Roman Khan: The Ecommerce Logistics Play Worth $10 Billion

Roman, tell us why Hong Kong is the capital of the consumer world. Why should I sell everything and move there? I love it. We jump straight into it. No intro, nothing. I think for e-commerce operators, I do think it gets the holy grail and the mecca. I feel like eight out of ten people watching this pod is probably making some in China or close to China. Nothing beats being closed to your supply chain. Number one, number two. I just think Hong Kong is such a livable city compared to most other cities. You have incredible beaches, insane nature, really good international schools if you have young kids and amazing childcare. Yeah, it's just very, very good. Every time I come to America and I see my rich friends with young families struggling, I'm just like, "Oh my God, people with half of their income living like kings in Hong Kong, right?" So I think that's my sales pitch. You should totally move to Hong Kong. What I'm really interested in is you just threw a big event in Hong Kong. Hundreds of brands showed up. Billions of GMB. I think you're right that if you make a stuff in China, like Hong Kong, people speak English. It's very livable. It's very safe. You are 20 minutes from your supplier and not 20 hours. So I think it makes a ton of sense. But I want to hear what's been going on in your world. You're buying brands, you're selling brands. What's new? What is Roman going to talk about? Quick context. I used to buy brands for a living and then I grew them and then I sold a couple of them. DTC brands. I paused that late 2024. So three years ago, I started hosting big e-commerce summits around the Canton Fair. So maybe people don't know what the Canton Fair is. It's a buy and all trade show in Guangzhou where factories come together across multiple categories. It's so big that there's three phases to the Canton Fair and all of my mentees from Enter Pass or my friends would pass through Hong Kong on the way to Guangzhou because the direct flight to Hong Kong are so great from to Hong Kong. So I started hosting this event three years ago, tried to find acquisition targets. That's how it all came about. By the end of the first event, I was just like, you know what? This is really fun. I was throwing a party in my hometown and it just became a thing. So I paused buying companies in 2024. I've been hosting these non-stop since post-COVID and it's just become a thing where it's a party for myself and my friends in Hong Kong. So we get together for three days. I just had one last month where we had 65 e-commerce operators show up. Maybe 20 non e-commerce operators. We had like Ollie Abdull and Izzy, the YouTube influencers. And we have the bunch of private equities show up. And we have the three days sell them at the world. We just kind of ran through workshops and enjoyed Hong Kong. We rented the huge boat to get out on the water and just had a good time. What do you hope to get out of this, Romance? Like you're going through all the work to bring all these people together. You're no longer buying companies. So it's fun. I hear that. But the content seems pretty awesome. So what's the plan for you? Yeah, I'm hosting another one in October. I actually should do the plug right now because probably by the time people watch this, I'll have a URL on p21.io. So go check it out. Sign up for the summit. What I get out of it is like an incredible network. So for me, every time I come to New York or San Francisco, I always leave super inspired. I want the same impact in Hong Kong. For me, change starts at home. So I want to have a real impact on my hometown, like Hong Kong. It's actually the primary driver for me right now. But the second thing is like I just learned a ton. So the average revenue among the participants was 72 million US. All of them were bootstrapped except for one like Surrey, the toothbrush company, maybe two two-word, not bootstrapped, the rest were bootstrapped. The average age of a business was four years. The average person attending was like 27. It's just an incredible group of people, exceptional operators who are really in the weeds of things. So I just learned a ton. So like, you know, we can go through the agenda and who we had come talk. So Steve Chen speak. He's in my chapter in white bio. He's the founder of YouTube, like in a PayPal mafia. So he was one of the key notes. It's pretty incredible. He lives in Hong Kong. So incredible opening event in Tautama. How it was working with Elon. The early days of YouTube, how the acquisition came about post acquisition at Google. But then we had a bunch of other really cool people attend. So we had like probably three of the top advertisers on Apple oven. So we had like one guy called Tom Sagi. I'm not sure if he's comfortable talking about what his brand is, but he's spending you know a hundred grand a day on Apple oven. He was talking about how he was able to unlock that scale. We had Paul, who I know everyone knows from Twitter for Moringa Rosabella. He was talking about how he's scale to 180 million in year two. So we just had a great group of people get together and share how they've grown their brands. And the playbook is so different than when the three of us grew our brands. And I just find that very fascinating. So I think there are two order events. One, that one, having an impact on Hong Kong. Two, I learned a ton just being in the room. Did you unpack some of the, like if you're willing, like what are some of the things you learned from this? Because I saw some of your posts on X afterwards. And I'm like, there's clearly some alpha that came out of this room. There was something, it was really, it was really interesting. And they actually pull up what I posted about it because I think number one was just like, which is very obvious, right? But like meta is so back. I feel like the numbers. I'm pumping this year of meta. Last year was horrible. Like the year before was even worse. But this year in the last 12 months has just been an incredible ride on meta. And the punchline, I think overarching punchline is that partnership ads and what Andromeda is doing, whatever they're cooking at meta is working really, really well. So it's a combination of those things that would say is huge. I think what's surfacing now as a second order effect, I think, is everyone has seen what comfort has done and Hudson has done with TikTok and the discourse and affiliate funnels. I think instead of getting like a high level understanding of it during the event, we went very deep and truly understood what it takes to be TikTok first. So we have like a handful of TikTok brands and attribution on TikTok sucks. The ad product is not that great, but it's the best platform for impressions. And that was really proven at the event. So I think like me and the team at my companies at least have really slept on TikTok and that's now become a high priority for us. And that's been a very high impact, very high leverage work stream for us coming out of that event. The third thing is just like how alive crop shipping is. Drop shipping is just like we thought the removal of section three to one with killed drop shipping that has not been the case. People are drop shipping large volumes from China. I know, like, you know, I do everything by the book. So you know, my margins are, you know, everyone who's not, who's not American and who's out in Asia or in Europe or in Dubai. Like there were so many kids from Dubai, right? Like they moved to Dubai. They lived there for the low taxes. We had some kids from Panama. It's such a fun group. They're all drop shipping with these like under the belly service providers from China into the US. Fun fact is like three or four biggest providers in China. I just tweeted about it because I can my advisor at Quinn's logistics, right? So I started going a little, a level deeper on like how much of the being drop shipped. So among the three top providers, I'd say like you express the four pats of the world. There's more than a million parcels coming to the US every day, you know, every single day. Like another very big takeaway. Fulfill is the ERP built specifically for D to see any commerce brands inventory purchasing warehouse and financials all in one system built for the way your operation actually runs. There is not an ERP on this planet, not one that has more direct three PL integrations and Fulfill. They integrate with over 400 three PL locations globally. And most you listen to this right now, either running your own three-pillar relationship or you're about to. And the second your three PL and your ERP aren't talking to you, treadmill, real time, you're flying blind. You don't know your true landed costs. You don't know your real margin. Your reconciling spreadsheet to 11 PM trying to figure out what $40,000 what I know because I am on Fulfill. The visibility we have now versus what we had before. It's not a marginal improvement. It's a different game. Fulfill is the only ERP I've seen that was actually built from the ground up for D to see and it's not some bivocated piece of crap. Believe me, those exist. Fulfill isn't one of them. Go check Fulfill, tell him Sean saying. Roman, before you jump into logistics because I would love probably a third of the podcast, talk about dropshipping, the future logistics, quince, everything you're doing over there, I got to ask, Roman, why do you stop buying brands? Yeah, I think this is a great question. I think number one, I felt like I was spread too thin. Number two, I got really scared with the evolution of AI. I just thought like, okay, things are going to change really dramatically in the coming year. I should pause and think about what are not buying versus incubating is a more efficient strategy. I actually think incubating now, like I think the terminal value for some of my brands actually went to zero. zero with AI. If I extrapolate and take a 10-year view, I think a lot of things we had in the Piper and the M&A pipeline were just so weak from a brand equity standpoint. Three is like, I had a lot of success with the public markets, like with, you know, but it was applovin or what I did with Prinetics, getting in early on like I made. So just thought, let me just pause, slow down a little bit and try to see where I can generate the most alpha. I'm still looking at brands. I bought one in 2024. I think I told you both about the brand, like June 2024, about this brand that does just shy of $30 million in revenue, $3 million in EBITDA. There's a clear roadmap to getting to $10 million in EBITDA. It's going to be a great acquisition. But I think I need to aim much bigger and higher and try to buy something that's north of 75 million. So I think it was a confidence of many things. And I think I was focused on way too small companies. And my pipeline was filled with like some $50 million companies. I think I'm now trying to build a pipeline of $5,200 million per revenue companies. And that's a lot more interesting. So I paused and slowed down, but I'm probably going to resume at one point. So let's really unpack your thesis, right? So from 2020 to 2024, the idea was you were going to buy e-commerce brands. You were going to find founder-led brands or slightly distressed brands or something. And you're going to get them at a fair market value. But nothing crazy like PE was offering in 2021. You weren't paying 10 or 15 or 30 EBITDA or whatever these companies were paying. And you made a hand-flag positions. I would say, north of 10 or whatever, right? You roll all these brands in. And that was the whole thesis behind peak 21. So starting in 2024, what did you start to see? You said something very interesting there. Terminal value went to zero because of AI. What did you see that made you think, oh, these brands are bad asset? I think that's sort of been more active in mencorpast. I did the events. And I just saw these young kids spin up brands, getting to like $10 million in monthly revenue in no time. You know, the stores of Paul and like Tom Sagan, all these kids. So I just thought, OK. These guys can ramp up so much quicker than any of the three of us have ever done because of AI. So it made me think more carefully and more conservatively about the businesses I was looking at acquiring because of just seeing this ramp up of these new brands, which were really AI first, I'd say. It was also the trade war. Let's not forget that. Like Tyres in Duties. Just ramped up like crazy. There was a lot of stuff going on, right? Like late 24 early early 2025, right? So I think it was a confluence of many things that just made me pause to be honest. I was just like, you know what? My existing brands are in such a great position now. It's a very clear likelihood that I can add nine figures of revenue annually if I just focus on what I have organically with my existing portfolio of brands, right? So there's a mix of many things. Roman, do you think that it sounds to me that it's sort of like a positive value, a size of bet for you? So like some of the success you had, both privately, then public markets, do you suspect going forward that that's going to be something you have to actually do is, I guess, regularly look and say like, am I actually making a bet that's like reasonable for the size of my like worth or sort of company size now? Like at some point, are you basically, are you thinking, I'm going to have to buy like 100 to 500 million dollar revenue companies. Otherwise, it's just not worth my time. Yeah. I think it's, it's hard, right? Like I feel like I'm, it was really fantastic, right? Like my Genesis story was I started linear, go lost straight to Fred because we maybe raised two million dollars in Kickstarter, Ray Lee, right? Like at this Raycon office reached out to me when Raycon was doing a hundred dollars a day selling e-bike so mine, right? Like it's just like, I think of myself as an honorary co-founder. It's like a hundred percent sweat equity, I own as much of this business as a co-founder, right? Like so, you know, it's a startup. Nutrition kitchen was like 1.5 million dollars on revenue when I bought into it and then we scale it to 20 million, 20 million. So these were tiny companies when I bought into that, right? When my balance sheet. I think to answer a question, it needs to, it needs to make a lot of natural sense for me. So let's take this company out of June 24. I think personally, maybe I'll make like, let's take it from three million EBITDA to ten million EBITDA and we sell it for a hundred million. I'll probably make after paying back my investors because I had LPs funding, acquisition of that business. Maybe I'll make 30 or 40 million dollars over a five, six year period. That's like the bull case. That's amazing. And I don't want to sound out of touch and like arrogant, but like it's just not enough for me to want to replicate again within subsequent one or two acquisitions. I think I can take the same time effort and energy and just go bigger. The problem is like you start rubbing against like people like the guy who came to my event was Chris North. He runs all of Pamela in Hong Kong, like in Hong Kong in greater China, like Asia. He has a 17 billion dollar fund and he buys businesses that he bought Dr. Martin's, took it public, he bought Reformation, he's bought a bunch of, right? Like that does like crazy amounts of revenue. So I think like for me, bonding something that's between a hundred to three hundred million dollars of revenue, I'll start rubbing against people like Chris who might leave Pamela and like go down and like want to launch his own fund. And I think like what I'm spending a lot of time on now is like soul searching and trying to understand where do I actually have an unfair advantage and where I can actually create crazy value as a soul of shareholder to some extent. And I think I got very chaired because I did like the Apple of an investment, I did pranetics and pranetics meaning I am eight really early on. I just saw like okay, there's a whole new universe here where I can do public markets and there are many, many other ways to play this game to put that way. So yeah, I'm doing some soul searching. Yeah, so the transition from private equity, buying brands, putting leverage on them, you know, growing EBITDA and selling it to somebody else, now kind of something like you're a hedge fund. You're going to do that, you're going to create brands, you're going to do public market investing. And I think the past couple years have been so unique in public market investing because there are asymmetric upsides, like you brought up two great names. You know, we watched all the semis and all the memory stocks, literally 15X in the public markets and like why waste your time with things that are locked up, things that have debt, things you have to operate when there's 15X opportunities in the public markets. So that makes a ton of sense. So let's talk about this, this, what happened, 2024, 2025, you're buying brands, you're making offers, you have companies that are doing $3 million in EBITDA that they want 10 or 12 or $15 million for. And then you get a call from a kid who's just launched on TikTok and he's going to do $15 million that month basically, right? Exactly. Exactly. Exactly. And you're like, what am I doing? Like why? Why? That's exactly what happened. The June acquisition I forked out eight figures, low eight figures for that business, right? Like I've wired the guy like $9 million from closing, I had another seller financing note of something and I bought the business, right? But then I started getting these calls from mentor pass of kids who are doing like, I'm going to produce $12 million in EBITDA this year. Like, and you know, the guy barely has his diaper on, you know, probably this guy is listening to it, but I'm just like, yo, listen guy, like you barely know how to put it on your pants and you're just crushing it. Yeah, that's what happened basically. Because you said they're AI first and I'm going to push back on that. I don't know if they're AI first, but they're definitely small teams, highly leveraged when it comes to, you know, new tools and they're, they're TikTok creator first, right? These people are just way better creative with lots of stuff. Correct. Yeah. But do you think AI is a big part of it? They were not AI first when I talked to them. So it's like, I'm mixing up the timeline. At the time, they were really TikTok first. Now, it's like, okay, we have an army of like 100 fake AI influencers promoting my products on TikTok or on ID wheels. But they were very lean, right? Like zero op X, fully remote, like people in Pakistan, India and Bangladesh and Philippines. Now I'm seeing somewhat AI first brands. You know, we had a bunch of them at the summit. Like all the creatives are made with AI, all the workflows are somewhat automated with AI. They barely have any North American or Western European employees anymore because they have a lot of the hard heavy lifting stuff done with AI, I'd say. You know, procurement, obviously customer service, a lot of that stuff. So they can hire more junior, less affluent heads of ops and heads of finance. Like trend line wise, I feel like these businesses are just getting leaner and leaner. Most AI tools right now are all promise and no delivery. You know exactly what I am talking about. Super fancy launch videos. This is why I'm in loving what Rich panel is doing. They have AI and support, smashed together, made a practical. made it useful, made it valuable to brands today, not on some future promise. And instead of asking you to spend weeks writing prompts and uploading help docs and babysitting, they flipped the whole script. There AI builds your support team for you and everything it needs. I've watched it. It works. It's freaking amazing. Rich Payton, even guarantees 50% of your support volume will be automated by AI within 30 days or your money back. I call that a no-brainer offer. The pricing is also kind of wild about 20 cents per conversation instead of most other vendors being like $1 or $3, which is a little nuts. If you are interested, go to richpanel.com/demo, not for some generic demo, but do actually book a call and watch them build your actual support team. Are these valuable companies over time? No. Or they just like, it's just great arbitrage in the moment, but they're not like, are they largely not building anything sustainable? They're not building anything sustainable, and they know that they're very intellectually honest about it. But it's free-cashable and enterprise value, and they're just maximizing free-cashable. But the biggest mentee I have did 25 million RCEB with that last year. And it's real. I've access to the management accounts. I'm coaching them on how to read management accounts, how to hold their head of finance account. But it's not fake. I'm in their dashboard to stuff. It's real. And it's like, do you need an exit if you're making 25 million RCEB? Not really. You're not even 30 years old. I think they're not building anything of value, but they're capturing all the value upfront. That's what's happening. How are these companies getting to that scale so fast while still capturing cash? Because we talk about this all the time. And these companies, like, product companies are notorious for just eating cash, especially if they grow fast. Like inventory just crushes you. Is this the dropship story or is this something else? This is the dropship story. So the classic setup would be that they have a sourcing agent in China. That sourcing agent will maybe float them. I take three out of the four cases. The sourcing agent will find the products haven't really nice padding on the product. Be a local Chinese person, go to the factory, source the product for them, take care of all procurement, but then take the personal liability risk of floating the payment terms to the dropshipper. The dropshipper will then scale up TikTok. If only it's Facebook ads, Apple ads, whatever it is. And then it'll dropship the product from China directly to the consumer in the US. And that's a classic setup. So they never run into the working capital and strains that we have because we do like ODM products that are really unique to our brands, but like our logo stabbed on it in a really unique way. So they iterate from zero to five million with like very generic products, then maybe start stamping them once they have product market fit. But they're not doing anything breakthrough. And they have a really incredible working capital setup, practically speaking. Obviously at one point when they scale to nine figures, which very few of them do, but when they do, they start parking that cash inventory. The genesis is it is a dropshipping story, Matt. All of us have built all of our equity in the value of having a business that could be sold. Right? Like Rich has some value. All, you know, Raycon has some value, Matt, Matt, a sold brands. And it is a phenomenon where like our brands are valuable because they've been around for 10 years or 20 years. Exactly. And they've done, you know, $100 million a year with $10 million a year or whatever. So we expect someone to pay, you know, 10 acts on that. But then if someone can do the same revenue in 12 hours, basically out of nowhere, it like it does lower the value of brands, right? And it just it does. You have to be intellectually unsavowed it. Like it does lower the value of rich and Raycon. And like if you don't have recurrent revenue, like if you're not like an eye made, like pure subscription, grunts kind of thing. And you are like fully discretionary spam category like a wallet or airbots or whatever. It does lower the value. It does. It does. It is. Does it not all it's at the same time? It's like, is there an also not an opposing force where it does raise the value of a brand? So like if you are willing to go build that kind of company, because the ceiling is so much higher, can you not argue that they are worth more now? Because of this other play. Only if you're willing to pass through the filters. It's like look, yet, grunts, like, grunts has, you know, subscription. Also it grew faster than anybody with less capital than anybody. Like, grunts did $300 million before they sold in one annual year. So it's like, yeah, it's incredibly valuable, but also they have the best growth story, right? And what really sucks if you're a slow growing brand, who is low EBITDA and has been around for a long time, because that's when you get taken off the board. That's the ocean of my M&A pipeline, right? So let's be like, let's be super actually honest about it. I'm not going to pretend my brands are any sexier. Let's be real. Like I have double digit EEPDA margins, but I'm not growing at like 300% a year. I'm not, I'm not like grunts, like, you know, like, you know, if I was a grunts, I'd be flying from SF to a New York in the private jet, right? Like I'm just not there, right? Let's be real. But like the, that was my M&A pipeline going into this, right? So, yeah, I think it poses the question of like, how do you underwrite these things? How do you think about them? Who would I sell these brands to three, four years, the other blind? And I think I just have to refocus. Do you guys on this then, like, Roman, are you saying, to my understanding, it's right, like you're both saying that sort of like the traditional path to building a consumer brand is largely going to be replaced by this new crop of, of like how you do business, like you stand up, it's more drop ship, direct from manufacturer, it's basically an arbitrage play. The brand actually has no value. Like so brand equity as a value driver is nothing. And that really the only people who get to go play that game are going to be like maybe a certain categories. They need to have like other characteristics, like growth rate, like subscripts, like quality of revenue. Like is that what I'm hearing from both of you? Like, no, I think what I think is going to happen is it's matured so much. So think about, you know, when I started linear, it's 2013, like I'm dying this one in this industry, right? Like so back then, there was no Ali Express. There was no Ali Express plug into Shopify where I could click a button and be live, never meet my supplier and drop ship from China directly to the consumer in the US. We the three of us built this industry. This is why this plug and it exists because we built so much GMB and create an ecosystem on Shopify Ali Express and all this stuff. So I think what's happening is that it's just there's just going to be a lot more noise and a like Sean's word filter. Like it's just going to be very hard for an acquireer to filter down to like, what is the core value of rich and Raycom and Pella? It's very easy with these three brands because we've been around for so long and you know, Raycom has like five million plus customers, you know, like it's a huge brand. So bad example, but like if you have like something a third of the size, it's really hard to justify buying it. You have to be nine figures or or bigger to merit like even being in a selection filter in my opinion. And that's why I want to go up in size. I think what would be really interesting is actually talking about public companies that I passed on. Like so, you know, I did analytics with IMA, but like if you go through the swath of like public companies, I looked at you can just take a couple of examples like look at pets, for example, I just tweeted about them. 1 800 pets.com. This I'll like pharmaceutical for pets. I think they do 200 million a year. Don't quote me on this 86% of that revenue or something. I think it's subscription revenue. It's like pharmaceuticals for dogs. Market cap is 35 million dollars or 40 million dollars or something like that. Yeah, it's like nothing. Maybe with that on the book, like maybe the EV is like 50 or something. Don't quote me on this, but like it's it's tiny, right? In the pet industry with like probably single digit ebit of millions of dollars of ebit of potential in the short term. It's like that you buy something like that, right? With 50, let's say you have to pay 75 million dollars for that. Another DTC company that's publicly listed that no one talks about I don't know why people don't talk about them X is like brilliant earth. It's a jewelry company that's huge has like 50 plus stores in the US. 120 million dollar market cap. They have 60 million dollars of cash on their balance sheet. No debt. Ebit of probably 10, 15 million and 400 million dollars of revenue. So you can buy a company like that for 60 million dollars, right? Like obviously have to pay more if you were to try to take it private, but you get when I'm getting at, right? Like so having a number of these examples, I think go down through the list of. But when you're seeing that in the public markets, it almost makes more sense to buy one of these in the public markets and take them private or do what I did with I made like pranetics, like buy a profit, let it be listed, then then go around by these private companies at higher multiples. Like it's we're in a really weird weird space now for DTC multiples in my opinion. Very, very strange place. Call me nerd. All you want one of my favorite things is one of my existing software partners in this case Northbeam adds something that I historically would have had to pay separately for incrementality was burned. broken and Northbeam fixed it. So let's face it, most incrementality tests are slow, their manual, one mistake can validate an entire test and waste thousands of dollars. If you've done it, you know. Not anymore. So only Northbeam incrementality automates your incrementality test design and monitoring, letting you focus on insights and not logistics. They're the only ones who build the test for you using your MTA data. I love this. Northbeam continuously monitors your test in the background, making sure everything runs smoothly, and maintains that sig. Once your test is complete, Northbeam then gives you actionable and precise results, fit into your Northbeam MTA dashboards. Finally, go to Northbeam.io and request a demo today. - Let's use the billionaire of the Earth example, because if they have $60 million in cash, they're worth $120 million. That means the effective multiple on that eBina is four or five or whatever. For a public company that you can sell into and sell out of whatever you want, right? As long as the market's open, you can always act as a position. And what you're describing is the bid-ass spread, right? So what, you know, I just talked to a top banker. So, you know, there's like four or five really strong mid-market banks, right? So there's Jefferies, there's Raymond James, there's Molyiss, I won't tell you which one, but I talked to one of them. And they said 75% of deals that have gone out in the past 12 to 18 months have not got a single bid. Okay? So if you think about that, that's people who went out. That means they have a banker. That means they did a book. That means they did all of this work. And they went out and did road shows. And 75% didn't even get a bit, right? And it's because what they're asking is they have 2021 or they want 10x multiples on their eBina and the growth is only 15 or 20% or whatever. And people don't want to buy that because there's public opportunities that are so much stronger or different industries are ripping. You could have bought in my cronstock and it's up 15x or whatever, right? My business is enough 15x in 18 months. It's just not. I'm lucky if I double in 15 months, right? So yeah, it is a crazy time. It makes sense why you wanted to pivot outside of buying brands, but then you said you might incubate brands. Have you started that process? - Yeah, so I think like I am incubating to experiment. So my brands suck for the TikTok funnel because I'm not solving at pain points, right? Like somehow it's gonna be honesty. - Yeah, some of these brands like they show like a cure for cancer, right? Like they're just like, well, they'll be like, take this like orange pill and like, I'll get rid of your cancer. I can't do that. I have too much ethics. There's something like that. But I don't think my brands are the best laboratory to learn and to actually really hone in on the TikTok funnel. So obviously we're doing it with Raycom. We're gonna do it with linear, but I just don't think it's gonna be an astronomical success. So I'm incubating predominantly to just hone in and learn to skill and to understand the platform as an operator. So yes, I am incubating one or two supplements brands just to test the funnel and to like really wrap my head around how you build a TikTok first brand because I genuinely, intellectually just want to replicate the success of my mentees and understand it. It's not even fomo-driven. It's just existential. I really need to learn it because if I'm gonna be an e-con until I die, I can't just not have this in my toolkit, right? So I'm gonna learn it. - So Robin, you and me are two brothers from different mothers, man, because we both have horrible categories for TikTok shop and what Hudson is talking about. Maybe for the audience, explain why Raycon sucks, Ridge sucks and why supplements are so good. Like why is everyone making a fortune to link supplements right now? - Yeah, first of all with supplements, I think on TikTok, what I'm seeing from all the portfolio mentee companies is like, okay, the female audience on TikTok is really, really strong. So let me just start that. Ridge is very male. Raycon is also predominantly male, very future-driven and very commoditized red ocean type of product. The reason supplements are ripping or even forget supplements like QBC's ripping on TikTok is because they're selling solutions. They're selling solutions for problems that appear in that every day. So supplements obviously is ripping because you're curing, bloating, you're curing, testosterone like what Zach is doing or you're, you're curing all these problems that are really, you're willing to pay and try is very, very high. And that works really well on a platform where you have to leave it an impression based marketing effort. And it's a thumb stopper if you have a problem. But if you're being like, hey, by this shining gold wallet or these air buds, that's just not a thumb stopper on TikTok. - How do you explain comfort and crocs and Portland leather and like, they're not problem solution products. And they, it is just because they're so female forward and like price point, I think so. I think it's female and price positioning and the value of the offer at ring, right? Like so comfort, I think is like an outlier in all senses. So like it's just like Hudson is a genius, incredible operator. You know, it's crazy. He came to me, he was in my M&A funnel really early on and like I passed on Hudson. Can you believe that? That's like, that's like the anthropic of DTC. You know, it's like, did I do like I passed on Hudson. He got introduced to me by David Fogarty. I have talked him since actually, it's crazy. I was like, bro, like you're exploding, but it's bloody brand. What were we talking about here? I can't do it. So I'm so glad I was wrong. I'm like, this is like whole fame. I should actually print out that email chain and just hang it up on my office at the M&A. Like this is what happens when you're 40 years old and you build up way too much bias and I should fire myself. But yeah, so like Hudson is just like, anomaly. So I think like Portland and Crocs are good examples. Female, super female, super, super strong brand equity, right? Like they're taking brand equity from build on meta and transposing it into TikTok too. But it's really rare to find something like a Raycon of Ridge crushing it on TikTok, right? Like it's just, it's just hard. Practically speaking. Hey, I'm doing, I'm doing about 200, 300 K a month right now on TikTok, bro. I'm doing the same too on Raycom. But that's like, I mean, compared to my mentees, I do that per day guys. They're doing it per day, right? Like so I'm just like, we still saw Kishon that hit break to you. (laughing) Every time Sean knows a screenshot, I'm like, what's Hudson thinking right now? Hey, I'm trying, dude, I'm Gen Z too. (laughing) Okay, so I think it's really interesting. And I end, let's, so going back to 2024, 2025, you brought up something else at the beginning of the show that meta was bad and now you think meta's back. So let's talk, 2026, the opportunities you're seeing, we're gonna end this show talking about logistics, drop shipping, all the new cool stuff you're doing. But what's working for you right now in 2026? 'Cause I'm having a great year too. But I talk to people and they say that it's suck, and it's horrible out there. So maybe help everybody out there. What's working with meta right now? And overall what's working outside of this TikTok method? I think meta sucked for us to massively in 2024, 2025. And what I see as a common threat for the people it sucks for is that they're still leaning on their hero products from that era, post-COVID era, COVID era. And they haven't launched enough new products. So I'd say like 60% of my success in these brands that are crushing on meta is because we're launching new products and bringing newness to our audience on meta. That's very similar to the core offering we had in 2022 to 2024. So that's number one. Number two is partnership ads. When I talk to my mentees who have experienced some meta and I ask them how much of your account is running on partnership ads? The answer is usually sub five percent. My accounts are running at 60%. Like anyone can go into my ad library, right? You can go into my linear ad library or running maybe 500 ads now. During a sale, we're running a thousand ads. So we're not like huge on meta. We're not like I made or comfort or any of these big brands, but we have a decent amount of ad diversity. Half of those ads are partnership ads. 60% I'd say of that spend is going towards partnership ads. So I think what's happening, if you take two to three steps back, this is a thesis I have, is that meta knows that the feed is going to be filled with AI slot. So when you launch a partnership ad with someone with an IG account that's more than 10 years old, right? Like you know it's a legit person. Has a 100k followers. It's super active, super trusted. You get two things. One, meta will prioritize it in the auction because it's authentic, it's real, it's validated. Number two is you bridge the trust gap because it's like an influencer showing your product instead of like a random UGC creator. So I think the biggest message I have to find is like, okay, maybe your product is going to stale and you have to do something new. I think like Moys did it really well back in the days with native, like you launched new scents with all these things to just bring newness to native like a deal grid stick. I think you need to bring newness to your product. But number two is like just run the account of partnership ads with real Instagram accounts real followers and just spend on it. Can you then go into like contrast that with your comment on Apple oven and how you're seeing people spend six figures a day there? Because I think that I just want to understand like the landscape. We've talked TikTok shops and like the whole Hudson thing and then now it's like meta, partnership ads. You even have to perform at summit this year. It was like they just basically drill that into your head when you get there. And then you're saying there's people who are spending six figures on Apple oven. Like is there a common thread here or is it just a completely different playbook over there too? Yeah. So I think I'm spending like five to seven percent of my budget from Apple oven. I'm not even that big of a spinner. It's pretty crazy. I mean, it's meaningful for us. But like as a percentage of our US spend we're probably spending north of 10 percent because Apple oven doesn't work in Western Europe. We're very global. So like in the US we're spending more than 10 percent. But it's not like 20 percent, right? So the main takeaway for us from the summit was with Tom Sagi talk about how he ramped up to 300 K a day during Q4, right? Like it's crazy, like crazy. And the punchline I came up with was he has no sunk cost. So when he spun up his brand, it's like two years old or whatever. Like it's very fresh off the boat. He had the path of going with meta, Apple oven, Tik Tok, Yadayada, and he just happened to make Apple oven work first and just double down on that channel. And I think for us like at Ray Comet linear, Apple oven still today is a little bit of an afterthought. We create the creators for meta and then we upload them on Apple oven hoping they're going to work. It's like this, right? And that approach works if you want to have it be 10 percent of your spend. But if you wanted to be 90 percent of your spend like some of these kids were like 90 percent. We hit three people in there spending six figures today on Apple oven, which is really meaningful in the material. And you have to be like I'm obsessing about Apple oven. I'm obsessing about the end cards. I'm like going all deep like that end cards were interactive like gamified like there were just like all in on on Apple oven. So I think that was the biggest takeaway like no sunk cost Apple oven first. If you're a founder using AI for analytics, you know the trap clawed plus BigQuery gets your answers that are fast and wrong or slow and right. Never both. The problem isn't your analyst or data or your tools. It's your business context gap. Sarah's IQ fixes that corner who runs my marketing. Kind of is reporting time from 10 days to 45 minutes IQ answers in plain English built on your business logic consistent deterministic and fully transparent with the assumptions and SQL behind every answer. Whether you ask your CFL ask or your board asks and if you're a cloud user, the IQ MCP is ready to plug in today. Cloud plus BigQuery isn't enough. It needs your context. Get it at the link in show notes or go to sarisanalytics.com to learn more. Do you guys have brands that you know that do each platform like except like top 1% on each platform and the one brand and the one brand that does it? How? I've wondered this like you know a Roman I guess a good comp for me is like we've never made Amazon. But we've put like if I look at it, it's like we've made Amazon work to the level that we've obsessed over it and invested in it, which has been like an afterthought if I'm being truly honest, I've never really chased it in any brand. And I'm like I'm so default on meta guy that that's where I spend all my time and I'm just wondering like is anybody master as anybody figured out like is it feels hard to hire like a higher a person who's going to obsess at that level over that love and or TikTok. I think it's there's one guy I know that's made both channels work like where it's like equally way that I would say it like maybe 40% of that 40% app love and 20% random stuff. But beyond that, I actually don't know and they want that was the other takeaway from the event. So everyone is spending like 5 to 10% on the app love and like everyone is in my camp of spend. But then there were these outliers like these three kids that are spending like six figures a day. So it seems very binary maybe because the platform is new because people are acclimating to end cards and all these things. I think that's going to change over time personally. But I don't actually know that many people in that bucket. Well, I think every brand just has strengths, right? Like if it's if it's channel from a sales perspective or a spend perspective, like I don't do wholesale. Well, I suck at wholesale. Like it cannot get it to work with a whole team spending the time and effort on it. But then you have somebody like Mike who who crushes at it, right? Like we are D to C. We are Amazon. We are meta and we're in the 5 to 10% tech camp on app love and and TikTok. Look at everybody else. Matt, you got a point you wanted to hit? Yeah, I got a few actually. I think I want to come back to on this sort of like making these platforms work. Like, Roman, you start one of the things you said earlier is like you're noticing that some of these newer generation of brands are also like AI first in their not just the company building, but it almost sounds like there's an AI creative trend that you guys saw at this event. And I'd love to just like, where is that working? Number one. So like, is that on all platforms? Is that what you heard? Or is that more concentrated in like meta or app love and or TikTok? It's just such an if it's a fascinating topic for me. There were two kids at the event. They went from one million to seven million a month. Purely on the back of just scaling up AI creative. So there's two levers. One, they launched a bunch of new products and they brought them to market with an automated AI flow. They would have a sourcing office in China. China would like take, you know, a picture of the product against generic white background. They would then have an AI workflow render it, turn it into pdp on their site, then turn it to create ads with that picture and then run ads automatically. The flow workflow was like literally like, okay, generic white e-commerce pictures come from China all the way to pdp to the ad accounts all meta first. So I can't answer your question on where it's leaning into whether it's TikTok, Apple or the meta, but this is like the best prime example I got from the event and they were showing us the workflow at the event, which was really eye opening to me. So that's becoming more and more of the standard. It's very hard to implement at Raycon just because of the size of the product, very hard to implement at linear, somewhat easier to implement at like the other companies I have, where nowhere near like if you look at my ad accounts, five percent of my creatives are enhanced with AI, you know, and maybe 15 to 20 percent of my working ads are pure AI and they're predominantly static. They're not even video, but that's becoming more and more of this trend. So this branding particular 90% of their ads were AI created. I'm actually more interested in what you said about how opX is lowered, right? And we've seen opX go from 15% and you know, you brought up reformation. They were probably a 25% of revenue going to opX and then we watched it go down to 10, then we watched it go down to eight. And what do you think best in class for 2027 is going to look like? Yeah, good question. That's what I'm asking myself to like what is best in class opX move on the move for basis? I think it's going to be sub 5% personally. I think it's going to be sub 5%. You want to cut as deep as you can and spend as much as you can on paid marketing. I think it's going to be sub 5% at like a hundred million dollars revenue per year. Right. Because creative costs go to near zero, right? You know, people cost you're going to have five people running these entire companies. But what are their softwares you're getting value out of? Or is it just cut everything, put every single dollar in tomato because that's what or tick tock or apple of it because that's what drives people. Like is it just burn all the bridges, go all in on paid ads? I'm just curious how radical the future is. I do think it is like burn all bridges and go. I'm fortunate. I wish I had the better answer, but I think it is that simple. I think it is really like how lean can you go and how much can you spend against LTV? I think it's it's that's what is going to come down to to win the race. And then I think evolution. So we went to case the vice office during this event, right? So for context case by this is this behemoth of a phone case company behemoths like hexclat big, right? Like maybe bigger to be honest. And it was so again, sparring because West has like OCD like he's like an incredible like Steve Jobs type like everything. It's just like the office is just like insane. We have videos of it itself like it's just like it's crazy. We went to the office and the topic was how to scale retail. So he's got from zero to more than 70 physical stores globally and they're murdering with their stores. So I think if you can get to nine figures in revenue on your calm, step number two to really be AI proof and to build a brand is to go offline and open retail stores. That's that's my or or or go into retail. Yeah, or go into retail wholesale or yeah, exactly. I don't sell or if you're in, you know, non this question like if you're in like, uh, non essentials, you probably have to open your own stores to really build a brand with a moat. It's like we're entering a world. where it's just extremes. You know, like on one hand, you've got, like we're talking about the hollowing out of everything in a brand except for paid media, right? And the factory. And everything between the factory and paid is like literally it's all up for like just moving around and shrinking. And then on the other side, like what you're hitting on is, as AI gets more prolific, offline, analog, real, also becomes more important. Exactly. I think the best example, like whenever I'm in New York, I mean, I think we all know Buck Mason and Sean, I think you introduce me to the founders of Buck Mason, right? Because I want to learn about retail. Yeah. I've just found my first lease for linear actually in Hong Kong, like I'm really excited. I'll come back next year after we open to talk. You're always a great place to do retail. Like, yeah, they would freaking, they work so well. Yeah, like Buck Mason store in Soho has like a coffee shop, right? It's like, it's an experience. It's like you're living in like this, everyone should kind of Google Buck Mason. So it's like such a cool store. You want to go in there, hang out. I think that's the future. And I think if you really want to evolve and kind of move forward, you have to think about that when you cross something or a million dollars in revenue. One thing I would add, like it's like, I think GMV target for Shopify in 2026 or 2027 is 600 billion, right? Like 600 billion or something. And back in the past, I'd say 30% of that would be spent on ads. I think in the future, that's going to be 40 to 45%. Like I spend 40% of my revenue and marketing. I think the average is lower because I've just seen so many companies in the M&A pipeline spend 20, 30% and rip a lot of profits. But the brand that bought in June was spending less than 10% on paid of total revenue, right? Like a $25 million, just a given idea. So I think the future is just, you know, that's going to go from 30% to 40%. Right? So we're going to go from like $150 billion of ad dollars on shop of like $120 billion, maybe now, on ad dollars, powering shop, by source, it's probably $200 to $250 billion, right? Like over the next two years. It's going to be dramatic, I think. And people always say, oh, meta should buy Shopify. That was like a common thing. But they don't have to because like half a meta's revenue is coming from shop firm merchants anyway. It's like, exactly. Like for me, it's take meta, right? Like $180 billion in revenue, 55% operating margins, right? Like it's a thing behemoth. It's going to get to $300 billion in the next two to three years with the higher operating margins, because they're firing everyone, right? Like they're just firing. Like they're doing exactly like what's happening and DTC is happening everywhere, right? Like it's just like, it's like, obviously, they're cutting people. They're spending on AI at one point. The catapult is going to stop. And they're going to like rain in on catapult. And we just know that. That's a that's a truth that's just waiting to happen. And as that happens, I think players like TikTok will follow. Because if you think about TikTok, why does the ad product suck? I think the product sucks because they have TikTok shop. The ad product spark ads is just optimized for like really short attribution with those. And it's made the ad team a TikTok a little bit lazy on building something that replicates meta, which is basically creating a marketplace where people bid for LTV and all short term productions, right? Like that's it. And the power and beauty of Apple when it came out is it was the only company that figured out how to make as good of an ad engine as meta. And if everyone else does that, like, I mean, it's a boom free commerce. But I do want to say totally. And what you're talking about is like perfect state capitalism. It's like there's the people who make the products. And then all the money goes to get the attention and everything else gets cut out. And we've all seen these VC back companies. And we're friends with some of them who they still spend 20 to 25% of revenue on people. And I'm like, what the hell are they doing all day? I talk to a brand, this brand's not VC backed. It's a new brand, very, very fast growth. You first year they did 20 million second year, they did 40 million. It's a physical goods company. And I was talking to them, I'm like, yes, sometimes your team structure, they're like, yeah, we have 40 people. And I'm like, why? I'm like, what do they do? Like, you're doing $40 million. Why do you need 40 people? It's like, they don't make the product, they don't ship the product. Like, what are you doing with all those people? It should really be five or 10. Is the reality of the future we're going towards. Most AI tools and software don't give you direct ROI every month, but PostScript does. I run two PostScript AI products at Ridge, both shop on our PNL. Infinity testing runs continuous AB tests on our SMS automations completely in the background. It's driven $446,000 in incremental revenue, not just attributed incremental. That's a 32X incremental row as with click the rates up 43%. Then there's shopper and AI sales agent that answers every inbound text in under 40 seconds. We're running 23X ROI on messaging cost alone. If you want SMS software that gives a proven ROI, go to PostScript.io and book a free demo. Yeah, I think it's hard to argue that, I don't think you can actually take the opposite side of what you guys are saying, right? Like, I do know some, but I know a guy actually has like 55 million in revenue, lots of product. So like, skew variety is pretty high. I think there's six employees in the whole place. It's like it's a perfect example of like, and there's young dudes that have just figured out how to do things in a scrappy way. It's like very technology first. And I think, rum and what you're hitting on with the TikTok shops meta thing is like, they both have the inverse problem of each other. So like TikTok shops doesn't have an ad platform because they figured out how to monetize shops. Meta has never figured out commerce. Like guys, we're old enough. We've been around for every iteration of Facebook shopping and they've all failed. But I think they failed because Facebook has like the highest revenue per user monetization ad platform in the world. It's really hard for them to turn anything else on and out, like outcompete that thing. Like, so that the bar is just so high for both of them to kind of cross over. I mean, it'll be interesting to see if there is an iteration of this with like maybe Instagram TikTok shops copycat. Like maybe they figure out a dollar per user number that's higher than their ad product. - Meta, you are 100% correct. How can they, how can they build a better thing when they have the world's greatest business to ever exist? It's like, it's like why is Google scared of AI? It's because they have a crazy cash flow money machine but like finally so many might take a slice of. But okay, this was good. So I'm gonna summarize the episode up until now. What we talked about is you got to move to Hong Kong because that is where it's the center, it's the center of commerce. Everything's made in China, it's just the reality of the world and you want to be as close to those factors as possible. So you can negotiate better prices, you can work out any issues, you could see samples faster. And it's a very safe city, it's a very fun city. There's a lot of things going on for Hong Kong. The second thing is Roman was buying a bunch of brands and I think everything he said applies to every single private equity group. They looked around and they said, "Look, the public markets are ripping. AI is over here. Why would I tie up capital and assets that are overvalued?" And why not just launch them themselves? The third thing is we saw this new generation this wave. Hudson is supposed to worry about it but TikTok shop powered brands that get great creative. They put them over on meta and they scale the hell out of them and they do $10 million in their third month and it just, it makes us look stupid for sitting around for 20 years trying to get a brand to do $10 million a year. The fourth thing is what's working right now. He is, it's partnership ads on meta. It is diversifying into more ad channels and it's taken to UGC creative for the AI creative and scaling up everywhere. Now let's get to the fifth part of this podcast. Roman, you are now an advisor for Quince. Everyone thinks of Quince as the place to buy nice sweaters but they just raised a $10 billion. And no sweater company can be worth $10 billion so what is actually happening inside of Quince? Why is it gonna be 100? Talk about this manufacturer to consumer. I think Quince is the poster boy if manufactured to consumer, right? Like so, Sid, the founder who is very inclusive and secretive, I've convinced him to come on operators to talk to you guys. So I won't butcher his story, I'll let him tell it himself but I've known him for probably more than five years, maybe eight years. We use the same 3PL in Hong Kong. So that's how I got to know Sid. And I just saw this business go from zero to like, an insane amount of billions and billions of dollars in revenue over a very short period of time. Incredible company that actually bought this little M2C print and so on. So all of their suppliers actually consigned products with them. So it's like suppliers agree to be FBA sellers, basically on Quince. And then Quince takes care of the rest acquisition, fulfillment, all that stuff. And I think the business works so well because their retention curve is just next level. So they built out this like incredible capability of drop shipping their own products from India, from China to the end customer in the US using a crazy logistical setup. So they built that out, they then decide to externalize it. They asked me to be an advisor to Quince. And the value proposition is just so good that I want to use it myself for linear and racon. Because you are able to ship a product from China to the end customer in the US at the price of the, at the fifth of the price of FedEx. So instead of the end customer, which helps us not tie up work in capital in inventory, by seefrating it to the US, on bundling it and shipping it to a 3PL. So it's faster and cheaper, and it basically just decides to externalize this capability. And I think that's the future of commerce. Just get closer and closer, cut out every middleman and all the fat between the Chinese factory and the end customer. And so the service is just like insane. I've never seen something like it. I actually tweeted about our first client on Queen's logistics. They're selling stuff to suburbia in the US, like a thousand suburbia moms every single day are ordering their product. And on average, we're delivering the product in less than six days, door to door from China, including Sundays, right? Like it's super fast. The founder can now turn inventory much faster. And I think it's like what all these other drop ship proprietors want to build, but they just didn't have the speed to match it. But these guys have kind of sold it. I think even for Raycom, when we move over, it's gonna be faster because Queen's flies these planes all across the US, so they'll have a plane go to the West Coast, the Chicago to America. So they just get much closer to the customer because the parcel moves like a human. So if you think about it, and I board my flight in Hong Kong at 2 a.m., I'll land in New York the same day at 6 a.m. And I'll just walk through immigration, right? And get to my office at 10 a.m. They've basically done the same for a parcel. That's basically what they've sold. So it's just insane. And it's been fun to watch this scale up. I think just from my Twitter, we've gotten a 200 million air or a pipeline, which speaks volumes of not my following, but like how much of a product market fit they've kind of hit, right? Like it's insane. I couldn't believe it. When I sold this spreadsheet, I was just like, well, it's this, this is insane. And I was like insane. Okay, but like this whole like thesis that you have that you posted about, which is like we're like M2C is the future, right? Can you unpack that for people listening? 'Cause like you put this thing up on on X. I think I messaged you right away. I'm like, rum and what the? And I'm like, we gotta talk. So like unpack the thesis. 'Cause like Quince is a good example, but like why do you think this is gonna be the future? I think the best example is like my keynote speaker at my first event three years ago, Angus Kong. So people can Google them on YouTube. People should obsess about them. He's like the Hudson of China. Okay, so the guy does like crazy numbers. I know how much he wants me to disclose, but we're going and touring his factory and his setup. Okay, in China, on my summit. So if you come out in October, you can see it. So he's basically an affiliate marketer. He doesn't own the factories, but he works directly with the factories. He'll literally go in and launch a hundred products per day. Like a hundred per day, I'm not exaggerating. Like he'll do 3000 products per month, approximately. 2000 to 3000 products per month. Spin up landing pages, run ads, pump them. As soon as they start declining, he'll stop and move on to the next product. And they're just running the whole machinery for profits. His HR structure is really crazy, but I think that's like the actual future of commerce. You'll have like super powerful affiliate marketers partnered with factories in China directly. With AI, the language barriers much lower. Like these guys in right flu in English, they can write scripts, they can do all the stuff they use American copywriters, Westerners like myself for, and then go live and sell their products directly, dropshaking from China. Obviously you can't dropshade that big piece of furniture, but like some earbuds or some jewelry or a Ridge wallet, super easy, right? Like super easy. So I think that's the future, frankly speaking. I think we're going to see a lot more of that. Where does brand come into this then? Do you think that the brand builders are also going to do this? Or do you think maybe, but like if you think about like 80% of, sorry, I'm exaggerating here, but probably 60 to 65% of my consumption is like stuff like this, like this roll of paper, right? Like yeah, like unbranded who cares? I don't even know what the brand is, right? Like I don't care. It's just a computer commodity to me. And I hate to say it, it's probably going to be the same for like wireless earbuds and some jewelry. Like there's going to be like things you just buy purely for style, price and convenience. And I think like obviously a line share of the volume profits will be captured by real brands. But I think there's a whole swap of this like Amazon FBA style businesses done in a D2C way. Why they not been done in a D2C way before? Because it's operationally complex to sell on Shopify or on.com. And I think the ability to sell on.com is going to be as simple as an FBA listing. You're going to have to put in minimum listings, right? They have to have a good product. But I think D2C is going to be FBA, FBA is, right? Like it's just going to be like completely Amazon-like eventually. Roman, I'm glad you brought up Amazon because this idea of externalizing a resource is Amazon. Like Amazon AWS is a $200 billion year window of the business that they externalized. And I've talked to senior VPs at Amazon. And they're trying to externalize everything right now. So Amazon Pay is Amazon OneClick, like Amazon Logistics to try to get money for. And what Quint is doing is the advantage Timo and she had of going directly to vendors and then airing it into America. Quint is like, we will let everybody do that, right? And that's why-- because people like, why is Quint's worth $10 billion? This makes sense. It's because they're trying to be the AWS of logistics from China to the US. So-- And I think it's-- I want to pinch you as an end state. The end state of commerce is whoever can spend the most on attention will win. And that's why OptX is being cut. That is why you're removing warehouses. You're removing creators. You're removing everything because every dollar that goes into attention is whoever can do that at the end state wins. And that is the world we're in, where every single dollar needs to go to marketing. And it sucks. I love my team. I'm going to keep them. I love building a brand and culture and vibing. But the brass tax is capitalism is who ever gets the most attention is going to win. And whoever puts the most money into it is going to win. So that's what I-- I think, John, it's just all you're saying is there's likely a lot more companies, but with just fewer people per company. And that more and more money goes into distribution. The world is everyone's an FBA seller. So what I was going to say, are we all just running like 100 different-- what does the brands at FBA? It's like, if I just mashed my keyboard like a cat, that's my brand name on FBA. That doesn't really matter. I'm going to take that copy with Sean just said, it's a world where everyone is an FBA seller. It's 100% like that's hitting the nail on the head. And that's actually so well distilled, because that's what made me pause into it. And the four is like, I couldn't articulate it back then. Most is like, something is profoundly changing now. I've been doing this game for-- at that point, maybe definitely more than 10 years. So it's like, something has changed. This was an inflection point. If you're scaling any commerce brand today, ads alone aren't enough. Aftersell focuses on the one moment that every brand already owns after checkout and turns the post-purchase moment into more profit. Monetize every order with post-purchase offers and thank you page experiences without disrupting checkout or hurting conversion. Enterprise grade tech used by Gap, ticket master, Macy's and Target, now driving results for brands like True Classic, Hexclad, Ridge, and Jones Road. I would know. This is the reason I ended up buying three pants from Hexclad instead of two. Aftersell has already generated over $1 billion in additional revenue for e-commerce brands. Revenue that doesn't require more traffic or higher cat. So check out Aftersell and tell them that the operator sent you. What's your take on Shopify then, guys? Roman, I know you've had some takes on this, but where does-- and I guess maybe a different way to answer this is like, where does the.com value lie? And Shopify's role in this ecosystem is pretty substantial right now. I'm a super bull on Shopify in general. As a stock, it's very expensive, right? Like it's priced on a sales ratio. It's not priced on an EBITDA ratio, because people are extrapolating that at one point, it's going to go to $1 trillion a year, instead of $600 billion a year, $1 trillion a year in GMB. And they're going to have a lot of pricing power. I think what's at risk now is their pricing power. So if they came to us today and said, like, hey, your Shopify Plus is going to go from $2 to $10,000 a day. I think most of us would just suck it up and pay it. But you know, a month, yeah, a month, sorry, yeah. A month, sorry, yeah. Yeah, unfortunately, a month, yeah, exactly. So we would suck it up and pay it, right? Let's be intellectually honest about it. That being said, what I think is going to happen five years from now is you're going to have what, like, these kids that came and are spending on apploven instead of meta, is you're going to have this potential of, like, just clicking a one button on Medusa and, you know, have a firm and fully loaded that Shopify like with an order system like Shopify. So I think they're going to have a lot of competition coming the next three years. There's going to be a Medusa, like, next wave, whatever, those platforms where that I wrote in my thread are going to come up and really give Shopify some pricing pressure. That's my two cents. I do think Shopify is a little bit weak at a couple of things, like I've been with child fight for more since then. day one, right, with my brands. Like, going global on Shopify is a pain in, like, it still is, like, globalizing all that stuff is really tough. And like, my brands are really global. And number two, I think is like, it is not truly AI first, right? Like, if you think about one of my mentees that I wrote about, it's actually an Norwegian of all places like myself. So they did like $45 million in TTM revenue, on track to do $100 million this year. And his whole setup is, you know, claw terminal, just like launching products in a very similar fashion, like Angus. Not 100 today is doing like 50 to 100 a month. But he's spinning them up using clawed. Once they work in the US, he just hasn't translated into 50 different markets, spinning them out. Replicating that workflow in Shopify is extremely difficult today. So if you want to think about in the world of where everyone is an FBA seller, I don't think Shopify is the best tool right now. Would that bet against Tobin Harley? No way. We've met them both. Like, I would be like, a run for the hills before I do that, right? Like, I wouldn't be that dumb. But right now, if you were to ask me, I think they're at risk and they have to make some big changes to accommodate the future of e-commerce, in my opinion. Yeah, you know, one worry I have about the future of all SaaS, all services is in three years with a limited compute and a limited tokens, if I asked Claude, "Hey, I want to sell something." It would just build its version of Shopify, right? Like, you know, Dario, the founder of Anthropics idea, is that there's a country of geniuses inside of every single server rack. And if you really had 300 million PhDs, if I asked, "Hey, what's make me the best selling, whatever?" It would just do it, and it would create entire workflows and systems and thousands of lines of code, and then that's what it would be. I would just be sitting, drinking, and smoothy or whatever. So. Yeah, I think, Sean, I'm with you. I think that that's, like, directionally correct. I think the timeline is just way off. I mean, I think we are, like, decades, because what Roman is saying, which I think I agree with both you, I just think it's, like, 20 or 30 years away, because you're talking about connecting, like, everything is code and thropic to factories, and that everything in the middle is, like, not valuable because everything in the middle can be code, or it can be pushed over to the factory. Like, that's kind of where we're at. Like, even the media buying is, like, well, Facebook's got all the demand. That AI is going to talk to this, their AI, and it's going to hook up to whoever owns the factory, and that everybody that used to do all the work to facilitate all that stuff is just gone, including Shopify. I just, it is so many moving parts. I don't know, though, but it was Matt, like, I built, like, so, you know, for me, like, right now, I'm really focused on pixel-in-shouvels, right? Like, so I think my equity at Quince is going to be worth it. Like, cities, like, yeah, it's great play. Yeah. Quince is like, it's great. Like, so I did something where I thought about it, like, what shan did, right? So at linear, we upgrade our packaging, and we've had, like, a huge LTV lift. So I started packaging supplier. So I'm now selling packaging because, like, all my mentees need packaging. And the interface I'm building for the packaging is an AI first interface. So you can render all yourself. I'll send you the demo link once it's ready. But then I'm taking on, like, first principle of e-commerce. Like, okay, shan might be, my clients are new to the game. They're new to e-commerce. Like, their kids fresh off the block. They don't understand. If you shave off, like, one CM on the side, you can save a dollar with USPS, right? Like, so I think service providers are going to build things that can interrupt with agents. That's why I'm trying to do it. At least says it at thought experiment. Because I think, like, going back to shan's thing, the reason I think Matt, you're extrapolating the timeline is because you're still dealing with humans on the other end. But if you start having vendors build really agentic first, I think it's going to be very, very different, right? Like, I think so. Right? Like, I would work with my, if I was like a jewelry factory and it was like truly AI first, I would 100% like work with me, right? Like, so yeah, I think that's, that's like, you know, like, I guess my argument is always we're a bunch of dudes and you have to discount dude logic. And because like, the way that he moved through the world is very different from like more emotionally intelligent beings. And like the way that we consume is very different. Like, that's, I am happy to have robots by most of my, with like some amount of exceptions. And I am happy to not interact with any other humans. That's not true for a lot of the other people in our species. So I just, I think it's like, we have to remember there's, there's like a lot of participants in the economy and a lot of like incentives that are competing as much as I love this like future. All right, guys. I'm Roman. I love the idea of starting picks and shovel businesses. Like I'm thinking about starting more manufacturers. I would love to get some equity in your packaging companies or go ahead and just send the advisor Reuben over. I'd love to get that. But we, okay, so we just unpacked where we think commerce is going. It is going to be more money spent on marketing. It is going to be close relationships between manufacturers and customers and how, how does a brand sit and, you know, navigate that? If you're a brand doing 10, 20, 30, 50 million lives a year, that's our core audience. This is going to be a negative episode for you, but you should, like, Roman has said countless times, be intellectually honest. Like where do we think the world is going with AI with all these kid brands? Like you, you called them 18 year old foreign diapers basically like coming out and doing $20 million a month, punching you in the face and they have different rules. Don't get left behind. Roman, what's the one tip you'd give to a brand owner? They're stuck, you know, they're not one of these fast growing kids. They're doing 10, 20, 30, 40, even $50 million a year. They were praying for an exit. What's the lesson you would give to them? Cut costs and take out distributions every single month. On the 30th and 31st of the month, you send yourself a calendar and by saying dividends. And then you take half of the profits in your business and you split it out yourself, then you're asked yourself, how can I double that dividend in the next like six months? The 90, 180 days, whatever your timeline is, but just start saving up money and take it out the business and leave your ego at the doorsteps and choose lower growth from more dividends. Dividends first always. That's my core message because I still talk to founders or drone sailors who think like a private equity is going to come in and scoop them up. It's not happening anytime soon unless you're crushing it and you have recurrent revenue. So it's basically operate like your brand equity is zero. All you have to get is cash. Yeah. Plan for the worst hope for the best of it. That's it.