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Man, oh man. Do I have a podcast for you today? I've been waiting to make this one. I think two

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weeks ago was the Olympia here in Vegas. Ben Francis, who's the founder of Gymshark in the UK,

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since UK Parallel brand. I think they were valued at a billion plus one or two years ago. I think

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they've doubled in size since then. So really, really great entrepreneur. And I had the the fortune

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of being able to hang out with him for the day. He came a day early and went and hung out here

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in Vegas at my headquarters. It was such a wonderful conversation because he's my age and he's

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achieving really big things. So it was very like rare for me. So this is me just I'll show my

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cards, barrel, try to, you know, hedge my self-aggrandizing comments, but I was very pumped to hang out with

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him. And what I want to do in this podcast is break down some of the lessons I was reminded of

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in my conversation with him that I think would benefit honestly everyone who's an entrepreneur

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or wants to be. And so I wrote down a bunch of bullets from the conversation that I had. And I

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want to walk through a few of my biggest takeaways. One is AI versus IRL. All right, and you're like,

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what the hell is that? So AI is like all these big tech companies and all the hot software, whatever

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is talking about AI is metaverse, decentralized, web3, whatever, right, all that stuff. And so

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there's this interesting and very large push with lots of capital behind it for people to go into

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these AI digital spaces, right? He and I were both talking about our shared consideration for the

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value of in person, IRL, which has been told me the story that the reason that their company was

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so successful is that they built an online business offline. He told me I'm pretty sure he shared

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this in podcast and I'll probably run this little thing by him to make sure that I don't share

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anything that was like too proprietary. But for everybody else who's listening, then that you can

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tell the heat that we're going to be dropping, which is when his first couple of years, he went to

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every single fitness expo across the world. All right, that he could afford to go to. At this fitness

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expo, they would sell a peril and they would meet people and shake hands and kiss babies and all

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that stuff. And so what was interesting that he shared with me was that years later, the cities

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that he went to, they were going to be doing millions and millions a day or something like that in

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sales. You're talking, you know, 20k, 50k, maybe 100k, you know, a day in sales and they may sound

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like off for some of you, but like big picture for a company that size, not huge in terms of needle

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moving. But what was interesting is that when they overlaid their sales across the whole organization

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on a globe, the hotspots, the concentrations of customers were in those cities.

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And it was disproportionate to the amount of sales that they were able to generate on those days

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when they were there. And so to me, I have the same, same kind of thesis that we work off of,

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which is I'm a big IRL guy. I'm a big in person guy. I think there's huge value in that, especially

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now. I think that there's a higher demand for real experiences, real community, real connection

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that we try to approximate with technology and we simply fall a little bit short. Now it's kind

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of like eating like vegan meat. It'll get you by, it'll, it'll keep you full. And I'll probably

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offend the six vegans who listen to my, my podcast, right? It'll keep you going, right? But like,

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it's not a steak. It's not a burger, right? And so we keep trying to improve beyond me and make

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the fake thing closer and closer to the real thing, but it's not the real thing. And I think that

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what's happening is we're actually still, there's still this, this starve, right? This, this deprivation

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for more and more people because more and more people are eating the beyond meat of connections,

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the beyond meat of conversation when they could be getting the juicy real steak of a thing. Like,

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Ben and I met in person and we hung out for a day, IRL. And he was awesome. And I would consider

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that because of that, we will probably maintain a friendship for years to come, or I hope so,

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right? Unless I sucker who knows? So that's kind of like big shift number one that I was reinforced

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and it was great to hear somebody else, another business leader kind of share that thought with me

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or that same direction, which is like whenever possible, we were trying to create in person IRL

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in real life experiences. And that's why we decided to do like the workshops we do at our

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headquarters, just because I was like, okay, how can I, how can I facilitate that kind of experience?

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Even though it's quote unscalable, right? Of course, it's quote unscalable. Of course, there's more

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people in my audience than I could possibly fight of it every single day for the rest of my life.

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I still wouldn't be able to meet every person in most nation, but it still creates a way where

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if you hang out with 50 people, those people, if they have an exceptional experience,

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talk to another 50 people each. And those people talk to 50 people. And then you're at 50 to the

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third. And all of a sudden, it's like, wow, we touched 75,000 people, not 50. And I think this is

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fundamentally one of the reasons that Jim Clark has been and continues to be successful. Like now,

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they're going and opening these in-person shops. They're doing these these big meetups with

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athletes. And they're doing that because they're not stupid. They know that they have a higher

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return. And so what happens is most advertisements, marketers, look at the return on these these small,

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you know, IRL relative, IRL in real life experiences relative to kind of the digital footprint or

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digital views and engagement and things like that that they can get online. But again, it's the same

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as like feeding people, you know, tons and tons of beyond meat burgers. But like you still remember

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that one juicy burger that you had when you were starving better than all of them. Brian Chesky

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talks about this founder of Airbnb. He said one of his mentors said, it's better to have 100

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people who absolutely love you than to have a million people who just like you because those

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hundred will tell another hundred and those hundred will tell another hundred and keeps going,

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right? And it's like that that potency of the real meat of the real meat conversation, the real

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meat connection outweighs the fact that it costs more to make those connections. But I also

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believe that if you do a good job in those instances, which obviously Ben has with his when he

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would go to attend those expos and we have these meetups with his athletes and the influencers

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and things like that that he runs, that it's worth it if you do a good job because I think

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that those connections become permanent. I think those connections permanently change the way people

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see you see your products, see your brand. And so that was kind of big big thing number one that I

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took away. That was a great reinforcer and a reminder kind of felt like right pat like just

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corroborated kind of like some of the conclusions that I came to. So the second big one was we were

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talking about growth rates. And so this I think this will be really really helpful for a lot of

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you guys here. He was talking about and we brought up some big influencers that we both knew who

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started brands and had to explosive just crazy numbers in terms of their annual revenue,

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et cetera. And he said, you know, I don't know if if that kind of growth is, you know,

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sustainable long term. Now mind you, these guys have Mondo, Mondo brands and all that kind of

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jazz. But his point was he's like, yeah, but if we look at 20 year horizons, do we still think

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that they're going to be number one? And I thought it was a really interesting, you know, perspective.

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So I'm obviously a big, you know, long-term thinking guy. And I talk about long-term thinking and

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patients around goals so much because honestly, it's just something that I've struggled with. I tend

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to be a very like I want everything now guy. And so it's like I push so hard on on the long-term

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stuff because it's so difficult for me. And for any of our entrepreneurs to listen to this,

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if you're like me, something that has helped me with this and I'll continue back to what I was

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saying in a second, something that's helped me a lot with this is understanding that I can feel

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impatient and act patient anyways, meaning as long as I do not change my behavior and act like

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an impatient person, I can have this deprivation where I'm like, I want these things, I have these

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desires and they are unmet. But as long as I don't change what I do, I act as if I am patient.

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I figure out other things to do in the meantime. And so people, it's funny because like I'll get

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described as patient. Like so, Kale, who's got the CEO of gym lunch, I've heard him on a couple

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of podcasts be like Alex is incredibly patient. And I find that fascinating because every single

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second of every day, all that I feel is impatience. And so I think for me, it's been helpful to

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delineate how I feel and what I do, which is why I have such an emphasis on behavior

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rather than thoughts and feelings because fundamentally, for me, I don't think they matter.

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As long as they don't change what you do, right? Back to the patient's thing with the long-term

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time horizons. And so one of the things that Ben has, Udels and Udels of, is that he wants to

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build an iconic brand. He wants to build a brand that hinders after he's dead. And he talks about

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everything in terms of a 50-year brand. He has a number of, you know, brand heroes that he

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looks at. You know, looks at Range Rover. He looks at Harley Davidson. He looks at Ford in the US,

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for example. And so these are these companies that create iconic robbery, right? They

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create iconic products, which create iconic companies, iconic brands. His emphasis on this honestly

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was very refreshing because a lot of times, the reason that our goals feel big is because or rather,

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our goals feel impossible is simply because we attach too small of a time horizon to them.

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I'm going to say it again because I think it's really important. We as entrepreneurs, myself included.

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A lot of times I create undue and anxiety and stress around the goals that I have because I attach

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a timeline to them that's simply too short. Oftentimes, I mean, Bill Gates said this and I don't

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think he's the first one who said it, but it's entrepreneurs underestimate, so they overestimate

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what they can do in a year and they underestimate what they can do in a decade. And a decade has

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been a really good kind of like measuring stick for me. I don't explain why. A decade, it's like,

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around seven years is where it's like the sweet spot for a lot of companies to go public. So there's,

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you know, there's these studies where they put these scatterplots of what year companies go public,

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relative to the long-term performance. It's basically year five to ten. Seven-ish is kind of the

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sweet spot where companies do that. But I think about this meaning that like at any point in time,

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any person in ten years can radically change the world in ten years, but probably not 12 months.

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For me, that's kind of freeing and empowering because it's like, you're just 10 years away from

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changing the whole world, which I think is really cool. He is this outlook on brand of building

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50-year iconic brand. And he was here with his right-hand man, Noel, he's director of brand.

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It was interesting because some of the words that they used was like, we want to build a brand

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not a business. And obviously to build a brand, you need to build a business. But what they meant

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by that was like, if you look at a lot of e-commerce that exists today, they're just arbitrage

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businesses. They're just what they call bottom of funnel, the row-ass businesses. All they think

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about, all they obsess about is dollars and dollars out, dollars and dollars out. The problem with

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that, and I'm going to segue into probably the most significant takeaway that I have from the

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the day that we spent together was this story. So Noel told me this story. They met the CMO

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of New Balance. For those you don't know, New Balance has had this massive resurgence. You know,

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it used to be only a dad shoe. And now you see all these like, Gen Z and 20-year-old chicks

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wearing these things, right? These big, clunky, ugly shoes. But now they're like in. And so what

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happened was they had New Balance had 15 years of year-over-year decline. They literally just went

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down 15 straight years. Okay? So they got a new CMO in, which is the guy I'm referencing. And the

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guy went to the CEO and said, can I just swing for the fences here? And the guy said, sure, we need

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to, you know, we really need to change it up. At the time during the 15 years of decline,

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they had a 70-30 split between bottom of funnel, meaning they spent like just direct response,

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you know, dollars and dollars out, conversion rate optimization, that kind of stuff. And they spent

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30% on top of funnel or brand awareness associations, etc. Things that were not directly,

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they didn't have direct attribution to sales. And with this guy dead, as he came in,

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and he flipped it, he said, we're going to spend 70% on top of funnel, brand awareness,

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associations, and only 30% on conversion. And here's what happened next. The next 18 months,

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they continued to lose even more money, which is why a lot of times business is more about having

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a strong stomach more than a big break, right? They kept losing money, kept losing money,

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kept losing money. And then on month 19, it started ticking up. And the next month, up again,

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next month, up again. And then it just started going straight line up like a rocket.

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From that mini little less, that mini story, I have taken away so many things that I want to share

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with you. Number one, in terms of thinking, this is again, if you want to build something big

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that endures, if you don't, then you can just stick with the arbitrage business. But most of you

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who do this are always wondering, why is it that the moment I turn off my ads, my business dies,

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right? It's because you don't have a brand. You don't have a quote like follow, you don't have

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an audience of people who want to continue buy your stuff. You don't, you don't have people who

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who would miss you when you're gone. To create that missing, you need to build branding,

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you need to build positive associations between your stuff and what customers in your audience love.

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And no, here's some of the takeaways that I have from the stories. I think it's pretty profound.

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Number one, is that branding takes time. And so like this is a big company that has a big budget

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that was able to spend a lot of money and it still took them 18 months. And so I would posit,

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I would hypothesize that for most of you trying to do this, it will take you two years or three

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years for a brand to really start yielding dividends, start paying you back. And I bring this up

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because I think, and this is because this was such a fundamental misunderstanding of me in my

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earlier career, is that I didn't understand the value. I didn't understand what brand actually

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provides, right? Brand provides three amazing things. One, actually four. One is you get higher

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response rates to everything that you do. So think about it in an advertising perspective.

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It means you get more clicks. A higher percentage people will click your stuff because they have

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a positive past history with your company products brand. Number two, they will convert it higher

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percentages for the same reason because they have a positive past history of it. You get more

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clicks and a higher percentage of those clicks convert. If you had only those two things,

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you'd already be printing. But the third thing that comes into play is that they will do both of

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those and they're willing to pay a price premium. They're willing to pay more than they can

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to buy your thing that otherwise is the same besides the positive associations that you've made

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with your brand. So they buy white t-shirt, white t-shirt with swish mark, they're willing to pay

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five times more, ten times more, right? For the white one with a swish mark. And then number four,

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finally, it is more likely that they will buy again and that they will not buy from a competitor.

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And so brand, if you think about it from this, what more viable thing could you do than something

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that increases your cleat through rates, increases your conversion at higher prices and increases

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repurchase rates, almost nothing. And yet people don't want to invest in it. And so it's funny

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because I feel like I can share all the secrets of branding in the world. But I never have,

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I sleep great at night knowing that no one's going to do it because everyone, like no one can think

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long-term. Part of that is obviously being able to get yourself right. Meaning if you can't feed

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yourself, do that first, right? But this is where having a more modest lifestyle is an advantage

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because it can allow you to think long. I think it's one of the biggest outcomes of saving money

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and living below your means is that your time horizon that you're able to think on expands.

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And the longer time horizon is, the bigger the goals that you can pursue. Because even if you

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do expand your time horizons in terms of how you think through things, if you act as though,

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if all your actions are aligned with somebody who can only think about payroll this week or next

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month, then you're never going to build that thing because you're never going to put time into

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something that you're willing to lose money on today. You're never going to make investments

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because most of the biggest things that really change the world take time, they take extended

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periods of time of investment without any return. I have this tweet that got shared a lot which was

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the world belongs to those who can do without seeing the result of their doing. They can keep doing

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without seeing the result of their doing. And you have to be able to do it for a very long period of

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time, which is why the extended time horizon is so important with this story. So number one,

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takeaway that I had was just like the increase in horizon from this story. Number two,

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branding takes, it might take you two, three years in order to really see the return.

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Number three was the ratio. And I thought this is actually really valuable. Many of you who are

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listening to this, you're thinking, Oh, okay, I'll spend 30% on brand. 30% on brand is what was

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losing them market share. It was losing them market share. And so you think about that, give to

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ask ratio, like I talk about this in my leads book for content. I would posit that 7525 is probably

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the right is the actual precise right ratio. Now, the story that we told was 7030 and it also

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depends on how good, you know, I'm sure that in doing that 70% shift, like I didn't get to double

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click and talk to that CMO and maybe someday I will. And if you know that CMO of new balance,

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please introduce me, right? But I would bet that when they made the shift from 30% being brand

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first to 70% bringing brand first, that not only did they make that shift in terms of spend,

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he also probably reallocated that spending the places where they could even more for it, right?

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You probably updated their strategy got got the right influences on board who had more reach,

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etc. We do know that the give to ask ratio, which has been studied is three to one minimum,

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is that for every kind of neutral kind of interaction where maybe you make an ask or whatever,

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you have to have three positive ones. This is why the ratio of TV commercials in a mature platform

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is three to one. And sometimes you want to be even more than that if you want to be growing.

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This is the investment of brand. And this is how you it's like you basically are always digging

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your well before your thirsty and you have to keep digging that well forever. Basically,

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you always want to be ahead of your ask. You always want your good, good will,

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your positive position, your brand strength to be in access of the ask that you make. And so that

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brand strength, the nice thing is that it came compound. So a 10% growth over and over again,

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like that 10% at your 10 is an enormous amount so that when you do have that ask of this

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significantly bigger audience, you still are always in equilibrium, basically. Like you always,

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you're actually really out of equilibrium because you're under, under asking relative to the

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good will that you have. I was talking to a different friend of mine who has another is as a

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multi-billion dollar company. I was talking about the conversation that I had. He's like no one

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gets it. He's like, even my CEO because he is, yeah, I see you have his company. He's like, he

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doesn't get it. He's like, I always have to go in and be like, no, man, we got to spend this money

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on this brand stuff. But he's like, but dude, we're not, we're not getting anything back for that.

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But look at this bottom of phytometrics. He's like, the reason we have these bottom of phytometrics

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is because we spent money on this stuff 18 months ago. And this is why it's so hard for people to

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grasp. And so it's also difficult, by the way, this is why public trade companies get into trouble

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when founders leave. If you're optimizing for the quarter, you're already screwed because anyone can

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come in and immediately look at a genius by cutting all branding and then putting all of it in direct

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response. But the thing is that you will road the brand over time. And if you don't have a brand,

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then it means that you basically have to put all that money into the brand first, not make any

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direct response, you know, asks with draws, whatever, row as shit. And you have to wait and you just

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have to keep waiting. This has been just a really wonderful, hard, quantitative number that I can go

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to, which is that when I look at our, our advertising that we do at the portfolio level, at, at the

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whole level, that was not calm, is are we three to one? Now, obviously, I want to be clear here,

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it depends on what your goals are. If you want to build a 50 year iconic brand, then you have to be

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there. You got to be three to one even more, right? Four to one, five to one, six to one, right?

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In that ratio, if you're looking for like a quick, you know, when bam, thank you man, exit,

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then you're just going to do arbitrage and you're going to hope to sell to an investor who doesn't

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understand how this works. It should be real. So I guess that's what it is. You're just going to,

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you're just going to sell that, you know, you know what your LTV to crack ratio is and you can spend

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this is tame and this is what, how much more than marketplace you can get and this is what your

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retention is, whatever. And that's fine. There's nothing wrong with that to be very clear. I'm not

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saying any should. You can know how you want. But the biggest brands exist and function this way

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for a reason. It's because they get superior returns on advertising, superior returns on investment

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because they always reinvest in the brand. If you have, for example, free cash flow that comes out

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of your business, then some of that you might want to consider investing in those top of funnel

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relationships in those top of funnel brand awareness things where you associate your product

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with things or people or experiences that your ideal customer loves. And then long term,

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you can reap the benefits. Big themes here, right? So big theme was number one, AI to IRL. So,

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you know, like this whole tech metaverse, whatever shift to IRL, the demand for in-person

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experiences. The second one was kind of the 50 year time horizon. The third was around the

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ratio of branding of the give to ask ratio being confirmed at a higher level, being

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corroborated by other companies. So that was just like a, it was a fun thing for me.

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The next one, and this is a, this is probably like a sub brand point. What do, what do those

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investments look like? And so we were talking about this. The thing is, is like, you want the brand

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to be aspirational. You want the brand to be something that is overkill in a way. So let me explain

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what I mean. So you think about Red Bull. They're jumping a guy out of from outer space to the ground.

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That's overkill. But the thing is, is you're like, well, shoot, if they're that extreme, then like,

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this drink will help me like stay awake for my meeting. To take another, another equal opposite

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example, like the North Face, if you've heard of them, it's a jack company. And the reason that they,

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you know, have those guys climb Everest and use their, you know, their sleeping bags and their

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tents, whatever, with the North Face logo on it, is that you're like, well, if he can climb Everest

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in that jacket, then it'll, it'll keep me warm on my way to work, right? When I'm walking outside.

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In like, you know, 40 degree weather, whatever, you know, Ben brought up the Range Rover,

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the Defender, which is one of their, you know, their best off-road vehicle for Range Rover. And

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you're saying, you know, they, they continue to build some of the best off-road vehicles on the

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planet. Now, the vast majority of people who use those products don't drive them off-road literally

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ever. But it's kind of this, this overkill idea, right? I'm using the word overkill, but it's like

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this, this over indexing. It's like, well, if, if it can do that, then it'll suit my needs,

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right? If you're, if you're building a brand around something, it's like, what big brand

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reference point can I create that we're so far above what the need of the consumer is that they're

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like, oh, oh, oh, if they could do that, then they can definitely do this. And so these are the

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things that kind of like act as gravity, like these gravity bombs for the brand. What demonstration?

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Because this is the key thing is what demonstration? And a lot of this comes from the products you build,

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right? And products are like, okay, well, I'm a service. It doesn't matter. Like if you're,

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if you're a lawn care person, for example, right? Like I'm just taking the extreme here. You could go

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and find a house and do like the ultimate transformation to their landscaping, right? Just do this

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crazy before and after. Observe, like you're willing to front all of the money just so that you can

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show it so that people like, well, man, if they did the, the, the hermosy mansion, you know,

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gardens, then they can definitely mow my lawn, right? There's always an extreme version. Like what's

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that crazy version of what you do on a daily basis that you can do one time that can anchor the

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brand in your customer's mind so that they're like, oh, okay, well, then they can definitely handle

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what I've got. All of these things are an effort to shift people's perception of your products

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in their mind. One of the other pieces that's kind of like underneath of that, the ideals is,

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what's the primary use case? Who buys your product? We'll affect your brand as well.

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And so one of the things that they were telling me about Gymshark, they want is they always want the

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most in shape person in the gym to be the one who's the Gymshark athlete. They're like, we want

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the people who you'd go up to and ask for form advice. We want that person to be wearing Gymshark.

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And we have to create the person so it's like Seabum, right? It's like, you know, best

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best bodybuilder of our era right now. We have to make the association with Seabum so that that's

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aspirational for that person who's aspirational for a regular consumer, right? So it's like levels

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of aspiration. And so if you're thinking about building the brand, the prospects that you choose

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to sell to also have an effect on the brand itself. The reason that Harvard is Harvard and Stanford

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because a lot of people, especially in the education world, try and they're like, I want to be

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the Harvard of this. But you're never going to be the Harvard of that because you're never turning

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anybody away. Every time Dick and Harry that has a credit card, you have no qualifications.

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If you don't think somebody is very impressive, and they say, oh, I use this lawn care service,

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and you don't have much respect for this person. You might not care about their reference. And that's

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the crazy thing. You as a business owner might have done a great job servicing a customer,

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but because the customer isn't respect worthy with their peers, then that referral actually

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becomes moot. It doesn't even matter. You can notice how brands happening at different levels,

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right? It's like, how does guy jumping off of, you know, space station or whatever to land on

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earth? How does that translate into more adjunct drink buyers? It's just, it's like steps of removal.

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It's steps of delusion. And I think the more aspirational, the wider and more distributed

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that base can become over the long term. If your aspirational thing is you just have a cut lawn,

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then you're not going to get many levels of delusion there. You're like, you're one step

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way from nothing. And so this is where these extreme demonstrations exist to anchor the brand,

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and the perception of the brand and products in the consumer's mind, right? Whether it's B2B

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or B2C, we're the same way. These were some of the takeaways that I had from the conversation

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with Ben. I also think he's just an awesome guy, really humble, works super hard. He like me,

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where's the same thing every day. I have this little test that I run. Actually, I'm not going to say

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because it might ruin it for somebody else, but he passed that test with flying colors. I'll just

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say of humility. He has, he has reinvested every dollar of profit that he made back into the business

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because he was willing to bet big on the future. Every distribution that you take from the business,

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if you think about this, if I had to reinvest this money into my business to grow it,

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what could I do? And sometimes some of the best investments are in brand, which are going to show

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for some time. So, for example, if you were to say, I'm going to spend more money on ads, but you

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can't because you don't have sales guys or whatever, then it's like that might not be the best

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investment, but brand comes into delay. And so it may be worth investing into some sort of brand

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stunt or something like that. That's a huge demonstration of your prowess, your ability as a company

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because it will commit a delay. And I think that's something that we can kind of all think about

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as I've heard is like, what are those crazy things? What are those crazy ideas that move the world?

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What's that big aspect? What's the Everest for your customer? And then how can we show them that we

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can do that? So that when they just want to walk to work, and it's a little bit chilly, the where

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are jacket? There's the big three AI to IRL, long-term thinking, the brand ratio, big aspirational

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associations. There's rather before big things that I got reinforced from the conversation that

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I would have been, and I thought I was sharing with you. Lots of everyone share this pod. If you liked

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it, if you don't, then don't share it, I guess. Otherwise, be amazing, and I'll catch you guys on

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the flip side. Bye!