How to Package Your Service Into a Product
May 22, 2020 |
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Michael Spinosa and Scott Greenwell started a digital marketing agency called Unleashed Technologies at the start of the 2007 financial crisis. Spinosa believes the recession helped Unleashed get started because their flexibility and lower fees enabled them to pick up business from larger rivals who were losing customers amid cost-cutting. By 2019, Unleashed had grown to over $6 million in revenue when they were approached by LINC Partners, a private equity-backed group looking to do a role up of digital marketing agencies.
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Michael Spinosa and Scott Greenwell started a digital marketing agency called Unleashed Technologies at the start of the 2007 financial crisis. Spinosa believes the recession helped Unleashed get started because their flexibility and lower fees enabled them to pick up business from larger rivals who were losing customers amid cost-cutting. By 2019, Unleashed had grown to over $6 million in revenue when they were approached by LINC Partners, a private equity-backed group looking to do a role up of digital marketing agencies.
The big take away from the interview is how to package your service like a product. Spinosa characterized Unleashed as a “very average” digital agency when they first began. Then in 2009, the partners decided to rebrand their solution under their “Growth Package” offering where customers could get digital talent in “dosages” that fit their needs. This packaging allowed Unleashed to differentiate themselves from other digital agencies that billed for their time. This marked the beginning of a great run, which saw Unleashed grow 20% per year with 20% profit margins and 90% client retention.
Unleashed’s “Growth Package” is billed annually, which has enabled them to navigate the COVID-19 pandemic and avoid the worst of the recession.
Spinosa assumed a service business like his would trade at 2.5 – 3 times EBITDA, which is why he was pleasantly surprised to get an offer from LINC Partners of around double that. Spinosa and Greenwell agreed to sell a majority interest in Unleashed and decided to carry some of their shares into a new entity set up to acquire complementary businesses.
About Our Guest
Since 2007, Michael Spinosa has led Unleashed Technologies in delivering value for clients in the digital space looking to develop and achieve trackable metrics. Under his leadership, Unleashed Technologies has become a global leader in web development and design and has enjoyed 13 consecutive years of profitable operation. In his new role as president, Spinosa is committed to that tradition following the company’s acquisition in 2019 by the entrepreneurial investment firm, Linc Partners.
