How Creative Strategy Can Improve Contribution Margin With Abir Syed

Abir Syed: What's going on?

Evan Lee: Everyone, this is a beer. A beer, this is everyone. How's it going, man? How are you?

Abir Syed: Good, good. I've been enjoying the uh presentation so far, especially the uh the battle between Taylor and Jess. I wish it was in person so it could have been spicier. But no, it was a lot of fun.

Evan Lee: Good, good. We have to run it back. But I'm I'm super excited for yours. Everybody, if you don't know Abir, you're going to get to know him. He's absolutely incredible. Abir's a fractional CMO to e-com brands and he has a pretty unique background compared to others in our space. So he's a CPA by trade first and foremost. So when we're speaking numbers, he's that guy. But he also has run his own e-com brand and agency to provide unparalleled level of financial insights, especially about scaling in our worlds. So let's welcome him to the party everybody. Let's say hi in the chat.

Abir Syed: Hey.

Evan Lee: Perfect. Okay. So Abir, I'm going to hand it over to you now, sir. Uh I'm going to I'm going to dip out, you're going to step in. And then I'll come back for Q&A, but I'm excited. Let's let's give the people what they want. This is going to be a great one.

Abir Syed: Sounds good.

Evan Lee: Most def.

Abir Syed: Appreciate it. Thank you very much.

Evan Lee: Most definitely.

Abir Syed: All right, cool. So hopefully uh everybody can see the presentation that I've got put together.

So, um let's get right into it. So, this session is entitled, How Creative Strategy Can Improve Contribution Margin. Uh, Paige kind of scooped me a bit and she started talking about contribution profit in the last presentation. So, at least now you have some uh someone with clout talking about how important it is. So, basically I'm going to dive into that a little bit more deeply to be able to give you a bit more context as to how it plays into contribution strategy. Uh, sorry, creative strategy. Cool. So, beginning with, who is this guy?

So, that's me. Uh, just to give you a little bit of background on myself. Evan already did a pretty good introduction, but I have this slide there already. So I'm going to uh take the time to go through it anyway. So, uh my background, I used to be a science person. I used to work in a lab doing lab things. Somehow I became an accountant at a certain point uh and became a CPA. I worked as a manager in a big four audit firm for a while, then I was a VP finance at a startup. Raised quite a bit of sorry, hold on. I keep more people waving at me. Never mind, I'm going to ignore that. Sorry, so then I was a VP finance at a startup, raised quite a bit of money, about $60 million. So a fairly successful one. But then at a certain point during my tenure there, uh we actually ended up acquiring an e-commerce brand and for reasons uh related to maybe a suboptimal HR decisions, let's call it, I ended up running that brand. My department was kind of on autopilot. I took over and really got my hands dirty. I mean, answering all the Zendesk tickets, sending the emails on Klaviyo, running the Facebook ads, uh putting in orders with the manufacturer, really kind of got deep into e-commerce and that's where I fell in love with e-commerce as an industry. Uh at a certain point when I left there, I actually ran a performance marketing agency for a while. So Google Ads, Facebook ads. So I've done quite a bit of media buying and still do a little bit of it on the side. Um right now though, we run an e-commerce accounting firm. We're about 30, 35 people. Uh we are basically provide bookkeeping, CFO services and all that to e-commerce brands. I during my career realized that there was a pretty big gap uh amongst accounting firms in so far as their understanding of how e-commerce brands had unique challenges and how to help them. So basically built a company around that. And I'm also a fractional CFO for e-commerce brands. Cool. Hopefully that's an interesting enough background. So, moving on, why am I here?

It's not to preach to the choir. My goal isn't to come here and tell you all that creative is important. I assume you believe that. That's why you're here. But my intention is to basically reinforce what you already intuitively believe to a certain extent with a little bit deeper level of understanding. I think we all get that creative is important. If we run ads, we kind of see it just kind of on a on a day-to-day basis, but I think reinforcing with a bit of math and finance can help reinforce that belief. And it'll also help you to act on that with a little bit more confidence because you know what the the very important outcomes are of those efforts that you're making on the creative strategy side. So, that's what I'm hoping to achieve today. But first, I have a question.

Is finance our friend? For a lot of you, especially if you happen to work in a marketing department or if you are in a especially in a larger company, you probably run into these issues fairly often where your accounting department, your finance department, they are against the idea of you spending on things that to them will sometimes seem frivolous. I know a lot of larger accounting departments tend to just look at Google Analytics and last click attribution in so far as they make budgeting decisions and that can get frustrating if you don't have a culture where everybody's on the same page. But the truth is we're all in this together. Uh, you know, we're all trying to win for the brand, we're trying to accomplish things. So, there might there often is a gap between the understanding of say the marketing side and so far as how finance works and the finance side and so far as how marketing works, but we are trying to achieve things. So I think that the more you are able to, because I'm mostly talking to marketers here, not finance people, the more you're able to understand the language and the things that matter to the finance side of the business, I think it becomes easier to kind of connect those dots and bridge that gap so that everybody really understands why we're doing what we're doing.

So, what we're going to cover? Three things. Firstly, some valuable finance concepts for DTC brands. We can't cover them completely, but I'm going to skim over a couple of concepts that are I'd say are the more important ones for DTC. Uh I know that there are a lot of different people in the audience. Some of you are creatives, some of you are marketers, some of you are agencies, some of you are brand owners. Uh so there might be a varying amount of familiarity with the things I'm going to cover. I'll try to cover them quickly and simply enough so that everybody is on the same page. Uh and I also put it at the beginning because if I put it at the end, people would probably leave. So the accounting stuff I got you locked in to to get through that with me. After that, we'll talk about how creative affects the brand's financial performance because at the end of the day, that's kind of really what matters. We're trying to make money here. Uh so we want to make sure that what we're doing on the creative side, how is that actually linked to financial performance. And at the end, I have my little special surprise for you where I'm going to give you a tool that allows us to actually plan for the impact of our creative efforts on the financial outcomes for the business.

So, to begin, financial concepts for DTC brands. What are some of these basic concepts I'm talking about?

First one, we'll go through it quickly, is gross profit and gross margin. Now, gross profit is how much you're making from the sale of the goods. It's basically the the revenue from how much you're selling minus the cost of the goods sold. So it's what's left over after you paid for the items and you sold it. Your gross margin is a similar concept, but slightly different. It's just taking your gross profit and dividing it by your net revenue. Two very similar numbers or or or concepts, but they're linked in a certain way. I'll try to explain with an example. Hopefully you can see my cursor over here. So let's say in July of 2023, we had gross sales of 100,000, discounts of 10k. So we have net sales of 90k, which is 100 minus 10. If our cogs or our cost of goods sold is 30k, our gross profit is just the 90 minus the 30, so 60, and that gives us a gross margin of 67% because it's 60 60,000 divided by 90,000. In August, if we were to increase our gross sales, let's say we run a big promo and we decide to increase our gross sales by 20%, but we were able to do that because we discounted fairly heavily. So we got instead of discounting 10k, we tripled our discounts that month. Our net sales are still going to be 90k. The reason this is important to to to pay attention to is most brands will often times just be focusing on their net sales. ROAS, which is everybody's favorite number to look at, is just looking at your net sales and comparing it to your ad spend. What it doesn't take into consideration is your cost of goods sold, which is what is important because that's what determines your gross profit. So you'll see in this case, even though our net sales were the same, our cost of goods sold actually goes up because that's in relation to your gross sales. To be able to sell more for your gross sales to go up, it's because you sold more units and more units means more cost. So even though your net sales stayed the same, your cost of goods sold went up. So your gross profit actually goes down as does your gross margin. So, again, just wanted to touch upon this simply just in case it was not necessarily at the forefront of a lot of people's consciousness. Even if it is something you are aware of technically, I think it's important that people have a top of mind when they are talking about their performance aspect of what their marketing is doing because the changes in your gross margin matter because of how they affect profitability. And those changes are hidden if you're just looking at something like ROAS and kind of making all your decisions based on that. A lot of brands will have a target ROAS for example where they're just thinking about, you know, our target ROAS is a 2.2. But they don't necessarily take into consideration that if they run a campaign where they're doing bundles where different things have different margins or they're giving away free gifts or they decide to offer free shipping or if they decide to do some heavy discounting. Those all affect what your target ROAS is going to be because the costs associated with that offer are higher. So, just want to touch on that quickly. Moving on.

Now, to the magic finance metric. So, there's a number even more important than gross profit. It's contribution margin because Paige talked about it.

But first, to just understand it a little bit better, I'll talk about fixed versus variable costs. It's a slight detour. We'll be get through it quickly, but understanding this concept is how you can understand contribution margin uh with a little bit more depth. So, of all the costs and expenses that you incur in your business, very broadly, we can put them into two buckets. You have fixed costs and variable costs. Fixed ones are those that don't change as your revenue scales up or down. So, if you double your revenue or half your revenue, your fixed costs don't change. The classic example is rent. Typically, if you triple your revenue one month over month, your rent stays the same. It doesn't nothing is going to change there. Variable costs are ones that do scale up and down. Simple example will be transaction fees. If you double your revenue, double transaction fees, half your revenue, half transaction fees.

Now, the truth is most costs are mixed. They're not perfectly fixed or perfectly variable. They lie somewhere kind of on a spectrum where they will change somewhat with sales increasing, but not entirely. So, just to give you a little bit of examples to kind of drive that point home. If you double your revenue, do you double your transaction fees? Typically, yes, you will. Do you double your ad spend? Usually you'll more than double than you more than double your ad spend. Do you double your UGC costs? Uh, probably not. Like you'll probably find some good winners, so you might spend more on UGC, but you're not going to really double it necessarily. Do you double your email marketing expenses? Generally, no. I mean, Klaviyo subscription fee might goes up, might go up, but your cost to send an email to 10 people or 10,000 people is about the same. Do you double your payroll? Usually no. Maybe your customer service reps, but overall no. Do you double your software costs? Some but not all. So, the point really is that it's not always so clear what is exactly fixed or what is exactly variable, but it is still it can require some judgment to know exactly where to bucket things.

Now, why did I spend some time going on this? Because that understanding is very important to be able to calculate your contribution margin. So your contribution margin is the amount leftover from revenue after variable expenses to cover fixed expenses. So, essentially, putting that a little bit differently, if you take your revenue and were to double it, the variable expenses will double along with it. And what's left over when you take your revenue, your variable expenses, that needs to cover your fixed expenses or else you won't be profitable. So, ultimately, it is what funds the business and it's crucial to be able to make decisions around scaling. I'll give you some examples soon and you'll see why it can be so impactful for decision making. And it also determines the minimum um minimum activity needed for the business to survive. So if your contribution margin isn't enough to cover your fixed expenses, then you're incurring losses. So, a lot of times, for example, during the present uh during the early presentations, people talk about like the most important thing is just that we are generating revenue and that is true to an extent. But the the more important thing is really that we're generating contribution margin because that is what allows us to be able to keep the business afloat. So, like I said, knowing which expenses are variable versus fixed can be a little bit tricky, but the usual items to consider, ad spend, shipping expenses, transaction fees, some software if they're like very directly linked to your ad spend levels, uh agency fees, especially if they have a performance component, so if you're going to be paying them more when your sales go up, that's relevant. and possibly influencers, especially if you're compensating them for the amount of ad spend you're putting behind their content. So, those are some basic ones.

So now, a tale of contribution margin madness. How can a misunderstanding of this concept lead you to make the wrong decisions? So I have a little bit of a story that I'm going to tell through numbers because I'm an accountant. And hopefully this will give you an idea of how people who don't understand contribution margin can go down the wrong path with their decision making. So, I'm going to try to keep this really simple, just hopefully you can follow along with me. We have a brand. They have a blended ROAS of four. Their ad spend is about $250,000. That gives them a revenue of mathematically $1 million. They don't do any discounting. So we're just going to keep this simple. Just $1 million of revenue. Uh no discounts, that's the total rev. Their cost of goods sold is about 30%, so 300,000, meaning their gross profit, which is revenue less cogs, is 700,000. For the sake of this example, we'll ignore all the additional costs like shipping fees, transaction fees, all that. The only thing we're going to deduct for contribution margin is going to be the ad spend. So, 700 minus 250 gives me a contribution margin of 450. And if your fixed costs are 300,000, that gives you a 150,000 profit. Cool? So that's my baseline scenario.

Now, let's say, all of a sudden, Senor Zuckerberg makes some changes to the platform of Meta and then all of a sudden the ROAS goes down. So, over here, ROAS has decreased. So our ROAS went from a or blended ROAS went from a four to a three. We have the same ad spend, which means we have a gross profit of 525 instead of 700. 525 minus the 250 gives us a contribution margin of 275. So our contribution margin has decreased quite substantially. Our fixed costs though do not change because they're fixed. Now, all of a sudden this company is experiencing a $25,000 loss.

When faced with a situation like this, unfortunately a lot of brand owners will look at that and say, well, my target ROAS is a four. And so if my ROAS goes down to a three, I must lower my ad spend to get back to a four. So let's say they make that decision. This would be the outcome. They would, for example, lower their ad spend from 250 to 150. They get back to a four ROAS, which sounds good. But now because of that, their gross profit is 420 because they have a lower level of revenue because of the lower ad spend. Their contribution margin is now 420 minus 150, so 270, they've actually decreased their their or increased their loss. They're less profitable because of the fact that they lower their ad spend. They may have a higher ROAS, but because they have a lower ad spend, at the end of the day, it's not that you could have a 50 ROAS. It doesn't matter. The point, the thing that matters more than anything is your contribution margin. And so if you lower your contribution margin even further, you're actually hurting yourself more. And the problem is this can create a death spiral because you'll end up if you are spending less on ads today, chances are you're going to have less of a blended ROAS over time because of the fact that you're acquiring fewer customers, you have less of a halo effect, etc. So this can start getting a little bit worse over time.

So what does the courageous brand owner who knows finance do instead? They'll actually increase their ad spend. Now, you might say, but hold on, if you increase your ad spend, you're going to hurt your ROAS even more and that is true. The question really becomes, how much are you hurting your ROAS? Are you dropping it down to a 1.1 or is there some level at which it can be a reasonable hit to take? The answer is on my slide. So, if for example, the same person decided to increase their ad spend from 250 to 350, the ROAS went down to a 2.65. I selected this number very particularly. So if the ROAS goes down to a 2.65, they're actually now able to generate just enough contribution margin to cover their fixed expenses and become break even or hit break even. Now granted, it's not always that simple. You might drop to a 1.1 if you increase your ad spend by that much. The point is more that I wanted to illustrate a point using simple examples that ultimately the decisions that you make should not be around your blended ROAS, it shouldn't be around your revenue number. It has to be around contribution margin. Granted, you can also try to deduct like improve your fixed costs. You can go make changes there, you can uh, you know, downsize rent or get rid of software you don't need or or fire people if you have to unfortunately. But those are not easy decisions to make and they also take a lot of time to implement. On a week-to-week basis or a month-to-month basis, the things you can affect a little bit more directly are going to be things of contribution margin and upwards. So it's your variable expenses, it's your ad spend, it's the offers, it's the revenue. So hopefully that can give you at least a bit of an idea of why contribution margin is so important and why misunderstanding it can be very problematic.

All right, moving on. Contribution margin calculator. So this is a bit one of the tools that I've put together. I've shared this with a lot of people. I'll be able to share with you guys as well at the end, but I'll just walk you through it just to give you an idea of how what I have explained thus far can be put into practice.

So, this is um it's just screenshots but I have an actual Google sheet for this. I just didn't want to be able to didn't want to have to switch around during the presentation unless it runs into some technical issues. But essentially the way this works is that if you you plug in your variable expenses. So you put in your percentage of cost to get sold, shipping, transaction fees, others, etc. that can allow you to determine how much contribution margin you'll get per order for varying caks and various AOVs. So you can for example determine that at a 40c if I offer as a 65AOV, I'll break even. Also, I'll roughly break even at a 52c with an $85. So this allows you to do a little bit of a scenario analysis to determine kind of what is a profitable order. There is of course a little bit more depth than that because I would rather have a $5 contribution margin per order if that gives me 10,000 orders for $50,000, rather than a $50 contribution margin for order if I can only sell that to 100 people because that's only $5,000. So you take it one step further and then if you look at your additional fixed expenses as well, you can then determine fine. So at what raw as, blended raw as and at what add spend, am I able to a cheap profitability. So again, I don't want to spend too much time on this. It's really just to kind of illustrate how this can be put into practice. Like I said, I'll share this uh afterwards.

So, moving on now to the next section. If you're still with me, thank you for making it through the accounting part. Uh, secret is there is still more accounting, but at least hopefully a little bit more relevant. So, how creative affects a brand's financial performance? Certain decisions about your creative strategy are obviously going to directly affect the financial outcomes of the business. This is what we all care about, so let's see how that can happen.

To illustrate the point, I'm going to start off with a little bit of a simple analogy. Hopefully one that's easy enough to to . creative is basically your sales team. Each ad has a purpose and a job, whether that be talking to people at the top of the funnel or the bottom of the funnel, they're essentially co-ing people along the sales process so that they can get them to convert. So every ad can be thought of as a sales person in this analogy. So let's say you have a sales team and you have three sales people and each one's doing 100 sales per month. That gives you 300 sales per month. Now, you have the option of either hiring better sales people or training them, which means that if they're efficiency improves from a 100 per person per month to 120, that'll give you 360 sales per month. Or you could add more people. You can just hire more folks and so instead of three people, you have five people that could take you from 300 sales to 500 sales. Or you could do both. And if you increase your efficiency and the number of people you have that will take you from 300 sales to 600 sales.

So how does it translate into creative? Well, essentially, not that has a secret. The efforts need to be focused around more and better ads. That's what we need to be able to achieve. to be able to improve the scale of our business overall.

So what makes creative a winner? Well often talk about, you know, better creative and there's been a lot of debate during the day about what makes creative better. I will try to put this into fine arts. These are not the only things to consider, but I find them a helpful way to look at it. So a good creative to hire a row as. Put it a little bit more simply, there's three things that I pay attention to. Does it improve your AOV? So are you able to, for example, sell a bundle instead of selling a just a single product. Are you able to sell a more expensive product? Are you able to sell if you're on a subscription, can you get people to buy a 6-month subscription instead of just a monthly one? So, improving AV. Does it have a better cap? Does it convert for a cheaper cost or require customers to acquire more cheaply. And the third one is very important, can it scale to higher spends at the same performance. I'm sure you've all experienced this where you have an ad, you uh it's performing quite well, let's say 100 bucks a day and you up that to 130 bucks a day and then it starts faltering and not performing quite as well. So, the ads that can scale further are going to be able to have a big impact. So again, another table I love tables. Let's look at the impact uh or what that could look like. Hopefully it's easy to follow along. So, let's say in our baseline scenario over here. We have a $90 AOV. $30 C, Cogs and other cost all together that adds up to $6375 of cost for that $90 AOV. That gives us a contribution margin per order of 90 - 6375 of 2625. Cool. If I'm spending 300k on ads, I have 10,000 orders that gives me a contribution margin of 262.5. Let's say I increase my AOV. from 90 to 99. The impact of that is I can increase my contribution margin by 24%. Let's say, instead of increasing my AOV actually lower my CAC from 30 to 27. That'll also give me a 24% improvement in contribution margin. Let's say I keep the same CAC and the same AOV, but I'm able to do that at a higher very specifically numbered spend. So now, I was able to get $300,000 to spend at a $30c, but couldn't go further than that. But the new ads that I'm creating actually appeals to a broader audience or whatever. So now I can actually scale to a higher level that can also allow me to achieve a 24% increase in my contribution margin.

So the best creative isn't just giving you a good raw ass, but it keeps performing as you continue to scale. And how that does that is maybe something a lot of people debate, but in from my advantage point the way I often think about it is that it'll appear to a larger audience and it will continue to perform as more and more people see it and doesn't cause creative fatigue too quickly. So essentially again, driving home the same point, we want to be able to generate higher contribution margins and we can do that by figure bring out what makes our ads perform better than the old ones.

So, how does winning creative then enable us to scale over a longer time horizon? A concept or a way that I like to put it is this concept of achieving exit velocity with our creative. Let's think of a scenario. A brand is spending $2,000 a month on creative. So whatever that be, whether it's a copyright, creative strategies, from the video design or video editor, graphic design person, whatever it is. At the end of the year spending $2k on creative. That allows them to develop or generate a certain uh quantity and quality of creative for that given investment. And that investment only allows them to basically cap out about 100k of revenue. So every month they put out some more creative, it runs for a little while, it starts to die, then they put out more creative the next month. That $2,000 a month is basically the minimum necessary for them to not decline because if they turn off their creative pipeline, they just decide to stop spending entirely on creative. They used to be at 100k, but chances are hard as creative fatigue sets in, some creative start dying, they're going to start increase in revenue. So that 2K is just the minimum they need to stay where they are. Which also means that if they were to increase their investment and creative, that's what's going to allow them to start improving to be able to achieve exit velocity from that plateau because you're going to be able to test a higher volume of creatives which means you might be able to test more and find winners more frequently which then allows you to stack more creatives running that are very strong at the same time. Plus each individual creative has a higher chance of being a banger. So this can allow you to improve over time. to achieve higher levels of scale.

So, more, now moving on to the last section. How to measure creative strategy impact. So, hopefully this is the the section that will give you a lot more excitement because it's something you can take with you. So, how do we follow the numbers that ultimately matter to the business rather than just what we intuitively believe. We're going to combine all the concepts that I've talked about thus far into this coin, this term that I coin called creative contribution margin.

The concept is basically how much additional value am I unlocking from a contribution margin perspective for the investment in creative that I'm making. So, if I'm going to spend more in creative, how much more value I'm getting because there's no point in spending more on creative if you're not actually getting a value for it. We're all here to make positive financial decisions and outcomes. So, just to think about it really quickly, what are some of the costs to augment the creative machine? It could be working with a creative strategist. Maybe you were doing everything yourself before. Now you hire someone fancy pants who's really good at what they do and they're very good at creating strategy. So you work on the on a daily basis or hire someone full time. You hire more graphic designers or video editors or people who are more skilled at that. You hire script writers. Again, before maybe you just letting uh, you know, the creators that you work with, write their own scripts, now you're writing it for them. Perhaps you start using more uh cloudful content creators. You might have been using Rando's and now you can afford to work with people who are uh actually have their own following that are well known. It could be because you start investing in software like our sponsor motion. So, all of these are basically investments that you can make into your creative machine, but again like said they all ultimately need to unlock value to be worth any of this effort. And the reason is that certain levels of spend can't even really be achieved if you're not actually generating enough creative iteration and improvement because realistically if you have like three or four ads and you're not really spending on creative, there's very little chance that you're going to be able to spend $500,000 a month on Facebook. Like you just can't really hit that level. So to be able to achieve that exit velocity and be able to hit higher levels of scale than investment and creative needs to be We've all kind of discussed that all day.

So how do we actually measure it? Using my creative contribution margin calculator, which I will also share, but let me just walk you through how it will look so that you can again perform some of the scenario analysis. So how can we determine the impact of our investments in creative, more tables. Let's look at a baseline situation. We have an AOV of $90, a cack of $30 and a cack scaling increment of 125. This is something I'm kind of making up as a concept. Uh you can think of this scaling limitation in any other way you can talk about it from a raw as perspective, from a cpective, whatever. The idea is basically this. Just because an add happens to perform say a $30 cac at say $10,000 a month. We all know that if we were to double that to $20,000 a month, it's not going to stay at $20 cac. Its performance is going to decrease over as it scales. So this number is essentially measuring how much your cac will go up as you scale up. And that number Now that I'm saying it's easy to calculate, that is more for illustrator purposes, will vary from one add to the next. Some have a lot of scale potential, some have less scale potential. And to a certain extent it's all a function of which pocket or audience of of users it actually appeals to. So, each add is going to have a different cack scaling increment. And again, we can think of this in different ways, but this is what I'm going to use for the sake of this example. So, for what I'm going to be showing you, basically, for each increment and add spend, which in this case is going to be every $50,000. The cack is going to go up by $1.25. So from 30k, sorry, from $30 to 31,25 for example.

So, if this is our baseline situation, what will that look like in terms of ad spend. So, on this chart, you have your ad spend over here and you have your contribution margin generated on the Y-axis. So, at zero dollars, you have zero contribution margin. But as you're increasing your ad spend, it's going to start increasing or bringing in more and more contribution margin because the ad is still in the hot pocket like in a in a zone where it can perform well. It's going to peak and then over time, your contribution margin is going to start to go down because the cack is going to go up. But that still can be quite probable. Still a lot of money coming in and at a certain point you're going to basically wipe out all the benefits. So, given this baseline example, we're going to say that you can achieve your maximum contribution margin at around 450k of ad spend. But if our fixed expenses, just as an example, are around 100,000, I know I need to be spending somewhere in this range over here. You could choose to maximize profit, so still be at the 450k. So, all this little extra gap here is just going to be profit. Or you could try to be aggressive about scaling and you know that I'm going to spend to the absolute top end of the range. So I'm still going to be above break even, but I'm going to be acquiring as many customers as possible. That's just a business decision.

So, let's say now we decide to invest in creative. In the baseline scenario, we didn't invest in anything. Here, I'm just going to add in a couple of examples of things, but this can obviously look very differently. So we're going to pay 8,000 bucks a month to a creative strategist. We're going to incur some other creative cost of 600 bucks a month and a percentage of our ads spend is going to go to creative as well. So for every 100k we spend on ads, 5% of that we're going to spend to or spend on, you know, creators or script writers or whatever.

So, let's say we actually decide to make these investments on the creative side, but we don't improve our creative metrics, our financial metrics in any way. The issue here is that if we don't have an improvement in performance, it's just a loss. So to look at it on a chart, essentially, the blue was our baseline. If you look over here to the red, you're going to see that at zero you're obviously losing money because you are earning $8600 a cost over here. And also you're going to your you're going to peak at a lower level and you're going to be able to scale less further because you have additional costs that are earning but it's not driving any new value. So fairly simple concept I mean I'm sure most of you can kind of intuitively guess that that's how it would look.

So moving now to a minimum viable performance. This will get tell us what is the minimum amount of improvement we need to be able to experience such that where actually compensating for the additional cost. So if I'm going to spend an extra 8600 bucks and 5% of my ad spend on on creative. As an example, this can obviously manifest in different ways, but let's just say if I were to improve my AOV from $90 to $95,

that would give me just enough of an improvement to be able to kind of break even. So I need at least that much of an improvement for me to be able to recover the cost of investing in creative.

But let's say that instead of just getting a $5 improvement in AOV, I actually got a $100 improvement in AOV. So went from 90 to 100. What would that look like? Well, in this case, I'll actually be able to hit a higher peak, so my peak will actually be around $500,000 that spend and give me a much, much greater contribution margin. And also, if my fixed expenses were $100,000, in the baseline scenario, I can only spend 750. But over here, I can spend about I don't know what is that? 875. So you can scale much further because you have a higher AOV.

Similarly, it's not just about the AOV. What if we're just improve our CAC? So our AOV is going to be the same. We're going to go from 90 to 90, our cack is going to go from 30 to 25. Same concept. You're going to have this massive improvement over here. Much higher uh peak contribution margin and you can scale much further.

And then the third example, probably you can anticipate it, is what if we just improve the scaling ratio. So, let's say we just happen to make an ad that is now more broadly appealing. As the same cack, the same AOV, but it scales much better. It goes much further. This will give you the greatest possible improvement. You're going to peak higher and you can scale much, much further at much higher levels of ad spend without hitting your your break even point.

So essentially what we're looking at is our creative to scale ratio is one of our biggest lever in so far as being able to allow us to keep scaling. I I'm just repeating myself but ads that appeal to larger groups of people and don't fatigue as hard allows us to have a better creative scale ratio. So that's that $1.25 increment that I kind of threw in there just for the sake of the example. And it doesn't have to necessarily be, obviously, the whole time I'm talking here, talking about this one ad, but like we all know this. You don't have the one ad to rule them all that we're all trying to like dig in the dirt to find that diamond ad. It can be a sweet of ads as well. So, you can have, for example, one ad that might be able to handle a million dollars of ad spend because it's just so fantastic and applies to a whole bunch of people, or you could have five really good ads, each that can handle 200k, each that appeals to a sub-pocket of those people and together can lift the entire account. So, it's not about just one ad I say for the sake of simplicity, but the point is that coming back to what I said earlier, the more testing that you do, the better the creative that you come up with and the higher a volume of creative that you have that individually perform well, that gives you a sweet of high performance ads that can together raise the profitability of the account.

So, I guess we're pretty close to done. I talked a lot faster than I realized it would because I guess I'm a little nervous. Um, so some practical takeaway is that you're able to kind of work with uh everything we've gone through so far. So how much to spend on creative. The number will naturally vary depending on who you're talking to, but a good rule of thumb is going to be somewhere between 5 to 10% of your investment and ad spend. So if you're spending 100k on ad spend, 5 to 10k a month should be going to some creative strategy or creative generation efforts. That number might be a little bit lower or sorry, higher if you are at the lower end of the the spectrum in terms of ad spend because if you're still trying to figure out or find your footing on Facebook, you're spending, I don't know, 3 to 5k a month. You might have to spend much more than five at the 10% just because there's no point in scaling. There's no point in spending that money if you haven't found something that can at least get you a little bit of attraction. So the lower end might be a little bit higher. Uh but what if you're a boss and you're actually spending 10 million a month? Do you spend $500,000 on creative each month? I mean, you could, if you wanted, chances are you could probably peel back a little bit and doesn't mean you're going to be spending, you know, testing 500 pieces of UGC per week in the account. But it could mean that you're just able to invest in much more uh high quality pieces of UGC. Maybe you're able to work with fancy expensive or celebrities instead of content creators. So there's other ways that you can decide to invest that. But the point is that 5-10% is a rough take away and it can depend on the scale that you're at.

Am I done? Yes, I'm done. So, you can find me on the internet. That's where I belong. We help out with the full cycle accounting and CFO services. So, reach out to connect if you want on Twitter or X. I'm ABER_CPA and uh send me a DM and I'll send you all those links I talked about for the calculators. And now I am open to questions. Evan, back to you.

Evan Lee: A beer. First of all, incredible information in there. Second of all, as a member of like the 2X speaking club, I I'm not I'm not mad at all that you finished early. I'm rolling through everything myself in all honesty.

Abir Syed: Fair enough. I have a bad habit of listening to everything on 2X so I talk at 2X.

Evan Lee: Me too, me too. Like when I try to watch myself back and it's 2X, I'm like, oh, I got to slow down. This is too much. This is too much. Um everybody, what did what did you think? I know that was a ton of information all valuable on your ends. Let's show it in the chat. How are we feeling? I saw some good feedback all throughout. Yep, fire emojis, there we go. I love it. I love it. This is why I was excited folks. Like this was this was the sauce. This was the sauce. So, we have a we have a bunch of Q&A that's popping up and and we're sharing your social in the chat there as well. But before we dive into some of the questions, I did want to go back and like touch upon some of the topics that we were talking about.

And I think like to set the stage, we should have done this at the beginning. It's my apologies. Everybody who's here if you've already filled out this poll, no worries, but if you haven't, we're going to put it up on screen now. Just curious to know the roles that you're currently holding. The main reason that we want to get this information, open a second. There we go. So the main reason we want to get this information, perfect is because I given a presentation to kick off the day of the the multiple levels uh of an organization where it's impactful. So it's like the org level, the team level, so media buying and creative teams and the individual contributor level, right? And a lot of these concepts span through all of these bricks here and we want to know like who are we mainly talking to so we can kind of position it in the necessary ways.

Abir Syed: Yeah, I I knew that it was going to be a very broad mix of people. So I really it's a little tricky to know exactly where to hit in so far as information given that some people know nothing about accounting and some people who for example are in management C suite or brand owners, they obviously spend a lot more time thinking about it. So hopefully I kind of threaded that line reasonably well, but Yeah.

Evan Lee: You killed it. You killed it. And I think like the biggest the the biggest piece that I want to I want to hit home for everybody here. Now that we're seeing a lot of like the the individual levels of people jumping in is is why is all of this important? Like let's start with the goal. Like we we know the financials, but if we were to simplify the hell out of it, it's like why do people need to uh to care about this in your in your opinion?

Abir Syed: Well, ultimately, uh I mean, even if we have a very mission driven brand at the end of the day, we're all here to make money even just to be able to sustain the business to keep doing what we're doing, it requires money. So I think that um no matter who's involved in any part of the business's process and whatever sort of relationship, they know that at the very least if they have this one North star to care about, it helps everybody stay aligned or at the very least have things that they can all focus on. I mean, it's not uncommon for people who are sometimes on the agency side you can have this relationship, sometimes marketers are like this, sometimes if the finance people at the company are are chiming and they're going to have different opinions about what they need to focus on. So the accountants are going to be like, oh, we need to lower expenses. It's the most common thing. I get it. And the market is like, no, we need to spend more on ads because our row ads and etc. But if we have this one thing and we can all agree that contribution margins is all that matters and we have the not only the the shared language, but also that clear understanding of how everything connects. It's a lot easier for people to be on the same page about those things and kind of make sure that we're all working and kind of rowing in the same direction so to speak.

Evan Lee: Yeah, and I want to pull out one particular piece in there that you had mentioned because uh something that comes to mind for me is you talked about the different roles and you identified things they might individually care about at the end of the day. So when we're talking about contribution margin in your opinion, who needs to care about this most? Is it truly everyone across the board? Is it a subset of people that then uh or is it like high-level than filters down? Talk us through that.

Abir Syed: That's a great question. So I'd say that pretty much everybody should care about it because of the fact that it is one of the things that almost anybody has some degree of direct influence upon. The only argument I would make to the contrary if I wanted to myself would be that the owners might care more about profit. But the difference between profit and contribution margin to a certain extent is just your fixed expenses. And the thing is that on a day-to-day basis, the marketer is not going to show up and be like, hey, we should lower our rent. You know, most people aren't going to be able to have any sort of impact on fixed expenses because of the way that strategically those decisions are made and also because of the fact that they are very usually slow decisions to enact or to improve upon. So, yeah, sure profit and cash flow and I'll make that caveat. That cash flow at the end of the day is arguably more important than contribution margin. Uh but that's a very complex concept, so I'm not going to talk about that here. Um and also it's it's that's a lot more impacted by operational side of things rather than anything a marketer can impact for the most part. But yeah, contribution margin, one of the absolute most impactful metrics just because of the fact that it is very impactful and everybody has a much more direct relationship with how that number pans out.

Evan Lee: Cool, cool. Okay. I I actually wanted to share a couple of thoughts because like I've said I'm excited about the session a bunch already and like I kind of want to outline why and then pepper in your thoughts after the fact. where I missed. Shut up, man. You did not pay me. But basically, but basically, like when we're talking about contribution margin, I want to talk to now the the individuals who are on the ground hands on keyboard. So, our media buyers, our creative teams, our creative strategists, everybody who's here with us at the end of the day. So, on the media buying side, what I was really excited about is when we're talking about contribution margin, what we're really defining is scale. Often times, we're talking about some arbitrary benchmark or a goal that we might not actually know why we've set it as what it is. and what contribution margin is allowing us to do? It's saying like what is actually profitable for us on that first order. So we're making sure that we're good to go in overtime. Just making sure that it's continuous. So on the media by side, I think about it as scale. The other thing and the other reason why I was excited and honestly a little bit more is for our creative strategists and creative team members are in the room. So we experienced this during that uh in the debate that we had a little bit earlier. But a big question to ask is like how do we quantify the creative impact of what's really going on there. And when we cut the noise, that's where contribution margin starts to actually give us those insights. So what was super exciting about that is when I'm thinking about um for context everybody like if we take it there like compensation on what it would make sense for on okay for a creative strategist, what's the impact that you're going to have? By you putting numbers beside your name, the attribute table, you get to sit at it now in terms of those decisions at a higher level, not just the granular. So giving the language and and giving the tools and resources even though it's a little bit made up. I think it's really empowered people along the way. That's my really quick spiel. I don't know if you have anything else to pepper on there though in terms of how I'm viewing the world.

Abir Syed: It's an excellent point and I think that to to maybe make it a little bit more intimately or to bring it one step closer to to the strategies and the creative specifically. Obviously there's maybe not that much of an impact that they can have on the cost of good sold directly or for example the pay roll and stuff like that. But I think where the impact is a lot more directly within their control. Obviously the the ads and how that can scale and what its cack is, but I think a missed one is the choice of products that they actually push. This might be not super relevant in so far as a company that has or a brand that has one product, but especially some that have a larger sweet of products and especially if those sweet those products have different margins, which is not always going to be a very huge variance, but it can happen for example in the case of apparel. I've often times they have much bigger margin differences, especially if you carry accessories or supplements as well, being able to determine which offers are the best ones to push impact your contribution margin. So knowing that okay let me just sell the cheapest product with the highest raw as okay cool yeah this is going to give you a good raw as I suppose but at the same time you have to look at your cost you have to look at the whether or not can you increase AOV which one actually retains customers better. Some some products are better as a first time sell some are better as a retention cell some are some products are harder to sell on social because they're so expensive like all of those things need to be taken into consideration because the impact is beyond just your raw as so I think thinking about it a little bit more deeply can also inform the strategy from creative side and so far as what do I what am I trying to sell?

Evan Lee: Perfect. And and I want to get to some of these questions now and this is going to be an oversimplification, but as you're going through your presentation, I think people I I really believe they follow the numbers. Like it's so straightforward and makes sense. I think on my end where where a lot of the the delineation will happen is in two worlds. Number one, it's like where do I go to get this information to inform my decision making? So if I'm a mid buyer, what does that look like? But then number two, how do I educate people along the way to think in this way of uh like contribution margin at the end of the day. So the first question I wanted to kick off with is like let's say I'm an individual creative strategist I'm an individual media buyer and I'm trying to get a sense of contribution margin. Like where can I start? Who should I talk to to be able to get some of this information?

Abir Syed: That's a fantastic question. So generally speaking, a lot of that information should exist with the the brand itself. times depending on the size of the brand, it'll be either the owner or their accounting department and if they don't know those numbers, they should probably refer them to us so we can figure it out for them. Because realistically if you don't know those numbers and it's it's actually quite surprising how many brands don't. actually it's probably not surprising but a lot of brands really don't know. It's very hard to be able to make those kinds of decisions to understand what are you doing, how are you scaling, what's going on because you just don't know. Um so I think that you touch upon a good point that the a a a vendor or a strategist or a marketer or whatever who is genuinely invested in trying to drive the best outcomes for a brand should be talking using the language and the metrics that matter the most of the brand. They can come in and say, hey, I'll get you a great raw as. And like even the simplest example is just discounting. Like if you run discounts, you can make your raw as look fantastic, but clearly you're making less profit, right? So being able to talk in terms that the brand actually cares about like contribution margin will not only make you seem more sophisticated, but also will align you a lot better. Um but it's it like you said, it sometimes they don't know. So you try to ask them, try to get it from them and if they they don't, then you tell them like, hey, that's you can send them this presentation. Be like, this is why it should matter to you.

Evan Lee: I love it. Okay, so let's shift to the audience questions now. The first one falls into that bucket of communication. So Mark has the most up voted question right now. Shout out to Mark. Uh a question from agency perspective, how do you have this conversation with a brand? How do you talk about contribution margin, financial, etc. What if the client doesn't want to share this information with you? So honestly, spring boarding off what we're talking about.

Abir Syed: Yeah, it's a great question. So, I mean, like I mentioned, I used to do agency work. Uh so I I've kind of run into this in the past as well. I think that it's about first setting the stage and so far as why this this information is coming up and also displaying to them, I think that you care about what their financial outcomes are. It's very uncommon that a brand would hear that you're coming into this conversation saying, look, I want to make you the most profit possible. I want to be able to help you achieve financial outcomes. To do that, I have this contribution margin calculator. So, if we can fill it out, we'll be able to better determine what actual performance metrics to pay attention to and how to achieve the best outcomes for you. So, I am hard pressed to think that any brand would be very reluctant to share that information. Sure, they're not going to give you access to quickbooks, but they should at the very least understand A, they'll respect you more. B, they'll understand what you're trying to achieve and be able to help work with you to at least enter that information. And even if it really comes down to and they really don't want to share anything, I would just give them the calculator and be like, look, you plug in the numbers, if you don't want to share them, fine. But at the very least now you can tell me targets that I can pay attention to. Take a screenshot of that little table at the bottom and tell me different row as and different ads bend. Because then the conversation that's so common for agencies is when you go into talk to somebody and the uh you ask him like, what's your budget? Like, well, if you can scale to the moon. If the row as in like infinite, I'll scale to the moon. And it's like, yeah, okay, cool. Thanks bro. It doesn't help me at all. But at least if you have a table like that, you say fine, at these different ads bends and or sorry, these the row as, this is my and spend. Well, that that's your answer to the question. Now I know what my budget is because it's a function of your contribution margin. So I think working from their hopefully it would be a little bit of an easy way to have that conversation.

Evan Lee: And there's also something in there about like the actual template itself. So it's a really strong communication tool, like everything a beer ran through to be able to talk your client through what's going on as a very first step.

Abir Syed: Sweet.

Evan Lee: Uh the second most up voted question is from Vince. So shout out to Vince. Uh this is now getting more into like the tactics as it applies to the goals. So say your meta return on ad spend is 0.5 and your break even raw as is 2x. Based on your contribution margin, should you turn off non-performing ads and focus on creative testing instead of to get your raw as up before scaling up spend?

Abir Syed: That's a great question. So I say there's two parts to it. The first one is more of an attribution war question. If you have a meta raw as of 0.5, but you actually happen to have a blended raw as that's a lot better because of the fact that maybe you're running one day click, maybe you have a very expensive product, maybe you have a long consideration window, whatever the case might be. Maybe your pixel got installed and you didn't realize it. There's more to it than just what your meta raw as is specifically. So there is something to be said about in platform attribution and off platform whatever. But I think the broader point is that really if your performance is not where it needs to be on the ad platform regardless of what that number is. You should this kind of comes to the lot point I was making towards the end, you should very likely reduce the amount that you're spending on ads and invest that into first cracking the code about how you can scale on ads. Because ultimately, let's say your row has actually is a point 5. That means for every $100 you're putting in, you're getting $50 of revenue and of that $50 of revenue, your gross profit is like I don't know, $30 or something. So you're just losing money. And the thing is you can't this isn't the old days where like, you know, I'd be using hiring strategies and horizontal scaling and all these different media buying tricks and different interest in AWS where I can use all this hack this like hacking approach to media buying to hack my way out of poverty. Like really the only way these days to be able to achieve some sort of ability to scale on meta is because you have the creative that makes you deserve that scale. So it's not there's no point in just spending more and more and more. Excepting being you have a brand new pixel brand new account sure the first few days is going to suck, you have to just kind of bite the bullet there. But if you're not performing well, it's probably because your ads suck. And so you may as well take a 100% of that spend or like 90% of it, put it into the creative iteration until you find something that's going to do well that allows you to scale. But just spending more on meta it's not going to get you anywhere. so yes, that's my answer.

Evan Lee: Great. The next question that comes up is similar to how you've spoken about like multiple cues having different uh the contribution margins essentially. So Fredrick asks margin difference widely per product. How would you recommend looking at return on ad spend um and that table? If you are working with products with varying cogs and therefore varying margins? Would you do an average across all catalogs? Do you have a calculator for each? What does it look like?

Abir Syed: That's an excellent question. So A, yes, you could do an average across a catalog. If you know what your average basket or overall uh product mix is when you're when you're when you're running ads. The second thing is you could do it on a per product basis, that's a little bit funky. The real answer is that I would just develop a little bit more of a complex spreadsheet for that, but I didn't I keep it relatively simple because my whole intention with that is that I can just share with people and they can use it on their own. And these things can get a bit complicated naturally. Um, so there the the truest answer is that you probably need to work with somebody who's a little accountant CFO like that can get a little bit more complex on that front. But yeah, using an average is a good place to start. The one thing to keep in mind is that just for the sake of illustration I'll I'll keep it simple. If you're running no ads, you might have a certain blend of product mix like for example just simple you have two products. You're sending selling 100 bucks of this, 100 bucks of that. This is an 80% margin, this is an 30% margin. Okay, that's your blend right now. When you start running ads, you might be pushing one product way more than the other one. So that average might change over time depending on your your acquisition strategy. So I'm going to keep in mind but the easiest way to start is yeah, just use your average.

Evan Lee: Cool. Now I want to talk to people who are just getting started out. Um maybe not just getting started up with like our smaller businesses that are in the house with us. So Megan asks, how would an early stage or be able to calculate contribution margin and optimize more in real time? What are the tools or resources that you need to make this impactful?

Abir Syed: Great question. So, usually to be able to get a pretty decent uh just like initial footing in the contribution margin calculation, you just need historical data. So as boring as it sounds, you just need to do your bookkeeping and get your get your records kind of in place uh to be able to see how much things are actually costing you historically and then use that to inform your your contribution margin calculations. If you're very very early stage and you don't even really have that data in your just planning it, do the best you can in so far as your estimates as to how each one of those things are going to work. So by talking to your suppliers, you have an idea of cogs, by looking at shipping estimates, you should have an estimate over there, but looking at transaction fees, you should be able to get an estimate over there. So obviously you have to work with what you've got, but for for most uh brands, even if they are early, they should have enough information in their bookkeeping work uh to be able the kind of subset information out.

Evan Lee: And does all of this, so Michelle has a question now relating to the B2B world, does it differ from like D2C world to B2B side? So how can this be applied to a B2B and really long sales cycle? Minimum six months to six years. Damn, that's a super long cycle.

Abir Syed: That's that's that's commitment. Yeah. Um, that's like dating some shit. Six years. So it's it's a good question. At the end of the day, the concept of contribution margin is not uh specific to DTC. It exists in all business. It's more an accounting finance concept. So it does exist in in the B2B world. It's just not going to manifest it quite the same way. And especially the calculator I built is specific for e-commerce companies. So we're not thinking about our raw as and our ad spend when we're talking about B2B. But the concept does exist. So for example, I have one client that does a significant amount of DTC and a significant amount of B2B. So what we'll do in our reporting is that will break out each PNL a little bit differently. So you have your DTC performance, you have your B2B performance. And what that allows us to do is then look at on a b-b-base, what's my contribution margin. So, I take my revenue, subtract my cost of goods sold and I subtract usually sales people commissions, broker costs, uh, what's called trade spend, all that kind of stuff. You you subtract that and that still will give you a contribution margin because everything else is your fixed expenses. So conceptually, it does apply. It won't work in the calculator because that's free e-com, but yeah, the concepts there.

Evan Lee: Amazing. Okay, we probably have time for one to two more questions and Caitlyn has a good one that I want to bring on to stage. So how do you adjust your model for changes in time horizon? In other words, the model assumes that you achieve a return in the same month and that the spend occur the same month at the spend occurs, but that isn't always the case. So I think you alluded to it a little bit earlier on, but it's like when do you want to be profitable first order or not?

Abir Syed: Yes, exactly. So, for obviously depending on the type of business you have and especially if you run a subscription type business, you can start taking that more c to LTV view of things and think okay fine. I acquired a customer but over time I'm going to be able to recover the revenue or the profit the margin on them so that it all kind of balances out. For the purpose of the the template that I built out, it doesn't take that into consideration for two reasons. A, I'm trying to keep it simple so everybody can use it. Uh and so I could probably someday build a much more complex version which has your CLTV lever in it as well. But the second thing which is a bit more important is that for most brands, most brands are not at the level of sophistication, scale and risk tolerance, I believe to be able to operate on a long long-term horizon like that. I'm really maximizing here, but most for most of them, it would be dangerous to do that because you're taking quite a bit of risk. If you're willing to go unpredictable now, lose out on cash flow, put yourself in the negative hoping that you'll make that money later down the road. So, it is a lot safer for brands to be able to focus on being profitable in the first order. because if you can go all the way down to just being zero, let's say you just go break even on the first order because you want to be aggressive as hell. If you're confident, you're going to make that money later, great. All that's just gravy. And then if you know how much you're making, then you can get a little more aggressive and say I'm willing to lose 10k on the first or on like per month on the first order or 100k whatever it is. Um to build out something like that like I said, you just work quite someone like me and we can help you with that. but uh for the for this for most brands it's just a lot easier to focus on first order profitability or break even at the very least.

Evan Lee: Love it. And now I'm stretching it. We're going to run out of time, but I found a question that I think is a really great one. I'm just curious to see how you tackle. So Carlos asks best practices for spreading these financially driven creative strategy into culture. Bottom up during onboarding or top down to media buyers and creative strategists. How do we create the culture of uh of data driven and numbers driven creative strategy?

Abir Syed: That's an excellent idea. There's obviously a lot of depth into how to disseminate conceptual things into culture, but I'll give you the shortest answer because we do a short time. I would say it all comes down to reporting. It it's uh that classic thing of the incentives drive or show me the the the measures and I'll give you the no, give me the incentives and I'll show you the outcome, right? So it's it's all about focusing on what you measure and what you the the the drum that you're beating. So if you're reporting is always looking at contribution margin and you're compensating people based on contribution margin. You're complaining based on your contribution margin. still having that, you know, not being so intellectually lazy that all you do is pay attention to profit and like not realize what people are actually doing because not everybody can have that sort of an outside impact on things, especially because plenty of things are out of our control. Like Facebook ads will just start sucking some days. It's not because we're not doing our job, it's because that's how the world works. But I think from a cultural perspective, it's that idea that if you have that in your in your reporting, so if a person for example, they're reporting and their uh the number they have to answer for is Roas, that's what they're going to focus on naturally. But if you have the things they can control, but then also always show contribution margin. Like show that the kind of north star metric down the road as well that is still something that should be thinking about. I think that's how you bring it something that's a little bit more uh at the forefront culturally. I hope that answers the question.

Evan Lee: Oh, you came through and you mic drop man. Thank you so much. Thank you so so much for coming through and and giving everybody uh hopefully some really insightful things that they can walk away with. Thank you, sir.

Abir Syed: I appreciate it. Of course. Thank you so much for having me. Appreciate it. Thank you.