The Addiction to Growth: Why Entrepreneurs Avoid Paying Themselves

[00:00:00] Richard Gaffin: Hey folks, welcome to the Ecommerce Playbook Podcast. I'm your host, Richard Gaffin, Director of Digital Product Strategy here at Common Thread Collective, and I'm joined today as I usually am, and he's gotten a little bit of sun here. It's, it's Mr. Taylor Holiday, our CEO here Common Thread. Taylor, what's going on, man? 

[00:00:14] Taylor Holiday: Yeah. Don't mind my bright red face. I was rushed and late to a children's soccer game. Forgot a hat. Didn't have any sunscreen and sat for three hours watching my kids play soccer, just roasting. So here I am bright red today for 

[00:00:26] Richard Gaffin: There we go. Okay. All right. Well, here's here's a segue for you Taylor's face is well done. Here's another thing well done. And it's one of his opinions. And so recently, yeah, I can work on that one. There's Taylor, you dropped a thread. This is back in. The 16th of this month, maybe. But basically the discussion point was around basically goal setting in a business and how rarely that's actually related to the generation of value for shareholders.

And I think there's a lot of things that we can dig into here, but but maybe let's just kick it off by sort of like frame this sort of this tweet or set of tweets or this thought that you had. And then we can dig into it deeper. 

[00:01:04] Taylor Holiday: As I'm continuing to lean more into the financial side of businesses, I'm trying to really understand The cultural norms that have sort of led to these patterns of behavior. I think that a lot like we as people, the things we learned to do are usually things that we were either taught or that we watched other people do.

And so we develop this pattern of sort of monkey see monkey do that becomes the basis for An industry like that's like sort of the behavioral patterns because they're just so consistent. Like the problems are so pervasively the same across all these customers that I'm interacting with. And so I'm sort of trying to almost alongside the like rigorous financial and tactical side, get to like the sociology of it and try and understand a little bit about what's happening.

And one of the things that I feel like I'm coming to is this idea that 

[00:02:01] Taylor Holiday: entrepreneurs are not actually trying to make money. And what do I mean by that? I mean, that the business objective that they have chosen to operate isn't actually connected to the idea that they want to get the money out of the business into their pockets.

And I think that this is. Something that I really want to war against is that all of the narratives about how people run and operate businesses and where we celebrate usually have to do with this like sort of monumental effort where everything you do is poured into this thing for a period of time that culminates in this singular moment of realization of value in an IPO or a grand exit.

And that's like, therefore what we all do along the way is like, we just keep betting it all on black is that every time we win, whether that's with a product release or a sale or a great year, even we just take all the chips every time and push them back into the middle and push them back into the middle and push them back into the middle until eventually something happens and it's like, That more often than not means that there are no more chips.

And I've been trying to think about why this happens a little bit, but, but, and it's part of why my assessment of the business model between service and E commerce has become such a topic for me of why I think service business offers you greater flexibility in that because it requires less chip betting.

Essentially it requires, it creates more availability of cash for you to make choices to pay yourself. I also think that there's a lot of norms around whether it's right or wrong to take the money out of the business as the people owning it, the complexities and cap tables and that what that create, but money gets trapped inside of these organizations and what that really means is that it gets siphoned out to a bunch of other people.

All the costs in your business begin to siphon the money out of your business and out of your pocket really. And. I would love for part of my next phase of life, a next chapter of business service to put more money into the pockets of shareholders like that. That's like a thing I want to be known for in a way that I think could be really impactful for businesses.

And it's just, it's been really fascinating to sort of begin to tangle with this idea on a more sociological level than a sort of tactical financial one. 

[00:04:27] Richard Gaffin: Hmm. So before we maybe dig into this or more philosophical implications or sociological implications, let's talk about like the specifics of the type of, the type of thing that

happens. Like what's, what's the sort of characteristic scenario here.

[00:04:39] Taylor Holiday: Yeah. So one. I'd say well documented the challenge in generating the availability of cash. So just like, I don't think we need to rehash how hard it is to just win the game. Which is to say, like, at the end of the day, there's money that got, there was money in a bank account and it got bigger, like, there's all the tactical challenges of why that's a really hard thing to do.

Okay. But then there's this whole other massive hurdle that happens when the money exists in the account itself, which is what to do with it. And this is probably part of my greater lived reality now which is that in CTCs success for the last couple of years, my job is to transition to having to think about these questions because.

We have more money than we've had in a long time. And so you begin to think about what do I do with it? When there's excess and should I maintain access and should I distribute it? Should I buy back shares? Should I pay debt? Should we reinvest in some new initiative? Should we acquire a company?

Like there's all these things that you begin to consider. And so I am recognizing my own emotional relationship to the idea of putting it in my pocket. I'm recognizing all the other things that compete for that idea. And how many things pull at me to push the chips back in as the right thing to do for the organization.

Yeah. 

[00:05:57] Richard Gaffin: So let's talk about, okay, let's talk about some of those pressures. So 

[00:06:00] Taylor Holiday: what are the 

[00:06:01] Richard Gaffin: why does this keep happening? Yeah.

[00:06:02] Taylor Holiday: Yeah, So, in order to grow, let's just, well, they're different in every business. Let's use e commerce as an example. I'll give you a very specific example right now. We are having a conversation with a client about Q4 inventory purchasing, and they sort of have a choice.

Right about how much inventory they want to buy. And of course there's a spectrum of possible outcomes here that range from like, the 99th percentile, highest value outcome, and then the lowest the, like a really bad outcome. Right. And there's like a spectrum of possibility. And those bounds are sometimes pretty wide, but in some cases for brands that have been around, you can get it pretty tight, but even within that choice, right.

Okay, there is a tension. And the question is, you can sort of be wrong on two sides of this. You can be wrong where you had too little inventory and you actually sold out. Or you could be wrong where you have too much inventory. And you didn't, and then you're left with excess inventory. That's challenging to move.

And each of those are sort of a different set of problems where the cash ends up in different places. If you have too much inventory, the cash sort of ends up on the balance sheet, but it likely means that you've satiated the most available demand. Whereas if the, if the if you have too little inventory, then you probably have more cash, but less, maybe total volume of available dollars.

Because you left some demand on the table. And so that choice is almost never made through the lens of, well, how much money would we have available to put in our pockets at the end of the decision? Which one maximizes for that? Like, nobody talks that way. And there's a million competing reasons. Why?

Usually because. The cap tables aren't that clean. And so the distribution of capital sometimes can be not that incentivizing to everyone in the process, or also it's just not the normal pattern of behavior that you ever think to solve for is which one optimizes for cash in the bank account such that I could, at the end of this sale, literally like at the end of an individual moment.

The other thing that happens is like the idea of distribution of capital is sort of locked into like the calendar. It's like at the end of the year, we will review the bank account and make a decision versus like, well, what if at the end of this moment that you won, where you created this game, mini game, that was this peak moment that you created.

What if you just decided to give yourself some money that and that these are just not normal things to think about. And so it's all about how do you make the next big bet to continue to grow the thing forever more. Another example is right now I have a client that is a big business. And they're in really great position.

And we're having this like really intense argument about where they should set their media target relative to their desired return on invested capital over a year. And I am under the belief that they are functionally just giving Mark Zuckerberg money. In other words, they are taking a level of inefficiency that is not necessary for their business, but there would likely be some trade off between volume and efficiency.

See. On the top line that would happen. If they were to reduce their efficiency requirements and hold themselves to a higher standard. As a business, but they just, they have so much money, literally like cash in the bank account. And the founder doesn't, for whatever reason, want to distribute the capital to the shareholders.

There's probably complexities there that are beyond my exact understanding, because there's a lot of relational dynamics there that are hard. And so they're just like, well, this is good enough. And as a, as a deployment of our cash, this is sort of good enough. And I just look at that and I just go, man, like.

Again, it's taking all the chips and it's putting them back on the table and going, this is all a plan to create a liquidity event at some point. And man, I hope, I hope it happens. I really do. But dammit, if you couldn't offset a lot of risk by maybe not making as aggressive a bet on this efficiency and really continue to set yourself up for winning, for, for realizing the value of the thing that you've created, That's magnificent.

And I don't know, and when I look at it, the person I think that actually wins that game. Is Mark Zuckerberg. Like, I really think that when I look at the ecosystem, I look and I go, Toby at Shopify has sort of convinced us that he's serving all of us as entrepreneurs. And that's cool. I, I, I believe that there is genuine intent there to do that.

Same thing with Zach. I think they, but I also watched them disproportionately capture value from the ecosystem personally, personally, like to the point of being billionaires, right? Like, and I, I just. I just wonder if maybe some of the value capture could be redistributed and not in a, not in a communistic obligatory way, but in a capitalistic intentionally acted on way.

So that's a couple of examples. 

[00:10:56] Richard Gaffin: Yeah. I know that was the last thing you mentioned there. Or your point about Zuckerberg reminds me of the speech that Matthew McConaughey gives in Wolf of Wall Street, where he's talking about how essentially none of the trades that they do are realized in any real way.

So money never ends up in the pockets of the investors, but they make commission on everything. And that's essentially what's happening here is that other people are making commission on your money while you yourself never see any return on it, essentially.

[00:11:20] Taylor Holiday: the time. That's a great metaphor. Is that like, and, and in that case, you had this, like, you know, Leonardo DiCaprio obviously playing this character where he's very conscious of that intent is to never give them their money back. And it's really nefarious. And I don't, I don't actually think that's what's happening.

Although I do think candidly, like some of the, like, we're here to support you message is very self serving and, and all of these, like, Agencies and software and all the things that compete for your precious resource. I just watched too many entrepreneurs be too broke for the amount of money that exists inside of the thing.

It's like, there's 50 million of money moving around every year. And the entrepreneur is making 150, 000 and you're just like, where's all that 50 million going? Well, it's going to your manufacturer and then it goes to your payment processor and then it goes to meta and then it goes to your shipping. And then it goes to your fulfillment and then it goes to your employee base and then it, and that's 50 million of value that gets deployed into the system, which I get it. Yeah, It's good for the economy. It's good for the GDP, but, but like you, the person who created this thing are capturing such a small percentage of the value that I actually think it's like really poor system design. You're not capturing the right amount of value relative to the thing that you created.

And that's where I think I, I, there's lots of opportunity to get better. 

[00:12:46] Richard Gaffin: Yeah.

Okay. So let's, let's keep digging into like, what, what are the, maybe it's sociological, maybe it's human pressures that prevent people from even thinking this way in the first place. You know what I mean? So like, for instance, being seen as sort of the fat cat owner who's taken a huge distribution at the end and where everyone else gets the shaft or whatever.

Like, so there, that could be sort of a, you know, ethical, moral pressure that people feel. But what are the other things that sort of prevent, like, what is this mindset that's been created that prevent people from, let's say, taking a distribution or getting themselves paid after a sale event, 

[00:13:18] Taylor Holiday: So, so one of the things I hear people say.

a lot, it's like, well, I don't have a better place to invest the money. Like, like it's this idea that if you took the money out, there's a few things that happen. One is like, it's a taxable event. So we all hate the government for some reason. Like, this is just like a very American ideal right now that like paying taxes is just like the worst thing I could ever do.

And so the idea that if I took the money out, I would have to give 30 percent of it to the government, just like that right there, people hate. And that will keep the money trapped in there forever. And it's just like, it's the people's relationship to taxes I think is really unhealthy. I watch people like move all over the world, like reduce their quality of life for the sake of avoiding this.

Like there's all these things that I just go like, I don't, I think there's something that's there. So there's, there's that there's the government and money and taxes and the feeling we have about that idea. Now, I get it. The government's wasteful. I don't love giving them money either. But at the end of the day, that's the system I'm in.

I was very conscious when I entered into it. Now, if I want the money in my pocket, some of it has to go to them. That's just the trade. So that's part of it. The other thing. So this idea that I don't have something better to do with it It's like, we believe that we have to be peripheral, you know, Perfect capital allocators or investors all the time that if we, like, took money out of our business and put it in our checking account, instead of using it to grow our business, that we'd be making some sort of, like, really terrible idea, terrible decision.

And maybe if you acted in this, like, really utilitarian view, that's probably true from, like, the use of money, but, but you could also just, like, buy your kid a bike. You could actually just consume it. It doesn't actually need to generate a return all the time that is monetarily measured. It could be measured in the quality of life that you're able to offer to yourself or to other people in the form of generosity or kindness or whatever you want.

So I don't think we value those things the same way we value the idea of like, well, if I grow it back here, my business is growing 30 percent a year. So I could grow that money more next year. And it's like, I don't actually think you're doing that calculation correctly. Well at all. And I just don't think we do, we don't do that thought work well at all.

And we also don't actually have clarity of the lifestyle that we want or what we would do, like learning how to spend money. It's like another skill you'll talk about. You'll hear people talk about, like, if all of a sudden you had a million dollars in your bank account, what would you do with it? Like, where, where would it go?

What do you know, things you enjoy? Like, do you like, 

[00:15:41] Richard Gaffin: Yeah, that's 

[00:15:41] Taylor Holiday: do you like sailing? I don't know. Like I I've never tried. Do you like scuba diving? I don't know. I've never tried. Like, so, so I don't think people. You develop a lifestyle that sort of fits your means and you become generally satisfied with it. It's sort of that like classic.

We find the misery we can tolerate and call it happiness. And like, we're all sort of in that and we don't always recognize that. Like, oh, if I actually. Did this other thing. I might, I might actually like that more. And I also think there's a lot of ideas that tell us that like money is bad and the use of money is bad, which I think is like an oppressive idea.

Like I think we're going to get it. So I think it's like a way that people with money sort of like, can oppress people who don't have it is to make you think that it's bad. So I don't know. I think there's a lot culturally that's in the pot that contribute to it. 

[00:16:28] Richard Gaffin: That's interesting. Well, yeah. So, so that, that point about like, well, it's interesting. Like the, the, everybody's end goal seems to be something along the lines of an acquisition event. Like, so rolling the dice for this, like big, almost like winning the lottery type thing to happen. But also like the idea that the, an acquisition event would be the ultimate win.

And one thing that like, I've observed anyway, in like a lot of entrepreneurial types is that idea that like, Winning is the goal, but not making money. And those are 

winning is tied to making money very tightly, but they're not exactly the same thing. So the, the analogy I was using before I hit record is in, in the movie heat, there's, there's this moment where like Robert De Niro, who's kind of the leader of this crew of thieves, who's trying to pull a heist, there's a big score that maybe has been compromised.

And he's talking to his crew and he's like, Hey guys, you don't have to stick with this. And he's talking to one of his And he's like, Hey, man, like the juice is not worth the squeeze here. You got a family. I would just take what you got and leave. And he says, no, man, the action is the juice. And that's that phrase, which is like the pursuit of, of money is the win.

That is kind of like the thing that's playing a role here. Whether or not people even want to do that. There's a sense that, that that's the right way to approach 

[00:17:36] Taylor Holiday: So, so this is, this is you are getting to what I actually think is happening that I'm starting to wake up to and go like, oh shit, I'm surrounded by dopamine addicts 

[00:17:47] Richard Gaffin: Yeah.

[00:17:48] Taylor Holiday: and we're all, I I'm, I'm in it and we think we're trying to make money, but we're not, we're actually just feeding our addiction. And like, that's, it's all about the experience.

We're actually, we're actually designing an experience. Yeah. One where we win sometimes and we lose sometimes and we're putting it on the line and we're fighting to make it happen. And we're finding these little things. And the loss is actually a thing that we kind of crave because it remotivates us and gets us reenergized to go solve more problems.

And if we actually ever got out of that, we wouldn't know what to be. And so we don't, we intentionally self just like we self sabotage because that keeps us in it. That keeps us. Needed and wanted and depending on things. And this is why I think you get to this thing when people get out of it, you meet, and it's this sort of classic story of like loss and depression and all these things.

And I'm like, Oh Yeah,

because you took, you took an addict out of their game, like you and you made them recover from this feeling that they optimized for every day. And so I'm looking at these peniles because the behavior is just so illogical. That I just can't, like, you literally will be saying something and they'll be like, yeah, but I don't know.

You're like, and I'm, it's just, I'm really, it's not math. It's not a math problem where it's like, they just need to see the numbers add up. It's that there's something else happening. It's something bigger than that. 

[00:19:16] Richard Gaffin: Interesting.

[00:19:17] Taylor Holiday: so I don't know. Go 

[00:19:19] Richard Gaffin: yeah, so there's a couple things here, like one. So one thing like to just to go back to even the very beginning of this discussion, which is like, I think there's there's sort of a premise that's been kind of unspoken here, which is that preceding the way that you're describing. Would be, would be good, right?

It would be a better outcome or like, like you just placed, it's sort of phrased it as like being the logical outcome. Would it be create a scenario where you're actually pulling money out of the business? So like, I would say like, make your argument for the idea that this is, that this is better.

[00:19:49] Taylor Holiday: Yeah,

Well, so, I think that it isn't necessarily better. But it creates more optionality for other versions of a life. And my experience of the people that I meet is that they're generally in these circumstances, like pretty anxious, pretty overwhelmed. And that there could be versions of their life that are better.

And so I don't, I don't mean to assert for every individual what their ideal life is. And I, I don't ultimately really care what, what, what somebody wants to do. They all give them plenty of space to make that decision for themselves. I just, I think what I watch happen is that there's some people that have like, Extricated themselves from it.

And they're like now above the fray in some ways that seem to have ascended within our society. Above this thing. And I've, I feel like I've met a few or know a few and maybe they suffer the same anxiety, but they suffer it with better food. I don't know, like, with nicer sheets and and less less chance of ruin in some ways.

And so I think that there's probably, and it's not that, that like solves all problems or. Issues. But like, if you think about, I know something as stupid as like, the likelihood that you would attract a partner for your life, like sort of a joke, but being rich helps like, now, man, what does it attract?

I don't know. Somebody who wants some version of that life, but it probably increases optionality. You'll have more people interested in being rich. Doing things with you again. Is it for the right reasons? I don't know. What does that phrase really mean? I just think that what I've experienced is that like.

There's a real sense of being trapped within the context of a thing that you can never extract value out of. And yet you're dependent on laboring towards every day. And that is that is really a toiling exercise that becomes at some point for people very draining. 

[00:21:58] Richard Gaffin: yeah. No, that makes sense. I mean, yeah. And 

[00:22:00] Taylor Holiday: It's kind of and I think it's like sorry, last thing, it's like the bigger American ideal. Like, I feel like when people get mad at, like, when you hear people talk about, like, there was that song that went super mega viral that this guy, like that one guy came up out of nowhere singing, I forget exactly how it went, but the, the general thematic, Yeah.

the rich man from Richmond, right.

And the general thematic element was like, I toil all day, all the time for all this effort and I get nothing for it. Right. And I think that's like the ultimate empty thing that nobody would ever say that they want is to labor endlessly and never reap the fruits of the labor. But in many ways, we're kind of designing systems that do that for us.

They create endless toil with no value realization. And I think that that, that feels like an unfulfilling promise. 

[00:22:55] Richard Gaffin: Yeah, for sure. Well, yeah, it feels like it comes from the sort of Puritan American work ethic thing where like toil for its own sake is good. And if you were the person who works the hardest and has the worst time of it is actually the best person, you know, 

[00:23:12] Taylor Holiday: honestly, yes. Yeah, That feels like 

[00:23:13] Richard Gaffin: even thinking about the idea of like, let's say I was able to pull a million dollars out of my business or something, and then to have all that excess and like, what do I, what do I do with it?

And would it be indulgent for me to upgrade my fridge or whatever? Like, I think all of those sort of moral things start swirling around your head for 

[00:23:31] Taylor Holiday: if the fridge is such a funny example. So I have a garage fridge now that I fill with. Just drinks that I like and I it does it feels like there's something about that. It's pretty that's a very American thing to the garage fridge I think our rich friends had garage fridges growing up. But like Yeah. so where it's like, oh, Yeah.

that is it would have felt wasteful But I actually really like it I like having coke zero and my protein shakes available to me whenever I want them.

It's better than not I don't know and so there's something I think that Yeah, the idea of toil as the end ambition. I think there's a lot of religious undertones in this, this too, that, that exists in American Western culture around Yeah.

like poverty as a value as like an aspirational identity that, that sort of is built, built into things as well, too. 

[00:24:15] Richard Gaffin: Yeah. Well, okay. So, I mean, I think the other thing at play here too, is like that idea. I think that a lot of people maybe, or that I would suspect people have with this too, is that if I, let's say, do the MySpace Tom, right? Like get, get my money and get out and just start doing something else. I'm going to no longer have purpose.

I think that's a huge part of it as well. Is like, if I get my, you know, if I get paid out in a certain way, To the point where I'm comfortable and I don't really have to be in this all the time. I think that there's, there seems like there's this weird duality or whatever, where people are in the business, not because they love making the product per se, like, Oh, I'm obsessed with making the best, you know, disposable, whatever, or, and they're not actually in it to make money out of it either.

They're in it to just do it. There's sort of like, yeah, I feel like there's sort of a lack of purpose. So if you weren't like shooting for the win, then actually creating the thing wouldn't be particularly fulfilling. And then if you're just going for the money, you have to figure out another way for that money to help fulfill you, I 

[00:25:16] Taylor Holiday: Yeah.

well, so, so I think, I think we are like purpose making machines. Like we assign, we just, we get into things and then we start assigning purpose to them to make them feel important. Like I actually, that's a lot. What happens with business is that there are a subset of founders that we'll put over here that like started with purpose and went like, I care about changing the world.

And so I will start this thing. My experience is that that's not really how most things existed. Like, that's not why like. Men's t shirts companies exist, right? Like they didn't, so they tend to be like, there's a product idea. There's an opportunity. I made a thing. Some people wanted it. And I just, you just started rolling down this hill.

And then you start trying to assign purpose onto it. You started like. Create mission statements and jam value and talk about the people and like you, you start crafting it around it because we need that. We desperately crave that. So my point is just like whatever's on the other side of that. You'll just do the same thing.

If it's like your local pickleball team and, you know, the, the serving in your kids classroom, all of a sudden, you'll, you'll just, you'll do the same thing. A sign for yourself, the idea that that's really purposeful, like you can , you can, that part can actually be morphed pretty easily, I think. And maybe that's a little bit cynical of me, but I, I just, I don't actually buy the idea that most of us ended up in the businesses that were operating out of some.

Grand initial impetus of purpose. I think it was more pragmatic than that. It was like, this is a way I could make money and somebody wanted this thing. And I came up with an idea and so I created it. Oh, and now it's making money. And so now it needs to be purposeful. Like, I just think that that's probably closer in most cases to what has happened and people are kind of now 10 years into it and they're like, Oh, I sell rugs.

Okay. I'm a, I'm a rug salesperson, but like, if there was a blank slate, And they didn't have to solve for the financial requirements of life. I think that, that space is actually really interesting to figure out, well, what would purpose be then? And would that be truer for you than the assigned purpose to the pragmatic thing? 

[00:27:11] Richard Gaffin: Mm. Yeah. It's like, you remember when Dave Chappelle, I think was on David Letterman and he talks about like, basically like, what, what does money do for you? Yeah. And he's like money money just gives you options. It allows you to choose a life and that's why he walked away from The 50 million contract, because he had 10 million and he's like, the difference in choice is not enormous.

And then he says, the only difference between 10 million and 50 million is an astounding 40 million. But other than that, it's like you have walking away with at a certain threshold. You're giving yourself a range of choices. It's not available to most people. And within that, maybe building a purpose becomes much easier.

I don't

[00:27:50] Taylor Holiday: That's, I think that's right. And I, I, you get a little taste of this where like you, you suddenly get to, to, to, Certain points of like money where you're like, what, like, what would I, what would I do if I had more? I don't, I don't really know.

So why am I like, what am I, what am I doing? Like, I think there's, there's these different points where you reach these levels of consideration along the journey or sometimes you get to.

And Yeah.

you just, you take a step back and you realize that maybe the reason the business isn't producing cash isn't because it can't. It's not because your AMER goal is Is unachievable. It's because, like, there's actually something in you that doesn't really care. And so you don't hold the boundary to obligate the thing to that because it's not truly what matters to you.

And that's, like, again, I just sit with too many people where the decisions are sort of too illogical. Like, in a way that's like, I don't, why would you do that? And it, it's not because the goal is to create the fastest way to put the money into the shareholder's pocket. I also think there's probably just some like bad statistics around us thinking about not really understanding.

Cause people are bad at and I don't mean people, you, I mean, me, people are, we're bad at like understanding really small, long odds of things in the same way we like, we struggle to understand infinity. So like the idea of creating a really big exit. Is something we all aspire towards, but it is so unlikely and such a small percentage of outcomes that, like, actually orienting your behavior around it is really, truly crazy.

In many ways. It's like, really crazy behavior because it happens so rarely. 

[00:29:26] Richard Gaffin: Okay. So let's maybe end on this note, like from a practical perspective, maybe how would the, your business be changed for the better across the board if you were to approach this? Approach your business using the kind of goal setting logic that you're talking about, which is again, because I want to go back to you've been framing this as, as, as a logical choice.

So talk a little bit about like, what, I don't know what the practical implications of what would be if you were 

[00:29:53] Taylor Holiday: I actually. So, I'll tell you what my experience of it has been is that like there's just a cascade of clearer decisions for everybody involved. And you'll just more clearly. Begin to source people who like those kinds of decisions and then eliminate the people that don't. And it like it makes it so that the whole organization sort of has a clarity of existence, which is like if you create a financial goal that's tied to a reality of an objective that you want for yourself that everybody kind of just knows what to do.

So I'll, I'll give you, I'm going to speak to mine. Okay. And this is, I, I in the process of like, losing my religion sort of had to redefine my life purpose. Like, and so I came up with these things that for me right now are, are, are sort of these operating chairs. I've published them before. It's like die married to my wife, be best friends with my adult children and try to be post economic by the time I'm 40.

Okay, and so post economic kindling meant like I don't know like I need about 10 million dollars liquid that I think I could opt out Of the game so to speak and to use the Dave Chappelle number here like sort of get to this point We're like, okay, I can make all these choices in a way. that gives me a lot more optionality.

Well, I'm 40 and so I Had to think about the asset that I own which is common thread collective and think about how to drive it to a place that Could create Value for me in sort of that potential and sort of that just became the game to think about the economic goal of the organization, which became then a set of corresponding KPIs for individual contributors.

Like, there's literally like a downstream. Chain of behavior that that clarity enabled for me and allowed the whole organization. And what the end result is, is like CTC is like the most financially healthy company it's ever been, probably in part, because it's the first time I'd ever had a financial objective in my heart as, as, as cliche as that is like that.

I think it's really all it's downstream from now you can throw on the macro effects and blah, blah, blah, whatever, whatever. But in reality, we just redesigned the system to produce a different kind of outcome. Whereas I would 100 percent contend that for one decade, 10 years, I designed CTC to be an experience for me and for, and therefore everybody in it was sort of having an experience and that's what they came for. 

[00:32:09] Richard Gaffin: Right. And part of what you're saying is that like that's seems to kind of be like what a lot of businesses are designed for 

[00:32:14] Taylor Holiday: That's right. 

[00:32:15] Richard Gaffin: Just designed to perpetuate the experience without setting an end goal, basically. 

[00:32:20] Taylor Holiday: right. Or those things are disassociated and then it's sort of chaos and everybody's confused because there's a stated financial goal, but everyone's behavior and really the founders behavior don't actually match that. And that's like often very common too is that like we say there's a financial goal, but the behavior doesn't align to that.

And everybody goes like, I don't know, what are we trying to do? Are we trying to do that? I don't get it. 

[00:32:41] Richard Gaffin: Yeah. Yeah. All right. Okay. So in summary, know what you want and actually build the business towards achieving that thing, whatever it happens to be. Is there any, anything else like you want to 

[00:32:50] Taylor Holiday: And I would, I would just say that, like, I would challenge you that business is a vehicle where value the rules of the game are actually sort of more objectively determined. Then you realize because you didn't design capitalism and you didn't design the economic system that you chose to participate in and shareholder value is a lot of that message.

It's like, can you create liquidity for your shareholders? Can you put money in their pockets? And I think if more entrepreneurs took the burden of saying, I'm going to put money, even if that shareholder is you, or it's 25 people, If you took the burden to say that I'm going to, at the end of this?

have the reputation as having delivered that objective, I believe that that will make more people around you more satisfied and create more life options for you in a way that will lead to increased satisfaction of you and your partners. 

[00:33:42] Richard Gaffin: Cool folks. All right. I think that's going to do it for us for this week. Again, appreciate everybody listening and we will talk to you next week. All right. Bye everyone.