Morgan Friedman: Hello, hello everyone. I’m so excited to be back for the latest episode of Client Horror Stories, and I’m doubly excited to have Beth Trejo here. Beth, did I pronounce your last name correctly?

Beth Trejo: Yep, you got it.

Morgan Friedman: Okay. It can be confusing sometimes. Beth, I have my coffee here to fill me with energy, and I’m so excited to hear about your craziest client experience ever. Take it away.

Beth Trejo: Well, I know you typically have client horror stories on your show, but I want to share with you a partnership horror story, because I have kind of an interesting one. A little background — I started a social media agency in the heart of America, in Sioux City, Iowa, when I was 27 years old, and I had a pretty wild ride throughout that journey. I bought a partner out, sold the company, and then there was a nightmare at the end — but also definitely some good things and some real learnings along the way. That’s what I want to talk about today.

Morgan Friedman: I’m very excited to hear that.

Beth Trejo: So I’ll start from the beginning — when I decided to start Chatterkick, which is my agency, primarily social media. I did not think I was going to be an entrepreneur. That wasn’t what I had planned for myself. I had a background in marketing and was working for a local chamber of commerce, meeting a lot of businesses, and I just saw a pattern — businesses needed help with either recruitment or promotional sales. And I was like, hey, I know how to make this happen. So I was doing it on behalf of the chamber, and I was also part of a young professionals network where everybody around me was just starting businesses. And I was like, well, hey, how hard could it be? I was extremely naive. I had a baby at home.

Morgan Friedman: And by the way, I just want to point out that in my experience, people who don’t set out to be entrepreneurs but stumble upon it — life just brings it to them — they often tend to be the ones with the most painful horror stories. Because I feel like people who spend their whole life saying, “I want to be a businessman and make a lot of money,” are already a bit cold, already ready for war. But the person who says, “No, I’m just an artist, a creative, a normal person,” and then happens to become an entrepreneur — they’re like, “Oh my god, what did I get into with all these difficult people?”

Beth Trejo: Yeah. And I didn’t have any funding. I submitted myself into a business competition and I won $1,100 to go get a laptop. A friend came to me and said, “Hey, you should start a social media business.” And I was like, “I mean, okay.” And he said, “Well, let’s be partners. I’ve got your back.” So with my $1,100 laptop, I started Chatterkick. I thought I was going to be cold-calling on day one because I was bootstrapped, I was ready to go, I was willing to do whatever I needed to do to make it happen. We ended up getting quite a few accounts in the beginning, so it was really just me both selling and servicing the accounts. I got a couple of interns in the mix and it really took off.

Then a little detour happened — I found out I was pregnant about two weeks after I quit my job. I already had a little baby at home. So I felt like I was starting a business in a trance, in a coma, because I was extremely sick. And it was a high-risk pregnancy, which was just another level of difficulty — you can’t outsource that, you can’t delegate that. I remember my daughter was in the NICU. She’s great, she’s wonderful now, but she was in the NICU. And I was in the hospital bed emailing clients, just bawling, because your hormones are wild and crazy. But yeah, I got through it. It was definitely a challenging first couple of years, but you figure it out. I was naive and scrappy and was able to make it work.

I hired a couple of people about two years in. I felt like, okay, I can do this now. And so I bought that partner out — and he was also my friend. It worked. It wasn’t dramatic, it wasn’t over the top. We’re still friends today. It was just kind of what you would want to happen. Like, perfect — I’ve grown up and I can do this on my own.

So I had the business running for a couple of years, and we were getting quite a few solicitations for acquisitions. This was that time when social media was just booming. Agencies didn’t know how to handle it. And so I had multiple offers and decided to sell the business to a contact I knew from my local hometown in the Midwest. He was working on behalf of a company in Baton Rouge, Louisiana, in their operations — had been there for years — and was really going to be like my boss and help us grow. I sold the company not for the money and not really because I didn’t want it anymore. It was because I wanted to grow without the kind of risk I couldn’t take at that time, because I had babies and bills and all the things. So I sold it to another entity.

This entity had a portfolio of businesses, but none of them were anywhere close to the technology or social media service model space. A lot of their businesses were in rice milling, farming, and agriculture. So we were already the odd ones out in that business model. And even just merging cultures in the beginning was a horror story in itself — a partnership horror story — because I thought, well, hey, I’m super weak at all this back-office stuff. I don’t want to do the billing, the handbooks, all the things you need when you start to scale. But I didn’t think about the fact that their handbooks might not align with our culture, or that their culture might not align with what we had built — our young, fresh, poppy, punchy social media brand.

Morgan Friedman: I just want to point out that that’s a really interesting observation you’re making — that culture is very underrated. It tends to be treated like, yeah, yeah, the HR girls will have a movie night when they have five extra minutes. But it turns out that the way people work — if this group works one way and those people over there work a completely different way — it’ll be a nightmare before it even starts if there’s real cultural incompatibility. And that’s so common.

Beth Trejo: Yeah. And this was the total opposite — I mean, from everything on paper. We didn’t own a printer, you know what I mean? And the contrast was pantyhose are required versus we’re blasting hip-hop with the garage door open, having parties in the office. It was such a massive misalignment. And thinking back on it now, I’m like, why didn’t I know that wasn’t going to be easy? Why didn’t I ask those questions? Because that first part was definitely a challenge. My team was still my team, and I was really that layer between the private equity group and the rest of my team. I didn’t want to push things too far. But the handbooks had things in them that I was pushing to get redlined or removed. It was kind of wild.

Morgan Friedman: Okay. So the acquisition happened and you quickly realized there were wildly different cultures. I feel like there are a whole bunch of euphemisms floating around in our conversation, and I like to get to the meat of it. Did the different cultures result in just kind of annoying problems, or were there actual wars? Like, did it lead to more serious conflicts, or just — eh, they don’t want us to have parties anymore?

Beth Trejo: So the biggest thing that actually worked really well for us was the fact that we had that operator — the person who knew the company and knew me — who would be that insulation between a lot of the rules. He was kind of helping us keep being who we were, because in a service business, that really is your secret sauce. So in the beginning, it was just little annoyances — eye rolls, the occasional “what in the world” moment. It was okay. We grew. We did some of the big initiatives they wanted us to do, and that I wanted to do as well. We expanded into Baton Rouge as a market, which was very different from Sioux City, Iowa in terms of connections and who you needed to know.

Morgan Friedman: Just as a tangent — how do you summarize the difference between the way the two markets operate?

Beth Trejo: Baton Rouge is large — it’s a big city. Sioux City, Iowa is about 200,000 people, so it’s small. I had a lot of contacts I knew personally, and relationship-based selling is a lot easier when you actually know somebody. We did have contacts in the Baton Rouge market, but they weren’t the ones doing the selling. We hired people on the sales side, but selling professional services is a whole different category than selling products or agriculture or whatever. Just hiring salespeople alone was a big challenge. And the market in Baton Rouge was just not very mature in digital at that point — we were literally explaining why you even need social media, never mind what we specifically do. And I couldn’t be there in person. They would tote me around on a laptop and prop me up in meetings. It was so awkward. I was like the floating head on the laptop. We can laugh about it now — that wasn’t the culmination of anything serious, but it was definitely just awkward.  

We grew from four or six people to about 26 people in a very short amount of time. We didn’t have systems that scaled with us, so that was a big learning curve.

Morgan Friedman: Going from four to 26 is very fast. Stressful, intense.

Beth Trejo: Yes. Especially because your management style has to change, the oversight changes, the tools, the technology — so many of those pieces we had to just figure out as we went. Some of it was sloppy and chaotic, and others we just made work. The interesting thing was that because I had never hired salespeople and had never been formally trained in sales — I just naturally love talking to people and solving problems — I didn’t know how to train a salesperson in this world. I realized I’m not a good sales trainer because I don’t have any processes or systems that I consciously use. We didn’t even have materials for them to hand out. We had good people, but we had no real sales infrastructure. We had four or five people in that market and we were still not selling anything there. Our other market was rocking and rolling, but that Baton Rouge office was definitely a hard shift — we liked all the people, but this was before virtual work was mainstream. We were operating two totally separate offices, and the second one I wasn’t on site at. That was another challenge that definitely came into play. 

Morgan Friedman: Interesting. Yeah. My experience with acquisitions is that the more common sequence is — you acquire, then you integrate and work together, and then you expand to other markets. But massive growth, new markets, and integration all happening at once is a lot. That significantly increases the risk.

Beth Trejo: Yes. And I think we were maybe six months in when we made this massive growth push. It felt very short. And again, I had little babies at home. I couldn’t be traveling back and forth, especially from a market like Sioux City where there’s no major direct international airport. To travel to those locations would be a full two days on each side just for travel alone.

Morgan Friedman: Actually, I want to make a side point here. I hadn’t quite thought about it this way until you said it, but a lot of people — especially private equity types — reduce everything to numbers. And a lot of deals look very good from the numbers. But when you factor in the human element — for example, the CEO, the main person, having a newborn baby at exactly the moment you need them to be intense twenty-six hours a day — that is a huge risk factor. And it’s one that’s not easily captured in the financial analyses you do when considering an acquisition.

Beth Trejo: Yes. And I think it’s also made me a better woman leader because of it. There were so many times when my kids were little that are probably my only real regrets — just the fact that I was going a hundred miles an hour and wasn’t present, even when I was physically there. I always laugh about this — my thirteen-year-old, who was that baby, is now the most independent, bold, and amazing human. And I’m like, well, she had to figure a lot of things out on her own, because I was so deep in building a business at that time. So maybe it worked out for her. But yeah, it definitely made me realize that women have life events that are simply not comparable to what men navigate. I couldn’t fake my pregnancy. I had babies. And my husband is an amazing partner, but he was also building a business at that time — he had randomly decided to start a startup. So we both just had craziness happening all at once with little kids.

Morgan Friedman: By the way, I want to make a final comment on something you said about ten minutes ago — speaking about women in business. I often talk about merging different company cultures, but until your example, I never thought about pantyhose versus no pantyhose as a specific illustration of a cultural difference.

Beth Trejo: Yes — or the length of skirts. And let me guess: they were the longer-skirt company and you were the short-skirt company?

Morgan Friedman: Yeah. Yes.

Beth Trejo: We were definitely the ones going, “We don’t even wear skirts. What are we talking about here? We have jeans on.” And again, it was just one of those realizations when you see it in writing in a handbook. I was like, oh jeez, this is going to have to go. But there are some very traditional company cultures out there. To each their own — it was just definitely not where we were at.

Morgan Friedman: Okay. So the merger happened, all this stress from the different offices and the cultural tensions — and then what happened?

Beth Trejo: Things were kind of — I mean, we were growing. I had some great people. We were getting things figured out, honestly. We had landed on a somewhat workable sales configuration and people were selling, we were growing, and we were looking good. And then they had a change in their operator — the individual I knew left after twenty-plus years in that position. They brought a new person into that role, someone who oversaw most of the different entities in the portfolio, and this new person and I just did not see eye to eye. Not only that, but we had no trust in each other. At least with the previous person, I kind of knew him. I knew his family. But this new person had a different vision, we had zero trust, and our vision on where the company needed to go and the speed at which it needed to grow were completely different.

Morgan Friedman: Interesting. Okay — and for a weird tangent for about thirty seconds. To be briefly and weirdly religious for a moment — the Old Testament starts with the book of Genesis, and the second book is the book of Exodus. I remember from religious school as a little kid that the first sentence of the book of Exodus is: “And a new king arose over Egypt.” The book of Genesis was about the Jews moving to Egypt — they were happy, they had lots of kids, everything was great. And then the second book begins: “And a new king arose.” And it changes everything, one hundred percent. So when you say, “Oh, everything was great” — and then a new king came from the PE firm.

Beth Trejo: Yeah. Yeah. And I think a lot of the misalignment was really just vision. I know that I am a bold person, very confident about the company, confident about where we should go — as well as I know the space. The person who had been there before knew the space well enough to say stop, go, stop, go. This new person that came in, I don’t think knew our space at all. Not even the basic difference between what a service business versus a software business was.

Morgan Friedman: That’s a pretty fundamental difference.

Beth Trejo: It’s a basic difference, which is why I was surprised. But it was a real thing, and they were asking us to do things and scale in ways that just don’t apply to how we work.

Morgan Friedman: Can you give us a specific example of a particular request, situation or issue that was like this?

Beth Trejo: They were comparing our rate of scaling to software companies — and look, you’re selling a $100 software license, and we are selling services on a subscription basis. It’s a scoped project. You can’t just right-turn and burn. In a very basic way, one model sells human hours and the other does not. And there was a conversation that came up around something that sounded like selling software — they didn’t use that exact word, but it was something in that direction — and I was like, I don’t even know how to counter this because it’s not even what we do. It was like you’re talking about a chicken and they’re over there talking about a cow and you’re saying, but we don’t have cows. Those little moments made me realize there was a fundamental misunderstanding of the business — what we do and how we make money.

Morgan Friedman: And what’s interesting about that is it’s not a little bit of a misunderstanding. It’s a fundamental one — like, are you a farm or are you a company that manufactures tractors? Both are cool. They’re just completely different businesses. And if you go to a farm and you’re like, “Hey, how come we’re not making tractors?” — you’re like, that’s not our business.

Beth Trejo: Exactly. And I still wanted to grow — that was aligned. I had ideas for growth. But trying to perform growth inside a structure that didn’t really understand what made us work meant that I spent more time educating the parent company than actually building. And thinking back on it now, with the lessons I’ve since learned, I could have actually been building at that time. But it was a ton of resource drain just to communicate — and it was emotionally hard, because I’m not used to having to explain things in very simple terms to someone I would assume should have a basic grasp of the situation.

Morgan Friedman: Do you think the misunderstanding was primarily between you and the new guy, or between you and the PE firm more broadly? Did they want something fundamentally different from what the company was when they acquired you?

Beth Trejo: I think they wanted something different from what the company was, and I think multiple people within the organization didn’t really understand what we did. The organization was extremely traditional, and that was very apparent. So when that insulating individual was no longer there, it was just — what do we do? What do we do? Let’s try this. And none of these things were actually relevant to what we did. It was a fundamental “we don’t understand how your business works or how you make money.”

Morgan Friedman: It’s interesting that they acquired you even without understanding that basic concept. 

Beth Trejo: Yeah, I agree. I think maybe there was some easy-to-grasp narrative around it — like, we were the new media company. And I think that’s kind of the category they put us in. And there’s a lot of PR and media that is totally connected to social media, but it’s not quite the same thing.

Morgan Friedman: I’m still in awe that one company would acquire another with such a deep misunderstanding of the business. It actually reminds me of a story from Nassim Nicholas Taleb’s work — I think it might be from Fooled by Randomness or one of his other books. He tells the story of a trader at the Chicago Mercantile Exchange who made a fortune trading options and futures on green lumber. And then at some point it came out that his entire career — after he had made millions of dollars — he had actually thought green lumber was just lumber painted green. He didn’t realize it referred to a specific type of lumber from young trees. And that’s a good anecdote because it really illustrates how often people — investors, companies — make money or build a business without actually understanding the basic, simple things of what they’re dealing in. They know the numbers and they think they know how it works. Sometimes, like the green lumber guy, you can do well anyway. And other times — like when you’re acquiring a company — maybe not so much.

Beth Trejo: Yeah. And I think there came a moment when I really felt that because they didn’t understand the business, they decided they kind of wanted out. And it was clear that pressure on their end had replaced strategy. It was no longer about strategy and how we grow — it was about how do we get out of this. And I think they realized it wasn’t a simple exit, because you can’t just sell a professional services business that’s still founder-driven and founder-sales-driven to another entity like they realized that at one point and that’s when it got ugly. 

Morgan Friedman: Tell us about the ugliness.

Beth Trejo: So honestly, a lot of this battle was happening in silence. Because they were using emotional pressure. They wanted me to buy the business back, or they wanted to sell it to someone else — they clearly wanted out. And a lot of the silence was directed at me, because I had not told my team any of this. I didn’t want anyone to think they were going to get fired or lose their jobs. So I became this holder of information. And they threatened to close the company the next day. They tried to force urgency. They applied what weren’t absolute threats, but it was that kind of emotional pressure — the kind that they knew was getting to me. And it was extremely difficult to just absorb all of that.

Morgan Friedman: How long was this after the acquisition? Did you still have a little baby at home when all this happened?

Beth Trejo: Yeah. So this was probably about three years after the acquisition. My daughter and son were probably around four and six at that time. Still busy with little ones. My husband was doing his own thing — still helping at Chatterkick, but on his own path at that point too.

Morgan Friedman: By the way, on the point about the battle happening in silence — I want to make the observation that in my experience, that is really common. All the time I’ve seen this, especially in corporate politics — people do and say things and you’re left wondering, wait, what are they actually trying to get at? Why are they doing this? What’s really happening here? And that realization — that you have to figure out there is a struggle, and what form that struggle is taking shape in — that was an important moment in my own professional development. Because a younger version of me thought the bad guys wore a hat that said “I’m bad” and everyone could see it clearly. But in real life, it’s, wait — who’s good? Who’s bad? What are they doing? Why are they doing it? Most of the struggle is just figuring out that there is a struggle at all.

Beth Trejo: Yeah. And at the time, I thought the hardest part was the negotiating tactics — because they were intense. I knew it at the moment, but it’s still hard to call a bluff, hard to know when they’re serious. And I had a team of twenty people who I dearly, dearly cared about. I was still trying to run the company. So in between meetings, I’m getting emails and phone calls about all of this. And what I realized was that the truly hard part was carrying that fear privately while still showing up to my team — in person, with a smile, projecting that everything was fine. I would be in the middle of this drawn-out battle and then be ready to be happy and smiley two minutes later on the team call. That was extremely difficult. Probably one of the hardest things I’ve ever had to go through.

Morgan Friedman: So they put these emotional tactics on you, and it took a real toll — because even if you recognize that it’s emotional pressure, even if you know rationally they might not follow through, it’s still emotionally difficult. Which is exactly why it often works, and why companies do it. If it didn’t work, they wouldn’t do it. So you held up the act for a while — and then what happened?

Beth Trejo: Then there came a point where I had to look myself in the mirror and ask: what do you actually want? I am a chronic people pleaser, which honestly makes me really good in business — top-level customer service. But it also makes it hard for me sometimes to say what I want. And I had to really sit with that question — what do I want, not just for the business, but for myself? If someone else bought Chatterkick, would that be okay? And where I ended was: if I bought the company back, it would have to be on terms that were genuinely okay for me and my family. And I had to do it as an investment — not just to buy my job back. Because I could get another job. Buying a job back didn’t make any sense. But buying the company back as an investment, with the confidence that I could turn it around — that was a different thing entirely.

And at that point, they were using our company in its growth stages to offset some of their other entities, so the books were not great. It was a real risk. But I had to say to myself: I believe in myself that I can do this. This is an investment, and I’m going to treat it as one, not as a job, from this point forward. That was the conclusion I had to come to.

Morgan Friedman: So you decided to do that — and then what?

Beth Trejo: I said, okay, I’m willing to come to the table. I knew the business alone wasn’t worth that much on the open market at that point, and I knew I had the upper hand — I honestly knew I did. So I went to their office, the very traditional office, sat down at the table, and told my story. This is why I believe the valuation should be what I’m proposing. This is what I need from this business. And then I let silence be. I just sat there. And that’s hard for me. I let the silence linger. The individual was kind of playing hard distraction — trying to shift the conversation — and walked away to go talk to some of the other people in the organization. He came back and said, “Alright. The deal you’ve requested — we’re going to do it.”

And I said, “Okay.”

I walked out of that office. We didn’t have a car, so I had to walk around the building to call an Uber because I just wanted to get out of there. My husband was with me — he obviously knew about the transaction — and we walked around the corner and we could finally just take a breath. Like, okay, we got this. We’re going to do this. And this whole emotional roller coaster is coming to an end. It was comforting. It was relieving. There were so many emotions at that point.

Morgan Friedman: Wow. And then they followed through — happy ending?

Beth Trejo: They followed through, and it was actually a very quick transition. Thirty days. And one really great thing that came out of it was that one of the team members on their side — the one person who actually understood what we did, a young professional in their office — decided to come to Chatterkick with us. She’s extremely strong on the finance and operations side, which is exactly where I’m weak. So we said, let’s do this. Then I told my team. We had thirty days to figure out how to build it back up. I think we had one of those Trello boards and we were like, you do this, you do this, you do this. And my team was amazing. We figured out how to offer health insurance — we had never done that before. We figured out how to handle our own policies, and got compensation all moved over. My team was incredible. We stood it back up, and that was in 2018. Since then, we’ve been rocking and rolling.

Morgan Friedman: Amazing. If I can ask — and you can absolutely not answer — did you buy it back for less than you were paid, about the same, or more?

Beth Trejo: I said I had to make it an investment, and again, the company was losing money at that time. So it really did have to be a good business decision. And I was proud of myself for making a business decision and not an emotional one.

Morgan Friedman: Yeah, that is the big win-win — when you make a good business decision, like acquiring an asset at a low valuation because the previous owner treated it badly, and that also coincides with what you love and care about. So it was a win on both fronts.

Beth Trejo: Exactly. And I think the ultimate lesson I really took away wasn’t about anyone else. It was that I was clear on what I wanted and who I was at that moment. And that was a big growth opportunity for me personally. I even see it now — every chapter we go through at Chatterkick keeps bringing me back to that same question: do you trust yourself fully? Are the decisions you’re making coming from emotion or from truth? Sometimes they need to have both elements. But getting that conviction back, I think, really made a big impact on my career.

Morgan Friedman: That is great. I grew up a classics nerd, and there’s this foundational idea in Plato — the voice of Socrates — of “know thyself.” I remember reading that as a kid and thinking, I can’t believe the deepest wisdom of the ancient world is just “know yourself” — that’s stupid. But as I’ve grown up and had a real life of experiences, I’ve realized it’s actually the most important thing. What do you actually want? Why do you want it? Are you sure you want it? Are you genuinely prepared to do all the hard work and make the trade-offs and sacrifices necessary to get what you say you want? Those are the important questions. And if you can honestly answer them — which is very hard — then everything else falls into place much more easily.

Beth Trejo: Yeah. And I think a lot of that also just comes with experience in life. I was so young when I started Chatterkick, going through life changes and life phases and growing a business all at once. There were a lot of parallels. And it’s interesting, as I get older, to look back and think — oh my goodness, it was probably good that I was naive in some ways, because I would have done that part again regardless.

 Morgan Friedman: Naivety is actually a huge advantage, because you take risks that make no rational sense. But guess what — sometimes those risks pay off big time.

Beth Trejo: So, like I said — it wasn’t quite a client horror story, but I do think the learnings from certain partnerships can be extremely aligned with the agency life.

Morgan Friedman: This is close enough to a client story, and there’s definitely horror in it. About ten or fifteen percent of the episodes aren’t a traditional client dynamic — sometimes it’s with a franchisor, sometimes with a boss, because your relationship to your boss is very much like the relationship to a client. So this has been great, Beth. It’s been really interesting learning your story and hearing about it. I’m happy for all the growth — as a person, and the growth of Chatterkick. Not Chatterbox.

And yeah — congratulations, and thank you for your time and for sharing your experience and your lessons with everyone.

Beth Trejo: Yeah, thank you. It was a great conversation and I really appreciate it. 

Morgan Friedman: And everyone who’s watching — thank you for watching until the very end. I hope you’ve enjoyed it as much as we have. Until next time.