Hello and welcome to Operation Agency Freedom. My name is Chris Martinez and I am your host for today. And in my day job, I also am the CEO and founder of Bloom, where we work with marketing agencies and provide them management consulting and technology to increase profit, maximize agency value, and unlock potential guaranteed or it's free. I have a very, very special guest. (upbeat music) Today on the podcast, this name is Drew Kosoff. So he's such a big name that I just get all flustered being in the same Zoom meeting as him. Drew is the CEO of Rainmaker Adventures. I love their slogan or one of the slogans. This is, "They Make It Rain." This guy has a lot of accolades to his name. Seven Time, Inc. 5000 award winner, over $250 million in revenue that they generated as an agency seven time fastest CEO for LA Business Journal. Over a billion dollars generated clients. He also went to a small school on the East Coast called Cornell for his undergrad and then got a masters on top of that at Northwestern University. Welcome to the show, Drew, honored to be in your presence, sir. - Oh, Chris, it's a pleasure to be here. Happy to join your podcast. - So I love the name. And obviously, after going to your website, I encourage everybody to go to their website, Rainmaker actually spells Adventures, but it's Adventure, I'm sure that was intentional. I love the focus on the return on investment for agencies, right? And that's something that I think that a lot of marketing agencies don't emphasize enough, that it is about what we're doing for our clients. Not just the creative stuff and the tech stuff, it's all about the ROI. - So why don't you kind of walk us through, if you could, in a few minutes, kind of like your journey from New York now living in Los Angeles and starting the agency? - I found love with advertising in college and studied it and then went to grad school to study direct marketing. So I knew I kind of wanted to do this from an early age. And then I got a professional residency, which is basically like an internship when I was in grad school at a little company called Prodigy, which back in the day was one of the three top online services. There was AOL, CompuServe and Prodigy. And this was the early days of internet advertising. It was, you know, there were 2,400 bound modems and there was no video and there was no real, even like photos, it was more like blocks of color with words on it, banner ads, like 1-800-flowers and that kind of stuff. And that's where I got my start in the early days of internet advertising that I evolved, eventually ended up when the internet really started happening, working for eMedia, which was at the time, they're a big computer magazine publishing company. And they had, they were one of the top 10 revenue generating sites on the internet at the time. We were selling advertising to Toshiba and Oracle and all these big tech companies that wanted to reach the readers of these that were basically the CTOs and 9,000 laptops at the time. - This is around like what year, like '97 to '99, 8,000ish. And so I was selling advertising and managing a sales team to $25 million a year and ad sales back then, which was a lot, you know, back then. - Is this back when the CPMs for digital advertising were like the same as newspaper? - I was selling $150 CPMs and educating people on what banners were. - Right, right, right. - And then a friend of mine, I just happened to know socially, it's a guy named Evan, brilliant mind, an amazing guy and one of the original OGs in internet marketing, and he had a business called Double Your Dating, which is helping men be more successful in their dating lives. And he said, hey, something about advertising, maybe you can help me buy some advertising. And so we actually had a business together with him in the wedding space and I helped him with his dating business. I was one of the early advertisers on Google. Back then doing pay-per-click on Google and Overture and sort of that was my start. And the name Rainmaker actually comes from Evan. He was born in Oregon and his parents were hippies and he had his very interesting approaches to business that business is a meritocracy. I don't want titles. I don't care whether he's a secretary or the CEO, anybody can contribute. And so it was great for the culture, but when you go to a meeting at a company and everybody had titles and none of us had titles, it was a little weird. So he would always go to a meeting and he would describe people and he'd say, oh, Drew's our resident Rainmaker. He does all our advertising deals and this guy's in charge of legal affairs. And so the Rainmaker name kind of just, that's where it started. And eventually when I left and started my own business, I was like, okay, I guess I'm the Rainmaker, you know, somebody with that name. And like you said, it's advertising ventures, but you know, adventures is a play 'cause it's all a big adventure for me. So that's kind of what led into Rainmaker. I was doing a lot of affiliate marketing back in the day and then Google and a bunch of the places were not liking affiliates and we're slapping and banning affiliates. I seem to want to work directly with either themselves or their agency. I was the top affiliate in the world for a dozen companies. And I was like, maybe I'll just become their agency, you know, and so that's kind of how I transitioned from affiliate to agency, but it's a performance agency, performance media buying for 20 years and helping companies scale traffic. And to add to what you mentioned earlier, not only do we make it rain, but we make it rain and ease the pain is our slow. That's what a lot of people say is not only do we help them grow, but we make their lives easier. We take things off their plate. We do things that they don't want to do and send them one build at the end of the month. Yeah, that's super, super cool. I love the transition. I love actually the origin, right? Is like helping to start doing affiliate stuff and then it evolved into you becoming an agency. So that's really, really cool. I actually started out in digital marketing. I, well, I had a soccer magazine. That was my very first business and I failed miserably. The soccer magazine, I lost everything. And I was never really into like internet marketing stuff. This is a 2009 when my magazine officially tanked. But then Russell Brunson, he had a coaching program back then for internet marketing that was called .com secrets. I ended up, I was paying 500 bucks a month to be coached by one of their people and it's like a lot of money. He taught me a lot about internet marketing, a lot of affiliate stuff. So it was like cheap, remnant banner ads striving to some sort of offer. And at the time, one point in time, I had a soccer betting service. So people would pay the day of the games. We would tell them, hey, bet on this game. And so you would put down like towards on a game and it was a small return, but like those games were a lock. $100 you'd win like $750 and you just keep doing it. So, and then eventually I got into digital marketing. So, and then 2012, I started my agency. - Really, really cool. - I know Rusty's the way he's a great guy. - Nice. So in terms of like your business now, around like how many employees do you guys have? How many more? - We are nimble. We are nimble. We've got people. And it's, we're distributed, you know, virtual companies. So everybody works from home around the country and people on East Coast, West Coast, you know, from Florida to North Carolina to Colorado to Texas to San Diego. - So over the years, like a lot of what we talk about on the show is running the business and making sure that you're building a business that not only is financially rewarding, but also helps to serve your lifestyle goals and things like that. And as owners, we also have to evolve as people, right? I say that the business will only grow to the extent that you personally also grow. I think that the agency is a reflection of you as a person. And one of the things that you brought up before we even jumped on was the power of essentialism. So I would love for you to talk about that because this is literally something that nobody has ever talked about before. - Okay, cool. Yeah. So, yeah, I think that I can sort of touch on a couple of things. One, I was a one man show for many years. So in the beginning, I just kind of did all myself and wore all the hats. And you can only grow so much doing all yourself. And so when I started building a team, that's when everything changed. And those seven timing, 5,000 kind of awards only came after I built the team. I should have started building a team earlier. So anyone who's a small agency, if I think that depends on whether you just want a small lifestyle business or you want to grow something bigger, but I made that transition from a lifestyle business to a real business when I started building a team, which has its benefits and also has its headaches. But one of the things like growth at all costs is also not healthy. And we got to a point, I've had a number of times where it's like, it's almost like you fill up your closet with clothes and now you have no more room on your shelves. You've got to clear out some, but the closet to make more room for new stuff. We got to a point where we were like, I discovered this thing, I mean, I've known about 80, 20 and Pareto principle for a long time, but which is essentially what essentialism is about. It's actually a book with a New York Times bestseller that's one of my favorite books of all time. It's called Essentialism, The Discipline Pursuit of Less. And it's all about sort of power law theory and how certain efforts could have sort of multiplier effects. You can do one thing and get a 10 X result and one thing to get a one X result. So how do you put the least amount of effort to get the maximum result? And when you think in those ways, we've had a number of times where we've had to, we'd go like, oh my God, we're dealing with 50 clients or 80% of our revenue, running around like chickens with our heads cut off. So we've had some periods where we've stepped back and said, you know what, we're gonna cut back on clients. We're gonna let people go. We're gonna give more attention to the ones where we really have the opportunity to scale and it's a win for them, a win for us. And so we're always trying to constantly figure out that ratio of like where the power balance, you have to always bring in new things. Not every client's gonna be a whale from day one, but just understanding how, you know, with a small team of 20 people, you get the maximum results with the available time and effort that you have. And so that's kind of basically what it's about. And I'm just always, you know, all right, you just like, you know, you put your head down and all of a sudden you'll be, when you look up, like, oh my God, you know, why are we doing all these things that don't, you know, are getting minimal results or sometimes it's even the flip side of that is 80% of your problems come from 20% of your customers. Sometimes you have a customer that is just challenging and we've had, we've fired customers who are just like, you know what, they're not treating them our people well or they're not, you know, they need way too much attention for the amount of money that we're earning. And we want, we want a great culture in our company. We want to have great clients. We want clients who appreciate us. We want to be able to deliver and have an impact. So I don't know if I can relate to what you're saying because we have a lot of clients that come to us and they've grown really fast, right? And a lot of these folks, like, they're, I think the majority of our clients are first generation entrepreneurs. And so they never really built a business or be a business that's doing a million, two million dollars in revenue. And so they were growing really, really fast and learning as they go and they're like, is this really what I want? Or they start to recognize that like, not all money is good money, not all clients are good clients. And I think that there's a point, this is where a lot of our clients come to us and we help them solve these problems where they're like, I'm at a two million dollar run rate, but I'm not nearly as happy as I was when we were at 600 grand in revenue, right? And my income has not grown at the same rate that my revenue has gone up. And maybe profitability percentage-wise is a lot lower than what it was before. So I can envision that journey of you. Was there a point in your agency where you're like, enough is enough, we need to scale back something? Was there a moment in the business where you recognized that you needed to scale some things back? - Yeah, I mean, thinking back, there were sort of the leap from being solo to bringing on someone to help to three people, you know, the first five people organic and when we can afford it, we added another person. And then going from like zero to five is one challenge, going from five to 20 is a whole different challenge. And in the beginning, wear all the hats and then even when you bring people on, you're still involved in everything, everything that's going on. But eventually when you have 50 clients and 20 people like have your fingers in all pies, it just doesn't make sense anymore. That's why you build the team. And so letting go is a, I think it was a big challenge for me, like a bit of a control freak, you know, allowing other people to do stuff and trusting them. I'm sure that's challenging for a lot of entrepreneurs, but ultimately even if there's no one person that can do all the things you can do, there are lots of individuals who can do things a lot better than you. Yes, specific things. And so if you bring in these little expert, little not little, but you know, bring in experts in all these things, ultimately it's a much better than you trying to do it all yourself. So yeah. - Most agency owners or most owners in general, there's some element of trust issues that we have to deal with. Whether that, and we actually break this down. Like there are psychological reasons why you have trust barriers. But one of the other obvious ones is that we have so much writing on this business. Like if the business goes south for the owner, or let me take a first to explain the employee, if the business goes south and the employee loses their job, what are they gonna do? Yeah, it sucks. But they can essentially just pick their life back up with another company. If the business goes under for the owner, we got a lot of problems. That's like not just the financial, the taxes, but like there's our reputation that's at stake. And then we could lose our house and like how are we gonna feed our families. And so that environment will naturally create trust issues because you're so afraid, right? And that's something that I think is an agent to you and end up having to learn how to manage. I don't think you're always gonna be afraid maybe that this thing could go under, but you learn how to manage it better. It's all about risk and rewards. And speaking of Evan earlier, one of the Evan had years ago had shared this question. He basically said the more successful you become, you become more afraid or less afraid, less fearful. And you think once you become successful, you have a big company that you have less fear, but the matter is most people actually have more fear, more fear of losing it, more fear if it goes under there's a lot more at stake. Like you said, your house or the debt, there's also lawsuits and things. You can sue you, like you're taking all the risk as an owner that the employees don't have to take. And so that's why you get all the rewards, but you're also taking some risks. And it's, there's ups and downs in business. I've done it for 20 years. I've definitely gone through cycles of growth and cycles of, there's no guarantees. You have to have a lot of grit and stoicism is a great philosophy to help through the challenges because it's not easy. It looks easy on the outside, but you have to really have the right mindset and the ability to ups and downs. - Yeah, I think that running a marketing agency is one of the hardest things that you can do, not to take away from other businesses that legally are more difficult, but like, God, there's so many moving parts in running a marketing agency. And like what we sell is an intangible and like managing client expectations and managing your team and like the types of people that we have to employ to make the stuff work. And like it's hard. - You know, listen, I like the idea of a lifestyle business so much you could grow. So I built it, what do they call it? A mid-market kind of company. But you know, I have some friends who run some much bigger agencies that they're gonna, you know, they'll be the big, you know, they have hundreds of employees and they're on that path. That's not really a path that I wanna go. I don't, you know, I'm comfortable. I don't need yachts and jets. - Right. - I can live a very good life and also have some quality of life. So for me, I had to sort of find that balance. We did, you know, we got to a point where we were doing too much and I made the decision to pull back and let's focus on the best relationships and the most scalable ones and not trying to serve too many people 'cause then you're not able to serve the good ones either, right? I've done that sort of twice in the business and we're actually in that mode right now. Like we've paired back on the number of clients and we're trying to serve our better. It's working for us. It's no perfect formula. But I don't wanna have the stress and having hundreds of employees and whatever, even if there's a great in the rainbow. For me, I'm willing to make more for quality of life. So, but some people might feel differently here. - I'm really glad that you bring that up because I think it's important, especially like in the environment of like, you know, you gotta like, people call it like hustle culture. I think it's really important to recognize that businesses go through different phases or stages and people also go through different phases and stages. And so as an owner, we have the benefit of being able to align the phase of the business for our phase in life, right? And so I think it's good and healthy that you recognize and verbalize that I don't want 200 employees. Like right now we're kind of going through a similar thing where at one point we had over 100 employees and now, yeah, we've managed a lot of people and like you talk about stress and like different layers of management and like, we've seen a lot of things. And so now we've scaled it back. And so we have a fraction of that right now running the business and the business is much more profitable. And like, I'm very, very happy with work. We'll always be like this. Who knows, there might be a day when I want hundreds of employees again, but that's okay. Like what you want in life and business is different or it changes over time, that's totally okay. It's up to you to like have that self-awareness and recognize what it is that you truly want. You had brought up, 'cause I know that we as business owners were constantly dealing with problems. In my notes when I was doing my research, you said something about problems come to you as gifts. And like in my life, I've had a lot of things that people would consider problems and they were problems. Like a lot of like health related things have passed away. I've had other people pass away from illnesses and stuff like that. What are some of the problems that have come to you that you recognize that are... - Well, it's actually just like, it's a Confucius philosophy versus the concept. - Right, and but I just, I really resonated with it. I can actually tell you a personal story that even before I learned this philosophy is basically the same philosophy. And that was something I learned from Tony Robbins. And it's a question he said to ask when you're in a traumatic situation or a bad situation is ask yourself this question rate about this. And it sounds like a crazy question, but I used it. At a point in my life, I was engaged to the wrong girl and we ended the relationship and I just moved to LA. She went back to New York and I found myself alone, looked in the apartment, feeling sorry for myself and sort of that wimey and the victim and what am I gonna do now? And I asked what's great about this. And all of a sudden I was like, you know what? Thank God I didn't marry her. Thank God we teased together. I've got a completely blank canvas to paint. I could start my life over again. How lucky am I? And that just mindset transformed everything. And problems come to you as gifts is the same idea. It's like whenever you get, encounter a big challenge, it's very easy to like, oh my God, not, you know, what now like this problem and like that stress you out and feel overwhelmed and okay, you know, where's the gift? Okay, you know, 'cause typically we have a problem, there is a solution to that problem. And the sooner you start working on the solution, even though it sucks to have the problem a month later, a year later, whenever it is, you're gonna look back and be like, oh my God, you know, things are much better now than then if I'd never had the problem, right? You solve the problem. So while it sucks in the midst of a trauma or the midst of a problem, if you can look for the solutions and the gift and have that kind of mindset, there's always a gift. And it really helps, at least it helped me, personally, business-wise is tackle challenges. It's just like, okay, gotta put on that firehead on and put out this fire and attack the challenge. So for me, that's like a really key like reframe or mindset as an entrepreneur that is just super helpful when we face challenges. - Could I ask you to be a little vulnerable and tell us like, what's one of the big problems that you've recognized ended up being a gift? Other than obviously being engaged, is there another one that kind of, in your life? And I'm gonna share mine. So you don't feel like I'm-- - There's so many I said, I literally applied to everything that we do. So I was just talking to one of my employees that has a challenge right now where she's had a flood in her brand new house. And we had had a similar thing happen a couple of years ago. And it was a nightmare. We had to like move out of the house and rip up the floors and fix everything. But we ended up getting a big insurance settlement and got, you know, then we'd ever had before. And so it sucked going through it. We ended up, it was a win in the end because we got a much nicer, much nicer floor. But like, you know, just looking for-- I mean, that doesn't always happen here again, new floor. For me, it was like, the solution was better than the problem before the problem never occurred. So I don't know if that's a good example, but that just comes to mind. And then even in business, like we do a lot of email advertising. And so we traffic 1,000 plus emails a month to different publishers that we're renting email lists from. And it's a lot of work. And we also do some stuff on a performance basis. So we, you know, we have all these clients and we get their campaigns and we get the links set up and we traffic them to the different publishers and a whole bunch of links. And then we started going, noticing that like, they're not even using half of them or testing things. There's a lot of stuff. We're doing a lot of effort that's wasted. And when we really looked under the hood, we're like, oh my god, why are we feeling so overwhelmed? We're trafficking, you know, our team is trafficking so much stuff when a lot of it was just useless. It wasn't that we need to stop doing. So we lived literally by just, the problem was overwhelmed. And the solution was, we don't need to do half of what we're doing. Let's cut back and let's not send 50 links to each publisher. Let's send 10, whatever. And overnight we were able to reduce a lot of the over by just attacking the challenge and looking for the solution. You know, and now we have a much better system. So problems come to use gifts, you know. - Yeah, I love that one. I mean, like from the business side for me recently, we had a manager who was on the leadership team and he was reporting numbers and we just kind of assumed. And so like we ended up diving into the numbers and they were all wrong. And he'd been recording the numbers incorrectly for months. And as angry as I wanted to be at that person, at the end of the day, it's my fault. Because I took my eye off the ball of double checking everything, even though, and I don't think that this person was doing it maliciously. I think it was just an oversight. And so because I did hold that person accountable to me and double check the numbers, it led to this problem and now, absolutely, I'm never gonna make that mistake again. Dive in and inspect, I expect. So that was like another problem where it ended up being a gift. - I actually just thought of an even better one. A great example that, you know, led to a really good result for our clients and for us. So a number of years ago, and I wrote about this recently, I think on a post on LinkedIn, but we had a client that was really fast growing company and they wanted to go fast. And when I'm a very respectful of people's money, I wanna ask for permission. I wanna, you know, get their approval on everything. And so in the beginning, you know, we were buying a bunch of media for them, but I was running everything by them and for approval. And they were basically like, this is way too many things. It was like, you know, this is not going fast enough. Is there any way, you know, that we could, you know, go faster? I said, well, if you just trusted us and didn't need approval on every single thing, we'd love we could scale a lot faster. And if you just gave us some parameters, unless you just spend anything $5 and under, you can do, obviously, you know my goals. You're not gonna spend money to waste money if it doesn't work, you know, then try something different. But as long as it's under five grand, you guys can scale to your heart's desire. And if it's over five grand, my permission. And the truth was, you know, 90% of the time, but what ended up happening is we went from spending, I don't remember, 25 times over a million dollars a month because because he gave, he trusted us, gave us the freedom to do what we do best, removed the friction and it enabled us to help him achieve what he wanted, sold the company for nine figures. And it made us, you know, millions and millions of dollars over the years. And it was a great streamline relationship or literally I checked in with him once a week and we had it like it was, you know, he didn't need to micromanage us. You know, he knew what we did well and we knew he had, you know, great offers and great things to promote. And it was like, it was a real win, you know, but if I were, I just thought I had to run everything by him and had to get him to sign off and everything, I never would have realized that now when we meet new clients who want to do similar things or like, you know, if you will trust us, you know, we're not gonna go spend your money wildly. You know, you know, it'll streamline things a lot more. And so, you know, not everyone feels comfortable that at first. We don't expect that, but, you know, ultimately that's where we'd like to get to. Or it's like, yeah, we've got clients that we've been working with for a decade that we spend 500 grand a month for. And yes, they have completed everything we're doing, but they're not having to, you know, be involved in every single step of every decision. It's just, you know, adults and we make adjustments and we collaborate. - I love that. That sounds like it could be another episode that we gotta interview about. Building trust with clients. We're just about out of time. I do wanna give you the opportunity because you've got an amazing, well, it's an offer where people can get some time with you, but it's tied to a charity. And that's what I love 'cause I'm huge on philanthropy. So why don't you just really quickly tell us about that and then we'll get to that. - Yeah, I mean, I don't even know if I'd called an offer, but I got invited, there's a great platform called Amio, but it's a place where you can go connect with founders and entrepreneurs and investors, including, I mean, big name people, like the founder of Reddit and the founder of Zillow are on this platform. And you can borrow their time to chat with them. It's through their app on their phone. And I've done this over the years and I've actually gifted things like this over the years to people is, you know, to talk to someone who's been, you know, who's accomplished what you wanna accomplish or is ahead of you or is in your space that could leapfrog years of trial and error. And it's just, you know, mentorship and if you find a mentor or you don't need to, you just go on intro and buy a mentor. They invited me to join the platform. I just launched literally today and I'm giving 100% of the proceeds to charity to one simple wish, which is a charity that helps foster children with them and what I've been doing. I've given last year, I gave like 10 laptops away 'cause the kids write what they need and it's not just laptops, they need lots of things, but I kind of like the idea, I think a laptop 'cause I'm in the, you know, the internet business, computer businesses that change your life and if you don't have one, it really can hold you back in life. So a lot of these kids are like, they need a laptop. They're going to college, the first kid in their family to go to college and they don't put their own laptop or there's, you know, their stay at home mom and they're starting a business 'cause it's a, so there's, to me, I just like giving laptops away. So I'm gonna donate all the proceeds from this kickoff to this charity. And if for anyone who wants to buy some time with me and of course I'm happy to for free advice on how to grow your agency, on how to scale media, on entrepreneurship in general, just capitalism, which I'm a big opponent of and lots of spy tools. If you want some, you know, analysis or competitive intelligence, happy to share that. I'll open up my Rolodex if you need introductions to people who just grow. So I feel like it's a win-win-win. You help, you know, help me, help you, help some foster kids and they just gotta go to intro.co/truecostsoft and they can check it out. - Yeah. - I love that. We'll make sure to include that link in the show notes. So if you're listening to this, go to the website, you can very easily get that link and then get some time with True. True, I wanna thank you so much for being here on the show. You've been amazing and hopefully we can have you back on in the future. - And thanks Chris. - All right, thank you. (upbeat music) - Hey, thank you for listening. And if you enjoyed this episode, it would mean so much to me if you would subscribe to the podcast and also share it with friends, family and basically anyone you know who will find the same value in this episode as you do. So to get the latest from me, then let's connect on social media, on the Facebooks at facebook.com or Instagram. Then you can also find us on LinkedIn, YouTube and even TikTok. Yes, I'm back with your own TikTok. Finally, go to our website where you can see all of our other episodes of Operation Agency Freedom. Register for live trainings on how to run a highly profitable agency and you can see exactly how we help marketing agencies fix their operations and scale to eight figures and beyond. Thanks again for listening and I will see you next time.
