How I Left Silicon Valley And Started A $100K/Month Digital Agency

Kenn Kelly

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Published: October 28th, 2019

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Kenn Kelly

Founder, Never Settle

$150K

revenue/mo

Founders

Employees

Never Settle

neversettle.it

from Denver, Colorado, USA

started June 2012

$150,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

WooCommerce

ActiveCampaign tool-icon

EmailOctopus

web hosting tool-icon

WP Engine

Discover what books Kenn recommends to grow your business!

Black Box Thinking: Why Most People Never Learn from Thei... Matthew Syed

The Lean Startup: How Today's Entrepreneurs Use Continuou... Eric Ries

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Want more updates on Never Settle? Check out these stories:

1. Never Settle Update: How We've Grown 20% YoY (2022) ➜

Hello! Who are you and what business did you start?🔗

Hello, I’m Kenn Kelly and co-found Never Settle with two dear friends Andrew Lundquist and Shaul Hagen. Never Settle is a Digital Agency where relationships with our customers come first - after all, they are everything in our business. Although small, we’ve been globally recognized as a leader in mobile, website & marketing solutions.

Our clients range from small mom and pop businesses to enterprises. Our flagship product is eCommerce development. Whether helping a business sell products for the first time online or helping a company manage online sales + in-store purchases + Amazon from one unified inventory and reporting system, we’ve completed a very diverse set of work inside the eCommerce ecosystem. While we technically do a lot of eCommerce, marketing, and web development - really what we’re experts in, is helping our customers build bigger stories.

We’re huge fans of ‘lean methodology’ and that’s one of the things that sets us apart. We’re the first to help clients reduce their overall budget while coming up with creative ways to leverage what’s needed at that moment to create the maximum impact. Because we’re in it for the long haul, we’re not focused on getting the most out of our clients, but rather we’re focused on building a long-lasting mutually beneficial relationship. From that starting position, everything else falls in line.

In seven years, our team has now built over 1,000 business sites and apps to which we’re seeing momentum pick up even more. With that kind of volume, our team can leverage that experience for our current and future clients providing even more value. Our growth is consistent and moderate, which falls right in line with our focus on being a ‘legacy based’ company, not a high growth one. Our goal is to take care of our people, create sustainable value, and be a company that is around for decades to come. High growth comes with a different focus and different result, neither is better than the other we just felt this was the best path for our team. The team is everything at Never Settle and below are just a few of our guys having a good time together.

how-i-left-silicon-valley-and-started-a-100k-month-digital-agency

What's your backstory and how did you come up with the idea?🔗

I started in Management Consulting where my teeth were cut and I learned an incredible amount about business and technology that I am forever grateful for. From there I moved to Silicon Valley, where I had the opportunity to build a tech startup. We did the Sand Hill road tour and raised $9M in VC funding, had our SaaS white-labeled on multiple Fortune 100 companies and saw true hockey stick growth. During that time in 2009 when the Market dropped by almost 50%, we also learned what true hockey stick loss looks like. Those same Fortune companies were now laying off 25% of their workforce and our SaaS also went out the door.

I ultimately came back to Denver where I took a CIO position and ownership stake of another tech company. After a few years there it was very clear that my ideas on taking care of people were different than one of my business partners. It was at that moment that Never Settle was born.

I left that company, released all the debt I had invested, and returned my equity to create a clean separation. Took everything I had learned in my career from Management Consulting, to being in a high growth tech startup, to being part of a culture I wasn’t comfortable with and launched Never Settle with the axiom that we would ‘never settle’ on doing the right thing even when it costs us money, time, or humility. The money and growth simply aren’t worth it, people win every time and we want to be a business that values and empowers people to be all they were created to be - both clients and staff.

In a culture that’s insistent on blaming others and finding excuses - ownership stands out.

I was three months away from getting married so starting over was a risky proposition, to say the least, as I convinced my fiance (now wife) to start over with nothing. But we did it, we built one website, then another, all with the focus on serving our clients from a relational standpoint. Up to this point, our business has been a 100% referral which speaks more to who we are than who we hope to be.

Growing up, my family had a small Italian restaurant where I started working at a young age. It was there that I truly realized the value of service. Never Settle is a service company that builds solutions with our customers that help them achieve their goals. If we want to stay competitive in this industry we can never lose our focus on service. Our goal as an agency to help our clients build bigger stories through design, marketing, and web technologies.

Describe the process of launching the business.🔗

For us, we started with our core values and operating agreement. Instead of just rushing into ‘making money’ we wanted to build a foundation that would last for a legacy so we spent a LOT of time (months) on really determining ‘who’ we were going to be rather than ‘what’ we were going to be.

Launching a services business is a bit different than a product business. Products typically have to first be developed before they can be sold, but with the services, it’s all about winning the business. It was grace, but right at that time, I had a few contacts from years before ‘happen’ to reach out knowing I was in technology to see if I could help them build their solution. At first, it was two of us before picking up our third partner a few months down the road and our first project was for a total of $3,200 over two months of work. That was a long way from paying for our expenses for two full-time people yet we treated that project the same way we treat a $320,000 project today. With radical service, knowing that our clients have a choice in who they select and we’re grateful for everyone regardless of budget.

Since launch, what has worked to attract and retain customers?🔗

Service. Service always wins. As mentioned, remember that our clients have a choice and taking a position of humility is key. Sure we’ve won awards, are ranked globally in a few niches, but none of that matters to the next client we’re taking on.

Other companies have fancy awards and have done cool things so we must set ourselves apart by serving them with service that leaves them with no choice other than to choose us.

Most of our customers are US-based but we do have a percentage who are International. For the first seven years of the company, we were 100% referral only. We believe that if we serve our client's needs the rest will follow suit. While that has worked with some wise counsel from our board this last year we became more direct in our sales efforts, most of those are focused around generating inbound leads through marketing efforts. Yet despite that new effort, I’d estimate that over 90% of our business is still completely referral based. The great thing about a referral network is that with time it only grows. The one caution is patience, sometimes it could take years before a client knows another potential client that would be a great referral. Regardless of time we always treat our current clients with the best service possible.

Then there’s the whole business of making mistakes - yikes. We’ve made a lot of mistakes but we’ve done our best to proactively acknowledge them and then own them. I can honestly say that we’ve given hundreds of thousands back or away for mistakes we’ve made. We put ourselves in our clients' shoes and ask “what would I want if I were in their shoes” and from there determine how we can resolve in a reasonable way.

The last point to make is that it should be about retaining the ‘right customer’. Sometimes a customer can be toxic to your culture, not mutually beneficial, or just no fun to work with. Since we spend half of our awake time working, we do our best to choose and keep clients that we enjoy doing business with.

Take us through the process of designing, prototyping, and manufacturing your first product.🔗

The first thing we do is listen, I can’t tell you how important that step is. After building over 1,000 solutions there is a piece of you that can think you know what’s best because you’ve ‘seen it all’. The truth is that’s radically incorrect, even two competing businesses in the same market have unique needs, strengths, and culture. Tapping into that, understanding, and working with our clients by fully hearing them is always our starting point.

We put ourselves in our clients' shoes to determine how we can resolve problems in a reasonable way.

From there we really start building out the solution on paper thinking about the desired deliverable from a holistic standpoint. For instance, instead of looking at a website as a way to sell widgets - we look at it as a way to interact with their customers and tell their stories. How will this impact the existing customers, solutions, brand, etc... then create a comprehensive solution together for our client the put together a roadmap and blueprint to execute that plan.

As Seal Team says “always have a plan, and always plan for the plan to go to $h!t”. Which is why instead of coding we go-to design and create an interactive prototype where our clients can see and interact with what will be the final solution even though no code has been done. Fixing graphics is cheaper to adjust, and better stewardship of our clients' budgets, than code.

Once we have the prototype nailed down we move into active development where we let the client test and see progress early on. Obviously, if we’re only doing design and marketing work there is no code but the process is very similar.

How are you doing today and what does the future look like?🔗

Our gross margin is around 56% on average. It has to be on average because sometimes we win fairly big and sometimes we lose but again we’re in it for the bigger picture so we try not to get too caught up in the single at-bats but rather keep our eyes on the game and season as a whole.

Our margins also fluctuate with the size of the project. The larger the project the lower margin. That exchange comes from the value that a large or long term project offers to our pipeline and cash flow. Essentially it’s a bulk pricing discount.

The best way we’ve seen as a services business to offset the highs and lows of cash management is to find a way to offer a recurring service. This is a really powerful tool that a services business can build to help structure themselves to not be so dependent upon new sales. For us that recurring marketing, SEO, advertising, maintenance, or consulting services.

Through starting the business, have you learned anything particularly helpful or advantageous?🔗

It always starts with the man/woman in the mirror. In a culture that’s insistent on blaming others and finding excuses - ownership stands out. Besides that, the only thing you are in control of and can change is yourself, starting there than building upon that is a key to success. Leo Tolstoy says it well “everyone thinks of changing the world, but no one thinks of changing themselves.”

There are thousands of things an entrepreneur must do to launch a business and be successful, yet being the best you first is the building block upon which everything else rests. And remember to have fun - this is your life and your journey!

What platform/tools do you use for your business?🔗

Below are some of our favorites, but you can see all of them here on our free resources page.

Hosting: WPEngine
eCommerce: WooCommerce
eCommerce Reporting: Metorik
Marketing Automation: Active Campaign and Email Octopus
A/B Price Testing: Price Lab
Password Management: LastPass
Amazon Fulfillment Automation: NS FBA for WooCommerce
Point of Sale: TouchPoint
Website Cloning and Templating: Free Version and Pro Version of NS Cloner

What have been the most influential books, podcasts, or other resources?🔗

Books and podcasts can change a lot during different seasons of your life or company. Below are a few that seem to stand out:

Black Box Thinking - Learning from Mistakes
Lean Startup - Doing More with Less, doing the right things that are validated with data.
Extreme Ownership - Everything rises and falls on leadership.
Chop Wood Carry Water - Doing the small things well and why that matters.
Elon Musk - Besides being a radically entertaining story the best way to learn is from other’s actual mistakes and success, not just theory.

Advice for other entrepreneurs who want to get started or are just starting out?🔗

For those considering starting - start! For those in progress - keep going! The most powerful factor you have going for you is time and momentum. Together they can create compound returns. The key though is starting and continuing. Even small deposits over a consistent period of time make dramatic impacts in the long run.