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What happens when two founders build a successful marketing agency without ever clearly defining who owns what?

In this episode, John Scheer shares how eight years of overlapping responsibilities created hidden friction inside Herman-Scheer, and how a simple role clarification transformed the business. He explains why moving upmarket after the 2022 downturn required a completely different level of strategy, why bringing in a third partner accelerated growth instead of creating complexity, and how his agency is approaching AI as an amplifier of expertise rather than a replacement for it.

If you're leading an agency that's outgrown founder improvisation, this conversation is a masterclass in evolving your leadership before it becomes your biggest bottleneck.

What You'll Learn

Why undefined founder roles create invisible bottlenecks, even when there's no conflict.
How a 360° leadership review helped two co-founders finally divide ownership and improve decision-making.
What it really takes to move a digital marketing agency from startup clients into Series A and enterprise engagements.
Why adding a third partner succeeded after previous senior hires failed.
How to evaluate executive talent beyond impressive resumes.
Why AI should accelerate strategic thinking, not replace it.
The 10-80-10 framework for using AI without sacrificing creativity or expertise.

Key Takeaways

Clear ownership creates leverage. When founders stop sharing every responsibility, the team gains clarity, decisions move faster, and each leader can operate at a higher level.
Market changes often demand business model changes. Herman-Scheer's shift upmarket after 2022 wasn't just about larger clients; it required stronger strategy, operational discipline, and deeper industry expertise.
The right partner fills capability gaps, not title gaps. Their third partner succeeded because she wanted to build alongside the digital agency team instead of managing from above.
Great branding is driven by judgment, not just creativity. AI can accelerate execution, but differentiation still comes from human insight and strategic thinking.
Founder evolution is less about doing more and more about creating the structure that allows others to lead with confidence.

Have you and your co-founder been stepping on each other's toes for years, not because of conflict, but because nobody ever drew the line between your roles?

Today's featured guest moved across the country to Santa Monica after his current partner called him and asked him to take a chance on building something of their own instead of "working for the man". It took eight years of figuring out what not to do, a 360 review that finally split their roles, a niche into healthcare and wellness, and eventually a third partner to unlock what the agency is today. He'll walk through how the role division changed everything, why going upmarket after 2022 forced a more rigorous kind of work, and what he actually thinks AI is doing to branding.

John Scheer is the co-founder and chief creative officer of Herman-Scheer, a branding agency based in Los Angeles focused on healthcare, self-care, and well-being. They work with clients at three inflection points: zero to one startups, high-growth companies around Series A and beyond, and enterprise legacy businesses looking to regain relevance. Two and a half years ago they brought on a third partner with 20 years of operational and insights experience, which shifted the agency's growth trajectory significantly.

In this episode, we'll discuss:

Two founders. No defined roles.
The decision to move upmarket as a response to a shifting market
Why the third partner hire worked

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Sponsors and Resources

E2M S olutio n s:Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

The Two-Headed Monster Problem

For eight years, John and Chapin ran Herman-Scheer without defined roles. Neither of them was trying to undermine the other. They just both did everything: sales, creative direction, project leadership, client management. Clients did not always know who to call. The internal team did not always know who to go to. And both founders kept stepping into the same spaces without realizing it was costing the agency something real.

The shift came from an outside advisor who ran a 360 review and surfaced the pattern clearly. Chapin got voted in as chief executive and John got voted in as chief creative. The way John sees it, they both got promoted at their own agency.

This way, clients knew who handled creative direction and who set operational direction. The internal team had a clear routing system. And for the first time, each founder could fully commit to a lane without the other one also running it. That kind of clarity is not just organizational tidiness. It is what makes both roles more effective and makes the agency feel less like two people doing the same job.

Why Going Upmarket After 2022 Required a Different Kind of Agency

John's agency spent several years focused primarily on zero-to-one startups, building deep roots in the Los Angeles venture capital and entrepreneurial community. It worked well until 2022, when the economic environment shifted and early-stage funding dried up. Founders who had been raising millions to launch consumer products suddenly could not. The client base Herman-Scheer had depended on was no longer buying at the same rate.

The response was a deliberate move upmarket toward Series A and beyond, and eventually toward enterprise legacy brands looking to regain relevance. That shift required closing the gap between brand strategy and execution, getting closer to conversion rather than staying in the lofty world of brand identity alone, and integrating more rigorous insights work into the process.

The outcome is that Herman-Scheer no longer competes on portfolio or personal chemistry alone. The decision to work with them is a decision to work with people who understand the healthcare and wellness consumer, the mechanics of those businesses, and what brand actually has to do at each stage of growth.

The Third Partner Hire and What Made It Work

John and Chapin hit another plateau several years after the reset. Revenue was solid. Growth had stalled and they both knew they did not have what it took internally to push through it. At this point, their advisor introduced them to Allison Servey, who had been head of strategy and insights at a major agency and had reached the point where her job was managing people and traveling rather than doing the work she was good at.

They'd already tried with big-company hires and failed, but hiring a senior person who wanted to roll up her sleeves again was the filter. People who come from large organizations where 10 people supported a single role often struggle in lean agency environments. Allison came in wanting to be close to the work, not above it. Within two and a half years she had helped manage out the people who were not a fit, brought in strong people from her network, and shifted the agency's operational foundation in ways that made the growth trajectory possible.

What AI Is Actually Doing to Branding

John is confident enough in his work to know that AI is not a replacement for creative thinking. What it has done is allow people to get ideas out more efficiently, which is genuinely valuable when used correctly. The problem is what happens when junior people or clients start treating the output as the finished work rather than as a starting point.

Herman-Scheer now includes language in their contracts preventing clients from submitting AI-generated onboarding forms. This means clients were doing it, submitting AI-filled questionnaires without reading them, and expecting the agency to build a strategy from questions answered by a chatbot with no real context about the business.

He makes sure AI usage at his agency complies with the 10-80-10 framework: 10% great thinking and prompting going in, 80% of the lifting done by AI, and 10% refinement and judgment coming out. That ratio requires real expertise at both ends. Without it, the middle 80% produces the average of everything the model has seen, which is not a brand strategy. It is a synthesis of other people's brand strategies.

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