Growing Profitability featuring Dave Huffman of Ancestral Supplements

[00:00:00] Taylor Holiday: Welcome to the second interview episode of the Ecommerce PlaybookPpodcast, where we are interviewing brands through the lens of their GQ score or growth quotient score to figure out what is true about brands that are growing predictably and profitably. And today, we're venturing out of the skincare realm.

Thanks Dave Rekuc, for joining us last week and we're going into another category that is prone to high GQ scores and that is the supplement space. We're going to be joined by Dave Huffman, the CMO of Ancestral Supplements and Ancestral Supplements is what we call a duckweed brand. Inside of the GQ score, we have a threshold at 120 above where we have brands that are genius level or what we call duckweed.

And duckweed is a metaphor that I've stolen for what is the fastest growing plant on earth. If you Google duckweed, what you'll find out is that what makes it special is that it has less genetic requirements for photosynthesis. So it's able to grow in the dark. It actually doesn't require sunlight to reproduce.

So the metaphor is that. Duckweed brands are the kinds of brands that can grow in any environment and therefore they grow quickly and ancestral is no different. So they have one of the highest GQ scores we've ever recorded over 397 GQ score. And today we're going to dive into why, what makes them special?

What are the attributes that make it work? And we're going to talk a lot about great team building stuff. Dave's an awesome human. You're going to enjoy this episode. Check it out.

[00:01:21] Taylor Holiday: Alright, welcome back to another episode of the e-Commerce Playbook podcast. Today I am joined by a long-term digital friend. Still waiting to meet in person. It's gonna happen someday, but I am joined today by Dave Huffman, the CMO of Ancestral Supplements. And I wanna give a quick story of how Dave and I came to be friends, because this is one of the ways that I tend to develop some, some friends in the digital universe is that he was a defender of me in a Twitter argument and showed up in my dms. I thanked him for helping me fight off the bullies. And I don't even remember what the topic was, but we, we discovered in that moment that Dave and I are kindred spirits and approach the world of acquisition and marketing in many similar ways and actually bonded over the growth equation. So, I don't know, way back in the day, CTC used to have in our office wall this giant. Set of steal letters and it was visitors times conversion rate times average order value equals revenue. And Dave shared how he had used that framework in his initial history. And so we started from there just finding all these ways from, we've talked leadership together, we've talked hiring, we've talked marketing, lots of shared journey, and now we get a chance to work with them on a day in, day out basis at Ancestral, which I'm super super excited by.

So, Dave, give us a little of your story. Who are you, how did you get here? And then tell us a little bit about the brand before we dive into your GQ score.

[00:02:34] Dave Huffman: Well, you know, it's funny, I was, I was reflecting on some of this and initially. This was probably back in like 2017. I had adopted gr like Dr. Sinski's growth formula, which is, is just three multipliers. There's no like profit component. It's all, it's all top line. And then I, and it was around that time, I stumbled upon yours and my ego flared up a little bit because mine had worked for me.

You know, and and then like I, I marched forward. We scaled a brand called Micro Formulas, like pretty quick, you know, we rode a lot of market, category, wave and, and and we did a lot of good there too, but it was just a lot that just really fast growth. And I used that formula to navigate how fast, you know, we needed to move and how I agile we needed to be.

And I actually hired a team around it, and it was around that time I stumbled upon yours and I was like, why is, and it just, it literally like. Threw me for a loop. I went and like wrote it down on my whiteboard over here. I wrote yours on top and I wrote mine on bottom. And I was looking at it, and then I reached out to you on Facebook and I was like, Hey tell me the difference.

Like, why would you do this? And then you sense like over time you've become like more profit focused and it just locked in for me. And, and I don't, people, you know, you didn't share this part, but I've actually, you've coached me through . A, a couple of hard times. So it's I just really appreciate it and, and feel lucky to work with you now.

And, and yeah, I mean, my, my story's kind of a, every time somebody asks me, I'm like, where do I start? We were joking before we got on that, should I start at kindergarten? 

[00:04:01] Taylor Holiday: Well, let me, let me tee you up because I think there's, this is a good point for you to go to this part of the story. So one of the things that I've been talking about on Twitter lately is this idea that the head of growth title, I think is going away. I think it's sort of this relic of sort of a misnomer for an expectation that really is an organizational expectation, not the expectation of an individual. And you are, and have always, as far as I know, maintained a marketing title. And right now you're the CMO. And I think what I've always appreciated about our dialogue is that you view Tactical growth marketing through a broader lens that considers a lot more of it. So I'm gonna use that as a setup for you to tell a little bit about your story of how you got to a place where you are a great tactician, but also have a broader view of the idea of marketing.

[00:04:43] Dave Huffman: Man, you're really good at that. And I, I just got goosebumps 'cause you just, I, I, I literally, I didn't even start in marketing. I started in clinical. Psychology. So I studied psych and then I went to work in it. So I'm talking lockdown, psych units, running group therapies, charting behavior, working with patients.

And you know, as I, as I came, I got bit by the entrepreneurial bug at the time, and I, since I played guitar, I just made a, made a run at a, at a music career. And I actually did it for a while and build a, build an audience. Had a festival released merch, like made a decent living. There's videos of a couple thousand people singing along to my songs, and it was in that time I learned marketing, but I also learned that the dynamics of building an audience and some of the broader things that play, how to make connection between larger groups of people.

And I thought if I could do this with these crappy songs, I should be able to do it for a business that has a legit service and value to provide. So then I got in, you know, I got into marketing. My son was born. I didn't wanna be on the road 175 nights a year, and. So I've always come at this like, I sort of wear, like I've had this badge of honor that I'm a tactician.

In fact, you and I have had conversations. I typically have not worked with agencies because I've, I've got this like ego thing to build in-house. I've changed my mind on that over the years and I. Like, even to the point where at ancestral, the first move I made was to, to try to bring you guys on board.

But I bounced around a lot, so I went and worked in, in consumer education or career education, healthcare. And then I finally got into supplements in like, 2014. And and I've just always viewed it from this. Like, I look at it like this. Like I, to some degree it's probably sacrilegious on marketers, but I don't really think.

Marketing drives the needle as much as we think it does sometimes. You know, I think a lot of times it's, it's market, it's category, but I look at it through a lens of market, product and team. And even though I'm a big team guy, I think you a, a good market or bad market always wins, you know, and a and a scenario where there's a great market, a great market will make a bad product and a bad team win.

A poor market will make a great product and a great team lose. So. In any case, the market to me always wins. And I just look at these like through this like broader lens, but I do believe in the incremental effects of great marketing. And that's kind of like maybe even a segue into ancestral and 

we'll get 

[00:07:01] Taylor Holiday: I was just gonna say it's such, it's such a perfect setup.

[00:07:04] Dave Huffman: yeah, I mean we, that's where I started with ancestral. There are broader things that we need to do. And accomplish, but they could, you know what? A brand that was basically grew on the back of a category, an owner influencer that's also benefiting from, you know, our sister brand who's growing, you know, on the back of an influencer in a category.

There's a lot of sort of optimization. There's a sort of like tactical marketing cadence that we needed to get into and and that was like first place I started. So kind of doing like a an and to both. We've got a short-term path 

and I'm kind of, now I'm, as we're getting into Q1, I'm like eyeing this long-term path of interviewing customers and deeper sort of category of market research and things like that.

[00:07:44] Taylor Holiday: I think this is, so if we think about the point of this series, the point of this series is to help operators and marketers think about what needs to be true in order to be successful and in in particular, what needs to be true in order to predict or produce predictable, profitable growth, which is core at the center point of what we're helping coach people through and. As is the case, I think with most people as they sort of move through their career, you begin with this sense that you are almighty and in control, that I am the creator of all success or failure and I take on all responsibility. And if there's anything I've learned over 10 years of working with hundreds of brands through covid, through different markets, it's that actually I'm in very little control.

It's much more like sailing than anything else.

Right? And so it's, I I sort of apply the Floyd Mayweather principle and I, I say this, the same thing to agency owners when they enter the service business is you wanna be great in the service business. Pick your clients well, because it doesn't matter really, like how good you are as a marginal gain or loss relative to the impact of the thing. And I think as an employee, and this is something I think you did a really good job of, is you were thoughtful enough to understand that, yeah, I'm a great marketer, I'm a great leader. I'm gonna do those things well. But if I'm facing a massive headwind, that may not matter at all. So step one, choose your boat.

Choose the thing you're going to be riding in. Well choose the market well and start there because if you're fighting that force. That is an almost insurmountable task.

[00:09:06] Dave Huffman: Taylor, you and Dave actually helped me through this after we left Microbes. So for for people to know, there's a, a brand called Microbe Formulas. That was maybe a gig or two ago. I tried a couple things in between, but we, we scaled that from five to 50 million in about 18 months. I say we, there were some owners that took it from zero to 50 in probably four years.

Most of that growth came over 18 months, right? Then we exited for 200 million, 68% for 200 million. I left that gig thinking, what the hell did I even do? I lost half my hair. I built a big team. We navigated some pretty heavy wins. And I, I was using the wave analogy. I was like, man, I, I think, you know, what did I even do?

I did. I, I did a lot of good, like sort of tactical marketing, marketing cadence market, you know, built a great team. Navi, like was agile in the growth. Like we, we moved with it, but I left. I was like, I didn't actually do anything. That's what my thought was. And then and then somebody, I think it was Dave was like with mo, like 90% of the battles picking the, the right gig.

And that I did do very well. Like at the time before I took that gig, I had like two other offers and I picked that one because I identified the category and the founders and all the things that led to it. And we couldn't have predicted Covid and what that did. Right. But there were a lot of things that we did pick and, and I'm glad you brought that up 'cause it's.

The biggest part of the battle. It's why I picked ancestral, even though there is some overall headwinds that we gotta, we gotta get through. But that's the, and I love your ship analogy because I do think that that's the closest analogy to how we think about this between headwinds and tailwinds.

[00:10:37] Taylor Holiday: And so when we thought about this, like so much of what we wanted to do with the GQ score was to think about who could we be successful for? Like one of the things I've learned as an agency business is . That I don't control the product. I don't control the team. I don't control so much of the macro condition that it exists in. And so part of what this was about, helping to identify the things that have this massive growth potential, and this is a great setup. So for those of you that are just joining us now, ancestral has. What we would call a duckweed score, meaning they're above one 20 in their gq. They're a genius level brand, which means they have the components of something that grows quickly. And a big part of that I think shows up in, we're talking philosophically about market conditions and waves and momentum, but it shows up in the data in practical ways. And a couple of the categories that Dave, I'd love to, for you to share some insight on that are driving this incredible score for ancestral is the amount of organic traffic that they're able to drive, which is sort of a treasure trove asset for any brand where you're getting people to show up to your website that's not on a direct PPC basis.

Now it's, of course, there's other things that contribute to that, but there's a lot of organic demand that is being driven for this business in this product category. So Dave, I'd love to. Where is that coming from and what is the source that's driving that demand from your perspective?

[00:11:55] Dave Huffman: Well, yeah. Let me say two things. First one, I just wanted to, I did wanna touch on the whole head of growth thing. I wanna, I wanna leave no doubt. That our head of growth is our CEO, Chris Ritchie. I mean, he is, is a, he's a brilliant guy. I, I, I've been working with him for five months now. He's an ops whizz.

He is worked for nine figure brands. He's turned brands around and I love your your view on that because I used to think I was the head of growth and other jobs and there was a lot of entitlement that came to that that I was unable to deliver on. Or not even just entitlement, but ideas that I didn't have the authority to deliver on.

So, but, but, but to directly, you know, get into your question about the organic traffic. So most, 98%, I wanna say most like it came from our owner influencer, you know, his name Brian Johnson. He's not in the business anymore. He stepped out and launched other businesses, but he cre like we ancestral supplements is.

The, we say the founder of the category, the, the category itself had, you know, meaning liver supplements, beef organs had existed for a while. People have been taking 'em for, you know, a long time. But bodybuilders made it popular in like the seventies and eighties. But Brian is what brought, he amplified it to like the larger to the larger, you know, culture to the public, right?

So a lot of that we still, even though he's not in the business and he's not posting about it. We still benefit from that wave. And then there's, as the category is amplified, we've got other people who have come into the category that continue to amplify it. So you've had heart and soil on before.

They're a sister brand of ours. Saladino is still rocking and rolling. Now we all understand the bent, the, the downfalls of leaning on an owner influencer at, at a certain point you need to stand on your own as a brand. And we're all kind of, I say we're all, but I speak, speak for me for ancestral.

We're pivoting. We were kind of forced into that pivot. So we're working on harnessing a lot of that through just continued investment in content marketing. We've got some like internal influencers that actually have some decent audience. I'm talking like 60,000 I. Instagram followers. Not 3 million like we had before, but enough to create, start to build, build on, and build an audience.

And then I know you, you know, you don't wanna talk about paid necessarily, but there is an investment I think in paid for us to just basically continue to grow that wave.

[00:14:18] Taylor Holiday: That's right. So one of the things that I think is fascinating about watching both of these brands and, and you guys, is that a lot of the content creation. For Paul and Brian early on wasn't product specific.

It's a bigger thing. There's a cultural lifestyle and movement around a certain way to approach living and health and nutrition. That is an underlying current that is bigger than any individual product,

and I think. That has sort of now gone beyond them and been adopted by more people on a broader spectrum that actually makes the movement, I think, even more powerful than any individual now.

And I think that's been really fascinating to watch as that's the current that has started to build. And now within that. There's an opportunity to attach yourself into that with different stories and amplify with paid and be specific and be direct response. But there's something happening where clearly people have experienced incredible benefit. They're experiencing a meaningful impact to their life, and there's this trend in the way that many diets and other things kind of rise up in the world as a way to pursue a connection to, to better health.

That is really, really powerful.

[00:15:24] Dave Huffman: Well, let me tell you what that is. So, um, I interviewed probably a hundred customers at Microbe Formulas. This is the same customer. It's a consumer health customer, not when I say consumer health, I mean. There's a difference in consumer health supplements and like bodybuilding supplements, right? It's a different customer.

So this customer has, and it's the same customer. We've got an ancestral this customer is . Has been, su has been suffering with chronic health conditions for probably a decade. They've seen by their own words, this is their own words. They've, they've seen a dozen or more doctors. Every one of those doctors have told 'em nothing's wrong with them, but they feel pain.

They feel, you know, they're, they're tired. They're just, they know they're not themselves. In fact, they'll say, I don't feel like myself anymore, and I know something's wrong, but everybody tells me there's not something wrong. So what that does is that . Puts them on this journey that almost matches Eugene Schwartz's five levels of awareness.

Almost perfectly. You can overlay it. It's, you know, unaware, problem aware, solution aware over top, that you can do hopeless. Hope ignited, hope restored. So they go on this journey from hope hopeless to, to health. And that starts when they, they, they, they're just, they haven't got any answers and they go all in to educate themselves and take control of their own health.

And that's why when you look at customer journeys in the consumer health space, it's like two to three weeks long. There's 20 touch points, there's outreaches to customer support. So there's a, there's a journey at play to like tie into what you were saying that this consumer is very driven to figure out what's wrong with them.

They're very educated and when you convert one of 'em, they stick around for a long time. So there's a lot of like genetic benefit of a supplement company in the consumer health space. If you've got a good product, you've got good education, and you've got good support.

[00:17:16] Taylor Holiday: So that's so good. I you're sort of outlining. Again, what I love is when My friend Andrew Ferris, I just started three sentences and didn't finish any of them. I'm gonna do this in order, I apologize. Andrew will say that data reveals truth. That's one of the things I love about data. And if you take the sort of philosophy that Dave said, again, he's speaking like a psychologist and a creative in a way that outlines a customer journey. Eugene Schwartz, you've never read Breakthrough Advertising, one of the best books you'll ever read on advertising. He outlines this customer journey and he ends it with saying What you end up with is a loyal, committed customer that shows up in a metric that matters immensely to e-commerce brands and their capacity to grow and compound money over time, which is LTV, which is the next attribute that Ancestral uses to drive a GQ score that's through the roof. And I love that consumer health is an exemplary category for this because it takes a lot. To get someone in the journey and the amount of customer support is required is high, but once they are there, this is like almost religious for people. This is a way of being that is identity connected and identity doesn't shift quickly. It's much closer to permanent in a way that shows up in the consumption of a product, which equals PR very practically really high LTV. And that's the other benefit of a product category like this.

[00:18:32] Dave Huffman: Well, and, and there's another part of that, it's community. So I, when I first started at, I keep taking it back to microbe, but let's, I'm gonna focus on ancestral, like what I identified, I, I used to. I got to a point in my career and people would talk about community and I would just roll my eyes like community around a brand.

I was like, nobody caress about And, and I know people care about lifestyle and that's all a part of branding, but it's so different in the consumer health category it because here's why. When people go through this journey and they're hopeless, one of the first touch points they all make is they either see a story or they talk to someone that validates their experience.

And in that moment. It's validated that there is something wrong with me and that sounds bad 'cause nobody, you never wanna tell somebody that something's wrong with you. But when you know there is and somebody tells you there isn't, it's actually a validating experience. So connection is created that I used to call until like, that went out the, until it went out the window, the Me Too thing.

But I used to call it the me Too connection because the first thing they would say is Me too. Me too. And then at that point they're, they're locked in. Right? That's when I call say, hope is ignited. 'cause they're like, oh my God, me too. I'm feeling the same thing as you. And that's why story and education is so big, and I say it in that order because story is what ignites that.

And education is what drives it home. To bring them to solution aware story makes them problem aware. But yeah, community is is huge too.

[00:19:53] Taylor Holiday: Yeah, and, and it's the same thing we used to have with klo, which is that whatever your problem is, when you, when someone has that shared experience, like do you ever take your wedding ring off the gym? Yeah, I do that all the time. Like I tie it on my shoelace. What do you do? I put it in my locker. I hang it on the hook, whatever.

It's like, okay, bonded. I. Okay, now I'm in a space where now I'm interested in a clear sense of, of problem and solution that you can speak into that the intrigue iss already there because you've established this communal connection around an issue. And one of the things I say when I interact with both your employees or hard soil crew is none of them talk to me about. They're like practical reasons for joining a company. It's like a conversion story. Like you'd hear from somebody at church, it's, I was sick and now I'm, well, I was hopeless and now I'm hopeful. And when that's the case, you cannot tell them that their experience is anything but real. And it is so personal and impactful that their commitment to the participation in the thing is so high.

It's just, it's insane. And the same gets true for the customers.

[00:20:50] Dave Huffman: Yeah. I'm glad you brought that up too, 'cause it's, yeah, you're right. It's the same, everybody, in fact, I just, we did a, we just got back from a retreat where we're, we're focused on culture and we did a lot of connection and, and time together. We actually, we did very little work. We rolled out these. Like, I dunno if you can see these like little culture coins that's got like pillars on one side and values on the other.

Chris came up with these, they're really cool. But throughout that time I did a brand positioning exercise and I was just, I'm was so lucky to, to be able to start with the team and not get a lot of guessing and pontification because these people have actually been through the journeys themselves.

So, yeah.

[00:21:28] Taylor Holiday: So, one of the things, let's go practical for a second, because I've, I've worked with a lot of different supplement companies and. One of the things that I've seen is we know that generally speaking, margins are pretty solid in terms of the space, the good value to weight ratio and the product. Usually the shelf life isn't too poor or is pretty, pretty solid depending on the product category.

But there's two things I wanna I wanna highlight. One is that I have found that if you think about the difference between the, the medium of delivery here in terms of powder pill, gel beverage, the different things that supplements may show up in,

I have found that Pill tends to be the highest retention rate of any of those form factors.

Is that if somebody is taking a supplement in that form factor, it's got the best LTV of all the categories, and that's the category that primarily you guys exist in. So I'm curious if that form factor was a business operation decision. Is it just a supply chain constraint? Talk to a little bit about the product roadmap in terms of the form factor and how you think about that.

[00:22:23] Dave Huffman: Well, that, that's a, that's something I'll, I'll, I'll have to speak out of, turn a little bit on, from what I understand. , that's the it, it was a, just a business decision supply chain wise, it just made the most sense at the time. I, I've, I've got similar experience in other brands where it was you know, a lot of times when you get into other form factors like powders you have to deal with like mixability and texture and things like that.

And, and, and a lot of times it's just easier just to get it into a capsule. We actually say capsule pill puts us at a. Little bit of a regulation disadvantage, but, or, or, yeah, what word I'm looking for. But yeah, I mean, but we are, one of the things that Chris is working on our CEO, you know, he's an ops guy and, you know, you talk a lot about margin innovation so far this year.

I mean, that's, that's where a lot of our, we're gonna make pretty big strides. In fact, I'd be interested to see what our GQ score is at the end of the year. One of the things we're working on is form factor innovation. So we've got a product launch here in a couple of weeks where we've got some stick pack powders that.

Just make it really easy to travel with and we're just taking a product that we already have that sells well and we're creating another form factor of it. We're gonna work on some pack size innovation and, and I don't wanna reveal too much 'cause I still wanna play some stuff close to the chest.

But yeah, I mean, when it comes to form factors, it, it, sometimes it just comes down to the formulation and what you can actually get at, at the, you know, as the end result.

[00:23:40] Taylor Holiday: That's another place too, where I think this idea of market trend becomes really important. Like one of the things that I'm seeing in this category is gummy as a form factor is sort of on the ri, it's a trend, right? And so what happens is we all sort of get used to consuming things. We see it in the kitchen and this person, and so. You know, it's almost like we're returning back to the Flintstones era here of the nineties gum, gummy vitamins we all took as kids. But there's something about that, that, that form factor. 'cause again, I do think the mixability with powders is such a pain for many people, and I just think about it as like, I don't like doing dishes and you just make me get a. Glass and fill it up and it's just it versus just popping the gummies and I'm off and running or whatever it might be, or take the pill and down I go. You know? So I think that there's just some of that, but that's another category where there's trend underlying. So I don't know. I'm gonna, I'm gonna force you as a marketer to go to the one negative that does show up on your guys' scorecard.

And I know this is a complexity in your space 'cause there are some novel ingredients and it has to do with your cash conversion cycle and your production timelines, like,

so talk a little bit about the unique, the novelty of what is, you'd think, oh, it's meat. Products, they're readily available, but they're not.

It's complicated, right? In terms of the supply chain side of stuff.

[00:24:47] Dave Huffman: So I'll say two things. There is another one on here I take issue with, and we'll get to that. And it's the number of peaks, but the cash conversion cycle. Two, two things. One. I don't know that we really know that yet. You know, when we filled this out, Chris had only been with the brand for three months.

There's a lot of cleanup he's gotta do. He's been singularly really head. I mean, he's head, he's wore all the hats, but he is been really head down in our p and l. But you touched on something that I'm glad you brought up 'cause I actually forgot about it. Is while we, while our supply chain does, I think differentiate us it is complicated, you know, to, to harvest the organs.

It's not like. You know, we just got a bunch of powders laying around. I mean, that's a whole process that come from, you know, a singular animal that then end up in a, you know, in a powder, in a capsule. So that's a process that, you know, there's not a lot of optimization that can happen there, and we just gotta 

live with, with what we've got.

[00:25:42] Taylor Holiday: It's interesting though because in some ways I think it is a core advantage in that like a lot of, one of the drawbacks often with supplements is the barrier to entry is very low, and so

you end up getting this sort of race to the bottom in these product categories where there's so much price pressure in these and they functionally become commodities, if you will.

Like, if you think about like ZMA or these other things that got really popular for a while. Eventually, there's 745 versions of them on Amazon and it's just sort of a race to the bottom. But there is some complexity here that I think is worth pointing out. Creates leverage in the market as brands. Think about this.

One of the things we learned this with Kalo. Kalo is the ultimate example of the zero barrier to entry product. It is costs nothing to make. There is no proprietary information. It is a silicone ring, and if you go look on Amazon right now, there are thousands of results and you can buy 10 of them for a dollar. When we started. On Amazon, if you search silicone ring, there was one thing us, we captured all of that demand,

but eventually all that margin got competed away.

And so that's one of the things, as you think about businesses that succeed, there's some leverage to sustain the margin capture over time. And so complexity and supply chain, sometimes people are like, I don't want that. And I'm like, Ooh, interesting. If I could, if I could solve that hard problem that could help me over the long run.

[00:27:00] Dave Huffman: Yeah, I think so. I've heard different estimates, like I've heard anywhere from as low as six months to maybe a couple of years. But, you know, but I've just, you know, I was in the pet space for a little bit and that was one that just, I. You know, every day there was a new pet brand launching in like a new gummy form and, and literally copycats left and right.

And, and to your point, people see a trend and then they go out and find like, and then like you start trying to differentiate yourself through ingredient formulation, positioning, and looking for like a, you know, an ingredient that was harvested in the Mediterranean by like, by like a, you know, or like somewhere from on, a mountaintop from a local tribe.

So they've got story built into it all. It just, it starts to get pretty good on like some pretty wild rabbit holes.

[00:27:41] Taylor Holiday: It's always a trade off, right? Between the simplicity, which is easy to copy, and then the complexity, which is. Hard to pull off. And so somewhere in there

there's magic. All right, let's take, let's hear it though. What's your, what's your issue with my peak? So I'm looking through, so prac, we've tried to create an objective definition to this, which is like, I think it's one standard deviation above the mean, or two standard deviations above the mean.

So we take your average monthly revenue for the year.

And we say, how many months do you drive? Two standard deviations above that. Richard can fact check me off if it's one or two standard deviations. But but what, what's your contention? I'm looking right now it looks like. Yeah. You know, you, part of it is when brands are growing fast, things tend to look like up until the right a little bit more than there are these big changes in the, in the peaks.

But tell me, tell me what you're thinking.

[00:28:23] Dave Huffman: Well, first let me say I love your peaks, and that sounds weird without context, but I love the four peaks. I love the the four peaks of the fourth peak. We, we used that this year. I love all of it, dude, but. But when I go through this, I don't think we should get a negative for having one, because R one is representative of steady growth throughout the year.

We don't have to deal with these valleys that other brands like fashion and 

and some other industries that have to deal with now that not to say we shouldn't push for, like sometimes, you know, I think like also I realize that peak can also just be, it doesn't have to be this deep valley. We do have some

Or some, or valley doesn't need to be like so deep. We do have some downtimes in the year, like Q2, Q3, that we, what I, what I have taken from this is we need to focus in and try to focus on some bumps there. But when I first saw this, I was like, that's bull crap. We've, that's actually a good thing. We shouldn't.

[00:29:16] Taylor Holiday: Yeah, well, it's okay. So, and this is fair, and I've gotten this criticism from a lot of brands that are, they tend to buck this trend when they have really high LTV.

And so they're compounding their existing customer revenue at a consistent base over time, such that they are producing what is very rare in commerce, which is steady month over month growth, which is just like

an abnormal thing, and it does buck the four peaks trend. But my pushback would be this. Is that one of the things that the Four Peaks does when I think about marketing operations is that I can't make everything a level 10 importance and a level 10 effort. So if I think about the amount of assets I create, the amount of story that goes into it, how broad the distribution is, how much preparation I get, you can't make every moment matter at a level 10. So my question back would be, how do you think about The, the parts of the marketing calendar then that you put disproportionate investment into, if it's all just gonna be the same every single month, and how do you give yourself space to do a deeper initiative around a big moment?

[00:30:13] Dave Huffman: Oh man, I knew you got, I knew you were gonna get me on something. That's brilliant. And I, you know, it's funny, I got goosebumps. 'cause right before this, we were on a marketing calendar call. All right. And we had our Q1 ready to go, and then a product launch got pushed back. I. And I'm pretty decisive. Like I can bring, I can, I break things down into minimally viable chunks so I can move.

I'm a quick start. I can move, move, move, move. I can make decisions all day. But I was stuck 'cause I was like, how do we weight the importance? Well, it's a product launch that's highest priority. And then, but I also, the way I'm thinking about it now is there's a lot of marketing that hasn't been done in this brand.

You know, some, something we didn't talk about is 70% or more of our revenue is actually on Amazon. We're an Amazon business at one. When I came into this business, I just like did a mental calculation of revenue for employee per employee, and I was like, whoa. I mean, we've got a very small marketing team at, at my last gig, it was like 25.

Here it's like five. Um, so, so like weighing the importance but then thinking about, well, what hasn't been done? We're setting a new expectation and setting a baseline. So, that makes, that makes it easier for me to make decisions and know that we don't have to do everything right now. We just have to do more things, and that's gonna put us in a better position going forward.

But that's a great point.

[00:31:32] Taylor Holiday: Yeah, I think especially product launches are a great example for me where if I think about the, the universe of potential marketing initiatives you've got to seed product to influencers ahead of time. You've gotta produce UGC, you've gotta do a photo shoot. You've gotta think about all the different ways that you could distribute this product in message. And we'd like to break it down. I'm, I'm doing some coaching with a, a brand order right now, and they're breaking their . Moments into tier one, tier two, and tier three, and they're trying to build playbooks around each of them. So like tier one would be, we do this much messaging and this many challenges or channels with this big a budget and this many influencers, et cetera, tier two. And the good thing is then, then you can start to connect that to the demand planning around the amount of. Production and inventory that you purchase and, and things like that. So again, it it, when everything's kind of just working, there's not necessarily the need to create these deeper moments, but for many brands I see that like, hey, they're trying to drive disproportionate return or they're actually dissatisfied with the present state. And so how do we get to an outlier outcome? Well, we've gotta stop, stop and go, okay, we're gonna think deeper about this a little longer. And I found that, like, I remember when I was sort of on the brand side running marketing that you couldn't You couldn't go deep and wide all the time. And so

it was like, okay, each moment we've gotta think is the how deep and how wide are we going in each of these things and why? And some sort of cadence to that I think

was helpful from a functional standpoint.

[00:32:52] Dave Huffman: It's like a multi-level thing. And, and I have a tendency to stay just minimally viable, just to turn sprints and just keep action going. And I need to, I actually need to take a step back and think about the bigger, the bigger swings that we can take as a brand. That's probably a, a weakness of mine is not doing that enough.

But but yeah, man, that's a great point. I was actually looking through this before you sent it, and I was reminded our cost of delivery. I think it's gonna get better too. So I would say marketers and CEOs one of the first places that I would look if I were you, and it's 'cause we didn't until recently, is your shipping.

So Taylor, we were shipping everything two day air. We just, and it's, it's like part of that above and beyond customer service, right? That made us who we are. But what if I told you that we could do three day. Save $6 per order. 

So there's gonna be a lot of contribution margin we're gonna get back on that side that we can put back into advertising.

But yeah, there's, there's Chris, and, and you know, and then he brought me on. We've, we've done a lot of work here even since we got this. But that was a huge win. We were at our retreat and he got an email and he goes, Hey do you wanna switch shipping? And I said, yeah, if I needed to talk to you about it.

He goes, we could save $6 an order as well. Like, send it right now. Let's go.

[00:34:05] Taylor Holiday: That's right. And, and the customer experience three day is still a value proposition. , you know, like that's, that's still caring for them in a way that

honestly probably will be negligible in terms of their impact.

But I wanna, I wanna go, so you mentioned cost of delivery. You guys are right at the benchmark.

Again, product category lends itself to that really well. You talked about the team though. And Lean Opex is another thing. This is a common trait that I see If I could find any category where almost universally profitable businesses are driving leverage, it's on the opex side.

They have a team that is producing disproportionate value to their cost.

And so my, my thought is, as a newer person, 'cause Dave, you've been there, what, four or five months now? I don't know. How far in are you?

[00:34:43] Dave Huffman: Coming up on five. Yeah.

[00:34:45] Taylor Holiday: So you see that, you know, the team is lean, which means there's always more to do. There's there's some level of strain or capacity in that all the time. That's a consideration. But how do you think about what investments to make and how you think about the relationship of the cost of your team versus the value, and when do you grow the team? When do you not? How do you think about building your team in light of that as a leverage point?

[00:35:06] Dave Huffman: Oh, I love this because Act building teams is actually probably my, I love that more than the marketing itself. Um. You know, I've built big teams fast. Like literally went from one to 25 in, in 18 months before. Some of that was some realignment inside the organization. As I identified people reporting up through different chains of command that actually would be more efficient if they report up through marketing.

But when it comes to ancestral. You know, Chris, Chris and I had a, a conversation pretty early on that we wanna focus on profitability first. So, you know, even though we've got like a, an a customer metric is like really like our top north star. It's a customer number and then there's like a top line revenue target.

We're really, we're really after net operating income. And you know, like as you said, like a, a real quick way to bloat that out is to just build a big team, but we're gonna have to build a bigger team to support the direct to consumer side of the business. So, the way I'm thinking about it, I used to just kind of run and gun and go out and just what I think, right?

But now I'm looking at, I'm trying to operate with the team that we have. So I put a, I put a sprint process in place. It's a weekly sprint and really just started with our creative team, and it's just a really simple process of capturing ideas throughout the week. Reviewing the ideas and then pulling them into a work week, which I'm calling a sprint and setting a target number of like creatives that we need to produce out of that and creatives and copy.

Right. And we pushed really hard at the tail end of Q3 and into Q4 to the point where people were just losing their minds like Dave, like we need this. I cannot keep this up. And that's what I'm looking for. That's what I call a gap. So when I identify the gap, that's what I go out and hire for. So what I realized is I was, at first, I was leading a lot of these sprints.

I was helping take them through, I had to design the sprint. I. Our, we've got a guy that's like brilliant creative strategist from tv, but he's never really learned from like a creative director. So that's what I'm going for first. That's actually, that Will, my first hire was actually a director of content, like my first week, but she was already in the pipeline because to your point, we needed to capture more of that organic demand, more organic traffic, but I just keep, we, we try to operate as lean as we can.

I've really coached communication. We had a scenario a couple weeks ago where I had who a, a guy who would be my director of growth. He said, I've got a lot that I wanna bring to the director of content. But he goes, I know she doesn't have capacity, so I've been holding onto it. Well, I, I encouraged them to have the conversation because that's where I identify who we need to hire.

So it's really just operating within the, the, the parameters that we have, and then having the conversation around the gaps and then making the decision on when we wanna make the . Basically make the investment or the bet that that person will help fill the gap.

[00:37:52] Taylor Holiday: One of the things I think you said that's so important is that your first thing was to learn the boundaries of capacity. And I think this is, especially like on human service side, I think about this all the time. What is the boundary of capacity? How many accounts can somebody interact with? Where is the point at which it breaks? And the temptation though, and this is, this is what I would say. Once you find that 0.1, you have to find it. And I, that's that. In some ways, you have to acknowledge that that's going to create strain. You have to be empathetic. You have to care

about people in that process, which I know you do really well. Then here's what I would even say too. The next step in my head isn't actually even a new person. It's to ruthlessly examine the process and how people are working for improvement in that, so that the reason they aren't over capacity is because the system's clunky and that you aren't just inserting another person into a clunky system. So press the present system with the present people to max capacity. Then analyze the system to go, oh, that's really, that's taking way too much time. We could automate that. Or, Ooh, if we did this, we might lose a little bit of quality. But the speed goes up a ton. Okay, now we've refined the system. We know the people. Now, when we insert people into it, we're confident that we're getting the output per person that we need in order to make it work. And I think that's one of the things that a lot of times, I see people jump immediately to, oh, we're at max capacity. I need another person. And it's like, hold on. Okay, hold on. I'm, I'm with you. I, I wanna get there, but let's make sure that this problem is an a process problem or a technology problem that we couldn't solve another way.

[00:39:21] Dave Huffman: Yeah, that's, that's well said. And I, on some level, I'd like to think that I do that, but I, I don't, I don't have a good process for doing that. I think, like I, I document the process. We go over it together, we stop down and we review it together and we identify, talk about where the gaps are. And you're right, there's a lot of empathy that needs to happen.

In fact a lot of times you just, like most of the time or all of the time, you have to just be willing to let things fall through the cracks, let things fail instead of keep pushing people. But you're right, like, that's, I knew I was gonna learn something from you.

[00:39:54] Taylor Holiday: Well, so another thing I wanna compliment you on, and I, I wonder if you do this intentionally, and I've found this as a really important skill for leaders, is you collect relationships. Over time that don't have an immediate application in your life. Then the moment will arise and you'll be able to fill the void.

So the delta between need and resolution gets smaller because of the effort in that. There's three ways this has shown up for me. One is every time I've had a job opening, almost you've made a recommendation of somebody. And it sounds like this, it sounds like I was probably gonna hire them later, but I, if I'm not going to, you should, you should do it. You are immediately saying this is a person for that problem. So I recognize you're always

sort of collecting these relationships. Two, when you were going to a job search, you enlisted me in that process. So you're building network all the time and community and connection. Is that like, is that something you do intentionally or is that a natural sort of just characteristic that you have?

[00:40:48] Dave Huffman: Absolutely. So my mom always used to say, I could still hear when I was five years old, David. It's not what you know until, you know, and you know, there's maybe some, like somebody might push back different ways of, of thinking about that. But when I was getting out of music, I. I, I didn't even know that I wanted to do marketing, but I kind of thought I did and I read Keith Azis Never Eat Alone, and I went from playing on stage with not even leading marketing anywhere to the head of social for a Fortune 1000 in like, in like two, two years.

So, but that was because I just networked and I provided value and conversations and then I just, when it was time I just asked. For a return. I, I don't do that very often, but I've got like two calls next week for people that I might bring on. I might not, I might just knowing them, I might refer them out to someone.

I'm always, you know, I've got Matt is help hooking me up with a couple of partners that I wanna have intro calls with. So when it is time, I can either refer them or I can just have a conversation that we're ready. So, yeah, I'm always thinking about it. I was telling Chris yesterday that I've always got my recruiting hat on and I've always got like

Networking hack, but it's also more of, it's not just networking. Like I don't think about it like that. I think about it as just, I just wanna provide as much value as possible and and oftentimes you won't even see me on the podcast circuit because I don't really, I don't really know that I've got a ton to the value to provide.

'cause I see all the stuff you guys are talking about and I'm like, well, I would just say that. So that's, that's great.

[00:42:17] Taylor Holiday: But, but dude, again, for leaders, and I try and enlist this for my managers, this hiring is a very cumbersome process. And if your process for hiring is, oh no, I have a new role starting at ground zero, start that engine. You will get exhausted by it and you will come to hate hiring. But if you are always hiring, In the sense I tell my managers for their departments, always have a job posting open.

Just be in relationship, get to know everybody so that when your need arises, you have gone, you, you have a sense of the market, you know what people are currently asking for, you know who's out there. You know what it's like, you know the places to go. You should, it should be a permanent part of your process because it's so critical to what you're doing and it's just something that's like you, I've watched you do with me and for me, incredibly well.

[00:43:10] Dave Huffman: Well, and there's something you, I think, did you say always have an interview?

[00:43:13] Taylor Holiday: Yeah, that's right. It's like always Exactly. Always

be in that process.

[00:43:17] Dave Huffman: So, I used to say, and I would say this to my team, always be interviewing. I would push them to interview and they were like, what do you mean you want me to leave? And I would say, absolutely not, but you need to know what's out there.

And it helps you kind of keep your eye on the market. But here's the other thing. You know why I have this job? Because towards the tail end of my microbe gig, like I, I would interview every month. I had no intention of leaving, but it just helped me understand where the market was going. It kept my, my chop strong.

The reason why I have the ancestral gig is I interviewed at another company. We both agreed it probably wouldn't be a good fit. I wasn't looking to leave anyways, and, but they, they were fans of the value I provided over the interview and he ref, like two years later, referred me to Chris. CO of here at Ancestral.

So that came out of an interview that had nothing to do with what I'm doing 

[00:44:08] Taylor Holiday: That. That's exactly it. My, the way that CTC got started is when I was running marketing at Power Balance, there was a couple of founders that were former baseball players too. They were starting this little company called Evo Shield in Bogart, Georgia, and they said, Hey, we've been following you guys. We could, we meet and just chat about stuff. And I wasn't a service provider at that point, but I was like, yeah, I would love to chat those guys. We jammed. Three years later I launch. What was called the Arch network at the time of CTC, my first customer, those guys at Ebo Shield, 'cause they had gone on

and built a really big business and I had stayed in relationship so that when I went to launch my own thing, that was a relationship that was obvious.

There was trust. They had felt a sense of connect. Like all of that is part of the experience of, you know, like, and when I think about running a Lean opex, like one of the things about the efficiency of an organization is. Hiring and turnover has massive cost to the organization, and bad hires are really difficult and getting the market wrong and overpaying is really bad for the organization.

And so you have to have a skill of the sense of the market. Relational equity with people, the ability to make good hiring decisions. That all goes into what shows up as an organization that has operating leverage.

[00:45:16] Dave Huffman: Yeah. Honestly, you to some degree, I don't think you even know an interview process. I don't even know if it's helpful. 'cause you really don't know until you've worked with them. And then, then you have to make a decision. Do I do this? If it's not working, do we, do we fire fast or do we coach up? And, and that's something that I, I'm always back and forth on.

'cause I love to coach and I believe everybody's coachable. I've learned over the, like, last few years that I need 'em to at least meet me halfway. But yeah, that's, that's a really interesting point.

[00:45:47] Taylor Holiday: So much of it. Again, if we think about the whole strain of what we're talking about here is. LTV is a function of the connection to the community and to the solution problem to the lean. Opex is a function of having great people who you trust and know and are able to create operating leverage with.

Like it's easy to get lost in the data, and I think if there's any drawback to trying to algorithmically output a score that makes brands. Sort of seem like they're just a bunch of inputs and outputs. It's that what's lost in the creation of these numbers is generally very human attributes. And I think that's one of the things I'm hoping to get outta this podcast. I'm hoping you guys see that in Dave Bo. Back to back Dave's. By the way, Dave Ook and Dave Huffman both, you'll notice that they are human in their language. They care empathetically. And the last thing I wanna tell you guys about Dave. If you're a brand and you're thinking about be hiring an agency provider, here's what I want you to know. Dave is without a doubt the person that I genuinely believe cares about my business and goes out of his way to praise my team when they're, they're successful. And he's equal parts care and challenge. So I'm gonna give you a story that's literally sort of happening right now. And I'm gonna tell you why his investment on the front end makes a difference. Okay? So Dave, from the time he started with CTC, has been out of his way to send me voice messages, to check in with me, to let me know about when things are going well. And yesterday they're having an issue with a feed or you know, some, some something.

And we were slow to respond and didn't get it done in the time. And I saw Dave post a message because I'm in every Slack channel, and in particular, I keep an eye on Dave because it matters to me that relationship matters to me. There was frustration and he expressed like, this isn't good enough and. What preceded challenge was lots and lots of care such that I knew like, okay, this is a person that when that happens, there's a level of response then that like, it enlists me, it enlists. So I go directly to my VP of paid media. We need to resolve this now what is going on? And you earn that through this relationship of equal parts care and challenge.

And if you wanna have a great relationship with a service provider and employees, that's the pathway. It begins in that way. And so, Dave, I just wanna say I appreciate you for that palms down approach. I think it's served you well, and it makes me eager and enthusiastic to want to win for you because of the way that you approach it.

[00:47:57] Dave Huffman: I appreciate that feedback, man. That means a lot. 'cause I, I actually didn't like sending that message. But I've, I, I do that because I didn't use to be that way. I and, and over the years I've realized that that didn't serve me now. And also now my wife is an agency owner. I, and I've worked agency side, so I know what it's like to have client ex unrealistic client expectations and, you know, we're all just trying to do the same thing.

So, I appreciate that feedback, man.

[00:48:20] Taylor Holiday: Yep. Well, there you go. Go check out ancestral supplements. Amazing brand, an incredible group of people, and one hell of a GQ score. Dave, thanks for joining us, man.

[00:48:28] Dave Huffman: Thanks, man.