What the Likeable Exit Means for Agencies

The Big Idea Behind a Big Exit

A trend is sweeping the agency space, and it reminds me of the Big Idea that marketing and advertising gurus like David Ogilvy and George Lois made famous.

Why? Because this trend is big – a unifying “theory of everything” that could connect agency services with client needs in a comprehensive, industry-changing way – if only entrepreneurs adapt their business models to it.

How did I get wise to this trend? Because Likeable, a social-first agency founded in 2006 by husband-wife duo Carrie and Dave Kerpen, just sold to 10Pearls, a global digital transformation technology company with 750 employees.

I worked behind the scenes of the deal through my agency-focused M&A firm Barney and saw first-hand what drove this 8-figure acquisition. There’s a lesson in it for digital entrepreneurs who wish to someday make a smart exit - not to mention build a robust agency that can stay ahead of the curve.

In short: I have seen the future, and it is transformative.

Digital Transformation: Change is Gonna Come

To understand the trends that are shaping tomorrow, we first need to know where they came from.

10Pearls is a digital transformation company. Digital transformation – working across departments to adjust processes, people, and software to generate new business and revenue in today’s world – may feel like a buzzword. But the trend actually began in the late 1940s with the invention of the semiconductor transmitter and microchip. Digitization has been disrupting business processes ever since.

No company is immune to the need to digitize. So it’s not ironic that 10Pearls, which helps companies modernize at scale, would seek to upgrade its digital offering – it’s smart business. Clients rely on 10Pearls, as co-founder and CEO Imran Aftab puts is, to help them “deliver digital experiences that carry the power to emotionally connect and inspire end users.” 

The whole point of 10Pearl’s services is to make digital experiences seamless, so acquiring a social-first digital marketing platform makes strategic sense. Especially since covid has been rocket fuel for the move to digitize. A McKinsey survey showed that 70% of businesses stepped up their digital transformation game due to the pandemic. More than half of companies surveyed that had not yet begun the digital transformation process said that COVID-19 had sped up their plan to do so.

The effects will be lasting and will even intensify. The majority of CEOs in the U.S. believe that there is no going back and that the pandemic has accelerated digital transformation by anywhere from months to several years.

From brick-and-mortar retailers taking their businesses online for the first time to large enterprises migrating to cloud-based processes, everyone is affected.

As a digital agency owner, why would you not want to meet that market head-on?

All the Things

This brings me back to the “Big Idea” I mentioned earlier - the lessons from the Likeable exit that you need to know about as a digital agency owner.

When a digital transformation company like 10Pearls acquires a standalone, pure-play, social-first marketing agency like Likeable for 8 figures, those of us who work in the space should take note. We should ask ourselves: what wider trend is driving this transaction? How can we capitalize on it to strengthen our own agency model?

The answer is right there in front of us, so big that you could almost miss it: we have to do all the things.

In short, we have to think holistically. It’s on us as digital entrepreneurs to provide full-service solutions that create a compelling end-to-end user experience. That experience must align with our consumer expectations as citizens of a mobile-first, digitally transformed world.

Cross-Functional = Unstoppable

To sum up: if you are 10Pearls and you have a digital transformation product, but lack a way to drive clients to that product, what do you?

Easy: you find a standalone company (a trailblazer and icon in its space, in Likeable’s case) and forge a partnership. The rewards of the acquisition are immediate. You gain a unique position in the marketplace that strengthens your ability to lead transformation for businesses. You also get great press for your big, bold move – and moves like that are what digital transformation is all about.

Not to mention that you can now cover the full spectrum of your customers’ digital needs. And because you now have access to precious social media insights, you have real-time customer feedback at your fingertips and can pump that back into your product to make it perfect for your audience.

Congratulations, you are now cross-functional! That makes you unstoppable. And as an entrepreneur myself who had the honor to broker this deal, I applaud you!