Barrel's Blueprint
Barrel co-founder & CEO Peter Kang
The Come Up highlights successful business owners’ & operators ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews.
Know someone who would make a great interview? Nominate them here!
For this issue - an interview with Barrel co-founder & CEO Peter Kang!
Barrel Quick Stats:
💼Business Model: Digital Agency
💻 Platform Focus: Shopify
⏳Time In Business: 17.5 years
🤝No. of Clients: 50+
⏩Best Growth Channel:
Client Referrals
Partnerships
How Barrel got it’s start…
So I'm coming up on 18 years of Barrel…
I went to Columbia University in New York City and graduated college in 2005. Right out of school, I went into investment banking at Lehman Brothers. I always knew this wasn't a long-term thing; but it was one of the more popular jobs you could get coming out of an Ivy League school at the time. I was fortunate enough to get the job, but immediately, I was like, 'okay, I definitely want to be doing something else…preferably my own thing.'
I met my co-founder, Sei-Wook, at Columbia and the two of us had been involved in various entrepreneurial things through school. To give you an example, at one point, we operated a small digital camera and photo printing business for a while - we named it CampusPix.
My parents had a photo store in the East Village, so we could take these files and transform them into physical prints, which was pretty novel in the 2000s, as film photography was gradually fading into obscurity and digital cameras were gaining popularity.
We created a website and used AOL Instant Messenger to receive files from students at school, and whenever there was a vacation or spring break, we would blanket the campus with flyers, inviting students to have their vacation photos printed. We would then hop on the train to my parents’ store, have the photos printed, and personally deliver them to the students on campus.
On top of this, we’d make websites on the side or do some graphic design and things like that too, together, so we always thought we could start a real business at some point…
But anyway, I graduated first and went to investment banking, and immediately knew banking wasn't for me. Honestly, I wasn’t that good at it - I never even had an internship in finance before I got this job and had never taken a class in economics, so I had literally nothing in terms of experience.
Somehow I managed to get through the first year, but every moment I was like, “I wish I could be doing something different.”
So think about banking - you work like 60, 70, sometimes 90 hour weeks…
I would get off work at like 9 pm, which was considered “early,” Sei-Wook would come down from Columbia, and we’d jam on websites all weekend.
We took on a few freelance clients, so we’d work from like 9 or 10 pm Friday to 6 am Saturday, every weekend. We did this for a good 6 or 7 months and got to the point where after my first year at Lehman - the minute my bonus hit my bank account - literally, the next day…I quit and was like “let’s do this thing full-time.”
And as a random aside, the irony is the group that I worked with at Lehman was a CDO banking group, who were actually the originators of a lot of the collateralized debt obligation type of stuff that were bundling all those mortgages together. It was making a lot of money in the pre crisis days - generating these crazy multi-billion dollar assets…of course that would later be problematic in 2008, but yeah, it was really interesting, getting front row seats.
So years later when I was watching The Big Short, I was like, “holy cow - I was right in the eye of the storm leading up to the mess.”
Why an agency?
One thing I think that probably slowed our maturation as business people was really a desire to do anything except building an agency - we really didn’t even know much about agencies at all, we just were doing stuff for clients which helped pay the bills right?
But we were always of the mind, like, "hey, maybe there's something that we could build, whether it's software or some kind of product so that we don't have to rely on client work."
So honestly, we always saw it as, "client work is the last resort….we don't want to do this..."
And at the time, there was a lot of hype around 37signals - they were a consulting company that ended up giving birth to a very profitable SaaS business. Nobody really called it SaaS back then, but they built this suite of tools that started generating recurring revenue and amazing margins and whatnot.
So everyone who was paying attention was like, "Oh, my God, that's the thing you should be going after." And yeah, honestly we had those kinds of desires, and we worked on a bunch of stuff completely unrelated to the agency.
we ran some content sites,
we sold t-shirts online,
we built a foodie blogging network…
We worked on so many different projects just to be like, "this is the thing that will help us not have to do client work."
We tried to not be focused on the client stuff, but because there were such tailwinds of people needing websites and things like that, we just had a wealth of work. So I think in hindsight, if we had taken the agency more seriously, we probably could have grown the business better and matured a lot faster…but we really fought against that idea.
It wasn’t until around 2014 or 2015, when the agency started to falter that I realized the split attention was a liability. I mean, none of these side projects were going that well, the agency started faltering, and I just started asking myself, “what’s the point?”
All the profits we had were being poured into these side projects that weren’t generating any revenue, so at that point, we were like, "alright, maybe it's time to focus…why don't we just try to do one thing well?"
And all this time, the agency was the thing we actually had the most experience in, so we decided just to focus on that. But that wasn’t until about 9 years into the business when the distractions finally began to go away.
So you could argue…yeah - I've been around for almost 18 years, but really, it's probably closer to 10 that we’ve actually been running the business - probably even less than that where we've been running it in a proper way.
There's a quote that goes, when someone says, "Oh, I have 15 years experience!!!”
Well you can either truly have 15 years of experience, or have had 1 year of experience 15 times, and I think for us, for the first 9 years or so, it was just the same year of experience, over and over again.
On learning to grow a great business…
I think part of it was being inspired by folks that helped me realize I had a huge knowledge gap…There's a group called the Bureau of Digital - they put on these things called Owner Camps.
I got to go to one of the earlier ones, and had the chance to meet a lot of different agency owners at different stages in their careers. I met so many who had really articulate perspectives on agency business, and would reference different books that kind of opened their eyes.
And I just felt like such an imposter in some ways there because I was there like - "I don't know any of this stuff,” and I had nothing to add to the conversation. So I recognized a huge gap and decided "the easiest way to bridge that gap is to start reading."
I read about agency business models, and sought out mentors.
And through a combo of the sheer volume of content I consumed there, and the ability to test out concepts within the company, I could see what worked, what didn’t and what concepts I might just not quite understand yet.
It was that repetition over time that got me to start feeling more confident about the agency and I remember shifting from being the one who was always quiet in the room with nothing to add to being to being able to say, "Okay, this is my POV and my lived experience, and it's a synthesis of knowledge that I've consumed."
It was a journey, and it took a lot of work to get there, but I think just identifying the gap in the first place really helped.
On if/how writing consistently helps the business…
When I think about the practice of writing and what it's all about, and also, ‘who does it help’, I'm like, "ultimately, the best thing I can do to positively impact a business is to be the best version of myself, right?"
There's a book that I love to revisit every now and then called "The Fifth Discipline," and in it, there’s a concept of personal mastery, and how that is really at the foundation of great leadership.
If you're going to be a positive influence or have an impact in an organization,
you've got to master yourself…
you've got to be a learner…
you've got to be somebody who's going to continue wanting to improve.
So, from that lens, I decided that writing was a means through which I could achieve clear thinking.
And a lot of what I'm writing is to a future version of myself - I’m trying to give that future self a window into how I used to think and why I did some of the things I did. It also happens to be an artifact for my future self to be like, "Alright, cool, that worked out, that didn't, these are the ways in which I've improved or not."
And I think that I always thought it was an incredible resource - and tried to stay true to that…I'm like, "Look, I'm not going to dress this up and try to glorify it because that's not going to be of use to my future self.”
I think my future self will appreciate it if I can write things in a way that is real so that when I look back, I can see like, “Oh, cool, I've come far,” or alternatively, “I have the same problem right now that I faced a year ago. And, oh, my God, I'm none the wiser…”
So these things are just really helpful for me to reference, and in doing so, it seems as though there are others out there in a similar situation who may be in a similar situation and are going to appreciate the honesty.
And I think that's kind of proven true for me.
On finding time… (and keeping up consistent habits)
I'm a big fan of the Atomic Habits stuff - and I think identity is a huge part of having a habit.
I think the example that's in the book talks about going to the gym -like if you go from,
“I'm going to try to work out three to four times a week,"
to…
"I'm a person who works out every day…”
Just with that little shift, the identity piece in who you are is so much stronger.
So almost by default, you're just going to find a way to make sure you work out because that's who you are…that’s just what you do.
"I'm going to try three to four times” - well, you've already given yourself an excuse to opt out, so it’s less likely to add up.
I remember around 2019 or something, some kind of switch went off - I think I had taken the Write of Passage, David Perell writing course, and I was like, “all right, cool…this is really inspiring, but am I going to make use of it?”
I had done a sporadic newsletter once every few weeks, and then would go silent for a number of weeks, and I just decided…
Why don't I just become a guy that sends a newsletter out every week?
That's just me from now on…
And to make it a bit easier, I decided on a repeatable structure, and just became the guy who does this practice. It's crazy too, because at that time, I had my first kid, and then two more came afterward, but each time, I'm like, you know what?
It doesn't matter if there are three kids, my work schedule is packed to the gills, and weekends are crazy with family.
I'm still going to find the time - I don't care because this is who I am.
And that was sticky enough that, honestly, sometimes I might only have 15 minutes while my kids are watching something on TV to write a few paragraphs…Then maybe it's a few hours later, right after bath time, I get ten minutes before I have to do something else.
But those things add up.
I've thought about it a lot - all the times that we look at our phones in dead time to check social media or whatever…all those things, if you add them all up, it's probably hours.
And that's essentially what I end up having, it DOES end up being hours that I have to write stuff. So, one thing this has taught me is that there's always time…we actually have a lot of time, it's just the willingness to want to use that time to do stuff.
On future plans for the agency…(sell/hold/acquire)
A couple of years ago, we spun out another agency business, and that experience was really interesting for us. It gave us a lot of inspiration to rethink how we wanted to approach things, especially for Sei-Wook and myself, as we considered the next 15 years, let's say.
In the beginning, it was pretty simple - it involved smaller accounts that weren't necessarily being serviced well within Barrel, and we thought maybe they could be run by someone else and perform better. That became our business, Vaulted Oak, which has since grown three times in size…it's been doing well as a business.
And then in 2022, we launched another business called BX Studio that focused solely on Webflow development, and that has grown really nicely. That was cool - we found a CEO for that who's been doing a great job with it.
Then, last year, we launched a business called Bolster, which is a brand design agency. So, okay, we have four businesses, and I think the next step for Sei-Wook and myself is to take a step back…
We're still involved in a good chunk of the day-to-day operations at Barrel, but because we've seen how it's possible to have leadership at these other three agencies without being involved day-to-day, and still have them grow, I think that's the next step for us - to take a step back from the day-to-day operations of Barrel.
We have great leaders already in place, and I believe they can more than manage the growth without us being deeply involved with clients and such. Our role would be to support this portfolio of agencies with shared services, such as finance, back-office operations, recruiting, and perhaps some marketing and business development activities.
So, it's about designing those aspects and becoming a proper holding company in that sense.
And then there are other skills and experiences that might come into play - so far, we've incubated all these businesses ourselves and started them on our own, but what's the opportunity for M&A?
Can we acquire another agency, perhaps a turnaround situation or a bolt-on to an existing agency? There's so much room for exploration that we're excited about, and it really has been a multi-year planning and visioning process of what's possible.
I think there's going to be a lot of movement this year to help take a step in that direction - still making sure everything is within our circle of competency, but hopefully, it will be taken to a different scale and a different variety.
On marketing…(especially with multiple brands)
All four businesses have different audiences for the most part…
And I think lead generation is still going to continue to be driven through the personal brand of our people - meaning me and the other Barrel leaders.
One of the Barrel partners, Lucas, has been very active with his personal LinkedIn account and personal branding to promote that side of the business, but my thinking is more about finding partnerships with other agencies for our other businesses.
For example, BX Studio gets a lot of business from other creative studios or agencies that need specific Webflow help, so that works out nicely because a lot of my reach is with other agency founders.
And so that gives us a good pipeline of opportunities where I can connect with such folks and introduce them to BX…
The same goes for Vaulted Oak - often, it's larger agencies that are trying to offload smaller accounts who come to us, so it's helpful if I can assist them and say, "hey, if you're looking to transition this client, Vaulted Oak could be a good choice."
But having four companies to direct leads to is super interesting because I can be talking to somebody who has nothing to do with ecommerce, but know there's a chance that they might need branding through Bolster or maybe a Webflow marketing site through BX. And that's cool, just being able to have a broader footprint of opportunities I can send traffic to.
The personal element is important too, because it's also just how the major social platforms operate. LinkedIn, Twitter…all these apps tend to prefer a person doing it rather than a company account. So naturally you're incentivized to follow those algorithms and try to play the game that way.
It's been interesting, too because you can see the emotional resonance it has when I’m telling stories on LinkedIn from a personal standpoint vs. a company account.
As a result, people will be like, "Oh yeah, you keep popping up on my feed, and I like what you're talking about with this project. You want to talk about it? Okay, cool."
It's fascinating how that works, right?
So, I think I'll do more of that - but these things are all supplements, right?
It's not like social media is going to be the thing that changes the game for us or whatever…It’s that, plus, we've got to continue to do an excellent job for our clients, keep them happy, and have them talk about us.
It’s layering all these things on - that’s how we’re going to continue to grow the businesses.
On customer experience…
Honestly, as long as we've been in business, it's been hard to operationalize it and get it to a place where it's been consistent overall. There are always reasons for that - you know, in the agency business, people come and go, so you're always having to replenish talent and get people up to speed.
It's never easy…
And even if you think you've got it figured out conceptually, doesn’t mean you’ve actually nailed the details and daily execution of it.
I think when it comes to client service, the big thing is keeping it as simple as possible, which is like, "look, what do clients really value in a relationship?"
One is responsiveness…
Look, if they reach out, the faster we get back to them, the better…
Simple as that.
That's a basic thing that we don't ever want to drop the ball on - and we really do emphasize that with our team. Responsiveness is super important because it also builds trust, honestly. The consistent responsiveness makes clients go, "Oh, cool. These people are easy to reach and are thinking about me."
The other part is just being able to anticipate and have a plan for our client - help them with long term planning on what’s next - just having an idea and working towards it.
Having clarity in those two areas and being able to articulate that to the client has been the core of where we’ve landed.
It's funny because I did go down the rabbit hole of, like, "Oh, how do you craft an awesome experience where when they sign on, they get a cool package with cool stuff in it?"
But really, those are ‘nice to haves’…because you can have the coolest swag pack for your client when a project starts, or take them to a nice dinner, but the minute you’re not responsive you immediately lose all credibility.
So I think we try very hard just to not lose sight of the core fundamentals of client service.
On growth…
The projection game is still hard - I kind of think back to all the projections we've made in the past, and they're just wildly off.
And you can always backfill a narrative to it, like, "Oh, look, we set a big number, and then we didn't get there, but the big number motivated us to try harder…" or something like that.
Or you could set a realistic number and then blow it out of the park, and think, "Oh, cool. We had an awesome year, and we overperformed."
So really, at this point I just ask myself, "Alright, what is the goal?"
I think over the years, I've come to the realization that projections are important just to help you inform other decisions you’re going to make.
Thinking about this year, we are going into it knowing last year was tough…our revenue actually decreased, but we were actually able to increase our profitability. So it wasn’t all good, but it wasn’t all bad either.
So thinking about how we are exiting 2023, and the momentum we do, or don’t have, we are just making our best assumption at whether we think we're going to do less, the same, or more than last year on the top line. And based on where we’re trending, we’re aiming to just hit the same revenue again.
Because we’re making progress on the cost side of things, we could actually do better on the profit side and could have a much higher profit projection, even while revenue is flat. So we decided that is our target - because even with maintaining revenue, a lot of things have to go right to actually get there.
And making that decision is cool, because it informs our decision making process - we know we have to be super mindful of all our costs, because if we’re not thinking of growing top-line, we're really betting on being more efficient.
On past mistakes…
Maybe I’m generalizing - but people often get burnt out or feel jerked around by the agency business model. There can be these periods where certain tailwinds just overwhelm you with deals, and you sign them all, and you're like, "Oh, shit!"
It can become so easy to think this is the new normal - like you’re on a massive growth trajectory, and that you’re going to ride it to the sky.
But at every moment when those influxes of business take you from your previous baseline to a new level, can you deliver on that new amount of work? We were stuck at a certain revenue level for about 5 years…it was brutal, I mean, it just felt like we’d never surpass that ceiling. And when we finally broke through, we almost doubled our business.
But when it happened, we actually scaled up too quickly, and dropped the ball across the board…
There were so many projects that were understaffed, mismanaged, just on fire.
I think we actually did more damage to our reputation with enough people that we couldn't even produce recent references from any of the new opportunities.
"Holy shit, we got fired from that one…
And we dropped the ball on that other one…”
We were just unprepared for that level of new work and growth.
We over-indexed on thinking that new revenue would solve all, because once those new opportunities dried up, it knocked us back in a big way - both in terms of revenue potential and the ability to win new work.
So I say growth is hard because in the moment, you really do think you're hot shit and things are going to go well because winning is intoxicating.
It just makes you feel that good. And that was a huge lesson learned…
I think I was more vulnerable to that than others, because I do know a lot of folks that are very even keeled about it.
When they face growth, they're like, "You know what? Let's pump the brakes…I want to protect the brand reputation more, so let's turn away clients, even though it sucks, to do that, and just make sure we're servicing our clients that we have right now and do this in a more measured way.”
That's tough - and that wasn't my temperament when these moments happened.
But I think now, if I were to face that again, we have more systems in place that help us be thoughtful about resourcing and scaling our services and making sure, first and foremost, we're delivering for our clients and not messing up our reputation.
On positioning and differentiation…
So I think about this a lot…
The service we’re offering definitely has a commoditized aspect to it - sure you could argue there is expertise and depth to it, but enough people know how to do it that it could be seen as a commodity.
So how are we actually differentiating?
And I think part of the answer depends on what you are trying to work towards?
If we were working towards an exit, for example, I think I would prioritize revenue above all else - you can’t really have a down year.
But I think for us, the big consideration is the sustainability aspect of all our work - is it quality revenue?
Like I mentioned, you’ll get these one-off projects - take the crypto boom for example - where a client will show up, spend a bunch of money in a short period of time, but then they go away, and then you never hear from them again.
Okay, cool…we got a nice little bump in revenue because of that, but was that materially good for our business in the long run?
How did that play out?
Are we going to be able to show the work to potential clients and get more of the same?
Did we deepen our reputation in any particular category that can be valuable?
If I’m asking myself these questions and the answer is no - it’s just a money grab, and in my mind, there could be a huge opportunity cost to taking that business.
Because the alternative route is to say - “we're focused on this specific thing…”
Being able to do more projects within the same niche and getting clients who fit a particular mold is a lot more valuable because then our body of work compounds and we can start to be known as experts at something. And now we’re at the point where we start to get reactions like,
“Oh, wow, you've worked with all these brands within that category…”
It makes that next project so much easier to win when it fits our positioning.
Of course, there's exceptions to the rule, otherwise, how would anybody ever get started, but the way to a competitive advantage is having done the exact thing your client needs done.
So by going deeper, we’ve actually managed to create differentiation…we can create price premiums and actually become a safer choice for clients in many ways.
We have the ability to really make the argument that we’ve seen all the patterns and trends within the space…we know the nuances, and we can say “these are the things that are really special to what you guys are trying to do - and we know exactly how to do it…”
That’s powerful.
That’s it for issue this issue!
To learn more about Peter, check him out on LinkedIn or on his website!
Read past issues here:
If you, or someone you know would like to be featured, or just want to connect, feel free to message me on LinkedIn!