How Erik Huberman Scaled Hawke Media by Breaking Every Marketing Agency Rule

[00:00:03] Hector: Hello and welcome to another episode of the how to scale a business podcast. My name is Hector Santia Esteban and I am your host. Our special guest is Mr Eric Huberman and he is the CEO of Hawk Media and they are more than just a marketing agency. We're going to talk about what they've become and turned into.

[00:00:19] Hector: But Eric, thanks for hanging out with us today.

[00:00:21] Erik: Of course. Thanks for having me.

[00:00:22] Hector: Yeah, I've I mentioned before that I've I've had the benefit of seeing your story and most recently you've had some really cool accolades, you know, jumping on the ink list and acquisitions and enlarge a lot of numbers and such. I'm curious for you. Is there something that you Cool.

[00:00:40] Hector: Put on your shelf or that you like to have on your shelf, you know, that that you sort of enjoy looking at, whether that's an achievement, a certain mark bringing on a certain person, you know, it doesn't have to be, you know, some sort of external achievement. But when you look back on sort of what you've built, what

[00:00:55] Erik: I mean, sincerely, the shelves in my office, I have a lot of photos from family past, like I've got a snowboard group. I go heli snowboarding with every year. That's a bunch of entrepreneurs that I've got a few of those photos. I've got my American marketing association, four under 40. My Forbes under 30.

[00:01:15] Erik: Those were two big ones. And then now I've got my most recent triathlon trophy up there. So, it's, it's a combination of all those, but yeah, no, honestly, I, I think it is a good reminder to note, to room as an entrepreneur, If you're a good one, your default is what's broken moving forward. Like you're not really paying attention to the winds.

[00:01:33] Erik: You're like, okay, well, what's next, what's coming. And once in a while, that reminder of where you came from and that you've made it to a certain level, I think is a big one. And so I started forcing myself to have some of those reminders around me.

[00:01:47] Hector: Yeah, and I'm sure it's evolved over time. But now when people ask you, you know, whether it's at like the, you know, the cocktail party or at, you know, in line when someone says like, Oh, what do you do? Or what does your business do? What's the easy way to answer that question?

[00:02:00] Erik: I still say it marketing. We help grow companies. We work with, you know, we've got about 300 full time marketers and work with about 600 brands. So that number changes. But, you know, the our mission hasn't, which is we want to be the best at what we do, but the easy but easy to work with. And that's where I saw the hole in the market was, you know, there were tons of agencies you could hire, but they all were kind of terrible at what they did.

[00:02:21] Erik: And the few that were good were really hard to work with. So I was like, well, why not? Build a great agency that also, you know, sticks to its guns and can continue to be easy to work with. And that that simplicity is what's really built Hawk.

[00:02:34] Hector: One of the things that we've sort of noticed in or I've noticed in doing the show is that there seems to be iterations or phases of businesses, you know, level one or stage one, you know, here was the first iteration, and then it sort of evolved. When you look at, like, sort of a high level, you know, stages of business.

[00:02:49] Hector: Yeah. Yeah. the business. What do those iterations or evolutions kind of look like?

[00:02:54] Erik: Yeah. I mean, it's every time you double the business changes completely, the culture changes, the needs change, the way you have to operate changes, your job as a CEO changes. So that means I mean, going from like 1 to 2 people, 2 to 4, 48, etc. It just the dynamics change and I think for us and I think every business is also unique for us.

[00:03:13] Erik: I had a vision of what I wanted to take this to like the first four years. I didn't really like the first four years. I had a vision of where it would be in four years and we did that and we achieved that. Then we probably hit a little bit of a like we're my friend called it our work. puberty phase where we were like, our body didn't quite fit our brain and we're trying to figure out who we were and then it really clicked and then we spent a few years building towards that vision, which was the idea of combining sort of AI enablement and all the technology out there to make it so that we were really had this backbone that made us way more efficient, way more productive.

[00:03:47] Erik: And building that out combined with our investment arm, which to that point was really more of just like we're investing on the side and funding some of the technologies we use and really solidifying how we integrate with technology, how we invest in it, how we onboard it, all that, and then building out this marketing infrastructure that really made us a marketing powerhouse.

[00:04:05] Erik: And so solidifying that, I think, took us another few years. We got to that point, and then we went, okay, now we have this platform. This is, I'd say, a couple years ago, really, but more really a year ago is when it really clicked in. And it was like, all right, now let's really proliferate this. And that's when our M& A strategy started kicking in.

[00:04:21] Erik: And we started really looking at how do we get rapid growth, given the playbook we've now built in the ecosystem we have. And so those are the three big phases for us. So to start up and then ecosystem and now, you know, massive expansion, but I would say again, every time we've doubled, we've had to figure out what, you know, completely new infrastructure, completely new talent, all that kind of stuff to

[00:04:45] Hector: Yeah, it seems like the best founders are the ones who are able to re you know, redefine themselves or, or refine themselves and, and kind of create this new iteration. Because in my experience and, and from, you know, outside and running my own business there, there's this want for innovation, but then there's this need for For sort of productivity and efficiency and the balance of that or the ones who seem to do it right, seem to have a constant evolution, but seem to be constantly effective as opposed to being sporadic or, you know, or things turning to shit.

[00:05:17] Erik: what I think that comes with having a clear vision of why your company exists and why it's, you know, even starting to be successful, like the the part that I watch a lot of entrepreneurs have, including me, I've had a DD, I went and started a You know, personal defense training company, like for to work with one of the biggest private security companies in the West Coast, and after we got it ready to launch, both of us looked at each other like this is a complete distraction from both of our businesses, like, let's focus and we spent money on it.

[00:05:41] Erik: We invested into it. It was like, you know what? No, we this was fun to put together, but it would probably be a cool business, but we're going to have to dedicate too much brainpower to it. It was going to take us away from our core. And so, you know, Taming that entrepreneurial ADD is super important, and then yeah, just having a queer vision so that you know what you're building like I knew that I wanted to dominate the marketing world and I had different ways that it fed into that.

[00:06:04] Erik: And I wanted to be the best of what we do and easy to work with. Well, how do we continue to be easy to work with? We have to be cost effective. How do we continue to be cost effective? Well, we've got to figure out how to make people efficient because if we can't You know, have our people work efficiently.

[00:06:17] Erik: Then we have to charge too much and they can't afford to use us. And we want all these softwares and all the tools that the fortune 500 get to use and to bring them to the masses as part of our strategy. And so again, there's all these things that play into that overall mission that define you. And then when we get things that don't play into that mission, That are a distraction.

[00:06:34] Erik: It's it's important to be disciplined not to go down that path

[00:06:38] Hector: Yeah, you mentioned discipline and what was interesting, the thing that I was always sort of, I don't know, fascinating is the right word, but it also seemed like you were, you were flexible in the way that you sort of went about it. You said that, you know, you, you talked about a vision and a mission, but you're, you know, the way.

[00:06:53] Hector: I don't know if it's changed or evolved, but, but I was like, I was, I was always surprised to see the different modalities in which you were able to accomplish that.

[00:07:03] Erik: Yeah, it's trying a bunch of different things, failing a bunch of times succeeding here and there and then doubling down and just iterating quickly is always important with again and overall vision. So. Good example of I want to call it a failure, but where it just didn't take off is, you know, in 2020 and 2021 revenue based financing and factoring were huge because money was cheap and so everybody was taking out loans and you had clear bank and way fire and all these big companies coming out that were offering really easy financing for businesses.

[00:07:32] Erik: And we went, well, why don't we build sort of the kayak model for that, where we can go find the best deals for our clients? Because they all need financing and just be able to assist with that. And we got a small origination fee when we get it to, but really what it was, was it got more money into the pockets of our clients, but then would take off.

[00:07:48] Erik: Well, then 2022 happened and rates skyrocketed faster than, I don't know if it was ever, but it was very fast. And that whole market just got decimated again. Thankfully, because we took it, we dipped our toe into it. We didn't. It wasn't that big of a deal, but you know, we lost some time, some attention. We had some staff that we think they actually still with us.

[00:08:07] Erik: They just don't really focus on that anymore. We moved him into other roles because it just ended up not being a thing. So you try things like that. That makes sense. Fit the thesis. They weren't a distraction. It was again enabling our clients to do what they needed to do, but it just didn't end up being a worthwhile endeavor.

[00:08:21] Erik: And so move on. And there's a lot of Cases of that over the past almost 11 years, we've been doing this,

[00:08:27] Hector: Yeah. I think another big, you know, I guess it seems obvious from the outside, right? But then another big hurdle that a lot of founders, solopreneurs that sort of hit this mark where they've got a sort of a real businesses is need. And there's this needing word and I'm one of them is, is people become a part of it, right?

[00:08:43] Hector: Whether it's clients or whether it's, you know, leadership or, you know, team. And, and at the end of that is culture. And it seems like Hawk has always had this vibe about them, you know, and even from the outside, like the people who would talk about them, there was always a way that they talked about.

[00:08:58] Hector: I'm curious how you, you know, from the top, if that was an intentional or if that's something that sort of emerged or, or how you saw that develop. Yeah.

[00:09:05] Erik: or I guess it depends. What, what is that vibe? What is

[00:09:08] Hector: Well, it was always like when you said like we dominated the marketing space, it was always like, that's how they talked. Like it was like, it was always in sort of, you know, in a, in a sense of leadership role or a way of leading the industry in a sense.

[00:09:21] Erik: yeah, I mean, I think it comes from a few things. One is I, I came from building and selling to my own company. So a lot of the bullshit that happens in the agency world, I just don't buy into. So I think by nature being a contrarian, because I don't like this stuff. A lot of the stuff that was built, the agency just took for granted, allowed me to sort of have that.

[00:09:40] Erik: Yeah. What felt maybe bold where it's just like, Hey, you know, this is what we're doing. You know, my, one of my early lines that I said a lot, and I still say it is 99 percent of agencies are full of shit. And I believe that it's not just whip service. It's not hyperbole. It's like, I believe that 99 percent of agencies have no idea what they're doing.

[00:09:58] Erik: They're built by people that can't build businesses don't know how to do marketing and there's no barrier to entry. So they, that's part of the nature of our industry. And so when I say things like that, I think it gives this sort of vibe, that vibe of like, we're, we're in a, we're aggressive, I guess, would be this.

[00:10:12] Erik: Thing. And then we're, you know, we are relentless. We are trying to grow something big here. I, you know, I want to build a massive successful powerhouse. And what happens that I've noticed with your team is when you preach that you talk about it, you push that you end up attracting that talent and you end up scaring away people that aren't looking for that.

[00:10:34] Erik: There was a stat that I am addicted to, I guess, at this point, I think would be a fair way to say it. Yeah. It was thousands of people answered a survey that would you rather work 25 hours a week and make 125 grand a year or work 70 hours a week and make 300 grand a year? That was a survey. And honestly I thought it was a no brainer.

[00:10:51] Erik: Th like, I know you'd make it's slightly less per hour for three, 300 thousand a year, but I'm like, I'd much rather work harder and make more money. And turns out 98.2% of people disagree with me. And so seeing that, I'm like, okay, well I wanna attract. The people that aren't that are the 1. 8 percent both to work with me as well as my clients and so we're very aggressive about that because what it does is it scares off the people we don't really want to work with.

[00:11:15] Erik: And by the way, I'm not saying there's any fault in that. I get the argument for work life balance and what best work. That's just not what drives me. And that's not what I'm trying to build. I do think that you need to enjoy your life to be clear. But I think when you're working, you should be working your absolute ass off.

[00:11:28] Erik: And so Attracting that I think then starts to proliferate that message and then we talk about it like our mission statement became marketing world domination like it became that because we would joke about it half jokingly and then we always know like let's commit to that like we say it all the time.

[00:11:44] Erik: People would ask me what are you going to do? You're going to sell it like no, I'm gonna dominate the marketing world. I want to take over the world here like that's what I'm trying to do and now it's our mission. And so people see that and they're either attracted to or not. Same thing with our core values.

[00:11:57] Erik: So our core values from the beginning have been get shit done. Learn quickly and be cool. And to my wife's credit, she's in private equity. She's very buttoned up and professional and she's like, you should not have shit in your core values. And I actually changed them at one point and put together like a more like professionalized core value system.

[00:12:13] Erik: And no one could remember him. It didn't resonate with anyone. It was just like, yeah, yeah, we get it. And we went back to this because it's a very easy, simple, and honestly, if you don't like the word shit, probably shouldn't work with us. So it became very poignant and self selecting. So all these things together create an ethos.

[00:12:29] Erik: And then we talk about wanting to be the best. So there's a little bit of people believe like if we're aiming for that, there's probably a potential outcome that we could be and then we deliver. And so it gets reinforced. And I think that's where the conversation comes from.

[00:12:43] Hector: Yeah, when we get back from break, Eric, you have the unique benefit of not only if you're running your own agency, your own business, but you've been investing in and acquiring, you know, a number of them over over the past little bit. And so I want to ask a little bit about that and kind of what you're seeing in terms of building a number of businesses.

[00:13:03] Hector: And so we're gonna get into that right after this quick break. Hey, y'all. Today's episode is brought to you by amplify media and we are a podcast and well, if you like to think of ourselves as a media and content creation company, because chances are, if you're listening to this, you have a product, a passion, a mission, a message, something that you're trying to get out to the world, but you might not have the time, the team or the tech skills to do it.

[00:13:21] Hector: Well, if that's the case, we can help go to amplify media dot com. That's a m p l a f y media dot com. You can also check the show notes for the link. And with that, let's get back to Eric. So one of the things that I think is unique and I seen a lot of consultants and you have the opportunity to do it as a investor and, and, you know, maybe you can use a different, more appropriate word, but you have a larger sample size than one.

[00:13:45] Hector: So you're able to sort of see, I don't know if you call it trends or, you know, common things. And one of the things that I like to ask in these regards is if there are common mistakes or common errors or, you know, big sort of glaring blind spots that you see people are making when you come in and start.

[00:14:01] Hector: to invest in different companies and different agencies

[00:14:03] Erik: Yeah, many. But I will start with. So we knew that one of the benefits of having a solid sizable agency is the forest from the trees. Look, as you said, we get to see what's happening across a bunch of different companies. One of the funniest things I think about marketers is to this day, almost no one pays attention to benchmarks.

[00:14:20] Erik: They're just like, Hey, how's your, I would always still get the text like, Hey, how are you guys seeing Facebook performing? Because we're having trouble right now. Like, this is how you do your data research. Like, how are you seeing it? Oh, I'm doing great. How are you doing? Well, I'm doing shitty. Well, what is shitty?

[00:14:33] Erik: Actually knowing what the numbers should be, you know, just like the stock market as the S and P 500. Like, what is the index? What should you be benchmarking against? And so we built it. We spent and we knew I was coming. So we built a benchmarking tool. We started building it nine years ago, and we have 6000 companies, marketing, media and revenue data running through it in real time.

[00:14:53] Erik: We're able to train algorithms and against it so we can plug into an individual company and immediately see which KPIs are working, which are not where the opportunities are, etcetera. And so that ended up being Yeah. A huge opportunity. And so that's been the backbone of what we do and allows us to see where are those mistakes happening.

[00:15:09] Erik: So common mistakes. Number one is people not understanding their own marketing in the sense of tracking it incorrectly. So iOS 14 is a big subject in digital marketing. It's when Apple basically cut off cookie tracking for mostly meta, but Google as well. And it basically shifted the ability to track it didn't change anyone's buying habits when it comes to meta ads at all on Instagram and Facebook, people are like, Oh, yeah, performance went to shit when that happened.

[00:15:35] Erik: And it's like, there's a little bit of optimization that went poorly because you can't track everything longer tail now. But it still works great. And the advertisements still get the same clicks, etc. And so Why that's important to understand is so many people just look at the data and don't understand the data and make decisions that they end up cutting off their nose despite their face.

[00:15:53] Erik: You had all these companies pull their money back off of meta ads in 2022 2023 and pull back on all these digital marketing and the companies that stuck with it crushed it. Consumer spending kept growing and growing and growing and these people are struggling now because they don't know how to read their own marketing.

[00:16:10] Erik: So number one is they are, you know, again, yeah. 99 percent of marketers don't know what they're doing. They look at these data points and they were used to like Facebook told me I made money so I can keep spending like it's not that easy and if you can actually understand how to analyze your own data, that's number one.

[00:16:23] Erik: Number two we wrote a book about this called the hawk method about kind of our three pillars of marketing, awareness, nurturing and trust. How do you build awareness? Meaning how do you get the top of the funnel going? Let people know you exist. How do you nurture that to get them from aware that you exist, actually buying from you And then trust.

[00:16:37] Erik: How do you get third party validation and get people to trust you up until you can build a brand of your own that people trust. And so nurturing is the one people miss the most. I just talked to an 20 million a year company literally today that does no email marketing, no SMS marketing, no content, no follow up.

[00:16:54] Erik: They literally just people coming in by there and they've gotten to that size without any of that. It's crazy. And it'd be so easy to make them triple that money. And I mean that like the amount you miss by not just staying in touch with your potential customers is insane. So that's the, the other thing that I see, honestly, some of the biggest companies in the world still missing that point.

[00:17:14] Hector: , it seems like a simple sort of, you know, shift, or at least it can be. And my question is, is it that simple in the sense that does it just become an implementation thing? Well, now we just need to, you know, implement a email marketing, you know, sort of system or an SMS, or does, do you find that it becomes, you know, more of a, a deeper sort of thing with, you

[00:17:34] Erik: it's actually that simple. Honestly, usually it's just, they haven't taken the time to plug those holes. And it, and once you have all of those things functioning, right, then the devil's in the details. But a lot of times like. I'd rather a person get a bunch of bees than one a, you know, like go just get everything going, make sure you cover all your bases, then worry about the incremental growth and all that.

[00:17:55] Erik: Because, you know, optimizing your website or optimizing your ads, you can get a few percentage points of extra conversion, but you're not going to double your revenue.

[00:18:05] Hector: This is really good. A couple more questions here. One of the things that stands out is you know, we talked about you trophies at the beginning. I'm curious if there's any sort of a comeback stories. I think in business, you know, there's that classic meme of the guy who's digging and turns around right before the diamond, right?

[00:18:20] Hector: Are there any sort of, you know, comebacks or turnarounds that you've seen and things that you may have, you know, may have led to those sorts of

[00:18:28] Hector: successes?

[00:18:28] Hector: Yeah. Yeah. Yeah.

[00:18:28] Erik: Yeah, I mean, we've had our own we've I mean, one of we had like almost three years ago, I found out like I can't go into too much detail, but our executives were doing a lot of bad things and the company ended up in a downward spiral and we had to like get really scrappy, really fast, roll up our sleeves and work our asses off.

[00:18:45] Erik: And I remember my one of my advisors that I love because he's always so blunt with me said, you know, when most companies go through this, they end up bankrupt. But I'm hoping for the best for you. Like, that's the situation we're in. And thankfully, no, we ended up doing it. Coming right out of it, fixing it, building a bunch of stuff.

[00:18:58] Erik: And I can't go again for legal purposes. Can't go into too many details. But yeah, there's definitely been, you know, running a business is chaos, no matter how big or small the businesses. And I think you're going to deal with day to day shot fires. You're going to deal with crazy stuff over time.

[00:19:13] Erik: You're going to deal with, you know, Crazy executives, employees, software is going wrong. The market, COVID, what war, whatever, like, it's just part of running a business. And honestly, I try not to dwell on it too much because I learned that like, yeah, welcome to running a business, fucking move on. Like this is what you signed up for.

[00:19:32] Erik: This is what you will always be doing. There will always be chaos in the world. That is how the world works. And you just kinda got to do it. In terms of turnarounds again, we did our own. We did not bankrupt or anywhere close. Thankfully, we fixed it very quickly and figured it out. But yeah, I mean, there's always challenges and I've seen it with trying to think if there's a company in mind that I watched save themselves.

[00:19:52] Erik: I mean, we've got A portfolio company that I every few months I think is going bankrupt and then they end up doing better than they did the last quarter and then they're like, and we're out of money. What are we going to do? You guys got to fund us again, right? You're not going to do that. You got to go find the money.

[00:20:03] Erik: They go find the money and then they end up with another big court. It's like this, like, it's literally and hopefully they don't see this because they know who they were immediately. But it's like every quarter we're like, are we? Is that are we writing this off? And then it's like, Nope, it's one of our best investments.

[00:20:16] Erik: Like what the fuck? But you know, that's the key to being an entrepreneur survive. Like that's longevity is them. Big driver of success.

[00:20:25] Hector: Yeah, and I think that is been a big key to you guys is successful and seeing it from the outside is your willingness to sort of evolve as you know, the market in the world changes as we sort of, you know, we're recording this the end of 2024 and in a not so calm, you know, year politically, economically, the whole thing, you know, when you look out in terms of, you know, wanting to continue to dominate the marketing world, what sort of either trends or ideas or like where does you what sort of things are you paying attention to?

[00:20:53] Erik: Yeah. I mean, on a granular level, like TikTok shop is crushing it right now. AI and the efficiency piece. I mean, these are cliches in our space, but they're cliches for a reason. Like, you know, I'm not the guy, I didn't buy into the crypto and NFT craze. I was, you know, I dabble in, I do have some crypto thankfully given the past week but I I'm not the guy that went all in on any of these things.

[00:21:13] Erik: I don't really chase the hype, but AI is real. AI is prag. There's a practical. Benefit to AI that makes a lot of sense that the efficiencies and the optimization that can be had with it is significant. So huge piece TikTok shops really performing for a lot of brands. And if you're a consumer brand, checking out your TikTok shop is a big opportunity.

[00:21:33] Erik: Other than that, I would say don't chase the shiny object. Most of what has been working is still working and email marketing and SMS and meta and Google are still the best things to be doing in core. I'd say influencer marketing is good in a in small doses, but I don't think it's this big of a driver anymore.

[00:21:51] Erik: I think bigger endorsement deals are, but like these, you know, going wide influencer campaigns, I don't think are getting the reach they used to or not. Don't think I know they're not getting the reach they used to. So that's shifted. I think it's gonna be an interesting year. I mean, one thing that a lot of things that people haven't paid attention to is, you know, we had ahead of the FTC that really stopped any M and A and IPOs from happening because people are afraid about antitrust.

[00:22:11] Erik: And so, that's suing Google and doing all these things that with that being alleviated. There it should be a pretty big year and the end of the day the economy is run on confidence and when if you know the majority of the country is now happy with our new president given all his flaws still happy with them and they think that he's going to drive a bigger economy you're going to see people's wallets open up you're going to see what's happening in the stock market you're going to see what's happening with crypto because people go oh now I'm confident I'm not going to just sit on cash and hold on tight let's go and that's what we're I think going into so I'm very optimistic about the next couple of years.

[00:22:46] Hector: Yeah, exciting stuff. I appreciate that. Eric, if people want to get deeper in your world, find out more about Hawk or anything that you're up to, where's the best place for people to go?

[00:22:54] Erik: Yeah, just social at or slash Eric Kuberman. It's super easy to. Reach,

[00:22:58] Hector: Sweet. We'll link all that up as well. And since I have just two more minutes for you, my last question for Eric is in your opinion, what is the secret to scale in a business?

[00:23:08] Erik: Ambition. I'm one of the best piece of advice I got about investing a guy that helped us start our first fund and we're on our second now. He said, when you're investing, make sure to invest in the ambition of the entrepreneur, and that has become now that I've invested in over a hundred companies and I can see the difference, it's like the person wanting to build a billion dollar company does what they need to do to build a billion dollar company.

[00:23:29] Erik: If the person is okay with building a 50 million company, they build a 50 million company. And so for you individually. That's not a job. I mean, if you make 5 million and you call it a day, you can live a great life. The rest of your life earned 5 percent of that making a quarter million dollars a year without working.

[00:23:46] Erik: You're fine. You're making plenty of money. So it's like you don't have to go for big. But if you want to, you've got to really have that. And it can't be a forced like surface level ambition for it. It's got to be a core. I want and need this to happen because then then you'll stick with it. And it can't be me.

[00:24:05] Erik: Financially motivated either because there's gonna be times where it doesn't feel like you're gonna get there. There's gonna be setbacks. There's gonna be challenges, and it's not a linear path. And so if it's all financially motivated, you will burn out because you're gonna see time for it. The money doesn't seem like it's worth it.

[00:24:19] Erik: So that combination of like again, that's what's driven us. I'm just not satisfied with how big we are. I want to go home. Way bigger. It's not because of a lifestyle change. It's not because I want to buy something specific. It's because I want to build a powerhouse. And so if that's what you want to do, that's great.

[00:24:35] Erik: But I run into a lot of people that make again a few hundred grand a year. They're super happy. They've got a lot of work life balance, and that's totally an option to it's really what makes sense for you.