How To Build A Lean Ecom Team With Offshore Talent + AI (With Gregg Carey) transcript

You are probably a pretty bad manager of people in your business. I know that because I know you did not get into e-commerce to manage people or because you have some great management background and that's your core skill. You got into e-commerce because you love products and you love e-commerce and you love marketing and growth and maybe you even have some financial sophistication. That's my take on the industry and has been for a little while and that is a really big problem in the age of AI and the age of offshoring as an opportunity in your business.

That insight was actually first given to me or really sort of solidified for me by my friend on this podcast Greg Carey. Greg is going to be on the show in a minute. Greg runs More Staffing, a staffing agency that you've heard me talk about countless times on this podcast now that connects you with incredible talent in the Philippines. But what Greg is doing at More Staffing is really fascinating because he's running an e-commerce business himself for a while.

He has seen the challenges of integrating incredible offshore talent, no matter how good the talent is, and only seen those challenges get more difficult as you also try to integrate AI into your process. But it's a really important thing because if you're going to take advantage of the margin opportunity in e-commerce right now, which I just recorded an episode about and released a couple days before this one is launching, you need to be able to leverage resources towards >> [music] >> the outcomes that you are trying to produce in your business while maintaining lean OPEX, while maintaining high profit, while maintaining an efficient and functional team.

It's the kind of stuff and more that we're going to talk about on this episode with Greg. Greg is on the show today. This is technically a sponsored episode, but I hope you know that as with anything like this, Greg is a is a trusted friend and colleague in the space who I'm glad to have on the show either way. You're going to like this talking about how you get the most out of offshoring. What do you do about things like cultural disconnects, about workflows, about processes, and how do you integrate AI into all of those things in a way that makes sense so you can actually take advantage of the opportunity?

Let's get into it with Greg Carey, the CEO of More Staffing, right now. >> [music] >> Good job, man. That's just That's just smooth. >> [laughter] >> Did you have a monitor? Are you Are you like reading the monitor? Are you like Ryan Seacrest with like a monitor just coming in. No, no. I was Now I one-shotted that. >> just going to say, man. You're like the the Jeff Probst of e-commerce podcast. >> [laughter] >> Oh, I don't even know I should say.

I Is that guy just a machine guy? So, if you guys maybe not know don't know this. Some some somebody out there immediately is seeing you and knows exactly who you are, Greg. But uh Greg Greg Carey here, I I always talk about how you know, you run more staffing and uh you've run an e-commerce brand for a long time in the apparel license apparel kind of world. Uh but of course, maybe the most important relevant fact of your whole life, >> [laughter] >> the key thing about you, no, is that you were on Survivor.

So, you know about Survivor. Yeah. And you made it really far. 20 years ago. 20 years ago now I was a I was a kid. Oh, man. It was uh But Jeff Probst, you know, Jeff Probst He's a machine, right? He's got to be a machine. machine. He does not He's just perfection the ad-lib and and everything. And so, uh he takes it seriously. He I know I hear that intro, I'm just like, "Geez, Oh, I'm sure. And then you just turn the energy on.

You turn the energy on like the camera's rolling. >> [laughter] >> The energy's on. Behind the scenes he's yeah, he's yeah, we're having a normal chat, but those cameras start rolling, elect- electrified. [laughter] I have recorded like hundreds of these podcasts, so hopefully I'm better at it than I used to be. Um there I do still have some ticks that bug me. I talk way too fast still. I cannot solve that. I still have lots of filler words.

Uh um that kind of stuff. I People who can solve all of those things and can really get it down. I I mean, it it just must take endless endless endless reps. Like just hours and hours and hours cuz I've had a lot of reps at this point. And I also have a like before this, I've like stood on a lot of stages and talked. And I I still can't solve some of those things. Like it just feels really difficult. >> I mean, some of the stuff you you can't solve who you are really.

Like the it's more about like leaning into who you are. I know for me when I was like on Survivor, speaking of fast talker, I was in the jungle recording these, you know, confessionals or whatever and the producers were always, you know, gesturing my hand like, "Yeah, come on." Cuz I'm like a slow talker, right? I'm a slow talker and they're like, "Come on. We only have 44 minutes for this episode. You got to make your point." So, oh, put it on so funny.

Put it on 1.5 speed, everyone. For me. I have I know one guy one guy who listens to me on 3x. Wow. That he I recorded a podcast and he sent it and I like sent it to him before it released cuz he asked me for it. It was It was actually a me and It was an episode with me and Taylor. And Taylor also talks really fast. And and and we both get each other going and the energy is going and uh and he's he's like, "Hey, can you send me that episode?" I sent it to him and like 20 minutes later, it was like an hour and a half episode and like, you know, 20 30 minutes later whatever it was, he like emailed me.

He's like, "Oh, it's great. Here's what I thought." I was like, "What?" Like, "What?" The guy listening on 3x. I was like, >> [laughter] >> That is like that guy is insanity. I mean, yeah. That's like, you know, That's tough. You were What were you fourth place? I was sixth place, but I I lasted Sixth place. >> 33 days out of 39. I thought I was going to win. I didn't. I lost 30 30 lb. You lose 30 lb, you look at look at yourself in the mirror after not looking at yourself in the mirror for over a month.

In 33 days. >> 33 days and you look at yourself in the mirror and it's like um you you're like, "That's so familiar. What What is it?" And you're like, "Oh, that's me when I was 14." You know? You're like, strip 30 lb and I'm seeing that body before. You know? 30 year Well, uh Wait, I have a question about that. This is so beside the point, but it's This is This is You said we'd talk life at the end. We're going to move it up a little.

Do you Did you Was there anything about the experience of not seeing yourself in the mirror specifically that you noticed? I'm They may or may not have been, but like that could have been It strikes me as something that could be an interesting and powerful experience or could just be what life was like back then. >> it's You don't like You're not like missing it or any You're not You're not noticing it as like something that's not part of your your life.

You actually get into like a comfort level where we had an opportunity to like take a shower, right? 3 weeks into it. And you take a shower, then all of a sudden you're like conscious about trying to stay clean. But once you wipe yourself of that kind of need to stay clean, right? So, the shower is almost like this mental disruption. It's like, "Ah, now I'm Now I feel like I got to stay clean." But the mirror is not a conscious kind of thing, but then when when you're done and you get voted off and you've not seen your your your face and your body for over a month, you realize how how And and and change happens during that time.

You You Everyone This is, you know, everyone will just spend time in the mirror just like just like staring at your face and just being like, "I'm so thin." And your body it's it's this strange thing where it's such a stark difference from the last time you looked. And it's familiar, and then you have this like epiphany where like, "Oh, it's familiar cuz this is what I used to look like 10 years ago." You know? So, it's >> [laughter] >> Yeah.

It's It's wild, man. And there's so many um There's so many kind of you know, business-related things. You know, if You know, you're always kind of overlapping one learning of the part of your life to another, but there's this especially pronounced experience on the island where there's a spectrum of kind of It's a spectrum of confidence. And on one side is paranoia, and on the other side is, you know, cockiness. And as you navigate your relationships in the island, if you get paranoid, no one's going to want to join you.

Right? No I I'm not That guy is a liability. And so you be you're seen as a liability by others. Right? Whereas if you get cocky, you're you're ignoring your own liability to yourself. But you so And so they're both signals. They're both signals where you you you kind of have to And so you want to just kind of stay in this confidence line, but you get cues from both, you know, both side, you know, both little voices in your ear.

And as I was, you know, as I was approaching like the, you know, the end of my time, not knowing it, I started to have this spidey sense of like, something feels off. But my cockiness was like, no, I'm good. I'm good. But my paranoia was saying, hey, listen, listen to this, listen to this. And you don't want to listen to it too much, you know, for an open up this vulnerability. And I was in a confessional, and I was like, you know, they kept asking me questions, asking me questions.

And And uh I finally leaned in and I go, "You want to know the truth? I can't sleep at night cuz I'm thinking about how I'm going to spend this million dollars." >> [laughter] >> I got I got voted off 4 hours later. Like I assume I assume that line made it onto the show. >> It didn't, but I spent like 4 months thinking it would. And then like being like, oh my god, right? It didn't? That's That's crazy. I can't believe that. >> that they had been been developing.

Wow. >> Um But just so it it's so many kind of things, you know, about that. Um It was wild experience. And they're on season 50 now, which is >> What? unreal. Crazy. We'll we'll have to do a um separate Survivor bonus episode just I I just like to ask you about that experience cuz it seems like a fascinating like a truly fascinating life experience. >> It was it it was it was amazing. It was amazing. And then the the final thing I'll say is you have this incredible experience and and one of the most rewarding parts is like yes this experience itself was incredible but for an experience to live beyond that that the that the time box of the experience was kind of extended because it's now it's shown to to the world right and this was before streaming there's 30 million people a week watching it and so all your friends and family get to develop like extreme interest in your experience so then your experience and now becomes this personal journey that you you want to talk about but no one gives a it kind of your ability to what is it 20 years later I found a way to like inject it into this conversation right it's like that's that's that's like an incredible part of the experience is that it just there was a your your your your journey got broadcast and so it makes it relevant for others so anyway it was fun really interesting uh all right so let's talk let's talk about the the thing that I want to talk about first you you're inside when we talked about this recently was that basically in in so many words I'm going to repeat back to you how I think of the way you said it to me that management is actually very difficult and integrating team members is really difficult everybody seemed a little like image where you add lines of communication for every team member you have and it gets like really really crazy really fast basically as soon as you add more team members like there's just a million lines of communication I've really experienced this I I don't think I'm a particularly good leader or manager uh in an organization because there's a detail orientation and a process orientation is extremely hard for me hard for me for like great leadership I think there I'm not trying to be hard on myself I think there's ways in which I do fine as a leader but like but I am not process oriented and I I have definitely experienced a thing where integrating team members and processes is really hard for me.

And you from the position of running a staffing agency, like a lot of your uh financial success is dependent on not just not just placing a hire with a company, but on them having a good enough experience that like you get LTV off that, right? Like it's just like any e-commerce brand, right? It's just like if that goes well, then somebody's much more likely to say, "Ooh, I'm going to do that again." You know? So that's the experience I've had with More Staffing for a long time.

I've come back to More and hired a bunch and I'll probably will for a long time still, right? But um but uh but I'm curious sort of like what you see uh sort of maybe maybe start start wherever you want to answer this question, but what you see as you see uh team members integrated into sort of client teams. And then of course you also built an e-commerce team with a bunch of team members from the Philippines. And so you've experienced this in in a lot of different ways.

So yeah, anyway, I I'm curious just sort of how that all hits you and what do you think? Yeah, I think it's um you know, so we started More Staffing like 5 years ago to to replicate the solution that we did we kind of that was born out of our own e-commerce experience, right? And it's like, "Oh, small budget at the beginning. Oh wow, it's we can find talent. It's you know, cheap labor." But then you realize, "Oh no, this is like incredible company, incredible um talent." So it was just solve a real problem and we were coming in as e-commerce operators, right?

And then, you know, through kind of you know, running a staffing agency, it's like everyone and their brother just started popping up staffing agencies. You know, if you hit one of those sites and you're inundated on Meta with another staffing agency, five you know, five bucks an hour and this and that and and anytime and this is that was with the e-commerce. Anytime like a barrier of entry is reduced, and we could talk about how that relates to like AI, how it relates to like e-commerce, you it it attracts like riffraff.

And I just had a like a like a pit in my stomach being like, "Oh man, do I have a Am I Am I a guy that's running a staffing agency?" And and [laughter] and so I had to I had to like level it up. And I'll get to the end answer about management a bit, but we had to level it up and be like, "Well, well, listen. A staffing agency is, you know, give me a job description, I'll give you a person, good luck, you know? Good luck, you know?

But what we're really about and always have been is providing operational leverage. Right? And you can deliver operational leverage through a suite of of kind of, you know, pillars or or services. And so one is like installing talent, right? And there's things that you do with that talent cuz it's a human being about how you can kind of measure growth and and educate them and coach them and, you know, provide some type of community, you know, for them, right?

But then there's workflows. Right? Workflows like SOPs, but I'm not just talking about like a a task list of what needs to get done. I'm talking about embedding kind of the decision criteria, the the the escalation points, the the KPI triggering events that say, "If this happens, do this, right?" And so you couple those two together and what happens is you bring down the management burden. You know, you bring down the management burden and the impact of what they they can do goes up because if you don't have that management competency already kind of baked in in your to your organization, and a lot of e-commerce companies are great brand or, you know, great product or or or ads people that leverage those two points to kind of grow their business.

And so that not equipped to like build a team and provide all these ops. And so you you put a person in that seat and now what you've actually done is is you've created management burden and overhead. Now you're managing someone cuz you don't really know how to manage and just go figure it out, you know? They're like figure what out, right? And so you have those two things, like the talent and the workflow, that's that's a multiplier.

And where we are today is a there's a we're on the the the you know, the wave of a enormous compounding effect of agents. Right? And it's it's it's with the two of those you know, you need the insight of the workflows. Right? Cuz I've seen, you know, one person with AI and another person with AI, one has wisdom and the other one doesn't, like they're going to go down two different paths. Yep. 100%. And so you leverage, you know, the talent and the workflow to inform the agent and now the the the talent is a 5x talent with the agent.

Right? And then I think there's another component where because of all the efficiencies that you gain in, you know, with just all the you know, AI API access and building dashboards and rules and and and leverage, having it's easier to provide some type of fractional leadership oversight so that you're baking wisdom into the system. And you talk about the collective balance sheet of of the intelligence and the you know, the the majority of all that has been on how do you play the meta game, you know, what's contribution margin, right?

Um that's that's where like that's the heavy that's where the heavy amount is. And I think there's this other line item which is just like, you know, the ops and that's where Yeah. the the that's where you can provide management freedom, time to actually access those bigger level levers that drive the growth, drive the contribution margin. But if you're constantly being pulled down by the gravitational pull of just people in seats, you know, you can never you're just going to be on that treadmill and you're you're like, you know, the important stuff always, you know, doesn't get the attention that it needs.

So, that's that's kind of Yeah. what we've seen to be super long-winded in addressing your answer is No, it's very >> helpful, yeah. But we we we see, you know, we see so many people coming in and and we we know our success is is determined long-term by like delivering like like value, you know, that in the form of someone that's excellent. And so, if we can mitigate all these things and wrap them with the buffers that create bad outcomes.

And we see it. A lot of people just come in and they're like, "I need like I need someone to kind of do this, kind of do that." You know, it's not that they don't even necessarily know. They're just having a time to like They just They feel the pain, but the pain hasn't kind of given them the time to like really nail down what they need, right? So, if we can take the collective balance sheet of all the ops knowledge and build those workflows and playbooks and like emerging AI agents to make sure that everyone's ops is super buttoned up so that they can maximize their time.

Anyway, what's that like, 12 minutes long? That's a classic Yeah, no, it's great. That's a That's a classic hiring problem that people talk about too. The idea like you sort of come in trying to hire somebody to because you feel overloaded, not because you're actually sort of so it's always like a negative reason to hire somebody as opposed to like the positive like, "I have a thing I want to have happen in my business and so I'm going to build team to and I need team to accomplish that outcome and here's the way it's going to create value in the business." And so, people people go hire for the bad reason of like, "I just have too much to do" versus here, you know, here's the thing I'm going to do next.

Because if if it's true that work is an air or what I say work is a liquid solid gas. Work is gas. Goodness gracious. Work is a gas. See, I'm really good with this like we talked about 100 episodes in. Work is a gas that that fills the space that you allow to it, right? That idea. So, it will always kind of feel like you're overburdened. So, then the question is like how do you actually think proactively about what you're trying to accomplish and what's the best way to do that.

And I think I think it's also something that I think something that you know you from the first time we talked basically had sort of drilled into my head and into others and that you've always been really intent on which is like if you were thinking about the opportunity in the Philippines as like 5 below an hour virtual assistant kind of talent and really any offshoring, you know. You know, there's probably some usefulness to that kind of thing.

It's not that there's no place for for finding entry-level work that can happen for people, but it's just missing out on what's really what's what's what the real opportunity is which is actually going and getting really good people, you know, A-player type talent and integrating them and actually using the market advantage you have to go hire at the top of another market just because your dollars go further, you know, at top of the market relative to whatever position you're hiring.

And and then going and attracting better talent because of that because because it just it just works that way. And if if you can think proactively in that direction, that's certainly the way we've we've approached you guys. And so, if that's the way you can approach the whole issue and the whole problem or whatever, then you end up with this much better opportunity to do this. But, then there's this question of sort of like how do you actually then set those people up for success?

Now, by getting better people, you can paper over this to some degree, right? It's like you you have people who are better contributors and just therefore create value just in general. But, but it's sort of not the only part of it. And again, this all gets sort of heightened by now adding like being an agent manager which is I think basically where this is going and where it is, not just where it's going where it is, as as part of the part of the challenge.

So, yeah, I I I know. I just think of you guys as like um, having an interesting relationship to the problem of management and of team building because it's it's not just offshore cuz it's cheaper, you know. >> Oh, yeah. Yeah, I mean that that's how and that always you know, you you get what you also see is like, all right, I got this budget and I want them to do, you know, a little graphic design and I want them to do a little, you know, creative strategy, a little little bookkeeping and I want to pay six $6 an hour, right?

And it's it's like and, you know, it just doesn't you know, it just doesn't work that way, obviously. >> Yeah, obviously. Yeah, yeah. The and the the unlock of Do you So, you you talked about you referenced native workflows. Um, are there ways in which you guys are not only just help bringing the hire but sort of like helping first uh review, analyze the workflows of the companies that you're coming with? So, like let's say I we called you up fresh.

I'd never talked to you before. I didn't know what I was looking for or whatever. Would you come in and sort of look at our operational structure and like try to implement workflows with us and bring people in? Like do you go that to that level of the service at this point or is it is it is it not there yet? Like how are you thinking about that? >> Yeah, it depends on the company, right? I mean, some people have, you know, workflows.

Some people just put people in the job and kind of give a job description and and they're everyone's feeling their way around and then there's inevitably some type of like gap between like what the talent is expecting and what what the boss is expecting. And so, what we'll do now is we we weren't kind of happy with just the you know, just a job description, right? Because we we knew that to mitigate to make someone as productive as possible, there's really an opportunity to just choreograph like that, you know, the first few weeks of onboarding and to really choreograph the workflow.

And and so, and we try to come at that workflow from a first principles like 80/20 type vibe because you can you can get something pretty detailed, right? But like let's focus on the core. What are those things that like get to get the job done to the lion's share of the job? And it's it's usually that process is is like starting it from a clean slate rather than trying to audit what they're currently doing. It's like let's have a conversation and let's like prepare something that that almost resets your thinking, right?

So there's a deliverable in an SOP, and then that SOP will sometimes be attached with a a dashboard for that role. And so we're pulling in KPIs and for like a a merchandising role, for example, um you know, we'll pull in KPIs around conversion rate, around like the positioning of products within a collection page, and the conversion rate of products in the collection page. Um product, you know, product page conversion rate, all stuff that kind of feed a merchandiser's kind of tactics.

And you you don't rather than it just being a dashboard of KPIs and all right, conversion rate should be this, where they'll kind of just use that now and look at it on a daily basis and say, "Okay, when the conversion rate drops below 15% here's the things that you look at to first like hygiene. Like make sure nothing's like broken. Go through like, you know, check them, you know, make sure it's not working make or make sure it's work make sure the the site's not there, right?

You can do that in like 10 minutes. But then there is other things, okay? Like if you you find something and you realize, "Oh, there's the best seller's like halfway down on the page." Right? Let's let's move that up. And so the key with the real unlock that what I've found from AI is that you're able to take kind of a workflow which used to be like in notion and bring an interpretation with an API to a dashboard for that particular role that that drives decision escalations, like event triggers, and that helps to kind of facilitate the role, but then it also allows for you know, the the creation of a a status report at the end of the week, so that the executive can just be like, "Okay, here's what happened.

Here's what happened." Other than, you know, when you don't have that, it's just often very loosey-goosey, and even a dashboard alone, the data alone just doesn't really tell what's behind it. And you don't you don't want to be like Corey directing every test, you know, right? So. Yeah. So, that's one example. >> course not. Yeah, that's the whole point of getting good people. Are you um Are you guys building that dashboard for people? >> Yeah.

Yeah, yeah. It's It's uh >> Really, really cool. Yep. And then it's like a one-off, you know, just using cloud code, building the dashboard, getting the API connections, and and customizing it to their their business. And so, it's um That's what you can do now. So, that when So, that when the person comes in to the business, you're sort of building the dashboard tool set up to hand an executive and say, "I can help you evaluate how this person is doing and help you set them up for success, and not just evaluate them, but set them up for success in it, and evaluate them, and and actually set them up to succeed." Like uh sort of like a custom AI integration alongside >> Yeah. alongside the person. >> Yeah.

And the And it requires an input from the executive, right? Cuz the the all the triggers are based based on KPI thresholds. And those are those are unique to their particular business, past president, right? >> Every business. And so, you're bringing those in and making them go through the process. Like, when is there a warning sign? When do When do you When do you want to know when like a conversion rate drops, or when, you know, when a stock out, you know, anything.

Like um And then And what do you, you know, there's clear recommendations and um mitigations that happen out of this. Um, but kind of mapping that to a dashboard, I think is the un- the unlock. Cuz otherwise, people are basically just making these decision decisions based on vibes and and like general health and it is lies and loosey-goosey. >> Yeah, I mean, you you're trusting that you're hiring someone with competency, right?

So, someone good at their job. And and to be honest, after after a while, you know, that dashboard kind of just becomes a a validation Sure. >> point, right? But you you you're you're just connecting the behavior and someone's, you know, an excellent talent is going to do that. But then, when you have that, I mean, one other leverage point here is that when you have that detailed workflow and KPIs and escalations, you can actually you know, if if if needed, you can actually hire someone who's less experienced.

But they're probably smart and scrappy and now you're giving them explicit play playbook because one thing that I've learned is that the world's changing so fast and someone that has 10 years experience is sometimes a burden to the to the new you know, to the new tools that that are required today. Yeah. It's so interesting because and this is something I think about with hiring and and some of that stuff right now is like it's such a different skill set.

Like the the experience can be a burden, but can also be make somebody so effective because now you just give them such better tools. Yeah, like I was listening to uh I think the AI Daily Brief, which is a podcast that I don't listen to all the time, but uh my my Patrick, my business partner, talks about um listen to a lot and and really helpful on some of this stuff. And the he has an episode about sort of like the skill set and AI now and into the future here and he basically says like uh there's there's these two skills that become extremely valuable.

One of them is sort of like agentic management. Um and then the other one is domain expertise. And of course, the the best the best people will actually combine both. But those are the two things that are really, really extremely valuable is if you can do those two things. And it's so much of this is is comes down to that. What I hear a little bit in in what you're saying is sort of like you have domain expertise in the realm at this point of hiring uh hiring and onboarding in the Philippines.

Like you've done this a lot. You've done this for a while. You've helped businesses with that. You found great people. You've done this. And so you've seen where the breakdown happens enough times. And so now it's like, "Okay, you are trying to use that." And then I'm sure, you know, uh leverage tools to make that process better and smoother and all that stuff to where you can, you know, speed that up for your clients, getting them better talent, etc.

And then at the same time, um then take that same thing, which is like there's domain expertise in the world of e-commerce, which is like how do how do e-commerce teams work, which is another area a bunch of domain Okay, so it's like, "Okay, now you also know how that stuff works in the actual integration of e-commerce business. So how do I, you know, what are the problems that are going to come up? What are the challenges?

You just referenced one of them, which is sort of the loosey-goosey uh set up for success and evaluation. Um Okay, so now how do we like use the tools to to build these things, you know? So I it'll be interesting to see how that continues to play out specifically in the realm of hiring, specifically in the realm of e-commerce. Because now everything is so customizable that these particular these particular domain expertise I'll just hiring offshored in the Philippines for e-commerce that becomes this this this unique space where you have this uh outsized opportunity to to impact sort of how brands are set up for success.

Yeah, I mean, I think the the the domain e-commerce expertise is is really kind of this the connective tissue, right? And and and I always say that and it's hard out there. It's hard, right? And so companies have huge advantages, but if you're just a, you know, just a run-of-the-mill successful not break out story e-commerce company, yeah, you don't just manufacture product. You have to manufacture profit. >> Right. And manufacturing profit is understanding 50 tweaks within your, you know, from your top line to your your bottom line, whether it's in your your COGS or all around your your OPEX.

Obviously, the COGS have have more leverage, but like it it's a commitment to like to to tweaks and and and building process that has such discipline. And so, all of this is in an effort to like drive more profit. And and and it's the little little things that that we can even pass on in those in those workflows, which are our own learnings of like we we were just, you know, I mean, we had to scratch we man, we we we have to just do a lot to just to scrape by a a profit.

We had to Nothing was Nothing was given to us. So, Yeah. Yeah. Um it's part of why I'm so hot on this, why I've liked working with you guys for so long, and why I'm so gladly endorse the concept is that is is that like I just think the margin opportunity, part part of my baseline belief is still that the great advantage of e-commerce, the thing that makes it a valuable business model, is OPEX essentially. Um uh it's it's that you have the ability to scale revenue against a low OPEX.

That's sort of the thing that makes the the margin opportunity interesting. And if you compare this to something like OPEX and probably probably product gross margin is another one potentially. Um you know, if you think about e-com relative to retail, it's like if you even for owned retail, you have like uh you have like storefronts to manage and, you know, uh people to pay in those storefronts. And uh you know, all this stuff.

It becomes a lot harder to turn a profit. Or if you're if If got a third-party retailer, then it's like, well, you've got you you take a big gross margin cut off of that. And so now like, you know, you cut your margin in half. And so it, you know, because they have to get their margin as well. And that becomes a big challenge. So, there are these things. But like the great thing about D2C, theoretically, is that you have you can run a very low average as a percentage of revenue.

You can run very high gross margins at the same time. The challenge is CAC. And the challenge is um and the challenge sometimes is shipping shipping freight to customer. That that's Those are the big things that would make it really hard. Freight to customer eats into your margin a fair amount, especially for some brands. And then CAC ends up being this really big problem as well, just acquiring customers, which the storefront solves in a way that uh is harder on on Meta.

So, if you think about that, then like well, how do you play into and lean into the advantages and make it so that so that an e-commerce business makes sense. The answer to me, among other things, is to press those margin areas harder. It's to say like okay, well, like for OpEx, like if I can already run uh you know, a $10 million business at 15% OpEx. What if I can run it at 10% OpEx? What if I can run it at 7% uh OpEx or something like that?

And and so this is why for a long time the the offshoring opportunities made so much sense to me. It is like wait a minute. I live in California. Like I'm it's going to cost me all the money to hire people here, you know? That's before California's state employment tax, which is like another tax, you know, right? Um and and to say nothing of state income tax, which is also another big problem, right? So, like I I have like the deck deck stacked against me in all of those ways.

Uh but like if I can go hire now uh in the Philippines, where just my dollars go a lot further, it's just sort of obvious to me that if I can find even roughly equivalent talent levels, then then it's such a massive OpEx advantage. I don't know why brands don't automatically go and do that. And then when you add this AI component to where it's like, wait, now actually each person gets a more powerful hammer in their work.

And maybe like a drastically more powerful hammer uh to swing when they work, you know? It's like now you are talking about this really really really big thing to where you actually don't have to affect the other things that much at all and you can still end up with this and now you can like add a whole bunch of bottom line margin to your business by doing this stuff well. The question is like can you actually get yourself set up for success to utilize those two things?

And so like the way you are talking about this got me really excited about this idea because you're going oh, there are there it's not as easy as it sounds to do those things to add AI and offshoring, right? So uh so we will now step in and say we will be the people who connect you to the talent and also get them to be successful because that is actually a monster business opportunity and will continue to be going forward, you know? >> Yeah.

Yeah, I I think the you know, the reason to do it when you're like a cuz the the the operational the the the operational benefits of an e-commerce company scaling is that leverage that you get over time, which makes it more important when you're sub 10 10 million sub 5 million to solve it now. Yeah, that's right. >> Solve it right because solving it solving and right one gives you the availability within your CAC and freight and especially with your CAC to kind of get that engine working, right?

So if you're extremely, you know, uh you know, if you're just kind of resourceful with your your OPEX in the early days, you give more window to compete in the for CAC. That's huge. It's a it's a compounding benefit over time then as you start to unlock different levels of growth, you've just built the habits that will serve you well. They'll they'll just be ingrained, they'll be habits that will serve you well on that growth path and a great exercise, which you said and everyone should do and it it's you know, people talk about, you know, the the inverse of this sometimes like what what what would we have to do to grow 100% this year instead of 50%?

If you're doing 15%, you you net income, like ask that question, What would it take to do 7%? And our We reduced our labor expense over, you know, over an 18-month period by 80% and we didn't skip a beat. We didn't skip a beat. And and I was playing, you know, a game that I thought I had to play that I did not need to play. Part of which is the you know, the intellectual capital and the learnings that get infused. And so, if you're you're putting all those in to your business, you you know, you can unlock the, you know, the playbook.

Assuming that you got a great A great product sits above everything. But, if you have a great product, then it's a playbook. Yes. Yeah, that's absolutely right. Um Did I miss anything on that? What else do you Are there anything else you're seeing that you that you feel like uh is helpful for people to hear about sort of as you're watching this from the perspective of somebody staffing brands? Is there stuff that they're missing there that they're um the the common mistakes, any of those kinds of things that are sort of top of mind for you as you look at this?

I I think um on the on the contribution margin side of things, I think I think um thinking about you know, velocity of product as it relates to contribution margin and pairing pairing purchase orders to a like an investor rate of return. And so, you're actually looking at your your the economics of your business and it's a framework change where the product just becomes a tool, a financial mechanism. And so, every purchase order is how quickly is it going to return money?

That's the only thing to address and there's there's real easy ways to kind of build in, you know, build in just kind of checkpoints of like, okay, calculate Here's my purchase order. Calculate the IRR of this based on historical data. Um stuff like that. I I I am amazed at people's willingness to spend. It's It would be really great to keep building more stuff into dashboards and things like that that accomplishes for brands uh because there's so much money being spent at negative IRRs in in uh or at the very least at sub public market IRRs.

Um uh right? Because cuz like listen, if you are not getting more than 8% per year >> Yeah. uh in return on your investment, you should save yourself a whole bunch of headaches and go put that money into the S&P. Like the the and there's just so much money spent at this at a negative IRR that's like really crazy. Now, it can be hard to calculate when some of these things create longer-term value in a business and I and I understand all that.

But beginning to sort of challenge yourself in in that notion, I think is a really useful exercise for operators. It It's a to begin to just say like can I make how strong and how clear is my case that this is a really positive IRR and and how positive is it? Like what You need to know what it is. >> And and even Yeah. Yeah. Yeah. And and uh and you know, I've we've built this into some into some dashboards. Like I've built sort of a sloppy return on invested capital at times for advertisers that I sort of reference with ad spend where I'm calculating the ad spend and the inventory costs together and thinking about that as like what am I What is my return on the combination of those two things?

Um it's actually hard to get the timing exactly right like because there's a weird timing thing where you pay 30% for your product up front or whatever and then 70% on delivery or maybe you have net 60, you know, all of those things complicate the calculation, but you can at least get a directional sense and begin to compare different efforts in your business by thinking this way. I think it's a really useful thing. I actually have uh never mind.

I don't have that as a freely available tool. I have an internal tool that like allows me to look at that. But I've not I would I would gladly share it. >> By the end of this call, I will have a freely available tool. >> No, I'm not going to. I'm not going to I'm not going to promise that. >> No, no, no. I'm saying I'll just take the prompt of what you described and by the you know >> Yeah, yeah. it it'll build, right? >> Great.

I mean, you should. You should. Yeah, that'd be good lead lead lead indicator for you. >> Another just another like, you know, tidbit of things that I've experienced in CDs where I think there's gaps. Um What What I think there's a whole lot of brands out there that do not know how to read a balance sheet and they do not know what they've They're They're You do not know the um uh the hamster wheel that they're they're on.

Um but there's a a a There's a reality that the the balance sheet will just give you the answer. You may optimistically feel like, "Oh, we're we're out of this." And then the balance sheet may may actually just If you really know how to read that balance sheet, you'd be able to just look at it and be like, "Those things are disconnected. Your optimism or where you want to go That's It can't." And until you experience the the math of that, it's going to It's really hard to see, but it's It then it becomes >> thinking about like loans in particular? >> Yeah, yeah.

A lot of the Like, yeah. Right? I mean, a lot of the I mean, I know we had like a SBA loan from the economic injury that that was a very seductive cheap cheap loan. Um I know all of the All of these MCAs, it's it's just too low-hanging fruit. And then the the math on it just becomes if you're up $500,000 in SBA, you're going to make $800,000, you know, eight $900,000 to to you know, probably a million dollars to actually pay that off.

Right? If you're a You know, so the math just makes it incredibly hard, not to mention the the consistent cash pulling out of the business. So, you you really need to like understand what that balance sheet looks like and the constraints that it provides on the business. And And it's kind of tangentially related to that is I see a lot of companies doing the bookkeeping with an awareness of the the income statement, um but really not knowing how to like reconcile inventory on like a monthly basis to truly understand your COGS.

Like that And that's not a it's not an easy process. And it's it's a it's a blind spot that can have a big swing on what the actual profit is. And until you do that, you don't really know because the especially at those at those sizes of people that are using bookkeeping businesses, you know, they don't have an ERP that can give the granular COGS data, right? And so No. you know, one that their Shopify data is probably like, you know, off by a fair amount and then the the reconcile of like what inventory is actually in stock and what has been sold.

I mean, you can see 10 to 20% swings there which can totally change oh, we're profit oh, we're 10% profit to like oh, we're actually slowly bleeding money, right? I had a brand that that we made all of our targets based off of a margin profile that was about five percentage points wrong in the bad direction. So, it was like our margin was five percentage was five percentage points, not 5%. Five percentage points worse than we thought.

And the difference between that was a year of like squeaking out profit versus like getting towards 10% and growing which is like a reasonable year. I mean, that's it's a huge huge gap. It wasn't the only problem in the business at the time, but it's it was like it was a it's it's a really really big impact on on your business, you know, when there's not it's just cuz that five those five points are straight to the bottom line.

And it's like not having that. Or do you do you guys again, do you have do you guys do anything do you have tools or something that help people with this? With with with the the book that kind of financial level bookkeeping thinking or is that is that I'm curious if there's a particular reason for that or if that's broader e-commerce advice that you've seen? >> book bookkeeping doesn't you know, there's things like bookkeeping and like video editing where like kind of a job it's like reconcile the books, know that, right?

From a bookkeeping perspective. Right? So, that that role but then but then you need to like level up the the bookkeeping and provide some type of like controller type influence to it. And so for the for those particular roles, we've not implemented like an SOP yet for uh for it. We've kind of been building out as like the the the needs kind of develop, but man, I would I I I love to just talk to folks and just share the pain that I've felt personally on like >> Yeah, right.

Right. >> And it it is literally just you know just make sure you reconcile your inventory. Don't forget about that cuz usually Yeah. usually I mean it just doesn't even get done at all in the like length of the business. >> Yeah. Yeah. How are you guys uh I mean I'm listening to all the work you and Patrick are doing um with AI I traded some some some tweets and stuff with Patrick just we're talking about this this overwhelm where it's like it does feel like wow, we're we're building we're spending so much time building, customizing and like in in in a month it's you just going to be able to one shot it.

Yeah. Yeah. And then the the cognitive >> Uh you know, the cognitive work through all that is I I feel two things about this. One of them is there is this element that is Okay, cuz you know, I've talked about Prometheus on our podcast a lot like the idea of like an AI co-writer is the way I first framed it, but it's like it's just like it is so drastically undersells what it is now. I mean, that's what it was when it started, but like now it is like it is a an interactive tool with a custom-built vibe coded like we call it AJFOS and now Prometheus is just like one little tool within that.

Um and so it's it is like it is the promise to me what a lot of this stuff is, which is like the ability to basically democratize coding cuz Patrick's built AJFOS one I think 100% in Lovable I think is what he's used to build build it and he knows zero he's he's looked at zero lines of code. He knows no code at all. He has just built this custom way. And the thing that's so valuable about it is that we are an agency that does things a particular way.

So, everything was in Notion before. And And when you're working in Notion, you're taking a publicly available uh tool, and then you're customizing it for for your workflows. But, it always has these things that were not quite built for you. But, for us, we're like, well, now we can build the software to accomplish our exact specific work. And that is like the promise of this stuff. And some of the democratization of software is like, we do a really specific thing.

We We do have the main expertise. And it's very hard for me to imagine ever one-shotting the entirety of it because because the cuz the work changes and the work is so specific that it's like, you could tell it, "Build me a custom dashboard that did it, you know." And it would be like, "Okay, but what about this?" And you would get a lot of things wrong. There's almost no way to describe every possible detail of the thing until you're working in it and see It's an iterative process like all software where it's like people have to work on it and they would report bugs and feature requests, and that then becomes ways to make it your own.

And so So, in that respect, it's so awesome. And it's so encouraging and and exciting. But, I do feel the thing you're saying at the same time, which is like it's also one of the reasons why I I Some of what you're saying is why I have been a not very concerned about being first on a lot of this stuff because uh um the tools are getting so much better so fast that I'm like, I don't I'm not bothered by the idea that I'm not going to be the earliest earliest adopter of X tool because that tool's going to be so much better in 6 months that right now it doesn't do enough for me and it requires a lot of time and there's still bugs and it's not quite what I you know, whatever.

Whereas like in 6 months it will just like be perfect. And it's like that's like uh that's kind of the way that I have sort of approached this whole thing. So, I I think right now the way we're going about it is the way that I think is best. And it's really Patrick doing it. Like which is like the place that we are that we are great outside value is by having our own kind of custom operating system for our work that makes it so that we just continue to find ways to smooth out all of the annoying parts of our work and then do the things that we do really really well and create value for clients.

And when I look at our actual client performance is the other thing is like our on on the whole our clients are doing awesome right now. They're doing really really well. And I'm very confident in the work that we're delivering them. And therefore, I don't feel a big need to go change our processes and do a lot of other stuff. It's like just keep going. They're growing at the pace that's good. They're producing the value that that's going.

Instead, build tools intentionally that allow us to keep doing that work at a high level and then over time we'll just kind of keep adding to it, keep adding to it without this big rush to like be first or something like that. So, I don't know if that answers your question, but that's what I'm thinking about it. >> no, I think you're I mean it's like you can't you can't uh the productivity gains in being first to productivity gains is not the the race you want to be in.

You know, so, focus on solving like delivering value, solving the the business problem for your clients. Product and and the thing with AI too, like productivity gains does not distribute, you know? You don't you gain a lot of optimizations, but like you still got to build an audience, bring customers in. Like that's the human component that >> Yeah. that you can't and stuff you can't you can't skip, you know? >> Yeah.

Um Yeah. I think it's when I've watched great agencies >> use this kind of stuff. When I look at CTC, like they did this with a lot of code and a lot of money and time, you know, in terms of building custom software. But, one of the things that's been core to their success I know has been Statlas, their development of a software tool internally to help unify their work across a lot of different people by having a centralized way that work gets done.

And we're we're building what we're building is different than Statlas in some ways, at least right now. You know, I mean I've I've seen Statlas. Statlas is more analytical, more database than what we've built so far. What we've built more is like workflow based uh I would say. But it will get there. We'll add a bunch of analytical and kind of data stuff into the workflows, of course. But [clears throat] but yeah, that's the thing that I think for me is like I watched that happen and I think there is a thing for service businesses in particular that there's this ability to do that stuff that is just so so valuable and it will be a way that service businesses can create a lot more leverage and value for their clients.

I think that's probably for your business for More Staffing as much as it's going to be for you know, it'll look really different for the two of us but like I think that's that's the right sort of approach. >> Yeah. It's wild though. It's wild out there. That's for sure. All right, man. Greg, you know I'm a I'm a huge fan of More. I have I you guys are my longest running advertiser for a long time. I just I'm a huge fan of my Filipino team members.

I have no plans of changing anything that we're doing on anything that I'm touching. I'm very grateful for you in particular. Grateful for the team. I like find myself rooting for the Philippines in the Olympics. >> [laughter] >> Fully like I'm like I'm in. Um so yeah, so it's like it's just been such a gift in my life that I never saw coming and so I appreciate it. I I just want to commend it to other people listening or watching this.

Yeah. And his team care a lot about about about solving it and about getting you guys set up. You can hear Greg is thinking about these things at the level of not just like how do I get you a new hire but like how do we really set e-commerce brands up for success for a success from people somebody who knows how hard the game is. So I appreciate you, man. You had a dramatic impact on on my life in a number of facets and uh and you know, just so happens to you know, be a knowledgeable guy but a but a great human being.

And so that's that's what's awesome. It comes through as your personal brand, you know. It's just a a perspective on happiness, doing the right thing, living a good life and that that's that makes all of this that much sweeter. So we all uh So yeah. Yeah. All right. Next time we'll do the survivor cast, and and >> [laughter] >> Yeah, all right. All right, thank you. Uh go to morestaffing.co, morestaffing.co/af. Uh the link's in the show notes.

Awesome. Uh for that. morestaffing.co/af, and uh Appreciate you, bud. >> Thanks. >> [music] >> Thanks so much for watching or listening. When I do sponsored episodes, I really want to make it good content, and [music] just I just don't pick on sponsors with whom I don't actually want to talk. So, I'm always happy to do that. morestaffing.co/af is the place to go follow up with Greg and his team. Uh like like I said, I have a job search open right now, uh where I'm adding more talent to AJF Growth right now, and uh yeah.

So, just a huge fan of what they're doing. Go check it out right now. Subscribe wherever you're watching or listening, like I said. Leave any comments you have. I would love to do interact with those. I read every comment. I try to respond to every single one of them. Uh if you want to interact with me, it's it's actually the best place to do it, maybe. You can also go to ajfgrowth.com if you want to work with me and my team.

I'm the huge believer in what we're doing right now. I think we're doing doing the best work I've ever done. Go fill out the intake form there. Tell me a little bit about your business. I'd love to hear about it, understand the context of it, even if AJF Growth is not the right fit for [music] you, even if it's not the right help for you. Uh I might know someone who is, so I'm happy to always refer out if that is the case. ajfgrowth.com for everything I'm doing.

Thanks so much. See you next time.