The build was ahead of the business: Mark Kelso, Glaze Digital

Connor: Hello and welcome to Exit Ready, the podcast for agency owners who want to build a business worth selling, so that if someone puts their hand up one day, the company is ready. My name is Connor McAuley and today I’m sitting down with Mark Kelso, co-founder of Glaze Digital. Glaze is a Shopify Plus partner, top 1.5% globally. They’ve built over 250 stores around the world for brands doing over £20 million a month. Now, by any measure, that’s a brilliant agency. What makes Glaze’s story interesting is what happened when Richard and Mark decided to match the commercial engine of the business to the technical excellence that was already there. Glaze had the reputation, they had the clients and they had the capability. The question was, what would happen if they applied the same focus and drive to positioning, pricing and sales that they’d always applied to the build? Over 13 months, Richard, Mark and I worked together on exactly that. The results are a 47% increase in revenue growth and a 110% increase in profit. So if you run an agency that’s already doing great work and you want the business side to work just as hard as you do, this podcast is for you. With that said, Mark, welcome to the show.

Mark: Connor, how are you?

Connor: Well, how’s your day going?

Mark: Yeah, it’s going good. It’s nice weather outside, so I’m happy.

Connor: Tell us, where are you in the world today?

Mark: I’m in Amsterdam, so I’m just outside a little village called Haarlem. It’s about 15 minutes outside Amsterdam, but I always say I’m in Amsterdam because no one knows where Haarlem is.

Connor: I know. I had to Google it the first time we met just to see how far away it was. It’s not too far away, though.

Mark: No.

Connor: Brilliant. And how long have you been there now?

Mark: We’re there five years. We moved here just at the end of COVID. So it was a sort of sneaky move into the country during the night when the lockdown was on.

Connor: Very good. Excellent. Well, look, we’ve worked together for some time, and I know a fair bit about the story and the history of the business, but everybody else may not know that. So take me back to when Glaze started. What was the original plan and how did the first few years actually play out?

Mark: Yeah, I think the original plan was really we wanted to… We had the slogan in our head that Richard and I came up with, which was “Making digital manageable.” It was during the days when people had websites that were built using basic website builder services. And we kept talking to people that didn’t really understand what they were getting or what they wanted out of it. And they didn’t really see the performance that they maybe wanted. So we had this idea of Glaze being a company that would put the cherry on top, the Glazing, as we called it then, and be able to help people understand what they were getting and manage it for them. At the start, we built Glaze to be an agency that could do everything, from videos to photography to production to app development to websites to email marketing. But over time, we slowly realised that we needed to focus in on things that we felt we were best at. And in the last 10 years of the business, we’ve been going about 12 years. In the last 10 years, we’ve really focused in on, firstly, it was more into marketing and websites. And now it’s really into e-commerce marketing and websites completely.

Connor: Fantastic. And I know you as a Shopify agency. So I’m acutely aware of what that means. But you’re a Shopify Plus partner, which means you’re in the top 1.5% of all agencies in the world. What does that mean, really?

Mark: Yeah, what it really means is that we’ve just been in the Shopify ecosystem for a very long period of time. I built my first Shopify store about 15 years ago when the platform was very, very different. The founder built it because he wanted to build his own snowboarding business. And he didn’t have a complete system that could build websites. So he built Shopify as his own system for his own store. And then turned it into a multi-billion pound business that is publicly listed. We sort of saw Shopify as a very opportunistic way of looking at it. There were a lot of people using WooCommerce, Magento. We felt those systems were starting to get a bit end of life or were getting very large. And people were coming in when they were tendering for websites at 20, 30K. And we were able to look at Shopify and see this as an opportunity where we could do sites at a much more reasonable cost. But still deliver on the same fundamentals, which was security, easy to use, easy to manage. And at the very start, a system that was really simple and easy to use for them to be able to build their business off or to move over to.

And today, the whole ecosystem around Shopify has just gone rocket ship. There are so many opportunities.

Connor: Yeah, it’s huge. It’s not that simple as it was back then. Or you can make it as complex as you want, I guess.

Mark: Yeah, no, completely. So I think back then, Shopify was very simple. We really only had a very limited number of themes. We couldn’t edit the code in those themes. We were very, very restricted in certain aspects. And that meant that some of the clients that maybe we wanted to work with, we couldn’t do the things that we wanted to do. Which at the time was actually a benefit because I felt we maybe weren’t in the position to take on those larger clients. We didn’t have the infrastructure. We didn’t have the team. We didn’t have the processes in place to manage them. But nowadays, Shopify is huge. It’s 1.3 million stores around the world. By being Shopify Plus partners in the top 1.5%, what that basically means is that we have built enough stores to meet their strategic partnership limit of getting to that tier. And it’s a really good opportunity for us to use that to draw in new customers. But it’s also just something we’re really proud of because it shows that all the work has paid off. But I think the Shopify ecosystem has changed over time. They used to be very much that they didn’t support those sort of developments and partners. And now they’re really nurturing them and growing them. And it’s great to see that because if you put in the time and effort into a platform which we have and invested heavily into it, we’re getting the rewards of that off the back of it.

Connor: Yeah, honestly, whenever I think about Shopify, it’s Glaze every single day of the week because you guys are the most technically minded agency that I know. And you’re so bespoke and focused on Shopify that it just, for me, it’s one and the same. And when we first sat down and talked together, the difference between your technical capabilities on the side of the team and the commercial side, well, it was like this and this. From my perspective, my goal and the whole opportunity was to mature the commercial side to that same level, just to get it working at that same level as the technical team. How would you describe what shifted in how you thought about the business at that time?

Mark: Yeah, I think, to be honest, both Richard and I were in deep. We were in deep in not trying to grow the business, trying to build the projects that we had. And we never really came above the surface to have a look at it and understand, well, what are the commercial areas that we need to focus on? How do we want the business to be perceived and seen to the outside public? And we were living off referrals to allow for referrals, which is great because they’re the best leads that you can get. But at the same time, it wasn’t letting us build a pipeline that was further than the month ahead. And I think by coming in and understanding where the business was, but where the business could grow to, I think the help that you added is taking that top down approach of looking at everything, not just me looking at web, Richard looking at marketing, but looking at the holistic approach of the entire business and seeing where the gaps were that maybe we needed to fill. But on another point of view, letting someone from the outside look at a business and say, well, this is working really well. This is where you could improve. And this is where maybe you haven’t thought enough about. And that opportunity has been really beneficial for us.

Connor: We went through a pretty structured and intense process over 13 months. What was the hardest change from your perspective that you had to make? And what did you resist the most? I mean, not disrespectfully, because you guys were very open to change, but there were definitely elements that would have been harder to change in the business as it was at that point.

Mark: Yeah, no, that’s completely correct. I think my biggest change was understanding that as a business owner, I can’t be in the deep of it. I have to be able to be above the surface because I have to be looking at the further growth, looking at what the opportunities are, looking more at business development. But then secondly to that is understanding where my strengths are and where my strengths aren’t. And I think by working with you, it allowed me to see that we could take that risk. You talked a bit about the figures that we were doing and the increase that we saw. And I think by having that additional capital, we were able to then take risks where we could come above the surface a bit more. And we were able to focus on other companies that we wanted to start or other businesses, but as well as also understanding that we had to bring in key roles to hire at Glaze to allow that company to grow in the way we wanted to. One thing that was always important for Richard and I, we never wanted to bring in middle managers. And I think that may have been a short-sighted thought process because we felt that by bringing in a middle manager, we lost control. Whereas I feel that by having you on board, it allowed us to understand, well, we can bring in middle managers, but we can control what they can control. We don’t have to give them everything. We can have that ability to say, well, this is your focus. This is my focus. I’m still happy working with this client because I think I could still add strategic value, but you can help when they need to have an update about something. And I think that’s been the biggest sort of change and resistance that took a time for me to adapt to. The second part to that is understanding that for us, what we didn’t do very well was talk about ourselves and whether that was on our website, explaining the services that we did, keeping our portfolio updated on clients that we’d worked with, or even just posting on social media or myself posting on LinkedIn. And I think there was a resistance to that because it’s something which we hadn’t had experience in. And we felt that maybe we weren’t the right people to be doing it. We wanted to bring other people in. So I think that was a resistance where I feel that that has been a huge benefit of understanding that we could refresh the brand without losing its authenticity and that we can write content that actually is something that people want to read. And want to learn from. That really was something that I took away as one of the really big benefits of taking that step with you to the next level of Glaze.

Connor: No, there’s been significant changes the last 15 months now at this stage and all for the better, thankfully. Those are the internal changes, your team has grown, the brand has matured, as I would say. But what about the shift externally from being that development house to a strategic partner? What did that actually mean? And how did that change with the clients that you’re working with?

Mark: I think there’s two sides to it. So the first part was we changed the entire relationship, so instead of just adding value like everyone else was by building a website, we looked from a strategic point of view of where we could add additional things. Our knowledge of Shopify as a platform and our understanding of how to do something within Shopify, whether that’s choosing the correct app or that’s building custom functionality, is second to none. And I compare ourselves to some of the much larger agencies that we can do the same sort of thing because we have that understanding of the ecosystem. So when we were working with strategic partners that helped us be able to add value. At the start, we were doing a lot more white labelling, whereas what we’re finding now is we’re partnering with strategic agencies or strategic partners, not just because it’s a better fit because the company can work with us direct as well as them, but because it means that we’re directly in touch with the customer. We can make sure that their needs are met throughout everything that we do.

Connor: Yeah, no, that was a big change. Whenever we were working together, that strategic agency focus, not that you weren’t already doing it, but just increasing the positioning of Glaze in the relationship. And again, that all came down to that maturation of the business and understanding that you don’t have to white label everything.

Mark: No, no. And I think it’s also one of the things that we really wanted to improve on was understanding the services we were offering. And I think we were sort of doing everything. If someone needed a small tweak on a website, whether it was just a little button or whether someone needed a full blown store for doing 100K a month, we were doing everything. And I think by turning it into more of a service-led business where we broke those down into manageable options that people could choose from, it really allowed us to shift the focus into selling those and to fit the needs of a more granular audience, such that we had different people that wanted different things. But instead of saying, well, we can’t do that little bit of work, we batch that into a bigger bit of work that then became something like what we call a work stream. And a work stream became a flow of work that can continue over six, 12 months. But we have that starting point of where we’re going to start with the customer. And we also have an idea of where that could end and what the opportunity and the KPIs and goal is for the customer by the end of it.

Connor: Fantastic. Yeah. No, it’s been phenomenal to see the change in the business over that time. And the numbers are public. You were so kind to let me use it as a case study. It was a 47% growth in revenue, 110% growth in profit in the period that we were working together. When you look at the results, which are absolutely outstanding, which decisions do you think drove them the most?

Mark: I think the main decision was probably understanding our pricing from a customer point of view and understanding our value of where we could add value. The second part to that is bringing in team members and taking that risk to expand the business by bringing in additional resources to help with projects, not pushing back the deadline time on a project. And the second part to that would be more also looking at how we bill. Instead of billing on certain terms that we were using before you worked with us, you helped us improve our billing timeline on how we did it, whether it was from deposit to initial payment to final payment. And as well as that, it’s also looking at understanding that we can bill immediately for things and deposits upfront. One of the things that I wasn’t doing, and I hold my hands up, was I was waiting till the end of the month to do my billing, which then always meant we run a 30 day runway to get that next payment. Whereas now we’re able to book in a bit of work, we’re able to send out the invoice at a certain period of time in the month. So by the end of the month, we’re not sending out every single invoice. We’re sort of building up that pipeline over the month, which then allows us to see a much better steer in the business of where it is over a period of time.

Connor: Yeah, you mentioned there, I’ll come back to pricing in a second, but on billing, you mentioned there taking risks. There’s absolutely no risk in a business like yours whenever you are at that level where you’ve had the foundations and they’re so solid. And you’re now capitalising on that opportunity in the business. The risk is doing nothing, I guess, because things will stay the same.

Mark: Or instead of not doing nothing, you do take the negative route of actually doing damage to your business because you don’t put the time and effort in. You don’t add those resources. You can’t give every client the attention that they need. So you’re actually doing negative to the business. And I think that’s where it was really important. I think both Richard and I saw it as risk, but we knew it was something that by bringing someone from an outside point of view and a consultant role, to invest in that to help us with growth, was really something that as well as being a risk was a huge reward to us in the end. And I think the overall understanding of where we are as a business, but also the confidence in the business, which is something which especially when you are self-employed, you can go through periods of doubt. You can go through periods of not feeling that you’re doing a good enough job or that you’re putting enough time into this. And I think understanding from what you said in one of the first sessions that we had was, guys, you’ve got a great business here. You should be very proud of this. Before I even do any work with you, you should be super proud of the business you’ve built. I think hearing that from an outside person who has experience in the sector and in the industry and has sold companies before is something which helps you build that confidence. OK, well, we have got a great starting point. Let’s improve on that. What does that look like?

Connor: Yeah, no, I’ll say it again. The business is fantastic. It really is. It’s one of the ones that we competed against in the early days. And you went your direction and we went our direction and it’s both paid off, let’s say. So we’re very happy about that. But in terms of the payments, that’s something that most of the people that will be watching this, most of my clients today, still struggle with. The structure of a good payment in a web project. What does that look like today?

Mark: So I think it depends on the volume of the project that is in front of us. But for us, what we want is we want to understand that we can get enough of a payment upfront as a deposit to allow us to have enough roadmap to get the work done. And then it’s to have it that you’re transparent with the customer on when that next payment is due. And secondly, that you have a roadmap that is actually going to be met. You’re not saying, oh, we’ll get this project done in three weeks when it’s going to be a six week project. You have to be transparent in understanding the plan. It’s also an understanding of when there is scope creep, as there is with every project, and understanding when you’re going to take the hit on that internally. Or when it is something that you want to be able to go back to the client and explain that this is a bit outside of what the scope was. One of the things that we do here at Glaze that’s quite unique is if there’s something that’s more unique within the Shopify ecosystem, I’d be very open with a client and say, look, this is what you want to build. It’s a bit outside scope, but I’m happy to take some of our R&D time from Glaze to help build this out, to have something that is a more usable thing that we can show as a case study firstly. But secondly, because Shopify is coded in Liquid as a system, anything that we build for one client can be used in a completely different way in a different sector for another client. So there’s benefits of building these as sort of modular approaches where we can not just put our hands in someone’s pocket, which is never what we want to do, but also taking a risk with them to build something, but also offsetting the cost a bit to help them.

Connor: Yeah, I always remark about that being such a smart move because everything is reusable. Blocks are reusable in other development platforms. And that’s just a really good way of you building out the library of capabilities that you can now support other clients with. That has always been something that I’ve admired about Glaze. If you could go back to Mark at year three or four of Glaze and give yourself one piece of advice, what would it be?

Mark: Well, there was one month, three years into the business where we were doing websites, email, videos, product photography, social media management, email marketing. And we decided to also get into app development. We were working on an app for a local company. And there was one month where I remember that I said that Richard had nothing to build this month. And it made me realise that every month I need to be building. With money going out, I need to have money coming in. And it was the biggest wake up call in the whole of the business for me. Yeah, it was about three years into Glaze where I realised it was one month. And it wasn’t just that I was scared because we didn’t have any revenue coming in. I also felt a bit embarrassed because I hadn’t thought about what that revenue was going to be. I hadn’t thought about that I need to have this revenue in because we have bills to pay for staff, for offices and for other software that we use. And it was really a wake up call for me to understand it. From a business point of view, I think what I would say is I don’t think we changed to be a Shopify-focused agency too late. I think we changed really early. And I’m really proud that we took that risk. And I still remember this day sitting with Richard and bringing over my laptop and going, we should just do Shopify, and showing him some examples of what we could do. And what we could be about. And I remember the enthusiasm that he had for that idea. And the two of us coming together to make that decision was probably the big turning point. And then the advice is, don’t ever have a month with no bills going out and no revenue coming in.

Connor: Definitely. Yeah, always be billing.

Mark: Always be billing.

Connor: Change is happening in our industry at a rapid pace. And I know that you and I and most of the people that I speak to today, we talk about AI a lot. Because it is shaping different parts of our industry, a lot of our industry. But what’s the next problem that you’re solving in the business? And where is Glaze heading? Does that include AI as well?

Mark: Yeah, I think for me, it’s an understanding of how AI can add value to the business and save time. So we’re using AI a lot to make documents for specific things. For example, importing in products from a database that a client’s given us that isn’t formatted in a Shopify way. Making menu systems from a screenshot of that menu. So we’re using it more from an efficiency point of view internally, from a resource point of view on projects. And when I look at it from a business perspective, where I’m using AI a huge amount is building our dashboards for clients. Doing optimisation data points, taking into consideration multiple spreadsheets and page feed data points that were collected on a project. To helping us build flows and understand where we are in the business and looking clearly at where our resources are managed. I think there’s an understanding of AI on a very top level view at the moment in the world. And I think there’s probably only about seven to ten percent of people that are actually seeing where AI can take us. And for clients, I’m willing to take it a lot further than I am for Glaze. And the reason is, we can add value in other ways to a client to help them be more efficient, to keep their costs down. With Glaze, I’m more using it for helping us build the future of what Glaze looks like, helping us understand a bit more about where the business growth can be. But I’m also not using it to let it take over and manage the business and run things and send emails, because I think that’s when the core things that keep the business the way they are, and keep them the business people want to work with, are always there.

We have had clients where it’s been a very interesting turning point at the moment where we are also doing AI-generated imagery. So a client will pay us to build a library of imagery from their product. But we’re very transparent in saying we use Flux. We’re basically just using our prompts that we have spent months generating and testing to make sure work. And they’re just paying us for our time to do that. We’re also finding people are getting into the stage where they’re providing us with Lovable, which is a platform that lets you make your own website, and giving us the designs from those. And we’ve had certain conversations with clients where it’s been, OK, look, that’s great. Love the design. But here’s what you need to understand with this. It’s flat. It doesn’t have any dynamic functionality. There’s no link into Shopify. So yes, we can use this and that’s going to save us time in design. But we still have to convert that into Shopify and convert that into actual dynamic functional work that can click a button, go to the cart and check out. And I think that’s something where it’s a learning curve and a teaching part of our job at the moment, to understand and explain to clients what can be done and what should be done with AI and what also can’t be done with AI, because you’re just not going to get the results that you need.

Connor: Yeah, solid. I think exactly the same. And I’ve had similar experiences where people are bringing you things and they’re just not replicable in production the way they’ve been designed in Lovable. But yeah, that’s really good. I didn’t know you were using Flux for your imagery as well. That’s nice to hear because it’s a great model.

Mark: Yeah, it really is. And the way I describe it to clients is I don’t want this to become your product imagery. This is sort of like filler imagery that we can put in the backdrops and different places. You can also take, let’s say we’ve got a lifestyle streetwear brand in New York that we work with. And they have really good shots on green screens of their shoes, like Nike Air Jordans or whatever it would be. They can actually put a different background on from different parts of New York. So those shoes or that model, we can put in the subway, in a dark alleyway, in different settings. So when the customer comes on and sees this imagery, they relate to it being a physical store that’s in New York. They relate to being in the correct surroundings. As well as that, with Flux we can also make it walk. We can make the model actually walk, turn around and come back. So things like that where we’re willing to spend a bit of time researching how we can add value to a customer. But at the same time, explaining to them the exact tool we’re using, not trying to charge them for us learning that tool. We’re happy to take that on but help them get the most out of it. And reduce the cost of sending somebody out with a camera for a day. It’s a couple of thousand dollars or a couple of thousand quid. We’re able to do it for a fraction of the price.

Connor: Completely. Lovely. Mark, thank you so much for your time today. I really appreciate it and I genuinely appreciate you sharing all of the insights. If you’re watching this and you run an agency, here’s what I want you to take from this conversation. Your creative or technical ability is never the problem. The commercial side probably just has to catch up. And that’s true for most of the agencies that I work with. And it was true for Glaze too. So if you want to see where your agency stands right now, I’ve built a free valuation tool. It takes just a few minutes and you’ll get a full PDF report that shows you your numbers through a buyer’s lens. There’s no sales call. There’s no pitch. The link is in the description, but it’s moveatpace.com/agency-valuation. And if you want to stay up to date with what’s happening at Move at Pace, subscribe to the newsletter at moveatpace.com/newsletter. Thank you all for watching and I will see you in the next video. Mark, thank you.