We had our quarterly board meetings with our six agencies in July. We switched up the format quite a bit, sending out a worksheet for our CEOs to fill out, having them reflect on the past quarter’s performance and to articulate their strategy and priorities for the upcoming quarter. In the past, our meetings ran a bit too long on reviewing financial performance metrics, but now that we have a real-time dashboard that feeds from all of our agencies, we felt that our CEOs would be better served by using their time with us to dig into some of their written answers.

The format worked out well. We ended up jumping around and covering just a handful of sections from their worksheet during our allotted time, but we felt that the benefit was primarily in getting our CEOs to spend time writing thoughtful answers to the questions. And rather than having them read their answers in the meeting, both Sei-Wook and I read them in advance and were able to ask them to clarify or go deeper into sections that we felt were important.

The point of these meetings is to ultimately ensure that we’re both aligned in how we view the performance of the agencies and that we’re also on the same page about what needs to happen in the coming months. We want to avoid situations where we’re overly confident about an agency’s position or not acting with enough sense of urgency. And even worse, that our CEOs feel that the business is performing one way while Sei-Wook and I feel completely different about the situation – these board meetings are meant to ensure we calibrate and emerge with a clear understanding of where we are today, where we want to go, and how we’ll get there. More on how each business did in the next section.

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

Q2 Performance Across the Portfolio

As I mentioned above, July was busy with prepping for, holding, and then following up on our board meetings. Here’s a quick rundown of some takeaways for each agency:

• Barrel: Slow progress in new business bookings in Q2 even though the opportunities are there. Client concentration continues to be an issue. Some major personnel changes – some departures and some new additions at the leadership level – will have significant impact on the agency moving forward.
• BX Studio: Monster revenue growth coming mostly from account expansion (site optimization and SEO/GEO retainers). Material progress in improving margins, which were very poor in Q1. The revenue team experienced attrition and so an opportunity to rebuild that team while Jacob jumps back into founder-led sales this quarter.
• AO2: Good momentum from signing brands to TikTok Shop retainers, a new offering this past quarter. A large contract with Amazon drove profitability. New clients are signing on at higher retainers and the client roster is rotating away from smaller Amazon merchants to more omni-channel brands.
• Vaulted Oak: White-label partnerships drove all the growth while direct-to-brand relationships remained flat. They had to navigate some operational challenges from a combination of attrition and hires that didn’t pan out.
• Prima Mode: Some promising signs with increasing deal flow and opportunities, but lead gen is still a challenge. Even with some great new logo wins, a couple clients churned due to their own business challenges. Working with emerging brands poses a risk due to their fragility even if Prima Mode does everything right.
• Matyx: More on this in the Top of Mind section, but Matyx started off strong only to have new business fall off a cliff after the founder officially transitioned out of the business. Focus is on rethinking and rebuilding the business development machine from the ground up.

Overall, with the inclusion of Matyx for the quarter and revenue growth across the board, we had our highest revenue quarter ever as well as the highest EBITDA quarter ever. It was a promising sign, and we’re still far from hitting on all cylinders.

Hiring a Holdco Recruiter

We hired a talent acquisition lead at Barrel Holdings. She is a seasoned recruiter from South Africa. In addition to helping us build up a database of agency leadership talent, she is supporting some of our agencies in a fractional capacity.

For example, she is helping BX Studio fill a key role right now, engaging in proactive outreach, screening, and bringing a shortlist of candidates for BX’s hiring managers to review. For this, we charge BX a monthly fee for as long as the search goes on. The fee is basically at cost, meaning Barrel Holdings doesn’t profit off of it but helps cover our costs. And there is no recruitment fee once someone is hired, which the agencies appreciate.

This doesn’t mean that our agencies aren’t working with other third-party recruiting firms from time to time. Different roles require different types of recruiting expertise. I’m sure we’ll figure out where our talent acquisition lead could be most impactful over the coming months. And we’re constrained right now to offering 3-4 slots at a time, so we’ll most likely have our agencies request help on senior IC or leadership roles while handling entry and mid-level roles themselves.

One thing I’m curious to see is if there are some advantages to having some of these recruiting activities centralized so we can compare notes and candidates across the agencies. I can see in some instances where a candidate that didn’t get the job with one agency might still be a great candidate at another one, and therefore get fast-track consideration.

AgencyHabits Summer Ennui

In July, we had some tough convos about progress of AgencyHabits. We’ve been good about generating content (43 podcast episodes recorded, 2 newsletters going out like clockwork, articles published regularly), but subscriber growth has been minimal (stuck around sub-2k) and we haven’t done any business development to land some sponsorship partners.

We’ve been running a survey for our subscribers to get some data that will be helpful in designing an attractive sponsorship kit. The responses have been helpful to see. Our core audience is definitely the smaller agency, many of them doing well under $1 million with a handful of contractors. I’ve always enjoyed meeting with these business owners and being a sounding board for their challenges. But the great majority of these agencies are not in our Barrel Holdings M&A buy box – they’re either too small or play in spaces that we’re not interested in (branding, web dev & design).

One part of me says that we should just simplify and make our lives easier – leave AgencyHabits up as an evergreen resource (website + podcast frozen in time) and no longer invest in it, just focus on Barrel Holdings. But another part of me wonders if we just need to focus more on distribution and giving up now would be stepping away just as things are starting to compound.

Where I landed with our general manager Ivona is that we’ll be focusing on distribution for the next quarter. We’ll put a pause on recording new podcasts, save some dollars in podcast editing costs, and leverage as much of our existing content to cut clips and to distribute across Instagram, YouTube, and TikTok. We’ve seen some good early signals from TikTok and IG, so we’ll see how this plays out.

Perhaps we’ll finally crack 2,000 subscribers (and significantly add to it) and attract some sponsors to defray our costs. This would increase our appetite to continue AgencyHabits and its strategic benefit may evolve from M&A deal flow feeder to something else – a sandbox to test out our agency business theories, a way to recruit future agency leaders, or maybe it just becomes its own profit center, a cash flowing asset of its own. To be determined.

Top of Mind

Rebuilding Sales After the Founder Leaves

We acquired Matyx, our water treatment lead gen agency, in April. The founder fully transitioned out of the business in early June and a few weeks later, we really felt what that means for sales.

Matyx’s founder was great at sales. Charismatic, good relationships in the industry, the kind of person water treatment dealers liked and trusted. In a vertical like water treatment, where owners talk to each other and buy from people they know, that goes a long way. The business was largely built around his ability to connect and win over prospects. He also did a nice job assembling a team around him to deliver and retain clients.

This isn’t our first rodeo with a departing founder post-close. When we acquired AO2 in the summer of 2025, we ran a version of the same exercise: install a new CEO, bring on a Chief Revenue Officer, reposition the offering, and grind out pipeline through partnerships and trade shows. It took about a year, but the engine’s been picking up. AO2’s Q2 leads were up more than 50% over Q1, and referral partners drove most of its 7 new wins. So we came into Matyx believing we had the playbook.

We do have the playbook. It’s just harder to run here. At AO2, the transition mostly meant new leadership and sharper positioning in a market we understood. At Matyx, the founder wasn’t one contributor to sales. He was sales, in a business that runs on a steady flow of new client wins.

June made that plain. A wave of extra churn hit in the same month we landed zero new clients, a perfect storm that made everything look extra bad. July’s numbers bounced back a bit on the churn side, but we went almost the entire month without closing a new sale until one finally landed on the last day. The dry spell was worrisome, and it’s something we’ll continue to monitor closely.

This wasn’t a diligence miss. We knew exactly how critical the founder was to sales and went into the deal with eyes open. Where we fell short was the handoff period, while he was still involved and closing deals post-close. We never got into the weeds on the CRM setup. We didn’t scrutinize how the new sales rep was actually trailing and training with him. And we never confirmed that his knowledge was being captured somewhere we could reference later. He never recorded his own sales calls, so when he left, there was no library to learn from.

The real oversight was assuming Justyn, our newly appointed CEO, could fill those gaps himself. He’s new to the responsibility of owning business development, and the sales rep he hired doesn’t come from a similar space and hadn’t sold digital marketing services before. Both of them needed more support, hand-holding, and structure from us than we provided. We also could have started recruiting an experienced sales leader back in the spring instead of putting that on a first-time CEO. That’s the lesson we’re taking into the next deals: not tougher diligence, but a more buttoned-up playbook for supporting the company through the transition.

So July was about providing the structure we should have set up months ago. The biggest change was pipeline discipline. There was no practice of separating deals that were likely qualified from ones that basically had no shot, so we now review the pipeline with Justyn daily and sort what’s real from what isn’t. It’s part of his ramp-up as someone new to owning pipeline, and he’s putting in the work.

There’s more in motion. Justyn is on every lead call through Q3. We brought in an outside sales consultant for a 30-day sprint to audit the sales process and tech stack and stand up real forecasting. We’ve started working through the thousands of old leads sitting untouched in the CRM and talked through restructuring the rep’s commission around booked appointments. Churn mitigation was already in place before the summer, with client health tracking and weekly triage, so the focus is squarely on new sales. And the search for an experienced sales leader is now getting underway.

We asked for help, too. One of our investors, a veteran in the space and now a coach for similar agencies, told us to resist hiring a sales leader until there’s a working system for that person to run, and to lean on events, newsletters, and webinars in the meantime. I also spent time with a seasoned revenue leader at an agency 10x the size of Matyx, who walked me through how he built their outbound sales org from scratch. They offered different vantage points, but essentially the same message: it takes a lot of work to build a reliable, scalable new biz engine from the ground up.

Through our many convos with Justyn, one thing has become clear: the math for Matyx’s success is simple. Matyx serves about 70 clients out of an estimated 3,000 to 5,000 addressable water treatment businesses, with an average client tenure of about 15 months. If we can build a real sales engine while retention keeps improving, the business can grow quickly. Getting to 200 to 300 clients over the next 3 years while steadily increasing annual contract value would be the home run case. I think we can do it.

Shared Quotes

“Most of us naturally gravitate toward being low-curiosity and high-ego; we defend the self-image we currently have. That means shutting out hard questions. On some level we know that giving them our full attention might reveal things we’d rather not know, demonstrate that we’re deeply out of touch with ourselves—and if that were to happen, we might feel obligated to change, God forbid.” (Cate Hall and Sasha Chapin, You Can Just Do Things)

I like to think that writing these monthly reflections gives me space to explore some hard questions every now and then, but if I’m honest with myself, I could probably be better about being higher curiosity and lower ego. Gotta keep building that muscle.

“When Lifco notices results in their subsidiaries beginning to show deviations or negative trends, group managers promptly step in to analyze and assess the situation. They quickly identify underlying issues, ensuring any potential problems are addressed before escalating. This proactive approach allows Lifco to maintain performance across its diverse portfolio of companies. As a result, many business owners choose to continue running their companies well beyond the lock-up periods and initial put/call agreements after selling to Lifco.” (Oddbjørn Dybvad, Kjetil Nyland, and Adnan Hadžiefendić, The Compounders)

We’ve waffled a bit between trying to be hands-off like the Berkshire Hathaways of the world or more proactive like Lifco. The longer we run our holding company, the more I feel like we’re leaning towards the Lifco model of closely monitoring performance and then promptly working together with management teams to work through any problems. It’s not so much about jumping in and micromanging, but more about having leadership acknowledge what’s really going on and nudging them to act with a sense of urgency.