Start and Scale Your Marketing Agency Fast

Founder and CEO Erik Huberman started Hawke Media in 2014. It’s the fastest-growing marketing consultancy in the U.S., now worth over a staggering $150 million! By 26, Erik had already founded, grown, and sold two e-commerce companies.

In the years since, Eric has continued to grow his business portfolio, acquiring several companies, launching Hawke Ventures in 2018, raising $5.6 million in capital, launching his own podcast in 2020, debuting HawkeTalk in 2021, launching HawkeZ, a marketing agency that helps brands connect with Gen Z, and most recently publishing The Hawke Method: The Three Principles of Marketing That Made Over 3,000 Brands Soar in 2021.

Among Erik’s honors and awards, Forbes Magazine named him one of 30 under 30, CSQ named him one of 40 under 40, and Inc Magazine named him one of Inc Magazine’s Top 25 Marketing Influencers — just to mention a few.

I don’t think anyone is better at sharing how to start and scale your marketing agency.

The art of scaling up.

There is no comparison to Silicon Valley when it comes to establishing a successful startup,” Eric wrote in Forbes. No other place produces as many startups due to its talent and capital.

But building a profitable startup doesn’t require much capital. The key to overcoming competition is to scale up quickly and do it in a big way. Companies don’t get rewarded for doing something first — it’s all about who can do it quickest, largest, and best.

As you are all aware, Eric has first-hand experience with this. At the beginning of his business’s existence, growth wasn’t a top priority for his team. “We had just another scrappy, reactive company trying to stay afloat,” he explains.

“But once we decided to prioritize scaling, success followed rapidly. In the process, we discovered that swift expansion requires a few key elements: the right team, culture, and space — as well as some creative wordsmithing.”

• An independent team. A team that can function well on its own is essential for rapid growth. Each member of your team should possess brilliant ideas and are empowered and encouraged to apply them independently, as well as fill multiple roles at once if needed.
• A solid, appealing company culture. This process is part of hiring. Your team must be comprised of the right people, and you must ensure they will remain with you to help the company succeed.
• An effective space. There’s nothing complicated about this. As your company grows, your accommodation needs will increase. The right workspace can make a big difference in how productive you and your team are.
• Distinctive technology. When you can describe your company in an original way, you will be able to stand out and attract customers.

Raising a $50 million fund.

Want to quickly expand your business? The first place to start is to understand your demographic better so you can identify new opportunities for your business. But, you’ll also want to take it a step further. Get a complete understanding of your distribution channels, competitors, and even foreign markets and other potential industries. With the right amount of analysis, you could likely uncover dozens of new opportunities immediately.

Erik has transformed Hawke Media into other verticals that really help serve the entire business as well as capture these entire market areas. And, he did this by investing in other companies.

After about a year in business, a friend of mine asked me to invest in his e-commerce business, Erik says. “At the time, I had this very strict thesis of I was going to cash flow Hawke, put that money into real estate, and build a real estate portfolio.” At the time, Eric was focused on more conservative investments.” So, I told them, no, and he’s like, oh no, I’m not asking you. You’re investing, you just can write a smaller check as you want. I went, fine, wrote a small check into his company, which is now worth somewhere between $3 and $5 billion, and so, went well quickly.”

He then began investing in companies that complemented what he was doing. “And after a few years, I had an angel investment portfolio that had a Webex, and it was like, oh, that’s a good return,” he adds. “We should do more of this, and we had brought on someone to help manage that.”

Fortunately, Erik’s wife is in private equity. Because of this, she has a unique perspective on what happens in these funds. “It’s not that complicated,” he states. “And so, then we started talking about the idea of launching a venture fund, and we did, and it took us two years to raise five million bucks for our first venture fund. But now, two and a half years in, we’re about 5x on that money as a fund, which is kind of unheard of for an early-stage fund.”

“And so, now, we’ve just closed the first part of our second fund, and we’re raising a $50 million fund and raised almost half of it in a week,” says Erik. “So, once you get that credibility in that network, it starts to happen a lot faster.” They discovered they had built this marketing engine and had access to everything. “Every deal that we want to get in wants us in because mostly, what we want to invest in are companies we can be a strategic advantage to,” he adds.

“So, marketing, technology, e-commerce tech that’s trying to reach our giant roster of clients, if we find something we like that our clients will find useful, we can onboard hundreds of clients immediately, be a market maker for these companies and, by the way, get in at the valuation before they got all those clients.”

Making successful venture investments.

Venture investing, in general, is investing in early-stage companies, which is synonymous with venture capital. We invest in companies that are still in their growth phase, are not yet profitable, and are not yet mature, Erik clarifies. “We invest in them, hoping that we get to a point where they are worth something, whether that is an IPO, an exit, or, frankly, a great cash flow.”

Eventually, they become valuable, he says. As their growth partner, you help them mature enough to become real businesses. The thesis of their investment strategy is to invest in early-stage technology. The ideal revenue level for us is $20,000 a month. This isn’t much for small businesses. However, we want to make sure that they can make some money before we invest in them. Again, where we can offer them an unfair advantage, he says.

Set your own fundraising rules instead of following the status quo.

When it comes to raising money for your first fund, it’s more difficult than ever because you don’t have a name yet. This is because people don’t know who you are or what you’ve done. Many people come from small shops or have experience on Wall Street or Silicon Valley. Once they’ve started their fund, you generally offer nice terms because you’re a new investor.

In order to attract this new money, you need to attract it. As a result, your reputation has grown. Most of the time, the second fund is easier because people are throwing money at you. As the terms change, they generally become more advantageous.

Erick, however, did the opposite.

Due to the small size of the first fund, we were very strict about our terms, he explains. There was no choice but to charge it.” We did it; it’s usually 2 and 20 as a typical fund structure, 20% of the upside, and 2% annually of what you’re managing to fund the management. In Erik’s case, 2.5 percent of five million dollars equals $125,000 a year, which is what he operated. The price isn’t negotiable. “Like, we have to pay the guy running it,” he adds. “We have to pay our legal fees and our accounting fees, and that’s all we got. So, we literally just weren’t.”

“And then when we did Fund 2, all the people that supported us in Fund 1, we actually gave a discount on that, 20% down to 15% because we wanted to say thank you,” he continues. “We’re like, hey, f we all make money together, you’re going to make a little more on this one to say thank you for supporting us when we had no track record.”

The Hawke Method — a framework for marketing in the modern age.

Through Hawke Media, Erik has been able to outsource the company’s marketing and CMO. With Hawke Ventures, he has been able to take a little bit of that and get into venture investing. Then, astonishingly, he split off from there and moved into the debt market like a debt fund, which would have been a very unique and niche opportunity as e-commerce boomed.

How did Erik accomplish so much at a young age? Through what he calls the Hawke Method.

The mission of Hawke Media and really what motivated me to start it was my frustration with finding great marketing for my own business and for the businesses I was consulting,” he explains. “And so, our mission statement for Hawke Media has become accessibility to great marketing.” Specifically, becoming the best at what they do while also being super easy to work with, cost-effective, easy, flexible, and nimble.

“And so, it just seemed like a logical evolution to actually take our marketing methodology that we’ve used to grow over 3,000 brands at this point successfully, that we have a pretty consistent method that works.”

So, what exactly is the Hawke Method?

The Hawke Method uses a tried and true formula containing these three elements:

• Awareness. To combat churn, new leads must be acquired and converted into customers. This is what awareness is—letting your target customers know you exist. You can do this through billboards, press relations, paid media, affiliate marketing, and influencer marketing.
• Nurturing. In addition to reducing sales cycle times, nurturing can increase the lifetime value of customers. Taking care of existing customers makes them more likely to stay with you. By shortening the purchase cycle, you increase your chances of converting leads.
• Trust. The foundation of trust is consistency. An organization with many facets wouldn’t be a good choice to buy from. It is because of trust that Panera, McDonald’s, and Applebee’s have been so successful for so long. Most people know they will have nearly identical experiences whenever they visit these establishments.

Featured Image Credit: Photo by Mikhail Nilov; Pexels; Thank you!