Today on #MWL, I talk to David C. Baker, who joins me to talk about his entrepreneurial journey, his fifth book, "Business of Expertise," and his next book on the way, about the tradecraft of being a great advisor.

David is a friend and someone who I have really admired for the depth of knowledge he has in particular areas I like to like bounce around a lot of different stuff and that that that's fun to me.

I've done pretty well in my career I reached out to and hired David C. Baker to help me kind of think through this marketing agency idea that I had. And he forced me to spend eight hours with him and he started pulling out all these charts of thousands of different agencies that he had evaluated and he created his own model his own intellectual property.

He's written multiple books on that topic on business management, on the business of expertise which is one of things we're talking about today and he's just he's a fascinating guy but he's also someone who I do can consider - in a world of people who dabble - to be a true expert so I'm really happy to have my friend David on the show.

I hope you enjoy it and learn from it.

Where to watch live:
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David C. Baker - Guest Socials
MW-Socials
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MW
what's up what's
up the episode of Marcus Whitney live
how y'all doing out... there today I have a
friend and someone who I have really
admired for the depth of knowledge he
has in particular areas... I like to like
bounce around a lot of different stuff
and that that that's fun to me I've I've
done pretty well in my career... I reached
out to and hired David C Baker to help
me kind of think through this marketing
agency idea that I had and he forced me
to spend eight hours with him, and
and he started pulling out all these
charts of thousands of different
agencies that he had evaluated, and he
created his own model, his own
intellectual property, he's written
multiple books on that topic -on business
management on the business of expertise
which is one of things we're gonna talk
about today- and he's just he's a
fascinating guy... but he's also someone
who I do can consider in a world of
people who dabble to be a true expert... so
I'm really happy to have my friend David
on the show today. David thank you for
being here

DB
thank you I'll try to live up
to that, and I'm like everything I say
“does that sound like an expert, or is
that sounds stupid?”

MW
thank you no man you
you you know your stuff that is one
thing I can say for sure you know your
stuff so man let's let's just jump into
the world of expertise the world of
marketing agencies which you have deep
deep deep experience and knowledge on...
you've you built a fantastic business
basically by yourself which is also one
of the things I want to talk about how
how you have built something that is I
would consider to be very robust,
especially in a moment like this... because
you have your hands on so many aspects
of the business itself
but before we go in just give maybe 30
to 60 second blurb on your background
and how you got to be the expert around
business management and marketing
agencies that you are

DB
I soon as you said
that I thought this is gonna sound a
little bit like the description of a dog
-a mutt- on a on a adoption site... I saw I'm
US citizen born in the US, but when I was
four my parents went overseas and lived
they were medical missionaries, so I
lived in Costa Rica, for a year went to
kindergarten there learned Spanish my
parents learned Spanish then we went and
lived with the tribe of Mayan Indians
till I was 18 in Guatemala... came back to
the US for formal school and went
through five years of full-time grad
school I was intending to teach at the
academic level around ancient languages
and kind of had to come to Jesus moment
halfway through that realized that
wasn't a great path for me -so much
politics and academics- so I decided to
to create a marketing firm ran that for
five years and then the transition the
last transition was the one - what I'm
doing now, where I began to consult, or
advise, work alongside other principals
of firms like the one I was running so
for the last 26 years I've been doing
that my life is divided into three
things essentially writing, speaking, and
advising... I work for myself out of
Nashville... 30 seconds how's that?

MW
that was
really good that was really really good
and I'll let you maybe tail-end that... so
you you work by yourself
you you you host events but you also
host events you have a very regular
newsletter, and you have gathered a ton
of proprietary data that has helped you
to form insights, operating models, you
talk about that process a lot of people
do consulting advising I've met very few
who by themselves not with the power of
a firm and a you know a bunch of I don't
know MBA students you know kind of doing
all the research for them have managed
to compile the breadth of the data that
you had to be able to come up with
these insights that are yours... that that
are yours about the way that a
particular business runs well and and
you've you've you mentioned some stuff
about the business models and marketing
agencies really hitting a wall in this
COVID 19 moment I'm gonna ask you about
here shortly, but just just talk a little
bit about that process over the last 26

DB
years I think maybe it stems from this
search I've always been interested in
around certainty whether it was around
religious issues or around whether I'm
doing the right thing the right
technique for riding a motorcycle or
whether this word actually means this...
I've just always been intrigued by
knowing really what's true. I'd hear
somebody speaking and they'd say they'd
launch away from my experience and they
would say “well, you know, the real…” and
then they would immediately start saying
something and I didn't have access to
that, and I thought well I guess I have
to take their word for it at this point.
That really intrigued me about the
notion of being more certain about
things. The other thing that that really
motivated me all along was this fear of
looking stupid. I just, I'm a pretty
courageous person, but standing in front
of somebody -a group of people in a
conference room naked, so to speak,
metaphorically- and being caught out by
somebody who says, “wait a second that's
not really true.” And so all those things
together gave me this idea that maybe I
need to make my advisory service -which
of course just kind of moves over into
the writing as well- more research-based,
and the other the other thing that has
enabled me to do is to charge more for
it. Because it's really different.
There aren't there are lots of other
advisers, and lots of really good
advisors, but nobody has the IP that I
have. So it's another reason for
somebody to come and use me in spite of
my personality…

MW
yeah I I completely agree
um you know when you first quoted your
price to me I was like okay you had you
had enough credibility behind you, but I
have to say when we went through the
eight hours it was we were about an hour
and where I was like oh this is
definitely worth it... right you know once
you started opening the book and showing
me
all of the empirical data and and just
the different views that you had on it
in-house agencies versus you know small
versus digital first versus you know
that's when I was like wow... this is it
did bring me closer to a point of
certainty and honestly ultimately you
know helped me to understand, Wow how how
hard it would be to to operate a
successful marketing agency... doing that
right you know sometimes it's like you
could spend forever trying to do
something and, you're missing that piece
that clarity what would help you make a
decision “well maybe I shouldn't do it at
All” right yeah

DB
you're trying to save people time
and money yeah and not reinvent the
wheel and we're always learning but
surely there are some basic building
blocks we all ought to agree on and when
I speak to somebody that I that is in my
sphere, I want them to be listening and
saying oh that is like does he have a
camera in my office that's that's my
ultimate goal whenever I write something
or say something I want them to
immediately identify with that and say
that person understands my world

MW
right
yeah yeah so so one of the things that
I've followed along in your newsletter
for a while
that you that you talked about for,
you've been talking about for years, and
I I have to say I never really
understood it because - because it was
what you were advocating for felt harder,
and I didn't like that... but you you were
sort of advocating that marketing
agencies trying to get clients to sign
up for monthly recurring revenue type of
business models was bad -the bottom was
gonna drop out of it- I think now I
understand it's much more about skin in
the game and aligning incentives,
but you know now you've recently been
I've been watching some tweets we've
been talking about this new economy and
how you know the economy is really
driving people to look at every nickel,
and they want to see value being driven
for every dollar that they let come out
of their hands...

Talk about what gave you
the insights back then... Were
there a certain set of principles
that you used to identify agencies
trying to make their own revenue more
predictable using a monthly recurring
revenue model, and you just said I
understand why you would want to do that,
but the principle underneath it is not
sound? You know, those kinds of things are
really interesting to me when someone
has the insights, but it goes against
what feels good... So tell me
what gave you that clarity and
allowed you -even though I think, I would
imagine it was relatively unpopular- to
to stand on that because it is in the
best interest of the principles of these
firms.

DB
Yeah it's... you're digging way deep
in my psychological base here, because
I'm immediately suspicious of a quick
movement that is gathering all kinds of
steam, and everybody is clapping their
hands and walking off cliffs -or drinking
the kool-aid-. That doesn't
mean that they're all wrong at
all, it just heightens my awareness a
little bit about it. And then the second
thing that happens is -and it took me a
long time to get to this point- but
to try to be in touch with myself enough
as a consumer that I can put myself in
the shoes of somebody who is subject to
the opposite thing that we're saying. So
here we are I think of my own life, “how
do I react to monthly recurring revenue?”
Do I want to have Comcast pull out the
same amount of money every month
regardless of my experience with the
firm? No, I kind of want that
control, and so if that's true, -maybe our clients feel that way,
maybe they don't- let's think about it.
And then think okay, what's really
driving this? What's really driving this
is not what's best for clients, it's
what's best for the firm who wants to be
able to plan better, who wants to relax
in terms of new business. Those are not
legitimate things that are in the
interest of the client, I
just think we need to be more open to
these movements that come around. Now a
SaaS product -that makes perfect sense to
me-, because here we are expecting them to
constantly improve it and not us
start and stop like Zoom which we’re
doing this on and so on.
But advice, and then the other the
big one for that one, and this is a
really small point, but is that I saw
so clearly that when a relationship
started to go bad, it went bad so much
faster if that client was on a monthly
recurring revenue stream because they
felt they built up this sense that the
agency -or the advisor- owed them
something because they had been sending
them a check every month. So when it
went off, it just like, “whoa, that was fast!
They hate me!”

MW
right right and it's
basically impossible for services based
company when I see services I really
mean like human delivered services to
replicate what software-as-a-service is
doing right what what a technology
platform is doing in its you know a veil
you know 99.99% availability right and
consistent feature set that you go in
and you depend on at any time... you know
much more utility based.That's not
really what a human services based
businesses is there to provide is that
is that a correct way to frame it?

DB
right exactly right exactly
right, plus what you and I are doing in
those relationships is a customized
service it's not a productized service.
And so we're just borrowing -there's so
many things we borrow from the business
world around us that I wish we think
more about- like our focus on hyper
growth without really understanding what
growth means for us as personally, but
just assuming that we're kind of loser
business owners if we aren't growing
fast all the time. We
could get off on lots of tangents

MW
no no
no I want to go on that one because
that's that's a that's a that's an area
that I have strong feelings about mostly
because I… I learned about business
largely through trade mags, and because I came at it from
the technology side, you know, it was all
these blitzscaling, and like all the growth hacking. It was
it was a very Silicon Valley oriented
framework for growth. It was one of the
things I really wrote about in my book
that's coming out, was that, you know,
Silicon Valley hijacked
the word growth. you know and they
made it seem like growth well needed to
look like this and if it didn't look
like this like it was not good right
yeah and that's not at all like like
that's not at all what growth is... that
makes me want to ask you in and we're
gonna get to the business of expertise
in covert nineteen error but it makes me
want to ask you I when I look at what
you've built over two-and-a-half decades
I feel like you I feel like I am right
now working on building which your what
you have you know -full transparency
right- which is a base of expertise. I
have I have my book that's coming out,
you know I have my speaking stuff, I'm
gonna be working on on some events I
have my newsletter that I'm that I'm
growing and I actually don't want to
grow at all in the ways that I've tried
to grow in the past do you know what I
mean it's like not at all what I want I
want... I want true growth... I want to just
to sort of borrow a term from Godin and I
want I want to build a tribe that you
know fully fully understands the value
that I'm providing so I don't have to
wake up one day and feel like man I hate
putting the mask on today but I got to
do it because this is what they want
from me... you know what I mean yeah you
know... Can you just talk about when you
when it all came together for you what
the formula you know you talked about
your your advising writing and speaking
right you know those are three things
you do that's how you divide your time.
I remember you quoting to me you know
how much you bill a year all by
yourself and I was like, “holy crap man
that's that's no joke…” right
so... Can you just talk to me about at what
point did it click for you that oh this
is how I do this you know these things
work together create the flywheel this
is how the pricing model needs to be
it's actually far more robust if it's
just me as opposed to me working with a
bunch of people I have to imagine at
some point you tried to grow through
people and and maybe learn through that
experience so did you just always
intuitively know like if I can do it and
I can keep my hands on it then I can
measure it I can manage it I can you
know I can I can keep it in inbounds and
it can't kind of get a
with me with what I want for my life I
know you also your pilot I believe yeah
yeah your pilot and your photographer I
know you're a family person I know your
entire life is not all about this work
so you know one of the things by keeping
the growth managed to the size you've
done that it allows you to manage where
work fits in your overall life right
when did when did that all work out for
you and you figure that part out?

DB
it took
me a while, I when I was running a firm
we were still pretty small we started
out just me and then we got to be 16
which is still small but I remember
still having those weird feelings when
somebody would ask me how big I was and
you'd go to a conference and somebody
would come up to you and they they
didn't know you but they'd read the tag
and one of the first questions was uh
where are you from and you tell them and
then how many people at your firm and if
you if the answer was smaller than they
were expecting they kind of found a
reason to go talk to somebody that was
interesting yeah and I the other step on
this path was it was kind of
research-based but I was working with
all these agencies and a few of them
were applying for the Inc 5000 or the
fastest-growing whatever yep you know
and it was I was working with these
firms and it was it was it was really
weird because I didn't feel like the
firm's that were growing fast were were
any smarter were doing better work for
clients were making more money the
clients weren't happier the employees
weren't happier it's like well what's
wrong why are we going after this why
are we going after this I

MW
can I just
thinking when you said making more money
yeah right but one of the books that you
wrote was all about the finances of a
firm right right and that was really
illuminating for me right I mean it
helped me to kind of look at every
business I've ever done and think
differently about money, but when you say
not making more money certainly by
growing maybe their top line what would
be bigger but what do you mean when you
say making more money

DB
making more money personally like
to the owner

MW
right the
owner you don't even mean like bottom
line of an income statement you mean the
owner

DB
the owner right a hundred percent
right I just I don't really care I mean
I do care how much money that the
business makes because it can pay people
fairly yeah, but in the end that equation
is about this business needs to be your
-I wanted to say the B word- but it it it
needs to be your bitch basically. You
know it's not a right word to say, I
don't know what else to what are the
word to pick. But it needs to serve you right and and if this is
particularly an acute issue in the US
where we call ourselves a land of
opportunity which makes it almost sinful
to see opportunity and not pursue it... so
you would have this chance to grow it
may not be good growth but it's a chance
to grow and you felt like oh my gosh I
better grab this I better hire people
I better borrow money to buy equipment I
better just grab onto this and all of a
sudden you wake up one day and you
realize I'm running a firm I don't
really want to run anymore I'm having
that the bigger it is the more coal I
need to feed it … now I admire somebody
who can run a big firm and still have a
great life balance and there are
millions of those people. I may be one
of those, I don't know I just don't have
any desire to do it. One of the people
that has written a book recently that I
love on this is Paul Jarvis
it's called company of one okay and it's
brilliant it's it's a really good book
to read

MW
that's that's awesome I mean I I
I made a decision last year to really
start focusing on on my well-being
because my kids turn 20 and 18 and I
felt like I just I needed to kind of
press the pause button, I felt like since
they were born I had just been running
running running, you know really running
away from failing as a dad you know. And
in in so much of what I've done
professionally was about that. You know
and now we're at this place they're 21
they're 19, they're
well-adjusted human beings, I'm very
proud of and sort of you know. They're
not off on their own, but they're just
fine. you know what I mean right
and I just felt like I wasn't fine like
at the end of all that I was just you
know like like a burnt fuse, and I needed to sort of reboot. And a lot of
that process was removing management
responsibilities, you know I mean like
“okay no more managing people for a
minute.” It's just not it's not healthy
for me right now you know. and started
pulling all this stuff away and and
taking Wednesdays completely off of work
just you know making that those those
sort of personal days and and through
that process you know on the other side
I realized okay I've created some
businesses and I have equity ownership
in those businesses so you know I need
to reboot my positioning as an owner of
those businesses as opposed to like a
management team member right you know I
moved back into into ownership
restructured everything you know like
came off payroll and all sorts of stuff
you know I'm just I'm an owner and then
engaged where it makes sense right
engage where it makes sense but I'm an
owner and now that gave me the space to
do this which is something I love I'm
benefiting from him I'm seeing other
people really really like it but it's
also like if I didn't have the time to
do this as I was looking around at the
kind of people that I wanted to model
after and I don't mean in terms of how
they live their life or what they are
doing but but how they have built their
own business of expertise right you know...
I was looking at a Gary Vaynerchuk I was
looking at a Dave Ramsey I was looking
at these these people marie forleo, and
one of the things that I saw was that
they were able to consistently produce
high quality content. And I've just been
in search of like figuring out how to do
that for months now, you know. Just like
how do you do it in a way where you you
finally flip it on its head and you get
way more bang for the buck, and I feel
like that's what I've been able to pull
off with this with this show. And now
that I have this, and I have this book
coming out, David, I really like I don't
want to grow. I mean I want to grow my
audience you know what I mean I want to
grow audience I want to grow revenue, but
I am very happy with with, the life that
I have
I like how diverse it is you know. I
would imagine one of the things that you
probably like about writing, speaking, and
then advisory is even within your area
of expertise, you have diversity of
revenue streams and then within each
revenue stream you have diversity of
client base. So it would be very
difficult for someone to come knock the
legs out from underneath your business. I
mean you know, it would take
something macroeconomic right to really
to really do that that would impact the
entire industry in such a significant
way. So I just love the design that you've done,
and I just wanted to tell you it's
inspired me and it's it's it's a lot of
what I'm working on right now

DB
Can I
add something to that?
because I think one of the keys is to
charge enough or to make enough money as
an owner, however that equation
looks, right so that you don't feel like
you have to be earning money every
waking minute of the day, but you can
reinvest it in getting smarter,
developing your own content giving that
content a way to attract potential
clients who may or may never hire you
but it doesn't cost me any more to send
an email to 40,000 people or 4,000
it's just it's it all works
together better if your eye is on the
right thing and I guess nobody's ever
said this to me but I hope my clients
expect me to have enough time to
constantly be pushing the envelope and
getting smarter without any client to
pay for that time.

MW
right so that's that's
brilliant okay that's a great segue

Let's let's talk about your most
recent book the business of expertise.
Tell me about it.

DB
Well it's my fifth book -only three of my
books have been any good- so fortunately
this was one of the good ones.
I sat down to write it, I'd outlined it
all, and I went to our cabin in the woods.
And I was writing it, “oh gosh I'm
boring myself to death writing this
thing…” I was intending it to be about a
hundred and thirty thousand word kind of, I don't know a textbook,
about running
a firm. And so I just stopped it, went for a
long walk and said “I've got to start to
feel passionate about this.” So first of
all it's got to take more risks. I've got
to be more myself in this situation. It
needs to be shorter, it needs to be color,
it needs to be Illustrated, and I want to
stand for something. And so I turned it
into more of a compassionate expertise
manifesto, And the book starts out by
recalling that scene in A Beautiful Mind
where John the character is seeing all
of the code roll down the wall, and he
sees the patterns, and that was the that
was the springboard for the whole book.
What makes you an expert, and how do
you develop that expertise, and how do
you sell it, and how do you refine it, and
all everything around being an expert and sort of the
business of expertise. Now it's it's
really designed for people who are a
certain kind of expert, so it's somebody
who's selling their thinking for a
living. There are a lot of
experts who are not entrepreneurial:
scientists working for an association,
whatever. And there are a lot of
entrepreneurs who are not selling
expertise as well. This is just that
overlap between those two things: experts
who are selling their thinking for a
living, and it got a slow start
-slower than I thought- but the book the
sales of the book have just gone up and
up, more every quarter, and I've just been
so pleased with the reception of the
book. I ultimately write books I hope
they're successful -I don't want to lie
about that, I really do hope they're
successful- but mainly I write them to
figure out what I think about a topic
because, again, I hate to be embarrassed
publicly, so if I'm going to put
something out there that anybody can
critique, I'd better have thought through
it enough that I can stand behind it. And
that's what a book is for me. It's it's a
massive commitment. It's a stand. “This is
what I think of
this,” and I'm happy to talk about it with
anybody, and I'll adjust my thinking for
sure, but hopefully I've spent enough
time with the subject to have formulated
some things you're gonna stick for a
while.

MW
I feel like the covert 19 economic
era is forcing many many people to look
at the relationships between companies
and employees and you know many people
are sort of looking at themselves and
thinking about their expertise you know
what is your general feeling about this
moment and what people who who probably
are experts but we're doing that solely
for a company before and are thinking
about you know maybe going out on on
their own do you feel like it's a it's a
harder time and let me just sort of give
it a little bit of an analogy one of the
things that I noticed I started a
podcast last January so you know when
when covert 19 hit I already had 80 or
so episodes you know up but like the
explosion that I saw you know everybody
was creating a podcast right because
they're all at home and they're like oh
my god I have time and now I'm gonna do
the podcast but it did feel like to me
and I don't even know if this is true
but to me it felt like man I was so glad
I had started a yeren
you know guys timing wise I felt lucky
because it would feel so hard to get
above the fray with so many things
coming out there

What is your sense
about this moment in time as it
pertains to people trying to build a
personal brand around expertise and
build a business around their expertise?
Is this is a fantastic time,
business as usual, no big no difference
at all... what's your read on that?

DB
It's felt weird to me because so
many times I've wanted to say “I told you
all so, I told you so…” and it's not, you
know, that wouldn't be helpful right, and
not kind either. But really I've been
trying to get people to do the same
things I've been trying to get them do
forever, and if they've been
undisciplined about articulating a point
of view, then this is the time to start.
It would have been ideal to
start it earlier ,but if you didn't start
it earlier there's no better time than
to start it right now. There is a lot of
signal-to-noise ratio
problems at the moment, and and so it
is harder to get noticed, but when you
talk with business owners that you
admire -when I do the same thing- so many
of them will tell me that they started
their business in New Orleans in 2005, or
anywhere in in the world in 2008-2009,
anywhere in the US and 2001... It spawns
these people who just either they got
kicked out of the corporate environment
-now it's not a great time
to look for work, so they were forced to
do it- they discovered this
accidental entrepreneur in themselves.
And I am so excited to see -it's too
early to know what's what it's going to
look like- but there are all kinds of
amazing little firms out there that are
going to sprout up and be fantastic. And
they'll be room for those because some
of the lazy -fat, lazy firms who just
thought they had it made- entered this
era completely unprepared for it; either
with their own point of view having been
developed or whether, how they were
running things from a business a money
standpoint right... I'm excited about it

MW
I
am too. Ok so I feel, validated I
feel like I got some free consulting
today, so thank you for that. And David,
just thanks for the work that you're
putting out in the world. You're helping
so many people by giving them, you know,
clarity, time-tested, proven approaches to
doing business, and I love what you said
about the movements that pop up
really fast. You know sometimes those
things are just if they literally are
flashes in the pan, it's the more
time-tested robust stuff that you really
need to kind of go back to over, and over,
and over again because it works for a reason,
so thanks for being one of
the voices out here, you know, advocating
for that.

DB
thank you thank you for having
me Marcus

MW
everybody you can follow david
online at David C Baker that's both on
Twitter and Instagram check him out on
LinkedIn his tag is author speaker
advisor there and David C Baker com
I'm telling you guys honestly this is a
guy who I have personally followed I
personally paid money to get guidance
from so I can endorse fully
brilliant brilliant mind knows his stuff
and stays in his lane which is like
super cool
so go out there and follow David
subscribe buy his books you will not be
disappointed on the topic of books I got
one coming out creating orchestrate hits
June 30th this year I could not be more
excited to finally get this baby out in
the world so I hope you'll support it
June 30th we're gonna have a big party
on that day here on the show my podcast
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newsletter and that is it I hope you all
have a beautiful rest of the day and we
will see you back here tomorrow with
another episode of Marcus Whitney live
peace
[Music]

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