Irvine-based Directive has grown by 300 percent annually for four consecutive years.
By Lee Barnathan, California Business Journal
When he started consulting, Garrett Mehrguth had a simple dream: “Have a business that didn’t fail.”
His dreams have grown. Now, it’s “to run the largest global B2B search agency in the world.”
This 27-year-old wunderkind has seen his firm, Irvine-based Directive, grow by 300 percent per year for four straight years.
Mehrguth does it by doing things differently within the SEO world: doing in-house PPC and SEO, charging a fixed rate versus a percentage, maintaining a low employee-to-account ratio — and hiring women.
“One of the reasons we’ve been successful is we just kept trying to be the best at the same things,” he says. “Instead of getting distracted and wanting to launch automation or design or development or x, y or z, we stay focused on what we do best.”
Mehrguth always was an entrepreneur, turning his love of soccer into a private-training gig while still in high school. He hustled, obtaining his undergraduate economics degree at Azusa Pacific University in three years and his MBA in his fourth – all while starring on the soccer team.
He wanted to consult but had no idea of what industry he wanted to focus on once knee injuries ended his athletic dreams. In 2013, he applied to the three largest strategy-consulting firms, Bain & Company in Chicago, Boston Consulting Group and McKinsey & Company in New York City.
“I couldn’t find my university through the online application process, so I had to put ‘other,’ and I got an auto response in real time saying we don’t have any internship opportunities,” he says. “And in my head, I said, ‘Forget these guys. I’ll build an agency so big that one day they would have to acquire me.’”
Still unsure of his direction but certain that “I was good and I was going to make something happen,” Mehrguth hustled around Southern California in his 1976 Peugeot and found a Mediterranean restaurant that needed social-media assistance.
“Everybody I was talking to figured I knew the internet. I didn’t know anything about the internet,” he says. “I was always playing soccer. My dad was blue-collar, my business partner was blue-collar, and so I figured I should learn the internet, so I read everything I could on the topic.”
After a month of establishing the restaurant’s Yelp! and Facebook presences, handing out fliers and redesigning menus, Mehrguth went to get paid but was told to come back the next day. When he did, the place was boarded up.
He then discovered fiverr.com, which allows freelancers to offer services starting at $5. He created a social-media calendar, and through his ‘get-after-it’ approach, contacts and networking he made $1,000 a month.
“And then some guy at a hookah shop asked me if I could rank his website,” Mehrguth says. He had never done it before, yet in three months, it was No. 1 on Google.
He realized he had found his post-soccer career.
He told his college roommate, Tanner Shaffer, not to go to law school so they could build something big together. Hence, Directive was born.
Shaffer’s father ran a small plumbing business. After Directive worked with it, it was ranked atop Google. “His phone was ringing off the hook,” Mehrguth says.
They kept driving forward. Mehrguth saw that SEO clients wanted pay-per-click advertising, content marketing, and conversion rate optimization, so he hired another friend, Brady Cramm, to run the PPC division and another to run CRO. Now, he has a full management team of himself, Shaffer, the COO, and six department directors who oversee everything.
“I get to point the ship and help people, worry about our growth, vision and our employees,” Mehrguth says.
That includes eating their own dog food – Mehrguth’s way of saying he delivers on his claims – after all, Directive is on page one of Google when searching “B2B search agency” and “SEO agency.”
“There’s all these SEO firms, these PPC firms, but they don’t run any of their own PPC ads and they don’t do their own SEO. They don’t think it’s valuable to their business, yet they simultaneously want you to pay them $20,000 to do it for you. That to me is craziness,” he says. “We’re better than anyone at what we do, and they’re all supposed to be the best at it, right? That’s why you’re paying them. So, if they’re so good, why aren’t they ranking No. 1?”
Directive also doesn’t charge the typical 15 percent of a company’s ad budget, instead opting for a flat rate determined by the time the project would take. The company also doesn’t allow an employee to work on more than seven accounts at once.
Another issue Mehrguth cares about is hiring women. The SEO software firm Moz reported in 2015 that there is a gender gap in online marketing. Mehrguth addresses this not just by hiring more women (13 of 41 team members pictured on the Directive website are female), but by showing applicants that the digital media jobs they’re applying for are parallel to the PR jobs they already do.
“All we’re doing is hiring PR people to help do our SEO and our link building,” he says. “That’s a lot easier way to bring women into the organization.”
The results speak for themselves: a 200-percent increase in online leads, 245 percent more marketing qualified leads and a 147-percent reduction in cost per lead. Directive now has offices in Irvine, Los Angeles, and Europe.=
What started as a dream has become reality. Now, “when our ideal customers and enterprise organizations with large marketing teams and aggressive goals are looking for an agency and they find us, they immediately go, ‘Oh my gosh, finally, this is what we’re looking for.’”
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