LA Business Podcast

07. Taylor Holiday, Managing Partner, Common Thread Collective

Taylor Holiday LA Business Podcast
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We talk to Taylor Holiday of Common Thread Collective about Advertising Agencies, Digital Advertising, E-Commerce, and building Brands!

https://commonthreadco.com
https://4×400.com

Intro: [00:00:00] Welcome to the LA Business Podcast of forum for business owners and senior executives to share the experiences about the elements that drive their success. Your host is Robert Brill, CEO of brillmedia.co, an Inc. 500 company delivering the power of hyper-local advertising.

 Robert writes for Forbes Inc and Ad trade publications, our goal is to bring you the stories about successes and failures of people who are making big things happen in marketing, entrepreneurship and management.

Robert Brill: [00:00:43] Hey everyone. Welcome to another episode of the LA Business Podcast. Today we are talking to Taylor Holiday. Taylor, welcome to the show.

Taylor Holiday: [00:00:52] Yeah. Super excited to be here. Robert. Thanks for having me, man. I’m Taylor holiday. I’m the managing partner of the Common Thread Collective, as well as 4 by 400.

We are a online sales agency that helps, e-commerce companies in the zero to $20 million range grow their business.

Robert Brill: [00:01:08] Very cool. So it sounds like you’re a, you’re an advertising company too, right?

Taylor Holiday: [00:01:12] Yeah. So we call ourselves an online sales agency. We help. ECommerce companies in the zero to 20 million space grow their online revenue.

And the primary mechanism for that, about 60% of our revenue comes from paid media. The other 40% comes from a branding, content, production, website development. And we also have a community product called Admission, which is a member learning community for, recurring monthly fee for some smaller businesses.

Robert Brill: [00:01:42] Got it. And so, what’s been the primary, so when an eCommerce company comes to you, you offered them the slew of services that lets them sell more stuff.

Taylor Holiday: [00:01:53] That’s the simple way to describe it. Yeah. That’s the goal.

Robert Brill: [00:01:57] And is your primary platform. You said about 60% of that is paid media.

Taylor Holiday: [00:02:02] Yup. Facebook, Instagram, Google are the largest portions of that. It’s about 80/20 Facebook to Google.

Robert Brill: [00:02:12] Fascinating.

Taylor Holiday: [00:02:13] Then we also, so we also have a portion of our business, so we have sort of a little ecosystem here. We also have a part of our business, that where we own our own brands. So we have three of our own brands as well.

In a set in an NTP called 4 by 400 so alongside the service business, we have a separate business that where we own and operate our own brands that has gone through its own exciting growth alongside us. So we get sort of shared knowledge and information transfer across what we’re learning on the brand side that we can provide on the service side and vice versa.

Robert Brill: [00:02:44] And so w and why, why do you think Facebook is the primary driver for your business? For the media portion.

Taylor Holiday: [00:02:52] It’s the greatest ad product ever invented in human history by like a thousand X is the primary answer. And it for most businesses in the consumer product space, it’s the, at least if not the core engine, a key component of their growth strategy.

And so when we started this business. A lot of it was trying to convince people to use the app product and explaining what it was and why I benefit them now and now that is a foregone conclusion. It is now at as much more conversation of why we are the right partner to help them do that. So we followed the market in that sense, in that we were at the beginning of what was a very obvious transition from sort of traditional media into digital, with most of those dollars being allocated in the area where we were experts. And so that just happened to be, a combination of macro market factors that we were on the right side of, as well as we have been building brands for 15 years.

And so selling consumer products to people is something the just deeply understood from doing it ourselves. And I think that gives us a very unique vantage point on how to be successful at this process.

Robert Brill: [00:04:00] Super cool. And so, how did you get it? Tell me about, 4 by 400. How did you get into that business and tell me?

Taylor Holiday: [00:04:07] Yeah. So, so when we started, our sort of backstory of me and my partners is we were first, we were all professional athletes. I played professional baseball in the Yankees organization. My partner Jordan played in the NFL for eight years. And then my other partner, Cory played for the Tigers.

And so when we got done with that life, or other partners, so there’s four, four main partners now. Was starting a company called power balance. You may remember those silicone wristbands that every, all the people were wearing for a minute. So we started that business when we were 25 years old and it went from zero to 60 million in 22 months.

It was the craziest ride. It was our business school. We fell in love with entrepreneurship. We fell in love with. It meant in us all the same things that being an athlete did, a common team pursuing common goal. We were all young and single had had nothing to do but live in the office. We were working with people we loved and it was just experience.

I wouldn’t have traded for the world. Now along the way, we made every mistake in the book. But we just got a playground, a sandbox to plan and learn that you just can’t replicate. And so for me, my job when the company started and we started to grow was like, well, you’re the young person, so why don’t you figure out how to handle social media, e-commerce and you know, some famous people, so why don’t you do influencer marketing too? So for me, that was Googling. What is Magento? How do you set up a Facebook page? Like I knew nothing.

But because, I was like in the right place at the right time. I very quickly knew more than everybody else in the room, which afforded me the opportunity to do the job.

And because I’m competitive and in a way a little political, I very quickly was able to pick up the skills and very quickly I was managing about a $5 million e-commerce business, half a million people on social back when organic social was a thing. And brokering deals with Kobe Bryant and China, just stuff that we had no business doing at our age.

But we just like, we just got to learn and figure it out. And it was such a gift to us. But along the way, what I saw was that when we’re at our peak, we had about a hundred employees. And my team, the digital teams with e-comm and social was three people. But yet I realized that if anybody wanted to know anything about our customer, about what people were buying, that I controlled access to all of the information, and the margin on that business was much greater than our wholesale and international distribution.

And so I was like, Oh, this is the way the world’s going to go. So just got to spend a lot of time with that skill. And so when we finished that business, we all sort of went separate ways in life for a little bit. Got married, had kids, but always dreamed of getting back to building brands. And so when we got back together, the vision that we have was for an ecosystem.

Where we would have an agency. We also own a three PL company called buffer logistics. And then a product department where everything that we would need to sort of launch brands at a sort of more scalable, less manual fashion than we did it the first time could exist in one place. And so that’s sort of what we spent the last five years building is a system that allows us to do that.

And the end result was always going to be our own brands. And so last year, we raised $1 million and spelt spun out 4 by 400 into a separate agency from the business. Acquired, acquired three businesses along the way. Our goal is to do two a year, and now, you know, that company, I think the first year we did about a million and a half bucks.

This year we’ll do about 6 million bucks and then next year it’ll be bigger than the agency. So it’s been so fun and gives us like, it just makes us empathetic to entrepreneurs in a way that if you’re just working on the marketing side, you can’t understand. Especially in e-comm, right? Like so much of e-comm success is about cashflow management and demand planning and manufacturing and dealing with supply chain in a way that like is deeply and intimately connected to your advertising success.

And so it just gives us a vantage point on that, that we think is super helpful.

Robert Brill: [00:08:02] So, so I’m looking at your products, Slick Product USA or slick product, UFC goods, can you go into some detail about Slick Products or FC Goods. So the wallets. Wow nice wallets. What are the driving factors of these growth stories that, is it like just having great knowledge of how digital platforms work? Is it having a great product?

Taylor Holiday: [00:08:28] Great question. One of the things that we learned was that in running, you know paid media for some of the fastest growing income brands in the world is that we were able to identify some common attributes amongst the products that were really successful using those channels.

And so we have some very definitive philosophical beliefs about the kinds of products that we want to work with. And at glance, they appear to be sort of disjointed, right? Like in that they’re not connected at all, but there’s a few things that they all share in common. So our three brands are, like you said, slick products, which is a off-road wash kit, FC goods, which are repurposed baseball gloves into leather accessories.

And then a women’s skincare line called Bamboo Earth. So all very odd and disparate, but a couple of other commonalities is, they all exist at larger than 70 points of gross margin. That’s critical to our success. One of the things that we believe is critical to success, so they have high margin, they either exist in one or two categories, high AOV, so like the wallets are a $300 AOV or high repeat purchase rate.

So you’re either playing a game where you’re trying to win on AOV or you’re trying to win on LTV and you have to be really clear, which it is. The other thing that is absolutely essential is that we believe that you can be the best tactical marketer in the world, but if you don’t have a great product and story, it won’t matter.

So all three of these brands have authentic founder stories that we could not manufacture. So. In the case of Slick Products it was started by a dude who grew up in Hawaii riding with his dad, riding dirt bikes on really red clay that they have in Hawaii. And they used to wash their bikes with simple green, but it would be bad for the lubricant of the motors.

And so they came up with a better alternative wash together and use it on their bikes growing up. And that was the root foundation of how they created the product.

FC goods was started by this dude named John Bron, who’s a designer for the Atance MOV line, and it’s just a massive baseball fan and a craftsman.

And he would buy, baseball gloves off of eBay, and in his spare time would handcraft these wallets, release them in limited edition batches of like 30 at a time, sell them out, and then leave the store there until he got around to doing it again. And I was gifted one, for my 30th birthday by a friend.

And fell in love with the brand and got to meet John who’s just this true maker. And we were able to sort of come alongside him and help him scale the business into an actual sort of built supply chain and growth business beyond his own individual craftsmanship. But it was so built out of his love for the sport and his true sense of crafts.

And then Bamboo Earth, our most recent acquisition. Amber Hawthorne, who is the founder, is just. She’s the most genuine, deeply, careful creator of a product that she believes is the best skin care, cleanest skincare that you can buy. And she has really alternative views on what women’s beauty really is, and represents a voice that we just think is so unique that we’re eager to build an amplifier.

And so, there’s both tactical constraints that we think about in terms of the businesses that works and also as marketers. Things that we think really matter is the story. And so we look at it through those lens.

Robert Brill: [00:11:43] So it sounds like you’re betting on the jockey.

Taylor Holiday: [00:11:46] Yeah. Well, so we’re betting on the story of the jockey, the jockey, I think.

Robert Brill: [00:11:52] I think you’re the jockey and you’re betting on the story of the jockey.

Taylor Holiday: [00:11:56] Yeah, exactly. And we think that what we can do is we can sort of become the horse, if you will. Maybe it’s a better way of putting it. Follow your metaphor is to say like, what we’re really great at as tactical marketing, we understand supply chain. We have lots of relationships. We have financing, we have all the things that we need to do.

To make the business really successful. And a lot of times, like what’s magical about the world that we live in now with Shopify and Facebook is that the barrier to creating and launching a business has never been low. And so what you get are these incredible product people or people with awesome ideas that are able to birth into the world.

These really cool things. And there are just millions of them out there. But what’s still true, as true as it’s ever been, is that building a business is really, really hard and requires, a deep sense of knowledge and lots of areas. And so what we feel like we have an opportunity to do is to come alongside a lot of these founders that have come up with an incredible idea or product and just be a business and operational support, to their vision in a way that is a really useful.

Robert Brill: [00:13:00] What, is unique about marketing and advertising, e-commerce products that might be different than.

Selling tickets or generating leads or etc. Like what, what do you think are the, I understand the platforms that phase are important, but what are the driving forces behind that, that engine?

Taylor Holiday: [00:13:20] Yeah, that’s is a really good question. We have this class that we teach, which is about advertising philosophy.

That sort of goes into trying to understand the psychology of what motivates people. And one of the things that we sort of would say is that, I don’t know that there’s a difference. Is that human desire has been the same since beginning of time in terms of what we as people want, whether that’s the belonging, whether that’s acceptance, whether that’s, you know, just to be, have our basic needs met.

Like there’s all these core motivators, the humans that any product or service attempts to sort of tap into. And so one of the things that we’ll say is that the platforms change, the people don’t. And so whether you’re selling, you know, a hair salon and haircuts at a hair salon where you’re selling a shampoo.

I don’t know that the base motivation of the thing that you’re trying to tap into as an advertiser really is different. Now tactically, the conversion objective versus lead gen versus like how the funnel works. There are definitely differences in the tactics.

Robert Brill: [00:14:21] Sure.

Taylor Holiday: [00:14:22] But I think in terms of what motivates people, I think there actually isn’t much difference.

Robert Brill: [00:14:28] My understanding is the, you certainly have to have the level of knowledge and and tactical or practitioner technical capability to do the thing you’re selling obviously. This idea, something that I, that is sort of like a theme that has been ruminating in the back of my head for years now, is the idea that driving success for a business is about driving, is about finding the right businesses to market or the right products to adopt or buy. In your case, it sounds like there’s a lot of like, you’re not going to work with just anyone. You’re going to work with a company who has a prerequisite of characteristics that you think will drive will, will be part of the largest opportunity for success. Is that?

Taylor Holiday: [00:15:18] So, so one of the metaphor I like to use is, why was Floyd Mayweather, the greatest fighter ever that retired undefeated? Well, he was really talented. He knew how to box, of course, but one of his gifts was picking fights.

Robert Brill: [00:15:29] Right

Taylor Holiday: [00:15:30] He knew who to fight and when to fight them. Right? And so in a lot of ways. And the reason I know this is true is that I can assign the same on our agency side, we work in what we call growth teams, right? So growth. We just call them growth teams. So every client is assigned to a team of five people.

That includes a strategist of designer, two media buyers, and a senior media buyer. So you get like this group of this pod that is working on your client and on that team applying the same level of tactics and expertise, we can have wildly different outcomes, right? And you can say like, well, what’s the difference?

And the reality is the difference is always the brand and the product, right? And so like, we can take each brand and we can make it better than itself was six months ago. But in terms of comparatively across the brands, our tactics matter very little in terms of the outcomes. It really has a lot to do with the quality of the brand and the product, which are much deeper things than just the tactics in the attic.

And so I just see this over and over and over again where I can have the same person doing the same thing, applying the same logic and the outcome will be different. And it just comes down to a much deeper set of things than strictly the marketing techniques.

Robert Brill: [00:16:49] Yep. The equivalent that we say is marketing is not a silver bullet. It’s an opportunity and a set of possibilities, no guarantee.

We have a few more minutes left. Tell me about, raising capital. I’ve never raised capital. Everything I’ve done is bootstrapped. I’m not sure. Is your agency bootstrapped? And your businesses are capitalized.

Taylor Holiday: [00:17:19] Great question. So yeah, the agency is bootstrapped. We’d never raise cash.

I think that as a service, business is a much easier business to manage from a cashflow standpoint. It’s just as long as the money you bring in exceeds the overhead of the people, like it’s really straightforward to manage. It’s one of the simplest financial models in the world. And I love it for that reason.

And in eCommerce businesses, a much more complex business model because of inventory and you have to pre-purchase and predict in a way that’s much more sophisticated. So the agency has been fairly easy to capitalize and grow and cause it’s easy to scale your costs up and down, as needed. But on the other side of the fence, raising money made a lot more sense for us because of a lot of us to make investments in initial growth, that proceeded revenue in a way that was important.

And for us, the way we went about it is very different than maybe how most people go about it. And part of it is this self awareness of what we’re good at. So what we did is we know that we are good in person. We are good at events and we’re good at telling stories. And we didn’t have a ton of time.

And so most people have a bunch of one-on-one meetings. So what we did is we had a giant event at our office with all of the people that we wanted to invest in our company. And this included friends and family investors that we had relationships with, high net worth individuals. And we put a hundred of them in a room and we gave a really compelling presentation about what we’re doing.

And we said, if you’re interested in being a part of this, we’d love to talk to you. And so out of that meeting, we funded about 80% of the round. And then it was fairly easy to close the rest after that. And so it’s not a very normal fundraising process. A lot of it’s just blocking and tackling, taking meetings and meetings and meetings and meetings, but that’s just not really who we are or what we’re as good at.

And so we just, we tried to be consistent with what we thought we could be successful with.

Robert Brill: [00:19:14] Very cool. So Taylor, as we wrap up, I’m a big foodie, I believe your in Orange County or Orange, Orange County?

Taylor Holiday: [00:19:25] Yeah, we, yeah. So in Orange County, we live in Costa Mesa.

Robert Brill: [00:19:29] What’s, the first thing that comes to mind if I asked you about your favorite food or some really great food to eat?

Taylor Holiday: [00:19:35] No problem. Eastfro in west side Costa Mesa. It’s my wife and I’s favorite date night. It’s a Vietnamese little Vietnamese patio bar restaurant. And we go there. They have a bunch of awesome local beers are available that they swap out seasonally. I get the vermicelli noodle salad with, some chicken, and it’s like, it’s lightweight, it’s healthy.

It’s got a great little vibe. Not a place that a lot of people know of, but any chance we get, that’s where we’re going.

Robert Brill: [00:20:07] Dope. I love that. So Taylor, how can people, how can people find you?

Taylor Holiday: [00:20:12] Yeah. So Common Thread Collective is commonthreadco.com to check us out on the agency side. 4 by 400 is our brand side for my fourXfourhundred.com.

And then other place I engage the most is on Twitter at @Taylorholiday. The D to C community in particular on Twitter is awesome. So if that’s a place you’re looking to hang out with, would love to connect.

Robert Brill: [00:20:32] Very cool. Thank you, Taylor. Appreciate your time.

Taylor Holiday: [00:20:35] Yeah, man. Absolutely.

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Credits

Audio Production – Echegoyen Productions

Creation and Marketing – BrillMedia.co, a hyperlocal advertising company.