October was all about Matyx, our water treatment digital marketing agency.

Sei-Wook and I had been getting more and more involved with Matyx since the summer. First it was weekly check-ins, then daily pipeline reviews, and by September I was doing rev ops work for the sales team (see last episode). The pipeline was starting to look better with fresh leads coming in, but the overall business was still not in good shape.

In October, we made a change at the CEO level. Caroline, who had been our VP of Delivery, is now running the business. She knows the clients and the team well and has a good handle on what needs attention on the delivery side.

We also did a reduction in force at the same time. A number of roles were eliminated, a few people got promoted with new titles, and we moved invoicing and some other back-office work up to the holdco. The cost savings help, but the bigger thing is that we have a more streamlined org chart going forward.

It wasn’t an easy month. I began the month with a 15th wedding anniversary trip to Burgundy and came back relaxed, but every single day since has been pretty intense.  I feel a lot better about where Matyx is headed. The sales team is finding its footing too. We began closing some deals, fruits of our outbound approach powered by some of the rev ops work I began in September. More on the lessons from all this in the Top of Mind section below.

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

Q3 Board Meetings & Portco Updates

We held our quarterly board meetings with each agency in the second half of October. We postponed the Matyx board meeting given the transition. Quick notes on the rest:

• BX Studio had its best quarter ever, and September was the biggest revenue month in the company’s history. Profit margins were also excellent. A director of project management they hired earlier this year has made a big difference. BX also closed its largest retainer ever (analytics and strategy work), and inbound from AI search keeps growing. Lots of momentum going for BX, especially with clients signing 2027 retainers. They’re looking to hire for a Enterprise Demand Manager to drive more Webflow Enterprise deals.
• Barrel on the other hand had a tough end to Q3 and a shaky start to Q4. A couple of large committed projects paused or ended, and new business booked came in well under goal. Margins have also been compressed with many projects dragging on and re-work being done to fix quality issues. The plan for Q4 is to land new logos, close out at-risk projects, lock in renewals, and try to contain costs. There’s definitely some work to be done in sharpening the ICP and positioning. Something isn’t quite landing but the reasons for losing deals have been too varied to pinpoint something specific.
• AO2‘s recurring revenue is still under the threshold we set at the beginning of the year. The gains we made in signing clients up for TikTok Shop services may be short-lived as we’ve begun to experience churn with them after 3-6 months. We’ve challenged AO2 to also think about positioning more deeply, perhaps focusing on a niche like petcare to hone in their go to market activities and to develop deeper expertise.
• Vaulted Oak is up year over year but will come in short of its stretch goal. Jason has been leveraging AI more and more in the team’s process, even offering websites done in a week. Jason has also taken over partnership and new biz duties after the departure of their partnerships/accounts lead. While small, we’ve come to appreciate the steadiness of VO’s revenue and earnings. In 5 years of being in business, it’s probably been the least volatile agency we have in the portfolio.
• Prima Mode had been enjoying a growth year but 2 big churned accounts may derail the rest of the year. October was a busy month for Saniya in terms of various in-person events and networking to drive deal flow, but some will take months to really materialize.

Fireside Chat with Bill Kenney of Focus Lab

On October 27, I moderated a fireside chat in NYC with Bill Kenney, co-founder of Focus Lab, put on by BX Studio and Webflow. BX has worked with Focus Lab on a number of projects, including building their site on Webflow and optimizing it for AEO, so it made sense to do this together.

We had a great turnout of agency founders at our fireside chat with Bill Kenney of Focus Lab. It was a successful event for BX Studio and Webflow.

Bill was very generous with what he shared. I’ve long admired how Focus Lab has stuck with its positioning (branding for B2B tech) through good years and bad, including a rough 2023 when a lot of agencies were tempted to broaden out. That discipline is paying off in a way nobody could’ve predicted a few years ago. Bill shared that the share of Focus Lab’s new deals coming from AI search went from single digits in early 2025 to over a third in Q3 of this year, and he expects it to be around 40% of incoming business in 2027. Ask an AI tool who the best B2B branding agency is and Focus Lab shows up in most of the answers.

Overall, I was very pleased to be able to support BX in this capacity. They’ve thrived on agency partnerships, and I think it’s a good use of my network and reputation to help bring more agency leaders together both for valuable learning and to facilitate new partnership opportunities for BX Studio.

Top of Mind

What We Learned from the Matyx Leadership Change

Since we plan to keep acquiring agencies, I want to write down what we’d do differently after this experience.

For the first several months after we bought Matyx, we had one point of contact into the business: the CEO. Weekly calls, updates, numbers. We trusted him, which is how we operate with all of our CEOs. We fancy ourselves a decentralized holdco and we want our leaders to run their businesses.

But trusting the CEO and only having one view into the company are two different things. Unfortunately, we treated them as the same thing.

When performance started slipping over the summer, we got more involved, which meant talking to more people. The sales reps, the delivery team, the person running client accounts. A fuller picture came together as we did that including where processes were breaking down, which clients were at risk and why, what the team thought the priorities should be. These are things that a weekly call and a set of numbers just don’t surface, no matter who’s on the other end. You have to be closer to the work to see them.

I don’t think the answer is to give our CEOs less room. I think it’s to have more relationships inside each business so we’re never relying on a single channel for how things are going. In a 100-client agency with a few dozen people, there’s no reason Sei-Wook and I shouldn’t know the account managers, the senior technical folks, and the sales team and talk to them regularly.

The bigger takeaway is that as a holdco, we have to roll up our sleeves and get intimately familiar with each business, especially in the first year. Spend time with the different teams, watch recordings of client calls, understand the delivery work, know the people. It’s not about micromanaging. It’s about getting information from more than one place.

We were slow to do this at Matyx because the business looked like it was in great shape when we bought it. Good retention, growing vertical, a clear playbook. It’s easy to stay hands-off when the numbers look good. We only got hands-on when the numbers declined, and by then we were months behind on understanding the business at the level we needed to.

Sei-Wook and I are still talking through what this looks like in practice. Some of it is probably as simple as getting to know more people in the first few months after a deal closes, across sales, delivery, and client management, instead of just the CEO.

This experience also has me thinking about how we approach diligence. We’ve gotten decent at the financial side. We probably need to spend more time on the people side, understanding the org chart, digging deeper into who owns which part of the client relationships, and how information moves around inside the company. This will be an important part of the next deal we work on.

I’d love to look back a year or two from now and say that this was the turning point when we really found our footing as a holdco. But right now, we’re in the thick of it and I can tell the rest of this year will be a grind to get Matyx into good shape. Wish us luck.