Author: johnhooley

The Allure of Sophistication

A couple of years ago, I was in a mastermind with another entrepreneur who specialized in lead gen and sales. He had just launched a website for selling his expertise as a consultant. The website was sharp, but what most impressed me was his inquiry flow. It seamlessly transitioned from a video pitch to a slide in form with conditional logic for the fields.

More recently, I had a conversation with a consultant around the sophistication of different types of industries. He held enterprise software and insurance as two industries that were excellent at selling. As an example, he talked about the intricate marketing automation that powered follow-ups and segmented customers.

Sophistication is a kind of magic. All the wonderful technological advances that we use day-to-day are inscrutable. It’s natural to infer that if something is convoluted that it must also be powerful.

As it relates to growth, it’s easy to think that you can buy or build your way to growth by tacking on sophistication.

You look outside your business for opportunities and see complex solutions and reason that they must be a magical difference.

The antidote to this fallacy is Gall’s Law:

A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.

John Gall

Effective video pitches and conditional forms started as sales conversations. Effective marketing automation started as a manual system derived from managing sales conversations.

Though we want to buy or build around challenges without surmounting them our real opportunity is to face our simple, and often hard, problems.

What is working in your business? This is your opportunity to optimize to a higher functioning, perhaps even sophisticated, level.

Where are the problems in your business? This is your ground for innovation.


Featured image is “The Self Operating Napkin” by Rube Goldberg. Originally published in Collier’s, September 26 1931. Used under Public Domain.

Growth Algebra

“In 2021, I learned more deeply what the SuperFriend Model needs to succeed, some of which we had and some of which we didn’t. It needs a network supply that exceeds the pipeline demand. It needs someone whose job it is to continue to grow the network. It needs a steady supply of work. It needs laser focus on a niche. It needs ways to support and engage the people in the network. It needs a mechanism to train people in what it means to work like a SuperFriend. It needs a large and steady amount of working capital…As many of those things become less available—especially capital—the SuperFriend Model becomes more and more difficult to sustain.”

Dan mall

The above was written by Dan Mall, as part of a year end review of his agency SuperFriendly. The review is a deep dive on why 2021 was their worst year to date and why he was stopping his efforts to scale his agency. It’s worth a read even if you don’t run an agency as an example of how to reflect on business.

Dan has been working this business model for 10 years. His lessons from a difficult year are not complex:

  • Business focus
  • Steady supply of work (pipeline demand)
  • Accessible & capable workforce (network)
  • Strong people systems
  • Good capital reserves (good being relative to costs)
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Impact Ease Grid

“There are a million things that people think we should do and it would be great If we could do them. But we have limited resources,” James told me.

James is a friend that owns a coffee shop. We were discussing the challenges of growing a small business.

The biggest obstacle to growth for him is capital. Cash for a refrigerator, new products, branding, a better barista bar, and a new location. In terms of surmounting that obstacle, there are lots of tactics that could make a difference. But there’s little clarity of what will make a difference.

“Let me show you something,” he told me, and brought out a dry erase board showing various initiatives mapped according to their impact on profit and revenue.

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Hidden Strengths

I’m registering for a college class as a 41 year old senior. I haven’t decided what yet, but it will be something in the humanities.

A couple of days ago, I had a call with a consultant who specializes in helping agencies like mine make strategic pivots. We talked about the research I’m completing on agency channels. Like me, he sees a lot of agencies that don’t appear to be operated with much skill, but that are doing quite well in spite of this seeming deficiency.

“Luck is a big factor, ” he said, “especially with agencies.”

There are plenty of people who get lucky. If you’re around long enough, you’ll be one of them.

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The Few as Many

Clients love it when I get on a call with them. I bring a lot of experience, training, and unique perspective to problems. Team members like it when I get involved too. These same attributes make projects easier. Because of this, there will always be pressure for me to get involved in operations.

I’m not special. For smaller agencies like mine, it’s common for the president to provide this sort of value.

In all businesses, there are squeaky wheels. As in, “the squeaky wheel gets the grease.” These are situations that draw attention.

Often they’re important things. I love our clients and our team. They’re both critical components of the business.

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Exposing Progress

Last Friday, I evaluated our last six week cycle and looked at pay-per-click objectives for click through rates and leads. They were significantly improved over our initial campaigns (~50-100%). This was even though we had a brand new ad, landing page, and service proposition that hadn’t been optimized.

It was both measurable growth and validation of the thinking I’ve done on innovation.

It felt good.

Growth requires investment over time in an uncertain environment. The emotional experience of that is difficult. You’re in the mud, slinging it out, day after day. Your attention is splintered between responding to threats and trying to find a path to that next level.

Beyond the utility of learning, it’s important to track progress as a bulwark against your emotional experience of uncertainty.

Most entrepreneurs don’t put much stock in emotions. But what I noticed on Friday, when I felt good, was that I was re-energized to work on the next set of obstacles.

It takes emotional energy to grow. It’s important that both you and your team can see that you’re making an impact. Exposing progress reinforces motivation and greases the track for momentum.


Feature image is of Sisyphus by Titian (1548). Sisyphus was punished by Hades for cheating death. He was required to spend eternity carrying a boulder to the top of a hill every day where it would roll to the bottom. Used under public domain.

The 6 Week Cycle

When Trump was president, commentators observed that he made promises that were always three weeks away. Covid was going away in three weeks. Proof that the election was stolen would be revealed in three weeks. If re-elected, Trump would finish the Mexican border wall in three weeks.

What happened in three weeks? We forgot the promise.

When I was setting quarterly goal targets, a pattern developed where not only would they be irrelevant in three months, but often I forgot whey I had engaged with them in the first place.

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The 3 Marketing Channels That Work

How do businesses like yours get customers?

It’s not a complex question, but it’s one that most business owners couldn’t confidently answer.

I’ve asked other agency owners an even easier question: how do you get clients?  A significant number don’t even know this.  They say, “Huh… I don’t know.  People contact us.”

I have an operating theory that acquisition channels follow the 80/20 rule. 80/20, Pareto’s Law, or the Law of Imbalance states that most sets are not evenly distributed, but concentrated.  For channels, that would mean that customers are generated through just a couple of mechanisms in each market.

Last month, I decided to gather some data on this theory while improving my knowledge about businesses like mine.  As part of this effort, I hired a virtual assistant to scrape data off a publicly available services directory.  

The pie chart below, shows the initial 50 results:

Pie chart showing agency lead generation channels

75% of all customers reported finding the service company in one of three channels: referrals, directories, or Google search.  6% were in RFP’s and then little slices of everything else. (80/20 imbalance expressed as 75/25)

A few caveats with this data:

  • It’s distorted because it’s scraping from a service directory.  Because of this, directories are likely overstated by a significant margin.  Referrals are probably much higher and directories at least half of what’s counted.
  • It’s just a small, initial, sample – 50 purchases (the aim is for 500.)

If your business was a web development agency, and this held true for the larger market, the best return on your effort would be to focus on Google search, service directories, or referrals.

And that’s why this question of, “how do businesses like yours get customers,” matters.  There are thousands of marketing strategies that you could employ, but if they don’t align with customer behavior, they won’t work.

See also “Narrow Your Options


Featured image is of Cinderella, barefoot, by the kitchen fire painted by Valentine Cameron Prinsep (1880) used under public domain.

Growth Lessons From a Hotel Kitchen

A couple of weeks ago, the hotel where my Rotary Club meets switched out plate lunches for buffet lunches. It’s a seemingly unremarkable change. Rotarians went from being delivered a plate with food on it to serving themselves from a buffet.

However, the hotel grew their profitability by making this change.

Consider that:

  • Food takes less labor to prepare as it’s no longer being plated for guests.
  • Rather than having two or three staff members ferry meals to every person in the conference room, there’s just one person who monitors the buffet tables for when a container needs to be replaced.
  • There’s less food waste, because guests serve themselves the amount and type of food they want.

No one in the Rotary cared. In fact, you could make a case that the hotel made the meal more valuable for Rotarians by increasing the speed with which they were able to get their meal and customize it to their preferences.

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Angles & Dry Docks

“Wait,” I said, “You’re a software guy. How did you end up building ships?”

Last night, I was at a happy hour with the Rotary Club and struck up a conversation with a retired entrepreneur. He told me how he started in Silicon Valley, made a bunch of money in software, then bought a ship building business, and then went back into software and services before retiring.

The sandwich of software and huge transportation vehicles piqued my interest so I asked how he had made this transition?

He explained that flush off the success of a VC startup, him and a friend began asking around about businesses that they might acquire. They knew an attorney who heard of a business in the local shipyards that was on the verge of folding. They raised a little money from investors and put in a lot of their own money and bought the business.

“What’s your criteria for buying a business?” I asked.

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