Compound's January '25 Update

I can’t believe we’re already through January. Feels like yesterday I was mapping out my 2025 goals.

One of those goals was documenting more of the journey building Compound and Bluecast. If you're new here, Compound is my B2B content agency. We help SaaS founders grow an audience on LinkedIn. Bluecast is my SaaS company. It’s an AI content writing tool that helps founders write LinkedIn content, faster. Clearly I have a thing for LinkedIn.

I thought about doing a vlog to document building it all.

Then I realized my day-in-the-life is entirely un-filmable. Wake up. Cold brew. Write. Client meetings. More cold brew. Gym or run. Read. Repeat.

Riveting stuff.

I also love writing. I hate thinking of how to get the best cinematic camera angle of me sitting down at my desk to take a client call.

So, consider this essay series my version of a vlog.

Today’s piece is a January update. What went well? What didn’t? What lessons am I taking into February?

What went well?

🧱 Compound

Compound had another record month. Since Q4, we’ve been back in a moderate growth push. I felt comfortable with the infrastructure we built, and it was time for us to progress to the next step.

You can look at agency growth like a staircase. You’ll have rapid growth periods spaced out by flat ‘calibration’ periods.

The work we put in during our last calibration period is paying off, and we are on pace to have another record month in February. I anticipate we’ll hit that next ceiling in March, and have to spend a few months adjusting to our new ‘normal.’

Net margins are as good as they’ve been since starting to hire. Early on, when I was solo, I was rocking 85% margins and felt on top of the world (aside from my day-to-day being literal insanity).

Since we made our first hire in summer ‘23, margins took a big hit. They got as low as 9% at one point. This was calculated as we were building out our core team. Now, we’re back above 30% net.

We made two much-needed hires. We rounded out our core content team with a new Content Writer and a new Content Editor. We sourced our writer from an employee referral and our editor from a LinkedIn job posting. They’re both off to a great start.

A lesson I’m reminded of over and over and over again in business is that people are everything. In our line of business, they are literally the product. Worth spending the time to get hiring right.

We’re bringing on a fractional COO in mid-February. I’m looking forward to having a senior operations mind in the mix.

For most of the first 2 years of the business, the content side of the company was the constraint. I spent most of my time hiring and training content roles (we’re still hiring for a Content Editor, by the way).

Now I’m noticing operations becoming more important. As the team is now at 14 FTEs, operations get more complex. And I wouldn’t consider myself an ‘ops guy.’ I’ve gotten myself to a passable point here, but now it’s time to bring a real expert in—so I can continue to lean into my strengths. Content & marketing.

Myself and the COO we are bringing on will be sharing some of this work publicly in this series, and on social. More soon.

We completed the rollout of our newest offer. For the first 1.5 years of the agency, we stuck to LinkedIn content for founders. In Q4 we ran a beta for our newsletter production offer—I’ve seen how much Social Files has done for my businesses and figured this was the next logical step for our clients.

We also had the writing resources internally already. Easy extension of LinkedIn content writing.

That offer is fully rolled out now as an upsell for current clients. Exciting.

I got to spend some time with part of the team in NYC. Compound will always be a remote company. We may have an office one day, when I land on a city to live in long-term. But we’ll never go completely in-office.

That said...I always genuinely question that feeling whenever I have a chance to work IRL with the team or with our clients.

It's not even about productivity. I don't think that changes all that much when you have the right systems in place for a remote team. In-person work is just so much more fun.

And it's a great way to fast-track deeper relationships with clients.

Side note: a NYC move is inevitable at this point. I’ve been toying with the idea for the past year. Feel like this will be the year.

🌀 Bluecast

Growth is continuing to progress nicely. I’m keeping my cards a bit closer to my chest here, since I’m far less worried about competition in the agency space. Your moat as an agency founder is that scaling is a pain in the ass and often feels like eating glass. SaaS is more prone to copycats.

That said, happy to report Bluecast is continuing to grow steadily.

Free-to-paid conversion is double the industry standard. Once people try the product, they love it. I also attribute the above average conversion to content—the users trying the product are coming from my audience. Trust has been pre-built. So they’re more prone to stick around.

We rolled out our updated Idea Generator. This was our weakest feature at launch. The concept made sense, but the execution was a miss. The ‘ideas’ generated were reminiscent of Chat GPT-created copy with shitty prompting.

Luckily, the Writing Styles and Repurposing Templates features hard carried in the first few months.

After 2 months of working with the team to give the Idea Generator a facelift, we launched V2 in mid-January. Now, you can prompt Bluecast to give you content ideas that map to specific stages of your Content Funnel. The ideas are pulled from the same database we use with clients at Compound—instead of being randomly generated from the AI either. Way better UX.

Here’s a demo I recorded.

I’m starting to see more traction on YouTube. I’ve been investing in YouTube since the start of Q4 2024. We’re now starting to see sign-ups roll in from the platform. Of course, LinkedIn is our main marketing channel (I would hope so). But it’s exciting to see YouTube start to work, as it’s a more evergreen channel.

What sucked?

🧱 Compound

There’s always something wrong. Early on, your business is a shitshow. It feels like you're driving on the freeway on a dangerously foggy day.

Still, as one person, or a small team, it’s straightforward to handle. You only have so many clients at a time. You only have so many personalities to deal with.

Maybe I feel like this in hindsight now that I realize those problems were laughable. Who knows.

Back to the present—we’re now at the size that there is always something.

97% of our clients could be stoked, but my attention goes to the 3% who are frustrated. 13 of our team members could be crushing it, but my attention goes to the 1 that is underperforming.

My old CMO used to say that running an agency was similar to being a general on a battlefield. You're always pulled to the area on the front line where your forces are weakest.

This is what I signed up for as a founder—but it’s still hard.

We’re hitting another ceiling. Hello darkness, my old friend. I deal with this once per quarter, it feels like. We’re onboarding 1-2 net new clients in March and then capping it. Scaling responsibly is more profitable in the long run, but damn, turning away immediate revenue stings.

FWIW—I don’t even want to take on ‘more’ clients. I suspect the next ceiling will be broken by a reworked offer. We’ll continue rolling out newsletter plus [redacted] to go even deeper with current clients. Shit takes time though.

That said, I also told myself this when we hit 8 active clients on our roster. The line of thinking turned out to be a limiting belief, as now we’re at double that and getting better results for clients.

As you’ll be able to tell from my writing style here, my internal feelings on this topic are chaotic. I don’t have a set ‘answer.’ I hope that comes across in this series as I figure it out.

As I was writing this essay, I came across this thread on X. Great timing. The poster asks, “Would love to know how many agency owners are intentionally not scaling?”

The replies are interesting. You have a lot of folks echoing the message of the original poster—just want to stay lean, limited client roster, etc.

Then you have big dogs like Taylor Holiday shattering this logic—”there is no such thing as stasis.” You’re either growing or shrinking.

Michael also makes a strong point here. It’s riskier to stay small. What happens if you need to take a month off? Or a week? Will your business break?

Right now, as of February 7, 2025, my take is: you can scale an agency, it just takes time. Most agency founders who try to ‘scale’ just do so irresponsibly, taking on more clients than their team can handle, and then blame the fallout on the business model. Cope.

Compound will continue to have a waitlist. I’ll scale this by meticulously adding team members that raise our talent bar, and then either layer in new offers or increase client roster when it makes sense.

🌀 Bluecast

Why won’t growth go faster? A question I ask myself daily. Current growth is good. But could be better.

Bandwidth. Running an agency and a software business in parallel is not for the faint of heart. I always feel like I can be doing more. There’s this subtle feeling of guilt that appears when I’m working on one business and not the other.

The stuff that works is boring. Writing the next email. Filming the next YouTube video. Sending the next email. It’s not particularly exciting, and at times I can get bored. But the boring stuff works. I need to buy a fidget spinner or something to keep me from getting distracted.

What’s next?

I remember having a conversation with a good friend back in summer 2023. This was 3 months after I left my job to build Compound. I was staying in New York at the time, subleasing a client’s apartment.

I was going through it. Every day was an existential crisis, and the day that call took place was no different.

I told him, “If I can just get to $XXXK per month in revenue at [redacted] margins, I’ll be good.”

Well, we hit that target in January, will again in February, and again in March.

The last few months have been the first that I’ve felt like the business was truly working since I decided to hire a team instead of going solo.

Do I feel like I’m good?

Honest answer. No. It’s still early, and the goalposts moved.

I have a new number in mind. But the tricky part is, I don’t want to get there by brute forcing our client roster to increase in size as quickly as possible. I look at agencies who have 50, 75, 100+ clients and don’t see any agencies I want to model Compound after.

So, I have some thinking to do.

📚 Reading list

Everything I’m reading—fiction and non-fiction—in the past month.

• Hyperion 📚

• Terminal List (full series) 📚

• Dark Matter 📚

• A Swim in the Pond and the Rain 📚

• The Courage to be Disliked 📚

Thanks for reading this edition. I’ll see you in the next one.

Keep compounding,

Tommy Clark