How to Grow an eCommerce Business When the Math Doesn’t Math

0:00Phillip: Hello and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Phillip. I'm Brian. Today we are going to run the gamut. I want to cover as much as we possibly can because we have someone who I actually really treasure in our community, mostly because of his candor, mostly because of his dedication to telling the truth, sharing his journey, and also because he's been a valued member of the Future Commerce community for such a long time. He is the co-founder and president at Pop Smith. And today he's going to tell a little bit about why he thinks e-commerce economics are broken, how he's building a lean brand in 2026.

0:39Phillip: God help him. And why AI made ads and customer investors and raising funds and crowdfunding and all those things are helping him to turn the tide of everything else economically. that might be a challenge to otherwise building for success in the modern day. Welcome to Future Commerce, Dave Sticklin. Oh, thank you guys. It's surreal to be here. Excited for the conversation. Brian, I know you don't have the whole of our time here together, but you two go a long way back at Future Commerce Salons. Dave, I don't think you and I have had much opportunity to break bread together. Dave's a great voice at a salon.

1:20He's always got something inside full of say and always uh you know if i'm doing like one of my icebreakers it's always interesting to see what what dave's gonna say i always walk out of there with a friend too like every time i go to one of those events i come away with somebody that i have a relationship with after the event which doesn't happen a lot that's my goal that's my goal 100 that's so good

1:44Phillip: dave you have this post that you know went i would say pretty viral in our little neck of the woods especially amongst the DTC crowd who are, you know, generally are the screenshotters of success in the ecosystem. Which is funny because we're talking about the, I'm going to pronounce the e-combro. E-combro. The e-combros. Put the emphasis on the wrong syllable. Dave, you're like the sort of anti-e-combro or you sort of fashioned yourself to be sort of an outside voice in a world of e-combros. Yeah. And it's a lot. E-combros and direct response demons, as Alex calls them, like DR demons, right?

2:34Yeah.

2:34Phillip: Alex Greifeld talks about direct response demons all the time. I think this is a really interesting... The topic of conversation in the post was you basically say the math doesn't math anymore and i think the setup there was you having had so much experience in building brands especially brands that have used sort of like amazon at the core uh paid media at the core performance marketing and like the before times um and you did this really incredible breakdown of what the contribution margin looked like in the old days versus today and what can be done in order to get your brand to a healthy contribution margin in 2026 or what needs to be done in order to get there.

3:24Phillip: Could you walk us through that? And maybe we can sort of preface that by saying that a lot of people are talking about the kinds of things that might lead you to things like AI based creative, um, AI, uh, energetic, uh, automation within your business that can, you know, drive and give you more, uh, autonomy, more individual, uh, contribution within your business as a leader. Um, so yeah, that, and that's one of the reasons I reached out to you today. I was like, you need to come share that here with, uh, the folks that run these large enterprises every day. They want to hear about this. Yeah.

4:04Um, you know, I, the, the, the post that you're talking about came out of two things. It came out of, look, I mean, like there was a period for Popsmith where it almost fell apart and we had to fire everybody and go back to the garage. So I've spent the last year and a half learning how to be a marketer and to be the CMO of our brand. Um, one of the ways to do that is to get your hands dirty, uh, all the way down to, how you run the ad account to what creative goes in it. And one of the things that I think is catching traction that I'm doing is leveraging different AI tools to circumvent traditional ways of spending thousands of dollars on creative.

4:49So there's so many tools out there that are going so fast now that if you have a strong brand play, you're able to articulate that to the tools. You're able to provide it all of the context and build the correct scaffolding. There is nothing that you cannot accomplish if your imagination can will it. And as agentic stuff happens, what's happening is, you know, like even six months ago, I wouldn't be able to do what I'm doing like you were you were losing memory yeah in these chat tools and things are gone um but now with agentic i can build and build and build and build and it all it starts to create momentum and there can be a flywheel effect so you know as i see people talk about how founders are wasting their time and money in ai and nothing is coming out of it like you know let's go let's go look at what Grokbot and Dot are doing for me in the way that they are compounding success and listening in a way that maybe they can go faster and deeper and more interesting and do more than I could do with an agency, you know, five years ago.

6:02Yeah.

6:03Phillip: And, and obviously at, you know, a fraction of the cost. Yes. At, you know, infinite fractions of the cost, really all it is is time. And if I'm doing this correctly, there's nothing that says I can't hand this off to an employee. Like when, when AI came, I realized that everyone that worked for me overseas or not was probably doing the last version of whatever they were doing. Right. Like, so if I had a copywriter, this is the last real copywriting job she's ever going to have. So I took it on myself to say, I need you to get good at these tools because this is the only way that you get the next job.

6:41I can't guarantee Popsmith's around forever. So what is in your future? This is your future. So you either own the software or the software will own what you do. And so being able to build these tools and agents in a way that's unlike old software, it's very easy to hand somebody else. Like once I've created a system that I'm comfortable with, it is very easy for someone else to just go in and say, do the thing and get results. So, you know, while I am spending my individual time as a founder doing this now, my goal is to have this done by people that are paid way less than maybe even a creative strategist would be paid for now.

7:25It's funny, you're spending a lot less money on creative strategy than you have been or would have had to in the past. But you also talk about how selling online is the most expensive it's ever been yes so explain just just give a quick little background you have to get into everything since you've you've got an incredible video on on

7:45Phillip: the exact details but like why do you feel like we'll link it up yeah what will give us the basics about why uh spending on e-com is is more expensive right now um i think i think the big picture answer to this, which I didn't actually directly say in the video is there's no more frontier. You know, 10 years ago, 15 years ago, Amazon opened the doors to third party sellers to sell other things on Amazon. And they made that incredibly lucrative and cheap. Just like when, you know, you had all of the Ubers and the DoorDashes come out and they supplemented the cost of all those things to get adoption.

8:26E-commerce was able to take advantage of that moment to establish itself on a new channel and reap margin. The next thing out was, you know, maybe you weren't going to a local expo in the United States. There was more frontier to go to Canton Fair. And then after Canton Fair, there was more frontier if you were willing to go out into the weeds in Shanghai or Guangzhou or wherever the factories were and start meeting with people on the ground. Well, that's all saturated now. The ability through Alibaba to meet the factories directly, the savviness of those businesses that are leveraging, if you were trying to leverage global supply chain, there's a really good chance that the factory itself is competing with you on Amazon.

9:17There's a million ways that the American e-commerce guy who wants to make product and sell product on the internet has reached a zenith that cannot be sustained with the margins that they had. Meanwhile, the ad platforms have gotten smarter and sharper at maximizing their return on you, right? So Meta has changed everything. They continue to tweak stuff. They continue to adopt new ways of extracting maximum amount of ad revenue from brands trying to sell. And there's no one disrupting that. So there hasn't been a major disruptor in a long time. In addition to global supply chain, where we would save money, getting more and more expensive.

10:04The average amount of a worker at a Chinese factory has doubled. The amount of money that you would have to spend on logistics to get product over the United States has gone crazy. A lot of that has to do with coming out of COVID. No one really dropped their prices back down. They realized people could pay and there's continuing to be supply chain problems. So all of these things congeal into a place where whatever contribution margin I would have had pre-COVID is evaporated. And everyone else gets paid below the line, right? So agencies and people that you would hire, all the hiring comes out of that contribution margin.

10:45So if you aren't turning a positive contribution margin, you're really up a creek as far as how to grow. I got a lot of feedback off that post that just raise your prices. And of course, obviously, we've raised prices, but that cannot be the only answer because I can't raise prices higher than both the economy is shrinking and things are getting more expensive. it.

11:13Phillip: What is your, uh, what is the popcorn maker retailing for right now on your website? Yeah. The, the popcorn maker itself retails for one 99. And then we have a bundle that's the most popular. That's two 29 where we're sharing the popcorn. We were, we were really lucky to make that decision. Tal and I had always wanted to have a higher end tell my business partner. And I had always wanted to have like a higher end product that, uh, because that's what we like to be. we like to make really nice things that are premium. And so that part of the economy has stayed relatively stable. I'm sure you guys have talked about many times, just the idea that there's like some crazy small percentage of people that are the ones that are spending all the money online.

12:00I'm just trying to sell to those people basically and made a product for that. Like I have no idea how a skinny margin consumer product, a CPG product is even surviving. in this climate, um, at all, much less, you know, profitable after even two or three orders.

12:18Phillip: I mean, looking at the, your breakdown, it looks like you're heading toward a skinny margin consumer product, right? Um, what's, what are you doing to change that? Yeah, we definitely are introducing consumable products because we think that there's an opportunity, um, both for discovery through those consumable products of the popper People who are really interested in making popcorn at home can start with something like our consumable products and then decide they want to buy a popper. But also it provides a walled garden for us that keeps the brand really important to the buyer. It's not just a one and done product that you would buy and walk away from.

13:02That's the hope, at least, is that then we can then pivot that to being popcorn experts in the space. like our grand ambition is to be the Orville Rittenbacher of now. No one's been talking about this product for a long time. We just needed to establish a product that had the economics to survive e-commerce, which was we had to have massive margins. We had to sell at a price point that could afford to continue to scale and then hope for the best. And even since we launched, you know like there are probably things if i had known today how tight it would be i would have made different choices then for sure would you have just gone straight wholesale retail and just skip the whole e-com thing just all together i don't think so we we still have that door open to us but we're e-commerce first and have always been good at this and i think that this is a brand that lends itself to discovery um online when we when we when we came up with this it was like right around covid everyone was everyone was cooking at home again people were making sourdough bread and this was an opportunity to bring something back that felt real and whole in the home and so we knew that that would be a story that would work really well and resonate in social media we think we developed the box the product everything about it to be instantly instagrammable like the goal here is to make dtc work i have no doubt refill will work and look we're we're rolling out nationally in williams sonoma this year i don't think the volume that we'll do in williams sonoma is going to be anything close to what we can do direct consumer that for us is a positioning opportunity to say this is a product that belongs in williams sonoma We really believe in that partnership with that company and what we can do together.

14:57That's really what we're hoping for out of that is continued future strong brand that exists in a real retail store that's really careful about what it brings in. That's why we love that partnership.

15:12Phillip: I'd love to touch on, while Brian has another few minutes here, I'd love to touch on some of the AI creative that you're doing right now because I think it is helping you. You said you've turned into a marketer. It's helping you get closer to your customer. You get that immediacy of feedback of what is working in the cultural aspect of how people want to experience the brand. What have you learned there between what works and what doesn't work, playing a cultural strategist, if you will, or a creative strategist? And then what about the AI tools do you think is helping to drive value for the brand?

16:05Phillip: And give us a little bit about what is expensive, what's cheap. Help us understand that. Yeah, I really love building. And I think AI tools are really excellent places to build. and I think being able to go in and come with an idea and then have built a system that says, these are the kind of ideas I'm going to bring you. This is the expectation of what I want back from you. This is the process in which I want you to go through to vet my idea or to come up with something. If you have built that system, the ability in these AI tools to generate anything is amazing and quick. So I've spent the last year or so, you know, following really smart, creative brand forward ad makers and brands that I know I'm shoulder to shoulder with for the same market.

17:11What are they doing? And how do I do that in a way that's distinctly Popsmith? and being able to discern, okay, this is the idea that I'm taking from, let's say, HexCloud is running an amazing ad. I'm able to say, here's how I want to interpret that ad for me, right? Rather than if I think if you were just taking that ad and saying to an AI tool with no background of what you wanted or what your brand was about and said, make me a copy of this with my product in it and let's swap this, you know, and rewrite the script and make it an ad for me. Like if someone does that, they're probably going to come out with something that's legitimately terrible because the tool that you're using doesn't have 3D schematics of your product or understand your brand strategy or understand the thousand people who have ordered and what they're all about and what they like.

18:10So what I'm getting out of it now is the ability to take an ad concept, get it into my ad account within 24 hours of making a product. So let's say I start with a static ad. The static ad starts to get traction. Immediately take that static ad, cut it into a 10 second video where I animate the static ad. So now it's running as a video as a video ad as well not just an iteration but like just a little difference like a good example is we i just made one where it's the poppers are like flashing back and forth like uh like a like a you know stop motion video like uh video and then it's like well that worked okay what if we have the background filled with popcorn while it does that and it sounds like popcorn like boom you know you're able to to get that and then put it into the account it's also going to make organic goes so much faster.

18:59Like, you know, I think Sarah Moss just dropped her new book in her series and every single person in, in, uh, you know, in is talking about her series again. And it's able to take like, Hey, let's make it, let's make something for organic where we're saying this is the weekend to make some popcorn and read this book together. And now pop myth is on the journey with the audience that it wants to be on. So not just advertising side, but the organic relationship and the conversation around the brand is something we can fast respond to versus having to get on the phone with a photographer and say, Hey, I need you to go get that book.

19:36I need you to shoot this on the table. I need you to put some popcorn next to it and then send that over to me. Well, that's a, that's two weeks. Um, we can just execute on that immediately. And, uh, it feels amazing and it feels an amount of control over the direction of the brand that we've never had before. Yeah. I think, uh, Norbert Wiener said that the future revolution like isn't going to be us sitting around in our hammocks being waited on by robot slaves it's actually going to push the bounds of what our minds can do so it's if you can imagine it you can think it you can actually accomplish it and so is this an opportunity for sort of like an explosion of like new ad creative and new ideas experimentation of finding finding new ways of getting in front of people and seeing what they want.

20:29It seems like the last period was just like little iterations and following after trends and data. It seems like now is the time to be experimenting. I think it's going to allow brands to be, if they want to be, far more human. What AI will never be is relational. It will never understand what other people want. It's the same reason I never worry about when a factory starts putting a product on Amazon, because I know their branding is going to be terrible because they don't understand the American consumer, right? So they're going to have a product and it's going to be half my price, but they're not going to know how to market that thing to the United States consumer.

21:11And you see that in the advertisements they run. AI is the same way, only worse. And so if you are focused on your buyer and you are focused on your community and you're focused on your customer, the things that you were able to do to use this tool to have a relationship with those people, it becomes less about software and middlemen and people who can access different markets for you. And it becomes really about what you can do with this tool to continue to communicate excellently with your audience. That's what I'm most excited about. There's literally no limit to the ways now we can have that relationship.

21:58Even if I want to make content about the best way to make popcorn at home, and I film that on my own, I can turn that around without hiring a video editor or without having and fixing my own lighting and putting amazing like cuts in this that make it way more way more fun than just listening to Dave talk and watch him cook and that to me is like that's going to get more people excited about the product and and that delivers on my on my dream concept I just don't have those skills now the skills are just there if I ask for what I want it's bound to change within the next

22:34Phillip: few days before this even comes out, you know, tools change so quickly. What's in fashion changes so quickly, but you've been sharing your experience in building some of this ad creative with a small group of founders and operators. I'm curious, you know, what does that toolkit look like today? What's the stack? Is it, you know, as expensive as some people have been saying? I've, you know, myself, I've been working on trying to up our short form creative, especially around things like our summit. And I found that like things like Higgs field are just really, really expensive actually. And I have to, I have to believe that at the volume of creative that it takes to run, you know, an effective paid media strategy that it's not inexpensive, but it's also not the same level of what it would be to pay a creative strategist.

23:27Phillip: So I'm just curious what your experience has been and if there are any efficiencies that you found there. Yeah. I've kept it pretty cheap, to be honest. Where I have put most of my energy is into ChatGPT Astra, which is both an amazingly thoughtful tool, but also does pretty good image generation out of the box. So as proof of concept, that's where I started with my MVP. also them rolling out dot uh dot allows there to be an agentic third party that becomes quality control like yeah i think even you know a month ago you would go into uh google nano banana or you would use you know whatever image generation tool and you would say make me a dinner party it put some wine and some popcorn on the table and then it would be oh well can you move the popcorn back to the bottom left hand side of the table and like the next time it would make it there would be three extra people that each had four hands each it would have added like you know it's been it's fundamentally broken something else so it's just like every time you would make an image in these tools you would just reach into a bag and like maybe take something out that would work yeah and like hope that eventually it would get it right with the agent in the middle on chat with astra and chat gpt it's going through a bunch of iterations before it brings me anything so So I can actually really control and direct the smallest amount of stuff that it is doing.

25:03And so it became a matter of sharing the dimensions of the product. I hired a photographer to take a lot of photos of the product from different angles in relation to other things. So the popper next to a wine bottle, the popper next to a set of books, so that the tool could learn how to render the Popsmith correctly. and then being able to separate the rendering of the product from the rendering of the background that seems to be what has done best for me since then i have added uh like i'm using i think i think it's topaz or krea i'm trying different things to get a much higher resolution image to be able to take that image out or that video out of chat gpt and run it through a filter to make it really pop and really feel lifelike and then like for like creating like i have i agree with you on hicksfield and that hasn't been the direction that we've gone yet where we're getting super ambitious about creating video i can see how that would be very expensive i think for now we're just really focused on taking years of of really good like a lot of this is about having a giant library of creative that you made with different creators online, different personalities and finding new ways to get as much out of the things you've already paid for that a creative or an ad buyer or an agency isn't going to do.

26:33They're going to say, let's make an ad with this person that we found on Instagram. We'll pay them$3 ,000. They'll make the ad for you. We ran that ad for 60 days. It didn't work. Let's find somebody new. And I've always been the person and go, wait, wait, wait, wait, wait, what was, we paid three grand for that. Like what was good about that? Right. And now I can bring little bits of it into a video. I can create a mashup. I can find usable things in a bunch of stuff I've already paid for it. So it's not just future spend that I'm cutting out of. It's just like, I'm trying to extract value from things I've already invested in that are just sitting in a, in a digital assets management folder.

27:12Phillip: I find this to be, there's a lot of overlap, right? In the way that we think about the content marketing side of say our business insights and research, you know, especially in like back in the agency days. One of the ways that people are always trying to save money and in developing insights and research is like, oh yeah, they just, they just want the insight, give us the insight. Right. And, um, uh, but the way to get that in it more, in a more expensive fashion is to prevent, uh, Republic, you know, they don't have a license for republication effectively. Right. So it's theirs. They can have it, but they can't do anything with it other than the knowledge of it.

28:00And there's something really

28:02Phillip: interesting when they realize that they can't do anything other than have it and they want to republish it. They want to share with PR. They want to, um, you know, change it or alter it. Uh, there's something that gives additional value in their minds to the ownership or the license ability of it in order to, uh, create derivatives and derivative products. And I say all of that to say, I have to wonder what the service economy does by nature of having AI, be able to be for that their outputs to be licensed to be able to be used in AI like photography design creative even creative strategy to some degree where even these small amounts of work in the future are more highly valued even in in their even if they're singular pieces because they can be created in such scale and derivatives.

29:06Phillip: You see what I'm saying? Right. Yeah. Yeah. I think, I think you're right. I think the, the smarter, more accomplished people in their niches of creative and of software are going to ultimately win because you know, like they're going to own their own stuff and they're going to, and you're going to want it to elevate away from what already exists. But I also think, you know, like one of the reasons I created that post is because I have so many friends that are still trying to charge, you know, thousands of dollars a month on to do things for brands. And my goal was to say, look, guys, where do you think that thousands of dollars is not coming out of my current month to month P &L.

29:58Like you are, you are not look at how much you would have to scale my business to justify that cost with the contribution margin I have. However, I also look at brands that are saying, oh, well, I don't need to hire an email marketer anymore because I can just connect, you know, my email service to an AI. I can do a report on how all of my flows are doing or how my campaigns are doing. And I can make changes to that with this tool. I don't need a person to come to a weekly meeting and tell me about it. My question to those brands has been, but who knows Klaviyo in your organization? Who knows how to email market in your organization?

30:41Like you cannot, it is one thing to replicate the tool or to get reporting out of how a software is doing. It's another thing to be an expert at the software or an expert at what you use the software for. And what ultimately I think we end up paying for is we'll end up in a place where we're bringing in really wise advisors on a periodical basis. Like once a month, let's check in with how everything's going. You won't be paid to execute within the software anymore. You'll be paid to oversee the roadmap or develop the SOPs. And then the brand will be able to execute on it internally because it's not, it won't, it won't be reliant on you and your, and your staff or you as an outside person.

31:29We can do that with software now. It's all I need you to do is tell me what needs to happen and it will happen, you know? And so, so I think expertise is going to be way more valuable. And because I won't be paying, you know, like there's people now who will pay six thousand dollars a month for some agency who has a software proprietary tool and they're doing things to help you find new audiences or whatever they're doing sure and then they're paying an additional three or four thousand dollars to have that audited every six months to make sure that person is doing what they should be doing right you know now you know some of that gets eliminated either i have the ability to audit you myself against best practices that are out there and the and the brand starts to stop treating agencies like wise wizards who have spells they don't understand and or if they're smart enough to do that and they want to and they want to be involved on that way or the execution gets my ownership and you get to continue

32:34Phillip: to be the wizard it depends on which one you're good at right yeah i think back to my agency days and how much of my um you know what what would even the nature of the work be today uh in the you know post-covid post uh ai era so much of our uh i had moved into strategy but when we were in the engineering side, so much of my work was really just trying to point out all of their critical flaws. I think so much of the critical flaws today, and you see that a lot of free audits around ad accounts or something. We had very similar around self-hosted infrastructure, open source code, things like that.

33:21Phillip: This is the bad old days. But I feel like we're heading back toward that way with a lot of vibe code and a lot of folks that feel like they can go it on their own and take some, you know, some of those, some of those capabilities in house. I'm not sure if that's for better or for worse, if maybe competition helps to make the ecosystem better. generally. I think making price, it would drive some prices down if there's more competition potentially. Also, I don't know. I see a lot of gesturing online generally to the earlier point Brian was making around the sort of like e-com bro. And in fact, there was a thread recently about people who were saying they were rebuilding motion um in vibe coding it it took them two days to do it um i was like i thought that was interesting reza was in the you know chat saying that's you know well you don't have all the data we have um which i think is an interesting point too yeah i i see people all the time say look i don't need this tool anymore i've got i've got meta connected to you know my mcp i've got an mcp connection to meta and i've got my brand book and what do I need all this for?

34:48And the answer is, well, Reza has thousands and thousands of ad accounts, right? So do you want to train, do you want to make decisions only based on the limited data of what is working for you today? Or do you want the data that's out there about what thousands of ad accounts are doing to inform decision-making for you? I don't see how that's not incredibly valuable. Like the data set itself is what you are paying for, not the tool. Right. Yeah.

35:24Phillip: I think that's right. Of course, they're, uh, I think they're in the middle of a rebrand motion. Um, run it. Have you used run it? I have, I've been using run it for a while and it's been, it's been really helpful in like, even, even what I did on that reporting. It was one of the reasons I started that was I'm looking at what my cost of advertising is going to be at the end of the year. And I'm looking at, you know, where we want it to be as far as an MER and being able to say, you know, like to go into Runneth and do real research about, well, how many ads are these other businesses that I'm supposed to be running neck and neck with?

36:02How many ads are they dropping every single month? How often are they turning over their creative, like to really be understand what it takes and what I need to do to scale, to be able to ask really intimate questions about the strategies and see the other strategies of other businesses has been infinitely helpful. And because it is agentic with what it's providing me, the, instead of like what, you know, when you would plug meta into cloud code, or you would plug it into Kodaks and you would get a seven day look back, even six months ago, you're always like, oh, here's the report. And it's like, well, it's an idiot that doesn't remember that I ran a sale two weeks ago.

36:44So when you're looking month over month, of course, this looks terrible. You would instinctively know the report was garbage, but now it's remembering. It's remembering you ran that sale. It's remembering that year over year, you did Oprah's favorite things in 2024, and you're never going to have that level of like access to that audience ever again. So stop comparing data. Quit telling me I'm doing terribly because I did so well in 2024. It remembers all of that and just gets smarter. It gets smarter about what it tells you to do as far as which ads to run, which ads not to run, not to turn this into a commercial for those things.

37:23You can still do all that in your own tools. You have access to all of that. But that is the difference between, you know, when I hear people say, oh, what's coming out of AI is garbage. It's not going to be usable. It's just slop. People are bringing slop reports to my meetings and slowing us all down. They're not doing it right. That's a skill issue. And you have to, you know, like that is a skill issue on the brand side and people are only going to get smarter and better with the software. So it's better to bet on it now.

37:53Phillip: This is probably more of a philosophical issue and everybody's context is different, but what is the skill gap? Like, is it just the, there's a fundamental lack of, in a misunderstanding of what, you know, what the game is today versus what it used to be? Or I think, well, I think there are a lot of founders and brand owners, smaller, smaller brand owners who are relishing this opportunity to take power, type something into a box and get something back that they would usually have to ask multiple people for and would take a week. And I think there is the skill gap and a good example would be like creating static ads.

38:45I'm not a photographer. So the fundamentals of photography or how to tell it to light something. I would really, I took a, I took a class with Jamie Gannon like six months ago, who is, you know, for those of those who don't know, she's a really creative, amazing brand person who has been leveraging AI tools since the beginning. And what I saw Jamie do was, yeah, you can build this in AI. Let me show you the thousands of iterations I went through to get to this one thing. Let me show you the lookbook, all the different resources I gave it as far as the mood board and all of these things that Jamie would build in order to get one set of results that she would post and say, look what I built in just like in Nano Banana.

39:38And everyone reads that and goes, I can just get a Nano Banana day and make what Jamie did. But the reality is you cannot unless you... So that's the skill gap. The skill gap is the scaffolding and foundation between what your vision is and the result that you want. And I think that's where people will get better and better because I think that the people who make the tools or people who are in the middle as far as software will make better ways for you to access chat, right? Like the answer is not what some software is doing, which is giving me a window to basically engage Claude, you know, Fable through their own website when I already own Claude Fable.

40:26The answer will be, I'm going to develop scaffolding for you. This is, you know, like what is the shared brain? Like if you log into Runneth, what does Runneth know about marketing that it can apply to you versus what do you have to tell like the the versus on my own Claude where I would have to tell it about how direct response marketing works and go read this article and watch these 19 videos and and do all of that like the value of new software will be I built all that for you all you have to do is put your vision in this box. Hmm. I see.

41:05Phillip: I, I think the, what I was thinking before was more of the, uh, folks who approach AI and, uh, maybe have a, a fixed mentality about the way that it operates because of their, uh, association to the chat context of how, you know, uh, almost everything is going to exist within the chat window. And in reality, there's so much more that can be had and so much more that you can create, especially, you know, I've also worked with Jamie's content quite a bit and, um, uh, you know, the Flora and some other sort of workflow type creation tools. There's, um, there's a tremendous amount of, uh, chaining together of tools and tool sets that, uh, are required in order to have the, that kind of output.

41:59Phillip: Um, and so when I, when I say like the game is changed, it is knowledge of an entire ecosystem that's required, um, that does sort of exist, uh, outside of like a singular tool. Um, and to your earlier point too, uh, this is where it looks a lot more like, uh, I would say art, but it is any prolific art has a tremendous amount of creative waste. And so if you're going to, you know, create some, you know, something that is, has high value for a brand, there's going to be a lot of productive waste. And that's what winds up happening with the people who create really, really powerful, creative with AI things that are actually quite convincing or things that are, uh, mesmerizing.

42:52Phillip: I would say, uh, Jamie's done some work with, uh, actual brands, um, and has received print features and out of home, um, and doing her work and it's, you know, magazine feature quality. And so you don't get that without tremendous amount of creative waste, which means it's time. It's proof of human work. It just looks, it happens to be with tools that are generative AI. Yeah. And a point of view, right you oh yeah you have to have a point we don't say taste but yes point of view is yeah yeah and and look i mean like sometimes watching someone like jamie is like listening to a really good musician try to explain to me like how they came up with a song idea and it's like they'll play the riff that they started with and it's like how did you get that song out of that one individual riff and jamie's the same way jamie will start with like i've seen like the most off the wall, like image in her mood board of like, this is the vibe I'm going for.

43:56And it'll be, it'll be just a picture of colors swirling and like a, like a crystal or something. And it's like, I'm working on this thing for, you know, a CPG brand or something. And it's like, I would have never thought to start with that image. Right. I would, and I think 95 % of founders who are trying to pull off this kind of stuff are starting with, here's an ad that my competitor ran. Let me, let's, let's just do this with my product in it. Yep. And then those are, you know, and then, and then those are the people going, well, AI doesn't work because I ran 20 ads out of AI and they were all junk.

44:33Phillip: Yeah. Well, yeah. You know? Yeah. To be fair, I think that's why a lot of the consumer mindsets feel similarly about AI because they have had those types of experiences. This is a secondhand report, but I know someone who had overheard this conversation on the train a few weeks ago about these guys discussing that, oh yeah, AI is terrible at crosswords. And he's like, oh no, I've used AI to solve a crossword. He's like, no, no, no, AI can't make a crossword to save, save its life. And, um, it's like, yeah, have you ever tried that before? He's like, no. And then, you know, my friend was like, it's like, oh, surely AI can make a killer crossword.

45:24Phillip: Right. And he goes and he tries it and it's like, no, they're all like five by fives. They make no sense. They're, you know, they, none of the clues are any, they're not clever at all. Right. And so it just doesn't understand how to make something really, truly great. Or you don't understand how to prompt it and give it good input, give it great context, right? All that the consumer knows how to do is say, make me a crossword. Right. Right. And so they have one experience with it and they're like, oh, it's terrible. Right. Yeah. I think I posted a, like, I was just like taking another, an ad from another company and I was like creating it.

46:05And I did a video about that. And the first one, it was just a product in a, in an easy background, change the text, flop it out. no problem the second one was like recreating a bunch of elements and i think i i think i put like six hours of my time into that now i wasn't just like grinding for six straight hours but like lots of back and forth between different projects or whatever waiting for it to give me a new version it is it is a lot of it is a lot of framing and giving feedback which is why i think good managers make better AI like people. I agree with that. Most of what AI is about is being able to communicate effectively about what works, what doesn't work, what you would like someone to try.

46:52Here's an idea that's maybe out of left field that should inspire you about what you're doing. I think treating AI like a human and treating AI like an employee is a much better use of your time than treating it like a chat bot that is is just delivering you know just just on command making a crossword puzzle that think about all the layers of complexity in a crossword puzzle think about the research that has to go into to come up with questions and clues like this is not an easy task that you know it's pulling something out of the ether to do for you it's going to take work um to put that in place once you put that in place though you can make 50 crosswords and like yeah they're all going to be fun and great so it really depends on what your end goal is going to be where you put your energy and that too um there's a lot of tropes in crosswords there's a lot of like

47:50Phillip: little cultural hat tips. There's a lot of things like things that they lean on a lot, especially like certain outlets, New York times crossword. They, they have a, a lot of things. They love Gaga. They love Tina Turner. Like they, they have things that they do a lot that, you know, make them what they do. And if you don't know that, or if it's not familiar, it's just going to feel like it's not authentic. And if you take that, that example runs true through any medium that someone is deeply familiar with. Right. And I think you, you'll get that sort of uncanny Valley. It was like, something's off here.

48:32Phillip: It doesn't feel right. I think we can get that with, um, it can come through an ad creative. It can come through in, um, copy. Uh, and I, I have to wonder to like the, the blanding effect of site building, um, is almost like through vibe coding is something I'm also going to be very concerned about in the future. Um, it doesn't seem like it's, uh, the Shopify is new release maybe helps to hedge against that, uh, with the canvas. But I, I do think that we have to stay ahead of this stuff. And to your point, you said point of view. Yeah. I think it's people with, uh, you said management. I think it's people that actually just recognize what is tasteful and what is not.

49:12Phillip: and people that say, yeah, that's good enough, will probably fall prey to the best fit average over time. Yeah, I completely agree with that. And yet all of that said is, do I read this right here in the prep? You're hiring your first creative strategist? We hired two creative strategists. And what I found was like, no shade to them. Like they were really smart people. but i think that that that idea of what a creative strategist is is so new i think a lot of them learned how to do things by watching motion videos or other free trainings and they've come from you know ad buying or they've come from copywriting and they are not coming with creative thoughts and creative ideas.

50:06So what they end up providing you is so far is like iterative changes to current ads that you have or, you know, safe ways to spin off of what you get because just like us, they want to put things in the runneth or they want to put things into their chat window and say, let's play with this ad idea. And what they're going to get is what the data tells them the data is only based on how what has been successful or not been successful in my particular ad situation creative strategists need to think outside the box and they need to have a point of view and then again a point of view they need to have you know they need to bring that first image that i was saying that jamie that jamie would start with they need to have they need to have inspiration for a way to reach the audience that generates curiosity.

51:04And if you don't have that, uh, to start with, like a brand approaches you, like, let's do some work together. You should have that before you show up to the first conversation so that you, cause that's the vision that I would be paying for. I'm not looking for someone to do,

51:23Phillip: you know just to manage the you know incremental growth of an ad account uh you know to me that low-hanging fruit is now suddenly is is going to be gone that's that low-hanging fruit is gone the the only the only thing we're going to pay for is massive changes in incremental revenue from either whether it's different channels you're going to open up the tam in some way like we're going for big hits now we don't need to pay for singles you know we're we want triple and home runs when we bring people in smart people into our accounts right well said uh dave i don't know why we don't have you on all the time this is fantastic well anytime you want man it's been a pleasure and uh i'm a huge fan i'm a huge fan of you guys and the and the community you've built and and it's a it's a pleasure to be part of it thank you if you're not following dave sticklin on x at least you should be uh he puts out incredible insightful content about his journey in building Popsmith.

52:23Phillip: If you don't own a Popsmith, highly recommend it. You know, my kids and I, we love it. We make it all the time. We've been binging every single Marvel film and Loki and everything else because we are building up to Avengers Doomsday because my 14-year-old is pumped for that, which means we've been using our Popsmith a lot. Oh, great, great. And I think this drops during our Better Than Black Friday sale. So if you want one today when you're listening to this, we're on sale right now. Hey, all right. I love that. Dave, thank you so much. Thanks. Thanks for having me, Philip. Have a good day. And thank you all for listening to this episode of Future Commerce.

53:00Phillip: Hey, if this sparks something for you, you can find more episodes of this podcast at futurecommerce.com. Why don't you like, rate, subscribe, leave us a five star wherever you get your podcasts. We're at Spotify, Apple Podcasts. We're on YouTube. And it helps other people to discover what this is all about. You can bring more of Future Commerce into your world with our print. You can get that at our store at futurecommerce.com. We have print journals, zines, and our newest is called Lore. It asks you the bold question, you know, do you write the story of a brand or is it already written for you?

53:31Phillip: And our Vision Summit, it's coming February 10th to the Museum of Modern Art. We don't want you to miss it. We've got Carlos Gutierrez, the former CEO of Kellogg, and he was the Secretary of Commerce of the United States. He is going to join us with his new book, Sheer Will. And that's February 10th, the Museum of Modern Art. Don't miss it. Go get your tickets right now, visionsfuturecommerce.com. And remember, you shape the future because, oh my gosh, Sarah, you're going to kill me. Remember, commerce shapes the future because commerce is culture. We'll see you next time.