the power of storytelling, and the fact that there is an end goal, “launch a startup,” is definitely one of the best one-liners you can get.
2. Ivan’s team is backed by the famous lean startup methodology, which not only shows expertise but also tells me personally that they have chosen one camp over others like Agile or Design Thinking. This means they follow a set of rules and processes that are well-known and accepted by many startup founders.
Learning about a methodology or framework that is well-known in your domain and using it to serve your clients shows confidence.
3. Wise resource management is obviously very important for many startups, meaning we know how to spend money carefully and not waste it on futile initiatives.
4. A staged approach is one of the best ways to visualize the journey; it’s simpler, time-backed, and predictable. I can see through the entire path.
Many agencies that provide any services should package them around stages and then tie it to contracts, client retention, etc.
I think it’s a great example of how you can transform services into productized services, which is something all professional companies need to do:
It’s packaged (instead of just services, there are tiers, plans).
It’s frameworked (I can read about it and it’s been tested by many; it’s also comprehensive).
It’s resources oriented (exactly what I need as a startup ICP, so the offer matches the unique needs of the chosen ICP).
It’s staged (means I can move quickly from stage to stage).
Choose “smart pricing model”
Ivan’s team works on a time and material pricing model, meaning depending on the work they do for clients, they can get paid more or less. This is one of the most popular compensation models when it comes to software development.
Now, Ivan’s team tried a fixed cost, which is usually when you want to price the entire contract in advance, but it’s easy to see the flaws, right? You can end up doing twice the work for no additional pay.
Something that stuck with me here is the fact that Belkins is using the fixed cost model now, but very often, we have to put in extra effort to make our campaigns work, and while, the end results of appointments generated are more expensive than before.
If we employ the same time & material model in our industry, maybe it would provide us with more flexibility, plus benefit the client?
Advices from Ivan to other agencies:
Never give up.
Work hard.
Be unique.
Foundational Metrics
Year-to-Year growth:
Years 2016-2020 - slow growth, get to 14 full-time employees
Years 2021-2022 - 25 people
Years 2022-2023 - 40 people (revenue growth 300%)
Client Acquisition Cost:
$600/per closed deal
LifeTime:
Lifetime 1,3 year
Sales Сycle:
2 weeks <$25K ACV
2-4 weeks <$50K ACV
6 weeks <$100K ACV
3-6 months <$150K ACV
Closing Rate:
7.5%
Cost of service:
40% - 60%
EBITDA:
10%
Ivan's answer to my question about what he will do next year to increase EBITDA is, "You should increase prices." Thanks to Ivan Fortuna for joining me, and thanks to our listeners for tuning in!
Episode 1 — Ivan Fortuna / You are launched. Clutch №89 / From Zero To Agency Hero Podcast