Summary
In this episode, Stephen Brown and Preston Alder discuss their predictions for the e-commerce landscape in 2026. They cover a range of topics including tariffs, interest rates, inflation, the rise of AI, the value economy, and the implications of a K-shaped economy. The conversation delves into the challenges and opportunities that e-commerce businesses will face, emphasizing the importance of execution excellence and inventory optimization. They also explore the potential risks associated with private equity in the current economic climate.
Takeaways
- Tariffs are likely at peak levels but will stay elevated long term.
- Sellers should budget assuming current tariff rates do not improve.
- Falling interest rates may not reduce ecommerce lending costs.
- Inflation pressure still threatens consumer spending power.
- Consumers continue spending, even under economic stress.
- AI tools are already reducing labor and service costs for operators.
- AI-driven commerce may reshape how customers discover products.
- Ad costs may rise, but better targeting can lower acquisition costs.
- Execution and operational discipline will matter more than size.
- Brands that fail to adapt may not survive the next cycle.
What We Cover:
- 00:00 Predicting the Future of E-commerce
- 02:13 Understanding Tariffs and Their Impact
- 04:59 Interest Rates and Their Implications
- 08:48 Inflation: The Consumer’s Perspective
- 11:48 The Rise of AI in E-commerce
- 24:22 Navigating the Value Economy
- 30:08 The Importance of Brand Communication
- 32:24 AI and Employment Concerns
- 34:14 Emerging Channels in E-Commerce
- 37:14T he Future of Advertising
- 42:10 Winners and Losers in E-Commerce
- 46:05 The State of the US Economy
- 56:20 The Private Equity Bubble
Guest Information
- Sole Toscana
- Preston Alder on LinkedIn
- buongiorno@soletoscana.com
Work with LedgerGurus
If you need help with your ecommerce accounting, reach out to us at LedgerGurus. We are an ecommerce-specialized accounting firm, and we can handle all your numbers so you can focus on growing your business.
Stephen Brown (00:00)
Welcome to the e-commerce finance podcast. I’m Stephen Brown with LedgerGurus, also co-owner at Sole Toscana. Today I have my business partner at Sole Toscana Preston Alder. He’s the CEO runs the business. I’m the CFO.
We try and make these things go. We’re gonna do our 2026 predictions together because we’re trying to figure out what’s gonna happen in the future. And hopefully our discussion will enlighten you as you’re predicting your future. How’s it going Preston?
Preston (00:25)
Good, thanks for getting this together. And Stephen and I talk on a weekly basis, but this is fun too. I feel like all the time we’re saying like, we need to record that or ⁓ we have really good discussions, so.
Stephen Brown (00:37)
Yeah, we were stuck. We started I
started discussing my predictions and Preston started asking all sorts of good questions. I was like, we should just record our discussion because I think this is two guys owning a business, a brand. I also work with a lot of other brands and we’re thinking about e-commerce all the time. I shameless plug when I started the podcast a year ago, I started with a predictions episode inspired by e-commerce fuel.
But unlike them that are really stretching, I feel like what I’m trying to do is grasp realities and apply them to how we’re going to approach the business in the next year. I’m focusing on macro predictions. Obviously, every business, you got to think about some specifics. So things like we’re not going to get into as thoughts on the skincare market, which is specific to the business that we own here. But we’re going to talk about things, general trends and how we feel like they apply.
and Preston’s going to tell me what an idiot he thinks I am. Or we’re going to debate ourselves to better predictions. So, all right, I’ve got 10 predictions here. Let’s go. What was the favorite word of 2025? Not the favorite word, probably the least favorite word of 2025 for all sellers, Preston.
Preston (01:39)
man, tariffs, the T word.
Stephen Brown (01:42)
Tariffs. So let’s start off the T word. I’m to make an argument that I think we are experiencing peak tariffs with some exceptions. Let me tell you why. I feel like right now what the economy and what businesses are going to experience is largely negative. And I feel like in general, they’re only going to go down.
Unless somebody ticks off Trump and he decides to, you know, go nuclear on them and jack them up to like a hundred percent. So I think that we’re at peak tariffs. You could see some spikes if somebody ticks them off. And I don’t think they’re going to go back to 2024 levels. I definitely think they’re all baselined higher, but I could see them come down here or there as negotiations happen, or if we see some bad economic things. What do you think Preston? Am I smoking weed?
Preston (02:27)
No, I think I agree with that. would like on the opposite end, do you see there’s like a huge light at the end of the tunnel where something crazy happens with the Supreme Court case? You know, that’s a hopeful thing, but as far as budgeting and forecasting, we can’t count on that.
Stephen Brown (02:40)
That’s a good question, yeah.
I think there’s a decent chance that the Supreme Court rules that the legal authority that the Trump administration used was not legitimate. But what I’m reading is that they’re already working on their backup plan. They’re looking at other laws. It could be a lawsuit nightmare, I could see a lot of people suing. But I feel like they’re just going to pivot and say, well,
Okay, we’ll use a different legal authority to do tariffs. So I was optimistic a couple months ago, yeah, Supreme Court’s gonna knock it out. Now I’m like, well, they might rule that it was unconstitutional, but they’ll find a way to make it legal. Tariffs are here.
Preston (03:21)
Yeah. And I think as a
small seller, like we have so little power and we just have to plan on the tariffs being there for the long term for now.
Stephen Brown (03:29)
Yeah.
it’s just we’re in the new era. Here’s where I’m hopeful. People start to struggle. It becomes clear in the economy. One thing I feel like Trump does is he’s reactive to markets. So I’m hopeful that if there’s market indications that these are hurtful, that he will adjust. But I don’t think he’s going to go any higher. I think what we’ve
there’s a high standard, I would probably plan against where they’re at now and cross your fingers that maybe there’s some relief, but not holding my breath.
Okay, next prediction, interest rates. Interest rates are very important because a lot of us are having to lend on inventory purchases. I do think they’re going to… Okay, let me clarify. There’s multiple interest rates I’ve dug in. When we think interest rates, we think about the Federal Reserve. The Federal Funds Rate is what they set, which is overnight lending to banks. The prime rate is based off of that.
prime rate usually establishes certain types of lending. And I’m going to get into that. I do think interest rates are going to go down, but I don’t think it’s going to have a material effect. The federal funds rate which drives the prime rate is going to affect things like bank lines of credit, credit cards, SBA variable rate loans. The problem is when you look at other lending, that the other things that affect consumers, mortgages,
fixed loans, ⁓ fixed rate loans, I would say we see a lot of e-commerce loans are more tied to the 10-year treasury bill, five-year and 10-year treasury bills. And while those have come down some, those are really based on investors’ confidence in the US government. And I think there’s a lot of, on a 10-year horizon, I’m not terribly confident in the future of the financial structure of the United States because of the spending.
So I have a feeling that 10-year T-notes are gonna stay high even if the short-term interest rates go lower. And so it’s a mixed bag. There’s a lot of political pressure to drop rates. we have seen it. You and I, have a couple different loans. One is tied to the prime rate. We’ve seen the cost of that loan go down. The other loan has not budged, right? As interest rates have gone down, it has not changed. So I think there’s a mixed bag.
And I think a lot of the e-commerce specialized lenders, what I’ve been seeing is they’re not dropping their rates, even though the federal funds rate and the prime rate have been going down. So that’s my prediction on interest rates. What are your thoughts?
Preston (05:44)
Yeah, I think, I don’t know, you understand the set of macro level better than I do, but at the end of the day, the cost for us, like it doesn’t have a significant impact with small rate changes where I do think, and I think we’re going to get into this with inflation, like how’s it impacting the general economy and our consumers? Cause I think the bigger impact on us is just inflation and our, customers ability to buy right now and to continue to buy.
in the 2026. I think, you know, that’s obviously correlated to rates and other things going on in the economy. yeah, I feel like, I feel like the rates are like, like a smaller, like the direct cost impact on us is nice. Not huge, right?
Stephen Brown (06:18)
that’s a good point.
Yeah, think I’m with you to a certain degree. I’m more concerned about what it does to the consumer. housing costs, are, especially if you’re buying a house, like mortgage rates, credit card rates. I mean, I’m a little worried about how stretched the consumer is.
There was a lot more BMPL this year. Have you noticed more BMPL in our business?
Preston (06:46)
Yeah, I’ve seen those headlines. I need to dig into the numbers and see exactly what’s happened there with our consumers. But like it seems like the orders that I’ve seen and dealt with, like little customer service that I’ve had to jump in and help on, seems like there’s been quite a bit of BNPL with our customer base. But I don’t know how it’s changed over time.
Stephen Brown (07:05)
Which is
scary because the whole economy just a big house of cards? We build it up and then it topples down. That might be a bonus prediction. I have a thesis. This is when I’m going to take a stretch of where I think the economy could crash. We’ll do that at very end.
Preston (07:19)
Yeah, it does scare me. ⁓
Stephen Brown (07:21)
Yeah. Well, this kind of ties into the next prediction, which is around inflation. I think my prediction is inflation is going to continue to be sticky and it could rise. The reason I think it could go up is spending. We saw the inflationary effects in the Biden administration. And I think it was just because the government poured a ton of money into programs.
And there’s just this huge amount. mean, there was so much money going in and it’s just, it’s, there’s some basic economics that with supply, you know, money supply inflation increases when you decrease money supply, it decreases. And what we saw last year with the big, beautiful bill was a lot of spending. I also think that tariffs could have an impact. And I also think there’s some housing and energy constraints that could drive up costs of housing costs of energy.
Again, I’m not an economist, but I do think we’ll see some inflation. I think that the thing that scares me there, I’m more worried about the consumer than I am the business. Not that I’m not worried about our costs negatively impacting. I think we’ve all gotten squeezed. But if the consumers are heavily squeezed, they’re not going to buy our stuff. What are your thoughts?
Preston (08:28)
I agree and that just makes like our consumer has continued to buy this year. It’s crazy. They just keep buying. Yeah, yes.
Stephen Brown (08:34)
Yeah, God bless the American consumer. That was my big
takeaway about Black Friday Cyber Monday. was like, wow, Americans will spend. You got to be in a really bad place to not spend. I was worried that we’re going to have a soft BFCM. Nope, they kept spending.
Preston (08:50)
And December has been, continued to be really good for us. ⁓
Stephen Brown (08:54)
Yeah, and that’s what I’m
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Preston (08:58)
<p>Yeah.
As you’re getting into this third point, it’s yes, it’s a concern, inflation, like small concerns. It’s like they’re all adding up together. It’s like we have these tariffs, right? We had to do some price testing, increase our prices. Everything went well in that process, but we’re still dealing, we’re kind of seeing the lag cost impact on the business. So we’re seeing that happen.
Stephen Brown (09:07)
Yeah.
Preston (09:20)
then as you’re talking about interest rates, another small factor, right? Then you get into inflation and the consumer. Another small concern, but they’re just like all coming together, almost like ⁓ some sort of perfect storm. But yeah, we don’t know what’s gonna happen, but they’re all building.
Stephen Brown (09:30)
Yeah.
my plan
is to bring it all together and say, what do I think this means for the overall economy? But I do think the theme that you pointed out is, it’s something that I worry about. I feel like we’re in this foggy economic future. There are some things that are good, but there’s a multitude of, mm, this isn’t good, and mm, this isn’t good. How does it all add up and not cause problems?
Preston (10:02)
Yeah.
Stephen Brown (10:04)
Okay, well, let’s change the tone. Let’s talk about a trend that I think is going to be positive. In fact, I am probably most bullish about this trend, which is AI. ⁓ My prediction is AI is going to create measurable revenue and profit opportunities. And I want to pull on that latter one, but I am feeling really bullish about AI checkouts. We haven’t really seen them fully materialized. I know they’re being tested on like ChatGPT, but
There’s so much eyeballs on AI. I think it’s gonna be a good opportunity. I’d be shocked if we don’t see advertising on these AI platforms, chat GPT being the key one. They’re losing so much money and there’s so much attention there. It’s not like Google where you search, click and move on. mean, literally, people are spending a lot of time on there. So I feel like,
It’s more like a Facebook in terms of attention. And then the third one, and this is what I want to ask you a little bit, is I feel like AI tool efficiency is just, I was bullish going into 2024, but I think where we are now versus a year ago, it’s incredible.
Preston (11:08)
Amazing.
Stephen Brown (11:09)
I mean, you, know, you’ve been moving more and more to AI tools. Let’s kind of pull on this third leg of this prediction. Do you feel like you were finding efficiencies you didn’t have 12 months ago?
Preston (11:23)
Yeah, so I’ll answer this question and then I want to jump back to some of those first, the first two buckets. Yeah. Okay.
Stephen Brown (11:27)
Yes, I do want to pull on
those ones as well because you’ve said some stuff in the past that I want to tease out.
Preston (11:32)
Okay, yeah. So as far as just efficiency as an operator, business owner, it’s like the progress of these tools and the way I’ve been able to utilize them is just, it’s unbelievable. I feel like I’d have to have a team of like, I don’t know, three to five people right now. It’s basically me.
Stephen Brown (11:50)
Well, we’ve cut
some of our consultants over the last year because you’re like, hey, I can do this with AI tools for cheaper.
Preston (11:57)
Yeah,
we’ve cut consultants. My sister-in-law helps with the business on customer service and a little bit of marketing. But other than that, I feel like I’d have to have a team of like three to five people and or one or two agencies helping with different things or freelancers.
Stephen Brown (12:13)
Yeah, like the
creative is incredible. Was it you that got me onto now Banana? I’m trying to remember.
Preston (12:20)
Yeah, I think so. So and now Banana Pro. It’s amazing. Yeah.
Stephen Brown (12:21)
Dude, it’s unbelievable. And
even like ChatGVT, they just upgraded their image creation. I still don’t think it’s like now Banana. now Banana is truly amazing. But the new ChatGVT update, it took a really big step just like, obviously there’s the coffee, the word creation that’s, I don’t know, like, super efficient.
Preston (12:34)
Really good.
there’s a next
level now where like, okay, I’m using it for this, this and this. I’m pulling data from different areas. The more I can connect all of that and almost just like, it could almost automate like everything that I’m doing right now. If I do it the right way, ⁓ it’s just.
Stephen Brown (12:55)
Agents, yeah. We’re playing
around with agents at LedgerGurus, or their custom GPTs and chat GPT. it’s just shrinking the time of creative generation, or things where you need to take some creative and do this, or take some copy. it really is.
Preston (13:02)
Yeah.
Yeah.
Yeah.
Stephen Brown (13:21)
Let’s come back to the revenue side of things, because I want to tease out a question you asked me before we recorded this. You said, do I think this is going to create net new revenue or just move revenue around? I think you asked me that question a while back.
Preston (13:37)
Yeah, like if our consumer has so much to spend, how will AI ⁓ shopping, is it going to increase the number of people who are buying online, engaging with e-commerce stores like us? Are we going to be able to be a player against other big brands that have more credibility out on the internet and with AI tools? So yeah, I have a lot of questions there.
How? Yeah.
Stephen Brown (14:03)
Yeah,
let’s start with the first one. On a macroeconomic standpoint, it’s not like people’s wallets expand, right? There’s a certain amount of GDP growth. So I do think it reshifts some spending. Now, ideally, the great thesis of AI is it’s going to be super productive. There’s also the doomers that are like, it’s going to kill jobs. Which, does that have a net?
zero or even negative effect on GDP, I don’t know. But let’s assume just some basic GDP, know, few points of growth. I don’t think this creates new consumers. I do think it readjusts consumption some, and they’ll be winners and losers. Anytime you see a technology shift, there’s winners and losers. And I’ve been trying to think like, where would that consumer, what is it cannibalizing?
Is it cannibalizing Google? Well, AI mode’s really interesting. I’ve really leaned into Gemini more the second half of 2025. I think it’s come a long way. And I find myself, I just, think there’s the mental habit. You get all the tech super nerds are like, I don’t use Google anymore. I can’t help it. But I do AI mode a lot more. Or I look at the AI results. Obviously I’m using a lot of chat GPT. I do think like take like a chat AI like chat GPT.
I think in some ways it’s taking…
it probably takes away from Google more than Meta. think like Google tells us what we’re looking, gives us what we’re looking for. Facebook gives us what we didn’t know what we’re looking for. That’s the other thing is chat GPT, especially when you lean into that second part of my prediction around AI ads, there’s like, what it knows about us when you like ask it to profile yourself, it’s scary. There’s some scary prompts.
So I think on the Facebook side that an ad platform done right on ChatGPT could be very competitive to Meta. So I think it goes after Meta and Google. And in some ways, could have the interactive, I need a new hat or whatever, beard oil. And that probably cannibalizes some of the Google experience.
But an ad platform done right would probably cannibalize the Facebook experience and we would see products we didn’t realize we needed that it surfaces even better than Facebook can.
Preston (16:22)
Yeah, I think a big difference between meta and AI, why I see AI more along the lines of Google is
People are on meta for entertainment, for just endless scrolling. ⁓ They don’t really mind getting those ads to some degree. Whereas when you are in an AI, at least right now in my experience, as people go to AI, more to ask questions, to do research, to think through something. They need help with something. think AI, kind of like what you’re saying, AI kind of knows our psychology better, I think, in some ways.
Stephen Brown (16:35)
Mm-hmm.
Yeah.
Preston (16:59)
than like Meta and Google. Although Meta’s Andromeda update, supposedly the way it’s much more AI fueled and I don’t know exactly what’s behind all of that. We’ll get into this in advertising. think it’s made a big difference for us. But yeah, I think.s=”{}”>
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Yeah, it’s like this weird mix of meta and Google where AI knows us super, super well, but the user is there more for a Google purpose. So.
Stephen Brown (17:20)
Yeah.
It’s more like
a Google, it’s a more robust Google experience where you’re interacting with an income but you’re not going to be doom-scrolling. It’s like we do, we ask it a question. We may go back and forth more than we do a traditional search, but at some point you’re like, boom. Whereas like you can get into doom-scrolling and an hour later, you’ve seen who knows how many ads. I feel like on like on reels it’s like every five or so it’s an ad. That’s a good point. </span>
Preston (17:29)
Yeah.
So.
Yeah. So it’ll be really
interesting to see how they implement the ads in AI. Like I don’t know what that’s going to look like, but if they do it right and it doesn’t bug the consumer, like when I go to do my Christmas shopping, it may be able to give me a present for like every person. I give it a little context and boom with links. I’ve got my and it buys all the stuff like my Christmas shopping is done. You know.
Stephen Brown (17:55)
Yeah.
Wouldn’t that be awesome?
Yeah.
dude, that
would be so awesome.
Preston (18:18)
Or, Aura sends like a list to my wife. These are like, you know, I can have it create a list for everyone who’s buying me gifts. Anyways, like, I don’t know.
Stephen Brown (18:27)
But I want to pull
on the other thread that you had. Is this going to be, how is this going to affect small brands?
Preston (18:34)
Yeah, yeah, that’s my concern. I have a concern there because we don’t have the same type of credibility as these bigger brands out there on the internet. So I don’t know how to compete.
Stephen Brown (18:42)
That’s true. Well, if you think about
it, everybody’s claiming they can optimize towards generative, know, toward the LLMs. And then other people are like, it’s a big black box. I mean, I think some of the same elements of reputation go in, right? domain, know, will they be, we don’t know, but does domain authority carry weight? I think.
Web presence definitely does and bigger brands are gonna more likely be in more places. To me, maybe it’s a wash compared to SEO. I think the area that will, you and I have talked about a lot is the instrumentation of the product pages and the ability to put attributes. So I think that is the new SEO is the deep attribute qualities of product listings.
And then I do feel like there’s a whole another this revives reviews. Other reviews can be gamed. We’ve seen that over the years where people will go and do fake reviews. So how do you create authority? Is AI ⁓ going to be able to cut through the fake reviews better than ever? I don’t know. I do think whenever there’s a trend, I do feel like anybody can win at it in the short term.
So I feel like a small brands who execute well against AI, do the right instrumentation of product listings, could have some advantages, at least temporary over those who don’t. But it’s gonna be interesting to see how it plays out. This is the thing I’m most bullish about in e-commerce though, is the impact of AI. mean, everybody’s talking about AI, but AI…
related commerce. I’m really, really intrigued by this.
Preston (20:21)
Shopify is coming out. You sent me that message the other day. They’re launching a product where they help brands with setting up their AI. But then that just begs another question of, if Shopify is doing this for everyone, then how do you win?
Stephen Brown (20:26)
Yeah.
Get…
Does it, yeah, how do you win?
Preston (20:39)
And maybe it’s just that like, I mean, there’s going to be a small percentage of people who don’t do it or don’t figure it out. You do it, but does your product match the way you’re going to like, like people who are going to be buying or the products that are going to be purchased in AI? Does your brand and product kind of fit AI shopping? And how big of a market? Yeah.
Stephen Brown (21:01)
does it fit the AI shopping? if you’re a super niche
Preston (21:08)
Like how do we get your markets in there?
Stephen Brown (21:09)
and don’t have a big reputation, is that going to penalize you, right?
Preston (21:18)
Yeah, and I think maybe to some degree the super niche may help because people will get super specific in AI of what they want.
Stephen Brown (21:24)
Yeah, I want the perfect thing. I know, are you as bullish
as I am? Maybe that’s the question to conclude this prediction.
Preston (21:33)
I have a lot of question marks. I like overall I’m very bullish for the general e-commerce industry. I think for us as a small seller, have lot of question marks of where it’s going to go.
Stephen Brown (21:44) </p>
Oka
y, I hope I’m right, that it’s good for us too. All right, next prediction. ⁓ go ahead,<span data-ccp-props=”{}”>
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Preston (21:48)
The other thing, sorry, one quick for our brand.
have a lot of demand, like we do a lot of demand generation instead of demand capture, which I think, you know, Google is more of that demand capture and I feel like AI is still more on that side of demand capture. So I, yeah.
Stephen Brown (21:54)
Yeah. Yeah. Yeah.
Well, that’s where I’m
hopeful for ad platform, right? Because if, and I hope this pushes meta, like there was the glory days of meta before iOS 14.5. Could AI create an uber-efficient ad market and push meta? This is another hope. Let’s say the ad platform is awesome.
Preston (22:08)
Yeah.
Stephen Brown (22:31)
Now, in Meta, we can see Meta’s working really hard, but improved ad efficiency is only going to be net positive if that is what is the outcome of an ad platform on top of ChatGPT and these other AI chatbots.
Preston (22:49)
Yeah, and I think Meta’s gotten ahead of the game with Andromeda, right? Like that was their move to make sure that I think that was kind of their move to make sure these AI platforms don’t take over when it comes to the ads game. ⁓
Stephen Brown (23:03)
Well, I’m still,
maybe it’s because I click on too many e-commerce stores and don’t go incognito and get their pixel on my profile, but I still don’t feel like I’m getting targeted very effectively in meta, as effectively as I’d like to be. So I would only be happy to see better targeting of advertising. I wanna look at things that are interesting, but.
I don’t know. think we work with a lot of women’s apparel. So I feel like Facebook thinks I’m a woman because I’m always getting ads for women’s apparel. And I’m like, dang, then I’ll forget like, dang it, why did I go look at that customer’s website without going incognito? Now ⁓ my Facebook pixel is all messed up. Lesson learned for though, if you’re working in e-commerce, always go incognito. Your ads are not going to be targeted effectively to you.
Preston (23:33)
Yeah.
Yeah, I mean we have like we’ve played I’ve played into Andromeda as much as possible like tried to do everything that you know people are saying you should do and our ad performance has especially this last half of the year has done you know year over year it’s up a lot with increased ad spend and
So, you know, it’s one brand. It’s hard to know if that’s, if, you know, there’s other factors. And I know some people are still struggling, but I’ve heard a lot of people say that like their ads have gotten better as, as they’ve kind of played into the Andromeda updates.
Stephen Brown (24:18)
Yeah.
Well, I think competition is good. It’s going to push brands to where there’s the most effective outcome. I feel like, to your point, Google is a demand capture platform. So it’s been better for resellers or for unique products. But if you’re a direct-to-consumer like we are, where you’re trying to create awareness, that’s where Meta’s been better, because you’re trying to match.
target people who want your product. And maybe to conclude this prediction is, will 2025 be the year where chat GPT and maybe Google is trying to respond to? Will we get the best of both worlds? The ability to do better demand capture as well as ⁓ demand creation unlike anything we’ve seen on Meta.
It’s a big hurdle, because Meta’s really done a great job because they know so much about us. But I am startled by how well ChatGPT, after just using it for a year or two, if you kind of ask it about myself, it’s like, whoa, it is spooky and smart about me. Scary.
Preston (25:40)
Yeah. I
love that point to competition though. Like, Hey, it’s, if it’s going to drive meta to get better, which I think that it’s already doing, and it just helps the whole, yeah. Like all the ad platforms. Yeah.
Stephen Brown (25:48)
We all win. ⁓ Lifts the whole industry. All
right, next prediction. I am going to make a strong argument that we are squarely, if we haven’t been already, we are in a value economy. There is, are you familiar with the concept of a K-shaped economy?
Preston (26:06)
Yeah, it’s impacting like people with lower incomes.
Stephen Brown (26:09)
It’s like, yeah, basically
it splits into two. You get one segment of the economy that struggles and one that doesn’t. And this is all the conversation right now is that we’re in a K-shaped economy. The lower end consumers getting killed with inflation, right? They don’t have equities. They may not have own homes. If you own a home, your cost of housing doesn’t go up, but your asset does. If you’re renting,
know, rent will go up and so they’re talking about a K-shaped economy. I would argue both legs of the economy though, there’s a value need. On the lower end, it’s obvious, right? The inflation has been brutal, housing, energy, groceries. Like if you’re selling into that lower segment of the consumer side, you…
you definitely need to be value focused. But I would argue there’s some interesting dynamics going on in the upper K. We’re not gonna talk about the tip of the K, the Jeff Bezos, Elon Musk, those guys have unlimited money. But let’s just say the average professional, right, there’s a lot of squeezing going on by AI and I think there’s a lot of fear about am I gonna lose my job to AI? And so I do think there is a little bit of.
Preston (27:21)
Yeah.
Stephen Brown (27:25)
of a value mindset of both legs, even though one might be doing better than the other. I feel like there’s a lot of pressure from some of the things we talked about earlier, inflation being the key one. And so I think value is going to be more important. So how does that translate in my mind? How do I give more bang for my buck? How do I message value? How do I realize that consumers are trading down? They’re going to go from brand names to
generics, I just think it’s gonna be more important than ever that brands communicate the value, they speak to value than ever because of the mindset. ⁓ I mean, what do think? Am I?
What’s your thought on a micro example here?
Preston (28:08)
Yeah.
Yeah, I agree with that. think something well, brands should know where their main customer base is on the K shape. And I think something to watch is like, okay, we had to increase prices as a brand. We didn’t see an impact. People are still buying almost just as much and you know, and that increased through BFCM. But I think the question is, does that bottom K move up this next year?
Does it start to capture higher incomes? ⁓
Stephen Brown (28:45)
Yeah, oh yeah, so the lower
leg starts to eat into some of those that are on the bottom of the rising leg.
Preston (28:54)
Yeah, yeah, because I think for us, our customer base is maybe somewhere in the middle there. And so I have this concern, like it hasn’t seemed to impact them yet. But if, if inflation squeezes, you know, goes up the income ladder this year, I think our customer base does start to get squeezed more. And I think on the upper K, to your point, I’m thinking of like,
people in professional services that I know. It’s almost like they’re not super concerned yet, but they’re starting to think about it. They’re like, yeah, maybe I could take my job, but they’re probably thinking, I don’t know, three to five years down the road, most of them. But at what point is there like a tipping point where it becomes a legit fear?
that the time horizon is more in the next one to two years. And then I think you see a huge shift in their behavior, purchasing behavior.
Stephen Brown (29:44)
Yeah, and I’m hearing more about AI people having AI concern and nervousness. I don’t know. mean, it’s a little bit different when you own a business. But are you, how nervous are you about employment with AI? Like do you, I see some real smart, like AI researchers who are like, we’re all screwed and.
two years, six years, you know? It’s like, what are your thoughts? mean… ⁓
Preston (30:07)
Yeah. No,
I think I agree. Well, as a small business owner, like you said, I’m not as concerned because I could let, we could let AI like run our business and we’d be fine. But for other people, yeah, I think it’s more that like two to six year horizon. It brings a fear, but I don’t know if it’s impacting purchasing behavior yet. Yeah.
Stephen Brown (30:16)
Yeah, we can… Yeah.
That’s true, it’s like this uncertainty and it’s
like, well, you know, I think there’s a whole lot of YOLO. It’s like, yeah, I might lose my job, but hey, I got a job right now, let’s go crazy. I don’t know. When I look at AI, I’m mostly positive, because I feel like every technology revolution has talked about job destruction.
Preston (30:36)
Yeah. Yeah.
Stephen Brown (30:50)
And I just feel like there’s still a lot of work to do in this world. Like I couldn’t get not, I can’t get enough AI personally. like, I could use anything I can do to help me get my job done easier. I am all about. ⁓ But it is interesting. You get some really smart people that are like, we’re going to have catastrophic impacts. One thing I say is it’s going to change things, right? We’re going to see job.
jobs destroyed and hopefully we’ll see an equal amount of jobs created but in that transition, well they’ll be again winners and losers.
All right, next prediction. This one is a little bit of a recycle. I think we’re going to see continued growth in emerging channels. The ones I talked about last year, I’ve already talked about one. We’ve gone somewhat exhaustively on AI, but I still think TikTok shop. read this morning that we’re recording this here at the end of December, that I feel like there was an agreement for TikTok to be spun out and bought by a U.S. entity.
And we’ve seen huge growth in TikTok Shop this last year. One of the big takeaways was that it’s about the size of eBay. You the question is how much bigger can it get? And then I think you got things like AppLovin, which I got pneumonia a few weeks ago and I went down the mobile game rabbit hole just to, cause I was tired and needed to do something mindless. And the ads on there are terrible.
Like mostly it’s like other game ads or like gambling, like pseudo gambling apps. And I’m just like, clearly there’s an opportunity for that attention to have better ads and ad experiences. So I, know, and I’m trying to think if there’s other opportunities. I mean, are there other channels you’re thinking about that I haven’t?
new channels that are being discussed.
Preston (32:43)
No,
I think those are the main ones. then just, you know, the question marks around AI, but I don’t have much to say on TikTok because we haven’t gone down that road with our brand and customer base. AppLovin has been really interesting. We’ve been playing around and I think to your point of there’s a lot of improvement to be had there. They’ve gated who can run ads on AppLovin
First, it was like you had to have a huge amount of ad spend. I can’t remember what it was, it was way past our threshold, so we couldn’t get on AppLovin. Then agencies have been able to have private invites to brands. That’s how we got in, was from Triple L Inviting. I think it was Triple L Invited us in. Or Format, I can’t remember.
Stephen Brown (33:12)
Yeah, it was a big number for a while.
Hmm.
Preston (33:31)
Anyways, so I think there’s just, they’ve limited the supply of ads on AppLovin. And I think that’s maybe part of why a lot of people have seen success. For us, messed with our meta ads. Every time I ran a lot of AppLovin ads, the cost per click is so dang low that I would get a crazy amount of traffic. And so then I think our meta ads were retargeting these people. And so every time I ran AppLovin ads,
Stephen Brown (33:41)
Hmm.
Preston (33:59)
our meta performance would drop, which is crucial to our business. but I’ve heard a lot of people have had huge success there. So I think there’s a lot of opportunity for growth on AppLovin and TikTok. mean,
Stephen Brown (34:09)
Do you
think anybody dethrones Meta in 2026 as the premier champ? Yeah, I agree. I think they could take a chunk out of it, especially if AI advertising platforms are effective. I could take a big chunk, but I don’t know. Like even if.
Preston (34:15)
I don’t think so. I mean, yeah.
Stephen Brown (34:31)
like TikTok shop grows significantly, it’s still got a ways to go to meet Metta in my mic. Or Amazon, right? Amazon’s just a Goliath compared to everything else.
Preston (34:38)
Yeah, agree, yeah.
Yeah, Yeah, and they’re all, they
all have these little nuances and differences that you have to think about, right? Yeah. And I think meta just unlocked this, this, I don’t know, new beast of matching ads with people and it’s only getting better. And, yeah.
Stephen Brown (35:04)
And it took a while. mean, think about it. Meta was around
for years before their ad platform really got into gear. One could argue that was probably the renaissance of, or kind of the second wave of e-commerce. The first wave was the early internet where you had to build everything from scratch. But I think Meta was part of, there was a couple legs of that second wave. think you had Amazon third party sellers.
You had Shopify, you had Meta, and to a certain degree Google, but I think especially for direct to consumer, was more Meta advertising that unlocked that. It’s just huge.
Preston (35:44)
I think they were kind of this first mover into social advertising where people are just binging there for entertainment and they’ve been able to for a big company like that I think they’ve been able to move with the new technologies over time and effectively use them right so and so
Stephen Brown (35:48)
Mm-hmm.
Are there any channels we’re
not thinking about that we should? I’m just trying to think of anything I’ve heard of that’s emerging beyond some of those. AI isn’t here yet, but everybody is expecting it to come, and I would agree. I’m just trying to think where else there might be opportunity. And I think there’s a lot of streaming media. don’t know if they, but I haven’t seen anybody really, or heard of anybody really tapping into commercials on Prime Video or…
Preston (36:17)
Yeah, I think you’ve hit the big ones.
Stephen Brown (36:27)
But that could be. I just haven’t seen it emerge yet.
Preston (36:30)
Podcasting, seems like it’s kind of a tertiary thing, right? Podcast ads, yeah.
Stephen Brown (36:33)
Kind of hit and missed, yeah.
Well, in podcasts, seeing that we’re on a podcast, the audience sizes are much smaller than I thought they would be. Like it’s really hard to build a podcast audience. Now it’s super engaged, super targeted, I think, if you have the right product. I think podcasts are very fragmented. There’s not like, I mean, you do have some podcast networks, but for the most part, you just have a bunch of indies like us who are out putting our stuff out on
Preston (36:44)
Yeah.
Stephen Brown (37:03)
know, RSS feeds and then pushing them onto all the major podcast channels. So there’s the part of the challenge of a podcast is how fragmented are and nobody’s really built an ad network that can like podcasts can plug into kind of like, you know, Google was one of the innovators there. It was really easy to put AdWords on your webpage. It’s not easy. There’s not like a an equivalent for podcasts.
And so I think it’s a very fragmented experience and it’s a very, there are some that are doing really well and then there’s a whole lot that’s just a labor of love or part of a business strategy like ours. From a monetization standpoint, it’s really hard to get leverage on podcasts. And I’d be curious, like at least some of these big ones, you get your Joe Rogan’s, you get your…
I don’t know, I’m trying to think of some of the other ones. I’d be curious how well those ads perform. Like I’ve occasionally have listened to a Joe Rogan episode and I’ve heard Traeger advertise on there. I wonder how that does. Are they moving a lot of product with that?
Preston (38:06)
Yeah, the supply is just
so limited that they probably have to pay so much to get on there. I don’t know.
Stephen Brown (38:12)
They probably have to pay a fortune.
Whereas you could get onto a small podcast like us if we were doing ads, but like our audience isn’t that big. So it’s a lot of the ROI is hard. Like you don’t have, it’s not like, like an ad network you can push out and hit a lot of people. Podcasts, there’s like, it’s a long tail thing where there’s a couple of ginormous podcasts, a whole bunch of small things. And it’s really hard to get very, probably really expensive to get into big ones.
And it’s probably, and it’s really, it’s not cost effective to spread out into the small ones. So that’s a challenge. Maybe that’s what we should be building, Preston, is an ad network for podcasts. Which is basically what AppLovin is, right? It’s an ad network for apps, right? I feel like, you know, in the early days of the phones, you’d get on and maybe you’d have to spend a buck to go for the paid version of the app. Now it’s just all ads.
Preston (38:53)
There we go. Yeah.
Stephen Brown (39:09)
Like it’s annoying. I hadn’t really gotten into mobile games, but getting pneumonia where I was kind of zoning out trying to survive this like awful fever. I was playing, I just found myself playing a lot of mobile games and I was like, it’s all ads now. Like it’s just, it’s annoying. All right, let’s move on to the next prediction. I’m going to say that the e-commerce for e-commerce sellers, we’re going to stick to that theme of K-shaped. It’s going to be a market of winners and losers. So here’s my thesis.
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<span data-c=””>ontrast=”auto”>Stephen Brown (39:34)<span data-ccp-props=”{}”>
I don’t feel like it’s necessarily based on the size of the business, but I do think that bigger businesses inherently have some advantages. They have more resources. I think what we’re going to see with e-commerce businesses is a separation based on execution and excellence, which again, I think is there’s some advantages to bigger businesses that have more resources, but I feel like marketing excellence, operational excellence, supply chain, ⁓ fulfillment.
and financial excellence are gonna be really critical and those that are good at it, I’m not sure that they’re gonna flourish, but they’ll survive and maybe do better. And I think that those that don’t level up their game are gonna suffer and possibly go out of business. In some ways I hate this prediction, but I could see…
some losses in 2026 because of lack of operational execution.
Preston (40:25)
Yeah. And I would add to that prediction, those who utilize AI the best and all of those different functions will likely be the winners just for reduction, reducing their overall cost and improving efficiencies. I think where smaller sellers have an advantage, smaller teams.
is they can be more nimble in how they utilize and implement AI. Whereas, you know, bigger brands, bigger companies and teams can’t do that.
Stephen Brown (40:55)
You’re spending lots of time debating what we do and less time actually doing it, right? That’s why I think it’s about execute. Yeah.
Preston (41:00)
Yeah, and then you’re trying to hold on to teams and people
instead of just, yeah.
Stephen Brown (41:06)
And still feel really bullish about the ability to e-commerce businesses. feel like just the ability to create businesses, just like we saw with SaaS, where SaaS made it easier to start a software company. I feel like Shopify and Meta and a lot of things we’ve talked about, it’s still really easy to launch an e-commerce business. I just think it’s going to be harder to scale an e-commerce business.
And I feel like that operation, you know, and I think part of that execution excellence is also gonna be product. I think vanilla, undifferentiated products, it’s just gonna be a lot harder because it’s easier for competition to sneak in. So I don’t know how this is gonna trend, I don’t know how we would measure this outcome. I still think e-commerce as a whole, we’re seeing
A lot of strength we saw in Black Friday Cyber Monday, more growth in e-commerce than in brick and mortar. But yeah, I don’t know, there’ll be some statistics out there. I just feel like we’re gonna see some brands, more brands not make it because of just how difficult it is to run an e-commerce business today.
All right, this is going to be a fun one. You asked me, you said, what’s your prediction for advertising? Now this is more you, so I should probably be like, what’s your prediction? But my financial, I’m going to play it kind of safe. I think the safe bet is that cost of advertising CPMs will probably go up, not down. But I do have two outlier conditions.
Will AI, coming back to our earlier conversation, if there’s a really efficient ad platform, could it push the efficiency of advertising, make it more cost effective in general? I think there’s that potential. And then obviously if we have an economic decline, usually advertising gets hit. If there’s lower demand,
for advertising, but the same amount of ad inventory that should in by thesis. I did a little research usually when there’s a recession, things get better. And this gets into my last prediction, but I think the safe bet is that ad costs are, they go up some, but I do think there’s some, there’s some, there’s, you know, I’d say the most positive thing is does AI,
create more inventory and more competition, which is better for the consumer, which is the businesses. What are your thoughts? Would you twist my thesis in a different direction?
Preston (43:35)
Yeah, I may be leaning too much on our micro experience with the brand that we’re running, but I do think there’s this chance that advertising costs decrease, not necessarily CPM. So something interesting I’ve seen and I’ve heard with Andromeda is that CPMs have actually gone up, but cost per acquisition and new customer acquisition has dropped. because the tool has just gotten better at.
Stephen Brown (43:59)
Hmm.
Preston (44:01)
matching ads with the consumer. So, yeah.
Stephen Brown (44:02)
converting matching, which is a win all around. Like if they get more ad dollars, but
we get a higher conversion rate, then everybody wins, right?
Preston (44:12)
Exactly. yeah, and hopefully like the competition of AI if they come in the ads game and you know, across the board ever all the platforms get better. Yeah, I think those who play into the changes and into the way that you know, as advertising is using AI to do their matching, then
there’s going to be winners and losers. Kind of like what you’ve said with a couple of the other points. The question is like how big of the bucket are winners and how big are losers? I don’t know. yeah, think that’s, I don’t know for me as I’m listening to you go through these predictions, it’s like how do you adjust as a brand and be the winner in each of these areas? Yeah.
Stephen Brown (44:44)
Yeah.
Yeah, how do you make sure we’re on the winning track, right? Because it
could be good. ⁓ I don’t know if it’s a rising tide lifts all boats economy. We’ll get into that at the last prediction. But I do feel like if you’re on the right part of the trends, could be a good year in a lot of ways.
Preston (45:16)
And if the economy goes bad, you, then, you know, if you’re on the right side of, if you’re doing the right thing, you survive and you’re ready for when things go well. So.
Stephen Brown (45:26)
Yeah.
So this next prediction is more of a, it’s almost a derivative of the execution excellence. I feel like inventory, and I’ve carved this out as a separate prediction as well. I think inventory optimization is a critical skill in 2026. I feel like cashflow is just tighter than ever. Margins are tighter than ever. And the cost of capital is still high.
And so I feel like inventory excellence is going to be a really critical skill for businesses in 2026 because there’s not a lot of wiggle room to get it wrong. Unlike a couple of years ago where you could overorder, that’s okay. There’s enough efficiency that you could just sit on inventory. And I just don’t know that the industry can, especially these smaller businesses that aren’t as sophisticated, can get away with that.
I feel like we’re going to collectively as an industry, we’ll say the smaller part of the industry get better at demand planning than we’ve ever been.
Preston (46:25)
Yeah, I mean, for us, been it’s a huge factor because of we’re importing from overseas. There’s, you know, big days in inventory that we have. so, I mean, we’ve seen the struggles of inventory management and the impact it has on the business. And so any leg up that a brand can get on the competition and improving profits, I think is just becoming more and more crucial to stay in the game. So.
Stephen Brown (46:55)
All right, let me get the final prediction and then the bonus prediction. Final prediction is how I’m feeling about the US economy. I’m not going to talk about the global economy. We’re a US brand. Ledger Group is we work mostly with US brands, the OR brands that are selling into the US. So this is specific to the US. I’m going to say we are meh at best. Now I think there’s some mixed things. On a negative side, I think there’s some affordability.
Preston (47:00)
Yeah, there we go.
Stephen Brown (47:19)
big time affordability challenges with inflation. We’re just seeing pressure in a lot of areas, housing, energy. We’re seeing some increasing layoffs. I don’t think it’s bad, but we’ve seen unemployment tick up this year. There are concerns about the AI bubble. I’m less concerned about the AI bubble. And I’ll get that into my bonus prediction. Now on the other side, I think
The big beautiful bill, we’ve dug into it a little bit, there’s a lot of stimulatory things there. There’s no tax on tips. There is some really good things for businesses around accelerated depreciation. ⁓ So I think there’s some stimulatory impacts of that bill. Obviously we’ve talked about AI. I do think in a weird way, immigration has some…
potential positives because there is a thesis that I’ve heard. I don’t think it’s perfect, but if you take people out of the system, does that help preserve jobs? So you know, it’s a double-edged sword. You might lose some consumers, but the question is, are those consumers of e-commerce, know, the traditional DTC brand, or you know, are they more of a lower-end consumer? But if we
reduce that population, the work’s gotta come somewhere. Now, I am worried because I don’t see a lot of white guys mowing lawns or framing or doing stuff like that. So I’m not sure where the labor comes from, but I do think it may have a positive effect on employment. There might be a macro recalibration of labor.
because of the lower supply. So, but add it all up and it’s just meh for me. It’s like, there’s some good things, there’s some bad things. I’m not super excited, but I’m also not like…
I’m not feeling like this is a…
we’re set to crash, but I will give that in my bonus prediction. So what are you thinking about macroeconomics?
Preston (49:22)
My question is, I feel like we’ve been in this meh stage since post-COVID, and like how long is this gonna go on?
Stephen Brown (49:27)
for a few years. Yeah, yeah.
Well, and ⁓ I come back, you had a good point. Like there’s a lot of little things adding up. Is there just one more straw to cause it to all crumble or will things settle? think, yeah.
Preston (49:42)
Or is AI that good? It’s like the bubble actually,
not a bubble, I don’t know.
Stephen Brown (49:47)
Yeah, yeah, it has been years of this and I think, you know, there’s two things you could go before the next downturn. One, you could argue we’ve been in a downturn. I think e-commerce was in a downturn for a few years. There’s just been one thing after another. I mean, we had a huge spike and then it was a slump. And I think we’ve been crawling out of that. We’ve seen this year that e-commerce sales as a percentage of total retail has…
now surpassed peak COVID. ⁓
But yeah, there’s a lot of little things that are adding up and do those do enough those little things add up to cause things to topple over or does thing do things just kind of settle? I don’t know. There’s to me this is a really foggy year. I’m having a really hard time as we’re planning individually, but also as I’m thinking about this on a with the other customers I work with, like how do I think about this year? And I’m and I’m having a really hard time.
seeing through the fog of all of the things going on, good and bad.
So this is my bonus prediction. Any more thoughts on the MEH economy? You some good ideas.
Preston (50:50)
No, no thoughts.
Stephen Brown (50:52)
Okay, here’s my bonus prediction. This is me being a doomer. ⁓ I was talking to a friend the other day, and everybody’s talking about the AI bubble and if that thing pops, but I’m less concerned about that because the AI bubble is largely being fueled by ⁓ public companies deploying cash. They’re not leveraged. And I think when we get into trouble is when we’re leveraged. So I’m less concerned about AI.
with leverage. we look at OA, it was a housing leverage. If we look at the great recession, not the great recession, the tech bubble, that was tech investment leverage. But the deployment of AI is largely coming from these rich companies. So was talking to a friend and I was like, I think the real bubble is a private equity bubble.
Private equity is gobbling up everything and everything and that whole industry is levered. They don’t buy a company outright. They go to a bank, they get a huge loan, they stack the debt onto these companies and then they squeeze every dollar out of them. And I’m just seeing private equity everywhere I turn. They’re coming into the accounting industry. I haven’t seen it real heavy in e-commerce.
⁓ But I saw it in tech before I left tech. I everywhere I turn, they’re in housing.
And they’re so levered that the problem is if there’s any issues like a small bump economically and they can’t service that debt, those businesses do not have the free cash flow because they’ve got this huge debt hanging over their head. So they have to perform at a certain level. I’m going to, I’m going to make, and I’m not sure this happens in 2026.
but I guess this is a 2026 prediction. I guess my out there prediction is if we, think private equity is a huge risk to the economy because of the nature of how they fund acquisitions and run businesses. And not all private equity is equal. That I think there is a silent, and the other thing is these guys, a lot of them aren’t public. For every Blackstone and KKR, there’s a million that are private.
but they’re all levered. They’re all levered to the hilt. What do you think about that?
Preston (53:03)
Do you know what kind of portion of the economy ⁓ private equity makes up?
Stephen Brown (53:08)
That’s a good question. I
should have done some research on how much is going to private equity, but I feel like there’s so much acquisition of businesses that is happening at private equity levels. Whereas, 20 years ago, you wouldn’t see small businesses getting bought up by private equity. Now you do. We’re seeing it in the accounting industry.
They’re just gobbling stuff up. I’m reading about trades. I read a couple months ago about how private equity was going after plumbers and HVAC. And there’s a lot of virtue to that because they’re coming in, they’re applying better business practices, but they’re doing a lot of consolidation. They go in, let’s look at trades people, they’re terrible business people. They’re technicians who run businesses.
Preston (53:45)
They’re doing a lot of consolidation too, right?
Stephen Brown (53:56)
Often they have terrible business practices. They’re not good at invoicing. They’re not good at customer service So, you know the argument the thesis is hey, we’ll come in we’ll run we’ll run a tighter shop Have greater execution better profits, but they have such high debt that if I just don’t feel like they have the resilience because they’ve modeled so much debt in there that I feel like
you could see some failures. You know, my thought is where there’s leverage, there’s risk. And where is there a lot of leverage in the economy? Private equity. And where is there private equity? All over the place. We don’t even realize it, but it is just, I feel like there is, if there’s an opportunity for cashflow, private equity is going after it.
Preston (54:39)
makes me want to look up some numbers and yeah, dig into that a little bit.
Stephen Brown (54:45)
Yeah, don’t know how to do the trade on that one. It’s not like the big short where you could go out and you know, so much of this I feel like is in a private or in private the held companies taking debt from limited partners, banks, wherever they can get financing. And because they’re disciplined, financially disciplined, the thesis is, they’re good. But I just feel like the underlying economic model of private equity.
makes it could create some risk with economic downturns, their ability to service the debt is at risk. And then what happens if dad doesn’t service now you have a financial crisis. So there’s my outlier crazy idea that if we do have an economic crisis in 2026, it’s going to be rooted in private equity, not AI.
Preston (55:31)
And I could be off by saying this, but it seems like private equity, venture capital, just the number of firms I’ve seen and like those companies pop up over time. are there like less sophisticated private equity company, you know, like, and is that, you know, does that factor into part of the issue? It’s not only is it a lot of leverage, but less sophisticated leverage.
Stephen Brown (55:40)
There it. Yeah.
yeah.
They’re good about deploying good business practices, but there’s something to say about these inefficient mom and pop small businesses. They may not move the needle. They may not be as profitable. And there’s a lot of turnover. But you’ve distributed the economic risk. If you have a whole bunch of small businesses versus a concentration risk, it’s a little scary. And the thing I don’t love about private equity is
They just don’t care, right? They will lay off. let’s say they have a downturn, because I’ve worked for a private equity company, they’ll cut costs, right? So they’ll do what they need to to service the debt and to generate the revenues. So let’s say they don’t, you know, maybe they don’t crash, but job losses are higher, right? Because they’ll just be like, cut costs. And then that has a downstream negative effect.
So there’s my outlier additional prediction of the private equity bubble that nobody’s talking about. I hope I’m wrong. Hit me up in the comments. But that’s one I don’t think anybody’s talking about that they should be.
Preston (57:02)
Very interesting. I’ll be watching.
Stephen Brown (57:05)
Okay, that’s our predictions
for 2026. Any final thoughts, Preston, before we call a wrap on this?
Preston (57:12)
No, thanks Stephen. ⁓ Yeah, I think as a seller you just…
Stephen Brown (57:14)
So we’re going to have to get together in a year
and see if our assumptions were right. But I do think this is how we should think about planning our business, is using some of these considerations. And hopefully they’re helpful for those of you that are listening.
Preston (57:29)
And I think with each of these risks, figuring out how to be kind of on that winning side and in case it happens, if not, you’re in a good spot. Yeah.
Stephen Brown (57:34)
Yeah, and get after the opportunities if you can. So, all
right, well that’s a wrap. Thanks, Preston. If you’ve liked this episode, hit us up on the socials or in the comments. We’ll talk to you later.