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Two Ecommerce Podcasters Walk Into a Studio… · eCommerce Podcast

• 0:04
  Well, hello and welcome to what I think is going to be the eCommerce Podcast.
• 0:08
  Uh, I've got my good friend Brett Curry, uh, on the other side of the camera,
• 0:13
  and we've decided, because Brett, you have a podcast as well, right? Exactly.
• 0:17
  Uh, and we're like, let's call— record one episode and we'll put it on both
• 0:22
  podcasts. Uh, and so it's the first time in history I've ever done this. And so
• 0:26
  welcome to Matt's bretspodcast. Uh, it's great to have you, uh, with us.
• 0:31
  Um, yeah, I'm excited. Like, it's like, what, what do you do when you got two
• 0:34
  podcast hosts together on the same show? I guess you just interview each other.
• 0:37
  You just interview each other and, and see what happens. And I think it'll be— I
• 0:39
  think it'll be a lot of fun.
• 0:42
  So it's going to be fun, isn't it? So today we're going to be talking about
• 0:45
  YouTube, we're going to be talking about what a valuable eCommerce business is,
• 0:47
  and who else knows what we're going to get up to. But I'm so looking forward to
• 0:50
  this, man.
• 0:52
  This is gonna be, this is gonna be an Anything Goes Podcast. I'm confident,
• 0:56
  Matt, like there will be some golden nugget bits of information here that will
• 1:00
  really help the ecommerce store owner out there. So yeah, let's, let's dive
• 1:04
  right in, man. This is gonna be fun.
• 1:08
  Yeah, absolutely. Let's dive into it. Where do you wanna start?
• 1:11
  I, I think, so here's what, let, let's start, let's start with the broader topic
• 1:16
  here of running a valuable ecommerce enterprise. How to think about your brand
• 1:20
  like an investor would. And this is where I love your perspective, Matt, because
• 1:25
  you're— I know you've sold ecommerce companies, you're actively acquiring
• 1:29
  ecommerce companies, you're building a portfolio, things like that. And one
• 1:34
  thing I noticed, you know, I'm on the agency side, I've invested in a number of
• 1:38
  ecommerce brands, but I'm on the agency side in the day-to-day. When we first
• 1:43
  started talking to private equity groups and we were looking at like, hey, do we
• 1:47
  want to Shoot, I was on a tear there. Unbelievable. My battery is messed up on
• 1:52
  this camera. Let me— it showed full power when I turned it on. Hold on one
• 1:56
  second. Yeah, sure it did.
• 2:01
  I love that Brett's now been replaced by change the battery pack. Is that the
• 2:05
  camera or you, Brett? I'm not quite sure.
• 2:08
  It's the camera.
• 2:10
  Yeah, I mean, I don't know.
• 2:12
  It's hard to say. Yeah, yeah.
• 2:14
  Well, you know, you crack on. It's the professionalism of it all, which I enjoy.
• 2:26
  All right, there we go. Okay. So I think I can pick up mid-flow there. But I run
• 2:30
  an agency day to day. But I remember when we first started looking at M&A
• 2:35
  because we were considering acquiring some agencies and start talking to private
• 2:39
  equity groups and looked at other— talk to other investors and like, just went
• 2:44
  really deep on M&A. And what I noticed, Matt, is when I started to look at my
• 2:48
  agency the way that an investor would, when I started looking at my books the
• 2:53
  way that a private equity group would, yeah, I thought, hmm, I need to run a
• 2:57
  tighter ship. Like, we're really good at like a lot of things, but it shifted my
• 3:02
  mentality a little bit and I built a better business. So here's what I believe.
• 3:06
  I believe that if you can start looking at your brand like an investor would,
• 3:10
  Yeah. That either prepares you for an eventual exit, which a lot of people want,
• 3:15
  or if you're not interested in exit, it just helps you run a better, more
• 3:19
  profitable business.
• 3:24
  Yeah.
• 3:24
  That's going to give you the lifestyle you want. So, let's talk about this from
• 3:28
  an investor perspective, Matt. When you are looking at an ecommerce business to
• 3:31
  acquire, what are you looking for? Like, what are the top things you're looking
• 3:35
  for? And then we'll go deep on some of these.
• 3:39
  Well, I think there's two ways to look at it. Um, there's the investor side of
• 3:43
  things, so there's the things there that you're looking for. Um, but I think
• 3:48
  there's the other side of it, which is, yes, there's the numbers, right? And is
• 3:52
  the due diligence done and blah blah blah. But there's a side which says, do I,
• 3:56
  do I actually fundamentally like this business, right? Is this a business that I
• 4:01
  actually like? And so for me as an investor, it's understanding what it is that
• 4:05
  we're good at and how that business can then fit into our ecosystem. I'm not so
• 4:09
  bothered if the business is not making as much money as it should because it's
• 4:14
  gonna be a cheaper price. It's a bit of a bargain, right? In that sense.
• 4:18
  And you know, you can fix some of those things.
• 4:21
  Exactly. Exactly. So are there, are there dials that I can turn? Um, are there
• 4:26
  ways that I can add value? Um, and I suppose that's one of my key questions is
• 4:31
  like, how would we bring value to this? Uh, and I think the second thing that
• 4:36
  I'm looking for, all about the founder, right? The guy running the ship. Like,
• 4:41
  what, what kind of ship is he running? Now, when— I don't know how you do staff
• 4:46
  hires, right, at OMG. The way that I do staff hires, it used to be that we would
• 4:51
  advertise a job, right? And I remember one time we advertised a job, we had 400
• 4:56
  applicants for for the job, right? And I'm like, oh my goodness, how in the
• 5:01
  world am I going to sift through 400 applications? And so I did the usual thing.
• 5:06
  If there was no CV— or we call it CV, you call it a resume, right? If there was
• 5:11
  no CV, they're out. If there's no cover letter, they're out. If the COVID letter
• 5:16
  said Dear Sir, it was out. And I, I started to filter, and I realized what a
• 5:21
  resume tells me is how competent you think you will be at this job, right? What
• 5:26
  it doesn't tell me, and the key thing I need to know, is culturally where you
• 5:31
  sit, right? Because you can have the best technical person, but culturally, if
• 5:36
  they're misaligned, we call them terrorists. It's probably not very PC, um, but
• 5:41
  that's what we call them here. Yeah. And so our application process changed
• 5:46
  radically, and it— we started asking questions that didn't look at competence.
• 5:51
  We started asking questions, look, looked at culture. Yeah. And how they would
• 5:56
  fit from a cultural point of view. And the reason I'm telling you this is
• 6:01
  because it's exactly the same for me with the business owners. It's more
• 6:06
  culturally, what have they created, which doesn't fit that well on a piece of
• 6:11
  paper. But it's, I suppose, it's the vibe. It's the hidden. It's the unknown,
• 6:16
  isn't it? And that's, they're the two things that I want to know. Is what's the
• 6:21
  culture of the company and where can I add value?
• 6:27
  Yeah, that, that makes a whole lot of sense, right? You got to think at, at the
• 6:32
  strategy piece. Is this a product? Is this a category that we feel like, one, we
• 6:36
  understand, we can get our, we can get our head around it, we can add value
• 6:40
  here, right? You're, you're a strategic buyer in a lot of ways, uh, but then
• 6:45
  that, that culture piece. Yeah, I mean, we, we've all, we've all made bad hires,
• 6:49
  right? And, and so think about M&A as like we're making a group of good or bad
• 6:54
  hires, right? And depending on the size of the brand or the agency you're
• 6:58
  acquiring or merging with, whatever term you want to use, like that could
• 7:02
  dramatically shift the entire culture.
• 7:07
  Oh, without a doubt. Yeah. Without a doubt.
• 7:09
  Really, really interesting.
• 7:12
  No, it's important too because when we— other people do it differently, right?
• 7:16
  Some people might come in and take 100% equity in the business. We don't. We,
• 7:20
  we're like, we like partnerships. We like to keep people involved. It may be
• 7:24
  like with a company we acquired, uh, we put all of their distribution in our
• 7:28
  warehouse system, we handled all the marketing, and so the current owners, um,
• 7:32
  became part of sort of minority partners, I suppose is the best way to describe
• 7:36
  them, minority shareholders in the business. But they— I still want them
• 7:40
  involved, right? It's still their business, it's still their story. And so
• 7:44
  culture becomes really important because, like you say, it becomes a partnership
• 7:48
  in many ways. Yeah. And that's, that's a crucial thing, right? If you're, if
• 7:52
  you're a plonker, as we like to say in England, um, then I definitely do not
• 7:56
  want to be in business with you, right?
• 8:01
  So it's important to understand— plonker— for those of us that have never heard
• 8:04
  that term, like myself, I, I can, I can picture something in my mind, but, but
• 8:07
  describe a plonker to me.
• 8:10
  Plonker is someone who's a little bit, how would you describe another word to
• 8:14
  describe someone as plonker is they're stupid or you're a fool or you're an
• 8:17
  idiot. You know, those kinds of words. It's just a bit more fun, I suppose. You
• 8:21
  plonker.
• 8:25
  Yeah. I'm gonna use that. I'm gonna start with trying to, how can I weave in
• 8:29
  plonker to my everyday vernacular? Absolutely. Love it. Yeah. Yeah. That's
• 8:34
  amazing. So then what are the things? So when you're looking at How can we add
• 8:38
  value to this? Is that more based on your experience or categories you know
• 8:43
  well? Is that, is that kind of what's driving that piece of it?
• 8:48
  Yeah, so I know that we're good at small repeatable products, you know, beauty
• 8:52
  supplements, uh, gifts, things like that. Where we struggle, um, I think I would
• 8:57
  have a lot of questions if we were looking at buying a couch company. Do you
• 9:01
  know what I mean? It's, it's not our, it's not our expertise. It's one large
• 9:05
  single purchase and we're like, I not got any expertise there. And so I know the
• 9:10
  lane which we do well in, and so we tend to operate there. And so we've got it
• 9:14
  had down now. We're like, right, we want small repeatable products. We want
• 9:18
  businesses operating between half a million and 3 million because that's a
• 9:23
  really sweet spot, usually run by a husband and a wife who have taken it to a
• 9:27
  level and they feel stuck, you know, and they, they think, oh, to get to the
• 9:31
  next level, I've got to go hire an agency. They go hire an agency who charges
• 9:36
  them 4 or 5 grand a month and it doesn't work. And the cash flow runs out real
• 9:40
  quick and it all goes a bit, um, Pete Tong, as we like to say in England, which
• 9:44
  is rhyming slang for wrong. Um, so it all goes— you had to slow down a lot
• 9:49
  today, Brett. Uh, but it all, it just all goes a bit wrong. And so yeah, we,
• 9:53
  we've honed down our specialty, um, to a sort of a real good niche there.
• 9:58
  I mean, there's so many valuable lessons there in understanding what is the game
• 10:02
  that you are really good at playing, right? What is your style of business and
• 10:07
  not getting outside of that, right? I'm a huge NFL football fan. I know football
• 10:11
  means something very different to you. You're a Liverpool FC fan. We did a fun
• 10:16
  thing, Matt. We did an exchange of gear where you sent me some Liverpool jerseys
• 10:20
  from their championship run. My kids love them. I sent you some Kansas City
• 10:25
  Chiefs jerseys. After one of their Super Bowl runs. And so, this was super fun.
• 10:30
  But I think— and I think this analogy would probably apply to you guys as well,
• 10:34
  but like their coaches have a style of playing the game, right? Are we a
• 10:39
  pass-heavy offense? Are we a run-heavy offense? Are we more of a defensive or
• 10:43
  offensive first type of approach? And then, you got to get the personnel, you
• 10:48
  got to get the team to line up with that, right? So where I think you come into—
• 10:52
  get into trouble is just when you're not clear on those things, right? When you
• 10:57
  try to do— well, we'll do a little bit of this, we'll do a little bit of that.
• 11:02
  Like, yeah, I mean, some of them will be small and repeatable, but we're going
• 11:06
  to try the couches, right? We're going to— like, that's when things just get
• 11:11
  super messy, right? So, yeah, clarity and conviction and confidence in this is
• 11:15
  who we are. This is what we're— we can win this game. And so we're gonna keep
• 11:20
  playing this game. And I think what's cool is, you know, you're thinking more
• 11:24
  like investment, this is our investment thesis, right? This is our approach to
• 11:29
  how we invest. But I think brands need it too, right? Like this is who we are,
• 11:34
  this is what we're really good at. And so as we're expanding our service line,
• 11:38
  as we're adding team members, this is the game we win, this is the culture we
• 11:43
  have, this is how we grow it. And that will for sure make your business more
• 11:47
  valuable if you think about it.
• 11:52
  Oh, without a doubt. And it also, it makes marketing so much easier. Right?
• 11:56
  Because you know your voice, right? You know what it is you're trying to
• 12:00
  achieve. So stay in your lane and just own that lane. It's a really, it's a
• 12:05
  really powerful marketing strategy and it makes it so much easier. It is like
• 12:09
  one of the big questions I, I get asked a lot is like, how do I compete with
• 12:13
  Amazon, right? If I'm a small ecommerce brand and the same product is being sold
• 12:18
  on Amazon, how do I compete with Amazon? And the answer is Amazon can do
• 12:22
  everything better than you can apart from one thing. Which is be you, right? So
• 12:26
  figure out who you are, what your identity is, what your lane is. Do that so
• 12:31
  well that the one thing Amazon cannot compete on— they've got no chance, right?
• 12:35
  They're a commodity broker. They're just going to put it in a box, ship it, it's
• 12:39
  depersonalized. But you be you, own that space. But to own that space, you have
• 12:44
  to understand the space that you're trying to own, right? Yeah. And so it's such
• 12:48
  a good point, bro. Yeah, yeah, yeah. I totally agree with you.
• 12:52
  Love it. Well, let's get into the finances a little bit and some of the key
• 12:57
  metrics. I love that that's not the first thing you look at because culture and
• 13:01
  overall category and the overall strategy, that's most important. But I would
• 13:05
  have to think that there's some numbers where you're like, "Hey, we can fix
• 13:09
  these numbers. These numbers we maybe can't fix or it's going to be so hard to
• 13:13
  fix. I don't know that I want to go there." Walk me through, like, what are
• 13:17
  those financial metrics you look at? Maybe what's a hierarchy there and what's
• 13:21
  fixable versus maybe not so fixable?
• 13:25
  So the things which I'm interested in there, I was told years ago, there's only
• 13:29
  3 ways to grow a business, right? This was in an old— I was in a lecture years
• 13:33
  ago by Jay Abrams.
• 13:37
  Jay Abrams.
• 13:38
  Yeah, yeah, yeah.
• 13:39
  Jay Abrams. I love this.
• 13:41
  Yeah, yeah. And he said there's only 3 ways to grow a business. And I always
• 13:44
  remember I was like 18 when I heard this. You grow the number of customers, you
• 13:47
  grow the frequency with which a customer buys. So in terms of if a customer buys
• 13:51
  once a year, you can increase that to twice a year, you double your business,
• 13:54
  right? If all else being equal.
• 13:57
  Yep.
• 13:58
  So what he called the number of customers, the average order frequency, um,
• 14:03
  sometimes referred to as average order count, and then the average order value,
• 14:07
  right? So how much they purchase at any one point in time. And the thing was, if
• 14:11
  you grew your customer base by 10%, your business grew by 10%. If you grew the
• 14:16
  frequency by 10%, your business grows by 10%, right? If you grow the average
• 14:20
  order value by 10%, your business grows by 10%. But if you can grow all 3 things
• 14:25
  at the same time, your business grows by 33% because you start to see this
• 14:29
  geometric effect of everything affecting everything else.
• 14:34
  It's so brilliant.
• 14:35
  Yeah. Oh, it's genius. And the simplicity of it is phenomenal, right? So the
• 14:39
  questions we— the numbers that I'm always looking at Number of customers. I
• 14:44
  break that down into two sections: new customer acquisition and repeat
• 14:48
  customers, right? Yep. What's the average order count or average order
• 14:52
  frequency? And what's the average order value? How can I increase those four
• 14:56
  numbers or into those, those three areas? You know, breaking customers down into
• 15:01
  two areas. Can I play in those areas? Yes or no? If I can, I think great. The
• 15:05
  second question then is, If I can grow that, can I reduce the expenses over
• 15:09
  here, right? And for me, the obvious ones are, well, if I ship it from my
• 15:13
  warehouse, all of a sudden I don't have to pay rent for that warehouse, right?
• 15:18
  Um, we've got our own picking and pack staff. It's like, if we can do the
• 15:22
  marketing, I've got economies of scale, right? And this is how we bring a lot of
• 15:26
  value, to be fair, to our deals, is our value comes from these services which
• 15:30
  people are paying for, which we just throw in. And so we just take, we, we take
• 15:35
  advantage of the, the sort of the economies of scale. So again, the bathtub
• 15:39
  analogy, you got money coming in, which are your taps, your water coming in.
• 15:43
  You've got money going out, which is a plug. Can I make it go out slower? Can I
• 15:48
  make it come in quicker? Bish bash bosh, jobs are good. And yes I can, no I
• 15:52
  can't, you know, and it's as simple as that really.
• 15:57
  Yeah, I, I love that. And, and yeah, then you want to look at like, how do we,
• 16:01
  you know, double the business? Mm-hmm. You don't have to double the number of
• 16:06
  new customers. I think it's something more like, you create a 30% growth across
• 16:10
  all 3 of those main— and then you start to see some really impressive growth.
• 16:14
  And so, uh, that, that's a brilliant way to look at it. And, and then you're— if
• 16:18
  you're looking at like that 10 to 30% improvement in each of those areas, that
• 16:23
  feels very attainable, right? Like, hey, I don't need to suddenly double my AOV,
• 16:27
  I just need 10% increase, right? Can I, can I get 1 out of 10 people to add
• 16:31
  something else to their basket, or, you know, uh, can, can I do something
• 16:35
  creative with upsells and cross-sells and things like that?
• 16:39
  Or— and to be honest with you, most businesses we look at, they've not, they've
• 16:43
  not increased their prices. And so they're—
• 16:46
  I'm—
• 16:46
  and they've not done it for a while because of fear, right?
• 16:49
  Right.
• 16:49
  And one of the first things I look at is, can I put the prices up by 10%? If I
• 16:54
  can, what's the impact of that? Now, we may lose some customers over here, but
• 16:59
  I, 99 times out of 100, when I run the maths we always make a lot more money
• 17:04
  from the increase in price than we do from the reduction in customers,
• 17:10
  especially if that price increases. I, I can't remember what the number is. We,
• 17:15
  we've tested it a lot. For us, I think if we can increase price by about 4 or
• 17:20
  5%, it's— it has such a minor impact on customer loss. Well, 5, 5% increase in
• 17:25
  price is something like a 40% increase in net profit depending on your profit
• 17:30
  margins, right? Yeah. That's a massive chunk of change right there.
• 17:35
  Right. Yeah. It's just huge. And that's where you've done this now enough times
• 17:40
  that you know how it usually plays out. You've got the confidence to test it
• 17:44
  where some operators, and especially if you're kind of in a small growth phase,
• 17:48
  you feel like you're stuck, you feel a little more trepidation to do that. So
• 17:52
  then I would have to also think, Matt, that kind of going into all of this is
• 17:56
  quality of the product, right? Like quality of the product and your conviction,
• 18:01
  your belief in the product has got to be really, really high. Yeah, totally. Any
• 18:05
  insights there?
• 18:09
  Yeah. Again, it comes down to culture and value connection. Like, I wouldn't go
• 18:13
  and buy a cigarette company. It just doesn't sit right with me. Right. There are
• 18:17
  small repeatable products. Sure. And I could probably sell them if I really
• 18:22
  wanted to, but it's not where I'm at. Um, right. So I, I, I understand where I
• 18:26
  work, you know, I understand my lane. And I think if you're looking for
• 18:30
  investors, if you're looking to grow, if you're looking to get equity partners
• 18:34
  involved, go and find someone that matches your brand values, right? Don't go to
• 18:38
  a guy that invests in cigarette businesses if you sell Care Bears, because it's—
• 18:42
  right, it— I mean, in theory it could work, but you— everybody needs to be
• 18:46
  aligned on what it is that you're selling. And again, that comes back to the
• 18:50
  owner. Um, I remember, I, well, there's lots of stories I could share of people
• 18:54
  going, would you like to get involved in my business? And basically all they've
• 18:58
  done is buy a container load of stuff from China because they thought they could
• 19:02
  sell it on the cheap. And I'm like, yeah, no, that's not a business.
• 19:07
  Yeah, that's just like, this is a project.
• 19:09
  Yeah, it was commodity, isn't it? I'll buy this cheap, I'll sell it high. You
• 19:12
  kind of go, well, fair play to you, but arbitrage, yeah, that's, that's not my—
• 19:16
  I appreciate that's good for a lot of people, not for me.
• 19:19
  Yeah, totally makes sense. Great. And then what are the— Aside from those kind
• 19:25
  of 3 big buckets, what are some of the numbers you're really trying to improve
• 19:30
  upon or turn around so that you can eventually sell that brand you acquire or
• 19:35
  just continue to take out dividends or whatever? Are you focused on gross
• 19:40
  margin? Are you focusing on Uh, EBITDA? Are you looking closer at the cash
• 19:45
  conversion cycle? Like, what are some of those key metrics that you're really
• 19:50
  optimizing for as you grow?
• 19:55
  Yeah, I think the obvious one, if you want to sell your business, let's say you,
• 19:58
  you know, everybody wants to sell their business in 5 years, right? That's
• 20:00
  always when you want to sell your business, 5 years.
• 20:03
  How much do you want to sell it for? It's always 5 years.
• 20:04
  It's always 5 years. And it's like, how much do you want to sell it for? A
• 20:09
  million or 5? It's, they're the two answers, right? It's really funny. Um, which
• 20:13
  one do I feel? I don't know. Anyway. Uh, um, I think the obvious answer, um, is
• 20:18
  you have got to look at net profits. Now, I remember, um, years ago, uh, one of
• 20:22
  my clients, and this is kind of pre-e-commerce, right? This is how long ago this
• 20:27
  is, uh, it became a good friend of mine. He was a billionaire here in the UK,
• 20:31
  right? Made a lot of money, and he'd bought and sold a lot of businesses. And he
• 20:36
  says, Matt, you value a business by looking at its net profit, times it by 3,
• 20:40
  that's the value. Right? And this was 20, 30 years ago when he said this. And I
• 20:45
  was like, well, this is a really simple formula. And he says, I only ever buy
• 20:49
  business 3 times net profit. Of course, how do you define net profit? That
• 20:54
  becomes a very interesting question, which is why people now start talking about
• 20:58
  EBITDA, isn't it? Which is your earnings before interest and tax depreciation,
• 21:03
  depreciation and amortization. Yeah, that's— and so you, you, you look at that
• 21:08
  number, but I think in ecommerce there's another number which people don't
• 21:12
  really talk about, which is quite an interesting number. So case in point, I
• 21:17
  think there's two numbers. So the first one is, um, we have a supplement company
• 21:21
  which we are looking to grow and sell in the next 2 to 5 years, like everybody
• 21:26
  else, right?
• 21:30
  Um, and hoping for 1 to 5 million, uh, on that exit value.
• 21:33
  A lot more than 5 million anyway, but it's another story. So we're growing this
• 21:37
  business, right? And, um, what we realized is, let's say we make a million
• 21:42
  dollars in profit, right, in EBITDA. So our EBITDA is a million because it's
• 21:46
  easy maths. And you go, right, well, at the moment you would probably be able to
• 21:51
  sell that business for around $2 to $3 million. So you're going to go for
• 21:55
  multiple between 2 and 3, standard ecommerce multiple. So, okay, you go, well,
• 21:59
  I've made $3 million, great. But if I make one change to the business, which is
• 22:04
  how many subscribers there are, how many people, and even more so now if you
• 22:08
  want to go deeper, memberships, people paying to be a member, right? If I do
• 22:13
  nothing else, if I take the same business but convert all of my customers to
• 22:17
  being a subscriber or even better, a paid member of that website, my business is
• 22:21
  not worth $3 million. It's worth $8. Now I'm making the same sales to the same
• 22:26
  people, but the way I— the mechanism of sale is so different, and the value
• 22:30
  therefore shoots up, especially to investors, because they go, well, this, this
• 22:35
  becomes much more predictable, and they're willing to sell a lot more as a
• 22:39
  result. I think the other thing to think about is, um, one of the things that
• 22:44
  we've noticed, it's very, very hard to sell a business, a small business, right?
• 22:48
  So let's say there are a million small businesses on the market at the moment
• 22:52
  all want to sell, and they want to sell for various prices. Let's pick a million
• 22:57
  bucks because everyone wants to sell for a million, right? And so the
• 23:01
  competition is fierce, man. But the people willing to buy a small business is
• 23:06
  tiny. It's a tiny, tiny percentage. And the way I was told about this, and it's
• 23:10
  quite true, is it's an inverse pyramid. So The smaller your business, you're at
• 23:14
  the bottom of the pyramid. As your business gets bigger, there are less and
• 23:19
  less, right? So the pyramid is created. So you got a million really small
• 23:23
  businesses, 10,000 businesses that are doing over 10 million, you've got
• 23:28
  whatever the numbers are, right? And you go up. Um, the number of buyers wanting
• 23:32
  to buy those businesses is an inverse pyramid, right? So the higher the, the
• 23:36
  higher the, the, the businesses go up on the pyramid, the more people are
• 23:41
  wanting to buy them. Right. And so, and you see this, right? You put a company
• 23:45
  like Apple on the stock exchange, there are 10 million people that want to buy
• 23:50
  into that business, right? Um, and so you can see that the, the, the sort of
• 23:54
  inverse pyramid system going on. So we found the best way to sell businesses is
• 23:58
  to group together with other businesses that want to sell. Yeah, yeah, right. So
• 24:03
  you go and put together, you go and find 4 or 5 companies that will merge with
• 24:07
  you, and instead of turning over a million, you're turning over 5 million.
• 24:12
  There's a lot more people wanting to buy a business turning over 5 million than
• 24:16
  one. Completely changes. Yeah, changes everything. Everything. And again, the
• 24:20
  multiple goes up, right? Right. And so, and again, you, you put together a
• 24:25
  group, $20 million. I mean, ultimately our strategy is to put together a group.
• 24:29
  If we've got a group turning over $20 million a year, well, that's a really good
• 24:34
  exit for us. And it may be every company in that group is turning over exactly
• 24:38
  what they're turning over now, but you put it together in a group, not only do
• 24:42
  you find the buyer, but they're willing to pay more for it. Yeah. So when a
• 24:47
  company gets listed, if you go that far, you're looking at what, a multiple of
• 24:51
  around 25, 30. Yes, it's insane.
• 24:56
  So it's insane.
• 24:57
  They're the, they're the things that you can look at. And then one other trick
• 25:01
  we did when we sold our beauty business— I wish I could tell you this was
• 25:05
  intentional, it really wasn't, it just is the way it was. The guys that bought
• 25:09
  the beauty business, great guys, you know, a lot of respect for them. They were
• 25:13
  my competitors. And so what this meant was Whilst every— like, if you were going
• 25:17
  to buy that beauty business, you'll be going, right, Matt, what's, what's the
• 25:21
  EBITDA? How much do you have to pay the staff? What's the rent cost? What's it—
• 25:25
  do you mean it's like there's a lot you have to think about? Whereas he was a
• 25:29
  competitor, he already had the products, we sold the same product, you're out of
• 25:33
  the warehouse, he'd already got the distribution. It's like, in effect, I'm just
• 25:37
  buying the goodwill of the business, Matt. You bring in the database, we'll run
• 25:41
  the website, we'll buy your remaining stock, bish bash bosh. Well, the value of
• 25:44
  the business to him was so much greater because he was looking at more gross
• 25:48
  profits than somebody who might be looking at EBITDA. Do you see what I mean?
• 25:53
  Totally. Totally. That's why often the strategic buyer is the— they're the ones
• 25:57
  that are willing to pay the most. But there's several things you talked about
• 26:01
  there that I want to highlight because it's all really, really valuable. A good
• 26:05
  friend of mine sold his agency or did a partial exit recently. Most people
• 26:09
  listening would know who this is, but nice exit. And been talking to him quite a
• 26:13
  bit. You know what he said? Really, all the private equity company cares about
• 26:17
  that did this deal is the durability of the revenue, right? So I was asking
• 26:21
  about like, what about AI and all these things and like durability of the
• 26:25
  revenue? That's really all they care about, right? So there is an element of
• 26:30
  mitigating risk, like, hey, we're going to protect ourselves just in case
• 26:34
  there's like lawsuits or undisclosed things, like your books aren't what they
• 26:38
  say they are. Like there's some risk mitigation stuff that investors really care
• 26:42
  about, but ultimately, it's the durability of the revenue. And that is exactly
• 26:46
  what you were talking about, where if you take the same revenue and that revenue
• 26:50
  is all just one-time purchasers or people you've got to get to come back month
• 26:54
  after month versus subscribers, subscribers, much more durable. It's
• 26:58
  predictable. We believe that revenue is going to be there next month and the
• 27:02
  month after. And so, yeah, instead of 3 turns or 3 times multiple, we'll pay you
• 27:06
  5 times multiple. Or 8 times multiple. And then as, and then as you grow the
• 27:10
  overall EBITDA, then yeah, there's more people that, that want to buy and it's
• 27:15
  just a more valuable enterprise. So yeah, it's understanding those things that
• 27:19
  really in a lot of ways doesn't make it any harder to run your business. But you
• 27:23
  make it way, way more valuable.
• 27:27
  And so you do just by being smarter, right? And these are all things we've
• 27:29
  learned over the years in the scene. I wish I knew this 20 years ago. Life would
• 27:32
  be very different, right?
• 27:35
  Yeah, for sure.
• 27:36
  For sure. For sure. It is what it is.
• 27:38
  Fantastic. Well, anything to kind of like wrap a bow? So I love that you talk
• 27:42
  about those 3 ways, you know, more new customers, get them to buy more
• 27:45
  frequently, get them to buy more when they do buy. That'll be a nice transition
• 27:48
  into YouTube and kind of some growth opportunities there. But anything else you
• 27:51
  would share to kind of wrap a bow around, hey, how do I build a more valuable
• 27:55
  enterprise?
• 27:59
  The only thing I'd say is read Michael Gerber's The E-Myth, right? Be in the
• 28:03
  business, don't work on it. But don't, you know, be enslaved by— this is more
• 28:07
  than a job. You're building something that needs to function without you there.
• 28:11
  Yeah. And you, you know, it does take a little bit of time. Get your paperwork
• 28:16
  together, get your stuff in line, get everything in order, um, and be strategic,
• 28:20
  and you'll— I think you'll do all right.
• 28:24
  Yeah, yeah. We, we sometimes as entrepreneurs, we want to be heroes, we want to
• 28:28
  be fixers. We, we like for the, the business to be dependent upon us, Well, it's
• 28:31
  a good ego thing, isn't it?
• 28:35
  Yeah, it's a good ego thing.
• 28:38
  Yeah, exactly, exactly. That does not make your business more valuable. You want
• 28:41
  to be not dependent on yourself to be more valuable.
• 28:44
  The stat is— and I don't know how accurate this stat is currently, I've not
• 28:48
  checked it today— but on average, 80% of businesses that get listed don't sell,
• 28:53
  right? 80%. That's a lot. It's a lot. And so I think, think strategically. Go
• 28:57
  and talk to people who maybe think a little bit differently than the train track
• 29:01
  of, I'm in this business, I'll sell it for a million bucks, and then I'll leave
• 29:05
  and go live in Tahiti, right? Yeah. Get off that. Yeah. And talk to people who
• 29:09
  think differently, because otherwise there's an 80% chance you're not going to
• 29:13
  sell that business. And I just think, you know, there are, there are so many
• 29:18
  creative ways. One of the things I love about the States, right, is the way you
• 29:22
  do mortgages is so creative. In England It's like you want to buy a house. I
• 29:26
  know this because I've just gone and sold my house, right? So you're like, I
• 29:30
  want to buy a house. I have to go to the bank. I have to get a mortgage. I have
• 29:34
  to have this much deposit. Whereas in the States, you've got seller finance,
• 29:38
  you've got all kinds of things and possibilities, right? And I love that sort of
• 29:43
  free thinking about it. If you take that and apply it to your business, you've
• 29:47
  got an awful lot of opportunity, whether you're in England or the US.
• 29:51
  Great call out. Love that. Love that.
• 29:54
  Awesome. Let's talk about YouTube. I've talked about YouTube. Yeah, yeah. Let's
• 29:57
  go to your specialty, YouTube. Other than looking good, let's talk about your
• 30:00
  other specialty.
• 30:04
  That's awesome, man. Thank you. Yeah. And I want to underscore it this way. I'm
• 30:08
  a huge Jay Abraham fan. I'm so glad you mentioned that quote. I've always been
• 30:12
  obsessed, fascinated by how do you grow businesses, right? Yeah. How do you
• 30:17
  influence people to stop buying what they are buying and to buy your product
• 30:21
  instead. Right. And I was at an event recently that a couple of thoughts came to
• 30:25
  mind as I was sitting there. I was like, you know, I think, I think one of the
• 30:29
  keys to life is if you can find a problem to solve that you're infinitely
• 30:33
  fascinated by, I think you've kind of won. Right. And so, yeah, I've got these,
• 30:38
  these two problems that just fascinate me and I don't get tired of trying to
• 30:42
  solve them. One of those is How do you make marketing work, right? How do you
• 30:46
  run ads, campaigns, channels, whatever offers to get people to buy your stuff?
• 30:50
  Yeah, super interesting to me. It's a problem that I love solving. The other
• 30:54
  piece is how do you then prove that you did that? Because as an agency or as a
• 30:58
  brand owner, you're like, well, yeah, I think that— I mean, I'm making more
• 31:03
  money, I'm selling more stuff, but did this thing work or did that thing work?
• 31:07
  Did this channel—
• 31:11
  was that Yeah.
• 31:12
  And so, there's math there, there's critical thinking, there's statistics,
• 31:17
  there's all kinds of stuff that kind of play into that. So, to me, I feel like
• 31:22
  those two problems will be fun to solve forever. And so, that's why I love this
• 31:26
  game. That's why I love agency life so much. But let's talk YouTube. Now, I will
• 31:31
  say, and I've been running YouTube since 2016, 2017. I think I know it really
• 31:36
  well. My team, we're seen as some of the YouTube experts, you know, on the
• 31:41
  planet. But ultimately, like, I, I want stuff that works. And I, I just tweeted
• 31:45
  that, retweeted a buddy of mine's post today, and I'm like, hey, the DTC world
• 31:50
  needs Meta. Meta is like foundational for a lot of DTC brands. And I think if
• 31:55
  you're kind of in that 1 to 5 million stage of growth, you may not need YouTube
• 31:59
  yet. You may just need to go deeper on Meta and on Google Ads and things like
• 32:04
  that. But if you are ready for YouTube, It's extremely powerful. It is a
• 32:09
  different beast. It's a different platform. There are areas of it that function
• 32:13
  more like TV right now. Half of all YouTube views are on a smart TV.
• 32:18
  Really?
• 32:19
  Part of it. Yeah, yeah. Wow. And, this just shifted in the last couple years,
• 32:23
  but it's something like I've seen different numbers but somewhere between 50%
• 32:26
  and 60% of all views on YouTube. And, this is just the YouTube app and not
• 32:30
  YouTube TV. They take place on TVs.
• 32:33
  Yeah, it's pretty crazy.
• 32:34
  Incredible. Yeah, it's the number one podcast platform. Like, people engage with
• 32:38
  podcasts on YouTube more than Spotify or, you know, the Apple Podcasts.
• 32:42
  Well, it's interesting, Apple now do video, haven't they? They've started doing
• 32:45
  video. It's like, guys, you— there's a— there's— it's trying to bolt the gate—
• 32:48
  the door after the horse has bolted, isn't it? Or whatever the phrase is. I'm
• 32:51
  like, might be a little bit late, Apple.
• 32:54
  A little bit late. A little bit late there. Yeah, for sure. You know, YouTube
• 32:58
  Shorts kind of functions like a little more like TikTok, a little more like
• 33:02
  Instagram Reels. And so there's like different areas of YouTube, but it's got
• 33:06
  unmatched reach. It's got crazy levels of engagement. You know, we were just— I
• 33:09
  was just talking to one of our clients recently where they got some ads that are
• 33:13
  working really well on YouTube right now. And the average watch time per
• 33:17
  impression is like 23 or 24 seconds. Wow. Meaning we're reaching millions of
• 33:21
  people on a daily basis. And so meaning the average for someone who sees the ad
• 33:25
  watches 24 seconds of the ad, right? That's almost unheard of on any other
• 33:28
  platform. Meta's very, very performant, but a lot of times the average, you
• 33:32
  know, people will watch for 3 seconds or something, right? So it's like, it's
• 33:36
  just a different, it's a different animal, it's a different platform. It can be
• 33:40
  highly leveraged. So we might want to dig into a couple things related to
• 33:44
  creative that I think are kind of new and kind of interesting. And then some
• 33:47
  ways to measure that I think are— it's really hard with YouTube, but we can kind
• 33:51
  of talk about that as well.
• 33:55
  No, I'm looking— this would be great because, I mean, a few weeks ago I did a
• 33:59
  podcast where we talked about 6 areas that I think you have to absolutely look
• 34:02
  at, one of which was YouTube. So I've been looking forward to this conversation.
• 34:06
  Um, now when we spoke about this a few years ago, I remember the first
• 34:09
  conversation. Again, you were like, if you turn over sort of under 5 million,
• 34:13
  then YouTube is not for you. You seem to have moved that parameter down to like
• 34:17
  a million to 5 million now. So obviously it's changed.
• 34:22
  Yeah, I think it depends on your category, your level of expertise. I think
• 34:26
  sometimes it's just easier because a lot of brands know meta or they have a team
• 34:31
  member that knows meta or they have an agency that knows meta. Just go deeper
• 34:35
  there and just to like, don't divide your focus, don't divide your time, just
• 34:39
  push harder there. So we do see some brands at a smaller scale that just do
• 34:44
  really well on, YouTube, some of that is because they need a little more time to
• 34:48
  explain the product or their positioning. Sometimes they just feel like their
• 34:52
  buyer is on YouTube. You know, working with a brand right now, they sell a lot
• 34:57
  of truck accessories. Meta's going great for them, but their customer, you know,
• 35:01
  guys that own 4x4s and wanna, you know, add accessories, they're researching on
• 35:05
  YouTube. And so like finding, you know, how can we do that and how can we do
• 35:10
  that maybe sooner rather than later? Um, yeah, I think it's valuable.
• 35:14
  So, and so is it a case, Brett, that if I wanted to start doing YouTube ads, um,
• 35:18
  that actually audience— because the big thing was always how do you find the
• 35:22
  audience, you know, you can connect with. And obviously, Apple and Facebook had
• 35:26
  their big falling out, didn't they? Um, but it's kind of like, is it a case of
• 35:31
  actually YouTube is fairly straightforward to do that because you can you can
• 35:35
  go, well, that video is my ideal audience. Whoever watches that, that's who I
• 35:39
  want to advertise to.
• 35:44
  That does— that is an angle you can take with YouTube, and it is really
• 35:48
  interesting. And in some ways, like, I did TV back in the day, and so if you
• 35:52
  were going to run TV ads, you would pick your programming, right? You'd pick,
• 35:56
  hey, I want to be— I want to run my ad next to Friends, or I want my ad to show
• 36:00
  up in the local news, or NFL football, or whatever. So you're picking, yeah,
• 36:04
  you're picking the channel or the programming based on your brand avatar and
• 36:08
  whatnot. So you can still do that with YouTube. You can do that more when you're
• 36:12
  running like view-based campaigns. This is likely going to shift, but if you're
• 36:16
  running conversion-focused campaigns or demand gen campaigns, those need to be a
• 36:20
  little more audience-focused rather than channel-focused. Google's got some
• 36:24
  restrictions there. But yeah, it is still, you know, what I would hear from all
• 36:28
  my Meta friends and even the Meta buyers that we we work with, going broad is
• 36:32
  kind of ideal and really the creative is the targeting, right? So it's like if
• 36:36
  you craft an ad just for this avatar and it's really brilliant and it converts
• 36:40
  and stuff, Meta's gonna find that person that wants to see that ad, right? Uh,
• 36:44
  with YouTube, that's sort of true. Like the algorithm is pretty good and if you
• 36:48
  have a lot of conversion data in your account, it'll find people. But a lot of
• 36:52
  times it needs a little bit of direction, a little bit of guidance. Right. And
• 36:56
  so we're, We're creating audiences that are based on people's search behavior.
• 37:00
  We're creating audiences based on types of websites they visit. Occasionally
• 37:04
  we're throwing like, you know, interests and things like that, but that's,
• 37:08
  that's actually pretty rare. Uh, or we're saying like, hey, I want someone who's
• 37:12
  in the market for truck accessories and I want to run ads to them as a starting
• 37:16
  point.
• 37:21
  Yeah.
• 37:21
  And so that really still matters.
• 37:23
  Yeah. So we've got our audience, um, creative. How do we do YouTube creative for
• 37:27
  ads? Because I'm guessing, right, it's going to be a little bit different to how
• 37:30
  you would do it for Meta.
• 37:34
  Yeah, it is. It takes— so it takes a different mindset. But the really exciting
• 37:39
  thing is, man, I would— last time we chatted about this, that like whatever
• 37:44
  you're running on Meta, it can maybe inform what you're doing on YouTube, but
• 37:48
  you can't run the same stuff. Well, that's sort of true, but there are, there
• 37:53
  are some exceptions. And so what we're finding now is that sometimes you can
• 37:58
  take your winning Meta creative or your winning creative that is crushing on
• 38:03
  Facebook and Instagram or on TikTok. And with the right criteria, you can run
• 38:07
  that on YouTube and find success. And so we've seen this now with a couple of
• 38:12
  bigger brands from supplements to pets to home goods where taking the right
• 38:17
  creative winners from Meta, you can run on YouTube and it's going to perform on
• 38:21
  YouTube Shorts, but also on mobile non-Shorts as well, right? And so even in
• 38:26
  that like vertical 9:16 or 4:5 setup, but it needs to have a couple things to be
• 38:31
  true about that creative. I was just doing an audit the other day chatting with
• 38:36
  the owner of a pajama brand and really fun, really fun creative. So that some
• 38:40
  creative, it was just like all animated, it was like the prints of the pajamas
• 38:45
  and they were throwing stuff on a bed and you saw the pajamas there, it was
• 38:50
  cool. But I'm like, that's not going to work on YouTube, right? There's no—
• 38:54
  there's not much there that will work as good B-roll, but that won't be the ad.
• 38:59
  So here's what your ad needs. One, it probably needs to be 30 seconds or longer.
• 39:04
  We just haven't seen any video asset on YouTube get any kind of meaningful
• 39:09
  scale, drive any kind of conversions if it's under 30 seconds.
• 39:13
  It just almost never happens.
• 39:15
  Yeah. So, uh, and, and what YouTube is good at is driving longer watch times.
• 39:19
  And so Makes sense. If someone engages with your content for 15 or 20 or 25
• 39:24
  seconds, they're more likely to take action than if they engage with it for 3 or
• 39:28
  5. So, over 30 seconds. There needs to be either a voiceover or someone speaking
• 39:32
  on camera. So, if I'm going to show the fun pajama prints and I'm throwing stuff
• 39:37
  onto a bed and it looks kind of cool visually, I need someone to explain what it
• 39:41
  is that I'm seeing. Why is this interesting? Why would I want this? What makes
• 39:46
  this unique? What is the positioning here? Why is my life not good enough
• 39:50
  without these pajamas? You know, uh, and because we, we watch YouTube with the
• 39:54
  sound on, right? Even if it's YouTube Shorts, the sound is on. If we're watching
• 39:59
  on TV, the sound is on. Um, and, and so when you add the voiceover or someone
• 40:03
  speaking on camera, engagement goes up like 30%. Wow. Click-through goes way up,
• 40:08
  even though people still don't largely click YouTube, and just performance goes
• 40:12
  way up. So, so we need, we need that. We do need a product demonstration. Most
• 40:17
  Meta ads I've found do have that, right? Seeing the product in action or
• 40:21
  whatever. So that, that's usually there, but that needs to be there. We need
• 40:25
  some kind of social proof. So whether that's just showing reviews or maybe it's
• 40:30
  just Eugene in the ad, great. We need some social proof and then we need some
• 40:34
  kind of call to action. So with Meta, we've got some stuff around the ad that
• 40:39
  can drive someone to click. With YouTube, you kind of need to tell someone what
• 40:43
  to do, right? So, sometimes we run YouTube to drive retail sales, sometimes it's
• 40:47
  to drive DTC sales. Whatever you ask someone to do is what they're going to do
• 40:52
  for the most part. And so, you want some kind of call to action, click here, try
• 40:56
  this thing on, see what this will look like in your living room, do this to see
• 41:01
  how this is going to transform the smell of your laundry, whatever. So, a call
• 41:05
  to action there. So, If your top Meta ads have those components, yeah, they
• 41:09
  will, it will probably work on YouTube. And we've seen them, we've seen ads go
• 41:14
  directly from Meta to YouTube and, and achieve scale if they meet those
• 41:18
  criteria.
• 41:23
  That's really interesting. And so I, I guess the question is, right, the, the,
• 41:27
  I'm sitting here listening to you think 30 seconds, you kind of go, well, that's
• 41:30
  definitely, you know, we're all programmed now to do everything in 15 seconds or
• 41:34
  under, isn't it? And so, yeah. Are we watching? So we're, we're listening to
• 41:38
  YouTube rather than just watching it, which is, you know, on Instagram Reels,
• 41:42
  you've always got the captions on the, on the video. Are we doing that on
• 41:46
  YouTube as well? Are we not having the captions?
• 41:50
  Like to add captions as well. YouTube will do that automatically if you don't
• 41:53
  add them. So there's the, and that's getting better all the time, but generally
• 41:56
  speaking, we're, we're adding captions. Yeah.
• 41:59
  Yeah. So you've still got the text on the screen as people are talking.
• 42:02
  Yeah.
• 42:02
  Yeah.
• 42:02
  Because there, there are a couple of, one, I think text on the screen can
• 42:07
  reinforce what's being spoken and what you're hearing. There are a couple of
• 42:11
  placements, like if we're scrolling through our home feed on the mobile version
• 42:15
  of YouTube, those are called in-feed ads or one type of in-feed ad. Those don't
• 42:20
  play automatically with the sound on, so that's where captions are useful as
• 42:24
  well. So generally speaking, yes, we want captions to be there.
• 42:28
  Okay, so if I'm in ecommerce and I'm thinking, I need to get into this whole
• 42:32
  YouTube thing. Where do you start? I mean, you know, you've got the creative,
• 42:35
  it's like, how do you even be— I mean, other than calling you, obviously, right?
• 42:39
  How do we—
• 42:42
  how do we start? Always, always step number one.
• 42:44
  Yeah.
• 42:45
  Um, no, I, I think, I think it is— so it's looking at what are my top meta
• 42:50
  creatives. If they follow those criteria, let's test those on YouTube. We can
• 42:54
  test with a small budget, but then let's also look at all of our top videos, and
• 42:59
  maybe then what is, what is our pipeline from creators that are coming in?
• 43:03
  Because the other type of video, Matt, that just is consistently a top performer
• 43:08
  or the top performer, yeah, is creating a mashup of those top moments. And so
• 43:12
  we'll— and also the core of YouTube is still 16:9, so like the, uh, the, the
• 43:17
  landscape, you know, video. So what we'll do here is we'll, we'll take some of
• 43:21
  that vertical video and we'll look at, hey, what are the best moments from these
• 43:26
  top 10 or 15 videos, how can we order those in such a way that it tells a story?
• 43:31
  Yeah, you got a hook, a demo, proof, you're creating desire, you're overcoming
• 43:35
  objections, and then you get a call to action. How can we weave those moments
• 43:40
  from these top 10 or 15 ads into one narrative? Yeah. And, and then you can
• 43:44
  either do that like on a split screen where like half the screen is the creator,
• 43:49
  you know, talking, the other half is still images or B-roll, uh, with, with, you
• 43:53
  know, listing the, you know, with the logo of the, the brand and maybe the, the
• 43:58
  URL, that sort of thing. So then if you can build mashups of those moments and
• 44:02
  now you've got a 16:9, that's still open. That opens up so much inventory with
• 44:07
  YouTube, right, on, on TV screens. A lot of people, they're watching a podcast
• 44:11
  even on their phone, they're watching it in landscape, you know, mode. So
• 44:16
  running your top ads just like they are, testing those, but then also taking
• 44:20
  your top ads and creating mashups. We see so much success there. And, and then
• 44:25
  you can kind of get into a regular rhythm where, all right, we're taking our top
• 44:29
  5 ads every month and we're creating a couple mashups with those. Those 2 things
• 44:34
  can really unlock some volume on YouTube. And then you can maybe go bigger and
• 44:38
  do, do a bigger production, like once you've got some learnings and once you've
• 44:43
  got some budget. But those are the best places to start from a creative
• 44:47
  standpoint.
• 44:52
  It sounds— well, I'm listening to you talk, Brad, I'm thinking, well, that, that
• 44:54
  sounds actually quite doable.
• 44:57
  Yeah, that's—
• 44:59
  it's a beauty, right? It's simple.
• 45:01
  Wow, it is, it is. Yeah, I, I think, you know, it helps to have someone who's
• 45:05
  edited and done that before for YouTube, but you can also just find good
• 45:09
  examples and, and, and learn and, and iterate and try. But yeah, that— I think
• 45:14
  that's, that's what's really exciting about where I think YouTube is right now
• 45:18
  is the creative piece is so important and it's not a one-to-one thing, you know,
• 45:22
  with all your Meta winners are going to be YouTube winners. But there is now, I
• 45:26
  think, a clear path to go from Meta to YouTube.
• 45:31
  Is it okay, you know, like on Meta, I can go and find my competitors and I can
• 45:35
  see all their ads, right? And I can download them, I can analyze them, I can,
• 45:38
  you know, what I say, me, I get Claude to do all that these days.
• 45:42
  Yeah.
• 45:43
  Is there a mechanism for doing that on YouTube?
• 45:48
  It's much harder, yeah. I find I'm still, even though I do a lot with YouTube, I
• 45:52
  always go to the Meta ad library to look at ideas. So I'm also thinking about
• 45:57
  like, hey, how am I gonna create a mashup for this new client? Well, I'm gonna
• 46:02
  look at all their top-performing Meta ads and I'll get ideas. There are a couple
• 46:07
  of ways and it's like part of the ad privacy or ad transparency I don't
• 46:11
  remember, you have to Google it. It's not as robust. Yeah, so I guess the short
• 46:16
  answer is not really, but there you can find some ads or you can use like,
• 46:21
  there's a program called VidTao and there's another one, but they're not as
• 46:26
  good. Yeah, the bottom line is it's just not as good as what Meta offers. Yeah.
• 46:30
  Because the thing, what I've noticed my son do, right, who's an Instagram
• 46:35
  genius, What we've— what we have developed together, me and Zak, is we now have
• 46:39
  Claude, um, it will pull down all the videos from our competitors from Instagram
• 46:44
  and actually YouTube as well if we've got their YouTube channel, um, and it will
• 46:48
  analyze them. What's the top performing videos? And then it pulls out the top
• 46:52
  performing videos and it breaks it down scene by scene. Like, you know that this
• 46:57
  video, um, this worked because this scene lasted 1.7 seconds. There's no scene
• 47:01
  under 2 sec— over 2 seconds, and they're all like, "Duh, la la." And I'm like,
• 47:06
  it would be interesting, I suppose, for me— it's just how my brain works— let's
• 47:10
  go and find some really good performing YouTube ads, get Claude Code to analyze
• 47:14
  them, and give me a script for how we could do that for our business.
• 47:19
  Yep, yep. I think it's a great idea. I think it's a great idea. Yeah. Uh, and,
• 47:23
  and that's, that's one really exciting thing, or even, even creating mashups, or
• 47:26
  even understanding like How can I weave this together? Use Claude to do that,
• 47:30
  right? We built some Claude skills that do that for us, right? And so that's
• 47:34
  what's really exciting about right now. And the one thing I'll mention, I do,
• 47:37
  I'm watching the clock, I do have a hard stop, but the other piece, so like
• 47:41
  solving creative is super important with YouTube, but the other piece, Matt,
• 47:44
  that trips a lot of people up and prevents them from starting with YouTube or
• 47:48
  causes them to abandon YouTube too soon is just that measurement is really hard.
• 47:51
  And so I've got a couple of quick callouts there, a couple of quick tips.
• 47:55
  Go for it, man.
• 47:56
  But yeah, yeah, so one, you know, I think the best way to measure performance of
• 48:00
  marketing now is with incrementality studies and there's a few ways to approach
• 48:05
  those. If you're a really big advertiser, then maybe using a service like House
• 48:09
  Analytics where they do scientifically, you know, rigorous geo holdouts where
• 48:13
  I'm running ads to these geos and I'm holding out these geos and I'm gonna
• 48:18
  compare the difference, you know, scientifically to see what kind of lift did
• 48:22
  this advertising effort bring? You can also do stuff at a user level, right? So
• 48:27
  now Meta, you know, will run incrementality tests. So will Google. Google calls
• 48:31
  them conversion lift studies where they will show the ad to a certain group of
• 48:36
  people. They'll hold the ad from certain group of people that qualify to see the
• 48:40
  ad, like based on your audience targeting and stuff. And then they'll measure
• 48:45
  the behavioral difference. How do the people that saw the ad behave differently
• 48:49
  from those that didn't? And you can start to get kind of a truer picture because
• 48:53
  what we see, if you just look at in-platform metrics for YouTube, severely
• 48:58
  undercounted. If you look at your favorite MTA tool, right? Northbeam, Triple
• 49:02
  Whale, whatever, severely undercounted because at the core, those are still
• 49:07
  click-based measurements, right? And with YouTube, most people don't click. Most
• 49:11
  people are on YouTube to watch their favorite podcast or to watch a funny video
• 49:16
  or music video or learn how to, you know, trick out their 4x4. 4x4, whatever,
• 49:20
  you know, even when they're good, YouTube ads have half or less the
• 49:25
  click-through rate that Meta ads have. Oh, wow. So what a lot of people do when
• 49:29
  they see a YouTube ad, and especially if I'm on TV, I'm watching it on TV, how
• 49:33
  am I going to click? You can't click. So, but what people do is they see the ad,
• 49:38
  their follow-up action is they'll search for it. So they'll go and say, hey,
• 49:42
  show me about that truck bed accessory, right? Or show me this new supplement.
• 49:47
  And so one of the ways we like to measure now, and Google's getting better at
• 49:51
  this, is looking at what kind of a lift in search does YouTube drive. And so
• 49:56
  there's one key metric that if you don't have this and you're running YouTube,
• 50:00
  you need to ask your, your Google rep for this. It's called attributed brand
• 50:05
  search. And what it will do is it will look at each campaign and will say this
• 50:09
  campaign drove 100 brand searches for your brand after someone saw the ad. And
• 50:13
  so it's a really key metric because we can start looking at, hey, how impactful
• 50:18
  is this campaign versus that campaign in driving people, getting people into my
• 50:22
  funnel? And so the key with YouTube is you can't just rely on your favorite
• 50:27
  measurement tool. House Analytics did a study where they said, hey, on average,
• 50:31
  if you see like a 1 ROAS in platform for YouTube, you're probably getting like a
• 50:36
  3.4x ROAS. Wow. Based on like the incremental impact. Yeah. Um, you know, and
• 50:40
  so, so you, you've gotta look at this a few different ways or else you're gonna
• 50:45
  become discouraged. And so that, that's also a heavier lift piece where it's
• 50:49
  like, I don't have the energy for that. Okay, well then maybe YouTube isn't,
• 50:53
  isn't right for you right now. But, but, uh, yeah, the creative and the
• 50:58
  measurement, those coming together, really, really important.
• 51:02
  So good. So you've got a, a hard stop, so I, we should probably end this cuz
• 51:05
  we'll just keep, we'll just keep going.
• 51:09
  Let's keep going, man. We'll just, We'll look up, it'll be 2 hours in and we're
• 51:12
  still going strong, still excited, no loss of energy.
• 51:16
  Yeah, none whatsoever. Always great talking to you, Brett. How do people find
• 51:18
  you? How do they connect with you if they want to do that?
• 51:21
  Absolutely. So trying to be more active on LinkedIn and a little bit on X, but
• 51:25
  just Brett Curry on those places. But then omgcommerce.com, that's the best
• 51:29
  place to connect if you want to nerd out on YouTube or get an audit for, you
• 51:33
  know, Google Google or Amazon or YouTube or whatever, that's the best place. And
• 51:36
  then what, what about for you, Matt? Like, if someone was like, hey, I want to
• 51:40
  maybe sell my business, or I, I want to, I want to get in touch with Matt, do
• 51:44
  you even allow that? Can people even reach out to you these days?
• 51:48
  No, they have to call my wife first.
• 51:51
  That's, that's smart. That's really smart.
• 51:55
  Yeah. No, mattedmundson.com. Just go to mattedmundson.com or
• 51:57
  ecommercepodcast.net. Either one, you'll, you'll find everything you need to
• 52:00
  find there.
• 52:02
  Love it, love it.
• 52:04
  Brett, you're a legend, man.
• 52:06
  Love it, man. Love it. Super fun. Thank you.
• 52:08
  All right, God bless you.
• 52:10
  You, you as well.
• 52:11
  See you. So there you have it, my conversation with the legend that is Brett
• 52:15
  Curry. What a phenomenal chap he is. Uh, I really enjoyed this, doing this
• 52:19
  podcast, you know, where we're sort of, uh, doing it on his and mine at the same
• 52:23
  time. Let me know, right? Does it work? Does it not work? I don't know. I'm, I'm
• 52:27
  kind of intrigued. It's a new way of doing it, like I said. So Uh, what a
• 52:31
  legend. Just what a great guy Brett is. But a big thank you, Brett, for joining
• 52:35
  me on the show. Uh, if you are new, make sure you like and subscribe to the show
• 52:39
  and do all of that good stuff because we've got new episodes coming out every
• 52:43
  week. And of course, we don't want you to miss any of them. Make sure you've
• 52:47
  signed up to the newsletter. Make sure you've checked out what Cohort is, you
• 52:51
  know, our sort of monthly group for ecommerce founders. And if you're into AI,
• 52:55
  go check out Slingshot, our new AI membership for ecommerce. We're really
• 52:59
  excited about that, some of the stuff that's going on. Anyway, all the plugs are
• 53:03
  over ecommercepodcast.net. That's where you find all the information that you
• 53:07
  need to know. But thank you so much for joining us, wherever you are in the
• 53:11
  world. I will see you next time. That's it from me. Bye for now.