In early February, Sei-Wook and I went to the HoldCo Conference in Utah for the 2nd year in a row.

Last year, we were complete newbies, still unsure about the vision and strategy of Barrel Holdings. We met a lot of people who were generous with their knowledge and came away inspired. We took those learnings and made a lot of progress with our business, becoming clearer about the design of the holdco.

Sei-Wook and I back in Sundance Resort in Utah for HoldCo Conf. Right, my book was included in the conference’s welcome bag.

This year was also filled with learnings from new attendees with different businesses. I enjoyed getting to know people doing interesting roll-ups, sector or geographic-specific plays, and pursuing all kinds of businesses (growing vs. distressed, small vs. scaled, incubated vs. acquired, etc.).

I was also able to give something this time around. I gave away copies of my book The Holdco Guide with every welcome bag at the conference. The feedback was very positive and some attendees shared that it was a helpful read.

I’m very curious to see how this year unfurls and what advances we’ll make in understanding the business.

About Agency Journey: This is a monthly series detailing the happenings at Barrel Holdings, a portfolio of agency businesses. You can find previous episodes here.

Highlights

Barrel Holdings Leadership Summit Is a Success

We held our first major leadership summit in New York City towards the end of February. We had typically done 1-day quarterly meetings that were mostly centered around each agency sharing their results and learnings. We decided to move to a 1.5-day format that was mostly about knowledge share and networking among our agency leaders.

The summit was a success and everything went quite smoothly with the exception of travel challenges for a couple attendees due to the snowstorm that preceded the event.

Left, our Kickoff Reception at Pineapple Club. Middle, our New Yorker inspired tote bags, and right, Lucas giving his talk on building the growth team at Barrel.

Some of my favorite moments:

• Welcome reception in the Lower East Side, where we also invited any agency team members who lived in the area. Great chance to see some of our old employees from Barrel who are still with the company and thriving (Christine, Isaac, Allison).
• Presentations from our CEOs Lucas (Barrel), Jacob (BX Studio), and Jess (AO2) – each shared some great insights on leadership, process, and lessons learned from setbacks. Lucas talked about the shift from handling most of business development himself to building out a growth team. Jacob shared the wild ride in 2025 of going from a barebones team of freelancers to building out a fully fleshed-out org structure. Jess gave us an honest and vulnerable talk on taking the reins as AO2’s CEO and the internal struggles she’s had to overcome.
• Talent recruiting expert Dom Farnan gave an engaging talk on “hiring vs. recruiting” that the attendees greatly enjoyed and found valuable.
• Our two long-time consultants Max Traylor (account growth) and Luke Maloney (sales) provided engaging sessions on their respective topics, giving room for our agency leaders to chime in with their own experiences while also underscoring the importance of the fundamentals they’ve continued to preach.
• Leadership dinner at Upland was a chill and laid-back time where we got to enjoy good food and get to know each other better.

Left, the scene in the conference room where we held the summit. Right, enjoying dinner with the group at Upland.

This was also the first time that our growing Barrel Holdings team – myself, Sei-Wook, our head of M&A Brandon, and our portfolio ops manager Annabel – all got together in person. Ivona, our AgencyHabits general manager, was unable to make it due to the weather, but she joined for part of the summit via Zoom. Sei-Wook, Brandon, Ivona, and I gave a “state of Barrel Holdings” presentation that touched upon our business model, 2025 performance, M&A activities, and AgencyHabits progress.

Next year, I’m debating whether we keep it in NYC or if we do it somewhere more remote, like a resort. And perhaps somewhere warmer, or if we keep it in the area, then perhaps in the spring vs. winter. And next year, it’s very possible we’ll have more attendees!

As a decentralized holdco, where we afford a great deal of autonomy to our agency leaders in how they operate their respective agencies, the Leadership Summit is our chance to provide a great deal of value by facilitating valuable knowledge share and exposure to various thought leaders. It’s a very important investment that we feel can motivate and inspire our leaders.

Positioning and Specialization Convos

Across more than a dozen or so conversations with various agency founders in February, one topic that continued to come up was around agency positioning.

Since doing deep work on this topic through our Agency Growth Engine and the Foundation component (we’ve held two free AgencyHabits Knowledge Share sessions so far, the first on positioning and the 2nd on ICP), I can’t help but notice that most agencies are quite reactive in crafting their positioning and don’t spend nearly enough time exploring ways to differentiate themselves.

One agency founder I spoke to had done a nice job of building expertise in a specific industry vertical even going as far as to assemble a robust network of advisors and partners who referred good deal flow. However, the founder hesitated to fully position the agency’s website and go-to-market around this focus for fear of potentially alienating a handful of opportunities that didn’t match.

I shared how being narrowly focused and specialized in your marketing materials didn’t necessarily preclude the ability to take on non-ICP clients. I noted, for example, that even though Barrel positions itself very proactively as CPG food and bev, it still works with clients like Mack Weldon and Zonda Home, opportunities that came through warm, trusted relationships. Those engagements will still find a way through, but having crystal clear positioning in your marketing materials will give your agency a better chance to cut through the noise and stand out.

Looking across our own portfolio, there’s still work to refine their positioning as well. For example, BX Studio began with the focus of being a Webflow dev shop, which helped in the early days. But now that it’s a more crowded space, BX will benefit from narrowing its ICP and also reframing its value prop to go beyond just Webflow into something that is about solving specific problems for a well-defined set of clients.

This is a topic that will never get old and for agencies, something that isn’t just a set-it-and-forget-it task. It’s something that will require continued observation, refinement, and investment.

Check out our Agency Foundation positioning app – we’ve gotten really great feedback from agencies that have used it, and we’re continuing to make some significant improvements to it.

Top of Mind

Revisiting AI’s Impact on Agency Business

About a year ago, I wrote this in episode 56 about the impact of AI and clients embracing AI-powered tools to do more of the work that our agencies had traditionally done for them:

In the short run, this will eat into some of our revenue, there’s no question about that. However, if we play our cards right and continue to evolve our services, I think we’ll be in a good position. The AI-powered tools are great time and cost-savers for clients, but there’s still the work beforehand of knowing what to create and why. This is an opportunity for our agencies to be more involved in the planning, research, prioritization, and strategy work.

The AI deliverables today are also anywhere between 10-95% good enough. There’s still, no matter how small, a degree of polishing and final touching that will be required via a human. Maybe it gets to 99-100% at some point, but I think the last bit will take a while to fully build away with tech. And even the assurance of “human eyes” to check quality before launch will not fully go away. As long as that need exists, agencies like ours can provide value.

More likely though, I think our agencies will thrive on the fact that the exploding world of AI will require greater expertise in knowing how different tools and systems work with each other. Piecing things together, knowing the right questions to ask, understanding what flows into where and why, and tying these all back to business results – it’s no different than what we’ve done for clients with software, content, design systems, and branding, but now with this powerful technology we call AI.

A year later, the technology has improved at a breathtaking pace. Playing around with Claude Code for most of February, I was struck by how easily a user could create so much of what used to be gate-kept by agencies and software developers.

For our web-focused agencies Barrel, BX Studio, and Vaulted Oak – the ones that make up the majority of Barrel Holdings’ revenue and profits – the pressure is on to evolve the businesses to meet the changing landscape. Barrel and BX Studio have responded by offering clients more services around strategy and on-going marketing, especially with AI search. For Barrel, serving mostly ecommerce clients, conversion rate optimization (CRO) will also need to be a bigger percentage of the offering. And for BX, there’s opportunity with marketing ops around helping clients set up better analytics and piece together data sets to create better go-to-market plans.

For Vaulted Oak, they’re continuing to invest in their white label development efforts. Their excitement over AI has been more tempered, and it’ll be an interesting study in how things play out. I can see a world in which clients become over-exuberant about using AI to build out their websites, often doing it themselves or through very low-cost providers, only to run into hairy problems that need careful attention and a team that still knows how to read code. This is where VO seems to thrive and perhaps they become the “AI rescue” team for AI slopped Shopify and WordPress sites. We’ll see.

But the big question remains for Barrel and BX Studio: how quickly will the economics of our core web offering shift as “vibe-code first” becomes more prevalent? I think it’ll depend on the sector and maturity of the client. Earlier stage tech companies with tech-savvy team members are already using Claude Code to build and deploy their own sites. Some CPG founders are in this boat too. But more mature companies with different departments and complex tech stacks are still likely to lean on specialists for support. The shift will most likely be uneven, by sector and by company stage.

The immediate opportunity for our agencies is to think hard about which of our services are actually valuable to clients and then ruthlessly automate and streamline the rest. Front-end development, QA, project timelines, certain aspects of content and design. These are things that cost clients money now but could be done at a fraction of the cost with AI.

The secondary opportunity is to expand upon the value we deliver and imagine how we can fashion AI-powered tools and workflows to go even deeper, perhaps into the world of building custom tooling and products that solve specific client pain points. Not to turn into a software business, but understanding that services + software can be a powerful combination.

The urgency isn’t about having FOMO over the latest AI tools or mimicking how others have this or that automation going. It’s about getting more serious about understanding our relationship with clients, how we continue to evolve to support their changing needs, and building the infrastructure to have those conversations and opportunities. From here, our agencies can refashion themselves not as web agencies but as specialists that help clients solve real marketing problems.

Some of the investments we’re making now aren’t about bringing in “AI experts” to adopt this or that tooling but instead doubling down on basics like having better discovery conversations during the biz dev process and training our client services teams to have deeper conversations with clients around their business goals and pain points. I believe these will matter more than any AI tool we adopt.

Shared Quotes

“A quick summary is that a terrible industry looks like this: the product is an undifferentiated commodity; everyone has the same costs and access to the same technology; and buyers are price sensitive, knowledgeable, and willing to switch suppliers at a moment’s notice to get a better deal.” (Richard Rumelt, Good Strategy Bad Strategy)

This is why it’s imperative that we continue to pursue specialist agencies. Otherwise, we could very well be stuck in a “terrible” situation.

“The accomplished person is not aggressive. The good soldier is not hot-tempered. The best conqueror does not engage the enemy. The most effective leader takes the lowest place. Shih wei pu cheng chih te This is called the TE of not contending. This is called the power of the leader. This is called matching Heaven’s ancient ideal.” (Lao-Tzu, Burton Watson, Stephen Addiss, and Stanley Lombardo, Tao Te Ching)

I sat with this quote for a bit, trying to figure out what it really meant. I don’t think it’s saying that you become passive and not act, but I think it’s about acting with no ego and having intention with your actions, not just doing stuff to show others. The holdco journey for us in many ways has this dynamic. Earlier on, we were so eager to just be aggressive and do stuff, juggling way too many initiatives and projects. Over time, we learned how ineffective such an approach was, and have drastically cut back on what we focus on and how our activities align to our long-term goals.