Equation of Excellence

Taylor (00:01.678)
What on earth? What? You can't...

Rabah (00:04.086)
Macha. I can't just break that out. It's too aggressive.

Taylor (00:09.358)
321 Cauldron. What is that?

Rabah (00:11.894)
That's it. I'm trying to, the law of unintended consequence, I'm trying to get off coffee. And I was like, I should cut back on my caffeine. I saw these health benefits for matcha. And then I looked it up and it has like eight million more milligrams of caffeine. So I'm trading one vice for the other. But it's Argentinian. And so this is very, if you go to Argentina, all the people have these kind of little gourds. And this is what they'll do is they just have their little pack of matcha. And they put their matcha in their gourd.

Taylor (00:30.734)
Okay.

Rabah (00:41.078)
put some water in it and it's like the Argentinian coffee break if you will. Like very cowboy, it's a big cowboy culture.

Taylor (00:45.262)
So in that pot and then in the straw with like the pipe attachment.

Rabah (00:49.974)
Yeah, so it's because the match will get in there. So it's like filtered. But like the cup is custom to me, obviously, bougie. So we got to do big, man. I mean, hey, I got I got I got I don't have the California taxes. I got to spend my money on something, you know. my gosh. Already a minute in, we're off the rails. This is going to be amazing. It's all good. I might even keep this in. This is great. All right. Three.

Taylor (00:54.458)
my gosh, okay.

Taylor (00:59.022)
Jesus. Holy cow. All right.

Taylor (01:08.366)
man, love it. Yeah, sorry, are we recording? Did that count?

Hahaha!

Rabah (01:19.254)
Two, one. All right, folks, welcome back to another equation of excellence. I've been wanting to get this guy on the line for a while. Been a longtime listener, first time caller. I'm really excited. I think he sees the marketing, the ecosystem, the business in a way that is really meaningful and awesome. Has a lot of hot takes, which I also really enjoy. But you have a little bit of a quirk, to be fair. Like when you get in person,

Taylor (01:23.886)
60 emails.

Taylor (01:28.206)
That's just the way it is.

Taylor (01:35.79)
And they're all unique and things.

Taylor (01:46.35)
Okay. Tell me.

Rabah (01:48.022)
your Twitter personality and your in -person personality are very, I don't wanna say divergent, but in -person, you're just an insanely awesome conversationalist. And not to say you aren't online, but I think online sometimes there is, sometimes walks like a duck, talks like a duck, sounds like a duck, it is a duck, and you'll have a dissertation on why it's not a duck.

Taylor (02:07.854)
Well, what I, what I like to tell people is that I think the interpretation of text is more about you than me. And that's my, that's my candid feedback is that, in person, you get context, you get social, you get facial cues, you get, body language you get. But when you're, when, yeah, you told a voice when you're left to just interpret text. Now granted, of course, I think that Twitter is a medium that's intended. It's hard to cut through noise. Right. And so.

Rabah (02:17.238)
Mmm.

Rabah (02:24.63)
tone of voice. 100%.

Taylor (02:35.086)
It's about crafting attention. That's what we're there for. Let's be very direct about the purpose of the channel. I don't, I'm not there for fun candidly. Like it's my dream to turn it off and never come back. but yeah, so, but it's the business we're in. We have to generate attention for our ideas. And so to do that, I think is to represent, a version of the idea that is intended to provoke. And so I think in some ways there's, yeah, there's, there's, there's a different medium, but, but in many ways I would just, I would just contend that.

Rabah (02:41.59)
Yeah. Same. my God, same. Yep.

Rabah (02:57.526)
Very well said.

Taylor (03:03.086)
you read into it, whatever story you've created about me or about anybody else. And so in many ways, those are, those are outside of my, my control.

Rabah (03:10.518)
I agree. I mean, and I think you're you're spot on and zero percent hate the game, not the player. I think that you're doing it the best. And I haven't even introduced you folks. Taylor Holliday, welcome to the show. We've had a very awesome meandering offline conversation. But a Taylor, thank you so much for taking the time out of your busy schedule for coming on. And then B, for people that don't know you, let's give them kind of the elevator pitch where you were, where you are, where you're going.

Taylor (03:20.558)
Sorry, sorry.

Taylor (03:30.99)
Yeah, yeah, yeah. And it's more so.

Taylor (03:38.408)
geez. Okay. So, Taylor Holliday, I'm the CEO and founder of Common Thread Collective. We're an e -commerce growth agency that helps consumer brands grow predictably and profitably. So, that's the sort of present state. We've been at that for a little over a decade. Before that, my first life was a professional athlete. I played professional baseball in the Yankees organization. And then on the brand side, growing a few consumer brands. Most recently, Kalo, the silicone ring company that my brother and I started together, built and sold that. And that was sort of in parallel to the agency. So, Ben.

Rabah (03:55.19)
Yes.

Rabah (04:02.582)
Yeah.

Taylor (04:07.342)
selling things on the internet, ever since I was let go by the, by the Yankees and, have very accidentally fallen into this world, but it created for me a lot of the same things that athletics did, which was competition amongst a group of people that I loved a common goal. I've always had an orientation towards data. Baseball is rich in that. And so it, those things, overlapped in a way. And so here we are a long time later. I'm 40 years old now just turned 40 a month ago. So,

Rabah (04:21.622)
Yes.

Rabah (04:27.734)
Yes.

Rabah (04:34.454)
Yeah.

Taylor (04:35.566)
Hopefully not too many years left in me, but I'm the, it's funny. I've had a bunch of people start referring to me in like language as like OG or, you know, like in this way that you're like, damn, did I, I've reached that part of my, my career in this phase, but yeah, been at it for a minute.

Rabah (04:46.39)
Yes.

We're in that era for sure. And it feels like too that not that like the era is going to pass us by, but there's just a new burgeoning era of especially with AI coming down the pike with the macroeconomic situation because we were just the last 10 years, just maybe even 12 and just such a bull market that you could pretty much do anything and make money or you can borrow money very cheaply to make bad decisions. And so like there was just all these very unique things. But.

Taylor (05:13.902)
Yeah, yeah, maybe that's better said, yeah.

Yeah, so maybe a...

Rabah (05:19.542)
I was also in sports D1 not professional did not have a baseball card like you do But tell me about that transition because for me it was actually very difficult because I'm assuming especially baseball You're in it your whole life. Like I was in athletics my whole life basically, you know five or six all the way to 20 21 20 when I quit running and transferred schools, but I found it very discombobulating because I never had to build the muscle of

Taylor (05:33.454)
Yeah.

Taylor (05:47.274)
Thanks.

Rabah (05:48.406)
generating a goal, structuring my life. I felt very lost, you know what I mean? Almost akin to a lot of people when you hear that go to the military and come back to civilian life where there was just, I just had to do, you know what I mean? My schedule, like my goal was to win. I wanted to win every race. I would get up in the morning, I would train, I'd go for a run, go to class. Then during the middle of the day, go for a workout. And then evenings I had practice and then that's what I would do. And once I didn't have...

athletics to structure my life. it was challenging for me. You know, I didn't know how to goal set. I didn't know how to structure my day. I didn't know how to, just do a lot of the basic things in life. So, so talk to me about that transition. Cause it must've been even more dramatic because you were professional, which is, it's, I mean, very, very rigorous and baseball's a lot too. That's a big, that's a long calendar.

Taylor (06:40.686)
Yeah. I totally understand that experience that you're describing. And I think it would have been my experience had I not gotten incredibly lucky in the way that my life played out, which was I was in the off season trying to find work. And I was drafted as a junior in college.

So I had some school to finish up in between each year. So I would do a few classes every time there was an off season. So I had a rhythm that I was in school and then I would work part time. I had a bunch of random jobs. But one of them was my friend, Josh, invited me to come to his office and print the orders for his little business off the website and take them to the post office. And so in between class, this was a thing I was doing as a side job. And I got

Rabah (07:33.462)
Okay.

Taylor (07:40.366)
got the call to find out that I was released by the Yankees in the off season while I was doing that job. And so I...

Rabah (07:48.15)
Did you know that was coming? Sorry to cut you off, but did you know it was coming? Because sometimes you can get the vibe, right? Especially in pro.

Taylor (07:52.046)
There was a, there was a chance I was, I was old. Yeah. I was older when I was drafted. So I was drafted as a 23 year old. So that's older. and I knew that, I had been injured towards the end of the year. So yeah, I had, I had a good sense that it might be, you know, you're hoping that it wasn't, but so I get that call and. At first I was like, okay, what am I going to do next? And I, my, my vision, my alternative vision for my life was to become a lawyer. And so I had, I would started taking LSAT prep classes. Yeah. And I was,

Rabah (07:56.502)
Yeah. Yeah.

Rabah (08:05.43)
Yeah, of course.

Rabah (08:16.758)
Really?

Taylor (08:20.751)
going to work on taking the LSAT and apply to law school. And in the meantime, I kept working part time for my friend. And what happened was, is that that company went from three of us in a room to 60 million in revenue in 18 months. It was a crazy ride. And so all of a sudden I was in the middle of an explosive consumer product startup run by my friends. And I was one of the only people in the room. And so it was like, well, what's your job going to be?

Rabah (08:34.295)
Not nothing. Not nothing.

Rabah (08:44.63)
Yes.

Taylor (08:49.742)
while you're running this website, so figure out Magento, there's this new thing called Facebook. Maybe you could set that up and can you text your famous friends that you played with and see if they'll wear the product. And very quickly that became me managing organic social e -commerce and influencer marketing, which turned into a $10 million business, half a million people back when organic social mattered and brokering deals with Kobe Bryant in China. Just stuff I had no business doing, but I was suddenly present and immersed in it. So I am.

Rabah (09:13.206)
Yes.

Taylor (09:18.734)
It is not lost on me how lucky I was to have that experience that I didn't deserve or earn or have the credentials. But what I became obsessed with was I didn't want anybody in the room to think I was there because I was my buddy's friend. And so I was like, I'm going to know more about this thing that I'm responsible for than everybody else. And that's a really small bar because they don't know anything. It's brand new. And so I just became obsessed. And so I was the expert in a very small room and.

Rabah (09:31.926)
Yes.

Rabah (09:40.022)
Yes.

Taylor (09:46.382)
I maintained that status as the room grew and my learning grew. And so I was able to carve out for myself this like skill inside of this growing company that all of a sudden became useful in the world. And that was like how it began.

Rabah (09:59.51)
That's super fascinating. So where did all your financial chops come from?

Taylor (10:04.398)
Well, that's from just running a business. Like I've been a CEO for 12 years. I've started and run and acquired e -commerce brands for the last decade inside of four by 400. And so as a CEO, you learn somewhere along the way that usually you begin with your responsibility as sales because you have no business. So it starts with sales and then the job becomes people. Cause you need somebody to do the work that you've now created. And then eventually your job becomes finance and.

Rabah (10:09.174)
there.

Rabah (10:14.326)
Yeah.

Taylor (10:32.942)
So it sort of moves through that phase. But ultimately, at the end of the day, what I've learned is that my primary responsibility as the CEO of a company is the financial health and well -being and the shareholder value of my entity, which is a financial measure. And so it's just 12 years of messing it up that gives you the capacity for that skill.

Rabah (10:50.102)
I love that.

No, I love that. I'm pretty aligned on that. Dave Rieckuck, a mutual friend of ours, we had a little back and forth because he had a really interesting take on the jobs of a CEO. And I have revisited my take where I think the three main value adds of a CEO are vision, hiring, and don't run out of money. If you're doing those three things, you're crushing it as the CEO.

Taylor (11:17.806)
I would just, I think there's a higher bar than don't run out of money. I think the bar is like produce growing financial returns. Like your job is, I think it's your primary job. Yeah. It's the, it should be the primary measure of success in your job. Like hiring is a mechanism. It's an input. It's a way in which that you accomplish that goal, but your job should be measured in the financial results of the organization. I think that's the scoreboard of business. I think.

Rabah (11:21.366)
Say more.

Rabah (11:26.87)
Is that your job though?

Rabah (11:47.318)
Yeah, I agree. I'm just trying to get my head around that. I don't hate it. But I think the, I mean, we might be ins...

Taylor (11:54.766)
Well, think about it this way. Imagine I fail at two out of three of those. Which one actually would kill the organization?

Rabah (12:03.606)
Hiring for sure. Hiring and vision will kill an organization. I mean, you can have money.

Taylor (12:05.23)
No running out of money. I could, I could hire poorly.

No, it actually can't. It literally can't. You can have, there's lots of organizations with terrible vision. There's lots of organizations with mediocre employees, but you only die. The only way to actually lose the game is to run out of money because if I have money, I get to try again. So only one of those can, only one of those can actually kill you.

Rabah (12:22.838)
Exactly. Exactly.

Taylor (12:32.398)
The other two are things that you could mess up and try again, you can mess up and try again and you do all the time. The third one, if you run out of money, there's no more trying. So it's actually, it's a priori to everything else, is the financial well -being.

Rabah (12:42.582)
Yeah, I agree, but that's what I'm saying is like don't write out money. Maybe we're saying the same thing different ways. Don't write out money and you're saying the fiscal responsibility, their fiduciary responsibility, or making sure the company's growing, et cetera. I'm just trying to be a little more trite. My Twitter, this is off of this from Twitter. I get what you're saying though. So.

Taylor (12:59.95)
Well, I think that was so what's the headline so then say it in one headline the job of the CEO is

Rabah (13:05.366)
For me, the number one job as CEO is to not run out of money, but it does.

Taylor (13:10.094)
Don't buy, no you don't get nuance. You just said Twitter headline, that's it. That's all you get, just the headline.

Rabah (13:13.206)
That's it. So yeah, the job of CEO is don't run out of money. But I do, I'm a big, you know, I don't like to do beliefs because you can get dogmatic. But my thesis is the three value drivers. So the one, so I'll give you my CEO and then CMO one. The CEO, the number one job of the CEO is to not run out of money. But the secondary and tertiary are hiring and vision. Because hiring and vision, you can't pay for those. Like those half.

Taylor (13:38.286)
Well, so how about this? Here's another pushback. There are one -person organizations that are really, really successful. So that's, so, no, no, no.

Rabah (13:44.342)
Yeah, there's nothing wrong with that. But they definitely hire people. That one person is not doing anything. So hiring doesn't need to necessarily be FTEs or full -time employees.

Taylor (13:52.622)
Well, I mean, but they don't have to hire anybody. There can be individual people that create entities by themselves. Right?

Rabah (13:58.902)
Yeah, but I mean, there's a certain ceiling on that.

Taylor (14:03.79)
I mean, it's getting bigger and bigger. How many people does mid -journey have?

Rabah (14:07.158)
I mean, WhatsApp is another thing, but again, the higher.

Taylor (14:10.03)
Right. There's endless amounts of businesses, right? That can be one person that can drive immense enterprise value. Sure.

Rabah (14:16.214)
But is that a CEO? But for me, that's not really a CEO. You're just a business owner.

Taylor (14:20.686)
That feels semantics -y to me. You're the primary person responsible for the business.

Rabah (14:22.998)
So founder and CEO are the same thing to you?

Taylor (14:28.334)
When they're, if they're unified in a single person, yes. Now you could have, you could separate them. You could have a founder that's no longer the CEO. But if you're the only person in the organization, then.

Rabah (14:30.998)
Yeah, that's a.

Rabah (14:38.998)
Yeah, because that's for me, like if you're a CMO, but you don't have any like direct reports or anything like that, it's like, yeah, but it's title only. Like you're literally just a high level IC that has a really high title in my opinion. But I get what you're saying. I get what you're saying. So I don't know. I think we could definitely triangulate on don't run out of money is or the fiscal health of the company is the number one job of the CEO. I totally, totally agree with you there.

Taylor (14:43.982)
That happens all the time, though.

we can do it this way.

Taylor (15:05.358)
Yeah. I don't, how about this? I don't hire at CTC. Anybody.

Rabah (15:12.086)
So say that different, but do you set the vision? Yeah, so I mean, I guess you could say though hiring is a function of the vision though, right?

Taylor (15:16.142)
Yep.

Taylor (15:21.742)
Right, but in terms of primary responsibility is the way I think about it. And I actually think that there's probably not a singular answer to this in terms of, but I think that at the end of the day, the primary job, the CEO to me is a vessel. It is a vessel for the shareholders to deliver value to them. That's actually the job, is you are responsible for representing a group of people. And sometimes that entire shareholder pool is encapsulated in you. You're the sole owner. You're...

Rabah (15:48.822)
Yeah. Yeah.

Taylor (15:49.902)
And in other cases, you are a representative of a group of people. Like in my case, I'm a representative of a group of shareholders. And the task I've been granted by the shareholders and what they want from me as the executive, the person in charge, is to grow the value of their shares. And the measure of the value of their shares is in our industry, functionally, TT Amoeba, you could do it in free cashflow, you could do it in dividend distribution, you could do it in lots of different ways, but they're all financial measures.

Rabah (16:05.974)
Yes.

Rabah (16:19.158)
Yep, I would agree with that. Trailing 12 months TTM for the kids falling along at home. No, I'm totally tracking with you. I think you're, yeah, I would agree. I think we're aligned at the first principles and then it gets nuanced where, I don't know, I just think hiring and vision is definitely the job of the CEO, because who else is it? Who else is going to do that? Like people can bring it up, but you as the CEO should be setting the vision and the hiring plan, in my opinion.

Taylor (16:23.246)
Yeah, yeah, there you go.

Taylor (16:28.014)
You

Taylor (16:31.822)
Yeah, totally.

Taylor (16:37.582)
I mean, could be, could, vision I think is.

Rabah (16:48.982)
because that vision is again gonna be a function of the hiring plan because that vision is gonna need resources to stand things up, et cetera.

What do you think about CMOs? So here's my CMO stick. A CMO has two value vectors. The first thing is get momentum or keep momentum. And then the second thing is efficient and effective capital deployment. I think those are the only two jobs of a CMO.

Taylor (17:19.31)
I think that I would probably take the first one and make it less philosophical and more practical. So maybe you could do that for me.

Rabah (17:28.086)
I can show you momentum quantitatively. Like how is our traffic trending? How is our, for example, like B2B submit, B2B, what does our funnel look like? Do we, what are our social mentions, et cetera? Like I can show you.

Taylor (17:30.766)
Okay, so let's define it.

Taylor (17:39.022)
Yeah, so I would just replace them. I would just, yeah, I would just replace the confusing word that means a lot of different things to a lot of people with an objective measure. So that, but I think philosophically, like we're agreed, I would never describe it that way. I guess I wouldn't say create momentum. I would be more specific in the expectation. The second one I think is hard.

Rabah (17:55.478)
I mean, it sounds more like a mirror problem. What were you hitting me with earlier? I'm teasing you, I'm teasing you.

Taylor (17:59.15)
Yeah, yeah, maybe. Yeah, yeah, but maybe, maybe. And I think that's just how my brain works. Like for you, there's a very obvious connection. It was like, well, obviously momentum means that, that, that, that, that, that, that, that,

and acquire a business, generally speaking. So the actual arena in which they're allowed or able or have authority over the allocation of capital is a little narrower. So I would probably go after that with a little bit more. OK.

Rabah (18:38.934)
It's the marketing budget though. Yeah, it's the marketing budget though, because the market, the CMO doesn't have product money. It doesn't have ops money. It doesn't have any of these things that I like. And again, we're a little bit in like same, same, but different with like golf swing, baseball swing with B2B SaaS and D2C. But.

Taylor (18:46.734)
That's right.

Rabah (18:57.462)
B2B SaaS is I have my annual targets, I have my quarterly targets, and then I get a quarterly budget that I then can deploy in whatever way I see fit. I mean, obviously, my boss, the CEO, has veto power, but the reason he's paying me all this money is because of those two things. Can I get momentum for the company? And if I have momentum, can I keep it? And then.

Taylor (19:17.966)
Well, so maybe, maybe I don't know if you'd share it, but what are your KPIs?

Rabah (19:22.582)
My KPI, so basically the highest level KPI for us is basic. Well, so us is me, or so us because I'm the head of the department is us. So there's marketing and then there's personal robber rocks as well, if that makes sense. So.

Taylor (19:30.094)
Not us, you, like you say, for Raba, for you.

Taylor (19:41.422)
Okay, yeah, well what are the person, so what do you get hired, fired, or promoted based off of? Maybe.

Rabah (19:47.286)
For me, again, it's twofold because I'm running it at org, but I also have personal goals as well. And so what I get hired and fired for is the performance of the melding of the two. But really, because my personal stuff is so linked to the success of marketing, you can kind of bulk them together. The reason you can separate them out is for...

Taylor (19:51.085)
Peace.

Rabah (20:13.302)
you know resource allocation measurement things of that nature, but the big thing of marketing so basically marketing is and I'll use my philosophical language and then we can get quantitative but basically I want to get people to know about the party get them excited about the party get them to Make sure they're cool enough to come to the party aka qualification because we we don't service everybody We have a certain ICP that gets the most value for us and their alarm economics line up Are they cool enough to come to the party? Okay?

did they book a time to come to the party? Okay, so that's for us getting a discovery call booked. And so we measure that in nomenclature for B2B SaaS. People don't need to know, but MQL is what we call that. And then when somebody attends that discovery call, that's what we call an SQL. And then that SQL will then either get graduated into an opportunity and sales takes over, or that SQL will get dequeued. And so similar to kind of how you have your awareness consideration conversion funnel,

And that's basically the marketing funnel. And so what I'm beholden to are the absolute numbers as well as the velocity. So are people excited? And then you start to piece up that funnel of like, OK, cool. Awareness is really weak. People don't know about the party. Or, cool, everybody knows about the party. But the cool kids actually, you're getting in front of people that aren't cool. So you need to shift your marketing mix to get in front of the cool people. OK, the cool people know about the party. They're cool enough to come to the party. Why don't they want to?

book a time to come to the party. Okay, now they're booking a time to come to the party, but they're not showing up to their time. And so very similar to what you guys do where we just have stages in the funnel and there are certain initiatives that are supposed to support and impact those different phases. And then as you see one phase get weaker, you put more resources there or shift it. As you see one phase get stronger, you give it more resources. And so those are...

My like that's what I'm behold into is essentially pipeline. If that you want the Twitter headline, it's it's pipeline

Taylor (22:10.67)
Yeah. Well, so, okay. So that to me, that's the job of the CMO, the pipeline. And I think that that it's the same thing in my organization, my CMO or head of marketing, I would say has two jobs.

Rabah (22:20.054)
You have such boring Twitter headlines, you're so much more fun on Twitter!

Taylor (22:22.67)
That's it. No, no, but no, no, this is the headline though. That's the, I just think that the job of the CMO is the measurement that you give the job. And I think this is actually really important because incentives, if there's any learning I have in my experience, it's that the incentive and the measurement drive all behavior. And so the most important thing to do is to define success objectively that they can orient their behavior against. Cause that's what they will do. That is actually what their job will become. It will be the creation of that output. So.

Rabah (22:38.39)
everything. Couldn't agree with you more.

Rabah (22:44.502)
Yes.

Rabah (22:48.982)
Correct.

Yes.

Taylor (22:52.686)
When I think about the job, so my head of marketing has two primary measures. One is pipeline value and at the end of a given period. And I've, I've moved that up and back the funnel all the time. I've moved it to SQL volume. I've moved it to new business revenue. I've moved it back and forth all the time, but right now I'm satisfied with pipeline value with a specific set of defining criteria. And then the second thing is we actually create marketing as a revenue center. So we have, we call it digital product revenue. And he has a responsibility for the creation for digital product revenue. So.

Rabah (23:18.678)
Yep, you guys do great stuff.

Taylor (23:22.67)
Those are the two measures of the job. That's what he would get promoted, fired, or, so at CTC, that's the job of the VP of Marketing. Now, do I think that's what the VP of Marketing should do everywhere? Well, of course not. But in our case, but yeah.

Rabah (23:34.71)
That's why my philosophical placeholders work, because I could overlay momentum and capital deployment across those two things, and then you can nuance them down to your business. Because I 100 % agree with you. I think it's absolutely right. We'll invalidate my thesis then.

Taylor (23:44.654)
Yeah, but -

Taylor (23:49.422)
Well, I just think capital deployment in this case has very little to do with it. I don't actually think. No, it's not. That's the thing. He's.

Rabah (23:53.91)
What are you talking about? That's the resources. I'm guessing your VP of marketing has resources, correct?

Taylor (24:00.782)
very, very little cash resources. Very, very little.

Rabah (24:03.702)
I'm not just saying capital. It's not capital deployment. OK, maybe resource deployment is maybe resource deployment is a better. I mean, B2B SaaS, you have to have money. Like you can't be like, hey, stand up a marketing department with one person. And I mean, I did that at Triple Whale for the first three months. And it was there's a reason nobody does it is because people burn out and it's a horrific experience. It's just not a sustainable place to be. But maybe so effective and efficient resource deployment. Is that a more tidy thesis?

Taylor (24:08.526)
Well, capitalism. Okay, well.

Taylor (24:33.838)
I think that's a very general thesis that can be applied to almost every job in an organization. I don't think that would be a unique description of the VP of marketing or the CMO's job.

Rabah (24:44.15)
See, that's why I like capital. Because how are you spending my money and investing my money?

Taylor (24:47.214)
But capital's money. Yeah, but I don't actually look for my VP of Marketing's spend money. I actually look for him to create money. So there's, I think that I like to use, if I were to think about a job description, and I think this is when I try and think about writing them, I think the primary thing they should lead with is not a description of the job, it's the measure of the job. So like in other words, if the first headline of a job description,

Rabah (25:11.254)
Yeah.

Taylor (25:16.27)
should be the actual KPI that I will, when we do our one -on -ones, and when I someday fire you or promote you, I'm gonna tell you what that is, because the how you will accomplish that, especially the more executive level roles, I think there's so, it's such a wider opportunity to determine. So in a lot of ways, it's like, okay, your job inside of this organization is to create this out.

Rabah (25:20.886)
You're beholden to.

Rabah (25:33.974)
Exactly. Couldn't agree with you more.

Rabah (25:41.334)
Yes, agreed. I'm a big proponent of, especially at the high level, like ICs as well, but you have to, sometimes ICs need a little bit more management depending on the level you're at. But ultimately, like all my directors, VPs, everybody, it's here's what I need, here's when I need it, the how's what the money's for. You go figure it out. But I don't know, it's interesting. It's interesting, I don't.

Taylor (26:03.918)
I also think your goals should be the organization's goals if you're the leader. They shouldn't be distinct from you. No, but I'm saying the marketing org's goals should be your goals.

Rabah (26:08.182)
I'm not the leader though, I'm only leading the marketing team. So you can get, yes, yes.

They are my goals, they're not my priorities. So the marketing team has, exactly, yeah, exactly, 100 % with you. So basically what we do is we'll stand things up. So basically we have like a three phase.

Taylor (26:22.542)
Okay, yeah, that's downstream. Priorities are downstream to goals, right?

But like I don't care if you complete your priorities or not. I care if you complete your goals, right?

last year.

Rabah (26:36.822)
Yeah, yeah, totally. I mean, no, no, I caught that. So I'm with you. So I mean, for me, the big thing is we have kind of like a three phase of action, just get shit done, systems, and then optimizations. So action, just go. Just do look at the leading indicators. This is way too early to look at lagging indicators. Let's just get shit done. OK, cool. Once you move into a systems phase, we can't keep rebuilding the wheel. Let's get efficiencies now from systems. Cool. Now I can get.

the same amount of output for less input. Fantastic. And then the third phase is optimizations. I have all my systems in place, all my data, et cetera. And now I can make decisions that will be more effective, where I can say, hey, this thing is doing really well. Taylor's going to love it. I'm pushing up my KPIs, or this thing is doing really bad. We need to take it behind the shed, do what needs to be done, and make a new bet. And so that's how I think of it. And I think it's really hard sometimes in hypergrowth to get from the action to systems phase, because you don't have

Taylor (27:35.022)
very hard.

Rabah (27:36.534)
there's very little incentive for the boss to be like, we're going to sacrifice short term wins for a long term gain. And so I think that that system's jump is very challenging.

Taylor (27:45.646)
Well, and systems are all about repeated action. And when you're growing that fast, what you're doing today is very different than what you're doing in the future. And so it's very hard to build a system in that environment that's novel changing all the time. It can be done, but it's hard.

Rabah (27:53.59)
This is exactly right.

is exactly right. And it's not necessarily incredibly effective, depending on how, because I analogize it to a kid, where it's like these businesses in hyper growth are kind of in like baby, infant, growing stage. And when you buy baby clothes, like in six months, they don't fit anymore. And so,

Because the other thing is you can also get into a place where if you have systems before success, it's very awkward. Where like the old Phil Knight where it's perfect results count, not perfect processes. But there is a point where you need systems to succeed because if not, the inefficiency starts to become such a headwind or this just millstone around your neck that you can't really hit your goals because you're so inefficient.

Taylor (28:30.19)
Right, yeah.

Taylor (28:41.198)
we just have to identify clearly what that is.

if you did this for me.

So why not slow down?

Rabah (28:52.854)
Nobody wants to slow down, especially if you're VC backed. Well, if you're VC backed, you can't. That's the challenge with VC backed and public companies. You're really beholden to quarter by quarter results, especially if you're in a growth stage company where you can't really go back to the board and be like, hey, look at where we had all this hyper growth and now we're slowing down to speed up. It's the right thing to do. But to your point of an.

Taylor (28:54.958)
Why?

Taylor (29:18.414)
Why can't, but that's only true if they have governance authority, right? Like, like Zuck, Zuck still torches tons of cash at his own discretion, much to the dismay of his bevy of investors, right? Yeah.

Rabah (29:22.39)
Correct. Yeah, but that's what I'm saying to the board.

Rabah (29:30.454)
Ish, ish, ish. I mean, they did let him have his little metaverse playdate, but there was a certain case of like, hey, this ain't working, dude. Stop torching all this cash and let's, and he turned it around. I mean, and he turned it around. So I agree with you. I think, yeah, I agree with you there, but the...

Taylor (29:37.998)
Yeah.

Taylor (29:46.798)
Yeah, for sure. Cut.

Taylor (29:52.174)
I just think that it's interesting and the software thing is really interesting. I think the best argument for pace in that business is that the barrier to entry is basically nothing. And so market share matters a lot. Like I think about the, if we look at the key players of all the sort of commodity service functions in our space. So like, and I say, I say that gently, but like email SMS, these different things, there's definitely a real leverage. Yeah. Yeah. Utilities. There you go. There you go. Okay. Yeah. Yeah.

Rabah (30:12.246)
Mm -hmm.

Rabah (30:16.502)
Yeah, we'll call it utilities instead of commodities so it doesn't sound like a pejorative. But I'm tracking what you're saying.

Taylor (30:21.998)
Okay. There you go. Okay. in those markets, there's immense importance to speed of market capture, right? Because you, eventually the marginal value of the service gets competed down to basically nothing of that individual service, but yeah, but you create enough, lock into now with that and relationship with that customer base that you can roll out additional services in other ways you can. So, so.

Rabah (30:31.894)
Yes.

Rabah (30:39.734)
Exactly right.

Rabah (30:47.766)
exactly right.

Taylor (30:49.582)
I think in that space that is a unique dynamic that does demand a certain pace that is contingent on how quickly you think your thing will get replicated and competed against.

Rabah (31:01.974)
Yes, I mean, so that thesis is spot on. I mean, you can just see your mind opening up from the wonderful Shopify thread that you wrote where this is exactly the path. And what can happen is capital can become a moat. And so if you can make it from your A to your B, I have this fucking war chest that I can now, to your point, slow down to speed up. But there's certain areas of the business that you really have to just sprint, sprint, sprint, sprint, sprint. And.

That's why I think some of the best executives have systems and people that they bring over where they're not starting from zero. And so when I was at Triple Whale, I was the proverbial, you're building the plane as it's flying. And I never had time to be able to create a system.

And now once I took a few months off, I built this beautiful marketing OS in Notion and Slack. Because that's the challenge. I don't think it's a capability issue. It's a bandwidth issue where people just don't have the time to think through how they want information to flow through the system. If this happens, then this happens. All these things. And so now I have this Notion system. And now I brought over a lot of old people that I worked with. And in six months, I was where I was at in Triple L in two years.

And so I think there's definitely ways you can hack through the system, but I didn't start at the systems phase per se. I started at the action phase and then moved that into the systems phase. And now we're almost rounding out the optimizations phase because the funnel data, everything is kind of tidied up in a nice neat bow.

Taylor (32:14.638)
But anything that we like...

Taylor (32:26.478)
Yeah, that makes a ton of sense.

Rabah (32:29.142)
Okay, I'd be remiss to not ask you and we don't have to go down too many rabbit holes, but you have, I think, personally, the proper view on attribution, but give me your take on how you think of attribution, how do you guys leverage it, what do you guys look at? Because I think you have some really interesting theses and thoughts around attribution.

Taylor (32:45.134)
So I think that's the main thing is being able to show it's like really you, you're today. Yeah. Attribution is the hero's journey that every marketer goes on. And, and it's, I did over a decade ago when I first got into this space too, because the intrigue of it is so compelling. The idea that you would be able to.

Rabah (32:59.094)
Shut out Joseph Campbell, you cultured motherfucker.

Taylor (33:14.638)
accurately assign the appropriate amount of value to every action that you take such that you could perfectly allocate your dollars relative to their impact is a intoxicating idea that everyone would love to be true. The unfortunate end of that journey is it's an unknowable reality. And when applied in our present context, the problem became we have these systems.

Rabah (33:23.99)
Yes.

Rabah (33:29.526)
Yes.

Taylor (33:43.886)
that optimize based on a specific set of data that are actually the things that are allocating your dollars. So you might make a decision at the channel level, I'm gonna put budget here in Meta, here in Google, but in the channel itself, within the context of the channel, the optimization, which is the actual mechanism by which your dollars get allocated, is not informed by the third party thing that you're using to measure it. And so the problem becomes,

Rabah (33:50.55)
Yes.

Rabah (33:56.534)
Yes.

Taylor (34:11.598)
those things do not have a causal relationship to one another. So that when you attempt to measure something and there's no optimization that affects it, there's no relationship between the two. A media buyer has no actions that they can take to affect this number. They're disassociated from one another. And this is why you're seeing now Metta finally walk through the door of allowing you to feed the data into the optimization so that you can actually affect your measurement. So my problem all along.

Rabah (34:14.966)
Yes.

Rabah (34:22.966)
Yes.

Rabah (34:27.574)
Yes.

Rabah (34:39.35)
Yes.

Taylor (34:41.454)
was that people were touting the idea that attribution was a solution to optimization and it never was. And it was always, and it caused more harm and confusion about what people should do than it provided a solution. I thought it was opportunistic. I thought it preyed on a weakness that people had at a moment in time when they were desperate and needing.

Rabah (34:47.99)
Yes. Yes.

Rabah (34:53.718)
Yes.

Rabah (35:04.086)
Some of the best businesses are built like that to be fair.

Taylor (35:06.478)
Exactly. I, and right, there was a very clear problem. I thought the solution was over -promised in a way that masked that core issue and wasn't upfront about it. I'm not speaking specifically about you in this case. I'm speaking about that scene in general. and that was the problem that I felt most enthusiastic to convey. The second problem is the idea that there's a right model. See, the thing about attribution is it's apparent.

category for like infinity different versions of a thing. It doesn't actually, it doesn't actually mean one thing. It means like there are a million attribution models that are subsidiary to the idea of attribution. So the question is, what do you even mean when you say it? And I don't think, right. So, so it's also a word without meaning. So, what happens is people take it and when you say it and I say it, we think we're talking about the same thing, but we're not. and there's the problem is every one of those models is flawed and imperfect. Every one of them.

Rabah (35:37.046)
This is correct.

Rabah (35:47.99)
This is exactly right.

Rabah (36:03.03)
This is correct.

Taylor (36:04.174)
So it's an inexact science in a way that I think was conveyed as a single source of truth is a phrase that I think would get assigned to it in ways that was frustrating.

Rabah (36:16.182)
Yeah, I mean, zero pushback there. I think the, one, the biggest inherent challenge with attribution is this asymptotic, where it's just never gonna be perfect. Even as good as it gets, you're never gonna have it perfect. And the other thing that I've been really coming around to is more probabilistic than deterministic.

And so I think there's some like Michael true over at prescient. There's some people doing some really interesting things and Facebook's actually starting to do this as well with their AI because they can't quote unquote do deterministic anymore because they can't use user IDs. And so I think that's actually pretty interesting because to your point that gets into relationships that are so highly correlated. They can they can you should look into that where it could be a causal relationship. I don't want to go as far as say it's causal but you can look into like.

Taylor (36:59.438)
able to like where are you planning to drop them into like a separate sheet or dock somewhere or what's best? So...

Rabah (37:06.774)
high correlations are really interesting. They're not necessarily causal, but they're very interesting and you can look into those places. And then, let me finish the attribution model thing and then I'll throw it back to you. And then the other thing is, for me, the reason why it was so confusing is because nobody, to your point, had the same lens. And so if one person is looking at first click, another person's looking at last click, another person's looking at...

linear all another person's looking at J shaped another person's looking at time decay like that it just nobody's working from the same first principles and so I think there was a certain aspect of attribution not only wasn't optimization but attribution would help performance and I thought that was just very off the mark where attribution is your speedometer has nothing to do with the engine the brakes making your car more horsepower attributions the speedometer.

And a lot of times that speedometer might not necessarily be perfectly aligned. Or to your point, people are looking at different speedometers. Nobody even knows how fast the car is going. And so for me, where I've landed is attribution is useful, but it needs to be synthesized in ways. And there needs to be different models. And honestly, you should only let a few people in there, because if not, it clutters the room where you can.

Taylor (38:03.118)
Yeah, yeah.

Rabah (38:28.726)
you need some semblance of information, but you need a thesis behind that information. So for example, for us, we use basically J -shaped attribution, where it's like, OK, the person that gets into the party and knows about the party is quasi -important, but the person that actually touched them to get them to book the demo is really important for us. And so we can look at all these different models, but we're still looking again at first click, like original source, last click, last source, and these things. But.

Attribution is exactly the way you explain it. That's how I see it and how I've seen it deployed in really meaningful ways. Because if not, you can just get into a really weird place with stories that don't make sense, but data that enforce those stories.

Taylor (39:08.59)
Yeah, so I think that's all well said. I think the thing that you said at the beginning about the potential, and I know the team at Pressian, I think they're doing some cool stuff. I think that probabilistic is exactly the right way. And I think there's an obligation of every tool in the space to publish with transparency the accuracy of their probabilistic modeling in the scenarios that they're modeling it. And the problem with that,

Rabah (39:30.422)
the R squared kind of thing. Yeah.

Taylor (39:34.67)
And look, I'm in the business of forecasting. We do more forecasting, I would say, than any service provider, maybe in the world in terms of e -commerce. There's nobody forecasting more businesses every month than maybe us. And what I would say is, the only thing I know about every forecast that I create is that it's going to be wrong, and it services primarily as a trellis for how we behave more than it does an attempt at an accurate numerical goal. And so my problem with any tool that just plays the role of providing

Rabah (39:49.878)
Yes.

Rabah (39:58.902)
That's exactly right.

Taylor (40:03.854)
the number but doesn't participate in the execution is that they are too intimately linked in order to accurately execute that idea. And so I think that there's just too many human components, again, immense amounts of variables in this business to continually accurately predict things absent participation in the creation of it. And so I think that that is where I've run into this sort of issue all the time. And this is true of most...

most probabilistic forecasting is that one in general, it is really different. Like if you, if you ever wrote super forecasters, you would love this, probably if you haven't. Okay. So one of the main points of that book, is that it is incredibly difficult to beat basic trendline forecasting. One, just as a, as a general statistical rule in most cases that will outperform a, any model that you create in the vast majority of cases.

Rabah (40:42.006)
Yeah. Yeah.

Rabah (40:50.966)
Yes.

Rabah (41:01.846)
I mean, the corollary, not to cut you off, but the corollary is index funds to hedge funds. It's the exact same thing.

Taylor (41:05.486)
That's exactly right. That's right. Now, and the author of the book is famous for the study he did where apes outperformed venture firms, right? Yeah. So, okay. But his point in the book is that that was true at the average of both groups, right? But there were people who consistently outperformed the apes in the market and everything else, right? So it's an analysis of those people and it started studying why that happens. So in that, I think that what you should want is that those tools,

Rabah (41:10.998)
Yeah. Tetlock. Powerful fill Tetlock.

Rabah (41:21.046)
Yes.

Rabah (41:24.854)
This is exactly right.

Taylor (41:35.566)
identify themselves through data as those super forecasters. That they actually show to you the capacity to consistently produce consistent predictions about the future. And if they do that, then they should win market. And they should be rewarded for their ability to do so. And so I think that's sort of what will happen, is that those people who are able to help brands accurately predict the future, and AI is going to play a huge role in getting better at this, will win market in that process.

Rabah (41:39.318)
Yes.

Rabah (41:44.246)
Yes.

Rabah (41:57.014)
That's exactly right.

I couldn't agree with you more. And there's also, I think, going to be a bit of a Peter principle here because the more data you have to feed into the systems, the smarter the systems can get, the better the projections they can make. And so as a smaller business that's out of the growth stage or out of that hyper growth stage, because hyper growth is very, it's nonsensical to project on it because you're going to be a different company in six months. But once you kind of get out of that phase and into more of that growth value phase,

the projections become really interesting. And if I can feed you a ton of data from a ton of different data points, it gets us some really interesting places really quickly. Because the other thing, to your point, is you can tune the model to make it nuanced to you. And I think that's where things get really interesting. Because I have an AI thesis where AI is kind of like extracting resource. So take oil. You have to have the land, AKA the data. OK, cool. I have the data.

Now what's the drill that I use? Is it fracking? Is it deep sea? Is it putting just an oil well in a field? That's the frameworks and the models that you're overlaying on the data. And then the third phase is refinement. Now that you have this crude oil, how can I make it into petrol? And then that's the business impact. And I think the AI companies that are doing those three things are doing, I think that's when it gets really interesting. And.

I don't know. I'm really bullish on it. I can definitely see. And I guess to just bring everybody at home along, deterministic is by human. So we're following humans to determine what they do. Probabilistic is looking at data sets and correlating the metrics that you want to see. So keep it simple there. What are you excited about in the future? I mean, have you seen the TikTok thing with the AI stuff with the symphony is pretty, pretty insane. Because I'm old like you, where it's like, dude, this is, this is.

Taylor (43:45.614)
No.

Rabah (43:49.302)
It's the first time I've ever been shake my fist at the sky, get off my lawn, where, well, because there's just a lot of social implications that I think a lot of social contracts need to get renegotiated. And like, where does AI fit? Like, if I write my significant other and I have all this incredible data on her and I put that into an AI to write this gorgeous poem.

Taylor (43:53.838)
Really?

Rabah (44:14.614)
I give it to her, she's so happy, she's excited, et cetera, but then I tell her, you know, I was augmented by AI, she gets really mad at me. So I think there's just a lot of, I mean, this is, in my opinion, just one of those world -changing technologies, and the speed of it is so insane that it's, I mean, there's just lots of matzo balls hanging out there. But the efficiencies are just undeniable.

Taylor (44:35.726)
Yeah.

Taylor (44:40.974)
No doubt.

Taylor (44:44.782)
Yeah, I agree with you. It is hard to conceptualize what will change in the future as a result of this. and the questions that we'll have to answer, whether it's the newest tick tock AI UGC models that are now available to be one click telling a story about your business that are indistinguishable from reality, or it's like you said, a version of myself that answers emails. Am I liable for what that thing says? Like, you know, like whatever it,

might be, there's so many open -ended questions, but I think that I tend to be pretty progressive in my view of technology in the sense that I, I want to live forever. I think that that would be really cool. And so if that we could cure disease, then that would be awesome for me. And if this feels like a pathway to do that, that's pretty cool. I hate driving. The idea of a driverless car sounds like an absolute dream.

So there's all the ways in which I tend to see the optimistic reality of wherever we're headed that I'm sure will be accompanied by all sorts of horrors and traumas as well.

Rabah (45:48.982)
I'm totally with you. I'm totally with you. I mean, on the horror side, I get really sketched out about, you know, autonomous, like military stuff and stuff like that gets I mean, we already have drones and stuff, but even more, you know, intimate like dogs with guns on their head or what like that stuff, like straight up black mirror stuff creeps me out. I totally agree with you on the I think.

And this is Jensen Wong from Nvidia also says this where he thinks AI and biology are gonna be just an absolute gangbusters win there So I'm totally packing or I'm totally on that path as well I think it's gonna be a ton of good, but there's also like the human experience right you have Einstein you have Dahmer I mean and so with these, you know cures of cancer does that allow us to make Faster more aggressive more impactful biological weapons or thing, you know, I mean, so it's it's this really

weird dance of we're in this really awesome honeymoon phase, but there hasn't been a lot of the negative stuff coming out. And that's kind of where, for me, it's just this blurred line between the human experience. Like you said, you want to live forever. So what if I could encode your brain agnostic for your body? Is that life? You know what I mean? And so you just get into these really esoteric kind of philosophical quagmires of the human experience used to be really clean cut.

Taylor (47:00.878)
Yeah.

Rabah (47:09.622)
and now it's this augmentation of it. I don't know, it's in a really interesting place, but honestly, I'm very bullish on handmade goods. I think there's gonna be a huge swing back to human -made, man -made, or person -made. So quasi -bullish on Etsy and things like that, where I think smaller run things are gonna become very, very in vogue. But yeah, I think your thesis is spot on.

Taylor (47:22.51)
Yeah.

Rabah (47:37.398)
I just don't know where it all lands and that, I guess is the most discombobulating thing, but at the same time, the internet was very similar, right? But the challenge with the internet is it didn't have the efficiencies and the barriers to entry that were so low like AI does. And so that to me, yeah, you got the guy's stuff.

Taylor (48:03.406)
Yeah!

Rabah (48:03.734)
Amazing! I didn't know you. Are you a soccer guy or no? You're a baseball guy.

Taylor (48:07.822)
No, I'm not all, I'm falling in love with soccer as I watch my children play it. But yeah, I am. But to your point though, okay, so you're talking about handcrafted goods. So John's Paul's Balls, if you guys follow him on social, yeah, he's amazing. And he's been making balls out of these like all different materials and he's done so many different cool layouts. Yeah.

Rabah (48:12.79)
Let's go. Are you following the euros or no? Okay, amazing. Okay, yeah, tell us this story. Yeah, this is such a good story.

Rabah (48:24.95)
killing.

Rabah (48:33.366)
We just did a Burberry collab, which is pretty incredible.

Taylor (48:36.238)
Yeah, so he's done some really high end stuff and he recently launched a brand called 92 Pentagrams, which is what the ball is made out of. And they had their first release and so this is the case that I just got this and this is the first one. They made a limited run of them and you know, here it is and I'm gonna probably display it in my office because it sort of represents I think the culmination of my world, right? Like sport, commerce.

Rabah (48:42.582)
Yes.

Rabah (48:47.734)
gorgeous.

Taylor (49:03.822)
creator in a way that I feel connected to. And I feel connected to him and his story. And so, yeah, exactly. Yeah. Yeah.

Rabah (49:04.918)
Yeah. Yes.

and bespoke, limited run, handmade. Yeah, I'm totally behind that. And I think there is gonna be some really cool things that crop up around that. And I also, I'm not against AI stuff, to your point. Well, cause to your point, autonomous cars. And so what gets interesting is, and again, thinking of the ripple effects, okay, autonomous cars then, if we wanna make people go back to work,

Taylor (49:23.694)
Yeah.

Rabah (49:37.654)
that totally expands your driving radius now. Because if you don't have public transit, this is even better than public transit. Because I can actually work on my way to work. I can work on my way home. And so now, these really sought after real estate areas, you can go out. I'm in Austin, but you could start living in Buda. You could start living in these places that are out of the quote unquote commerce centers without very little. Because the thing with traffic is one, it just grades on you. Because it's this quasi, you need to be there.

Taylor (49:40.494)
Totally.

Taylor (49:45.262)
That's right.

Rabah (50:05.974)
and you can't do anything. So it just feels like this huge waste of time. And I think it's like babies crying. I don't think you can actually anesthetize yourself to it. I think it's just these, there's these fundamental things that are just, like the fastest way to de -stress yourself is cut traffic. And then it's, but that's, yeah, damn it. I gotta get one of those balls down too. They're so cool.

Taylor (50:22.766)
Yeah, no, I totally agree. So I think, though, if we think about this, if we try and bring it a little more practical for our audience, I feel like that one of the biggest things, let me see if I can say this without getting too in the weeds nerdy, but one of the biggest missing pieces to e -commerce is the underlying data structure.

specifically related to finance and inventory to allow tools to be really good at leveraging AI to apply large scale machine learning onto good quality data structure. Like one of the, one of the problems in most businesses is that their inventory data is like a mess. It exists in all these like fractional places in ways that the actual cost of every unit is really hard to know. And.

Rabah (51:00.79)
Yes.

Taylor (51:15.886)
how that relates to their decision making is difficult and then finance is lagging. And so you're watching right now what's blowing up in our space is Final Loop just raises their $35 million Series A and you've got the chubbies guys at Good Day Software doing modern ERP for e -commerce. So it's the underlying data rails for e -comm that ultimately at the end of the day what we're doing in this business is we're buying a unit and we're attempting to sell it at some future date for a price greater than that unit. Will that?

Rabah (51:20.278)
So well said.

Rabah (51:26.358)
Bank.

Rabah (51:32.694)
Yes.

Rabah (51:44.15)
Yes.

Taylor (51:45.038)
that flow and the cash conversion cycle requires more clarity. In reality, your cash conversion cycle is probably the most important thing that no business owner could actually tell you simply what it is. And so the shift towards what are we actually trying to do here, which is, to your earlier point, as an entity, what we're trying to do is deploy capital and return more of it. But our visibility into that set of actions is horrific. And it really, it's underpinned by the operational side of the business around inventory and finance. So.

Rabah (51:55.542)
Yes, correct.

Rabah (52:08.182)
Correct.

Taylor (52:14.414)
What's happening is all of that architecture is finally getting built in a way that wasn't necessary when demand was like so easily accessible and efficiency wasn't the primary concern. But now that you need to be efficient to understand efficiency, you actually have to understand inventory. Understand inventory. We have to create better data structure. So as that happens, so that's the next step of next phase of e -commerce is maturity of the underlying data architecture. Then what gets layered onto that is AI now, now AI.

Rabah (52:18.486)
Yes.

Rabah (52:29.846)
Yes.

Rabah (52:38.55)
agree with you more.

Taylor (52:42.254)
can say what object that you have in what warehouse should go where, when, on what campaign, et cetera, et cetera, relative to placing POs and all of it, that can get layered on. But the data structure has to exist first and it doesn't.

Rabah (52:54.742)
This is exactly right. And this is also kind of very interesting because this is also usually where you see high growth, where there's a democratization of technologies. So places like Amazon bought Kiva, like all these big people that Walmart is one of the most like logistically strident, like they have metrics on everything, they can optimize everything. But now you're not only getting into a place where it's not hyper expensive to actually do it.

But to your point, you have your data in a place that can actually become effective and useful to your business. But no notes, man.

Taylor (53:29.614)
Everybody thinks right now you have a marketing problem, but you don't. You actually still have access to the most efficient marketing tool ever created in human history. You have an operations problem, and you have an inventory problem, probably way more than you have a marketing problem. And that's what's driven so much of the change in our business, is that if my job is to produce profit, the lever and action to do that is often not related strictly to a marketing initiative.

Rabah (53:59.478)
That's why I tell marketers they should stop at the gross profit because you have no control on the OPEX. You can make them gross profit and then they could be going willy -nilly in the OPEX and then if you're on the hook for net profit, you're like, dude, I gave you all this money and none of it made it down to the bottom line. So that's amazing. Okay, two more questions and we'll wrap up. What's one, like, if you could give a business or an agency like,

Taylor (54:15.31)
That's right.

Rabah (54:29.59)
a piece of advice that has really helped you or framework or how you theme things, structure things, what would that thing be? What's your Twitter headline for the TH advice?

Taylor (54:41.23)
Who am I speaking to? Who in the organization?

Rabah (54:43.094)
You are speaking to either an agency owner or a hyper growth brand owner.

Taylor (54:48.398)
Yeah, so an agency owner, it's very simple. It's stop trying to build other businesses, build your business, fall in love with your business. Like stop the idea that you're going to go launch a brand, please, for the love of God. You have maybe the best business model ever created in human history. And it may not have the greatest upside ever. Maybe that's software. It has disproportionate asymptotic returns. To use your word, I stole it earlier. That's a callback. But in terms of the highest floor,

Rabah (55:11.286)
Let's go.

Taylor (55:16.302)
highest potential still and great multiples, lots of exits in our space, lots of opportunity to succeed. It's an amazing business. Fall in love with it. That would be to the agency owner. To the brand owner, I would say reorder the sequence of information consumption for yourself every day in this order. Wake up every day and look at your cash flow forecast. Then look at your balance sheet. Then look at your P &L. Then look at your business intelligence tool.

Rabah (55:21.206)
Yes.

Rabah (55:25.91)
Yep, that's really well said.

Taylor (55:44.302)
If you reorder the consumption of information in that way, it will change the behavior of your entire organization and make the first one grow. And if you do that, everything else will fall in place.

Rabah (55:55.542)
Amazing. God, you're such a hitter. You're such a hitter. I loved, I could just jam with you forever. Okay, last question. What is your function of excellence? What is excellence a function of?

Taylor (56:08.91)
Living in, normally Coke Zero, but limited options at the place I ordered from. But yeah, that's my vice for sure. I have worked really hard to live in integrity with my best available truth. So that my, whatever I say it is matters most to me in my life at this moment that my behavior maps to that thing. And if I do that, I feel really proud of who I am and the way I'm acting.

Rabah (56:09.014)
also a DC guy. Look at this. I knew you're a man of culture and taste.

Taylor (56:38.606)
doesn't mean I'm gonna be right when I look back on it. In many of the ways I look back on my behavior and go, dang, I was wrong then. But in that moment, was I acting consistent with what I believed? If so, then I can be proud of that then. So I, yeah, go ahead.

Rabah (56:38.774)
Yes.

Rabah (56:50.206)
I love that. I mean, I think it's beautiful. And the only other two things I would add, so there's a great book called Thinking in Bets by Annie Duke that talks basically about this, about resulting. So many people result where they look back on the decision they made with the information they have now, where it's like, you need to look at the decision you made with the information you had then, because it's so easy to conflate the two, where it's like, I've made decisions, even at Firmout, where it's like, that was the right decision. Like,

Taylor (57:12.078)
That's right. That's right.

Rabah (57:18.678)
Did it work out? No, but at the time with those things, it's the right decision. And the other thing is when you build systems, like you might build a system that's 80 % win, 20 % loss. And just because you landed in the 20 % tile doesn't mean you should scrap the system and vice versa. If you have a system that's 90 % failure, 10 % win, and you land in the 10%, it's like, no, you don't want that system. Scrap it. You just got lucky. There wasn't an actual, it wasn't a skill win. It was just you happened to land in the right thing. So.

Taylor (57:20.366)
Right.

Rabah (57:46.422)
I don't know, I think that, and then the only other thing I would add is, obviously I'm a little bit hippy -dippy, but when you start living that truth and you're really aligned with what you say and what you do, and you show up for the, you give the people in your life that are most important to you the best you, the universe starts to make the hard things easy. Maybe not easy, but like, you just start to catch quote unquote breaks. And when you don't do that, the easy things become really hard. And that's one of my biggest like,

Taylor (58:11.182)
That's right.

Rabah (58:15.542)
internal heuristics that isn't quantitative, but just qualitative where it's like, dude, this should be easy. Why is this so hard? And that's when I know I need to reconfigure either me, the system, my environment, like what's going on? There's not a resonance here that when you walk down the right path, that's for you, you start to feel these resonance and you start to feel like doors just open that were previously really hard to find. And I think that is...

Really a function of being aligned with yourself who you are what you want to do where you want to go how you want to show up in the world It's beautiful, man

Taylor (58:48.558)
Yeah. And the other thing, so the other thing I would say is have a short list of those things. So I just got off with an agency owner right now that was like, what I want out of my life is I want to make this much money. I want to have all my employees do it. And he gave me this long list of all these things that he wants for himself. And I said, Hey man, if I could offer you any path to satisfaction, it'd be to shorten that list. And what, one of the simplest things for me in life that I, that I used to have all these.

Rabah (59:09.622)
Exactly.

Taylor (59:15.598)
things that I would use to measure myself and I look I still fall victim to this all the time. Am I a good friend? Am I being a good brother? Am I being a good boss? Am I the best? Like it was a long list of things that at any given moment I was inevitably failing at something and I would pick up that bar and it would feel bad. I've gotten down to a really simple list. There's three things that I currently work towards is that I want to die married to my wife or be best friends with my adult children and I'm trying right now to be retired by the time I'm by the end of my 40th year. So everything else you didn't hear be a good friend. You didn't hear.

Rabah (59:27.318)
Yes.

Rabah (59:32.278)
That's my favorite. This is it.

Taylor (59:45.454)
have the most social followers, you didn't hear it. So anytime I'm tempted to measure my value off of anything else, I remind myself that that's not what I'm trying to do right now. And I'm allowed to change my mind, I'm allowed to change it, but have a short list. That's the other advice.

Rabah (01:00:04.406)
Dude one of the best things I can't remember I think it was you and Shaq going somewhere or something and it's funny this I mean you have kids so you know this better than I do I don't have kids yet I do have baby fever though is that The randomest shit you say will have the most asymmetric impact on people

when you weren't even trying. And so why I'm bringing this up is you and Shaq, I think we're going to a golf tournament or whatever. You guys were just doing like a random AMA on Twitter. And I asked you kind of this question couched in some different clothes. But you said, I had to get OK with people being disappointed in me.

And I thought that was such a fucking bar. Like, obviously you have your core cadre, right? You have your partner, your kids, and then some semblance of family members and stuff. But I've just realized that, especially for my personality type of like, obliger, I don't want people to not like me, you know what I mean? Like all these things. And it was just like, dude, the real ones will get it. And the ones that don't get it, maybe they don't need to be in my environment. And it's nothing personal. It's not mean. It's just.

I need to show up and give my best self to the people that are most important to me. And that was really sage advice from you. So I really appreciate you taking the time to make that Twitter feed. And I appreciate you taking the time to make this call. And this podcast has been impeccable. I just love the way your mind works. And you also just have this intellectual horsepower that is so interesting because sometimes I can intellectually browbeat people.

Taylor (01:01:15.758)
That's right. That's right.

Taylor (01:01:22.83)
Heh heh heh.

Taylor (01:01:30.606)
Yeah, buddy, it's.

Okay, can we do...

Yeah, yeah. Yeah, yeah.

Rabah (01:01:39.99)
into having conversations go certain ways. And you are just an absolute immovable object meets an infinite force kind of thing. And it's just been such a fun ride with you. How could people? Yeah.

Taylor (01:01:48.302)
Thanks, buddy. Yeah, I feel like we've been well, well, let me just say the last thing. Let me give you some love after all that is I feel like we've been cojourners and like side by side in many arenas. And someday we're going to find something something to do together, I'm sure. But yeah, I appreciate I think one of the things that I've watched from you is that you engage our world with a lot of kindness and graciousness. And I think it's served you incredibly well. And so.

Rabah (01:02:02.934)
100%.

Taylor (01:02:14.638)
You're a cheerleader. You're a positive impact on the world around you. And so I appreciate that very much. And it's something that I envy your capacity to be that way. It's not as natural for me or maybe you've had to work at it. I don't know. But so yeah, man, you keep, keep leaving a positive trail wherever you go, because I certainly experienced it.

Rabah (01:02:32.47)
Let's go, baby. Yeah, I mean, I'm super crazy, but I just find it's good to spread the light. But I will say, I despise toxic optimism. So like when shit's not going well, you know, you got to be able to talk in a frank manner of like, hey, you need to get here. We're here. What are we going to do to get you there? Like that kind of thing where toxic optimism is not great. But I also think, you know,

seeing the world in a rational optimist is a really good way to move through life. Or for me, anyways, I've found that it's just a better way to assume people are doing their best and smart and then ratchet back to, man, this guy's a douche bag or this gal is not the nicest person to interact with, versus starting from the end of the spectrum and trying to move them up. And so yeah, there's going to be people in the world that you might not totally align with, but I'm also a big for agreements guy, where it's like, dude, it's not personal. It's, you know, you just.

Taylor (01:03:17.966)
Yeah, for sure.

Taylor (01:03:24.782)
Yeah.

Rabah (01:03:28.342)
You just move on, but I really appreciate those kind words. Taylor, how can people follow you? How can they get more involved with CTC? This time it's yours, my friend.

Taylor (01:03:36.526)
Yeah, at Taylor holiday on Twitter. My DMS are open. They're too much for now until I disappear. But I love the community. I'm grateful for it. It's not a lot for my life. And then Taylor at common thread code .com is my email. If you're interested in talking about service or anything else, I'm available there. Try to get through all my emails every day. So I'll do my best to get back to you as soon as I can and appreciate the time.

Rabah (01:03:42.182)
Same.

Rabah (01:03:57.654)
I love it. I love it.

Rabah (01:04:02.39)
You're the best, dude. You're the absolute best. If you guys want to go book a demo at firmoutcommerce .com, we'll make the money printer go more burr, create funnels, like you create ads. And then we also have a great newsletter that goes out every Monday called The Geometry of Growth. Go sign up for it right at firmoutcommerce .com. Go follow Taylor's feed. He is one of the most brilliant people I know. But you're also, you have a range. You have some really awesome intellectual range where not only philosophical, but systems, marketing.

really, really strong feed. Go do that. And then he has a bunch of content. Is that just all over CTC, like the Bridge series you did, like the trainings you guys do? They're fabulous, man. They are absolutely top floor. Yeah, absolutely top floor. Awesome. Thanks for tuning in, dude. I really appreciate it. When I make it out west, I'll give you a ping. If you come to Austin, let me know. And that's another equation of excellence in the books. Thanks so much for showing up. Taylor.

Taylor (01:04:41.838)
Yeah, if you like long form stuff, YouTube's probably best.

Taylor (01:04:51.95)
Yeah, come on.

Rabah (01:04:59.19)
You're my muse, brother. I really appreciate all the awesomeness and same of you just putting light and knowledge and really awesome but respectful discussion into the world. And that's my favorite, favorite vibe. All right, folks, that's all we got. We'll see you on the flip. Bye bye.