Why I’m Shutting Down my Influencer Marketing Agency
2 years ago I was more than $100K in debt and had to lay off every single one of my employees of the influencer marketing agency I founded. It was one of the lowest points of my life professionally, psychologically, and emotionally. Here’s the story of how I paid off every last cent of that debt, reinvented myself as a sponsorship coach, and why I’m permanently shutting down my influencer marketing agency.
How It Started
I incorporated Trending Family in July 2015 after identifying what I felt was a big opportunity. My wife April and I had been on YouTube since 2009 and had quite a bit of experience working with tons of big name brands. We were making pretty good money from YouTube Adsense and sponsorships but I was absolutely convinced that if we wanted to continue making a living as creators, we had to figure out a way to diversify our income. Sure, things were going great now but what if we got demonetized or what if people stopped watching or what if we’re not able to get as many sponsorships in a few years? I have this vivid memory of sitting with my friend Mike at a diner one day talking about potential ways to make extra income and it kind of just hit me. “Why don’t I just try to get deals for other creators and charge brands a % to manage the campaigns?”
And I had a clever angle. There were all these big traditional brands in retail and consumer electronics and consumer packaged goods that really wanted to work with more influencers but were just terrified. They had dabbled with a few campaigns here and there but they didn’t know how to find people who were wholesome, weren’t swearing a ton in their content, or posting risqué pics. They just didn’t want a PR crisis, it wasn’t worth it to them. And so I thought, we have a bunch of vlogger friends who are family-friendly, why don’t I ring them up and offer to bring them business, they just have to let me put them in a deck and say they’re on my “roster.” Then I’ll go to these brands and offer to run the campaigns for them!
I very specifically didn’t offer to manage these creators. Back then, creators kinda had PTSD that from working with MCNs (multi-channel networks) where they were locked into these absolutely awful multi-year contracts that were predatory and exploitative. And so my logic was, I’m not going to even touch that model – besides, the brands and the advertising agencies have the money, so I’ll just go to them, they’ll be my “customer” and I’ll go to creators with money in hand and say, “do you want to work with this brand?”
And to my surprise, it actually worked. I got around 30 creators to say YES – and I set out pitching brands! First it was the brands that my wife and I were working with personally. After we finished the campaign, I would just say – hey it was so awesome working with you, are you looking for other creators to partner with to help spread the word about your brand or product? And since they had just had a great experience working with us, it wasn’t that big of a stretch to imagine that we could provide the same level of service managing campaigns with other creators!
Expansion
I remember one agency early on gave me an RFP, which is a Request for Proposal for a campaign they were planning. I had no idea what the heck I was doing but I just figured it out. I made the first one in Microsoft Word and converted it to a PDF – it looked so terrible. But we won the deal. It was for $50,000. I remember being absolutely floored by that. Like this agency is trusting me with this much money – insane. I have to deliver. So my level of service was crazy, I answered emails within mins no matter when the client messaged me. I overdelivered on the amount of content from the creators. It was super exhilarating, I created this business from nothing and it felt like it was really working! More and more brands and ad agencies started coming to us to the point where I simply couldn’t do everything myself anymore!
I talked it over with my wife April and decided to hire my first full-time employee. That was terrifying – I gotta admit.
It’s no longer just me. This is another person who is relying on me for their livelihood. I really gotta do this right.
So my first employee helped with Operations – communicating with influencers back and forth, then I hired another person to help with Marketing and client services. It seemed like everything was going incredibly. More and more money was coming in, at one points we landed $500K in business in just a few weeks…and I just kept investing it back into the business.
Trouble Ahead
But alas, there was trouble on the horizon. Back when I started, not a lot of people were doing this, anyone could put up a website and say they had an “agency.” (Psst... I did that) But as more and more money started to flow from advertisers into this space, that caught the attention of investors who started pouring venture capital dollars into influencer platforms and marketplaces that promised to connect brands with creators. These other companies started telling brands about their slick software dashboards, they had access to 1 million influencers, and you could filter every single demographic or geography, or use Artificial Intelligence to find the “perfect influencer” for your brand.
And I got roped into that, thinking our agency needed that too. So I hired a software developer and spent probably $50K making a dashboard for our clients to monitor how the campaigns were going.
And more and more competitors kept entering the market, it started becoming extremely fractured, if a brand decided that they wanted to do influencer marketing, it was so difficult for them to differentiate between all the different agencies and platforms and companies that they could hire.
And so I thought to myself, now is the right time to hire an experienced sales person who has deep relationships in this industry. And that’s exactly what I did. But experienced sales people aren’t cheap. And so I took out a line of credit because I was sure, if we gave it some time, that move would accelerate our growth and we’d regularly be pulling down big six figure deals.
But that…just didn’t happen. And it was just so, so, so frustrating that I was never able to “round the corner” with the agency making it into the big profitable venture I hoped it would be.
It became a situation where every deal we did for the agency was to pay payroll which at its height was like $50K a month.
And through it all, my wife April was my absolute rock. She always believed in me, always supported all the investments I made into Trending Family. And she worked her absolute butt off, because remember, we were still doing sponsorships and vlogging - the whole thing. And she was just trusting in me that I knew what I was doing.
1-1 Coaching to help you dial in your sponsorship strategy, work through a complex negotiation, overall audience monetization, or other creator business challenges
The Hardest Moment
And then… Covid happened. And if you remember that time, it felt like the world was falling apart. Not only were we terrified about the global health crisis like everyone else, but we had a bunch of huge deals that were in the pipeline for the agency that just evaporated overnight.
We also had several ongoing clients greatly shrink their budgets. And so I had no idea what to do. I saw no way out. I had this mountain of debt I was planning on paying down with all those deals we were counting on. I had employees who I absolutely adored that relied on me for their livelihood. And after a few torturous weeks and after examining every single option to try to save the company – I decided instead of running it into the ground, I would use the money we had left to give my employees severance and give them more runway to find their next opportunity.
It was one of the darkest times in my life. I just felt so defeated. I'd spent the last 5 years of my life working my butt off, working nights and weekends to try to get this business off the ground and those dreams just crumbled in front of my eyes. I had no idea what the state of advertising, let alone influencer marketing, was going to be for the foreseeable future. And so, I spent the next month or two feeling pretty low.
A New Beginning
But I just kept thinking about this really unique perspective I had now. I was a creator who had been in the trenches for years doing deals - and I was still doing deals - but I now had experience running an agency. I had seen behind the curtain of how these big agencies and brands form their marketing strategies and allocate hundreds of thousands, or even millions, of dollars for influencer campaigns. Who else could say that?
Not only that, I had now exchanged literally tens of thousands of emails with creators, seen it all, every single issue you could ever imagine come up during a campaign with a brand. Crazy reshoot requests, crazy brands, crazy creators, you name it. And I thought to myself, that’s kinda interesting. Maybe I should film a few YouTube videos about some of the mistakes I see creators making when they negotiate or when they’re trying to pitch brands.
So that’s exactly what I did. And people liked them. I got comments asking for more videos. People started DMing me asking for help with specific negotiations. Then they started emailing me. I started reading creators’ contracts just for fun to help them out.
Again, I did not think at the time: "This is going to be my new business!" I just loved the feeling of being useful again. Of feeling helpful. Of feeling like myself. And…I was good at it.
Then, something really interesting happened. Creators started asking me if I had a course, or if I could coach them 1-1. And I was like…wait what? You mean, you actually want to pay me for this advice?
And that’s when I realized, there is this giant pool of creators from let’s say 10,000-150,000 followers who aren’t quite big enough yet to have a manager…but they’re making money. And they need guidance! Why couldn’t I be that person to help them navigate this whole confusing process working with brands?
And so I doubled down, started making more content about brand deals, I changed my title to “Sponsorship Coach” on Twitter, and I just went for it.
Meanwhile, I still had all that debt from the agency! That didn’t magically disappear – and so slowly but surely, interest in running influencer campaigns started coming back and a few of my old agency clients came back.
So over the last 2 years, I ran a bunch of campaigns all by myself – all the emails, all the contracts, everything. I’m not gonna lie, it’s been absolutely exhausting. Doing deals with my personal channels with my wife, running campaigns for my agency, running my course and coaching for Creator Wizard.
But, as of 2 weeks ago, I made the final payment to pay off the debt and officially shut down Trending Family.
Reflections
A few close friends have asked me why I’m not restarting the agency. Why not start fresh and give it another shot?
Well, there are 3 lessons I’ve learned throughout this experience that I hope you’ll take to heart when you’re trying to make that next big decision in your creator journey.
Are you being pulled or are you pushing? In the beginning of Trending Family, it felt like we were being “pulled” by the market. Lots of interest, lots of brands wanting to take meetings with us, lots of deals, and the money came pretty easily. But then things started getting harder. Then they started getting really hard. And it felt like instead of being pulled along we had to push our way through the crowd to stand out, we had to push a boulder uphill to win these deals.And when you’re doing a lot more pushing than pulling, it might be time to reassess if this path that you’re currently on is the right one. The really interesting thing is with Creator Wizard, I have felt an absolutely incredible gravitational pull the entire time, and it feels like it’s never going to slow down. And so for now at least, I’m strapping myself to this rocket ship and I’m gonna see where it takes me!
You have to “pick a lane” Over the last 2 years, while I’ve been running both the agency and Creator Wizard, I’ve had a bunch of situations where I would reach out to a creator about a paid sponsorship and they would say, “OMG I love your videos, I’ve been following you for a while. How much do YOU think I should charge for this opportunity?” I felt like I was talking out of both sides of my mouth – on the one hand teaching influencers how to advocate for themselves and charge more money, then on the other, trying to get the most efficient ad spend for my actual customer who was the brand. And so ultimately I decided that situation was untenable and that I had to just pick a lane.
If you want to have an impact, your mission has to live on without you. For a long time, I felt like the best way that I could have an impact was through the agency, literally showing up to creators’ doorsteps with giant bags of money. I was just killing fish and handing it to them. But with Creator Wizard, it’s totally different. I’m teaching people HOW to fish, and helping creators everywhere build sustainable businesses for the long-run. Even if I stop making videos or posting content, that knowledge will stay with them forever. And that is going to be my legacy.