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As we conclude our Agency Growth Series, we wanted to capture the journey of Morphio’s Co-Founder, Eric Vardon, who before Morphio founded our former agency in 2011. Read more below about Eric’s decade of transition from agency owner to freelancer, back to owner-operator, to handing off leadership to others, and ultimately exit. There are plenty of lessons in here about the steps it takes to create a scalable and sustainable business that can succeed beyond any one individual.
In fall 2010, John D’Orsay and I got together, and we had an idea: to create a company that would fuse digital marketing, data and web development. If we could explicitly show a client what their marketing dollars returned to them compared to traditional agency models, all of the subjectivity that had plagued our careers wouldn’t exist. At the time, we were both consulting for a handful of clients, and we thought it would be much easier to pull them together under one cohesive banner. John and I co-founded Arcane in 2011, and we dove right in. After almost a year in separate basements connected via Apple iChat, we thought, ‘why not hire a few people to help and sell some more stuff?’ – we had been doing it for so long already on our own. We didn’t have experience running a large company, but we knew what the product needed to be, and that was our focus. Tony Crncich and Bryan Taylor joined as partners after a long trip to Tony’s cottage to finalize business plans, which rounded out our dynamic ownership group. Together, we hit the ground running with a broad marketing strategy to grow our business from the initial ROI-focused concept.
Over the next decade, the agency successfully scaled to eight-figure revenue, opened offices across Canada, won Google Premier Partner awards, transitioned leadership to non-owners, and ultimately was sold. We realized that entrepreneurial dream of creating something sustainable and valuable in the eyes of someone else. So how did we do it?
Agency Direction (Me)
Every year, the partners and I revisited the key questions needed to reaffirm the direction for the agency as a whole and our business partnership. This ensured ownership shared a shared vision for a successful business. In our minds, that vision meant not holding the client relationships or stunting growth by dictating from above. Although I often led the vision as President and CEO, we as owners have always shared the workload. But I made a promise to myself that when the time was right, I would pass on the reins. The company was built to be for the team, and we knew at some point, our exemplary leadership would do what we could not.
The Process of Letting Go Starts with Process (We)
Mid-2015 was a significant time for us – we had grown past 20 team members and were experiencing that as Founders, we often cared more about getting things done our way than the right way. The challenge of separating our roles as owners versus operators caused continual challenges in objectively making decisions as a group of partners. Often, we pushed teams in different directions using a different approach each time. This distraction often caused more chaos than good – and we knew this didn’t work. While we were disruptive, we always listened and acted on feedback from the team.
We also knew we could not rely on our account leadership, strategy, and execution with every client as we passed the 40 client retainer mark. We knew we could no longer organically know everything about every client and be the lynchpin for success on each account.
Collectively, the ownership mindset became to find and establish a talented leadership team to manage the business better than we could. We began to bring in and empower leaders to guide the direction of each department. Starting with project management, we built processes surrounding our core product. We invested in technology, process development, managed our work’s financial accuracy and established a path to profit. The strategic planning process would require the owners to give the business the financial stability it needed, which meant a robust finance team. We had always been fiscally responsible and financially strict from day one, but the company had grown to such a size that it was a simple call to make. A finance department would take our business to new heights and one that could manage the extent we had grown to be. HR was next – or as we referred to it, Human Capital – and the investment in a leader to take away the most sensitive and rapidly changing part of our business was a priority.
After formalizing and redefining all departments, we moved to building a split leadership team in early 2017: an Executive team managing the overall strategic plan and a Senior Management Team to lead the complex day-to-day operations. I continued to lead these groups but with additional support and responsibilities to crucial talent viewed as succession options. We were also very transparent with those individuals on how and where their career trajectory was going and our ownership group’s intentions of not being in control forever.
It’s Your Ship (Them)
I was given a book in 2017 that took me a year to pick up and read finally, but it honestly changed my life when I did. The story of Captain D. Michael Abrashoff and his command of USS Benfold in It’s Your Ship showed me how he could ‘let go’, and served as an analogy that spoke to my mindset and our current position – I took it as a sign. So in the spring of 2017, the owners agreed that we must follow the same path of letting go and moving forward with a plan to replace our daily personal functions, with the target being the next 18 months. This chat resulted in one objective: put the power in the hands of the fantastic team we had built.
We explored options with recruiting firms, had conversations with external candidates to analyze what Arcane could look like, and came close to a decision on candidates. It would have been too disruptive to our growth plans and none of that “felt right.” After months of debate, conversations with mentors, discussions with leading partners and trusted advisors, and battling between the exhaustive process of external search, we confirmed our instinct – we had the talent inside the walls of Arcane. We merely needed to enable them. We also knew that hiring from within has a higher chance of success, and so we made that decision without much debate.
Empowering and enabling our people to drive decisions through our values would give the company what it needs. We knew that an executive leadership team that could walk our the four corners of the office every day and extract the best out of its people would be able to accomplish what we could not. If this leadership team could take each team member to the next level and provide access to learning, management growth, and career-defining confidence, we would win…and we did.
Check out the rest of our Agency Growth Series
Intro – How to Grow Your Digital Agency for a Multi-Million Dollar Exit
Gone Fishin’ – How to Find Clients
Keeping Clients Happy AND Creating Margin: Goal-Based Account Management
Results, Rinse, and Repeat – Creating Repeatable Processes