How to Grow a Full-Service Agency Using Pod-Based Teams with Jesse Resnick
Key Takeaways
- Ei Digital runs account teams as color-coded pods backed by creative, technology, and marketing departments, and mirrors what the client needs instead of its own org chart.
- One pod is always kept at about 60% capacity to take in new business, so a new client doesn't force a new hire every time.
- Brand and performance marketing are meeting in the middle. Jesse's test: if nobody wants to go deeper after your beautiful spot, you're doing something wrong.
- Reverse the funnel. Count sales first, then data captured, then engagement. Clicks and impressions come last.
- Run on accrual accounting, run each pod as a mini P&L, have account directors allocate their own revenue, and measure everything against EBITDA.
- 2023 was the quietest deal-flow year of Jesse's 25-year career. Every deal he's closed came from relationships, so he's working on being more visible.
Jesse Resnick is the co-founder and CEO of Ei Digital, a full-service creative and technology agency that was 13 years old at the time of recording and has worked with PepsiCo, Proximo Spirits, and Allergan. Gray MacKenzie hosted. They covered how Jesse got here, how Ei Digital structures its pods, where brand and performance marketing meet, and how he runs the numbers.
The backstory runs from Flash sites in 2000 to a web design class Jesse taught at the Apple Store in SoHo (students asked him to just build their sites), to Special Ops Media, where he grew a 25-person creative department inside a 75-person agency that was sold and merged into LBi US in 2010. He was laid off in the merger, two days inside the extension of the Obama stimulus bill that paid his health care for 18 months: “that was my booster pack to basically starting this agency.” He and his business partner Walter started Ei Digital out of Jesse’s apartment. The philosophy from day one was strategy and great user experience carried through execution, because watching ideas get handed down the chain had frustrated him most at a big agency.
Color-coded pods, with one kept at 60% capacity
Gray asked whether Jesse’s preference for small teams caps Ei Digital’s size. Jesse said it shapes the structure instead.
Our account teams are essentially set up as little working groups or pods. We actually color code them. So, there’s the green team, the blue team, etc. And so our account teams are those small working groups. And then we have departments of resources, whether it’s creative, technology folks, or digital marketing, kind of deep T skill sets… And we look at our client work and we mirror what the client needs versus mirroring our own structure.
Gray asked how new clients get assigned to a pod. One is always waiting for them.
Right now we have basically one pod that is always set up to intake new business. And so, they’re at let’s say 60% capacity as a unit. And so, what’s always been difficult is if you run everybody at 100% or 90% capacity, you’re basically just needing to hire in to every piece of new work you get… They partner with our business development team and myself in winning new business, and then it creates a really smooth onboarding for that client.
Jesse and Walter still handle continuity on bigger onboardings themselves, because “a great idea poorly executed is nothing or could even be harmful, and even a medium idea really well executed has value.”
Brand and performance are meeting in the middle
Jesse described marketing as two circles, brand (emotional connection, long-term) and performance (conversion now), that privacy and cookie changes are pushing together. Gray asked what that looks like inside a client engagement.
If you’re doing your job well as a brand marketer, you have this beautiful emotional engaging commercial, some percentage of people should want to go deeper. And if they’re not, you’re doing something wrong… When you’re looking at metrics, it’s what I’d say, reverse the funnel… There’s only three points of conversion. You’re either getting an actual conversion through a sale, you’re getting a point of data from the consumer, or you’re getting an engagement. And I prioritize them in that order.
Clicks and impressions come last. His example of getting it wrong: a video ad that leads to a landing page showing the same video. Getting it right: Dew Nation HQ, the Mountain Dew loyalty program Ei Digital runs, where some share of everyone who sees the work signs up.
Accrual accounting, a mini P&L per pod, and EBITDA
A listener question asked which metrics Jesse watches each week. He started with the accounting method underneath them.
It’s amazing to me how many agency owners I meet who run their books on a cash basis, and I’ve helped many understand accrual accounting and shift their whole mindset… Accrual accounting is taking in the dollars as you earn them, not as they’re deposited into your account… I recognize my revenue against when I’m doing the work versus when the check is deposited.
We essentially run each pod as a mini P&L and then we roll everything up. And I actually have my account directors do their own revenue allocations. So, they’re in charge of, “Great, I worked with Bushmills, I worked with Allergan, I did this amount of work. This is the amount of revenue I’m recognizing.”
Ei Digital is mostly W-2 employees, so he matches utilization against those numbers. The metrics are month over month: gross revenue, net revenue (kept separate), flat operating and salary costs, and everything against EBITDA. “I’ll turn down a million-dollar project that cost us a million dollars to do any day of the week.” The partners pay themselves last. Gray’s counterexample from his own work: a 40-person agency doing $3.1 million at a 1.5% net margin.
Where deals come from in a quiet year
I would say 2023 has been the quietest deal flow year I’ve experienced in my career, 25 years… I know agencies who’ve shuttered their doors. I know agencies who’ve been cut into a fourth. I literally yesterday got an email, an agency somebody actually used to work with closely, probably 30, 40 person shop, they’ve decided they’re closing up shop. And it’s rough out there, man.
Ei Digital has grown mostly by keeping clients, who bring the agency along when they change jobs. Every deal in Jesse’s experience has been “relationship first,” and he’s skeptical of spending ahead of a deal, so he’s working on being more visible instead. On talent, his edge has been spotting it early; many people he’s pushed now run departments or their own agencies. His closing tips: separate your identity from the work, make sure you’re actually earning money along the way, and pay your taxes. Ei Digital had just written its own agency principles, borrowed from Ray Dalio’s Principles.