Behind every great company is a lot of hard work, calculated risk, business acumen, overcoming adversity and, oftentimes, a little bit of chance. Leap Group Network is no different, with a chance encounter in 1998 leading to the founding of the bespoke agency group, now celebrating its 25th anniversary as well as a host of other accomplishments: a spot on the Inc. 5000 list, the opening of a Chicago office, and 13 new clients and 30 new employees in 2023 alone.
But before all that success could happen, Daniel Knapp had to go to boarding school. While he attended this high school in Michigan, he lodged with the family of a certain Alan Gilleo, and while Daniel never met Alan during his boarding school days, he and the family stayed in touch. Then, one fateful day in 1998, both young men were invited to a family lunch and the rest, they say, is history.
Recently, we sat down with Leap Group Founders Daniel Knapp (CEO) and Alan Gilleo (CMO) to learn more about the company’s founding, the challenging early years, and the strategic business moves that have allowed it to flourish while so many other agencies have come and gone. Read on for an edited and condensed version of our conversation.
Alan, you and Dan met over lunch at your family’s home back in 1998. Did you talk about starting a business at that first encounter?
Alan: We did! I was finishing college at the time and Dan had just graduated and was working as a CPA.
What was the impetus, back in 1999, to start this company you called LeapFrog Interactive?
Dan: I think what intrigued us about interactive was its newness. It seemed obvious to us there was going to be a revolution in the marketing and advertising world. “Digital” wasn’t a term back then, but the whole “interactive” aspect seemed like it was what was up and coming. From our standpoint, it felt exciting to be part of that revolution within the industry.
Alan: Most ad agencies were not adopting interactive at that point. That was the catalyst for me wanting to explore these new technologies. Even the owner at the ad agency where I was working at the time was against it. So that’s when Dan and I started talking.
In 1999, what did “interactive” encompass?
Dan: Basically, websites. There really wasn’t much else. E-commerce was beginning to creep in with some medium-sized businesses, but not much. It was mostly brochureware.
For our Gen Z and Gen Alpha readers, “brochureware” is a term used to describe early websites that did little more than list products and services. They were, in effect, digital versions of brochures.
How many employees did you start with and who was your first client?
Dan: We started with seven people, but they weren’t employees. They were volunteers. We all lived in my house here in Louisville and everyone donated their time and expertise to get the business off the ground.
Alan: Our first client was First Class Baskets, a flower shop started by a friend’s mom. It was in Chicago, and now Leap Group is back in Chicago with the downtown office we opened in May, so it’s like we’ve come full circle.
Can you tell me about some of the challenges you had along the way?
Dan: Our most harrowing story was when we almost failed and went out of business. We struggled a lot at first because at that time, your only conduit to business was through advertising agencies who had all the clients. Unless you had that trusted agency partner leaning in and saying, Yes, this is a smart thing to invest in, it was hard to land those clients directly. So, we really struggled to the point where I had stopped paying my mortgage. And remember, we all lived at my house, so if we lose the house, we lose the whole thing, right?
What saved us was winning an opportunity through Creative Alliance for KFC. We convinced KFC to do interactive, and that’s what turned Leap around. We went from being a struggling, all-volunteer group to getting out of the house and being able to truly move forward as a business. For us, KFC not only represented revenue, but as a large global brand, it gave us legitimacy, allowed us to get our foot in the door at other companies and have a conversation. That was probably the biggest single turning point in our history.
Were there any other critical moments in terms of the life of the business?
Dan: There were two other key decisions: one was the roll-up locally, and one was the creation of the group structure. First, the roll-up: at the end of the dot-com bubble, everybody in Louisville was closing shop. We met with the principals, got on the same page, rolled five of those businesses into Leap, and brought the best and the brightest together under one roof and used that as another big stepping stone for us in terms of moving forward.
Then, about five years ago, we really began to define the group structure. That was life-changing for the principles of the individual agencies we brought into the Leap Group Network, and certainly a big change for us. We went from running and managing a single agency to stepping out of those roles and promoting Group as a business.
You seem to have the ability to anticipate where the agency landscape is headed.
Alan: So much of our journey has been informed by the fact that we had no mentors. We didn’t come out of a big agency, we didn’t start with a big client. So many agencies are started by big-time creative directors or account directors who go out on their own and have one or two big clients that come with them.
We didn’t have that. From the very beginning, it was very much a bootstrap mentality. We were young and dumb, and we didn’t have any mentors. We made a lot of mistakes, and we learned from them. You try, and you keep trying, and you keep trying, and you just keep trying. I think both Dan and I have a never-give-up kind of attitude. Whether that’s smart or dumb, I don’t know!
You’re obviously very passionate about what you do and the industry as well.
Dan: I think there’s been a consistent itch that we’re always trying to scratch in relation to wanting to make a difference, wanting to have an impact. Alan came out of a role that wasn’t going to be that for him. And in my role at GE, I was never going to have an impact on a 256,000-person organization.
Both of us had that desire to make a difference and that’s part of what drew us to marketing. It’s an area where you can really have an impact on a client’s business and help them take the next step. In our roles here, we get a chance to truly see it through. And that’s exciting.
I think a lot of agencies are more intent on winning the big client and having the Super Bowl spot. But it seems a little different for Leap Group.
Alan: We’re more interested in being effective than the big, sexy, splashy thing. That’s where our tagline, “Market Less, Matter More” came from: this idea of, Let’s not continue to contribute to the noise that’s out there. Let’s work with clients to find how we can create relevant, authentic moments that help their business and make an impact. We’re not working with the biggest brands in the world that have unlimited budgets, right? We’re working with a lot of challenger brands, so we’re going to be smart and intentional about how we do it.
Can you tell me a little bit about the decision to form the group network?
Dan: We’re always trying to figure out how we can have the greatest impact and make the biggest difference. We felt like we were constantly in this push-pull with clients where today they want agency of record and then tomorrow they only want specialized agencies. Group was really a result of saying, we need to be able to meet the market wherever it happens to be. So, for the client that wants the AOR, Leap Group can serve as an AOR, and for the company that only wants specialized agencies, we can disassemble ourselves into specialized agencies because, of course, that’s exactly what we are. It’s all in the service of the client.
It takes a lot to survive for 25 years in this industry. What do you see as Leap Group’s particular strengths?
Alan: There’s no question. It’s our people. You can only do this with a strong team.
We have been fortunate over the years with strong teams and people that stuck with us, who believed in what we were doing and helped create it into the company it is today. There’s no question: we wouldn’t be here without a legitimate team. I’m excited about our team now, and we just keep getting stronger.
This is an industry where you have to have strong people around you. You have to be resilient because this industry changes constantly. I think that’s a benefit that Dan and I bring with our backgrounds and our approach, trying to stay on top of industry trends, working with clients and understanding what their needs are. And it’s a strength of Leap Group overall: that resiliency and embrace of change. And that dedication to being relevant and helping clients be relevant has always been a strong point of our company.
Dan: I couldn’t agree more. At the end of the day, clients don’t buy anything other than people. We’re only as strong as the team that we have.
I do think one of the things that has become harder, though, is that the frequency and volume of change has become so intense in our industry. It’s hard on team structures.
It’s hard on individuals having to work through and live through what is a constant change mechanism. It’s further challenged by the fact that you have remote workers. So, how do we manage that? How do we better create cohesiveness? We want everyone at Leap Group to feel confident, secure and on a solid trajectory.
Dan: We’re always trying to figure out how we can have the greatest impact and make the biggest difference. We felt like we were constantly in this push-pull with clients where today they want agency of record and then tomorrow they only want specialized agencies. Group was really a result of saying, we need to be able to meet the market wherever it happens to be. So, for the client that wants the AOR, Leap Group can serve as an AOR, and for the company that only wants specialized agencies, we can disassemble ourselves into specialized agencies because, of course, that’s exactly what we are. It’s all in the service of the client.
What do you see looking ahead to the next 5 years?
Dan: We, and every agency, will have to figure out how to keep using ever-more advanced technologies. To get smarter and better and more integrated with our clients. There’s the downside to all that constant change, which I just talked about, but there’s also an excitement about what’s happening. We’re getting to work with so many cool technologies that we could never have imagined.
Just thinking about VR: five years ago, would we have ever thought we could put on glasses, enter a different world and be fearful of stepping off our carpet because it looks like we’re going to step off Mount Everest? And now, that’s almost passé! So, where our industry is going with storytelling is pretty exciting. There are few industries that get to live in that world of the next new thing. I think there’s an eternally youthful aspect to marketing and advertising. And that’s pretty cool when you think about it.
