The 5 Stages From Operator to Owner (Rerun)

0:00John Jantsch:So what if being the CEO of your own agency is the trap that most founders mistake for the finish line?

0:16John Jantsch:Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Jason Swenk. He's the founder of Agency Mastery, host of the Smart Agency Masterclass Podcast and author of a book we're going to talk about today, Operator to Owner. He's built and sold his own digital agency after working with brands like AT &T, Patachi, and LegalZoom. And today he advises seven and eight figure agency founders on building businesses that run without them. Jason, welcome to the show. Yeah, thanks for having me, John. So you built and sold your own agency before any of really the consulting work that you do now.

0:55John Jantsch:Now, when did you kind of come to the realization that maybe, and maybe this didn't occur for you, the agency owned you more than you owned it? Did you ever have that moment? Oh, yeah. A bunch of times. I mean, I can't even count that many times. So the one that I remember that is the whole purpose behind writing the book was I kept coming home every night and I was just completely exhausted, miserable. we were probably at that time I think around 2 million in top line revenue so we weren't small but we weren't we weren't big either but everything was on my shoulders right and my wife said why don't you go get a job and shut it down and so I took a job interview with NASCAR and they asked me two questions not to race I would have taken that job but they said what do you want to do every day and what do you never want to do again?

1:54And those two questions changed everything for me.

1:59John Jantsch:So I think a lot of people wrestle with the first one. I don't think enough people wrestle with the second part of that. And so they stay stuck in the second one, which keeps them from doing the first one, right? I mean, well, I was going to ask a question about the book, at least in your work, you've identified these five stages that you need to climb through. You want to unpack that a little bit. You don't have to do every stage, what it means, but just kind of give us the framework. Yeah. So as founders, we all start off as operators where we're doing everything. Okay. Yeah. So then what happens is we're having fun and we concentrate on sales and then operations takes a hit.

2:39And then we focus on operations and then sales takes a hit. And this, it's, it's this rollercoaster ride. And then what happens is we go, we want to grow and I don't want to be doing everything. So what you start to do, and you're working 80 hours a week as an operator, right? If not more. And we've all done it and we all have to go through all these roles, right? And so then you transition to a manager. But the problem is we suck at managing people. We are horrible at managing people. And so we hire the wrong people. We don't have systems for them. So now we're stuck doing the same amount of work that we were doing before, plus managing them, plus probably even doing their work.

3:21So now we're paying them and doing more work. It doesn't make any sense.

3:27John Jantsch:Have you gone through that? Yeah. Well, absolutely. I mean, I, you know, like many of folks you've worked with over the years had, I did everything myself. I was a one person shopper. I've been doing this 30 years now. So I did finally figure it out. And, you know, we have a CEO. I, you know, I'm the chief innovation officer, which is code for I can do anything I want. And so, but it took a long time to get there. And it took a lot of, you know, I think the hardest part was I like doing the work that an agency does. I'm pretty good at it and I enjoy it. And in a lot of ways, even when it is no longer profitable for that person to do that work, that's the hardest part of giving it up.

4:09John Jantsch:is it's not even so much like I don't trust other people. It's like, what about me? What am I going to do? So that's what I call the rubber band effect. Yeah. And I've gone through it too, right? So when I sold my first agency, I only reached the fourth level, which is CEO. But when I reached that level, and I'll talk about the other levels too in a second. But when I reached that level, I only had to work like 20 hours a week. and so mentally going from 80 hours a week to 40 hours a week to 20 hours a week and I would go into a creative meeting now Jay I'm good go into a marketing meeting now we're good and I was like they don't need me anymore so what do we need to do we need to get in there and mess stuff up so we feel important again and it's in the whole book is really about it's not about who you need to hire.

4:59It's about who you need to become and the identity shift that you go through because like we all go through it and some go through it faster than others. But if I can, like, when I was writing this book, it was really kind of like writing it to my sons if they ever wanted to go into business. Like, here's all the stuff that you're going to be going through. Just know, like, if I'm not, here's what you need to do.

5:23John Jantsch:Yeah. You mentioned this identity thing and we work with a lot of agencies as well. On top of having our own agency, we have a network, as you know, similar to some of the work I think you do with agency owners. And what we're finding is right now, they're going through not just a sort of an existential identity crisis right now because of what's going on with AI and changing attitudes of the buyer and what their expectations are. I mean, so I think a lot of, I don't know if they all have the answers, but certainly a lot of agencies right now are asking some pretty hard questions like, what business are we really in?

5:58John Jantsch:And I think that's really got to add to this kind of owner doubt or owner-suffering. you know, dependency, doesn't it? Well, the thing that I realized and what everybody else needs to realize is this. So when you get to the different level and you want to stay there, you have to realize that the agency needs you for something different now. Yeah. Doesn't need you for what you used to do. And so when you can get to the CEO stage where you're steering the ship and you're protecting culture, you're investing in the things, right? And building better leaders. That's your main goal as a CEO. So I'll give you a story that will explain this like that.

6:40The other day, we were trying to make our podcast more efficient using AI and creating some AI agents. And so Stacey and I jumped on a call on a Zoom, and I started building it in front of her. I basically did it where it does everything. And then I realized, I go, if I build this all for her, she is getting robbed. And just because I'm experimenting with AI or we're using, you know, for our sales team, we'll use AI agents and all that kind of stuff. I need to train them. So I literally hit delete right in front of her. I said, I want to show you it's possible. Now I want you to go do it. And it's the mentality that I've always thought about is I can give fish to my team or I can teach them to fish.

7:28John Jantsch:And I think really when it comes to AI, particularly, that's the skill they need to have because otherwise they're just going to get replaced. I mean, they're not going to have a purpose, I think. So I think that's great. Right. So, you know, I do want to go back to the stages a little bit of progression because each one has its own challenge to get out of. Right. But I will say that for me, when it finally felt like it was a possibility was when I finally had somebody who could actually sell and land a big client, you know, that wasn't asking for me anymore. And it was really until that happened, I didn't feel like I could be free of, you know, running the business.

8:09Yeah. So that's when you get to a place where it's the third stage, an architect.

8:15John Jantsch:Yeah. Where you design a system. But a lot of agencies have you seen or businesses, what they'll do is they have no clue. They know how to program and do something really cool, right? Like I'm an accidental agency owner. I designed a website making fun of one of my friends called InShit and it looked like NSYNC and I was off to the races. So I didn't even know what an invoice was. I didn't know all this stuff in 99 when I created it. had to figure it out. And so we were reacting to it. And so what a lot of people do is they hire a salesperson with no systems, no agenda, no outcome. It's like going to chat GBT and say, create me a website.

8:52And all you do is get garbage, right? No context, no system. And so when I was able to give them context and I'm curious what you think on this, when you hired your salesperson, it probably took you a while to hire a salesperson. I did with me. And I tried to think back. Why was that? Why was I the best salesperson? It was because I knew all the stories.

9:19John Jantsch:Yeah, right, right, right, right. Yeah. All I had to do was share the stories in the system. Voila. Yeah. Well, and frankly, accidentally, that's what I did. I was a longtime employee who was doing the work, who was really good at serving the client, who then knew all the stories and hung around long enough. I was able to really, in fact, it was kind of humorous. I'd listened in on the calls and I was like, oh, you heard me say that one time. And it was just almost like playing back what I, kind of the anecdotes that I had done. But she also had her own stories. I think you're absolutely right.

9:59John Jantsch:It's really hard to hire that person that's been classically trained as a salesperson and expect them to be very productive. And you probably get these pitches. I mean, we get them all the time of people wanting to come and generate leads for us and wanting to close deals for us. And it's like, I wouldn't want the leads you would generate. No. No, not at all. But it's like an epidemic. You know, it must be the most lucrative business going right now is generating agency leads because there's sure a lot of people pitching me on it. There was a certain individual that would be nameless that had a course that taught all these people how they travel the world and do it.

10:38And it's the same pitch over and over again. Yeah.

10:42John Jantsch:So what I know a lot of business owners, and this is not just agencies, I mean, this is just business owners in general, is have kind of this, I'm going to call it a false assumption that if they're not doing the work, if they're not hanging on to and checking the work and, you know, there every moment, that it's not going to be done as well as they could do. How do you get people passed up? Because obviously that's a constraint that, you know, is going to keep you from going anywhere. so you have to kind of throw your team into the deep end without floaties and i was telling our group of our community last week when i was speaking to them i said you gotta be okay with fender benders but avoid the train wrecks yeah where you have to let them know where we're going what do you expect from them i always people that report to me they can manage themselves that's the keys and i have systems in place to allow them to make decisions without coming to me because when you're the operator or the manager you're the bottleneck and especially with ai every ai enhances everything so now you have even more work yeah which isn't that funny you wouldn't But if you don't create these decision layers and these systems in place and you have that, you create that as an architect.

12:07And the other thing, too, about all these roles, right? Like, honestly, we have architect, CEO, and then owner, which everybody thinks they're the owner of the agency. But really, come on, the agency owns your ass. Yeah, 2 % of the time, you're the owner. Yeah, that's right. You start an agency to leave the 9 to 5 to start a 24 by 7. Like, it doesn't make any sense.

12:30John Jantsch:Yeah, yeah. I can't remember. I think it was, you're probably familiar with Michael Gerber's work on the E-Myth, but I think I remember hearing him say one time that, you know, I went out into business so I could be free, you know, free to work any eight hours a week I choose. That's right. Really kind of what it is. Well, and my goal, and we always used to, I mean, you've been in the agency world a while. And so I was on the tech side for a long time. We always used to tell people joking around that we have support 24-7, 24 days out of the month, seven months out of the year. And so that's the goal to work, right?

13:10John Jantsch:Absolutely. So I'm curious where you land, because I get this question all the time. You know, a lot of people that are starting a consulting or a fractional CMO practice, and they're like, I need a niche. I just haven't figured out what my niche is. I'm curious where you land on there. My view is it's really hard to pick a niche unless you've got like deep history in it or experience in it. And like, what if you pick the wrong one? You know, because you've been told you have to pick one. I'm curious where you are on that. So I had a member, and we were screaming at them for years and years to pick a niche.

13:45Okay. They picked a niche, and they picked conferences. I was like, oh, man, that's great. Conferences spend a ton of money. The issue was six months prior or six months later, COVID happened.

14:02John Jantsch:Yeah, yeah. Right? So he had to pivot and he pivoted to cybersecurity and now crushes it now. So here's my deal on picking a niche though. I do believe that you need to pick one, but it takes people a long time because like you said, how do I know which to pick? I treat it like a Vegas buffet. If you've ever been to Vegas and the buffets, right? Like you go, you try it out everything. And then you're like, man, I really like these crab legs. I don't like the prime rib over here. And then like anytime you go back, you're like crushing those crab legs if you're anything like me. And so the question that I always tell people in picking a niche is not who do you work with the most clients or who are the most profitable ones?

14:49I always say, if you had to be paid on performance only, who would you do it for and what would you do for them? So now you're setting yourself up for success and then you can start understanding the client's biggest challenges, their struggles. But here's the key. You don't have to fire all your other clients. You can take on work outside of it. You're just marketing to that niche. That's my stand on it.

15:13John Jantsch:Yeah. I mean, I think mine's very, very similar to that. I always tell people, let it find you, you know, as opposed to the one I have a problem with is the people that have been told you have to pick a niche. So they just go out there and say, well, here's where I think I can. Yeah. And three months later, they have to start over again because they've got everything set up for dentists and they hate dentists now. So it really, I think we're in sync on that. All right. So once a founder has made it all the way to owner, what's their week look like now, day to day? you do anything you want the business does not depend on you all you have to do is be accessible to the leadership team for when they have things that may come up they want to bounce off you so like one of the example i use in the book is tony robbins he is an owner of a thousand companies he cannot even if he owned five companies right he could not be the ceo of five companies right Right.

16:14Right. Then you're dividing. It's just not fair or even an architect or whatever it is. And most people don't reach the owner realm other than stocks. Like I was able to reach that when we started another agency, but, and that was great. And they would just come to me like I was on the board. Okay, cool. Like, here's what I would do, but it's not fulfilling. So you got to make sure you do other stuff. Like when I sold my agency for the first time, I was really depressed because I sold my baby. I didn't have any sense of purpose. I actually went to a Tony Robbins event, walked on that stupid fire, all that kind of stuff.

16:50He saved me. No, I'm just kidding. Like I didn't have a sense of purpose because my identity was being an agency owner versus being creative, innovative, all the other things that I could contribute to other things.

17:07John Jantsch:i'm curious is there one thing that you held on to too long and i guess the flip side of that's what changed when you finally were able to let go of it so i held on to sales for too long and then i even competed with my sales team which is unfair because like like i'm gonna give away a good lead right and i was always a competitive person right like i paid yeah you know tennis through college So I was, I will crush anybody, right? Like it was just, that's my mentality. And so I held onto that too long. I've did the exact same thing probably, but also it is hard. I think a lot of times, especially, I mean, you're a public figure.

17:50John Jantsch:I've written books that have sold well. And so people come to us and I mean, my close rates like 99%, you know, because I was just like, oh, you want, sure. I don't know how we do anything here, but you're talking to me. We're not telling them that, right? They've already sold. Right. And so it is, you do kind of get a rush of that and it's hard to let go of that. So I was probably in that same boat. Yeah. And I just had to realize I had to put my effort into building a better team and really coaching them, not managing them. Going back to what I was saying before is like, you know, how can I build a better leader where they can build better systems and become the architect?

18:30And even, you know, these five roles that I described, it could be an employee right now. It could be anybody. And so it's just, we all need to evolve, especially now more than before, more than ever.

18:44John Jantsch:If you're not evolving, you're not doing anything. Yep. All right. So for the agency owner listening, I know there are plenty out there that are listening to this show and the business depends on them too much. They know that. What's one move they can make in the next 30 days to really kind of start this climb of yours? Well, it depends on what role they're at. So let's say they're at the operator. Well, they need to figure out who do they, what role do you need to get away from that you're not good at? So if I'm really good at sales, I need to hire a project manager. but I need a project manager that can manage themselves right and just be honest with them say look I suck at process I need you to be able to create this now if they're at a manager it goes back to like you need to evolve to an architect so you need to start removing being the bottleneck and how do I build a system or a layer of systems so people can make better decisions without coming to me.

19:44Right. That's really it. Then if you're an architect, how do you start building people that can architect the systems that you're already building? And then if you're a CEO, you know, and not, and that's one thing I want to tell everybody. Some people may only want to reach architect and that's perfectly fine. No one, you don't have to go all the way up to the top and wherever you're at now is just a starting point. And just to enjoy the journey. You know, when I look back at the first agency, like some of the stuff that I was like, I can't wait to get rid of this. Those were the things I remember the most, like, you know, burning the midnight oil with the team and creating the sites and programming this and all that kind of stuff.

20:24Like that was really cool looking back. Now you can't maintain that for a long time, but it was pretty cool.

20:30John Jantsch:Yep. Well, Jason, I appreciate you stopping by the Ductate Marketing Podcast. Is there someplace you'd invite people to connect with you, learn about operator to owner and find out more about your work. Yeah, if you go to operatortoownerevolution.com, you can get a link to get the book as well as there's a diagnostic, if I can say that right, that will tell you what stage you're at because a lot of people think they're at a different stage and they'll implement different strategies and then it won't work. So make sure you go to operatortoownerevolution.com and you can check it out. It's free. Awesome.

21:07John Jantsch:So again, I appreciate you taking a few moments and maybe we'll run into you one of these days out there in Western Colorado. I hope so.

21:37Thank you.

22:08Thank you.