Erik Huberman, Founder and CEO at Hawke Media, shares how companies can position themselves for success during COVID-19 and beyond.

Avenue Code: Tell us about your personal career path. How did you get to where you are today?

Erik Huberman: I graduated in 2008, exactly one week to the day before the last recession. That year, I worked in commercial real estate in L.A. and only made $350! I started working on alternatives and ended up launching an online music company providing one-on-one coaching for musicians, raising 1 million dollars in venture capital at the age of 22. 

Although the business was profitable, I realized it wouldn’t grow as much as I wanted since the audience was financially limited. So I hired a CEO to take my place and started an e-commerce t-shirt subscription company. This was before Dollar Shave Club and ShoeDazzle, so it was a completely innovative business model. I got a lot of press, which drove a lot of revenue, and sold the company a year and a half later.

I was then offered three jobs: 1) running e-commerce for Warner Music, 2) running BusDev for Live Nation, and 3) consulting at a small incubator called Science. I chose Science, where I helped launch several e-commerce brands and ran marketing full time for Ellie, an activewear brand that we sold a year later. 

Then I started consulting on how to drive revenue growth using marketing. I worked with big brands like Red Bull, Verizon, and Eddie Bauer, as well as several startups, and I saw that every company dealt with the same problem: getting access to top marketing talent. Whether marketing in-house or through a typical agency, it’s hard to attract great talent while remaining cost-effective. 

So I started Hawke Media six and a half years ago with a small team of experts. We offer à la carte, month-to-month services that are cheaper than hiring in-house. We can spin up a team that fits any need based on a comprehensive menu of services. Now we have over 150 people and offices in New York, L.A., and Boston. 

AC: Throughout your career, you have identified and seized opportunities. Are you in marketing because that’s where you saw opportunities, or did you see marketing opportunities because it’s what you love?

EH: I love the study of human psychology and sociology inherent in marketing. For example, it’s interesting to watch how the COVID-19 situation has completely changed the business landscape. People aren’t paying attention to anything else. So if your company’s marketing strategy is still what it was two months ago, you’re probably not going to do well.

AC: Hawke has grown more rapidly and received more attention than many of its competitors. What makes Hawke so successful, and how can other companies use marketing to set themselves up for success during COVID-19?

EH: A lot of agencies preach marketing but don’t drink their own punch. We went to a Google meetup recently with dozens of marketing agencies. We were by far the biggest company, and we were also the only company spending on our own marketing!

If you can build a brand, a community, and a funnel, you’ll be much better prepared to sustain a recession because you can find new customers that aren’t economically affected. We are experiencing some client turnover with COVID-19, but because we’re skilled at marketing, we can pivot and change with the times. We don’t follow a template, whereas a lot of our competitors are stuck in what they’re doing, meaning they’re victims to change.

Right now we’re telling a lot of our brick and mortar clients to focus on in-home delivery, and it’s working: we recently looked at our Amazon accounts across the board, and we saw a 1% revenue increase, not a decline, for brick and mortar shops. 

Last year, 87% of purchases were done in brick and mortar stores, 13% online. Now, people are afraid to go into brick and mortar stores, but they’re still buying. There’s going to be a pendulum swing to e-commerce, which we saw in Wuhan and a lot of China. The economy hasn’t stopped; businesses just need to pivot. 

AC: A lot of companies pay lip service to marketing, but it’s often the last thing to be added when companies are growing and the first thing to be cut when budgets are scaled back. Why is that?

EH: When companies operate out of fear, they lose strategy. There are a lot of studies coming out right now that portray three types of CEOs: 1) the fear-based CEO who cuts everything, 2) the unfocused CEO who is just trying to figure out what to do, and 3) the strategic CEO, who doesn’t panic and instead uses marketing to explain why their services are valuable. 

Cutting off marketing when sales are declining is like holding your breath because you were told you’re sick. It exacerbates the problem. You have to pivot and push, not the opposite. This is what we’re doing at Hawke. We haven’t pulled back on anything, because the other option is to give up. 

In a situation like the one we’re facing today, there are only two outcomes: either everything blows over in a few months, just like it did in China and is starting to in Korea; in this case, companies shouldn’t cut themselves off, because when the economy comes back - they won’t. Or the economy continues to decline, and this becomes the worst pandemic in history; in this case, spending on marketing is going to be the least of our problems.

AC: There are always ups and downs in the economy. How can companies set themselves up for success during downturns beyond COVID-19?

EH: Keep a rainy day fund. What I’ve seen with a lot of businesses that are struggling is that they have to operate on a weekly basis because they run so thin. Having capital available helps you sustain recessions and make major investments in up cycles. A bigger balance sheet allows you to make longer-term decisions and avoid being reactionary. 

AC: Once you’re already in an economic downturn, what should you be doing to set yourself up for success coming out on the other side?

EH: Cut all non-essentials costs, like office massages and other perks. Comb through your P&L and keep everything that’s focused on retaining current customers and generating new leads. Everything else should be out the window. Figure out how to make yourself essential to your customers, and double down where it counts. This is a time for marketing to prevail, because companies are at a critical point where they have to find new customers.

AC: Companies can be wary of hiring consultancies, especially when it comes to branding. What are the biggest advantages to outsourcing services that aren’t core competencies? 

EH: Whether you’re working with an agency or building a team in-house, you’re working with people, so you have to explain your brand either way. Usually hiring in-house is an emotional decision. 

We’ve taken companies from 3 million to 139 million, only to see them decide to use their extra revenue to bring marketing in-house. Then a year later, everything falls apart because they lose access to outside perspective. My favorite example of losing perspective is when the CMO of Pepsi decided to eliminate agencies and then immediately launched the infamous Kendall Jenner ad. 

At Hawke, on the other hand, all of our teams start every day with a 30-minute training, and we have Google and Facebook in our offices training our staff almost every week. We meet regularly to enforce core business practices, share discoveries, and learn from mistakes. 

A year ago, Facebook was pretty dramatically in decline across the board. Companies marketing in-house didn’t know if the decline was due to their tactics or if everyone was struggling, whereas we saw the big picture and had better perspective on how to pivot. 

AC: What was your biggest “Aha!” moment in the last 6 months as it relates to marketing?

EH: Marketing is and has always been about creating emotional appeal for buyers who want to change their state from where they are to where they want to be. It’s worked the same way for 2,000 years, and no new tool or strategy will radically change it. 

We’ve been watching a lot of D2C companies that overspent on Facebook ads fail. This validates what we’ve always known: dumping money into Facebook ads to drive revenue growth is not the way to build a brand; you have to look at marketing holistically. For us, Facebook is 15% of what we do, whereas for most agencies, it’s 80%. 

If your goal is to find new customers constantly, that’s unsustainable, but a lot of companies are so focused on customer acquisition costs that they forget to build a community. You have to be able to build trust, keep your customers, and create lifetime value.

A positive example is FabFitFun, which got to 250 million in revenue on 6 million in funding. They are great at advertising, but they also keep their customers and make them happy. In fact, they have a whole media business that has nothing to do with their core product because they understand the importance of building community. 

AC: Hawke yet again made the Inc 5000 list for fastest growing companies. With such rapid and sustained growth, where do you see Hawke in five years’ time?

EH: Hiring locally is important for many of our clients, so we’re looking at expanding to new territories in the US as well as internationally. Right now, there are no large marketing agencies that work with SMBs, whereas we work with everyone, both name brand and small-to-medium. Hawke’s company vision is accessibility to great marketing for everyone, and part of that vision means expanding to new geographies.

AC: Thanks, Erik, for sharing insights on core marketing principles, as well pointers on how companies can pivot and change during today’s economic realities. We look forward to following Hawke’s next steps!