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[Intro] A.J. Lawrence: Hey everyone, welcome back to another episode. I'm really glad everyone's here today because one, we're gonna be talking about startups and kind of dealing with complexity in growing a startup and also as you move past the startup phase. We're also talking to someone who's had success in some of the things I've aspired to in the past. I think I've mentioned in the past that I had an agency I ended up selling, but at one point we were being touted and fated and all that fun stuff by some of the large holding companies. But I let my ego get in the way of exiting that way. I paid a price later down the road. But today's guest, Feras Alhlou, I hope I'm not massacring it. Feras, thank you so much for coming on the show today. Feras Alhlou: A.J., I'm happy to be here. Thanks for all the great content that you produce and looking for an exciting and very engaging conversation. A.J. Lawrence: I really do want to get into Startups with Feras and what you're doing with that, but also just a little bit back on the company you were able to sell, Enor. Because one, as an analytics guy, I love that space so I'd love to kind of see where it was and how you're seeing it changing what you did with it and how you were able to exit. I don't want this to be fully too much inside baseball around agency world, but I geek out on this space. Maybe later it would also be great as AI is coming in and sort of becoming more prevalent. I've seen some really interesting stuff out of MIT about sort of using AI to evaluate KPI's and the growth of your utilization of KPI's. But you and I know there's 20,000 other discussions around it. But it could be kind of cool just to take it because you are such an analytically focused person. But all right, before I go all over the place and gush a bit, where are you on your own entrepreneurial journey these days? Feras Alhlou: So as you mentioned, we sold E-Nor, the digital analytics consulting company, back in 2019 to Dentsu, the global media giant. I stayed with the acquirer for two and a half years, made sure the integration of the two companies went really well, and that culture that we've built for 10+ years want to make sure that we maintain most of it. And after that, in September of 2021, I left corporate. I bowed out and took some time off. Something I wanted to do for many, many years is I wanted to dedicate some time to nonprofits. So I spent most of 2022 and most of 2023 actually helping pro bono. I was fortunate I was able to do that, supporting a number of nonprofits. And then I started to build this company that now I'm spending my startup hours in called Startup with Feras. It's really taking all the experience, all the mistakes I made. I want to make sure that new generation of founders are not making. So producing educational material to those who are thinking to start a business and those who built a business, and now they want to grow it to seven and eight figures. That's what we're focusing on and helping those founders. A.J. Lawrence: That is such a great thing. And I do, what I find is you get to a certain point in the journey as an entrepreneur that when you hear another entrepreneur, it's how they talk about the mistakes they made, not the cool stuff they did, that you realize how good they are. And, yeah, it's part of the fun of trying to explain this. I have a 19 year old son, and it's only now that he's away at university that sometimes he goes, oh, all those times you told me about those stupid things that you had done and you didn't want me to do, maybe I should have paid a little more attention. And it's like, yeah, learning from other people's mistakes helps a lot. Feras Alhlou: And you're so tempted to say, I told you so, right? Like you're holding back. A.J. Lawrence: Now I'm tempted to tell them more things. There's more. There's more. Don't do this, don't do that. Parenting is such a fun experience in this, but all right. So as you talk with the people going through Startup with Feras, what is it that you tend to see as they approach seven figures that happens with the complexity of their business? What are they starting to see different than the early stages of just trying to show that there is an actual need for their product? Feras Alhlou: Yes. I think entrepreneurship is a fascinating world. A lot of us, we get into it, forced or otherwise, and we figure things out. Resilience is there if you're getting close to seven figures, or maybe you've exceeded seven figures. One thing I remind entrepreneurs is what worked for you in your early stages when you were just starting out did not work for you when you got to maybe half a million dollars in revenue. And now, as you're starting to grow and scale, whatever worked in the past needs to be upgraded. And I think a lot of the time, and this is maybe I always say, I don't share any earth shattering advice. It's all these business principles that have withstood the test of time is, if you're still doing your accounting, and I always pick on accounting because I have scars from doing my own accounting. If you are still doing your own accounting, your own invoicing, your own collection, yeah, I can do it at night, I can do it on the weekend. My friend, you are wasting your time because you should be thinking about the business, growing the business, new opportunities, new partnerships, new markets. So I think a lot of the founders kind of hold onto things knowingly or unknowingly, and I think you want to find ways to outsource or to delegate things that you have done for a long time. This way you have the mental space, you have the psychological space, the emotional space, so that you can either take some time off or just think about the next phase of growth. So that is sort of a common thread that I come across all the time. A.J. Lawrence: I've seen this both from my own experiences, but as an angel investor, I sadly see it way too. It's the allocation of resources to the phase you're on. There's that either, Oh, we're going to, especially not right now, but even just a couple of years ago, Oh, we're going to have so much money. We have so much money. It's all about speed. We have to just spend more. But how you allocate it, not to go too crazy, but then also to spend appropriately. You're in, especially in this environment, you're in such a cash is so important. Yet if you're not allocating appropriately, you're going to decrease your likelihood advancing. So how do you kind of, especially in startups phase where they are starting to see a little cash but not as much as they probably need. You're talking about the accounting. That's a great example because the numbers become cleaner, it sets a better understanding, a common language to start working on before we even talk about other metrics and stuff. How else do you tell them to look at that resource allocation? Feras Alhlou: Good point in terms of resource allocation. So if you used to do a whole lot of networking to get leads, and it's something I did and something I think people underutilize, there's a certain amount of time you have in the day to do that. So now maybe you've hired your first senior salesperson. So now potentially, you don't have to do the network that you used to do in the past. The salesperson would do that on your behalf or they would generate their own leads. So time is very precious. You have to support sale, you have to deliver, you have to manage the team, but you also have to allocate time to spend on the business. So I was at the post office just a couple of days ago, it was tax deadline here in the US, March 15, and I was there to drop off something for a friend of mine. It was 4:45 and this business owner rushing in, trying to sign the forms and get them mailed out like the last minute. I laughed. I was, obviously, I was very polite. It reminded me of my own mistake 20 years ago when I was doing the same exact thing. I was, A.J., I used to try to save a buck about resources. I didn't do direct deposit because they would charge us like $50 extra. So I would go twice a month to, what is it, ADP or one of those services. I pick up the checks and then sign them and give them to employees. Like, that's silly, right? I'm trying to save a buck. I bootstrapped for a long time. I understand money is tight, we have obligations. You got to pay the bills, but you want to outsource the headache, outsource the things that you're not good at. You can do it gradually, but there are a lot of trusted sources out there that can help you in back office. You got to focus on growth, you got to focus on sales, on being out there, on making sure the clients are happy. I think these are the primary areas I think that a founder who wants to grow the business need to focus on. All this back office stuff, granted you did it, you had to do it initially because you were the CEO, you were the janitor, you were everyone in between. But at this phase, if you're in six figures, seven figures, you gotta delegate. You gotta outsource, you gotta bring in experts who can help you focus on what's really important for the business. A.J. Lawrence: Yeah, and these days, especially in the past 10 years but definitely since COVID, I always call it the American business mullet, global talent and automations and some of these tools have just- I mean I used to do the same thing. I remember at one point we figured out sending my office manager to go was costing us x amount of money. So I said, okay, I'm going to change banks so I could hit the bank on the way home. And I would do the 40 minutes once a week to deposit all the checks because back in knots, you would get checks. Then they were like, oh, we have this thing for $50 a month. You could scan the checks at the, I'm not going to waste $50. And then someone did say that like, you spend almost 3 hours a month. Feras Alhlou: Yes sir. A.J. Lawrence: Are you saying? It's like, no, but it's free. Feras Alhlou: Yeah. A.J. Lawrence: So looking at, especially this where they use tools and there are some nice automation doing this global talent, it can really bring it more cost effectively. So you can focus on the core businesses you've been talking about, play metric, because this is something I always find fascinating. How do you kind of push the people in your program to start developing a metric structure around their goals and objectives for their startup or for their business? Feras Alhlou: Yeah, good one. I think adopting a framework, pick one, don't spend three weeks, figure out which one. We used to use the OKR, the objectives and key results. Very common one. I read the book on it, shared it with our senior team, and just like everything else, it's a change, right? So there's change management. You as a leader have to follow it. You have to model that behavior and then nudge and encourage and maybe threaten your people to see the value of what you're introducing to the organization and then make it part of your day-to-day. So we used, and I forgot what software we use to help us all document our individual goals. And we started sort of, there's a top down approach here. Here's what we want to do this quarter and that everybody's goals sort of rolled up to that. And people have also some developmental goals. So that was really important for us. And it took us about a quarter to get that process right. But once we got it in and people bought in on this process, it was really helpful because then we know what's important. We know we're all aligned on taking care, for example, on these three accounts that they got to get the white glove service and everybody knew that. And we then bent over backward for these accounts because they were paying us a premium and they were nice people and they threw more business at us. And then this other certification that we wanted to get so that we can sell more services, that was always slipping through the cracks. So we tracked that in the OKR system that we have. And if you don't invest in a software, you can do this in Excel, in a spreadsheet, in Google sheets. But the idea is find a framework and a bunch of them out there and use it and stick to it. And I think as a leader, the founder, he or she, they have to really model that. If you don't put goals, if you don't track your goals, if you don't share your progress and green, orange, red, then people won't. Then it's just another corporate thing, another business thing that it's a slogan, not a real process. A.J. Lawrence: I used to call it green, yellow, red instead of orange, just so I could call it the stoplights. And we would just always, hey, here's the green, here's the red. Always start with the green, here's the worry. And then the red. I'm looking to right now, I've been out searching to acquire a marketing related company and I'm kind of in talks one, but I have a feeling who knows where the deal is going to go. I keep expecting each step for it to blow away. Its sort of like that 50% chance to find one, 50% chance they'll accept your offer, 50% chance it will blow up during due diligence, and 50% chance it will blow up in financing. Forget the chance of what happens once you acquire it. But one thing I would love is, okay, so you set the OKR structure, and I do love the OKR structure. It's funny, there's almost like depending on the type of business model or the type of where you are and the type of funding, it seems startups and externally funded companies tend to move more to the OKR, where I'm seeing more of a movement towards EOS scaling up for more traditional, or not traditional, but bootstrapped-styled businesses. So it is an interesting split. But what I've been trying to think about, and I would love your take is, okay, you have this structure, you're getting this information, everyone's aligning around numbers, how are you encouraging or teaching people to learn from these numbers? Basically what actions to take out of these? Feras Alhlou: Yeah, we had actually a score and there are two things. We had the people first culture that people even six, seven years after the business was sold, ex-employees are still friends and they still talk about it on LinkedIn how an amazing culture we had. So we were measuring employee happiness on a weekly basis at a very, very high level. Like, how was your week? And just like one reason why or one thing that went well. And then obviously, we were measuring client satisfaction. And I think having that open culture, that culture of openness and transparency and trust is really important, because people in the front lines, your customer support people, your account managers, they're at the pulse of what the customer is, right? So if they're sugar coating what they're hearing, if they're not passing on that information from the client, then you don't know what's going on until you lose the deal or you lose a client. So that was important. So creating that culture of transparency. And again, it starts with you as a leader, as the CEO. I used to share a lot. We used to share every month. Here's our revenue, here's our profit, here's the customers we won, here's the customers we lost, here's why we lost them. And always said, got to be hard on issues, soft on people. And you gotta, I think, exemplify that. You gotta just live it. So if we lose an account, we never fired anyone for losing an account. We understood what happened. Typically, when there's an issue, it's a lot of contributing factors. It's not just on the account manager. And even if it was the account manager who messed up royally, maybe they didn't get support from the engineers or maybe did not get support from sales. So I think that creating that culture of transparency, of openness, where people can bubble up the things they're going through, their emotions, their feelings, why they're happy, why they're unhappy, and then also get the same system of input from customers and be able to act quickly on both, on making sure you address the issues with the employees, and also obviously fix any process issues related with our delivery capabilities and our delivery capacity to make sure the clients are happy. So that it's more about the culture and then system. But we measured it. We measured it. We got this survey every week, part of that software that we picked for the OKRs. Sorry, one last thing. I used to have my one-on-one's with my senior team. Thursdays and Fridays, I had 30 minutes. Even if you had a team of ten or you have a team of 100, you got to have this culture of bubbling up input. And I think those one-on-one's on a weekly or bi-weekly basis are essential. This way you understand and you hear issues before they become major issues. A.J. Lawrence: It's funny, having learned a lot of that after the fact. Say this with hindsight, that I think it's not just the clarity of that type of structure, it's the consistency, the cadence. Because one off, sometimes you get lucky and you hear great, amazing things that really help you understand or things get framed in a way that you can. But the reality is most of the time it's, hey, how are you doing? Oh, what's the number? It takes that extra type of understanding between the parties to start moving through sort of that like, Oh, yes, we're all saying this the same way. We're looking for different things or we're looking at the changes within this in a similar framework. And that consistency that you identified to me was always the thing I was very weak on and then learned the hard way. And now I'm very much like, there has to be. I laugh sometimes. It's like everything I propose these days is what I did wrong when I had my company back in the day. In looking at sort of these, what do you see when, and I'm just going to pick on this type of thing as companies, companies that you feel really, and OKRs or whatever, but the framework of OKR and follow into that framework and put that effort to really make an organization versus those that maybe are following it. But yeah, I've seen sort of that lip service or inconsistent and sometimes, oh, well, we don't really worry about that, and it's like, that's gonna come to bite you. But all right, everyone's business is their own. How do you see differences in companies that really approach it and trying to bring it in versus ones that kind of go by the motions? Feras Alhlou: Yeah, you wing it. A.J. Lawrence: What do you see happen there? Feras Alhlou: The way I see it, I look at a lot of things we do in business, especially if we want to grow and scale and we're serious about growth and scaling. You got to set up systems and processes. So whether it's OKRs or whether it is a new CRM system that you are implementing, it's a business process. So their inputs, their conditions, their constraints and their outputs. So if a founder is in this phase where they figure out the business model, they're getting the revenue in, but they're struggling with growth, examine the things that are not efficient today. Examine things that can be processized. I think that's a verb. That's a word. A lot of times I see, oh, we're buying this accounting software or buying this CRM, or we're buying this marketing automation software HubSpot or what have you, and going to solve all our problems. I always used to say it's the 10-20-70 rule. So 10% is technology, 20% is people, and then process. So 70% is process. Any of these systems that you are implementing to help you grow and scale, you got to have qualified people behind it. You have to allocate time for people to think about their OKRs and documenting them. So you have to allow time on their schedule at the end of the quarter, at the end of the quarter. Same thing if you're implementing an accounting system or even a CRM system. Because if you don't have your salespeople, they don't see the value of taking the time to enter all the information about the lead and the process, the growth, or how a deal is moving through the system so then you can report on how many open opportunities you have, how many you're closing. You don't have that data. You don't have that because your people haven't really bought in on implementing those systems. So another advice for founders who are ready to scale and grow is you have to implement technology and system. But it's not just about buying the best technology, it's about making sure there's a process behind the technology and there are people who are actually implementing those processes. And that takes time. There's no quick fix to these things. A.J. Lawrence: It's funny. You see I am in the middle of my potential acquisition here. I've been rereading Good to Great. It's funny because it's another time I'm just sitting there like, let me just hit myself over the head every other chapter, but very much that idea of like, first having the right people in the right seats, that focus, it's not this. But the other thing I learned the hard way when you say technology is important, it's sort of the reason why you have technology then the process. I spent a gazillion dollars on Salesforce, I always say this was my big example where I just realized, okay, we're doing this backwards, chasing big name salespeople only to have them fail. Put in big program, big software to support them. Had that fail. And it was when we finally got a good understanding of why sales was going to be important to the company. And then from the bottom up, we built a process. We ended up, I can't even remember it was, I can't even remember the CRM we used. And it was perfectly fine because we had started from the bottom. We finally had, instead of it being like, oh, we just need more sales, it was like, well, look, this allows us to bring in better people. We can go higher up in the value of what we could serve our clients, more business. It's not just more money, it's the idea that we can climb that value add strategic thing from vendor to partner within an agency world. And it was like, oh yeah, we want that. Because my team started seeing what the conversations were like when we were brought in higher. It was like they actually care about our opinion versus, oh, just go do this. It was that like slow growth because we started as an SEO shop and slowly moved our way up into analytics through that and media buying. Well, media buying was steroids. It's a whole different ball game when we talk about that fun. But it is interesting kind of in guiding people that way. And a little aside, given where you are in sort of the startup space and talking to people and giving your experience with analytics and stuff, as we're at the early stages of sort of our AI overlords say kind of growing up, it's like our AI overlords are still in nursery school. What's interesting to you? What are you kind of excited about right now? Feras Alhlou: Just like any new technology, there's a lot of amazing things you can do with it. There's a lot of fusion around it. It's going to replace people's jobs. It's, I don't know, maybe it'll amplify the polarization that we have as a society. You know, misinformation. But I think ADMs, when ADMs were introduced, everybody thought that we won't have people working in banks anymore. But hey, banks, I think did end up doing better. So I'm an early adopter, given that I live in Silicon Valley and I'm with a tech background. I think you, as a business owner, find ways to use AI in your processes for automation, making things more efficient. And then if you can also include an element of that in your access services, that might be very, very interesting. So just, I mean, we have the Nvidia, I think it's the GDX or GTX conference, their developers conference. A.J. Lawrence: Going on right now. Feras Alhlou: And you have the CMO, CTO of WPP attending a developer's conference. Like, wait a second. One of the largest global media marketing agencies attending a developer's conference. Well, guess what? If you invested in Nvidia, Nvidia made the right bet about microprocessors and AI, and this space is moving very fast and you want to be there. And I think creative agencies potentially can leverage AI in a lot of different ways. I'm speaking with a video editor and I'm saying, are you concerned about the outlook of AI and your job? He said, actually there's some boring, mundane stuff that used to take me like 7 hours to do. Now, it'll just be done in a few minutes in the background while I'm doing something more creative. So I would say look for ways to use AI to automate something you're doing in-house. And we do that in a couple of my ventures. And also see if you can tap into something where it would help you in the delivery. I mean, in terms of analytics. A.J., as you know, the code involved potentially, you can get code generated. But obviously, it's not 100% precise. It's going to help you. It's going to expedite, potentially produce some documentation that you can then package and give to a customer. So I would say use it with caution as of now, both internally, and find ways to potentially package it in a service that you have. But we're in the early stages and I think you want to dabble with it, play with it, be aware of its shortcomings. But I don't think we can avoid it. That's my take. A.J. Lawrence: You've had some success, you've sold your company, you've been involved with different organizations at a senior level. You have a very interesting Startups with Feras. You're being able to sort of help others and participate in their own potential growth and success moving forward. How are you looking at what success will continue to be or becomes for you as an entrepreneur? You personally, not the companies, not this. But how do you kind of go about defining what that is going to be? Feras Alhlou: Very deep question. I mean, success, especially as founders, as entrepreneurs, you and the company, sometimes you're living, you're breathing, you and the company are sort of one. But at one point, life is beyond business. Business is really important. Some of the most amazing relationships I've had in business, like my friends, some of my best friends are ex-colleagues or current colleagues. So we spend most of our waking hours at business. So that's why it's really important to pick, if you can, the people that you work with. I think that's the most amazing thing about entrepreneurship is as a founder, you get to hire and make sure you hire people. They make you stronger, you make them stronger. But in terms of success, there's obviously the financial aspect of it. I live in Silicon Valley. I've been here for 25 years, selling, growing, building, growing, selling a business is the Silicon Valley thing. So, again, fortunate to have been able to do that. But there's also other aspects of life. I'm fortunate to be happily married for over 35 years now with three children. They're not children anymore, they're adults. Also, I had the nonprofit volunteering bug in me early on, so that's also important. I gotta put a plug for blood donation. I'm a lifelong blood donor. A.J. Lawrence: Yep, I saw the pictures. Feras Alhlou: Yeah. My 107th donation, I think. So it's once every couple of months, it'll take an hour of your time for those who are eligible, but do something outside of work. Initially, you might be really, really busy, focused on work. I'm a big believer of work hard, play hard, but you can find an hour on your way home, or maybe when you're on your walk and speak with a younger founder or a founder who's struggling and share with them what you've learned. You can go, and maybe if you have some young ones, go to Habitat for Humanity. You can go to the Red Cross and do something there. So I think in terms of success in life, there's the business aspect, the financial stability and the financial freedom in a way that's important, which will allow you to, I think, share more, help others, obviously, provide for your family, and even share financially. I think, to me, success is also when you're making it big and you're profitable, share with your team, those who have helped you grow the business. When we sold the last business, A.J., my now late co-founder, he and I decided three years ahead of the sale that we would take a good chunk of our proceedings and share with the team. And we decided on 30%. That number is in seven figures and higher. But those are the people who helped us build a business. And there was no stock options and there were no big contracts. It was a summary. I spoke with my lawyer and said, okay, let's just put it one pager describing how we would do this based on seniority and based on their salary, and a nice simple formula. When we were able to distribute that money to our people, that was very, very rewarding because you're helping. I'm a capitalist at heart. Don't get that wrong. I want to make the next dollar like anyone else. At the same time, whether it's skills, whether it's money, whether it's resources, sharing with others, I think is really, really important, especially in this day and age where there's a lot of focus on me, I, what's important to me. And then we have a huge income parity in our society. So helping, sharing others, I think is important. Be a role model. As a founder, I think that's important to me. That's all part of success now. A.J. Lawrence: I like that because there's so much research that shows that playing a collaborative game over a long period of time has a higher personal outcome than maximizing individual transactions. Too often, I think capitalism and other things, it's what's the most I can get versus, Okay, I'm going to be in this game for quite a while and my goal is not to just have a pretty penny now but to have a lot of pretty pennies over the course of my life to do the thing that I want or whatever. So that approach, I think, is the right way, is the way to do it. It's just not that common. So I'm glad you were able to do that. That was pretty cool. Feras Alhlou: Fortunate. Yeah, we're fortunate that we were able to do it. A.J. Lawrence: And when you are able to help your team, and you are going to have people that's like, oh, that's nice, to people where it's going to be like, Oh my God. That's a cool experience to have. And I'm very jealous you were able to have such a great, because I've done it in smaller, but yeah, it's pretty impressive. I like that. Feras Alhlou: Thank you. A.J. Lawrence: If the audience wants to learn more about Startup with Feras, learn more about you, where should they go? How should find you? Feras Alhlou: So you can go on Startup with Feras, and Feras spelled F-E-R-A-S dot com, that's our website. We have a daily newsletter, you can sign up for that. And we also offer, actually, every week I set aside two 30-minutes sessions, free sessions, no gimmicks, no sales pitches, nothing. Just any entrepreneur who wants to get on my calendar, ask questions, I'll be more than happy to help them out and also learn from them. And you can also check out our YouTube channel, which is on YouTube at Startup with Feras as well. And we have I think 200 videos now about business planning, working with partners, accounting and then sales, marketing, and we continue to build content. So yeah, I'd love to hear from the community and we'll share answers on our weekly livestream on Wednesdays. A.J. Lawrence: So yeah, we will make sure we put links to all that in the show notes, the email when we announce this, and obviously on the socials. I've been going through a lot of the material and I think there is a lot there. Even if you are deeper on your journey, I think there's a lot of topics that we slip by or we don't pay enough attention to early on. Quite a lot in my case that it's worth coming back and reviewing and getting a gaze. And you have really good, well-thought-out content in different concepts around the business journey, the entrepreneurial journey. So thank you for putting that together. Feras Alhlou: Sure, thanks. A.J. Lawrence: Thank you so much for coming on the show today. Feras Alhlou: Pleasure being here. Thank you so much. A.J. Lawrence: This was a lot of fun and you gave me a lot to think about and kind of evaluate as I try and move forward with my own journey. Everyone, thank you so much for listening today. If you enjoyed our conversation with Feras, please share it with another entrepreneur you think can learn from this. Someone who's maybe early in their journey in their startup or just you think can actually use a little help along the edges. That way we can find more cool people to listen to the show and bring on really interesting entrepreneurs like Feras to the show. So thank you for listening. I hope you have a wonderful day and I'll talk with you soon. Bye-bye everyone.