Episode 152

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“Don’t put all your eggs in one basket.” That’s the standard advice of any investment advisor. But that investment can only happen once we’ve actually made the money. But maybe the concept of diversification is equally applicable to the first stage – making the income in the first place.

Having multiple sources of income builds wealth more quickly and mitigates risks inherent in having just a single source. The logic of that seems simple enough.  But the execution – that’s a whole different animal.

My podcast guest Dorie Clark has a very interesting perspective on this topic and I was excited to pick her brain for all of us. Her most recent book, Entrepreneurial You, is a blueprint for developing multiple income streams without losing your sanity.

Building these income streams involves tough decision-making but it doesn’t have to mean you take huge risks along the way. Dorie suggests a more measured approach and walks us through some of the methods we can explore as we expand our ability to accumulate wealth.

Dorie Clark is a marketing strategy consultant, professional speaker, and frequent contributor to the Harvard Business Review. She is also the author of Reinventing You and Stand Outwhich was named the #1 Leadership Book of 2015 by Inc. magazine and one of the Top 10 Business Books of the Year by Forbes. 

The New York Times described Clark as an “expert at self-reinvention and helping others make changes in their lives.” Clark consults and speaks for a diverse range of clients, including Google, the World Bank, Microsoft, Morgan Stanley, the Ford Foundation, the Bill & Melinda Gates Foundation, and Yale University.

 

 

What you’ll learn about in this episode:

  • Creating diverse income streams without jumping into big, new, risky ventures
  • Guiding people through the sales funnel by offering incrementally advanced services
  • The importance of living beneath your means as an agency and as a person
  • Minimizing risk over time through developing diverse income streams
  • How to be the person that makes the hard choices
  • The meaning of the word “perspicacity”
  • The biggest obstacle to being entrepreneurial
  • How making introductions with no expectation of anything in return can be a superpower
  • The difference between a mindshare activity and a market share activity

The Golden Nuggets:

“Depending on your client base, you could offer a more bespoke, hands-on offering as an upgrade, or do the opposite – offer something pared-down to reach a different audience.” — @dorieclark Click To Tweet “Two questions to ask: one, what adjacent services can we offer existing clients, and two, who else might be interested in your services that you currently are not working with?” — @dorieclark Click To Tweet “In developing new income streams, more is not better. You’re not going to develop ten new income streams this year. Choose one to focus on. When that is up and running, then think about the next one.” — @dorieclark Click To Tweet “Ultimately if you want to keep a client long term, you have to approach them with a little less urgency. Come from a position of strength – be willing to walk away if it’s not the right fit.” — @dorieclark Click To Tweet “I am a big advocate of both individuals and companies really making a concerted effort to live beneath their means. Whenever there is an edge of desperation, the client can sense that a mile away.” — @dorieclark Click To Tweet “What we have to understand is that the essence of strategy is deciding we're doing this and we're doing only this.” — @dorieclark Click To Tweet

 

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Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build a Better Agency podcast, presented by HubSpot. We’ll show you how to build an agency that can scale and grow with better clients, invested employees, and best of all, more money to the bottom line. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McClellan.

Drew McClellan:

Hey, everybody. Drew McClellan here. And guess what, this is another episode of Build a Better Agency. Super glad that you join me today, this is a going to be a great conversation. We are going to talk about entrepreneurialism, some of the traits that we need to lean on and lean into in a bigger, better way to be smarter about running our business in terms of the entrepreneurial nature of our work. We are going to talk about networking. We’re going to talk about all kinds of thing.

And I’m guessing that, for some of you, this is a guest that may not be on your radar screen, but boy, should she be. So I’m excited to introduce you to her. So Dorie Clark is an adjunct professor at Duke University’s Fuqua School of Business. And she is also the author of three books, Stand Out, which the subtitle that is, How to Develop Your Breakthrough Idea and Build a Following Around It. And then in 2015, she wrote the book called Reinventing You, which was named the number one leadership book of 2015 by Inc. magazine.

And she just came out with a new book called Entrepreneurial You, which is a really interesting read about sources of revenue coming into your business and some other things. She’s had a fascinating career, which I’m definitely going to ask her more about. But I mean, she literally has been a presidential campaign spokesperson, a journalist. She often writes for Harvard Business Review. I told you, she’s a professor. And one of the things I find fascinating about her is she’s also a producer of a multi-Grammy Award winning jazz album. So that’s an interesting combination.

And we’re going to find out about all of that. And we are going to pick her brain to find out what we need to do to make sure that we are being as entrepreneurial as possible, as we think about growing and building our business. So let’s welcome, Dorie Clark. All right, so without any further ado, welcome to the podcast. Thank you for joining us.

Dorie Clark:

Hey, Drew, thanks for having me.

Drew McClellan:

Give the listeners a little bit of an intro. I gave you a little bit of information about your background, but give them a little bit of a sense of who you are and how you came to study and understand the entrepreneur the way that you do.

Dorie Clark:

Yeah, absolutely. So I came to entrepreneurship through a somewhat convoluted path. I …

Drew McClellan:

As many of us did.

Dorie Clark:

Yes, exactly. I did have my stint as a very junior person in the world of agencies when I was in college. I did an internship at a big advertising agency in New York City. Ironically, I actually now live in New York City about a block from where I did that summer internship. So it’s coming full circle. And then right after I graduated from college, I did another internship at a PR firm in Washington. So I got to see those sides of things. But when I started my career, I was a journalist. Then I worked in politics, doing political communications on governor’s race, presidential race.

I ran a nonprofit for a while. And eventually, in 2006, I started my own business and have been an entrepreneur ever since then. But it’s piecing together all of the areas, all of the avenues around writing and spin and communications and turning them into my own entrepreneurial venture.

Drew McClellan:

Yeah. So tell everybody a little bit about your business and how that intersects and ties all of that together.

Dorie Clark:

Yeah. So broadly speaking, my new book, Entrepreneurial You is actually about how to create multiple income streams in your business. And so, these actually have nine, but what they all center around, all the pieces, the writing and the speaking and teaching and executive coaching, they center around a common theme, which is about how professionals or at the enterprise level, organizations, companies, agencies, can make sure that their message is heard effectively in an increasingly crowded and noisy environment. What can you do to break through and make sure that your voice and your ideas are heard? That is what I help people figure out.

Drew McClellan:

Yeah. And boy, do we need that now. Agencies, they wrestle with that, they wrestle with being different, they wrestle with breaking out of the noise, they wrestle with getting on the radar screen of the clients or the prospects that they know they would be a great fit for. So we have plenty to talk about.

Dorie Clark:

Yes, I’m excited to be here.

Drew McClellan:

So, a lot of agency owners, I believe, are accidental business owners. So what happened in many agencies beginnings, humble beginnings, is somebody either got mad and quit, or they got downsized because when an agency loses a client, that’s what happens, whatever it is. And all of a sudden, this person hangs up a shingle and decides to while they’re looking for another job or maybe they decide they want to just be a consultant. The next thing they know, they look around them and they’ve got 10 employees or 20 employees.

And now they’re an entrepreneur, and now they’re a boss. And so, all of a sudden, they’re like, okay, this is not what I went to school for. I was a great art director. I was a great writer or a great account person. What’s a P&L? And what is this whole idea of being an entrepreneur? So I think some of them, some of the younger owners that I know actually chose right off the bat, right off college, that they were going to be an entrepreneur. But if the owner is more my age, middle aged, odds are they worked for someone for a period of time and then suddenly found themselves holding this baby and going, oh, I have to raise this baby now. So talk to me a little bit about how does one get more entrepreneurial? How does one learn to be a better entrepreneur?

Dorie Clark:

Yeah, it’s an important question, Drew, and you’re exactly right. I think a lot of times, people do stumbled into it through the craft of what they’re doing. Ultimately, when it comes to being an entrepreneur, thinking more entrepreneurially, one of the main messages that I share in my new book, Entrepreneurial You, is the importance of diversifying your revenue streams. And I think that this is something that as a broad principle, when it comes to entrepreneurship is useful. Because essentially, it’s talking about two things that every entrepreneur needs to do.

Number one is mitigating your risk, and number two is figuring out a way to maximize your upside. And so, I’ll give an example. Of course, if you are offering really just one kind of service, as an entrepreneur, you might feel like you’re diversified. You can say, oh, well, we’re an agency, we do advertising campaigns. And let’s say you have 20 different clients or however many different clients, great, okay, you lose one of them, you still have 19, you’re a lot better off than many other people.

Certainly better off than someone with a day job who, if they lose that, they have zero streams of income. What I want to encourage folks to think about, especially entrepreneurs, is understanding that if you are doing the same type of thing for all your clients, you’re actually not that diversified. There are market changes. There are hidden disruptors. All of a sudden, hey, Amazon decides they want to get into healthcare. Well, guess what? All of the insurance companies are quaking now. You never know what’s around the corner. And so, just thinking a little …

Drew McClellan:

And it comes so fast and furious today.

Dorie Clark:

Yes, absolutely.

Drew McClellan:

It’s not like you’re like, oh, I bet this is going to happen in five years. It’s like, all of a sudden like, oh, holy buckets, that happened today.

Dorie Clark:

Yeah, that’s right. And so, the questions that we need to be asking ourselves, number one, how can we take our existing customers and offer adjacent services that they might also need? And/or number two, who else might be interested? They’re not our client currently, but they could be interested in the things that we offer. And how can we structure it so that maybe they can do it? For instance, maybe you’re doing very high end bespoke offerings. There’s a lot of people who might like that, but can’t afford it.

Is there a way that you could strategically structure a pared down offering that is something that could open you up to a new segment, or vice versa? Maybe you’ve been doing something low end automated. Could you do a more bespoke hands-on premium offering? If we can ask those questions, think about how we can expand strategically. It makes our businesses stronger, by giving us more options and more ways to bring in money from interested customers.

Drew McClellan:

Yeah, yeah, that’s so true. And I think one of the challenges for business owners is that they are so busy putting out fires and taking care of clients and dealing with employee issues, that it’s hard to carve out the time to strategize around that or to think about that. So if you have some ideas of if somebody is like, yeah, that sounds great. But in the 25th hour of the day, I’ll get to that. How does somebody bake that into their routine or their day or their month or their quarter so that they are asking those bigger picture questions on a more consistent regular basis?

Dorie Clark:

Yeah, so I have a couple of thoughts about that, Drew. The first one is it is really important to state upfront. When it comes to creating multiple income streams, this is an area where more is not better, at least in the short term. You need to pick one new thing to focus on. You can’t say, oh, I’m going to have 10 new revenue streams this year. What I like to encourage people to do is, yes, add new revenue streams, layer them on, but pick one a year to add and to focus on that. That is a doable number. It gives you something you can wrap your arms around.

I’m up to nine now, but I’ve been doing that over the past six to seven years. And so, it’s been a very strategic and incremental process. So if you can pick one new area to focus on per year, it’s a lot easier to do it. Now, in terms of the second piece, how do you actually decide what to do? How do you wrap your arms around the strategy of it? What I would suggest is you want to look for an activity that is going to make other things easier for you down the road. That helps you answer the question of, what is a good thing to do now? Or what is the first thing to focus on now?

So, for instance, you might say, well, all right, there’s a million online courses I could offer, let’s say, if you decide you want to do that. But if you say, oh, okay, I can focus on this particular audience here because I can already tell that if they take this online course, let’s say, they’re beginners in whatever subjects, they take this online course and it goes well for them. I can already envision that they are going to need follow on services. And so, if I have this pool of people that I have assembled who are going to need things that I can offer down the road, then that presents to me both a strategy for things I can add on in year two, year three, year four. But I have the readymade audience here. I’ve already assembled them at the top of the funnel.

Drew McClellan:

Right, yeah. That’s a good point. So if somebody thinks about a new product or offering or any aspect of their business, really, it would be arrogant to assume and erroneous, probably, that every idea you have is a winner and that you’re never going to stumble and fall. And I know, in the book, you talk about the importance of using the things that didn’t work, using the failures and really not just learning from them. Because I think we all hear that, like learn from your failures. But what does it actually mean?

And how do I infuse that learning into my business so that it’s sticky. So talk to us a little bit about when something doesn’t go according to plan. And the other thing, I think, that you address is the whole issue of being willing to talk about and acknowledge that something you tried didn’t work. And I think especially in an agency culture where everyone is looking at the founder or the owner or the president to set the direction, I think there’s a misperception that that means that somehow we have to present the perfect version of ourselves, as opposed to the real version of ourselves.

Dorie Clark:

Yeah, for sure. I think the key here, Drew, is taking the mentality that almost any new thing you’re trying should be viewed as a pilot. If you say from the beginning, oh, we’re going to do this thing and we’re going to go all in on this thing, and it’s going to be huge. If that doesn’t work out, of course, you’re going to lose face, of course, you’re going to lose a lot of money, because you’ve just thrown everything into it without really having a basis for making that decision.

But if instead, we have a constant, I think in many ways, this is emblematic of entrepreneurial thinking, if we have a constant view of life as, you know what, let’s try it. Let’s have an experiment. Let’s try it for a month. Let’s see how it works. If it works well, let’s try it for three months. Let’s see how it works. Okay. Now if three months in, we’ve got some traction, maybe now we can make it a thing. But you don’t make it a thing until you have some proof or some evidence that it’s going somewhere.

It is nothing to be embarrassed about if you try a pilot for a little while and it doesn’t work. All it is, is a hypothesis you tested. I mean, it’s kind of the equivalent of, if people are dating, if you say to your friends, “Hey, I’m going out with a girl on Friday night.” And then you see them the next week and they say, “Oh, how did it go?” And you could say, “Eh, not so well. She wasn’t for me.” But if you, meanwhile, have told your friends after only ever seeing somebody’s profile online, “I’m going to go out with a girl that I’m going to marry on Friday night.” And then the next week they say, “How’d it go?” And you say, “Oh, it didn’t work.” Well, of course, they’re going to say, “Well, geez, you got so worked up.”

Drew McClellan:

Right. Yeah, you just ditched your bride.

Dorie Clark:

Yeah, exactly. We’ve got to be measured. We’ve got to take the mindset of placing the little bet, rather than the big bet.

Drew McClellan:

Well, and I think the other thing about that too, is when we live that out loud in front of our employees, it also encourages them to be more experimental and to try new things and to keep their eyes and ears and mind open to, oh, we could do this a different way. I think it’s even in our business, which is rooted in creativity, it’s easy to get in a rut. And so, if you, the leader, demonstrate this willingness to experiment and that it’s okay that every experiment doesn’t go well, I would assume that that would inspire your people to start behaving in a similar fashion.

Dorie Clark:

Yeah, absolutely. It’s kind of the ultimate form of role modeling. You’re exactly right.

Drew McClellan:

Yeah, yeah. So I think the other aspect of that, as I’m listening you talk, is this idea that … We talked about Amazon deciding all of a sudden to hop into healthcare and what that did to the whole industry, talk a little bit about how, not just the theory behind it, but how, really, what we should do to be keeping our eye on the ball in terms of our own industry. And by the way, the industries of our clients, because I think we have a dual role.

We have to be mindful of our own businesses and the trends or what’s coming down the road in our space, but our clients look to us as a trusted advisor. And so, we also have to be able to watch for the cultural signs or the shifts that are happening in their business as well. So what are some best practices around that? And do you think that that’s important for us to do? I’m assuming you do.

Dorie Clark:

Yeah, for sure, for sure. I mean, part of the reason that people come to agencies, creative agencies, is the sense that we’re the eyes and ears on the ground. They’re busy turning out their product or doing their typical business things. They don’t necessarily have time to be out in the public square, seeing what everybody else is doing or talking about. And they are relying on their agency to give them a sense of like, oh, wait, have you heard about this thing? Maybe you should think about this thing. So I do think that that is important.

And similarly, I think that we have to be judicious about finding a way to operate in the sweet spot between the two poles of one pole is like, well, let’s just do things with the way we’ve always done them. Let’s just keep a good thing going. And then the other pole, of course, some people fall prey to is the shiny new thing pole. Where it’s, whoa! You got to be on periscope and you’ve got to be on vine and you’ve got to be on Snapchat, and this and that. And, of course, half of them disappear within three months and, eh.

And after a while, you get to be viewed as like The Boy Who Cried Wolf. If it’s like, oh, do this, it’s going to be the big thing. And then three months later, they’re like,