Welcome to another edition of Cash Machines.
Most people in startup land look down on service businesses (agencies).
But what if you used the agency in a different way?
Specifically, what if your agency was an information gathering machine as well as a cashflow stream?
E.g. What if you used your cash flow to invest in your clients that you know will do well?
You know because you have all their metrics AND have seen how their founders work over a long period of time?
Your average VC would drool at this kind of information flow…
Enter Robb Fahrion and Flying V Group.
Let's break it down...
The Business: Flying V Group
Founders: Robb Fahrion, Tyler Fahrion, and Brennan Smith
Business Model: Marketing agency
They make money via high-retainer service contracts, pay-for-performance models, and equity investments.
This is where the "service businesses don't scale" narrative dies.
Relentless execution with audited growth figures:
Most agencies have redundant founders. FVG’s founders are all in leadership roles in the business:
Not only do we have highly skilled professionals in key commercial roles, but these are also roles that can directly add value to their clients.
Despite the fact that the CFO and CRO and typically internal roles, FVG also deploys the founders in these roles to help their clients.
In the advent of AI content, the team scaled production to get to 38k organic session per month in 2024:
It’s since come crashing down.
Marketing is an art and a science, things go wrong sometimes.
And I would much prefer to be working with a marketing agency that are in the arena, making mistakes. So they don’t make them on our business.
FVG doesn't deploy a sales team.
Everything is inbound lead gen, referrals, or word of mouth.
We do the same at Fame.
Why?
Because every dollar spent on ads means we have to increase prices.
And any price increase without an increase in value means…
Less value for clients.
Which means lower retention and lifetime value.
In other words, Fame and FVG would rather spend the ad budget on making clients happy.
They follow a "self-reinforcing loop" of content and capital.
They use excess retained profits to take equity positions in their best clients:
Presumably it’s both tax efficient and as mentioned, they have more information about a company than any average VC as they’ve worked with them for years and have ALL their numbers.
What if your agency is really an information gathering tool?
And what if you could use that information advantage to better invest your cashflow?
That is the #1 learning from The Flying V Group.
Amen to that.
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