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In this episode of the eCommerce Playbook Podcast, we've convened a panel of experts from the ecommerce industry to dive into one of the most debated topics today: SaaS pricing. 

Today's discussion features insights from Sean Frank of Ridge, and Tomer Tagrin of Yotpo, with moderation by Eric Dyck from DTC. This episode promises to offer an in-depth exploration of the strategies, challenges, and innovations shaping SaaS pricing in ecommerce. 

Tune in for a riveting conversation filled with expert analyses and real-world perspectives. Join us for an episode packed with valuable takeaways and straight talk from some of the top minds in the business.

Show Notes:

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All right, this is an emergency intro to a surprise podcast. I am at the Dallas Fort Worth airport on the way to Charleston, South Carolina, and you're going to hear today the SaaS pricing debate episode featuring myself, Tomer Tegrin, the CEO of Yapo, and Sean Frank. This CEO of Ridge, moderated by Robin from the OPPO team and Eric Dick from DTC newsletter.

So it's a great conversation. You're not going to want to miss it. It gets spicy. There's a lot of people mentioned. I want you to notice just who's saying what? Keep my name clean in these streets because I don't really have a dog in this fight, but it was awesome. And I actually appreciated the candor from both sides.

Announcements, boarding. Enjoy the episode.

 Well, what's up everyone? Happy Friday. I'm gonna kick things off, so I'm Robin. The unofficial host of this unofficial production that unexpectedly came to life thanks to the D2C Twitterati. How did we get here? So a few weeks ago I randomly tweeted that it would be very entertaining to see a live debate between a brand operator agency operator, staff operator, on a controversial D2C Twitter topic.

Keep in mind, I'm new to Twitter, I have like a hundred followers, no one knows who I am, but the concept itself was actually quite popular. Not shockingly, the controversial topic of choice was fast pricing. So Tomer was the first brave volunteer, Taylor followed shortly after. Poor Sean became the victim of this exercise out of his own will, but chose it by popular vote.

So Sean, appreciate you being a man of people. Thank you for your services. But I got to say, we have an epic lineup. I really don't think there's actually a better group to represent each point of view on SaaS pricing than this Motley crew. The quick round of intros, we have Sean Frank, CEO of Ridge.

He does a thing or two about wallets. Some may say he's the vigilante of all vigilantes, representing Brandside on Twitter through outrageous tweets that are actually pretty funny but of course the occasional sass takedown. We have Taylor Holliday, CEO of Comic Strike Collective, founder of StatList, congrats by the way.

He has a podcast, you seem to do a bit of everything. If you don't know Taylor, you're living under a rock. He's the top voice in all things growth marketing, and maybe the only meta defender on Twitter. And then we have Tomer Tagarin, CEO of Yappo, aka longtime public enemy number one on Twitter when it comes to SaaS pricing.

And the only reason I can say that is because I work at Yappo full transparency. So I've seen this go through the ringer. But today is not going to be Yappo focused, which is why we have the amazing Eric, aka D2C Daddy. Of DTC Newsletter and Podcast who's gonna be our moderator today. And just FYI, for all of you and anyone tuning in, outside of giving Eric like a few questions and topics to talk about, there's been literally no prep, no hidden agenda.

I don't think any of us knows how this is gonna go, including myself. I'm personally excited. I wanna watch Tomer get roasted. Sean, I have no clue what's gonna come out of your mouth. Taylor, you might have to hold them both back. Eric, you just gotta stir the pot. Thanks but seriously, I really do think there is a lot of perspective to learn from one another from these industry vets.

So let's have some fun. We're going to rock. And before I hand it off to Eric, I'm going to kick it off with a few of Sean's greatest hits. Yapo mean tweets edition. I have four. All right. Number one. January 12, 2022. Putting together a worst software tier list. Yopto is famously a shitty, scummy, no reason to use service.

I hear the same about ADP and bill. com. Who else? Number two. Yopto is a force of evil in the world. Okendo is a force of good. Number three, Attentive is making a play for most harmful Sass player in the space. Will they upset the number one seed, Yapo? And then finally, my favorite one, We switched to Okendo and they did it for us.

I recommend them or really anything else. I would rather turn off my website than use Yapo, lol. Man, you only found four, huh? I thought honestly, the other tweets on your tweets were even worse, but Sean, we'll let you, we'll let you provide some context on those. Yeah. It's, I was a Yopo customer for a long time and they tried to charge me, I think, 24, 000 a year for a review widget.

And maybe there was a point in time that was the going rate, but just like physical product companies have to. Make better products over time or do some sort of innovation to get people to actually buy and be worth value. And we've seen a lot of companies who can't do this, go out of business. I don't think Yopo has kept up with the times, right?

I mean, I haven't looked at the service in a while, but I have a friend, I won't name his brand, but he got an offer for 76, 000 a year to use Yopo, like two months ago. And this is a world where I don't even know if I recommend Okendo anymore. I still use Okendo, but I think judge. me or stamped is 15 a month and it's like, yeah, they collect and put reviews on your website.

That is the new going rate. And the beauty of software and technology is that it brings all things down to zero, right? It's a commoditation of resources and what software companies have to do is find a niche remote that lets them continue to charge premium prices. And I just don't think that really exists in an e commerce world where Shopify sets the going market rate, the most they'll charge you is 40, 000 a month.

So it's like, okay, compared to running my entire website, what value are you providing? It's why I'm very against the Clavios of the world and very against the NetSuites of the world, like software products that are just designed to extract value. So that's why you guys get a bad rap is that you're still sending over contracts for lots of money.

And years ago, I got pitched 2, 000 a month. They're like, Oh, well, there's AI. That actually will help drive sales for your reviews. And that is total bullshit. Like just putting the reviews on the website is what drives the value of reviews. So that is my, my negative take on the product. Maybe it's changed, but I haven't seen the offer for years.

It sounds like in the SaaS world, you either die a hero or live, live long enough to see yourself become the villain. Tomer how would you respond to, to some of these the tweets and then the follow up? So first I think Sean is right, like in general, and by, by the way, send me your friend. 'cause I would be shocked if we offered someone on reviews like 76 grand if they're not like Fashion Nova or I don't know who is your friend.

But like regardless of that, I think it's right. But I think, like, and this is maybe the biggest message of what's happening, is what is the source of all evil, if you want? Like why? Sean said we are like the force of evil and say is that we are the first one to do like the mistake that everyone is doing.

Like the root cause is that e commerce Shopify ecosystem is a small TAM. Meaning all of the vendors, I mean, like the vendor that not the judge me and the looks, as I actually called them, like indie developers. I don't think like judge me, Sean, like, and like over time can be that solution, maybe just in reviews, but that the rest of the categories, like Like we have in loyalty or subscription or email or an SMS, like it's a problem.

Why? Cause the time is small. You have around like 15, 20, 000 brands that everyone is going after. That means CAC is really expensive. Like the customer acquisition costs for a SaaS vendor on Shopify is expensive. Second, the buyer are sophisticated like Sean. So they want good product, good UX, good service.

They want like a great price and they're right that it's becoming commodities. So that means. You need to raise money from VCs. When you look at all of the top players on the Shopify ecosystem, what have one thing in common, all of them raised money when they served the top 15, 000 brands, I mean. Now there's a problem in raising VC money.

Like you need to show some kind of growth. So what happened when you ran out of TAM? Cause all of the players are single category players. What happened to Yotpo in 2000, probably 15, 16, you raised prices. And we expanded to other categories. So as Sean said, we didn't innovate it enough in reviews. And we said, one day we'll have enough product.

We'll have like enough scale. So, and the day has come by the way, Sean, you should check it out. Like we really changed like 18 months ago, but that's not the point. I think what's happened to whatever Klaviyo. They did amazingly well. They ran out of time. Guess what happened? The increased prices, same thing will happen with all the single category players, and we took on ourself around in 2016, our way to solve it.

It was okay, let's expand to multiple categories and get some leverage from the platform, from marketing, from GNA, so we can actually take down prices. Klaviyo, by the way, after Shopify, I think it's like probably the best company in terms of SaaS execution, they took a different decision. They said, we are stepping outside of Shopify.

So now that's why you see Klaviyo for restaurants, Klaviyo for wellness, Klaviyo for travel. But when you think, if you play long enough, any single category player. Will be the villain because they ran out of time and we are going to actually accelerate that now This is why we launched whatever subscription very very cheaply email very very cheap Why because we can afford it now because we spend a lot of time money and building the capability that will help us Leverage that but I think what's important to really understand is that the source of all evil is the time and maybe the let's call It the inexperience of SAS founders If you want to combining with that.

And I think we were the first villain and that's made a mistake. We, we now, let's call it trying very hard to, to change that perspection in everything that we're doing. But at the essence, Sean is right. I just think it's inevitable in a single category world where every category have a small time and all of the players today from any category you look at raised money.

So the question is what, how that's going to play out in the next five years. Yeah. It's a time problem and you can't win a time. Like I, I think building software for e commerce merchants is it's a trap. Like people shouldn't do it. People shouldn't fall for it because you end up getting thousands and thousands of the most cutthroat like margin hungry businesses, right?

Cause selling physical goods on the internet is a race to the bottom a lot of the time. And unless you're. Generating net demand for these people. There's almost no tolerance for expenses. And a hundred percent what Clavio or attentive or tap cart, or you guys do is not generate net demand, right? It's servicing customers, right?

There's no acquisition flywheel. Maybe you could argue loyalty is different, but I've never seen a loyalty program, not just fall into fraud. Maybe it can be done, but I've never seen it happen. And so because you're not generating net CAC demand, it's just, it's a race to the bottom commodity service with a bunch of indie developers.

I mean, I mean, if anything, I have a lot of compassion for software companies right now, because. Every software company I think is fucked and every software company selling to small e commerce businesses is super, super fucked because those, the, the clients you're going after are basically becoming extinct, right?

If your target customer is a 5 million or 10 million a year company, well, it's been an extinction event for five years. It gets harder every single year. So, I mean the TLDR is, I mean, Moving up markets, whatever one does, right? Everyone wants to be hub spot. Everyone wants to have this multi prong approach going into every little part of the marketing funnel, because marketing is this massive, massive ecosystem where there's add dollars and flywheels and CRMs and all this type of shit.

But the number of customers you can serve that can afford 10, 000 a month on the Shopify ecosystem is literally 15, 000 people, right? Like that is, that is everyone Clavio has. And they're talking about adding. A thousand people a year. It's like, yeah, I can email those people. There's not very many of us.

Right? Like it's a very, very small ecosystem. And because venture capital is left, it's a very unprofessional ecosystem. You have people who are willing to break legs over thousands of dollars, right? So, and the TLDR is, dude, it sucks to be apo, man. , I, I don't know what I would, I actually think, I actually think, no.

I actually think if, because we spend so much time, so by the way, I con what you said, now we understood. It took us many years to understand that. But once we understood that, what, what did we do? We took advantage of the fact that one thing we did have is raising cash. So we build the platform. So now building another product on Shopify is much cheaper for us.

Marketing it, it's much cheaper for us, servicing it, it's cheaper for us than a single category company. So it's very, very hard to pull it off, but we are super committed to the Shopify ecosystem because of it, because that's our way, the more categories we have, the more leverage we have. So you're going to see us actually doing that.

I agree with you as a single category, you don't have a choice, you're fucked. Like you really are, what we are trying to do. I don't know if it's going to work or not. We've seen like in five to seven years, but it's actually having like enough leverage from. Like, I'll maybe share with you like a story that's like for me was an eye opening in Q1 in Yotpo this year, the last quarter, we did like a marketing overview of Q1.

And I don't know if you saw, we did like a frown campaign that was basically like a brand awareness campaign about the minute that you send the wrong SMS to the wrong person. I even made Taylor his own frown face. We did like above a lot of noise of it. And because of the frown campaign, our loyalty.

Email subscription and review sales went up dramatically. So our CAC, because of SMS went down in whatever loyalty, as an example, when you get some leverage, when the time is small, Sean, that's like, we basically saying, okay, we're going to play on it. It's tough. You need a lot of like operational efficiency and the bar, like it's tough.

Like, but if someone can pull it off, it's only the company that can actually expand the time through those leverages. And then offer actually a cheaper than any single category. It just takes a lot of time together. But I completely agree with you that it's, it's horrible to be like a single category going after those 15, 000 merchants.

But I'm curious, what do you think will happen? Let's say five years from today. How do you imagine, like, cause, cause I'll give you an example. Let's take in whatever, in a cut, take loyalty, take subscription, take email, take us any category besides reviews. Cause reviews is relatively easy to build the basics, but the rest, like you have to use a vendor that gives you some level of service, some product function.

And that costs money. Like in the developers in the apps cannot provide it, right? My honest take about the ecosystem is that everything, so there's 15, 000 merchants that matter. I think that number goes down slightly. I think it gets down to 10, 000 merchants that matter. I think the biggest players get bigger and they'll just be some sort of consolidation or fall off so that there'll be bigger merchants that matter and there'll be less of them.

So let's say there's the 15, 000 number becomes 10, 000 and then Shopify does every service. Because Shopify is overvalued for what they are right now, currently trading at 80 billion. And they're a payment processing company with SAS built in. It's basically it's performance gated payment processing, and they will just do everything right.

They'll, they'll do, they'll just hire or buy or roll out. Every single function that currently is the best in class in the app store, right? Or their best in class partners. Like my, my, my take on that, by the way, I think it's going to be now it's 15. I think it's going to increase because they're gonna, Shopify is going to go up market and just add more logos to the Shopify ecosystem.

And some will die. So I'm not sure it's going to go to 10, 000. I, our analysis, by the way, show that it will grow, but not very, very fast. And second, I think Shopify currently getting. More value because of the ecosystem. Like actually if Shopify will take the revenue out of the ecosystem, even more, their enterprise value will go down today, the market gives them a premium a lot because of the ecosystem.

So I think it's like counter. counterintuitive for them to do that. They would probably go to other places where they have more time, but competing with the ecosystem, just like a small price for them to do that. It doesn't make sense. They will actually be valued less if they get like additional 500 million of revenue that they can take from.

Yeah, it just depends on what the internal strategy is. I bet if you ask Harley right now, he will agree with you. But like what, what happens when the stock price turns? Right. And they're like, no, we actually want to start seeing revenue growth out of this. Right. Like revenue growth. That's not payment processing related.

They might be a, a, a rush to be like, okay, we have email now. Right. They tried this with fulfillment. Right. That was a disaster, but they're way. The much larger 10. Yeah. And it didn't work, but, but their core process is software, right? Like they could very well just be like, Hey, we'll do reviews and it's 200 a month.

And actually if you want to use a different review app, they're deleted, right? Like you currently can use different payment processing and they penalize you for it. Why wouldn't they do that with email or reviews? I'm like the prophecy is giving, like, I'm, I'm not like take a lot of salt of what I say.

Like Shopify is our second largest investor. So I try to spend a lot of time with like the Shopify leaders. And so I'll tell you what I know, at least very openly, or what I think very authentically is I actually think Shopify cares very much about payments. And if you try to compete with them on payments, good luck with that.

And, but the rest is just too small of an opportunity for them and a company with 5 billion on the balance sheet. And I think like, right, they're like smart as hell. I would go to like bigger opportunities that they can make money from. And I think in fulfillment, they learned that like fulfillment is not for a software company, but there are other places that they can go to from advertising to consumer, to giving you actually delete what Amazon has that they don't have is traffic, right?

The consumers. So there's like a bunch of stuff, but direction, I think Shopify will play differently. I don't think it's going to be like. They will take over, like, they will be also the ecosystem. I don't see it happening. Like they just deprecated the reviews product. They're like even like the apps they have are like very basic.

I don't know. I don't, I think it's like actually going to be value destruction for them. And from a. Maybe we can bring Jeff, the CFO of Shopify. I know him pretty well to also a conversation. He's like super sharp, dude, super sharp. Super round two, let's bring him in. But Taylor, what do you think? You straddle everything here on the agency side.

You you're launched now into the SAS world yourself with statless. What's your take? I'm to be clear. I'm very intentionally not. So I actually think a lot of what Sean believes about the market is right. What I don't understand though, and I think this is my question is that what we're discussing here is like.

A question about the business viability of the pricing model, which I think is a great conversation with valid points. I don't understand the perspective that it's evil. And so, so I think, I think my question about this is like, I think there's a compelling conversation with valid points, but what I don't understand is the disdain for their business model, that if it's going to be sort of capitalism the way, why do, who cares?

Like what, where's the part where it becomes evil? Like, that's the part I guess I don't understand. Yeah. No, it's a great, it's a great question. Right. And actually, I mean, I don't think it's evil. Right. Like, I just want to clarify. There are, I, I, they'll never accuse Yapo of being evil. There are players in the space who I do think are evil.

Right. I think a good example. What is that? When does that happen? Yeah. I think it's deceptive. Revenue capture is actually evil. Right. And I would point to gorgeous and I would point to tap cart as being two examples of they tried to roll at deceptive revenue capture. Right. So tap cart rolled out.

They're like, yeah, we're going to take one and a half percent of GMB in our app. Just like Shopify does. That's bullshit. That is, that is purely deceptive because on the surface that sounds correct, but it isn't because. Shopify isn't capturing percentage of GMV. They're doing payment processing, right?

Which is the same thing, but there's a value add service that that's always going to happen. Even if you were off of Shopify and you were running your own payment processing, there's no way to get around that, that charge, right? That is just a tax Visa has built into the entire ecosystem, right? Of the world.

Now. Tab car positioning like that is evil. I think that is deceptive revenue capture and gorgeous being like, yeah, we're going to, we have this AI thing and we're going to charge per ticket and. And then the second point of this is any time that they try to position it as we're driving a percentage of revenue or like we're, we're helping you expand this pie when it isn't showing net new people, net new things, I've considered that deceptive and evil, just charging a lot for your product.

I don't think is evil. It is just not what I want. Right. Well, so, okay. Thank you. Okay. That's, that's good. I think that's an important distinction because I understand that it's not what we want and I, But even to this point of like deceptive marketing, let's apply this to any industry. Doesn't that just fail to work?

And that's the thing that solves it. Like, I guess, what, what are we trying to, this is like everything you're describing about the free market movement of software towards zero is a function of the way our Western society works from a capitalistic perspective. Tap cart won't work because it doesn't make people money.

And eventually someone's going to be like that line item. No, thank you anymore. See you later. And they're going to change, right? Right. Well, it only works. The whole, some people will fall for it unless you're, unless the people who know better are very loud about it. And like the, the, the equivalent would be.

Pyramid schemes. Everyone in high school hits you up trying to sell you fucking vitamins or whatever. And you have to, you have to educate somebody that like, no, that's a pyramid scheme. Don't fall for that. You're not an entrepreneur. It's not your own business, right? Tap card is the SAS version of that.

When they're trying to deceive you and take percentages of revenue. Now, if they were just like, Hey, it's an app and we're going to build your app. You know, we're going to charge a monthly fee for that. No one should be trying to take percentages of the pie, right? When they're not actually driving net new revenue to your business.

But because of this perverted ecosystem where you raise money and you have to show growth and the TAM is limited, which, you know, Tomer talked about the only thing they have to do is be like, okay, how do we steal as much money from our customers as possible so that we can get our next round of funding?

I have a great question for you, Sean. Great question. Currently happening at Yotpo. True story. So Yotpo, we're not burning a lot of money. We have a lot of money. We don't need to raise more money. We actually now very for like in the last 18 months, maybe for the first time ever, truly infinite mindset, trying to apply it to Yotpo.

We have a loyalty product where the value proposition, you just think everything go to scam. If you have time, I would love to show you a loyalty program that actually works. They don't drive new customers though. They don't do that. They do improve retention though. Now, the question is in loyalty. The pricing model, currently it's pure SaaS, a lot of brands coming to us and tell me, Hey, why it's per SaaS?

Can I pay percentage of redeem points? Can I charge per loyalty member? Like actually a lot of brands and we have an internal debate on should we change? The pricing model of loyalty to a more, let's call it consumption based, whatever the metric you want to consume in loyalty is, and we're not sure. So I'm just curious, like, cause certain customers really prefer it saying, no, I don't want you to charge me upfront.

If you bring me value, then I'm willing to pay for that value. Yeah. And if, if. If there's an option to pick between the two, or if there's a very clear and concise way of how it's calculated then, I mean, there's ways to do things. It's about transparency. I mean, it's more about transparency than the model itself.

That's what you're basically saying. Yeah. And if, if two consenting businesses want to do whatever, right. As long as they both understand each side of it, that's fine. But when things are positioned in a way that like is intentionally deceiving, like deceive, that is, that is evil. Well, now you're getting to intent, though.

I think this is where my challenge for you, Sean, is that, like, I don't, I think you're representing the character of people in ways that I find to be inconsistent with the character of those people. So I'll give you an example where this comes up a lot, right, is on revenue based financing. Okay, right?

Where people, there's a lot of people that think that that is pure deception. That the idea that you present your APR, or you present the interest rate on a fixed rate loan over a period of time without presenting the APY. Is intended to obfuscate reality. And, like, that's an opinion that I think is you can have it, whatever.

I think the idea that the person selling that is doing so for the sake of harming people is like a bridge that I think you would require that you have some connection to the intent of the human in a way that's like really hard. To pull off. Yeah, well, okay. That has a real world parallel outside of sass paycheck lending.

Okay. If you go to a fucking pawn shop, there's like paycheck lenders who will loan against your paycheck and give you money. And that is, that is taking advantage of people who do not know better that like, or don't have any other access to capital. Right. And. In a lot of ways, e commerce merchants are that person at the pawn shop where even if, even if there's, there's suitcases, they don't know how expensive it is or how bad it is, or they don't have any other option.

And either one is. One of those is fine, right? Like if you don't have any other options, it's like, this is the only way to get money and you need money to buy inventory. It's like, that is the reality of the world. You're too risky to get lent lent to, but people, I would wish more people would be eyes wide open.

And if I have to be boombastic on the internet to get people to understand that, like how things are happening, that's a net positive to the world. So I get it. You're moving the Overton window. And I think I do this a lot with. content to, which is you speak in hyperbole for the sake of moving the direction and conversation a little bit.

And I think that's, I think that's fair. I just think that in many of these cases. That one, there's, there's two things that are interesting. One is you have this really utilitarian view of pricing for a guy who cares about brand as much as you do. And the reality is that a price of what you sell is not purely utilitarian.

It's not, there's all sorts of reasons why people buy things and being on Shopify for people and running an e commerce business. And I could like across millions of people, they are. The idea that entrepreneurs are logically conscious that the thing that they're doing is maximizing every day. The decision to optimize return on investment is not true.

That is not how people behave at all. They run businesses for all sorts of reasons to tell my friends about it, to look cool in some circle, to have some experience amongst peers. Like it's just not that utilitarian. And. So I think that these things, these buying decisions for customers at various prices happen for all sorts of reasons.

And so I think there's room for people to price in accordance with whatever it is that somebody wants and allow the market to make that decision without asserting that they're an idiot, which is essentially what we're saying is that they're being deceived. They're incapable of seeing for themselves, and we must therefore provide them.

A view of the world that, that is your truth, but it's like, there's, it's, it's wider than that. Right. Well, yeah, let's, let's, let's talk about the inverse of this, which is where, what are some softwares that are, that I've paid a lot of money for and delivered value at the time. So. And this is actually, I think, a good, a good fable to learn from, because I think it could show where Yotpo was and maybe where Yotput could go, right?

It's the risk of that. Today, where Yotpo is today, Yotput changed. I'm going to fly to your apartment and I'm going to show you some stuff. Yeah. So I used to use a service called Wunderkin. Right. And it was an email matching tool and it's incredibly expensive. I think I was paying either 000 a month.

Right. So this is more than I was paying for Clavio. I was paying for Wunderkin. Right. And what Wunderkin did was people would come to your website. It would have better matching. You would send more emails and it would drive incremental revenue. And we tested a ton of different ways and it did drive incremental revenue.

Right. There was some amount of lost attribution because you couldn't match up emails or whatever. So we had to pay for that. I am not paying for that anymore because the technology has caught up, right? Their, their technology lead has been blown and they couldn't launch anything else, right? They wasted their time.

I don't know, doing whatever. They raised a bunch of money. They had internal strife. CEOs left the whole fucking thing. And now. That service, they send me a renewal and they're like, yeah, so it's going to be 15, 000 a month this for the next year. And I'm like, okay, no, because there's three new companies.

And I can't remember who I'm going with. It's not privy, but it's some fucking amped or something does the exact same thing. And it's like 1, 000 a month. And it's like, that, that happens all the time. That's the pace of change we're talking about. So in a moment in time, I paid a fuck ton of money for the software and it delivered value.

And I was happy. I recommended it to people, but now the technology has changed. The landscape's changed. And I think that's happened to every software provider in this ecosystem because it is, it just like we have Timu and TikTok shop knocking off products. There's the same thing happened in software, probably more aggressively.

And for Sean, you to call it out like that, you actually need to maybe to move the Overton window is Taylor says it wasn't just your tweets, I'm sure, but you kind of, but the Overton window did move for Yopo in that you guys have changed a bunch of stuff. Like I remember when Eli was brought in, it felt like Shane Gillis getting hired by Bud Light a little bit.

Like we're going to, we got to bring in, we got to rehab our image a little bit. So talk a little bit about like what the epiphany was and then what actually changed. Oh man. I don't know how deep you want me to go here, but it was a very, very deep for me. Interesting. How you. Again, I don't know if someone will watch it, if we release it eventually, but I've been through like some rough time, been through like cancer two times.

And in the second time I had like cancer, I've been through like a bone marrow transplant and that's like the nightmare. Like the most, it's a fancy word for the most aggressive, aggressive chemo known to men. And when I was doing that, my mother, I remember asking me like, do you want to get back to work?

Like is work, is Yotpo killing you in a way? And I took like a lot of time thinking about, am I, do I want to come back and how I want to come back? And eventually I decided I very much want to come back, but I want to be like a much longer term company. And I think. I was very short term and, and we say, okay, what we need to do, we need to build better products, better experience because the buyer persona is shown and he's a sophisticated internet.

So we focus much more on experience. Second, you need to have like a great pricing. So we went to go down on pricing and reviews launched email and subscription, the cheapest solution SMS. Now we're the cheapest loyalty. We're getting there. We also going to take down prices. Third, you need to be like a much better brand.

So this was Eli and a bunch of other stuff, by the way, there's a, like, actually a lot of changes happening. And I can tell you the last change that's going to happen now is the service because the CSMs, we actually going to make like a huge change in like our service model. And I think if we'll stand hold by these four principles of experience.

Price, service, brand, and a platform that's number five, then we can crack what Sean is saying that we're going to be the one that's going to take everything to zero per category, but the combine, we're going to be the only one that can make it work. So the, the epiphany was actually very personal, very deep, and like very, very deep, and it manifested into a lot of changes in your point in the true DNA.

Of who we are. And yes, Yodpah was like a very aggressive company. Like, the fact that Sean said that, like, you got those things, it's just like dumb and trust me when you meet the people, you know, I'll share with you a very good story on Eli. After three weeks, I told him, that's it. You can go home. You did your job for the month.

So Eli after three weeks comes to me and tell me, tell me, you know, something really strange is happening. Every person I'm bringing from the outside to meet the Yodpah people is shocked how much the Yodpah people are nice. On the other hand, I keep hearing here in Yodpo that we're not good in marketing SMS.

No one knows that we have SMS. He told me it's not true. Even if you would selling ice cream, I don't want to buy ice cream from you. You are the most aggressive company in the world. Like we have a DNA problem. It's not a marketing problem. And I told him that was like a 10 million tip. Go home for a month now.

You did your thing. And we started changing our DNA. In a, in a very, and it's a very painful process, but we're going through that. And from that, we actually going to be a much better company in my eyes. You're describing brand people pay for Shopify in part. Cause they like Toby. Like that's like the idea that the tool is somehow so much better than everything else is like, sort of true, right?

It's part of it. But that's the case for any product. Like people buy software more like they buy consumer product than I think people realize. Like, and I can tell you the big, the present, like the present reality is like, we watched this happen with attribution software. Like, let's just use that as an example.

Attribution software has existed for decades. In all sorts of formats and form factors providing the same functional service that all the things that showed up did today, the difference was brand and marketing messaging relative to the present moment. And like that wasn't a utility function thing. It was just purely a function of brand network messaging more so than anything utilitarian.

Yeah. And. Let's okay for the Apple thing. Yeah. You guys just had a reputation of being just aggressive in the marketplace, right? Aggressive, aggressive sales. And that's why I have emails that are incredibly annoying from your guys sales rep when I was trying to leave. Right. And we talked about, I want to throw back to the, the, the deception piece being like, well, dude, our AI reviews are driving revenue.

It's like, objectively, we can all say that that's not true. I'm an engineer. And whoever said in 2000, I'm in a computer science grad and like, Yeah. Tech is actually my thing, I'm a geek, I really, please send me that email. Please try to find and send me that email. If that person's still in your pod, like, I'll be extremely shocked because, and I'll make sure they're not, because I completely with you.

Like anything that's like, not even dumb, just deceptive, I hate personally. And I think AI wasn't a thing even back then. Who can even say AI, there wasn't any LLM, TLM, you name it. Like there was nothing. So I'm completely with you. That was just like a seller that probably tried to hit his quota because we, we, I build like a too aggressive of a company and that's what's changing.

And that was, that was the flavor, right? It's the same problem I have with Klaviyo, where like the Klaviyo CRO thinks he's the fucking, like the, the best sales guy on earth. Right. And I mean, I think a lot of yappos. Bad brand image is just because like, it just becomes a whipping brand for former brand image.

It's, I mean, the, the current perception is just an easy thing to make jokes about on the internet. Right. And I'm sure that's what a lot of my tweets were. I sent you guys a screenshot of me. Taylor called me out being very kind to loop, loop returns. I think loop returns is going through the same thing right now.

And I'm currently a loop returns customer. And I told them, Hey, people hate you and people are going to start hating you because you're incredibly expensive and you don't do anything. They don't have a choice. Yeah. And trying to raise prices. And now I'm like, yeah, I'm going to go to return, go, or I'm going to go to aftership and go to all these other people because loop had a tech advantage at the very beginning and they've totally wasted it because what they haven't launched any new products, wasted it.

They have a term problem, nothing that they would launch that you can't innovate. Always like think about the best companies in the world. Like even. Right. Google didn't launch anything new that they built for, I don't know, ages, like maybe Amazon and Microsoft are the outliers, but the rest are like, they can't, what loop can innovate that will make you.

Pay so much. Everything is being commoditized. Like you said, it's like inevitable. But there's a whole layer of software that people are paying a lot of money for right now. And it, I think that this whole thing is just missing what the market demand was. I think the actual narrative of these change was driven by a zero interest rate environment where everything was grow, grow, grow, grow, grow.

Revenue was the objective to now suddenly. Profit's the objective. Like Sean, it's not true that entrepreneurs cared a lot about costs until like 20 minutes ago. Like, like that's the truth. And so now all of a sudden software has to return value and now all of a sudden the price matters and now all of a sudden all these things are true because everyone's broke because they can't access cash.

And if you can't access cash, you have to produce your own cash, which is a really freaking high bar of a problem. And so everything's under immense scrutiny, but they're like house and measured are selling it. Incrementality testing for 10, 000 a month with a one year minimum contract, no negotiating.

It's insanity, but I'm paying for house. I know you are. And that, but I think that is. It's the same thing that eight months from now we'll all laugh about because it's the same commoditization of the function, but the present problem and the present value gets solved by the thing in the market in the moment.

You win in that period of time, then the market changes and you have a chance to change. But I think loop didn't change. Maybe Yoppo missed it, but you can innovate. There are software that people are paying for today. It's true. Taylor, and this is, this is Wunderkin. I was paying for Wunderkin. Now I'm not.

Eventually the market commoditizes your service. That's right. That's And if I was loop or if I was Yopo and like, the thing is I'm not better than you guys, I would charge more for my software. I'd be more aggressive. Like it's, it's like if capitalism through and through, I would fuck it. I would try to sell software for millions of dollars.

Like if I had a software company, that's what I would try to do. The difference is. If I was at Loop or if I was at Yapo, I would be like, okay, what are people paying for house incrementality? I'm building that tomorrow. Exactly. I'm selling that to everybody. That's what we're doing, man. We launched loyalty, SMS, email, subscriptions.

And I can tell you in the next few years, we're going to launch more categories. It just takes time to build good products. It doesn't happen in like a quarter. If you really want to build a good product. Yeah. And the, the shift that Taylor's talking about is the shift away from ops and ops simplicity, or even CX simplicity and getting to what is the biggest line item people pay for it's marketing dollars.

And how do we optimize marketing dollars? Because if 10 percent more effective, I will give you 5 percent of that. And I will spend a hundred million dollars on marketing this year. So if you can make my a hundred million dollars feel like a hundred and ten, you can make 5 million. Right. And that's just the reality.

And that's why I endorse North beam for a long time and house and measured or Eminem, like all of them are trying to solve this big marketing expense challenge and making it slightly better. But those services too will be come out of exactly. Yes, they will. Yeah, for sure. This same thing will play out.

It's like the moment you watch all the hottest software, you look at be profit and find a loop and you know, Iris, like all the things that are good day software, like all these guys are solving a different stack of problem related to margin innovation to help people get back points of points on their margin to make marketing more efficient, to do better job with inventory planning, to, to, Reduce the dependence on outside capital.

When I purchase inventory, like that's the next wave of innovation relative to the present market need. And so that's all it is. The question is just can loop or Yopo or anybody else meet the market again in a way that allows them to continue to capture, but the advantage he has, and this is sort of the Reid Hoffman blitz scaling principle is you go spend all the venture dollars to get market lock in, to have access to all the customers for cheaper than ever, all your competitors.

And now you can go out, win on those new products with cheaper CAC, and you get to just bludgeon them to death. Cause they can pay more for a customer and they'll win. Yeah. And the advantage is one, not being public. Right. And then also just, I mean, Klaviyo is their only solution now is to try to raise, raise prices further.

Right. I left Klaviyo because I'm like, yeah, there's this insane. Yeah. Yeah. Add marketing services to like piss off the email marketers of the world. I would say though, and by the way, I just, on their defense, I'll say that like, They don't have a choice. They maxed out a TAM. Like, what can they do? Go outside of Ecom.

Go outside of Shopify. Increase pricing and take down service on Shopify. Like, they are 70 percent of the Shopify TAM. Like, it's unbelievable what they achieved. Really, Andrew and the team did, like, something unbelievable. But here we are now. They don't have a choice. You can't innovate. And that space, you just can't.

Yeah. And dude, if there's any takeaway from that, is there a 70 percent of the time and how tiny shitty of a business it is? I'm like, Oh God, I, you shouldn't build in Shopify. That's the, like literally. That's our opportunity. But that's what gets me excited. Cause if I can do that, or we can do that on multiple categories and get more leverage, you can be much more profitable.

That's, and it's tough. It's hard. I don't know if we can pull it off, but if we can, the price on the other side would be like enormous. Because we are the only one that can actually be sustainable and be Shopify committed forever, quote, unquote. And what do you mean small? Like it's a six billion dollar market cap.

I'll be that kind of small. Like what do you, what do you mean small? So it's a $6 billion market cap that I think will be eroded. Like I'm, I'm very publicly, I think Lao is a, is a bad buy, right? They got the $600 million in revenue and they have no, it depends how good they're gonna be outside of Shopify, if they're gonna kill it on restaurants and travel and like, if you believe that the team can replicate what they did on e-commerce in other verticals, it's not, if you don't think so, then you're right.

And there's a lot of, there's a lot of rich people between here and there that it's done. Like they won the game. Well, yeah. I mean, the founders did fabulous, right? I think, I think it was great, but the long dude, I mean, I don't know if we want to get into a Clavio breakdown if that's what this podcast ends up being, but no, okay.

They're going to, they're going to go after restaurants and travel like, like HubSpot and like Salesforce and like every other fucking CRM software. Their whole advantage was the lock in and focus on Shopify and they've maxed it out. And now the shocking thing is how shitty they are at SMS. Okay. They have horrible SMS.

I think it's a 10 percent attachment rate from the 15, 000 customers they care about. And that's, that's what's going to happen for the rest of whenever they try to go into travel or anything else, they're just going to fumble the bag like they just did. They, they had advantage of being very early in a growing market that isn't growing anymore.

So anyway, speaking of SMS, I want to ask one, did everyone see Moaz Ali's tweet the other day? He said SMS for e commerce. It's more important than email, act accordingly, unpopular opinion. I'm curious, what do you all think? Tomer, I know you have thoughts on SMS, but I think SMS will consolidate women from a very different angle, because, again, everything will be commoditized, and everything will be potatoes, potatos, like, there won't be a difference in products, in, per category, like, Yotpo SMS, PostScript SMS, Attentive SMS, Klaviyo SMS.

We'll probably be pretty much the same. I don't see it's like a massive difference in like choose the year, the quarter. And therefore the same trend, the mega trend is commoditization per category. And the only way is to consolidate as tech providers. And the advantage for the brands are they, they can choose until that happens.

And even when that happens, who they go to, but they, I don't know. I don't, I just don't think there's one truth or one channel. That's like the most, I don't believe it. A lot of brands have different situations and different circumstances. Yeah, I, I hard disagree that SMS is more important. It's just, I think it's, I think it's wrong.

Yeah, I don't, I, I don't, I don't understand the premise necessarily. I think all these communication channels are just like, it's like really simple to see the assignment of revenue by channel. Like it's the easiest data ever. Go ahead. Sorry. Sorry. Well, I was just gonna say, like, you can just break down the percentage of revenue by channel and SMS is not even close to email and that trend line are not intersecting anytime soon.

So I don't know what the timeframe that we're referencing there, but like, that's a pretty easy one to answer. It's a tough path for SAS, SAS providers, because it's like the only opportunities for them to. Break into new areas and to, to crack new TAM, but then you've got people that are focusing on that channel exclusively and they're built.

So is the answer then for these bigger companies to buy these other companies that have these unique, you know, these unique skill sets rather than trying to replicate them in areas that maybe they're not as strong in. Okay, well, let's let's talk about the extremes of the spectrum. So mid journey has 20 employees does billions of dollars and stays on top of the world of being cutting edge.

Right? So there are very small team. You can move very fast on the very small company. Lifetimely. I'm very I've talked. I've I'm a customer. I've been a customer for years. It's the best value in software out there. It's 100 or 200 a month. And it does all of your cohort analysis and everything. It's a Shopify app.

They've never raised prices. I think they sold, but liking just incredibly small and owns this one little niche. The third thing is you can have a very expensive software that does something that drives a lot of value, right? And I don't want to endorse fulfill like this fulfills probably seven to 10, 000 a month.

And it's an ERP. You need a fucking ERP and maybe it's one, but you can have an expensive software that drives a lot of value. The challenge is you have to stay ahead of whatever the mode is, right? Either through API connections or for features or driving actual dollars, right? If you, I would never be complaining about a software that actually made me money in some way, right?

But I haven't found one yet. I wish there was a free money software. I'm trying to think of one, but like the big challenge with something like Clavio is like, they talk about. Incrementality or, or, or, you know, abandoned carts or whatever. And we've been perverted to think that Clavio is doing that when it's not.

Facebook is doing that. And Clavio is just the, you know, someone stole the ball. Someone got to the other side of the court, someone shot it, and then someone got an alley oop and that is, that is Clavio at the very end. Right. So I guess they do get last points attribution, but like the value chain started when someone stole the ball.

And that is the Facebook. Analogy and all this. So anyway, aren't send lane and fulfill though, just like earlier stage, not yet having to be profitable. Like, is it, is it really any different than they just reset the cycle? Like, cause at some, at some point they have to make money and how do you think they're going to do it?

Same way everybody else tries to, like, and you're just going back to the early stage guy and saying they're better. And it's like, well, yeah. And then eventually I'll switch again. That's the thing is like, I have a tolerance of dollars spent and value created, and right now sin lane is 90 percent cheaper than Clavio.

So you should go there and fulfill as 70 percent cheaper than Netscape or Netsuite. So you should go there. But then if they ever try to raise prices, I'm not investors in either of those companies. So if they try to fucking raise prices, I'm just going to go to the, the next down version, the cycle restarts.

Right. Well, yeah, I mean, you have a, you have a podcast read where you beg Jimmy to take your money to invest in his company. I don't know if that's, if that's true that you would want to, but like, to me, like, I just look at these things and I go, Oh, early stage business on venture dollars. Okay. Willing to lose money while they try and take TAM, no feature distinction, no way to make money, unless it's like, we're going to arbitrage cheap labor that somebody else that I don't, it's just the same thing.

It's literally the same thing. Just earlier stage. 100%. 100%. So how is that viable? Why is that a good business? Why would you want to invest in that business? Oh, well, I think if you're talking about the economics of Sendlane, I think that they will take 30 percent of the market from Klaviyo. I'm willing to bet on that.

A big bet on that. Yeah. And I would, I would bet. Well, actually here, here's the real bet. I think Klaviyo loses. 70 percent of the Shopify ecosystem in the next two years because where they're going and then as soon as they realize that they're going to lose it, they're going to have to try to double down lower prices as a public company.

They can't. The whole thing is a fucking disaster. Maybe they get bought by Shopify. Maybe they get bought by HubSpot or some other roll up something like that, right? But If I'm, if I was a SAS builder right now and I'm looking at what are the companies that have the biggest risk that are trading on a premium, it is Clavio.

So if I was a postscript, I'd get into email. If I was with whatever Yapo is doing, like that is, that is a big pool of money that I have no idea why people pay so much for because it's all built on Twilio, right? Like it's, or SendGrid or whatever. Like it's one for everyone's just building UIs on top of that.

That's all the whole industry is. See, that's every piece of sass. It's just that, right? Turtles upon turtles upon turtles all the way down. Yeah, dude. Totally. It's a good thing. Twilio is about to, Twilio also has their own issues at the moment. So, we've seen examples of course, correction, Tomer, you're a great example of it.

I think of Alex Beller calling out attentive on Twitter and that, you know, I think that probably caused something. So is the answer here, Sean, you've got a shit post more towards Klaviyo, or are you saying that they are, because they're a public company, they're going to, there's going to be too hard for them to turn it around and be as responsive to the market as maybe Yopo and other companies have been able to.

Yeah, I don't think they can. I mean, look, they've, they've been posting good quarters. So this is literally just speculation, but I just don't see how they can keep price integrity in this new world. They haven't been able to attach SMS at any meaningful rate to anybody. There aren't new. They're getting better at it, by the way.

It's a good company. They're getting better at SMS. Yeah. I mean, hopefully, I mean, they went public with 10 percent attachment rate after SMS was a thing for five fucking years and attentive and postscript are both companies and apparently you guys are doing it. So it's a commoditation of service that I think is very, very obvious that they're betting our entire strategy on it.

On the commoditization of SaaS in Econ. But it's so our genes, like this is just a branding exercise. It's a sales and marketing and branding exercise. And whoever wins, that's what we're doing here. Like, what are we doing here? We're not changing the product of Yotpo being here, right? Like there, there's a whole element to who wins this market relative to the market's perception of those things.

And it has, So little to do with the function of the, no one actually has any fucking idea how these softwares work. They don't care. They don't attempt to know they aren't assessing it. Utility. It's like, my friend said, I like this, this is good. He's nice. He's bad. That's it. That's the logic for the decisions.

Yeah, dude. It's a great point. So. Like people don't like attentive and I actively get people to get off of attentive. I'm sure it's a great product, but they've been assholes. Like at every chance that they've been able to, someone wants to leave. And they're like, well, we're not going to give you your SMS list.

That is straight up asshole behavior. So I recommend postscript not investor in postscript, but that's who I use. And Alex, when he's been able to be an asshole, hasn't been. Right. And we talk about branding exercise. Look, if Yopo actually is lowering prices, okay. And their idea is we're going to have the lowest price offer across all these different things and build this ecosystem.

People want to participate in, and then they not have evil behavior, then I'm sure they're going to win because there is going to be a crumbling at the very top. And I think this goes very far in the next 10 years that people start building true Shopify competitors for very, very low rates, right? If Shopify and Stripe aren't going to merge.

Then what the fuck, like, why wouldn't you just build the exact version of that? Like, and I think, so I think the whole thing will crumble. That's my bet over the next 10 years is that the only thing, the only thing that you miss judging a bit is how expensive it is to acquire those 10, 000, 15, 000 rents.

It takes a lot, a lot of money, a lot of branding money, marketing money, partner money that SaaS vendors throw in order to get Sean or someone on Sean's team to use my software. That is expensive on a small time. And in this market, it's basically impossible because you have to be willing to like lose tons of money in the process and that money doesn't exist to pull it off.

Exactly. Yeah. And that's really Clavio's main advantage. It is not technology or anything else is that they were very early in a market when there wasn't 10, 000, there was 10 and they watched it grow to Melchim got kicked away. Yes, of course. It was like the perfect storm. Yeah. So. But dude, we just weren't like, I, I wrote a whole thing about like, it's like the physical product Renaissance.

Is that like for the past 15 years, everyone, the only thing anyone talked about was SAS and how SAS is so great. And software is awesome. And everyone should have a SAS startup and raise venture dollars. Now we're at a point where like. Dude, if any of these AI coding things actually come out, then like you're not competing against somebody raising venture dollars.

You're competing against 5 million computer science grads in India who are just going to fucking make the exact same thing using AI. And that's why I feel so good about physical product companies over the next five or 10 years is that there's for the first time ever, more of a moat because you actually have to fucking make something and hold it in your hand.

Actually, this is a separate topic, but I actually have a lot to say on that. Like AI is something I spend a lot of time on. And I think you're missing again, the importance of the customer relation, what Taylor said at the beginning, like the fact that Klaviyo has all of those customers, put them in a much better position to leverage AI, because you need to service them.

You need to acquire them. You need to have a relationship with them. That is a mode by itself. Like it's the go to market mode is an important mode. It's not like something that's easy to replicate. I mean, undoubtedly, right? That's the whole value when Google acquires something, they can roll it across everything.

They just bundle it and give it away. Which is, which is, Tomer, you and I have talked about this. I think this is the weird thing that I don't understand why a lot of you guys didn't do was give every feature away for free. I don't, I don't, it seems like that was the opportunity to create the lock in.

Cause in reality, your point is right. Your leverage point is distribution and money against every startup ever. So how do you bludgeon them to death? You make them compete with zero dollars. Right? Like what? How can they compete with that? Right? It's really hard. So Google Hangouts destroys zoom for that reason.

It's like, why would I pay for this? It's free. If you were me, what would you do? I think it's too late now because you can't get access to capital. But back when you could, what would you do? Let's, let's say you were me. And you have access to capital. What would you do?

Play that game? Like, well, so you're, you're doing, you're doing part one, which is make everybody like you by getting the people who people like to like you. That's like, that is literally how every e commerce SaaS business has been built in this space. I, you could tell me whatever it's literally. This industry is so consolidated and who has influence in it.

And if they like you and they say, use their thing, entrepreneurs make no other functional decision besides that for how they choose product. Like it is so rare, like that there's actual deep analysis into these things. It's just not, it's total top down influence in software buying. So that's one, you're on that road.

You're doing the right thing too. I would give away all the other features for free. You Sean just told you the thing he cares about more than anything else is the price. So just go to him and say, send lanes doing it for what? Congratulations. It's now free. Now, guess what? Sean's using Yopo email tomorrow.

But if you have costs, how do you, you have to get someone to eat the cost for a really long time. You have to go to the market and you have to convince investors. I get that. But what happens when that long time ends? You have to, you have to use the space that you have to actually create something that creates real value that people will pay for, not a commodity function.

That's Google AdWords, right? Like you actually have to create the thing that creates incremental value at some point, but you can't charge people money and make the business model a thing that the price is that. We are trying to build it. It's a crazy idea. I don't know if we'll be successful or not.

I'll send it to you like in a few months. And we've been working on it for a year now, but that's like a huge risk. It is. Like, that's like saying, I don't know if I can, we are trying to do something very similar that hopefully Sean also, we're going to give you net new users. So you would also like us besides it.

But I think it's, you're absolutely right, but that's like a very, like you need to bet on the fact that you can create that thing that's going to be worth so much that nothing else matters. Right. Or Shopify's position where you have enough leverage to actually change the price. Right. Right. And you can eventually extract more value from the, or the Apple app store, where you actually have so much lock in and value that you can twist the screens and people do, but Shopify has, has, has proven.

So they've always acted with constraint. They've could have, they, they are such a good value in the market. They could charge way more and they just simply don't. So, you know, they're really like the Testament that like they're delivering value hand over fist. But don't refile with you. The only thing I would focus on is trying to build some form of an ad network because at the end of the day, that is, that is who wins the most in all of this.

Facebook has made more money off of my business than I've ever made off my business. They've made more money off my business than my suppliers have made off my business or Shopify or any app, right? So I'm not saying you have to go build a social network, but there was, there was a, I, we used it. Man, we're trying.

It's the same product I'm referring to. We're trying. I don't know if it's going to work or not. Not an ad network, but we're trying to build something that will truly, truly just bring new customers to your door. We're trying, I don't know if it's going to work or not. And like, you know, I forget the fucking name of the service, but we used it and it would show other people's products at your post purchase.

Do you guys remember what I'm talking about? Yeah, yeah, exactly. Disco. Yeah. So we were using that and I, maybe we still use it, I don't know. Or whatever their, their big problem is that there's just few, so few transactions happening per day. Of course. Right? Like, hey, okay. Someone, one of the product managers came to me a year ago with the idea to let's build disco, or disco like and simple on a whiteboard.

You run down the numbers. You need like a thousand x xmo scale, 10,000 xmo scale than , and we are probably like 25% most brands in the shop, like you don't have the scale. That's what Shopify is trying to do with shop. Right. Yeah. Wait. Exactly. You talk about shop and like, you know, they really care about payment processing, but that bit, what they care about the most is the app because they can just PayPal does this like, Hey, for 35, we're going to send you traffic or whatever.

Right. And every order you'll get, you'll give us 35 bucks. And I would just build a, a CPC model that like everything thing. Throughout my entire ecosystem will eventually refer to other brands on a CPC basis and be like, yeah, we're supposed to be 5 per click, but you couldn't get these clicks anyway.

Right? These are engaged buyers in your niche. Are you sure you should, and you should split the revenue with the brand owner. Like if it's, if my list was an audience. That I could pay to access and pay Sean a click price and you a click price and I could advertise in every email he sends. And that's a revenue stream for my list becomes an asset.

It's a media property that I could sell ads against. I think there's opportunity there. Cause the other person that you want to incentivize for that participation, brands are desperate for incremental dollars themselves too. So it's like, if you could, if you could do both, I think ever like Sean, Sean will ever give real estate on his emails.

Oh, totally. Absolutely. Tomorrow. Yeah, especially like if you could, if you could consolidate or, you know, have a network of like, very cool, like minded brands, right. If you're like, Hey Sean, we're going to send a Yeti email, like, and we're going to take, like, there'll be AI photos of the Yeti and the water bottle together, and I'd be like, yeah, dude.

5 per click that people come to my website and doing the same thing with reviews and loyalty and any of these other widgets. If you have loyalty, it's so good. It's like, Hey, here's a loyalty offer. Buy it like you get our loyalty points. If you shop at this other store, right? Anything that's like, because what we're talking about is the verticalization consolidation of.

Software for a vertical brand, right? From website to reviews, to emails, to SMS, that is all going to be commodified and vertical, but the horizontal shit is more valuable than ever, right? Taking a brand across portfolios is just so valuable. He lets, he lets YouTube sell ad space on every video he posts on YouTube, right?

Like, like eventually if the distribution is valuable, the difference is that YouTube owns the consumer. Here, Sean owns a consumer and he lets other people put ads. It's a bit of a different. Sean doesn't own anything. He owns like a bunch of numbers in a row that he can only access through an ESP. He literally can't communicate with them any other way.

He doesn't, he owns nothing, right? Like it's all rented land. That's only accessed and distributed through some technical platform. Actually, if you have to do like a product strategy on exactly that, building like a cross network, really, we have the scale, probably one of the only players that actually have the scale in real estate.

And I'm totally game on like developing it. It's actually an interesting concept. Yeah, look, I mean, a, a cross function loyalty product could be very, very valuable if you have lots of different brands on there and that's something people would pay, I mean, not only just, they'd have to pay to have access to it.

It's like, yeah, we're the only loyalty program that drives. True net new customers, not just monetizing yourself, but that's also innovation. And what's lacked in this industry for 10 years is innovation. The reason why you give us a quarter, a quarter, I'm going to send you the product literally a quarter, quarter, maybe in a bit.

It's, it's very much exactly towards the places you're referring to with a twist. Yeah. And like Disco had the right idea, but I also ran the numbers and I'm like, there's only 10, 000 transactions a day or whatever. Because they tried to make money off the sale. And again, everybody tries to extract margin where it doesn't exist.

There is no margin to be shared in a purchase of a physical product. There's not like there's none left. Nobody has any e commerce businesses don't make money. So yeah, it's you. Sorry, you got disconnected, but oh, sorry. Anyways, Disco tried to take a rev share off the purchase, right? They tried. I need to bring a you to also Sean to our like a product strategy sessions.

You're absolutely right. Yeah. But look, I mean, we, we, we, we can wrap it up. I don't think you guys are evil. It's like, like it, there we go. Yeah, we did it. You, you end up, it ends up being a very funny whipping boy. Right. Like that's what it is. Just, it's a, it's a meme on the internet. Right. I'm sure you have lots of customers who are happy and see it, see the value in it and very Courageous to be like, okay, come on and let's debate if we're good or not.

Right. But like, I'm, I'm someone who's very, very hard to win over. Like, like Taylor's talking about people don't care about. Price dude. Ridge has never raised any money. Every dollar I give is a dollar I don't personally get. So I do care about price. I've cared about the whole time. And my loyalty is to like, whatever is either cutting edge technology is actually driving incremental revenue or the absolute cheapest, right?

Anything in the middle, I just don't think deserves to exist. And too many things are in the middle right now. And I sent screenshot from loop loop was the best return provider. Okay. They had the technology lead. They, they. Ruin that over time, but not investing more there and trying to continue to raise prices.

And then eventually overnight, I just go to something else and that's the new best return thing. Right. So I feel like we're watching the full arc of Yopo. Oh, it's happening in every industry. Like in my world. You used to charge 10 percent of spend on media dollars and you would charge a hundred thousand dollars a month to someone spending a million dollars to manage a freaking ad account.

That was normal. That happened all the freaking time. And now the going rate for that is like 2, 500 bucks. Like it just, it just gets, everything happens this way, right? Especially as the dollars get compressed. When the money's free, nobody evaluates this stuff. They just, ah, there's enough to go around.

There's more in the account. They'll lend me some more. And now, so Sean, you're an outlier in your behavior. Across the spectrum for sure. But it does it all. Everything moves this way. Service software product. I used to sell rubber wedding rings. You know what the margin on rubber wedding ring was 99 points.

You know what you can buy on Amazon now, a hundred of them for a seven cents. It's all the same. Yeah. Well, we have a great rubber wedding ring business, so we're still doing all brand baby. Okay. All right, guys, I think we're at time. Yes, thank you. I hope everyone learned something new. Thank you for joining.

That was really fun and happy weekend guys,