Billion-Dollar Brand Strategies: The Power of Consistency and Strategic Clarity | Josh Sparks

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I think there's kind of four distinct eras if you like of of brand and marketing the first one was damn dude this is a lot to unpack Josh Sparks is a leading strategist to designer and lifestyle Brands he was the former CEO of Tom Brown New York and sassin B as well as the managing director of anthropology e-commerce in the AI economy execution is cheap and ideas are priceless he has architected some of the most exciting growth stories in the fashion and lifestyle sector for over 20 years Josh currently serves as a retained

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strategic adviser to the CEOs of MJ Bale who is Elijah Natalie Marie jewelry sir the label and is a partner to rival strategy and brand Advisory practice there's this Buddhist concept which is growth maintenance destruction and it's a continuous cycle when you launch anything there's a period of intense growth it gets to a point of maturity where it's largely about maintenance now to get back to growth you've got to go through a destruction phase that freaks everyone out what happens that a brand could

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wrestle 20 million for a year two 3 5 years and then get this enormous valuation in the market [Music] well welcome to the podcast what an introduction that's a mouthful isn't it I've got to try to work out how to get that a little tighter well you have a complicated resume that's that's difficult to put in a power statement that's the best we can do and I think for you um this is quite a unique episode so we've um had you on as well our relationship started off with you

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coming on the podcast for the first time yes back when it was the target table yes um and then we started having conversations and coffees and then we ended up working together um I approach you for Consulting you're very expensive but got a tremendous amount of value out of that and then that's transformed into a partnership yeah so what I want to cover on today's episode is is some of the stuff you've been teaching me over the last 10 months I've felt have been groundbreaking Revelations for me and

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you've been able to answer some questions that I've gone to some of the biggest thought leaders in branding and marketing that they couldn't answer and you were like oh yeah that's just XYZ um so I guess to kick things off um regarding where you kind of stand in the market what's your opinion on the difference between sales marketing advertising and branding great question so they they overlap they interact uh they're mutually uh they're codependent at the same time they have an

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independent purpose and they create value in independent ways so another way of saying that is whilst we can look at each of those in a silo I think it's more useful to think about how they interact and support each other in more of a flywheel uh as you like to think of it an infinity loop so different elements of each support the next element and it loops around in terms of creating a a value flywheel so a brand if we think about breaking it down though so a brand is at its core a promise and ultimately what a brand and

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you could say well what's the promise that's dependent on the company itself and what the founder and Leadership of the company perceive as their vision of a better life so effectively the brand is is the the means through which we articulate and we dis distill and communicate our version of a better life so for example it could be that I will feel more empowered I will feel more creative I will feel sexier I will feel smarter I will feel richer more powerful uh I will be able to demonstrate to

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myself and those around me that I have certain attributes and I want to convey those to the world so I use the brand to reinforce my sense of self who I really want to be at my best and I use it as a means of communicating to the rest of the world what that best self looks like so if we think about that as a promise then how do we bring that promise to life so marketing whether we're talking sort of top funnel Brand level mid funnel kind of campaign level bottom funnel kind of call to action

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Performance Marketing they're all elements of how we create a narrative that progressively moves someone from first encounter and awareness of the brand with the decision to become a member of that Brand's community so marketing is the means through which we both create the narrative that conveys the brand promise and we evolve that narrative over time so if you think of the brand as the the hero in the story and that hero is off on a quest to conquer demons and evolve and ultimately self-actualize as a better version of

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him or herself marketing is the narrative that propels the the hero on that Journey so it describes how the brand comes to to life in your personal reality and how ultimately you're going to benefit from partnering with the brand sales is where we ultimately end up so at the bottom of that funnel at the end of that narrative once we've taken the customer or potential customer on a journey we've engaged them we've inspired them we've educ at than the sun composite of that mix and ultimately

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they're at a point where they're ready to become a member of your community as the brand owner then sales is what tips them over the edge so that's a composite of Performance Marketing at the very bottom of the funnel and then typically some more proactive sales activity as well but if we think about if we think about brand really as it it is it's a magnet and brand and marketing I think are a misunderstood uh in many ways I'll just give you two examples a brand really serves to pull customers into the

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community it is it's a very very powerful magnet in terms of creating attention inspiration education as I mentioned and pulling people towards your community As you move down the marketing funnel then the consumer or potential consumer is more ready for a little bit of a push and that's where we get to the bottom of the funnel with performance marketing and sales but like in any relationship personal relationship business relationship um you know friendship romantic whatever it is if it's all about push and no pull it

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can feel a bit violent it's not necessarily it's not a fun process and I would argue that many so-called brands are really product and service companies that are offering a product price combination and relying on a lot of push and they are unfortunately not taking the huge advantage of pull at the Brand level I think they're also a little misunderstood in some such as in the modern in the modern economy I can work out the the the physical attributes that work out that that make up your product

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or the time and motion associated with the service and fairly accurately price it so I can go on the internet and find products like yours or services like yours and scour the globe for for for similar offers and ultimately that will give me a good sense of what the price range looks like you know absent brand and marketing to support my decision I will typically make my decision on price and promo because there are a lot of products in any given category and a lot of them actually offer a lot of the same

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benefits if we're completely honest so my ability and my desire to spend 5x 8X 10x 15x the cost of production boils down to brand and marketing so when people think about brand and marketing they often think about it as a way of conveying or communicating what you're ultimately purchasing I would argue that brand and marketing are critical value pillars of the offer itself and in fact when you look at the physical attributes that comprise the cost of my shoes or my watch or my glasses or the or the the time and

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motion involved in the service provided by the various service providers that I utilize it's actually very a very small component of the cost could be 10% could be 20% maybe 30% the most so in other words the other 70 80% is some combination of other elements of the customer experience a large component of that is brand and marketing another component could be that it's through a distribution partner and they need to make their margin so I could be selling wholesale to a retailer so this I'm not

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saying it's all brand of marketing for the other 80 90% but a large component of it is and the proof of that of course is that the value of a brand sits on your balance sheet in your intangible assets so brand is one of the very few Investments we can make that imp improves the efficiency of marketing and sales so increases the ROI that impacts your p&l and your cash flow but then in it of itself becomes an asset an enduring asset that for many business is the the most valuable asset they have so

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when we look at the trillion dollar valuations of various companies out there and the many many many companies in premium consumer goods uh Services software Etc the physical attributes of what they're doing is a it's a very small component of their value there's a people layer there's a real estate layer there's an infrastructure layer there's a distribution layer etc etc but the value of the brand I mean I guess if you if you're unsure whether you believe me or not just go and read

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the balance sheets the financial statements of the biggest brands in the world and see how the value of their assets is largely composed of the value of their brand so they're distinct but they support each other and they support each other in terms of propelling the customer Journey maximizing post-p purchase loyalty explation to referral lifetime value all that good stuff but they're also interlined in the sense that they way the way they impact your financial statements so I would say that

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from my perspective brand is the greatest single investment that you can make in terms of optimizing the value of that clearly marketing is is incredibly important sales is incredibly important customer experience at the retail level at the service Suite level is very important so they're all important but ultimately the value is most optimally distilled in brand so if someone's looking at their their organization um you've you would my team have created this vend diagram which we can put up on the screen which

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is there's kind of three spheres and they overlap one being which you've talked about is I guess the marketing domain which is that is directly correlated to your profit and loss so so we can unpack that in just a moment then you have a second sphere which is sales which directly uh correlates to cash flow and then you're saying that brand is essentially uh on the balance sheet so can you explain each of those spheres and how they overlap starting with marketing then sales then branding sure

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so I think it well it really starts with brand so we might start brand and then move around well in my perspective great great businesses start with brand because when we when we're looking at marketing the question that we always ask is in service of what and there's two two components to that you know does this act in service of our brand is this marketing opportunity wherever it sits in the funnel ultimately reinforcing brand promise or not there's lots of tactical marketing opportunities that

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you will come across as a a business owner or leader that may be interesting in it of themselves but are neutral at Best in terms of how they reinforced brand and ultimately might undermine brand and we can think of simple examples um discounting uh off price opportunities um Partnerships with businesses or Distributors that are not on brand so so I'd start with brand do you have an example of of undermining branding like maybe if we talk to Fashion because you've worked in the world with Ralph Lauren Tom Brown Etc um

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maybe an example that people might know of like what's something that they could do that would drastically inhibit or hurt their brand or undermine what they do so I think an overreliance of Performance Marketing and the discounting offers and promotions that are associated with Performance Marketing is is a really simple example and what do you mean by Performance Marketing Performance Marketing is that that within the trade we call bottom of the funnel so it is typically these days largely a social and digital and that is

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the kind of offers you see where it's your two for one 30% off um uh it's it's typically associated with some blend of price and promo that you are you are distilling the offer down to kind of lowest common denominator terms to push someone over the edge to purchase now when I I was really fortunate and I know I've spoken about this with you before so forgive me for repeating myself but I was very fortunate to spend some time with Ralph and he he summarized branding for me as deposits and withdrawals so I

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would say that discounting and promotions is not necessarily going to undermine your brand it is a withdrawal of brand Equity so therefore it's only going to not undermine it if you put in enough deposits so what do I I mean by that in Ralph's World deposits are things like the Mansion on Madison in New York City it's the runway shows it's the catwalk shows it's the celebrity events it's uh dressing celebrities at the Met Gala it is being uh product placement within film and film clips uh

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it is everything that reinforces the lifestyle that is that he is associating with the brand the promise that you can if you aspire to that you can participate in that through partnering with his brand that that basically is the Ralph Lauren brand promise in a grossly uh simplified form so for Ralph to send po sell polo shirts in Blooming DS in New Jersey at 30% off when he has that level of brand Equity he can sell an awful lot of polo shirts at 30% off before anyone starts to question brand Integrity so I would say

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it's a bit more nuanced than saying an over Alliance on bottom of the funnel is a problem it is a it is a problem for those who don't balance that with topof the funnel brand supportive brand Equity Building uh marketing we see that happen with retail where they just get stuck in this cycle of being on sale forever and always like I always think of like like uh rug commercials where they're always two for one 50% off closing they're always closing down they have been closing down for 15 years but you're

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seeing it at a certain point if the if the scale tips too heavily into that that's what your brand becomes known for at discount shop a box with offers um and it's losing its Equity or its impression in the market well it's absolutely so so first of all yes to your to your question and just to Nuance it out a little bit more you don't really have a brand if you're relyant primarily on price and promotion what you have is a product or service and you are competing on some level of you know

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convenience price speed of delivery these are all kind of head offers right so these are all things that when I'm looking for rational reasons to believe uh rational reasons to partner with your organization uh it appeals to my prefontal cortex as we know from about 30 years of of study all decisions not just purchasing decisions all decisions are made in the Olympic system they're emotional decisions first that we then justify rationally so if we're not taking advantage of the the the power of

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that system with messages that are meant to move you on an emotional level then we're really missing a trick because we are then at that point competing on a set of attributes that frankly anyone can compete on so the the real winners in any category have a brand that stands for a higher purpose a better life that that promise of a of a of a better tomorrow that that every brand every great brand encapsulates such that when they are speaking to that bottom of the funnel you've already decided you want

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to engage and that's why it's a very gentle push when a brand hasn't created that sense of awareness of the lifestyle promise the aspiration that you represent and kind of stirred you through some emotionally engaging content then it takes a bit more of a push uh a you're going to be resistant to that because you're up in the head you're looking for reasons not to purchase rather than reasons to purchase at that point in time you're much more likely to price compare and shop around you're much

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you're much less likely to have an impulse purchase for something that is price and promo and convenience driven because if you're up in the prefrontal cortex and you're looking for best price you know greatest promotion most money off fastest delivery I mean these days that's one click away so you you really want to be in a position as a brand owner or or or leader that your customer they're looking for reasons to buy that they want to believe they want to engage they want to be part of your community

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such that when you are at the bottom of the funnel occasionally you need an offer most of the time you don't it's more about that you've you've created such aspiration at the top of the funnel you've provided it within context you've made it real midf funnel is all about making it real so campaign level assets you know how does this manifest in in the world uh that is these days uh somewhat brand driven and directed but there's also a big ugc component to that your community is doing the selling for

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you so that when we're at the bottom of the funnel it's a very gentle push now with the brand being the balance sheet piece yeah just break down what you mean by branding showing up on the balance sheet how does it do that what impact does it have on my business we've talked about this if someone's looking for an exit or evaluation it can very much show up and become a Force multiplier for that um can you unpack that sure so they the the brand and I realized I probably just didn't answer

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your last question very well so maybe I I'll start answering this one by answering the last F better no you're doing great this is fascinating I'm like I'm loving these little Segways so so brand brand isn't solely on the balance sheet and marketing and Sals aren't solely kind of P they overlap like V diagrams so brand directs and accelerates and propels marketing it makes marketing more efficient and effective because you've really got someone excited and engaged by the time

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they're engaging with your marketing so it it opt it's a terrible word we overuse it but it optimizes marketing it it ensures that marketing hits as hard as it it can because you've got someone who is effectively pre-qualified if we want to use a sales term someone has identified themselves through engagement with the brand as being receptive to the marketing the marketing then supports and leads to a sales outcome which may or may not involve distinct selling as opposed to just marketing so certain

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transactions occur really just as the result of great marketing and the customers making the decision online certain activities will get you into store and there's still a human sales interaction at the end it could be a car dealership it could be a Telco store it could be a fashion retailer whatever so there's there's Nuance But ultimately the brand optimizes marketing marketing leads to a sales opportunity at the lowest possible cost great marketing does and then that feeds through to more

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money to invest in brand so you can do more deposits like you were saying Ralph Lauren does this you know he'll put millions of dollars into a Runway yeah purely just to have celebrities present um and become the talk of town yes right that's a deposit or you might invest in a a a campaign that really touches on a certain point for example um I understand that your Mentor um Charlie Baker is very involved at Nike and he was around back when Nike were doing stuff with Michael Jordan and Serena Williams and so forth but it's

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this deposit into a community deposit into the Zeitgeist of people's psychology of what this brand means yeah and by making these deposits you're investing in your Equity kind of inflating or growing it and making it more valuable yeah yeah exactly and so that virtuous Loop of brand Marketing sales brand Marketing sales NeverEnding ultimately exactly ultimately adds to the objective not just subjective but the objective measures we use to look at true brand equity and that brand Equity is I mean it's an

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it's this people think brand Equity is a marketing term okay it sits on the balance sheet it has a dollar value and why is that important uh brands that are at the top of the table in any given sector call it you know the top two or three in any given sector and again I would encourage listeners to go and just do their own research if there's any uh questions in their mind around this their brand valuation is significantly higher to the extent that they are valued publicly that's simple you just

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look at what their multiple of earnings is their price earnings ratio right so if if I have a company it's making 100 million a year the brand is super valuable we could get you know a 40x or a 50x or whatever on that in technology you can uh in in product categories 40 to 50x would be very very very very high yeah very very very high but you can still get multiples of Revenue rather than multiples of profit so when when there's lots of different ways to value a business we won't go down that that

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rabbit hole too much but if we're talking about the premium consumer space you brands that Brands so-called brands that really haven't yet demonstrated that they have true kind of best in class again another cliche apologize but sort of that they occupy the number one two three slot in their space and that they can demonstrate pricing power they're not dependent on some level of discounting or convenience to drive the bulk of their transactions the bulk of their transactions are Curr

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at full price they are minimally participating in promos discounting convenience-based offers then we can start to ascribe a higher valuation to brand and an Enterprise Value when you look at an exit situation selling the business brands that have demonstrated they have true brand equity and we'll get to how you demonstrate that in a second can sell for do sell for multiples of Revenue rather than mules of profit so I'll give you an example if um and Tom Brown this is public information so I'm not talking out of

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school but when Tom was valued at 500 million by zenya he was doing substantially less than that in revenue and I'm not actually sure if the exact number is public so I'm going to be careful here let's talk a little bit about this because so so but whereas if you looked at the the exit valuation of a brand like Tom Brown versus the exit valuation of you know Men's Suit Warehouse they will attract a value B based on cash flow perhaps on a discounted cash flow basis or on a multiple of their profit or in

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Australia we use e more often than than profit so so let's put that in perspective let's say your average fashion brand well-run fashion brand is generating 15% of e in fact we'll make the mass easy and we'll be really generous and say it's 20% so if you're doing 100% in sales and 20% in e now very few fashion brands are doing 20% in EA in Australia right now but let's let's be generous you would typically expect a mult multiple for a business that has some some Runway left for

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growth but not a super strong brand now what do I mean by super strong brand they don't they can't demonstrate true pricing power they're really in a pack with a bunch of others in terms of price they competing there's a lot of bottom of funnel activity going on and they're permission to play in other words their customers propensity to join them on a journey into other categories so I'm doing I'm doing um women's dresses uh do I have permission to play in eyewear do

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I have permission to play in handbags could I go into shoes could I move into another geography these are all indic that we look at to say is there true brand Equity here right so if a brand is super popular and there's demand we just wish you did glasses yeah then then we might be able to line extend into that but if there's not a massive impression or demand then the brand doesn't have much value yet in that in that sphere cuz it's really associated with a product and a price so ultimately if I

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think of a brand if you ask me to to think of a brand and my response is yeah they do really good women's dresses for kind of your you know younger sort of out andab kind of girl at 300 bucks then I've in my mind I've got no background in brand or marketing I'm just giving you an honest assessment of what I think about when I think about that brand if the response from your Target customer your those that aren't educated on brandom marketing and haven't read every single thing you've ever written but

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they're just interacting with the brand occasionally as most customers do if they say it's about product and price you don't really have a brand if they if they speak to I mean look at Zimmerman yeah so when I was CEO sassad Zimmerman was uh smaller than sassin and it was a contemp a Contemporary women's fashion brand those those girls were very as were Ser hi sess B but the Zim girls had a vision to turn that into a global designer brand a very bold and audacious Vision based on where they were at the

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time and they and for context where were they at the time like 20 odd million turnover now they ultimately exited for multiple billions they are around the world now they're globally distributed they're in multiple categories and they've done something extraordinary which they have maintained an assortment that still starts around about the price point that was the top of their range previously whilst progressively moving to higher price points and move from contemporary to designer that's super

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hard so rarely do people move up the food chain it's very difficult usually they topple down yeah and and and there's actually a legitimate strategy to moving down like sometimes it's a fall cu cu I I you know for whatever reason lost credibility go down a rank but but there is actually a there is a credible in in uh from um watches cars fashion that there is a credible strategy to diversify price and moving to a greater range but it's very hard to go up okay so Zim were going up they so

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they P off a whole bunch of things that that I I actually I actually think they're extraordinary the the Zim the Zim girls have done something that I think we see very very rarely in in any category you have seen it in a few others that we're all very familiar with I mean you know the permission of PL that what Steve Jobs has did with apple which is obviously now a well-worn example and it's over used in our world and all the rest of it but if we step back and think about it i' I've been an

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apple consumer since I was 14 and the Macintosh was what I convinced my parents to buy even though the IBM clone was you know a fifth of the price I bought into that marketing early I'm I'm super old so I remember their original 1984 commercial think different think different it was status quo it was awesome and I truly believe that I would be some sort of creative superpower if I used an Apple computer versus an IBM Microsoft clone and the specs were almost the same uh more or less and in

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many ways the Apple was more difficult to use the the guey was better the user interface was better but the sweder software available was much more limited um they just weren't they just weren't the ecosystem wasn't as big a great example of Battle of the brands David vers Goliath in 1984 Steve Jobs was Tiny IBM were massive yeah yeah and apple as we know um you know had a whole bunch of financial issues and so anyway we won't we won't get we go down that that rabbit hole but for those who who have grown up

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with the iPhone and who weren't there when it was released I mean I was a Blackberry kid I had um I had they called it a Palm Pilot that was a sort of a really lightweight pocket computer before that I was sort of an early adopter of the multifunctional what we would Now call smartphone but no one conceived of just how powerful this device could be and apple was a computer maker everyone else in the space had come up through the the TCO side see like Nokia motor permission to play was not obvious I mean if it was obvious

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then larger better capitalized and better resourced computer competitors would have gone there first so my point is that when we think about Brands and permission to play in new categories Apple managed uh what is something very rare and I've given you a local example in Australia with Zimmer which was to become something more in the minds of the consumer than an association with the product and the price point within which they launched and they came to represent a lifestyle obviously Zim and

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apple are completely different but we could go on I could keep giving examples of Brands what what not the brand Inver commas you know everyone thinks they have a brand but they've really got a product in a price point and the consumer that's intera there's nothing wrong with that but it's nowhere near as valuable as as a brand Brands and how we test whether you've truly Got a Brand one of the one of the traditional indicators price elasticity one of the more meaningful indicators now in a global economy and a

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digital economy and the attention economy is do I have permission to play beyond my initial domain so I planted a flag I own this Turf I become famous for doing this one thing does the customer think of me of this one thing or does the customer think of me of representing a higher purpose that this one thing is just one example of and then it'll be a second thing and a third thing and maybe I move from Australia to the United States United States to Europe or maybe I go global and to take the customer on

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that Journey requires a real affinity and affiliation with the with the brand and that's an emotional that's an emotional affiliation so that's the power of great brand and I know I've gone all over the map here but if we if we you can simplify this diagrammatically yeah and the VIN diagram that you just spoke to is one way to do that but ultimately there's a lot of nuance that lies behind that uh there's exceptions to every rule but it's great to think of brand and as as

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as as pull you're pulling the customers in you're creating a community that they're voluntarily joining mid and that's sort of topfunnel midf funnel is more how am I making it real how am I manifesting it in their reality what are examples of how they would use this on a day-to-day basis so traditionally that was campaign assets seasonal type Campa new release new product release and we'd see it out in the wild and this is how you using it these guys are having fun and isn't it

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cool these days it's as much community and ugc driven as it is BR BR driven and we'll talk about monologue versus dialogue versus co-creator later yeah no I'm fascinated by that and I I'm excited to Deep dive on that but I think one thing I just want to I guess weave together here is is with Zimmerman yeah so to take a a label from not to 20 million is is a Monumental task however you see Brands hit 20 and then all of a sudden they're half a billion yo my name is Dane Walker and I am disgustingly

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obsessed with branding I had to figure out a way to do branding every every single day so I branded myself then I started my agency rival and hired a team of branding Mavericks hellbent on creating Brands so good that they'll make you a competition their pants so here's the thing you want your brand to go viral and rival makes Brands go viral that's why we're offering you a free 30-minute branding session to get an expert's opinion if you don't believe me the proof is in the

00:32:33 - 00:33:43

pudding here's what clients have to say about rival rival is trusted by Brands like nutrition Warehouse light my bricks and V so if you want to absolutely smoke the competition and make your brand go viral hit the link below and book in your free 30-minute branding session what happens that a brand could wrestle 20 million for a year two three 5 years and then get this enormous valuation in the market well it doesn't happen overnight um it's it's one of those you see you see it kind of like like a like a graph

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it's like it's tracking with like a 20° incline and then it goes 70% it's a hockey stick so yeah so we'll talk about talk about the hockey stick I think a lot of these brands that we talk about and we and because we don't pay a lot of attention what we think is an overnight it was an overnight success that took 20 years so it looks like an overnight success it looks like it it definitely isn't yeah um it's good to note that because we do meet entrepreneurs both of us in our our work here at rival that

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drop things like I want to be 200 million in three years and I'm selling a physical product that needs to be made 14 years in and they're scratching 10 and it's it's like okay let's I mean I love the ambition and eventually you can get a hockey stick but but the foundations have to be in place it's it's not as true of digital delivery like if you're doing software as a service or you've got a product that's capable of digital delivery the right once Run Anywhere old cliche from

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Microsoft and everything we've seen since with software as a service and apps and everything else clearly the hockey stick time frame can be compressed right because you can just download it anywhere you don't need Logistics or delivery or ex there's no physical componentry that has to be put together somewhere that needs to scale so if I have a business that's built on physical componentry yeah how how does one start to create the foundation to one day have the possibility of having

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that kind of scale of success well it's it it's a more God that's a that's a that's a big um that's a big question clearly you need to create the demand so everything we're talking about with brand and marketing you need the capital stack um you know obviously a big component of that is cash flow and self funding but Capital stack meaning some level of equity external equity and or debt and you need to make really smart investments in middle and back office so what I mean by that back office um or

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what we traditionally called back office is everything from your supplies to your means of production to your Supply change your Logistics etc etc middle office is all your uh the financial team the HR team the operations team the systems the technology etc etc so the Temptation for any founder and I've been a Founder a few times so like I I get it where we're all somewhere on the ADHD Spectrum we all want it done immediately and sometimes it's a little bit uh frustrating to learn that even if we are

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hyper successful in terms of our brand and marketing if we're delivering a physical product there are step changes in terms of the factors of production simple example you will work with small factories when you start uh why because the large factories aren't interested in working with you unless you're ordering hundreds of thousands or millions of units at a certain point in time you will fully exploit the capacity of that small Factory you now need to move to a new Factory that doesn't happen

00:35:55 - 00:36:47

instantly there's a Handover process you have to start it ahead of the actual Handover there's a bit of a canyon between you test and learn because every factory makes things slightly differently you want to ensure quality is either the same or better as you move to a to a bigger factory that's going to distract middle and back office from other functions There's an opportunity cost and all these Investments so it's a it's a process and it requires I mean I know I'm broken record on this but

00:36:21 - 00:37:21

you've got you need great strategy you need true strategic Clarity you need an executive team and external stakeholders like board investors Etc but an executive team that is truly aligned and that's often where these things get unstuck actually and then you need to have a level of competence and so I talk about you know capability capacity and consistent consistency at the Tactical level so that you can offer tactical autonomy to great people to get on with it otherwise you're micromanaging and

00:36:51 - 00:37:55

you can't micromanage you know very very difficult to micromanage a $10 million business um imagine that at 10 or 100 or a th X so your your your strategic Clarity is critically important but the executive team through which you direct that there's another cliche that's it's worth throwing out there though as a CEO you lead the team the team runs the business now if you don't have that level of clarity on what your role is as CEO and you are constantly diving into the Tactical tactical level either

00:37:23 - 00:38:11

because you just have an obsession with meddling or you think you know everything better than everyone else then that's kind of partly on you and it could partly be on the team it could be an absence of strategic Clarity that the T the team are running off the rails it's like do they know the rails you know the the team off the map it's like well have you frame the map do they have Master they have kpis do we have systems for monitoring and managing their performance against those kpi so there's

00:37:47 - 00:38:48

a lot that goes into it so to answer your question to scale and eventually achieve that hockey stick there's a truckload of groundwork that has to happen under the covers such that you and I look at it from afar and go wow that looked easy and it's it wasn't definitely not the case the duck underwater paddling underwater last thing I'd say is that the hockey stick is about Network effects so you know think of compound interest so in any investment you continue making that small investment over time and results

00:38:17 - 00:39:25

compound now that's easy to understand conceptually it's really hard to do in reality because people are inconsistent and they get distracted they chase the new toy they get bored and I would say no one is as guilty of that as entrepreneurs including myself because you get really excited about something you start to create some proof points it reaches a level of success where maybe some of your you scratch that each a little bit and then someone's got a new idea and it's like wow look over there

00:38:51 - 00:39:46

that looks like fun so just that consistent application is critical to enjoy the compound growth and all the benefits I'm AC from that including the growth that the revenue line that looks like a hockey stick yeah and I on that point you know over the last 10 months that we've been working together now we're partnered is the biggest issue I was having personally was just shiny object syndrome which I was like okay I want to write another book I'm going to do a course I'm going to speak on the

00:39:19 - 00:40:14

stage I'm G to and you were saying look like what is the opportunity cost when you're away from this company yeah and we had uh multiple meetings where we're seriously contending with like what what is that actual number and you're saying that in most cases with entrepreneurs is when they're trying to create greater capacity they're trying to be more consistent and they're trying to you know engineer their company to have that hockey stick moment yeah that the biggest distraction if you will is them

00:39:46 - 00:40:52

not just focusing on compounding what already works yeah versus trying to jump on this new trend or this new tactic or what have you which brings to mind a quote that I texted you last night from Ryan Holiday from a book I was reading and it said that you know discipline is all about you know um it's impossible to have discipline without wisdom yeah and and the wisdom of knowing what to choose to be disciplined at and you're saying to grow a company you have to be ruthlessly disciplined uh on on a a

00:40:20 - 00:41:24

couple key functions otherwise you're never going to have the hockey stick moment 100% so I would say that the first of all I completely agree with everything you just said I recall beautifully our very first you can touch on it if you need to cuz there was moments where I was having um you know not a crisis but I I was just like rewriting every frame of thoughts that I had about how to build this company yeah in a healthy very common in a healthy way very very common so I think you know the the same qualities that provided you

00:40:52 - 00:42:07

with the conviction that you had something new and better to offer the world and the inspiration and Innovation and I call that you know that's cre monetize creativity is is innovation so that the creativity that ultimately inspired you that led to over time your innovation in this business model those same qualities if harnessed can become they can cut through steel so we're talking laser couple hundred watts of laser appropriately focused you can cut through steel um 10,000 watts can be a

00:41:29 - 00:42:40

flood light at a football stadium where you feel very little heat and it it manages to light up an oval it's not cutting through right same amount of energy to outc same energy which brings to mind that other thesis which is like water and steam are the same thing at different frequencies yeah our job in coaching and Consulting to Innovative purpose-driven enormously ambitious entrepreneurs and Business Leaders is to support them in in harnessing and channeling that energy such that it has the greatest impact because if that is

00:42:05 - 00:43:03

if that is left unchecked and I'm not saying anyone voluntarily or consciously runs all over the field but that that same energy that got you to this place in in they got you to this place if it is not channeled is going to lead you to find a whole bunch of other things that are really interesting and could be turned could be monetized so you know the active entrepreneurialism It ultimately if you really boil down that there is some level of creative Insight that's led to the inspiration the light

00:42:34 - 00:43:32

bulb moment that there something in this I could turn it I could turn this into something the unpacking of that the reworking of that uh the repackaging of that which I would call kind of the process of innovation that results in a business model that you decide to test you have high level of conviction around decide to test and that you then take to the world and turn into a business that creativity inspiration Innovation flywheel is addictive it feels awesome such a dopamine Rush it's so much fun

00:43:03 - 00:44:02

right like creating a new business creating something out of nothing feels great and you talk to anyone who writes music or writes books or writes plays or creatives have a wonderful life so there is something innately human about creativity and it's why I'm really interested and we'll get into the AI thing later but there's there's a layer at which we are not acting reductively like the way we think of AI we're acting at a different we're on a different plane and call it the Flow State call it

00:43:32 - 00:44:25

divine inspiration call an outcome in meditative process whatever you like yeah whether you believe in leprs or God whatever it comes from somewhere it's a it's a you are you are create you're seeing around corners and over Horizons you're connecting dots that other people haven't and there is a level of original thought even if you drawn on a whole bunch of pre-existing ideas the original thought is putting it together and repackaging it in your own unique way and that process is highly addictive so

00:43:58 - 00:44:54

to then distill it into an offer with all the complexity and all the frustration of sort of front middle back office distribution Supply Partners people people management at a certain point a lot of entrepreneurs get bored and they want to go back to the fund bit like I did you're saying the compounding piece is is often forgotten and it's just like let me create the new thing the new thing the new thing to new thing versus just doubling down exactly and there's a one thing just to touch on here Darren

00:44:27 - 00:45:23

Hardy has a book on this called The Compound Effect and he he has this uh this concept where he goes I'll give you a uh a penny um that doubles every day yeah or I'll give you a million bucks yeah which one do you want yeah yeah and after 30 days the double a date expires but if you double a penny every day for 30 days I think it ends up being about 14 million bucks what you're saying is the compounding is is what someone needs to focus on versus just trying to get the cash grab that they they think

00:44:55 - 00:46:07

they're going to get from an exit yeah well it it could be a cash grab and it could just be scratching that emotional edch that is around creativity and Innovation but for whatever reason there's a level of distraction and so what what we really encourage entrepreneurs to do and to really simplify to oversimplify it is get famous for one thing so before you're tempted to rush into something else make sure that you are famous in the eyes of at least some subset of your target market before you get too tempted by adding a

00:45:31 - 00:46:29

new product or service around it now I would caution that there's an exception to every rule I would I guess caution that statement by saying that doesn't mean we're stubborn in the eyes of obvious evidence to the contrary so if product Market fit isn't there if a new competitor comes in that dramatically underprices you um if Supply chains break down due to a Pand like there's a bunch of reasons that you might have to rethink that original strategy but one reason not to rethink it is it's it's

00:46:00 - 00:46:50

kind of working but I've got excited by something completely new because the risk is that you're pulling up 96 MERS down the 100 met Sprint to run back to the starting blocks and go again now there's another qualifier which I think will make the entrepreneurs and the audience feel a bit better so they're not going to have to do the same thing for the rest of their lives which is another metaphor I use which I actually got from uh from Matt Jensen a long-term client the founder CEO of MJ B and he

00:46:26 - 00:47:36

got it from a meditation team teacher that I also went to see as well the the late great Tim Brown and he spoke about this cycle of life which is a a Buddhist concept but I think it applies to everything including business personal relationships natur the natural world so which is growth maintenance destruction and it's a continuous cycle when you launch anything relationship uh new growth forest a business anything there's a period of intense growth and that is is really exciting and it gets to a point of

00:47:00 - 00:47:55

maturity where it's largely about maintenance there is there's overlap between there's like there's overlap between everything we're talking about today there's a little bit of growth uh but it's mainly about solidifying and enforcing a a position so you've created some space for the organism whether it's a a plant a business or a relationship and it's more about showing up and being consistent because that's the basis upon which we build long term trust and

00:47:28 - 00:48:18

confidence and that optimizes lifetime value now I'm talking about business not relationships don't worry not talk about my relationship like this now I'm talking about business maintenance is incredibly important because consistency is one of the key Hallmarks of trust and if we don't have trust and I mean the legal definition of a partnership starts with a relationship based on Mutual trust and confidence so if you want to partnership with your community you better be consistent and you better turn

00:47:53 - 00:48:50

up and create that Mutual trust and confidence now eventually everyone one gets bored uh including the community the entrepreneur everyone else involved and it's time to do something new for the entrepreneur the Temptation is to dump that and move on to something new you don't have to the best businesses that I consult with and I I coach have a growth team and they have a maintenance team right so the they separate the two ideologies they're very different they are because I think when you start a

00:48:21 - 00:49:07

company for example you know when you're in startup phase or growth phase or bootstrap phase it's exhilarating it's en toxicating it's exciting everything's happening all at once everything's growing but at a certain point you need to have an operating Rhythm that's like ERS come in order gets fulfilled that happens on time and then how do we speed up the maintenance yeah potentially what which might be growth but once it's optimized it's just like let's maintain

00:48:44 - 00:49:36

this system so it doesn't break and it's and the big difference is you know in maintenance doesn't maintenance is not stasis maintenance is still about incremental Improvement but it's not transformational it's not radical growth is trans transformational maintenance is incremental so of course we're incrementally improving all the time but it's not this transformational period we're offering something completely new um new distribution channels new products and services new

00:49:10 - 00:49:59

price strategy new Revenue model whatever it looks like so you're liking it more to maybe Kaizen from Toyota where it's like 1% improvements every day yeah yeah and that's a that's a great approach to maintenance so there's two things in this that I think are important for the entrepreneurial audience one is don't worry you're not going to be stuck doing the same thing for the rest of your life but until you are famous for something and you have the proof points to validate that you're not quite you're

00:49:34 - 00:50:20

not quite done yet once you do have something to maintain it's you're no longer figuring it out because we don't want to maintain something it's still being figured out it's kind of an oxymoron it's impossible once you've got something that's well enough established and proven that it's ready to maintain then it's about going back to growth now to get back to growth you've got to go through a destruction phase that freaks everyone out little bit it panics people

00:49:58 - 00:50:55

whenever I brought this up uh with interactions I'm like we might have to destroy some stuff in your business people just start pumping the brakes yeah so it could be as simple as what I just described that the organizational structure you have the people you have the systems you have are now maintenance oriented so in order to go back into growth we need to destroy the assumption that what we have is enough that the or chart is complete that our fixed cost base can't get any bigger that the EB

00:50:26 - 00:51:16

we' committed to our investors to maintaining with maintenance is sankran because the reality is if you want to go back into growth you're going to need some different perspective you're going to need some different people you're probably going to need some different partners etc etc so the destruction could be as mild and it's still hard to do because you've got to rope in all the stakeholders and get them aligned but it could it could be as notionally simple as destroying some assumptions around

00:50:51 - 00:51:29

what the business looks like this is what I've experienced in the last 10 months yeah so like just to touch on what you're talking about here like I've gone through this journey together with you and when you brought this up with me like hey Dane like in your business you've got things that need to grow things that need to be maintained and things that need to be destroyed I remember I was like dude pump the brakes what are you talking about Destruction for um but I think I had to destroy some

00:51:10 - 00:52:00

assumptions I had to destroy some limiting beliefs I had to destroy potentially how I believe that the vision should come together yes and it's kind of like if you know you sit down with a coach and you say coach I want to win the championship it's like cool let's have a real conversation about what that means so you know you didn't come in out of nowhere and start bullying me I sat down with you and said look how do we actually legitimately scale this operation to north of 100 million yeah and you were like are you

00:51:35 - 00:52:36

[ __ ] serious and I was like yes and you're like well okay that's a very different conversation so you were kind of uh how would you say giving yourself permission or license to Kill if you will uh through through the commitment of like this is my goal I legitimately mean it so then we had to engineer everything back to that to say well okay like if we're legitimately trying to get there we might have to destroy some ways by which we do things yeah which is a a painful metamorphosis but for me I think it's

00:52:05 - 00:53:07

it's so Paramount as an entrepreneur to sit down and go hey everything I thought up until this point control out delete yeah well some of it some of it and it's about being really targeted and so it could be you you touched on a bunch of mindset stuff there yeah so the the destruction of limiting self-beliefs of you know um core assumption of um uh an organizational chart that everyone aligned on when you took your last round of equity what they're all relatively well I wouldn't say they're

00:52:36 - 00:53:30

simple because you know um in reality they're hard but they're simple to understand there's layers to the destruction piece yeah it's not everything all once no and and and sometimes it's as little as a mindset and sometimes it's as much as a fundamental redesign of the organization did it involve some painful decisions did it involves some restructuring perhaps the jetting of relationships that you've had longterm partners that you've worked with that you believe in

00:53:03 - 00:53:59

like there can be some very difficult aspects to the destruction phase but there isn't always but ultimately it's in you know how I mentioned before it's in service of what when you have strategic Clarity then the way that you are approaching each of these you've got a nor star in terms of does this serve us is this getting us closer or further away from our strategic objectives including an assessment of opportunity cost so second and third order consequences are you know no one really

00:53:32 - 00:54:31

wants to get into those and it can feel a bit esoteric and we're playing threedimensional CH second third okay so I mean the simplest um is the opportunity cost like everyone understands opportunity cost if I do this I can't do that if I invest in this I can't invest in that so if we continue to do this invest in this particular Market commit a certain amount of human resources are time money and people so if I want to reallocate ate resources I'm the leader of a business my number one job after

00:54:01 - 00:54:55

achieving strategic Clarity and executive alignment is the efficient allocation of resources in service of the strategy so what resources do I have to deploy time money and people um I can't get any more time unless I hire more people I it's the only way to leverage time is to have more people none of us get more than 24 hours a day and I can get more money through being a better operator or through taking on external money in which case I want to be a great operator so I don't dilute

00:54:27 - 00:55:29

too much so the point is what what reallocation of time money and people within my current means you know you may be able to raise more money you may not within the means I have available to me today across time money and people what am I going to do differently to free up the necessary time money and people to do this that's opportunity cost I can't continue to do this because we have limited resources and if I want to do that I have to take it away from here it's like pretty simple so the

00:54:59 - 00:55:59

opportunity cost assessment is again one that in high functioning extremely ambitious fast moving individuals they don't always get to that so it's like this looks awesome this opportunity has come out of nowhere it's tactical but my goodness it seems exciting let's jump at it and the whole team that the the leader comes in and goes guys this has come up I want everyone to drop what they're doing sorry and go and do this and of course it's like great the leader says jumping into that particular you

00:55:29 - 00:56:27

know Pond of burning water and we're there like we're going to go it may or may not be a great decision an absent an assessment of not just the opportunity isolation but the opportunity cost both of which are grounded in strategic priorities understanding what you're trying to do strategically then it's kind of Amateur hour and we see we see a lot of businesses that operate highly tactically and opportunistic that whole hustle culture thing I I get it I I I love the I love the emphasis on getting

00:55:58 - 00:56:58

[ __ ] done and just moving FAS and working harder and you know let's just go and get a beta up and minimum viable product I hate that term by the way like I I just cannot understand why your desire to launch a business and achieve your dreams is now being attached to a minimum viable product I mean really it works in software if you're beta testing it with a small subset of the target market it doesn't work in anything else so I think there's just a there's a lot that can go wrong when you're chasing

00:56:28 - 00:57:25

the new shiny toy and there's a lot can go right by building a business to the point where you've got something to maintain and continuing to incrementally grow it whilst diverting just enough resourcing and bringing in just enough different people Partners processes technology whatever it is to test new opportunities for growth so we're not putting all our we're not putting all our cards on one bet we've got a business that is growing at 5% 8% 12% 15% whatever that looks like in your SE

00:56:56 - 00:57:53

sector so it's a good level of growth but it's incremental it's about improving what we already have in small ways and then you diverting just enough resources to test and learn around growth opportunities that's a really Smart Balance the the wrong way to do it is to get this to a certain point where we get bored divert all your best people into an entirely new unproven project start to un underservice the customer that's paying the bills and you start to see things head south now there's a lot

00:57:25 - 00:58:20

of nuance in that and different sectors the rules are different and I I'm not saying this is a rule for everyone but as a an operating premise or an intellectual framework within which to approach these decisions it's not a bad one business owners if you're stuck using one platform for every project you're probably stuck in a growth bottleneck more clients means more hires which just adds noise and cuts into profits to break the loop you need flexible tools that don't stretch your

00:57:52 - 00:59:02

resources Wick studio is a smart addition to your business tool tool kit intuitive by design your team can quickly Master the platform and focus on the work that matters the most then keep up the momentum with a built-in management tool a unified dashboard reusable assets and a figma plugin that turns static design into launch ready websites with robust native Business Solutions like bookings e-commerce and events you can take any project at any scale without the added cost of third-party plugins Plus Wick studio is

00:58:27 - 00:59:30

a low maintenance platform meaning you can redirect the client budget towards real growth initiatives think more value for clients steady income streams and stronger relationships to get started simply go to wix.com studio so you're saying that you know let's imagine the entrepreneur is in a cockpit if you will there's a couple things that they can use to guide themselves one which is you know what's their capacity uh for themselves and their team what's consistent across the

00:58:58 - 00:59:49

boards and the third one which is um capacity consistency capability capability capacity and consistency and and you're saying okay that's one guer of like how we can measure things the other thing is what's in growth mode what's in maintenance mode what's in destruction mode yeah one thing I think of when I when I see that and I saw this recently where Elon Musk was talking about what he's doing with SpaceX he said if you're not putting 10% of your system back in you're not deleting

00:59:23 - 01:00:17

enough of it yeah so so do you often feel that entrepreneurs um aren't removing enough yeah from what it is that they're trying to do they have too much potentially what what do you think is like the common mistakes when it comes to growth maintenance and destruction that you've seen with entrepreneurs well I think just not not doing exactly what you just said so what Elon was referring I mean Elon is a um he's a completely different bread yeah and he has a different approach that is

00:59:51 - 01:00:52

not going to work for everyone that's true but there's a lot we can learn from him um I think he ruthless about he Embraces the destructive phase so he is utterly ruthless in his understanding of the importance of destroying in order to recreate to get back into growth and you see it even across his portfolio he's got some that are largely now in maintenance mode you've got some that are largely in growth mode and you've got some that appear to be well and trilly in destruction mode and uh so and

01:00:22 - 01:01:19

he basically you know we all know the way he operates he goes very very deep with anyone business at any one time he focuses on the most important problem he sleeps on the factory floor to get it solved I mean he he's he's phenomenal I mean agree with his politics or don't agree with his politics I don't really care as an entrepreneur I don't think we've seen anyone like him in Generations so I think there's a lot to learn there equally not everyone can do that no uh a lot of people would prefer

01:00:50 - 01:01:50

a more balanced existence a lot of people have families they want to see occasionally a lot of people want to invest in their personal health and wellness so whilst we won't necessarily mimic and mirror there's a lot we can learn and I think you asking the question what do people get wrong I think we need to embrace a little bit more of his appetite for ruthlessly destroying that which is not adding value because we're not in business is it a hobby or a business right so how would you describe the

01:01:19 - 01:02:10

difference well I mean a hobby is a is a uh is something you would do for the hell of it it's something you would do for fun and there's a lot of again V diagrams hate to keep going back to there's a map right so there are hobbies that are pure Hobbies not only you're not getting paid for it no one would pay you for it I would say my playing the guitar is a good example of that we talk about this people would pay me to stop playing the guitar but but I insist then there's people that turn Hobbies into a

01:01:45 - 01:02:40

business there's a lot of those where ultimately they're not scalable to the extent they are scalable they're not that interested in going that hard at it but they love the fact that they able to pursue something something they love and take care of their family there's lots of businesses like that then we have businesses that are what we more typically understand as corporate entities that act in service of their shareholders and their fiduciary duty to those shareholders is to maximize profit

01:02:13 - 01:03:17

now if you take that Duty seriously you take that Duty seriously and you need to be cleare eyed on all elements of that process with the flip side of that coin being the Strategic Clarity executive alignment and tactical autonomy and with tactical autonomy tactical agility are sort of two sides the same coin down there we'll get into that later or maybe not at all we'll see but the the idea that you can it's not a buffet you can't kind of select the bits you like and not do the bits you don't

01:02:44 - 01:03:44

so I love growth main it's a bit boring and I'm too nice a guy to go through destruction so I'm going to have you know the steak with ice cream and I'm going to you know what I mean like you don't go down the line and pick out the the pieces that you think appeal to you the most there are Frameworks that that work for businesses and there are Frameworks that work exceptionally well for businesses regardless of sector product or service um bet to C or B to be physical or digital and if you choose

01:03:15 - 01:04:09

to ignore those great but it is at your peril and you might just hustle your way through it but you probably won't well we've had this conversation many times where I've probably been in the camp of like yeah growth mode growth mode growth mode maintenance is something that I'm like okay we we should probably solve for that and then destruction I'm like God do we have to you know and I think I've learned over the last 10 months how important the destruction piece is because it's like what doesn't mean the

01:03:42 - 01:04:36

end of something it just mean it could mean a metamorphosis a transformation a change a pivot an adjustment yeah um but sometimes it is a divorce from something yes and that can be painful but rightfully so back to what you said about the Elon piece is like if there's a page we can take out of his book it is some of this ruthless commercial bone in his Acumen that is sleeping on the factory floor that is keeping people acutely AAL and and demanding Excellence yeah so so let's just say you know like

01:04:09 - 01:04:59

you said divorce ourselves from the politics if we just purely go okay as a case study of an entrepreneur he's had uh stacks of evidence that he knows what he's doing yeah when it comes to making money yeah yeah what what would you say that your advice would be if someone could I guess distill that into themselves around this like how do how do you gauge that you're investing the right amount of growth the right amount of Maintenance the right amount of Destruction obviously it's different in

01:04:34 - 01:05:37

every business but is there a rule of thumb that you try to stick to uh unfortunately not so I think yeah uh it's it's highly individual and and also it's such a dynamic Marketplace and these do overlap so it's more about becoming aware you need to be conscious of the different um so you got critical and I don't know how deep to go on this Rabbit Hole so I'll try to keep it high level there's critical success factors in every business and when we look at a business in a silo we want to optimize for

01:05:05 - 01:06:03

success or another way like maximize the Der risk them as much as possible so we understand strategically what we're trying to achieve we have an executive team that are highly competent they've got capacity um they're consistent appc etc etc and we've empowered the executive and functional leads with tactical autonomy to get stuff done which allows the leadership to focus on running the team bus a direction we're marching in the executive alignment is like we're all Marching In The Same

01:05:34 - 01:06:24

Direction co-authoring the Milestones that we need to march in to get the job done and then the the actions are in spirit or in direction of what we're going toward and you're seeing that a lot of companies aren't really doing that well no because it's it's it's it's also it's not one and done it's it's just a constant process I mean strategy is not constant if you're changing your strategy every week it's not really a strategy it's a tactic but um in terms

01:05:59 - 01:06:59

of executive alignment that is that's constant I mean if you're if you're kind of again another way to describe the CEO's responsibilities I described allocational resources most efficient or optimized allocational resources another way to say the same or similar thing is that you are leading coaching and holding accountable the leadership team the leadership's team is then to run their functional responsibilities with a level of autonomy such that you get the intellectual Firepower and the worldly

01:06:29 - 01:07:25

experience and all the network and etc etc you get those full benefits at each functional level it's not the CEO making all the decisions for everyone he that's massively disempowering and no one who's got any respect for themselves would last in a company like that for very long and secondly you're discounting the fact that you know three or four or five brains at the functional level might possibly conceivably have thought of things that you haven't as one brain at the top of the organization the team

01:06:57 - 01:07:49

sport analogy the military analogy the orchestra analogy it's the collective is much more you know the the whole is greater than the sum of the parts right so so like if an entrepreneur is in their business and they've very much been the Michael Jordan of their team for a long time um potentially their ego might get in the way of their company growing and you've said this to me multiple times where you know a company can only grow as fast as its as it founder does well no no company outgrows

01:07:23 - 01:08:35

its leader yeah is is how I put it and that is to my knowledge 100% true I've never found an exception um now the the really evolved actualized leader recognizes their strengths and leans into them and also recognizes their weaknesses and they they solve for not only their personal weaknesses uh temperamentally or intellectually or or in terms of their knowledge base but also in terms of the deep domain expertise that's required at each functional level to be truly great so a really strong

01:07:59 - 01:09:00

leader is is they're standing on the shoulders of giants and those Giants are not just everyone they've learned from externally and everything they've experienced in the past it's their team and the the leader that recognizes that they are their success is dependent on their ability to lead that team in an optimal way and then the organization success is ultimately dependent as much on them as each functional leads ability to manage their people and optimize for the success of their functional

01:08:30 - 01:09:23

milestones and kpis it's a collective like it is it is truly a team effort and we don't see a lot of that or hear a lot of that from you know a lot of entrepreneurs when they're on podcasts talking about everything they changed you hear all about the hustle culture and taking ice BS in the morning and all the mantras and everything else which is fantastic but you're you're saying that you really need to take a deep look in the hood of your business and think about you know are your team in

01:08:56 - 01:09:53

alignments are we Marching In the right strategic direction are we taking the actions in said Direction and a lot of people like to say well yeah sure I am but when you get under the hood you're like man like this engine isn't built to go 100 miles an hour well yeah yeah and we got to this through your question around you know that balance is there are there phases to growth maintenance and destruction or and so this is a great Segway at this point because I said not really there's there's no set

01:09:24 - 01:10:44

rules and um where I was getting to was even when you look at the critical success factors in a silo like what would this organization look like optimally across strategy executive level tactical uh People Partners etc etc we don't operate in a vacuum we operate an incredibly fluid super competitive ruthlessly aggressive Marketplace so not only is it not one and done it's not up to us so so we will what is it with sun Sue said that no strategy first encounter with the Enemy it is it is directionally war it's directionally

01:10:03 - 01:11:04

important and it holds us to um an aligned uh Direction and it provides us with Milestones on KP kpis on which we hold each other accountable so I'm not discounting it at all no but one of my favorite quotes that you said in in a in a meeting recently which is we had a what was it a graph and you said there's 100% um a guarantee of about every graph that's ever been pitched about what a p&l could be it's 100% wrong yeah so back to the sunzo quote is like you can have the best plan battle yeah go to

01:10:35 - 01:11:24

battle plans change that they have to and so and so tactically you're very agile and you're very fluid um you know the strategy shouldn't shift too much but there are instances where you have to rethink strategy because of an externality and we can all think of examples over the last few years whether it's pandemic or you know supply chain disruptions or whatever so there are examples where strategy needs needs to be reviewed much sooner than you were planning on reviewing it but largely

01:11:00 - 01:12:02

it's around a tactical agility I'm just going to get back to your question about the growth maintenance destruction if you have that operating framework that marries that strategic Clarity executive alignment and tactical autonomy and Agility then the chances are that you you won't be relying on yourself the chances are that others in your team are going to see an opportunity to spin off something from the maintenance business to get back into growth so we need to look at this this business unit it's

01:11:30 - 01:12:25

minimally profitable at best it's it's sucking up way too much resourcing time money and people if we exited that we might be able to spin up this for a licensing deal on a new territory whatever it is right and those suggestions are bubbling up constantly to the CEO because you're living you're empowering the people with your people your your functional leads and they're empowering their teams with the respective tactical autonomy and Agility they're closer to the cace they will

01:11:58 - 01:12:46

they will find Opportunities typically that ahead of you or are different to those which you might perceive and so you create a structure within the organization that that once you're in maintenance mode you're actively seeking new growth opportunities so you're not getting attracted by the new shiny toy before you've proven out the business but once You' proven out the business you get a certain level of attraction it's watching its own face however you decide to measure it through kpis

01:12:22 - 01:13:15

financial and operational it's at a point now where geez be thrilled with 10 to 20% growth per anom in this like it's a really good offer we see room for incremental Improvement um you're a retailer we've got five locations we've identified 80 locations around Australia now 5 to 80 you would say that's transformational growth but fundamentally you're taking the same brand the same assortment and the same customer experience and just adding stores I would say that's incremental

01:12:48 - 01:13:41

it's a large number but it's incremental in the sense that nothing fundamentally is being transformed in order to to ra you have a blueprint if you will and it's copy paste copy paste so it could be 5 or 10% it could be 300% and it's still incremental if it's fundamentally the same offer transformational growth is we've got a retail offer in uh men's wear and we've decided that we want to go into shoes or eyewear or Home Furnishings or whatever that's going to

01:13:15 - 01:14:04

take a few people from the maintenance team probably add in a few people from somewhere else maybe raise a bit of D to set up a separate entity if we're not prepared to fund it or maybe take a little bit of the free cash flow from maintenance and and fund it and we're going to set up you know what led Martin used to call a skunk works so we're going to we set up three guys three girls in a garage three of each whatever it is and they are going to go hard on reimagining what this brand offer could

01:13:39 - 01:14:40

look like how could this brand offer manifest to the benefit of our customers in a different geography in a different segment in a different product or service Suite that is how we maintain and we grow at the same time now you could ask what's the destruction in that well result had to be freed up so at least some assumptions had to be destroyed that unit may be less profitable because it's funding the new unit that unit may give up some of its people so they can work in the the new unit if the board of directors and

01:14:09 - 01:15:08

shareholders that own the existing business do not believe in the new business it may need to be a subsidiary we may need to set up and fund a new entity going to a joint venture so something has to be destroyed it could be an operating assumption it could be the capital stack it could be partners whatever is in order to get back into growth so to answer your question no there is no set measure or time frame and the only way you really will know is if you have optimized for for maintenance you've got youve got a team

01:14:39 - 01:15:39

that are are responsible for continuously improving what is a pretty consistent brand product and service offer and you have some way of harnessing the best ideas in the business including potential some external advisers who are scanning The Horizon for acquisitions or you know m&a activity um new markets whatever so a com at the at the CEO level at the SE Suite level it should be a combination of let's percolate the best ideas in the business and continuously review those ideas for opportunities for growth it's

01:15:09 - 01:16:04

5% of my week 10% of my week whatever it is as well as external advisors whether they're Bankers corporate advisory guys like us that are scanning The Horizon and looking for opportunities for the brand to grow externally and I think that's a great balance and the businesses that I've seen do that well have I I'm thinking of a couple in particular like Urban Outfitters has a a very structured process to this and they are very very good at what they do they only invest in a new brand if they

01:15:37 - 01:16:24

believe it's a better investment than continuing to incrementally improve their existing offer and they're ruthless in terms of the metrics they apply to that there are Brands coming to Urban affid is all the time trying to get Acquired and they they very rarely do a deal but when they do a deal it's like free people you know free people started as a brand within anthropology it was a small tiny little capsu offer U Meg Hae launched it as creative director she convinced the board to spin it out

01:16:00 - 01:16:49

it's a billion dollar brand now uh in many ways free people I think it's I think it's the fast I think it still is the fastest growing part of the urban outfit is group now in that period of time there were dozens and dozens of acquisition opportunities that came to Urban including a couple that I put to them when in my time there brands that I loved and it just didn't pass their test so very disciplined very consistent they got criteria for an acquisition it either meets the criteria or it doesn't

01:16:25 - 01:17:12

and and one of the the last ones is will we get a better return on shareholders Capital are we confident do we have a high level of conviction that we will get a better return on shareholders Capital by investing in the new brand but then continuing to invest our own now that level of discipline Urban's been around since like I think it was the 70s I mean it's it's a phenomenal success story dick Hayne the founder the haes are the wealthiest family in Phil in not just Philadelphia in Pennsylvania

01:16:48 - 01:17:45

and it's just been consist now you could say well it's it's almost it's such a success story and it's been around for so long at at least in my world in the world of retailing and fashion that it doesn't get a lot of attention you know they're not popping up in Hustle culture podcasts they just keep doing what they do really really well yeah and over time that family has accumulated enormous wealth they've created enormous wealth for their sh shareholders there are hundreds of millionaires that have

01:17:16 - 01:18:20

been created within the Urban Outfitters ecosystem through stock options and equity and they pay tens of thousands of mortgages so I mean they're one of the employees in Philadelphia so I think I think there is the flashy kind of look at me way to go about this and I'm not denigrating that at all but there is also just the consistent application the the still backbone resilience and the ruthless kind of objectivity around are we ready to go from maintenance to growth and if we are what does it look

01:17:48 - 01:18:48

like how do we resource it let's go and that's how great sporting teams operate that's how great businesses operate that's how great militaries operate so yeah the the idea that it's all sort of flash in the P pan tactical Idea new influencer digital thing lets go absent a strategic framework absent the executive level and the resourcing required to do it not just once and have a flash in the pan and be one of those dozens of Instagram Brands we see rise on Fall within two or three years it's

01:18:18 - 01:19:24

uh you got to play the long game if we're moving up to the marketing piece the p&l piece um one thing that you were touching on recently was what we or you've termed as the four epochs of branding and the reason I'm attaching it to marketing not branding is like it's the delivery of which and how that's framed can you unpack what you mean by that um and what is the era that have uh that has been in the past and what era are we in now okay so this is me playing armchair academic so forgive me I think

01:18:50 - 01:19:54

it checks out yeah but I I I love I love the inter play um of consumer psychology um marketing advertising as it's evolved over time you know brand Theory the the hero now like I'm fascinated by it so I'm a bit nerdy and I I you know I read a lot so forgive me if this sounds a bit esoteric but I think as a simplified framework that the simple version It's a useful way to think about how you're showing up in market and whether you are really whether you're fully exploring

01:19:23 - 01:20:24

the opportunity of what we created with with brand and indeed whether you even have the brand that you think you have so okay so we'll run through them quickly so um I think there's kind of four distinct eras if you like of of brand and marketing the first one was and it lasted about 607 years is what we might call kind of the monologue era where essentially a brand was communicating in a unidirectional manner to the the customer what that brand promise was and then we can g into detail about how

01:19:54 - 01:20:48

brand promise has changed time I me originally it was this our product will not kill you you know this food is not contaminated this tractor or Carriage uh and then then Caro tractor will not blow up and set you on fire like there were sort of pretty basic trust issues lot of death in the world back then a lot of death a lot of death a lot of Ming a lot of missing arms great way to sell you're not going to die yeah you won't die and then obviously that evolved over time so your better life was you will continue

01:20:20 - 01:21:15

living your better life progressively became more aspirational but it was largely a monologue so uh I Define what the brand promise is I decide how it is going to show up I'm not terribly interested and in fact you don't even have a means for communicating back to me other than writing a letter to the editor of the newspaper the local newspaper or writing edit of the CEO which will promptly be thrown in the bin there was no kind of two-way Loop right so we're talking about like 1920s we

01:20:48 - 01:21:49

don't necessarily have phones or computers or anything like that even earlier like the century the century before mean Brands really started if we go right and without getting too nerdy about it Brands did start around around safety around Public Safety and um so anything that could kill you quickly tended to evolve into a into a branded offer so guns where bullets would typically often explode in the barrel and blow off a hand uh carriages that would fall off the horse and send you caring into a tree uh any kind of food

01:21:18 - 01:22:20

or alcohol or so-called medicine that would send you blind or [ __ ] you or whatever so there are a bunch of categor that really required the reassurance of this stamp means that it's quality assured to some degree it's a guarantee we'll tell you how it is yeah not always a stock guarantee unfortunately but it was a good it was a safe bet it was a safer bet so it evolved over time in terms of what the promise was and it it moved more from more physical attributes resulting in physical safety to more

01:21:49 - 01:22:48

emotional mental spiritual attributes and mental emotional spiritual actualization um you know I'll be a a smarter version of myself I'll be a more powerful verion like so it evolved over time but it was still largely a monologue so whatever it was was a one-way conversation think of it as a soliloquy it's a it's a monologue from Brand two audience we then started to move into into the dialogue phase now the dialogue phase really started off you know way back when call it you know

01:22:18 - 01:23:24

70s 80s mad era it was yeah and it was pretty mad man yeah just after mad man right the the the early mad are was still pretty monologue but when we started to see the better brand started realizing that customer insights were important um there was customer satisfaction surveys there were uh you know 1800 in the US line set up to take customer feedback so that started pretty early arguably it wasn't really it didn't really kind of gain momentum until the customer was engaged in a dialogue that was public so that's

01:22:51 - 01:23:50

really kind of early internet ERA with kind of message boards you know you're too young but I remember this time that then evolved ultimately into social media and um the ability for customers not just to talk back but to tell everyone else but it was still largely about the brand and the way that the brand chose to turn up so brand marketing product or service directed by the brand the customer then saying I liked it I didn't lik it I want to see bit more of this want see bit of that that overlaps though that social media

01:23:21 - 01:24:06

media that social media era and kind of the the evolution of social media particularly with Instagram and Tik Tok I mean we didn't really see much of it with Facebook it was still mainly a conversation about the brand I it was a conversation which is great but it was still mainly about the brand on the Brand's own terms right so we move from monologue which is I'm going to talk at you to dialogue let's interact we will talk but we'll talk on my terms oh I see so this's the product this is marketing

01:23:43 - 01:24:39

this is how we do it in retail this is what it's going to look like we decide what the ads are you like it you don't like it give us your feedback we'll have a chat you know we're interested kind of not that you know then but as and towards the end the the sort of last stage of of of dialogue was when we started to see the internet evolve into not just a two-way communication device that happened to have a public element which sort of the tail Ender dialogue but more into a forum in which I now get

01:24:11 - 01:25:07

to interpret the brand so there been discussion for decades that the customer is a stakeholder in the brand and All Brands paid lip service to some degree or another around that but they also had things called brand Bibles which would indicate that wasn't really subject to review it was the Gospel the brand was deciding what the brand was this is how it would show up this is how it would look and feel in terms of logo and font and um assets and models and art Direction and channels and all the rest

01:24:39 - 01:25:32

of it so whilst we're saying you're a stakeholder you're a stakeholder on my terms you're a stakeholder if you want to join my religion and the Bible is how we govern our interaction so more dogmatic very dogmatic the definition of dogmatic and so to the tail end of the that that early internet or pre-social media but you're starting to see message boards you're starting to see the sort of stuff that we would now describe as redit but it was red at light so it wasn't the full ugc world that we now

01:25:06 - 01:26:08

exist in but there was a level of dialogue not just back to the brand but public and then the public were weighing in and typically we this was pretty mind-blowing when we first started seeing this before we would get to that Forum our customers were defending us so when I was CEO of um of of a couple of Brands um sass particularly when we started to see this occurring and something had happened you know the the one uh delivery of jeans they were over sand blasted and as a result they were tearing and these girls were hitting the

01:25:37 - 01:26:28

Dan on a Saturday night and getting a big tear through the crutch of their jeans which was not great and so we getting getting a lot of uh a lot of complaints what was interesting though is we started seeing on these internet forums this is pre social media we started seeing on these internet forums that our customers were offending us now this is and B and they they make locally in Australia not everything goes perfectly right every time but they're real Artisans they hand make it and that's why every pair is not exactly the

01:26:03 - 01:26:58

same and we were just watching it my marketing director Nelly Filan and I were watching it going this is this is extraordinary so it had move from a dialogue to just the early start of a co-creator now at that point they were just participating in a conversation of the brand then social media got its legs and we started to really get into the 30 Epoch which is what I would call co-creator lots of different people use lots of different terms I like co-creator because it's beyond stakeholder it it

01:26:30 - 01:27:29

now what we're saying is that the customer is actually creating brand so whilst we are putting down the funnel our vision of what we think brand should look like so these are the models we used and this is the campaign and this is the TBC for the insurance ad with everyone having a good time on the whatever it is that's our vision of what the brand is if you have a real brand and you have an Engaged Community then that Community is now creating their own content and Tik Tok supercharged this

01:27:00 - 01:27:59

obviously it started with a little bit on Facebook you know Instagram sort of kind of but Tik tok's really what's taken this to a whole new level of course now Tik tok's playing back into reals and everything else so you've now got this incredibly Vibrant ugc Community um and user generated content when it first kicked off it was thought of as the customer just promoting the brand for you that ultimately they were kind unpaid influencers or ambassadors for the brand what we started seeing

01:27:29 - 01:28:25

over the last well 10 years really but particularly over the last few years and this was supercharged by Co is the customer is actually presenting back to you a vision of the brand that you may not have even thought of so they're wearing it in a different way they're using it in use cases that you never thought of they're describing it to their friends with attributes that you didn't even realize it had and that's feeding back into the bra brand team that is then not just boosting and

01:27:57 - 01:28:58

promoting that ugc content but incorporating it in their own so the thinking within the brand about what the brand stands for how the customer optimally utilizes the offer and how the two sort of Link together in narratives you've got you got a whole bunch of content creators that are their film directors they're actors their ambassadors their influencers their models their thought leaders and they're giving it all back to the brand for free and the best brands are looking at it and going my goodness we didn't think of

01:28:27 - 01:29:24

that there's that that's really clever and rather than just boosting it having a little viral moment very tactical it's actually going all the way to the top it's going to CMO and coo level where they're looking at it and rethinking the potential of the brand which is opening up opportunities with the existing customer base but also often identifying a customer cohort that they weren't targeting in ways that they didn't even realize were relevant so that co-create is super interesting and I think it

01:28:56 - 01:29:47

turns that that term stakeholder from window dressing something pretty superficial into something much more substantive but now you're seeing we're in an era where where there's co-ownership people want to have they want to have a slice they want to get paid for it well so so we and we've SP there's been a bunch of research and and thinking around this over the last decade around potential for micro payments um that was you know cash us affili using fiat currency um there's a

01:29:22 - 01:30:24

lot of talk in the crypto world that there is the potential to uh there's a potential to expedite that for a bunch of uh reasons around freedom from certain regulatory regimes but also that that uh cryptocurrency is by its very nature universal currency you're not going through multiple conversions I if I'm interacting with a French brand and they are paying me in French in Euros I was going to say French Franks that's how old I am they're paying me in Euros on some micro micro you know half a Euro

01:29:52 - 01:30:50

Cent or whatever um great but you know there is then a level of conversion I need to go through I lose money at every stage it's not a fungible I can't just trade it with everyone all over the world some people want Euros some people don't I've got to find a buy I've got to sell etc etc so through a combination of crypto blockchain Technologies and some of these web point3 these emerging business models around um web what they're calling 3.0 web 3.0 um there is the potential for a new model that

01:30:22 - 01:31:26

recognizes and rewards what what you do for my brand in a way that creates a tradable asset so it's not a loyalty program you get 10% off next time day it's like great like better than nothing but I'm out here hauling us for you guys I am I giving you the best of my creative ability I am so in love with your brand I'm effectively creating what the equivalent was tvc's back in the day and amazing print campaigns and beautiful PR moments that we as a brand owner would have spent millions of on

01:30:55 - 01:31:57

not knowing if they're going to work or not so in this world you at your own risk you know the world's full of entrepreneurs creative entrepreneurs now they're on Tik Tok so they're creating content and some of it is really compelling and they're just at this point not being rewarded with anything other than likes so what I'm saying is the attention economy to truly be an economy and not just a attention uh metric how many likes did I get with all the enrich attached to that

01:31:25 - 01:32:28

going to the tech platforms I think it makes sense for us to think about a more Equitable approach where those creating the value on the platform to the benefit of both the platform and whatever brand they're interacting with has a means within which the platform we haven't spoken about the the platform could also participate in this but the brand Andor the platform can recognize and reward those creators in a way that gives them an asset now at the moment with influencers with a significant following

01:31:57 - 01:33:01

have this opportunity they already do right so Brands pay influencers uh platforms pay influential content creators to be exclusive to that platform so whether you're Taylor Swift or Joe Rogan you're in a different league in terms of what the platforms offer you I'm talking about this if if you know if the average teenager in America spends between 17 and 22 hours a week on Tik Tok and they are creating content constantly and they have at the moment no means to monetize that unless they've got half a million followers or

01:32:28 - 01:33:31

or more I think this is an interesting new way to think about the relationship between brand and consumer we talk about Community right so typically a community a real Community like if we go right back to our days in tribal Clans the community was about there was there was a constant exchange of value so to be a member of the community and a welcome member of the community to benefit from the protection of the Warriors and to benefit from the the nourishment of the hunters and gatherers and to benefit

01:33:00 - 01:33:53

from the physical protection of those that made the shelers like the list goes on right you were expected to add value and there was constant exchange and that's what we That's the basis of the word Community that's what we understand as community in its most fundamental sense when we talk about Community as brand owners mostly it's [ __ ] mostly we're saying these are the people who buy from us it's not a community there's no Mutual exchange of value there's no there's no recognition of what you bring

01:33:26 - 01:34:26

to the party other than a like so what I'm suggesting is the technology is now available and the business models are now emerging to rethink what the relationship between brand and consumer could look like and that's brand on the product and service side but it's also on the tech platform side no brand or Tech platform is necessarily going to rush into this although some are experimenting with it the tech platforms I think you know there's been demands for Tech platforms to share the monetary

01:33:56 - 01:34:51

Awards with their the community that propelled their value for a very long time and it it it doesn't appear to be happening so I think it's more likely to start on the brand side and if we want to go a level deeper in a world within which instant price comparison on any product or service is available with click or two on my phone the importance of the brand to represent something above and beyond the cost of production so the inputs that went into that product or the time of motion that went

01:34:24 - 01:35:32

into that service the importance of a brand through its brand layer marketing layer the whole CX the whole customer experience to demonstrate value above and beyond those physical inputs it's never been more important and one aspect of that I think is rethinking how we can build narish reward Community there's others of course but I suspect and you know my crystal ball which isn't always perfectly clear I suspect that a on from the co-creator is going to be at least some level Co ownership when you're in

01:34:58 - 01:35:49

the cockpit of running your Enterprise you got to be very conscious about like the Zeitgeist of culture Trends where things are going how people like to be marketed to the type of relationships they want to have backwards said Brands and we're in a different era where people want ownership yeah and that hasn't come to fruition yet but the people that try to get on the bleeding edge of that are going to have the advantage yeah 100% it also ties in with my sort of obsession with AI um and

01:35:23 - 01:36:32

something I saw on X which I I sent to you actually was a quote from one of the guys I fall on X and and it was just um in the attention sorry in the AI economy uh execution is cheap and ideas are Priceless and I think an awful lot of what brands have become terribly good at is execution right and what originally started as a set of ideas that evolved into a philosophy or a way of seeing the world that evolved into a promise all about ideas all about creativity all about literally the inspiration

01:35:58 - 01:37:03

Innovation to create something out of nothing and make it so engaging and compelling that I can drag a whole host of people Along on that Journey with me so very IP focused right AI is not good at that I mean it may be one day but right now it is a reductive algorithm that sets con that understands and distills and articulate summarizes convention better than you or I could in 100 lifetimes so if you want to know what Best in Class looks like on everything that's ever happened before AI can serve it up in in seconds and

01:36:30 - 01:37:23

with a little more effort and a few people around you you can create your own model that sits on AI so that you can tailor it to your tone of voice you can tailor to your philosophy of business you can tell like whatever you want right so we're we're very much in an era where AI can Sol for an awful lot of execution to the 70 80 in some cases 90% level what it's not very good at his original ideas like if you if you jump on there and in whatever business business you're in I'd encourage you to

01:36:55 - 01:37:46

ask AI for a original idea around some problem or challenge that you're grappling with consumer brand marketing operational whatever what you'll be served up particularly when you ask the follow-up question in the prompt around what were your Source material it's Source material it's drawing it from things that have already been done they've already been said they've already been executed someone has already someone has already done this in the real world incredibly useful for

01:37:22 - 01:38:24

operational efficiency you how best to structure a p&l for high growth e-commerce business focused on whatever um what is the you know optimal supply chain to blah blah blah what is the perfect contract to solve as an NDA that will work in the United States even though I'm based in Australia all that stuff really good um so you're saying as as AI is expanding in the market as we speak it's gobbling up everything that is um execution has been done before repeated and and The Slice Above that

01:37:53 - 01:38:52

that saying where the opportunity lies is an invention yes and as as companies are facing you know the their the faces in the furnace or the fire so to speak with how much the Market's about to change you're seeing that ideas at this point in time that are original that are one of one um that aren't prompted through an AI system are are a strategic Advantage for businesses yeah what I'm saying is invest more in ideas so whether that is how you manifest the brand across products and services how

01:38:23 - 01:39:30

you reach your customers how you recognize and reward your best customers how you think about evolving the offer the the the IP that sits at the top of the asset table in any organization to go back to what we were talking about earlier with brand unfortunat I mean look at the stats Australia massively underinvested in Innovation we're ranked like 157th in the world or something for the uh for the complexity of our economy we're really good at a few things things we are not known as an innovation

01:38:56 - 01:39:57

Powerhouse Israel with a fraction of our population produces multiple multiple orders of magnitude more patents um our investment in technology biomedicine genetics deep Tech generally we are just so far off the mark So if that is true of us as a culture as a society that we've got a bit fat and lazy um we've had rivers of gold coming off mining extractive Industries for a long time of course there's exceptions c is awesome Alan's awesome I'm not saying there's not exceptions but as a rule the

01:39:26 - 01:40:20

development exploitation licensing sale of Ip is not what we're best at and I'm saying that and I know you've got a global audience I'm speaking specifically to Australia um at this point we need to invest more in Innovation where does innovation come from it comes from creativity a thesis like I've got this idea I need to test it the whole scientific process of testing it out that leads to Innovation that ultimately leads to more value that you can invest back in so you we talk

01:39:53 - 01:40:40

about the flywheel before about kind of yeah brand Marketing sales going back into brand same thing with the Innovation fly so anyway we about flywheels all all day long what we spoke about before in terms of the web 3.0 tokenization you know membership is ownership all that kind of stuff it's out there it's been out there for years Matt Matt was talking Matt Jensen was talking about this like five or six years ago passionate crypto Advocate has done extremely well has ridden that market up and down for years um very

01:40:17 - 01:41:04

clar very bright very cleared in very well read um so he's been talking about this for years um I guess I've I've now sort of taken it and applied a slightly different lens on it because I I work across clients in different sectors but there's people like Matt talking about this all over the place it's just people aren't paying enough attention and to the extent they're interested intellectually they're like oh yeah that sounds cool I'll wait for someone else

01:40:40 - 01:41:37

right I'm going to be a fast follower because the guy that go the guy or the girl that goes first Burns a lot of dough Burns a lot of time Burns through a lot of people and by the time it's being figured out then I'll jump on board I think the risk with that today is that things are moving much much faster and so if you are not first of all the narrative the the environment the experience that you want to have with your customers in many instances is getting a bit stale and think of Shane

01:41:09 - 01:42:06

think of the think of the Shane business model so on Shane in real time based on your browsing before you've made a single purchase they are changing the experience on the website well you go okay cool there's other brands that have done that that's that's pretty cool I'm seeing stuff that they think I would be more interested in you're seeing a different experience on that website to me kind of cool Amazon does it as well you know not that Innovative that then feeds into their demand forecasting and

01:41:37 - 01:42:42

is fed into their supply chain so they are changing their demand forecast what they think will sell and ordering product based on the activity of tens of millions of people on the website whether they purchase or not now in a world that is just starting to realize the capability of AI and apply it the way Shane has which really no one else has at this point they they're really ahead of everyone what does that do to your brand so if if I can get from Shane the physical attributes and at a price point

01:42:09 - 01:43:02

it's 90% as good as your product for 10% of the price lots of people will do that trade there needs to be another reason it can't just be price and convenience so what is that other reason now the brand narrative about creating aspiration the promise of a better life critically important and that has to continue to involve and it's got to be honored and one of the ways we might honor that promise is by rewarding our community so you can see how this all links together these are not ideas in

01:42:36 - 01:43:29

isolation no what I'm saying is you create the promise you have to honor the promise and that how you honor that promise has to continuously evolve or people get bored and this I think this co- um co-creator which a lot of Brands I've in at that point yet I think that's a great opportunity if you're not into it dive in like there's a arguably maybe 5% of the market is actually actively doing that definitely yeah because they're not even those that are in it aren't aren't really they're

01:43:02 - 01:43:55

not really doing oh I paid an influencer agency and and then they F but like I'm talking about true co-authorship is is pretty rare and you're saying that not only is that pretty rare and people trying to catch up on that there this next year that's kind of simultane it's evolving fast and I think even if you dismiss everything I say around co-ownership and go it just doesn't make sense it's too woooo it's too hard you know blah blah blah blah blah I guess the main point that I'm making whether

01:43:29 - 01:44:18

you want to think about that as a potential application of this approach or you've got another way that you would like to think about as a potential application of the approach the approach is the same and that is if you are not evolving the way that the customer interacts with your brand to constantly reinforce brand promise and create that intangible value that's got nothing to do with the physical attributes the time and motion that went into your product then Shane's going to kill you and

01:43:53 - 01:44:54

there'll be something like Shane in every category soon enough whether it's Furniture whether it's eyewear whether it's watches what they're doing to a par can be done in any physical category and I can't really see why it couldn't be done for Law Firm services or for accounting services or for wealth management or for I.E I can get up to 70 80 90% of Best in Class at 10% of the price now will I do that in every category in my life no probably not in building my house for example you know I

01:44:23 - 01:45:19

don't want it to fall in on me and maybe there's certain categories I prioritize I want a real a real Swiss watch I don't want to you whatever but there's an awful lot of things in my life that honestly I don't think the brands that are charging me 5 10 15 times as much are worthy of my custom they're not creating the emotional connection they're not evolving the experience in a way that I feel is rewarding and as a as a result the intangible value I place on that brand is steadily going down over

01:44:51 - 01:45:53

time whilst the tangible value there's 50 people that can compete with that so when I get to the point where there is no intangible value or there's not much left price comparison is not hard and if I can get something that's 80 90 70 80 90% is good for 10% of the price that's a pretty compelling deal damn dude this is a lot to unpack and and um you know you and I can talk all day I know we can talk all day and we do we we try not to um but we do sometimes we do sometimes that's the

01:45:22 - 01:46:14

biggest problem everything I tell you about productivity is we start talking and it's a productivity killer but we have these ultimate Jam sessions and I'm glad to have made one of these public um and as you guys can see what what you're incredibly talented at is dissecting unpacking distilling information and looking at Trends and forecasting what can happen next and you do this at lightning speed with our clients with your clients and and uh it's an honor to sit with you here and just unpack some

01:45:48 - 01:46:36

of this thank you and um we would definitely like to get you back to do this again because I think there just there's days and days worth of stuff we can unpack here and I think AI is another big one which we might jump back in on next week um and uh if you're listening to this and you'd like us to rip into AI in The Branding space we would love to know what you would like us to answer in that space but um Josh thank you so much for joining us today and we're excited to have you back in

01:46:12 - 01:46:20

again soon man it's a pleasure thanks for having me