Season 2, Episode 4: Carl Smith from Bureau of Digital

Kristen G: Hi, welcome back to Up Right & Better, the podcast where we talk about growing businesses up and to the right, and up and better. On this show it’s not just about scaling for scaling’s sake, it’s about making organizations that deliver value to everyone involved. I’m your host Kristen Gallagher.

All right. Welcome back to season two, episode four of Up Right & Better, and I’m super excited to have Carl Smith from the Bureau of Digital here. Carl and I actually haven’t met in person, but he’s been gracious enough to listen to me yammer at him a couple of times, maybe, over the last couple of months. I’m really interested in what he’s working on. So, I will just go ahead and introduce him. Carl was a theater major who decided to act like he understood business, which I can relate to. Not a theater major, but… Carl spent 14 years in advertising before launching his digital agency in nGen Works in 2003. nGen went on for 12 years and constantly experimented with different models of management and team structure, including the Jellyfish model, which was flat before flat was cool. Toward the end of nGen’s run, Carl attended the very first Bureau event and fell madly in love with the concept of building community in the web industry. So much that a few years ago he later closed nGen to take over the Bureau in 2016. Now Carl spends every day connecting digital professionals to give them the support they need.

So that’s a correction to something I said earlier. Carl bought out his partner in the Bureau of Digital, and sort of now runs it full-time. Welcome Carl. Thank you for being here.

Carl Smith: Thanks for having me. It was fun to listen to all that. It was a trip down memory lane.

Kristen G: I haven’t heard about the Jellyfish model. Can you just start with that?

Carl Smith: Sure. I’d be happy to. So at nGen, we got to this point where we were successful. We had as much work as we can handle. We were about the size we wanted to be. We’d gotten around 30 people, and we were fully distributed. So, we did have an office. So purists would say we were located distributed, but nobody had to go in there. It was just something that the team voted on to keep. We got to this point where I was talking with one of the people who’s managing projects, Rachel, and she was like, “What is your vision for how we should work?” And I said, “Well, for me, I would love it if everybody got to choose what they worked on, and if clients had to pitch us on why they were the right fit for us instead of us having to pitch clients with four other people chasing them.” And started talking about human nature, and how if we get to select what we want, then organically we’ll start having the work we want, and we just get better because we’re passionate about what we’re doing.

The next day Rachel called me. And I’m in Florida, she’s in Vancouver. So about a three hour time difference and she said, “You’re talking about the Jellyfish. You’re talking about Jellyfish. That’s what you’re talking about,” and I was like, “You’re drunk. I have no idea what you mean.” She said, “No, Jellyfish are transparent, and we’re transparent. We’ve always shared exactly what’s going on.” If anybody wanted to know the numbers in the bank account I’d make sure there was context. If somebody said, “How much money?” I would say, “Okay, there’s 400,000 dollars,” but what I would really say is, “We’ve got three payrolls.” Right?

Kristen G: Right.

Carl Smith: I had to put it in a context they could understand. She goes, “We’re transparent.” She goes, “You know what else? We are totally at a point right now where we choose what it is we want to do, and that’s what Jellyfish do. When there’s a problem they grow to the size of it to fix it. So, we kind of expand out.” One of the things we had going at nGen was, if two people on the team want to do a project but nobody else did, they could supplement the two of them with freelancers. Although, we call them friendgeneers because I thought freelancers and contractors is horrible, and they got paid every two weeks just like we did. There was never a when you’re done with the project you’ll get paid. But two people could expand the team, just like Jellyfish would, and when the project was done those two people who had worked on that project would know that their time with nGen for that time period was up. So it wasn’t like we were going to constantly grow. We were going to expand when there was opportunity and we were going to shrink when there wasn’t.

Then sustainability was a huge one, and that was one of the things Rachel said. She was like, “Jellyfish have been around forever, and they are in the coldest waters, and they are in the warmest waters. They are totally adaptable.” So we just started thinking about it, and it just made total sense. So we kind of inverted the normal sales cycle, and when somebody would contact me and say they were interested in nGen pitching the work, I would basically tell them, “Look, here’s how it works and if it is not a fit for you we totally understand and it’s not a problem, but what I’m going to do is ask you some questions so that you can tell me what you’re looking for, and if we are a fit and if I think, ‘Hey, this is in organics, or it’s in fantasy sports, or it’s in this sort of thing,’ then I’ll say, ‘Okay, I need you to write me a three or four paragraph pitch to sell the team because if they don’t select your project, then I’m going to call you and tell you the teams not interested and would you really want to work with a team that’s not interested? No. But if they are, wouldn’t you really want to have a team that picked you instead of one that got a project slapped in their face and told to do it?”

And it just worked magnificently. It was amazing.

Kristen G: That’s amazing. My business is only three years old, but gosh, I want to do that. That’s so exciting.

Carl Smith: I do have to say, you have to have a decent pile of cash to stand on.

Kristen G: I think so.

Carl Smith: So that you’re not scared.

Kristen G: Yeah. More scared than the regular scared.

Carl Smith: Exactly.

Kristen G: Gosh, I love that. I think that’s really interesting. I kind of want to segway a little bit from the agency life. You decided to close nGen to go and run Bureau of Digital, or work with … At that time I’m assuming that you had somebody that you worked with.

Carl Smith: Yeah.

Kristen G: Tell me about that decision, and why’d you do that?

Carl Smith: So, the Jellyfish model worked great with one fatal flaw. There was nobody out there looking for new business. So, for a while the model itself acted kind of as a marketing stream. So we had articles that were written up about it, certain clients. We actually had a client that wrote an email to his team – “They said yes.” So these things started to happen, but then we said no so many times that people stopped asking. I kind of checked out for nine months, which sounds horrible, but I will tell you it was glorious, and I apologize to no one.

I took nine months. I shed 30 pounds. I learned to cook a little bit, but I also went to the first Bureau event, which was at the time called Shop Talk, and Greg Hoy and Greg Storey, collectively known as “the Gregs” at Happy Cog invited 20 plus, I think it was 24 of us, to get together in Portland, believe it or not, at the Kennedy school. And basically they said, “We’re getting these people together to talk about what’s going right, what’s going wrong, and just how we can help each other because none of us are business majors.” And I said, “Okay.” I didn’t know they knew who I was. I was a little freaked out. Actually, I was like, “I’m getting called to the principle’s office. I don’t know what happened.”

So I replied back with a very short email that said, “Why me?” They replied back we’d been reading on the Jellyfish model, and either you’re onto something or you’re totally full of it, and we want to know which one.” And I said, “All right. I’ll be there.”

Kristen G: That’s awesome.

Carl Smith: So I went to the first one and to this day my absolute best friend was in that first one, and we text each other every day. It’s one of these things where he was a lawyer, and he’s my lawyer, and now I don’t really need a lawyer, but we just connected on so many levels, and that was it. I never quit going to these events. I was speaking quite a bit at the time on the Jellyfish model, and it got to this point where I just became so addicted to the concept of being in a room with other people, and sharing everything, that I couldn’t stop.

Kristen G: That transparency is such a resonate concept for me because I’ve never quite understood why I wouldn’t share something. Right?

Carl Smith: Yeah.

Kristen G: I think it’s an orientation. I don’t believe that people are going to hurt me with that information or hurt my business with that information. So, I’m going to share what I learned, what I failed at, what’s been kind of interesting but didn’t quite work. All of those things, and I’m curious if that’s something you share.

Carl Smith: Absolutely. I think that, from the very first one to the last one we just had in Santa Fe, it’s one of those things where I’ve never worried about it. Now, there are things like oversharing.

Kristen G: Oh, yeah. For sure.

Carl Smith: If there really is no point, and you just keep telling people about your troubles at home or whatever. You’re like, “Okay, this is not helping.” But, when it comes to the trust that’s established. You can tell. We’re animals. We still have our instincts. We kind of sense when something’s off, and I’ll pull back a little if somebody doesn’t seem legit in what they’re sharing, but overall, yeah. So, as long as you’re not going to hurt anybody, I think sharing anything that helps others is just going to help everybody and that’s the nature of the Bureau. That’s why I had to take it over.

Kristen G: I think that’s really interesting, and two things happened to me recently that are very counter to that idea, and it’s so interesting that you mentioned instincts because I think that there are people who run their business or their organization by that sort of gut feeling, and they’re willing to take those risks if the gut kind of backs up the risk, and then there are others who are maybe motivated by something different. I won’t go into excessive detail, that would be oversharing, about two of the things, but basically the jist of one of them was that this person had started a business that actually would be a competitor of mine in a different state, far, far away, and he was basically asking how do you do this work? We hadn’t established any trust, at all. Right? I just met him five minutes ago, and it was totally sort of phony, and I was like, “I can’t tell you right now because I feel really … I actually do feel kind of threatened right now.”

The other instance — somebody who I kind of thought that we shared the same set of values, and then the way that she came about putting an event together made it really clear that it was actually motivated financially, which … Money’s important, right? We all have to put food on the table, but that’s so counter to how I run things and what I focused on, that I was just like, “Oh, this is a weird taste. I don’t know how to handle this. I’m going to go now, and leave them.”

So, it’s interesting how that sort of … people sort of self-select into that community or out of that community, or that community sort of welcomes them or doesn’t.

Carl Smith: Yeah. I mean, that’s something I’ve seen. We’re coming up on 2,000 digital agencies who are kind of part of this community.

Kristen G: Wow.

Carl Smith: And 5,000 digital professionals and all this stuff, and one of the issues is scaling intimacy, right?

Kristen G: Right.

Carl Smith: Intimacy is about a small group that has something in common that’s familiar, that’s willing to make itself vulnerable so that others feel comfort because trust is based in comfort and familiarity, right? It’s in knowing that somebody else has kind of let down their guard, and they’re inviting you to do the same. Well, when you suddenly have a whole lot of people you don’t know, it’s not the same situation. It’s hard to do, and then you get to this concept of borrowed trust. Well, if so and so knows you and thinks you’re cool, right, which is the whole premise of LinkedIn, which is kind of bastardized now.

Kristen G: Yeah.

Carl Smith: But it was just that idea that, “Well, okay. Carl’s friends with you and I think you could help me out, and so I’m going to try to figure this out.” I think for me the community now polices itself, and if somebody seems like they’re doing something that’s not quite right, I get a call. It’s really kind of weird. But to your point, when you have somebody who has taken that trust from you, it could be that you shared something, and then they set something up financially. It’s not that they shouldn’t, it’s they should let you know. Right?

Kristen G: Right. Heads up. Yeah.

Carl Smith: Just reach out. And it’s funny because I’ve gotten … Every day there’s somebody putting on a new event that is trying to help people. And almost every time I get a message, “Hey, so and so is doing this.” And after I reply back, “Look, I’ll reach out to them,” but it’s a good thing. The more of us that are trying to help each other, it’s a good thing. Then I reached out to the individual and say, “Hey, some people in the community are a little cranky because you’re doing this, and I want to support it. Can you just tell me what it is, and then I can go in to the Slack channels and say, ‘Hey this is great. This is what’s happening.'” But it’s funny, and I don’t know that it’s people are worried to say it, but … My mom taught me to trust people until they give you a reason not to, and then look at them sideways every time.

Kristen G: Yes.

Carl Smith: So for me, I always like to think that nobody did anything intentionally, and I like to reach out as soon as I see it and ask how I can help. It takes people off guard. It’s like waving to somebody who gave you the finger in traffic. They don’t know what to do. Hey, good to see you. It’s a struggle, right? It’s always going to be a struggle.

Kristen G: Yeah. Something that can be learned, I think. We’re sort of talking about this in a sideways way, in a better sense, but have you learned some things, I’m sure you have, along the way about building better organizations, better businesses, and what does that even mean to you, that word better?

Carl Smith: Yes. So, better. That’s an amazingly good question. I think amazingly good is also known as great.

Kristen G: Well, thank you.

Carl Smith: It’s a great question. I think, better for me when it comes to an organization is something that strengthens it holistically. It’s not about profit being better because that can come at the expense of culture, and it’s not about something getting done quicker because that can come at the cost of quality. So, I think it’s about a holistic improvement, which has to start with the way that people feel, and obviously there can be things that are being done from a process situation that are bad. There’s this great example. This was a research experiment that was done with five monkeys, and I’ll give you the short version.

So, these five chimpanzees in a room. Pole in the middle of the room. Bananas at the top of the pole. One of the monkeys climbs up, touches the banana, and the whole room gets doused with cold water, right? Monkeys freak out, they don’t go near the pole. Next day they take one of these monkeys out, they bring in a new one. That monkey walks towards the pole, the other four grab him and pull him back. And he’s like, “What is going on?” They’re like, “Trust me, the bananas are a lie dude.” Then they go through this every day until finally there are five monkeys in there that have never been doused with cold water, and they don’t go near the bananas because that’s what they were told when they came in the room by everyone else, and I think that is part of what happens in an organization, as well, is why do we have this meeting on Tuesday mornings when all we seem to do is sit there and delay everybody?

Right? Oh because we always have. So, I think that’s part of getting better is looking at, those legacy things and asking yourself, does this even matter anymore? Right?

Kristen G: Mm-hmm.

Carl Smith: Anytime you bring in somebody new, don’t just shut them down. Listen to them asking why, and then ask yourself why. I think that’s a lot of what happens when you get a lot of people together who have made up how they do things, which is a lot of what digital agencies are.

Kristen G: Right.

Carl Smith: They just create because they were musician or they were a writer, or maybe they came in as retail, and they’ve never done marketing before. But when they all get together and share their unique path, I think it starts to expose that there are ways you are doing things because you thought you had to, and you start to realize that you don’t. The other thing I’ll say that’s been the biggest epiphany for me is when I’m in a room, and somebody says, “I’m the wrong person for my job.” Right? A lot of time it’s the founder.

Kristen G: Yeah. Yes.

Carl Smith: They realize, I got us to here but I can’t get us to there. That’s the struggle I’ve been having. I’m holding onto everything I know and understand out of fear of being found an imposter, right? And if I just let go and bring in some other people to lighten the load, everything is going to get better.

Kristen G: I love that, but what you’re talking about takes so much vulnerability and trust on the part of that founder. Having worked for a person, actually two people in that situation and wishing, just hoping that they would say, “I need some help. Somebody help me with this,” or, “We’re all going to take a two-day kind of time to think about what work we’re doing and why we’re doing it,” but it never came. How do you get to that place?

Carl Smith: I mean, I think you have to have, first of all, a strong number two. You have to have somebody in that position who will call you out, and I’ve only had one boss ever in my life, and that was at the advertising agency I was at. Her name was Melanie, and she was amazing. It ruined me for any concept at having a boss after that, and I remember we went to this event, and this person was talking about founders needing to let go, presidents needing to let go, all this kind of stuff, and one of the things they said was, “You have to be okay with somebody getting 80% there. They’re going to make mistakes. That’s how they’re going to learn. As soon as you see them making a mistake, you can’t grab them by the scruff of the neck, and say, ‘You’re making a mistake.’ You have to let them feel the pain of what they do.” And it was funny because after that I looked at Melanie, I said, “I never start until you show me how to start. We need to start where you just tell me what to do, and I take off.”

And she was like, “But you always take off in these weird directions.” I’m like, “I know because I don’t know what to do, but let’s just see where I end up.” So we started changing it, and you know what? She would come in and say, “I saw that you were doing this.” I said, “Yeah, yeah. I gave up on that. It’s not going to work because of this reason.” And she goes, “Oh, okay. Right.”

So, it’s beautiful. The other thing I think that founders really need to understand is that they tried something once and it didn’t work, but they tried it. Somebody else tries it, they may try it a different way, or it may be that time has changed. Right? We’re not using, like, Netscape Navigator anymore. I mean, there’s a lot of things that have happened just in 10, 12 years. So, let people try the same thing you tried and just see if maybe it does work, but it is a lot of letting go, and actually, I’m plugging my own thing, but I wrote this post called The Irrelevant Strategy, and it’s just about how I started trying to make myself irrelevant when I was running my agency, and I would just ask everybody three questions. The first would be, what’s going on? The second would be, what do you think we should do? And then the third was, try that and let me know how it goes. Right?

Kristen G: Yes. I love all three of those questions.

Carl Smith: After a couple of weeks, they stopped telling me how it went and then after two months, they stopped telling me what the problem was. They just started doing it, and it was great being irrelevant, but another thing I think owners struggle with is I started losing a sense of identity because I had so been, this is Carl, he owns nGen works. So when that suddenly wasn’t there, I had to reestablish who I was to myself, which sounds ridiculous.

Kristen G: No.

Carl Smith: But it’s so true.

Kristen G: I think that happens often, right? Or let me rephrase. I think it could happen often, and it could be really healthy, I think. The idea that you aren’t that monkey situation to yourself. Right? That you kind of constantly question, why am I doing this? Is this who I want to be? Is this who I am? Am I giving my highest and best to this world? And I love the Irrelevant Strategy. The idea, and my background’s in non-profits, so a good non profit should be trying to make itself irrelevant, right?

Carl Smith: Right.

Kristen G: I’m also a realist. So, I know there’s always enough problems, right, to try to fix, but what would it be like if you did reach your mission, and you were so good that you did reach it and you enabled other people to get there too? What’s the next problem that you can work on?

Carl Smith: Yeah. That’s it. Absolutely. That’s when nGen, I realized, I didn’t have the energy or desire to reboot it once we hit a problem. I was just like, “You know what? Let’s just let the old girl lay down. I think she’s tired. I’m tired.” It’s interesting because you said healthy. There was a study, I think it was called the White Hall study. It was done in the UK around … They had 500 government employees, and they were able to research who was healthy and who wasn’t because they had public medicine, and they could always see who went to the doctor, who didn’t. And what they found is people who defined themselves outside of their role at work were much healthier. So if you ask someone who they are and they start talking about a softball team that they’re on, they’re going to be healthier than a person who says, “I’m trying to get my bosses job,” blah, blah, blah because they’re defining themselves based on this one structure. I started trying to define myself more as, I’m a slow runner but I can run far, and trying to do a marathon or trying to do an ultra.

And also defining myself as, I really love video games. Right? Instead of just one thing, starting to spread it out and realize these things aren’t arbitrary, they’re kind of innate.

Kristen G: Right. They’re definitely not arbitrary, and what’s interesting about defining yourself in multiple capacities or multiple functions even is that you open up to different worlds, right? Because people who love video games, that’s a world. Right. People who run, that’s a world. I like being a person– One of the reasons I love working with engineers is I don’t code very often, but I knit, and knitting is like code. So we can talk about the sort of structures behind these things, and have kind of shared conversations and you start to learn somebody else’s world and what’s going on for them, and they can learn about that for you.

Carl Smith: That is really cool. I never thought that. About knitting and code, and the similarity.

Kristen G: There’s some amazing engineers actually, one of whom is in Portland, that actually writes code for knitting patterns. It’s pretty amazing. Yeah.

Carl Smith: That’s awesome.

Kristen G: And very cool. I am not actually that great of a knitter. So I like to knit very simple things, but there is some math behind it. So, as we sort of wrap up, I’ve really enjoyed this conversation. I kind of want to know, is there one or two short cuts that you took that you wished you didn’t take in building your business, or shortcuts that you wish you took in building something?

Carl Smith: That’s a very interesting and introspective question, right? I’ll say there was a shortcut I took in trying to reboot my business or in trying to get something out of the years I put in it, and I tried to sell it to somebody, and ignored my instincts and as a result I got into some trouble. Now I own the trouble. I let what happen happen, but I also acted out of fear and greed, and those were two things I always tried to avoid in my whole career and I kind of gave into them. I was scared what people would think if the company failed, and I wanted to get paid. You know?

Kristen G: Right, right.

Carl Smith: I had put 12 years worth of stress into that and the Bureau and nGen actually just merged about a week ago, which is kind of fun. nGen still existed as an entity, even though it wasn’t doing anything. Then in terms of ones I wish I had taken, I wish I had relaxed sooner, and I don’t know that it’s a shortcut, but I wish maybe in the sixth year or seventh year, I had trusted everybody I worked with a little bit more to do more.

I explained to another owner of a digital shop at one point that I think when I relaxed and left the room, it gave everybody a chance to grow, and I’ve told a lot of owners, you’re a big Oak tree and even if you tell people to do stuff, the shade in the room is not going to give them what they need, but if you leave and don’t even necessarily tell them what to do, if you’ve got the right people they’re going to figure it out.

Kristen G: Yeah.

Carl Smith: Yeah, and maybe you’re called an absent owner, but what you’re doing is giving them room to grow and figure out how to run the company without you, and that is gold. So, I think if I could have done that sooner, who knows, maybe I wouldn’t be running the Bureau, which is what I think I was actually born to do.

Kristen G: So not necessarily a bad thing.

Carl Smith: It would have been a nicer run towards the end there, I think.

Kristen G: That’s such good insight. Well, Carl, thank you so much for sharing all of this with us. I’ve really enjoyed it, and I can’t wait to hear what people think about it. Thank you so much for being on.

Carl Smith: Thank you Kristen. It was amazing, and now I feel so good because I’ve had this introspection.

Kristen G: Oh, good. Good. Little mental health in the morning.

Carl Smith: There you go.

Kristen G: All right. Have a good one. Thank you.

That’s it for today. Thank you so much for joining us for another episode. If you’d like to ask a question or suggest a guest, email me at Until next time, grow better.