I had lunch a couple of weeks ago with a guy that has been operating an agency for over twenty years. I asked him what the perfect agency looked like and he said, “If you want to make money: just you or a couple of account managers and everything outsourced overseas.”

I know of several agencies that already operate with this sort of model and one of my friends is shifting his local team to an international one. As time passes, pressure will build that will cause it to become the standard or a common approach.

In the meantime, no-code tools and AI can do more and more of the specialized work that agencies need.

The agency of the future will probably be a combination of software and commoditized labor.

Last fall, Philip Morgan recommended to me, “Why Clients Buy” as part of my investigation into referral focused strategies (thanks Philip!) A thesis of that book is that for client work, you only need around 200 possible clients to know you. It’s a relatively small number of people (with the caveat that the number is based on income per client.)

From my research on agency channels, a little less than 1 in 3 referrals came from colleagues and peers, people who would probably compose much of that group of 200 people from “Why Clients Buy.”

I’m in the early phases of implementing a referral strategy and how I’m thinking about this is networks. Every person is a node in a network that connects to a certain number of other nodes. For a client serving business, you need 200 that have some sort of link to you, either directly or within one connection. As in, they know you, or when they ask for a referral, someone they’re connected to knows you.

People are not equal (sorry founding fathers, you got it wrong.) We don’t have the same abilities. As it pertains to networks, not all nodes are equally valuable.

Due to this, as strategic priorities, in building a referral network, I’m looking at building relationships with three kinds of people:

I’ve been around long enough that I’ve seen many people achieve great success in the various communities I’ve participated in.

One of the patterns I’ve noticed is someone new to entrepreneurship building up to $1-5 million in revenue in three to five years (as an aside, this fits the 1,000 Day Principle- which I’ve been critical of elsewhere.)

I’ve also seen plenty of smart and diligent people wash out in three to five years with ho-hum growth in their business.

What separates the two is that the self-funded newbies who achieved exponential growth have always been in an emerging market.

We tend to treat these successes as, “Look! There was a hidden genius in our midst!” But it might be more accurate to say that someone was competent enough to ride a good wave.

Association executives reporting increases in one-year and five-year membership levels and increases in new member acquisitions and member renewals are significantly more likely to consider their association extremely or very innovative.

This is a quote from an annual research report that Marketing General does on member based associations.

Yesterday, I wrote about having some level of risk taking and exploration as a requirement for pursuing growth opportunities. Later in the morning, I was doing research on a vertical position that we’re investing in (again), associations, and came across this tidbit.