Have you ever considered merging with another firm but not sure where to start—or what could go wrong? Hear from Noah Berk, Co-CEO of Aptitude 8, as he shares how his firm OBO Group successfully merged with Aptitude 8 become one of the top consultancies in the HubSpot ecosystem. You’ll learn about the trigger event that prompted the merger, how they navigated common fears about client loss, employee retention, and partner relationships, and the leadership lessons that made it work. Walk away with practical insights on using mergers as a strategy to scale your firm faster and more effectively.
TRANSCRIPT
Greg Alexander: Hey, everybody. This is Greg Alexander. You’re listening to the Pro Serve Podcast. If you’re not familiar with our show, this show is dedicated to founders of professional services firms who are trying to make more money, make scaling easier, and someday make an exit achievable. On today’s show, we have a long-standing, well-respected, well-liked member, Noah Berk.
Greg Alexander: The reason why we asked Noah to be on the show is that he recently merged with another company called Aptitude 8. I think merging with another firm is an under-leveraged tactic to reach our full potential. So I wanted to hear from Noah the ins and outs of that and see if some of our members can benefit from that. But, Noah, it’s good to see you. Please introduce yourself to the audience.
Noah Berk: Very good, and thank you for having me on the show. I’m Noah Berk. I am one of the co-CEOs of Aptitude 8, as Greg alluded to earlier. We recently merged our organization. I was originally the co-founder of the OBO Group, another HubSpot Elite Partner, and we merged with Aptitude 8, a HubSpot Elite Partner, and we now go by their name, Aptitude 8.
Greg Alexander: All right. So I’m looking at the press release, which came out in October of 2024, and it says Aptitude 8 and OBO, both recognized as HubSpot Elite Partners, merged to form a leading technical consulting firm within the HubSpot ecosystem. It looks like the rationale was to combine Aptitude 8’s established brand and operational infrastructure with OBO’s technical expertise. Is that accurate?
Noah Berk: I would say it’s pretty darn accurate, truly like puzzle pieces coming together.
Greg Alexander: So that’s where I want to start. What were the puzzle pieces, and how do clients benefit by putting the puzzle together?
Noah Berk: Well, I think that’s a great question. First and foremost, we realize, especially in our ecosystem and space, HubSpot’s going upmarket. They’re trying to target the enterprise clientele. In order to do that, you need scale. It’s very hard for smaller organizations to have all the roles necessary inside one shop to be able to handle deploying large enterprise instances on behalf of our customers. So the first thing we noticed is that with scale, we’ll be able to have specialties that enable us to meet the needs of the upmarket client versus trying to go at it alone for a really long time and hopefully getting there, but being felt squeezed in the long run.
Both organizations realized what we were great at. When I say we, OBO was great at, I’ll call it legacy OBO. Aptitude 8 wasn’t as strong, and vice versa. Where Aptitude 8 was really great, OBO wasn’t as strong. Probably the prime example of that is brand recognition. Aptitude 8 had put a tremendous amount of effort into their brand outside the HubSpot ecosystem, so they generated a tremendous amount of organic, qualified leads from people who were not coming directly from an introduction via a HubSpot rep. We put all of our emphasis on building HubSpot relationships. We had a partnerships role in the organization, and whereas 80% of our leads came directly from HubSpot and HubSpot reps, 80% of Aptitude 8’s leads came from organic sources. So we brought the partnership angle, and they brought the organic angle. That way, we’re not relying just upon one particular lead source for our success. That’s just one example.
Greg Alexander: Yeah, yeah, no. And I’m sure there’s many more. But thank you for that context. The lesson I want to highlight for people listening to this is that there was a trigger event. In this case, the trigger event was HubSpot moving upmarket. These two companies in the HubSpot ecosystem listened to that and said, “Okay, because of that trigger event, our firm needs these new capabilities.” So we could either build them internally, which has pros and cons, or we can merge with somebody and probably get there a lot faster, which also has pros and cons. If you’re thinking about combining with another firm, one plus one equals three, make sure you have a really good reason to do it. It’s not just because, “Oh, I want to take out a competitor,” or blah blah. There’s some real strategic rationale.
Greg Alexander: Now, Noah, I want to ask you personally, because you are, in my opinion, a quintessential entrepreneur in that you are a fiercely independent thinker. Now, all of a sudden, you’re Co-this and Co-that. So you had to share, and you gave up your name, and you’re going by the new name, Aptitude 8. How did you work through all that individualism?
Noah Berk: Well, I can give credit to this guy, Greg Alexander, who gave me some advice a really long time ago. He said, “You can either be rich, or you can be a king.” That kind of stuck with me as I was going through these conversations. Ultimately, in the end, I would like to be rich. Now, I think I’m very blessed in this particular position because I’m still CEO of the combined entity, and so is my business partner.
Noah Berk: Rob Gwen. He’s also co-CEO of this, and our new partner, Connor. He actually had a separate company happily, which builds apps on the Hubspot ecosystem, and he was stuck between a rock and a hard place, where ultimately, in the end, he had to focus on one. And so this was really an opportunity for Rob and me to take over the combined professional services business so he could focus on his app business, which is not part of our entity. The first thing is, “no ego” has kind of been the mantra throughout this whole entire experience. Letting your ego be aside. I love the Obo name. There’s no part about it that I don’t love, but also, in the end, it’s who had the better brand name recognition. If we’re going to do this merger, let’s get the most out of this merger, and they had better brand recognition than we did. So it was, yes, a tough decision, but also a very easy decision to make that we’re going to keep their name. Throughout this process, we’ve looked at processes like, for example, how legacy Obo was doing our scoping proposals versus how Aptitude 8 was doing scoping proposals. Ultimately, in the end, we found a better way via the original legacy Obo model to be able to incorporate into the proposal. So there’s been very much a blend of how we work, but it’s the best process that wins throughout that blend.
The second thing is, anytime you integrate companies, there’s a lot of egos across the board, and very much you got to go on this listening tour at the organization. You don’t just try and say, “Well, this is how we did it, so this is how it needs to be done.” But instead, “Well, how did you do it? Why did you do it? And is this the best way of doing it moving forward?” And so I would definitely harp on the mantra “no ego” for this to really be successful.
Greg Alexander: You know, when I talk to members about this, and this has happened a few times, not nearly as much as I think it should happen, because our community, as you know, is made up of small firms. If you put two small firms together, all of a sudden, a small firm is a medium-sized firm. You put two medium-sized firms together, now a medium-sized firm is a big firm. So combining is a very effective way to scale and maybe get to an exit. But when I talk to members about this, they’re afraid. They’re afraid primarily for three reasons, and I want to get your opinion on all three of these. Number one, they’re afraid they’re going to upset the partner. So in your case, that would be Hubspot, and they’re wondering how that’s going to play out through the partnership structure. That’s number one. Number two, they’re worried that they’re going to lose clients as a result of it, and they get really protective of their own clients, like, “Hold on a second. I now have to introduce these other people to my clients,” so this turf war goes on. And then number three, they’re worried they’re going to lose employees. Most mergers, although not all of them, involve rationalization. I mean, you only need one HR person, you only need one finance person, etc. So this fear paralyzes people. Can you talk about how you overcame the fear and maybe use those three examples?
Noah Berk: Yeah. So in the first example, Hubspot wants upmarket partners. They need them desperately. We actually had talked to Yamini, both myself and Connor, prior to officially announcing the merger, and she was a big fan of it. She’s like, “Absolutely, guys.” In the same breath, she also said they generally fail. There have been four or five in the Hubspot ecosystem that took forever to try and integrate. They didn’t necessarily work out. In the end, they had to go their separate ways, etc. And she’s like, “You know, number one thing,” and when I say “no ego,” she’s also used similar terminology with us as well. So one, we wanted the endorsement of our partner Hubspot, and she gave us a glowing endorsement. Both Aptitude 8 and Obo were pretty much in the top five in the entire Hubspot ecosystem in terms of what companies can do upmarket, and she recognized that.
The second piece here you asked about is clients and what happens there. This is probably one of the hardest parts because you can’t keep all of your clients. Part of the reason we’re scaling is we’re going upmarket. So smaller clients we’re going to have to shed. I think we probably could have done a better job of communicating that to some of our smaller clients in terms of moving them out of our company and working with them. I think it’s really hard for employees when you say, “Hey, listen, our minimums are X. We can only work with these types of clients moving forward.” We had a lot of long-standing relationships we pretty much had to say goodbye to, and I think that’s the hardest thing in the world to do—say no to a client. I don’t want your money, but you’re too small for us to continue working with you. It had nothing to do with there being anything wrong with these clients. On top of it, we had employees who’d built relationships with our customers and didn’t want to see them go, and really tried everything in their power to say, “Can we keep them if we make exceptions?” Eventually, you have to draw a line in the sand because it doesn’t do us any good to keep certain clients who can’t afford our minimums because it’s too expensive to service them when they’re that small.
The last piece here is really on employees, and you have to shape that vision for the employees right away. Our vision is quite simple, and you can ask anyone in our organization: to be the number one Hubspot technical consultancy in the entire world. It’s a very singular vision. We’re not a marketing agency. We’re not building your website. We’re focused strictly on Hubspot implementations. In addition to that, we’re operating where the air is thin—the upmarket clientele, the organizations who are larger, who require a higher degree of sophistication, who require certain types of talent and capabilities on your team. I think by providing a vision, and also what we did prior to the merger, is anyone who wasn’t a fit we had already exited. The idea here is when we went in, we went in with a clean slate. There wasn’t a lot of duplication of roles in the combined entity. But you have to communicate. You should probably make your decision sooner rather than later. You have to communicate to your team: this is the team we have, and you have to communicate that vision. As soon as we did the merger, we put together a summit, bringing both teams to that summit. That was an in-person, two full-day event, three days altogether, where we walked them through what to expect and what it was going to look like. Ultimately, through the end, we had very little turnover over the last three months—extremely low. In fact, our headcount is higher than when we originally started the merger at this point.
Greg Alexander: So it looks like you’re about six months in or thereabouts. Usually, when things go wrong, they go wrong in the first handful of months. Is there anything that has surprised you, or any kind of landmines that you would tell others to watch out for before they decide to do something similar?
Noah Berk: I mean, there are landmines left and right when you do a merger. We’re in the people business. I think the first thing you have to recognize is that everyone’s going to have fear. They both look at it as a good thing and a bad thing. The good thing is, “Wow! This company is making moves. I get to be working for one of the top organizations.” The bad thing is, “What’s my role? Do I need to learn new systems? I need to learn new processes.” I’ll give a very early example. It was the beginning of November, right before the election, where we brought all the teams together and officially merged. We had talked about it, but we hadn’t really done the merger piece.
So, November, December, January, February—we’re about four months into this merger. We did a summit. We laid everything out for the team: what to expect, how we’re going to operate, how we’re going to work, etc. But I think one of the things we weren’t prepared for is how fast you have to execute once you get that in motion, how fast you have to start moving people into the new system. I hear a lot of stories about organizations that merge or acquire, and it takes them six, twelve, or eighteen months to get everyone operating on one system. We were doing it in six weeks—everyone on the same Slack, everyone on the same contract, everyone on the same HubSpot, everyone on the same project management system, financial system. We just pulled the Band-Aid off. Now, was that good? Was that bad? Only time will tell. I think I’m glad I’m through it because it’s complicated work to get done. But we went very fast. Now, granted, we also don’t have any outside capital. So we did this with our own capital, our own teams to make this all happen so we could drum to our own beat, you could say.
I think that was one of the interesting pieces here. I think the mistakes we had in the beginning were not being ready for all the questions we were going to get. As much as we were prepared, I think we could have done a better job. I think we could have done a better job communicating that we have to let go of all these clients that you build strong relationships with. There was also, I remember, teams moving into one Slack, and it took our director of technology and one other team member to say, “We are no longer using legacy OBO Slack. Everyone go over.”
It’s really kind of entertaining because their culture and legacy AA culture in Slack were different. Legacy OBO culture, such as using threads. Legacy AA was kind of newer to Slack, and they weren’t using threads, but we were. There was definitely a battle in the beginning with our team saying, “Why are you doing it like this?” and their team saying, “Well, no, you need to do it like this.” Ultimately, we didn’t get involved. We let the teams discover it for themselves. I think, also, a lot of times you have to be able to let the teams figure these things out and not just hover over them, which is an important lesson.
Greg Alexander: You know, human nature is a funny thing, right? People have habits; they resist change. Even something simple, like Slack or threads—I mean, you probably didn’t think, on the list of priorities, that was going to be one of them. But it was, right? Because that impacts people’s daily lives.
Greg Alexander: All right. My last question, maybe, and then we’ll save some more specifics for the private member Q&A. Now that you’ve been through this, and it sounds like it went pretty well—I know it’s still early, but it went pretty well—is this now a core competence of the new Aptitude 8? And do you anticipate continuing to do this? I mean, are you going to roll up the whole ecosystem?
Noah Berk: That’s a great question. It is becoming a competence for us to be able to do these mergers. I think I can tell you exactly everything—from human resources to how to handle that stuff, to how to onboard clients, how to communicate, to how to assign contracts. I have the entire blueprint down. I could probably write a whole book on how to do this in the future for professional services. There’s no doubt that part of our strategy moving forward is going to be similar, either acquisitions or mergers, as we continue to scale. Right now, as we talk about our teams internally, it’s stabilization—that is, documenting all of our processes, making sure we have a singular way of doing business across the organization, making sure we have high client net retention moving forward, and making sure that we’re really building the foundation for scale.
You know, one of the benefits is we’re now number two in the world globally in HubSpot—number two HubSpot global partner of the year. This is a huge achievement, and we very much expect to be number one this year. Partly, it’s due to our size and scale that we think we’re going to be able to achieve these big numbers. In order to get there, I think it’s a combination of organic growth but also either acquisitions or mergers, as we continue to roll up other companies and ecosystems that we think can help us extend even further. It can’t be a 1+1=2; it has to be 1+1=3 at minimum, if not 5.
Greg Alexander: Yeah, awesome. Listen, man, I’ve known you for a while now. I am so happy for you. You guys have really kicked ass and done some amazing things.
Noah Berk: Thanks, Greg.
Greg Alexander: Congratulations on all your success. On behalf of all the members, let me speak for them—I appreciate you very much for being a role model, coming on, and sharing what you learned with all of us.
Noah Berk: Thanks, Greg, appreciate it. Thanks for having me on.
Greg Alexander: All right, a couple of calls to action. If you’re a member and you want to ask Noah a bunch of questions—and I’m sure you’re going to—look for the meeting invitation for the Friday private Q&A. We’ll send that out to you, and we’ll get going on that. If you’re not a member and you want to become one, go to collective54.com and fill out an application, and someone will get in contact with you. Until next time, I wish you all the best of luck as you try to grow, scale, and someday exit your firm.
Note: This transcript was generated by Zoom.