Practical Tips on AI, Brand & Growth With Taylor Holiday

11:15Sean Frank:trend on twitter well taylor has a different one uh service yeah sean named after you like your

11:22Katy Mimari:namesake oh i i saw that i thought about that yeah it is your namesake yeah so but anyway i want to

11:29Sean Frank:talk about your journey for the past five years, Katie. So what was your worst year? What was your best year? And what would you do differently?

11:36Katy Mimari:Oh, God. Well, okay. So going back, I mean, so we've had growth year over year, right? So I would say each year has gotten better and better, but we've had a different set of problems each year and all related to, right, like substantial growth. Like in 2020, 21, 23, we had like 2000 % growth or something like that. So it was insane. So what was hard about those years, although I do remember, like you mentioned, the whole like COVID bump, which to me felt like a slingshot, really. Like we didn't see a screeching halt in revenue after that. But I do specifically remember when the iOS update came out and that really affected a lot of our numbers.

12:16Katy Mimari:And that was in June of 21. But it didn't. We had really healthy margins. And so we absorbed most of that. the hardest year looking back five years ago was, I would say, 24, which is weird because a lot of people had really good years in 24. And then this past year in 25, we saw substantial growth again for us. And when I say growth, like ours, Taylor, too, was we're only D to C. Like we just opened up wholesale. So we're not omni-channel. We didn't get to, we didn't have the impact of like large retailers closing or Amazon shifting or any of that. Like ours was just straight, like direct to consumer.

12:57Um, this year, God, I don't know, Sean, what the hardest part of this year has been

13:02Katy Mimari:last year. It was just man. Actually the, I would say the last two years, the hardest part has been dealing with metas and efficiency. Yeah.

13:14Sean Frank:It's, it's funny you bring up 2024 because if I have to think about my hardest year like every year had a little bit of bad but they were all different right like it just changed yeah yeah because you talk about covid you talk about the ios update 2022 was a hard year i mean we saw gas prices shoot up that hurts discretionary spending it ruined our 2022 father's day right we had a horrible father's day 2023 was awesome probably the best year and then q4 2024 sucked like you know ours crushed we talked about like this but

13:44Katy Mimari:It can just be like one random outlier, right? Like that affects it. It might not be. And I think it's just so brand specific too. It's funny. This is where I think like sometimes the benefit of the seat I sit in is that we look at an

14:00Taylor Holiday:aggregate all the time. So when I think about how things are going, I never, no individual point, because you're right. There are brands that are always winning. There are brands that are always losing, but it's the distribution. And if this is like the normal distribution, right? At any given point, the median moves in some direction in that data set. And that's what's the signal to me is like in this period of time, was the median result up or down relative to expectation? I've published a lot of stuff about the median growth rate year over year across those years. In the COVID years, it was like 50 plus percent.

14:30Taylor Holiday:And then it dropped to 20. And then I think in 2023 or 2024, it was down to like 12 percent was like the median growth. And so much of this follows the availability of capital is like really the core driver in an inventory-based business of people's expected growth rates because it has a lot to do with your availability of financing to determine how much excess growth you can sort of go out and get. There's a lot of other pieces.

14:50Katy Mimari:You're right. And that's a great point. I feel like in 2020 and 21, there was a lot of brands that were still VC-backed, right? And it was just the debt ate their lunch. And what we all know on the brand side is that cash is king, right? And that's what manages it. But I still think in your seat, it'd be really hard to look and see any kind of trends when you're comparing brands that are between 5 million and 100 million, because there's some things about being a nine figure brand that make things very easy, right? And you can sustain like hiccups in whatever it is. But then there's some parts where like as a $30 million brand, you know, maybe, maybe some of the impacts are harder on different levels.

15:32Katy Mimari:Like I just, I feel like it's not fair to put everybody in the same bucket because what's hard at different levels is is relative to their size yeah and you know on this a 30 million dollar brand can double

15:46Sean Frank:like and that's where then that's when you have people like doing like the flexing like i grew

15:50Katy Mimari:100 or whatever without their ops breaking without their inventory supply chain breaking like all of

15:54Sean Frank:that yeah yeah the the advantage of a nine-figure brand is it's very hard to sync right if you're cash flow positive and you know you have a team you have infrastructure you have systems and like more or less it operates pretty smoothly day to day but you're you're lucky to get 25 growth because it's just so much revenue you have to extract out of the ether it's another 30 million right like it's insane yeah totally uh but so taylor um you're looking at the next five years midway through the decade do you are you are you bullish on this idea of brand and e-commerce stores and basically what built our fortunes the past 10 years, the next five years, are you bullish on that?

16:36Taylor Holiday:I think brand is one of the constants that exists. And I think that's sector agnostic. I think about that a lot as a service is, what is the brand that I'm trying to create? So I think that that will perpetuate forever because identity matters and brand is identity and people care about alignment towards those things. And even if that's individuals becoming brands, I think the principle still is the same. E-commerce, I think, is going to be like an archaic idea. Like, I think it's like completely going away. Even though I just wrote my 26th production.

17:05Katy Mimari:Because what, they're just going to shop in their sunglasses? Yeah, everywhere.

17:09Taylor Holiday:You're going to shop everywhere. Like, it's commerce. Like, I think that from LLM chats to, yes, AR to voice to retail. Like, the Honest Company just shut down their website. In the next three years, Taylor?

17:19Katy Mimari:In the next three years, you think that people are going to be clicking some imaginary button in their sunglasses?

17:24Taylor Holiday:Oh, I think they're going to be buying it with their brains, probably, Katie. Like, without even clicking the button. In three years?

17:29Katy Mimari:Do you know how much doesn't change in three years? We're going to blink, and we're going to be back in this podcast in three years, and I'm going to be like, hey, where's your sunglasses, Taylor? And you're going to be like, well...

17:38Taylor Holiday:I own, I own, I own, I wear meta Oakleys all the time and film my kids' lily games with them and create instant AI highlight clips of every game they play.

17:47Katy Mimari:Which is great, but you can't share it with any of your friends because none of them own the sunglasses to be able to watch it in.

17:52Taylor Holiday:They're on Instagram every time I, it's the second the game's over.

17:56Katy Mimari:Yeah. Okay.

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18:36Sean Frank:As a CEO, that's like music to my ears. Sign up now, and you can lock in 50 % off unlimited tests for the year. yeah but look i i i share the sentiment that like the a website's gonna look look more and more like a catalog over time right it's just like like the idea of a catalog is is archaic and like you still get them yeti sends them j crew sends them but like it's not how i'm actually shopping and it just makes sense that like in five years ten years like the your website just looks more and more like a mobile app today which is like a weird thing that like some stores choose to have um but john 20 of our revenue is on our mobile app yeah you have the perfect customer base for a mobile app it's like young moms they're on their phones you can send push notifications the whole point right

19:25Katy Mimari:is i think like each like you can't just call it brand like there's so many definitions like i can't imagine my mom's shopping in sunglasses i just can't but like i can totally picture your customers are doing it, Sean. Like, totally.

19:39Sean Frank:Yeah. Well, I guess the point I'm trying to get at is like, look, the past five years have had their own challenges, but like there hasn't been very many structural changes. It's like Amazon's still big. People still go after wholesale. But like the next five years is like, is the industry about to, you know, continue to climb up and like we'll see e-commerce penetration go up or we on like an edge and like there's a cliff in front of us. And like, that's what I'm trying to suss out. Well, five years ago, everybody was

20:03Katy Mimari:saying that brick and mortar is dead. And I don't think it is. I mean, you've seen a lot of growth, right? And you're like retail, Costco. Yeah. Yeah. Yeah.

20:15Sean Frank:So we, we had basically a$2 million wholesale business in 2020. And now it's, you know, in, in the eight figures and it is, it is probably the second fastest growing part of our business right now. Um, but I, we bring up things not changing. Like we're talking about shopping on AI sunglasses and they still use EDI. So it's like that world is very far away. But Katie, you sound pretty optimistic for the independent brand. So where do you think things will go for five years?

20:43Katy Mimari:I think things are going to change. They always change. Thank God. Because if we had to do the same thing over and over again for the next five years, we'd be miserable, right? Like things have to change and they have to evolve. I don't think we're going to fall off a cliff. I don't think that we're just going to like all of a sudden wake up and Shopify is dead and we have to find a new way to sell these customers. I mean, I started in an age where celebrities were in magazines, right? We just talked about that. Now it's influencers. Like there's, I think with change comes opportunity. And I don't know, I don't, I'm even all this AI stuff.

21:17Katy Mimari:Like I think there's so much that we're going to all lean into, but, but brand is something that maybe AI can't replicate. And, and I would say in the next five years, the brands that probably create relationships with their customers and stay real, right? Like who's going to be the first person to start an AI brand? You know, I don't know.

21:41Taylor Holiday:So I want to be clear. I completely agree that I think the future is full of opportunity. I think mature channels favor incumbents and new channels favor upstarts. And so like, think about like what comfort represents as an illustration of like growing faster, maybe than all of you guys, I think, I don't know exactly.

21:59Katy Mimari:Yeah, Hudson grew like crazy. Right.

22:02Taylor Holiday:And so as novel channels emerge, the problem is it's really hard for legacy players to shift their infrastructure into that new adaptation, right? Like they don't move like that. So what happens is depending on the size of the new thing that gets unlocked, you unlock these bigger and even more emergent things that can. And those legacy channels are still huge portions of the market. Target and Walmart and all of these things, even websites will exist that way. But the problem is the economics for a new person to enter in into those spaces becomes really, really, really challenging because all the digital real estate has been seeded.

22:35Taylor Holiday:Like you can't go in and win categorical search on wallets or categorical search on Amazon for silicone rings the way that we did back in the day. That digital real estate is gone. It's like Malibu Beach property. It's been sold up. So the new place has to emerge for those things to go arbitrage some not net new area of opportunity.

22:53Sean Frank:I agree completely on that. is that like the most dangerous advice people ever gave was to not sell on Amazon because it's so obvious now that the Amazon list is an asset. It absolutely is. Right? Just like your customer list, just like, because they built themselves into such a large incumbent and you just benefit from that, right? In a way that like, it's like being really tight to Walmart like Mike is. He can get end caps before anybody else. I can't sell my water bottles into Walmart because they have a vendor that they like, right?

23:18Taylor Holiday:Yeah. And I even think the biggest thing is that, so the biggest battle to be determined to me is like which product gets surfaced by the LLS when you talk to it. And there's a real question about whether that's going to be your Shopify feed, product feed, or whether that's going to be your Amazon product feed or a Walmart feed or a Target feed. And I really think that the most likely answer in the recent$10 billion investment from Amazon into OpenAI is an indication to me that there's a huge incentive for ChatGPT to make that Amazon because it's by far and away the best user experience from a fulfillment standpoint.

23:47Katy Mimari:Yeah, I think Meta's already optimizing for Amazon. I think everybody's optimizing for Amazon.

23:52Taylor Holiday:So to your point, like to Sean's point, if you didn't win the retail listing and you aren't the dominant player in that place around that category, that's a huge disadvantage to that space. But there are going to be places where that's unrealized or underappreciated. And I think there's going to be opportunity in that for a bit.

24:06Katy Mimari:Yeah. And for everyone listening that's not Amazon, I do not depend on Amazon. I don't think you have to have Amazon, right? Like. Yeah.

24:16Sean Frank:But the concern is that if the future is LLMs and Amazon is a leading player in that, they have all the money on earth and they can you know buy their way into chat gpt then like they they win more it's an incumbent becoming more in in entrist in everything we're doing

24:32Katy Mimari:do you think so that consumers will be hesitant because they know it's that lm's going to lean into paid advertising dude i i me and connor have this debate all the time like about the consumer

24:45Sean Frank:and i think the consumer doesn't care i think the consumer doesn't care it's paid i think the I don't think there's going to be movies in the future. I think people are just going to watch custom AI videos that are designed for them. And he's like, no way. He's like, that's so sad. I'm like, I think it is sad, but I think it's where it's going. I think I'm going to agree with Connor.

25:03Katy Mimari:I think I'm going to agree with Connor. I think that, I think actually it's going to put more value on things that aren't AI to us, to a certain customer cohort. Right. Like not everybody.

25:15Sean Frank:Yeah. And like, I, I want to believe in that as well because it's like this, Like people are going to go back to reading books and meeting in parks and like having fun and like being in the real world. But unfortunately, I think it's going to be people in their basement swiping and it's custom AI videos talking about how great they are. And then they buy a rich wallet. That's because you're just defining men.

25:32Katy Mimari:Women are not going to do that. We're going to be like, we do not want to be in our basements. We do not want to be living in AI. We want. Yeah. We want real life experience, I think.

25:42Sean Frank:Yeah. Yeah. So let's we'll see how the future plays out. This is a good five year episode. we'll come back with our AI glasses and we'll figure it out. I'm going to die if in three years I'm the one with the glasses on in here.

25:52Katy Mimari:And I'm like, okay, you guys were right.

25:55Sean Frank:So Katie, you're optimistic about everything going on. Now, do you kind of unpack your push into wholesale, right? Because you've just been D2C first. You have a massive nine-figure brand just doing your website and your mobile app. You're avoiding Amazon. Why are you going to wholesale?

26:11Katy Mimari:Not because I think it's like the next big strategic move and it's going to add a certain, right, like dollar amount to my bottom line, although it will be profitable. I think it's for us, it's more a stepping stone to what my ultimate goal is, which is owned retail. So, you know, I've kind of our our big one in our industry is Carter's, right? That's not doing as great, but it's a three billion dollar industry that that or brand that 60 percent of the revenue comes through retail. and I think that I still think there's gonna be a lot of opportunity in experience with retail and so the way I see wholesale is almost you know and training my company right and every part of it is what's going to work what is the um you know what are the skews that works what are the different product types the product assortment we need like I could go I have a brick and mortar right now I could go open up 10 more but how interesting is a whole store with pajamas and swim in it like i need all the product categories that are going to have the like gifting experience that i want in own retail and i think going into wholesale right now is going to let me test and really see what does well what doesn't and then also i think it's just kind of de-risking myself from meta the nice part about babies is it's a life event getting pregnant you know right and it's like buying a wedding dress and they still want to go in and touch and feel uh and see in person and so i i do think it'll be a nice um like top of funnel move for us too yeah to unite the two ideas it's like right now we have a industry changing event that is like on par with the internet right like

27:58Sean Frank:Shopify is an e-commerce company. They have to become a commerce company because there's going to be a fight for the LLM chatbot. There's going to be a fight for the sunglasses. How those people shop, it's going to be a fight. And the reason why I'm doing wholesale, and I'm glad you're doing wholesale too, is it's just a diversification. It's like, look, if the experience, real life people win and people are back in malls, I need to have some exposure there. And I'm doing TikTok shop now. I've talked all year about how to do TikTok shop sucks. I'm like, there's no way it's going to work for my brand.

28:28Sean Frank:like it is a we're a luxury price point men's wallet it's never going to work on this there's tons of knockoffs i'm spending hundreds of thousands of dollars a month to get a hundred thousand dollars a month in sales because i just need diversification i have to try it all and

28:42Katy Mimari:you're gonna have to follow like make sure those customers you're acquiring through there are valuable customers right like because it's you're still trying to understand if it's a profitable channel or not i just i do see the value in diversification for sure but i don't think you have to do i don't i don't think there's like one big win right like at some point these as a brand you get big enough where like you've really leaned into product diversification like you said right like most of your growth this last year is in new product categories

29:13Sean Frank:yeah all of my growth yeah i think the core wallet business is probably flat but like that's why i can't tell you where the puck is going i know the puck is going to move but i know what the puck's made out of and that is like for me it's product like that's what i'm doing

29:28Katy Mimari:it's just more product and i think it's so smart because what if all of a sudden you don't have credit cards anymore right and wallets become obsolete then you're not you don't have all your eggs in one basket that's that like your people are gonna still possibly get married want wedding rings or right like lean into luggage or or whatever you've got up your sleeves right now um i think product diversification is probably one of the safest bets brands can make right now

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30:53Taylor Holiday:But right now it's the arbitrage, right? Like I think what people are finding is that I actually think that the secret here is that the underlying massive cost to run and grow an e-commerce business is actually the creative plus the media, right? So it's this idea that you have to go out and produce all of these assets and then you have to spend money to distribute them in hopes that they generate some positive return for you in this like marketplace that you don't actually know the price of until you go and spend it. And it's like that thing is really, really expensive. TikTok shops did this really smart thing with social commerce was that they introduced this layer and said, we actually will allow you to outsource the creative production portion.

31:32Taylor Holiday:And you can create this affiliate system by which you'll get all of this content generated for you. Right. And it's going to generate all these impressions and views for the sake of growing this potential channel. We'll subsidize it for a bunch of time to help all of these people be incentivized to make a bunch of money and make a bunch of content for you. and now they've done an amazing job of making every brand believe that they have to be there for this halo effect this is like the ultimate move to make people believe is that like you have to be here you're going to make no money we're going to make all the money and then you're going to capture the value over there and you have to do it and that's what they've managed to pull off and it's because we're all so desperate for this creative asset of content creator in particular and they understand that that's like the authentic culture moving development and so it's like this is a mechanism to that asset as much as it is the revenue isn't that the one thing that we're certain ai is going to replace right like we see it depends on who you ask i don't know like i i'm

32:30Katy Mimari:not an ai i'm not on the gravy train but i do know that like the creative stuff i think it is there

32:38Sean Frank:yeah look and this is what me and connor debate about because because when you the affiliates have two things to them right they have the distribution that it's to pay for, and then they have the content creation. And I think nobody will debate that AI content creation is almost, I mean, I will call this point indiscernible. I think if you actually can look at an AI UGC video and a normal UGC video and actually tell them apart, you're a unicorn. And that's us. That's us that see it all the time, right?

33:06Katy Mimari:Like the average person, I agree, cannot. Yeah.

33:09Sean Frank:But then will those videos get distribution? That's the question. I think they will. I think people's TikTok feed will just be AI videos. Connor doesn't think so. He thinks people are going to still follow.

33:20Taylor Holiday:The other thing I'll tell you though, and this is again, I work with 200 brands. Okay. There isn't a single one of them, not one of the 200 that has more of more than 50 % of their creative production through AI, not one. Oh, they are so lagging. It is there. And it's because the entire system was predicated on this idea that there's a set of brand standards that an individual holds the key to and everything flows through the gate of this individual person. It's like the most inefficient creative system for the modern landscape you could ever imagine. But that's how it gets gatekept. AI just blows that apart.

33:52Taylor Holiday:It's like it overwhelms their system with things that they don't like. And so they are so slow to engage it.

34:00Sean Frank:And I would say 50 % is an insanely high threshold right now. I would say the average brand's at 10%. There's one brand I know that is 100 % AI and it's minerals. and maybe you guys know those guys, but you should check it out if you don't. They just run the most insane AI videos over the top and they're scaling like crazy. I mean, they'll do high eight figures this year. It's just, it is just like they take a very -

34:26Taylor Holiday:You guys ever listen to the Mobile Dev Memo podcast with Eric Seifert? Have you ever had him on? He's awesome. If you haven't, you should. But he interviews like a lot of researchers in the AI space. And he had this group of researchers on that did a study recently about human interaction with AI and whether AI could outperform humans creatively. And they did it in three ways. One was just human designers. One was human designers using AI. So they got to like, here are the standards, here's the prompts, the output. The other one was like unchained AI, like give it no boundaries at all. Which one do you think what of those three?

34:55Taylor Holiday:I'd say B. No, it's the unchained AI, right? Like the one with no constraints. Like when humans inject themselves into the AI interaction, they impose all the biases and limitations that make it so hard for humans to create diverse content. It's because we only extrapolate out of our own lived experience. It's so hard for us to, I can't be you, Katie. I don't know how to speak to your customer the way that you do, but an AI is unbound by that and will create anything relative to the objective. And so I think you have to wrestle with that. I think Brad should listen to that and wrestle.

35:24Katy Mimari:But so you think AI is going to learn how to, because humans, we naturally change all the time. Our behavior changes. You think AI is going to stay in tune with that?

35:34Taylor Holiday:I think it is. I think already the AI would produce better creative if you removed your interaction with it that it does when you try to prompt it and guide it. I hope you're wrong. Yeah.

35:48Sean Frank:Yeah. And like this, this is why it's such a weird take on the future. I want to go back to what TikTok shop did so beautifully is everyone tries to solve, you know, a very small percentage of the actual e-commerce stack, right? Out of a hundred percent revenue, payment processing is 2%. Your people is 10%. Fulfillment's 10%. COGS is 20%. And for a typical brand, 30 % to 50 % is actually post-marketing. And people always picture me different SaaS platforms or new SaaS they could build for e-commerce. And I'm like, look, unless you're solving that 30 % to 50 % problem, it's just you're not going to build something very valuable.

36:24It's like, build me

36:25Sean Frank:a software that actually gets my new revenue. And nobody's been able to do that. It's because it's impossible. How do you get impressions? how do you get distributions how do you actually get new people coming in and tiktok shop did it by getting all these affiliates to make a bunch of content for you and then they packaged the commission the sale everything to that distribution it's just a different way to get you know uh you know ads but i also think they're going to stop i mean they've stopped subsidizing it i think tiktok shop is basically going to go away because the ellison family is buying it and they just want

36:57Katy Mimari:to control the media well is that a good thing or a bad thing because a lot of reasons that brands didn't get on TikTok shops is that there was so many knockoffs, right? Like all the junk that was on there. So, but now if that's going away because of tariffs and right, like the whole thing, is it a good thing or bad thing that shops goes away?

37:17Taylor Holiday:I think you want as many distribution opportunities for your business as possible. Like, because the reality is, is that every piece of digital real estate gets competed down to zero over time. Like this is like the unfortunate truth of every listing where that's an auction based environment. There's always going to be somebody that's going to be willing, whether they're subsidized with venture capital or whether they have better LTV than you or they have alternative streams of revenue like Amazon, that's going to be willing to pay a little more for the click and a little more for the click and a little more for the click until the categorical search term for wallets becomes profitable to no one.

37:48Taylor Holiday:And then that channel gets disintegrated. Then the next one gets disintegrated. And so the unlocking of new channels is really important to the continued growth of the ecosystem and for brands because otherwise the stuff just gets bladed down to nothing.

38:02Sean Frank:right but taylor i have one counterpoint to that is that yes i i would love there to be more channels more apps more new ad platforms because new ad platforms the first three months of app loving was free money dude it was amazing yeah but then as soon as soon as you have to comp that next year it gets really really hard right so new ad platforms are better for everybody but i think we're going to a world where incumbents will win more so if you're not an incumbent what what is going to be the newness that you can actually go in there and win. And it's new products coming out. So it's like consumer taste is going to change.

38:36Sean Frank:There's going to be some new supplement everybody wants. Like it was creatine for a long time, right? The past three years, it's been about creatine. So like if you can't win Amazon for wallets, cause I'm there, or you can't win, you know, Facebook or meta ad auctions because Katie's there for baby clothes, what you have to do is look for new places, new emerging white space, which was creatine. Or right now, I think the biggest opportunity is just pouches. Like people are doing Xen nicotine pouches, pouches for everything, pouches for vitamins. I think that's going to be a huge category and it's new.

39:07Taylor Holiday:So think of everything existing on an XY matrix of volume and competition, right? And so what you're describing is that when trends emerge, you get a period of arbitrage where the volume of demand outpaces the competition, right? And that's what that is. That's like arbitrage and it shows up in the click price relative to the conversion rate for the brand. eventually because we live in a perfectly capitalistic system all of it gets competed down to zero and the perfect illustration of this is like what happened with masks and covid like the day on march 18th the the value and the conversion rate of a click of face masks was like not that like there was no volume and there was a little bit of supply and it was a dead market and then suddenly the volume of demand went through the roof and a bunch of people made a

39:47Katy Mimari:ton of money for like two weeks yeah and then every and then everybody on earth started selling

39:52Taylor Holiday:face mask and the supply completely balanced relative to the demand then the demand collapses and everybody has too much supply but people go broke that happened in a ton of industries but it happens so fast in every category and this is why like sean i think i i've sort of like lauded you because i think there's this is where having some sort of motive relative to ip and the protection of your ip defends the collapse of that uh those those dynamics yeah i think that's what

40:18Katy Mimari:you're saying sean that's why it's so important that that's going to ultimately happen in every new category you've got to be the brand that's willing to go okay that that one has had its time i'm on to the next and then you look for the next big opportunity because especially with ai it's probably going to bring that window of opportunity even tighter because if the like ad buying turns into well this is the terms that right like if it becomes so automated that it can optimize faster

40:45Taylor Holiday:then I think hot trends are going to die quicker also for sure yeah and going back to the x y axis

40:53Sean Frank:the z axis is new channels right so it's like this there's new trends right and then new trends have attention and then eventually competitors come in and compete it away but when you add z there's just like there's you could sell different places so it's like creatine gummies had had the d2c moment it had the amazon moment they probably haven't had the retail moment yet that's the z access is that like being the first there unlocks.

41:19Taylor Holiday:That's why new channels are so important. And I think, but to the point of the defense, I think one of the things that, again, this idea, like you said, wallets are flat. I think the reality is for most businesses, what happens as a category matures is that it actually declines substantially. And so the new thing that they add on is actually just subsidizing the deficit. So I'll give you a couple of things that we were intimately connected to for a long time. Solo stove, ruggable, born primitive selling women's leggings. In these categories, what happened was because there was no defensibility at all, you had this massive run-up of demand in these product categories that when they leveled off or when the competition grew and the demand softened, they weren't flat.

41:54Taylor Holiday:They were down a lot. And so anything new that they tried to add was just, it was like a falling knife and they were trying to stack on top of it. The fact that you can hold wallets constant is like really, really important to the potential for the overall growth. And for a lot of brands, holding the category constant is actually really, really freaking hard because it all gets competed away a little bit further, a little bit further over time.

42:17Katy Mimari:But don't you think it's because some of those brands grew so fast that they were a lot of trend-based? And I think Sean's, like Ridge has longevity, right? Like it's, I think he's built a really great brand and that's what carries it. Whereas brands that grow super crazy fast, I do do you think that sometimes they crash? Yes.

42:37Taylor Holiday:There was artificial demand from COVID that like is part of that story for sure. But like women's leggings are a little different. It wasn't like in the same way, the outdoors industry. But if you go, if you go look at the SERP page and you type in like black women's leggings right now, there's not a profitable click on that page.

42:51Katy Mimari:Yeah.

42:52Taylor Holiday:Five years ago, there was a lot of them and you made a bunch of money. And, but now like a business like Born Primitive, who's an awesome customer and has done amazing work by shifting their business almost entirely in the product categories that they're in was all women's leggings four years ago. But now that product category, Allo and Viore, and like the biggest brands in the world with the most margin and the most money ever competing, they can't win in that same way anymore.

43:16Katy Mimari:Yeah, they just got to try something new.

43:17Taylor Holiday:That's right. And so they evolve into new product categories entirely. But for them, they actually have to subsidize the decline, not just like the constant revenue. That makes it even more challenging.

43:29Sean Frank:If you're scaling an e-commerce brand today, ads alone aren't enough. After Sell focuses on the one moment that every brand already owns after checkout and turns the post-purchase moment into more profit. Monetize every order with post-purchase offers and thank you page experiences without disrupting checkout or hurting conversion. Enterprise-grade tech used by Gap, Ticketmaster, Macy's, and Target now driving results for brands like True Classic, Hexclad, Ridge, and Jones Road. I would know. This is the reason I ended up buying three pans from HexCloud instead of two. Aftersell has already generated over$1 billion in additional revenue for e-commerce brands, revenue that doesn't require more traffic or higher cap.

44:08Sean Frank:So check out Aftersell and tell them that the operators sent you. Yeah. And it's a sense of paranoia that eventually, I wrote this down, but right now, we're all pros. We are professional athletes. We are pro players. We're playing pro ball. That is acquiring customers. And eventually our leg is going to give out and we're not going to be able to do it anymore. And you have to have some sort of stable to retire on, right? So if it's good Amazon listings, good wholesale listings, a bunch of diversified products. Because when you have black leggings and you scale them from zero to 50 million, you're like, I'm going to take these black leggings to 500 million.

44:48Sean Frank:But no, eventually you get wiped out. Because then the next day people are like, I like red leggings, you know?

44:53Katy Mimari:And then you're like. Totally. Totally.

44:56Sean Frank:yeah and and solo stove because i'm close with that on a personal level um they they did just sell every single person who would ever want one one and they had nothing because they last forever you don't even replace it you just keep your solo stove forever yeah from i mean i i know spencer over there when they were doing like 30 million they took it to 400 million and i'm like yeah that's too big it's like traeger grills traeger grills are publicly traded disaster of a company right now great product so do you do you think that a brand can get too big where they can't

45:30Katy Mimari:introduce new product categories because they're the expert in one like did we sean like start introducing new product categories at just the right size where we still had kind of like the brand recognition behind it so when you came out with rings people were like oh yeah it's a great brand they're good quality i'm gonna try that but like if you get so big that you're 500 million solo stove and they're like, now we're going to do, I don't know, bikes, then are people like, what? You're a stove company, you know?

46:00Sean Frank:Well, yeah, we've had this problem where we'll launch something and this is actually in 2018. So the wallet business was doing like$20 million a year or something. And we had a backpack and the backpack was doing$3 million a year. And we shut the backpack down because we're like, it's only$3 million a year. I can't get excited about this. If I would have kept that backpack in market today, it'd be a$40 million backpack. And everyone would be so excited by that, but I was too dumb to realize when something was good. And so that happens at a really big company. If you're doing a billion dollars a year in sales and somebody launches, somebody does 5 million, you're like, this isn't worth our time because they don't realize how long it took to get to a billion dollars in sales.

46:41Sean Frank:These things just take forever. And then you get so big, we're like, you're Lululemon, you launch shoes. like your expectations are too high they want to do a billion dollars in shoes in year one that is

46:51Katy Mimari:never going whereas their sales and shoes probably is like a really good whatever 50 million dollar

46:57Sean Frank:branch of their brand yeah and if anyone else did 15 million dollars in year one for shoes they'd be ecstatic but not if you're literally totally i also think that if you control the distribution

47:09Taylor Holiday:it also gives you a better opportunity as well. Like back in the early 20 or late 20 teens, there was a brand down in San Diego here called Skills. I don't know if you guys ever remember this brand. They got enormous selling like sports training equipment. Think of like mini hurdles, mini basketball hoop, like all these things. They basically would license the IP of these like random tchotchke toys, but they got enormous in distribution through Walmart and Dick's Sporting Goods, every major big box retailer. And that was all their distribution. And they left DC alone. They had none of their own channel.

47:40Taylor Holiday:And then what happened was every one of those retailers, one by one, started white labeling their commoditized product and just replacing them on the shelf, replacing them on the shelf, replacing them on the shelf.

47:48Katy Mimari:That's what Target did in the early 2000s.

47:50Taylor Holiday:Every retailer ultimately is going to do that to anyone that they think that they can create marginal leverage against, right? Like if they think it's a commoditized category and they can make more margin, they will do it that way. But the problem was they had no brand leverage. They had no. So introducing a new product, Dix was just like, we're good. Thanks. They weren't going to reintroduce that when they're competing against them now in the same place. So in that case, they couldn't develop their way out of it because they had no direct business at all. And so they were a$500 million business with$480 in retail.

48:18Taylor Holiday:And all of a sudden, those guys started collapsing. There was no way to get it back up over their operating expense against it. And so much of it depends on how do you have the ability to take that new product and control your ability to distribute it to subsidize whatever decline exists. Otherwise, you end up in a lot of trouble. Yeah.

48:37Sean Frank:yeah this is this is why when you can currently acquire customers you have to do it right if you can do it profitably if you can build up new lines of business because eventually it's going to get too hard um okay this is really awesome we brought up products a bunch i'm gonna give you guys some my uh my product insights um without a doubt my biggest win in 2020 to now is launching new products in 2020 we just sold wallets we were 100 a wallet company because i shut down that backpack I thought you got earlier. And in 2025, wallets were flat year over year. And in 2024, they were probably up a single digit percentage, basically flat again.

49:14Sean Frank:And that means for like two or three years in a row, all of my growth has been everything else. And the company's grown too difficultly in that time. We're lacking tens of millions of dollars in net new revenue from other stuff. And that's just because I realized how difficult it is to sell the next personal wallet, right? So we, I think on us.com, so our US only Ridge store, we acquired like 600 ,000 wallet customers in 2025. So there's a ton of customers that we have Amazon, we have international stores, we have everything else, but that is just people buying wallets. So how am I going to grow that next year?

49:50Sean Frank:We're talking like, this is the city of Seattle basically. And they have to, I'm going to comp that at least. How do I get that to be 1.2 million people, right? That's just really difficult i mean it's a durable good that sells for a hundred dollars or whatever uh so our expansion has just been all these new products we've launched and i'm going to continue

50:06Katy Mimari:you're using i know taylor you mentioned like talking about teams but you're using sean really the same team for all the different product categories right like you don't differentiate like right social posts for all of them and your graphic designers work for all of them like there's not specific teams for each product category is there

50:25Sean Frank:no so uh the media buyers are somewhat focused yeah but everyone else it's the same it's the same graphic designers the same studio same product team everything like that and this goes to taylor when we talk about the marginal increase in productivity from employees we have 50 full-time u.s employees right now which is like the lowest it's been not including fulfillment right that's just office yeah that is just just office um we don't do any of our own fulfillment so we have less office employees than we've had since 2022 getting way more way more revenue and it's just because we found a way to have a lot of shared resources across all of that but by the time this podcast comes out our new brand will be out and we launched a brand called gut culture so this is under ridge this is the the same equity owners and it's i've talked about how great supplements are for so long.

51:18Sean Frank:It's my first attempt to try to do a supplement brand. So the same team, we put our money into it. We launched it. We spun it out. And there'll be some overlap. You'll know it's from Ridge. If you buy from Ridge.com, you'll get a sample in your mailer. And we have a progress bar. You'll probably get free samples in the progress bar. But besides that, it's a fresh ad account. And the goal for the first year is$5 million. Oh, you're going to crush that.

51:41Katy Mimari:You're going to totally crush it.

51:42Sean Frank:Yeah, but if I launch a Ridge product and it only does$5 million, that's kind of like a whatever. But I'm like, this goes back to anchoring over a disposition super well.

51:51Katy Mimari:So you're sandbagging yourself on purpose so you can celebrate when you crush it.

51:56Sean Frank:I don't know if I'm going to... I've never used Recharge before. I've never used Subscription. I have no idea what I'm doing over here. But it's like, look, if we can hit$5 million, we should be so stoked. It's like, how do we run this thing as close to profitable as possible? So this is like me going into the world of product, what I think is the most important thing.

52:14Katy Mimari:And I think you saw, I think it's important, like you saw opportunity in this one category. People aren't doing it yet and you're leaning in and taking a risk, right? Like, and I think you've got rich to carry you through it. Really? Right? Like just, I mean, how many orders do you ship a month that you're going to put samples in? That's like free. I mean, that's like people pay a lot of money to do that. You know?

52:40Sean Frank:Yeah, so it's 50 ,000 whatever orders you're going to get every single month. But I've bullied Mike for so long. I'm like, Mike, you have to sell hydration stuff. Sell water bottles. Get out of a horrible business. And he launched Trevi. Trevi's been a big success. And I was like, oh, I got to take my own advice. I got to get it on this. So yeah, fiber first hydration drink.

53:00Taylor Holiday:Well, I just think that our job all the time as CEOs is to increase enterprise value in any way we can. And if you're telling me that you can't take the capital that you have in the bank and deploy it against growth of wallets, and if you were to launch another hard good, let's say you added$20 million of a hard good business at 10 % end margin, it's$2 million of added EBITDA to your business,$5 million of subscription revenue with a growth rate that looks like this might be worth more to the enterprise value of the business, to be honest. And so I think some of this is just like a good capital allocation relative to the opportunities available to you.

53:35Taylor Holiday:And I think you've got to look at, like, I'll give you an example. In my business, my service line revenue, like meta media buying in Google is flat. In part because the price that you can charge for it is like on a slope like this. We used to charge 10 % of spend to manage a Facebook ad account for somebody who's spending a million dollars. Holy smokes, you are killing people. That's crazy. You get paid$100 ,000. You are taking advantage of everybody. That's the market rate.

53:59Katy Mimari:Do not pay 10%. That is insane.

54:02Taylor Holiday:Katie, there's lots of people still paying that today, but the point is that the market moves.

54:07Katy Mimari:You people that are doing that, you call me or email me and I'm going to teach you how to negotiate. That is insane. That's right.

54:14Taylor Holiday:Well, so you're exactly right. What's happening is you're awakening to the market dynamic of what's available to you for a price. And now the price is more like$5 ,000 to manage that same ad account. So the underlying service market expectation went from$100 ,000 to$5 ,000. And so my growth in that category, well, I can't go, my business is going to grow by more meta media buying. Well, not at all, actually. That's flat or slightly down. But as we get into now we launch emails as service or Amazon or the forecasting or whatever it might be, that's the same thing for me. So it's no different. The service expansion is no different than product expansion in your world.

54:47Taylor Holiday:And the market dynamics for all of them relative to my opportunity in the future is just like what

54:51Katy Mimari:your assassin and it's the same thing we're talking about like your clients ultimately right like trust you and so if you're like now let me help you manage xyz it's gonna be an easier sale than acquiring a brand new customer that's right exactly yeah the ironic thing is actually it was

55:06Sean Frank:probably easier to manage facebook ads back when you could that's right now that it's harder exactly literally like actually yes you're right yeah so that's what i'm doing right now to win right like how do i plan on ridge growing as a business it's like look ridge will still grow this year because of these new durable categories we're in we have enough capital where i can still expand tech i can still relaunch travel i can do all these different things but like if i have excess capital either do another distribution which like what's the difference between doing 10 or 12 like million dollars paid out in a year who really cares right and or i could really try to build enterprise value with new brands and i want to launch a new brand every single year but that's what i'm doing as a brand.

55:45Sean Frank:I want to hear what Taylor is advising people to do. And then Katie, I want to hear what you're planning on doing for the next couple of years.

55:50Taylor Holiday:So Taylor, what are you advising? Not too dissimilar from what you're describing, which is one, our job at the beginning is to help them set the baseline expectation of the future of the core thing that they have. I think this is a thing that most people are not rooted in reality. So a lot of our job is to anchor in what is true today, that your core business in the future, you can expect this level of growth off of that. From there, we sort of get to hand them back optionality to make the kinds of decisions you're describing, which is that if you think your core business for wallets next year, if someone was like, oh, it's going to do 50 % growth next year, well, then they wouldn't make the decision to do the gut health thing you're describing.

56:22Taylor Holiday:But when you start to realize like, hey, your CAC is on a declining slope like this, every day the marginal frontier moves closer and closer to you, like you can spend less and less money, we need to think about product expansion, we need to plan some new moment or big swing, we need to think about distribution expansion. And so a lot of our job, because we don't do their product development or even manage their, you know, like marketing calendar, so to speak, is to help them anchor what is true today and the potential capacity of your business for the sake of making good decisions like the one that you're describing.

56:49Taylor Holiday:And I think that data clarity and clarity of what is possible out of the core thing gives them back the optionality to go. And then from there, they're making the same kinds of decisions you are, which is, okay, out of this then, do we need to expand distribution? Do we need to expand product categories? Do we need to take some bigger partnership swing to alter the dynamics of the demand for our product in the present state? Those are all the things that you sort of sort through from there on.

57:12Sean Frank:yeah yeah um well said katie was i agree i mean i i don't think there's one big swing we don't

57:20Katy Mimari:have one big swing lined up right because then you're putting it's so much risk um ours is for sure in product expansion sean and not just in the baby too we're uh launching pet in the next few months which will be amazing and i feel like a lot of people think you know their pets are their children. And so it kind of correlates, right, with Caden Lane. I think that will be a big opportunity for us. We have a lot of white space in channel expansion because we have none. So there's a lot of opportunity there. We're going to lean into corporate gifting, which is kind of fun. And then I'm going to try a thousand different things.

57:57Katy Mimari:I think we actually launched 11 new product categories this last year, which is insane. But like what you're saying, some of them were just$5 million wins. And I think, but if I launch 10 of them and they're all$5 million wins and I get to use the same resources and not overly complicate my operations, then there's a lot of growth opportunity there. And I think that's what I'll always lean into. Like, I just don't see there being one, and then an owned retail. I am going to be massive with owned retail one day.

58:34Sean Frank:yeah katie what your business and my business have a lot in common and that i call them blobs is that like there's a lot of different ways totally down right if you're huts in a comfort you're like i'm gonna do a billion dollars in revenue off a tiktok shop i have this perfect flywheel i'm gonna scale it forever but we're way more like we have to grow slowly it's like and and the blob eats everything which is slowly over time so like we will get and i'm okay with

58:58Katy Mimari:the slow. I feel like, I, my little thing fell. I, I feel like the blob feels safe, right? Like I've, I've been doing this for 21 years and I have seen a lot of rocket ships crash and it's come, I'm not saying Hudson will comfort is amazing. And he's had product expansion. His blankets are freaking amazing. Um, but I don't think it's bad to be a blob, Sean. Right.

59:26Sean Frank:Yeah. Yeah. And I, hate to pick on Hudson, maybe like a coffee alternative, right? Like they're just like, we're going to do subscription coffee alternative on DTC. We're going to scale that forever. And it works until it doesn't. We're being a blob and just like slowly eating the edges. I think there's a lot of work there. And then I want to talk, I always say this, not all of my product wins are great. The reason we launched this new brand Gut Culture is I did mini knives on my website and they cost$350 ,000 to make them, to buy them, to ship them to their website. And then I sold$42 ,000 of them in an entire year.

1:00:00Sean Frank:And I'm like, well, I just lit money on fire. Like might as well do it with something that has high upside, not these. But you're not doing it right.

1:00:07Katy Mimari:If you're not failing on some of the product categories, like you're just, then you're not trying hard enough.

1:00:12Taylor Holiday:Well, this is the thing that like, I think is a weird, we have a weird relationship with the way we think about the expected value of our money where like, we'll gladly go into the meta arena where we think about the bounds of outcome being like 0.8 to 1.3 as like the expected value of a million dollars investment. Whereas like new product categories have such asymmetric upside that it's hard for people to conceptualize like the EV of that bet. So like, and they become like dominated by the outcome. So like a mini knives bet, Sean, like it's easy to sort of play Monday morning quarterback that like, oh, it didn't work.

1:00:42Taylor Holiday:But if the percentage likelihood, this is a probabilistic bet on the future, right? If there was a 20 % chance that it was going to be worth$50 million, well, then that's a$10 million expected value bet. So how many times can you deploy$300 ,000 against an expected$10 million? You should do that every chance that you get. And it doesn't have to be big swings at the beginning.

1:01:03Katy Mimari:You can ease into it because you don't write. Like there's always going to be money left. And it means you're going to fail 80 % of the time.

1:01:08Taylor Holiday:It's a 20 % likelihood of achieving an outcome. So most of the time you're going to fail and it's still the right decision. Totally. Yeah.

1:01:16Sean Frank:Every SaaS company says they are AI powered, but very few can explain what it actually does for the revenue of my brand. This is why PostScript's approach stood out to us. They don't just build AI for demos or buzzwords. They built it to drive real incremental revenue. PostScript's AI called Shopper, it shows up inside of SMS at moments with real buyer intent when shoppers are likely asking questions, hesitating, maybe even about to drop off. Shopper can answer product questions instantly, answer questions about fit, availability, recommendations, order issues, the kinds of stuff that people usually bounce for.

1:01:48Sean Frank:This means more conversions, higher AOV, less lost demand. so you are driving more revenue and doing it more efficiently. Check out Shopper from Postscript. We use it at Pila, which is why I am telling you to check it out. Yeah, and so our launch is, Gut Culture costs about$350 ,000 to launch, but I'm doing another sleep-focused brand. It was$75 ,000. So you can launch these things pretty cheap, especially with AI now, bro. Like, I three-click prompt in Lovable and get a website out of it, and it's like, okay, this is the future where this is going. That's the part of AI I love.

1:02:21Katy Mimari:It has really simplified some of the things that used to make it really hard to get a brand or new product on its feet.

1:02:29Taylor Holiday:So this is the question I texted you guys because I'm wrestling with this and I'm curious how you guys think about this as brands. How do you contextualize what the expectation is of your people in this world? So, Sean, if you can build a brand like the way you described for$75 ,000, then what is each person in your company expected to be able to do? Like, how high is the bar of contribution for every employee inside of a company?

1:02:53Katy Mimari:I know what Sean probably, Sean just tells them you're going to do it. And if you don't like it, get out.

1:02:58Taylor Holiday:But like, do you have 10 times the expectation of them this year than you did last year? Like, how much more output do they have to generate for the same amount of money?

1:03:06Sean Frank:Dude, the future is here and it's uneven. So we have three, maybe five people on the team who are AI geniuses. like literally their output is going to match the entire rest of the company right so we have like five people who are doing the same work as 50 people and then it's getting as many of those people 50 people to not be scared of ai and lean into it and try it and experiment with it and we're using a lot of tools and coaches and teaching to get that done but like if you get it and you jump in on it you are really it's like you know people talk about 10x engineers though you're like a hundred X employee if you can go in there and build these systems.

1:03:42Sean Frank:But the problem is you can't find those people. You can't hire those people. They either, you innately have it or you don't. And then getting them to actually try to be coaches to get the rest of the people.

1:03:50Katy Mimari:But they're coming out of college right now. I think, I think that that will be an entire specialty, right. That they have. So, but real, but like what you're saying, Taylor is how do you, if Sean's coming out with this new product category and his whole team knows nothing about supplements or whatever, then how do you get them to absorb the work? Is that what you're saying? Like, or do you just hire again?

1:04:12Taylor Holiday:I'll give you an example of an experience I have. So we have a marketing team at CTC. And if I were to say to them, Hey, I'm going to write a blog, I'm going to write my 26 predictions for 2026 blog. I want you to turn it into a blog post on our website, a deck, a set of graphics for IG stories. They would say, great, we'll get back to you in a week. and they would go off and I'd be like, that was amazing. Thank you for making me better. In Manus, like while we're talking on this podcast, I made a 26 slide IG story graphic set off of a file I uploaded that's better than any design anyone could give me in a week.

1:04:47Yeah.

1:04:48Taylor Holiday:What does my designer on my marketing team now have to be able to do to be worth the same amount of money they were two years ago?

1:04:55Katy Mimari:They have to be able to do what you just did because it shouldn't be you going in. But like at what scale?

1:04:59Taylor Holiday:if I can do it myself in seconds, what do they have to be able to offer to be able to contribute to the ecosystem? Right.

1:05:07Sean Frank:Well, and it's moving. There's going to be less individual contributors and everyone just needs to be more of a manager. But the thing that they're managing is AI tools, right? So it's like, because either you're a one-person team and you do all that yourself. And now that one-person team can do$5 million a year in agency revenue, right? Which was impossible before. or you're still going to have all these people. You're going to have less of them managing less individual contributors, right? And you're going to have one head of design and then they're coming up with, you know, everything you ever tweet is getting put into decks, is getting put into everything that's happening automatically.

1:05:42Katy Mimari:And maybe more project managers and more communicators to make sure everything's flowing seamlessly because the flip side of that, Taylor, is you created it so fast that is there other parts of the process, right? And getting something live that's not automated or not AI yet. And then you start to get this backlog, right?

1:06:00Taylor Holiday:Yeah, well, the annoying part is I have to go log into Instagram and one by one upload them into my stories. That's the annoying part. But yeah, it's hard to fathom what the appropriate expectation is of people in this world. That's what I'm struggling with. It's like, are you outputting enough? I don't even know what that means anymore. That's what I feel like I'm struggling with.

1:06:18Sean Frank:Well, dude, and that's why, okay, people talk about jobs are going to go away, right? They're like, oh, we're going to fire everybody. there's not going to be any jobs. My argument is most jobs are already fake. It's like, what we're doing right now, all of us are being paid for. And a hundred years ago, I would have been a coal miner or a farmer. So look, my job's fake. Everybody's job's fake. But yeah. Anyway, good AI point. I want to end the podcast and some practical tips. I have one that I stole from Taylor and I shamelessly steal stuff from people. So I am I'm not afraid to steal good ideas when I hear them.

1:06:53Sean Frank:We do a giveaway every year where we give away a car. I stole that idea from somebody else. I was at a Nick Shackelford event. And so I heard someone say that it worked for them. I'm like, oh, I'm just going to take that. Now it's like a cultural phenomenon in DTC brands. Everybody gives away a car every year. And I definitely took that idea from somebody else. So feel free to take that idea. But that comes from this concept. Taylor has about four peaks. And it's that like every quarter, there needs to be a funnel clearing event. So every brand has two built in. If you're a female first brand who sells to older women, you might have a Mother's Day.

1:07:23Sean Frank:And we have a Father's Day. And then everyone has Q4. What are you doing for back to school? What are you doing in Q1? And so at Ridge, we have an anniversary sale in Q1. We have Father's Day in Q2. We have our car giveaway in Q3. And we do Q4.

1:07:37Katy Mimari:But you're forgetting, what about Valentine's and Easter and Labor and Memorial Day? And there's more than four, surely. Right.

1:07:44Sean Frank:Right, but this is four leaned-in campaigns that are designed to have a big promo attached to clear a funnel. We still run Valentine's Day sales. We'll do a Labor Day small sale. But this is like, you know, we spend close to a million dollars doing the sweepstakes every year. Yeah, just to fill your funnel for people. Because it's like, this is, yeah, this is like a big flagship event. So this is a good tip people should steal. Taylor, maybe you link out the four funnels. Do you actually still believe in this? It's absolutely.

1:08:10Taylor Holiday:We call it Four Peaks Theory. And Katie, you're advanced. So this is like, we're helping people who don't have four yet. Usually it's, and the key, there's two other key points to it. What I would encourage you to do as a takeaway, go export your Shopify revenue by week and draw the circles where the peaks are. And you're usually will see some valleys. And the problem with the valleys is that the next thing I want you to do on the overlay of that graph is I want you to draw a point on the line when you have to make your largest PO. Because the problem with the two peaks is that you usually have to make your largest PO in the valley ahead of the big peak.

1:08:39Taylor Holiday:And so that means you have the worst cash position that you have while you have to write the largest inventory of purchase of the entire year.

1:08:44Katy Mimari:I have anxiety listening to you right now. You do not need to have these ginormous peaks and valleys, people. Like, spread it out a little bit and place more frequent POs.

1:08:55Taylor Holiday:Well, here's why the peaks matter. Let me give you one more thing.

1:08:57Katy Mimari:And the valley is always after the peak also. That's right. That's right. So you want to be flush with cash.

1:09:02Taylor Holiday:You want to be flush with cash when the valleys come. But the other thing is meta, which primarily most of the people work on, is constantly a relationship between the price of the ad inventory relative to your conversion rate. And every normal day of the year, your availability for volume is tied to that conversion rate against that price. And what happens is Q4 or Black Friday, all the CPMs go up because everybody's conversion rate goes up. They can charge more and everyone can still make money doing it. What you want to create is moments where your conversion rate goes up, but the market price stays constant.

1:09:32Taylor Holiday:This is how you arbitrage efficiency or volume. You can choose which one you want. I have an example, Taylor. Right. So by creating a sale moment or a product release where your product, your conversion rate goes way up while the market stays constant. So we used to work with 47 brand. They made up an annual sale called 4-7-Day. Okay. Well, guess what? On that day, their conversion rate goes through the roof and the market price for the inventory stays the same. So you get more volume or you can choose to take it as greater efficiency. That's how you win the game on Meta besides just trying to play the creative hamster real good.

1:10:02Katy Mimari:Okay. I have to tell you my favorite one. We do. Do it. And we do the same thing. We have, we literally, we shoot, man, I hope my customers aren't listening to this podcast, but it's, we have our anniversary sale in October because there's nothing else happening in October. And so you have a valley. You just described exactly what I'm saying. I have one every month. I don't think it, if you should have 12 peaks, one every month, guys. But my favorite hack is, and because I totally agree with what you said, like it's hard. I mean, everyone leans into Q4. It's not our best quarter. I love Q1 because it's baby season.

1:10:37Katy Mimari:CPMs are lower. I'm not competing with as many brands. Everybody else is like, you know, out of inventory from Christmas, whatever. Okay. So my favorite one is April Fool's. And every year we send out a email or a text that says your entire order is free. it's not free but they all still buy something and it is our favorite thing to do and it's just literally because i don't you know it's just we call it like empty we empty the funnel right and i we calendar out like we have our complete promotional calendar done until probably i want to say it's july or august already and we look at it year over year and we find people use all of these reasons that valentine's easter you should have a friends and family weekend you should have a um april fools you should have memorial day labor day that is when people have their wallets out and they are converting and i think a lot of really large brands don't focus on some of those smaller opportunities and i don't want everyone else to go do it because then it's gonna screw up my whole process of winning in that but yeah we have like a hundred peaks but four peaks is good

1:11:50Taylor Holiday:too yeah i think you're right there's there's it's intended to be a metaphor and illustration for an idea yeah because and if you can do more peaks but i think to sean's point there are certain things that like when you're talking about large-scale efforts of planning and organizational wide effort in the same direction that stuff does usually take a larger investment in like giving away a car yeah it just takes planning and timing that you can't be doing that with your team all the time um so yeah if you can create 12 by all means do do 365 why not you know fire away

1:12:18Sean Frank:yeah dude nothing but peaks over here guys oh my god you just had q4 and you're such a gifting i

1:12:24Katy Mimari:want to be a gifting brand i want to be where like well i want i want all 12 months to be

1:12:29Sean Frank:november dude you got yeah just crush it with an awesome blanket and then you'll be the number one gift of the year. Katie, I appreciate you coming on this podcast. Taylor, I appreciate you coming on this podcast. Thank you, everyone who's a part of this. Thank you, all our sponsors. Thank you, Katie, for coming on. katelame.com, do shopping. Taylor, what do you want to plug? Come on.com. Come hang out. Okay. We have 20 ,000 listeners. They love this podcast. They're joining e-commerce fuel. They're on the newsletter. They're liking our sponsors. Thank you so much for being here. I'll talk to you guys later.

1:13:00Sean Frank:Goodbye.

1:13:05Thank you.