Starting a Digital Marketing Agency from Scratch with Serial Entrepreneur Dan Salganik – AEP #26

00:03

Ramesh: Hello everyone. Welcome to the Agile Entrepreneur Podcast. This is your host Ramesh Dontha. This podcast is about starting and building your own business with purpose, passion, perseverance and possibilities. Today I'm excited to introduce a guest with a very fascinating background. His name is Dan Salganik. So Dan has been a serial entrepreneur since his sophomore year in college. He's currently the co-founder of visual fizz, a digital marketing agency and another company Commut, a new billboard on data company. He has managed hundreds of team members and run over eight figures in marketing campaigns. Some of the notable campaigns that he managed are for President Obama, Yoko Ono, and the emperor of Japan. I know what you guys are thinking, so we'll get into that later. So Dan has worked on a diverse set of projects and clients ranging from half a million-dollar web biz as well as people who are just starting their own business and mentoring them. Hi Dan, Welcome.

01:17

Dan: Thanks for having me.

01:18

Ramesh: I don't know where to get started, but I will give the mike to you. So tell us a little bit about visual Fiz, the digital marketing agency. The company that you're managing right now.

01:30

Dan: Yeah definitely. So Visual Fiz is a full-service digital marketing agency which I have built with my co-founder over the past two and a half or so years. And the goal was always to build a lean digital marketing agency that can provide you know similar or better services than the large agencies out there. Based on just being flexible, being kind of communicative throughout the whole process, being transparent and hiring people who have 10 to 20 plus years of experience, minimizing the amount of overhead through crazy office space and having to hire every single person full time and finding that happy medium. So we can hire better people who enjoy the flexibility let's say of working from home or cafés or you know traveling once in a while as well. So it's been a know so far great journey and we're excited for the future.

02:30

Ramesh: So Dan the digital marketing industry I find it pretty competitive right. And you started about two and a half years ago. So what has been your experience with respect to finding your own niche and then competing in this what seems to be a very competitive industry.

02:48

Dan: The digital marketing space is incredibly competitive. And the thing is that I think where the leaders are going to end up are the small to mid-sized agencies. Because I think a lot of the large companies that have been hiring some of the major corporate digital marketing companies are finding that they could do so in a leaner manner and they're moving on to smaller agencies. So even though it is quite competitive. The nice thing about the landscape is that there are so many companies that constantly need reinforcements from the digital side that there are companies to allow them to kind of grow and partner with them. What we've done as we've just tried to create a very relationship-based type of business model where we get to know the clients on a personal level. A couple of the kind of a niche service offerings that we do have is one, we like to think of all the projects is let's say three dimensional. Where it's not just paper click advertising, it's not just social media. It's not just one piece of kind of a funnel. It's all of the pieces. And how do we integrate that into the story. And actually one of the points of differentiation are how do we create an emotional experience out of what we're doing. That's the tricky part is how do we convey an emotion and get a response that is also emotional from a potential customer or client when working with them.

04:16

Ramesh: So Dan you've been a serial entrepreneur since your college days. So is this the first company you started, or you worked somewhere else. Can you talk a little bit about your background?

04:27

Dan: Yeah definitely. So I have actually, I think the first projects where I actually had a you know a profit and built a small business was actually back in high school my junior year. That one I won't consider a business. That was actually just selling T-shirts like any kind of kid does. In college I did start my first web-based business that was actually in the crowdfunding space focusing on communities. So it was significantly I think closer scale and kind of close to home let's call it versus like a Kickstarter or Indiegogo at the time. I went part time in school during that build and unfortunately, I would say it wasn't as successful as I would have hoped. Which I think happens quite often for you know entry level founders or founders were just starting out and basically spent my next year or so catching up in college. Because I wanted to graduate at the same time. And started working in the digital marketing space. And since then I worked for some of the small agencies like your mom and pop style where you wear 10 different hats and I have also worked for the major companies where there's so many people that you're really only doing kind of one thing and one vertical and [05:48 inaudible] and happy place in the medium sized agencies. You know somewhere between 30 and 80 individuals where you do have your kind of your own vertical, but at the same time you're able to provide your own insight and your own ideas. But eventually I decided to break away from that space after seeing some of the, I don't know want to call issues but some of the inefficiencies in the digital marketing space to other you know through other companies I’ve worked for and I had to start my own which was visual Fiz just two and a half years ago.

06:21

Ramesh: Okay so then you decided that you wanted to study your own because of the inefficiencies that you really wanted to close. And then how did that transition happen.

06:32

Dan: That's an interesting story. Yes. So that company actually laid off a good portion of employees due to some of the inefficiencies. Yeah. And so by seeing that and being one of the actually one of the employees that was laid off, because I was a project manager and generally, we're not as profitable as some other team members. I decided to work no contract and just do some of my own stuff while building the name and the idea and I met my co-founder, I believe it was probably October of 2017 if I'm not mistaken, maybe 2016 actually. And I remember for the first time at a coffee shop on a Friday afternoon had a great conversation. I told her, hey if things work out you know let's try to become co-founders. She said okay sounds good. And then I dropped the ball and said, I'm actually leaving to Southeast Asia for three and a half months but let's do this thing. And she's like okay let's do it. You know I was going to travel. Basically I had an open-ended ticket so I don't know it could have been longer, but that was the beginning of Visual Fiz being remote for three and a half months traveling all across Southeast Asia.

07:45

Ramesh: Wow. And then you started the company during that time, and you've been managing at that time?

07:51

Dan: Yeah. So we started the company probably from that point and then we had our first paying client in two weeks. And so basically, we started the company at fifty dollars. And we were profitable in 15 days.

08:06

Ramesh: So can you talk a little bit about how did you nab that first paying customer.

08:13

Dan: Yeah. That's a good question. So I used to be a contract contractor on Upwork or some of those other platforms before I started this. I had a couple of individuals come to me; they ran a business actually out of Kuwait. Two women, very smart, had an e-commerce Web site which was also partially their cafe and restaurant where they featured a lot of their unique products. It was kind of like a modern more Millennial driven like e-commerce boutique, what's called a little bit of a hybrid. Really cool items and they came to me and they needed some help for SEO among other things. And so I said hey you know I can do this for you. But what if you start working with my agency and I can kind of give you the full scope of things right. A singular freelancer. They jumped on board. I was able to charge you know; it was not you know expensive by agency. We were able to charge an agency price. And by doing so it's able to start reinvesting that money into building the website and starting to get new team members and kind of hiring you know as I mentioned earlier individuals who were going to stick with us for that for those projects.

09:35

Ramesh: So Dan I'm kind of intrigued right now. Because you are trying to hire people with 10 to 12 years of experience and then at the same time signing up the clients. But how did you manage the finances like you have to pay these people that you're hiring a pretty decent amount of money and then you said you started with the 50-daughter kind of step. So how did you navigate these financing and hiring and managing people.

10:02

Dan: Yeah. So that's actually been I think a big, it just been a big thing for us from the beginning where we are just very smart about where we're putting our dollars. And until more recently every dollar that we earned basically was or rather every dollar that we paid out towards our team members was a dollar we earned from a client. So it's kind of like a one to one. We went on that margin. As I mentioned these are a lot of our team members until a certain point or contracts and still are. Because we can still hire these really great people who do want to build their own lives, we work on you know a pricing kind of model where we're still hitting our margin. We're very transparent throughout the process. We tell our clients kind of where we're at. We tell our team members where we're at you know what we're charging. So everybody knows, you know there's no smoke and mirrors. And most clients unless they are kind of a little bit more conservative don't mind the fact that we have team members that aren't in the office every day. The way that things are tracking anyway and like I said our client was International also. So it truly didn't matter if I was in Asia and someone else was somewhere else. Because we all had kind of this medium like a slack or something to work off of. Yeah it was just being smart about it. And then once we had enough to start to reinvest, then we started getting into working on internal things, you know purchasing tools and things like that. But a lot of it was bootstrapped and you know just not taking dollars out for a little while and just reinvesting.

11:38

Ramesh: So that's good. It's a good transition. Before I get into your interesting clientele later on, I want to understand a little bit about this www.Commut.com. So can you talk a little bit about this other company Commut.

11:53

Dan: Absolutely. So Commut is definitely still in its infancy, but it's a very interesting company and with visual Fiz growing, it's actually allowed me to bring someone on full time and manage some of what I'm doing from day to day, so that I can start working on Commut as well and what Commut is basically, it's a new version of the billboard company utilizing the sides and backs of truck trailers and basically getting people closer on the road than billboards can. And so that concept basically came from me having to drive to and from downtown Chicago every day. I used to live in the suburbs, now I live in the city, so I don't have the same issue. But I used to drive down every day, sit in traffic and then as I'm sitting there bored out of my mind, because I absolutely hate driving. All I can see in front of me are white billboards or rather white trucks that could be billboards. That was kind of the beginning phase of what we're doing. As we started talking about it and I brought on new co-founders and new partners on the team, it's actually going to become, it has already becoming a data company wrapped around a truck advertising platform. So we're able to understand who's on the road, when they're on the road, the types of cars, the speeds, you know the demographics of every single route that we're taking. You know there's probably from one drive you can we can probably plot tens or hundreds of thousands of data points and create something that's basically like the ways of you know our space. And so I'm pretty excited for the launch of, we're kind of in our pilot stage right now.

13:40

Ramesh: I'm excited because I'm at heart a data guy. So I do a lot of data strategy and data analytics. So essentially what you are trying to do here is a context where advertising kind of stuff.

13:52

Dan: Yeah. Yeah. It's essentially like that and then also just being able to prove out our model by saying in the out-of-home space, which is basically physical ads, billboards, bus ads etc. There's something called dwell time and dwell time is basically your impression time. How long is somebody looking at your ad. In this sense because the cars and individuals that are behind the truck are literally stuck behind a truck in many cases, our dwell time can be exponentially higher than most other outdoor advertising platforms, because there's nowhere to go. There's nowhere to look to the sides because there's one thing when you look at peripherals there's the other one the truck is right in front of you. And so we're going to have that data as we continue building the company. I wish I could provide some data stats, but I do know based on my own personal experimentation that our dwell time is and will be higher.

14:50

Ramesh: That's really nice. Actually I always wondered why people are not using the Commute time to do more ads. Excellent. So good luck with that one Dan. So I'm going into a different area. When I introduce you, I threw some names? President Obama. Yoko Ono, emperor of Japan. Okay so tell us the story behind this client. What did you do for them? How did you work with them?

15:19

Dan: Yeah that was one of my favorite projects. Just based on you know everything going on. It was, so like I mentioned I live in Chicago and they are in the south side in the parks in Jackson Park they are in the process of I believe fundraising and building and it's been a little bit of time since I’ve been on a project. Obviously, it's a different agency. But were helping the individuals who are in charge with the parks and the Obama library etc. Build what's called the Phoenix pavilion. If anyone doesn't know what that is, basically during the World's Fair in Chicago back you know over a century ago essentially, there was a gift that was gifted by the Japanese government, which was the Phoenix pavilion and unfortunately I believe it fell into disrepair or burnt down and was no longer functional, so they demolished it and been around for 100 years. The goal now I believe about 3 4 years ago was to rebuild kind of a modern New Age Phoenix Pavilion to talk about the Japanese American relationship and to become a pavilion for concerts and events in an area which you know would definitely prosper with additional tourism. The south side near the lake, beautiful park absolutely gorgeous. And so my projects with these stakeholders, though unfortunately I did not get to meet the individuals who were named. I worked with people who basically did finalize a lot of the things that we created and a lot of, let me go back one step. What we did is we created the website. We created multiple very extensive video campaigns which we are going to be sent over to Major funders and donors and individuals for fundraising etc. Vary in that and I mean each video took about a month to create, utilizing the very intricate etc. And I loved it. I mean I loved it. I got that whole kind of project as it related to fundraising and building awareness. But though I didn't get to like I mentioned meet these people, individuals like Yoko Ono and Obama and his administration etc. During that time we're all individuals who have personally seen these videos and have been on the website and knew about this project because they're building the Obama library. Because Yoko Ono had her statue will what's going to be in this space. And like I said I don't have the full updates anymore, but overall, it’s just such a unique project and those are the ones I just get excited about.

18:05

Ramesh: I know. Just curious on that topic, how did you snag this project?

18:11

Dan: This was actually as I mentioned a past agency, so it wasn't one that I, I wish I could say it was a Visual Fiz project. But this was just in the prior agency actually. We had some really great clients of Visual Fiz too. But you know we probably can't say Obama and Yoko Ono have been a part of it. Regardless I find every project to be unique and interesting just based on the fact that every business is so different. And I had a conversation just that day and that's why we don't ever do like packaged pricing you know because you don't know anything about the company until we have those conversations and you know it just doesn't make sense for package pricing or one size fits all. Because as you can see these projects range so heavily.

18:58

Ramesh: Excellent. So Dan now I just want to Segway into the running and operating of your business right. And then it looks like you have a healthy pipeline and the business seems to be stable. But were there times during last two and half years where there were lean times or where you thought maybe I should not do this business, I should go back to other times like that, how did you manage them.

19:27

Dan: Yeah definitely. So there has been some times where it was definitely slow. For example we launched one of our largest projects to date towards December of last year and we had a very healthy pipeline. We were expecting basically estimating that from the beginning of the year that we were going to double our business revenue than the prior year already and you know by January. In terms of new business coming in and signed contracts. Though we were able to grow, and you know by January, February we were able to basically successfully close a couple of good deals. A couple of those large projects did not come through and we did not win them. You know the client didn't go through with that. I think there was some dollars that they were promised, and they never received. Whatever this story maybe we just didn't get it. So that was a bit of a blow. I think it's something that you just have to prepare for as a business. And like I mentioned in the beginning we’re very conservative, even though obviously we're not. Because we're an agency and entrepreneurs. But from financing standpoint I try to be very conservative so that we have a good amount of runway. I mean at least six months plus in runway, maybe over a year in runway. But with that being said there have been those times where things are slow. But we usually utilize those times as reinvestment hours right. So when we don't have clients that are kind of jamming our pipeline and our hours, we started rebuilding the website and we started updating all of our content and creating new blogs and you know putting a lot of effort into some of those internally created videos for us. So it's definitely a cyclical process. You know some months I will get 20 inquiries of new business or 10, other months I won't get anything. And I think that's just the nature of it, like summer last year was really slow. It is a little worrisome and then it was fine. But what we're actually doing now is actually answering a question you had prior is we are even though we are agnostic company in terms of the clients that we've brought on. We are actually going to start creating our own vertical based on just the successes we've had with the specific type of clients. And I think that's going to differentiate our growth and I think I believe and I'm hoping that it's going to bring on a number of new clients because of the verticalization of our Brand.

22:10

Ramesh: That is very good. So Dan you have a co-founder. I just don't understand Dan as a person. What kind of a person you are and then how? What are your strengths you think and then how do you complement you know yours with your co-founder? So if you could talk a little bit about your personalities, your personality and then how did you augment or supplement that video co-founders.

22:35

Dan: It's a good question. That's actually something we mentioned every single pitch that we have is how we got started and why it worked. And as I mentioned earlier, I come from a project management background. That was my space. So I am good with numbers. I'm pretty good with, I like to think so at least with you know account management and compliance. I run the new business. I make sure that everything is, basically all the admin stuff is paid for, all the legal stuff is accounted for, the accounting and the strategy itself. I see myself as a high-level person. Sometimes it's good, sometimes isn't. But in any case, it just works for us where I can come in, you know bring a client, get all the funding from them, work through the whole process, come up with a strategy. And then my co-founder starts right. And my co-founder, her role is having been very much kind of in the weeds. So she has a background in PPC, paid social content you know more of the things that are really the marketing side. So I bring it normally to her to kind of complete that conversation in that circle until we bring it to our team members who are really kind of, they have just their one you know one or two strengths like they're just the PPC, they're just SEO, they are just content etc. So it works really well because I can start the conversation. She can kind of close it and then we can bring it to our team members to implement and we do monitor the whole process really closely where you know she'll make sure from a quality control standpoint everything is done properly and I’ll finalize and I’ll make sure it's fitting in with a greater strategy. The client's happy, it makes sense and it's just worked out really well, because we almost never step on each other's toes or get in each other's way because of the fact that she doesn't really do what I do, and I don't do what she does.

24:29

Ramesh: That is very ideal partnership. I'm always dreadful about partnerships, but I'm glad this thing is really working out for you guys.

24:36

Dan: Yeah and considering we'd never even knew each other until you know until that one meeting and I was asked this recently about co-founders and it's such a difficult task. Co-founder and one that you can trust. And the thing that I answered is you know in order to have a co-founder who is not you know like a family member or your best friend from grade school, you have to be able to trust the other person and their judgments because besides your family and your significant other and maybe your closest friends you're going to spend the most time with that person. So you better like them and you better trust them.

25:20

Ramesh: I'm with your 100 percent on that. I think the trust and being aware of what vulnerabilities is very important. So Dan the last question for the podcast is based on your entrepreneurial journey, if somebody is sitting at home and wanting to either start a business, they started a business, but they want to grow it. What kind of advice would you like to give them?

25:46

Dan: A few things probably. I'd say one, do your homework. You know I think a lot of people jump into entrepreneurship thinking you know if I build it, they'll come and I'm kind of a little happy that that cliché has slowly been dissipating. Because they don't come. You know there are so many entrepreneurs out there and I'm not saying in a way to have people you know not start their businesses. But do your homework, get your clients ahead of time and don't quit your job until you have a customer until you could support yourself. Because thankfully for me when I started my business for one, you know I'm a I'm a fairly young guy. So I was able to live with my family for a year and a half when building my company. I brought my expenses way down and I was able to support myself with very little money towards the first and even the second year of growing the business. Because a lot of it was going into reinvestment. So I'd say just be conservative, you know don't pretend to you know live or be beyond your means and that's going back to the overhead issues or don't have a sexy office. Just have a good team. And aside from that you know I think just be authentic and enjoy what you're doing because you know being burnt out is a truly real thing. And I think a lot of entrepreneurs go through that. It happens to me at least a few times a year, where sometimes where I'm just like I don't want you know I don't want to, I can't do this right now. And what I recommend is take regular time off. This is the same thing for my team member, know they have a limited vacation travel. Just like if it's not traveling, like spend time on the beach during the weekend or just do something, take walks. Because you have to have to be in a good mental state to constantly you know go through the ups and downs of entrepreneurship.

27:47

Ramesh: I mean I second every one of the things that you mentioned. I mean we are all in different phases of our life. I think based on your affairs I think that's excellent excellent advice. Dan thank you very much. So very very fascinating background. So good luck with everything that you're doing.

28:06

Dan: Thank you so much and thanks for having me on the show.

28:10

Ramesh: Thank you. All right.