Ep. 1: Tipsy Elves Co-Founder Evan Mendelsohn on Taking the Road Less Travelled

Evan Mendelsohn Tipsy Elves on The Savage Leader Podcast.jpg

In this episode, Darren Reinke chats with Evan Mendelsohn, the co-founder of Tipsy Elves. Tipsy Elves is an e-commerce company that makes and sells fun clothing and outfits for every holiday. Their mission is “to make the most outrageous clothes known to mankind in order to make your life more fun.” 

Evan talks about leaving a stable job at a major law firm to start an ugly Christmas sweaters e-commerce business. We discuss taking the road less travelled, tuning out negative voices, building a company grounded in “fun”, what he has learned from building his company, his advice to aspiring leaders and entrepreneurs, and more.

 

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SHOW NOTES

  • The genesis for creating Tipsy Elves [1:15]

  • Taking the leap from working at a major law firm to starting Tipsy Elves [3:05]

  • Tuning out the negative voices [8:22]

  • Telling his colleagues and family he was leaving law to start Tipsy Elves [10:20]

  • Building a company grounded in a value of “fun” [14:00]

  • Maintaining a sense of fun as the company has grown and become more complex [16:10]

  • Lessons learned from the pandemic [18:32]

  • The impact of the pandemic on him moving forward [21:06]

  • Staying ahead of the competition [22:32]

  • Lessons he has learned about himself in starting and growing Tipsy Elves? [24:18]

  • Advice to other entrepreneurs and up and coming leaders [26:32]

  • Growing and getting better [29:31]

  • Advice to people who are stuck between what they feel called to do vs. what they feel like they should do [31:53]

  • The future of Tipsy Elves [33:07]

  • Where listeners can find out more about Tipsy Elves [36:20]

SHOW LINKS

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PODCAST TRANSCRIPT

Darren Reinke: Today's guest on the Savage Leader Podcast is Evan Mendelsohn, the co-founder of Tipsy Elves. Tipsy Elves is an e-commerce company that makes and sells fun clothing and outfits for every holiday. Their mission, which I think is pretty cool, is to create outrageous clothing for the extrovert and everyone. We transform the moments that matter the experiences you'll remember forever. Hey Evan, thanks so much for coming on the show today.

Evan Mendelsohn: Yeah, thanks for having me. Happy to be here.

Darren: So I know it's been a while here, but take me back to 2011 or even before. So I know you've probably answered this question a million times, but what was the genesis for creating Tipsy Elves?

Evan:  Yeah. It really started, I'd say the seeds for it were planted in college. Nick and I, Nick's the other co-founder of the company. We were roommates in college and we were always attending different theme parties and events. We were in a fraternity, but even outside of fraternity events, we were just going to like kind of any themed party we could find. And we just really enjoyed the experience of dressing up and wearing fun outfits for different events. It made the night more memorable for us. It was a conversation starter. You know kind of led to fun, random experiences. So I think I always remembered the way that it made me feel wearing fun and kind of outrageous clothes for different events and carry that through graduate school. 

Then in 2011 had some experience with SEO as a marketing channel and kind of combined my enjoyment for dressing up with my knowledge of SEO. And the fact that at the time there was this big emergence of ugly Christmas sweater parties and decided to create a company with Nick's help with the goal of, at first starting off by creating Christmas sweaters as our kind of first foot, our first toe in the water. And then with the long-term goal of eventually expanding and becoming a company that serves all holidays throughout the year.

Darren: Interesting. One thing that really is fascinating about your story is I know you're working for, I believe it's called Sheppard Mullin, a very large prominent law firm at the time as a JD MBA from USC, and just that you jumped out and you took something really safe and to do something potentially risky, obviously it's worked out really well. Can you take me through that experience? Like what was that like in terms of making that transition, making that big leap?

Evan:  Yeah, I'd say there are a few factors. So I think for one, entrepreneurial endeavors have always been really fascinating to me and kind of hard to not pursue, you know, and I think even if I was still working at Sheppard today, I would always be trying little entrepreneurial side hustles. I mean, even with Tipsy Elves being super time-consuming, I do some property investment and some kind of like local Airbnb stuff here in San Diego on the side, because it just feels like a great opportunity. I know how to do it. The opportunity presents itself and I can't help myself from potentially buying another property. I find myself kind of wanting to pursue these entrepreneurial endeavors. So I think there was a big push aspect there.

Even before working at Sheppard, I started creating these informational websites where that I would monetize with Google Adsense. And I had a simple little site called dayfinder.com and it basically would tell you the dates of upcoming holidays because those get really high searched. So, you know, someone will search Mother's Day 2021 or Easter 2021, or you know, Rosh Hashanah like whether it's religious or other holidays throughout the year. And at the time Google would not pre-populate those at the top of the site. They'd actually, you know, serve website results for those terms. Before starting at Sheppard, kind of in-between law school, and when I started Sheppard, I created that site and it started doing really well. At least I thought by my standards, I was very happy with it. It was making a couple of thousand bucks a month on ad revenue. 

So that was what started giving me confidence that I at least knew enough about SEO to pursue other concepts that maybe would use that as the primary marketing channel. And then obviously had the knowledge about dressing up and the ability to see that AI enjoyed it be there was this emergence of ugly Christmas sweater parties. I was able to see that there was a lot of search demand for the term ugly Christmas sweaters. And then on top of that, I knew pretty immediately that I was not passionate about working in law. From the first few weeks at the firm, I could already start feeling that it wasn't what I was passionate about. What I was passionate about was when I got home at night, working on Day Finder or doing SEO research and thinking of other business ideas.

So I think for me, it was a mix of all these factors that made starting Tipsy Elves in May and eventually quitting easier. I think it was having proven to myself that it had worked before. I waited till Tipsy Elves got to a point financially where I knew I could quit my job and still pay myself enough to live on and kind of use that combined with the Adsense revenue for my other stuff to kind of survive. Like, yes, it was basically a 70% pay cut of what I was making, but I knew I would at least be able to pay my bills. And then I think it was my love for doing this stuff, I kind of was starting to grow in my confidence to maybe be able to make a living out of this stuff because of Day Finder having a good first year of Tipsy Elves. I was feeling like, yes, there's a risk in quitting, but I'm proving to myself that it's working. And I'm okay kind of betting on myself to grow the business from here and not regret the decision of quitting my job. 

So it's a long answer, but I have been asked that before, and I think it's kind of hard to answer sometimes. Because I think at first, you first hear, and it kind of sounds like this massive leap of faith. There was a leap of faith but I felt like I tried to test it first to reduce the financial risk that I was taking. So I didn't feel like I was betting my entire career and education on a website that sells, you know, humping reindeer sweaters or whatever it was at the time.

Darren: So in the run-up to making that decision to really just to cut the cord and go to Tipsy Elves full-time, so many of us have just thoughts in our heads, you know, they're churning in the middle of the night, what do you do to tune out those voices if you even had those voices?

Evan:  Yeah, I think those voices will go down if you've proven, whatever it is that you're thinking of quitting for. So if you're bringing in some revenue, or you're seeing some early signs of success, I mean, hopefully, that'll prove to you that you're onto something. I would have those voices too if I was thinking about quitting before like the first year that we launched Tipsy Elves rather than giving it a year to sort of build and prove that it was successful or that it could be successful. I think other than that, I mean, I have friends who are just naturally very risk-averse people, and even when they've launched side ventures, and to me, they seem to be successful enough that I would quit. They just seem to not sort of be able to tolerate that risk. 

I don't really know the answer for those people. I do think, you know, there is going to be a sense of a leap of faith, and I tend to think those people, their risk aversion outweighs their desire to be self-employed or to pursue a venture. So I think sometimes it just boils down to what's more important to you. I think some people would rather take the safe and secure. Maybe they would be mad at themselves for doing it or kind of have regrets down the line, but they're just the types of people that need security in their lives. I think that's okay to own that if someone's like that.

Darren: Yeah. I do find a lot of people who are like that. They just want that tried and true, more secure route. I would have loved to have been a fly on the wall in the Sheppard Mullin offices in the meeting with the partners and telling them what you were to go do. What was that like in terms of telling your colleagues, also your family that, you know, "Hey, I'm going to bail on this law job to go sell ugly Christmas sweaters".

Evan:  Yeah. I kind of didn't want to be talked out of it. And I sort of had my mind made up. So I strategically waited until after I had basically put in my termination notice before I told my parents because they're very much the risk-averse type. So I knew that they would've thought it was crazy and worried a ton about if I was making the right decision. Then I wrote an email to my mentoring partner to kind of break the ice because I knew it was so out of the left field. I mean it was very much a nighttime and weekend project of mine and it was very different than law. So not many people at the law firm were aware that I had this other hobby and interest of mine. And also if it didn't work out, I didn't want them to question my interest in law. Like I was building my career there, but I also had this hobby at night that, you know, excited me.

So I wrote an email to my mentoring partner first to just kind of like let him know, to kind of bring him up to speed on at least the early success of the business. I wanted him to, just like I wanted my parents' approval, I kind of wanted the approval of the people I respected at the firm to know that it was a smart decision. I didn't want to leave and have everyone sort of think like, Evan's crazy. Like, why would he do this? I know the emails sort of spelled out my reasons why it was successful so far and why I believed in it. And then I had the conversation with him, I think the next day after he was a little more familiar with what was going on and then kind of the word got around the firm started chatting with different people in different offices.

Everyone was really supportive and like always remember how supported I felt with the decision at the firm. Like the Sheppard Mullin is a really good firm with great people. I think at the end of the day; they want whoever works there to be happy. Even if it might not be in the best interest of the firm, they truly support their people. So I felt like they responded really well and made the process easier for me. Then my parents, I think were pretty shocked. But once again, I think they kind of worried, but knew I wasn't passionate about law. And I think as much as they would have preferred, I think at some points sometimes they still prefer I was a lawyer. They wanted me to be happy. You know, I think that they knew I wasn't really excited about the prospects of staying at the firm long-term.

Darren: That's great to be supported though. It's funny during the process of writing my book, I actually didn't tell very many people. So actually when I did publish it, I got some pretty funny emails and texts. Because a lot of times you go, "Yeah, I'm going to write a book." You can just see them go, "Yeah, yeah, buddy, you're going to be an author. Yeah right." It's like telling someone you're an actor outside of LA.

Evan:  Yeah. So it's better to just kind of do it on your own and then announce it once the decision's been made.

Darren: Exactly. So switching gears a little bit, so I see fun, you know, the word fun on your Instagram feed in terms of pictures and just the way you described the business on the site. So how have you gone about building a company it's really based around a platform of having fun? 

Evan:  I think for one, our products, I mean, yes, there's intentional design around making fun products, but just the nature of being a company that makes sort of outrageous and humorous products for every collection, there's already fun just embedded into our culture just from the products that we make and customers' natural reactions to them. So I think to absent anything else, if we were just a product design company, making humorous gear, that had a tag on social media, we'd still have like a certain level of fun about us because customers have a great time when they wear our products and it creates these really amazing memorable experiences when you wear a Tipsy Elves product. 

But we do more intentional things on top of that, I think to create a fun culture here. Obviously now during the pandemic, it's a different story, but when we are in the office, we try to create a fun work atmosphere. It's one of our values. It's at the top of the list because it's so important to us. So even in our managerial relationships, we have with our direct reports, we try to keep the managerial process fun. Like we try to embed it in everything we do. And even down to the photoshoots with models, like making sure, we try to use a lot of authentic photos like user-generated content. But if we are doing a lifestyle photo, just even trying to bring out natural fun moments in the shoot and trying to make it read as authentic as possible, as opposed to forcing some actors to smile who doesn't really have a reason to. Even kind of creating authentic, fun moments in our photoshoots. Like it's definitely something we put a lot of thought into.

Darren: And obviously you've had just a tremendous amount of growth since you started in 2011. How have you maintained that sense of fun? I mean, obviously, you gave great examples of the photoshoot and just interactions with your team. But what else have you done as you've grown and added headcount and grown in complexity, expanding into new categories, what's that look like for you?

Evan:  Yeah, I think we still try to, you know, even as things get busier or as the business grows, we still try to maintain fun at the top of the list. I think things that could potentially, moments that can be difficult to maintain that perspective and optimism and the fun atmosphere are making layoffs, which we've had to do. Last year and continuing through now with COVID and the pandemic, the BLM protests, you know some of the political stuff we've had to see with Capitol riots like there's a lot of serious, negative things happening and we're very much aware that not only our employees but our customers are dealing with a lot right now. So I think when it comes to those moments, we try to keep it real.

We don't try to act like the world's fun when we know bad things are happening. 

So I'd say it's more in those moments, we try to stay authentic and real and optimistic. It's sort of like how we navigate the hard times and then outside of those moments, we try to keep things fun generally. We also recognize that people need some like levity and humor even in a hard time. So we also do permit ourselves to still be a source of humor, fun, optimism, even when we know people are going through hard times. There's always a role for comedy and humor and laughter even in kind of darker times.

Darren: Yeah, it's always helpful to have an outlet. I've definitely enjoyed the Tipsy Elves emails that I get. So it's always good for a good laugh or a smile.

Evan:  Yeah. Good to hear. Glad you like them.

Darren: So what did you learn about yourself, about the organization as you've gone through a challenging year with the pandemic, and so forth?

Evan:  I've been really impressed with our team and just the ability for everyone to kind of stay nimble and flexible. In the first few months of the pandemic, we got really worried because our sales took a big nosedive and we put the team on sort of like half hours, half payroll situation, which obviously was not enjoyable for them. And we were genuinely worried about the business. We were sort of like looking at things in terms of how long can we go with our current expenses and minimal sales before we run out of money and knowing that what can we do to cut our costs even further to extend that ramp and give ourselves an extra month or two? So, I mean, we were looking at things in a pretty dire mentality just to make sure that we were prepared for the worst.

But I think our team, they worked with us and they were okay with these changes. They obviously didn't love it, but we worked together to kind of get through. From a marketing angle, everyone did a great job sort of pivoting and kind of taking the products that we did have that were relevant and really putting those at the forefront. So for example, loungewear was really popular last year. So onesies, pajamas, even taking our sweaters, which have traditionally been worn more in a party atmosphere and being able to market those and take photos of them being worn in more of like a home setting, more of a loungewear setting. 

So we definitely pivoted a lot as a company. Everyone was very quick to act. We pulled off a lot of, kind of like last-minute fun things for our customers. We started doing these recurring virtual bingo nights where Nick and I would host and we'd give away prizes. And it was very much like a team effort getting everyone involved to make sure that those nights went smoothly. So yeah, I'd say more than anything, just very proud of the team and kind of everyone's ability to navigate a tough year and we're not through it yet, but for the most part, being able to come out on the other end.

Darren: And what about in terms of carrying that forward? Like what are you going to carry with you from this experience both as an individual, but as an organization?

Evan:  Yeah, I think just kind of going back to our core of keeping things fun. But also I think we'll always remember that tough things can happen. I mean, COVID was a big eye-opener. Like, you can have the rug pulled out from under you at any time for any number of reasons. This one was a pandemic. Maybe the next one could be a war, could be a civil war. I mean, you know, weird stuff can happen. So I think just continuing to be a source of fun, but always with the mindset that stuff can happen and making sure we're prepared. And if anything, that's even more reason to celebrate when that stuff isn't happening, because you know, that means our team and the rest of the world can more naturally enjoy their lives without having all these significant sources of stress and things to worry about.

Darren: Yeah. I know that the two words I focused on the last year have been being flexible and being adaptable.

Evan:  Yeah. Yeah, exactly. I think those were very much present at the company last year.

Darren: What about in terms of, I've noticed other competitors have come in your space. I know at the beginning you had some greenfield there. How have you adapted in terms of just your own style, leadership, just the organization, just in terms of how you managed to stay ahead?

Evan:  Yeah. I think our philosophy has been to very much be aware of the competitors. I mean, I think, you know, you could ask probably a number of people at our company and they could give you a quick list of who we think our biggest competitors are. But I think that said, beyond being aware of them, we try not to like let their existence dictate or change the way that we operate. So I think we stick to our guns from a product design standpoint, from product innovation, from always challenging ourselves to be sort of a front runner in creating new categories and new products. Trying to be the most clever designs, the most visually aesthetic designs, and then trying to build an authentic brand that's who we are without really thinking about how to shape our brand because of the existence of someone else. I think we really tried to just keep going and not paying too much attention, but also being aware of them. Because it can be helpful to know, you know, who's kind of on your heels or you know if there's a product that a bunch of people is jumping on board. It can be good knowledge to have.

Darren: Yeah. Being aware but not being obsessed.

Evan:  Yeah, exactly.

Darren: So something that I tend to do, especially as I've gotten older is just reflecting on what I've learned about myself from the past. Like what have you learned about yourself during this whole process of taking Tipsy Elves as an evenings and weekends business to this thriving business that's in multiple product categories? What have you really learned about yourself during that journey?

Evan:  It's a good question. I mean, I think comparing now to the very early days, I guess there's a sense of pride that we've taken the business to where it is today. I definitely didn't think that you know, back in 2011, that it would be the size of the business that it is today and that we'd have the success that we've had. I think if you asked me back then and said, you guys will be a $5 million a year business, I would be like, even that would have shocked me, you know and we've far exceeded that. So I think like my expectations back then were very small, like, you know, do a little bit more in revenue than I'm making in my law job and maybe supplement it with a few other businesses and I'd be really pumped about that.

So I think definitely the idea of that, you know, I'm capable of that Nick, Nick's capable, our team's capable. I think there's a sense of pride that comes from that and now just wanting kind of like more out of the business and wanting to keep going. So I think that also shows that we're kind of ambitious and we kind of like to think big. We don't really like to sort of settle and get complacent. Trying to think beyond that. Yeah, those are probably the two of the things that just kind of come to mind. I'm sure I could think of others but nothing else is jumping out at me right now.

Darren: So based on that experience, what would be your advice to either your younger self or aspiring entrepreneurs or leaders?

Evan:  I think just having confidence. If someone's looking to do something entrepreneurial or get out of their job, I would first test it and make sure it's a viable concept. And then I would believe once you've tested it, that it should work, it's already proven itself. So believe in yourself to just go for it. I used to think that I needed a certain skill set or educational background in order to start a business. And I kind of quickly disprove that after I got my MBA because I realized that an MBA didn't prepare me. Like it prepared me like 0% for starting Tipsy Elves. I don't think there was anything I learned in the JD or the MBA that prepared me for Tipsy Elves. It was all like SEO was the first skill set and then everything else beyond that was learning as we went. I mean from sourcing products to distribution centers, to shipping and logistics, to hiring and training and leading teams. I mean, it's all been learned on the job and none of it was trained.

So I think that was like a big misconception that I sort of had to disprove to myself through the process of getting an MBA and then realizing I still didn't know what I needed to start a business. So I think getting any of those preconceived notions that like, you don't have what it takes, I think would be good to get rid of those. And just know you got to figure it out when as you go. It really comes down to work ethic. How much do you want it and making good connections? I think there have been simple conversations we've had that have leaped us forward by years in terms of allowing us to avoid mistakes. Or, you know, one person recommends a warehouse they use, and it's a really good 3PL logistic company. How do we know in that three years prior, maybe that would have avoided us from having three years in a row of really crappy logistics where we moved fulfillment companies every year. So like continuing to network, learn. But I think those are kind of the main things that I would sort of have told myself back in 2011.

Darren: Yeah. It makes me think about years ago, I made a decision just to stop worrying about what my resume said and focus on what I could actually do and what were my experiences. Just so much more powerful that way.

Evan:  Yeah, absolutely. For this kind of stuff, anything entrepreneurial, it really doesn't matter.

Darren: Absolutely. So how do you stay sharp? So how do you continue to grow and learn? And you've now reached the top of your first hill per se, but how do you continue to grow and get better?

Evan:  Yeah. I try to say it's definitely a lot busier now. So like my days are more filled with meetings. We don't have a huge team but we're about 25 people and we have a fairly flat organizational structure. So like I manage seven people directly. So it is a lot of administrative time spent managing but I do try to leave a good chunk of time to float higher or at least that's one of my intentions, is to spend time reading, learning, networking with other e-commerce owners, reading forums, listening to podcasts, like just trying to make sure that we're staying cutting edge, especially when it comes to marketing. The marketing landscape for e-com companies is changing so quickly and just trying to stay abreast of all the changes. So yeah, really just trying to like continue to educate myself. I try to read some books here and there, but I'd say I tend to focus more on e-commerce specific knowledge that is actually practical. Practical takeaways that we can use right away for our business.

Darren: Fantastic. Yeah. Lifelong learning is such a big thing. I know I have learning goals for myself. I work with clients to set goals that are specifically oriented around learning.

Evan:  Yeah.

Darren: That is really helpful.

 Evan:  Yeah. You have to. I mean, Nick and I sometimes talk about the concept of, you know maybe post COVID, even just him and I almost had a retreat for three or four days where we just do nothing. We turn off our slack and we just like brainstorm because some of our best ideas come when he and I are able to decompress from the day to day and actually just free up some like white space to just brainstorm and think big picture about the company.

 Darren: Yeah. Tuning out all those distractions is so helpful. I know for me I use the early morning hours. So that's how I finished the book. It was 5:00 AM on midweek, weekends, vacations. It's just helpful to get some of that. Just clarity of thought.

Evan:  Yeah, absolutely.

Darren: One more piece of advice. So what's your advice to other people who feel torn between what they feel they should do and what they feel called to do? 

Evan:  That's tough. I guess there are so many nuances. I mean, my gut tells me to go for what you feel called to do, but if what you feel called to do is quit your job on a whim and you've got three kids and everyone's depending on you for financial support and you feel like what you should do is keep your day job and be a source of financial security for your family. Then I'd argue, maybe you should stick with what you should do. So it's kind of nuanced, I guess. I mean, I do think everyone should seek to do what they're called to do but to do it in a way that sort of minimizes downside risk and doesn't create a wake of terror because they go just follow their heart on a whim. So I guess that would be sort of my advice.

Darren: Helpful advice for sure. So looking forward, it's been crazy to watch the growth of Tipsy Elves expand in all these new categories. What does that future look like for Tipsy Elves?

Evan:  Yeah, I think every year as the brand sort of solidifies and we kind of become more and more known as just an all-around fun apparel company that sort of spans every holiday, every month of the year, new product ideas keep kind of popping up. So, we sell a ski apparel collection and our ski suits are really popular. So all of a sudden you start thinking about other sports that we could offer products to. So we have a golf collection that we're launching this year. Bachelor, bachelorette products. We're launching a Valentine's collection for the first time in the next few days. So I think as we become more and more year-round and more known for that, just continuing to expand our product offerings.

 There's also a lot of opportunities to explore hard goods instead of just clothing. So, you know, giftable, if you're talking Christmas, for example. If we're already kind of the go-to place for all fun holiday-themed clothing, why not also be the go-to place for home decor, for fine decorations, for humorous ornaments, gift cards, you know. There are so many things you can do when you have a brand that's synonymous with fun. And a lot of the stuff we do can kind of cross over into other areas. So I think continuing to really expand our product offering and really solidify the brand and yeah, just kind of expand, but we want to be really mindful about the direction we take.

 So we're doing a lot of road-mapping exercises right now as a company and making sure we don't bite off more than we can chew. Kind of feels like there are a hundred different directions we can run right now. And we know that that's not good to run in all 100 directions. So really trying to figure out, okay, here are the four or five main priorities and opportunities for the year. Let's do them really, really well and then, you know, focus on the other stuff later. So it's kind of where our heads are at now.

 Darren: Yeah. I can definitely speak to the ski suits my wife wore for her 40th birthday. It was a huge hit and on the slopes over the holidays. So people love the ski suits. It's a really cool fun product.

Evan:  Cool. Yeah. Glad you guys liked it. Yeah. They're fun. We have a partnership with Johnny Mosley. He's a gold medal skier from the 98 Olympics. And he calls them the day maker because it's like, they not only make your day, but they make the day of anyone who sees you wearing them. And they're like such a conversation starter. So I'm glad your wife enjoy it.

Darren: Absolutely. She loved it for sure. So working people who maybe don't have any sweaters for me, or ski suits or any products, where can they go to learn and find out more about Tipsy Elves? 

Evan:  Yeah. Primarily everything we sell is through our website. So they can go to tipsyelves.com and kind of navigate the site. The things are pretty much sorted by collection. So we refer to collections being the different holidays or thematic groupings of clothes that we sell. St. Patrick's day, 4th of July, Valentine's, ski, all that. So yeah, I'd just say, go to our site, check out the gear. Hopefully, find something that makes you laugh and makes you want to rock it.

Darren: Awesome. And I'll give your Instagram feed a good shout out too. So Tipsy Elves is good for a good laugh or at least a smile.

Evan:  Yeah. Awesome. That sounds good.

Darren: Hey, well, Evan, thanks so much for coming on the show today. I know you're a busy guy, so I really appreciate it.

Evan:  Yeah. Thanks, Darren. Appreciate it.

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