Podcast / interview · Jul 2, 2025

# How To Grow A Nine-figure Advertising And Marketing Agency

Paramus, NJ

[Book this talk](https://www.alexmelen.com/contact/)

In brief In this Growth Boss podcast interview, Alex Melen, co-founder of SmartSites, explains how the agency has grown roughly 35 percent a year in revenue and headcount every year since 2011 without outbound sales, outside capital or debt. Alex traces the early years, when a ten-person team took any client it could get, and describes two mistakes that shaped the company: losing money on $1,000 websites that damaged client relationships and reputation, and launching an outdoor-gear e-commerce store that left developers packing boxes and handling returns. He contrasts SmartSites with his first company, T35 Hosting, which reached about a million customers but was outgrown by better-funded competitors because he refused to invest in growth, and with an investor-backed company whose founder was diluted to roughly 3 percent equity. On marketing, Alex argues that ad costs rise every year, so growth-focused companies must set aside 10 percent of spend for no-strings experiments. He closes with a measured view of generative AI as an incremental efficiency tool that every employee should learn by using it.

Key points
- SmartSites has grown at least about 35 percent year over year in both revenue and headcount every year since 2011, with its worst year at 34 percent and its best around 37 percent.
- Taking $1,000 website projects early on lost money nine times out of ten, frustrated project managers, delivered obsolete sites late and produced bad reviews; a cheap price never excuses a bad client experience.
- Reputation is the most important asset a business has, and once lost it is almost impossible to recover, so early-stage companies must learn which customers are a bad fit and decline them.
- SmartSites built its own outdoor-gear e-commerce store, outdoorgear.net, and found highly paid developers packing boxes and handling returns; the lesson was to focus on what the agency was actually good at.
- Alex's first company, T35 Hosting, grew to about a million customers but was overtaken by heavily funded competitors because he refused to spend on growth, even passing on hosting keywords at 10 cents a click.
- The only prediction Alex will guarantee is that ad costs rise every year, so growth-focused companies should set aside 10 percent of marketing spend each month for no-strings tests of new channels or campaign types.
- Overseas contractors failed on consistency and timelines, so SmartSites opened its own international offices staffed by full-time employees, each run by a local department head who hires and trains on the ground.

> “There's very few things I could guarantee in life, but I can guarantee you whatever keyword you're bidding on this year, next year you'll pay more for it.” [19:19](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1159s) · Alex Melen

> “I would highly encourage them to take 10% of their marketing spend, set it aside, and try something new every month. Could be a new channel, new platform, same platform, new campaign type.” [20:44](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1244s) · Alex Melen

> “If you provide a B-level product consistently, I think it's better than providing an A-level product sometimes and a C-level sometimes and an F-level some other times.” [26:19](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1579s) · Alex Melen

Chapters
- [0:00 Starting SmartSites in 2011](https://www.youtube.com/watch?v=YSB3r38rAL4&t=0s)
- [5:32 Two early mistakes: cheap websites and e-commerce](https://www.youtube.com/watch?v=YSB3r38rAL4&t=332s)
- [12:24 Steady 35% growth versus two extremes](https://www.youtube.com/watch?v=YSB3r38rAL4&t=744s)
- [17:54 Inbound-only marketing and rising ad costs](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1074s)
- [20:44 The 10% experimentation budget](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1244s)
- [24:57 Owned overseas offices, not contractors](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1497s)
- [31:54 Remote work, culture and US-heavy staffing](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1914s)
- [37:29 Two-way feedback and accountability](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2249s)
- [40:17 Generative AI as incremental efficiency](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2417s)

Questions this talk answers

**How did SmartSites grow to over 400 employees without outbound sales?**

Alex says SmartSites has never done cold calling or other outbound marketing. Growth always starts on the marketing side: the agency buys paid search for terms like SEO agency and pay-per-click, plus SEO, and salespeople work the inbound leads. More spend brings more sales, which funds more salespeople, project managers, developers and designers. Paid directory listings such as Capterra and G2 became the second-largest channel after paid search.

**How much of a marketing budget should go to testing new channels?**

Alex recommends setting aside 10 percent of marketing spend and trying something new every month, with no strings attached: it cannot be expected to perform like the other 90 percent. Tests can be a new platform, a new campaign type on an existing platform, or something like Netflix ads through Microsoft Ads. Every test still needs defined success metrics so it is measurable rather than money thrown away.

**Should an agency use overseas contractors or open its own offices?**

Alex says overseas contract labor was cost effective but caused problems with timelines, quality and especially consistency. SmartSites instead set up its own international offices with full-time, vetted employees, each office focused on one function such as front-end, back-end, design, content or link building and led by a local department head who hires and trains locally. Those offices are deliberately overhired so new clients can start immediately.

**Will AI replace agency employees and developers?**

Alex is skeptical of executive AI quotes, which he says are partly about boosting valuations. He sees generative AI as incremental efficiency rather than wholesale replacement, comparing it to the move from typewriters to PCs. Prompt engineering jobs paying 350 thousand dollars or more are temporary; proficiency will simply become expected. His advice is to use the tools daily and notice where they save time, as a dealership service manager did with a difficult customer email.

** Full transcript 19,582 words · auto-generated captions, lightly edited for readability · timestamps link to the video **

[0:00](https://www.youtube.com/watch?v=YSB3r38rAL4&t=0s)Welcome to the Growth Boss podcast, where we seek out the secrets to high-performing campaigns from some of the smartest marketers in the world. I'm your host, Jared Smith. Today, I have Alex Melen with me, and he's going to teach us what it takes to grow a nine-figure advertising and marketing agency. Alex is an award-winning entrepreneur, keynote speaker, and best-selling author who has been a leader in the digital marketing space for decades. He co-founded SmartSites, a toprated digital marketing agency with over 400 employees across six offices worldwide. Alex has spoken at nearly 100 conferences and has been featured in Forbes, Bloomberg, NPR, and more. Originally from Ukraine, he started his first company in 1997 and later launched SmartSites with his brother in 2011. Recognized as one of Business Week's top 25 entrepreneurs under 25, he was also invited to the White House to discuss young entrepreneurship. Alex, thanks so much for being here today. Thank you for having me. That's a great intro. That's probably the best intro I've had so far, and I've done a lot of podcast. That was very great. That was good. I appreciate it. Thank you. So, Alex, I would love to start at the early days of smart

[1:21](https://www.youtube.com/watch?v=YSB3r38rAL4&t=81s)Sites. Talk to me about what those early days were like and what was the inflection point where you were "Hey, let's scale this thing." So, but let's start at the early days. Yeah. Yeah. So, good question. So, I started with my younger brother as he was graduating college. I was working at Publicis at the time doing digital for Samsung and Walmart actually. So, very what is what can I say? Very enterprise level stuff. And the idea with SmartSites was to bring some of that execution to small businesses. That was the idea. My brother was doing a lot of SEO at the time. He say almost in a consulting basis, not really scaled out to how we move to moved it to later, but he was like on the ground I would say like SEO consultant. So, we combined that and a couple other pieces to form SmartSites with the idea of bringing the latest and greatest in digital to SMB folks. Yeah, I'm trying to think back. So, this 2011, which seems like it feels like a couple years ago, but I guess it's been a bunch of years. So, we started like 10 employees, a lot of them being my brother's friends from Cornell. In the beginning, I think we had a good vision. We had a good team, but I think we were not super focused. And what I mean by that is when we started, we didn't really know who we were or what our value add was. And it

[2:44](https://www.youtube.com/watch?v=YSB3r38rAL4&t=164s)Didn't take long, but it definitely I would say at least a year for us to really zero in what our value add to clients were because we had the knowledge, expertise, and the team to really do anything. We really were all over the place. Like we started with making websites but we were I don't know we were doing a lot of social media stuff when social media stuff wasn't super popular. It was like the likes on Facebook pages right 2011 it wasn't it wasn't the social media it is today and very quickly we realized that's probably not our big value add at that time. So the way we started, we were in a lot of different directions and then slowly pulled back to our core value ads and again or at least the mindset we tried to take is where do we add the most value for our clients? Is it trying to get them Facebook likes and at that time turned out to be no that's not where our value at is. So those are those were the early days. It was it was a lot of fun. It was a lot of people worked very long hours like we practically lived in the office. This was by the way back in the day when people came into offices. So we had You're right. You're right. Yeah. Physical office. It was hard for to imagine these days, but we had physical office and it was a lot of fun. It was a very fun atmosphere and the as we've grown our company, I always try to think back to the culture aspect that we created then and to try to carry it through as we've been growing. I love

[4:07](https://www.youtube.com/watch?v=YSB3r38rAL4&t=247s)That. I want to dig a little bit into that value add and how you guys honed in on your unique selling proposition. I think that's something a lot of entrepreneurs struggle with. I'm sure you were like me. You're "Hey, anybody that's willing to pay me money, I'll figure it out. We'll make it work." And then at some point, you're "Okay, we just we can't do everything under the sun." Like you said, we can't go, Facebook likes are not our USP. So, how did you figure that out for you guys? Yeah. So, it took a little while and it's not obvious and I agree that something a lot of entrepreneurs struggle with. They're especially something like a digital agency, but it's similar to other business lines. Something like a digital agency could really go in a lot of different directions, But if you go in too many directions, you're going to be mediocre at everything and not really good at anything, If you're not focused enough on the right thing or if you go focus on something that you think is a value add and really isn't, that also is not going to work very well. So, I'll tell you about a couple of mistakes we've made in hopes that could help others learn from them. And it seems like a lot of people who listen to this podcast are in that growth mindset or trying to focus their business. So I think it'll be useful. So we started as a digital agency that could do anything, Any lead we got, we would take. So we to give context, I don't know, we make websites, we do pay-per-click, we do SEO, we do social media. Anything if we didn't know how to do it, we would figure out and then we would do it.

[5:32](https://www.youtube.com/watch?v=YSB3r38rAL4&t=332s)Couple pitfalls. So by doing that, we took a lot of business that we probably shouldn't have. Being a small company that's self-funded, it wasn't in our mindset or really in our culture to turn down clients to be "No, that's not something we could do or not some that's not a good idea or not good use of funds." it was just not like you want it, we'll figure it out, we'll do it. So, a couple ones that were bad for everyone involved. We took on a lot of low-budget stuff, which again, for a lot of early entrepreneurs, I think it's very hard to figure out what your perfect customer is and to figure out how to gently not accept something that's not a good fit. So, for example, we did a lot of websites for a very small amount of money. So, people call up, I need a website. Fine. Well, these days we charge 10,000 for a website, but let's say back I forget the prices back then, but we'd say, I don't know, 5,000, 8,000, whatever it is. And the client would be well, I want something very simple. All I could afford is $1,000. Can you do it? We' be well, I guess something simple, I guess. Fine, we'll figure it out, I guess. And client would be I'll give you 50% right now, as a startup, it's very hard to be please don't give me your money. We went up with like situations that were net negative for everyone. So this is how it plays out for a $1,000 website, We have a project manager who winds up spending a lot of time, developers

[6:54](https://www.youtube.com/watch?v=YSB3r38rAL4&t=414s)Spending a lot of time. We will surely lose money on this website. And for the lowbudget ones, I would say nine times out of 10, we would lose money. The project would go way over, You think simple website, oh, we'll do in a couple months. Client wants like 3,000 edits over the la next 3 years. And the website launches on like year 7. The net effect is the project manager who is our employee in the office, right, is very frustrated with this whole process. Our project managers get comp. They have pay salaries, but they get compensated from the projects they manage. So, they're spending a lot of time not making anything from this specific client, let's say. So, negative experience for project manager. For the company, we wind up losing money. Website probably launches 7 years later, at which point it's already obsolete. Client has a bad experience. Client doesn't care that they paid $1,000 or $10,000 if they have a bad website took longer than they expect or it looks terrible. They don't care that they paid you a,000 and not $10,000, They're still going to be pissed. They're going to leave you a bad review. Your reputation's going to tank. Client's going to be upset. He's going to tell other people not to use your services. So, in the end, you thought you're doing a good thing, but like we'll help you out. We'll do for,000 bucks. And it's in that negative like no one wins. Everyone loses. All losers, no winners. So I think as and I've started other companies before and I've been on the board in a couple companies. I think that's very important for early like I don't see that issue as much in established businesses but

[8:18](https://www.youtube.com/watch?v=YSB3r38rAL4&t=498s)For early startups, early entrepreneurs definitely super important to figure out what customer is just not going to be a good experience for anyone. So I think that was that was a big one and I think it's still a big lesson for any early entrepreneurs to figure out and again it's very hard like right you're a new business you really want to make money and grow I don't know you're some you try and beat the last month sales and this like prop like client comes in you're not like oh all right we just we just won't do it forget about it right so that in itself is hard but again you got to think big picture of how this all plays out right and especially when it comes to reputation like you give discounts and do things cheaper or cut corners. I think reputation is the most important thing any business has. Once you lose reputation, I think it's almost impossible to dig yourself out from under. So, that's one big one. I'll do one more. I won't spend the whole time just on this question. I'll give you one more. As we were figuring out that we were good at making websites and doing marketing, we were wait, why don't we just make our own websites, So, like our for our business. So, we had a client that was e-commerce outdoor gear website like they sold like outdoor gear products think sports authority but they went out of business now but like Dick's Sporting Goods something like that but I'm generating like huge returns for

[9:40](https://www.youtube.com/watch?v=YSB3r38rAL4&t=580s)Them. So like wait we start our own e-commerce website. So we bought outdoorgear.net. We still own the domain, built the website very cheaply cuz it's our own cost, And then they're marketing to we knew the we knew the vendors. It's the same vendors that supply all these outdoor stores including the physical brick and mortar. So we had the vendors. We had similar pricing to them. And then we started selling a lot of stuff and this was this was like great. We're like crazy ROI like who needs to make websites when we're selling like camping gear and making lots of money, But then we ran into all the op stuff. So it when you sell a product that's not the end of the process. Some of it gets drop shipped, some you have to package. So we had like our I don't know like highly paid, highly trained, very technical employees like packing boxes. Yeah. And then once you send the box in, guess what? You got to deal with the customer. So customer calls in. I ordered I thought I ordered a large, but I got an extra large. Well, ma'am, you ordered an extra large. No, no, no. I'm pretty sure I ordered a large. So now all of a sudden we had like PHP developers doing customer service. People were returning things like just with send it back, Right. Send it back and do a charge back. Like I don't want to send it back. I remember one lady claimed that and it was drop shipped so it wasn't didn't even go through us. But one lady claimed she got a glove in them from us. She bought like

[11:01](https://www.youtube.com/watch?v=YSB3r38rAL4&t=661s)Camping gloves that there was glass in it. She's like I cut off my hand. I'm going to sue you. And we're like man this is not what our value add is. Like packing box packing boxes and doing customer and there are companies that are very good at it right like and it doesn't have to be outsourced there's companies that do US packaging and customer service and just very good at it we were not we were not like having like developers do customer service trust me was not a good experience for anyone so we still have the domain the website we took down but I think the takeaway there is it's very easy as a startup that's not super focused and not being super focused is not necessarily a bad thing, In the beginning, it might even be a good thing, but being a startup not super focused, you really got to figure out what you're good at and what your value add is and what you're really what you're bringing to market, We could make the really good website. We could do really good marketing to it. Can we do customer service for camping gear and like package boxes and deal with the returns? No, we were terrible at it. We were really, really bad at it. So, and it took a little figuring out and I think that's normal. I think I don't think that's necessarily a bad thing. If a business is listening to me tell the story and they're "Man, am I doing something wrong? I'm having similar like it's not necessarily a bad thing to try out different directions and I think if anything, it helps you zero in on what you really are good at and really

[12:24](https://www.youtube.com/watch?v=YSB3r38rAL4&t=744s)Start thinking about what my value it is value add is to the to the customers and what I should focus on." Yeah, 100%. Let's talk about that inflection point. At what point was it in this business journey where you're "Okay, we're not doing the camping gear stuff anymore. We're really going to grow this thing." Was it just a slow growth, 20%, 30% year-over-year, or was there like a year where you're "Okay, we made this decision, everything changed, skyrocketed up from there." Yeah. So, very good question. So, direct answer was we've always grown at a very steady pace. Our growth has been our minimum growth has been 35% year-over-year every single year since we started. Last year was the only one that came in a little bit under 35% on revenue and on headcount every single year. Never missed a year. I think our worst was last year at 34% and our best was like 37%. So we've been very steady with that. I'll tell you though that there's I've seen it both sides of it where it's works out not so well. So the first company I had T35 Hosting I started one of the first web hosting companies. So this was I don't know mid '90s towards 97. This is if for those who have been around back then it was Hyperar Tripod GeoCities if any of those names ring a bell. And my business my hosting company actually predated

[13:45](https://www.youtube.com/watch?v=YSB3r38rAL4&t=825s)GeoCities predated Google even. And there well first of all I was very young but aside from that I was very conservative in the growth. So I was very conservative. I would not invest like a single dollar without definitely knowing for sure I'm going to get X amount back. And this was when like I remember this was before Google, but once Google started and Google Ads, I remember Google Ads was like 10 cents a click for hosting keywords. And I was like I was like there's no way I'm blindly paying per click, not knowing how many will convert, It was like 10 cents a click. I'm like there's no way. And like so the domain so the first business I started was top 35 websites. So I had the domain T35.com. So for the hosting business, I'm what, I'll reuse the domain. I didn't even want to invest in like hosting.com was available. Like I could have hosting.com. I'm it was like $30. I'm oh no, this 30 bucks. So I was like very conservative with all the growth. And there were there were a couple times where we had investors approach and they're "Man, listen, you need to grow. We're going to invest the money and grow the business." And by the way, with all those jokes aside, I did grow to we had a million customers. So it grew it to just about a million customers, which at that time was a big part of the big part of the internet usage in the United States. So I did manage to grow it. The whole industry grew around me much quicker and it was because I was

[15:07](https://www.youtube.com/watch?v=YSB3r38rAL4&t=907s)Not investing in the growth. So that's the conservative story of don't invest in growth at all and just like I was like happy had I had two employees like happy I have two employees I don't want more I'm good where I am and that's fine in a lot of business lines by the way we have I don't know roofers plumbers pavers even doctors who like it's not either it's not really scalable or they don't want and they're fine with it right like I don't know family business roofing I don't I don't want anyone else but the hosting industry tech space really grows quickly and it grew around me and the companies that grew around me are the ones who had lots of investments, private equity, all of that. And I just I that was the conservative approach. They wound up growing way too quick. They actually w up being okay. They had to give up a lot of equity. It's all it all depends like what you want on it, Like I don't know if I'd be able to work at a company that like has my name on it and I own where I own 3%. That's just me, but it's not necessarily the correct approach, but yeah. So, they grew really quick. They wound up having to do almost yearly mass firings and mass layoffs, which by the way in the tech space is normal. Like I don't know Facebook, Google, Microsoft, all

[16:34](https://www.youtube.com/watch?v=YSB3r38rAL4&t=994s)All of those do layoffs every I think there's a website that literally tracks like hundreds of thousands of lay tens of thousands per year from the tech space. So, but that just it wasn't not something I would want either. I really don't like the like overhire mass fire approach. Yeah. So that's other extreme of growing really rapidly and that company specifically moved to the west coast to support their growth and I don't know if it's a chicken or the egg but in Silicon Valley you forced I think forced to grow or go out of business almost but I think there's negatives to both and I've seen both like the growing too fast and growing not fast enough. I don't know what the magic number is. We've been good with our 35% year-over-year, but I think it's very industry specific. But there certainly is some magic number where you definitely don't want to be my hosting example of having invented a lot of this like early hosting technology and then seen the industry grow around me in very quickly like in 5 years. So yeah, very long-winded answer to your question. No, that's fine. I'm curious on the marketing side of growth and then I would love to hear operational challenges as you guys have grown. But let's start with the marketing side. Growing 35% year-over-year is tough. I mean, at some point, you're ranking for all the keywords you can rank for. You're got the PPC ads out. It's like

[17:54](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1074s)You've captured as much of the market as there is. So, that's really impressive that for 14 15 years you guys have been consistently growing. Talk to me about what you feel like some of the keys to success were with that. Yeah, so we have a I don't want to say unique approach, but a maybe somewhat unique approach. We don't do any outbound marketing, meaning we invest in things like paid search for the keywords you would imagine we would SEO, pay-per-click, SEO agency, things like that. And leads come in and our sales people take the leads. Most agencies of our size are similar do a lot more outbound which is like cold calling things like that. So for better or worse that's just not something we've done. Our growth has always been the way we start the growth is always on the marketing side.

[19:19](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1159s)But it's between well, there's two factors that play into it. Every year, the cost of paid search goes up. And there's no like there's no mystery to it. Like there's very few things I could guarantee in life, but I can guarantee you whatever keyword you're bidding on this year, next year, you'll pay more for it. There's nothing that could happen like no black swan events. I promise that's very few guarantees. I'm very cuz I speak at a lot of these things and a lot of events and I always get like asked to make these predictions. I'm like I can't make any predictions and just because I other than other than ad costs are going to go up other than that. Yeah. I'm always like I made a couple predictions in the past worked out. But that's just pure luck. The only thing I can guarantee you is that ad cost goes up. And that's always been the case. So and even if you it's gone up by more but even if you think about let's say it goes up by 10% a year, over 15 years if you compound that you're I don't know double the triple and it's been going up more than that. So for sure that plays against you and to get more paid search traffic you have to obviously pay more to be in a higher position. So that incrementally each incremental click and conversion separate from it going up for everyone but every incremental click and conversion cost you more than the one before. So those two things play against everyone. So for sure as we keep growing as a company, it's something to be cognizant of that client acquisition client acquisition costs will continue to go up. We're always testing new

[20:44](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1244s)Things and testing new channels and things like that. And something also I've spoken about pretty consistently that anyone that's doing any marketing, I would highly encourage them to take 10% of their marketing spend, set it aside, and try something new every month. Could be a new channel, new platform, same platform, new campaign type. I don't know. Microsoft ads now lets you do Netflix ads. You could run Netflix through Microsoft ads as opposed to YouTube. Those are not skippable. Like people are watching those on a TV and they're a captive audience, Will they perform for your business? Maybe, maybe not. But something you need to test. And it has to be something with like no strings attached. You can't be I'm going to set 10% aside, but I want it to perform just as well as my other 90%. It has to be like completely no strings aside and honestly tell you it's something hard for me to even say because back to my web hosting example where I wouldn't invest into paid search at all because there's no guarantee return saying that is obviously outside of what I've practiced myself in the early years. But I think if you're going to grow, I think that you have to have that, There's so many new things happening, new things coming out that if you're not experimenting and testing new things, those who are will find new ways to acquire clients for cheaper than you and you might not be able to catch up to their advantage if

[22:07](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1327s)You start doing it once it's already proven 2, three years later. Yeah, 100%. Can you share one or two of those tactics that have come from that 10% budget? Yeah, for sure. So, we started doing I think originally we do a lot of it now, but originally, what can I say? I don't know if the correct word is paid, but paid listings on some of the big directories was initially something my brother did with experimental spend. And at this point, we don't spend as much as paid search, but it's our second advertising channel. And these are I don't know Capterra G2 like those directors. Some people don't even realize they're paid and it has as organic component like they vet your business, they check your reviews, they incorporate your reviews into your score, but a lot of it is paying for it. And it's something where you're paying and it's not even per click, You're paying flat monthly cost and hoping for the best. So now we're paying the same but getting less from them. So time to try something new, But that's something that came from very small test. And as with any test, you want to obviously have goals in mind and be able to quantify it. Like I wouldn't just test for the sake of testing, You want to be able what is going to establish that this was a success. Like what metrics is

[23:32](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1412s)Are going to establish success and how do I measure them and make sure I'm measuring them. It's not just throwing money away, That's for sure one of them. Clients that have recommended doing these testing things. I know on the automotive side. So I do a lot of with automotive. I have a automotive search marketing book. Automotive side for a little while people are doing really well with Facebook. Facebook changed their changed both their algorithm and their rules where it's a little bit more difficult. I think their ROI is not there anymore. I know people are test doing this 10% test approach with stuff like TikTok, TikTok is still very I would say in general very experimental. There's a lot that goes into it. I don't want to blindly say everyone get on TikTok right nine out of 10 people TikTok will not be successful but just ideas of things to consider and it could be different platforms could be different campaigns within the platforms like the Netflix example. It's just being aware and keeping an eye on what's new and different things that are coming out and testing them in a trackable way. I think for companies are growth focused, there's no other way that you'll be successful. And by the way, not everyone needs to be growth focused. Not everyone needs to grow 35% every single year. And there's a lot of headaches that go with that and not for. But if you are growth focused, I think it's an absolute must. So I want to switch focuses a little bit to the operational side. I love the way

[24:57](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1497s)That you said this a couple minutes ago where you're "Yeah, you just got to hire some more project managers and developers and designers." For me at least, scaling hasn't been quite as simple. Talk to us about what scaling has been like on the operational side, some of the challenges you faced, how you've overcome them, what you guys maybe did well even by chance, by accident, and how you've been able to scale to 400 employees. Yeah, good question. So, we're a little over 400 now, and hopefully it'll grow another 35% this year. For sure, lots of challenges. I'll tell you what has not worked. So when we just started very similar to a lot of other agencies, we had we had US employees, account managers, project managers, things like that. We even had developers in house at one point, but it just wasn't working out well. But we also had a lot of contract labor. So it's a lot of like overseas contract labor. And although it was cost effective, we always had issues with timelines. We had issues with controlling quality which in itself is a lot of to unpack. So what I mean by that is both keeping a standard like this is the standard of quality we want to achieve and keeping consistency and both were a challenge. If anything, I think consistency was the bigger challenge. Like as a agency, I almost want to say I think they're both important, but if you provide a B-level

[26:19](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1579s)Product consistently, I think it's better than providing an A-level product sometimes and a C- level sometimes and an F level some other times. And with outsource labor, the consistency was the issue for sure along with quality and delivery and many other things, time zones, I know languages. So what we did very early on is we set up offices internationally and they are centered around a certain I want to say team lead but they've become so much more than that department head you want to call it I don't even know the correct word for it but it's I don't know we have an office for front-end developers office for backend office for design office for content office for link building and each office is you each office is SmartSites employees so not contractors full-time vetted employees And surprisingly people the employees there in these countries overseas really appreciated this approach much more than I thought and they consider themselves SmartSites employees I would say even more so than US employees and what I mean by that they literally like wear the SmartSites t-shirts have like the SmartSites logo on the building and like not like we don't require any of that right like it's not it's not client facing but they really appreciate being part of a company because in a lot of these countries it's mostly like outsourced labor and people feel like

[27:40](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1660s)Outsour they don't feel like they like are part of a company right so we have these SmartSites offices in other countries SmartSites employees they are hired locally trained by the department head department lead whatever you want to call it who oversees the office and then they hire like a second in command and everything like that so that offloaded a lot from us because imagine like and by the way a lot of US companies do it. So, it's not hard to imagine, but imagine a US company trying to like hire, interview, and train overseas employees. Right, what a pain in the butt. How do you even like I don't know, do these interviews and determine who's good or not versus like someone on the ground who's from that country and who's head of your office and has vested interest in the company and everything. Them actually hiring locally on the ground and training and doing personal development, right, makes so much more sense. That was always our approach. It offloaded a lot of hiring from us which also helps a ton. US hiring is difficult enough. We have about half of our employees now in the US and half in these overseas offices. So that leaves our scaling challenges really on the US side. On the overseas offices, the mentality really is to overhire and the labor rates there are cheaper than the US which could allow us to have that mentality. So in terms of scalability like all of a sudden 30 new

[29:05](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1745s)Clients sign today we have the capacity to that we don't need to like hire and push everything off. So we overhire and then we try to grow not a cro not at the crazy rates like not at 300% or 35% is the target for every department. So we have multiple departments we have websites SEO pay-per-click email marketing social media and they have all individual goals but roughly 35% growth every year. So that's how we've done it. Not to say that we don't have challenges. There's always challenges and with having countries in offices in different countries, there's always geopolitical risk. There's always there's a lot of moving pieces and hiring within the US is also a lot of moving pieces. So for sure lots of challenges. That's always been our approach to scaling. That of course still leaves the US side and in hiring and I would like to say we've done a good job with that. So on the US side, our I don't want to say I don't want to say secret to success, but what works for us is we've been trying to hire people with a couple years of experience, not too much, not too little. And the approach really is I would love to hire people who have previously worked in an agency so they know what they're getting themselves into. Because if you hire someone right out of college and they don't know what they want or where they want to work and they haven't worked in the agency, I don't know, 50% of the time after 6 months, they're going to be what, it's not for me. And you just spend money hiring them,

[30:30](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1830s)Training them, the assigning them clients, That's been our approach with the US and overseas. And it for sure lots of challenges, but that's how we've been scaling at a I don't want to say quick pace, but at a 35% pace. Yeah. And how have you been able to standardize culture across six offices? Internationally is tough. So we have each office I would say internationally has a little bit of their own culture and on top of it's a SmartSites culture I think. And real quickly just for context are all six of the offices in different countries or do you have maybe different countries lots of geopolitical and government and taxation code issues headaches challenges. Yeah, no kidding. Yeah, it's a lot of like their own obviously I can't create US culture in a different country. So, it's a lot of it their own culture, but on top of it, it's our work ethic processes, client focused approach, things like that. We have events every year. We have one coming up actually in April where we fly everyone out to meet in person the old fashioned way. Mhm. Which I think is very helpful including the international offices for those like the team lead positions and those are able to get visas. So I think that in itself has been super helpful. In the US, we're now out of all of our offices, the US one is the only one that is officeless, meaning we have an office, but no one comes into it. So we have a we have a beautiful office in

[31:54](https://www.youtube.com/watch?v=YSB3r38rAL4&t=1914s)The lease 7 and 1/2 year lease started as soon as COVID started / COVID stuff. We moved in moved in there March 1st, closed down March 15th. It was a amazing 2 weeks. We like custom built it out. Yep. We had the same exact We had the same exact story with my ecom brand. Yep. 90 employees. Same thing. I think we had signed February 15th, closed it down March 15th. That's Yeah, I think Yeah, it was literally exactly that. I think we like the office lease started February 15th, we moved in March 1st, and you can't get I had a 7 and 1/2 year lease, so it's still there. Still there. But yeah, a couple things that came with that for sure. Now culture is a little bit trickier to maintain cuz people are not physically in the office. Definitely benefits that go along with that because we used to be two things. And now we have much broader base. I think we have employees in 31 states. So it gave us a lot more opportunity to hire really good people. And not to say we're in the New York City metro, so there's plenty of people here, I want to say, but it lets us be pickier, which is a good thing. And as a company that's growth focused with a growth goal of 35% a year, we were often constrained by office space. So we would have like office and my brother leads the growth stuff. I'm still more

[33:21](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2001s)Like the conservative approach, but he's like got to hire 10 more people. I like look around there's like one desk. I'm I don't know. Unless people sh start doing shifts or like sharing desk space. I'm like I like look around. I'm like maybe we could squeeze someone here next to the kitchen. I don't know. Someone like I don't know in the hallway. I think they tried to put someone in the hallway and then the building was like this is against fire code. So we were literally office constraints. We would we grew slower than we wanted to because we physically couldn't put people here. So the benefit of all this COVID started / COVID stuff is of course now we're not. The negatives, the culture, and what can I say? We have the once a year event where we bring everyone together for three, four days, which has been super helpful. And all of our employees have a $1,500 travel credit to travel somewhere and learn something every year, like conferences, things like that. And almost always they use it together with their people they work with, whether in their department or across departments. And that has been super helpful. It's like one of those things that putting my 1997 T35 Hosting hat on, like paying $1,500 as a for people to travel and like go to go like drink at a conference and go to like Vegas parties, like what's a hard value of that, but I think there's a lot of soft value and I think employee happiness, maintaining culture, things like that. So that's what we've been doing. But of course,

[34:42](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2082s)It's a lot harder not all being in a single office. Yeah. Now, when you said you've got about half your employees here in the US, half internationally, I was a little surprised to hear that. I would have thought it would have been maybe 7030, 6040 more international than Yeah. So, we kept a lot of things in the US. Whether that's good or bad, I don't know. It makes for high payroll costs, but for example, all of our PPC analysts, so we do a lot of like Google Ads management, stuff like that. All our PPC analysts are in the US. All of our project managers who oversee projects are in the US. Everyone except the actual developers. Good or bad of that, it's hard to judge. And for sure, we could outsource half of our US roles and we have the offices overseas and we have the literally the physical office could turn that around in 6 months. But I think quality would suffer. I think even though they have a

[36:06](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2166s)Lot of good PPC analysts, let's say paid search in many different countries, I think doing it for US local businesses, there's a huge benefit by having it done by US local employees who understand the small c almost cultural things and both ad copy and keywords and things like that I think someone setting up a campaign for, I don't know, for a dentist in a different country might not know the name of the procedures that are called in the US, Like have someone like in Asia set up like dental veneer campaigns, It's not a popular product there. They're not going to understand it. There's overall it's going to be a worse product. But yeah, I agree with you. There's definitely we're definitely USheavier on purpose. Yeah. And it was a strategic decision that you guys made to again maintain quality. I respect that. Yeah. Talk to me about accountability

[37:29](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2249s)Across virtual employees, six different offices. You got a lot going on. How do you manage all of that? Yeah. All very tough to manage. That's also a good one. Could be like a think about it in my head like a full like 1 hour presentation just about it. We use a project management portal which has a two-way feedback system meaning as tasks are assigned the project managers in the US who are assigning the task provide feedback on the employees who are doing the task. So task gets completed they pro and tasks it's not like just open close there's it's back and forth make a change to the website here I made the change here you go here's the new feedback from the client it's like I don't know thousands of projects and hundreds of comments being made every hour probably hundreds of comments so a lot of moving pieces but every comment has a feedback component where both the project managers and the US could provide feedback and the overseas staff could provide feedback back if the comment wasn't clear or was like someone was rude or something like that and then the team leads have access when we do reviews on a quarterly basis that all employees go through we have these scores they're not necessarily an absolute like right it's more of a measurement against the peers like if you're getting a lot more negative like I think a lot of developers will wind up with some negative feedback like it's impossible to have 100% just by the

[38:53](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2333s)Nature of like just the natural friction of how all of this works like right like I don't know you assign something to get done. The project manager wasn't clear on the task, so the developer didn't do it correctly, and now the client's pissed off. So, project manager is going to be "F you. I'm going to leave you a bad score." Like natural friction, let's call it. But it's all about comparing against department averages, team averages, things like that. And then people who are consistently getting the lower scores. We could track down the exact tasks that are causing them the team leads, and they could help train the employees to avoid that. So, it's a continuous feedback loop. And there's I have not come across a better way to do that than the way we're doing it. Okay. Well, I really appreciate your time. I don't want to take too much of it, but I have one more topic I want to tackle before we part ways. I want to talk about AI. I heard a quote a couple weeks ago now from Marc Benioff of Salesforce where he said, "My CTO came to me. He said, "We don't need to hire any new developers this year. Obviously, you guys are a developerheavy company. How are you looking at AI and how it can help you guys become more efficient as an agency? Yeah, good question. So, the reason a couple things the reason a lot of these companies are coming out and quoting these saying these quotes about AI is because AI is the new buzzword that helps valuations, He comes out and says something like that like

[40:17](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2417s)The value of his company goes up a couple billion dollars. Yeah. So, so you have to take that all with a grain of salt. But no, AI is changing everything very rapidly. I've been doing a lot of speaking on AI both at conferences and private groups of executives who what can I say the mood about all this went from being oblivious to it and not caring about it 2 years ago when I started these speeches to a lot of fear for a while after that and now it's coming a little bit back to reality. There's a lot of implications and efficiencies that AI could create. Not just for developers, but for any stuff you do. And I'll even give you a couple marketing examples. I don't know. Back in the day, if you're a small business that are doing your own social media, you probably have a junior employee or intern writing up your social media post like for Facebook everything. And that's probably part of their full-time job or maybe half of what they do. And they literally will like I don't know think about what to write, write up the post. Now you go to ChatGPT or your favorite gener tool and you say, "Hey ChatGPT, write me five Facebook posts at least 250 characters each. Put some emojis in. These are the topics. Make it, I don't know, make it something fun, funny. Make it about the season. Make it about the snowstorm that's coming, " And it gives it to you and you paste it in and then you go to back to ChatGPT since it does images now or your favorite image AI

[41:42](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2502s)Image generating tool. Ask it for an image to go with these posts and you're done. I don't know what I just described is probably a two-minute task. Before it was 8 hour task. So for sure efficiencies across the board. I think as a company we've been trying to roll out efficiencies at every level for every employee. And I would love for all of our employees to be proficient in generative AI stuff. I think it's going to be it's I think it's going to be similar as a transition from typewriters to computers too. If you think back to it, there was actually a couple things. There were there were first of all there were whole companies who consulted on this like literally there were consultants that would come in and help your company transition from typewriters to PCs. And those that did it's hard for a lot of people to think back to this but on a typewriter you can't really backspace. I just think of it the way I type today. Like I backspace probably my favorite key like misspel misspell something missthink something. It's got to be like if I if I check which keys worn out the most, it's got to be backspace out typewriter you had to white out. Imagine just from that standpoint the efficiencies it created, All of a sudden you could do 20% more with your time. So I think I think it's something similar. Good example I like to use is if you go on Indeed and search for prompt engineers, there's now positions called prompt engineers. Big companies are hiring them. They're paying, I don't

[43:04](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2584s)Know, 350 grand plus to be a prompt engineer. And every time I use that example, someone raises their hand and be "Well, my kids finishing high school. Do you recommend they become a prompt engineer?" And my response has always been, "No, that I think it's temporary." It's almost like the consultants that consulted getting from typewriters to computers eventually. Everyone just became proficient at computers. You don't you there's no more jobs for consultants to help you move from typewriters to computers. So, I think prompt engineering is something that's going to be part of what we do. I think people who are able to be good prompt engineers are going to be more efficient and are going to be more valuable. So, not even like business startup people, but like in the corporate world, if you're very good at prompt engineering and you go out of your way to learn it and become proficient at it, I think you will become more valuable. I think that's the approach to it. I haven't seen any really industry groundbreaking things where companies are 50% more efficient or I don't know it's incremental efficiencies I think at the same time companies who are not doing it are a disadvantage right when I get my employees to be 10% more efficient that we could deliver 10% more results for clients paying us than everyone else that's advantage that's going to be hard for other companies to overcome even if their labor costs are cheaper right so I think something to keep an eye on something to unfortunately there's still

[44:28](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2668s)Not a good way like if you really it's funny I do these speeches on generative AI and I have this like 2 hour I just did a three-hour session for the first time ever then they're like can you come to our company and teach all our employees this and I'm like that's unfortunately like I'm trying to teach my employees this right like I can't come I don't have that's not my business model but there's not too many I know there's a lot of books out there and there's a lot of AI written books about AI which in itself I think is funny but the best way to learn it is still to just use it. It's almost like the internet when just came out, oh, how do I use this thing? Like connect like dial up to CompuServe and then what do I click? I think the best thing is still to try to use it and as you go through your daytoday stuff, think about how it could make your life better. It's almost like a automatic like assistant for you, I don't know. Like I was just talking to a car dealer deals with a he was a he's a director he's head of a general service manager I think is his official title. So he deals with a lot of complaints. Service at dealerships is a big pain point. I don't know why but amongst other things at dealerships that's a big pain point. And there's a lot of clients who are like you did this wrong did this wrong and you gave me my car back scratched. And I was like and he was like just like I had a meeting with him about something else and I could see he's not focused and I'm like I'm like everything okay? He's like yes customers send me this email that we did this and I don't know what to respond and I've been trying working on

[45:52](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2752s)This email and I was like dude put this into ChatGPT. It literally gave such a better response that he could have because it took the emotion out of it. Right. It's very hard for a lot of folks to take emotion out of dealing with pissed-off customers. What a great tool for that, Like ChatGPT has no emotion. It's not going to like start like a petty fight with the customer, But how do you even He knew of ChatGPT. He's used it before. He's like He's "Wow, I didn't even realize I could use it for this." So, I think that would be my recommendation as you go through your day-to-day, whether you're managing a company or employee or whatever you do, and just think about how it could make your life better. And I think slowly over time, you'll create efficiencies. If you now are spending I don't know if your job is to respond to these emails and you're spending 10 hours a day now you're spending 6 hours a day, You have 4 hours of time. So I think that's where it's heading. I don't think it's going to completely replace people yet, It might eventually head there. But I think for most people and there's some executives that asked me to speak to them about it because they're afraid it was going to replace them, Like middle managers like I've been hearing there's going to be no more middle managers. Like what am I going to do? I'm too I'm too old to find another job. I think most people, even programmers, even though Zuckerberg thinks otherwise, but I don't think 2025 generally could help you debug code much quicker

[47:17](https://www.youtube.com/watch?v=YSB3r38rAL4&t=2837s)Than you could otherwise. But I think it's all about the programmer that becomes efficient and uses it efficiently versus like a robot replacing that person altogether. Yeah, totally makes sense. Alex, thank you so much again for being here. If somebody wants to connect with you, what's the best way for them to do that? Yeah, good question. So, if you go to my website, alexmelen.com, alexmelen.com, at the bottom, I have all my social media linked. I think I'm the most active these days on LinkedIn. So, that's probably the best place to connect, but any of those channels would be fine. And of course, SmartSites.com. SmartSites.com. And I encourage people to actually put into Google and search about us and see some of our reviews instead of going directly. Amazing. Thanks so much. Yep. Thank you. Welcome to the Growth Boss podcast, where we seek out the secrets to high-performing campaigns from some of the smartest marketers in the world. I'm your host, Jared Smith. Today, I have Alex Melen with me, and he's going to teach us what it takes to grow a nine-figure advertising and marketing agency. Alex is an award-winning entrepreneur, keynote speaker, and best-selling author who has been a leader in the digital marketing space for decades. He co-founded SmartSites, a toprated digital marketing agency with over 400 employees across six offices worldwide. Alex has spoken at nearly 100 conferences and has been featured in Forbes, Bloomberg, NPR, and more. Originally from Ukraine, he started his first company in 1997 and later launched SmartSites with his brother in 2011. Recognized as one of Business Week's top 25 entrepreneurs under 25, he was also invited to the White House to discuss young entrepreneurship. Alex, thanks so much for being here today. Thank you for having me. That's a great intro. That's probably the best intro I've had so far, and I've done a lot of podcast. That was very great. That was good. I appreciate it. Thank you. So, Alex, I would love to start at the early days of SmartSites. Talk to me about what those early days were like and what was the inflection point where you were "Hey, let's scale this thing." So, but let's start at the early days. Yeah. Yeah. So, good question. So, I started with my younger brother as he was graduating college. I was working at Publicis at the time doing digital for Samsung and Walmart actually. So, very what is what can I say? Very enterprise level stuff. And the idea with SmartSites was to bring some of that execution to small businesses. That was the idea. My brother was doing a lot of SEO at the time. He say almost in a consulting basis, not really scaled out to how we move to moved it to later, but he was like on the ground I would say like SEO consultant. So, we combined that and a couple other pieces to form SmartSites with the idea of bringing the latest and greatest in digital to SMB folks. Yeah, I'm trying to think back. So, this 2011, which seems like it feels like a couple years ago, but I guess it's been a bunch of years. So, we started like 10 employees, a lot of them being my brother's friends from Cornell. In the beginning, I think we had a good vision. We had a good team, but I think we were not super focused. And what I mean by that is when we started, we didn't really know who we were or what our value add was. And it didn't take long, but it definitely I would say at least a year for us to really zero in what our value add to clients were because we had the knowledge, expertise, and the team to really do anything. We really were all over the place. Like we started with making websites but we were I don't know we were doing a lot of social media stuff when social media stuff wasn't super popular. It was like the likes on Facebook pages right 2011 it wasn't it wasn't the social media it is today and very quickly we realized that's probably not our big value add at that time. So the way we started, we were in a lot of different directions and then slowly pulled back to our core value ads and again or at least the mindset we tried to take is where do we add the most value for our clients? Is it trying to get them Facebook likes and at that time turned out to be no that's not where our value at is. So those are those were the early days. It was it was a lot of fun. It was a lot of people worked very long hours like we practically lived in the office. This was by the way back in the day when people came into offices. So we had You're right. You're right. Yeah. Physical office. It was hard for to imagine these days, but we had physical office and it was a lot of fun. It was a very fun atmosphere and the as we've grown our company, I always try to think back to the culture aspect that we created then and to try to carry it through as we've been growing. I love that. I want to dig a little bit into that value add and how you guys honed in on your unique selling proposition. I think that's something a lot of entrepreneurs struggle with. I'm sure you were like me. You're "Hey, anybody that's willing to pay me money, I'll figure it out. We'll make it work." And then at some point, you're "Okay, we just we can't do everything under the sun." Like you said, we can't go, Facebook likes are not our USP. So, how did you figure that out for you guys? Yeah. So, it took a little while and it's not obvious and I agree that something a lot of entrepreneurs struggle with. They're especially something like a digital agency, but it's similar to other business lines. Something like a digital agency could really go in a lot of different directions, But if you go in too many directions, you're going to be mediocre at everything and not really good at anything, If you're not focused enough on the right thing or if you go focus on something that you think is a value add and really isn't, that also is not going to work very well. So, I'll tell you about a couple of mistakes we've made in hopes that could help others learn from them. And it seems like a lot of people who listen to this podcast are in that growth mindset or trying to focus their business. So I think it'll be useful. So we started as a digital agency that could do anything, Any lead we got, we would take. So we to give context, I don't know, we make websites, we do pay-per-click, we do SEO, we do social media. Anything if we didn't know how to do it, we would figure out and then we would do it. Couple pitfalls. So by doing that, we took a lot of business that we probably shouldn't have. Being a small company that's self-funded, it wasn't in our mindset or really in our culture to turn down clients to be "No, that's not something we could do or not some that's not a good idea or not good use of funds." it was just not like you want it, we'll figure it out, we'll do it. So, a couple ones that were bad for everyone involved. We took on a lot of low-budget stuff, which again, for a lot of early entrepreneurs, I think it's very hard to figure out what your perfect customer is and to figure out how to gently not accept something that's not a good fit. So, for example, we did a lot of websites for a very small amount of money. So, people call up, I need a website. Fine. Well, these days we charge 10,000 for a website, but let's say back I forget the prices back then, but we'd say, I don't know, 5,000, 8,000, whatever it is. And the client would be well, I want something very simple. All I could afford is $1,000. Can you do it? We' be well, I guess something simple, I guess. Fine, we'll figure it out, I guess. And client would be I'll give you 50% right now, as a startup, it's very hard to be please don't give me your money. We went up with like situations that were net negative for everyone. So this is how it plays out for a $1,000 website, We have a project manager who winds up spending a lot of time, developers spending a lot of time. We will surely lose money on this website. And for the lowbudget ones, I would say nine times out of 10, we would lose money. The project would go way over, You think simple website, oh, we'll do in a couple months. Client wants like 3,000 edits over the la next 3 years. And the website launches on like year 7. The net effect is the project manager who is our employee in the office, right, is very frustrated with this whole process. Our project managers get comp. They have pay salaries, but they get compensated from the projects they manage. So, they're spending a lot of time not making anything from this specific client, let's say. So, negative experience for project manager. For the company, we wind up losing money. Website probably launches 7 years later, at which point it's already obsolete. Client has a bad experience. Client doesn't care that they paid $1,000 or $10,000 if they have a bad website took longer than they expect or it looks terrible. They don't care that they paid you a,000 and not $10,000, They're still going to be pissed. They're going to leave you a bad review. Your reputation's going to tank. Client's going to be upset. He's going to tell other people not to use your services. So, in the end, you thought you're doing a good thing, but like we'll help you out. We'll do for,000 bucks. And it's in that negative like no one wins. Everyone loses. All losers, no winners. So I think as and I've started other companies before and I've been on the board in a couple companies. I think that's very important for early like I don't see that issue as much in established businesses but for early startups, early entrepreneurs definitely super important to figure out what customer is just not going to be a good experience for anyone. So I think that was that was a big one and I think it's still a big lesson for any early entrepreneurs to figure out and again it's very hard like right you're a new business you really want to make money and grow I don't know you're some you try and beat the last month sales and this like prop like client comes in you're not like oh all right we just we just won't do it forget about it right so that in itself is hard but again you got to think big picture of how this all plays out right and especially when it comes to reputation like you give discounts and do things cheaper or cut corners. I think reputation is the most important thing any business has. Once you lose reputation, I think it's almost impossible to dig yourself out from under. So, that's one big one. I'll do one more. I won't spend the whole time just on this question. I'll give you one more. As we were figuring out that we were good at making websites and doing marketing, we were wait, why don't we just make our own websites, So, like our for our business. So, we had a client that was e-commerce outdoor gear website like they sold like outdoor gear products think sports authority but they went out of business now but like Dick's Sporting Goods something like that but I'm generating like huge returns for them. So like wait we start our own e-commerce website. So we bought outdoorgear.net. We still own the domain, built the website very cheaply cuz it's our own cost, And then they're marketing to we knew the we knew the vendors. It's the same vendors that supply all these outdoor stores including the physical brick and mortar. So we had the vendors. We had similar pricing to them. And then we started selling a lot of stuff and this was this was like great. We're like crazy ROI like who needs to make websites when we're selling like camping gear and making lots of money, But then we ran into all the op stuff. So it when you sell a product that's not the end of the process. Some of it gets drop shipped, some you have to package. So we had like our I don't know like highly paid, highly trained, very technical employees like packing boxes. Yeah. And then once you send the box in, guess what? You got to deal with the customer. So customer calls in. I ordered I thought I ordered a large, but I got an extra large. Well, ma'am, you ordered an extra large. No, no, no. I'm pretty sure I ordered a large. So now all of a sudden we had like PHP developers doing customer service. People were returning things like just with send it back, Right. Send it back and do a charge back. Like I don't want to send it back. I remember one lady claimed that and it was drop shipped so it wasn't didn't even go through us. But one lady claimed she got a glove in them from us. She bought like camping gloves that there was glass in it. She's like I cut off my hand. I'm going to sue you. And we're like man this is not what our value add is. Like packing box packing boxes and doing customer and there are companies that are very good at it right like and it doesn't have to be outsourced there's companies that do US packaging and customer service and just very good at it we were not we were not like having like developers do customer service trust me was not a good experience for anyone so we still have the domain the website we took down but I think the takeaway there is it's very easy as a startup that's not super focused and not being super focused is not necessarily a bad thing, In the beginning, it might even be a good thing, but being a startup not super focused, you really got to figure out what you're good at and what your value add is and what you're really what you're bringing to market, We could make the really good website. We could do really good marketing to it. Can we do customer service for camping gear and like package boxes and deal with the returns? No, we were terrible at it. We were really, really bad at it. So, and it took a little figuring out and I think that's normal. I think I don't think that's necessarily a bad thing. If a business is listening to me tell the story and they're "Man, am I doing something wrong? I'm having similar like it's not necessarily a bad thing to try out different directions and I think if anything, it helps you zero in on what you really are good at and really start thinking about what my value it is value add is to the to the customers and what I should focus on." Yeah, 100%. Let's talk about that inflection point. At what point was it in this business journey where you're "Okay, we're not doing the camping gear stuff anymore. We're really going to grow this thing." Was it just a slow growth, 20%, 30% year-over-year, or was there like a year where you're "Okay, we made this decision, everything changed, skyrocketed up from there." Yeah. So, very good question. So, direct answer was we've always grown at a very steady pace. Our growth has been our minimum growth has been 35% year-over-year every single year since we started. Last year was the only one that came in a little bit under 35% on revenue and on headcount every single year. Never missed a year. I think our worst was last year at 34% and our best was like 37%. So we've been very steady with that. I'll tell you though that there's I've seen it both sides of it where it's works out not so well. So the first company I had T35 Hosting I started one of the first web hosting companies. So this was I don't know mid '90s towards 97. This is if for those who have been around back then it was Hyperar Tripod GeoCities if any of those names ring a bell. And my business my hosting company actually predated GeoCities predated Google even. And there well first of all I was very young but aside from that I was very conservative in the growth. So I was very conservative. I would not invest like a single dollar without definitely knowing for sure I'm going to get X amount back. And this was when like I remember this was before Google, but once Google started and Google Ads, I remember Google Ads was like 10 cents a click for hosting keywords. And I was like I was like there's no way I'm blindly paying per click, not knowing how many will convert, It was like 10 cents a click. I'm like there's no way. And like so the domain so the first business I started was top 35 websites. So I had the domain T35.com. So for the hosting business, I'm what, I'll reuse the domain. I didn't even want to invest in like hosting.com was available. Like I could have hosting.com. I'm it was like $30. I'm oh no, this 30 bucks. So I was like very conservative with all the growth. And there were there were a couple times where we had investors approach and they're "Man, listen, you need to grow. We're going to invest the money and grow the business." And by the way, with all those jokes aside, I did grow to we had a million customers. So it grew it to just about a million customers, which at that time was a big part of the big part of the internet usage in the United States. So I did manage to grow it. The whole industry grew around me much quicker and it was because I was not investing in the growth. So that's the conservative story of don't invest in growth at all and just like I was like happy had I had two employees like happy I have two employees I don't want more I'm good where I am and that's fine in a lot of business lines by the way we have I don't know roofers plumbers pavers even doctors who like it's not either it's not really scalable or they don't want and they're fine with it right like I don't know family business roofing I don't I don't want anyone else but the hosting industry tech space really grows quickly and it grew around me and the companies that grew around me are the ones who had lots of investments, private equity, all of that. And I just I that was the conservative approach. They wound up growing way too quick. They actually w up being okay. They had to give up a lot of equity. It's all it all depends like what you want on it, Like I don't know if I'd be able to work at a company that like has my name on it and I own where I own 3%. That's just me, but it's not necessarily the correct approach, but yeah. So, they grew really quick. They wound up having to do almost yearly mass firings and mass layoffs, which by the way in the tech space is normal. Like I don't know Facebook, Google, Microsoft, all of those do layoffs every I think there's a website that literally tracks like hundreds of thousands of lay tens of thousands per year from the tech space. So, but that just it wasn't not something I would want either. I really don't like the like overhire mass fire approach. Yeah. So that's other extreme of growing really rapidly and that company specifically moved to the west coast to support their growth and I don't know if it's a chicken or the egg but in Silicon Valley you forced I think forced to grow or go out of business almost but I think there's negatives to both and I've seen both like the growing too fast and growing not fast enough. I don't know what the magic number is. We've been good with our 35% year-over-year, but I think it's very industry specific. But there certainly is some magic number where you definitely don't want to be my hosting example of having invented a lot of this like early hosting technology and then seen the industry grow around me in very quickly like in 5 years. So yeah, very long-winded answer to your question. No, that's fine. I'm curious on the marketing side of growth and then I would love to hear operational challenges as you guys have grown. But let's start with the marketing side. Growing 35% year-over-year is tough. I mean, at some point, you're ranking for all the keywords you can rank for. You're got the PPC ads out. It's like you've captured as much of the market as there is. So, that's really impressive that for 14 15 years you guys have been consistently growing. Talk to me about what you feel like some of the keys to success were with that. Yeah, so we have a I don't want to say unique approach, but a maybe somewhat unique approach. We don't do any outbound marketing, meaning we invest in things like paid search for the keywords you would imagine we would SEO, pay-per-click, SEO agency, things like that. And leads come in and our sales people take the leads. Most agencies of our size are similar do a lot more outbound which is like cold calling things like that. So for better or worse that's just not something we've done. Our growth has always been the way we start the growth is always on the marketing side. Every year, the cost of paid search goes up. And there's no like there's no mystery to it. Like there's very few things I could guarantee in life, but I can guarantee you whatever keyword you're bidding on this year, next year, you'll pay more for it. There's nothing that could happen like no black swan events. I promise that's very few guarantees. I'm very cuz I speak at a lot of these things and a lot of events and I always get like asked to make these predictions. I'm like I can't make any predictions and just because I other than other than ad costs are going to go up other than that. Yeah. I'm always like I made a couple predictions in the past worked out. But that's just pure luck. The only thing I can guarantee you is that ad cost goes up. And that's always been the case. So and even if you it's gone up by more but even if you think about let's say it goes up by 10% a year, over 15 years if you compound that you're I don't know double the triple and it's been going up more than that. So for sure that plays against you and to get more paid search traffic you have to obviously pay more to be in a higher position. So that incrementally each incremental click and conversion separate from it going up for everyone but every incremental click and conversion cost you more than the one before. So those two things play against everyone. So for sure as we keep growing as a company, it's something to be cognizant of that client acquisition client acquisition costs will continue to go up. We're always testing new things and testing new channels and things like that. And something also I've spoken about pretty consistently that anyone that's doing any marketing, I would highly encourage them to take 10% of their marketing spend, set it aside, and try something new every month. Could be a new channel, new platform, same platform, new campaign type. I don't know. Microsoft ads now lets you do Netflix ads. You could run Netflix through Microsoft ads as opposed to YouTube. Those are not skippable. Like people are watching those on a TV and they're a captive audience, Will they perform for your business? Maybe, maybe not. But something you need to test. And it has to be something with like no strings attached. You can't be I'm going to set 10% aside, but I want it to perform just as well as my other 90%. It has to be like completely no strings aside and honestly tell you it's something hard for me to even say because back to my web hosting example where I wouldn't invest into paid search at all because there's no guarantee return saying that is obviously outside of what I've practiced myself in the early years. But I think if you're going to grow, I think that you have to have that, There's so many new things happening, new things coming out that if you're not experimenting and testing new things, those who are will find new ways to acquire clients for cheaper than you and you might not be able to catch up to their advantage if you start doing it once it's already proven 2, three years later. Yeah, 100%. Can you share one or two of those tactics that have come from that 10% budget? Yeah, for sure. So, we started doing I think originally we do a lot of it now, but originally, what can I say? I don't know if the correct word is paid, but paid listings on some of the big directories was initially something my brother did with experimental spend. And at this point, we don't spend as much as paid search, but it's our second advertising channel. And these are I don't know Capterra G2 like those directors. Some people don't even realize they're paid and it has as organic component like they vet your business, they check your reviews, they incorporate your reviews into your score, but a lot of it is paying for it. And it's something where you're paying and it's not even per click, You're paying flat monthly cost and hoping for the best. So now we're paying the same but getting less from them. So time to try something new, But that's something that came from very small test. And as with any test, you want to obviously have goals in mind and be able to quantify it. Like I wouldn't just test for the sake of testing, You want to be able what is going to establish that this was a success. Like what metrics is are going to establish success and how do I measure them and make sure I'm measuring them. It's not just throwing money away, That's for sure one of them. Clients that have recommended doing these testing things. I know on the automotive side. So I do a lot of with automotive. I have a automotive search marketing book. Automotive side for a little while people are doing really well with Facebook. Facebook changed their changed both their algorithm and their rules where it's a little bit more difficult. I think their ROI is not there anymore. I know people are test doing this 10% test approach with stuff like TikTok, TikTok is still very I would say in general very experimental. There's a lot that goes into it. I don't want to blindly say everyone get on TikTok right nine out of 10 people TikTok will not be successful but just ideas of things to consider and it could be different platforms could be different campaigns within the platforms like the Netflix example. It's just being aware and keeping an eye on what's new and different things that are coming out and testing them in a trackable way. I think for companies are growth focused, there's no other way that you'll be successful. And by the way, not everyone needs to be growth focused. Not everyone needs to grow 35% every single year. And there's a lot of headaches that go with that and not for. But if you are growth focused, I think it's an absolute must. So I want to switch focuses a little bit to the operational side. I love the way that you said this a couple minutes ago where you're "Yeah, you just got to hire some more project managers and developers and designers." For me at least, scaling hasn't been quite as simple. Talk to us about what scaling has been like on the operational side, some of the challenges you faced, how you've overcome them, what you guys maybe did well even by chance, by accident, and how you've been able to scale to 400 employees. Yeah, good question. So, we're a little over 400 now, and hopefully it'll grow another 35% this year. For sure, lots of challenges. I'll tell you what has not worked. So when we just started very similar to a lot of other agencies, we had we had US employees, account managers, project managers, things like that. We even had developers in house at one point, but it just wasn't working out well. But we also had a lot of contract labor. So it's a lot of like overseas contract labor. And although it was cost effective, we always had issues with timelines. We had issues with controlling quality which in itself is a lot of to unpack. So what I mean by that is both keeping a standard like this is the standard of quality we want to achieve and keeping consistency and both were a challenge. If anything, I think consistency was the bigger challenge. Like as a agency, I almost want to say I think they're both important, but if you provide a B-level product consistently, I think it's better than providing an A-level product sometimes and a C- level sometimes and an F level some other times. And with outsource labor, the consistency was the issue for sure along with quality and delivery and many other things, time zones, I know languages. So what we did very early on is we set up offices internationally and they are centered around a certain I want to say team lead but they've become so much more than that department head you want to call it I don't even know the correct word for it but it's I don't know we have an office for front-end developers office for backend office for design office for content office for link building and each office is you each office is SmartSites employees so not contractors full-time vetted employees And surprisingly people the employees there in these countries overseas really appreciated this approach much more than I thought and they consider themselves SmartSites employees I would say even more so than US employees and what I mean by that they literally like wear the SmartSites t-shirts have like the SmartSites logo on the building and like not like we don't require any of that right like it's not it's not client facing but they really appreciate being part of a company because in a lot of these countries it's mostly like outsourced labor and people feel like outsour they don't feel like they like are part of a company right so we have these SmartSites offices in other countries SmartSites employees they are hired locally trained by the department head department lead whatever you want to call it who oversees the office and then they hire like a second in command and everything like that so that offloaded a lot from us because imagine like and by the way a lot of US companies do it. So, it's not hard to imagine, but imagine a US company trying to like hire, interview, and train overseas employees. Right, what a pain in the butt. How do you even like I don't know, do these interviews and determine who's good or not versus like someone on the ground who's from that country and who's head of your office and has vested interest in the company and everything. Them actually hiring locally on the ground and training and doing personal development, right, makes so much more sense. That was always our approach. It offloaded a lot of hiring from us which also helps a ton. US hiring is difficult enough. We have about half of our employees now in the US and half in these overseas offices. So that leaves our scaling challenges really on the US side. On the overseas offices, the mentality really is to overhire and the labor rates there are cheaper than the US which could allow us to have that mentality. So in terms of scalability like all of a sudden 30 new clients sign today we have the capacity to that we don't need to like hire and push everything off. So we overhire and then we try to grow not a cro not at the crazy rates like not at 300% or 35% is the target for every department. So we have multiple departments we have websites SEO pay-per-click email marketing social media and they have all individual goals but roughly 35% growth every year. So that's how we've done it. Not to say that we don't have challenges. There's always challenges and with having countries in offices in different countries, there's always geopolitical risk. There's always there's a lot of moving pieces and hiring within the US is also a lot of moving pieces. So for sure lots of challenges. That's always been our approach to scaling. That of course still leaves the US side and in hiring and I would like to say we've done a good job with that. So on the US side, our I don't want to say I don't want to say secret to success, but what works for us is we've been trying to hire people with a couple years of experience, not too much, not too little. And the approach really is I would love to hire people who have previously worked in an agency so they know what they're getting themselves into. Because if you hire someone right out of college and they don't know what they want or where they want to work and they haven't worked in the agency, I don't know, 50% of the time after 6 months, they're going to be what, it's not for me. And you just spend money hiring them, training them, the assigning them clients, That's been our approach with the US and overseas. And it for sure lots of challenges, but that's how we've been scaling at a I don't want to say quick pace, but at a 35% pace. Yeah. And how have you been able to standardize culture across six offices? Internationally is tough. So we have each office I would say internationally has a little bit of their own culture and on top of it's a SmartSites culture I think. And real quickly just for context are all six of the offices in different countries or do you have maybe different countries lots of geopolitical and government and taxation code issues headaches challenges. Yeah, no kidding. Yeah, it's a lot of like their own obviously I can't create US culture in a different country. So, it's a lot of it their own culture, but on top of it, it's our work ethic processes, client focused approach, things like that. We have events every year. We have one coming up actually in April where we fly everyone out to meet in person the old fashioned way. Mhm. Which I think is very helpful including the international offices for those like the team lead positions and those are able to get visas. So I think that in itself has been super helpful. In the US, we're now out of all of our offices, the US one is the only one that is officeless, meaning we have an office, but no one comes into it. The lease 7 and 1/2 year lease started as soon as COVID started / COVID stuff. We moved in moved in there March 1st, closed down March 15th. It was a amazing 2 weeks. We like custom built it out. Yep. We had the same exact We had the same exact story with my ecom brand. Yep. 90 employees. Same thing. I think we had signed February 15th, closed it down March 15th. That's Yeah, I think Yeah, it was literally exactly that. I think we like the office lease started February 15th, we moved in March 1st, and you can't get I had a 7 and 1/2 year lease, so it's still there. Still there. But yeah, a couple things that came with that for sure. Now culture is a little bit trickier to maintain cuz people are not physically in the office. Definitely benefits that go along with that because we used to be two things. And now we have much broader base. I think we have employees in 31 states. So it gave us a lot more opportunity to hire really good people. And not to say we're in the New York City metro, so there's plenty of people here, I want to say, but it lets us be pickier, which is a good thing. And as a company that's growth focused with a growth goal of 35% a year, we were often constrained by office space. So we would have like office and my brother leads the growth stuff. I'm still more like the conservative approach, but he's like got to hire 10 more people. I like look around there's like one desk. I'm I don't know. Unless people sh start doing shifts or like sharing desk space. I'm like I like look around. I'm like maybe we could squeeze someone here next to the kitchen. I don't know. Someone like I don't know in the hallway. I think they tried to put someone in the hallway and then the building was like this is against fire code. So we were literally office constraints. We would we grew slower than we wanted to because we physically couldn't put people here. So the benefit of all this COVID started / COVID stuff is of course now we're not. The negatives, the culture, and what can I say? We have the once a year event where we bring everyone together for three, four days, which has been super helpful. And all of our employees have a $1,500 travel credit to travel somewhere and learn something every year, like conferences, things like that. And almost always they use it together with their people they work with, whether in their department or across departments. And that has been super helpful. It's like one of those things that putting my 1997 T35 Hosting hat on, like paying $1,500 as a for people to travel and like go to go like drink at a conference and go to like Vegas parties, like what's a hard value of that, but I think there's a lot of soft value and I think employee happiness, maintaining culture, things like that. So that's what we've been doing. But of course, it's a lot harder not all being in a single office. Yeah. Now, when you said you've got about half your employees here in the US, half internationally, I was a little surprised to hear that. I would have thought it would have been maybe 7030, 6040 more international than Yeah. So, we kept a lot of things in the US. Whether that's good or bad, I don't know. It makes for high payroll costs, but for example, all of our PPC analysts, so we do a lot of like Google Ads management, stuff like that. All our PPC analysts are in the US. All of our project managers who oversee projects are in the US. Everyone except the actual developers. Good or bad of that, it's hard to judge. And for sure, we could outsource half of our US roles and we have the offices overseas and we have the literally the physical office could turn that around in 6 months. But I think quality would suffer. I think even though they have a lot of good PPC analysts, let's say paid search in many different countries, I think doing it for US local businesses, there's a huge benefit by having it done by US local employees who understand the small c almost cultural things and both ad copy and keywords and things like that I think someone setting up a campaign for, I don't know, for a dentist in a different country might not know the name of the procedures that are called in the US, Like have someone like in Asia set up like dental veneer campaigns, It's not a popular product there. They're not going to understand it. There's overall it's going to be a worse product. But yeah, I agree with you. There's definitely we're definitely USheavier on purpose. Yeah. And it was a strategic decision that you guys made to again maintain quality. I respect that. Yeah. Talk to me about accountability across virtual employees, six different offices. You got a lot going on. How do you manage all of that? Yeah. All very tough to manage. That's also a good one. Could be like a think about it in my head like a full like 1 hour presentation just about it. We use a project management portal which has a two-way feedback system meaning as tasks are assigned the project managers in the US who are assigning the task provide feedback on the employees who are doing the task. So task gets completed they pro and tasks it's not like just open close there's it's back and forth make a change to the website here I made the change here you go here's the new feedback from the client it's like I don't know thousands of projects and hundreds of comments being made every hour probably hundreds of comments so a lot of moving pieces but every comment has a feedback component where both the project managers and the US could provide feedback and the overseas staff could provide feedback back if the comment wasn't clear or was like someone was rude or something like that and then the team leads have access when we do reviews on a quarterly basis that all employees go through we have these scores they're not necessarily an absolute like right it's more of a measurement against the peers like if you're getting a lot more negative like I think a lot of developers will wind up with some negative feedback like it's impossible to have 100% just by the nature of like just the natural friction of how all of this works like right like I don't know you assign something to get done. The project manager wasn't clear on the task, so the developer didn't do it correctly, and now the client's pissed off. So, project manager is going to be "F you. I'm going to leave you a bad score." Like natural friction, let's call it. But it's all about comparing against department averages, team averages, things like that. And then people who are consistently getting the lower scores. We could track down the exact tasks that are causing them the team leads, and they could help train the employees to avoid that. So, it's a continuous feedback loop. And there's I have not come across a better way to do that than the way we're doing it. Okay. Well, I really appreciate your time. I don't want to take too much of it, but I have one more topic I want to tackle before we part ways. I want to talk about AI. I heard a quote a couple weeks ago now from Marc Benioff of Salesforce where he said, "My CTO came to me. He said, "We don't need to hire any new developers this year. Obviously, you guys are a developerheavy company. How are you looking at AI and how it can help you guys become more efficient as an agency? Yeah, good question. So, the reason a couple things the reason a lot of these companies are coming out and quoting these saying these quotes about AI is because AI is the new buzzword that helps valuations, He comes out and says something like that like the value of his company goes up a couple billion dollars. Yeah. So, so you have to take that all with a grain of salt. But no, AI is changing everything very rapidly. I've been doing a lot of speaking on AI both at conferences and private groups of executives who what can I say the mood about all this went from being oblivious to it and not caring about it 2 years ago when I started these speeches to a lot of fear for a while after that and now it's coming a little bit back to reality. There's a lot of implications and efficiencies that AI could create. Not just for developers, but for any stuff you do. And I'll even give you a couple marketing examples. I don't know. Back in the day, if you're a small business that are doing your own social media, you probably have a junior employee or intern writing up your social media post like for Facebook everything. And that's probably part of their full-time job or maybe half of what they do. And they literally will like I don't know think about what to write, write up the post. Now you go to ChatGPT or your favorite gener tool and you say, "Hey ChatGPT, write me five Facebook posts at least 250 characters each. Put some emojis in. These are the topics. Make it, I don't know, make it something fun, funny. Make it about the season. Make it about the snowstorm that's coming, " And it gives it to you and you paste it in and then you go to back to ChatGPT since it does images now or your favorite image AI image generating tool. Ask it for an image to go with these posts and you're done. I don't know what I just described is probably a two-minute task. Before it was 8 hour task. So for sure efficiencies across the board. I think as a company we've been trying to roll out efficiencies at every level for every employee. And I would love for all of our employees to be proficient in generative AI stuff. I think it's going to be it's I think it's going to be similar as a transition from typewriters to computers too. If you think back to it, there was actually a couple things. There were there were first of all there were whole companies who consulted on this like literally there were consultants that would come in and help your company transition from typewriters to PCs. And those that did it's hard for a lot of people to think back to this but on a typewriter you can't really backspace. I just think of it the way I type today. Like I backspace probably my favorite key like misspel misspell something missthink something. It's got to be like if I if I check which keys worn out the most, it's got to be backspace out typewriter you had to white out. Imagine just from that standpoint the efficiencies it created, All of a sudden you could do 20% more with your time. So I think I think it's something similar. Good example I like to use is if you go on Indeed and search for prompt engineers, there's now positions called prompt engineers. Big companies are hiring them. They're paying, I don't know, 350 grand plus to be a prompt engineer. And every time I use that example, someone raises their hand and be "Well, my kids finishing high school. Do you recommend they become a prompt engineer?" And my response has always been, "No, that I think it's temporary." It's almost like the consultants that consulted getting from typewriters to computers eventually. Everyone just became proficient at computers. You don't you there's no more jobs for consultants to help you move from typewriters to computers. So, I think prompt engineering is something that's going to be part of what we do. I think people who are able to be good prompt engineers are going to be more efficient and are going to be more valuable. So, not even like business startup people, but like in the corporate world, if you're very good at prompt engineering and you go out of your way to learn it and become proficient at it, I think you will become more valuable. I think that's the approach to it. I haven't seen any really industry groundbreaking things where companies are 50% more efficient or I don't know it's incremental efficiencies I think at the same time companies who are not doing it are a disadvantage right when I get my employees to be 10% more efficient that we could deliver 10% more results for clients paying us than everyone else that's advantage that's going to be hard for other companies to overcome even if their labor costs are cheaper right so I think something to keep an eye on something to unfortunately there's still not a good way like if you really it's funny I do these speeches on generative AI and I have this like 2 hour I just did a three-hour session for the first time ever then they're like can you come to our company and teach all our employees this and I'm like that's unfortunately like I'm trying to teach my employees this right like I can't come I don't have that's not my business model but there's not too many I know there's a lot of books out there and there's a lot of AI written books about AI which in itself I think is funny but the best way to learn it is still to just use it. It's almost like the internet when just came out, oh, how do I use this thing? Like connect like dial up to CompuServe and then what do I click? I think the best thing is still to try to use it and as you go through your daytoday stuff, think about how it could make your life better. It's almost like a automatic like assistant for you, I don't know. Like I was just talking to a car dealer deals with a he was a he's a director he's head of a general service manager I think is his official title. So he deals with a lot of complaints. Service at dealerships is a big pain point. I don't know why but amongst other things at dealerships that's a big pain point. And there's a lot of clients who are like you did this wrong did this wrong and you gave me my car back scratched. And I was like and he was like just like I had a meeting with him about something else and I could see he's not focused and I'm like I'm like everything okay? He's like yes customers send me this email that we did this and I don't know what to respond and I've been trying working on this email and I was like dude put this into ChatGPT. It literally gave such a better response that he could have because it took the emotion out of it. Right. It's very hard for a lot of folks to take emotion out of dealing with pissed-off customers. What a great tool for that, Like ChatGPT has no emotion. It's not going to like start like a petty fight with the customer, But how do you even He knew of ChatGPT. He's used it before. He's like He's "Wow, I didn't even realize I could use it for this." So, I think that would be my recommendation as you go through your day-to-day, whether you're managing a company or employee or whatever you do, and just think about how it could make your life better. And I think slowly over time, you'll create efficiencies. If you now are spending I don't know if your job is to respond to these emails and you're spending 10 hours a day now you're spending 6 hours a day, You have 4 hours of time. So I think that's where it's heading. I don't think it's going to completely replace people yet, It might eventually head there. But I think for most people and there's some executives that asked me to speak to them about it because they're afraid it was going to replace them, Like middle managers like I've been hearing there's going to be no more middle managers. Like what am I going to do? I'm too I'm too old to find another job. I think most people, even programmers, even though Zuckerberg thinks otherwise, but I don't think 2025 generally could help you debug code much quicker than you could otherwise. But I think it's all about the programmer that becomes efficient and uses it efficiently versus like a robot replacing that person altogether. Yeah, totally makes sense. Alex, thank you so much again for being here. If somebody wants to connect with you, what's the best way for them to do that? Yeah, good question. So, if you go to my website, alexmelen.com, alexmelen.com, at the bottom, I have all my social media linked. I think I'm the most active these days on LinkedIn. So, that's probably the best place to connect, but any of those channels would be fine. And of course, SmartSites.com. SmartSites.com. And I encourage people to actually put into Google and search about us and see some of our reviews instead of going directly. Amazing. Thanks so much. Yep. Thank you.

Growing an agency to nine figures takes more than talent. It takes clarity, systems, and the ability to scale without losing your edge. From defining a clear value proposition to building a global team, success comes from doing the hard things right. In this episode, Alex Melen shares how he and his brother built SmartSites into one of the top-rated digital marketing agencies in the US. He talks about early decisions that shaped the business, the mindset shifts that made growth possible, and how to maintain culture and accountability across six offices worldwide. He also shares his views on ho

Date

Jul 2, 2025

Location

Paramus, NJ

Format

Podcast / interview

Speaker

[Alex Melen](https://www.alexmelen.com/about/)

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