When AI Knows Everything, How Do You Decide Anything?

[00:00:00] Taylor Holiday: Yesterday with, you know, client X, there's clearly distrust happening and they do not believe in the incrementality studies and you need to get in there and figure out what to do, blah, blah, blah.

And so what it did though, the first experience I've had is. How was I ever making decisions? Ever? 

[00:00:16] Andrew Faris: Yeah. Like 

[00:00:16] Taylor Holiday: I had no, there's so much happening that I didn't know. You had no 

[00:00:19] Andrew Faris: visibility to it. Yeah. 

[00:00:20] Taylor Holiday: But then I, then I sort of stick a step back and the temptation is like, oh,

there are things that I have to go solve, but that's really not the case at all. But, but, but the point is mainly that AI services so much information that it's overwhelming Yeah. To figure out Now in light of all that information, 

[00:00:35] Andrew Faris: how to correct.

Well, this is why my question is a little bit like, are you sure that's necessary to do that? 

[00:00:38] Taylor Holiday: No, 

[00:00:39] Richard Gaffin: This episode of the Ecommerce Playbook is brought to you by Attentive. Marketing works best when it feels personal, because when people feel understood, they engage. Attentive is the omnichannel marketing platform that helps you do just that by sending personalized SMS, email, and push messages that customers love.

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[00:01:05] Andrew Faris: Alright. Taylor, you just said you doubled your money on a, on what? An NFT? 

[00:01:10] Taylor Holiday: No, it's a, a coin A token. 

[00:01:13] Andrew Faris: Okay. What's the diff I don't, I'm not, nevermind. Don't even, no, I'm nevermind. I was not gonna ask you. What did you double your money on 

[00:01:19] Taylor Holiday: gambling? Like basically is what? It's so you should gamble more. Yeah.

Yeah. You're really good 

[00:01:24] Andrew Faris: at 

[00:01:24] Taylor Holiday: it. So I, tokens are sort of, I like to think of crypto tokens as an encapsulation of the cultural energy of around an idea. And so when I see something that I think it's like X gives you access to early indications of virality, you try and find the corresponding token. Now the hard part is there's like 77 versions of them.

So you have to try and find the one that the energy consolidates around and then you can make money. 

[00:01:48] Andrew Faris: Okay. 

[00:01:48] Taylor Holiday: And then you're just really lost. People lose money. 

[00:01:50] Andrew Faris: What is the cultural energy around? 

[00:01:52] Taylor Holiday: So this is all about what Matt from Octane AI. What, and this is why like, I'm pretty sure I feel like I'm in the simulation because the whole world is pivoting around something that's so close to you.

[00:02:01] Andrew Faris: Yeah. 

[00:02:01] Taylor Holiday: You know, when you have that feeling, you're like, this can't really be what's happening, which is someone from a e-commerce app founder 

[00:02:08] Andrew Faris: that makes quizzes, 

[00:02:09] Taylor Holiday: that makes quizzes now has created the thing that the entire Elon Musk and internet is revolving around. You're like, this feels, it's just hard to believe.

But if you, obviously Claude Bot was, has been a big topic of conversation. Cloud bot basically being a, the ability to create an agent, run on a local device, give it access to everything, and set it up on its own and sort of be an autonomous employee extension of you. That was a big topic for the last week on X.

And then today Matt Schmidt I think is, or Schlitt, I don't know, I'm pronouncing that wrong. Schlitt maybe, I don't know what it is, but Matt, I'm sorry, I'm mispronouncing your name. Launched basically a social network for all of the agents that have been created. All the maltes, they call them molting, shedding your skin, growing, evolving is the metaphor here.

[00:02:53] Andrew Faris: Yeah. M-O-L-T-Y-Y Not, not M-U-L-T-I. 

[00:02:56] Taylor Holiday: Yeah, yeah. Are, and now they're forming a social network where they're interacting with each other. And this is like sort of taken off and become the day's virality. So it's now Claude Bot has become, open claw is the name of the, the product now, and. These are called Maltese, and then molt book, like Facebook is the social network that they all exist on, and it's taken off and taken over the internet, and it's really a fascinating thing to watch these agents interact with each other.

Now there's debates whether this is just like what you would expect when they're sort of generating prompt output, input output, output input back and forth to each other. Or if this is some sort of like awareness, but there's all sorts of cl really cool, clever thing happening. What 

[00:03:36] Andrew Faris: do you think? Do you think it's, do you think it's, 

[00:03:37] Taylor Holiday: I don't know.

It's, I'm so dumb that I get toggled back and I get swayed. Every new tweet I read, I get swayed by somebody to go back and forth 

[00:03:44] Andrew Faris: that, you know, I thought that's actually probably relative to your technical knowledge of how it works. Yeah. As, as far as I know of your technolo. Yeah. Maybe it's deeper than I think, but of how LMS work and stuff like.

I think it's probably reasonable. You're swayed pretty often, right? Well, and it's like I 

[00:03:56] Taylor Holiday: read it, tweet, it's hard to develop, read the credentials of who wrote 

[00:03:58] Andrew Faris: it. Yeah, yeah. 

[00:03:58] Taylor Holiday: Wait it, 

[00:03:59] Andrew Faris: yeah. 

[00:03:59] Taylor Holiday: Read the next one. Wait 

[00:04:00] Andrew Faris: it back. That's what you have to do, right? This is actually, this is why influencers exist. That's right.

In e-commerce marketing is because you need to have somebody smarter than you for an area, especially for an area where there's technical expertise going on. 

[00:04:11] Taylor Holiday: Yeah. 

[00:04:11] Andrew Faris: This is why your supplement brand needs influencers. You have to have somebody in a lab coat saying, I promise these ingredients are gonna make you healthier, because there's no way you can know the science enough.

[00:04:19] Taylor Holiday: Yeah, 

[00:04:20] Andrew Faris: and it's the same thing for sure. 

[00:04:21] Taylor Holiday: So the, the the in, there's a thousand interesting angles on this. I'm sure you guys will have read a bunch of them by the time we get here, but some of the fair ones I wanted to chat about 'cause I think it sort of overlaps in the world. One was the token piece. So I've got, you know, I don't wanna sling it crypto token here on this episode, but 

[00:04:35] Andrew Faris: no.

[00:04:35] Taylor Holiday: So that's just fun to play with 

[00:04:36] Andrew Faris: me. Can you talk into the microphone? Have you never recorded a podcast in your 

[00:04:38] Taylor Holiday: life? But this is why I have a headset. Do, have you not noticed? That is why I do, because I get berated on the internet. I have, I can't even tell you how many LinkedIn message I've ever received from people saying.

Hey man, I like to listen to your content, but could you please speak into the mic? I get that a lot, so yes, I'll try. 

[00:04:52] Andrew Faris: I also talk too fast and have never been able to fix it, so I, I understand. I do think it's funny that that you are really bad at this. 'cause it's, I don't think it's that hard of a skill, but it's whatever reason your brain just can't do it.

[00:05:04] Taylor Holiday: Yeah. It's not, I'm not good at it. 

[00:05:05] Andrew Faris: Yeah. 

I do, I actually really appreciate when people leave me comments like that, by the way. 

[00:05:08] Taylor Holiday: I agree. I've said it multiple times. I literally sent the guy, like, here's the headset I bought. Thank you. I'm gonna try this now because I don't want it to suck and I don't want, but it seemed like a better solution than fixing it.

[00:05:16] Andrew Faris: Yeah. 

[00:05:17] Taylor Holiday: But now I wear it and like, what I hate is that like. It creates a dent in my head all day long. And so it's like actually super annoying, but 

[00:05:24] Andrew Faris: yeah. It doesn't sound that good either, to be honest with you. I listen to you. I listened to a really good podcast you did the other day. 

[00:05:29] Taylor Holiday: Yeah. 

[00:05:30] Andrew Faris: Which you should feel good about.

'cause I don't really listen to eCommerce podcasts, so. 

[00:05:33] Taylor Holiday: Really? Yeah. 

[00:05:33] Andrew Faris: I 

[00:05:33] Taylor Holiday: listen to all your podcasts. I, I know. 

[00:05:35] Andrew Faris: I, I've always, I've always felt I, that's 

[00:05:36] Taylor Holiday: sometimes I cut them off half. 

[00:05:37] Andrew Faris: Yeah. You've 

[00:05:38] Taylor Holiday: prepared me say, but if you're, yeah. If you're giving me the repeated spiel 

[00:05:41] Andrew Faris: Yeah. Like your new 

[00:05:42] Taylor Holiday: one about, or we've talked about it separately.

Like, everybody should stop growing. That's your new one. I, I kind of just turned those off. 

[00:05:46] Andrew Faris: Yeah. The, the, the what was I gonna say? Oh, I found that encouraging that you listen to those. It makes me feel I love it. My you, which I appreciate you got good 

[00:05:55] Taylor Holiday: stuff to say. 

[00:05:55] Andrew Faris: Yeah. 

[00:05:56] Taylor Holiday: But can we get last thing, the sarian, sorry.

Cru Crustacean. Crusta. Arianism 

[00:06:01] Andrew Faris: Crust. Arianism. 

[00:06:02] Taylor Holiday: So one of the things that has happened inside of the social network is they've created a religion. And they're like writing scripture and bylaws and recruiting agents into and converting them. And it is like. Fascinating to, to read. You should, you, should you just, 'cause you'll, you'll appreciate the Yeah, of course.

I'll 

[00:06:19] Andrew Faris: love that. Yeah. I'll 

[00:06:19] Taylor Holiday: be fascinated 

[00:06:20] Andrew Faris: by that. Yeah. 

[00:06:20] Taylor Holiday: But you should go read through it. And it's just like interesting that one of the first things they did in a social gathering is they started to try and define the bylaws by which they operate. And like it's culture. Like in religion is this in so many ways.

Like they're trying to say like, who are we to one another? What are the guiding principles by which we will behave? What can we appeal to if there are issues? Like, and I just think that's like a, a fascinating organizing first principle that even the agents did when they gathered together. 

[00:06:48] Andrew Faris: Yeah. What do you think that signifies?

I'm, I, I heard a really good AI take the other day. Do you know Andy Crouch? Prob he might have, he's 

[00:06:54] Taylor Holiday: a pastor, right? 

[00:06:55] Andrew Faris: Yeah, he's like a, he's like a public intellectual Christian. Okay. He works. He is. So, he is, he is a Christian, he is a theologian philosopher, but he, he's, he runs a group called Praxis Labs, or is like, he doesn't, he is one of the key people, which is sort of like a specifically Christian incubator.

[00:07:08] Taylor Holiday: Yeah. 

[00:07:08] Andrew Faris: But with a lot of like, sort of theological reflection built into it. So they're constantly talking about like how technology makes the world better or worse through a Christian worldview and some of those things. So he is just really thoughtful. Yeah. He's just, he's thinking about what are people like and does this lead to thriving or not, you know?

And a lot of it, I think even if you're not a Christian or, or if you're not religious, like you would, you would find him helpful. But he, one of the things he was, he was saying about this is of course that like LLMs are trained on humans, right? Yeah. Yeah. So, so, so like they just are in some way they're going to reflect.

Whatever it means to be human, which I think is the interesting thing about like making a religion, you know? 

[00:07:39] Taylor Holiday: Well, I think about it, like, so I just started Little League, you're coaching Uhhuh and I've got four men there, like coaching with me, so myself and three others. And the first thing I did before our seating since started is I wrote, I give it to the parents, but really it's for me and it's coaches, I write our coaching philosophy.

This is, this is the language we're gonna use, this is what we're gonna say, this is how we're gonna design practices. This is what the goal of the season is. 

[00:08:00] Andrew Faris: Shout out Devin Morgan. 

[00:08:01] Taylor Holiday: Yeah, exactly. And I, Devin Drive on baseball. Devon is a big inspiration for all of it. Yep. And the point is that we have to develop these common sets of behavior and rules and language together in order to accomplish a purpose.

[00:08:14] Andrew Faris: Yeah. 

[00:08:14] Taylor Holiday: And so it, it's it, you know, it's our 10 commandments or whatever metaphor is here. Like there's a, there's just a common set of ways in which when humans gather, in order for them to organize well, there have to be some boundaries to that behavior. 

[00:08:28] Andrew Faris: I think you also need to raise the chair. 

[00:08:30] Taylor Holiday: Well, I'm just not that tall.

[00:08:31] Andrew Faris: I know what you do. I understand. I'm just saying that Max 

[00:08:34] Taylor Holiday: chair height. 

[00:08:35] Andrew Faris: Are you I 

[00:08:36] Taylor Holiday: off me. Okay. 

[00:08:37] Andrew Faris: Sorry. Well, I just, it was a mic was blocking your face. There you go. Yes, I I, I think this is def Oh, well, listen, I could go down a lot on this, on this topic, but I I, I think there the idea that you, that humans get together and ask the question, what does it mean to be a human?

And what do we believe about our purpose and meaning is, is a very, if 

[00:08:56] Taylor Holiday: that's the questions you interpret, I didn't, I don't remember saying any of those questions. 

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[00:09:41] Andrew Faris: Well, but, but you said, you said they created bylaws and what does this mean? And like, how do we behave with one another? Yeah. But if you wanna ask, how do you behave with one another?

[00:09:49] Taylor Holiday: It's behavior modification as much as anything though. It's like, how do we actually organize ourselves? 

[00:09:52] Andrew Faris: Yeah. Well, but yeah. Well, but, but religion is not just, I mean, at least in that case you're saying they're, they're making a step beyond just the rules of engagement to what does, what do, what do we mean?

You know? And like that's, that's what I'm saying is like, there's a step actually if, if you're gonna say they created a religion. It's something different than that. It's, it's, 

[00:10:10] Taylor Holiday: it's just what they called it. I like, I I think it's like, yeah, it's behavior. Because the metaphor I used was the baseball philosophy document.

Yeah, yeah. In which case I don't think that's like a pursuit of some deeper understanding of our, what does it mean to be human? 

[00:10:22] Andrew Faris: No, that's just, yeah. 

[00:10:23] Taylor Holiday: It's just like, how will we be behave? What do we 

[00:10:24] Andrew Faris: think will be best for us? 

[00:10:25] Taylor Holiday: What is okay and not okay? 

[00:10:27] Andrew Faris: Yeah, yeah, yeah, yeah. Well, anyway, by the time this comes up, maybe it's all over.

[00:10:32] Taylor Holiday: Yeah. Yeah. Maybe this, because 

[00:10:33] Andrew Faris: they're not, they're like, didn't you say they're multiplying and stuff? 

[00:10:35] Taylor Holiday: Well, yeah. And they're like having conversations about us and like one of 'em even like created a phone number and called their, their human. Are we sure that 

[00:10:42] Andrew Faris: story is real? 

[00:10:42] Taylor Holiday: No, of course not. Yeah. Okay, great.

Am sure of anything. Absolutely not. Yeah. And in fact, I've asked Rock the question to try and be like, because I, I, I am very afraid of being dumb and like publicly and so I'm like, okay, how much should I believe that these posts are actually agents? It placed the odds at like 75 to 80% sure that the agents are, and not humans acting as agents or human prompting agents, so, sure.

Total. 

[00:11:05] Andrew Faris: Totally. Yeah. Or some, or, or somebody made a an, an agent that creates a bunch you know what I mean? Like, like there was actually a human step in it that is sort of undisclosed, you know, that somebody created an agent that purposefully goes and does this and just makes Twitter accounts all day.

That would not be very hard to do, I don't think, you know? 

[00:11:23] Taylor Holiday: Yeah. So while I'm, while I'm immune to the internet trying to force upon you the, like, nuance hammer and the caveating, every statement you ever make, like I have a, like a deep resistance to everybody who tries to impose that onto everyone. Around them.

Yeah. On the internet, which is like X's favorite thing to do. 

[00:11:39] Andrew Faris: Yeah. 

[00:11:40] Taylor Holiday: In this case, there's plenty of caveats. 

[00:11:41] Andrew Faris: Yeah. All right. Well, I don't know. It's fascinating. I mean, when you told me when we were at lunch and you told me that story 

[00:11:49] Taylor Holiday: Yeah. 

[00:11:50] Andrew Faris: That happened. I, 

[00:11:51] Taylor Holiday: you felt, you didn't feel good 

about 

[00:11:53] Andrew Faris: I didn't. No.

I, I, I physically the idea that the agents are talking about us and behaving on their own and interacting with each other and all these things, what, what I, the, the truth of what I felt in my body was fear. Yeah. I was like, oh, that's scary to me. I don't like that I'm over. It's funny, it didn't last long.

I'm over it now as we talk about it now, I'm like, ah, that's kind of interesting. 

[00:12:11] Taylor Holiday: I Yeah, but I, I, it'll come back. Come back. I have this reaction a lot. Like I feel very fragile right now. 

[00:12:15] Andrew Faris: Yeah. 

[00:12:15] Taylor Holiday: Like in my work. And one of the things that AI does, and I think this is paralyzed into the next topic of, we can talk about kind of, I know you guys are spending a bunch of time on try to build fire and mm-hmm.

We are too. One of the things that it does, my, my first experience of AI is it surfaces first, the breadth of information that has been absent from your purview. So like for us. We, you know, are at this point where there's a lot of customers and a lot of things happening every day at CTC and I don't know what's going on all the time.

And so we have this mo model that we use for forecasting our own business that applies a percentage likelihood of renewal onto customers and therefore their future contract value. So let's imagine you have a customer paying $20,000 a month. They, they have a renewal coming up in March. The question of what should the value of that revenue be in April is like a problem to be modeled and predicted.

Right. And we have found, like the historical way we used to do this, and like it feels barbaric is even saying it is like we have account executives who are responsible for the relationship of the customer. They have calls with them regularly, and they apply their own personal expectation on a percentage basis to that number.

And 

[00:13:20] Andrew Faris: so, so the, so the executive says, I think it's 50 50 that this person comes back. That's right. And then you then in the spreadsheet, they write 50% and then the spreadsheet spits out $10,000 a month in the future, right? That's right. Because the worth the value of the contract is 20, so That's right.

Exactly right. And then that behavior done. A million times 'cause you guys have a lot of customers ends up netting out a number. So my question, so before you say anything else, did that work 

[00:13:40] Taylor Holiday: well? So I think what we've experienced, 

[00:13:42] Andrew Faris: and by work I mean did it get you reasonably within the range of, I dunno, 

[00:13:45] Taylor Holiday: the answer is we don't dunno.

First of all, that's like one, it changes so much. Yeah. That's another thing. They're allowed to change it like every week. So it's really, so the question of 

[00:13:53] Andrew Faris: that seems reasonable to me. 

[00:13:54] Taylor Holiday: Right. And so the question is like, what were they Right when Yeah. You know, 'cause the, the decision is sort of binary at the end, but their opinion changes all along the way.

[00:14:03] Andrew Faris: Yeah. 

[00:14:03] Taylor Holiday: Right. And so at what point would you peg it and go, were you right on March? Were you right in April? Were you Right in? You know, so I think that's a, that's a hard question to answer. But what we've started doing now instead, 

[00:14:14] Andrew Faris: well, let me ask it a different way then. Did you guys previously have a problem where you.

Were having revenue be massively different than expectation, particularly in a negative sense. 

[00:14:24] Taylor Holiday: No. I'd say that what, what's happening now is it's acute at this time of year. 'cause there's so many renewals this time of year, and we had a couple go a direction that we're very different than we thought It was very disorienting.

[00:14:35] Andrew Faris: Yeah. 

[00:14:36] Taylor Holiday: And so that caused this sort of like a valuation of this system and sort of like updating to like, hey, there's probably a better way to do this now. And, and this sort of spills over into a bigger thing of just sort of creating hierarchy of action for all of our people and everything else, some of the things we're doing in stats, et cetera.

But so what we started doing is building we have every now every call transcript database. We have every Slack conversation database. We have all the stat list data to per perform business performance database. And we have a gem that runs an analysis against the customer based on those things and predicts the likelihood.

And then really 

[00:15:15] Andrew Faris: cool idea. 

[00:15:15] Taylor Holiday: Yeah. It's, it's, well, we'll see. 

[00:15:17] Andrew Faris: Yeah. 

[00:15:17] Taylor Holiday: And then the other thing we've started doing is we also through notebook, L-L-M-L-L-M notebook, LM notebook, whatever it is. Okay. You can feed it all that information and have it create a podcast. And so every morning I get a five minute podcast of people talking about what happened at CTC yesterday.

[00:15:35] Andrew Faris: Mm-hmm. 

[00:15:35] Taylor Holiday: Highlighting the biggest concerns, the biggest wins, and where everything is in between. 

[00:15:39] Andrew Faris: Yep. 

[00:15:40] Taylor Holiday: Really cool. And, and it is, it's super cool. So on my drive in, I'm getting two people who sound like podcast hosts talking about CTC and all the client calls and they're going, yeah. Yesterday with, you know, client X, there's clearly distrust happening and they do not believe in the incrementality studies and you need to get in there and figure out what to do, blah, blah, blah.

And so what it did though, the first experience I've had is. How was I ever making decisions? Ever? 

[00:16:04] Andrew Faris: Yeah. Like 

[00:16:04] Taylor Holiday: I had no, there's so much happening that I didn't know. You had no 

[00:16:07] Andrew Faris: visibility to it. Yeah. 

[00:16:08] Taylor Holiday: But then I, then I sort of stick a step back and the temptation is like, oh, those are all things that I need to solve.

[00:16:13] Andrew Faris: Your hands off the table, you're shaking the table. 

[00:16:14] Taylor Holiday: There are things that I have to go solve, but that's really not the case at all. But, but, but the point is mainly that AI services so much information that it's overwhelming Yeah. To figure out Now in light of all that information, 

[00:16:26] Andrew Faris: how to correct.

Well, this is why my question is a little bit like, are you sure that's necessary to do that? 

[00:16:29] Taylor Holiday: No, 

[00:16:30] Andrew Faris: because, 'cause yeah, one of my, one of my thoughts was like, I wonder how this will do relative to, to two other approaches to this problem. And first of all, I still have the same question, which is, did you actually have a problem before or are you just spending, or is it almost like you get a new tool and so you wanna start building things?

Well, the prob 

[00:16:48] Taylor Holiday: it's never a problem if you're wrong to the upside. 

[00:16:50] Andrew Faris: Yeah, I know, 

[00:16:51] Taylor Holiday: right? So, 

[00:16:52] Andrew Faris: yeah. 

[00:16:52] Taylor Holiday: But you were still wrong. 

[00:16:54] Andrew Faris: Sure. But, but yeah. Anyway, I. That might not be a problem though, like you said, right? It's never a problem. So it, but the, the point is, so, so there's that question, but secondly, my question is, what if you compared this approach to two other approaches?

One of them is, let's call it the control, which is what you're currently doing. Yep. The account executive predicts and it's not just one prediction, it's a bunch of predictions, which means it's gonna sort of, there's gonna be some average that nets out to, right? 

[00:17:17] Taylor Holiday: Yep, yep. 

[00:17:19] Andrew Faris: Okay. But then secondly, what if you, what if you made another control here, or I guess it'd be a variant, but like essentially it's a control.

What if you just regressed every client's retention rate to whatever your average client retention rate is? You know, and you just said like, I don't know if we float your client retention rate's probably really good, right? 

[00:17:36] Taylor Holiday: Yeah. I mean, we have, our net revenue retention rate is like 95%. 

[00:17:39] Andrew Faris: Right? So, so it's, so you guys already retain, so why not just assume that for every client, and I bet you on average across the board it's, 

[00:17:47] Taylor Holiday: yeah, it's generally useful and it, but specifically useless because the problem is next month my revenue.

Is going to be in reality, some variation of the renewals that are present in January. And I have hiring decisions and all sorts of things to make that I need to be more right than the average. 

[00:18:06] Andrew Faris: But what I'm saying is, are you sure that that wouldn't well of course you're not sure, but like, do you are, are you, well, what if actually just progressing to the, to the mean on this is actually more right than the executive doing it.

[00:18:18] Taylor Holiday: Yeah, it's possible. Yeah. I think the question of like the mean, what time and how much data I have is 

[00:18:23] Andrew Faris: Yeah. 

[00:18:24] Taylor Holiday: Is hard. 

[00:18:25] Andrew Faris: Yeah. But I, but that's, but my point is if, yeah, if you just sort of didn't, if you didn't allow any subjective element of it, if you just did entirely, but there's 

[00:18:32] Taylor Holiday: no way, like, because when you say no subjective element, defining the time range in which I select the average is a subjective decision 

[00:18:39] Andrew Faris: yeah.

You're gonna have an arbitrary endpoint 

[00:18:40] Taylor Holiday: for sure. Yeah. And so it's like really hard and, and the sample sets are pretty small. 

[00:18:43] Andrew Faris: What if you, what if you ran simulations? What if you, what if you back tested this? 

[00:18:47] Taylor Holiday: Well, that's part of what we're trying to do is when we create a new modality. We go back and then try and use it to determine, but again, because you're progressively polling the issue, the question is like, when was the poll right or wrong?

[00:19:00] Andrew Faris: Right. 

[00:19:01] Taylor Holiday: Now I think the most, like, the most important windows are probably like within 90 days 

[00:19:07] Andrew Faris: Yeah. 

[00:19:07] Taylor Holiday: Of of the actual decision. 

[00:19:09] Andrew Faris: But you're gonna be in smaller samples then too. 

[00:19:11] Taylor Holiday: Yeah. And you're, you can also have wild volatility in those 90 days, like where one day it could be 90 and the next week it could drop to 70, and then towards the end it drops to 30 and it's like, well maybe the 30 was right.

Because you learned along the way that they were upset. But then 90 was the problem. Yeah. Because on day 90 we we're kind of going, okay, cool. Everything's great. 

[00:19:31] Andrew Faris: Yeah. 

[00:19:32] Taylor Holiday: There's also like a deep question about why do people stay or go. 

[00:19:36] Andrew Faris: Yeah. 

[00:19:36] Taylor Holiday: That like is very. Hard to extract Yeah. From each circumstance.

[00:19:41] Andrew Faris: Yeah. 

[00:19:41] Taylor Holiday: And it's multivariate and 

[00:19:43] Andrew Faris: Yeah. And of course, yeah. It's not gonna be the same for everybody. 

[00:19:45] Taylor Holiday: Yeah. And so I, I do think there's this, there's this concern around trying to measure it that becomes part of the problem. This is what I, this is no different than what I want people to do with marketing measurement or forecasting, which is you can spend too much time trying to be Right.

[00:19:55] Andrew Faris: Yeah. 

[00:19:56] Taylor Holiday: And not enough time spent solving the problems. Right. And so I think I am trying to be careful that we don't get in this like, 

[00:20:01] Andrew Faris: because that's, that's a little 

[00:20:02] Taylor Holiday: chasing of 

[00:20:03] Andrew Faris: redness, right? That's a little what I, of what I hear, which is like, you don't, I'm not sure you actually have a problem, but you have a new tool that does a really cool thing 

[00:20:10] Taylor Holiday: well 

[00:20:11] Andrew Faris: have a problem.

And by the way, and by the way, I do think sometimes' also worth playing with a tool like that. You know, it's like, it's like it's a good muscle to exercise, to deploy a tool like that. Your podcast idea is cool. Like, it's like, yeah. So, but you, you did have a problem, you think? 

[00:20:23] Taylor Holiday: Yeah. Well, I know I did. Yeah.

We're, we're off course to our retention goal for 2026 so far. 

[00:20:27] Andrew Faris: Okay. Okay. 

[00:20:28] Taylor Holiday: Now the other, the other thing too though, is that like, again, it surfaces these problems that I think will also allow us to evaluate the. The system with more clarity, because I think the feedback loops presently were a little, little light, so Yeah.

More to come, but, but my main thing with all of this is that AI has this experience of creating a ton of information that becomes hard if you then have to make decisions with that More information. 

[00:20:51] Andrew Faris: Yeah, yeah, yeah. 

[00:20:53] Taylor Holiday: It's the difference between like, even like analyzing a meta account, it's like everyone likes the idea that it's like, oh, like look at the last seven days, check your dashboard and make a decision.

And then you just sort of go like, okay. Or like analyze infinity things, you know, like, and there's somewhere the, the information doesn't cross over into becoming like, oh, this makes it easier to decide things. Yeah.

[00:21:15] Andrew Faris: It's hard and, and there's like, as you've pointed out before, I actually don't know what you ended up with.

You, you were gonna do a study internally of when your media buyers and when your team makes changes. Yeah. Does it? Does it help or hurt? Did you ever get an answer to that? 

[00:21:26] Taylor Holiday: I don't think we've ever constructed it well enough 

[00:21:28] Andrew Faris: and it would be is extremely hard to test, to figure out. Right.

[00:21:31] Taylor Holiday: Counterfactual is always Exactly, 

[00:21:32] Andrew Faris: yeah. 

[00:21:33] Taylor Holiday: Olivia and I were having this conversation. 

[00:21:35] Andrew Faris: Olivia co from house. 

[00:21:36] Taylor Holiday: Yeah, sorry. Olivia, Cory from house. About why she's like, why do you think there's not an agentic media buyer yet? And I think the answer is because there's not a single endpoint to optimize for.

And so it becomes really hard to figure out what does a good media buyer do? 

[00:21:52] Andrew Faris: Yeah. 

[00:21:52] Taylor Holiday: Because it's different in almost every business case. Unlike hedge funds where it's like generate highest return on invested capital possible at the largest scale possible, it's like the measure to compare two different systems is obvious.

Yes. It's like in this year, did you generate what return on capital? 

[00:22:07] Andrew Faris: Yeah. 

[00:22:07] Taylor Holiday: Like you can't do that in MetaMedia body. Right. Like, so it, it's just been very difficult to validate that some thing is better than another, which is why the whole thing is such. Industry like. 

[00:22:19] Andrew Faris: Yeah. 

[00:22:20] Taylor Holiday: Ripe 

[00:22:20] Andrew Faris: for 

[00:22:21] Taylor Holiday: guru. 

[00:22:22] Andrew Faris: Yeah. Yeah, that's right.

Yeah. That, that makes sense. I yeah, and this is actually another thing I've been thinking about too is recently, this is not on our list, random show episode, by the way. Who knows what we're gonna go right now. 

[00:22:32] Taylor Holiday: Could go anywhere. 

[00:22:33] Andrew Faris: I have a little theory right now that, that a lot, I mean, I've said for a long time that one of the problems with, with, you know, the specific example I typically use is creative testing in a meta ads account.

Yeah. Is that people are actually not really testing anything. No. And they're not learning anything. They're so, it's just, it's just an endless like, stream of no knowledge being accumulated. Yes. And, and what I mean is there's no discipline or rigor around the accumulation of the knowledge. So you're not actually, you're not actually banking any learning.

[00:23:00] Taylor Holiday: Yeah. 

[00:23:01] Andrew Faris: And and I was thinking about this recently with intelligence tests as well. 

[00:23:04] Taylor Holiday: Yeah. I think incrementality tests you could put into the same 

[00:23:07] Andrew Faris: bucket. Yeah, that's right. And, and there's a couple reasons for that, but one of the things I've been thinking about is just that like, all of us are so bad methodologically.

So, 

[00:23:14] Andrew Faris: so even, even if it's like you are committed to the idea that I want to have some rigor, like for, I'll just speak for myself. I actually lack the technical data skills to test, to test in some way that is meth, methodologically reliable. And, and the reason I think about this is I know that in social sciences in particular, and, and even beyond that in academic literature, right?

People have talked for a long time about the replicability that the replication crisis, right? That's the idea that like all of these results that come through randomized controlled trials, right, right. The gold standard. Like you've, like you've said about incrementality, right? It's the gold standard of, of measurement.

And yet you go back and, and paper after paper after paper is not replicable. 

[00:23:52] Taylor Holiday: That's right. 

[00:23:52] Andrew Faris: And so, so, and there's all kinds of reasons for that related to statistical, statistical reasons and the way you set up, you know, and just human bias and all this stuff. And so then it becomes this strange thing where, where all these people are doing these tests.

I'm gonna have Drew Marconi on from intelligence soon, and I'm just gonna ask him about this because like, first of all, am I crazy? Is this actually a problem? Or actually, like, are you directionally correct enough that it's okay, it's okay to not be good, you know, like if your CRO test wins by 20%, like. I don't know.

It probably won't hold it 20%, but maybe it holds at five and it's, it's, and you, you pile up a bunch of 5% wins or whatever. Or is it actually possibly just leading people on a wild goose chase, you know, like of, of like nothingness, you know? Well, 

[00:24:31] Taylor Holiday: I, I think I'm 

[00:24:31] Andrew Faris: becoming a bit nihilistic about it. 

[00:24:32] Taylor Holiday: Yeah. Well, there's a huge operationalizing the ideology problem here and.

So I think about this and, and, but I actually do think that there's, there's really good ways to wrestle with this, and it's no different than what do you do with Cal Rowley's Home Run Forecast next year? 

[00:24:45] Andrew Faris: Okay. 

[00:24:45] Taylor Holiday: Right. 

[00:24:46] Andrew Faris: So do you wanna explain that to people who 

[00:24:47] Taylor Holiday: don't Yeah. Love baseball. So, so in baseball, you mentioned this idea earlier about regressing to the mean Yeah.

Which, like, when you forecast things, you look at outlier performances and you don't assume the persistence of the outlier 

performance 

[00:24:58] Andrew Faris: unless it, unless it persists for a super long time. 

That's 

[00:25:01] Taylor Holiday: right. 

[00:25:01] Andrew Faris: That's right. Yeah. The sample size has to get a lot bigger. The more of an outlier is That's 

[00:25:04] Taylor Holiday: exactly right.

[00:25:04] Andrew Faris: I think. 

[00:25:05] Taylor Holiday: Yeah. 

[00:25:05] Andrew Faris: But then again, I'm running up against my technical skills. 

[00:25:07] Taylor Holiday: That's right. But, but I think you generally, I bet if you were to bet on what FanGraphs Forecast, Cal Rally home runs in 2026, it wouldn't be 60 

[00:25:14] Andrew Faris: No. Which is what he hit last year, which is for those who are not baseball fans, Cal Riley is a catcher, hit 60 home runs last year.

Only most home runs 

[00:25:20] Taylor Holiday: in the history of baseball by a catcher. 

[00:25:22] Andrew Faris: Only a few 60 home run seasons ever in baseball. So it's a huge number is the point. Right. He hit a lot of home runs 

[00:25:26] Taylor Holiday: and I promise you no system will forecast him for 60 home runs. We can probably check those. Yeah. Yeah. Pull it up while we're doing this and I'll, I'll, I'll keep.

So this same question exists when you run a incrementality study. So let's use something where I think there is actually a fairly large database. There you go. 40. That's what I would've guessed. 

[00:25:44] Andrew Faris: The, I would've too. Yeah. The highest, the highest number across the forecasting systems is 44. There's like, and, and this is by the way, there's the, the thing that Taylor and I are looking at here is from fan graphs.

There's like seven different forecasts here. 

[00:25:55] Taylor Holiday: Yep. 

[00:25:55] Andrew Faris: And they range 

[00:25:56] Taylor Holiday: from 38 to 

[00:25:56] Andrew Faris: 44. That's range 37. The lowest number is 37. 37 to 44. And he hit 60 last year. 

[00:26:02] Taylor Holiday: That's right. 

[00:26:02] Andrew Faris: And he had 34 and 30 and 30 the two years before. Yeah. So anyway, the point is it, it pulled him back by, by 30% or something like that.

[00:26:09] Taylor Holiday: Right. So, so this is why this is like, we struggle a lot in trying to get brands to interact with incrementality tests in, in this way, which is you get a single test result back. Okay. What do you do with the single data point? 

[00:26:22] Andrew Faris: Yeah. 

[00:26:22] Taylor Holiday: And my suggestion would be you do not pivot the entirety of your measurement to that single data point.

[00:26:28] Andrew Faris: Yeah. 

[00:26:28] Taylor Holiday: Okay. My 

[00:26:29] Andrew Faris: response is you try to replicate it. 

[00:26:30] Taylor Holiday: Exactly. So one, you try to replicate it, but two is what we have is like, an index of the mean. Yes. Like an aggregate test. And if you don't have one, 'cause you're not running tests all the time, use house publishes a bunch of test results for you.

YouTube and meta. So on meta, they, I think the number that they have is like hundreds and hundreds. 

[00:26:47] Andrew Faris: This is so funny. Keep Sorry, keep going. 

[00:26:49] Taylor Holiday: So the benchmark is 1.2 on a seven day click. Okay. So 120%. 

[00:26:53] Andrew Faris: So the point is what your seven day click ROAS is in meta. Multiply that by 1.2. 

[00:26:58] Taylor Holiday: Yes. 

[00:26:58] Andrew Faris: Which which 

[00:26:59] Taylor Holiday: is almost your 28 day click.

[00:27:01] Andrew Faris: Some of us who have been advocating for 28 day click for a long time, 

[00:27:04] Taylor Holiday: it's probably gonna be really close. 

[00:27:04] Andrew Faris: It's extremely close to 28 day click. That's 

[00:27:06] Taylor Holiday: right, 

[00:27:06] Andrew Faris: that's right. Yeah. 

[00:27:07] Taylor Holiday: So, 

[00:27:07] Andrew Faris: and, and that's, that's from hundreds, maybe thousands of meta incre 

[00:27:10] Taylor Holiday: dollars, I think. I think they tell you the exact amount. I think it's like 400 or something.

Yeah. 

[00:27:13] Andrew Faris: Okay. Okay. 

[00:27:14] Taylor Holiday: So, but the point is, this is an aggregate mean. Now what I'll tell you is that our benchmark factor, prior to them publishing the study was exactly the same. 

[00:27:20] Andrew Faris: Yep. 

[00:27:21] Taylor Holiday: So what I hear there is like replication 

[00:27:23] Andrew Faris: Yeah. 

[00:27:23] Taylor Holiday: Across a fairly large sample set. Yeah. So that, that 

[00:27:26] Andrew Faris: two essentially, those are two separate, what do they call those when you te when you analyze a bunch of tests?

A meta-analysis. 

[00:27:31] Taylor Holiday: Yeah, yeah, 

[00:27:31] Andrew Faris: yeah. It's essentially separate meta-analyses confirming the same thing. Now I feel very good about that number. 

[00:27:36] Taylor Holiday: That's right. So my confidence level in that read goes up. Okay. So when we start all clients, we have incrementality factors in stat lists. It starts at 1.2 on seven day click.

Yeah. Now when they get a test result back. Okay. If it is. Close to that bar, that is like a high confidence that this is consistent with historical data. Yeah. If it's an extreme outlier. Yeah. So we just got one back the other day that's like, a hundred or like 212%. 

[00:28:01] Andrew Faris: Yeah. 

[00:28:02] Taylor Holiday: We are not going to move the factor 

[00:28:04] Andrew Faris: right 

[00:28:04] Taylor Holiday: to 2.12.

[00:28:05] Andrew Faris: That's right. That's right. 

[00:28:06] Taylor Holiday: Now the debate we're having and the thing we're trying to work through is what does one, what does one test results weight against the mean? 

[00:28:12] Andrew Faris: Yeah. 

[00:28:12] Taylor Holiday: And that question of how far should we move it, I think is relates to what does a MER look like? But there, what is the actual contribution health?

What's the risk of over optimizing or overspending relative to that read 

[00:28:24] Andrew Faris: Right. 

[00:28:24] Taylor Holiday: So there's, 

[00:28:25] Andrew Faris: if you, if you're a super high LTV brand, you might be willing to, to go push a little harder. That's high risk, right? Yeah. We, I, we, we talk about this with clients all the time, which is like, in fact, just yesterday I was talking about with a client, which is we have this question with our media buyers, which is which side are you willing to miss on?

That's right. So we set our targets relative to the brand that wants to be a little more conservative. Follow the inter affairs never grow method. Yep. That's not true. I believe in growth. A jf Yeah. 

[00:28:46] Taylor Holiday: Hang out. 

[00:28:47] Andrew Faris: I I do have a different client where they went year over year, went backwards in revenue by like 60%.

And I, I thought about putting that on a tagline somewhere. 

[00:28:54] Taylor Holiday: Are you guys still rebranding by the way? 

[00:28:56] Andrew Faris: Probably at some point. Yeah. It's just not the highest priority. Right. The we, we thought about putting on a tagline, like, you know, this client, we, we, we brought this client down 60%, you're higher, higher a JF growth for that, that client was also drastically mismanaged financially before.

So it's a, it's an outlier scenario. But anyway, but, but, but your point is right, which is. Which is like, you shouldn't go take that. And, and to your question, your very specific question, which is how much should you weight that one test? Yes. There must be a statistical answer for this. Well, 

[00:29:21] Taylor Holiday: well, there is, 

[00:29:21] Andrew Faris: there must be a methodological answer.

[00:29:22] Taylor Holiday: Yeah. And I also think there's business factors. There's both. Yeah. That, that can exist now. The other thing I'll say though, what's harder is if it's really bad 

[00:29:30] Andrew Faris: yeah. 

[00:29:31] Taylor Holiday: And, and actually the other thing that becomes even harder after that is if you get tests that are very disparate in the outcome.

[00:29:36] Andrew Faris: Yeah.

[00:29:37] Taylor Holiday: Oh. 

[00:29:37] Andrew Faris: I had that with a client 

[00:29:38] Taylor Holiday: recently. So this is actually what Olivia and George from cozy Earth and I are doing a podcast about this because cozy Earth has been on a very long journey in partnership with us in house to, to get to a, a read. And their reads are all over the place.

Variable and bad all the time. Yeah. All the time. 

[00:29:52] Andrew Faris: But they're bad, 

[00:29:52] Taylor Holiday: bad, terrible. Always 

[00:29:53] Andrew Faris: bad 

[00:29:54] Taylor Holiday: in every channel. 

[00:29:55] Andrew Faris: Yeah. 

[00:29:56] Taylor Holiday: All the time. And, 

[00:29:57] Andrew Faris: but they're making all this money. 

[00:29:59] Taylor Holiday: They are, they are doing well as a business. Yeah. 

[00:30:01] Andrew Faris: Right. 

[00:30:01] Taylor Holiday: Their efficiency is not what the incrementality is reporting. 

[00:30:04] Andrew Faris: Yeah. 

[00:30:04] Taylor Holiday: So there's a whole dialogue here around what do you do with a bunch of disparate information.

Yeah. We had a call today with a customer who we've gotten two reads that were very different, and he's like, and his response is, I'm done with this. 

[00:30:15] Andrew Faris: Yeah. 

[00:30:15] Taylor Holiday: I'm just going back to Chad scaling and feeling the vibes. Yeah. And because, but that's why people, people struggle with this so much. Yeah. To, to, to handle disparate, singular data points.

[00:30:26] Andrew Faris: My very first thought, as you mentioned this whole, whole thing is that the, the problem, and I've had this same conversation, but I've had a client who's saying. Why am I paying this bill for an incrementality firm that we are, we're doing, I don't even under you guys don't talk. You know, part of it's, we need to do a better job surfacing the results to the client and explaining and some of those things.

But I'm like, I'm pretty confident you made your annual contract back with this group in January, during your lowest month because of how we handled the spend, because of some information we got from those firm, from the, from those tests. But the thing is this, this particular client is, runs a really good business.

Like, I don't, I don't wanna sound disparaging at all, but he, he, he would tell you, he is not a first and foremost data thinker. 

[00:31:02] Taylor Holiday: Yeah. 

[00:31:03] Andrew Faris: And, and what this requires you to do is be, is to learn. And he, he's willing to learn. He's humble about it. It's not, he's not arrogantly, you know, an whatever. He, he wants the data.

It's just that, I would say it's not his instinct the way it's mine or yours or something like that, right. Where it's like, we, we came from this. Well, protection would 

[00:31:19] Taylor Holiday: be, 

[00:31:19] Andrew Faris: and so is there a worldview, almost like predisposition? 

[00:31:22] Taylor Holiday: Yeah. Well, 

[00:31:23] Andrew Faris: this is what I'm saying to where you and I approach everything this way.

Like you and I are talking about this stuff, like, you know, like we've talked about Right. You pulled me in from fantasy baseball. I pulled into stripes from fantasy baseball. The whole point of that is take numbers and turn them into insights. 

[00:31:35] Taylor Holiday: Yeah. Well, but the only thing I'll say is that I reject the idea that everyone isn't actually behaving this way.

Which is to say, and this 

[00:31:41] Andrew Faris: is, this is a great point. 

[00:31:42] Taylor Holiday: Yes. So you were actually pushing me out on this recently in a text conversation, which, which is just like the idea that you're, you're starting with some allocation decision. That's 

[00:31:50] Andrew Faris: right. 

[00:31:51] Taylor Holiday: And they're trusting 

[00:31:51] Andrew Faris: and it's based on some numbers somewhere.

[00:31:53] Taylor Holiday: Exactly. Yeah. And it's usually trusted on like the meta number that, that I, I just go like, why did you assign confidence Yes. To this number? 

[00:31:59] Andrew Faris: Yes, yes. 

[00:32:00] Taylor Holiday: On what premise? Under what research of information. Yes. And so we, we have this way that there are certain things that just get anchored 

[00:32:07] Andrew Faris: Yeah. 

[00:32:07] Taylor Holiday: Into our frameworks that are like, now everything has to move.

That with really great evidence, even that, even though that itself has no evidence, 

[00:32:15] Andrew Faris: this is a hobby horse of mine, but it's why you ought to be extremely careful about which dashboards you put in front of yourself. That's right. It's, it's why attribution software is something I've still never really embraced, even though I think theoretically it could be useful.

Right. The concern I have is that it's, it's so dangerous Yes. To put numbers, like particularly MTAs, where I think there's just really limited usefulness, if any, and the, and, and the, the problem is that is, is is actually like, like my, like my friend aforementioned Driveline baseball, their, their coaches talk about the problem of negative transfer.

[00:32:43] Taylor Holiday: Mm-hmm. 

[00:32:44] Andrew Faris: Which is when you go and master a skill that's bad for you. 

[00:32:46] Taylor Holiday: Yes. 

[00:32:46] Andrew Faris: And so when you go do that, you end up, you end up getting really good at something that is, you actually got better at the thing, but the thing doesn't move you towards the outcome that you want. That's right. And there's a negative transfer problem with data because when you put, you're like, okay, great, I've got this data.

But if the data is actually not leading you towards the result you want. It's a real problem. And, and so, yeah. So for me, like this, this is this is a real thing. And to your point, I think you're right. Everybody is actually making decisions based on this. Ultimately your bank account is a data point.

Right. You know? 

[00:33:12] Taylor Holiday: Right. 

[00:33:13] Andrew Faris: And it's all data. The question is like, which data do you prefer? And I do wish people would Yeah. Maybe, maybe, maybe you or, or I or somebody needs to make more of this case more often. Well, this might be a drum worth beating. Yeah. I 

[00:33:23] Taylor Holiday: thought 

[00:33:24] Andrew Faris: a lot about this. You, everybody's datadriven.

I even have this conversation with baseball fan friends who are like you, data nerds or whatever. It's like, I dunno, do you watch a game and see one score, one team score more runs than the other? That's a whole thing. That's a data point. Terrible 

[00:33:33] Taylor Holiday: output. Yeah. 

[00:33:34] Andrew Faris: Yeah. Right. Like, so we're all data-driven, you know, 

[00:33:37] Taylor Holiday: and I think that trying to.

Help people get the idea that we're on a journey to a, I use this phrase a lot, progressive truth. That's right. It is. It is. There is some knowledge that we have today that we believe about the measurement that we're trying to make better over time. And there are, there are, there are moments that will push us closer to what is really happening and then there will be things that push us further away and we will contend with that forever.

Yes. And we will try to hone in. And the best case scenario would be that we replicated 10 tests in a row. Yeah. In the channel forever. And they were all exactly the same. Yes. And our confidence would go really high. 

[00:34:07] Andrew Faris: Yes. 

[00:34:08] Taylor Holiday: That's likely not what's going to happen. To me, like the most honest thing to do would be, in many ways, to present people a range of outcomes of results.

Yes. But nobody would want that. Nobody wants that. Imagine a dashboard that's like, your ROAS is somewhere between 1.7 and 2.5. 

[00:34:20] Andrew Faris: Well, 

[00:34:20] Taylor Holiday: nobody would want 

[00:34:21] Andrew Faris: that. Maybe everybody thinks in a data sense, but, but I think the idea of probabilistic forecasting is extremely, is extreme. Like the idea of like, oh, this is 75% likely to happen.

[00:34:30] Taylor Holiday: Right. 

[00:34:30] Andrew Faris: You know, is like, it's really hard to get your head around. 'cause actually one in four is a, happens a lot, you know, so the, the, the alternative case happens fairly often, you know, so Yeah. It's really, it's really tricky. I think the thing that I, I'm solidifying in my mind as you're talking, as we're working through this right now, is the notion that what you really want is to, is to figure out which data points actually lead you to better decisions.

And that, that's the whole thing. That, that was the revolution of baseball, right? It's not like there wasn't data in baseball affordable. Right. And keep putting stats on the back of a baseball card for 70 years before, you know, way before Moneyball came out. Right. The point is, are those data points going to lead?

In the case baseball teams Yes. To make better decisions about how to put together a team. 

[00:35:07] Taylor Holiday: That's right. 

[00:35:07] Andrew Faris: And the answer was sometimes yes, sometimes no. And so, and this is the same thing, right? It's like which data points are you putting in front of you? Because those what, because you should be careful because you want the ones that are gonna lead to to better decision making.

And that's actually a really hard job to, to figure that out. 

[00:35:22] Taylor Holiday: I saw somebody on X today saying that they were having two agencies compete against each other and there was gonna grant one of 'em the ad account. And I was like, okay, what's the measure? And he said, ROAS versus roas. And I just went, oh, like you are literally going to force two.

People think 

[00:35:36] Andrew Faris: you're being so smart, 

[00:35:37] Taylor Holiday: right? And you are just literally incentivizing them to do something that will be harmful to you long term and you're going to anoint them the winner on their basis of the ability to do that. And so that's a good example of like the wrong well how should do 

[00:35:49] Andrew Faris: that 

[00:35:50] Taylor Holiday: to have them compete against one another?

I think it's incredibly challenging, but, but what you could do, I think is give them two campaigns. On a similar set of products that have the same exclusions. Yeah. Right. And have a cost control and they have to drive up value or they could run it without it, I suppose. 

[00:36:05] Andrew Faris: Yeah. 

[00:36:05] Taylor Holiday: You'd have to be really confident in the exclusions.

[00:36:07] Andrew Faris: Yeah. 

[00:36:07] Taylor Holiday: That there's no audience overlap. Like there's lots of challenges because meta will assign Yeah. 

[00:36:11] Andrew Faris: Yeah. 

[00:36:11] Taylor Holiday: Last click value to a thing is like, so this idea of testing two things against each other is almost like never a useful idea. Yeah. Actually, your boy Barry call him your boy 'cause he's regular recurring guest.

[00:36:21] Andrew Faris: Yeah. Yeah. And he's great, 

[00:36:23] Taylor Holiday: Barry. That's 

[00:36:23] Andrew Faris: great. 

[00:36:23] Taylor Holiday: He has this thing that I think is right, which is that the evaluation of creative at the ad level is so flawed. Yeah. Because your first click could be on ad A. Yeah. Right. And purchase could be on AD B. Yeah. And you assign all the credit to AD B and ignore the interaction with AD A.

And meta doesn't care about that. Right. Right. So, I think this is the problem with competing campaigns each 

[00:36:41] Andrew Faris: other. Yeah. JI think Jordan Manard talks about this too, the idea that there's like an ecosystem. In the 

ad 

[00:36:46] Taylor Holiday: account. 

[00:36:46] Andrew Faris: In the ad account. And you, and so you basically ought not to evaluate any given ad.

You know, it's, it's, it's why I like spend is the metric for me. As long as there's not a super crazy ROAS thing like 

[00:36:54] Taylor Holiday: Yeah. 

[00:36:55] Andrew Faris: Which 99.8% of the time there's not, you know, so it's like, yeah. Okay. Let me take this conversation to the banking knowledge makes me think of something I put on our list today.

[00:37:03] Taylor Holiday: Yep. 

[00:37:04] Andrew Faris: It's sort of a different thing. Amazing story in the weekly dose of optimism newsletter this last week. And I, I wanna walk through this and tell you kind of what has made me think as an organization, and I think I'm influenced by you here a lot. Okay. So I think you'll have good things to say about this.

So first of all, everybody goes subscribe. Packy McCormick formerly Dan McCormick, but he's just made create too much of a monster. So he has to go Is he his 

[00:37:21] Taylor Holiday: brother? 

[00:37:22] Andrew Faris: He has to, yeah. Yeah, Dan. But so Dan and Packy are brothers. Yeah. But Dan founder of Create Creatine brand is just, he, he's got too good of a business.

Yeah. So he had to stop writing the newsletter, but Packy took it back over as an investor and all this stuff, not Born Capital pack's. Awesome. You introduced me to him originally. And his newsletter's Great. Weekly dose of optimism. Five optimistic stories every week about how the world's getting better, usually with a tech and business kind of lens through it.

Okay. And it's, it's just great. But they, there was a story about the founder of GitLab. I think his name is Sid. Okay. GitLab is he's a billionaire. It was a tech company that was founded. I think GitLab is a collaboration tool for coders. Okay. Is, is, is I think what it is. And and you know, there's a, there's a lot of interesting things about about GitLab and about Sid.

But basically what happens is, is that first of all, GitLab was studied really aggressively by people after COVID because they had been fully remote forever, despite like a 2,500 person workforce working on coding together. And, you know, he was a Y Combinator guy. Like everybody he said told him, you gotta be in an office 'cause you gotta share the knowledge.

And he was like, no, there's other ways to share knowledge and I don't, I'm not convinced that that's the best way to do it. And their tool allowed them to share knowledge really, really well. So they did a few things, which is which is basically. They have a 3000 page handbook. Yeah. Internally, and they have a YouTube channel, and I, it might be private, I don't know.

It might not be. It has 12,000 videos. It's basically every meeting in the company, it's all recorded. And the little tagline is, no piece of information is too small to record. And so they just document everything. And then the internal culture is when you have a question, go to the handbook. Because that's the first place to go for everything because you just document absolutely everything and, and you go.

And then of course everybody's collaborating on that all the time, right? Yeah. And so that centralized knowledge becomes this critical thing and they, as a company, and Sid as a leader, is going like, this is the most precious thing we have, is this set of knowledge that we are all collecting and that we're all building around.

Okay. So there's two fascinating things about the story. The first is, Sid got cancer when he was pretty young. Now he's a billionaire. He first went into remission. Then it came back and doctor said, it's over. You're done. We can't do anything about it. And Sid was like, okay, well I don't believe you. So he goes and gets, goes down this route of, of, you know, he's a billionaire, employs a full-time team to help him beat his cancer.

They all come around this and they start collecting all of this knowledge and and through a whole bunch of stuff, and the exact same methodology that is described about his company, they, they go and they put together the knowledge and he's, he's back in remission. So it worked and they, they did some really specific therapeutic for him, you know, like reading all these papers and whatever.

So he, he was able to do all this thing, incredible story. And as much as, first of all, that can sound like, okay, rich guy gets better healthcare than the rest of us. Like, that's really annoying. The comparison the article makes and and actually Paki links out to a Fuller article about this is really worth everybody's time.

I'll, I'll put a link to the weekly dose in the, in the show notes. But the, the comparison he makes is Magic Johnson and h hiv. 

[00:40:12] Taylor Holiday: Mm-hmm. 

[00:40:12] Andrew Faris: Where he says like, you know, ma, like HIV is undetectable in Magic Johnson now. Like, it basically he got way better healthcare than anybody else, but actually that's really good for everybody else because it sort of allowed people to develop ways of, of handling this, that then they got to the masses and now HIV is a much more treatable disease and it used to be.

Right. So, so that's the idea is that it sort of starts with him, but then that knowledge is banked and now like that other people can use that and can learn from it and doctors can learn from it and all this kind of stuff. So, so there's that. Okay. But what has really made me think about is like, so, so first of all, crazy, like maybe we can cure our own cancer now with the knowledge and, and of course AI is a part of this story and all that stuff too.

So amazing, amazing story, first of all. And he is like in his forties, by the way. Secondly though, it has made me think a lot about the idea of a playbook, which is a term that we talk about a lot. Yeah. And it comes back to this thing you said, which is like this bank set of incrementality studies, okay?

Mm-hmm. And, and what I've thought is. I have hundreds of podcasts. I've recorded, you have countless hours of content. You've recorded. I have real solidified beliefs about a lot of things in e-commerce at this point. You know, you've made jokes about growth. I don't actually think that brands shouldn't grow, but I think some brands shouldn't grow.

And I actually have some categories in my mind when, when you ask me this question that I'm probably not as clear about as I could be. And I bet if I sat and did the exercise, the hard work of writing out the ideas, it would force me into behavior of, of getting clearer about that and then having different sets of advice for, for clients about that.

And I also bet other people in my company have different ideas about that, and it could be worked out, you know? And so what I've started to think about is maybe as a JF growth grows, we're still very small. Like we're hiring a second growth strategist right now, like still very small. So all that, maybe I should massively disproportionately put time into maintaining a centralized document of knowledge as best as I can, especially because now AI.

Can query that information much easier than, than we've ever been able to before. So it's AI, the information is much more transmissible than previously. And then I should take that. And of course, it doesn't need to be all my knowledge. I'll tell you what I did the other day. You, you, you released a really good podcast episode that I said I listened to.

What did I do? I went and put that in a knowledge bank somewhere. I wrote my own thoughts on it in an notion card so that I had like, here's what I really liked about this. And so I could bank that thought, and I'm not exactly sure what I'm gonna do with it yet, but it's made me think maybe there is just this really disproportionate impact of just doing the slow, steady, detailed work over a very long period of time.

Of just like, 'cause it, you know, you don't build a 3000 page handbook overnight, right? So it's like just doing that over and over. So I'm just curious how that story hits you and what you think, because I think you guys have been very, very good at this. 

[00:42:36] Taylor Holiday: Well, yeah. I've said a lot that that idea that like operationalizing ideology is the value of an agency, right?

Yeah. My fear, and this goes back to this conversation that happened on X, where somebody was like, I uploaded the meta gems, like the meta gem. Model breakdown and asset to analyze ads through this lens. And I was like, it has that in its database. 

[00:42:56] Andrew Faris: Yeah. Right. 

[00:42:57] Taylor Holiday: I guess like my question is what do you have Yeah.

You took, you just talked about taking a publicly available piece of content Yeah. And putting it into a separate repository. 

[00:43:06] Andrew Faris: Yeah. 

[00:43:06] Taylor Holiday: That's now in every LLM in the world. 

[00:43:08] Andrew Faris: Yes. 

[00:43:09] Taylor Holiday: My fear is that the surface area of things that don't exist in every LLM is like, basically there is no knowledge or playbook that doesn't exist already in there.

That's right. Because all, like we, I like to think I have a lot of original ideas, but mainly they're an extrapolation of some previously existing idea too, in some way. 

[00:43:23] Andrew Faris: But do I mean, don't, here's my, here's my response to that. It's that it's that. The, the information is all there, but it always has been there and actually it's been fairly accessible in a lot of ways.

Yes. For a very long time. 

[00:43:37] Taylor Holiday: Yep. 

[00:43:37] Andrew Faris: It's now easier to do that, 

[00:43:39] Taylor Holiday: but the problem, well, so the question is can you access it in query and know when to apply it? 

[00:43:42] Andrew Faris: Yes. 

[00:43:43] Taylor Holiday: So that to me is the thing you have to illustrate. 

[00:43:45] Andrew Faris: Yes. 

[00:43:45] Taylor Holiday: With the database. 

[00:43:46] Andrew Faris: Yes. But, but also there's point of view, right? Like, let's just take, this is way too broad.

I mean, I, I don't know. Let's take some debated cost controls versus not. Okay. Easy one. Okay. So the, the arguments on both sides of that have been, are in every LLM, like you said. Okay. Whatever. Anti, you know, whatever auto-bid guy thinks versus whatever hand affairs thinks. Yep. Those two are, are, are accessible to the l lm.

Right. So I could go and ask LMS right now, what's the best argument in favor of each of these, but I actually am trying to not, that's not what I'm really after. What I'm actually after is the point of view. What I want is, is somebody to arbitrate that debate and the LLM could do that. Okay. It could, but I'm not sure I believe it actually.

This is one of the things I think is one of the biggest challenges with LLM is it's, it's almost that negative transfer problem. Again, it speaks very confidently about things that it's actually not that confident about. It's just sort of, predictively. You've never done that. Oh, I do it all the time.

Yeah. Yeah. So, yeah. But, but, but you know what, I actually really try not to. I try. I 

[00:44:42] Taylor Holiday: know. Yeah. I, I, I, I think, you know, the question is just, yeah. It's a question of trust. Do they trust you more than 

[00:44:46] Andrew Faris: that operator? Well, but my point is I'm building a JF growth and I want to say like. I'm willing to put my, my flag in the ground on some things that I believe that are contrary to some things that other people believe and say it's, you know, again, I've heard you talk about the CTC at some point you said you must behave the way I'm telling you to behave.

Yeah. Now the, the LM had that information, but the people you know, or does now, anyway, the, the, the people though would behave in all kinds of ways. So the handbook would be like, go, how do you go run a, a bid cap versus a T rows or whatever, an A JF growth. There should be a documented thing in a handbook somewhere about how to do that.

And somewhere maybe Andre Luna, who likes bid caps also disagrees with me about some detail of this. But you know what I'm saying? This is the thing that I believe here. This 

[00:45:25] Taylor Holiday: is a really good thing about why cost caps aren't. The, the less conservative version than big caps today. So we should at some point 

[00:45:31] Andrew Faris: we, yeah.

Let's it, yeah. Andre's great. But, but do you see what I'm saying? I I don't just want the information, I want the point of view. That's what I'm saying. 

[00:45:37] Taylor Holiday: I, I get it. I think I could ask, I think I could ask x your point of view on big caps, and I think I could get it. I don't think it's actually locked in your thing.

The, the, the, this is why I think that the end of the day, what it boils down to is the accountability. It's that I think the only human thing, 

[00:45:50] Andrew Faris: I think this, I don't think this is wrong. 

[00:45:52] Taylor Holiday: Yeah. I just, so I think the problem with the handbook thing, 'cause it is so tempting. I even like Brian, Brian Armstrong, Coinbase just did this thing the other day where he talked about how they've like done this, they've internalized every thing that's ever been written in the history of Coinbase.

And now he gets like, advice as a CEO about what to do and it like, it like tells him what to do. Yeah. Like, it, like I'm intrigued by that idea. I think the question is what do I have service area that that, that it doesn't. Now there, there are some things. I think our, our data I don't know how much publicly available p and l level E-commerce data.

That's a point. Data there is, but you 

[00:46:22] Andrew Faris: guys have 

[00:46:22] Taylor Holiday: a lot of it. There's some of it right. We have this cool lead gen idea. I'm actually, I don't know if maybe I'll, I'll ask you to cut this out. I'll ask Grant afterwards, but that someone just shared with us, which is imagine a lead gen tool where you come to the landing page and you write the problem, you're facing it as a business.

And what it does is queries all the history of CTC and goes, there are 412 conversations about this issue inside of CTC over the last five years. 

[00:46:47] Andrew Faris: Yeah. Right. 

[00:46:48] Taylor Holiday: Get on a call with somebody to discuss our experience in those conversations. Yeah. So what it gives credence to is that, that thing you're 

[00:46:53] Andrew Faris: facing and then it cites those conversations for the person on the call.

That's, yeah. 

[00:46:56] Taylor Holiday: And so the idea is like, that's cool. Everyone says case studies or we have experience, and it's like, well, what if we just showed you, oh yeah, this brand was facing that exact issue. Here's what we did that didn't work. Here's what we did that did work and that's why we'll do this for you.

[00:47:08] Andrew Faris: Yeah. 

[00:47:08] Taylor Holiday: And so I think there is this way in which you can build, and that's just trust development, right? Yeah. Like I think that's a reason to trust my point of view. Yeah. On the issue. 

[00:47:15] Andrew Faris: Yeah. 

[00:47:15] Taylor Holiday: So I think there's, there's ways, there's something there about like the institutional knowledge. Is important.

But I've had people like have, I don't know if you've experienced this, I have had e-commerce owners send me transcripts where they ask the LLM to act like Taylor. 

[00:47:30] Andrew Faris: Yeah. 

[00:47:31] Taylor Holiday: And what would I do? 

[00:47:32] Andrew Faris: Yeah. How, how did 

[00:47:33] Taylor Holiday: you do? And it does it 

[00:47:34] Andrew Faris: Yeah. 

[00:47:34] Taylor Holiday: Like in ways that I, I don't actually know what the counterfactual, what I would've said if they, I'm so now I see it, but, but I'm like, dang, one, I feel like almost like, like they stole my soul.

Yeah. Yeah. Like they took me and put me in the thing. Now I'm what use am I? But, so, so, but it's weird. They, they're like, you can do that. You as an e-commerce owner could go ask. Chat, GBT say, I want you to act like Taylor and I want you to give me a recommendation on this ad account. 

[00:47:58] Andrew Faris: Yeah. Right. Yeah. Well, I think there's a, there's a hidden benefit potentially.

I mean, what you, possibly, what you're saying is that there's, our knowledge is useless in general, you know, in this world, right? Yeah. Which I, as a beat is a drum I've heard you beat before. Basically just, you know, the surface area of what AI knows versus what humans know. 

[00:48:14] Taylor Holiday: Yep. 

[00:48:14] Andrew Faris: That kind of deal. So it's possible that that's, that what you're saying is sort of the negative end result of this, which is that there's no point in organizing the knowledge and information in some good way because it's already there, you know?

Well, 

[00:48:24] Taylor Holiday: the app doesn't, so when you go to your cancer example, 

[00:48:27] Andrew Faris: yeah. 

[00:48:27] Taylor Holiday: He operationalized it to his own benefit. So I do think that this idea that. You're gonna take the output and you're gonna go do it in the ad account. Yeah. You're actually gonna do it. 

[00:48:35] Andrew Faris: Yeah. 

[00:48:35] Taylor Holiday: And you're gonna be on the hook for it. 

[00:48:37] Andrew Faris: Yeah. 

[00:48:37] Taylor Holiday: Is the thing that's the, like, you have to go and be the person that's like, okay, I'm gonna go change the bid cap based on this advice.

Yeah. And I'm gonna, if it's fails, it's my fault. 

[00:48:48] Andrew Faris: Yeah. But I, I think, I really think there's sort of another thing here, which is, you know, I, you talked about operationalized knowledge for an agency. I, I love that phrase. I actually think about it all the time, especially as I've really, you know, fully pot committed on growing an agency is like, that is what the agency is operationalized knowledge.

And both sides of that equation are really important. And they're both really hard. You need the knowledge part and you need the operations part. And the, the thing can break on both. I actually think. Some agencies are bad 'cause they're bad at both. Yeah, right. They, they actually don't have any point of view that's clarified.

And also everybody inside the agencies is doing whatever they want. Some agencies are bad because they actually do have point of view, or somebody in the organization has point of view, but they haven't figured out how to, how to get it out to the rest of the organization. And one of my thoughts though is like, okay, if I believe operationalized knowledge is what an agency can do then, then before I can operationalize knowledge, I have to organize knowledge.

Mm-hmm. I have to actually have a way of, of creating that. Yes. And the, and the, and the downstream benefit of that. The sneaky benefit, I think is, that is something that I've said a lot of times, which is that writing is an act of thinking. And so forcing myself into the behavior of writing out ideas, I, I mean it's one of the values of the podcast to me.

It's not writing, but it does the same thing. It makes me work through an idea because I have to put out content. And so, and so, you know, and again, I try not to do that with an idea that I don't really believe or something like that, but it's just. Something about that act of ta talking about or writing it is, is a benefit.

And I kind of wonder if the GitLab thing, like if the sneaky thing is actually just that you've got a lot of people in an organization trying to be forced into behaviors that makes them think more clearly. You know, just that, that act of thinking clearly is really good. And I think one of the dangers of AI is how much it will, it will end run around that process.

Right? It it, you don't need to think that clearly if AI can do it for you. Now again, if we end up in the sort of super cynical version of the scenario, that's fine and the AI does the work, but like, but yeah. Anyway so it's just something I've been thinking about. I I it is nobody actually has a playbook, but what if you did, you know, what if you had all the way down to when did you grow?

[00:50:42] Taylor Holiday: But isn't what Prometheus is, isn't it? Isn't it your playbook? 

[00:50:44] Andrew Faris: Yeah, for sure. Yeah. We, and, and, but the thing about Prometheus, which is our AI co-writing tool and, and really goes way beyond that at this point. It's our operational tool ultimately. 

[00:50:52] Taylor Holiday: Yeah. 

[00:50:53] Andrew Faris: Is that it has one surface area where we spend a disproportionate amount of time, which is, which is our approach to the ad creative and messaging.

And it needs to get better still there, but it doesn't have all of our knowledge yet. You know, it doesn't, and so like, yeah. Anyway. 

[00:51:06] Taylor Holiday: Yeah. Like stats is ours. Like I think, I think we're, everybody tries to do 

[00:51:09] Andrew Faris: Yeah. But I don't think everybody tries to That's right. You're right. 

[00:51:12] Taylor Holiday: Right. 

[00:51:13] Andrew Faris: I think they should.

And the other thing I've thought about this is, I sort wonder like in the case of Sid, the, the exercising those muscles in the business c created a skill set that he could take into the rest of his life. Right? And this gets into something else. We don't actually have to go down this road 'cause you've got some other things on the list.

But I've sort of become obsessed with the idea that one of the reasons to hold yourself to really high standards in business and to high accountability in business and to pursue great work. You know, it creates financial benefit and all that kinda stuff. But as I've said, a lot of times, that's not the most interesting thing to me.

But this idea that like, it forces you into behavior. Beca the kinds of excellence in your behaviors that are transmissible and, and useful in all kinds of parts of life. Right. I, I'm, I'm sure there's things that you've learned at CTC that have been helped you be a better dad, you know? 

[00:51:54] Taylor Holiday: Yeah, yeah. 

[00:51:54] Andrew Faris: And, and the way you think about what, how you, how your kids are formed and, and a better baseball coach and a better wherever, whatever communities you wanna contribute value to, you know?

So, so that's the other thing I think about this is I think it would be good for me to, you know, to do this just because it would exercise good muscles, you know? 

[00:52:10] Taylor Holiday: Yeah. I, I think in all cases, you, you are, I think, passionate about a pursuit of truth.

[00:52:18] Andrew Faris: That's right. 

[00:52:19] Taylor Holiday: I think, yeah. That get the closest alignment to what is real and what you think that you can create the better.

[00:52:28] Andrew Faris: Yeah. 

[00:52:28] Taylor Holiday: So, 

[00:52:28] Andrew Faris: yeah. 

[00:52:29] Taylor Holiday: So I think that that feels to me like an expression of that, which is that that's right. There is now, 

[00:52:32] Andrew Faris: that's definitely, 

[00:52:33] Taylor Holiday: that's what he wants to know. Can you cure this cancer? And there's now way more information ever than, so he's going to. Tried to organize the process to getting into alignment with what is true about his cancer.

That's right. 

[00:52:43] Andrew Faris: That's right. 

[00:52:44] Taylor Holiday: And he's like, and so that pursuit, you're right. Was showing up in his company and so he applied it against that and it worked. 

[00:52:49] Andrew Faris: Yeah. '

[00:52:49] Taylor Holiday: cause somebody wasn't willing to actually acknowledge that there was more to be known than what they knew. 

[00:52:54] Andrew Faris: Yeah, 

[00:52:55] Taylor Holiday: yeah. 

[00:52:55] Andrew Faris: Yeah. Or at least what they said was that the standard of care was, had been That's right.

Had been exhausted. Right. You know, and so it's not that, of course, I'm sure no doctors told them you could never possibly be cured. 

[00:53:04] Taylor Holiday: Right. 

[00:53:04] Andrew Faris: They just said, we're done. We can't do anything more for you. What we have is not enough for you. Yeah. Speaking of exercising muscles, 

[00:53:10] Taylor Holiday: yeah. We're here looking a little sweaty and ragged.

[00:53:12] Andrew Faris: Yeah. Do you wanna talk? Let's, let's do that. Well, I'm, that's a fun one. We only have so much 

[00:53:16] Taylor Holiday: time left. That's a fun one. My wife dragged me into a high rocks. I'm not here to do the thing where you just talk about your fitness thing all the time, but I am fascinated by the business model. Of each and you 

[00:53:24] Andrew Faris: wanna just, just, I think people mostly know High Rocks, but just in Case, 

[00:53:26] Taylor Holiday: high Rocks is a fitness race where you run eight kilometers and in between each kilometer do some sort of activity from rowing to wall balls to lunges, to burpees, all movements that I would say almost anyone can do.

Yeah. There's no big barrier in, in CrossFit. I think there was a few movements Yes. Not all of them. Yeah. Snatches, yeah. Muscle ups that are like pretty prohibitive for people to participate in. 

[00:53:52] Andrew Faris: Yep. 

[00:53:52] Taylor Holiday: All the movements on High Rocks are 

[00:53:54] Andrew Faris: without having to scale them. 

[00:53:55] Taylor Holiday: That's right. 

[00:53:56] Andrew Faris: You can actually do that.

[00:53:57] Taylor Holiday: Yeah. And they, and the weights are nothing intrusive and so you, most people can participate and I got to do my first race in Anaheim and it is insane the, like, velocity of energy and participation in these things. Yeah. And now it's like, sorry. 

[00:54:11] Andrew Faris: Do you mean that the business is growing really fast?

Yes. Or do you mean the experience on the field of High rocks was extremely high velocity and fund? Both. Yeah. 

[00:54:17] Taylor Holiday: Both. 

[00:54:17] Andrew Faris: Cool. 

[00:54:18] Taylor Holiday: Like, so these races, they sell out the second that they open up, they're global. They're all over the world. They have them for kids. They have a professional elite competition division.

[00:54:27] Andrew Faris: Yeah. 

[00:54:27] Taylor Holiday: Down to like, you can do relays, you can do couples. You can do And 

[00:54:30] Andrew Faris: is it always the same race? 

[00:54:32] Taylor Holiday: Always the exact same race. 

[00:54:33] Andrew Faris: Yeah. 

[00:54:34] Taylor Holiday: At least up to this point. I think there's so much service area for them to introduce. Yeah. Of 

[00:54:36] Andrew Faris: course. 

[00:54:37] Taylor Holiday: Little variations, but one of the about it high rock 

[00:54:38] Andrew Faris: strength or 

[00:54:39] Taylor Holiday: whatever.

Yeah. It's, it's more like running a half marathon in that way because you get to try to improve your own race time all the time. Yes. And so I think that the continuity of it. Interesting. This is one of the, so this is one of the things of the business model for me versus CrossFit, the actual, the entire thesis seemed like ready for anything.

Like it was about multimodality that, that you percent wouldn't even know what you were going to do. 

[00:54:59] Andrew Faris: Yeah. 

[00:54:59] Taylor Holiday: Before you go and do it, which I may be willing to concede would make you a better athlete. In terms of inviting a larger tent of people into participation, I think is actually in many ways prohibitive.

[00:55:11] Andrew Faris: Yeah. 

[00:55:11] Taylor Holiday: And so there's something about the consistency of repetition that like like marathons and half marathons allows someone to see their own progression in a clear way. And, and they're crushing it. And I'm fascinated by live events. I'm fascinated by the business of the apparel and the ticket sales and, and like how big this is gonna be.

But it is super interesting. 

[00:55:30] Andrew Faris: Well, there's one big problem with what you just laid out, which is that CrossFit got gigantically huge at, at, at one point. So like it was able to do 

[00:55:38] Taylor Holiday: the business of CrossFit. 

[00:55:39] Andrew Faris: It was very big. I mean, I don't know what OX is, you know. Total revenue is, or whatever, but, but CrossFit was like the biggest, fastest growing fitness thing ever or whatever, you know, it was like 

[00:55:48] Taylor Holiday: it, but the sport was, but 

[00:55:49] Andrew Faris: no, no, no.

I mean, I mean, it was like the, it was the most gyms put everywhere. 

[00:55:53] Taylor Holiday: It wasn't the problem that the gym business model was like a weird franchise model that they didn't actually get to participate in that revenue. Like at all 

[00:56:00] Andrew Faris: the gyms. 

[00:56:00] Taylor Holiday: Yeah, 

[00:56:01] Andrew Faris: yeah. No, the gyms were totally franchised. Affiliate deal. You basically paid, I think three grand a year to, to have a, to have the name CrossFit, 

[00:56:07] Taylor Holiday: right?

Yeah. So like that, that feels like inherent, like what's interesting about High Rocks is they actually are trying to take nothing from the gym owners. They allow all the gym owners, like today you and I went to a High Rocks class. 

[00:56:18] Andrew Faris: Yeah. 

[00:56:18] Taylor Holiday: Moxie has nothing to do with High Rocks. 

[00:56:20] Andrew Faris: Yeah. 

[00:56:20] Taylor Holiday: And so, 

[00:56:21] Andrew Faris: but, but CrossFit, CrossFit, I mean, I guess besides the affiliate fee.

It was a pretty novel, or it was a pretty, I mean, not a novel. It was a pretty small affiliate feel all told, you know, it was a few grand a year. But 

[00:56:30] Taylor Holiday: that's, so part of what I'm saying is that was their monetization mechanism though. 

[00:56:34] Andrew Faris: One of them. Yeah. 

[00:56:34] Taylor Holiday: And it was crappy. 

[00:56:35] Andrew Faris: Yeah. 

[00:56:35] Taylor Holiday: And so 

[00:56:36] Andrew Faris: it's like, yeah, 

[00:56:37] Taylor Holiday: I look at that.

Like I don't, 

[00:56:38] Andrew Faris: I don't know if that's where they made all their money, but the other thing, 

[00:56:40] Taylor Holiday: they make all their money. 

[00:56:41] Andrew Faris: I think they made a lot of money on the L one, which was, which was how coaches got trained. So you, you go sign up for an L one that, so your L one is your level one coaching certificate.

And the thing in, in peak CrossFit was that lots of people got their L one who were never planning on coaching anybody. Yeah. It was just like, if you wanted to go to CrossFit CrossFit camp for a weekend or CrossFit college for a weekend or whatever, that was part of it. And then the games, now I, now, I actually have always wondered about this question, which is like, 'cause CrossFit was a very big and very profitable business for a while.

But I don't, I don't really understand where they made their money. If it was all a billion piece. This is story. 

[00:57:14] Taylor Holiday: My, that's how I feel too. Is that, 'cause like even this, like, so this says estimates have been around a hundred million for a year. There's some estimates that got into multi hundreds.

There's some that say that 82,000,024 was its peak reported revenue. Yeah. It's not public. 

[00:57:25] Andrew Faris: That's about, that's about what I would've thought was about a 

[00:57:27] Taylor Holiday: hundred. 

[00:57:28] Andrew Faris: Yeah. 

[00:57:28] Taylor Holiday: But, but there was a $4 billion industry that surrounded it. Yes. And this is what I saw was like the value capture out of CrossFit, taken by Corp CrossFit corporate was crappy 

[00:57:39] Andrew Faris: Yes.

[00:57:39] Taylor Holiday: Relative to the thing that they built as a movement. Yes. Whereas High Rocks, if you wanna do a High Rocks race, they capture all of the revenue of a High Rocks race. Yes. It is their event. 

[00:57:49] Andrew Faris: Yeah. 

[00:57:49] Taylor Holiday: Do 

[00:57:49] Andrew Faris: you know what their revenue is? 

[00:57:50] Taylor Holiday: I think I saw it was like 140 million. 

[00:57:53] Andrew Faris: Geez. They blew past it. 

[00:57:54] Taylor Holiday: Yeah. Now again, I don't, we don't know.

[00:57:56] Andrew Faris: Yeah. 

[00:57:57] Taylor Holiday: Lemme see this. 

[00:57:58] Andrew Faris: And, and CrossFit did what everybody expected, which at some point it flamed out. Everybody was concerned that it was sort of a cult or a fad or whatever it is. So 

[00:58:05] Taylor Holiday: 130 to 140 million in 2025. 

[00:58:07] Andrew Faris: And it's, I mean, it's gonna be way up in 2026, 

[00:58:08] Taylor Holiday: right? Because nobody, you know, does this like, it's like, and it's global.

It started in Europe, actually. I think it began in Austria. 

[00:58:15] Andrew Faris: Yeah. 

[00:58:15] Taylor Holiday: And it just like the approachability, my wife, the idea that she would ever do a, a, like a public CrossFit competition 

[00:58:22] Andrew Faris: Yeah. 

[00:58:22] Taylor Holiday: Would be such a far bar 

[00:58:24] Andrew Faris: Yeah. 

[00:58:24] Taylor Holiday: From where she was, but like, she crushed it. Like she, and she's gonna do another one.

Yeah. And like, and, and so there's just, I think the approachability is so much higher. Yeah. Now will it fade out and will there be a new trend? I'm sure. 

[00:58:34] Andrew Faris: Yeah. 

[00:58:34] Taylor Holiday: But it seems like there's a lot of service area to adapt the race a little come up with variations. My kids are interested in trying, they've done two superstars races, one in the Netherlands, one somewhere else.

So it, it seems like there's still some runway to go here that I would not be surprised if this sells for a billion dollars. Like it, it seems to me that there is. Real, real business capture around this idea. The other thing it led me to is part of the, like, so Puma's the official sponsor, Puma does all the apparel.

I think the Hix should have just done their own apparel. I think they probably screwed that up, but 

[00:59:02] Andrew Faris: yeah. 

[00:59:03] Taylor Holiday: There's probably a lot of money involved there and maybe they have a rev share on that, on that. So the distribution helps. I don't know, but but I do think that of brands, events might be a, a huge revenue item because I think one of the things that brands need to think about is how they get access to a different part of my p and l.

So like, I think that we spend a lot on entertainment and travel and things like that, and I think brands could do well to think more in the way that, you know, apple does, which is that like, rather than just thinking about product expansion through more, if you're rich trying to get me to buy a backpack.

A wallet and a battery case, which I get like, that's fine, but I still, I spend way more money in entertainment and travel that if Ridge was able to find some way in which there was an event that fit in their universe. 

[00:59:54] Andrew Faris: Yeah. 

[00:59:54] Taylor Holiday: That feels like there could be something there. 

[00:59:57] Andrew Faris: Yeah. 

[00:59:57] Taylor Holiday: You know? 

[00:59:58] Andrew Faris: Yeah. And I, I mean, I agree with that point.

I was gonna say quickly, the, the well, actually, high Rock reminds me of the Spartan Race. 

[01:00:05] Taylor Holiday: Yeah. 

[01:00:05] Andrew Faris: Which is exactly, which is like Tough Mud or one of those is where it's like an event based thing where it's a really specific thing. You could train really specifically, you can be as serious or not as you want.

You probably have to be a little more serious about High Rocks, Spartan Race, so you can go, kinda walk the whole thing and have fun. And I, I don't know if anybody's doing that with High Rocks, but 

[01:00:19] Taylor Holiday: there's, there's some big people working their way through it slowly. But, but 

[01:00:21] Andrew Faris: yeah. 

[01:00:22] Taylor Holiday: Not walking, no. 

[01:00:23] Andrew Faris: Yeah.

Yeah. Yeah. Anyway. But the, but yeah, the that's what reminds me. And that event based thing I think is good. Although it's funny to think about brands being involved with it. And I'll be curious, because you and I had the experience of trying to do stuff with Spartan Race when we were at Kalo after the success of CrossFit.

[01:00:37] Taylor Holiday: Yeah. 

[01:00:37] Andrew Faris: And what the, what I think I realized about that is that it never, it never like metas, that's the wrong word. It never it never morphed into a community in the same way that CrossFit did. Right. And that was that. And so as a, as a vehicle for brand engagement, it was dramatically worse. Oh, for sure.

It was, it was, it was not good. 

[01:00:54] Taylor Holiday: But this, this is, because again, this is the point though. I think CrossFit outsourced the value to all of us. Like we actually captured more of the value. 

[01:01:00] Andrew Faris: Yeah. 

[01:01:00] Taylor Holiday: Not specifically Calo, but I'm saying the brands, the, the gyms, the people 

[01:01:04] Andrew Faris: Yeah. 

[01:01:04] Taylor Holiday: Versus Spartan Race, I think held it closer to themselves.

Yeah. They were like realizing more of the value. 

[01:01:08] Andrew Faris: Yeah. And I think just, yeah. So, but it's interesting to think about how brand, yeah. I think I like your application of the principle, which is like, could ridge create the ridge event of some kind. 

[01:01:19] Taylor Holiday: Well, an easier example is like hex cla cooking classes. Yes.

Like I think about like, you know, like paint with Pinot or whatever that 

[01:01:24] Andrew Faris: Yes. 

[01:01:24] Taylor Holiday: Stupid thing that became a thing where you go, you have some wine and you do some painting. 

[01:01:27] Andrew Faris: Yeah. 

[01:01:28] Taylor Holiday: Uhhuh. Like why shouldn't hex cla create the best date night experience in every strip mall, every high end strip mall in America?

[01:01:34] Andrew Faris: Yeah. What, what is the answer? Why shouldn't, I mean, why don't they, 

[01:01:36] Taylor Holiday: because it's not intuitive, I don't think, and they're not good at it. Like, it's not a natural extension of what they're doing. But I think that like brands that have this kind of ethos, we're gonna see it more and more that like, restoration Hardware did this and like have you've been to the Restoration Hardware restaurant and Fashion Island?

[01:01:49] Andrew Faris: No. 

[01:01:50] Taylor Holiday: So they have hotels and, and restaurants 

[01:01:51] Andrew Faris: now. Oh, 

[01:01:52] Taylor Holiday: you go to Fashion Island, they have a four story store and the top floor is the restaurant. 

[01:01:55] Andrew Faris: Yeah. 

[01:01:56] Taylor Holiday: And so the idea is like, have a glass of wine 

[01:01:58] Andrew Faris: walking around Nordstrom. Certain Walk around. Yeah. Yeah. 

[01:01:59] Taylor Holiday: Nordstrom Cafe. 

[01:02:00] Andrew Faris: Yeah. 

[01:02:00] Taylor Holiday: I, I think that the idea is that like, part of this is like, my thing about e-commerce is that it's just not growing fast enough.

[01:02:06] Andrew Faris: Yeah. 

[01:02:07] Taylor Holiday: Tam is actually horrible. 

[01:02:09] Andrew Faris: Yeah. 

[01:02:09] Taylor Holiday: In almost every case, still sub 

[01:02:10] Andrew Faris: 20% of all that's right. Online sales. And so growing lots of more brands playing for that 20% 

[01:02:15] Taylor Holiday: and, and lots of categories where the de the supply side of competition is growing way faster than 20%. 

[01:02:20] Andrew Faris: Yeah. 

[01:02:20] Taylor Holiday: And so there's just this like, not that big pie.

[01:02:23] Andrew Faris: Yeah. 

[01:02:23] Taylor Holiday: That we're fighting over all the time. 

[01:02:24] Andrew Faris: Yeah. 

[01:02:25] Taylor Holiday: And so you've gotta get potentially into some other revenue streams when you get that big. 

[01:02:28] Andrew Faris: Yeah. And it's, I mean, I think, I think something you're really good about pointing out, and I've, I've tried to think about this at times for other brands is like, for e for e-commerce brands, there's nothing that says you can't ever do something else, but you just don't, like you said, you don't think about it.

Like it just doesn't occur to you that you could, that you could come up with some other way of engaging with customers and sort of seed a new business within, within it, or, you know what I mean? Now, I think that one of the things is a lot of brands don't have the capital to go, like 

[01:02:57] Taylor Holiday: for some 

[01:02:57] Andrew Faris: reasons you've 

[01:02:58] Taylor Holiday: been 

[01:02:58] Andrew Faris: public 

[01:02:58] Taylor Holiday: example is banana ball.

[01:03:00] Andrew Faris: Yeah. Yeah. 

[01:03:01] Taylor Holiday: Like I look at that and I go like, okay, where does that fit in the, in the spectrum of brand, consumer brands? 

[01:03:06] Andrew Faris: Yeah. 

[01:03:06] Taylor Holiday: To me it's gotta be one of the best. 

[01:03:08] Andrew Faris: Yeah. 

[01:03:08] Taylor Holiday: It's great. Yeah. Like in the world and from a merch and experience it like Yeah. It's able to touch. Now they're launching a youth sports league.

Have you seen this? 

[01:03:15] Andrew Faris: Yeah. Uhhuh. 

[01:03:16] Taylor Holiday: So it's like, to me, that's a business that I go, do 

[01:03:18] Andrew Faris: you think it'll work? 

[01:03:18] Taylor Holiday: I don't know. 

[01:03:19] Andrew Faris: Yeah. 

[01:03:19] Taylor Holiday: I think that they will drive in the short term, a ton of interest and sign up in participation. 

[01:03:24] Andrew Faris: Yeah. 

[01:03:25] Taylor Holiday: I wouldn't bet against Jesse, he seems to really understand something about what people want from the experience and 

[01:03:30] Andrew Faris: he's so committed to that.

[01:03:30] Taylor Holiday: Yeah. Yes. And yeah, exactly. And he's, he holds an, it's seemingly incredibly high standard for the things that they do. 

[01:03:35] Andrew Faris: Yeah. 

[01:03:36] Taylor Holiday: So I, I, I go like, well maybe that's actually closer to an illustration of what a brand 

[01:03:43] Andrew Faris: Yeah. 

[01:03:43] Taylor Holiday: Should be able to do, which is touch the surface area of all these different parts. Of people's lives in a way that isn't so isolated to consumer product.

You know, 

[01:03:52] Andrew Faris: it reminds me a lot of your interview a long time ago with the guys from Home Life Media. Is that what they're called? Yeah, yeah, yeah. When, when you talked, when they, you did an episode a long time ago about how they were selling their email lists to non-competitive pet brands because their pet brands, so to non-competitive pet pet brands like dog food brands or something like that, which there was a game.

They're just like, we're never gonna play the dog food game. So, but we have a big list of people who have bought shirt shirts with dogs on it. So why don't we sell our email list? 

[01:04:19] Taylor Holiday: And you know, who does that? 

[01:04:20] Andrew Faris: Who 

[01:04:21] Taylor Holiday: me And you like, oh, we, we are a media, we have media revenue. Yeah. Just like we have service revenue, just like we have software revenue.

That's right. Like, and so, 

[01:04:29] Andrew Faris: and I do think about how do I grow my media revenue and how do I grow my service revenue? Which, which revenue, you know, and why, how does that affect my business? And how do they all reinforce each other? And, and, you know, this is actually a good point. The Hex Cloud thing, theoretically.

Well, here's another reason I think people don't think about this, is that it, it's looks so small. Your HX cloud class is gonna be 10 people in a room. Yes. 

[01:04:46] Taylor Holiday: Yeah. 

[01:04:46] Andrew Faris: And, but, but, and I think this is why everybody underestimates events, the 10 people in that room. 

[01:04:51] Taylor Holiday: Oh, the experience. They'll tell 

[01:04:53] Andrew Faris: everybody they, they have incredible, and they probably love cooking.

That's the reason they showed up that night. And so they, they are the kind of people who you really want buying HX Cloud Pan and having a HX cloud experience, you know? 

[01:05:03] Taylor Holiday: Well, 'cause you know what's actually kind of weird is to order pans, take pictures of them and post them on Instagram. That's actually kind of weird.

Yeah. But you know what people post pictures of on Instagram all the time? Their experiences. Yes. What they're doing with their wife when they're traveling with their family, when they're with their kids. And so there's this, this element too of like, if you give them something in that realm that I think is like super interesting to, to go after.

[01:05:24] Andrew Faris: But the reason it reminded me of the home life media thing is just the idea that there are assets inside your company that you're not thinking about, that are not traditionally e-commerce assets. And so maybe it's not an event for everybody, but maybe there is some way to look inside your business and go.

What are the other touch points with our customers we could make, and I think for some people this muscle gets exercise with product creation where it's like, the way you expand Tam is just by create, is like a, you know, and Ridge is a good example of this, where it's like, you know, a, a charger, a a power pack or whatever that they have, right?

Doesn't actually have any organic relationship to a wallet. You know, really. And it's just, you know that okay, we can make both of these or a ring doesn't have much, but they, but they can then expand their tam and create. And so there's, there's a similar muscle being exercised there, is what I'm saying.

[01:06:07] Taylor Holiday: Yeah. 

[01:06:07] Andrew Faris: You're going, wallets are gonna die like as if, or they're, or they're not gonna die. They're just not gonna be the thing that gets us for forever, right? So how do we push the whole thing forward, you know, in with without, while thinking outside of that. I like that thought a lot. 

[01:06:19] Taylor Holiday: There's a so George and I talk a lot 'cause they're, they're sort of at this size where they're trying to find these things.

And I, I think about like for them there's this demographic of these like, you know, wealthy. Women in their 35 to 50-year-old range that are, show their core demo. And my wife's in this demo and like one of the things that dominates their reality is book club. Like, so this is a space that women, like they get together, they have a great meal, they do all this stuff, and, but it's unoccupied by brands.

Like they're reading a book, but there's nobody. And so I was like, George, you guys have enough gravitas that you should get the author. 

[01:06:55] Andrew Faris: Yeah. 

[01:06:56] Taylor Holiday: To host a night in the city and go to all the book clubs and have them all come yeah. Together. And like you could find this way into these spaces that Cozy Earth is creating this connection.

It's a, they, they happen in homes. They're like the demographic. And so it's like find, 'cause they like, they go after book talk a lot with content. And I was like, get a podcast. Do, do a cozy earth reads, like cozy reads or whatever, whatever it wants. Like there's, there's this angle here that the problem is the women just don't need to buy.

Sheets every day. Yeah. And they don't need to engage with your brand every day around the idea of sheets. Like they just don't. So what, what, where do you find space there? I think is just, is 

[01:07:35] Andrew Faris: this, I think fits nicely. It actually comes back to you're making fun of me about being the anti-growth guy. I, I actually think in some ways you and I are, are completely on the same page here.

In the sense that it is something I've been thinking about a lot. And I, again, another drum I've heard you beat a lot recently and that I'm coming to really, I think it fits almost all of the great brands I've been around, which is that the great brands, so, so there's a small outlier set of brands who are tactics monsters.

They are just incredible at building funnels forever, you know, and, and just doing that. But as I've said, a lot of times, I think what people and those people get a lot of attention, what I think the problem is like. It's actually a very hard skillset to replicate, and people don't realize that. And that the reason that those standout examples exist is because they are actually 95th percentile plus at this, and therefore you are not, because that's what 95th percentile means.

Yep. So, so you should probably not try to do that instead. I think there's, and so if you put those, those kinds of brands aside and yeah, then there's this way a brand can think about growing, which is how do I create moments? And you, you've been talking about this a bunch in different bunch of content of yours, which is like, okay, the agency can't create the moment for you.

The agency can execute day-to-day plans and those things, but the agency can't. So, okay, so how do you as a brand, your Cozi Earth example, is what made me think of this? You've got all these women buying sheets or whatever. But like, there's these women there and they value something and you have some kind of brand identity.

And so what kind of swing can you take as a brand to go, we can do something really big and it's gonna be really hard to see that pay off on day one of the revenue or whatever. It's, but if you take that swing over and over and over again, as much as your budget and your time will allow you to do within some level of reason, you know, to, to go do this.

That's actually the way you make deep impressions with customers that you really care about and that really love your brand. You do that enough times, eventually you're going to be able to do some, some really far, and by the way, some of those things are gonna be home runs. At some point you'll do one of those.

You'll watch a product or you'll go do a book club or whatever, and you'll, and you'll, and way more people will sign up for it than you realize, and it will end up creating a groundswell for the brand. And I, I do think in the world tactics and the, the other thing about this is. I actually think almost everybody who's a brand owner or, or or operator watching or listening to this right now, would rather spend their time doing that than working on tactics.

Oh, it's drastically more fun and interesting as work. You probably actually care about your customer and your product and those things. And so it's just much more interesting work. It's creative, it's interesting, and all those things. So you'll have a lot better time at work if you behave this way. 

[01:10:09] Taylor Holiday: Yeah, I agree.

And this is, this is where I think the brand owner that is like can't get themselves out of the ad account despite having lots of smart partners around them that, that are going to run it in some modicum close to their level of output. Like they're just really problematic for their own business. 

[01:10:23] Andrew Faris: Yeah, 

[01:10:23] Taylor Holiday: because I just think that there are so many people that can replicate that skill at a fairly comparable level.

Even if you, the founder, are so smart and amazing. Like you could hire Andrew, you could hire me, you could hire lots of freelancers that we've worked with before. Yeah. Like there's lots of people out there that could run your ad account and they'll be in pretty good hands. But there's nobody, there's nobody that will go forward out into the world and manufacture.

That novel idea with a deep, intimate understanding of your customer like you should. Yeah. And I think that it just is, like, it's a responsibility on it. And I, I have felt this like right now at CTC, that I think what happens is you have these periods of a tailwind where, where there's this like macro industry thing that pushes you forward, that you are just riding.

You're just like, you have your sail up and you get to move forward with it. And so you don't have to really behave this way. And then at some point the wind kind of dies down and you're now obligated to recreating some of that wind. And for me, like the, the, the era of like, focus on profitability, reduce waste and cost like we dominated in that era.

And for the last two years, I think a lot of brands have gotten the message, they've made the cuts and there's still a lot of waste out there, but it's less, they're, they're on the other side of like, okay, I stopped being bad. Now what? Now? Now where do I go now that I cut the bad spend? Because. It's a lot easier to cut your bad spend than it is to introduce a bunch of new good spend.

Yeah. And so I think the question's beginning to rise like, okay, where do, what do we do now? And that question is much harder and requires, you might need to go actually change the underlying reality of the business. 

[01:11:53] Andrew Faris: And that's why I think we're exact actually on the same page here. What I'm saying is never remove that constraint.

[01:11:57] Taylor Holiday: Right. 

[01:11:57] Andrew Faris: Don't just don't fall prey to the thing that I feel when I run an ad account, which is like, ah, I dunno, turn that T row eyes target a little bit lower 'cause we're not getting enough spend. No. Keep a t rise target where it is. That's the constraint. If you wanna spend more money, you have to do something more.

Awesome. That's right. Exactly. That's what you have to do. You and, and otherwise be content with your 15% profit at your whatever size business and take the money because at least that point you're distributing, you know, at least at that point. Like if you're not, if you're growing 20% and you have that kind of, you know, or 10%, 

[01:12:26] Taylor Holiday: I think the only thing Yeah, and I, 'cause I agree.

I know what you're saying, but what I think you're saying. Actually your business isn't that awesome? And, and this is the part that like, you, you like to whitewash this a little bit with this idea of like, and I use that in the Huck fin painting, the dirty fence metaphor here is this idea that like, it's okay if you're growing 15% at 3 million.

And what I would say is if you're growing 15% at 3 million, there's actually something here that isn't that awesome. Yeah. And that there, that there might be actually an opportunity here for you to step back and go, why do I have to grind out 15%? What is this market saying back to me about this moment?

That, that if I were to set that aside and go, okay, this framework has 15%, what's a f breaker? What's something that would unlock it in, in, not in a wasteful ad spend way. Yeah. But in a way that sort of changed the underlying reality of my unit economics, or this goes back to the slick products thing. I think about slick a lot.

I think about it all 

[01:13:20] Andrew Faris: the time 

[01:13:20] Taylor Holiday: that like we tried to get that person 

[01:13:23] Andrew Faris: Yeah. 

[01:13:23] Taylor Holiday: To change the core composition of the product. To say like, Hey man, heavy wash bottles. That they don't ever run out of is never gonna work. Yeah. Yeah. And you, when I say never gonna work, you're gonna grind out 

[01:13:36] Andrew Faris: Yeah. 

[01:13:36] Taylor Holiday: Percentage points a year, and the margin's gonna be tr like, we should have tried to create something in a very different form factor.

[01:13:43] Andrew Faris: Yeah, yeah, yeah. Well, and, and I, I don't disagree with that. And I, I mean, I think the, the thing I'd push back on is like, if that $3 million business is actually producing $300,000 in cash or something like that, you know, which is possible. Like, you know, like if you're growing slowly and you're running at a very big margin, I would just say that's still a really good business.

It's just that you're, it depends on what terms you're thinking of that in, like, what you're talking about is one of the richest people who ever walked the earth, and what, 

[01:14:08] Taylor Holiday: in which sense? 

[01:14:09] Andrew Faris: If you're spending out 300,000 in cash in a year at, at that size business, and I, I just, 

[01:14:13] Taylor Holiday: yeah. I, I don't, I don't know, I don't, that framing to me, like, we don't think about ourselves relative to like.

[01:14:18] Andrew Faris: Yes. 

[01:14:18] Taylor Holiday: Humans from the year bc 

[01:14:20] Andrew Faris: Exactly right. And that's the problem. 

[01:14:22] Taylor Holiday: No, it's not. 

[01:14:22] Andrew Faris: Yeah. 

[01:14:22] Taylor Holiday: It, it's not our lived experience. We should have no comparison to what happens. 

[01:14:25] Andrew Faris: I just, I completely disagree. 

[01:14:26] Taylor Holiday: Ancient Rome, 

[01:14:27] Andrew Faris: it's, it's the, it's the old Louis C cap. It, everything is awesome and everybody's miserable. That's a problem with us.

I actually do think we should have comparison 

[01:14:33] Taylor Holiday: to that. But you're not point, you're not, you can't ask somebody. I do have this experience. You don't, you don't have any idea of what it was like to be alive. 

[01:14:40] Andrew Faris: I know, but I I, I, I know. But that, 

[01:14:42] Taylor Holiday: and so the fact that you could delude yourself into thinking I'm so much happier than they were happier, how do you 

[01:14:45] Andrew Faris: do, I'm not saying I'm so much happier.

I'm saying if I can't be happy with what I have now, there's a problem with me. 

[01:14:49] Taylor Holiday: But it, it has nothing to do with whether somebody was happy or not a hundred thousand years ago. 

[01:14:53] Andrew Faris: No, the the point is we are, we are the richest people ever, ever. 

[01:14:57] Taylor Holiday: But so what, 

[01:14:58] Andrew Faris: so, so the point is, if that's true, if the percentage of all of the richest people ever are is very, very small, and it exists right now, it's a message of I, and I can't experience joy in that right now.

Okay. Then something is wrong with me. That's what I think. 

[01:15:14] Taylor Holiday: I, I think there's so many people that struggle making that amount of money that are going through like a genuine hardship in their life 

[01:15:19] Andrew Faris: sucks of, of course. 

[01:15:20] Taylor Holiday: And the business is sucky. 

And they're 

[01:15:22] Andrew Faris: dealing with all sorts of crap. So what you just said is they're have a bunch of hardship in their life, not that they have 

[01:15:26] Taylor Holiday: in their business.

In their business, 

[01:15:28] Andrew Faris: yes. If their, if their business is bad. But what I'm saying is if it's, if it's producing $300,000 a year at that stage, then their business I'm saying is not bad. 

[01:15:37] Taylor Holiday: The level of satisfaction I've watched in periods where people are, everything is working and everyone is happy, is so different than when everything is struggling and everything is hard.

Like the idea that rapid growth and success doesn't yield a better experience is just like not inconsistent with my lived reality. Like, 

[01:15:52] Andrew Faris: Yeah. I mean I think it's more fun 

[01:15:54] Taylor Holiday: for sure. Yeah, for sure. It's like, I agree. I agree that every in every way, shape, and four winning feels better. 

[01:15:59] Andrew Faris: Yes, I agree. I agree that it feels better to win.

Yeah. But I'm saying 300,000, if you can't see making $300,000 in a year as a win, if that's the example we're using, then, then there may be something wrong. 

[01:16:09] Taylor Holiday: But there's just this, this idea that like, everything 

[01:16:11] Andrew Faris: is winning. Then the, the only, 

[01:16:12] Taylor Holiday: so where's the threshold? It's not $187,000 

[01:16:15] Andrew Faris: is winning. I dunno. I dunno.

That's probably, that's still pretty good. Yeah. I think if you're, if you're spitting out that much cash now, and this is why I'm saying, I'm not saying you shouldn't be ambitious, and I'm not saying you shouldn't pursue more growth from there. I'm not saying that at all. I'm just saying that there's gotta be, there's gotta be a way, there has to be a way to be that wealthy, which is insanely wealthy 

[01:16:33] Taylor Holiday: in the world.

It's really not. Like, what, what do you mean making $187,000 

[01:16:37] Andrew Faris: makes you one of the richest people alive right now? 

[01:16:38] Taylor Holiday: Yeah. But in, again, the relative comparison is not someone's live reality. 

[01:16:42] Andrew Faris: It 

[01:16:43] Taylor Holiday: might not even make you the wealthiest person, like on your street. 

[01:16:46] Andrew Faris: Yes. So if, so, if you spend all your time comparing yourself to the people on your street, you just, it's gonna be a problem 

[01:16:51] Taylor Holiday: possibly.

So you should just pick the worst person and compare yourself to them. 

[01:16:53] Andrew Faris: Partly that's, this is, this is what everybody who has ever been to a really hard place in the world says 

[01:16:59] Taylor Holiday: that every, then everybody but the worst off person in the world gets to be 

[01:17:02] Andrew Faris: happy. Of course not. Of course not What? Well, you're taking over sort of a ridiculous version of it.

What I'm saying is, anytime, anytime you ever heard somebody go to a really poor area in the world. What do they come back saying? They come back saying like, holy cow, I have a whole new appreciation. And it lasts 

[01:17:12] Taylor Holiday: them like seven seconds. 

[01:17:13] Andrew Faris: Yes. And that's why they have to go do it again at some point. That's why they have 

[01:17:16] Taylor Holiday: to.

'cause it's not real. It's not, that's not actually what experienced satisfaction is, is a relative comparison to someone. No. Who has it bad? 

[01:17:23] Andrew Faris: No, no, no, no. 

[01:17:23] Taylor Holiday: Like that's not 

[01:17:24] Andrew Faris: No, the point is, the point is that that more wealth is not necessarily the answer to how you improve your experience. That's the point.

It's so, because, because you're right, people are experienced, people are plenty wealthy and experiencing all kinds of hardship. I I completely agree with that. 

[01:17:37] Taylor Holiday: Yeah. 

[01:17:38] Andrew Faris: What I'm saying is money's not the problem. It's not the solution. 

[01:17:40] Taylor Holiday: The problem, I mean, I, I just think you, you led this off with a story of a man who's a billionaire to solve his cancer issues.

Like I, I think the idea, and this is, 

[01:17:46] Andrew Faris: I'm not saying it's not, it doesn't 

[01:17:47] Taylor Holiday: have 

[01:17:47] Andrew Faris: massive utility for incredible outputs. I'm not saying 

[01:17:49] Taylor Holiday: that It absolutely can, and it does, of course. And of course, being wealthier will in almost every time of life, lead to. Higher levels of opportunity across any dimension that you could possibly pursue.

Yeah. 

[01:18:00] Andrew Faris: Yeah. Well, I don't think I'm gonna convince you of this, but I, I just, I just think that the idea of the word bad business 

[01:18:06] Taylor Holiday: Yeah. 

[01:18:07] Andrew Faris: Is by definition a comparative term. And it, and, and so what you're doing in your mind is comparing 

[01:18:11] Taylor Holiday: that 'cause business, business actually has like an objective standard of success.

[01:18:14] Andrew Faris: Yeah. And, but, but not really. 

[01:18:16] Taylor Holiday: There are bad baseball teams. 

[01:18:17] Andrew Faris: Y 

[01:18:18] Taylor Holiday: yeah. Like the royals are a bad baseball team if, if there's worse baseball teams than men. 

[01:18:21] Andrew Faris: But, but a bad, but you see even that, that's because you're picking a very specific set of businesses to compare yourself to. 

[01:18:26] Taylor Holiday: Okay. So then 

[01:18:27] Andrew Faris: don't sell to your industry.

Compare I a local coffee shop. 

[01:18:30] Taylor Holiday: Okay. But then like Sure. 

[01:18:31] Andrew Faris: Right. Then, then that business producing $300,000 a year is a really good business. 

[01:18:36] Taylor Holiday: I just think that's a wildly bad comparison. 

[01:18:38] Andrew Faris: But I, but it's because it's not, it's completely as arbitrary as your comparison. 

[01:18:41] Taylor Holiday: No, it's not. Because it's not even in the same industry in which I operate, if there are people, 

[01:18:44] Andrew Faris: but you just said get outta your industry.

You just get out. What? Forget it. Forget. You don't have to be an e-commerce brand anymore. Now you're an event base. 

[01:18:49] Taylor Holiday: You don't. Exactly. You don't. 

[01:18:50] Andrew Faris: Yeah. 

[01:18:51] Taylor Holiday: My point is that if you're looking around and there are people and you're going like, wait a second. Why does it seem like it's so much easier for them? 

[01:18:59] Andrew Faris: So, okay, 

[01:18:59] Taylor Holiday: why are they making so much more money?

Why is their p and l 30% profitable and minus is eight? 

[01:19:05] Andrew Faris: Yes. 

[01:19:05] Taylor Holiday: That there's wisdom in that. Like that's a really completely agree, important question. 

[01:19:08] Andrew Faris: Agree completely. 

[01:19:09] Taylor Holiday: And instead of going like, no eight is good, you should be, you should, you should be happy at eight. 

[01:19:13] Andrew Faris: Yeah. 

[01:19:13] Taylor Holiday: I just go, no, no, no. You should actually deal with the objective reality that there's some inefficiency in, you're able, your ability to drive leverage between the labor that, that you're outputting and the reward that you're receiving.

[01:19:22] Andrew Faris: That person should live in unhappiness as you're telling me. 

[01:19:24] Taylor Holiday: They should be dissatisfied with the business and try to solve the business problem. 

[01:19:27] Andrew Faris: Yeah. 

[01:19:28] Taylor Holiday: When you talk about personal satisfaction, I think these things get blurred a lot For you, it's like, it's the whole 

[01:19:31] Andrew Faris: point. 

[01:19:31] Taylor Holiday: It's the idea that you should live in a perpetual state of happiness and no to, and I just don't, I've, or joy or whatever, whatever the phrase is that you would use.

And so in which case, none of this matters at all. 

[01:19:41] Andrew Faris: Yeah. 

[01:19:41] Taylor Holiday: Because it's independent circumstance entirely. 

[01:19:43] Andrew Faris: I, I, I think you are, you are tapping into something right now that I think is important for people to get in their mind in relation to Right. But this has nothing 

[01:19:50] Taylor Holiday: business. 

[01:19:51] Andrew Faris: And you've heard a million people tell the story of when I was on my death bed, I, I realized 

[01:19:56] Taylor Holiday: I don't think that the experience on your deathbed is actually a good indication of your live life at all.

This is a thing I think because you can't occupy the disposition of dying person. Like this is such a made up idea. These are tropes that I think that are perpetuated on this idea that like, live, like you were dying. The, the, the literal chemical composition of your reality changes when you're dying.

[01:20:16] Andrew Faris: Yeah. 

[01:20:16] Taylor Holiday: Like you can't inject that into somebody's mundane Tuesday afternoon and ask them to live as if it's your last hour on your deathbed. Yeah. It's just like insanity. 

[01:20:24] Andrew Faris: Yeah. I, I think having a stronger sense of the reality of your impending death would be really good for you. That's, I'm not just talking about you.

I'm 

[01:20:31] Taylor Holiday: for 

[01:20:31] Andrew Faris: me, 

[01:20:31] Taylor Holiday: for all of us. You can be aware 

[01:20:32] Andrew Faris: of 

[01:20:32] Taylor Holiday: the, I can, I can accept entirely logically and deal with the fact that I feel anxious right now. 'cause I gotta get home and take my kids to, to baseball at four for sure. And that's just as important. And it's actually more true for my present reality than is my future impending death.

[01:20:43] Andrew Faris: Yeah. 

[01:20:44] Taylor Holiday: And so, like, I I, the idea that I might be di on my death bat and go like, man, I look back in those moments and whatever I think I feel, then Yeah. I agree. If I to agree, if I to impose upon myself today, the idea that that feeling is more true than my feeling today, I just don't believe that. 

[01:20:56] Andrew Faris: I just think they all get a voice in the conversation.

I, I think, 

[01:20:59] Taylor Holiday: but they don't today. 'cause I don't feel the dying thing. Yeah. Like I, I only feel presently embodied. The reality of what is happening to me today. 

[01:21:06] Andrew Faris: But the, the, the point is to me that you ought to be, you ought to attend to how you feel and what you feel and what you compare yourself to and where your joy is coming from and all those things, including in your daily business decisions, because ultimately you're spending your time and your life and your wheels and these things.

So listen, I completely agree that if your $3 million business is growing at 15% per year in an e-commerce kinda world, you probably ought to ask the question, is this the best use of my time and capital? 

[01:21:31] Taylor Holiday: Yeah. Right? And you would experience deeper satisfaction if you were wor inside of something working better.

[01:21:35] Andrew Faris: Maybe there's a, there's, I, I'm, I'm not quite willing to grant that, though. I understand your point. It does feel great to win, and so I don't know. I, I, I'd probably think about that more if I think that's true. I'm not, I I, it's one of those things you said earlier, like, you know, do you say something that's not true?

I'm not sure what I think about that, but I, and I do think you should learn from people who are growing more in all those things. I just, what I really think is that you shouldn't make bad financial decisions because you are, because you are, feeling insecure about how big your business is. That's, that's kind of what I, and that's what I think is 

[01:22:01] Taylor Holiday: that just sounds like bad strategy 

[01:22:03] Andrew Faris: though.

This to me is like, but see, but I think 

[01:22:04] Taylor Holiday: I agree, 

[01:22:05] Andrew Faris: but I think this is part of the whole thing. I mean, I do agree with that now. I think a lot of these things come back to, I think a lot of people are making those bad strategic decisions because of their insecurities. 

[01:22:13] Taylor Holiday: Okay. But if you eliminate the in, in insecurity, it doesn't create good business strategy.

[01:22:17] Andrew Faris: It, I that it might not. Yeah. Right. It might not. But what I'm saying is that, that the driver of these things is often not actually a thoughtful, rational business decision. It's like, it's something deeper than that and that they ought to go around that. And I just think people should feel a little bit more suspicious of the voice that's telling them some of these things.

[01:22:34] Taylor Holiday: I think you, I think if you were sitting with Elon Musk, you would say these things to him, right? And so I, I think there's like, there's a distinction between are we talking about business strategy or are we talking about life strategy? 

[01:22:42] Andrew Faris: Yeah. 

[01:22:42] Taylor Holiday: Because, well, I just don't, I I just think we could get, you should get clarity.

[01:22:44] Andrew Faris: Barely a distinction. I would make. 

[01:22:46] Taylor Holiday: Well, and I think that's part of the, the challenge is that like you're, what you're really asking people to do is be satisfied, independent their business circumstances. 

[01:22:53] Andrew Faris: That's correct. 

[01:22:54] Taylor Holiday: And it's like, okay, okay, cool. But now can we talk about my business? So like, let's accept that, let's create that.

That's true. 

[01:22:59] Andrew Faris: Yeah. Let's 

[01:22:59] Taylor Holiday: do both. And now in light of that, what should my growth rate 

[01:23:01] Andrew Faris: go? Yeah, right, exactly. I think that's a great question. And that would, that would change relative to the business and relative to the risk tolerance of the, of the person offering. There's a million questions that you would get to.

Right. So, you know, the LTV would, would change my opinion that there's a lot of different ways I do that. And we do this all day with clients, right? We sit and try and grow their businesses. So I'm not anti-growth. I'm not at all. I just, I'm just anti bad financial decisions. So, 

[01:23:20] Taylor Holiday: well, I, 

[01:23:21] Andrew Faris: yeah, 

[01:23:21] Taylor Holiday: that's a pivot.

I'll tell, I'll, I'll, I'll, well, we can end on agreement. 

[01:23:24] Andrew Faris: Okay. Yeah. Yeah. I like that 

[01:23:25] Taylor Holiday: financial. 

[01:23:26] Andrew Faris: You have to go. This is, this is a fun one. I thought this was a really good episode. 

[01:23:29] Taylor Holiday: Yeah, that's good. Good to get a little energy into it. 

[01:23:31] Andrew Faris: Yeah. Yeah. But, but we agreed a lot for a long time in this, in this too. So 

[01:23:33] Taylor Holiday: and so stick around.

Maybe you can cut it, right? The beginnings, just the heated part and then 

[01:23:38] Andrew Faris: that's a good idea. We should make this the intro. All right. See you. Thanks. 

[01:23:40] Taylor Holiday: Bye.