Transcript

Paul Ford I feel like I’m reading a parallel universe [Rick laughs] Wikipedia page right now like I just—

Rick Webb Nobody thinks about it! [Laughs]

PF As you’re talking to me, everything—all the links are turning blue [laughter].

RW Yeah.

PF Like, “Ah! Theodore Vail,” I’m like, “Theodore Vail!” [Boisterous laughter from others]

RW Did you ever—[music fades in, plays alone for 18 seconds, ramps down].

PF First of all, hi Gina!

Gina Trapani Hi Paul! Good morning. How are you?

PF It’s good to have you on the podcast. I look forward to people saying that we get along too well and don’t fight enough. Can we fight a little bit? Get this going?

GT And there’s Rich. Let’s—I’ll see if I can do that with you [yeah]. Except that neither of us are fighters.

PF No, I know.

GT At heart [music fades out].

PF So this isn’t about us. At all. This is about the guest, and the guest today is someone who has actually had a—a kind of gentle and quiet on this organization through a book that he wrote.

GT There’s this book that Paul quotes all the time, and it happens so often that I finally was like, “Lemme, just [sighs] let me read this book because clearly this has influenced Paul’s thinking.” And then I read the book and I was like, “I get it. I get it.”

PF The book is Agency and it’s one of the many things that has been written and one of the many things that has been done by Rick Webb. Hi, welcome Rick.

RW Hey, how’s it going?

PF So Agency comes out of the fact that you actually use to—

RW Oh. Run an agency, a new agency, yeah.

PF You were a co-founder? Early partner? What was it—

[1:26]

RW A co-founder, yeah.

PF K. And that—that agency was called:

RW The Barbarian Group.

PF There were things that Barbarian Group did early like subversive chicken.

RW Subservient, yes.

PF Subservient chicken!

GT Subservient chicken was a thing! It was a real thing. It’s a big deal.

RW [Crosstalks] There was a period there I thought it was gonna be on my tombstone. A little worried about that.

PF Oh that was gonna be your like [?]. [Laughter] Subservient chicken for—for the people under the age of probably what? 30.

GT 30. Yeah.

PF Yeah, they might’ve missed subservient chicken. What was it?

RW It was a viral marketing campaign for Burger King.

PF Oh yeah!

RW And we did it with an agency called Crispin Porter [+] Bogusky who had done a bunch of ads with the subservient chicken which is a strange, bonded sh—inspired—BDSM inspired chicken. Man in a chicken outfit.

PF This was sorta the a—like Burger King was just trying everything, I’m guessing.

RW Yeah, they were going through a lot of—a lot of corporate MNA like private equity people had been buyin’ and sellin’ em and they would change their agencies all the time. But Burger—uh Crispin was pretty methodical in that strategy that appeared like they were going for everything.

PF So this was a big moment in which you’d created like an interactive Flash bondage chicken that you could torment.

[2:28]

RW [Chuckles] Yeah. It was kind of like the old video chat command creepy porn sites and like—

PF What could you make it do? I’m just trying to remember.

RW It had thousands of things you could do.

PF Yeah, so this was the thing and no one had ever seen a subservient Burger King chicken before on the internet.

RW Yeah [laughs].

GT I remember it being like at my first Dot Com job and like looking at my co-workers and just being like—

RW “What?”

GT “This is so weird and yet oddly so compelling. This isn’t—who thought? What?” [Rick laughs]

PF It was this thing that if you were on the internet you kind of noticed and talked it about.

GT Yes.

RW Yeah, yeah.

PF Which is pretty significant for Burger King like nobody was going like, “Burger King, the internet.” Putting those two things together. So—

RW No, no.

PF And that was a big hit for early Barbarian and kinda grew from there.

RW Yeah, we were about five years old at that point [ok]. Like viral marketing kind of was taking off as—it was very big in theory, meme theory and all that, but like brands were—it kind of like broke through to brands thinking about it, you know? [Mm hmm] All of those sort of influential marketing guru guys would be out there [right] talking about it.

[3:22]

PF And like Ad Week is writing about it.

RW Yeah, so they were all starting to wanna try it. So that was kind of when it left the lab and academia and people started thinking maybe it could work because the promise is obviously huge. You can get your message to millions of people without paying for a bunch of media, you know what I mean.

PF Barbarian is an agency.

RW Yeah, so the reason I said it was—we were about five years in is cuz viral marketing came along then. We were already around. We were, you know, probably 60 people before that happened [ok]—or 50. I don’t remember but the world was a little bit different back then. There was sort of like the big digital agencies, Razorfish. You know, [mm hmm] agency.com, people like that and there was like—

PF Oh yeah they passed on me once.

RW Yeah [laughter].

PF Yeah, yeah, yeah.

GT What year was this?

RW 2001. Late 2001. [Got it] Me and two of the partners, Keith Butters and Robert Hudgen, we were all working at Arnold, on the Volkswagen account.

PF There was that point where, you know, the guy who came up with Farfegnugen for—

RW [Stammers] That was before us.

PF—for Volkswagen.

RW We were “Drivers wanted”.

PF Were you the ones [Rick laughs] where like the music played and everything synchronized?

RW Yeah. That’s exactly how I got into advertising was that idea [laughs].

PF So there was—that was the sort of cool soundtrack era—

[4:25]

RW Yeah, that’s what we did. We brought indie rock to car ads [Paul chuckles]. My boss, Lance Jensen, did all that.

PF Right and then you’re making way for the later iPod-ization of everything.

RW Oh yeah [laughs].

PF So, you were, essentially, like I’d come hire you because I wanted a hit for my brand.

RW Yeah, online. Generally, it was one step more cynical that that [mm hmm] which is that the CMO would do it because he wanted a better job at another agency [ok] and uh some of it did work but generally speaking it was just proving they were on it with the new stuff.

PF Sure, I mean that’s—

RW Which exists today.

PF Yeah!

RW Absolutely, yeah.

PF That’s agency life but I can’t go buy a hit anymore.

RW Well, you have to buy it now. You can’t just make it.

PF I have to go give Google lots of money or like what do I do? If I wanted like the equivalent like—like two million people to look at my interactive brand experience, what do I do?

RW Well so I would say the important thing to remember is that like the internet got way, way, way, way bigger, right?

PF Yeah.

GT Yeah.

RW Like there were still people—and you might well be one of them that like when, you know, Axios launches, they’re looking at the CSS and giggling to themselves or like wondering why they chose this CMS or that CM—that was like 80 percent of the audience on the internet at that point, right?

PF That’s true. Everybody was kind of making it while [right] they were, you know—

[5:38]

RW Right, they’re still there but there’s just way more people and the other thing is now the answer is that you buy that audience which is I guess if I cared about the nobility of marketing I’d be like, “That sucks, man.” But it’s super convenient.

PF Oh it is.

RW [Laughing] You know?

PF I mean it does limit your options to break out.

RW Yeah well so I think the break out is a little bit different. So I think that like at any moment in marketing there’s some technology craft, medium, like that is the new emerging thing that it’s very good for agencies to sort of be able to make their market.

PF Oh they force it. It’s AR and BR right now.

RW Yeah. I would say that like app development was another one that, you know? [Right] And then I would say that like once you have your—your initial—like the book is really written to that [right], right? For us, our niche was post first wave of internet when people wanted to be creative through marketing versus like what Razorfish and all of them would become like ibm.com or something [mm hmm], you know what I mean? And then I would say that there was a viral marketing wave that—this was my thesis through the whole period and I would say that like we tried very hard with the next few. I had this theory that every 18 months there’s some new thing, right? So this is like viral marketing wave—YouTube—you know the chicken was coming before YouTube, right?

GT Yeah.

RW And then YouTube came along and that was a whole thing. We did a whole bunch of stuff with like a cannon that shot beer that did really well, you know, they would just keep [Paul laughs]—[Gina laughs]. That was awesome.

PF That’s good.

RW But that was like a million views on YouTube when it was impossible to get a million views.

GT Nice!

PF I like how you just keep updating your tombstone as you go along [laughter]—

RW Definitely more proud of the beer can that I am—

[7:08]

PF It’s not subservient chicken anymore, it’s beer can!

RW Yeah, Milwaukee’s best light [Paul laughing]. No, it was awesome. But so they keep coming along and—and so then you kinda gotta decide if you’re in your niche or if you’re gonna expand beyond your niche and the book is really written like you came to this business as a craftsperson.

PF Right.

RW Right? Like in the old days, in Mad Men, right? Like they start their own agency. Don Draper leaves with John Price and they all go—and they have an account guy and a copywriter and like a finance guy [mm hmm]. But now it’s like everybody starts these shots cuz they’re experts in some part of the craft [right] and then from that base where do you go? That’s really what I tried to write the book about.

PF Well, actually, let’s define. What the hell is—cuz we’re—I’m sitting here going like, “We’re not an agency!” What is an agency? By your definition obviously we are, like what is it?

RW So I’ve kind of ceded that term, right?

PF Ok.

RW Like in the old days I very much—an agency operated on—as an agent on behalf of their clients and the reason they were operating as an agency is cuz they were going to buy media. Right?

PF This is the classic—

RW This is the classic definition, right?

PF So a lot of our—

RW Cuz I was spending money for them. I would go to Time Magazine and say, “I need a full page ad for Ford.” And so I was operating as their agent.

PF And a lot of our listeners don’t—won’t know about this, right? So the way that you made money as an agency was you—you would go like you’d get a commission on that.

RW Yeah.

[8:19]

PF You’d buy the media and then you’d kinda say like, “I got this space over here. We can fill it with your ads.” Is that correct?

RW Right. Uh at one point it was that simple [yeah]. Earlier it was even—even more simple. Like the publications themselves were the ad agencies.

PF Right. And I’m talking like 1920s and 30s.

RW Yeah 20s and 30s you basically—all agencies made all their money off of the commission and then they did the creative for free on top of it.

PF Right.

RW And then in the 70s and 80s they started getting creative fees on top of that; in the 80s they started splitting the media agencies off, separate. And, you know, that stuff’s relevant today because it’s like a large part of why a lot of advertising sucks on the internet.

PF Mm hmm.

RW Cuz, you know . . . like the people that are planning the media aren’t the creatives, and the media can be the creativity when you do something really cool but they don’t because they don’t get it and it’s all separate and it’s a big mess.

PF Well, that’s the thing [Rick laughs].

GT That’s interesting.

PF No, I mean ads online are terrible.

RW Yeah, well that’s why they just really want video ads to be a thing [Paul sighs] and they have since the [stammers]—the early 2000s because they could just take the model they had and use it again, and they are winning! It is slowly becoming that but, you know, if you get something like—like, you know, interesting, artistic stuff on the internet. It still happens. You know, I would say your What is Code piece it was—it was editorial but it’s also one of those things, right? Like just this amazingly built, interesting thing and marketers can’t do that because the media company is separate from the creative.

PF What’s your—what’s your job now?

RW Uh so now I’m COO at Time Hop.

PF Oh. Let’s me look back at tweets of yore.

RW Yeah the thing that Facebook ripped off one year ago, two years ago, three years ago [Paul chuckles].

[9:49]

GT It’s so funny. It became a feature of every big product but Time Hop’s a great product and when it first launched especially it was something I really—my company took a lot of inspiration from. It just let you kind of appreciate your—your social content in a way, in a perspective that you wouldn’t’ve had.

RW Yeah, I mean it’s interesting in a lot of ways cuz it’s—in some ways yet another product Facebook ripped off, right? [Yeah] But it’s not dead. It’s still millions of daily active users. Uh it has a lot of advantages over—over Facebook but Facebook kinda ripped like ripped it off enough to take away the casual users. So it went away from, you know, it’s 20 million, I think it’s 23 million registered users. It had like 20 when I took it over. It was on a tear and now it’s like a slower kind of thing, you know what I mean. Um—

PF What is one to do with a 20 million user company these days? Because we act like, “Oh 20 million. Whatever.” [Laughter] It’s actually extraordinarily hard to get like a thousand users for anything.

RW It’s a real u-shape now, right?

PF Mm hmm!

RW There’s a ton of stuff with like under a million and then there’s like your big platforms and in that middle there’s just this gulf, you know? Like—like especially in mobile. In mobile only that—I mean that’s even rarer to have that many millions just in mobile.

GT What I love about it is it’s using your data to help you like know yourself a little bit better and to have that awareness. Like I love that idea of like I want to see where I’ve been is where I am. I think most networks just sort of ingest your data and use it to advertise to you [yeah]. But that’s what I—I mean the spirit of the product is like: look at where you’ve been; look at where you’re going.

RW Yeah it’s nice!

GT It’s nice.

RW And, you know, we use programmatic advertising but we don’t do data driven advertising. Your data isn’t in your advertising, right? We give the most generic, bland stuff you can, right? Like age range; gender; and location and that’s it. That’s all our advertising is on. So it’s programmatic and I always hated programmatic. I was a brand guy at Arnold; working on Volkswagen; won a bunch of Cleos and all this stuff; and now I’m running a programmatic ad business but—but, you know, it’s like—it’s—

[11:37]

PF For the listeners, that means that robots decide which ads go through.

RW Yes they do through an incredibly complicated auction that happens in real time that we built our own tech for because the entire industry kinda sucks [laughter].

PF I like the—what I really enjoy with this narrative (and it feels very comforting to me) is you keep digging a deeper hole that you then have to climb. Like, “I’m gonna write a book; then I’ll write two books [Rick laughs]. No, I’ll write a book and then I’ll start a company. No, we’ll do—it’ll have some advertising [Rick laughs]. Actually, what we’ll do is we’ll create our own advertising technology,” and then—

RW That was shocking to me, right? [Boisterous laughter] I was like, “Well—” I was like, “Well, you know, it’s millions of users a day and uh, you know, we’ll have a direct sales team and we’re doing pretty good on the direct,” and then I went, “Oh I’ll aim for some [?] or something and get some programmatic money.” And it’s all garbage, you know? [Mm hmm] It’s all garbage. So we just have been building our own for a year and it’s—I dunno like 700 percent better revenue than it was—

PF Woah!!

RW Yeah, it’s the best that’s out there right now.

PF Alright, so you’re—

RW So that’d be part—if you were somebody I was trying to sell the company, that’d be part of it. Mobile audiences are hot. Right? [Mm hmm] Nobody really has millions of people in mobile audiences except the big platforms.

GT Yeah.

RW So every publisher is like on mobile desktop, you know, but that brand advertisers like mobile apps because of brand safety like with their remote scores and all that stuff so there’s—there’s a business case for Time Hope that’s out there but really we took it because we didn’t—I believe in nostalgia. I always have. It’s why I wrote the first check for them. And like I like little simple things that are just a couple minutes of your day. We’re not trying to take over your day.

PF Mm hmm.

[13:07]

RW [Laughing] You know what I mean?

PF You know what strikes me too is like Verizon is now one of the largest media companies in the world.

RW Yeah!

PF And we don’t talk about that [no]. People would much rather talk about the New York Times Op Ed page than they would about the fact that Verizon controls—like I mean Yahoo News is still probably 80 percent of the news that people over 65 are reading [laughs].

RW Yeah, remember those like big freakouts in the 90s when cable companies and news networks were merging? Like that was like nothing [laughter and laughing] compared to what happens now! [Laughter]

PF That’s like—that’s so tiny in comparison.

RW I know.

PF Think about the things that—Disney.

RW Yeah.

PF Disney owns my—my entire life because I have two small children.

RW Well the counter argument to this is the one that Martin Sorrell made last week which is that none of them are anywhere near Facebook and Google and—and like the—

PF He’s having a good time, too. Tell the people who Martin Sorrell is. They won’t even know.

RW Well, so Martin Sorrell is the recently ousted CEO and founder of the largest ad holding company in the world, WPP. He also sort of invented the holding company uh model in the seventies. This is actually [?] when he worked for the Saatchi brothers as their CFO. They—they were the ones that taught Wall—this is gonna start sounding familiar to anybody that works in tech but they’re the ones that taught Wall Street that advertising agencies could be great stocks to bet on [right] and that consolidation and roll ups would be like the way to do it. They’re an improved management larger so Saatchi and Saatchi . . . ended up—they were aspiring to be the first sort of new holding company and—and Martin Sorrell was their point man to the bankers. And they—they—to IPO and get a very good evaluation and all through the seventies and eighties the Saatchis also mainly faltered when they tried to buy a bank. They get made a lot of fun for it but it was a totally smart move when you think about it. And now we’re in this world where McKenzie is getting into advertising but anyway! He left them and did it on his own, bought a shopping cart company called Wire and Plastic Products, named it WPP, and got a bunch of money from bankers and bought Ogilvy which was the storied, famous ad agency—

[15:10]

PF They weren’t enthusiastic about it.

RW Uh no, him and David Ogilvy eventually made up [right] but no, he called them an odious little shit.

PF That’s right cuz Martin Sorrell’s not tall and David Ogilvy was.

RW Yeah and then he also bought JWT very quickly and—

PF J. Walter Thompson. Yeah.

RW And the entire deal paid for itself because he sold their Tokyo headquarters building that was worth as much as the whole deal and they didn’t keep their books well which was wonderful evidence to his bankers that improved management techniques—So they were the hot stocks in the seventies and eighties [mm hmm], agency stocks. They had these giant share prices; great P/E ratios—

PF And they own hundreds of smaller—

RW Yeah! And he was on a great run with it and he could buy anything. I had like a broad thesis that the—the issue with the bank . . . with uh the bank when he was at Saatchi it kinda scarred him from expanding too far beyond his remit but they own data companies [mm hmm]; they own—you know, they own like measurement companies; media analytics companies [but they could never—]; PR companies—

PF They could lock down like a Facebook or a Google. Those [no] grew out sort of out from under them.

RW Yeah, they have an investment arm and they made some small investments here and there but uh, no. And so now we have these different behemoths with stock and so eventually like the—just to wrap that part of the story: eventually the—the bloom was off the rose of holding company stocks [mm hmm]. They didn’t have their great P/E levels anymore; they fell back down to like law firms and stuff with low P/E levels.

[16:25]

PF And you sold—Barbarian got sold through a holding company.

RW Yeah, well a smaller one that’s basically an arm of Samsung. Yeah.

PF Ok.

RW WPP was the other bidder.

PF Ok.

RW So now they don’t have this—they don’t have these inflated stocks, right? Like a multiple on their revenue whereas Facebook and Google do, right? And they like Facebook and Google sell the ad space and own the ad space versus just brokering the ad space, right? But the amount of money—of ad money that flows through is roughly equal. And then same with the—the big networks like uh Sorrell, well he just recently lost his job under very shadowy circumstances—

PF Yeah, nobody knows why.

RW No, I mean there’s—

PF I mean there’s a lot of in quotes.

RW Theories about it being part of the MeToo movement are brandied about but like there was an investigation by the board and they said it—it involved non—what is it? Non-substantial sums. But it didn’t say it involved substa—it was really weirdly worded like it might not involve sums at all. It didn’t do anything. So, anyway, he—now he’s out and free and he’s thinking of what he wants to do next and he’s operating as a bit of pundit and he’s been arguing very strongly for the uh CBS/Viacom re-merger and he said like together as much ad money passes through those two as Facebook [mm hmm]. So like all that is to say there’s this counter argument that the consolidation on the—on the network side is really the only option we have to fighting these giant platforms.

PF So we’re living in this world of giants. That’s real. We kind of scamper around in the shadows of dinosaurs as a little mouse with our firm but like a lot of the people listening to this show are people who are doing a reset of some kind into their career. If somebody wants to get into your world, what do they do?

[17:57]

RW So I think one thing that really confounds everyone or like the compensation structures of startups [mm hmm]. Like there’s this widely pervasive belief you can get rich in startups.

PF Oh it’s terrible. It’s sad.

RW It’s really bad. And while it’s true to some extent, it’s kinda like saying my career’s gonna be playing the lottery, right?

PF Honestly, you lose people to it for five years and then they come back.

RW Yeah.

PF Yeah.

RW Right. It’s not—like it’s not a great deal and it’s getting kinda worse, you know? [Yeah] Um and, you know, even just like the talk of if you had a really good, fair deal and you were one of the first five people, honestly, by 20, forget about it. And it became a unicorn, you could get, I-can-afford-an-apartment-in-New-York rich. Right? [Laughs]

PF Yeah, exactly. I think about it like, you know, are you—if you went to a horse race right now would you know the right horse to bet on?

RW Yeah, that’s—

PF Like that’s—and I wouldn’t. I wouldn’t have any idea.

RW Well, and there has to be a horse race that’s happening and horses have to be in it like when you’re sittin’ there planning your career. Like right now of the like hundred of companies that are being planned in New York maybe one or two will become a unicorn, maybe.

PF Yeah.

GT Maybe.

RW And but, I mean, where are they in the planning? Where are you when you’re needing your job? It’s just not feasible, right? So like—and by the minute you can tell that they’re gonna go somewhere, everybody else came too, so—

PF Oh my God, yeah.

RW It’s just—it’s just—it’s just like a waste of time.

[19:07]

PF Yeah this is—actually I don’t think people know that, right, like if you—going to a late stage startup is just a job.

RW Oh yeah, totally.

GT Yeah, very much so.

PF You’re like, “Oh my God, it’s growing so fast. I’m gonna get—” You’re gonna get—

RW Oh if you’re gonna do that, go to Google or Apple or Facebook where at least you’re paid really well and the stock is stable and they have great benefits [chuckles].

GT Right.

PF The thing the late-stagers do that’s brutal is like, “Oh we’re giving you 30 million units.” Like they’ll give you options to vest on some—

RW Yeah but it doesn’t matter, just take the cash at that point.

PF No, I know but the units will be like worth 30,000 dollars.

RW Yeah, totally. Yeah.

PF Right? And you’re just like, “Oh my God, I got all these units,” and you don’t realize that there’s 20 people in line who will vest before you and just sort of—just anyway.

RW Yeah, it’s all a mess. It’s engineered to screw you over, it really is.

PF That’s right.

RW And you gotta work with what you got, right? Like Agency I wrote because like [Agency: Starting a Creative Firm in the Age of Digital Marketing] I like agencies cuz it’s a hustler’s game. You could be born in like in a ditch in Tepeaca and you could still start an agency and make millions. Which is awesome. You don’t need— you don’t need an investment. You basically need like an iPa—I say in the book you need an iPad and a coworking desk to like start an agency [mm hmm]. It’s all about your wits and it’s all about talent and it’s generally like if you’re good, there will be work. It’s very, very hard to scale. That part sucks. You know.

GT There’s some network involved. You have to have a network, right? In order to bring in clients.

RW Yeah—

PF Yeah but the network starts to build itself if you get—if you do well.

[20:17]

RW It starts to build itself and it starts to build with your team, right? Like I don’t know the roles of the people here but I know one of you probably does more work getting the clients than the other ones, you know what I mean?

GT Yeah.

PF Mm hmm.

RW And I write about those different roles in the book. Like you need hustler—but yeah, I mean, obviously if you’re a sociopath, it’s hard to develop relationships but presumably, you know, even if you were born in a ditch in Tepeaca, you can make some friends and like tell which ones a good hustler and which one’s like organized.

GT Sure.

PF Mm hmm.

GT Mm hmm.

RW So [laughs] the books starts with like How Rich Can You Get or something like that because—and it’s like you’re not gonna get like. . . Warren Buffett rich. You’re not gonna get even like a billionaire. You’re not gonna get like—what do I call it? Oh-I-bought-a-jet-weird rich.

PF Yeah.

GT Yeah.

RW But you can get like oh-I-think-I’ll-buy-a-cool-car-today rich which is that’s—that’s—you know, for me that’s enough.

PF I mean that’s the plain old [Rick laughs] American dream right there.

RW Right, yeah.

PF As opposed to like, “Ah! I have the biggest TV that they had at the store,” right?

RW Yeah, exactly, I mean so like I don’t really—I mean it’d be cool to get really rich. I have a daughter. It would be cool if she was like an Olympian but I’m gonna like her anyway [laughs].

[21:18]

PF You have too—all three of us have had probably given our—our middle class, lower middle class roots surprising proximity to billionaires.

RW Yeah.

GT Yeah.

PF It—it—I’m—if somebody gave me a couple billion dollars right now I’d—I’d figure out what to do—

RW Oh I know exactly, yeah totally [laughs].

PF Buy—but! I don’t actually see it as an attractive outcome cuz you’re—it just seemed really hard to have long term maintainable friendships.

GT Things get real weird when you’re that level of wealthy.

RW Ah it’s kinda horrible. And I—the other thing is like we’re older—

PF You don’t have to worry about things.

RW Yeah. No. We’re older. So that’s also a huge thing. Like kids ending up with like five million dollars out of the blue when they’re like 20 years old, that’s—

PF I’ve seen it happen, honestly—

GT Yeah, things get real weird.

RW It’s—it’s not pretty, man.

GT Yeah, it’s not pretty. It’s not pretty [Rick chuckles].

PF It really goes away. The lucky ones buy real estate.

GT Right.

RW Well, I mean—

PF The unlucky ones buy drones.

RW Yeah, two million dollars goes away [yeah]. Like, you know, 200 million dollars it’s very hard to lose. It can be done.

[22:11]

PF No, no, no, but you’re right—

RW Just ask MC Hammer [chuckles].

PF I’ve met lots of like—yeah, that’s true.

RW That documentary was awesome.

GT In the beginning though you have to have some resilience for feast and famine, right? I mean, you know, when you’re first starting out, you have to be able to take a couple of months where you’re not getting paid and [yeah] or getting paid very little. Right? Like—

RW Yeah, I mean, by the time—it’s interesting, I mean, I didn’t really think about that period. I—outta college, you know, I graduated from college in ‘92. So it wasn’t anything like the great recession but it wasn’t a great time. I was an economics major. Not a lot of people were hiring economists in ‘92. It was a recession, right?

GT Yeah.

RW So I just sort of like worked, you know, at like Aquent Partners, MACK Temps. Did a lot of freelance and desktop publishing.

PF I worked for MACK Temps too!

RW Nice! [They high five]

PF Yeah!

GT Oh man! [Paul laughs]

RW Um but the reason I was saying that is like I had a nice period of like not making a lot of money and then—then Arnold. When I was in advertising I did ok. I didn’t really even think about the period, early Barbarian where we were paying ourselves 20 grand a year. I just don’t—I didn’t care [right]. I was working all the time anyway. Rents were cheaper then I guess. I was in Austin—

PF That was a big thing, my rent was 590.

RW Yeah, my—yeah.

[23:15]

PF And before that it’d been 250.

RW Mine was 433 so it was just like—

PF You remember that number cuz it was actually a pretty big number.

RW When I first moved back to Boston in ‘94 it was 200 bucks.

PF Yeah.

RW [Laughs] It was awesome.

PF Yeah, just—just livin’ in some room.

RW Yeah. So yeah I guess now—I mean I actually don’t know what it is nine stops out on the L anymore.

PF It’s not good. No, no. It’s like 1400 dollars.

GT Yeah, it really is.

RW So, it’s yeah. So you need something.

GT Yeah.

RW Um.

PF So if I wanted to—but I mean this is the thing, right? Like we’re talking about this nice agency experience back when we were young and you could live cheaply and write some copy.

RW Well, I, you know, it hasn’t really changed because I advocate you don’t take investment to start your agency. You’re building it from the base of the clients you get right away.

GT Yeah.

RW Right? So like we got our first client, it was 20,000 dollars. Two of us said, “Ok, so pay me—” I don’t remember like 400 a week or something. And then the other two just kept their jobs.

PF Right.

[24:09]

GT Right.

RW And then as we got a few more clients, we were like, “We can afford to take you on now, and the other one you know we can’t afford to take you on.” You don’t have to quit your day job until you make enough to quit your day job. Like there’s no investment; there’s no two years of burn in agencies, right?

GT I mean this is what I love about being an agency—

RW Yeah, you ramp up from the money you make. If you can’t make enough to like, you know, if you can’t make 1400 dollars a month on the agency, you probably are barking up the wrong tree.

GT Yeah. Yeah.

PF Alright, but what if I wanna get into like the world now, right? There are agencies, so on and so forth, but if I look at like online advertising—

RW Yeah.

PF—it’s a giant spectacle of craziness. We’re above LUMA Partners who make this chart which shows all the pieces—

RW Yeah, yeah, yeah, I saw you guys [laughing boisterously] made the chart. That was amazing!

PF Yeah. No, no, no, no, they’re downstairs. LUMA—

RW Oh you’re above them here.

PF Yeah, yeah. They’re right downstairs and so they make this chart about advertising. We’ll link to it. It’s all these giant interconnected systems that is this world now.

RW Yeah, I wouldn’t get into that.

PF Stay away from that?

RW Yeah, with the, you know, assuming we’re talking about somebody that isn’t gonna go raise money. We’re not talking like startup ideas here.

[25:04]

PF Let’s say I’m a smart, creative person. I know a little Javascript and I’m interested in doing something new or weird with my career.

RW Well, so, you know, just like in the book, I’d be like, “What—what are your life goals?”

PF Ok.

RW How rich do you wanna get?

PF Well, everybody’s gonna say, “I wanna get as rich as possible.”

RW No, no, everybody doesn’t say that.

PF No, that’s true. Let’s say, um, “I like—I aspired to lower middle class, I hit it. And now I wanna like just see how far I can take this thing.”

RW Do you wanna go all the way and risk everything or do you wanna do it in a nice, incremental, safe way?

PF Well, what do you think, Gina?

GT Hmm. Do I have children?

RW It’s a flow chart, you know what I mean?

GT I mean [laughs].

PF Let’s say I don’t have children.

GT Don’t have children, single.

PF Yeah.

GT Ready to go.

RW Ready to roll the di—and you’re cool if like all of it completely fails?

PF Yeah cuz then I’ll have to go—I’ll go find—

RW So now get a stock in VC in like investments, you know what I mean?

PF Ok. Ok.

[25:50]

RW Right. Which I did for awhile and still follow but I find less interesting as—as a career because it gets into like, “Oh, what’s hot?” You know then you’re—we have whole conversations about what VCs are into right now—

PF Dude, I am—every aspect—

RW What’s MNA friendly and like [stammers]—

PF I’m building systems here. We’re building systems here that are gonna last for 20 years. Like, for real, they’re really—

RW Yeah, yeah.

PF And then the whole industry is so exhaustingly fashion driven and part of me—

RW So I don’t think it is. I think there are like—like—we’re talking the services world [mm hmm] of digital end marketing [mm hmm]. I think that there is a very long arc, that’s almost a hundred years old, and we are still part of it. We are starting to see like the weakening power of the holding companies [mm hmm]. They’re being assaulted by Facebook and Google and McKenzie on the other side—

PF Yeah, McKenzie is on it’s way. Yeah.

RW They have—both have profound weaknesses on them. They’re like—the only time there’s been any interesting alliance between publishers and agencies is when Vice bought Carrot and then that got all screwed cuz of the—the—the problems with management but like, you know what I mean?

PF Our—our—our good client, Vice. We have no opinion on this [laughs wheezily].

RW No, but my point is like that’s still a very fertile area, right? Like [right] the alliance between the agencies and the publishers it was killed in the twenties and thirties because of like the media stuff and worries about bias but nobody’s gonna think that now in this era of like—like Facebook and Google.

PF Right.

[27:06]

RW And like McKenzie’s very smart about your business but they have their own weaknesses, people just haven’t really ever stabbed ‘em at it yet, right? Like they waste a ton of your money; they don’t actually have a firm opinion on anything; it’s all the exact opposite of what advertising is about. You know what I mean? Like it’s business processed stuff in the age of data is what, you know, this period we’re in now is like only part of the story. Like—

PF You live on both sides of this stuff.

RW I do. I do.

PF This is—I mean it’s—you know half of the stuff you’re talking about is like business process re-engineering.

RW Yeah. I mean that’s—

PF You’re just not a McKenzie consultant.

RW That is the period—there is an opportunity right now to re-engineer them out of their position, I think.

PF You thinks so? You think [yeah] you’re ready to go for McKenzie?

RW [Stammering] No, I mean—

PF Let’s do it!

RW I got other stuff to do in life, man [laughing and Gina laughs].

PF No! No! Come on! Let’s go! Let’s do it! Let’s go for McKenzie.

RW My great problem in life is I’m a very good manager but I just wanna write books. So [laughing and boisterous laughter from Gina and Paul]. I think of these things, I’m like, [in a whisper], “Somebody needs to take on McKenzie from the other side.”

PF That’s right.

RW Taking on these holding companies and—

PF But just write about it—

RW—like you could totally get ‘em from the side of creativity and like meh [mumbles].

[28:07]

PF Just write an article called “How We Could Destroy McKenzie”.

RW You could do it! You know you could definitely stop this supposedly inexorable attack of theirs on the holding companies [mm hmm] and like there are alliances to be made there; there are new types of shops I think that could be made but! The big downside is that I think it requires either MNA or investment. Which is something I’ve been very against in my agency.

PF Yeah, we’re bootstrapped. We like it a lot. Yeah.

RW Right, so like, you know, if like Martin Sorrell keeps hinting at what he might do next like there’s opportunity there for somebody to do something to sort of those McKenzies of the world. They’re not that big. Their P/E ratios aren’t that much better. It’s really kind of like two—two titans, you know? I mean it’s very different market caps but they don’t—it’s not like one of ‘em could . . . buy like, you know, whatever—

PF It was fun talking to you. This is—[Rick laughs boisterously] This is your football.

GT [Laughs] It really is. It really is. It’s fascinating.

PF “Ah look at these giants smashin’ into each other on the field of play!” [Laughs]

RW Yeah it’s pretty funny and, you know, I go back so deep in it like I read weird—like everything I read it’s like through prism, right? [Mm hmm] Like I’m reading the Robert Carroll LBJ books and even those [right] I find relates to this, you know what I mean? [Sure] It’s all—it’s all—advertising is a very, very, very big part of world that people don’t think about.

PF No, it’s a mega structure, right?

RW Yeah.

PF Like it’s like the military and industry.

RW You talk about like the post-war boom and then we always talk about government and technology and like tech—and mass media, maybe. Mass media and technology are both primarily funded by advertising—

PF Without a doubt!

RW You know? It’s just—and especially now—

[29:39]

PF And the part of tech we deal with, then there’s the substrate part of tech.

RW Yeah, so back then—

GT Yeah.

RW—there was kind of, I would say, the post-war boom was a transition, right? You had the, you know, the Vannevar Bush and the Raytheons and stuff like that [mm hmm] that was like the government, you know, the military industrial complex but there was definitely a tech ad one like Theodore Vail and like all the like AT&T and all that is radio and TV, giving into William Paley, all that money’s comin’ from advertising. 90 percent of all radio—network radio programming was advertising and it was worse on TV, even at the beginning, you know what I mean? And then the internet, I mean, advertising is spent something like—I have a graph in the book, in the new book but it’s like four times the amount of money as VC [music fades in]—

PF Mm hmm.

RW—has been spent building the internet on advertising than it has on VC.

PF Sure! That totally makes sense.

RW So like in the old days tech there’s railroads and steam engines and then up through like military stuff but of late it’s advertising that’s funding it. We’ll see if it’s something different now with Tesla and Airbnb and stuff [laughs].

PF Alright.

RW We could keep going forever!

PF No, I know—

GT We could!

PF We’ve got—it’s literally—there are 500 tabs open on this conversation right now.

GT Yeah. I’m sad I’ve got a client to go see.

PF I know [Rick laughs].

GT I wanna keep going.

PF Well it was good to see you.

RW Cool, you guys too. It was nice to come visit the office finally [music ramps up, plays for five seconds, fades out to end].