What's up, everybody? It's been a week, it's been a year, you know. Just when you think it can't get worse, it does and more will happen. You know, feeling for everybody that's affected by tariffs. It's a hard market right now. I'm not going to give tactical advice because first of all, I'm not a supply chain expert. I won't pretend to be.
Very few people know what's actually going on and I would hesitate to restructure your supply chain since it hasn't even been a week yet. Long term, it's worth thinking about how we can make our businesses more anti-fragile but short term, I wouldn't rush to set up anything just yet.
There’s probably nothing more valuable than taking a week to think it through and see how things unfold. That first week will be really telling. I wouldn’t rush back into manufacturing—plenty of businesses have done that in Vietnam and gotten hit with tariffs. Long term, we’ll just have to wait and see.
Latin America could be a strong play, especially with some allied nations in the mix. That said, I’m not in a position to be giving tactical advice. I feel for everyone involved, but at the end of the day, it’s business. It’s time to tighten things up. What I’ve learned is that you never really know how lean you can run, or how efficiently you can operate, until you’re forced to.
This is probably going to put a lot of brands out of business. For many, EBITA is going to drop to zero as their margins get whittled away. Others will be forced to operate more efficiently. We’ll likely see some price increases, but I’d watch the competitive landscape closely to see how brands start inching prices up. It’s not a huge net positive either way. Even if gross margins improve, consumer spending is down, so it’s all about finding that balance.
If you’re going to charge more, you’ve got to deliver more value and drive more demand, it’s a tricky balance. Consumers are hurting too, so the pressure is coming from all sides. I won’t get too tactical, but principally you have a few decisions. You really want to go lean on OpEx as much as possible
Every one of us has fat in our business, whether it’s software, agency retainers, or unused office space. Got half an office you can sublease? Do it. When there’s a will, there’s a way. And those next six hires you’re planning? Ask yourself: do you really need them? And if so, do they need to be U.S.-based? Could they be freelance? Overseas? If you’re exploring Latin America, hit me up. I’ve got a great recruiter we’ve used to fill a ton of roles.
Software. You've got to trim. You just don't have a choice. We're not a software business. We make products. If it doesn't help you make more revenue, cut it. We probably have a lot of nice-to-haves. A lot of us do. Also, negotiate. Just send a letter to people. And I highly recommend the book “Double Your Profits” by Philadin.
Negotiate. Do it with all your suppliers. If you're coming up on an annual contract, I've done this very successfully. Send a letter from the CEO or CFO that says we're not going to tolerate any increases.
Get quotes from two to three other vendors. It works every time. Software companies are going to be hurting, so you're going to have a lot of leverage with them as well. The entire ecosystem is going to be hurting. Same thing with vendors. I'd say get out ahead of it.
Everybody's going to be hurting. Everyone's going to be trying to save their existing business, and I think you can get some deals with the threat of leaving. Get quotes. Play a few people against each other. Get ahead of things in advance. Again, I'm just saying there's no problem doing that and sending a manufacturer, a vendor, or a software company a letter and saying, hey, in order for this to sustain, we need a price reduction.
There’s really no downside. Worst case? You might piss someone off, and that’s just business. But I wouldn’t rush to shift your supply chain or manufacturing just yet. Not today, at least.
If I were an agency or software provider worried about churn (and let’s be real, a lot of people are about to drop their agencies) I’d get ahead of it. Founders and CEOs are already talking, reading, and bracing for cuts.
So if I were in that space, I’d focus on one thing: proving value, fast. Show clients why you’re essential before they start reevaluating every line item.
The more you can report on incrementality, the better. That’s why I love Postscript, they’re the only SMS platform I’ve seen that actually enables it. We’ve talked about this on the podcast. Meta does a decent job too.
But if you’re not showing incremental value, and especially if you’re charging a premium or a variable fee - oof. If you charge a variable fee, cap it. Seriously.
Go to your clients, especially your best ones, and be upfront.
Say: “Hey, we know this is a tough time. We care about your business and our relationship. For the next six months, we’re going to cap our fee. I know we’re on a percentage-of-spend deal and you’ve been paying X, but moving forward, we’ll cap it at Y. All we ask is that you stick with us for the next six months.”
Boom. I guarantee you’ll win some serious loyalty with that.
Same goes for software. This is the time to play long-term, not short-term. Don’t be greedy—go to your clients and show them you’re in it with them.
“When your business does well, we do well. We know things are tough right now, so we want to make it a little easier—because we care about the relationship and genuinely want to see you win. For the next six months, here’s a credit. Here’s what we can offer you.”
I’m honestly curious if anyone takes me up on this, but if you’re an agency or a software provider—this is the move I’d make.
If you're an agency that we work with and you're seeing this, first of all, you're probably already on a pretty good deal and probably not on a percentage of anything. If you are, you know where to find me, but I'll probably be doing it as well.
The reality is it's a lot easier to do it with an outside partner than it is to do it with somebody internally. I think that's where you got to start.
Just look at the P&L. What do we need? What do we not need? What's a fancy tool that we thought was going to be cool that is just not core to our business right now? It's survival mode. It's wartime. It's batten down the hatches.
We'll have growth periods. I don't know when. I know that they will come again. I'm focused on an antifragile business.
Here are five things I'm focused on. Antifragile business, get margins as good as possible. Get your gross margins as good as possible. Get your terms as good as you can, if that's important for your sustainability.
1. Get your OpEx as low as possible
Go line by line. We’ve done it. And here’s what I’ll say: necessity changes things.
You might’ve already done a cleanup earlier this year, cutting some tools, reviewing agency retainers, but when your back’s against the wall (or you have a metaphorical gun to your head), you start realizing: Do I really need this?
No one loves cutting departments or budgets. But these kinds of constraints force clarity. You’ll see your business through a new lens—and you will find more cuts.
2. Don’t Kill Incremental Marketing Spend
I’m seeing brands talk about cutting marketing spend and claiming revenue hasn’t changed. That’s dangerous thinking. For most, pulling back without knowing what’s truly incremental is a mistake.
Here’s the rule:
- Cut non-incremental spend, yes.
- But cut it always, not just in hard times.
- Keep incremental spend, especially now.
Also, your marginal return curve has changed. If you used to spend $50K/day and stayed profitable, chances are that the last $10K is now 20% less efficient.
That could mean a negative contribution margin.
Some brands are okay with that—it averages out. But many need to reassess.
If you're not doing incrementality testing, you're flying blind.
3. Slower Growth Might Be the Smart Play
This market isn't built for aggressive scaling. If you want to grow, you need an alpha, something unique in product, channel, creative, or media.
Even the best brands doing all of that? They're growing slower… or not at all.
And that’s okay. Not growing might actually be the smart move right now.
Just don’t lie to yourself about it. Don’t throw spend at weak strategy and expect results.
4. Efficiency Isn’t Coming Back Soon
Will CPMs drop? Maybe. But if consumer demand softens, you won’t feel the gain.
Efficiency isn’t magically going to get better. What is working right now is adapting to new buyer behavior:
- People are sorting low-to-high more often.
- Value messaging is landing harder.
- Even if you're not discount-heavy, you need to justify the spend, emotionally and logically.
You’re not just convincing customers, it’s their partners too.
The more you can anchor purchases in savings, guilt-reduction, or practicality, the better.
This isn’t about cheapening your brand, it’s about helping customers rationalize a purchase in a cautious market.
-Cody