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Nov 23, 2016 · 19m · top-founders

EP 487: $8M in Agency Revenue, 12% Target Net Margin with BeFoundOnline.com CEO Dan Golden

Dan Golden · 9m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of 'The Top,' host Nathan Latka interviews Dan Golden, CEO of BeFoundOnline, on how his digital marketing agency scaled past $7 million in revenue while shifting strategic focus toward a 12% net profit margin and maintaining a tool-agnostic martech stack.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 46% of the talking time here. How this is scored →

Nathan as informed peer 4.7 Guest teaching 3.2 Guest disagreement 1.7 Nathan pushing back 2.7
05100:0010:001:24–3:55 · Nathan as informed peer 4/10 Introducing Dan Golden and BeFoundOnline Nathan introduces Dan Golden and quickly navigates through the founding story and initial revenue numbers. The dynamic is collaborative and conversational with minimal friction.3:55–7:23 · Nathan as informed peer 6/10 Focusing on Net Margins and Profitability Over Top Line Dan steers the discussion away from top-line vanity metrics to target net margins of 12%. Nathan probes agency margin benchmarks, global headcount, and monthly software spend.7:25–9:47 · Nathan as informed peer 7/10 Agency SaaS Trends and Deciding Against Proprietary Tech Nathan details VC trends of SaaS companies spinning out of agencies and asks why Dan hasn't built software. Dan counters by explaining that agency side-project technology is rarely best-in-class.9:47–13:08 · Nathan as informed peer 6/10 Client Portfolio, Retention, and the 'Perfect Client' Initiative Nathan presses Dan on retention and unit economics, questioning how LTV is measured if contract length is indefinite. Dan clarifies minimum 12-month commitments and client churn dynamics.13:08–15:27 · Nathan as informed peer 2/10 Contact Information and Brand Name Banter Nathan makes a lighthearted joke about BFO sounding like body odor, followed by a mid-roll sponsor read for Acuity Scheduling.15:29–17:44 · Nathan as informed peer 3/10 The Famous Five Rapid Fire Questions Nathan runs through the Famous Five questions briskly. Dan introduces a networking tool called Nudge and reflects on his career journey.1:24–3:55 · Guest teaching 2/10 Introducing Dan Golden and BeFoundOnline Nathan introduces Dan Golden and quickly navigates through the founding story and initial revenue numbers. The dynamic is collaborative and conversational with minimal friction.3:55–7:23 · Guest teaching 4/10 Focusing on Net Margins and Profitability Over Top Line Dan steers the discussion away from top-line vanity metrics to target net margins of 12%. Nathan probes agency margin benchmarks, global headcount, and monthly software spend.7:25–9:47 · Guest teaching 5/10 Agency SaaS Trends and Deciding Against Proprietary Tech Nathan details VC trends of SaaS companies spinning out of agencies and asks why Dan hasn't built software. Dan counters by explaining that agency side-project technology is rarely best-in-class.9:47–13:08 · Guest teaching 4/10 Client Portfolio, Retention, and the 'Perfect Client' Initiative Nathan presses Dan on retention and unit economics, questioning how LTV is measured if contract length is indefinite. Dan clarifies minimum 12-month commitments and client churn dynamics.13:08–15:27 · Guest teaching 1/10 Contact Information and Brand Name Banter Nathan makes a lighthearted joke about BFO sounding like body odor, followed by a mid-roll sponsor read for Acuity Scheduling.15:29–17:44 · Guest teaching 3/10 The Famous Five Rapid Fire Questions Nathan runs through the Famous Five questions briskly. Dan introduces a networking tool called Nudge and reflects on his career journey.1:24–3:55 · Guest disagreement 1/10 Introducing Dan Golden and BeFoundOnline Nathan introduces Dan Golden and quickly navigates through the founding story and initial revenue numbers. The dynamic is collaborative and conversational with minimal friction.3:55–7:23 · Guest disagreement 2/10 Focusing on Net Margins and Profitability Over Top Line Dan steers the discussion away from top-line vanity metrics to target net margins of 12%. Nathan probes agency margin benchmarks, global headcount, and monthly software spend.7:25–9:47 · Guest disagreement 3/10 Agency SaaS Trends and Deciding Against Proprietary Tech Nathan details VC trends of SaaS companies spinning out of agencies and asks why Dan hasn't built software. Dan counters by explaining that agency side-project technology is rarely best-in-class.9:47–13:08 · Guest disagreement 2/10 Client Portfolio, Retention, and the 'Perfect Client' Initiative Nathan presses Dan on retention and unit economics, questioning how LTV is measured if contract length is indefinite. Dan clarifies minimum 12-month commitments and client churn dynamics.13:08–15:27 · Guest disagreement 1/10 Contact Information and Brand Name Banter Nathan makes a lighthearted joke about BFO sounding like body odor, followed by a mid-roll sponsor read for Acuity Scheduling.15:29–17:44 · Guest disagreement 1/10 The Famous Five Rapid Fire Questions Nathan runs through the Famous Five questions briskly. Dan introduces a networking tool called Nudge and reflects on his career journey.1:24–3:55 · Nathan pushing back 1/10 Introducing Dan Golden and BeFoundOnline Nathan introduces Dan Golden and quickly navigates through the founding story and initial revenue numbers. The dynamic is collaborative and conversational with minimal friction.3:55–7:23 · Nathan pushing back 4/10 Focusing on Net Margins and Profitability Over Top Line Dan steers the discussion away from top-line vanity metrics to target net margins of 12%. Nathan probes agency margin benchmarks, global headcount, and monthly software spend.7:25–9:47 · Nathan pushing back 4/10 Agency SaaS Trends and Deciding Against Proprietary Tech Nathan details VC trends of SaaS companies spinning out of agencies and asks why Dan hasn't built software. Dan counters by explaining that agency side-project technology is rarely best-in-class.9:47–13:08 · Nathan pushing back 4/10 Client Portfolio, Retention, and the 'Perfect Client' Initiative Nathan presses Dan on retention and unit economics, questioning how LTV is measured if contract length is indefinite. Dan clarifies minimum 12-month commitments and client churn dynamics.13:08–15:27 · Nathan pushing back 2/10 Contact Information and Brand Name Banter Nathan makes a lighthearted joke about BFO sounding like body odor, followed by a mid-roll sponsor read for Acuity Scheduling.15:29–17:44 · Nathan pushing back 1/10 The Famous Five Rapid Fire Questions Nathan runs through the Famous Five questions briskly. Dan introduces a networking tool called Nudge and reflects on his career journey.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 80% · guest 20%0:00 · Nathan 80% · guest 20%3:00 · Nathan 19.1% · guest 80.9%3:00 · Nathan 19.1% · guest 80.9%6:00 · Nathan 39.2% · guest 60.8%6:00 · Nathan 39.2% · guest 60.8%9:00 · Nathan 13.8% · guest 86.2%9:00 · Nathan 13.8% · guest 86.2%12:00 · Nathan 49.6% · guest 50.4%12:00 · Nathan 49.6% · guest 50.4%15:00 · Nathan 59.5% · guest 40.5%15:00 · Nathan 59.5% · guest 40.5%18:00 · Nathan 98.9% · guest 1.1%18:00 · Nathan 98.9% · guest 1.1%
Sharpest disagreement ▶ 8:56 Dan rejects building agency proprietary tech

Dan forcefully pushes back against the premise that agencies should build proprietary tools, asserting that agency tech side-projects are never best-in-class.

 Hardest push from Nathan ▶ 11:44 Nathan challenges vague lifetime value metrics

When Dan suggests clients stay indefinitely, Nathan challenges him on how he accurately models LTV and CAC without distinct churn milestones.

 Biggest teaching moment ▶ 9:00 Dan breaks down the trap of agency software development

Dan educates Nathan on the hidden costs of agency tech, explaining that agencies get bogged down updating APIs rather than innovating for clients.

 Nathan holds their own ▶ 7:23 Nathan shares VC insights on agency-to-SaaS transformations

Nathan demonstrates industry insight by outlining why investors look for SaaS spinouts originating from service agencies that already have captive distribution.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Dan Golden and BeFoundOnline 4211 Nathan introduces Dan Golden and quickly navigates through the founding story and initial revenue numbers. The dynamic is collaborative and conversational with minimal friction.
Focusing on Net Margins and Profitability Over Top Line 6424 Dan steers the discussion away from top-line vanity metrics to target net margins of 12%. Nathan probes agency margin benchmarks, global headcount, and monthly software spend.
Agency SaaS Trends and Deciding Against Proprietary Tech 7534 Nathan details VC trends of SaaS companies spinning out of agencies and asks why Dan hasn't built software. Dan counters by explaining that agency side-project technology is rarely best-in-class.
Client Portfolio, Retention, and the 'Perfect Client' Initiative 6424 Nathan presses Dan on retention and unit economics, questioning how LTV is measured if contract length is indefinite. Dan clarifies minimum 12-month commitments and client churn dynamics.
Contact Information and Brand Name Banter 2112 Nathan makes a lighthearted joke about BFO sounding like body odor, followed by a mid-roll sponsor read for Acuity Scheduling.
The Famous Five Rapid Fire Questions 3311 Nathan runs through the Famous Five questions briskly. Dan introduces a networking tool called Nudge and reflects on his career journey.

Statements from this episode (9)

Assertion Not checkable as stated
Golden: BeFoundOnline reached about $7M in 2015 revenue
“2015, I think about seven million.”
Dan Golden Nov 23, 2016 ▶ 3:53
Disclosure
BeFoundOnline sets 2016 revenue goal between $8M and $9M
“Our goal for this year is eight or eight or nine.”
Dan Golden Nov 23, 2016 ▶ 3:58
Disclosure
BeFoundOnline targets a 12% net profit margin for 2016
“Our aim is our aim is 12%.”
Dan Golden Nov 23, 2016 ▶ 4:48
Disclosure
Golden: BeFoundOnline employs about 50 US full-timers and 70 people globally
“So we have about 50 full timers in the US. If we add everything up, we have about 70.”
Dan Golden Nov 23, 2016 ▶ 5:36
Disclosure
Golden: BeFoundOnline spends $50k monthly on software tools
“50 grand a month on different tools.”
Dan Golden Nov 23, 2016 ▶ 6:42
Insight
Golden: Agency Side-Project Software Will Never Be Best in Class
“If technology is a side project for a marketing services firm, it's never gonna be best in class, and the clients that sign up for it are gonna be stuck using a proprietary tool”
Dan Golden Nov 23, 2016 ▶ 9:16
Disclosure
Golden: BeFoundOnline manages between 60 and 80 active clients
“We have about somewhere between 60 and 80.”
Dan Golden Nov 23, 2016 ▶ 9:51
Disclosure
Golden: BeFoundOnline averages $10,000 to $15,000 monthly retainer fees
“Probably if we were going to do a weighted average, probably 10 to 15 K a month in, in fees.”
Dan Golden Nov 23, 2016 ▶ 11:13
Insight
Golden: Agency churn happens when client contacts change jobs
“Usually when our main client contacts go to, ah, you know, quit or go to a different company and new blood comes in and brings in their guys is when we have our churn.”
Dan Golden Nov 23, 2016 ▶ 12:30
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