Lessons from 11 Years of Building an Agency … and What Happened After

[00:00:00] Andrew Faris: Let's talk about what we're here to talk about.

[00:00:01] Taylor Holiday: What are we here to talk about? 

[00:00:03] Andrew Faris: Well, this is a random show. Yeah. We do these uhhuh long talk about all kinds of stuff. Yeah. Saddle up. We're gonna be here for a while. Speaking of Joe Rogan.

Yeah. Um, this is gonna be more focused than usual. Yeah. Normally we each have two or three topics we bring plus a bunch of little lightning round stuff. Yep. Today there's a big thing that happened. Yeah. And so we're gonna talk about it.

[00:00:23] Taylor Holiday: You launched an agency. 

[00:00:25] Andrew Faris: I, it is funny timing. It is. No, I know. It is funny timing.

[00:00:26] Taylor Holiday: That's the big news. 

[00:00:29] Andrew Faris: Uh, no, the big news is that Common Thread Collective Yep. Has been acquired. Is that, has been, has partnered. 

[00:00:35] Taylor Holiday: Yeah. We, we call it a growth partnership. 

[00:00:38] Andrew Faris: Okay. Yeah. I noticed that. I noticed thankfully enough people on your tweet about this. Understood. 

[00:00:43] Taylor Holiday: Yeah. There's a pr PR spin there, but Yeah. Yeah. It's a growth partnership. 

[00:00:46] Andrew Faris: Well, I, that's, it is a growth partnership, but the mechanism of that growth partnership, is that a private equity company Yeah. Acquired Common Thread Collective. Yeah. The, the, you just, you just want two. But the point is, it's not like, I don't, the point that I read under this, you tell me if this is right, is that it wasn't acquired and then like Taylor goes to the beach forever.

That's right. Yeah. The point is that they are, there's a particular purpose Yes. For. What you guys are doing in this acquisition That is, that is not just go away, Taylor. 

That's right.

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[00:02:05] Taylor Holiday: And, and that's why you choose that language. It's just a signal to everyone that everybody's not leaving. Um, that, that's not the intention at all is for us to write off into the sunset.

And anytime you're in a human service business, it's obviously really important for customers and employees and everyone else to send the appropriate signal. So yeah, those words are chosen with intention and, um, but I think like the basic mechanics are pretty simple in that sense. That it's a, it's a way for a partner to come in and build a platform for them to grow a service business to try to lead to a bigger acquisition for themselves down the road.

That's like what private equity does. I don't think there's any mystery to the business model of project equity. 

[00:02:44] Andrew Faris: They exchange dollars for equity. 

[00:02:45] Taylor Holiday: That's right. In, in the hopes of selling it for more later. It's, you know, it's not a rocket.

[00:02:47] Andrew Faris: which, which means they need the business to be good. Mm-hmm. To sell it, to make a return on their money.

The business has to make more money over time and they think they can help you do that. And they think that you can help them do that. That's right. Yeah. Um, let's talk. There's so, so this is what we're gonna talk about. Yeah. That's the main thing. Yep. Uh, I have a lot of questions. Yeah. This is the longest set of notes I've ever had for this.

You and I have actually talked shockingly little about this part of it. I like, we've talked a lot about some parts of it. Yeah. But we've talked relatively little about some. 

Go ahead. What were you gonna say?

[00:03:15] Taylor Holiday: Well, I, I just think that if you're listening, and one of the things I'll say is a, is a reason to stay is that I, I put out this message of like, Hey, if you're an agency owner, part of my hope here is that I could bring more awareness to the potential of these kinds of opportunities for you, the service writer.

So you as an agency owner, sort of can act in proxy for a lot of people to ask the questions that I've gotten in my dms, that I'm setting up some calls with people to do in hopes that, like, one of my things that I genuinely, deeply care about is to try to make people love their service business more.

Yeah. And to understand the potential that I didn't for many years. Yeah. And so I think I had a lot of people that were really helpful to me. 

[00:03:47] Andrew Faris: Why didn't you, why didn't you love it for many years? 

[00:03:49] Taylor Holiday: Well, I, I don't know that I didn't love it. I, I just didn't understand how to make money with it. 

[00:03:53] Andrew Faris: Um, I think you didn't love it at times.

I think I was around you. There was a lot of times when you, I mean at one point you had to make a rule that we couldn't make fun of clients anymore or something, or couldn't, couldn't complain. Oh, okay. Yeah. So, and I think that's, I think that's illustrative of the ways that service business is great on people and the reason people leave.

That's right. Everybody says the worst part of servants business is clients. 

[00:04:12] Taylor Holiday: That's what I say. So I think what happens is there's a trope that's woven into how you're supposed to perceive your agency business, which is that this is a miserable existence and you're just suffering through it for the sake of financial outcomes.

No, for the sake of even getting enough information to launch a brand one thing. Oh, yeah, yeah. Or something like. Sure. So I think like, I, I feel like. Whatever externality I received about what an agency was, it was negative and it, that was woven into the way I treated my own business. Yes. Was that like, I shouldn't like this that much?

Yes. That this is kind of a second tier Yes. Existence, uh, that this is a lower class model. Um, and I think that I adopted that for myself and that sort of was woven in then into this idea that we hate clients. Clients are the worst. This business sucks. You've got five bosses all the time. All those sort of stereotypical tropes that I think get spoken over agency in a way that, um, I definitely absorbed early on.

So I think that's fair. 

[00:05:04] Andrew Faris: Yeah. So, uh. Did was, did something shift for you? I feel like I, I can't tell if this happened all at once or if it happened over time where you decided Yeah. There decided, lot Shift, decided to love the agency. I mean, I do feel like partly I remember conversations where you sort of realized that you were going to need to think about it differently to be successful in it.

And so there's, well, yeah, there's four by 400 going away. 

[00:05:22] Taylor Holiday: Yeah. Like, so like I said on my podcast that the, and you obviously were aware of this, is that the vision that we lived under was that four by 400 was gonna make us all the money and CDC was gonna build this experience and missional purpose for us, and we were gonna be able to accomplish both at the same time with this thing.

That's why we sent our best talent and people to four by 400. Yeah. Like that's, that was the point. It was like, oh, it's a better allocation of resource to send Andrew to four by 400 than it is to keep him in CC. And that turns out to be, it worked perfectly. Really, really dumb because not only did that not work out, and I did a great job and now, and now you're a competitor.

It's like worst of all the worlds, you know, turned out. 

[00:06:00] Andrew Faris: Yeah. There's there's so many, I mean we've, yeah, there's so many things to say about that. Okay. So, so. Let's talk about the financial part of it first. Okay. So what I mean by that is you have a strong theory that agencies, I mean, last time we did a random show, you berated me about how e-commerce businesses are bad.

Yes. Now tell everybody why agency businesses are good. 

[00:06:19] Taylor Holiday: Yeah. So I, so I put this out on Twitter the other day. We've been sort of arguing about this on the internet, about like what is worth more in agency or eCommerce business, and I think Chris fester. Like who Chris Spencer runs, um, propeller, which is a large fractional CFO business, one of the biggest in our space.

Have you ever interacted with Chris, by the way? Mm-hmm. Um, and he responded, should, I think he's great. Yeah. He responded perfectly when he said. Every multiple of EBITDA is just a model for a discount on future cash flow. Yep. Like that. And this is like, I think, the really important thing to understand about value that, especially, especially in the private equity world, I, I'd say maybe less so for a strategic, maybe less so even for venture capital, but, but in particular in private equity, this is just a model of a discount on future cash flow, not on future ebitda, on future cash flow.

Because there's, there's so many reasons for that. Not, not the. The, the largest of which is that most of these deals are, the multiple is predicated on your capacity to get debt. Right. Like that, that is a big piece of what funds these acquisitions. And so you mean 

[00:07:24] Andrew Faris: because the acquirer is going to fund the acquisition with debt?

[00:07:27] Taylor Holiday: That's right. Yeah. A they want to, they want to do what is functionally, like it's a model built off of like leverage buyouts where you're, you're going to put debt on the business to buy out, um, portions of the equity. The, the most conservative lender in the ecosystem is a bank, like they lend almost exclusively on, uh, historical Yeah. EBITDA. That's like in historical cash flow. 

[00:07:48] Andrew Fairs: They'll light your projections on fire. Yeah. 

[00:07:51] Taylor Holiday: They don't, they don't wanna see your 24 month forecast. Yeah. They wanna see trailing 12 months, trailing 24 months cash trends. Yeah. And so, so if you want to get the largest multiple possible from a PE firm, then you, they've gotta walk in feeling really confident that they could lever your business up as many turns as possible and feel confident in their capacity to debt service, which is a question of a lender.

Right. And so I think when you think about e-commerce businesses, they uniquely struggle at generating cash flow. 

[00:08:16] Andrew Fairs: Yeah. 

[00:08:16] Taylor Holiday: And whereas my, my free cash flow to EBITDA ratio is like 95%, right? Yeah. Like EBITDA is cash in a service business in many ways. Now there's, I think there's probably like nuances to how people invoice that we've learned along the way to improve that.

But, but that's why when I think about that's a much smaller problem than planning inventory though. Totally. Way, way smaller. Yeah. Right. And, and so I think that is where, what people don't understand about like the, that the idea of value is people just like think about like TAM or the potential total size and like that, that's not really the consequential decision when someone comes to purchase your business.

Now it's a consideration for sure. And, and even when CDC was acquired, a big part of that was a market analysis of the potential total addressable market for sure. But at the end of the day, what they're willing to pay for it is going to be about the window in which they're looking at the horizon in which they want to recapture value and your ability to produce cashflow in that period.

Um, and so I think that those are just really important things that when I look at ecommerce businesses, I like the idea that they could very effectively, especially in this moderate, smaller tier produce. Large amounts of future cash flow is just insane. 

[00:09:25] Andrew Faris: Yeah, it's insane. Yeah. So my question about that is, for as long as I've been in e-commerce, what everybody has said, I mean, you've just been way more in the m and a world recently than I have been.

And, and just in, in general with a lot of probably the clients and the size you're at and all that stuff. What everybody has said forever is that essentially what acquirers care about is multiple of ebitda. 

[00:09:42] Taylor Holiday: Well, but the multiple of EBITDA is just a proxy, right? Like, so if you go to a lender, um, they're gonna give you usually the, the, when people talk about like how much you're able to lever up your business, it's how many, what the multiple is on your EBITDA that they'll give you in debt.

Right? So like in the middle of COVID, historically, when interest rates are really low, you can get a, they'll let you lever up more. 'cause if you just think about it, it's just your debt service payment monthly Yeah. Is a function of they look and go, okay, based on your cash flow, how much can you afford to pay me to pay in debt 

[00:10:12] Andrew Faris: service? Yeah. 

[00:10:13] Taylor Holiday: Right. And so when interest rates are low, you can obviously lever up higher. Yes. So like in COVID famously, you could get 6, 7, 8 times leverage. Yeah. As a, as a business. Well in today's world, you can get like. Maybe two to four times. Yeah. Two is conservative, four would be very aggressive. 'cause interest rates are pretty high.

Yeah. So if you just look at it and go like, how much can you afford? If every month you added to your, it's a really obviously a balance sheet. 'cause it's like your, your debt service is obviously below ebitda, right? So, yeah. Um, but how much could you afford to pay the bank every month? That's a question of cash flow.

Yeah. That's not a question of ebitda. Right. So it's not, it's not really a p and l consideration. And you think 

[00:10:45] Andrew Faris: that's the driver of why ebitda? 

[00:10:47] Taylor Holiday: Why multiples have gone down? Well, you can look at multiples as a way of just sort of understanding the world. Like you could look at the, our acquisition and list it as a multiple of revenue.

Like we got a multiple of revenue. Yeah, of course. Yeah. And you could say it that way, you could express it that way. Um, it just doesn't, it doesn't really matter. The question is how does the, how does the purchaser derive the amount of money that they're willing to give you? But what everybody 

[00:11:09] Andrew Faris: has said for forever is like, okay, e-comm, brand EBITDA, 2 million, they get three to five x every 4 million they get.

Yeah. Yeah. Six to seven. So you think that's, you think that those, 

[00:11:19] Taylor Holiday: that calculation has changed? I, well, I think that there's a secondary consideration, again, relative to who the buyer is, that has to do with how much free cash flow you produce as a, in relationship to that ebitda. Yeah. Because again, like if you Sure are negative, free cash flow on positive ebitda, like the bank's gonna go, you don't have any money to pay me.

Yeah. Like, there's no available cash to service in an incremental line item. And so the acquirer's not gonna be able get a loan. So they're not gonna be able to get a loan, so that means somebody's gonna have to foot entirety equity into the deal and these guys don't wanna do that. Yeah. Like they, they don't wanna take on that much risk, and so that will just lower your multiple.

Yeah. Um, and so I think that's a, that's a piece of the consideration, uh, in the process is that how much debt service you can take on is going to factor into how much cash you're gonna get 

[00:12:03] Andrew Faris: out. And the net result of that calculation is that agencies are much better businesses than e-commerce businesses because they, that's because they generate so 

[00:12:09] Taylor Holiday: much more cash.

That's a piece of it. I also think that the growth rate, like the LTV to CAC of my customer acquisition is just way better than every e-commerce business is by a lot.

 [00:13:08] Taylor Holiday: Yeah. I think that's, I think that's, we have better than software in argument in many cases. LTV to cac. Yeah. Now part of that's because we, I think we have a fairly novel.

Customer acquisition mechanism that we've built over time. Yeah, exactly. So I think that helps certainly, uh, that we, and I don't think that that's like a traditional approach, but still, like my customers are worth a lot, a lot of money. Yeah. Um, whereas an e-commerce customer might be worth $30. Yeah. And like there's like a classic problem here, which is that the LTV on a lot of businesses is really crappy.

Yeah. So what happens in this argument is like you. People show up. And this is Daniel who's founder of Stars and Honey, which is a cool it. Do you know Daniel? 

[00:13:44] Andrew Faris: Uh, maybe. But it's funny though, the, the move you're making right now is to do the exact same calculation we tell every client to make in their business.

Right. Which is like unit economics, cocktail, LTV, that's right. And all those things. And so it's like a comparison you're making is like, look at an agency ltv. That's right. And Tam and you make that calculation and it's like, makes a lot of sense. 

[00:14:04] Taylor Holiday: That's right. And so people, people, I think they just assume better than supplements consumer.

Yeah. Right. They just think consumers like way bigger. There's way more people. But like the, the 10 bucks each. What's funny is that like there's a direct relationship between if there's a lot of D two C businesses Yeah. The TAM grows for the service business too. These things are tied to each other in some ways.

Yeah. Right. So, um, and I think that's what, when they did the market research, what you find is that like. To get my business from the size it is now to double the size we have to win such a small percentage of what is a very big market. Right. And a growing market. Right. So the TAM in my business is not a problem.

Yeah. Like versus I think in some cases, like these e-commerce business is what they're running into. At their size is they are actually running into a T tam problem for the D two C side of their business and they need to now expand it to retail. Yeah. Or other things. And there's just so much supply side competition.

It's like the barriers to entry are basically nothing. Now that's true in my business too, and I'm aware of that, but I think there are some unique ways in which we can create leverage against that sort of, uh, competition. But what, what ways, uh, time. So I think, I think one of the big, big value propositions in the service business is that your network compounds.

So like, just the amount of people that know and refer us business now is like a hundred x greater than it was when we started. Yeah. And so you get this like network effect of all the historical customers you've worked with that know you and refer business to you over time. That is really hard to recreate.

Data is another one. Like the amount of money that has flown through our systems for us to be able to develop processes and models on top of is like, you can't get that at Day ZI can't get that. Yeah, you can't get that at day ZI. 

[00:15:35] Andrew Faris: Yeah. Um, do you, um. Do you think that that network effect is something, this is actually something I've been thinking about with some friends of mine who have a service business that's unrelated to, it's not a competitor to me, but it's in our space.

Um, do you, do you think that that network effect is generally true across e-commerce? Like the really quick and dirty way I've said that's just that everybody talks to each other in e-commerce, right? And that's just sort of like delivering a great service is like essentially the, like word of mouth on your, uh, service business post-purchase survey would be really, really high, right?

Yeah. Like, um, because, because it just, it seems to me that, yeah, that one of the ways you build a great service business is like deliver a really good service repeatedly over time and you will not really have a customer acquisition problem. That's 

[00:16:17] Taylor Holiday: right. For, for, for many years have. 80 plus percent of your relationships go well and like Yeah.

The net effect of that. Yeah, that's right. Moving over time grows really wide. And so there's just a bunch of people that like care about CT C and that I have relationship with that are just kind and whether we, like, I think about somebody like Alejandro at Montvale. We don't work together anymore, but I love that dude and yeah, he's awesome.

He would always say nice things about us Yeah. In any interaction. And so there's a bunch of things like that. Edward at, you know, uh, road Id like when I, you know Yes. When this went through, he calling, he's always been so kind like you just, you compound enough of those interactions over a very long period of time.

Yeah. And it has an effect that you just can't recreate on day zero. It's like, the way I think about it is like if I'm looking to remodel the, my home, like the, the sequence of like how I get into that interaction is like there's these very like clear like hub and spoke referral models that, that come out of a contractor who has relationships to all the different vendors.

And like if I'm, if I'm a pool remodeler, like. If I can own in Orange County, the five largest contractors, like I've kind of monopolized the market. Yes. Like you can't because to drive direct consumer purchasing through it, it's just not really how it happens. Yeah. Like people don't Google. Well, I mean, for eight figure brands it is a really, 

[00:17:28] Andrew Faris: really, really easy version of this is that you have some of the highest level of expertise of anybody alive in terms of, uh, paid.

Yep. And anything that you don't have knowledge of in the specifics of paid 'cause you don't click the buttons as much as you used to. Yep. You have five people on your team who can do, you know, for every channel at an elite level. That's right. And you probably don't spend very much on paid. 

[00:17:49] Taylor Holiday: And, and so it's because whereas like in reality 

[00:17:52] Andrew Faris: and, and it's, it's because of the who the customer is.

It's not because it's not because. It's not because you're bad at paid. The point is that like that's not how customers shop for this sort of thing. 

[00:18:00] Taylor Holiday: Exactly. And so versus in D two C, like acquisition is sort of a commodity in the sense that the customer will buy through an Instagram ad. And so what that means is that your competitor just has to make a better Instagram ad than you, but that's not how my customer buys.

You have to have trust and a referral network into those relationships. So it's actually a harder barrier to entry for a newcomer to come in. And you can't just like run Instagram ads and instantaneously acquire a bunch of million dollar customers. Like that's not how those people buy. And so I think there's a barrier on that side of it as well, that one of the problems is that like the reality is right now, if I wanted to, I could go win the number one placement on jeans on categorical search.

That's right. I would just have to pay more than everybody else, but I could do it. Yeah. And that isn't really that valuable for a Facebook advertising agency. No, it's not. It's just not. And so I think that it makes the barrier to winning in this space a little bit harder. Do you think 

[00:18:49] Andrew Faris: that CTC at its worst mm-hmm.

Almost killed your ability to do that. How close do you think it got to killing your ability to doing that? Yeah, for sure. So like, because, because the, I have a question in here about the biggest mistakes that you've ever made, but when I'm hearing you talk, one of the things I'm thinking about in my mind is times when I've tried to send you customers.

Yep. I remember one response I got from somebody once was, unfortunately, CTC just, uh, is a customer churn factory that just like takes the three month deal, takes your money, and then turns you out. Totally. And, and I knew why they said that, which is, which is not that of, and of course like I always like try to defend you in those situations.

Like Sure. You don't understand. Like that's not, is growing your business hard? Yeah. Yeah. Because growing Taylor's business is hard too. It's not because you're a monster when you like, don't deliver the pro, you know? 

[00:19:29] Taylor Holiday: But I think that actually really matters. Like, so I think one of the things that does, 

[00:19:32] Andrew Faris: and when you answer this question Yeah.

Talk about, talk about what went bad. Yeah. Like, so explain the context for people of how CTC, I mean, I'm putting words in your mouth now, but almost failed. Uh, what happened? 

[00:19:46] Taylor Holiday: Well, so, so what happens, um, is that. The experience of CTC is. An experience with an individual person, likely at the very end note of our system around your individual experience of them running your ad account.

Some person, Mike, Jimmy, you hire 

[00:20:05] Andrew Faris: me. Yeah. And you are on the sales call or one of the salespeople on the sales call saying, this is the Taylor Holiday way of doing things. Yep. This is our method. And everybody's like, great, Taylor's really smart. Yep. And then I show up on the call to deliver the service.

That's 

[00:20:15] Taylor Holiday: right. And, and so your actual experience of CTC is not Taylor that. Yes. Right. Um, and so that is the thing that you have to protect is like the actual consistency of the promise. It's no different than, like, we say that in consumer too. Like the quality of the product has to match the quality of the ad.

That's why 

[00:20:30] Andrew Faris: I defend you on this. It's like it's saying like it, 

[00:20:31] Taylor Holiday: yeah. So, so what happened for us in particular is we were a very in-person culture prior to COVID. So we had offices in LA and New York, and this is obviously you were a part of this. At that time I would say our culture was very geocentric.

Like it was, it was. Part of the way people learned was like in listening to us all yell in the hallways and it was that kind of tribal transfer of wisdom. You, you, you know, would never yell in the hallway. So we, we would, but it sort of like, yeah, it's like legendary speak on each other 

[00:20:58] Andrew Faris: at 

[00:20:58] Taylor Holiday: a normal quiet voice and, and measured tones.

I would regularly be like, alright everyone come here, whiteboard. We're just gonna talk. Or Yeah, we did this thing called whacking ad where I used to walk around and I'd, yeah. Open up your ad account and I'd 

[00:21:10] Andrew Faris: and force people to turn off ads. Yes, exactly. Well, 

[00:21:13] Taylor Holiday: prior to manual bidding, but yes. Um, yeah. So yes, that was, that was literally, so there were all these like tribal mechanisms by which people developed knowledge.

Um, and then when we went remote, we didn't have any documented processor systems. 

[00:21:26] Andrew Faris: Yeah. 

[00:21:26] Taylor Holiday: And so two things happened simultaneously is that we were forced into a remote work culture and we grew really, really fast. So COVID happens and all of a sudden demand goes through the roof, right? Yeah. Shooting fish in a barrel, everybody wants it.

We have a good reputation at that time. We grow a ton and we have no system. And so we went from 60 people to about 180 people in about 18 months. So what that means is suddenly. 70% of the company had been at CTC for less than a year at one point. What that means, if you think about like, um, the, the quality of the, the experience also being tied to the continuity of somebody like their tenure basically.

Um, well, if 70% of the company's been there less than 12 months, then that means more customers are having a newer experience. Yeah. You just 

[00:22:07] Andrew Faris: said a second ago, 80% of people need to have a good experience with your service business. That's right. Right. And, and that was probably not happening time. Well, 

[00:22:14] Taylor Holiday: well, and let's not, I'm not saying that all 70% of people were bad, but I am saying that Yes, of course not.

Our ability to, our ability to train them, um, was we, we under, you started by 

[00:22:24] Andrew Faris: saying you had no processes. You're fingers We had systems. Yeah. 

[00:22:27] Taylor Holiday: Yeah. We like people. The way I think about it is like, it's really hard to understand that in the old world, people would go to their desk and they'd sit in their pod, and Andy would be there and Luke would be there, and Michelle would be there.

You'd be there and they'd be sitting next to two other media buyers and a strategist and whatever, and they would work together and COVID d they would go to a meeting, they'd shut their laptops in their inner room by themselves. Like it's a very different experience, right? And you have to build a completely different kind of company.

And so that combination of really rapid growth combined with like really poor operating UN infrastructure led to the end nodes of the system being really poor quality experiences. Now additionally, a lot of those businesses were propped up by demand. That was candidly fake. Yes. Like it was the point of the graph where everybody was buying online.

'cause there wasn't nowhere else to buy. Yes. So when that stopped, you had not that good of businesses working with not that good of people. Yeah. Leading to a bunch of hardship. Yes. Uh, and so that period end of 2022 is I think when a lot of that culminated in a. Large batch of experience. That was less than ideal.

Yes. And that was that moment for us, for sure. Yeah. 

[00:23:24] Andrew Faris: How close do you think it got to, to being a death now? I mean, I know you guys, I think so at the time, you guys. Yeah. We had 

[00:23:30] Taylor Holiday: a, uh, because we were an esop, we had a bank loan that we were servicing at the time that we used as part of the esop. The way ESOP works is you finance basically a debt, finances a purchase of the shares from the shareholders and puts it into a trust for the employees.

And we use that to buy back a partner, uh, when, when he left. And, um, so we owed a bank money and we were in breach of our covenants. And I spent, Brian Dunbar and I spent every day during Christmas break of 2022 on the phone trying to convince the bank not to take punitive action against us, uh, in that period.

And my lawyer at the time was like, it got so, like, they were being so oppressive in terms of their language and demands that he was like, you should just. Claim to be filing for chapter 11 bankruptcy because you, you need to call their bluff on whether or not they're actually gonna foreclose on you because they don't wanna own your business.

But it got it, like those were the level of conversations we were having every day about how we were going to move forward. So it was like, it was very serious. Yeah. 

[00:24:25] Andrew Faris: Yeah. 

[00:24:26] Taylor Holiday: What was that like? Horrible. Yeah. I mean, like, it was like really stressful. Yeah. And, um, I remember calling, like at the time, one of the things that I had done that, like, again, this, this whole season of all this, I had created an external board that had governance authority over me.

Like I created it myself. I, yeah, this is a, this is like a part of that, that journey where I was, uh, uh, so there was, and I called one of our board members and I was like, I think you should fire me. Like, I, I think that I have lost the emotional capacity to do this. 

[00:24:52] Speaker 4: Yeah. 

[00:24:52] Taylor Holiday: Um. And that was like, it was like a bad day for sure.

Uhhuh. Um, but that's where I was at. I was just like, I don't, I don't know the way out of this, I'm, I'm exhausted. I feel like I've failed. Like, I don't wanna do this anymore. So I was definitely at a place where I was like, done. For sure. You got to that point. Okay. How did you get 

[00:25:09] Andrew Faris: out of it? Well, wait, hold on.

I, I wonder if we wanna sit in the pain a little bit more first. Um, let's see. 

[00:25:16] Taylor Holiday: But what, but what I'll say also, so sitting in the pain, what, what I'll say is the thing that I had was most harmful to me is that I felt like. I was lying to people. Like I, it felt like I couldn't deliver on the promise. And what promise of, like, come to CT C we'll do great work for you.

Like as if you'd get on a sales call and you'd say that I was like to people and, and that was a sentiment that I had heard back and I was like, I don't want that. Yeah. Like that. Especially 'cause CT C was 

[00:25:40] Andrew Faris: so tied up with Taylor Holiday. 

[00:25:41] Taylor Holiday: That's right. The two things felt personal, the brand 

[00:25:43] Andrew Faris: overlap on those.

[00:25:44] Taylor Holiday: And so I was like, I don't, I don't think I want to continue to create that level of dissatisfaction for me in my work. I was like, I don't think that I wanna continue creating that kind of experience that I'm so intimately connected to. And now it was sort of like, looking back on it, that's sort of like the, the cheap way out was to just say, okay, I think I'm gonna stop and remove myself from that process.

Yeah. And it's not ended up what, what ended up happening. But, um, that's how I felt. I just felt like. If I say, next customer come in, someone's just gonna end up hating me, and that sucks. I don't want that. And so I didn't, I didn't wanna do that. Or some even worse, like the other thing that had happened is we had had to lay off a hundred people.

Yeah. And so I the same, the same many sentiment. 

[00:26:28] Andrew Faris: How many, what was the most number of people you laid off in a single day? 30 probably. Yeah. Um, and how many of those calls did you personally make? I don't know. 

[00:26:35] Taylor Holiday: We did them ballpark, a few of them in groups. 

[00:26:37] Andrew Faris: Yeah. Okay. 

[00:26:38] Taylor Holiday: 18. I don't know. Yeah. Right. But the other thing was that employees felt that way.

Yeah, of course. Because I'd say in some ways that was the bigger, I'd say more employees felt, uh, that I had. Deceived them than even did, um, clients where it was like CTC, like you promised all this amazing care. Yeah. And now I'm harmed. Yeah. And I feel personally let down. And, um, and that was very much aimed at me.

Like I had, I had represented something faulty. Yeah. Um, and that, what sucks is that when you, when you so genuinely wanted to do the opposite. 

[00:27:15] Andrew Faris: Yeah. 

[00:27:15] Taylor Holiday: Like, it was so real for me that, that I cared too much. Looking back on it about that. Yeah. Um, that it just felt like if you had tried. With all your earnest to do one thing and you did the exact opposite, you'd be like, well, what, what the heck?

I don't, I wanna stop. 

[00:27:30] Andrew Faris: I think this is the part of the story where we need to go through some history a little by little. Okay. I'm, I'm thinking about what the listener is hearing there and they don't have the context for all the things you're saying. I do. Yeah. And so I'm tended to go into it, but I think we'll be missing some things.

Sure. So I think what we should do is think about the, the journey here a little bit. And my, my hope is that, first of all, this is interesting. You, you, you're a really important figure in the D two C space. You know, you, you, small 

[00:27:51] Taylor Holiday: pond, but 

[00:27:51] Andrew Faris: Yes. Yeah. I know. But, but it's, people keep, people care about, I mean, you, you mentioned earlier the, the general attitude in DTC.

Yeah. It's one of the things I tell people who don't work in our space a lot is that it's awesome. Yeah. Generally speaking, I agree. People are kind and root for each other. 

[00:28:04] Taylor Holiday: Totally. 

[00:28:04] Andrew Faris: Agency owners who are competitive will get on the phone and tell each other how to do better at it. The, 

[00:28:08] Taylor Holiday: the, the most helpful people to me in this process were my direct competitors.

[00:28:11] Andrew Faris: Yeah. Yep. And, um, and I think that's because there's an awareness that there's like enough fish in the sea Yeah. And that it's just was helpful. Yeah. Anyway, so. So, but, so you matter in the space, you've contributed a lot to it. Uh, you know, it's certainly to me personally, but the, I think people will be interested in your story around all this because you've, you've played a significant role in the community.

Um, and then I also think that my experience talking with you is that when you reflect on leadership moments in your journey, you're really good at picking out things that just as you talk about them that are valuable to you. So it's like, I mean, I remember listening to the Howard Schultz acquired and you just, you hear little things from him.

You're just like, oh, that's, he's just telling the story. Yeah. But, and like little offering little things, it's really helpful. So that's, that's my hope is that people will just kinda hear, um, people have always said, you're the Howard Schultz of D two C. Yeah, yeah. We're really, and Joe Rogans, those two, those are the two that you always get.

Um, okay. In the beginning of ctc. Mm-hmm. It was essentially an offshoot of KLO slash not really an offshoot of klo, but like happened at the same time as Klo and I, I would call it like glorified freelance small team. Something like that. I dunno how you wanna frame it, but just so we started, what I'm thinking about is the early days with you, Jordan, and maybe Josh.

So Josh came on later in Cory, so there's an important, 

[00:29:26] Taylor Holiday: we actually started something called the Arch Network with me. Yes, that's right. Arch me, um, Jordan and then Clark. Jordan. Jordan Palmer, yep. Clark former quarterback, who's now the founder. CEO of Thread performance Uhhuh. Shout out to Thread. Yeah. Uh, and a guy by the name of Tyler Vaughn, who was a, a guy that we, I played baseball with at UCI and then worked with us at Power Bounce.

Um, those two could not work with me, understandably. I am, uh, I'm not Jordan and Tyler? No, Clark and Tyler. Oh, Clark and Tyler. Yeah. Um, I'm not the easiest person to like, uh, partner with, I would say. Um, and so it was like really hard in those days. Do you think that's still true? Yeah. Why do you think that?

I don't, I don't have. I, yeah, I think I've gotten, it's probably gotten easier. You'd have to ask people. It, it's important that, that we're clear on the roles and responsibilities I think that we are gonna occupy. And if there's overlap between my domain and somebody else's domain, I think that becomes challenging.

I think that's why Jordan and Aaron are good examples of partners that were Aaron Ky. Yeah. That were really effective. Who, what's his job? He's our head of sale, VP of sales here at ctc. Jordan previously basically had that role. Same role. Right. And And they both represent that neither of them thought of themselves as an expert in my domain.

Yes. And so there was no like butting heads over the ideas. In my world, and they were they, both of them are these charismatic, outgoing, yeah. Love to go be with people. Yeah. And I hate that. And so there was this like part of this experience that they both represented that I go, Jordan, Jordan is so uniquely gifted.

Yeah. At a thing. I know I'm not, yeah. Like when I go to a gala. With Jordan. He's six four. I'm five nine Uhhuh. I stand next to him and I feel like an idiot. Yeah. Everybody's looking at him. I'm not dumb. I can see it. They all want to talk to him. He's got good stories. He knows all the famous people like, and so I just go like, I don't need to be here.

Yeah. And I love that. And, and he thrived in that space. And so it was just like, and he also. Is not a Facebook ads expert. I would never pretend to be. No. Yeah. And so he would just be like, yeah, Taylor's, you should talk to Taylor. Yeah. Yeah. And then I'd be like, great, I'll talk. Yeah. And then, so I think in those ways, those complimentary skill sets are really important.

This is one of the things that I think will be interesting with you and, um, Patrick. Yeah. Yeah. I think you guys are masquerading as two different people, but I, I, I wonder if you actually are. Well find out. Well, 

[00:31:36] Andrew Faris: well, yeah. I think that's one of the big questions for us. Yeah. And it's, we've talked about this.

Yeah, 

[00:31:39] Taylor Holiday: yeah. Uh, we, we will get to, um, hopefully some of that at some point. Yeah. But, so I think that that's the distinction in partnership. So going back to the early days, anytime that there's more, uh, of an overlap, it's been hard. And I would say I was, I was immature for sure. It was a lot of a me, probably, probably.

[00:31:54] Andrew Faris: Well, I think when I think about, I was never a partner with you at quite the level and quite the way that others have, but I, I think maybe my role in the ecosystem has been the. The closest thing to that without being that along the way. Right. Like without being, in most cases, like in, you know, I didn't start it with you, I didn't whatever.

Right. And there was always kinda a mentoring relationship, especially in the early days. Um, I found it actually mostly really easy to do that. But I think it's also because, but that's 

[00:32:19] Taylor Holiday: ultimately why you left is because you want my sense of it. And again, we're just here in this space, here, we're in the trees where let's go.

Yeah. Is that you wanted to be at that partnership level and there was never room Yeah. To do it. Yeah. And so you didn't want to be the junior partner anymore. You wanted to be the full partner at the table with everybody at an equity level and then everything else level. 

[00:32:39] Andrew Faris: Yeah. Yeah. That I think you But first 'cause of 2021 or it's 'cause of uh, excuse me.

'cause of four by 400. That was, yeah. But 

[00:32:45] Taylor Holiday: even in four by 400, I think a lot of the narrative was around your equity position in that Yes, definitely. Whether that was commiserate with the responsibility and the opportunity and Yeah. All those things. Um, yeah. Or even coming, when we talked about coming back to ctc.

Yes. I think there was like, when you guys said no to me. Yeah, yeah. Um, and then you guys, not you guys, but, um, but yeah. Um, yeah. When, so, but, but I think that, that, like, that didn't rise to the level of the kind of offer that would've made you say Yes. Yeah, I think that's right. Yeah. So I, I think those are, but, but I, 

[00:33:15] Andrew Faris: but, but I, yeah, anyway, I, I just, I think I've been in a lot of partnership rooms with you.

Yeah. And. I think what people just have to know is what they're getting into. Yeah. Uh, you know, in the sense of like who you are and what it is. And I think there's a, there's a reality in which it's like, it's just who your, your presence and capability and way of being is a double-edged sword. Yeah. And what I mean by that is not even necessarily negative and positive, I just mean like if you want somebody in a leadership position, and I've noticed this in plenty of other organizations too, with people who have somewhat similar personality types or whatever.

Is, if you want somebody who is going to aggressively push something forward and follow, believe that their ideas ought to be put into actions and yeah. Uh, believe that their ideas matter and think hard about things in terms, then what that's gonna mean is at times you're gonna have to let them make decisions that you disagree with.

And, and I sort of just think that's other people's fault if they did, if they weren't ready for that. Well, of course you're talking about the very earliest days of the thing when everybody's still trying to figure that kind of stuff out. So I understand that you're talking about, you know, Clark and Tyler or whatever, not wanting that.

And that's fine if you figure that out in six months earlier. I think my worst though, 

[00:34:25] Taylor Holiday: like I'll argue to be right versus caring about what's actually best for everybody. Yeah. But you usually come around. Yeah. I, I think, I think I'm matured in that way, but that was like, there was definitely moments where I, I would try to like, I just wanted to like almost intellectually defeat you.

Like that would be like the feeling that would come outta me. And it was like all of a sudden we've lost sight of like, what are we trying to do for the business? And I'm now in this like. Destroy, like win mode, you know? And I think I, I found myself in that space and I would leave conversations going like, what did I just do?

Like, did I, I just harmed something and that wasn't really very valuable. Um, like I've had that, like, it's like my wife and I, like, it's, that shows up at a lot of places for me where I've learned to like, need winning less, I think. Um, 

[00:35:06] Andrew Faris: but it's funny 'cause so, so much of the problem in organizations and certainly for me as a leader is, is the exact opposite, which is like just being Yeah.

Too willing to step aside on things that I actually believe are true. Oh, really? Well, I mean, obviously I'll sit and argue with you a lot. Uh, I don't know what it's like inside of your organization. You got a lot about a lot of people disagreeing with you? No, no, I don't think so. No. My organization's too small for that, but, uh, but just, I don't know, just in general.

I'll, I'll eventually give way and, and a lot of, in a lot. Well, I'm, this 

[00:35:32] Taylor Holiday: is, again, I'm excited for you in a partner. 'cause even like, when I'm gonna listen to your conversation with Patrick, one of the things I notice you do is like, you have this way of being like kind and deferential to him in these ways where you're like pointing out areas that like, you expect him to have a better opinion or authority than you.

And, but it's like you've carved them out and you're like, you're serving him. Like, oh, this area, you're, you're the guy. But what I wonder what happens is when he has an opinion on like an area that you haven't carved out Yeah. That you haven't like, that you're like, no, actually. I have an opinion about this and I, I, I actually really think, right.

Yeah. We've had a couple of those already. Yeah. Yeah. So, um, I think those are the ones that are harder. 

[00:36:06] Andrew Faris: Yeah. I, I agree. I, I'm totally happy to talk about that. I just want to maintain the focus a little bit more is also 

[00:36:12] Taylor Holiday: there's a lot of ego and money. I think that was another thing that, like, I made some decisions and this goes to like what I thought was the right thing to do versus what my ego is actually ready to handle.

Where I let let people come in at levels. Of partnership, I shouldn't have uhhuh. And that led to a certain perception that was different than what was actually in my head. 

[00:36:32] Andrew Faris: Um, you mean, sorry, perception, what you mean is their perception of their value creation was different than 

[00:36:37] Taylor Holiday: what, or their position in the org the organization.

Like, so just, and look, I love these guys. We've worked through a lot together. But like when Ian and Josh came in Yes. Was very much just like equal partnership. Yes. But in my head, I was in charge. Yes. Like, and so I didn't, I didn't understand the mechanics of saying, oh, we're all equal, but you're all gonna listen to me.

Yeah. Um, and what that actually signaled was like weird. Yeah. That didn't make, that was actually like a improper signal. Yes. And so I, and I did this a lot where I think I had this like sense of, I don't know if it was morality or fairness or like wanting to be generous. Uh, whatever idea I had in my head that was different than my actual behavior sometimes.

And I think those things would. Be incongruent for somebody at a partnership level. 

[00:37:16] Andrew Faris: Okay, so we're still talking about the early days. So let's, let's clarify the comment about Josh and Ian and when they came in. 'cause that's fairly area. So you go from freelance Arch Network Yep. To then what happens? I'm gonna come back around to the equity.

Yeah. It goes down to your thoughts on equity are extremely helpful. So I I'm gonna bookmark that and come back to it, but That's right. 

[00:37:32] Taylor Holiday: Uh, so it goes down to Jordan and I and we, that's when we transitioned. Oh actually that's not when we transitioned into CT C but we're still our still arch. First time I 

[00:37:39] Andrew Faris: ever met you, first time I've ever met Corey, you were still Arch.

That's right. Corey becomes our first employee. Corey wearing a bucket hat. I was, he was still at CT c he was wearing a bucket hat when I met him and he is probably still wearing one now. Yeah, he might be probably, yeah. He's he was early to the bucket hat, right? Yeah, 

[00:37:52] Taylor Holiday: he's he's got a weird look right now.

Um, but uh, there was the three of us and at the time Jordan was in this weird state where Jordan, so Jordan played in the NFL for eight years and he got called to go play for the Bears and so he actually left, I remember this in the middle of our partnership and, and again, it's another example where I just let him keep.

Of his equity despite not being present and, and so having to go play professional sports. Yeah. So, so it was really Corey and I for a long time and then that's when Casey came to us and the KLO thing started. 

[00:38:19] Andrew Faris: Yeah. So Casey's your brother, founder of Qalo. 

[00:38:21] Taylor Holiday: That's right. And he came to us with the idea for the silicone wedding ring.

We said, okay, let's do this. We'll take a piece of your business to as a service. So like, we owned a portion of klo, this is still from a bag of returns from who knows how long ago. That's right. And so that's the story. Me, Casey, and Corey above the Blue Frog Bakery. That's where really we started CTC, we had two clients.

We had Evo Shield, we had Eat the Ball, and we had KLO three clients. And so that's where we started to learn Facebook ads, running them for KLO and that sort of thing. And eventually where you come in. So that's, that's like sort of the really, the impetus for where it goes from there. And then. Along the way, Ian ran a production company that did all the photo shoots for Kalo.

Yeah. So photo and video, hype Media. They did all of our content early on. Big photo shoots, athletes, influencers. And Ian and I, they were beautiful. 

[00:39:04] Andrew Faris: They delivered, they delivered beautiful work. Ian's 

[00:39:05] Taylor Holiday: like, he's a really gifty creative. He runs creative for Bamboo Earth. Now I'm like, uh, and so Ian and I would just talk all the time and it was like, Hey, this makes sense.

We you do creative, we make, we run ads, we should come together. And so we brought um, Ian on before that, actually Josh came on. Josh was my boss at Power Balance. And uh, he had, yeah, he was founder, had married, no, yeah, he was one of 'em. And he had married Natalie Bu professional golfer and had kind of been.

Traveling the world caddying for her and hanging out with her for a while and was coming back into the workforce and it was like, Hey, come work for us. You can be the ops guy. So was Jordan will sell the things all, do the bus, the work, and you can run finance and uh, hiring and HR and all those things.

And that was like the triumphant. Yeah. And then we added into that and we were all four equal partners. So each time I just divided the pool up equally. 

[00:39:48] Andrew Faris: Yeah. 

[00:39:48] Taylor Holiday: Uh, but in my head. You were the leader. Yeah. And, and that, and, and not only in your head and I was the CEO and that, that that's how it was expressed.

[00:39:55] Andrew Faris: And, and in, uh, soft power, you were the head. 

[00:39:57] Taylor Holiday: Yeah. Right. And so I think, I think that, but, but that at first, like we all took equal, equal salaries. Like there was all these ways in which it was trying to be this like, like I think in many ways I was still in this like communal living socialist 

[00:40:08] Andrew Faris: Yeah.

[00:40:08] Taylor Holiday: Christian thing. Yeah. And it was expressing itself in my business in many ways. And so it was just like, oh, just divide it all up. We're all equal and I won't care. We'll all do our best. Like, and the reality is I didn't actually feel that way. Yeah. Right. There was times where I changed my salary, like, and it would cause all these like little minor conflicts along the way.

Yeah. So that's, that's some of the early stuff. 

[00:40:26] Andrew Faris: Okay. So that all happens, you guys then go and there's a point at which, and I think this happens a lot for agencies and freelancers Yep. When a dividing line happens Yep. Which is that you start handing work to people who aren't you. That's right. And that was me.

That was where I entered the story actually. I was with you at Calo. Yep. Uh, I was the first strategist at CTC Besides you. Yep. And I, I will always, always, always remember the email you sent me when I was, when after I had agreed to be. To come with you where you were like, here's the 10 clients we have, or whatever.

And you were just sort of servicing them all yourselves, working your butt off like at, at the time, which is what you do in that stage of business. Yep. And here's the split, here's the ones you're gonna take, is one I'm gonna take. And you said, and you said in that email, uh, you're explaining what each client does and you know how much money they're worth to us, whatever.

One of them was worth $0 to us. 'cause it was a supplement company that had No, that had, they had uh, like a zero row as on Facebook ads and it was like we were paid on percentage of revenue. That wasn't great. So that wasn't good. Um, and then the other one was, uh, was quote the Golden Goose. Yeah. And that was a Hangover Cure company called Drink.

Well, that's right. I don't mind saying great. And Yep. Uh, anyway, there's a lot to be said about that. Yep. Um, but I think they were worth, like, I think they had had one month where they billed 17 grand. Yeah. Which was a lot then. Yeah. I think it 

[00:41:42] Taylor Holiday: probably, it was probably 10% of spend on 170 grand or something.

Yeah. Right. 

[00:41:44] Andrew Faris: Something. And so it was like pretty good. And you handed that to me. Yeah. Um, and so anyway, so you start doing that and hiring people and start building a team. Yep. Uh, anything you wanna say about that phase of business? This was a long time ago. 

[00:41:56] Taylor Holiday: I think this is where agency owners make the biggest, have the biggest problem is that they're so precious about this, and this is where I think this.

This idea that you are going to screw up the quality of service is an inevitability. Yeah. And like sure, you should accept that. Yeah. And you should understand that the way that you get better is actually through those mistakes. Yeah. Like, it's so obvious. Like we would all say logically that you learn from through, screw it up, fix it, screw it up, fix it, screw it up, fix it.

Yeah. But we're, I see service providers, they build this story, this bubble around themselves that what we don't want to do is ever degrade the service or over promise. And so they stay paralyzed as the service provider. Yeah. And they like, they think that the second they bring someone into it, it'll make everything worse.

Mm-hmm. And the answer is yes. Yeah. And so what 

[00:42:47] Andrew Faris: Yeah, 

[00:42:48] Taylor Holiday: because the next, the, like, it's like FC goods, if you go from hand sewing every wallet Yeah. To manufacturing them. Yeah. Yeah. They might get, the first batch might not be good. Like, and then you'll improve it and then you'll go back and you'll improve it again.

And, and that iterative journey is what you have to be willing 

[00:43:02] Andrew Faris: to, the interesting thing about that is that I think the end state is actually. That the service at some point can get better. Exactly. Yeah. Uh, better than if you had delivered it. For sure. So this is, this is one of the things I'm experiencing with the agency growth thing for me is that like part of the motivation for me to start, like really trying to beef this thing up and, and grow it, is not that I believe there won't be any problems, right.

It's just that. I actually now think I don't deliver as good of a service for the needs of my clients, especially relative to when they were like, I got them at $3 million in revenue. It's certainly not for 

[00:43:29] Taylor Holiday: every client, because not everybody likes you that much. No. Like that's totally right. Like the personality, the, the, the, I'm not smartest guy in the world too.

Exactly. The specific kind of problem, like, so, so it's totally true, but it's a big hurdle and it's a fear and it's, it's a roadblock that I think people experience. 

[00:43:45] Andrew Faris: I agree and I certainly have experienced that, but it is funny to play that off of something you said a little bit ago, which is that you were also got to a point where you were delivering a service that you could not get on a sales call on and feel like you were promising something with integrity.

That's right. Like you said, you said just a little bit ago that you were selling services that you thought were bad. 

[00:44:03] Taylor Holiday: Right. 

[00:44:03] Andrew Faris: And you didn't wanna do that either, so there has to be some kind of middle ground there. Right. Well, there, 

[00:44:07] Taylor Holiday: of course there, it's, it's, there's a spectrum of really, really shitty work and really, really good work.

And you're on it somewhere all the time. Yeah. Um, you don't want it to go too far. There's some dividing line, but, but 

[00:44:17] Andrew Faris: I believed in you. No, I know that, but I mean, I, I know that in those days, but I'm thinking about what you were saying later when you got to 180 employees. 70%. But I think what I lost accountability 

[00:44:25] Taylor Holiday: for is that I didn't know the person at the end of this.

Yeah, yeah, yeah. So where, where you might screw it up. But I like believed in your integrity. Yeah. I believed in your desire to do good work. Whether you made the right decision all the time or not, I knew you were gonna try your best. Yeah. And probably learn from it all that stuff. Yeah, that's right. And I don't know that I could represent that towards the end of it in a way that like, I felt like I had.

Capitulated to a standard all along the chain that I couldn't feel that way about. Yeah. Like, 'cause again, it's one thing if someone called me and was like, Andrew's an idiot and screwed it up. Yeah. Like, I could deal with that. One 

[00:44:55] Andrew Faris: time. One time a client did do that in so many words, emailed you and said it was a client from Drink.

Well, oh, it's great. Do you remember the la I remember the, the last two words of that email. Yeah. Uh, he sent me an email saying that I had done some math wrong and the la and it was like period, end of sentence. And then there was one, two word sentence at the end of the email and it said, simple arithmetic, period.

Oh, I remember this. Yeah. And then you were like, hold on a second. And you got on the phone and called him. You were very unhappy. What did they say? I was very heavy. Well, you called him and said, come on. What are you doing to this guy? Like, why are you, why are you, there's a point at which you're holding your agency accountable.

There's a point at which you're just being a jerk. Um, but also he was wrong about the math. Well, and so, so I was right about the math, and so he had, he was like, berating me for that, and I would like the record to, to be set straight here. That, back then that's the case 10 years ago, I was right about whatever that math was at the time.

And I, I even feel 

[00:45:39] Taylor Holiday: that now. Is that like, there, there is, there, there is times where I know a lot of the people delivering the work and I I, I, I know their intention. Yeah. Now I, I know that that is in some ways inconsequential. The business outcome matters. That's right. Like, and they can hold us to that standard, and that's okay.

Yeah. And so you're allowed to be disappointed in the experience that you had. Absolutely. And I can say. That I would stand by it, that that person went in and whether they made the right choice or not, I know they were thoughtful and cared. Like they didn't screw it up because they were frivolous. They didn't screw up because they didn't care about your money or were screwing around or whatever.

They may have messed up. That's certainly possible. And they will and will again, like, yes, but I feel very confident and that that really matters. Like that's, to me, what the most important part is, is that I can look around the team and go like, yeah, if Brian Skanky gets on call, I'm just picking a random employee.

Now I'm gonna, I go like, I'm proud of whatever interaction happens. That's right. And that, that matters a 

[00:46:30] Andrew Faris: lot. Another thing about this is that in that stage of business, well, something you are great at as a leader. That I've learned from a lot is that I have never once. I'm sure you've done it at some point, but I've never, I have never heard You undercut your team to a client.

Yeah. You, you pretty much always, in my experience working with you, at least you would take your employee side mm-hmm. On the call with the client. Yeah. Defend your employee and then come back to the employee and work through whatever the issue was, including if there was anything that needed to be addressed or something that they, you know, and you're also not unwilling to listen to the client, by the way.

Like it's, but it's just like you were ne you, I've never seen you like, sell out an employee to the client. One of the things I've learned is that 

[00:47:11] Taylor Holiday: they are me a and so like who is the employee? Yes. Oh, interesting. So if I, if I undercut them, I've under You're undercut yourself. Yeah. Yeah. And, and this is, this is actually a really important lesson for leaders.

I remember a very clear conversation, so I'm gonna call out my boy Nick here. Nick. And this might even, yeah, yeah. When Nick was the head of growth strategy. Yeah. Uh, there was a dispute about an employee bonus. Um, and Nick is a very empathetic leader, and this is the kinda mistakes that I think that people make in those positions when they really care about their people, is that we reviewed the results and we determined that they didn't meet the requirement for it.

And so Nick came to me, we had a discussion about it, and I was like, no, that, like they didn't meet the requirement. And he went back to them and said something along the lines of like. I don't agree, but X, Y, Z uh, and so I called him and it was like the only time I really ever like berated somebody yelled at him like, you don't understand that what you just did is you actually undermine your own leadership.

Like that person now knows that you have no authority to get them what they want by not owning that decision. Like you've created the circumstance that they now know if I need a bonus, Nick can't get it for me. Yeah. So instead of owning the like collectively disagree and commit together, or you and I working it out until we got to a level of consensus, you left, you undermine me and you undermine yourself.

Yeah. And that's what I recognize in the same thing with the client is that if I undermine. Their authority. I've actually undermined my own. 'cause all I've said is I can't hire people. Yeah, yeah. I put people who I don't believe in, in the position. And so I think it's really important. Now that doesn't mean that you don't own mistakes, but if the, if there's a mistake, you own it as you yourself too.

That's right. Like, yeah, we screwed that up. Yeah, I screwed that up. We're gonna fix it. Yeah. It's a we. Yeah, yeah, 

[00:48:44] Andrew Faris: yeah. That's good. Um, 

[00:48:44] Taylor Holiday: so I think those are just in the human service business, they c, CT C is who they're paying. Yeah. It's not Anmar or Taylor or anybody else. It's like they're paying CTC 

[00:48:52] Andrew Faris: in those days.

It's funny to think back, the pitch to clients was you should use Facebook ads. They will work for your business. Yeah. Yeah. That was what the pitch was. That was a sales pitch. Right. You had to explain to somebody like, no, no. When you give money to Facebook, you get more money back. That's right. And it works.

[00:49:06] Taylor Holiday: There's a early article is like, uh, what is it? The something something, or In the Genius Genie, or Yeah. That was the first article 

[00:49:11] Andrew Faris: you 

[00:49:11] Taylor Holiday: ever wrote. You wrote it together. It was exactly, it was about like convincing people that meta worked. 

[00:49:15] Andrew Faris: Yeah. Yeah. Um, shouldn't you spend more when the Genie will give you $2 for every one you put in?

That's right. Yeah. Yeah. That's funny. Looking back on it now, it's like 

[00:49:22] Taylor Holiday: maybe you're giving the genie too much money. Yeah. 

[00:49:26] Andrew Faris: Maybe, maybe The Genie was playing a long call. Yeah. Yeah. Um, that's funny. Okay. Four by 400 launched at some point. Uh, that's, that's when I launched the team grew, of course, did all the normal things.

And at some point you made the decision to launch an aggregator. Let's talk about 4 0 400 for a minute in the story because it's probably something you would classify as one of your biggest mistakes along the way. Yep. 4 0 400 was our aggregator. Um, that eventually I started as the head of growth there.

I eventually became the CEO. That's when I left CTC. Um, I mean, the story up to that point is just sort of the usual agency growth stuff. You're hiring people, adding clients. I, I'll always remember when we crowded around the diff Google Analytics dashboard when Diff eyewear came to us and it was like, and they had made like, you know, 15 whatever million stars.

Yeah. Or million or something over a year. And it was like, whoa. Yeah. Yeah. Anyway, um, that's the, that's the timeline of that. And four, 400 comes around and is an idea of we're gonna have a brand holding company. Mm-hmm. And this is an important moment in CTCs. Thinking and leadership structure because there's an equity group owning not only that, not only CTC, but four by 400.

There's a couple other things in there somewhere that's called Dream Labs. Yeah. And the idea was like, we're gonna build this family office style of like portfolio of companies across these different industries. They're all gonna service each other and all this kind of stuff. But four, 400 was like the platform, one of those where that was gonna be worth the most money in the ecosystem.

And so we were gonna go launch all these brands and do it. I, when I was there, we ended up getting up to six brands at a time in our portfolio. Yep. So talk about four, 400. 

[00:50:50] Taylor Holiday: It cost me five years of my life. Like I, the reason it took me so long to get to where I'm at in C TC is because of this whole side quest.

Yeah. Like is, um, and this is all, this is the number one thing even today that there's just, nobody will ever just believe this, that like, it's a bad idea to use your agency funds to start a brand. And like every agency owner. Does this? Yeah. Like there's just, I'm doing it right now. You're doing it right now.

Yeah. Like, there's just no way to avoid the temptation that you're watching all these brands be successful and you think you can do it. And it seems, it just, it's so compelling. Um, so I, I, I, I empathize with it while also regularly telling people, please don't do this. Please stop, don't use your money in this way.

[00:51:28] Andrew Faris: Um, do you really think that's true for everyone? When you look at, like, here's the example I think of when you look at what Zach seems to be accomplishing at Homestead right now. He is got a couple brands in his portfolio. I don't, I don't know all the, I don't know all the metrics that, that, uh, that they've got or whatever.

But Hollow seems to be successful. He is got another brand. I know he is talked about some being pretty successful. Um, you know. As far as I can tell, he puts much less of his time mm-hmm. Into homestead these days. Right. And Zach, if you're watching this or listening, like I, I don't know the full deal here, but I'm just reading, reading between the tweets.

[00:51:55] Taylor Holiday: Yeah. I'd rather so, so I know a lot about that situation. Okay. I'd rather not speak specifically about anybody's. That's fine. So, so story. So what I mean to say is 

[00:52:02] Andrew Faris: like, it seems to me that Zach is really, and I hear him talk one of the times when I perk up and want really wanna listen to what he has to say.

It's about like, it's about like building funnels for brands to sell stuff. You know, like he's like, it seems to me he's really good at that. Yeah. And so perhaps the highest leverage use, and this is sort of the, this is sort of just taking the other side of this argument because I actually don't have a super strong opinion about this.

Sure. When I think back to four by 400, I think maybe it wasn't a model problem, maybe it was an execution problem because we sure executed a lot of things poorly in that process. Um, if we'd acquired better brands, maybe we would've gone differently if we'd have done, you know, anyway, if I had been better maybe whatever.

So. So the point is, um, if that's your skillset. There are really good e-commerce businesses. Why not go build that? 

[00:52:47] Taylor Holiday: Well, you can't like do what you want. To me, it's like, is the expected value of a pull side fly ball higher than a ground ball up the middle? 

[00:52:56] Andrew Faris: Yeah. Yes. 

[00:52:56] Taylor Holiday: Does that mean that everybody should try and hit pull side fly balls?

Probably not. Yeah. Like maybe D Gordon should kind of, but maybe, maybe D Gordon should, I don't know. Maybe he should. I don't know. Like, I don't know what the math is, but I, I think that like, this is where when you speak about what is true most often Yes. That doesn't mean it's true all the time. Yeah. Okay.

So like, it doesn't mean that somebody can't do this and win. Yeah. Um, I just think that that's, that's, I 

[00:53:17] Andrew Faris: think that's fair. 

[00:53:17] Taylor Holiday: What I, what I'll say is that I don't think it benefits the agency. Yeah. Yeah. So why do you have a business that's successful in working and you as the leader don't act in the interest?

Of that thing. Yeah. And the people in it. And so what you'll hear often is about the stories of the brands maybe working, but I don't, I don't know many of the stories where it benefited. They're both working the agency. Yeah. Or not both. Or the agency benefit. Yeah. And I think that's a lot of the trope too.

It's like, oh, we'll learn from our own money. Yeah. And brand, and that'll make the agency more successful. Yeah. But when you suck the resource and talent and time from the thing and put it over there. Yeah. The we at CDC, we took the money, which I, again, I know that's what people do. They take the capital out and they deploy it somewhere else.

Yeah. They take the people, the best people, they put 'em over there. I don't understand how that could possibly benefit. Agency. If I worked at an agency that happened, I would leave. Yeah. Is what I'd say Yeah. Is because, wait a second, I'm an employee here. Yeah. How does this benefit me to take the money and talent from here and put it over there?

Yeah. Um, and so I think that's like the question and, and what it says is that if you think about just capital allocation, it says, I don't have a mechanism to deploy capital. This here, that's a better return than their, this partly what I was gonna say was like, and it's a heinous math decision. Yeah. Like, you have a thing that is growing and producing free cash flow.

Yeah. And so you think the better EV bet is to take that dollar Yeah. And put it into this thing. Yeah. Then the yield that is like produced to the cash to begin with. 

[00:54:51] Andrew Faris: Yeah. 

[00:54:52] Taylor Holiday: You would have to look at your business and go, there's like no growth here. Yeah. Um, and, and that's where I just, I I, I started sort of looking at, well, let, let's 

[00:54:58] Andrew Faris: ask a question about agency growth then.

Okay. Okay. Let's, because, so, so how ought, let's say, let's say, uh, I mean, I don't know, maybe, maybe you're dealing with A CTC all the time, but like, let's say you're, you have to go, uh, expand your services. Create more demand for you to generate more value, right? Like, I mean, you gotta create more, you gotta get more clients and you get more people to service those clients.

Okay. That's right. Yep. And let's say you don't have them yet. Mm-hmm. So you, you, you need to hire people and you don't have enough revenue to support it yet, or you need to hire, or you need to get more clients and you don't have enough people to support it yet. Something like that. Right? Um, like how do you handle actually deploying capital aggressively in an agency?

Because what everybody can say is that an e-commerce business is sort of clear, right? You like buy the ads or whatever it is, and you keep trying to grow the business. But with an agency, there's like a process expansion that has to happen and you have to like hire the next person and some of those things.

So, so can you aggressively deploy capital in an agency to do those things? Besides on, I don't know, maybe marketing or something? 

[00:55:55] Taylor Holiday: Yeah. Well, besides on marketing, yeah. The, the number one thing that agency owners don't do is they don't sell. Yeah. Interesting. Like even you. 

[00:56:01] Andrew Faris: Yeah. 

[00:56:01] Taylor Holiday: What is your sales process?

It's do a podcast. It needs 

[00:56:04] Andrew Faris: to be addressed. Yeah. Yeah. 

[00:56:05] Taylor Holiday: That's the number one. Because content creation. So if you wanted to grow faster, if Andrew spent 40 hours a week, and I told you that your primary obligation was to drive pipeline Yeah. For a JF growth. Yeah. You could do more than you're doing that.

Sure. Yeah. And the business could grow faster. Yeah. Agency owners don't sell. Yeah. Like usually a lot of 'em are stuck in this like duality of service and sales. And so sales is, that's certainly where I'm at. Yeah. Sales is like this thing that as referrals happen, you'll go get on a sales call. Yeah. That's what sales is.

Sales is. Every day I wake up and try and sell stuff. I try and sell stuff. Yeah. And that's what you should do if you wanna make your business grow. Yeah. And if you applied resource against that problem. You would do it. Yeah. And you would try things, you would try advertising, you would try going to events.

You would try sponsorship, you would try hiring people. You can deploy endless amounts of capital in sales and marketing. Yeah, yeah, yeah. There's no shortage of of that. Yeah. And I actually think this idea that like the operational side of hiring people is like hard to scale is kind of just a, it's a way of like hiding.

Like you're telling me that finding another designer in the Philippines would be hard for you? No designers. I'm not worried about that. Really the barrier. It's 

[00:57:03] Andrew Faris: more about the growth strategists and stuff that, that feels like those are hard positions to hire. But 

[00:57:06] Taylor Holiday: so, so what you do is like, you know what you do, you have someone work 60 hours for a little while.

Yeah. Sure. Like you, you flex the resource. Yeah. Yeah. And I think that's what we, and you can pay them for it to do it. Of course. Yeah. Um, but, but what'll happen is like, or you know what you do, you hire a recruiter on contingency that's working for you all the time. Yeah. It's funny, I was just reading 

[00:57:26] Andrew Faris: Double Your Profits, which is, have you read that?

[00:57:28] Taylor Holiday: No, but you told me you'd mark, 

[00:57:29] Andrew Faris: I I wondered if you Yeah, yeah. I wondered if you had read it because it reminded me of some things that you said, but one of the little principles, he said, this is a MayT tab, Bogle recommendation, MayT tab gave like six books. He's like, you just read these six books, you've read all the business books you need.

And I'm like, I should listen to that. Maytag's read all the business books. So he speaks so directly to me. I know he's great. Um, he, so I've just trying to listen to that advice. And in W Profits, he says, he says, you should aggressively deploy capital against things that make you money. In fact, you should be willing to deploy more capital than anybody else.

'cause if it makes you money, it makes you more money. That's the, the biggest failure. And you should aggressively reduce capital for things that cost you money. Exactly. That's, he's like, you just make, you just make that, 

[00:58:04] Taylor Holiday: we call it units of growth. Like when we think about all my opex, I think about each component of it as, uh, I, I want them almost all to be variable expenses associated with revenue, but even every employee I have.

Is has some capacity to produce money, and some of them don't. And I wanna make sure that the money goes to the things that do. And you know who the most obvious people are that create incremental revenue? Salespeople. Yeah. They're the most obvious nodes of the system, that if you give a salesperson money and a quota, like the math is very clear.

Yeah. And simple. Yeah. You 

[00:58:34] Andrew Faris: know, and, and by 

[00:58:35] Taylor Holiday: nature of 

[00:58:36] Andrew Faris: there's selection bias for who goes into sales, those people are motivated by that. 

[00:58:39] Taylor Holiday: That's right. And they, they actually respond to it. And so, yeah. I think, um, my biggest mistakes. Uh, and CT C history are not deploying more capital into sales and marketing and not doing the LTV to calc ltv.

But that's not true. 

[00:58:52] Andrew Faris: That, see, the thing is that's not true at your, at the moment that you were talking about earlier when you got to 180 employees. 

[00:58:58] Taylor Holiday: No, but that again, that was this like remote infrastructure problem that I didn't understand what was happening to me. 

[00:59:03] Andrew Faris: Yeah. But but you can't wave that off like that.

No, but no, no, you can't because what happened is your promises outstripped your ability to deliver on them. And, and so if you could, you could say all you want to me right now, for example, right? Which you're kind of doing, go deploy more money into sales and marketing, just deliver the service. Except that you, you just told me that you were basically figuring out if you needed to claim that you were gonna file chapter 11.

Right. Tell me to fire you. 

[00:59:26] Taylor Holiday: Right. So don't take out a bank loan while doing the process. Yeah. Don't also try and initiate and massive internal cultural effort towards Yeah. DEI, uhhuh and, uh, dream Days uhhuh, and all of the other things that were happening simultaneously as well. And then you probably won't end up on the phone with the bank.

Yeah. That doesn't change. Fact that the mechanism for I'll make a mistake. 

[00:59:46] Andrew Faris: Right. Isn't everybody gonna make those kinds of mistakes? I mean, I, I just think, I mean, you're, that's what a conversation like this is. You're trying to, you're trying to listen to it and think, how do I not make the mistake that Taylor made and how do I do the things right that Taylor did?

That's the point of a conversation like this. 

[00:59:57] Taylor Holiday: Do you want, what do you want?

[00:59:58] Andrew Faris: Well, I I'm not, I'm not worried about me, I'm just trying to play it through the, play it through the audience's lens here. Like how do you, how do you, how do you think about that moment? Here's what I'm saying. Moment. I think what most people are moment, I mean, I do think, I do think your principle is right, that more agencies ought to think about how deployment of capital generates return.

And they're not thinking aggressively about that at all. They're just kind of like, ah, somebody else wants our business, so I'm gonna hire another strategist or whatever. I 

[01:00:22] Taylor Holiday: don't think so. We've 

[01:00:22] Andrew Faris: talked about 

[01:00:23] Taylor Holiday: this a lot. I don't think anybody has the end in mind. And that's like the end in mind. Yeah. What do you mean death?

No, no, no. Like this. They should, that's what I think. How much are you trying to sell a JF growth for? I don't know. So you have like, so, so you're building towards a unknown end. Have 

[01:00:36] Andrew Faris: a This is, this is of the, I have a working theory, but I, so I agree that this is part of the problem. This is actually part of the reason why part, probably very likely, uh, Patrick and I will adopt EOS for a JF growth.

Because it forced forces 

[01:00:47] Taylor Holiday: you to answer that question. Exactly. Because this is the whole point. You can't build a strategy to nowhere. Yes, that's right. So, so that's what most people are on. They're on a path to nowhere. Yeah. And so the decision making framework, I, this is totally right. Framework for the next decision is just totally.

Ambiguous. 

[01:01:00] Andrew Faris: Yeah. 

[01:01:01] Taylor Holiday: Um, or, or unknown. Like one of the things I'll say at least about Dream is at least we sat down and we wrote on weekly, we had a clear number, a number two 50. Right. It was the thing. We didn't have any idea is how to get there. No, but, but like at least we tried to 

[01:01:14] Andrew Faris: create that. Yes. We said we wanted to create a system that has, was valued to $250 million.

That's right. 

[01:01:18] Taylor Holiday: And so we had this way in which four by 400 was going to accomplish that. Yeah. 200 million. We failed at it. Yeah. We failed at it. That was like 200 million of the dollars. So. Totally. And so, and, uh, so I got to do it again. Like for me, with ctc there was like, I wanted to get to a number and I worked towards getting to the number.

Yeah. Like that was the framework for every decision. Um, and so I just think that like, if you get clear on what you want, it's easier to get. Yeah. Like, but I just don't, I think most people are sort of discovering what they want. 

[01:01:43] Andrew Faris: Yeah. 

[01:01:44] Taylor Holiday: Or then they like are clear on 

[01:01:45] Andrew Faris: it. Why do you think people don't get clear on what they want?

[01:01:47] Taylor Holiday: 'cause it's really hard and we're fickle. Like I think it changes constantly. Well, this is 

[01:01:50] Andrew Faris: something I say to people and you don't actually know what it's like to get there. I also say this to people on calls all the time, which is whenever I ask that question, I'm not actually asked a question about where you end up.

I'm asking you a question about what you think today. 

[01:01:59] Taylor Holiday: I also think that like there's a whole bunch of people who think it's bad to say that they want money. Yeah. And so like the idea that what you would say is, I want this much money is like not a thing you're supposed to say. Yeah. Yeah. So I, I think that 

[01:02:12] Andrew Faris: it's funny, I don't think it's bad to say that you.

Want this much money in a situation like that. Uh, in fact, I like money as a scoreboard for that specific reason. I think people will be unsatisfied if money is the end, end, end, end goal. But that's a broader life question. Like Yeah. Uh, but I do, I actually think in a business setting or something like that.

Yeah. That's just, that's what you should business. 

[01:02:31] Taylor Holiday: Um, yeah. So I think when you substitute an alternative scoreboard, it's like you've signed up to play basketball and you're gonna track your rbis. It's like, 

[01:02:39] Andrew Faris: yeah, yeah, 

[01:02:40] Taylor Holiday: yeah, yeah, yeah. You just played a game where like the measurement is not Yeah. You gotta, you gotta play with the right measures.

[01:02:45] Andrew Faris: Yeah. I just, uh, I, I think the problem with that analogy still is the, is the notion that it's inherently your score is competitive to somebody else's. I just don't think it has to exist that way. I know what you mean by that. Have to keep 

[01:02:55] Taylor Holiday: it, but like, I just look at your business. Like you, you're about to make this big partnership decision Yeah.

With this person. Yes. And the question is like, why do you need it? Yeah. 

[01:03:01] Andrew Faris: Uh, to get to what, because I, oh, I know the answer to that question, so, okay. Very clearly the answer is that I do want to grow the business now, and I have some ideas of what those numbers are. I have a couple ideas. I'm, I'm not quite ready to say publicly, but I have a couple ideas.

[01:03:14] Taylor Holiday: Can we bleep 

[01:03:14] Andrew Faris: it out? Uh, yeah, sure. Okay. Chris, you ready? We're gonna bleep this. Okay. Somebody, somebody read it, Dan. Note to author. Okay. Ready? Or editor? Uh, yeah, I think that right now the number I'm looking at is between 

[01:03:28] Taylor Holiday: Oh, but how much, so you, what do you want? 

[01:03:31] Andrew Faris: Uh, I think that would, uh, I think that would trade.

I don't know. I think that would trade something like four to five x probably. Right. So let's 

[01:03:39] Taylor Holiday: say it's bleep it out. Yeah. Okay. Right. Now, let's assume there's nobody else. You own a hundred percent uhhuh. The deal's gonna be somewhere between, 

[01:03:47] Andrew Faris: I'm gonna walk away with Yeah. S in half. It's gonna be in, uh, earnouts and rolled equity.

[01:03:53] Taylor Holiday: So you're gonna end up with cash after taxes and another earn. Yeah. After that you'll get seven. Like, so here's part of the problem. 

[01:04:01] Andrew Faris: I actually don't really want any more money. Like, I, I see that, 

[01:04:04] Taylor Holiday: that's a huge problem. 

[01:04:04] Andrew Faris: I, I, well, personally, but if 

[01:04:06] Taylor Holiday: I was Patrick, I would be like, dude, I'm out personally. 

[01:04:08] Andrew Faris: Well, that's why you set a goal on the scoreboard and say you're gonna commit to 

[01:04:10] Taylor Holiday: it and, 

[01:04:11] Andrew Faris: but you 

[01:04:12] Taylor Holiday: don't want, this is actually one of the biggest problems I, I even think with Patrick, is that I don't, I think he's gonna suffer the same problem.

I agree. Yeah. Is that he doesn't want money either. 'cause he's already got it. Yeah. So you're gonna like, how do you like, yeah. Yeah. 

[01:04:21] Andrew Faris: Well we have to decide. I mean, it could go wrong actually. Another thing that, from my conversations with you that has been helpful in this process for thinking with Patrick Yeah.

Has been that, uh, we should link that episode in case anybody wants to hear it. Know what the heck we're talking about. Patrick, 

[01:04:33] Taylor Holiday: we're talking about you so much. He won't care. He'll, 

[01:04:35] Andrew Faris: he'll be, he'll be glad. He'll wanna come on and talk about it too. Um, Patrick, uh, one of the things I was gonna say, what was I 

[01:04:40] Taylor Holiday: just talking about?

Um, like you might get further giving your homie that is like your GS Daniel. Yeah. Like a bunch more because he'll work like infinity hours. 

[01:04:50] Andrew Faris: Yeah. He probably will. Um, he'll 

[01:04:51] Taylor Holiday: do all the things you won't. 

[01:04:52] Andrew Faris: Yeah. Yeah. Uh, what was I just gonna say about this? Gosh dang. I had a really good thought and I lost it.

Yeah, it's gonna be so many. It was gonna be really important. 

[01:05:01] Taylor Holiday: But, but my point is like, it's probably so close even. I'll make you faster. How about that? If that's really the end game? 'cause it's, that's the point. It's not the end game. Yeah. So, but then it's like, well, what is like, so is it 200 million? Like no, there's no amount of money.

That's the end game for me. Oh. See, it's just like you're, so then you just meander around until 

[01:05:20] Andrew Faris: you don't doing anything. I'm gonna set a goal in it to generate some kind of, uh, outcomes in, in life that are related that I can use the money towards. Right. So I have a couple ideas about how that might look in my life.

Right, okay. Um, but it's not, for me, the goal is not like. In fact, if anything, I see a lot of cost with getting much richer than I am now. So I, I, that's where my current, that's where my, it's really, it's really hard to 

[01:05:43] Taylor Holiday: transfer money around. I'll say that.

Um, yeah, that's, 

[01:05:48] Andrew Faris: that's my current best assessment of life. 

[01:05:51] Taylor Holiday: Oh, man. Yeah. Then you should just shut it down. 

[01:05:53] Andrew Faris: Why? 

[01:05:54] Taylor Holiday: Because what's the point? 

[01:05:56] Andrew Faris: Uh, well, because I can do all kinds of things with the money besides 

[01:05:58] Taylor Holiday: keeping. But you just said you don't want anymore, it becomes more problematic. Yeah. That's, that's how you get rid of it.

So you want to, you want to create a funnel for sending it somewhere? Possibly, yeah. 

[01:06:08] Andrew Faris: Or possibly doing other things in a way that the might the, the necessity of what a business can accomplish, which is value creation for humans. Okay. Mm-hmm. Uh, that so them making money partly. Yeah. Okay. Partly, yeah. That, and I think that ha, I mean, this is actually where I think your position on a lot of these things, and mine kind of come together nicely in the way I'm thinking about this, which is like you, you've been really insistent that a business's job is to generate profit.

And in fact, that a lot of the social enterprise type stuff that CTC did, which we should get to next in the story, um, is that, that, that, um. That didn't serve CTC. Well, it didn't serve clients well, it didn't serve you well. It ended up being a bad use of business as a mechanism. Totally. That's the way that I hear you talk about that story.

Okay. So in my view, I think that's right. I think that's, and I've, I've actually kind of thought that for a while and in some ways I think I actually, I 

[01:06:56] Taylor Holiday: feel like you were consistent with that. 

[01:06:57] Andrew Faris: I think I voiced that to you at the time. Yeah. That I thought it was a bad, you know, the example I always give of this is like, there were a lot of studies that came out when it's, you know, 20 20, 20 21 when, when the DEI conversation was, its most live in business settings in particular, right?

Yep. Um, and I, and I think there's a lot of well-meaning people having these conversations. In fact, when I disagreed with you on some of the things that were happening at CTC. I've never once questioned your motivations. It's part of the reason I was like, great, let's try it. Let's see what happens. Okay, maybe I'm wrong.

Um, the, there was this, there's this staff that got kicked around. It was some study who knows what the original study is, right? Which was like, uh, diverse teams perform better, diverse teams perform better. Right? We've had this conversation, right? And the question I always had back to that is, what if they don't 

[01:07:35] Taylor Holiday: right?

[01:07:35] Andrew Faris: Is the, is the business. It. Let's say somebody created the landmark study that was unimpeachable and proved beyond all shadow of a doubt. Yep. That homogenous teams performed better. Yep. What is the moral obligation of a business, particularly for these giant publicly traded funds, which is more of a thought exercise?

'cause it's fun. 'cause I don't have any influence over that, but like, uh, or these, uh, publicly traded companies. Right. Do they still have to create diverse teams because there's a moral imperative to do it. And I think different people depending on the world, you're gonna answer that question a little bit differently.

In my view, the answer is probably not. Yeah. Um, within a certain ethical framework that is make sure everybody's being treated fairly. Yeah. Yeah. You can't treat people, you can't treat people, uh, unethically and we'll just leave it there. Whatever that exactly looks like. But I think that that's, that's the way that would look.

So I think in whatever mechanism that I see the value of life and my time and the kind of value creation I wanna have in the world. Alright. Um. If it's going to happen through a business, the business needs to be profit focused to do it because that's what businesses need to do. Yeah. So in that respect, I think there's a coming together, I think what happens with the money afterwards and how motivating that is to me relative to the money, I think is a, is a fair question that you should always needle me on because it's very helpful for me.

Yeah, 

[01:08:41] Taylor Holiday: no, so I, I would, I would totally agree that there are different kinds of vehicles, that there are charities, there are, that's right. Pre corps, there are churches, there are all sorts of different kind of entities that exist for different stated purposes. And a for-profit entity is stated, exists for profit.

That's right. 

[01:08:55] Andrew Faris: Yeah. And I think that's right. Yeah. And that's 

[01:08:56] Taylor Holiday: what it's in service of whether you like, if you want to try and pretend that it's not. The problem is that all of the structures and the mechanisms will constantly drive you back towards that evaluation criteria. 

[01:09:05] Andrew Faris: Yeah. And I, I think your clarity about that's been really helpful to me as I think about trying to generate some kind of value in life, uh, beyond that, where, where money, as we've talked about is plenty of times, like is not the motivating factor for me.

It has to be in the business because that's what the business is for. So that there has to be a way in which that's still the case. Um, okay, let's talk about, uh, so let's wrap the four, 400 conversation. We did that. It went badly. You, you wore a lot of my mistakes. Thank you for that. I, I, I didn't exit that.

I think the best that I possibly could have, but the, um, but. Give me the summary idea, maybe you've already done it, about that stage of CTC and four by 400 and sort of like if you have any one biggest takeaway. Is it just like, is it more about stay focused on the agency? Is it about e-commerce models?

About aggregator models? Like what are the, what's the, yeah, it about the equity split, which was a big problem in that business, like 

[01:09:55] Taylor Holiday: Yeah, I think it's all of those things. I don't, I don't think there's any singular thing. I think that aggregator as a business model has a lot of flaws. There aren't, um, these synergies, uh, that you presume when you start.

Um, the reality is like every business we had on a wildly different supply chain, wildly different customer persona, no shared data. Like there, there's just like no actual wildly different cap tables. Yeah. Like exactly like different incentives between all the participants. And you end up with this ultimate capital allocation problems that if their money's held at the whole co level, every individual operator of the individualized cap tables all want it to go to them.

And there's like a fight for scarcity. And ultimately the right decision is to continue to deploy capital into the thing that returns the most, which is going to be one of them not. All of them, you know? And so I think that model has a lot of flaws, uh, in it to begin with. Um, as a result of that, I think that using the agency's cash to do that was foolish and naive and a poor capital allocation decision.

I think raising capital in the way that we did, we actually raised a million dollars for that entity and then stop raising the treat. Treated it like it was bootstrapped. Exactly. It was just, all of it was just like, that was naivete. And having never, and, and even I think looking back on it, like we had this relationship with one of the investors that like, we look back on and go like, what a jerk.

But I think he was right about much. He was totally right. Much, he was totally right. Then we realized at the time, and he was just like, you guys don't understand the game that you're playing. There were two investors who were like that actually, who both one of 'em was more gracious and willing to teach.

And the other was just like, like treated us like stupid children, but in some ways we were. And so I think there's, there's learning from that. Um, but I, but the thing that makes me the saddest is that I don't think, I think it was all ego. Like, I think everything we wanted was to have the coolest thing, and we thought the way to get the coolest thing was to have a brand.

[01:11:36] Andrew Faris: Yeah. 

[01:11:37] Taylor Holiday: And I still think this goes back to the idea that an agency is a second class citizen in the entrepreneurial world. 

[01:11:42] Andrew Faris: Yeah. 

[01:11:42] Taylor Holiday: And so if you like, the coolest people are the brand leaders. And it's probably even turned to like software, probably even elevated over consumer product, to be honest. And now maybe ai.

Ai don't think that AI is at the, well, I think about Mark Zuckerberg and all the like, yeah, yeah, yeah. Oh, oh, like big tech. Yeah, yeah, yeah. I was 

[01:11:55] Andrew Faris: gonna say sa, the SaaS company's in our space. I don't think that's true about, 

[01:11:58] Taylor Holiday: yeah. Probably not in our space, but like ultimate entrepreneurial pinnacle.

Certainly. Yeah. So I just think that agencies at the bottom of that list, and so it was all about what was the coolest thing we could have. And it felt cooler to me to have a baby sporting goods company than it did. Yeah. 

[01:12:13] Andrew Faris: Agency, CDC, this is the reason I tweeted the other day, that like you, you need to, to decide why you're making less ebitda, uh, when you're growing your e-commerce business.

Like if the answer is ego, you need to be really clear about that. You know, because I think the same thing is happening for brands that are pushing their growth too hard to get a bigger top line number. People will, and people reply to that tweet honestly, and they said, yeah, there's economy scale, there's value in some of those things.

And that's true. There is, you know, right. Um, but realistically also it's ego. And it's like that's, that was actually from a conversation I had with a potential client, and I really appreciated his clarity to his answer. He was like, it, his ego. Yeah. Like, that's the reason why I'm doing it. And it, it's, it, it will really hurt you.

[01:12:49] Taylor Holiday: I also think like when you have no money, you don't really understand. The distinction be between having like a hundred thousand dollars, a million dollars, $10 million, and a hundred million dollars. Yeah. And so you like don't really know where to aim, like That's right. You're not actually clear on the life that you're trying to build or what it actually would cost.

Yeah. And you don't actually ever stop and go like, what are all the things that I want and what is the total amount that that would cost? Yeah. Like you're just aiming for big and cool and status and like that felt a lot of my youth was like, that was what I wanted. Yeah. You know, like was a cool thing that everyone went.

That's cool. 

[01:13:21] Andrew Faris: CS Lewis has a. Essay called The Inner Ring that everybody ought to read. It's, I mean, is Christian author. You don't have to be a Christian to get a lot of value outta the point. But he basically says like huge, huge, huge amounts of the behavior of people in the world is motivated by inner ring, which is essentially that there's always a group of people more inside in the next group.

And, and, and people will say, the classic example is like you call your wife, uh, if you're at work or you call your husband and you're like, I'm sorry babe, I, I, I got a, the boss is having me work late, but inside. Thrilled that you get to work with the boss. Yeah. Makes And, uh, and, and that inner ring is the motivation for many, many, many bad decisions in the worlds so insightful.

[01:14:02] Taylor Holiday: It's probably when I, when my experience at Power Balance, I was just on the outside of that inner ring and I wanted so badly to be in that room. Yeah. I, 

[01:14:08] Andrew Faris: I definitely felt that at CTC. Yeah. And so I 

[01:14:10] Taylor Holiday: think, I think everybody feels that. And so I think whatever I perceive, and as a leader, you actually 

[01:14:14] Andrew Faris: have to be willing to keep people out of it, even if they wanna be in.

[01:14:17] Taylor Holiday: Totally. And so I do, I think that's very true. And that was probably a primary driving motivator when I was young. And wherever the, wherever I had applied the idea of like the coolest ring that I wanted to be in. It's also like when I look back, so the way we raised the money was kinda interesting. Like, we held an event, we like invited a hundred people to an event and we did a presentation and we said, if you wanna write a check, email us in 24 hours.

And like even that was just a play and like. Get all the people in our life together. Show them something cool. Yeah. And make them wanna be a part of it. You know, it's like, which I think is not necessarily, it worked really well. Like it was a good, it actually turned out to be a decent fundraising mechanism, but, um.

Yeah. But even that as like an idea is like, that's not, 

[01:14:59] Andrew Faris: it 

[01:14:59] Taylor Holiday: was, in 

[01:15:00] Andrew Faris: some ways it played to your strength though, which is like a exciting entrepreneur who somebody would wanna back, right? They're they're looking at you going, this is the kind of person I wanna be with. Yeah. And I think that's, yeah, but I, but I see your point.

Okay. So let's talk about equity a little bit more, um, because now a few of the stories come together here. So there's, first of all, the point that you made about, um, Ian, Josh Jordan, you guys sorting all the equity split out there, some of the mistakes along those ways. Four by 400 was an equity disaster.

Um, I would say, like we talked about raising money poorly. We talked about acquiring businesses poorly with different motivations and different cap tables on every single business. All those kinds of things. You talked about the ESOP earlier where you brought, uh, employees and you sold equity in CTC to employees in the business.

Um, all of these little things along the way, um. So a little phrase I've heard you use that I think is a really helpful lesson from all of this is equity is the lifeblood of the business or something like that. Yeah. It's a life force that aims 

[01:15:52] Taylor Holiday: that you want aimed at the business. Okay. So, so, so 

[01:15:55] Andrew Faris: say it right and then expand on it because I think it's a really helpful thing from your pathway.

The phrase 

[01:15:59] Taylor Holiday: I'll use is equity is a life force and you want it pointed at your business. And if someone leaves with equity, they take with it a force that you can't recreate. Yeah. Um, and so you need as much of the equity aimed into the goals of the business as possible. And the second somebody takes it and has a different direction with it, you lose a thing that is really powerful.

Um, why is it so powerful? Because when shit is bad, employees have no incentive. To work outside of their compensated obligation partners do. And so when things get really bad, and it's Saturday and you need to call somebody, like, you call the people with the equity and they step into those moments. And they also have a constant perpetual incentive to do a thing outside the bounds of their present responsibilities.

Um, and that just happens and they step through that door constantly in moments of hardship or in moments, moments of positivity. Mm-hmm. They're making referrals connecting you. You still behave this way even when you were outside of CTC constantly helping us. Yeah. And it's because you had an incentive to do so.

Yeah. You, so even though you weren't working in the business, you still aimed your energy into it. Yeah. Um, and I watched that happen, um, most powerfully with co people that are in it with you every day, so. Sure. But, uh, so yeah, so I think that that's like. I, I left too. I let too much of the life force leave sometimes.

Yeah. Um, and didn't get it back. Uh, and so I think that's a big lesson, but, and like what I'll tell you is if you wanna sell your business, like you want simplicity in this process. Yeah. I created the most complex structure for selling a company, and it caused endless disputes because I ended up with all these counterparties with different incentive structures, um, in the transaction.

Yeah. Um, so yeah, it's just like simple, clear, and. Someone owns the, the equity should be owned by the people working in the company as much as possible. If it leaves, you should get it back as fast and at the best price possible that you can. Um, I think that's like a, a really important rule to hold to.

Yeah. Um, the other thing I'll say is like the ESOPs a beautiful mechanism. Employees got equity at zero cost. They had to write zero checks. It was zero tax obligation, and they valued it accordingly. Is that part of the importance of equity is it has both risk and reward? Yeah. And they're both important motivators and if you rob people of the risk, you actually robbed them of one of the really powerful motivators of it.

Um, and so we had another moment where a bunch of people wrote checks that was way more impactful than the esop. 

[01:18:18] Andrew Faris: So do, so let's say I wanna bring people into a JF Growths. Yep. My, my team members. Into ownership in the business. Yep. What, what mechanism, what mechanism would you recommend me doing that? I have to 

[01:18:30] Taylor Holiday: write a big old check 

[01:18:32] Andrew Faris: at the 

[01:18:32] Taylor Holiday: highest value you can.

[01:18:33] Andrew Faris: So, okay. So you think, so instead of giving them that as part of their compensation, you would have let's, you think they should write a check into it? Yeah. What if I wanna set a set of. 5% employee total shared equity pool. 

[01:18:47] Taylor Holiday: I think, I think you should assume that the value, you are gonna do that to help educate them on the potential and distinction between capital and labor and because you care about them, but not because it's gonna change their behavior.

[01:18:58] Andrew Faris: Okay. So this is something I've watched happen over and over again in these businesses is that people do not respond to, they don't care. I mean, this is like a classic economics principle, which is that the, the further out the, the, um, the incentive, the less people respond to it. And equity is extremely far out equity in a, there's a loss 

[01:19:13] Taylor Holiday: aversion.

It's not worth anything. 

[01:19:14] Andrew Faris: Yeah. And it's completely illiquid. So it's, yeah. So there's just nothing. Yeah, that makes sense. So, so do you think a profit sharing would be like a better mechanism to accomplish That's something similar? I don't do that either. 

[01:19:23] Taylor Holiday: I, again, I, I want, I, so Jamie Diamond, CEO of JP Morgan Chase, Uhhuh, like biggest bank of the world, like probably the second most powerful man in the world, maybe behind Donald Trump.

Yeah. Like I was listening to an interview with him on, uh. Uh, the acquired podcast. Yeah. Uh, and that's crazy. They talk about when he, so he got fired from Citibank and then when he took over in what became JP Morgan Chase, um, at the time when he was worth a few hundred million dollars at the time, and when he took over, the first thing he did as the new CEO is he took half his net worth and bought the stock.

[01:19:56] Andrew Faris: Huh. 

[01:19:56] Taylor Holiday: And he didn't have to, he had a huge compensation package and that was his signal to everyone that, like, I'm in. Yeah. I'm not going anywhere. Yeah. I am personally invested at this, at a level that would cost me dearly Yeah. If I fail. 

[01:20:10] Speaker 4: Yeah. 

[01:20:11] Taylor Holiday: And that was one of the like, it's like a really powerful testament to his leadership in, in that moment.

And he, he kind of calls it out as like, when was that? Do you know? Whenever. I don't what year it was. Like did you ballpark what year? 2010, maybe two. Oh yeah. It's a post post-recession. Yeah. Post recession. Okay. Yeah. Um. So, and, and bought so personally with his own bank balances, didn't, didn't negotiate to receive it, bought it with his own cash, $60 million in stock.

Yeah. So it's, 

[01:20:32] Andrew Faris: it's, yeah, it's, so 

[01:20:33] Taylor Holiday: like when I think about Pat, the example is that like, I would want it to be at a dollar amount that actually like, would cost Patrick meaningfully if he failed. 

[01:20:41] Andrew Faris: Yeah. Yeah. I, yeah. Yeah. And I, I've thought about that. I mean, yeah, I think that's right. So I think I, I'm on, I'm on the same page as you as this.

I've thought about it certainly at that level of leadership and with that level of equity partnership, that kind of thing. Yep. Um, what I'm, what I'm really specifically asking about is like employee profit share pool type things, like mechanisms like that. 

[01:21:00] Taylor Holiday: Have them write checks. It would be more powerful that they wrote a $5,000 check, I think, than you created an option pool for them.

[01:21:06] Andrew Faris: That's really interesting. Yeah. I, yeah, I, I think you're right. I mean, I've watched it not motivate people for a long time and there's like the, there's the thing, and I think therapists talk about this like, free, free therapy doesn't work. Yeah. Right. People have to actually be, uh, doing something. Okay. I don't know why I didn't think about this, but my brother is nodding his head right now who is a professional therapist for a long time.

Yeah. So the, the, the, the client has to be paying for it, otherwise they don't value it. And I think that's a, that's a broad principle that, is that right Chris? 

[01:21:30] Taylor Holiday: Totally, 

[01:21:30] Andrew Faris: a hundred percent. Yeah. There's 

[01:21:31] Taylor Holiday: something too about, it's even like, um, what's the right way to phrase this? It's like honorable to like write a check.

Yeah. Like you, you feel like, yeah. I saved up, I bought something. Yeah. In this way that it's actually deeper. 

[01:21:45] Andrew Faris: Um, well, I wrote a check into CTC. That's how, that's how I got the equity that I had in CTC. That's 

[01:21:51] Taylor Holiday: right. 

[01:21:51] Andrew Faris: And I'll tell you what I have felt after the transaction. Like, somebody should pat me on the back for deploying my money well.

[01:21:57] Taylor Holiday: yeah. 

[01:21:57] Andrew Faris: You know, like, I like, uh, I, I want an attaboy on it, you know? And it's funny, like, I don't think I, I mean, I don't know, I've been so, I've had enough of my sweat equity and CTC that I think I would've felt pretty good about it either way. But like, I do feel that way a little bit, you know? So, yeah.

Yeah. 

[01:22:11] Taylor Holiday: Just, there's something about that, that, and, and, and just learning that, so one of the things that happened, this little inside ball that I'll give as I just might get me in trouble, but whatever. We had an imp So when, when we bought the shares back when the employees wrote checks, we had, uh, we offered it to a group of employees.

Um, and one of the employees that wasn't the senior most employee wrote a bigger check than a lot of people. Um, and at the end when he did really, really well with that, that was like hard for some people, 

[01:22:41] Andrew Faris: huh? 

[01:22:41] Taylor Holiday: Because they, it's this comparison game, right? At the end, who gets all the money is sort of a signal of value in various ways.

But when I look at it, I go like, well, when the opportunity was there, everyone had the opportunity. Yep. And this person believed the most at probably the largest percentage of their individual net worth. That's right. Yeah. Took that and said, I'll make the bet. 

[01:23:00] Andrew Faris: Yeah. 

[01:23:01] Taylor Holiday: And like to me, you just like that understanding of risk reward.

What And how that works is like a very powerful lesson that you don't get it, you don't get the reward, you don't get it if you don't risk. So, you know, like the, the, these things, and this is true of any yield curve. Yeah. Like if you want Yes. 20% return. You've gotta absorb the volatility on the downside too.

That's right. And if you want 8% in an index fund, you reduce your volatility, but you reduce your upside. What it's like just how it is. 

[01:23:29] Andrew Faris: What did that do for you as a leader? Did it have any emotional impact on you? 

[01:23:33] Taylor Holiday: I. Everybody, the, the, the pace at which everybody wrote checks was like really empowering.

Like it felt really, because 

[01:23:40] Andrew Faris: people were like, yep, I'm in 

[01:23:41] Taylor Holiday: p Yes. The money, and they were fighting over the, how many they all got. Um, and so it was like, oh, you're, you believe you guys are in. Yeah. And like, I know you all aren't mega rich people. Like I I we worked together. Like, so I think it was really empowering to me.

And again, it's like this fiduciary responsibility that suddenly I carried 

[01:23:58] Andrew Faris: up. Yeah. Now, yeah, that's right. This is other people's money. Yeah. That's really good because something else that we've talked, we've hit a few times here, like you just said with the, the risk component, the potential cost. And this is, this is something I've voiced in my, my conversation with Patrick.

We should have framed this whole thing through this lens of start and end. Yeah. Yeah. We should have, we should have framed the whole conversation this way as like, what I can learn on the beginning of an agency journey from what you did on the end of it. Still time, you know? Yeah, yeah. Whatever. Let's just start over, but yeah.

No, no. But listen, I, I, I think one of the things that also has been really clear to me, and and I've always said before is like this. This notion that like, essentially put another way cost and cost is really good. That's the point. That's right. That, uh, discomfort is really, really good. Yeah. And, and there's probably a limit to how much of it you can bear and should bear.

And so you ought to be really careful about. The kind of discomfort you bear. Like an example of this I've given, I think I might have even given on the podcast, I dunno, is marriage. Yeah. Uh, that like, essentially there's a massive cost to marriage, right. Which is on the day to day and all those kinds of things, but also like you are now pledged to one person and that means that the cost is all of the other people.

Yep. You know, and you have to decide if the benefit is out worth the cost For me, easy decision, great decision I ever made. No. Like I'm not just saying that I really believe that my wife is the greatest. Right. And I, and I, I really believe that. Um, and it doesn't change the fact that there is a limitation of my decisions within that that has to happen as part of that.

Um, and so, um, and I, I think there's like, that's true for all these things and that's part of the decision I've been thinking about business wise has been like, you know, I had this idea, I'm gonna have this freelance life that is sort of easy and lower key, um, and lucrative enough. 'cause I don't have super big money ambitions.

So it's like, great. But it's like, wait a minute, I probably actually need to elect into more cost for the sake of, um, for the sake. Of actually generating the best of myself. Yeah. Um, in a way that is, is important for me. Not to say you should never rest. I actually think most people need to rest a little bit more.

Not to say you should never have any comfort or luxury or leisure, like, I think those are all, those are all important parts of life too. But just that like, uh, that I think the cost really matters. It's of course the reason why working out is good and all that kind of stuff, you know? 

[01:26:05] Taylor Holiday: Yeah. There's definitely a relationship between the potential return and the investment.

Right. So like the marriage metaphor is like, it's an ultimate investment and an ultimate reward. That's right. And you can't have one without the other. Yeah. And so I think that lesson exists in a business equity context is that you can't just give the reward. Yeah. It, like, it, it just doesn't yield the same input.

Like, so I think super good. Yeah. There's something there that is, is an important, like, I think about it as like. My reward in CTC cost me 12 years of my life. That's right. Like, yeah. That's at a massive cost. 

[01:26:32] Andrew Faris: It's a huge portion of your life, right? Yeah. 

[01:26:34] Taylor Holiday: The both healthiest, youngest years of my life. Yeah. I had to give to the thing to, to yield the outcome.

That's right. It's hard to, to skip that. 

[01:26:41] Andrew Faris: Yeah. Um, okay. Um, there's a lot more, we don't have that much time left, I don't think. Uh, so I wanna be a little careful about this. Let's talk, um, let's talk about, let's roll all the social enterprise stuff into one. I think this is a really important conversation point in this journey.

Um, two kind of key things that happened is I'll you, you retell the story however you want, but, uh, tell me your dreams. Yep. Which was around helping employees quit. CTC. Okay. No, but this idea that like, employees have these dreams for their lives, you're gonna help 'em get there. And that was your promise to them as part of the employment agreement.

They help you accomplish your dream. You help 'em accomplish theirs. Okay. Something like that. Yep. Number two was a commitment to put very simply DEI initiatives. Okay. Um, post COVID, George Floyd, some of those things. And you were, you were not. Corporate washing about this. You were, you were, you were a true believer.

And I, and, and I, I mean that in the best possible way. What I mean is you did it with all, I don't mean you were duped. I mean, you were, you were, you did it with all integrity and sincerity. Sincerity, in my view, trying to do something good and important in the world. Okay. So, um, so you were, you had people that were coaching you on this, you were trying to learn and listen from people who were different than you.

Yep. All things that I think are really on rule qualities. Okay. My sense in the end is that you would look at both, tell me your dreams and those initiatives as mostly, if not, maybe not entirely, but mostly mistakes. Mm-hmm. Um, correct that story however you want, and tell me what you think about it. 

[01:28:03] Taylor Holiday: Um, I think that the thing that they were intended to get for me, I no longer want.

Um, and so they're a mistake. If what I want today, then they were a mistake to help me get that. But, but at the time, I would actually stay that I wanted something different. Um, and so the, I I think that if the goal was to create shareholder value in the form of Yeah. Profit, which it probably should have been, but it was not the goal at the time.

[01:28:33] Andrew Faris: Um, so funny how much you're backing off on the shouldness of what a business should do and the way you're telling this story right now. Well, 

[01:28:38] Taylor Holiday: I, no, I think it evolved forward in one direction. Yeah. I think at the time though, I never would've said it should do that. I know. Yeah. So I was an idiot. 

[01:28:45] Andrew Faris: Yeah, that's what I'm saying.

You're de you're still holding back. You're, yeah. Right. So that's a stronger word. You were an idiot. And delusional is a stronger word than wrong. Yeah. Just wrong than the way you were framing it a second ago, which was like, oh, it's not doing what I, well, I sure started a 

[01:28:56] Taylor Holiday: church candidly, right? I started the wrong kind of thing.

Yeah. It's because I was kind of confused. That's, but 

[01:29:02] Andrew Faris: that's, that I think is a more honest answer that Yeah. It's like you were not just, it didn't do the thing you wanted to do, whatever. It's like, no, I was wrong about this. That's, I think of this stronger language I didn't 

[01:29:13] Taylor Holiday: understand. I thought these vehicles 

[01:29:15] Andrew Faris: Yes.

[01:29:15] Taylor Holiday: Would be easier to like morph into versions of one another. 

[01:29:18] Andrew Faris: Yes. 

[01:29:19] Taylor Holiday: And I, like, at the time, you have to remember like a big inspiration for me was there was a church in London Yeah. That was trying to become a business, like it was trying to deploy a similar mechanism. Is this Brom? Uh, I honestly don't remember.

Like, I'm trying to remember. That's fine. That's 

[01:29:30] Andrew Faris: fine. 

[01:29:31] Taylor Holiday: Name of it. But like, and, and so there was this convergence of these things that I had. Sort of been captured by the vision of that, that somehow business and church could exist together. Yeah. And what I've learned now is that like, no, no, no, no. They should not.

They should not. Yes. They, they actually serve completely different ends. Yeah. And so that's naivete, that's like youth. And, and I think some of that is what creates change in the world for a positive. And some of it is when you come into thousands of years of wisdom and you realize that you were just wrong.

Yeah. And I think I was closer to that, which is that like there's a reason these things are structured very the way that they are. Yes. And it's good. Yes. And somebody was thoughtful about it. Yeah. And they were, they probably experienced the pains I've experienced. Yeah. And so, um, it's so, 

[01:30:14] Andrew Faris: it's so easy to look at all of these things and be like, oh, they got it totally wrong.

Yeah. What a bunch of idiots. Yeah. Yeah. And to look at like legalese for things and like, you know, all this stuff and go, oh, this is just, ugh, this process holds you down five one 

[01:30:25] Taylor Holiday: c threes. What are they? This, you don't need that. You know, like. What's the point of that? Yeah. Like, but, but they're actually like, 

[01:30:30] Andrew Faris: somebody was wise in thinking about organizational structures and purposes and some of that.

Totally. Yeah. 

[01:30:34] Taylor Holiday: Um, and yeah, and, and, and, and even like, I think about the separation of church and state, like that is an ideal, is like why it's important and why, like why those things actually really do serve both entities in some ways, you know? Yeah, yeah. Yeah. And so I think I was, uh, like I was deep into like, like, you know, community capitalism and uh, like mm-hmm.

Stakeholder agendas and like mm-hmm. Was there a different version of capitalism that could exist that benefited more people? Yeah, I think. Which I think is like a very captivating idea that I think people are still struggling with. Like we're still, of course, of course culturally, I think very stuck in this reality that capitalism seems to converge a disproportionate amount of the resources into too small of a group of people.

Yeah. And communism is a failed concept too. Yeah. And we're sort of stuck in this as a species, I feel like, and I don't know that anybody's solved it yet. Yeah. And I think we're working through this as a culture. Yeah. And I don't have the answer. Yeah. And I, I thought it was noble to endeavor to be part of the solution.

Yeah. I do think, I still think it was noble to endeavor to do that. Yeah. Do you think it was noble? Yeah. I just think, I, I do think, do you think it turned out to not have enough courage? Um, I think Well really? Yeah. What 

[01:31:38] Andrew Faris: do you mean? 

[01:31:39] Taylor Holiday: I, I think that my principles fell apart. Like I, in the pain. 

[01:31:43] Andrew Faris: Your principles fell apart in the pain 

[01:31:44] Taylor Holiday: that like what sort of, what I discovered in it was that the people leading me and the reality, the middle of all that movement and DEII think as a, as an initiative Yeah.

Is the reality is that no one knows how to solve it. 

[01:31:55] Andrew Faris: Yeah. I remember this is the big problem. You told me a story about this once, where you got to some end point in the, in your DEI like the coach. The organization you brought in was like, no, nobody knows. 

[01:32:03] Taylor Holiday: Yeah. We're wandering, we're like now pioneering.

And so what I felt like was like, oh, I'm not. I'm not gonna be the pioneer and I don't know the answer, and this is too hard, and so therefore, like I withdraw. Um, do really You think that's what you did? I think you as I think you assessed it just Well, think I was destroy. I think I it was gonna do the thing I was doing was gonna destroy us.

[01:32:23] Andrew Faris: Yes. And that's what I mean. I think what you did is reevaluated whether or not it was a good mechanism for the thing that you wanted to accomplish. And, and then of course the thing you wanted to accomplish change at the same time. There's 

[01:32:32] Taylor Holiday: this phrase that gets used a lot in that work, which is that you're planning for seeds for trees you'll never sit under.

Yeah. And I was not willing to do that. Yeah. Okay. Yeah. So I think, I think that is the reality of that kind of work is that there is no gratification in the, IM It's such 

[01:32:45] Andrew Faris: a, it's such, that's such a fascinating worldview. It assumes a progressiveness to the way the world works. Yeah. That seeds don't just get mowed over or something.

[01:32:55] Taylor Holiday: Well, no, no. Yeah. But, but I would even accept Yeah. That there's a possibility that that would happen. Yeah, sure. I know, I know, I know you're not saying this. Yeah. Yeah. But, but I think that you. There are things with a latent value realization Yes. That are true over the course of society that like I think lots of people didn't realize the immediate benefit of their behavior Yes.

In the life that they live. Yeah. That turned out to be more impactful later. I think that's like, there's lots of things like, for sure. So, so, so now that's also an easy trope to get people to behave a certain way and it removes the obligation of efficacy. Yeah. To say things like that. Yeah. And I struggle with that too, to say like, if someone says to you it's gonna work.

Yeah. You'll just never know. Yeah. Like that's like then that does feel borderline cultish language to be like, yeah, you should persist because this is good. And also you have no accountability if it doesn't work. Work, right. That's right. And there's no accountability to impact. Yeah. And so those are really hard things to sit in and go like, okay, I'm open to that possibility, but I don't know how to evaluate your statement.

Like I don't, I don't know how to know if what you're saying is true. 

[01:33:55] Andrew Faris: Yeah. So do you think. Because I think some of the reassessment of that is tied up with the deconstruction of your faith. Mm-hmm. So do you think the deconstruction of your faith was a net positive for CTC? 

[01:34:05] Taylor Holiday: Well, it was certainly a net positive for the shareholders of C tc.

Yeah. Yeah, yeah. Uh, yourself included. Yeah. Well, and, and like, you could, I don't know that this is causes cause a causation correlation question, but I think all it, the, the removal of my faith just made my, the, the process simpler. Yeah. I was just serving less things. Yeah. Um, can't serve God and money.

Right. So I just chose money. Yeah. So you chose money. 

[01:34:26] Andrew Faris: I mean, you know what just made it simpler? Um, I think, I think that's an interesting, uh. It's interesting 'cause everybody assumes with that phrase that you should go serve God then and you decide, well wait a minute. 

[01:34:38] Taylor Holiday: Yeah. And, you know, we'll not find out in the end, I guess.

Yeah. 

[01:34:40] Andrew Faris: I think 

[01:34:40] Taylor Holiday: we'll, um, but yeah, so I, I think, uh, but that really is like, when you try and do those two, that's why I said like I should have started a church. What I was really trying to do is be rich and serve God and like, do both of those things at the same time and feel like I could be a cool entrepreneur and, uh, you know, a, a person evangelizing people and trying to bring the game of thought about.

Is there any, is there of 

[01:35:02] Andrew Faris: Taylor Holiday that gets talked out of some of these pursuits before they happen? My experience with you is that I think I is that you have to go into them for a little while. Oh, oh, oh. Yeah, yeah, yeah. Do you know what I'm saying? Is that like, I could try to, I mean, we, you, you brought the DEI conversation to a group of people who were involved in the conversation.

Yep. And it, in my take on this now is like, you just have to go experience the, the, the, the thought process. I think you put on ideas as much as you test them out. Like you, you wear them for a while. 

[01:35:33] Taylor Holiday: Yeah. I think that's 

[01:35:33] Andrew Faris: right. Do you, so do you think there's any version or should there even be a version of you that like, pursues this kind of thing?

[01:35:39] Taylor Holiday: I think that, I think what you're tied what that's, you see what I'm saying? What's that's tied to is like a deep mistrust in people. Huh Uh And so therefore the idea that I would like orient my life around the idea without having experience that is like not a thing I'm not into anymore. Yeah, 

[01:35:56] Andrew Faris: yeah, yeah.

Yeah. 

[01:35:58] Taylor Holiday: So I, I think, 

[01:35:59] Andrew Faris: uh, but I think you do this with every idea. You, you. With the big ideas that you go down, you know? Yeah. You put them on and you, and you run with them for a while, and then you evaluate them and then try to make a better decision next time. Yeah. As opposed to, you know, I get caught in this sort of like, endless evaluation.

I take forever to do the thing, you know? And, and, but, but I think a lot of 

[01:36:17] Taylor Holiday: it, like, I think you're like, how many times did I tell you, like, Andrew, you're just gonna start an agency, but it, but you should start an agency. Exactly How 

[01:36:24] Andrew Faris: many times. It took a long time for me to get there. You make that decision much faster than, oh, so you're, 

[01:36:27] Taylor Holiday: okay.

So you're saying the, but I feel like though it was, we've been having this composition for a year. You had, but you had to ex, and my, my thing is that you had to put on freelancing to find out that like, the end tail of that is you just, you go, this is like inefficient. Yeah, yeah, yeah, yeah. You know, and so you, I'm not serving me or the client.

Right? Yeah. I, I could, I could do this better. Yeah. Um, and so you, you move on. Yeah. But so like, I think you had to put on freelancing in the same way. I would have to. Yeah. Yeah. So, you know, like put on whatever ideal that someone would tell me. So I don't know. I, yeah. Yeah. I, uh. I don't 

[01:36:59] Andrew Faris: know. Yeah. Okay. Well, let's see.

We, let's, let's, let's wrap. So four, 400 dies. CTC shrinks, DEI. Stuff goes away. I mean, I don't know exactly how that works in the organization now, so don't hold me to exactly saying it like that. Sure. CTC then grows, focuses on profits. Yep. Um, and then eventually leads to an exit. We don't have a lot of time left.

I want don't 

[01:37:19] Taylor Holiday: talk about any of the good part when it all worked. Know we were awesome. 

[01:37:23] Andrew Faris: Yeah. Yeah. Well, I mean, I have some rapid fire versions of these questions, but talk about what, just hit the center of it. What is the core of what made CTC, in my view, the best agency DTC over the last couple years? And I, I, I don't think it's very hard to say that I think you guys do an incredible job for your clients as far as I can tell.

And I think that's borne out in your retention numbers, so well. Well, so I, 

[01:37:43] Taylor Holiday: so when you say, so 

[01:37:44] Andrew Faris: why, why did you create so much value for clients and yourselves? What happened that allowed me, what was the execution that made that work? 

[01:37:52] Taylor Holiday: So I, I, I like really learned how the machine works. Like I know how a service business works, like very clearly.

Yes. Um, and understood. That there were a bunch of things that were actually really unnecessary to make a service business work. And you could actually be really lean and management is a dumb idea. This is another whole philosophical thing. Like, I don't know that I believe in the idea of management at all.

Yeah, yeah. Um, as a principal, which I think was a big thing that got served on my throat was like the importance of management. Yeah. Um, I think this is like, people are just entru, you guys don't have management. We, we basically mainly yeah. People doing the work and like you might have people whose like KPIs you fill out or whatever, but you're, nobody doesn't do work.

Yeah. Um, and yeah, I wish I, I don't actually live out my, the totality of my belief here. I, I would eliminate the idea almost entirely. Um, yeah, there's a, there's an extreme version of a thing I've discovered, but, um, but because of that, like, what I, again, it goes back to this idea that the labor exists to generate revenue.

And when you create this like alternative purpose, um, layer, it's like really degrading to the, to the thing. And it doesn't actually improve the quality of the performance, like really at all. Um. Uh, so that, and then I, I learned this, this is like super dumb because, uh, it's, so, it's like, well, everything we model for people like, but net revenue retention, so the way that people calculate, uh, retention, like for most of my career and agency, I calculated it as like percentage of clients that left, like they call that logo churn in the PE world.

Like, so it was like, but that's all we focused on, but it's fundamentally wrong. The thing you want is net revenue retention. Yeah. So if a client paid you a hundred thousand dollars last year, how much do they pay you next year? Yeah, and there's two, the inputs to that are logo churn, but they're also contract.

Expansion. Oh. So like if I, if you, if your contract this year is $10,000, could I make it 12,000 or $15,000 next year? So the question is not just who leaves, but what happens to the people who stay? Um, and that's about service expansion. And when you do that, what you realize is that like the, there's actually a real ceiling to how much improvement you can make on logo churn.

[01:39:48] Andrew Faris: Yeah. 

[01:39:48] Taylor Holiday: The best agencies in the world, you're not gonna have really better than like 80% logo churn. Yeah, sure. In reality, it's probably gonna be somewhere in the like 60 to 75% range year over year. And, and yeah. And the best it could ever be is a hundred percent Yes. But contract expansion actually has no total upside limitation.

Um, so when I think about that is as a metric is so much more important, is that for the customers who stay, who love us, how do you, how much more value can you get out of them? 

[01:40:14] Andrew Faris: Yeah. 

[01:40:14] Taylor Holiday: And, and because there's just gonna be some customers that it just doesn't work. 

[01:40:17] Andrew Faris: Yeah. That's, 

[01:40:18] Taylor Holiday: they're the wrong fit. That's, and, and you should spend actually not that much time trying to, trying to salvage them.

Yeah. Like it's just exhausting, endless, whole of sadness Yeah. To go into. Um, 

[01:40:29] Andrew Faris: and so probably actually more valuable to you to be. To behave with integrity till the end of the relationship. Make sure that they go out on as positive a note as possible. And you know what I mean? Like I not saying because of that word of mouth thing.

You should No, no, I know, but I'm, but yeah, like, but I'm saying 'cause of the word of mouth thing. I'm saying like, it's like if, if they can have a decent experience on the way out, it's like it's, look at what you're talking about with, uh, a Alejandro from Yeah. Mountain Bow. That, that's great. He doesn't have a great experience with CTC and its services and everything like that, but he still walks outta there thinking highly of you.

That's right. He knows you guys tried hard. You know what I mean? Like, 

[01:40:59] Taylor Holiday: and what I'll say though is that like we would spend so much energy trying to make people not leave. 

[01:41:05] Andrew Faris: Yes. 

[01:41:05] Taylor Holiday: Like all of my directors, I, I think about this, it was always about like, don't let them leave. Yeah. Versus they love us. What else can we do for them?

Yes. Yeah. Like, let, they want more from us. Yeah. Let's, let's do that. And so that, that was a huge piece of it. The, the, the marketing thing where we just started driving demand through content creation and sponsorship is a huge thing. Yeah. Um, so like getting to the $0 cac and then like looking at the operating, like the gross margin of every customer and changing our pricing to where every customer has a fixed margin rate, no matter the size.

All of those things made it so that like the business is just, so, so you're saying there's 

[01:41:37] Andrew Faris: some, there's some amount of margin. So if a customer's worth too much to you, you either, you, you increase your services to them. 

[01:41:44] Taylor Holiday: Yes, exactly. 

[01:41:45] Andrew Faris: Yeah. Because, because otherwise they're gonna turn That's right. 'cause 

[01:41:47] Taylor Holiday: you create in-house risk.

That's on that side of things. 

[01:41:49] Andrew Faris: Um, okay. That's what you said on the agency side. And I do think you just said a lot of things about the agencies that people do not talk about in our space, about the mechanics of an actual agency business. I know also there's some things that you guys have done on the actual delivery of services side that have been allowed.

Yeah. Technology piece 

[01:42:02] Taylor Holiday: of it. Yeah. So like putting, putting it the center process where what you want is not individuals making individual decisions. Yes. That's just not what you want. That's not, that's not what someone hired CTC, that that person doesn't have 12 years of history. They don't possess all of our data and information and knowledge like they shouldn't be making individual decisions.

That's not the point. Um, if you're gonna do that, you better hire freaking, you better be paying $300,000 a year. And I'll just tell you this, if you were hiring an agency and there's somebody working for you who's making $85,000 a year, they are not equipped to make growth decisions for your business.

It's just they are, they do not have the experience to solve the complexity of problem that exists unless. They're like massively underpaid. And guess what? They're gonna leave soon if that's true. 'cause they'll realize that. That's right. It's just, that's just the reality of it. And so what you want is those people to take the legacy experience of the, the agency and deploy procedural decision making as much as possible.

And then like small bounds of like. Uh, uh, thoughtful decisions, but you don't want open-ended problem solving very much. Yeah. Like, that's like, and so I think technology and process are at the center of that. Yeah. That allowed us to do more consistent work and allowed us to get more, and this is a big thing.

I was getting an argument with Michael from UP Stack, this idea that revenue and costs have to move linearly in the agency is fundamentally wrong. The, there is no business better equipped to benefit from AI and the change in technology in the present state and to create operating leverage off of human service than human service agencies.

Yeah. And so you don't have to grow revenue and cost at the same time. You can create expanding margin over time. Like all of those things. 

[01:43:28] Andrew Faris: I have, I have this little theory, which is that if your revenue per head goes up because of ai, it's an incentive to hire more, not hire less. That's right. Because, because it means that each person creates, creates more valuable Yeah.

[01:43:36] Taylor Holiday: And you can pay them more money. That's right. Like literally at C TC over the last three years, our average contract value has gone down. Our average employee salary has gone up and our operating margin has increased every year. That's really fascinating. So all three of those things can be true at the same time.

And that's, that's where real value lies is that if you think about the value to the customer, it's a calculation of the value created over the cost. And so there's two ways to improve that calculation. You can make value go up that's really hard or you can make Costco down to them. Yes. That's easier.

Yeah. So if I can make my services cheaper, it's easier for it to be valuable. It's easier for them to stay longer. 

[01:44:05] Andrew Faris: Alright, let's do rapid fire answers for a few. 

[01:44:07] Taylor Holiday: Okay. 

[01:44:08] Andrew Faris: Okay. What's the number one thing you learned in the transaction process itself? I mean, it doesn't have to be super rapid fire, but in the process of actually selling the business, what, what was your business learning from that?

Um, and by selling, you know what I mean? 

[01:44:20] Taylor Holiday: Be clear on what you really want individually, like what your individual goal is. Don't conflate that for other things. And then understand the incentives of all parties negotiating. 

[01:44:30] Andrew Faris: Yeah. 

[01:44:31] Taylor Holiday: Great. Good. Because you'll have to give on things and so the questions is which ones do you want to, to give on and which ones do you not?

Um, and they're gonna attack every angle, so you better be clear. 

[01:44:41] Andrew Faris: Okay. Um. Are agencies bad at delivering growth services? Another way of asking this is, yes, growth 

[01:44:48] Taylor Holiday: is a terrible word. 

[01:44:50] Andrew Faris: Um, okay, great. Growth ahead. 

[01:44:51] Taylor Holiday: This is another thing. You, you should not call your 

[01:44:53] Andrew Faris: business, which I mean, it's gonna, the name's gonna change.

It is good. Yeah. Well, partly, I was actually thinking of the other part of it changing 'cause it's not gonna be this company, but jf Yeah. 

[01:45:00] Taylor Holiday: Uh, well, whatever. Fine, you can do growth if you want. I don't want to, I want outta the growth synthesis. Yeah. We're, so we're working on sort of this rebrand around what is the value proposition, and I don't think our value proposition is growth.

Yeah. I think that I, I've said this, I think head of growth is a dumb title. I think growth is the CEO's responsibility. He's the only he or she's the only person actually with the capacity and authority to generate growth. Because it is a holistic effort that includes every discipline of the organization and your external vendor.

Cannot develop product. They don't control your gross margin. They don't have control over your marketing calendar. They don't produce photos. Like they just don't do enough to actually be responsible's for that outcome. 

[01:45:33] Andrew Faris: That's, that's totally right.

[01:45:34] Taylor Holiday: So I, I think that we have, that is a, that is a misnomer that in the worst case scenarios makes clients look at us and go, why are you not making all my revenue grow go up?

And I'm like. I think your primary problem is product goes larger, the product or you have no marketing moments or whatever it might be. And I don't get to decide that, but that's a capitulation. 'cause I told them I was gonna grow the business, so Yeah, that's right. But, but my best clients skull, candy BG doesn't look at me and go like, how are you gonna make my revenue better next year?

Yeah. He goes out and does a partnership with Bose and goes, distribute this. Bring me back the most efficient media possible. Yeah. And 

[01:46:04] Andrew Faris: I 

[01:46:04] Taylor Holiday: go, great, 

[01:46:05] Andrew Faris: I'll 

[01:46:05] Taylor Holiday: be happy to do that. We can do that. Yeah. 

[01:46:06] Andrew Faris: Really, really well. Really well. Um, the another way of asking that same question is agency versus in-house. Uh, you've seen this Yep.

Debate a lot. And part of the reason people hate agencies is because they say it's too expensive and they should in-house it. Sure. I've heard you talk about this, but gimme another rapid fire answer. 

[01:46:18] Taylor Holiday: The, you should, you should deploy your money on the smartest, most available person you can find for many businesses.

That's not hiring in-house because you can't afford Andrew as an internal employee, but you can afford him as an agency and he's way smarter than your internal person. And so, but what I'll say is if you can find an Andrew or someone smarter than Andrew Sure. And you can get them to work full-time in your business, that would be better.

[01:46:39] Andrew Faris: Yeah. 

[01:46:40] Taylor Holiday: But I just think it's like, it's a talent disparity problem that for whatever salary you're willing to pay your person, I think we're smarter Yeah. Than that person. Yeah. And so I think getting us on a fractional basis is actually more valuable than a less experienced, capable person with less systems and technology than that.

But if you can get them and your network offers you that leverage, then hire in house. Yep. Just get the smartest person you can. Um, okay. Um, here's the perfect example there is, it's supposed to be lightning round. I'm sorry. If an agency owner of a $1 million agency, I could do more for them in one hour.

Than any in-house employee that almost in the world that they could hire at any price. At any price that they could afford. Yeah. In one hour I could do that because there's, the lived experience I have offered into that moment is so disproportionately valuable that any employee they could afford to hire.

Patrick and 

[01:47:29] Andrew Faris: I have already talked about like weekly coaching call with Taylor. 

[01:47:31] Taylor Holiday: It's like, so, so I, I now play that out on a larger marketing scale and if the same principle kinda becomes true. 

[01:47:37] Andrew Faris: Yeah. Um, does manual bidding at scale work and for creative testing people all say it doesn't, uh, do you guys still run manual bids for everybody at scale?

[01:47:46] Taylor Holiday: Um, I have, uh, I am no longer responsible for defining the paid media strategy of CTC. Nice. Um, and there are all sorts of different cases where we are working with the customers to determine the best strategy to accomplish their business goals. Great. 

[01:47:59] Andrew Faris: Um. How many hours a week do you have to work to get a great business outcome?

MayT tab says you have to work a bajillion hours. Yeah. He's never met anybody who works less. Uh, other people I know want to work less than that. Other people I know are Andrew Ferris. That's who I'm talking about. 

[01:48:13] Taylor Holiday: I have no idea what, how many hours I've worked. Um, I do know you 

[01:48:18] Andrew Faris: have some idea. What about per week on average?

You have an idea? 

[01:48:21] Taylor Holiday: Ballpark it. Right now? My time in the office? No. What do you mean then? Because this is the problem is that you and I Marco polo each other at nine 30 at night while I'm sitting in my hot tub. Am I working? No. Okay. So what I'll say is that my mind is captured by the thing constantly.

[01:48:35] Andrew Faris: Yeah. 

[01:48:35] Taylor Holiday: Endlessly. 

[01:48:36] Andrew Faris: Yeah. 

[01:48:36] Taylor Holiday: My time in the office is less, is like 35 hours a week. Yeah. 

[01:48:39] Andrew Faris: Great. Um, any business books you've read along the way that particularly helped? 

[01:48:46] Taylor Holiday: Uh, the Carrot Seed. 

[01:48:48] Andrew Faris: Oh, interesting. 

[01:48:49] Taylor Holiday: Really favorite business book. Yeah. Great. Why? Uh, because I think it just encapsulates the journey best in simplest form.

[01:48:55] Andrew Faris: It's a kid's book, right? Yep. Yeah. Great. Um. Is AI going to kill agencies? No, you just said this a little bit, but yeah. 

[01:49:02] Taylor Holiday: Technological innovation drives demand for expertise, not suppresses it because, uh, brands move slow to adoption of new technology. 

[01:49:10] Andrew Faris: Baseball has turned up its viewership. Uh, all Star Game was the highest rated, uh, game I think in a long time.

Uh, everybody's talking about baseball dying for a while. Why'd that happen? 

[01:49:22] Taylor Holiday: That's a great question. I don't know the answer. 

[01:49:23] Andrew Faris: Do you know why Ani? 

[01:49:26] Taylor Holiday: Yeah. Maybe. Yeah. 

[01:49:27] Andrew Faris: Famous 

[01:49:27] Taylor Holiday: people. 

[01:49:28] Andrew Faris: Yeah. Might be. Um, I 

[01:49:30] Taylor Holiday: hadn't seen that data. That's cool. 

[01:49:31] Andrew Faris: Yeah. Yeah. It's doing great. Baseball's doing great World Series with daughter's Yankees, but it was the highest rate of World Series in a long time last year too.

So, um, at what age should you start methodically coaching your kids in sports? I think maybe 

[01:49:43] Taylor Holiday: you should never coach your kids in sports. 

[01:49:45] Andrew Faris: Interesting. 

[01:49:45] Taylor Holiday: I think, but again, this goes back to the in-house versus agency debate. The question is, can you find a great coach? 

[01:49:49] Andrew Faris: Yeah. 

[01:49:50] Taylor Holiday: I think you should give your kids the best available coach you can find.

Okay. And if it's you, then you should do it. But you're second best to a better, uh, someone. 

[01:49:57] Andrew Faris: You, you're probably not the best coach you can find. 

[01:49:58] Taylor Holiday: I think. I think, yeah. If you could find a better coach, you, you should. 

[01:50:01] Andrew Faris: Okay. Um, what about at what age though? Like, I mean, at what age should you start doing that kind of coaching?

[01:50:08] Taylor Holiday: Man, this is a great question. 

[01:50:09] Andrew Faris: I actually, I have a 3-year-old and a 

[01:50:10] Taylor Holiday: 5-year-old. Should I be putting 'em through serious coaching now? I think. I think so. 

[01:50:14] Andrew Faris: Okay. 

[01:50:14] Taylor Holiday: Yeah, if you want. Well, it depends. Do you want them to be a professional athlete? Don't care. Well, then you gotta decide, because I think if you want them to be elite, like the skills that youth sports kids have is incredible.

Yeah. Incredible. Yeah. And it is really hard to compete. Yeah. If you don't deploy massive resource and time into your child at an elite level, it's different than when I was a kid, I think. 

[01:50:34] Andrew Faris: Are you actively trying to reduce your screen time in life? No, I don't care. 

[01:50:38] Taylor Holiday: I want to absorb my screen. I want to be a permanent, perpetual view in my array of my eyeballs.

I'm like a transhumanist a little bit like, yeah. It's fairly so, yeah. Yeah. Like I just, I just think it's an inevitable place that we're heading. I think my average time on my phone is like 12 and a half hours a day. That's a lot. Like, so Great. Yeah. It's just an extension of me at this point. 

[01:50:57] Andrew Faris: Okay. Um, okay.

Very last question because Neuralink is very last question. You can speak to this as much as you want. Yeah. Sh shut up. Okay. Ready? You built and sold, uh, or entered a partnership, you know what I mean? I know it's hot in here. You built and sold CTC. Yep. And, uh, that was a long journey. Yep. Uh, you have had a massive financial transaction.

Yep. I don't think that's gonna be shocking to anybody. How does it feel? 

[01:51:25] Taylor Holiday: I feel relief 

[01:51:27] Andrew Faris: just because you got there. 

[01:51:29] Taylor Holiday: I think one of the things I've realized is that, and I think I shared with with you, I think you're forcing me into a question we've talked about, but, 

[01:51:34] Andrew Faris: um, yeah. But, but that was like a week ago.

Yeah. I mean, this, this is close enough to it. It could have changed completely 

[01:51:39] Taylor Holiday: a week ago. No, I think, I think I always ex, like I had expectation of myself, had an externalized expectation that I should do this. And so when I got there, I felt very little joy. I felt massive relief. And so I feel light. 

[01:51:51] Andrew Faris: Huh?

You feel light. Yeah. That's a really good word. Yeah. That's awesome. 

[01:51:55] Taylor Holiday: I feel like you just can't, like, like I, I'm a made man, like you can't take something from me. 

[01:51:58] Andrew Faris: Yeah. 

[01:51:59] Taylor Holiday: Now as before it would've been like, like I never made it to the big leagues. 

[01:52:02] Andrew Faris: Yeah. 

[01:52:03] Taylor Holiday: When people talk about my professional athletics career, I kind of been embarrassed.

[01:52:05] Andrew Faris: Yeah. 

[01:52:06] Taylor Holiday: Because it's like, 

[01:52:07] Andrew Faris: I didn't, Staten Island Yankees isn't that good 

[01:52:09] Taylor Holiday: and I, my minor league that suck, like, and I know they're publicly available and like 

[01:52:14] Andrew Faris: fangraphs.com that Yeah. You could, you could 

[01:52:16] Taylor Holiday: look it up. And so all it says DM me if you need help interpreting the data, all you get to go look up is that I failed.

Yeah. You know, like I didn't make it. Yeah. And so it feels kind of sad. Yeah. I don't know. Um, and but, but now CTC isn't, isn't minor league level professional baseball? Uh, no. It's the game at the level I tried to make it at. Okay. And so like okay. Alright. But maybe, probably somebody will make me feel that way.

'cause there's definitely better levels. 

[01:52:39] Andrew Faris: Yeah. But um. People a lot richer than you build a lot bigger businesses. Yeah, 

[01:52:43] Taylor Holiday: I, I posted a stat on LinkedIn about the likelihood, uh, the percentage of little leaguers that make it to the MLB versus the percentage of transactions that occur over eight figures.

They're actually very comparable Ah, in terms of the likelihood of success. 

[01:52:54] Andrew Faris: That's cool. That's cool. 

[01:52:55] Taylor Holiday: Um, so yeah, 

[01:52:57] Andrew Faris: you, uh, are a great friend and have had huge impact on my life. Yeah. Yeah. And I am, uh, I'm really happy for you. Congratulations. 

[01:53:05] Taylor Holiday: Yeah. You're next. 

[01:53:06] Andrew Faris: We'll see. I'm hopefully gonna sell it to the new platform equity, private equity owned thing at called CC if, 

[01:53:12] Taylor Holiday: if, if you want to Yeah.

And you're interested in a couple million bucks, 

[01:53:15] Andrew Faris: we could work something out. 

[01:53:16] Taylor Holiday: We could do that over the next episode. That would be really fun. Yeah. We work out on an equity agreement on this and may like, especially if you can solve creative 'cause like Lord knows you, you think you can. So are you still, do you still believe that by the way?

Where a lot of my resources are going right now? Yeah, I know. We'll find out. I dunno. 

[01:53:31] Andrew Faris: I have, I maybe. Thanks Taylor. Thanks man. See you.