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Keith Roberts of Zenman and the Buddhist Principles of Sustainable Growth

President and Founder of Zenman, Keith Roberts sits down with me to discuss his agency, growth, and recruiting talent.

Keith Roberts started Zenman in 1998 after working as a professional photographer with top artists and agencies. Keith talks about his daily practices as a business owner and sustainable scaling for Zenman. After showing us around their bustling office space in Denver, Colorado, we got down to discussing what Zenman is all about.

You can find more information about Keith Roberts and Zenman by visiting their blog and following them on Twitter, Facebook, and Linkedin.

Video Transcript

Brent: I’m Brent Weaver and you’re watching uGurus, the must watch web series to become a more profitable and in-demand web professional. Today I’m here at Zenman with Keith Roberts. Welcome to the program.

Keith: Thanks for having me.

Brent: So Keith, tell me about Zenman; what makes you guys unique?

Keith: I think there are a few things that make us unique. One is the company name Zenman and when we started it was just me. So I kind of am the Zenman and we apply the same ethics and principles to our business life that I do to my personal life. I’m Buddhist and we do positive things out in the world. If you take care of people, if you do right then the right things are going to happen back.
The other thing that I think just makes us really unique is we have a unique blend of, say, geeks and artists; we’ve got the left brain/right brain people here. We’ve got the developers that really push the creative to be cutting edge with what we’re building and then the creative interns do the same thing with the developers and they come up with all the block solutions, they want to be creating award-winning sites that convert for our clients.

Brent: Cool, so you started Zenman, it was your thing, and now where are you guys in terms of kind of size and scope?

Keith: We’re just under 20 people in two locations. Our main office is here in Denver and we have a couple of developers out in Monterey.

Brent: And in terms of your customers, what’s the typical Zenman customer?

Keith: It’s a pretty broad range; we have everything from asbestos abatement to voice over IP, so really the A to Z. But some of our favorites are startup and technology. We do a ton of work in the service industry and healthcare, so we’re got a couple of verticals that we play really well in. Probably one of our favorite clients, here local, is Frank Bonanno. We’re worked with Frank for about a decade now, and everything from his new website branding, marketing strategy sort of soup to nuts.

Brent: And just for our audience which is not Denver based, who is Frank Bonanno and what companies does he have.

Keith: Frank Bonanno would be sort of Colorado’s celebrity chef. He’s been featured on Anthony Bourdain’s No Reservations, and he’s been on several food and network challenges. He’s got about a dozen restaurants here in Denver. But he would be sort of the Anthony Bourdain or the Thomas Keller of Colorado.

Brent: So how do you get customers like Frank?

Keith: Frank actually came to us through a referral, so one of the things that we really put out there is good work and positive energy and then we get a lot of referrals that come back. In the last 18 months we’ve changed things pretty dramatically with a big push on our organic search engine optimization and in-bound marketing. And it’s had a dramatic effect. We’ve actually been eating our own dog food and consequently we have to find a new office, as you can tell; we’re pretty crammed in here.

Brent: It’s a little tight, it’s a little tight, but it’s definitely good and cozy. We started seeing you guys eating your own dog food, so for the first part of your business you were building websites that may be doing some online marketing, but not necessarily doing online marketing for yourself.

Keith: We were working on projects, not on the business. And when we got to a really pivotal point where . . . right now we have the best team we’ve ever had, and I have total faith in our creative director, our art director, lead developers, and I’m able to take a step back and actually focus on growing the business strategically and sustainably.

We’ve been very cautious in growth to make sure that it is something sustainable. There’s a great article I read a few months ago that every agency is three months away from going out of business, and we’ve seen that happen here in Colorado with some big shops. So it’s really important to me that we grow our family and we do think of ourselves as a family in a very scalable sustainable way.

Brent: In terms of the family you have here with this business, how do you guys find the talent, the developers and the designers that work for you?

Keith: That’s actually harder than finding the work. So that’s a big piece of the puzzle. We’ve got a few different ways that we do it. One, we cultivate people through their education, so we’re very involved in internship programs here in Colorado. We’ve even got people from RIT come out and intern with us as well as Florida and Texas. The reality is probably one of twenty people make the cut, and we’ll bring them on as part time developers through school, so we like to give people the opportunity, and we’ve got a couple of guys here that were delivering pizzas and halfway through the art institute they were able to come on part time, earn more money than they were making delivering pizza, and get 18 months of agency experience.

And then there’s that sort of final cut, you know; did you get to the point where you’re worth our hourly rate. You made the grade and we’ll hire you full time. And we’re pretty good; if we bring somebody on part time we’ve got about a 95% retention rate that we’ll keep them on. And then we use other resources, like B. W. Bacon, which is a Colorado company that helps place developers, designers at agencies. So it’s sort of two fold; and then we use all the Andrew Hudson job lists, Craigslist, all of those. But it’s tough right now to find talent.

Brent: So once you have talent, you have somebody that seems like they’ve got some development or design chops, what kind of training do you provide for your team to get them up to your billable rate?

Keith: Oh, it’s all ongoing; even the guys that are lead developers are still continuing to train. Tom, who actually has more experience than me; he’s kind of our neo we would say, is coming out in a month. He’s one of our Monterey developers and he’ll be doing agile scrum master training and then product donor training. The team downstairs we sent to the CSS Conference up at the Stanley, so really we sort of ask the team what do you want to do as far as continue training. And then to keep them here, obviously you have to pay people enough that money is not an issue. We don’t want somebody seeking out another job because they’re not getting paid enough, so we sort of make sure everybody’s compensation is fair or above market rate, and then provide a working environment; that they’re working on projects. They have creative outlets; we do projects that are even non-work related where it’ll come in. We did a Walking Dead Zenman entry to their biggest fan contest. A lot of those are big Walking Dead fans. We came in and had a blast; so just creating that environment that cultivates that synergy.

Brent: So really you’ve got about 20 people. I assume you guys have a lot of projects coming in the pipeline at an even time. Like what’s the typical workload at Zenman at any one time?

Keith: A typical workload, we’d probably have between 25 and 40 projects going. The magnitude which right now we’re developing a half million dollar software to service for an enterprise level client that I can’t say their name, to a small, five-page responsive websites for contractors, orthodontists, restaurants, so it really spans the gamut. We do have an 11th Principle that we added last year when we sort of grew to the point we were able to add; we work with people that we like, so we’ve gotten over that hump of having to take every job that comes in the door. And that’s really a lowed us to help–what’s the right word–keep the right talent in this family.

Brent: You mentioned an agile methodology, so you have some of your folks trained in it, so 20 to 40 projects at any one time. Are you guys an agile development shop, and is that how you keep everything organized in terms of the volume of the projects you guys are doing?

Keith: Absolutely. We have a rock-star project manager, Caitlyn, who keeps sort of all the pieces in place. But we are a 100% agile shop, so if you go downstairs and look at our Canban, we actually have a design in the development track and you can see each project where it is in process. And if we weren’t an agile shop we wouldn’t be able to keep that many balls in the air.

We also use a couple of great project management tools, Base Camp, which is pretty standard, and then because we are agile, we utilize Pivotal Tracker. That we keep internal, so all of our user stories and that granular level of project management is only for the Zenman team. But we do have the total transparency Base Camp, this is what’s going on, and it’s our timeline project plan, discussions, etc.

Brent: Is Zenman’s revenue driven primarily from the project based revenue, or do you guys have any recurring streams of revenue that you bring in?

Keith: We have some agency of record stuff that we do, but they are still ongoing projects. I mean, we probably have half a dozen clients that we would see a record for and they come back weekly or monthly for significant projects. But we still scope these projects out.

Brent: Gotcha, so in terms of like ongoing support it’s just everything’s billed by the hour, scoped project fee oriented.

Keith: Yes. Everything is time and materials.

Brent: A lot of web pros are chasing that recurring revenue type model; what’s kept you guys from building that into your business model?

Keith: It’s actually something that we are working on. One of the areas that we’ve identified that we only work with the outliers are restaurants and healthcare. So one of our projects, if we do responsive, you’re probably looking at $25,000 or $50,000 without a lot of functionality, you know, just a beautiful responsive well-tested site that’s going to be effective. For a restaurant, $25,000 or $30,000 is a pretty significant undertaking, so we worked on creating more of a commoditized solution that has a proprietary CMS that allows them to go in and modify things, just more of a subscription based.

Brent: Sure. In terms of going from yourself to 20 people, what’s been the biggest challenge for you growing?

Keith: The biggest challenge was the significant decrease in income personally when I started hiring people. It was a really interesting arc; the first four years of the company almost for five years it was just me, and you have this sort of general growth. But I started the company in ’98; we were profitable the first year. We’ve been through 2001, we’ve been through 2009, so hopefully the worst two economic downturns of our lifetimes.

But when we got to that point where I started bringing on talent it was a commitment to investing long term in the company–that I’m going to make considerably less money to bring on the right talent and they’ll help me grow the company back up to the point where it’s profitable.

Brent: In terms of your job within the company, I mean, obviously you’re the president, owner, CEO, whatever you want to call it, founder, but what’s your typical work day look like?

Keith: Wow! That is all over the board. It’s usually very, very busy. It starts at 8:00 and usually ends at 6:00 or 7:00. Up until this year I still had my hands in a lot of creative projects, but we’ve brought on an art director and a creative director that has actually allowed me to step back and really be focused on growing the business, and that’s been a really great place to get to and we’ve seen a significant change. So on a daily basis I would be in Discovery Meetings, presentations; I would help close any pitches that we have go out with that. I work with our account executive, VP of Business Development, on proposals. And then tonight I’m speaking at an event on responsive Web, so it keeps me busy.

Brent: What practices have you done over the years that have gotten you to where you are today? I mean, I hear this kind of Zenman Buddhist type of approach to business. But are there specific practices that you brought to the table to continue growing as you have?

Keith: Personally, meditation has been a huge thing for me. Being able to take the extra time, even when you don’t have it, to focus allows you to be so much more productive throughout the day, so I think if I didn’t have the daily meditations part of my practice I wouldn’t be able to sustainably run at the pace that I do.

As far as within the company, outside of my personal, again we’re an agile setup so we start every single day with our standup. It’s five minutes long and the entire company goes through what’s going on, what are they working on, and if they’re blocked we’re able to literally within five minutes identify what almost 20 people are working on and if there are any impediments.

Brent: So with 20 people you just keep that to five minutes; it’s just like that quick?

Keith: Yes, five minutes is our goal. We literally run through it; it should take about 15 to 30 seconds per person tops. What did you do yesterday, and what are you working on today, and if you’re blocked by an impediment, and then we would actually take those offline and our project manager, whoever would need to, would work with them and make sure they could be productive all day?

You know, as an agency, as everybody knows, all we have is our hourly time, right, our billable rates, so that commodity is really valuable. But at the same time knowing what our team is working on is invaluable. We can’t move forward without it, so getting it down from a half an hour to five minutes has been very, very helpful.

Brent: At Yogers we have to do that as well, and so I can say if people aren’t practicing some kind of daily really quick high velocity meet up with the team then that’s something definitely to explore. What do you think in terms of like skills or qualities or personality traits, what are you best at for your company?

Keith: I am a people person, so I’m really good at working with any particular client. I’m a bit of I’ll almost say freak in that I remember really strange facts about everything, so it’s very easy for me to associate with a person and get on the same level with them. And if you were into energy I would start talking about how

Sedona and Qi are the two natural energy recharging stations on the planet.

Or if you’re into photography or whatever you’re into I’ve got a good bit of knowledge in a lot of different subjects, and I’m personable and like people so I’ve found really early on in my career people like doing business with people that they enjoy working with, that they like. Even if the work isn’t as good, or it fall under sort of what you’re competing against. So the relationship is critical for us. And I maintain those relationships.

Brent: Have you been able to teach that to other people as Zenman?

Keith: Yes and no. I think that there’s sort of some things that you’re just born with as far as if you’re a people person or if you’re not a people person. But absolutely, we do have some sort of best practices that we try to make sure that everybody instills. We really pride ourselves on never trying to up-sell people on things they don’t need. It’s actually great for me if somebody comes in and says I have a budget of $40,000 and we come back with a bid that’s $42,500. Then we can come in under, over deliver, they’re expectations and then we create this friendship and work together for the next ten, twenty years. And it’s much better than trying to squeeze every penny out of a project and make the most money you can, the most profit. It’s just not what we’re about.

Brent: Now you’ve had a pretty long tenure in web. I mean, I’d say if you got into the web in the ’90s and if you’re still here doing it, the same company same identity, that’s a huge success. Over that period of time, what have you learned that you think other web professionals that are either getting into the business or have been in the business a little while should know?

Keith: Getting the right people on the bus. So absolutely finding the right talent and one of things that we’ve grown to the point that we have the luxury to do–if we do find the right person–we’ll find a position for them. One of the things that we don’t like to do is be hiring to fill a project or fill anywhere. We try to stay ahead of that curve.

At the same time we really pride ourselves on being sustainable. I have never laid anybody off for lack of work–knock on wood. So in 2009 we had an awful year–everybody did. And we lost a lot of money, but we had a family in place of critical talent and I went in the hole to make sure we could keep those people. And the very next year we were able to dig ourselves out of that hole and keep excelling.

Brent: Now in terms, you mentioned responsive web design and how you guys are doing some things in a responsive space. You’re speaking on responsive design later tonight.

Keith: Yes.

Brent: What trends are you following that, I mean, I don’t know whether responsive design is really a trend anymore, but what are the things even ahead of responsive design that you’re looking at as a company right now?

Keith: Progressive reduction would be the next thing. Responsive is something we really hung our hat on two years ago, and it has made a big difference. I think it’s pretty fair to say that we’ve done more responsive sites than the other agency here in Denver. And almost all of our sites that we do now, you have to actually ask us to not build a responsive site for it to be an option. Based on the impact in organic search replacement and you know, Google sort of puts a lot of weight in having a responsive site, it’s critical if you care about people finding your business.

And the other thing I was talking about was progressive reduction. People coming back to your site and reducing the content based on the experience that they’ve had.

And another thing that’s not new, but I’m a huge advocate of is inbound marketing or retargeted. That’s something that since 2006 has been the most effective online marketing tool, and getting back to that eating your own dog food, you know, once we actually embraced and took the time to do for ourselves what our clients pay us to do, it’s had an exponential effect on our business.

Brent: So you guys went from just building sites to now doing some marketing services, did you always do marketing services, or was that more of a kind of cause and effect thing; you had these websites now for your customers and now you had to figure out how to get people to them?

Keith: Exactly, so that the first five years it was just web. And then I sort of realized, geez, all my clients come around every three to five years for a new website, but in between that time they might need marketing, they might need branding for a new product, they might need a media buy. So we’ve added the staff to fill those services, so of like you mentioned in the recurring revenue earlier. That was one of the way we were able to get agency of record relationships and have that ongoing revenue, even though it’s unique projects.

Brent: Sure. So you guys are around 20 people, you’re moving office very soon to a bigger location. What’s next for Zenman?

Keith: The biggest thing in the back of my mind as the business owner is just the sustainable scaling. So as excited as I am about this growth, I’m very sort of back of my mind thinking about, all right, we’re number one if you search for web design or web development on Google. What’s going to happen to our business if our traffic went from 6,000 click to 3,000 clicks, so I’m always focused on just staying ahead of the curve?

One of the things that I love about Colorado and I hope the other places are the same, but the agencies that we work with here are very synergistic. Almost all of the shops here; I was just at a pitch Monday with an account executive and it came down to the end of it and who were we up against, and it was Spire Fusion Box and Elevated Third, and I was able to say to the client, you know, you can’t go wrong. Which ever agency you pick you’re going to have a great product. And that’s pretty awesome. So I love having that symbiotic relationship.

And we do something called the meeting of the minds once a month where we’ll get all of the owners or our peers together and we’ll go grab lunch and just–you know, it’s 75% BS, but there’s 25% huge value in getting those minds together.

Brent: Sure, I think two of those companies have already been on the program in terms of the IV over at Fuser Box and Michael Gillman at Spire. We’ll have to make sure that Elevated Third is on the docket, but I’ve gotten a huge amount of value in just having the sit-downs with folks. You just never know, like everybody’s doing it pretty much the same, but those little differences and seeing what’s out there from almost transferring the idea of they’re your competition to then your peers. I mean, some people are very competitive focused, like they have a mind set of scarcity and that there’s only so much business out there and they don’t really play that well with others. But it sounds like you’ve taken kind of more the abundance approach to how you work with companies in Denver.

Keith: Absolutely. I mean, like Mike at Spire, we ended up a few years ago I ended up using the same business consultant that he had used. And in talking with him he made some recommendations as far as redoing our proposals or statements of work in our contracts. I called Mike up and said, hey, Larry recommended this. And he just sent me his [turns] page. We’ve got some guts in our proposal and they do in their, too, that’s proprietary and I think gives us a competitive advantage. But I would gladly share our terms with any other agency.

There are two guys Young and Hungry, Mike and Alexander, that were two developers here that came up and they started their own company and they’re doing kick-ass work. And that was the first thing I volunteered; like hey guys, if you’d like our contract, if you’d like our terms, you know, it’s good CUA, I don’t want you to get burned and not get paid and end up in a lawsuit wasting money. I’d rather make sure that those guys that are kick ass have the tools and the knowledge to go out and kill it.

Brent: Very cool. Maybe I’ll hassle you for sharing some of those things with our audience, if that’s possible.

Keith: Yes, absolutely.

Brent: And we’ll see what happens there. Well, I appreciate you taking the time with us, Keith, today. And definitely the best of luck to you and the rest of the Zenman team. You guys are doing great work, and we’re happy to have you on the program and hopefully we’ll be able to touch base again sometime in the future.

Keith: Yes, and thanks for having me. I appreciate it.

Brent: All right, it sounds good. That’s it, so stay tuned for more great content from uGurus.com.

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