Patience vs. Complacency | How to Keep Moving Forward While You Wait

0:00I'm productive, I'm not complacent, but I'm comfortably patient. I'm very fast in the micro, but very slow in the macro. For example, even our global expansion, we've had four to five substantial moments in the history of our agency where Fortune 50 companies have walked directly into my office and said, if you open these offices in the Middle East and Africa and Brazil tomorrow, we will give you this$80 million in fee, which at one time was double our revenue. We passed, because I knew that we wouldn't be able to pull it off, that it was gonna get sloppy, that my culture was gonna get ruined.

0:32I call that patience. The VaynerMedia is now, I believe, it's the largest independent agency in the world. Is that true? I think Wyden is probably still big. I mean, we're in the mix. I'm not sure even how that all gets calculated, but it's definitely gotten big. Yeah, but you've obviously got about 2 ,000 people now. Yeah, in VaynerX. So we obviously have a publishing company called the Gallery Media Group. We have a commerce company, a production company. So Vayner, I think, is probably 1 ,200 or so. but in the VaynerX network, yeah, close to 2000. And that's quite interesting to explain the structure of that business because obviously VaynerMedia is a major entity to the right, but you've got a holding company which is VaynerX.

1:13Can you just explain why you've structured it that way? You know, a lot of what this journey for me has been about was not knowing a whole lot about this great industry and so a lot of it was instinctual. It was, you know, I started off building the company for myself, to be frank, and I still am. I think one of the things I'm most proud of is a lot of the things that we've stumbled into was based on the opening day thesis, which was what if we built an incredibly capable contemporary marketing company that was global to run other businesses through that I was involved in. Originally, I thought I was going to buy brands from Fortune 500 CPGs, orphan brands.

1:51Mug Root Beer was always the one that I wanted. I like Root Beer. But I knew that I had to learn Fortune 500 land. I knew I didn't know big company marketing. I knew that I knew small business marketing because I'd done that successfully. I knew that I knew Silicon Valley well. I was a very good investor in that era. But I knew that I didn't know Fortune 500 land. And I wanted to learn. And I don't really learn by reading. I learn by doing. So, you know, a lot of what I wanted to do was build a company for myself. Something that would work is how my brain worked. And so some of the stuff that we get a lot of credit for now of being early on bringing media and creative together.

2:30Well for someone like me, that was the only way you can do internet marketing if you're gonna do it well. And so that's kind of the journey we went on. So VaynerMedia was built, media and creative together under one house and away we went. It originally started as community management. It was literally setting up Twitter and Facebook accounts for very big brands. My brother's laptop created the NHL's Twitter account, Campbell's Soup, Facebook and Twitter account, Pepsi's Twitter and Facebook account. So it's like kind of fun stories we'll tell our grandkids one day. That evolved into us believing that creative in social was gonna emerge.

3:07We took a bet. We got very lucky and fortunate that Facebook's business model changed and they created the feed instead of the wall, which completely accelerated the concept of creative and social. And then from there, what became obvious to me was that both media and creative were in one man's humble point of view, a little too expensive for big brands to compete with what I was seeing outside of Madison Avenue. And that the cost of production and the media plans were based on potential reach, not actualized reach. And that really got us galvanized to get serious because I thought there was a better way.

3:42We saw it differently. I started to become educated on what was going on in ad land. I understood now, oh, there's a lot of holding companies. They're publicly traded. this is gonna impact a lot of their strategies and started kind of getting my feet under me five or six years in and that's when we got really serious probably about six, seven years ago where I was like wow originally I thought I was gonna build the agency and actually shut it down and just bring all the people that I wanted to the brands and just run a business now I'm like wait a minute I can have my cake and eat it too I wanna build the largest global independent agency in the world and we'll shuffle talent between that world and things I do like VFriends my Sesame Street Pokemon IP or Empathy Wines, a direct-to-consumer wine brand that I started with two interns from VaynerMedia that we sold to Constellation.

4:28Resi, the restaurant app, was an original product built at VaynerMedia with VaynerMedia employees. So it's really cool how we've got it now. And now I understand why we're so different. We've got a very different business model. And in a lot of ways, I do feel transparently, with all due respect, that we have our interests more aligned with our clients because I'm trying to figure out marketing that works selfishly for me for other behaviors versus the model of trying to run a business where you are trying to do the marketing you believe in but there's also the only business model is being a client service provider and having to worry about your revenue and margin and so I think that's been a competitive advantage in the last decade.

5:08It's interesting and so did you start the agency first and then you built a holding company around it? Yes, oh I'm sorry, I apologize. So five or six or seven years ago there was an opportunity to buy a publishing company called PureWow, which was a top five leader in the women's lifestyle publishing game. As all of us know, the rise of Refinery29 and BuzzFeed, we just read that BuzzFeed News shut down, BuzzFeed and Refinery29 and Vice, and I think everyone remembers that era of publishers. I was concerned about that. I thought that that was actually, you know, I felt at that point that I knew how to be successful within the context of big holding company media and creative agencies.

5:44I was a little worried about publishers, six, seven years ago, like, wait a minute, they have an advantage. They're taking working media dollars and turning it into creative in a world where I felt creative was an important battleground. And so I wanted to really have a competitive arm in that race. And so I bought PureWow. That immediately forced us to create a holding company. We created a 1.37 PM, a men's lifestyle publishing term. And then it started rolling. We started, you know, one day I woke up and said, why are we saying no to a thousand clients a month who are all small businesses who had contacts in my career prior to this world?

6:21I'm like, we should probably start an agency because Vayner wasn't built for that. I was like, maybe I should start it. It kind of seems like a bad business move to say no to a thousand people a month. I was like, why don't we start an agency for small businesses? I named it after my dad, which is a lot of fun. And I called that the Sasha Group. And so that's an agency that does the same philosophy but has different products and services that smaller companies can afford. That became a third. Then we created a production company. I really felt weird. I still feel weird. I still think the production of videos in our industry are way too expensive.

6:56I really do. I think 30-second videos are too expensive, especially when I know what people are paying for 30-second videos in startup land and outside of our world. So we started a production company that really tries to tackle. We lose so many triple bids because we're so much less cost. Procurement doesn't think that we're doing the same thing. And I keep trying to tell them it's the same thing. So we call that Iba Nosadam, which is Madison Ave spelled backwards. And so we've built from there. We've got commerce. We've got innovation. Oh my God. My accountant tells me that. My business is too complicated.

7:30Yeah, we'll figure it out. I'll ask you one question from Uli Kadi. I'll let you know your name properly. They're saying you're obviously, you've invested a lot in social media platforms. you obviously know it's gonna work. Would you ever consider starting your own social media platform? I don't think that that's what I do. It, of course, it's crossed my mind. I bought a version of one that was in the wine world called Corked 12, 13 years ago, created by a great designer named Dan Cederholm, who created Dribbble. But, you know, I have thought about some sort of blended version of a small social network that also provided like information.

8:10I've called it in my mind like content as a service. So like a SaaS business, but with content that has a social network element, maybe like some sort of lightweight version of a LinkedIn. But I'm not sure I'm gonna ever cross that bridge. But one of my main principles is to be in the maybe business. I think no is a very dangerous word. And so I don't sense that that's where I'm going, but I've done a lot of things that I didn't see coming. But do you think that's part of your, I mean, if you're sort of advising other people how to go their, you know, the sort of media come brand business, what are your views on ownership?

8:47When would you sort of suggest people should get partnerships or should get help or do you believe it's better to keep the equity and build it yourself? I think if you're capable, you build the equity and keep it yourself. I think everyone's on their own personal journey. I think that this industry desperately needs many more independent agencies at scale. I think it would make the industry so much happier and healthier. That's not a dig at the holding companies. I think the holding companies have done a remarkable business job over the last 40 years. I think it's out of balance. I think four to five massive global companies that were independent and not publicly traded and not part of the current form of holding companies would be really healthy for the industry.

9:28And so, of course, I see the white space. I'm currently building one, it's going to end up being a very, very, very large business. And I think that there are many young women and men, and not only young, very many men and women in this industry that are capable of starting companies and working for 20, 30, 40 years and building a massive independent agency because I think there's a white space. I think clients are looking for alternatives. But it needs to be big, big, right? The big companies need you to be global. And so if someone's got the talent, you stay independent forever. the buyout deals are not good if you're good.

10:02If you're good, the buyout deals that you get from a holding company are bad deals. They make you finance yourself. But most people get tired and most people are scared. Most people have a nice agency and they say to themselves if I lose my two biggest clients I got nothing. And so this cash out, and they get, it's a tough business. We all know that so people get burned out. I'm very empathetic to why all these agencies have sold over the last three decades. But to answer your question, if you're good enough you never sell. Yeah, you never sell, that's interesting. I mean obviously because you're, you just mentioned your dream is to buy the jets.

10:38It's gonna be probably a billion dollar, billion, isn't it? Yeah, 10 billion. Well, you know, to me, if I can build a big enough company, I can buy it with the distributions of the profits over five years. Why would I sell? Yeah. And so what would be your long term, you know, if you were to talk about an exit, eventually would you look at an IPO or would you just, or are the adults just gonna be adult to last? I don't think I'm capable of being a publicly traded CEO. I just don't want to be accountable to anybody. I'd rather lose out on my dream of buying the Jets than to go IPO. I'm gonna have to build a big enough business that kicks enough profit, and then I'm gonna have to invest that money wisely to give myself a chance.

11:22But to me, I'd rather be happy in my freedom, day to day as a businessman and miss out on this childhood goal I had than to compromise my happiness for the, you know, for, I mean, truth be told, gun to head, if the moment comes in 20 years and there's a quick little I can sell it and then I can buy the Jets, that's something I'm going to have to really talk about. The problem is there's so many videos of me publicly telling all my employees that the day I sell, no matter what I say, you should all resign because I'm full of shit. So that would be like, maybe not interesting for someone to buy.

12:01So. And that's very unusual isn't it? Because any business owner, the question you always get asked is what is your exit plan? You know. Mine's death. For real. I won't sell it unless truly the Jets thing like kind of plays out a certain way. but otherwise I'm gonna die talking about dying I have to say looking at your schedule that would kill me and if you google how many hours a night do you actually sleep oh I sleep I mean I'm not functional or I mean I do it unfortunately often enough but not as much as people think I sleep six seven or eight hours a night I'm a huge fan of sleep I think I'm very, I mean it, I think I'm incredibly misbranded on this even though my, you know, my words have been consistent for 10 years on this.

12:56To me it's about being effective when you're awake. To me it's, I don't think people should work hard if they don't like what they do. To me this is you work hard when you like it. I think that unfortunately there's been a couple viral articles written about me which the people that have written them have come back and been very kind to me over time that I think when people think I don't sleep or I think you gotta work, I'm always confused. I'm not confused. I know my energy. I'm self-aware. I get it. But to me, sleep is an enormous part of my partnership with my happiness and success. I'm always fighting for seven.

13:36I'm very, very, very functional at six. Oh boy, will I be pumped if I can sneak in an eight. and I'm just think that for example one thing that kills agencies mine included meetings meetings are a fucking disaster there's 12 people in a room when it only needed five it's an hour and a half and it could have been done in 20 and so those are the things I think about which is like it's not that I want people to work more it's not that I don't want people to sleep it's that I think that there's incredible ways to be dramatically more effective and efficient if we did the thing that needs to be done versus philosophical things.

14:15How do you control that then? I haven't figured it out. I've spoken about it at length. Because I'm speaking to some of your team and you're saying a five minute meeting. I'm sorry, I've figured it out for me. I'm killing it. I do 30, 15 minute meetings a day. I've really figured it out for me. for the company I haven't been able to get to the level of efficiency that I think we should be at given that I'm the CEO and that's the culture but you know for me it's been great like and honestly it's been really rewarding I've gotten a lot of emails specifically in the last year of they were so taken aback or even one guy wrote me the other day he's like I was appalled when I only got 15 minutes for our meeting he goes until I realized we were done at 11 meetings and now I do them too and so like you know for a lot of us you know I get sad when people feel burned out or tired or overwhelmed.

15:11And a lot of times I'm like, look, this is a self, in a very compassionate way, I'm like, this is a self-inflicting wound. Your insecurity makes you show up to every meeting because you don't want to miss out, thus not giving you time to do the work. Maybe you should pick some meetings that you don't need to be in and maybe somebody will take some notes. A lot of people's insecurities create behaviors that lead to a lot of troubles. Yeah. Yeah, and I agree, but the other thing in terms of your time management, when you look at how much social media you put out, you do obviously a daily video, you're one of the most prolific people I've ever met in terms of content.

15:48So how do you manage a business at the same time as managing your personal branding? Because I created infrastructure, right? My team's filming this video right now. I mean, if you look very carefully at my content, I don't make content. I'm being filmed and then we post-produce it. To your point, we run a lot of analytics on this. I am one of truly the most prolific output producers in the world, I'm producing on every platform. But it's because I have a 25 person full-time team on the production of it. First that started with seven years of just me doing it myself. Then I got to a place where it built to where I could afford one person in 2014 and I kept building and building and building.

16:31but I don't produce content. I live my life as an operator. There's things that I do as an operator like this that are great for me in the industry and that will be filmed and then it's caught but I'm not producing content. I'm posting the content. We have a full workflow in WhatsApp. Like I'm posting my, right now you haven't seen Instagram for me for the last five hours because I've been busy so Daisy's driving me crazy and putting me everywhere and I gotta be this and that and this and I'm like, I'm sorry Daisy. And like, you know, but once I get off with this and I transitioned only because I was in the tube downstairs.

17:03I didn't have Wi-Fi, but if we were in a taxi cab, I would have done it in that downtime. So I'm still a practitioner of the craft. The copy on social media creative is something this industry desperately does not understand. What's so fun about the life I'm living is as I've become more a historian of the ad industry over the last 100 years, VaynerMedia is just doing the same thing in just different distribution form. A lot of our model is built on what actually worked in the 50s, 60s and 70s with local newspaper, local radio, you know, like media and creative together. It's funny, I'm like, oh my God, actually what we do was done for 40, 50, 60 years.

17:42It was only the early 90s when things started to really change in this industry. Separation, this, that, so it's kind of been very romantic and exciting to me that I feel like, huh, we're looking at this enigma, or different, or this, and I'm like, actually, I have a funny feeling we're doing it the way it was intended to be done. yeah but the other interesting thing is your you know the business you know your personal brand is such a big part of what you do and I mean a question has come in someone saying is a found led agency the way to success I suppose what they're really saying can others learn from how you built your agency would you suggest other people wanting to build a successful marketing business should look at their personalities for the people in this business this will probably land with you because you probably know, I would argue the Gary Vee of it all has not done me any favors with VaynerMedia.

18:33I would argue that Gary Vaynerchuk, me, the actual businessman and operator, has been a way bigger impact on VaynerMedia doing well than Gary Vee. This industry wasn't overly warm and welcoming to the concepts coming out of my mouth over the last decade. And I actually respect that. Why? I was already trained for that. It was called my 15 years in the wine business. the opinions and thoughts I had about democratizing wine were met very negatively by the wine business my point of view that everyone here should drink what they like and explore different things instead of being dictated what they should drink was a big passion I had that was incredibly not well accepted in the wine business my belief that wine was too intimidating and people were overthinking it and we needed to humanize it was believe it or not incredibly ridiculed in the early days of my career because I was not respectful to the wine.

19:30Then I got into the ad world and I was not respectful to the work. I have bet my career and my professional life on caring about the humans in mass versus the industry that pretends to care about the humans in mass. Yeah, it's interesting. But what would you think, being in the business is such a big part of what you're doing in fact. Julie Cohen just asked this question. It's quite morbid, really. But she's saying, obviously, this business is you, but how important is legacy? If you're not gonna sell a business on. Legacy is the only thing I'm trading on here. If I was trading on money, we would sell television and programmatic.

20:15We've left an extraordinary amount of money on the table the last 13 years. I'm only doing this model to be historically correct. Every agency in advertising in 15 years will look a lot more like us than us looking like the agencies today. Yeah. And the other issue is you're so busy. Because I did actually enjoy your book, 12 and a half. Thank you. Talked about emotional attributes of being a successful business. But one of the key things you spoke about was patience. Yes. And you're showing me as the least patient person I've ever met in terms of... That's because I think patience is misunderstood.

20:51I'm productive. I'm not complacent. But I'm comfortably patient. I'm very fast in the micro, but very slow in the macro. And so, you know, for example, even our global expansion, we've had four to five substantial moments in the history of our agency where Fortune 50 companies have walked directly into my office and said, if you open these offices in the Middle East and Africa and Brazil tomorrow, we will give you this$80 million in fee, which at one time was double our revenue. And we passed because I knew that we wouldn't be able to pull it off, that it was gonna get sloppy, that my culture was gonna get ruined.

21:33I call that patience. You know, and so I'm busy and productive on a day-to-day basis, but on a year-to-year basis, the way I strategize to build this business has been very patient. I believe in patience so much. I think people are so quick to get the money, get the accolades, prove to somebody that hurt their feelings along the way that they made it, and take that. And so, yeah, I'm a big fan of patience. I mean, I spent the first 12 and a half years of my career building my father's liquor store business for him, never getting paid more than$100 ,000 a year, and I built his business from$3 to$75 million, and at 34 years old, started VaynerMedia in Buddy Media's conference room because I had no money to pay for rent.

22:16So when I tell kids be patient, I spent the first 12 years of money, you know how good those 12 years of your career are in your 20s and early 30s, especially when you got it like me? Those are profound years where you can work all the time and all this. And I deployed unreal patience on an ideology that mattered to me which was I wanted to give back to my parents for what they gave to me. And so, I mean, I didn't even start my career until I was 34. Yeah, that was good. I must encourage my son to build my business. Talk about that later. What I quite enjoyed about your book is obviously, you know, is it trying to look at the emotional traits and in fact I think, Cereal, I'm going to, I hope we're pronouncing it properly, ask the question along those lines, how much does company culture impact on your success and how do you manage to keep strong culture while growing the business?

23:11Oh sure, it's every, it's dumb. The biggest reason I feel like we're gonna win is we have better company culture than who we're competing with. And not because we're better people, though maybe that is it. A lot of it has to do with we have an enormous advantage. When you are independent, you can do what I did do in 2016, 17, and 18, which is make no profit. And when you're a publicly traded company and part of a holding network, I would've been fired by delivering no profit. So I don't, you know, it's funny, I have very little judgment or negative points of view on the holding company model. I'm too empathetic.

23:47I'm a businessman. I understand. But company culture is the whole thing. It's the punchline. Our longevity. Risa, how long have you been at Vayner? 11 years. Ben? 8 years. You know, we're a 13-year company and we have like ungodly amounts of employees that have been at the company for 8, 9, 10, 11 years. That's unheard of in this industry. We have hundreds of people that have been here five, six, seven years. That's unheard of. What's the secret sauce? I mean, how do you? Two things. One, make less money. Value the humans over the P &L. So when we lose a client, you don't fire people because they were on it.

24:28You like take less profit that year. That's unheard of in this fucking industry. Number two, fire people.

24:39Let me explain that part. The thing that we've done very well that has really gained a lot of trust over the years is I fire people that are great at their job and make us lots of money because they're not nice. You want to build company culture? Fire the asshole that's bringing in revenue and watch how fast people start to trust you. Ah, but most people don't do that. Most people look the other way if a creative director can win a lot of pitches. Most people look the other way. Don't look the other way. Mm-hmm, good. I'll be for the HR department. But the other, I mean, talking of less money, I mean, obviously, we've been touching BuzzFeed News, and there's a bit of a sort of economic wind, chilly wind blowing to the market at the moment.

25:29How do you seem to be growing? Well, that's because we're a price leader. You know, we're a better priced agency because we make. You know, the dirty secret of this industry is creative agencies are consultants. It's a real brain twist. I didn't realize it until not too long ago. I was like, wait a minute. Every creative AOR sells decks. You have to outsource the production. And this was like, it hit me. You know, I've had my point of views. I've been in the business. It just hit me one day. I was like, ah. maybe that's like what's at the crux of this is that the ideas are too expensive. And so for us, we give you the ideas, but we also produce creative and produce output every day at scale, which is a requirement in the consumer journey because I think the industry has not come to grips with a very significant truth, which is the lower funnel, social, is actually the upper funnel.

26:33That brand is now being built in social in a significant way, for real. And this industry will hold on to that not being true as long as humanly possible. But I think as brands now are trying to not waste money, people are gonna start losing market share to companies that have better pricing models and are able to produce creative in a much more thoughtful way. And I think that's gonna rear its head quite a bit over the next half decade. Yeah, but we'll also talk about building brands and the work itself. Adam Klein's got a question. He wants to know what piece of work is VaynerMedia most proud of?