Equation of Excellence

FERMÀT Commerce (00:00.334)
work. Alright, alright. Here we are folks. I think everything's coming in live. We got mic check here. Here we go. Did you test mine yet? Is it good? Yeah. Can you see? Yeah, yeah, yeah. Oh yeah. Good. We're live people. Alright, three, two, one.

I am here with my favorite humans, a Jersey transplant to Miami. He's, why is I spelling me a little bit on Miami? I was out there a little bit for a conference and dinner. Nothing not to like there. How long have you been there? Close to three years now. Do you miss the hustle bustle that you spent? The only thing I miss about New Jersey, New York, honestly, the food and the beer and then the cocktail bars, you know, like quaint little spots. I'm going to go plopping every night.

Miami.

Find it difficult to find a good meal and just a good simple drink. Yeah, Miami's very index on the fist bump. Yeah. Very, very peacocky lifestyle out there. Sometimes you want just good food. You don't need all the glam and the glitz. Yeah, exactly. And, I don't know, New York, there's just something special about the New York corridor over there, like the city, Brooklyn, even some cool spots in Jersey. There's a there there. Oh yeah. The weather sucks though. Oh yeah, weather sucks. That's what drove me out. Yeah, you can't do that. Okay, we kind of jumped the shark here a little bit.

But John recently had a really awesome exit with your agency previously did your agency and I didn't realize this the agency came out of your brand incubations So bring the people along for the ride. Let's let's get the John Snow chronology. Yes. We'll give you the whole story. Yeah, we won't touch on the dentistry side of things today.

FERMÀT Commerce (01:51.982)
Really? Yeah, still licensed. Okay, so we'll plan a flag in the dentistry stuff. That'll be for round two. The military dentistry business class. Yeah, so I really got started on the influencer and affiliate side. Built an affiliate marketing platform about ten years ago with my brother, Danny, that leveraged influencer pages on Instagram. So that's how Danny got into the RAPTV. So yeah, the story is Danny was building all these big Instagram pages. RAPTV is one of them.

That's what everyone knows his Instagram network for. And he had a realization. Smart guy, he picks up on things real quickly. He's like, I have millions of followers. I know a lot of other pages that have millions of followers. They were in all these shout out groups, amplification groups and whatnot. But he realized, and then there were influence pages out there, and no one was really monetizing those pages properly. So he's like...

He saw the value because he had certain advertisers buying shout outs on his page daily. And he was increasing the prices week over week and they kept buying daily. He's like, these things must be worth a lot of money. So he came to me, he's like, Hey, do you want to build this influencer marketing platform that essentially is running affiliate offers through their pages? So essentially buying placements on their organic pages. And so we had all these different offers and we were taking a cut and ended up working with all the biggest influencers Instagram you can think of. One of the Kardashians was in our network.

I was buying shout outs from Cardi B for $100 back in 2013, but right as she was coming up. Wow. So yeah, we drove nine figures in revenue through that platform within two years of launching it. That's why I was still a dentist actually. I was doing this on the side. No! I was practicing in the Air Force. So I had all this free time like dentistry or like the dental clinic would open at 7 a .m. I was back in my apartment at 3 p .m. in the middle of nowhere.

I was free time of my hands and that's when timing was perfect. If this happened while I was still in dental school, there's no way I would have taken this on with Dan. So it was the perfect timing and from there we're like, oh shit, this influencer network, we have so much leverage now, why don't we start launching our own brands? So we launched our first e -commerce brand. Built a Shopify store, we had no idea what we were doing on e -commerce, didn't know how to even run paid media, didn't even buy media yet, it was just influencer. Launched that brand, built a warehouse in my garage in Louisiana, fulfilled orders.

FERMÀT Commerce (04:15.792)
I forgot in my garage.

Starting with a credit card, didn't raise a dollar of capital. Really? Yeah, and then drove seven figures of revenue within six months of launching that brand. Profitable, everything was profitable. We're like, holy shit, why don't we launch another brand in a different niche? We could hit different influencers with it, right? So, launch our second brand, same thing, seven figures within six months. Then we're like, okay, let's launch a third brand. And then we started getting deeper into e -couch work. This is actually gonna start taking off. So, started learning email marketing, started learning Facebook ads.

Google Ads, the whole nine, landing page, created, started mastering every element. The third brand we hit it big with, there was an eight figure revenue brand within the first year, threw that to 30 billion in revenue within two years of launching it. And then we launched a fourth brand, a fifth brand, and we started assembling a team, bought, or not bought, but got a lease on a huge warehouse in New Jersey, ran our own fulfillment center for like nine brands, we were fulfilling thousands of orders a day, it was wild. And then, yeah, we started.

We did everything in house, so we never outsourced any form of marketing or anything. And over the years, yes, we got to start building a reputation and brands started coming to us to do the marketing. So we already had our whole infrastructure set up for our own brands. Took on one brand, and they referred a brand, they referred a brand, and next thing you know, that was it. Wow. What was it like running a fulfillment that...

That's to be just a whole day. That was the worst, that's definitely worse than practicing dentistry. I'd rather be in people's mouths all day. That's way better. Thousands of orders a day, you're in Black Friday. I have pictures and videos I'll show you, but we got kicked out and we kept out growing everywhere. So we started with like...

FERMÀT Commerce (06:01.038)
It's actually in the same building as the Abbey guys. No way! In Cardi, New Jersey. What? Actually, there was a little office before that, but it wasn't fulfillment stuff. Fulfillment was in my garage for a while until that. I got outgrown. Then we went to Cardi. And sacking boxes, floor to ceiling. There was no room for even a desk. It just turned into a fulfillment. And they're like, what are you guys doing? This wasn't a part of the lease agreement. You weren't going to be running a fulfillment center. Like it was an office. You were going to be fulfilling like 100 orders a day. We were at the post office. Guy was coming. We were dragging bags of shit through the...

office building is wild so they're like

You can do this, but you need to take over like five times the space we don't have you actually need this space Yeah, so we moved into a different place in that building then they ended up just picking us out if we had pallets of shit I could have in and out it was just right. We were like the elevators were just No one in the office could always building can even use elevators in those things all day and then yeah from there we just Went to Clifton, New Jersey have this huge like I remember how many square feet both massive shit with two rafters We have the biggest nightmare is that?

that we weren't fulfillment ops guys. So we had all this stuff. So like we had shrinkages in the warehouse. We get hiring warehouse workers, it's tough, unreliable most of the time. So people call out, but you got thousands of orders to fulfill. We realized one day we're like, ship hero inventory levels don't add up. Like something's going on here. And so we had cameras, so we just ran it back one day and we found out that.

Some of the warehouse workers were taking bags of orders and instead of loading them on like a truck, they were throwing them in the dumpster pretending they were taking the trash out. And so they were filling up a dumpster throughout the day and they were just loading it into their truck at the end of the day when everything closed and they would come back later that day and...

FERMÀT Commerce (07:46.478)
And it was all gone. They were doing this for weeks and weeks and weeks. And God knows how much money, yeah, was stolen. That's an awkward conversation for sure. Yeah, the logistics business is a, I mean, that's a whole monster by itself. So that happened. We outsourced that. We ended up outsourcing that. And yeah, sometimes you run out of inventory during Black Friday. Like it's just, it's a nightmare. If you're not scanning things in properly, you think you have X amount of stock and you don't.

Yeah, so the other thing too is to get really complicated with like bundles and stuff. How do you account for bundles? And you kit everything. Yeah. That's interesting. Yeah, I think...

That is definitely the last thing I would bolt on in terms of incubating MIM is logistics where you definitely get hold of a barrel, don't get me wrong, but like we were talking off line, there's more to cost than finance where your focus and your bandwidth, those are honestly way more expensive than the finance. You can't find money places. It's hard to get the team focused or when the focus gets sporadic, it's just, there's some real knock -on effects to the business version.

It's like I can figure out how to get money but oh yeah, but any mistake that you make is gonna be so costly one costly stupid mistake you make from a full -fledged op standpoint pays for the entire Delta European Union you're paying for outsourcing is so up that's so well put in to you because your he's our finding president findings with Which I want to get into in our group text, but also just the peace of mind so nice to be like hey I have somebody to yell at like exactly this is your job. I'm gonna go do this step

Now that's so interesting. Do you miss the brand incubation? Do you hit stop me or no? No. Over the years when we started, we got to that inflection point where we had like nine brands, we got nine clients, and we're like, these are totally different business models. Which side do we want to be on? We can't scale both and spread ourselves thin. We're just gonna, you know, we're not gonna get anywhere before. So.

FERMÀT Commerce (09:48.207)
had that introspective moment where we're like, you know what, we just love marketing. We aren't passionate about the brands that we're building. We're really good marketers. We love selling the products. But you know, it wasn't getting our juices flowing. Order products. Try to build that product line. We weren't product guys. We were just scaling guys. So we're like, okay, let's sell our brand. So over the years, we sold off all of our brands and yeah, we just transitioned into an agency. September 2019 is when that happened.

Oh shit, you guys are so young. So you went from zero to year five exit, or four I guess. That's incredible. If you were going to start up right now, what would it be? If I was going to start up right now, wow, that's... It would definitely be a subscription heavy brand. Love that. So, consumable. Ideally it's a product that someone uses every day, so monthly subscriptions are in the way. I've seen CPG brands try to do these subscriptions that it's not clear when the refill is going to run out, and it's like...

Might be three months, might be five months. I asked the brand owner, what's the lifespan if someone uses it every day? They can't even tell me. How are your customers going to know what frequency is like? They're going to end up having a monthly frequency or every other month, then they're going to start stacking it up. They're going to cancel that subscription and struggle losing forever. That's a, dude, that's such a nugget. And I, when I was consulting brands as well, that was one thing. Like if you have a subscription, the closer you can get to that monthly cadence, the better. Cause the death nettle is like somebody loves you.

you just keep shipping and then you're just so and then you eventually have a warehouse of Huron or something like that. I love my Huron warehouse, I just bought a bunch of soap. But that was my issue is like, I think people buy with a no regret strategy and that making a bad decision is way more scary to them than making no decision. So instead of subscribing, they're gonna buy, buy, buy. I honestly think the, I'm old, so do you remember the OG Amazon buttons? Yeah.

I thought those like now are kind of great where it's like, I don't know, maybe we can start a little Shopify thing because I love like just being able to hit a button and like I need it now. Just shit down stuff. Because you take all the, they offloaded all the complexity to the merchant and the user just hits this button and you just send me stuff. I'm with you man. I have so many products that I love that I have zero subscriptions for because I just bulk buy. Because I don't know when I'm going to run out, how I'm going to run out, how I'm going to consume it.

FERMÀT Commerce (12:16.047)
Okay, yeah, super cool subscription having what else? Yeah, I would say most use store like close to like not a lot of flavors or sizes or variables to it. I would start with like from a brand starting out. I might only want to start with one skewer to Max. Yeah, last thing you want is close to 10 skews. You don't know which one's your hero product. You're testing all of them. You're having tests that aren't like statistically significant. You're calling them too early. You just create this store of like, I don't know what the fuck's going on.

I couldn't agree more and honestly I've worked in a lot of big skew brands Dude, it's that Pareto principle where 20 % of those skews are generating the 80 % of the product So it's like these skews are okay, but they're almost Or in my experience. They were essentially passion products of the owner. Yeah, they're like this is a really cool product We should have this product. It's gonna break even or because the other thing is I don't think every product has the anatomy for paid media as well.

And so I'd work in, you know, 23rd SKUs and we would only have two SKUs that we would run paid ads behind because everything else, the math just didn't math. Like, I got a long one that didn't make sense. Or it's like, yeah, I can sell these, but I'd always have this like thought experiment of if this scales, like would I be happy? And the worst thing you can do is have success scaling it. Like, oh my gosh, we're selling $10 bills for $20. You can't do that perpetuity. It just doesn't work out. Okay, so low SKU, what's the vertical?

The vertical, honestly, it would probably be in the supplement stage. This is literally my whole exact basis. Yeah, supplement stage. And if it's functional, if there's a problem solution, it is so easy to market. If there's, I'm not saying it has to be a before and after, but probably a before and after thing. But as long as it's there to do something, there's an active ingredient that's exciting and functional, and there's a whole story behind it, it's going to be easy to sell. And so I used to work at a company.

and that was their hero product was AlphaBrain. It's exactly what you're talking about. I think it's set a different way. It's an easy story to tell yourself or somebody else why you're buying the product. And so it's like, oh, I have this. Is that me? Am I? Oh my gosh. I'm such a scrap. Is it this one? Unbelievable. I quit texting these people.

FERMÀT Commerce (14:41.615)
You crack up like eight phones over here. I know. Unbelievable. Oh, you know what? I'm a King D &D guy. But because you came into town, I wanted to make sure I didn't miss your text. Got it. OK, so is that one? OK. And we're back. And we're back. I'll never look down this chain. I'll never look down this chain. OK, so now I want to kind of dive into a little bit.

tangential to the brand question.

how heavily do you build a brand or do you take into consideration the effectiveness of TikTok shops? Because you have, I was never bearish on TikTok, but it was kind of AI where I just, I couldn't formulate my thesis on it yet. And you've given me so much clarity there and not only TikTok shops, but TikTok SEO is great. And I would argue if I was indexing on Google SEO or like Web SEO, Google SEO, if you will, and TikTok SEO, I think that -

there's way more upside to TikTok SEO. Would you factor that into your brand building of...

Oh, this is going to be a brand that can really heavily penetrate TikTok and TikTok SEO, or do you think that's more of an <|tr|> <|translate|> <|notimestamps|> ancillary consideration? Yeah, I would say the TikTok SEO is definitely ancillary consideration. I wouldn't bring a brand just for that. That's like an extra value prop for being on TikTok shop. You're going to get this whole organic search volume traffic in your shop just because of non -brand keywords. Yeah, that's fair. Would you want an influencer distribution?

FERMÀT Commerce (16:20.207)
at the center of this brand. Oh yeah. Yeah. So I mean with TikTok Shop in general, the two main unique drivers behind TikTok Shops is it's all about virality.

without having to deploy me at all. So I have always been bearish on TikTok ad platforms. I still am. That's not what excites me about TikTok shops. I see TikTok shops scaling right now through organics, so the brand posting frequently on their own page and the influencer affiliate network on TikTok shops. So if I'm a brand today, I'm not working with any influencers unless they are TikTok shop affiliates. So yeah, because there's one -to -one attribution. So when an influencer is posting and tagging a product,

Obviously that the consumers are going to be buying it on a TikTok shop. They're going to be clicking the product that's in the video. They check out on TikTok shop. You have one -to -one attribution and in TikTok's analytics platform, you can see where all of your revenues attribute. Is it from your brand organic page? Is it from the influencers organic post? Which influencers post is doing well? So you get all these metrics and attribution is solved. And TikTok literally tells us that the algorithm is favoring brands that are tagging

products in their posts and they're favoring influencers who are tagging products in their posts and brands that are posting more frequently and influencers that are posting more frequently are also getting rewarded in that way. So they're creating a ecosystem where if you're just investing in TikTok and just building there, whether you're an influencer, you're doing a lot of creative on TikTok, you're building TikTok first. And if you're a brand and you're posting every day, multiple times a day, the chances of you going viral and just getting free impressions essentially is astronomically higher. I mean, the mental model I use almost

is you're buying essentially lottery tickets for free. And so why not? Exactly. And you want to test creatives, right? Like everyone talks about like blowing money on creative testing on Facebook.

FERMÀT Commerce (18:11.695)
Don't even do your creative test on Facebook. Do it on TikTok organic. Do it on your TikTok influencer pages. Whatever engages well there or performs well, use that as your filter for what you're gonna then test on Facebook. Since it's almost like a zero dollar cost way of testing your creative and your thesis. Man, I love that. I love that. Speaking of Mediavine, you just dropped a GoFollow, what's your name? On Twitter? Dr. Jonathan Snow. Dr. Jonathan Snow, DDS, go get it folks. You just dropped a

a really interesting thread on bid cap multipliers. Bid multipliers. Bid multipliers, excuse me. I don't think a lot of people know about them. I knew Quasi about them, but they were so new that I never deployed them. Give the listeners a skinny on those and then if they, when you would apply them. Yeah, so I just put out a great thread on Twitter, like Rob said, follow me to go read through all the details. It's a lot more detailed even than what I put out there, but long story short,

Meta only has a certain amount of data.

that they can use in the auction and everything like that. You know LTV of all the different, you have all this first party and zero party data. You know if men or female are worth more money. You know if iOS or Android devices might convert better or have more lifetime volume on the backend or have maybe a higher average order value. So you have all this granular data that you can group into different cohorts essentially. And if you know that group A is worth more than group B, you can out -tell meta that in the form of a business.

multiple product. So let's just say females are worth 30 % more on lifetime value than your male customers. Meta has no idea so they're just gonna you know if you're running you know $100 bid they're just gonna bid $100 for everyone but you're like you know what I actually I want females I'll bid 30 % more since they're worth 30 % more. You tell Meta that and so the bid cap is like 1x you can't go past it so you do a little bit of math where...

FERMÀT Commerce (20:11.247)
you know, the females will bid at a full 1X and in the males you'll do 0 .7. Right? And that, so now when that is algorithm knows, and this helps you consolidate your ad account, consolidate it. Right? So if the men doesn't want you to over segment and do like, oh, one ad set where you're going to female and we're going to set, you know, a bid at this much. And then the males, we're going to do a different ad set because then that's destructive. You're spreading the data thin. You're not consolidating. It's almost like reverse best practices right now. So now you just want a broad audience, but you give the algo all of these little nuts.

That's so interesting. Is this?

dependent on scale or spend. So will this work in kind of the smaller to mid -tier businesses or do you need to be doing so and so? So yeah, the most, I would say the biggest thing is it really depends on how much first -party data you have. If you truly have a good data infrastructure, first of all, data needs to be reliable. Last thing you need is to run, you know, big multipliers on bad data, right? So if you have a data set you can trust and it's big enough to where it's statistically significant, you know that females are worth 30 % more than males.

And you're spending on Meta at least, I would say 100K a month in ad spend on Meta and you're copying the data set, that makes absolute total sense for you at least testing it against your business as usual. And Meta has the exact framework of how you should be running a bid -multiplied test versus business as usual. Super simple. There is a little bit of legwork getting it off the ground.

In my tweet thread, you'll see like three ways of activating the multipliers either through a Meta business partner They have their own Meta dashboard and you need to create a Meta marketing app or just through the API So if you're buying media through as API, those are the three ways So it does take a little bit of a lot of work off the ground or if you're spending $100K a month That's cool you can do through the API so it's possibly some semblance of a feature built into a business that later deploys it and kind of builds it into your bid strategy. Right.

FERMÀT Commerce (22:06.769)
That's so fascinating. Yeah, I never really messed with them, but that makes tons of sense. I talked to a few Titans that I really trust whenever I have these big questions or before I start testing because I get their feedback. They're running their own tires. They've been doing it. They've been doing it. You never know. No one talks about it.

I've been speaking with our MREP at the agency and he's like, you know what, you guys should really start testing some of these accounts and it would really take it to the next level. And I've always been a skeptic a little bit, but I've seen it and I've talked to the right people and it makes total sense, right? It especially makes sense if the consolidated ad accounts now in Advantage Plus. And I would argue too, that's always been the missing link in the outgo is not necessarily an estimated action rate, but that value factor.

Now you have this value back there. You used to be able to kind of hack it together back in my day, but now that there's a literal direct line to the algo, that makes tons of sense. Huh. It's fascinating. I need to start playing around with it. Maybe I'll throw some money behind the merch store. It's really interesting.

Speaking of media and agencies, big big news coming out of Boston, Klaviyo is doing professional services. What do you think about that? Do you guys offer email? Yeah, we offer email and SMS. You guys are full stacked over here. Yeah, we have the highest partnership here with Klaviyo actually, and attentive, we like both.

I'll say right off the bat, I'm not upset. Like, if you go do this, it makes sense.

FERMÀT Commerce (23:44.559)
They've just been, for any day, rolled out really poorly. We were totally blindsided. It's like, what, we just get an email and that's like a much bigger deal to where before that email goes out, your partners, at least the top partners, should be consulted. So it really depends. They didn't say we're only, the arguments right now are like, oh, they're only doing this for enterprise. But they didn't say that to their partners. Don't you think if they knew that their partner would get upset or frazzled about this type of decision, they would,

I'll lay those fears by saying, you know what, we're only doing this for 0 .1%. We need to penetrate X, Y, and Z, you know, billion dollar companies, and this is the only way to do so, and that's our intention, we're only gonna live there. That makes total sense, that's transparent. I think if they start rolling this up and down their book, like whatever brands, you know, whatever monopop store on board to Clavio that has zero in revenue and is just gonna pay that to get their templates off the ground, their flows off the ground, Clavio is going to nuke themselves.

because they're going to piss off and alienate all their partners because now their target market is every brand. They have, what is it, 150 ,000 active clients right now. So imagine how much they're going to have to scale their service teams. So now they're getting into this whole like, are we a tech company or a service company margin compression, which the stock market will hate. And yeah, and the multiple, if you're not a software business, you're blurring the line on straddling both sides and like you're destroying yourself in two areas.

but then you're gonna start alienating all your agency partners. And that's how you got there. So you cut off your main engine for how you rose to IPO as a multi -billion dollar company, and they start going to the more agency and marketer friendly companies that, I'm not gonna name any names, but everyone knows that these other companies are out there and rising in the background. They're kinda like the...

ESP for the people right? Yeah. Like, Klaviyo started approaching on this like villain territory which is a very dangerous place to be. Yep. Because that's where the allegiances start shifting. Yeah. And if they're more expensive than their counterparts and their, you know, the relationship isn't there anymore they could, they could be nuking themselves so. Yeah, no, I had no notes on the tape. I do think it was the right call but I think to your point the comms strategy was absolutely atrocious. I felt almost the same thing when I was running a triple web.

FERMÀT Commerce (26:06.769)
when we changed our pricing, we actually, it was actually great. Most of the people were actually gonna pay less. There was all these actually big nuggets that were awesome and we just rolled it out terribly and all this backlash. So I think that's absolutely right. And I also think to your point,

it would behoove them to play in the enterprise because those people are giving them the most money. This is one thing that I was shocked by where they only have a little over 1500 people giving them 50k a month or more. Which was like, wow, that really sized the DTC market for me. Where it was just like, there's just not a lot of them. And what we would call, I mean, I would argue, I don't even know if there is an enterprise brand in DTC because what I consider enterprise, Target, Walmart.

Home Depot, these are proper balance sheets where it's like, you know, even Hexpad, what, even on the high end, and I'm just making numbers up here, they're gonna do half ability across the whole thing. That's not enterprise. Enterprise for D2C, yeah. That's what I'm saying, right? It's not SMD 500. Yeah, yeah, you know what I'm saying? It's just kind of interesting, so, yeah, I don't know, I think it's definitely the right move, but I think the wrong rollout.

So yeah, we'll see and I think the walk -ups about to expire. So not stock advice There could be some down and here's where it could really get weird and that is probably the biggest point If they are going to be scaling their services teams

there's two things that are going to be really detrimental to them. One is if obviously they're going to have service teams with sales targets. It means they're going to be going after clients on LinkedIn, Twitter, and they're not going to realize that their agency partners or platinum whatever, master platinum, titanium partner.

FERMÀT Commerce (27:57.615)
services that client and they're gonna be, you know, who knows what type of access these service teams are gonna have to, even if they're not managed clients and start talking crap about their agency partner, like that could get to a really weird place where agencies just totally jump ship from them if it's executed poorly from that perspective. But then the other side, if they're stealing that service team, they're inevitably gonna start hiring from agencies. So imagine they start, imagine Klaviyo came and they poached one of my teammates, I'm done. Klaviyo, we're done. First of all, probably like a non -solicit.

as partners, but like that's bound to happen and even if it doesn't happen that aggressively, which I doubt they would ever do because that would be extremely destructive for reputation, it could happen indirectly. One of my employees could apply to go to PlayB .io and then I'm going to be upset that they hire knowing that they're coming straight from us, right? So there's this whole gray area of like just talent procurement and allocation that is inevitably going to be crossed. And I think you can get into a really weird place too because...

they have some economics they can subsidize. So then they can start to distort.

market rates. Oh yeah. Where it's like, well, Klaviyo offered me a buck 80. You're making a buck 20. It's like, dude, I can't pay you one that I love you. I want you to be here, but they're overpaying. You get into this really interesting kind of talent scarcity where again, yeah, they're just going to start to distort market rates. When you can throw, I mean, it's like a gorilla. It's like Silicon Valley software engineers. You know what I mean? It's exactly it. It's on the price. I don't know. Yeah. It's such an interesting one.

Ah.

FERMÀT Commerce (29:34.095)
What do you think, do you have any predictions for this year? You're one of my favorite followers in terms of, like I was teasing earlier about the macroeconomics, what do you see in the, because consumer confidence is quasi -voluntary, but goddamn, it feels like 2021, right? Shit's ripping, dude. Shit is ripping. The stock market is definitely not aligned with what's going on. It's on the ground right now. I feel like 2021, the market was exploding. Every bit.

business is just growing, e -commerce, services, tech, everything was like, you know, you're just swimming in this ocean of opportunity and you can't do anything wrong. Even if you're doing shitty, you're still growing year over year and you're profitable. The ecosystem is so different now, it's like stock market's at an all -time high. Well, crypto is right there with it, but I feel like businesses in general are not on that same ride. But Magnificent 7, like AI Boom and Nvidia and you know.

Indeed these are the guys that are carrying the stock market. It's not so much like the rest of the S &P. My son's a bullshit actually the two weight loss drug companies Eli will he's been exploding to What's up? No, no notice with you? Yeah, I was I'm big and What's with the? Eli willy one is uh, yeah. Yeah, they have other one right now. I don't even remember the name clearly. I would take weight loss drugs, but

Yeah, they're a message company.

And they're a dividend crush here too. So like they're paying dividends, they're growing 100%. Like you go over to their stock chart, they look like a... To be fair, Nvidia too, right? 268 % growth at those numbers. The math just doesn't even do that. My tin hat for conspiracy is like, they might be the next Enron. There's no way this business is that good.

FERMÀT Commerce (31:39.281)
I've been selling on the way up. I've had Nvidia since 2015. I'm up like 2000%. What is this, a 20 bagger? Yeah, 2000%. So I just sold at 800, now I'm at 880. Sold at 800 like a week ago. Now it's up 10 other 10%. That's a big loss right there. I'm happy to offload on the way up. And then rebalance into index funds and money market. I'm a compounding type investor.

These companies aren't going to grow forever. The second they have a bad end report, they fall 40%. Then there are values to hunk. It's never going to keep growing. That's so interesting. So do you have any kind of, do you think, like it's an election year here in the States, do you think that'll have any impact on kind of, because from my take with election years, the worst thing that can happen is you don't know who's going to win. Right. Because then you get the pro -clutching. You know, like, you know, not to get political, but if you know a den goes in, taxes are possibly going to go up, things of that nature. If you know,

Republicans gonna go and say fuck it. We're just gonna rip and you can strategize and put your portfolio and employer capital knowing kind of the litigation that's in the pipe If that doesn't happen, you can start sometimes to see like a q3 q4 freezing effect where people are just like hey Let me wait and see until election season has and we see who's the president who what his or her cat like stock market strategy now or you know, we're just

Definitely, maybe I'm wrong, but there's definitely some macro economic linkage to D to C. Oh yeah, like ad costs are absolutely going up in the election year. Yeah, so I got an actual prediction that's tied to macro is like ad cost CPMs. I actually just posted this in my newsletter this past week. CPMs on every ad platform have been negative year over year over the past two years. Really? And Facebook just pumped out the craziest earnings. But my prediction is that all of them go up this year. Maybe they go up in the next year.

except Pinterest. So, it's like Snapchat, it's all publicly traded. Big fours, Google, CPC, Meta, Snap, and Pins. TikTok doesn't report, but we know that they're probably in the same boat, but they all have that.

FERMÀT Commerce (33:51.279)
you know, 2020, 2021 year over year growth and then boom created once the macro shifted and ad dollars pulled back, it was negative year over year for seven straight quarters. Then I think it was Q4 of 2023 was the first time I think meta Google went positive. I think Snap Google meta are positive every single quarter in 2024 year over year. Pins increased ad load this past year. So they're like really negative year over year because of CTF.

Yeah, yeah, yeah, pins suck. They're tough. I feel like it's actually big that they're going to the Google ad platform. So it's going to give exposure to brands that are very hesitant to go buy on another platform.

I think it's interesting with the pin sub, and I agree with all those tags, I think that's spot on. And for people that don't know why it's so impactful for us as media buyers or in the media space when you have political election years or big congressional seats or whatever, when you give money to a political campaign or when that political campaign gets money, if they don't spend it, they lose it. And so they will just go full fucking send no matter what the efficacy is of it because if not, they literally have to figure out a way to redistribute the money.

because legally they have to spend it. So there gets into going back to distorted economics. You get to this place of like, say of election year overlay that with Tmoo in China jacking up ad spend. Those TPMs are going way up and yeah, so ad costs are definitely on the rise. So that's one big prediction.

What is one big opportunity that you're looking forward to and what is one big thing that keeps you up at night? The biggest opportunity, honestly, right now is to top shops. So that's like the biggest blue ocean right now for e -commerce brands, especially for brands like AOV. I'm seeing AOV under 50. Is 50 really like the secret? I was gonna ask you, is it a function of price? Yeah, for sure. I mean, I've seen brands work really well over $50, even over $100. Really? I wouldn't say, if you're a $500,

FERMÀT Commerce (35:53.617)
A .O .B. brand don't test TikTok shop. It's free. It's literally free. Go have your organic page cranking. Right? Like TikTok's only, you know, it's gaining more and more. There are genties on it, obviously, but like the older people are, my parents use TikTok. So it's only going to grow the daily active user base. So like if you're a growing brand, you need to have an organic presence. Launch your TikTok shop. It's a few hours of work, max, depending on how many skews. If you're a high -speed store, I would not launch all your skews. Launch 10, launch 20 max.

see what goes on but like so the opportunity on TikTok shop is just under 50 that I see these brains cranking the number one TikTok shop I'm not gonna name them right now they don't even run paid media it's zero zero ad spend a billion and it's a flywheel like once you once you open your TikTok shop

Once you get a few influencers to work with you and a few do well and they start selling products, other influencers see those influencers posting it and printing money off it. Now they apply to work with your brand on TikTok. I feel like a platform is like an open collab. So it's just that once that flywheel starts going, I mean, these brands like, and even an enterprise brand Tarp Cosmetics, I posted about them. They did over 10 million TikTok shop revenue in less than a year, zero aspect, just from live shopping and all this stuff. So they were getting wrecked on.

The Twitter verse about they just had that like big influencer event. I guess Did horrible Okay, tick tock shops. I'm hundred something either I think you totally changed my mind on the tick tock SEO thing I think that's something that at worst you just get a dedicated resource and like that's that's what you do and almost Operate autonomous of it. I'm not autonomous to this but you go I'm saying like just go hunt and kill right like you're hey, yeah So here's a good example. We set up a tick tock shop this brand is

zero brand awareness, they didn't even exist. We were launching them, built their Shopify site, built their TikTok shop, before we even launched their website, before we even launched their organic page, we just set up a TikTok shop product listing, just to make sure they were there, whatever. Next thing you know, I look at Seller Center a few days later, and the product listing somehow had hundreds of views. I'm like, what the hell's going on here? No ads alive, no influencers are supposed to get. We don't even have a post on the organic page.

FERMÀT Commerce (38:19.087)
We haven't even uploaded the profile picture for the brand on the TikTok shop page. And we just looked, it was all organic search for the non -brand keywords. So they were already showing up as the number one brand on TikTok shop, whenever you searched their product category. Just because we did proper TikTok SEO and like the product title. So here's like another nugget. If you're setting up your TikTok shop, TikTok does an amazing job of telling you like where you're missing out on SEO opportunities. So they'll tell you like what the keyword volume is related to your products.

that you're missing out on and they'll actually say like, add this word to your product title, add this, and like you just click accept suggestion and boom. And like now your brand is just little things like that. Not a lot of competitions. Like right now there's like that arbitrage moment for TikTok traps. I don't think it's gonna be there a year from now. So it's like I'm a brand I'm watching again on the platform and just crank it. Cause that algorithm is not gonna be there forever either like favoring TikTok traps. Exactly, no. It feels a little bit more so, yeah, exactly right.

What keeps you up at night? What keeps me up at night? That's a good question. Well, the stock market only fits now. But, uh, DCA! You know, it keeps to until DCA and that's it. Dollar cost, average, index funds, money market while the interest rates are high. You literally, if you're rich right now, you literally can get paid for it.

You're just parking in a 5 .5 % APM. Oh yeah, you could be making six, seven figures a year on your dividends from a money market. It's insane! Your money should not even be in a bank account. Anyhow, so what keeps me up at night? That's a good question. I would say... I would say just the approach of marketing as a whole right now.

Omnichannel holistic marketing and just like deciding where to deploy dollars. But that's also where AI has started to come into play. Like there are some companies right now building. Yeah, Crestian. Yeah, Crestian has been under the radar for a while. I've seen their product and platform grow over the past couple of years and they're at a point where they're about to start. I think that gets interesting. That's going to get interesting. So it's like if you're a brand, you have over a billion dollars a month, you're like, you know, am I over spending on Facebook? Am I not?

FERMÀT Commerce (40:31.569)
Should I be deploying some of that Facebook budget on TikTok? Should I be adding incremental budget on TikTok? Should I put some on pins? Should I... I should be telling you all that, right? So it's like trying to do that as a human as like TikTok Shop is prepping, there's Halo Effect on Amazon sales, Halo Effect on Shopify, like all these things and trying to do that as a human and, you know, build a team and have everyone educate on how that works. I would say like...

And piecing all the data together has been what keeps me up at night. I go down every rabbit hole you possibly can go down.

That combined with like we built our own data platform actually on top of source medium, great analytics company, infrastructure company, and like trying to perfect our dashboard is what really keeps me up at night. Just making sure the team is adopting it and everything is in the right, that's what's been keeping me up. No, that's such a good answer, man. And I think you're absolutely right with the AI stuff where it's just a way better job for AI than human. Yep. Because it can become this neural network where no matter how many dashboards you have, it's going to have

way more data up to date real time. And you see it now too because it's almost like the Bernie Madoff where ASC campaigns are that Bernie Madoff, right? Where it's just like, hey, I can't tell you how it's working, but if you put a bunch of money in this black box, I'm going to deploy your paid media in a really efficient way to get you 20, 30 % returns every year. And like, you don't want to do it, but you're also like, I see John's making 30 % returns a year, or Suzy's making...

Alright, Bernie, take someone like that. I think that gets into a really interesting place and I don't know if it's necessarily even a bad thing. I think everybody that says AI is going to take their job, I don't think that's correct. I think the thesis that I believe is, or the thesis I'm betting on is somebody that uses AI is going to take their job. They're augmenting their self and so I think... Freeing up their own mental bandwidth and focus on the high level strategy. I think you get creative and I can get it. I can work on my landing page experiences. That's a huge error. Exactly, I think that...

FERMÀT Commerce (42:35.889)
is going to get to a really interesting place because I mean candidly that's what we were talking to the car I think a CMO's job is get momentum or keep momentum and efficient deployment of capital and I think if you make that efficient deployment of capital easier and easier and easier it gets us some really interesting places really quickly but yeah actually that just you answered my question your own question was what keeps me up at night most it's actually keeping up with the change so all the

things that are coming out, all these AI innovations, all these new tech tools, whatever, keeping up with that and then changing our processes and systems on the fly when I know that like...

Hey, X, Y, and Z have been working for so long and y 'all are all so comfortable using this process, but guess what? This part of it is changing and you have to adapt or you get left behind. So like keeping up with all the changes, the updates. I like to stay sharp on like, I like getting real time information on like all my sources on Twitter and you know, just talking to people and networking and everything and just trying to think about how can I better my business in the service we're delivering our clients based on what's now available that wasn't available yesterday.

No, that's so we'll put and though I think there's a double -edged sword to that because you can get caught in what I call like tool masturbation or shiny objects that have a bite. Just fucking cut the tree down. If you have an axe cut it down. But you know this guy has a chainsaw. Maybe I should look how to use this chainsaw. This is a Predator but this guy has a laser. Oh this laser was bullshit and I spent two months learning how to operate this laser and can't even cut through paper let alone wood. So I'm with you though. I think that's

Honestly, I think those are the best media buyers and I think I don't know as we get older I think it's more so getting minions around you. Yeah to have the pulse of the network that was one of the things that triple whale where Tommy was just so clued in on the Ems and flows of D2C social that it was so easy to Plug in where I didn't have to have key tabs on that because it it's hard sometimes I mean in a leadership role, but at the same time you do want to stay at that cutting edge, but that's that's really good feedback man Yeah, I think that like even our

FERMÀT Commerce (44:45.393)
group chat like surround yourself with people that are really smart really cooler friends but they're doing slightly different shit than you are and just in conversation you pick up random things right how do I know a lot of my finance stuff another group chat with like my best friend growing up like he's like a wizard PhD in statistics from Wharton and runs like data

big hedge funds and just in conversation you just enjoy talking about I just get an inside look into his brain you know so surround yourself with those killers and where you want to be good I'm not saying go out and make friends because they're smart people but you already keep your company. I love it. Another absolute just call. I'm a mess. Okay let's wrap this up with Lynn is playing Mr. Snow. What is your equation of excellence? What do you think equation of excellence is?

or excellence is a function of? Excellence is a function of curiosity, number one. So, it's curiosity, it really just comes down to curiosity and work ethic, to be honest with you. Love that. Love that. So it's a function of both of those. So like, if you have a great work ethic, or you're in your own tunnel vision and you're just grinding and doing it, I'm...

you'll be great, but you're not going to evolve with the times, right? If you're curious, you're staying up to date with what's going on around you in your bubble and grinding on the areas that you deem fit. Without the work ethic, like, I mean, it's so cliche to, you know, post about the four hour work week and all this and all that. There's no way I could have accomplished a tenth of what I did if I cut my hour. If I was working 40 hour work weeks, like on the come up, I'm not saying you should be, you know, working around the clock seven days a week. I firmly believe that if you do that, if you're going to...

of crash and burn. Maybe you do that for a decade but after that it's not sustainable and you become like your own worst enemy in that regard but you do you do need to start somewhere if you're looking to get to that like platform of where it's downhill sledding you need to grind you know be curious you need to just dig and like just don't clock in don't clock out.

FERMÀT Commerce (46:47.183)
You have questions in your head, find the reason why. I don't just like, I don't like, someone tells me something, I always say like, why? Or like, how? So I need to understand how it works. Because that's how you memorize things. You start to conceptualize how something is, then that's what's going to be written in your head. I do my own mental math until I understand why that is. That's beautiful, man. Curiosity and grit, I think it's absolutely it. And I love that idea too. It's almost like defining the technique. I know I really, math.

something when I can explain to somebody that really doesn't have the foundational knowledge necessary to understand what I'm explaining. So true. Yeah, I love it. John Snow, go follow him on the Twitters. How can people get more involved? You guys take more clients at the agency, tell them about the news, tell them about the Twitters. This time it's yours, my friend. Hell yeah. Yes, follow me on Twitter and LinkedIn. That's where I'm definitely most active. Always taking new clients at the agency, Snow Agency. We were actually acquired a year ago by Avenue Z, so you might see both those names floating around.

always taking more clients at the news e .com or the snow agency dot com for really looking for like half by plus brands holistic growth services and yeah just launched the newsletter and using just once the newsletter

Yesterday was number six. Six? Oh my gosh, what a big time. So that was the sixth week. Yeah, so a weekly newsletter. Give you a little inside look into what's hot in my mind for the week. So yeah, just D2C updates, a little bit of finance sprinkled in, a little bit of lifestyle. Let's go. And yeah, maybe some controversial stuff coming, who knows, we'll see. Oh no, that's a... You're just one of the master of life, awesomeness, a dentist, a media buyer, a great brother, a wonderful husband.

just a magnificent friend go model yourself up for this man.

FERMÀT Commerce (48:55.823)
Alright folks, that's it. That's all we got for another episode of Equation of Excellence. This one was in person, but I totally messed up the lighting, so we'll see what we can get from it. Go follow John, go do all the things, go hire a snow agency, and then go to firm .commerce .com to book a demo, make my boss happy, and then we also have a great newsletter called Geometry of Growth that goes out every Friday. And then lastly, we have a sister show with me doing a bunch of unboxings, so go check that out as well. John, thanks so much. And then if you guys are in town,

I don't know actually when this is gonna drop maybe tomorrow, but John will be on account now at the Founder Made and also joining us at our event at the after party. So if you're in town, get us up Austin, Texas. John, you're the best guy. Get you a hotel, get you all dressed up for dinner later tonight. Oh yeah, thanks so much man. Thanks Rala, thanks for having me. Amazing. Fucked up the lighting, but I think we got the other two angles. Nice.