In this episode of Retained Trust, host Karl Hughes sits down with Garrett Mehrguth, founder of Directive and Abe, to unpack what it really takes to build, scale, and sustain a high-performing digital agency. Garrett shares why he's drawn to the constant reinvention required in agency life, how he structures leadership across multiple teams, and the bold bets he's making—like launching a new LinkedIn ads agency and buying others through his HoldCo, More Good Capital. From hiring to contracting, reinvesting profit, and knowing when to acquire versus build, Garrett brings candid, high-energy insight for founders navigating uncertain markets and aggressive goals.
Key Points From This Episode:
[00:00:00] Garrett's passion for the complexity and human challenges of agency work
[00:04:01] Why the idea of “elevating out” of your business is a myth
[00:06:08] Garrett’s executive structure and leadership style at Directive
[00:08:12] How he sets pace and alignment through strategic initiative planning
[00:12:14] The need for constant service reinvention in marketing agencies
[00:14:35] How Garrett tested and scaled paid channels with gift card demos
[00:17:46] Why proper contracting and LTV shape agency scalability
[00:20:56] The value of tightly focusing on one service for one persona
[00:23:17] Smart cross-selling: building services based on client delivery pain points
[00:24:14] Why Garrett launched Abe, a LinkedIn-only ads agency
[00:26:53] Directive vs. Abe: how focus improves clarity and execution
[00:28:23] The logic behind pre-hiring and betting big once a year
[00:29:11] Shifting from mid-market to extremes: startups and incumbents
[00:32:45] Garrett’s take on the myth of “passive income” from agency ownership
[00:34:22] Using acquisitions to gain capabilities and reduce CAC
[00:36:55] What makes an agency acquisition worthwhile (and what doesn’t)
[00:38:10] Lessons from failed expansions and why he'd buy instead of build
[00:41:20] Why coaching other agency founders is Garrett’s favorite work
[00:44:05] How most growth challenges tie back to leadership and structure
[00:47:47] Book recommendations on professional services, hiring, and strategy
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