How Logan Speights Balances Systems, Creativity, and Revenue

[00:00:02] Hector: Hello and welcome to another episode of the how to scale a business podcast. My name is Hector Santia Esteban and I'm your host for today. Our special guest is Mr Logan Spades. He is the co founder of proxy and we're going to talk about the path, the road map to not only scaling, but maybe one day exiting and maybe that exit is, you know, Is exit from, an investment or acquisition standpoint, or maybe even just exit as know, moving yourself to a board member or moving yourself out of the operations.

[00:00:29] Hector: So anyways, Logan, thanks for hanging out with us today. Appreciate it.

[00:00:33] Logan: Absolutely.

[00:00:34] Hector: so much of what I think the value of today is going to be in the tactical. Aspect of it. I got a chance to pick your brain a little bit. I believe it was over breakfast recently at an event that we were both attending.

[00:00:45] Hector: so we're gonna get into that. But before we do that, there's always those people who are sitting there going. Yeah. Yeah. Well, why? Why should I listen to you? And so I'm gonna let you either answer that question with, you know how you got into this or maybe even, what you guys have been doing at proxy over the last, several years.

[00:01:01] Hector: Maybe that's also part of the answer as well.

[00:01:04] Logan: Absolutely. So, why to listen to me ultimately? I'm an ops and automation guy that was birthed out of the. com boom. so it got started in the. com boom, 3d modeling, animation, television production, then got pulled over into the digital agency space, back during the flash days for those of us who are old enough to remember those websites.

[00:01:24] Logan: And so then out there kind of agency landscape. and so dot com crash started, started rolling through different agencies and at the bottom of the dot com crash, I looked up and there were a lot of people who still need to work and a lot of people who still wanted to do good work.

[00:01:40] Logan: so I started my first agency back in 2000. I then spent, over 20 years building and scaling digital agencies. got out of my last one about six years ago, and then that process fell in love with the ops and automation side of doing it. I love, automating things even pre AI. is a great story.

[00:01:58] Logan: even while I was scaling the agency. And for those of you who are still putting in the 80, 90 hour weeks, trying to do that, I even automated text messages to my wife for a while to help smooth things over, while I was Putting in way too many hours at the office. And so, fill in love with kind of doing that and seeing how, the back office and how the operations really supported all the creative work that was being done, on the front lines.

[00:02:20] Logan: and so when I got out of the agency game, I actually. Partnered up with a couple of other agency guys. and we created platform and a service to basically help those service based industries, optimize their processes. we do it through installing people, processing technology behind them, to ultimately turn them into an all star, allow them to scale and ultimately, achieve whatever their goal is, whether that's exit or generational transfer or anything like that.

[00:02:49] Hector: Yeah, I'm glad we're having this conversation because we have, you know, a lot of our audience has a an agency or a service based business. And my question is, what makes agencies different than other businesses? Because I found that what the product that in the service that we provide in podcast, we find that similarly service based providers, agencies, it tends to be a good Product for those types of people, a variety of reasons.

[00:03:14] Hector: But I'm curious if there is, something that, you know, when you say, when you think about agency specifically, there things that make them different from, say, an e com, provider or platform or a physical product or someone selling, you know, information or education? Like, is there something unique about the service or the agency space that you think Yeah.

[00:03:35] Hector: Should be sort of accounted for differently than other, say, industries or, business models.

[00:03:42] Logan: The answer is yes and no. so business is business and we start looking in the SMB space, that small and medium sized business, which is where the majority of, these creative agencies tend to live. very few of us got into the agency game to run a business. if you want to do that, you go get your MBA.

[00:04:00] Logan: You'd be working at a fortune 500 somewhere doing all of that. We have a passion for the creative side of it. We have a passion for doing the work that's out there. And so with that, what's unique in the agency space is because we are creatives because we tend to lean that direction and we care so much about, the work that we do that.

[00:04:20] Logan: A lot of times we try to apply that same mindset to all the back office business things. and the reality is that, And things like, manufacturing, if you're dealing with supply chain and stuff like that, there's some logical pieces that have to flow. And so if you're thinking that way, some of the back office stuff tends to work a little bit easier, but when you're always coming up with creative ways of spinning things and always coming up with creative ideas of doing things and communicating things.

[00:04:44] Logan: And then you get into financial reporting a lot of times. We try to bring that mindset into financial reporting as well. and so we tend to overcomplicate. We tend to, not fully grasp some of the nuance of, those types of things, because that's not how we're wired. so in that space, Sometimes we're able to grow to the point where we learn those things.

[00:05:02] Logan: A lot of times we staff accordingly, so that we hire those people who can, who can think that way for us. that's really kind of the main thing is because we're so geared at doing the work and being creative that I think a lot of times we miss some of the, that fundamental just, business one on one.

[00:05:19] Logan: type things.

[00:05:20] Hector: Yeah. One of the things that you said to me during that breakfast when I believe that the question that I asked was, what are some of the common, you know, mistakes or the biggest mistake that you see a lot of businesses, Make and the answer that you said at the time, and I'm curious if it would be the same answer, or if you think that it would be the one that might be most relevant, was that most of them don't have some sort of operating system.

[00:05:41] Hector: They don't have an E. O. S. They don't have a, pick whatever, whatever one you want to do. Rockefeller, you know, these sorts of things. And since then, I mean, it's been a couple of months, but that has been a huge part of our focus over the last A couple of months, and it has, it has really unlocked a new level of, productivity and, capacity and such.

[00:06:00] Hector: And so, I'm curious if that is still the answer that you would give today, and if it is, why you think that is, the place that is most glaring for a lot of businesses?

[00:06:10] Logan: Absolutely. if you don't have some sort of an operating system you're running, and you're just trying to make it up on the fly, you're really, you're reinventing a wheel that has been done and done well. and so yes, if you're getting started, We love EOS. It's a fantastic platform.

[00:06:24] Logan: eventually you'll outgrow it and that's okay. Are there some issues with EOS? Absolutely. we've even written blog posts about the shortcomings of it, but that doesn't mean that you shouldn't have something there. So whether you run Six Sigma, whether you run lean, whether you run EOS, something like that, but as long as you have a system and a process to actually run your day to day operations, not the creative side.

[00:06:44] Logan: But actually how do you run meetings? How do you evaluate your employees? How do you schedule your time? How do you track your kpis So even just some of those simple things Really do. I'm thrilled to hear that you've taken that and actually started to work through it because you start seeing things differently, right?

[00:07:01] Logan: You start finding those areas that rough spots that you need to clean up, and having that preset, methodology for doing it doesn't mean you have to go create it or go find it or hire some high power to the, consultants come in and tell you how to do it, because those tools are already there for you just to deploy and leverage to grow your company.

[00:07:19] Hector: Yeah, I think it's a really good point. One of the first books that I I've ever read was, was the E-Myth. And I think that it, speaks a lot to, and I think the E-Myth is, it's a great. I think it's also limited in a large regard, but there's this inflection point that I'm sure a lot of our listeners are at, which is probably why they're listening to the show where they can't just be the baker in the bakery or the chef in the kitchen anymore.

[00:07:41] Hector: And there's so many other hats to wear and to have to figure out and then to create and design all of those different systems, when you think about it, it's just too much to ask for someone who also has to do all the creative stuff as well.

[00:07:53] Logan: Absolutely.

[00:07:55] Hector: so we have the operating system, once that sort of implemented and going, what are the levers or what are the, you know, when I, I have a five and a six year old. And so I can't tell you how many times inside out Disney movie has ran through, Our house here.

[00:08:12] Hector: And what's interesting is that, the end of the first movie, they upgrade sort of the dashboard, They upgrade the controls. there's a new set of levers and knobs. There's, you know, an expanded sort of, you know, set of capacity. And I sort of like in, business to that sort of thing as well.

[00:08:27] Hector: you start off with sort of limited, tools and controls. And then as you grow, there's more levers to turn. And I think with that complexity, create some challenge. But, Talk to me about, that what that evolution might look like from, say, a solopreneur freelancer to, okay, what's the next stage?

[00:08:43] Hector: And is there a third stage or, you know, how that sort of growth, from a high level of even sort of looks for some of these agencies.

[00:08:53] Logan: Absolutely. So, said stages and we've actually identified six stages of growth that we can identify everything from existence all the way up through maintenance into a grow and a scale and ultimately kind of an exit phase. and that is a common problem that we see a lot of founders get into because they want to know.

[00:09:12] Logan: Am I doing this? Right? , how am I doing in comparison to other people? And that information is typically pretty hard to get ahold of. one of the things that we've done at proxy is we've actually built a tool that we can run people through that actually plots them not only on their growth stage, but in addition to that, gives them eight key metrics, that we can then tell that founder, are you over indexing or under indexing on that particular piece?

[00:09:35] Logan: and then what comes out of that ultimately are those recommendations. now typically what comes after, what comes out of that after your operating system, for the principle, if you don't have an assistant, you are an assistant, you waste way too much of your time doing work.

[00:09:47] Logan: That's way below, your billable rate. and I would like to also point out that your billable rate, isn't your agency's billable rate, because the, Missed opportunity costs, are significant for those of us sitting in that seat. so that number is probably higher than you even realize.

[00:10:03] Logan: So very quickly getting some help around those is critical. and then really coming quickly after that is succession planning, not just for you, but for every key seat in your organization, making sure that not only do you, have you identified what gaps you have today? And how are you going to fill those, even if you're not going to be able to do it today, but then once you do that, how are you going to make sure that there are people who are coming behind those people and you're continuing to train and build and all of that, that comes through process things.

[00:10:30] Logan: And so, uh, so there are a lot that can come in with that. but ultimately, yeah, there's, a whole logical series of steps, that you can take. Cause that's beauty of business is it's not creative. that wheel has been created. And so we don't have to go back in and re engineer it.

[00:10:47] Logan: we really can follow in those footsteps of the agencies and the companies that have gone before us, to really maximize, our impact and our ROI on those efforts that we put in.

[00:10:57] Hector: What a fascinating revelation, though, that because so many entrepreneurs, they get into business because they want to be creative and they want to, be innovative and, they have these ideas when really it's just like one of my, one of my first, sales managers was just notorious for saying follow the script, follow the manual, follow the, you know, I can't tell you how many times you beat that into my head.

[00:11:16] Hector: And one of the other adages or maxims, if you will, and I have to be mindful of these because you know, if you do what everyone says, like it's just, have to be mindful of when it becomes, too perverse. But that is that what you do at one stage or what you do. I can't even remember how it's said, but we'll get you to one stage is not going to get

[00:11:34] Logan: It's not what's going to get you the next. Absolutely.

[00:11:37] Hector: something like that. And is that sort of what is kind of that kind of what you're talking about? Or is that sort of fall in the line with, what you've been saying?

[00:11:44] Logan: really is. because again, if you're a solo producer and you're out there and you're having to do everything, to move from that existence stage and, into the next stage, you start to getting into your grow and your maintenance stages. You can't do it all yourself. You have to learn how to delegate.

[00:11:57] Logan: You have to learn how to put processes in place. You have to learn how to let other people have freedom inside of your organization. and let me be clear, when I start talking about, the systems that have been established and how we don't need to be creative in them, Not talking about the work that you do, I'm talking about the back office.

[00:12:14] Logan: Like, how do you run your yearly planning sessions? How do you deliver your board reports to your board? How do you work with your CPA to make sure that your P and L's accurate? Those are the things that. I have already been established and you don't need to be creative on, use all of that creativity on your work and your client's work.

[00:12:34] Logan: because ultimately that's your value that you're putting out into the world. unless you're a CPA firm focusing on how to do your books. Isn't really going to impact your business and so make sure that you're investing your time and what you are really good at the things that will actually provide the most value to your clients, which is what will ultimately grow and scale your business

[00:12:54] Hector: Yeah, this is great stuff. Logan, when we get back from break, I'm curious about I love how you laid it out in these different stages. I'd love to dive into, A few more of these and maybe talk about some specific levers or some examples of moving from stage to stage, and we'll get into that right after this quick break.

[00:13:10] Hector: Hey y'all. Today's episode is brought to you by Amplify Media and we are a podcast and content production company. we like to think of ourselves as a media and thought leadership accelerator because chances are you probably have a product, a passion, a mission, a message, a service, something that you're trying to get out to the world.

[00:13:25] Hector: You might not have the time, the team, or the tech skills to be able to get it out there. Well, if that's the case, we could help go to amplify media. com. That's a M P L a F Y media. com. You can also check the show notes for the link. And with that, let's get back to Logan.

[00:13:39] Logan: Logan. So before break, we talked about these stages and I believe there's even a wave if listeners want to find out exactly where they are, what stages are at. We'll share how you can find that out at the end of the episode. But we'll Remind us again of the stages. And then I'm curious, in other systems things like this, it seems like there is a, let's call it a, keystone habit or a keystone, there's something that's like, the critical area that you need to nail down in order to move forward.

[00:14:08] Hector: Maybe it's the boss, right. In order to pass the level, if you will, if there is something like that at each of these stages, I'd, love for you to sort of share what that unlock is and maybe what that focus area should be. For, for listeners, if they're in that particular stage.

[00:14:21] Logan: Absolutely. so yeah, there are six stages, we move through the very first is existence. so those of you who have really started from scratch, that you have the idea, you want to put your shingle out there and you want to get started and you have to birth this company. so at that point, a lot of times it's you, maybe one other person, and you're out there really just trying to make sure that you can get your idea off the ground, that you can actually make money with what it is that you are doing, once you've had a couple of clients, once you actually get up, get things going, once you're actually doing some good work, then you move from existence.

[00:14:56] Logan: into validation. that validation step is making sure that you have things like product market fit, making sure that people see the value that you're creating and that they're willing to actually, spend because a lot of times in existence, you're dealing with your friends, your family, your network.

[00:15:10] Logan: and so once you get into validation, typically at that point is when you have people that don't know you. and so you're literally getting either Cold, referrals coming in through your, drip campaigns or through down your funnel, or referrals from one of, kind of two or three contacts out, who see your value, see what you're doing and want to be a part of that, what you've really validated your idea, you built a solid business.

[00:15:35] Logan: the third stage that we move into is maintain. So the maintenance, stage for some. Can be the end. so the beautiful thing about this is a lot of our lifestyle companies live in the maintain stage. you are at that point, typically, you're making good money. You're happy. You're not putting in tons of hours.

[00:15:54] Logan: you're able to cover your bills. Life isn't stressful. And you can do good work and be happy with it. so a lot of people get there and that's where they stay. and that's perfectly okay. and so we have a lot of founders that we work with who have been there, who are having to make the decision at that point, what do I do with my agency?

[00:16:11] Logan: is this something that I'm willing to just kind of sit on? there's kind of the axiom in business, right? That if you're not growing, you're dying. And so, so some of that does play in. So a lot of people hit that plateau and they've sit there, they sat there for three, five, seven, 15 years. They've had their agency, everything's fine.

[00:16:28] Logan: and that's the word we hear a lot at the end of that maintain, that maintenance stage, everything's fine. nothing's great. Nothing's growing. Nothing is, really impactful. So at that maintenance stage, typically you have one of two things people decide that. They want out at the end of that maintenance stage.

[00:16:45] Logan: And so that's the sort of liquidation event, generational transfer, exit, something like that. Or they decide that they're really wanting to double down and really grow their agency. And so from there, when they make that decision, they typically step over into stage four, which is the growth stage.

[00:17:02] Logan: as they're continuing to grow and as they're continuing to build, this is a lot like your existence because you're pouring into new product lines. You're pouring into to hiring new staff. You're really starting to put new systems and processes in place to allow you to. plant the seeds to grow.

[00:17:18] Logan: once all that's in place, we move to stage five, which is takeoff. and so takeoff is typically that hockey stick. and so as you're looking through your growth, things are going fine. You're in that maintenance stage. Everything's good. That grows where you start to turn and then take off is where you actually start to hit that, hit that accelerator and really start to impact.

[00:17:36] Logan: There are a number of ways you can do that, whether it's through acquisitions, or you can do that through through just the sheer getting in and building new product lines and rolling things like that out. but there are a number of ways to do that, to really get into takeoff. once you've kind of hit that peak, last stage that you hit a lot of times is maturity.

[00:17:53] Logan: and at that point you kind of get back into a higher version of maintain. nice thing about this is you can walk through the cycle as many times as you need. Cause once you hit that maturity and you sat there for a while, it's going to start looking a whole lot like maintain. And so then we hit that same inflection point where, okay, what are we going to do with our agency now?

[00:18:11] Logan: Are we going to exit or are we going to double down again and go to grow once again and hit kind of that next plateau the last three are really kind of a stage that you can hit multiple times. As you continue to kind of grow and scale through your agency's life.

[00:18:26] Hector: Yeah, I think that's fantastic illustration of the different stages. And as you were talking about sort of the grow phase, maybe it's just the grow phase seems like a haunted house and I'm sure the other phases come with their own challenges, but it seems like, maybe this is my own projection of my experience, but it's like, that stage is like a gamble.

[00:18:45] Hector: or it's like a, increase. And so we're like, we don't know we're trying to get to this place. We don't know if it's going to work. We're on our way, hopefully it works. And so I guess maybe the question in there is that, is there a way to limit the risk during the growth phase, but, Increase your chances of success to get to, that inflection point.

[00:19:04] Logan: Absolutely. and in fact, there are eight key factors that we look at, to make sure that we are mitigating those risks. the first one is reputation. Kind of what is your reputation in the market? what do people know you for? Things like that. So helping to build that reputation. a lot of times that's marketing, which again, for those of us in the marketing realm, that, that becomes an easy thing that we'd like to do anyway.

[00:19:24] Logan: the second key factor there is cashflow, making sure that we are planning and understand the needs and the impact that cashflow will have during that phase. from there we get into strategic planning. one of the mistakes that too many people do early on is they try to do too much strategic planning in the early kind of stage one and stage two without having their basics in place And so what happens is they do strategic planning and they run into something they have to pivot So they have to redo all their strategic planning.

[00:19:52] Logan: They have to pivot again, and they can't keep having to redo that so really in grow and take off is where that strategic planning really starts to become a major factor to impact your future stages, following that systems and controls that your processes and how you're running things and how you and your operating systems, making sure that all of that is really firing on all cylinders.

[00:20:12] Logan: This is also where we start separating from the leader from you guys, So again, a lot of us are at heart, so we are doing a lot of the work. We are the creative directors were out there. but our expertise as we hit grow and take off really needs to start pulling back. We need to have other people doing that work for us.

[00:20:29] Logan: and so our particular expertise really starts, pulling back. And so if we're seeing founders who are still that engaged in the day to day work, especially if you start getting into takeoff, that's one of those risk areas. from there we get into kind of the leader goal alignment, making sure that your personal goals and your company's goals are aligned.

[00:20:47] Logan: because during maintain, a lot of us get into working on boards and doing nonprofits and doing a bunch of other things like that. If you're really going to double down on grow and get into takeoff, your focus needs to be on, and your personal goals need to align with your agency goals. Along with that, we move into delegation and making sure that your leadership, not just you, but your entire leadership team is delegating effectively and properly.

[00:21:10] Logan: So, um, one of the main reasons why we see people get stuck is that they suffer by not being able to delegate effectively. so that's really one of those, big, big risk factors that we look at. and the last one is, is really people, quality and diversity of your staff. early on, we always like to, to talk about diversity and we'd like to get different perspectives in, but if it's you and two other people, you can't be that diverse just because you don't have the numbers.

[00:21:36] Logan: As you continue to grow, really making sure that we're bringing in different viewpoints and different, lifestyles and different other things into your organization to make sure that you are really covering things from every potential, aspect, becomes critically important to get out of that growth stage and really end to take off.

[00:21:53] Hector: You might have mentioned it at the beginning or before you got into it, but I'd like to clarify, is it, do you look at these as sort of an order of operations and, reputation first, then cash flow once reputations figured out? Okay, let's move on to cash flow or like in that sort of order. Or is it, you have a toolbox and you look at and you sort of assess, a company where they're at and what they need.

[00:22:12] Hector: and you might, realize that. The vision and the goals or, that sort of thing is, is more appropriate. How do you guys look at that?

[00:22:18] Logan: Absolutely. so because we are process oriented, we've actually built a tool that will measure each of these. and based on, a bunch of studies done in, the eighties on small business growth that we've been extending for the past eight years, we've actually identified, Individual curves for each one of those key factors.

[00:22:35] Logan: So basically we can come in and measure an organization on those key factors based on what stage they're in and say, where do you fit along that pipeline? and so there's sometimes where leader goal alignment is really important in your early stages. and even like leader expertise is really important early on.

[00:22:51] Logan: But as you get into maturity, that really starts to drop off. so early, if you aren't doing all the work and you're having to outsource your work, that becomes a problem, but later on, if you're still doing all the work and not outsourcing all of it, then that becomes a problem. and so it really does change depending on how your organization grows.

[00:23:07] Logan: and we've identified individual curves for each one of those and being able to map an organization against those to really make sure that we're custom tailoring those solutions for where they're at that point in time.

[00:23:18] Hector: Awesome stuff. I've got one more question for you, but, before I, I ask that I'd love for you if, listeners see the map, but they're unsure about where they lie on the map. I know that you guys have a resource or a way for them to figure that out. I'd love for you to share with listeners where they can get more connected with you and proxy and then I've got one more question for you.

[00:23:38] Logan: Absolutely. so proxy. com that's what two X's. So P R O X X Y. com is our website. and you can definitely email me directly. So Logan at proxy. com will get ahold of me. If you send me an email and say, you heard it on the podcast, I'll block off some time with you to actually run you through the tool.

[00:23:55] Logan: And I'll be happy to provide this back to you so that you can see exactly where you land.

[00:23:59] Hector: Wow. That's an incredible value. guys. I have to be fully transparent. Part of the reason I got him on this episode because I didn't want to like bother him at the breakfast cause like I wanted to let him eat and, but I want to, I had more questions to ask. And so that's why we got him here today.

[00:24:11] Hector: So I would, uh, encourage you to take him up on that. Logan, my last question for you is in your opinion, what is the secret to scaling a business?

[00:24:21] Logan: The secret to scaling the business. go back to our foundation, it's people processes and technology, and making sure that you are leveraging those to fill gaps as you move forward. because those gaps are what are going to kill you every time. so as you grow, you will continue to look up and find these little gaps, whether it's staffing or process or whatever else, and being diligent about filling those, really is the key to growing and scaling your creative agency.