This time last year, we were wrapping up a record-setting quarter at Barrel. We had landed more business and booked more revenue in that quarter than at any point in our 15-year history. We were confident that we had finally cracked the code and would scale up to new levels. Things were looking up, but little did we know that the next 9 months were going to be some of the toughest ever, including a painful downward slide in both revenue and profit margins that would leave us in a precarious place in February, precipitating in our first ever round of layoffs and other cost-cutting measures to reduce continued losses.
I noted last month that things were beginning to turn around, and indeed, the momentum has continued to swing in the right direction. I should also note that a year ago, Barrel was the sole business we had going. Over the past 12 months, we’ve seen both Vaulted Oak, our website support & maintenance agency, and BX Studio, our Webflow development agency, become fully operational businesses with a roster of customers and their own distinct cultures.
I wanted to note all these things because I’ve been thinking a lot about where I’d like to see us go from here. A year from today, looking back, what would I find? More on this below in Top of Mind.
About Agency Journey: This is a monthly series detailing the happenings at my agency Barrel, founded in 2006. You can find previous episodes here.
Leveraging Audits as a New Business Tool
We’ve offered some form of an audit for clients for as long as I can remember. Our most common audit is for websites, looking primarily at the user experience, performance, and overall design and storytelling. We surface most glaring issues and help prioritize remediation or enhancement opportunities. When done well, an audit can lead to a follow-up project to implement our recommendations. In some instances, if the audit reveals too many faults with the existing site, we could be asked to take on a website redesign and build project.
Two challenges we’ve faced with our audits over the years:
- They’re difficult to price. Clients generally don’t want to pay too much for an audit and at the same time, we want to ensure that we can make a profit on the project. We’ve experienced both extremes, pricing too low and getting great volume of audit work only to lose money or pricing too high and rarely getting any clients to sign on at all.
- Figuring out what to include. It’s taken us a long time to really hone in on what makes audits valuable. We used to generate 100+ page decks that would take forever to review with the client. We then slimmed it down quite a bit only to get feedback that we didn’t include enough data-backed insights. Only by doing more audits were we able to keep refining our approach, but I don’t think we can stay static with our audits and have to keep on evolving them as our clients’ priorities and industries change.
One thing we’ve started trying to address these challenges and to recognize the value of audits as a business-generating tool is to offer a free version for qualified prospects. The key here is that we are very picky about the types of prospects who are eligible for a free audit – they need to be of a certain size in terms of annual revenue, they need to be on Shopify Plus, and they need to have an appetite and necessary budget for ongoing work after the audit. The free audit, if effective, should give us a roadmap to quickly engage in a smaller project at which point we can come back to do a deeper audit and develop a more comprehensive roadmap for improvements and enhancements.
In our initial runs, our strategists have been able to turn around an audit in under 15 hours. We’re hoping to get it to under 10 hours. One of the early recipients of the free audit seemed impressed and have expressed a desire to engage us in ongoing work. We have a handful more lined up, which will be great reps to solidify our free audit offering.
Testing Out Discipline Team Retreats
In late May, our Software Engineering team met up in Las Vegas in what was our first discipline team in-person get-together. Given our financial situation at the time, we had to be very stringent with expenses and used points for air travel. One team member was local and another drove over from Los Angeles. Despite the low budget constraints, the 5-person retreat went as well as it could and the team enjoyed getting to spend time in person. In addition to workshopping thoughts on the state of software engineering at Barrel and opportunities to improve processes and ways of working, the team got to enjoy good eats in Vegas as well as attend a Shin Lim show!
We’re now gearing up to do more in-person get-togethers in the coming months. In a few weeks, the Team Leads will meet together in NYC for a full day, which should be productive and fun. We’re also planning on holding a retreat for our Client Services team in a few months. This will be a larger undertaking with a bigger budget since it’ll be 10 or so people. At some point, we will begin planning for a team-wide retreat, but I’d like to see a couple more quarters of profitability before we make that investment. The important point is that as a fully distributed (remote-first) team, it’s imperative that team members get to spend time in the presence of each other to foster relationship-building that otherwise will be difficult to emulate purely via Zoom and Slack.
As we do more retreats–one day, multi-day, small, and large teams–I’m certain we’ll come away with some valuable learnings and systems to give everyone memorable experiences and something to look forward to.
The System of Accountability
One of the most gratifying things about being part of this business is seeing incremental improvements adding up into substantial results. I cherish the opportunities to test processes, switch up the ways we communicate and collaborate, and see how experiments play out. I find myself even more excited when new initiatives and improvements are spearheaded by other members of the team, without my direct involvement or instruction.
To that end, I’ve been very pleased with how our team has developed a system for ensuring that our client accounts and projects stay on track and if any issues pop up, that there are clear avenues for addressing and escalation.
Our Chief Experience Officer Lucas Ballasy lays out our Weekly Accounts Review System in detail on his blog. As the primary overseer of team collaboration, services, and delivery, Lucas has done a great job of bringing cohesion to the many meetings, documents, and checkpoints to ensure that no client engagement gets overlooked.
We still have stressful and unexpected challenges that pop up on projects. These are to be expected. However, because we are continually checking in, talking things through, and aware of what’s happening, the problems are surfaced earlier and can be addressed sooner. Such oversight makes all the difference in whether or not projects blow up or client relationships stay intact.
Top of Mind
Twelve Months from Now
Looking back a year from now, I’m intent on making the following things true:
We’ve transformed Barrel into a lean and profitable business with strong margins and utilization metrics. Gone are the days of wild swings in profitability and revenue month-to-month. We operate with financial discipline and drive a culture of performance and accountability. Our clients value us for our consistency, our service, and our ability to deliver results. We’ve continued to develop our network of contractors and partners, allowing us to scale up for new work without necessarily increasing headcount. We’ve continued to develop our in-house team into strong leaders who excel in communicating with clients and collaborating on project teams.
I’m certain the road ahead will be filled with all kinds of obstacle and setbacks, but I’m heartened by all that we’ve been able to accomplish in just the past 3 months. Heads down execution, doing the hard things day-in and day-out (see my Top of Mind note from February 2022 on this). It’s a repetitive message but one that I have no problem repeating over and over again.
On the Barrel Holdings front, I’ve been exploring the possibility of incubating another business that would be very complementary to our other agencies. I’m in the early stages of ideating and stress-testing the idea. It may be a 6 to 9 month effort that may result in the launch of a new agency or help convince me not to start another one. Either way, I’m very excited about the process.
I’m also intent on helping Vaulted Oak and BX Studio continue on their respective growth journeys. I’m so impressed and proud of what Jason and Jacob have been able to accomplish so far, and my goal is to continue providing guidance and support so they can avoid making the many mistakes we made with Barrel.
A lot of things can happen over the next 12 months. The future is uncertain and full of possibilities and pitfalls. The main things I can control are my level of focus and energy. Pair these with a willingness to trust in our people and to do what it takes to help them be successful (see my Top of Mind on patience and enabling execution), and I can’t think of a better way to get to our desired future.
Shared with Partners
“It’s not what happens to us, but our response to what happens to us that hurts us. Of course, things can hurt us physically or economically and can cause sorrow. But our character, our basic identity, does not have to be hurt at all. In fact, our most difficult experiences become the crucibles that forge our character and develop the internal powers, the freedom to handle difficult circumstances in the future and to inspire others to do so as well.” (Stephen R. Covey, The 7 Habits of Highly Effective People)
This is a message that is worth repeating every single day. Many situations can trigger negative reactions, but if we can be aware of the split second before the response, there’s a chance we can alter our behavior and choose a more productive outcome. I’m continually amazed at how it’s possible to choose a response that prevents me from feeling angry, envious, sad, disappointed, frustrated, etc.
“The market is a cruel place that sometimes rewards the foolish and punishes the brilliant. The difference, though, is that the foolish eventually lose their good fortune (unless they wise up) and the brilliant find a way to survive and make it work—even if it takes fourteen years.” (Greg Crabtree, Simple Numbers, Straight Talk, Big Profits!)
I’m proud that we’ve built and run a business for over 16 years (we celebrated 16 years in early June). We’re far from brilliant, but I believe we’ll continue to find ways to survive and make things work.
“There are two ways to help a client embrace a bigger solution: First, excite them about an idea by helping them connect with it emotionally. Second, simplify the solution by helping them see a clear pathway to it. The goal is to anchor the client in their future desired state—to help them feel it emotionally and see it visually. If they’re enamored enough that they can see themselves in that future, change shifts from scary to approachable, even exciting.” (Ashley Welch, Justin Jones, Naked Sales)
We were recently engaged in a sort of “audition” project for a client. They wanted to see us reimagine the direct-to-consumer website experience of their flagship brand. The design concepts were a big hit and the client was excited by the possibilities our mockups represented.