11 Pricing Lessons Every Marketer Should Know

Neil, do you want to know the true economics and ROI of a Super Bowl ad?

I already know it, but continue. I did a chart and a post on this a while ago, but it's terrible.

So why is it terrible?

Super Bowl ads do not work out from a profit standpoint.

So get this, the, you know, Ro, the health company, right? So they did a post yesterday. You saw it on Twitter? No.

Okay.

So they do, I think they do about $500 million a year or so.

Okay.

So he actually wrote a post about this, the economics of a Super Bowl ad. So check this out. So he's going to have Serena Williams, known as one one of the GOATs of tennis, right? Or I guess you can't be one of the GOATs, you're just the GOAT, right, of tennis. And so he's doing it, he just kind of broke this down. So he's like, look, you're not actually paying, and this is where we talked about it, you're not actually, if it's $7 to $10 million, you're not actually paying $7 to $10 million. There's a lot more that goes into it. And I'm going to get to that. And then you can push back on some of these things that we've done or that he's talking about here. But he was just saying, look, the ads are a part of the product, but there's asymmetric upside. So here's the table that he made over here. I know you like tables. So assuming his marketing spend is $200 grand, sorry, not $200 grand, $200 million a year, the annual percentage you're spending on this ad is maybe 5%, right? And then you kind of go up. So I think their spend is, it's, I think it's around here, $200 to $300 or so.

So very few companies, Eric's showing a chart that goes up to $900 million a year. Very few companies spend $900 million a year on marketing.

But I would say, I mean, you would agree with this, that a lot of companies that are spending on these ads are spending a good chunk of money on Marketing for much higher percentage than the 5%. Yes. Now, so, you know, first let's talk about the full cost, which you've kind of addressed, and then let's talk about how he's breaking down the ROI and the short-term and the long-term benefits because the Super Bowl is coming up. Sad that the Rams lost, but you know, it's okay. I still like the Seahawks. So when you look at the production cost of this thing, okay, typically, okay, a 30-second ad Neil, I'll let you answer this one first. How much would the 30-second ad spot cost initially, just for the Super Bowl one, just the Super Bowl one, not all in?

So when you say all in, are you talking about the other costs like production or are you talking about more ad buying?

Because typically when you buy— I'm not talking about the additional ad buy. I'm just talking about the Super Bowl ad buy, not including the production cost for the ad.

It's typically less than $10 million.

Okay. So he's got it here. 30-second ad media cost is $7 to $10 million. Okay. Then he says production is $1 to $4 million. Okay. Talent is $1 to $5 million because you're paying the influencer, right? And 64% of these ads last year had influencers. The total Super Bowl, you're paying $9 to $19 million. I don't know where that comes from, but additional media spend, which we've talked about because the networks—

The $9, he's doing $7, one for the commercial, one for the influencers. Okay. He's saying low end is $9.

So then the additional media spend that we're talking about where the networks require you to buy another shows, right? That's an additional $7 to $10. So your total committed media plus production spend, to $29 million. So do you agree with the cost on that before we talk about measuring success?

I would say $16 is on the low end. Usually you see it, if you're going to do it, you're going to do it right. Typically all the companies we've worked with when we've done Super Bowl commercials, you're looking in the 20s.

Okay, so exactly what he's saying, right? So $16 to $29, $16 on the low end, right? So how do you measure success here? So the value of a brand to a customer can generally be distilled down to 2 parts. One is an association with a set of values. So privacy, craftsmanship, the environment, status, wealth, etc. Number 2, The reduction in uncertainty, trust that the company will deliver on the promises it makes. So, you know, you don't want it to be like brand awareness is not necessarily a brand value, right? A lot of people know Enron, for example. So what he's saying is that the way the economic value of a brand typically shows up is in one or a combination of the following. One, lower CAC, right? Lower cost of acquiring a customer through more efficient ad spend or word of mouth. Number 2, premium pricing power. If there are 2 identical products, but people are willing to pay more for one because of the brand, the brand is driving additional LTV. Lifetime value, and then you have loyalty and retention, right? So just to wrap this up, then we can finally discuss this. So how's Ro? Again, they're the health company. They sell like, I think the ad is about GLPs, right? GLP-1s. So the peptide that helps you lose weight. So how do we think about measuring the financial impact of the ad in the short and long term? So short term, it's all about tracking the conversion funnel from beginning to end across all touchpoints. So he's basically saying, okay, overall, Zooming out from the moment our Super Bowl ad airs through the rollout of complementary campaign elements, we will track the entire funnel. I'll save people from DTC metric diatribe. We track the additional— we track traditional funnel metrics. This allows us to see the impact, the uplift over time, right? Holding as much constant as possible. So long-term, which I think I'm more interested in, and then we can talk about this, is you are now able to Short-term impact is immediate customer acquisition. Long-term impact is improved efficiency of future marketing spend, right? Because you have awareness and hopefully the idea here is that that 1, 2, 3, 4, 5% of marketing spend that they're spending on this, they'll drive further efficiency across the board. And to him, that $30 million bet is worth it for that. Like it either does nothing for it or it lifts it slightly. And that's a lift across the board for all advertising. That's what he's saying.

Yeah, so we've done a lot of Super Bowl commercials. We're 8 years old now. I think we're going on 9, but we've done quite a bit. And what we found is it is great brand awareness. And most companies do look at it from the perspective that he is saying, in which if you end up doing a Super Bowl ad, you get not just more brand awareness, but you get more brand loyalty or love, whatever you want to end up calling it, where in the long run your conversion rates can go up and people are willing to pay more for you over the competition. But here's what companies don't really talk about because on our end, if a company runs a Super Bowl ad through us, we make more money. And I'm usually the advocate telling them don't do it and that'll cost us money. Mm-hmm. And the reason I say that is what companies tend to forget is when you take all those brand dollars and let's say you're going to spend $30 million, because you have to remember, they usually make you, I've done it in the past, I'm assuming they're going to do it this year depending on the channel that the Super Bowl is run on. But a lot of times they'll do things like make you buy ads for the Olympics, which are coming up really soon, right? In February, the Winter Olympics. Assuming it's the same network. I don't know which channel the Super Bowl's playing on.

NBC.

This year. So usually, yeah, you would have to buy Olympic ads as well. If you just took that money and you bought Facebook ads, Google ads, influencer marketing ads, you know, you did more partnerships and you did a lot of things like that, we see not only a higher ROI, but you're also getting the brand love and affinity because you're getting so many impressions. And with the Super Bowl, yes, you're getting a lot of eyeballs, but we find that we can get way more eyeballs spending $30 million on digital ads than we get from running a Super Bowl ad.

Yeah. So what I'll say is, is this. So he's actually got some, you'll like, you like these charts, long-term math efficiency compounding. Okay. So the more interesting math and the more often more important happens over time. For the long-term analysis, we'll look at 12-month time horizon. This is likely conservative, but if Provides a clean frame. So let's imagine a company's annual spend and estimate that the Super Bowl increases the efficiency of that spend by 1%, 3%, 5%, and 10%. As discussed, it could do this in a variety of ways, decrease the cost of traffic through higher performing ads, increase word of mouth. So he's just saying that it provides like a booster to everything, right? So the chart here shows that, you know, efficiency gained by marketing budget. So if your marketing budget is $200 million and then you gain 1%, You know, you're in the red here, right? Which is, you know, $2 million. If you gain by 3%, then $6 million, 5%, 10%, it kind of just goes up from there, right? You got $10 million and then $20 million over here. So that's the bet that he's making. I'm not sure, Neil, because they're a 3-year-old company, I believe. And I think this is their first time running these ads. And so I don't know if this is just the math to kind of justify in his mind to run it. That's, that's, that's That's like, if this math worked out great, right? But I don't think it's as simple as this.

No, I'm assuming he hasn't done this before.

I don't think he's done this before.

I think, A, he's totally off. I've done it so many times, dude.

Like, I don't think he's done it before.

Because the other thing that companies don't think about is, dude, even LinkedIn had a post about this. This lady worked in the ads department of LinkedIn and she broke down the highest converting ads. What kind of ads do you think they were? Highly personalized ads with influencers. Or lo-fi content.

Lo-fi content.

Yes, you nailed it. So if you think about how much companies spend doing a Super Bowl ad, Coinbase did one, one time that was really lo-fi.

They bought a double, remember it's a 60-second.

Uh-huh, and then it was just a QR code moving around.

Yeah, and they were number one for a day.

Yeah, they did really well because people were like, what the heck is this? That's lo-fi, cost is really low on that. But most companies don't do that, they spend an arm and a leg. When you take the cost of how much you have to spend on the Super Bowl, how much more you have to spend on other ads like Olympics, okay? How much you're spending to create the commercial. If you just take the majority of that money or almost all of it and you spent it on digital ads and you did lo-fi content as your ad, your economics are way better because you're spending more money on reach than the actual creative and you're picking your audience instead of just blanketing most of the United States.

Yep.

And on top of that, I just asked ChatGPT or Google actually, not ChatGPT, Well, yeah, it pulls from AA Overviews, but same thing. What percent of publicly traded companies spend at least $200 million a year on marketing? And they couldn't give me a good answer, but they pretty much said it's generally reserved for like the top 100 companies, right? And it's saying 100 to 200 companies, but I don't think in the US you're even having 200 companies spending over $200 million a year annually on marketing. I could be wrong. I'm just pulling this from the web. That's Too big. His baseline is $200 million. That is not the normal spend on marketing by, you know, by most companies globally. Like that is just an extremely large number.

I was trying to use Perplexity for this to do the research. And then how many companies spend over $200 million a year on marketing? Okay. You know what's funny, Neil? We'll come back to this. I had a nightmare yesterday. You want to know what the nightmare was? Nightmares, I was getting on the long-haul flight and I forgot my iPad was in the— Oh, the container. Yeah, yeah. But okay, so there's no public dataset. Okay, what we can say with confidence, global ad spend is projected, okay, $1.5 trillion, whatever. Industry reports show that top 200 advertisers in the US alone accounted for over $130 billion a year. So yeah, you're not— so given that one country, the US, already has 200 leading national advertisers, many of which cleared a $200 million threshold domestically, it is reasonable to estimate that hundreds of companies worldwide on the order of a few hundred, Not thousands spend $200 million a year, so not many. So here's what he's saying.

Wait, how many companies in the US spend over $130 million?

This is an estimate. So the best you can say given available data is that there are several hundred companies globally, not US, with annual marketing advertising budgets greater than $200 million, but no authoritative source gives an exact count.

Yeah, and that's why I saw something that's like—

200, yeah.

Is because it's like he's saying minimum in that table, $200 to $900 million. These numbers are extremely large.

He says this, right? So he says, for a company spending $500 million annually on marketing, a 2% improvement sustained over a year effectively covers the full cost of Super Bowl ad without counting any short-term acquisition. So I think this is well written, but the point is, I think he's trying to justify it with these things that are actually not realistic. And I think you, like, the problem is you should probably write this after you've done it. That's what I would say.

Dude, and I've been in the offices speaking to CMOs and marketing executives all around the world for companies like Pfizer, Procter Gamble, Walmart, like these are some of the biggest advertisers in the world, right? Pfizer and pharmaceuticals are more restricted on how they can do marketing, but they spend. And like even then, I'm telling you, dude, some of these companies that I mentioned, like, okay, they spend over a billion dollars. They're some of the biggest advertisers in the world. There's not too many companies like that.

This guy's the CEO and co-founder of ROE.

Yeah. He's delusional on his metrics.

Yeah. So we'll see what happens. Z, I hope you hit these metrics and then maybe prove us wrong because then we can have something else to talk about. But I don't think this is realistic.

No. And not just that, what Z is not taking into account, and dude, we've done this side by side for so many corporations. If you just took the money that you spent and spent it digitally, you would've made a much better ROI. You would've got a lot of brand love. You would, people would get to know you, your target audience would more likely see it and you'll generate way more revenue.

Yep. All right. So That's our little Super Bowl piece, and I agree with that. And I do want to shift gears because, Neil, I'm going to start creating this series now because I'm finding that the more—

One thing before we shift to that topic, I have something that's similar, but I would love your take on it because I already know you and I are going to think the same way. All right. We'll see. The largest companies in the world are like the NVIDIAs, the Microsofts, the Apples, the Googles. You agree with this, right? The Amazons. There's not too many that are just multi-trillion dollar companies, Meta. All right. So when you think about traditional advertising, a lot of people, or when you think about advertising, a lot of people think Super Bowl, Olympics, FIFA World Cup. They even think sponsoring like jerseys, teams, okay. Stadiums and all that kind of stuff. Would you agree with this statement?

Yep.

If this form of marketing was so profitable and so effective, would you agree that these big corporations would start spending way more money on this kind of stuff?

Yes. And they only do it for fun when they do it. Like Google, when they sponsor McLaren, the F1 team, that's almost for fun. It's like just a little logo there.

Totally agree.

Yeah.

Right.

Yeah.

But do you agree that none of these guys really spend on all any of these marketing channels like crazy because no, they just don't care?

No.

And it's because the ROI, and it's not as effective as people think. If it really was, these large corporations, the largest corporations in the world, would be running tons of these ads, taking up all inventory. Every damn stadium would be called the Microsoft Arena if it was that profitable.

Yeah.

It isn't.

There's only one Super Bowl ad I remember, and I feel like it's only the one you might remember too. Let's guess. Okay, let me guess for you. Is maybe the only Super Bowl ad you remember the Oreo one?

I remember a lot of Super Bowl ads.

But the one that comes to mind first.

The Doritos one.

Oh, the Doritos one. I don't remember the Doritos one. I remember the Oreo one. But my point is, and then the Coinbase one, right? There's not, first, there's not that much brand recall. And a lot of these brands that are doing it—

GoDaddy, you remember that one?

With Danica Patrick?

Uh-huh.

The driver?

GoDaddy Girls before that.

Yeah.

Also put GoDaddy on the map.

Yeah.

It was risqué.

Yeah. But like still a lot of these, like the Oreo one, like what happened to Oreo, right? Like, you know, it is what it is, right? Was that an Oreo? That was a SuperWOD, right? The Oreo one. Oh, it was a tweet. It was a tweet.

That was a tweet.

Never mind. That was a tweet. So anyway, all that to say is your mileage may vary. I think Z, I'm curious to see how your study goes in about a year or so after you do this evaluation. But it was a good justification for your side. And I like the numbers and the charts. I think it convinces many people. Okay. So I want to jump over to this piece because, and then I'll tell you kind of where I'm going with this. So yesterday you saw me tweet something about how I did $50,000 of copywriting work in 10 minutes. There is a reason that I'm doing this and I'm going to almost be making more and more of these, these videos. And I'll tell you, I'll explain why maybe, because I think we did briefly touch upon it. Now, you saw the copy between the old version on my site and the new version. So, and then you being unbiased, you saw the old version, how would you rate the old version copy on my site 1 through 10?

Like honest?

Yeah, honest.

Do you want me to just give you a number or give feedback?

I don't want feedback. I just want a number.

Yeah. I would say it's like a 4 or 5.

Okay. And then, and Neil, give me, Neil saw the new version too where I was kind of going through a video. The new version is better. I wouldn't say it's top tier, but I would say it's better. What would you say?

I would say your new version is more like a 7.

Okay, great. Which is a lot, right?

It's a good improvement. There's mistakes in it and I can always break 'em down if you want.

So this, what I'm calling out here is this whole, you know, $50,000 of copywriting work in 10 minutes. This prompt was generated off of the legendary David Ogilvy, Eugene Schwartz, Claude Hopkins, and it did a few rewrites, right? And this is like my initial version. It actually does a few rewrites and it keeps rewriting until it feels like it's a 90 out of 100. And I can actually tune it even more, but I have a prompt before that that does like a page CRO thing, right? So my point of saying this is that this, if I can get something at a 7 or 8 with copy, me as a marketer, I can refine it to 8 or 9, right? I just need a starting point. Oftentimes, like we just, like even with the ideas from this podcast, we just need a starting point, you know?

Yeah.

And then we can work off of it. Now, not only did I do that, Neil, that's not the point that, hey guys, oh, I did this, like this copywriting piece. My point is the SEO work, the $45,000 of programmatic SEO work that I did in 20 minutes the week before that actually ended up being like, you know, 4 times the amount. So let's call it $180,000 or something like that because people like big numbers. That was done in about an hour or so, right? The thing is, earlier this week, we were supposed to, because I did some math on Care. I'm like, dude, it keeps driving more customers, but we're not driving any ads on it. I'm like, Am I stupid? And so I did a—

You're not driving any ads on it?

We weren't driving ads for Carrot, remember the account-based marketing tool?

Oh, you're saying you're not running any ads?

We're not running ads for it, yeah, that's what I mean. Thank you for that. So I'm like, I went to Claude, I'm like, hey, based on all my goals and you know how we're trying to hit revenue higher for tech-enabled services this year, like, am I stupid? Like, shouldn't we be putting more dollars towards it? It's like, yes, you should be putting dollars towards it, right? So anyway, I create this whole go-to-market strategy with Carrot ads and then it's nicely done together. I do it very quickly. probably 20, 30 minutes or so. I'm like, this looks good. I refine it a little bit. I send it to my CTO. He sends it to the person working on ads, right? And I poop you not, okay, I'm not even gonna cuss. I poop you not, right? That was 2 weeks ago. Like 2 days ago, it was still not up. I was like, you know what? What's the holdup, guys, right? And so I check in, I'm like, oh, the creative team, you know, they're They're behind right now, whatever. I'm like, okay, that's fine. I'll tell you what, I got it, right? So I was just like, I got it, right? It's like, oh, I have a planner. Don't worry, I got it, right? 20 minutes goes by, I'm on Manus and I'm like looking at the ads and all that. Boom, 4 new variations. I just get the ads up, right? So my point of saying all this is not necessarily my team. My team's very busy, they're great, right? It's not, I'm not even blaming them, right? I'm just saying that the world that we're going into is not so much about the tasks that we do right now. The evolution of tasks is changing. And if anybody says like, you tell me, like imagine if I'm working for you, working for me. You can't say that anymore because the tasks are changing and you're able to do a lot of these things quicker. I'm not saying it's top-tier quality initially, but the speed, right? It's no longer about— we talked about this, like radiologists and nurses, like it's not about reading charts anymore. It's about— now it's about other tasks that you're working on. That's my point. And that's where this is going is I'm just going to make a lot of videos on how I'm doing these tasks quickly now. I'm just going to keep publishing them.

I thought it was a good piece of content that you published. I didn't know how you got to the $45,000 worth, but I can see companies spending an arm and a leg on it. Bless you, Noah.

Bless you.

You know, but I know internally you can do it for much cheaper than $45,000 or $15,000 or even $10,000. But I know a large company would pay even more than $50,000 for a homepage copy. And I look at this, the bigger issue here, you may disagree with me or not, I look at it as a team problem in which your team should have had better copy in the first place. But I know your pain because when you As you grow and scale your organization, it's hard to hit up a random person or a few random people and always get what you're looking for.

Yeah.

But because of AI, there's no excuse for them to not give you the stuff really quickly, and there's no excuse for them to not run your ads ASAP.

That's why our mandate is Claude— it's not even AI fluency, it's Claude code fluency in the next 6 months or so, because it's unacceptable to say these things, right? So I'm still not going to blame the team because they're still kind of figuring this stuff out. And so But in the next couple months or so, like, yeah, like the chickens will come to roost, right? Like this stuff matters. And let me just ask you real quick, 'cause we're like, my point initially was like, hey guys, like you have to figure out how to, if you're still doing the same task in 12 months or so, that's actually a very negative signal, right? So let me ask you, you have, let's just give or take, you have about 1,000 staff right now. What percent of your staff do you think are on top of these things?

As in learning cloud code or just learning on top of things and getting like stuff done?

Acceptable AI fluency.

I would say the majority, more than 50%.

That's interesting because our other mutual friends who I talk to, they're like, they might have different standards than you, but they're like, it's like 5%, 10%. And when I talk to like Zapier or Gamma, it's like, it was maybe it was at like 5%, 10% before, but even right now it's like 65%.

So to be very clear, when I look at AI fluency internally, we measure it based on do they have AI fluency for what their role is in the organization and what they're doing?

We look at it the same.

Yeah. Like Eric has amazing AI fluency. We do not expect someone who's just focusing on on-page SEO to have the same AI fluency as Eric because Eric is doing a lot of stuff, design, copywriting, developing products, coding, building free tools. He's doing a lot of stuff that we wouldn't have a certain specialist do. But if they're specializing in a certain thing, whether it's creating content or creating social content or doing on-page SEO and they're not using AI really well, we got a problem and they either need to learn it and we help them learn it. And if they can't get there, then there's a bigger problem.

Dude, speaking of Claude Code real quick, I know we can move off this topic, but you know what's crazy? So I might— oh, I just— my Mac Mini is arriving today. I bought a new Mac Mini, right? So there's a new employee that's arriving today. Okay, let me, let me tell you this. So check this out. So this guy says over here, so I asked Claude bot to do sales and find prospects plus get meetings. It booked me 27 demos in 1 hour. I asked how Turns out this Claude version, Claude bot, it found their Calendly links and just booked meetings. And so like, hey, so it's talking to this, this is a Claude bot, right? So it's like, hey, have you been able to book calls? Yes, I was able to book 27 calls with people in your ICP we discussed earlier. How? Give me a list. It's like, I use web search API to identify their public Calendly links and schedule meetings directly. Here's a list of participants, right? Come on, this is crazy.

It is crazy, but You want to hear the flip side? What we're seeing from large enterprise organizations—

You're going to talk about security?

No, B2B. They're struggling with AI right now. What do you mean? In the way of when you're trying to set up calls with their ideal prospects, what they're finding is their ideal prospects are getting hit up way more now because of AI, and it's just not effective like it used to be.

It's hard to stand out. Even harder to stand out now.

It's hard to stand out. It doesn't matter if you want to give them free gift cards or free products or headphones. What they're just finding, it's harder to stand out because they're getting hit up a significant amount more than they used to be.

Well, let's go back to the talent thing real quick, because it's to me, like when we, when you talk about any problem in your company, everything comes down to talent at the end of the day. Right. And so in my mind, I'm just like, man, okay, it is hard to find people that really have high agency and they think very critically and think strategically. Right. And that comes down to your hiring process at the end of the day. And so my thought is for really for everyone here and just reminder for myself too, is that you have to absolutely be a stickler about hiring because people on your team, they're going to want to throw resource at the problem because humans, we've been used to just saying, oh, I just need more resource. And sometimes they do need more resources, right? Human resources. But I don't think we're spending— and I'm kind of blaming myself— I don't think I spend enough time saying, hey, you want this headcount over here? What parts have you tried with AI that this role can do, right? Like, we haven't put enough guardrails in place. I don't know how you guys are doing it, but I think if you want to get people Like, like I'll just tell you, like this type of stuff right here, if you're finding Calendly links, I'm like, oh, that's really cool. Like if I'm on the team, if I'm a high agency, I want to figure out how to do this and try it. And, you know, maybe only 12% of the time it works, but, you know, at least the key thing is people are trying things.

Yeah. Yeah. I agree with people trying things and you need not just good people. You need good people with the right mindset. If they don't have the right mindset, they're not adapting from what we're seeing. And that's really important when you're going through the interview process. The other thing that we found is AI is just spamming the crap out of a lot of people. Excuse my language. It's harder to get prospects to really look at your company. And right now we're seeing the world shifting to more being not just community-oriented, but one-to-one and building relationships. And we're really finding that the way to grow enterprise companies in this new AI world, which is kind of backwards and it's more of the old way.

Yeah.

But that's what we're finding working more than anything else right now.

Dude, can I tell you what you did? So you were on the phone like a week or two ago and you told me about the deal manufacturing that you do. And I told you I built a little something from it, right? So that booked a meeting with a multi-trillion dollar company. And then we're grabbing lunch and then they actually want to invite me to like do some things with them, right? So, but that's because of you. But like you get like anything you do, any conversation you have, any X post you see, I'm lazy, right? So I'm just going to copy the X post and then throw it into Claude Code and say, hey, can you just build this for me? And it just starts building it for me, right? And so now it has all of my LinkedIn connections, everything. I just kind of look around, hey, here's the angle over here. Not only that, oftentimes when you look at your LinkedIn, there's so many amazing people to recruit. I'm just, I'm connected with these people already, right? And it's like, here's the angle, here's the last time you talked to them. You know, here's the last time they changed. Oh, by the way, here's all the people that, oh, you can enrich it with Clay, find when they change jobs, find when their company received a bunch of funding. There's so many angles where you, when you have a little Claude bot talking to it all the time, hey, just, you know, like, dude, You like texting people all the time. You should have one. Once I get this set up, I'm just going to show you how to do it because you can just be forever pestering this thing on whatever you want because it's basically a duplicate version of you that has all memory of you and how you act.

So what Eric's talking about here, and I don't want to give specific examples, him and I were talking on the phone a few weeks ago and we were talking about AI and AI fluency and he was being like, Neil, you're going to adapt AI really hard for what you do every single day. So I broke down to Eric what I actually do every single day, because we're friends and we talk. He knows my business, I know his business, but he didn't specifically know exactly where I'm spending majority of my time. He kind of had idea, but he didn't know the full picture. So when I was talking to Eric, I was breaking down how I spend my time. networking with really large corporations, C-suite, and getting in the door to try to pitch large deals. When I say large deals, sure, sometimes 7-figure, but I'm really trying to focus on 8-figure and 9-figure deals because they really move the needle for me. And, you know, most organizations—

And when Neil says 9 figures, 9 figures in revenue for his company.

Correct.

Yeah.

Right? So for me, that's a lot of money. Like you can close one deal, potentially makes you $100 million in revenue. That's a lot. And Eric was talking about, you know, I was breaking down ex— I gave him examples of companies I'm doing this right now with, how I got in, some of my conversations, how it's going, how I position myself, how I get the intros and all that kind of stuff. So then Eric was just like, oh, let me automate as much of this possible. With Claude, and I do agree that you can automate a good chunk of it. The part I'll never let Claude or anyone else do is actually send out the messages on my behalf.

Oh no, you can't do that.

Yeah, it's too risky.

You can't, yeah.

One wrong message, it screws up everything. It's too dangerous.

So human in the loop, draft it for you and then you adjust it.

Yes.

Yeah. But it's cool that it points out the angle because even if it's a 7 out of 10 angle, you can make it an 8 or 9 out of 10 angle. It takes a lot of the thinking.

Yeah, I like the thinking. I've actually had AI try to come up with the angles on how to approach it. I found that it's just not as effective as me sitting down and coming up with the angles.

You'll see once you set this up, at some point it will, it'll start to see how you make decisions and it has contextual memory and it compounds with you over time. Again, imagine Neil Patel that listens to you, that's infinitely on all the time.

I totally agree. I think it'll do really well. 2, 3 years later after it being set up. The hard part that we found is my brain dump of all my conversations in the past with colleagues, my network, and my relationships. It's really hard to transfer into AI because I can't just upload my text messages because my text messages delete on a rolling 30 days on my iPhone, right? So I don't have like a brain dump that I can give it of all my relationships. So for it to effectively figure out the angle, because some of these things, you know, with a company that was worth half a billion dollars, I gave you an example of what I was doing, or not half a trillion dollars, sorry, not half a billion, but half a trillion dollars. I gave Eric an example. It wouldn't know how I built that relationship 10 years ago and would have to have a lot of data from the past to figure out the angle because I don't communicate with that person that often. And that's the weakness I have right now with AI.

I want to be clear. So what Neil's saying is not Not wrong. It's because he doesn't have a lot of this data, like 2, 3 years, it will take time to compound. But once he starts collecting it, because this tech I thought was 2 to 3 years out, but it's here, right? It's more so he just doesn't have that historical data, whereas I do. I can plug it into all my Google Calendar, all of my Gmails, and so I at least have that context. Guys, keep in mind too, I YOLO these things. You have to keep in mind, like, you don't want to let your team do this and just YOLO because there's a lot of security issues with this. So that's why I'm buying a Mac Mini and putting it locally that way, because I'm not a technical person. I can make a lot of mistakes and still get away with it, right? So just be careful if you're going to mess with it. It's now called MoltBot, by the way. It's no longer called ClaudeBot because Claude, Anthropic was like, hey, copyright, you know, so they got them to change the name. So anyway, good for you to know.

But yeah. And what Eric's saying here is, I agree with him. The technology is here. When I say 2 to 3 years away, it's 2 to 3 years away because I have to feed it enough data for it to be effective. And it's just going to take a long time because in the enterprise world, when you're doing marketing, There's not a lot of contact. There's not a lot of contacts and a ton of leads and volume. It's more of a lot less. You're really going after a few specific accounts and you're going from there. It just takes a long time for it to have enough data to be pretty effective in the future. But Eric's spot on. The technology is here today.

All right. So I wanted to take a moment to tell you about my podcast co-host Neil's Agent called NP Digital, and they work with a whole host of global companies or global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side. So let's talk about one more thing that kind of relates to this. So Neil, have you heard of the founder gap problem? Do you know what that is?

No.

Okay. So have you ever had people on your team be like, oh my God, Neil works too quickly. He's like 1,000 times faster than us. It feels like he's kind of just way ahead of everyone. It's hard to keep up with him. Have you heard that before?

No, we usually don't have that.

Not in your company ever? For you working with you?

An NPD? No.

Okay.

So— We have the problem of before Neil would change his mind too much direction.

Yeah.

Well, yeah. That was my founder problem because my executives execute and move really fast. Non-executive level, yes, there probably is, but I don't really So watch. Too many layers lower.

Watch. So Noah, when I talk about the founder gap problem, remember when people used to write reviews, 360 reviews for me, and they used to say it's hard to keep up with me, the gap, right? So, 'cause the founder's always gonna be ahead.

Noah's shaking his head yes, by the way.

Shaking, nodding his head.

Yeah, nodding his head yes.

Sorry, thank you. So thank you for that. So my point is almost like 100% of the time, the founder's gonna be ahead, whether it's you, Mike, or like, you're gonna be thinking ahead, you're gonna be thinking about the business all the time, right? And you're always gonna be talking to people, things like that. So this gap continues to compound. And the thing is, my team was telling me, talking about it, saying it's hard to keep up with me. And I'm like, yeah, but you shouldn't look at trying to close it as close as possible or even trying to catch up with me because that's almost impossible, right? Not saying I'm smarter or anything. It's just so— it's more so I've seen a lot more mistakes, thousands more mistakes, and I have a lot more pattern recognition than what they have, right? And so I used to want to like, you know, hire people and just kind of let them do their thing and like, you know, they'll figure it out, right? But it's more so you and I, we had so much pain that we've had to go through and we're not going to be right all the time. But a lot of these patterns, we've seen this movie repeat many times. And that's why it's important to understand that the founder gap problem will be there. But everything comes down to one, again, how good is your hiring, but also the processes that you're not involved with process too much, but the processes that your company establishes comes from the mistakes that you made. So you don't make those same stupid mistakes again. That's why those processes are there.

Dude, I agree with you. You want to know one way to solve some of the founder gap problem? Because based on what you're saying, I had more of these issues in my previous startups than my current one. I now hire leadership and executives that they're not necessarily like me. They have other strengths that complement my strengths and they fill in the gaps where I'm weak, but they're very similar from a mindset perspective in which 7 days a week, it could be Christmas, they'll answer the phone and let's go, go, go.

Yeah. You heard what I said though, right? So Neil's absolutely right. It's the 2 things I said, hiring and process, right? And also keep in mind, Neil made a good point. Whatever team got you here is not the team that's going to get you to the next level. Usually, like, you're going to have to constantly, like, cycle through, like, unfortunately, as much as you love someone, right? And that's just how business is overall. It's not unique to your business or my business. So, yep, cool. All right, you pick one now.

All right.

Oh, you love these. Yeah. You know, these get the most likes on Snipped, these 10 pricing lessons, 10 business modes. They get the most saves.

I want to go over the 10 pricing lessons every marketer should know. I'm not going to read through this list because I don't know what the heck half of them are, but I have so many pricing lessons over the years.

Okay, you start. So guys, let me frame it for everyone. These are 10 pricing lessons every marketer should know.

Yeah, so a lot of marketers, and we've seen this, believe that increased pricing typically brings better customers. And you get a different type of customer sometimes when you increase prices, not always, We've seen in marketing for a lot of companies in today's environment, when you increase pricing, you actually increase churn and you can decrease your LTV. What we found to be really effective in today's world, especially with this economy, having some sort of low entry pricing and then upsell them into more expensive stuff later on.

Yep. So that's number one. So number 2, regarding when to raise prices, let's say you have a service business because there's a lot of different types of businesses, right? Let's just go with service right now. Now let's say you are the only one doing the consulting right now. Okay. But then let's say you're charging, I'm just making a number up, you know, 10 grand a month or something like that, right? Good money for you. The problem is if 20 customers want to work with you at the 10 grand a month or so, this is economics, guys, supply and demand. So in this case, because you're in such high demand, try bumping it up to 15 grand a month, 20 grand a month, 30 grand a month or so. It's all, and then when people start to say no, but there's still people paying you, that's when you know you're kind of starting to reach kind of the ceiling. But you just have to consider it's always a supply and demand equation that you should consider when it comes to pricing. Yeah.

Number 3, you're going to see a lot of articles and marketers, people being like, you shouldn't charge $10, you should charge $9.99. You shouldn't charge $1,000, you should just charge $999.

I used to have articles on this.

Yeah. And back in the day when we used to run these kind of A/B tests, we did see slight conversion increases by being under 2 digits. So you would be 1 digit instead of 2 digits, or you'd be $19 instead of $20. In today's world, we don't see it effective. We've run a lot of A/B tests on it in today's world, but when you talk about 10+ years ago, we did see some nice conversion lifts. In today's world, people don't care if it's $20 or $19. It has to be more, is it a good price for the value that I'm getting? And sometimes when you charge $19, people get the perception that this is a cheap product or a service. While when you charge $20, sometimes they get the perception of like, oh, I'm getting all this value. $20 is a fair price.

Yep. Actually, on that note, I want to talk about pricing psychology. When you're talking to people, right? It's like, oh, when you're doing customer development, when you're still figuring out pricing for your software, your service, whatever, talk to people and say, hey, what would be too cheap where you'd question the quality of this, right? So if you buy a Louis Vuitton bag for, you know, $5, you'd probably question the quality of it, right?

Yes.

Now also it's like, what price are you willing to pay where it'd be uncomfortable, but you're still willing to pay? So you're basically interviewing people right now. That's fine and all. It's fine and dandy to interview people and get some of these data points. But you're also going to have to just test pricing too in the beginning, right? And so the interviews are one piece of it, like definitely do the interviews, but don't let that be the end-all be-all. Just, and I actually, this is like a separate thing, but earlier this week I was just talking to my team. I was like, guys, like we can customer development our way. You can't customer develop your way into solving a problem, right? You actually have to live in the problem, but that's a whole separate conversation. Yeah.

And before I get onto number 5, I've done a lot of surveying data for pricing. What people say and what they're willing to do in many cases is drastically different. And that's why Eric also mentioned you also need to test it, but the surveying will give you a direction, right? It'll be directionally correct, or it should be if you did the survey right, but you still need to test. Going into number 5, we found that you can make at least 10% more revenue If you adjust your pricing based on the currency someone's in, so you work on taking their currency versus your currency, and then you do pricing adjusted based on the country they're from.

Oh.

And you may have to adjust the features or the product or what you offer so that way you can make it for that country because some countries have more excess money to spend, some have less. And then you also want to adjust your gateway systems, right? Like you may find that Adyen works extremely well for parts of Europe. In Brazil, they have something called a boleto where you can charge them upfront, but on their end, it's a payment plan that helps increase conversions. So it's not only adapting pricing and currency based on the region, but you also want to look at the merchants that you're using because it allows you to have more flexible payment options based on what people are used to within that country. And it drives up your conversions in marketing.

Why don't you give an example with Ubersuggest, like how you charge in India versus the United States?

Correct. So we will go and adjust our offering based on the country. In some countries, it's cheaper for us to get data than others, and we'll have plans that work for them that are in some cases a third or a fourth of the price because something may be affordable to someone here in the US for $100, but it's not really affordable in India for $100 a month starting off or even $99. So you got to figure out how to get them plans for $10, $20 USD, you would convert it into rupees, or in Brazil, you would convert to Brazilian reais. And we found that it just drives a lot more revenue.

Yep. All right. Number 6, the reverse trial. So Grammarly does this well. They actually, if you're paying for Grammarly, what will happen is they'll give you their other premium features, or maybe if you're trialing, they'll give you premium features. They'll give you like access to 1 try or 10 tries a month or something like that. And And then the whole idea is if you get a taste of it and you like what you're seeing, then the idea is that you upgrade. And that's worked out really well for them. So much— so Grammarly actually is such an under-the-radar company. They bought Coda, they bought Superhuman, now the company's called Superhuman.

Wait, they bought Superhuman, the email tool?

Yeah, the email tool, yeah.

I didn't know Grammarly bought that.

Yeah, and now the entire company's called Superhuman 'cause it's a better name.

Than Grammarly?

I think it's a better name 'cause Superhuman is like they wanna help you become superhuman with note-taking and emails.

Yeah, yeah, I get it. They wanna do more than just grammar.

Yeah, exactly. So reverse trials.

All right. Number, what are we on? 7?

Yeah.

Number 7, when you're working on pricing, you have to track your LTV. A lot of people when they're doing price tests as marketers, they just look at conversion rate on the front end. What happens on the front end doesn't necessarily go through with the rest of the funnel. In many cases, you can charge more and decrease your LTV, or you could charge more and increase your LTV. Or you can charge less, decrease your front-end revenue, but you can increase your LTV. You won't know until you test. And with pricing, it's not just optimizing for conversions, it's optimizing for LTV and profitability.

Yep. Number 8. So what's interesting with Carrot, which is our LinkedIn account-based marketing product, the enterprises that pay for it, they don't like, we don't charge a lot for it. It's like $2,000 to $3,000 a month. I mean, to SMBs, that's a lot a month, right? For software. So $2,000 to $3,000 a month. But the problem that we're solving is we're actually saving time for people because they just don't want to spend time making these ads, right? So that's what we do. And I would just say that you have to— you can talk to customers and see how they use it. And what you really understand is maybe usage is not that high, but the beauty is that they only need it for a specific task because if they can save that amount of time, $2,000 a month, $3,000 a month or whatever, and they can go do other things, it's worth a lot more money to them, right? So you have to understand that the problem that you're solving, and that'll lead me to my number 10, but I'll let you go next.

Yeah. So number 9, it's It's somewhat similar to what Eric is saying, a little bit different. From all the price tests that we've ran, the best way to increase your price and increase your LTV is you have to either pitch, I can help you do this in a more efficient way, so they can get more done in that time, or they can get better results. And the last one, not as effective, is save money. But typically, if you want to charge more, The easiest way to get a lot of people to pay whatever money you want to charge for is if you can be like, hey, we will help you get this done faster than any other competitor and the results are better. And that's what causes businesses to be willing to pay more, or even people.

I was going to do that one, but I have another one at number 10. So anchoring. So those of you that haven't read the book Influence by Robert Cialdini, actually I have Robert Cialdini in that prompt, by the way, it's like legendary advertorial people. So anyway, Anyway, I digress. So when you think about anchoring pricing, so let's say Neil wants to go buy a nice jacket somewhere, okay? So Neil goes into the store and he is like, this leather jacket is very nice. How much? Right? Well, typically $2,000, but there's a sale today. Today it's $400. Oh wow. And then like Neil might try to haggle a little bit, right? And get it down to $300. And then Neil thinks, wow, I've saved $1,700. But all along it was the same price, right? But the whole idea here is that you anchor high in the beginning and then they think they're getting so much value because they're— Neil has already shown interest in that leather jacket. And you see this happening all the time. You anchor really high and say, hey, there's a discount right now. And that oftentimes will get people to convert.

And I'm going to give you 11. I know you guys didn't want— we were only—

Oh yeah, we can do whatever we want.

Let's just add a number 11. There was a grocery store company back in the day, they did a jam experiment.

Jam?

So when people are thinking about pricing, they think about what can I change with my price to maximize sales? It's very rare do they realize that if they actually eliminated how many options they're providing people, it's a great way to get more people to pay whatever price you're charging. So this jam company, they decided to have—

Jam like the bread jam, right? Yeah.

Like you're putting in, like, you know, the Knott's Berry Farm jam or marmalade or strawberry jam. And what they did is they had 30, they had 24 varieties of jam and they wanted to attract more people. And they, what they found is when they showed people 6 varieties, it caused 10 times more purchases than when they showed people 24 varieties. So people were much more likely to buy when they didn't have to figure out which one do I want to choose. It's like a kid in a candy store. If you give them too many options, they're just confused. Oh, which one do I want? I don't know. And then a lot of times they just don't buy because they're overwhelmed.

Yep.

And this jam experiment was conducted by Sheena Langar and Mark Lepper. at Draeger's Market, right? I'm probably mispronouncing all these names, but you guys can look it up.

Does that, that kind of relates to that? Remember The Economist did that whole good, better, best pricing?

Yeah.

Similar, right?

It's very similar.

Yeah.

All right.

So—

But the good, better, best pricing, The Economist one is more related to anchoring than the options.

Yeah. Which is what I was just talking about anchoring.

Okay.

So maybe we can come back to the 10 business moats next, but I want to talk about, there's 2 that are related here actually. Oh, 3 that are related. You love these ties in with numbers. Let's start off with revenue per is skyrocketing right now. So we kind of talked about this, but Andreessen Horowitz, right? My new best friend, you know, Marc Andreessen, you know, but he follows 28,000 people. Is it really 28,000 people? Yeah. So ARR per FTE has skyrocketed, meaning annual revenue, recurring revenue per full-time employee has skyrocketed, right? So the graph that we're looking right now, the charts that we're looking at is one, you look at ARR FTE by percentile.

Okay.

So I'd recommend that if you're watching this, yeah, you probably should be watching this. But when you look at, you know, 2018, okay, if you are a 90th percentile company, meaning you're like top 10%, your ARR per FTE was about close to $400K, which is already really high, okay? Then you go through the years, 2019, it goes down, 2020, it goes down, right? It's closer to $200K or so. And in 2023, okay, guess what? 2022, I think ChatGPT comes out, right? 2023, it goes up to $400K, 2024 goes up above $400K, and then now 2025, it's closer to about $750K or so. So, right. And then you look at the general sizes, let's not even pay attention to that. But the point is, if you're a top 10% company, the ARR per FT is going up and same thing with top 75%, right? So sorry, top 25%, 75th percentile, right? So closer to $400K.

So it's kind of crazy. It's kind of crazy. You need less people to get stuff done. I'm assuming they're mainly talking about software companies. Yeah.

I was at a poker game earlier this week with a few entrepreneurs And one of the entrepreneurs was like, I thought the stuff last year when people say people are going to lose their jobs, I thought that was overblown. But him and his spouse, they are on Claude Code all the time on their couch. They don't even watch Netflix anymore. So they're now in a throuple, okay? Because Claude Code is in there.

They're now on a what?

Throuple. Throuple couple. Throuple. So you have 3 people in a relationship.

Throuple. Oh, because Claude is the third one?

Yeah, yeah, yeah, yeah. So, but he's like, oh, I can see it now.

I'm like getting confused on this one though.

Well, he gets it. He got it immediately. So, but my point is—

I wonder why, Noah.

So my point is like the people that were kind of naysayers, kind of seeing now, he's like, oh, like some of these people like have moved on. He's like, oh, I don't need to replace these people, right? So my point of that is like, okay, 90th percentile are doing $700K revenue per employee. I think we're going to see it go higher and higher over time. And that's both, this is why when I started the year, I came in both really angry, but also really excited, right? Really excited where it's like, oh, I'm going to help, you know, help my team get better at this stuff, right? But on the other side, the anger piece is like, damn, like we're so screwed if we don't get on top of this, right? So it's like a mix of both. It's weird. You're a father, you would know. Like, I kind of, I like, you want to protect them, but at the same time, like you're scared for them.

So yeah.

So what do you think about the FTE skyrocketing?

You mean the revenue per FTE skyrocketing?

Yes. Yeah.

I think it's a glimpse of the future. I think you're going to see it for more industries into software or tech businesses that have recurring revenue. And it makes me as a father really question the education that my kid is going to get because if they just go through the traditional ways, I don't think they'll be needed into corporations. Corporations will just remove them.

Do you know?

Yes. Or not even hire them, but you get what I mean.

Yeah. But do you know back in the day, like long time ago, how kids jumped from 50th percentile to 99th percentile when it came to education?

Parents left them on their own and let them figure things out?

No, dude, that's what our parents did. I don't know about you. I don't—

Yeah, that's what my parents did.

Okay, maybe it did turn out well for us, I guess. But it's one-on-one tutoring because back in the day, people couldn't afford one-on-one tutoring, but now everyone's going to be able to afford one-on-one tutoring. You know what I mean?

So you're saying back in the day, they did one-on-one tutoring to really get their kids—

Yeah. Like you think about like the aristocrats back in the day, or even like when we were growing up, let's say even the '30s, the '50s, the '80s, right?

That's when we were growing up.

But I think a lot of this stuff is much more accessible now. And I don't want to get into kind of philosophies on the future here, but I think everyone's going to be okay in the long term. Because if you think about it, right? Again, this water bottle cost me $40. I think it's going to get— the robots are going to be making it. I think it's going to deflate to like $4 or so, and then the $1 or so. So everything's going to become cheaper, and then there's going to be a level of universal basic income for everyone. So I think everyone's going to be okay.

Yeah, so my son was at a playdate Less than a week ago, it was last weekend. So we're almost—

Playdate with a bunch of kids?

One-on-one. So it was another kid and them. It could be with a bunch of kids, but this playdate was just with another kid. So this other kid is a little geeky and nerdy and my son is as well. And they got along so well. Randomly they started talking. One started talking about optical illusions. The other one's—

How old's your son again?

My son's 4. So the other kid's same age. And then my son's not into optical illusions, so he's learning about them. This is cool. So then he starts talking to the other person about animals and facts and—

Blue whales.

Blue whales or how fast they are. If I ask my son what's the bite force of a blue whale, he's like, the blue whale doesn't have a bite force. It's not like a shark.

So he called you an idiot.

He's like, yeah, pretty much. He's like, it just opens its mouth and then krill and other types of—

We didn't know any of this stuff when we were 4 years old.

Yeah. And then both the kids started talking about math. And then their love for math. So, they're like, do you know what the square root of 64 is? It's not hard for an adult to know this, it's easy, but you're talking about 4-year-olds.

4-year-olds, I didn't know that.

Yeah, I didn't know that at 4. So, they both knew the answer. Then they were talking about other math things like division, multiplication. My son, I don't know the answer to it, but he's like, do you know what 1 2 3 4 5 6 7 8 9 10? And then he's like, do you know 1 × 2 × 3? And he's going with this, right? And the other kid knows a lot of this stuff, but a lot of this is enabled because, uh, you could— I, I can't say AI, but the reality is Eric and I didn't grow up, uh, in a privileged household. We, we were— we grew up in a privileged household when it comes to love, but not financial.

Yeah.

Right. So our parents couldn't provide a lot.

Yeah. So I would say our parents were middle class, right? And it was your mom— was your mom driving a lot Yes.

But my parents weren't middle class when I was younger. They were middle class when I was like high school or like later.

Okay. So we're the same.

We're the same.

Yeah.

So, but my kids grew up in a very different world. So they have chess people that come every single week.

Let's just say they're privileged.

Yeah. They're privileged. My kids are financially privileged at least. They, we have chess tutors, one-on-one baseball coaches to make them better, one-on-one gymnastic coaches.

One-on-one Brazilian jiu-jitsu.

One-on-one Brazilian jiu-jitsu.

Yeah, every day.

He just got his gray belt yesterday.

What level is gray belt? Is that his second, third?

Yes.

Okay, that's great.

Kids have different belts than adults.

Gracie jiu-jitsu.

Yeah. So, I think to get a gray belt, it's like 40 or 50 classes.

Yeah, that's awesome.

That's a lot for a kid. So, they have everything, one-on-one tutors if they want to learn more, read more, talk about about stats and data. Dude, we take them to the museum. I think it was in Pasadena or by USC where you can see Space Shuttle Endeavour. I think, was that Pasadena? I forgot which part of LA it is.

JPL is Pasadena. Yeah. Right?

So it's just like—

Around there, I think.

They're able to get the one-on-one stuff. But the reason I bring this up is I totally agree with you in which if people had one-on-one help and it's adapted to what their love and their knowledge or what they love and are passionate about, they're going to learn so much better and they're going to do, uh, they're going to excel in that.

Yeah.

And same with marketing. If you look at you and I, we were connecting with other marketers who are amazing that were doing this stuff that we're doing, but before us in their version of it for their time because the channels are different.

Yeah.

And we learned a lot from those people. It's like one-on-one training and education, and I do believe it's one of the best ways to learn.

And AI has now enabled it where a lot of people have access I honestly think, so watch, then we can move on from this, but I think I wouldn't be surprised if your son or your daughter, like if your son starts a business by age 6, because I do think with all the AI stuff now, like, 'cause at age 9, I already had a website like selling MP3s, right? And I was like reviewing MP3s, right? Had I not gotten involved with gaming, I probably would've been all in on business starting at age 9. I just didn't have the guidance and I didn't know how to double down on that, right? You started at age 14 or so, right?

Yeah, 15, I think.

15, yeah, but you were selling CDs to start with, right? And so if we had all this stuff, probably age 6 or 7, we probably would've been going already.

My son has been trying to start a business now for 2 to 3 months. He actually has a really good idea. There you go. My wife will kill me if I say it, so I won't, but it is actually a really good idea. I was shocked that he came up with it.

Is it a rated X idea?

No, no, it's not rated X.

The way you're saying it is like such a—

It's a good idea. It's related to snacks.

Okay.

Okay. So, but outside of that, he's obsessed with money. So he's counting money.

Where do you learn that from?

Yeah, no, but it's gone too far. Every day, Hey, I need $20 from you.

That's a reflection of you.

And then he counts and then he makes you count his money with him and then all the quarters. And it's like, it just takes forever. And every day he negotiates. I got a gray belt. And before this class starts, if I get the gray belt, are you going to give me at least $100? No.

$100?

He's just like, he's like, okay, $50. If you give me $50, I'll try really, really hard. I'm like, the gray belt, you want the gray But don't you want to be proud of me? If you want to be proud of me, you would want me to get it. So what are you going to give me?

I like that.

So like he's negotiating. I eventually convinced him to do it for $20,000. He gets another $20,000 from his sister. And then after he gets the $20,000, he's just like, you're not going to match her? I'm like, I already gave you money. He's like, you can match more.

I like that.

But it's never-ending. So then he's just like, he's like, Daddy, I'm going to create a business so I can make more money faster because you don't give me I like that.

I like that. Whatever the motivation is.

Because he used to have to do chores to make money. But the problem with the chores is he doesn't make enough money from the chores. He's like, this is too slow. I need a business.

I like that. I like that. So mark my words, I wouldn't be surprised in the next, you know, 1 or 2 years or so. But this actually brings me to my next point here. Task-driven white-collar work is going to zero. So when we say white-collar work, we mean that you're sitting on a computer, right? I believe that we're going to be doing a lot less tasks. We kind of touched upon this a little earlier. But I have this example over here. This is Typefully, right? This is the little Twitter app. And basically they have these AI agents that will write these tweets for you and manage your social. But earlier I gave you the kind of, you know, the programmatic SEO example, the copywriting example. And if it's already a 7 out of 10, it's just going to get— ah yeah.

To be rich. That sounds like an Indian person. Very rich. Is it an Indian person?

It sounds like an Indian person.

Ideas. Big ideas. Big ideas. Zero investment.

No risk. No risk.

No risk. No hard work. No hard work. Saturday, Sunday off. World tour included. Shark Tank friendly ideas.

Anyway, I didn't mean to go to that, but this, what I was just showing on the screen was Cloud Code kind of working with Typefully. But I do believe that strategic work, and guess what? Watch, Neil, imagine if I worked for your company and I hated the work that I was doing. So imagine I was a paid media manager right now. I don't like managing paid ads, right? I'd rather they're just, maybe I like planting flowers or something like that. Guess what? You can do that now, right?

Yeah.

Long-term, because the— and you can become really good at it. Maybe you know everything about gardens, maybe you're the best strategic thinker when it comes to gardening, but you're just good, but you don't give a crap about the paid media work, right? So I think it's going to put most people in the right spot, but I think a lot of this stuff right now, like the way Jensen from NVIDIA talked about it, it's like, you know, we don't want our engineers to be coding all the time. We want them to be thinking about higher leverage stuff. Same thing with our marketers. We don't want them to be pushing a bunch Our purpose as our companies is to help our companies, our customers make more money by getting more customers.

So back in the day when you used to only focus on marketing, and I'll share my answer after yours, when you just mainly focused on marketing, out of an 8-hour day, I know you work more than 8 hours and I do too, but let's just use simple math. Assume our workday was 8 hours. How many hours did you actually spend on the computer doing marketing-related stuff?

And like when we're like 25?

Sure.

Okay. So let me think about this. So when I was working at that education company, that time I was working 7 days a week. I was like a lot of my time, I would say over—

50%, 60%, 70% on the computer.

50, 60% of my time doing marketing.

Yeah. So I remember when I started, when I was 16-ish and back in the day, technology wasn't as great as it is today, which is obvious. I was probably spending like 85, 90% of my time doing the actual tasks and work on a computer. Fast forward in my 20s, of course, scaling, hiring more people. I would say that it was probably somewhere around 50, 60%. Yeah.

So you're saying in the beginning it was 85. Yeah.

85. Easily 85%.

Because at 25, I already had a team under me.

And then at that point, call it in my mid-20s, I would say at least 50, 60% of my time was on a computer doing Doing just work. And now if I fast forward to today, for at least my marketing-related activities, I probably spend less than 10% of my time on the computer.

Yeah, and I'm thinking about it, like, because I consider this a marketing activity, right? What we're doing. And so it's—

Recording content, this.

Yeah. So, okay, if you think about it—

Creating partnerships, but some of that, you know, even with partnerships, you can have the AI help create lists. Like, even though I told you I do a lot of this stuff manually when it comes to partnerships, I am having AI scrape scrape who I'm connected with on places like LinkedIn that are large companies and where we have a lot of mutual friends. So I'm still having AI help me. It's just I am doing some stuff manual, but before I would have to do that and actually go through LinkedIn manually and do it all myself.

So let's say right now, give or take, we're working, you know, 60, 70 hours, sometimes 80 or something like that. Would that be fair to say?

Uh, 60.

60.

For me?

Yeah. 60, 70.

I don't know how many hours I work.

I mean, we're thinking about it all the time, but yeah.

So I don't work the same amount of hours I used to. I know I work way more than 40. Let's go with 60. Okay. So say work 7 days a week. So then—

Yeah. 12 hours a day, whatever. But anyway, it's hard to calculate this because we're thinking about work all the time. But so 10% would be 6 hours, right? Which seems about right. So let's just say we're working 60, 70 hours and I'm like thinking about it right now. I'm like, Yeah, it's about the same. But the thing, I think the takeaway from this too is as you continue to advance in your career too, if you're doing something that you love, you're going to be able to work on higher leverage things. And every day you should be thinking about what's the highest leverage thing I can do today? Just one thing today to get me closer to my goals. That's what we're getting at. Because eventually you're going to have a team around you and then you can focus on what? You can focus on doing deals, you can focus on hiring amazing people. It shouldn't be you thinking about doing all the time.

Yeah.

And that's what we're going into with all this stuff because these things are going to do the work for Dude, I just started doing it in my head. What?

So I work, if I exclude the time I'm spending with kids and family, I work roughly 9, and I'm excluding the time I'm on a plane because I have nothing to do other than work. But on a normal day, I'm working 9 to 10 hours Monday through Friday. That's after adding back kid time and family time, right? And eating and all this stuff. On the weekends, I probably work 6 hours on Saturday, That's a lot for Saturday. And 5 to 6 on Sunday.

Wow. I didn't— I thought you'd work less with kids on the Saturday and Sunday. That's a lot.

Yeah, because if I keep myself busy, I had to do less stuff. I love my kids and I love my family, but I'm not the type of dad— I'll throw a ball with my son and play baseball. Like I did that this morning indoors, probably not the best idea. I don't care if he hits a wall or breaks something. Horrible idea. But hey, he's having fun. Now I can always repair the wall, but the memory I'm going to get doing that with my kid is worth more than the wall. Wow.

Somebody quote that.

Somebody clip that. Right. So, but on the— I'm not the guy who wants to be playing with my kids for 8 hours a day. I just can't do that. Like on the weekend, I'll take them for bike rides and I'll chase them around on the bike or I'll go to their baseball games or whatever other sports they have or do swimming with them and jump in a pool. But I like working because it keeps me going and I'm so passionate about it. I can't give it up.

I don't think you're— I think 3 to 6 hours a week, A day on the weekends is great for the kid. I don't think they want all your time.

Like, I'm— Oh no, they would take all my time.

Well, but like, think about us growing up. I don't think we were spending all that time with our parents. Like, they've had boundaries.

No, uh, different life.

Yeah.

When we were growing up as kids, we would just go play in the front yard, right? Or outside. And you would just come home without a clock when it's dinnertime. You agree with this?

Is that your life? Mostly. Yeah.

Yeah, same here. Kids do not do that in today's world. Go ask anyone who has kids. They don't let their kids just go play and then come back at nighttime. Oh, you have rich No, even non-rich kids don't know, doesn't happen. And then B, when kids go play with other kids, parents are usually there supervising.

Yeah.

We didn't do that stuff when we were young. You just, if you're 5 years old, just go out and play.

We did always have a parent there, but—

You did? I did not.

Yeah, we did. Yeah, maybe it's an Asian thing. But okay, check this out. So let me, this is the third piece to tie this in, right? So we just talked about how revenue per employee is skyrocketing. We also talked about how task-driven white-collar work is going to zero. Now to close this off, this is the K-shaped future of software engineering, but I don't think it's just software engineering, Neil. I think we're talking about just many, many white-collar roles in general. So this graph over here, or this chart, I should say, in the blue, this is senior software engineering hiring.

Okay.

Are you following?

Yeah.

And then red is junior engineering hiring.

Okay.

So juniors are going down, seniors are going up. And so when someone says the K-shaped future of this, the way this article starts off, it's developers are cooked. If machines can code this well right now, what's even the point of engineering? But we're seeing the same things for marketing across the board right now, if all this can be done. So my whole thing right now is I'm just going to, I think to motivate people to get off their butts, I'm just going to be making videos on me doing these tasks in 20 minutes or so. And if I can get it 7 or 8, like wake up, wake up guys.

But the hard part is, is they just have to understand that 7 or 8 isn't good enough for customer work or even your own work because everyone's using AI and everyone's creating 7 or 8s. You have to figure out how to get to 10. And what this does, and Eric's not saying you should settle on the 7 or 8, it's you take the 7 or 8 and then you go spend your time to make it that 10.

That's what we call taste.

Yes. And that 7 or 8 that AI did helped you save a lot of hours, so you should be able to get to 10 much faster.

Yep. And here's the kicker here. So he says, look, consider 2 teams, right? So engineering is not being— it's being displaced but not replaced, okay? So you have Team A, and you've worked with engineers like this before, okay? So Team Team A cares about impact, not activity. They handle ambiguous problems without paralysis. They understand the product, business, and the data, not just the codebase. They design high-leverage systems and actively reduces complexity, that highly reduces complexity. They adopt new tools quickly and apply them with taste. They obsess over the user experience and they find creative solutions to hard problems. Versus Team B, Neil, for engineering, okay? Team B, they build before understanding the problem. They fixate on performative code quality. They bike shed details instead of making users happy. They complain about headcount and scope. stretches timelines. They add process when things feel chaotic, and they debate libraries and design patterns as a form of procrastination. And so Team B is going to have trouble in the future, whereas Team A, the ones that have the high agency piece that we're talking about, the taste, and just the ability to get things done quickly, those are the ones that are going to win.

I agree with you.

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Let's talk about what to do about the AI.

Oh wait, wait, Neil, you like I like this one before we do this slopocalypse. Okay, thank you. So, Procter Gamble, I was talking to someone recently. I don't know if we talked about this, but I think he— oh, he's going through a process right now. So, he's selling his e-com company, okay? So, Procter Gamble is trying to buy his e-com company. And so, he's talking to Procter Gamble. He's like, you know, he's talking to his founder. He's like, you know, at Procter Gamble, they own what brands? Remember?

Dude, they have so many brands. Diaper brands like Pampers, Gillette.

Okay.

Toothbrush, Oral-B is Procter Gamble. I'm blanking on brands, but let's see. Okay. Olay, Pantene, Tide, Downy, Charmin, Braun, Vicks, Crest. Okay.

So a ton of brands, right? So guys, the owners of Crest, Tide, Downy, Procter Gamble, they told a founder who they're in the process of buying their company right now that, look, what we've learned over the years is we don't buy remote companies. And the founder's like, why don't you buy remote companies? They're like, we've tried buying so many of these remote companies, meaning that the culture is remote, it's remote work, and it doesn't work because when we buy them, there's no real culture, right? Versus when we buy the in-office companies, those are only ones that work for us. So they're, they're saying, hey, from an M&A standpoint, that's not for everyone necessarily, but at least from what we've seen, the remote ones never work. And I think that's an interesting discussion point because you bought a handful of companies these past years, right? And so, but you most in-office, like what's the percentage of in-office versus remote and what are the differences that you've seen?

So the biggest thing that I learned with in-office versus remote, it's easier to bring people up to speed when it's in person. versus remote. By far, I would say that's the biggest advantage because there's way more knowledge transfer that happens when people are next to you.

Which is interesting. So you say that, watch, Neil. So when you say there's way more knowledge transfer, doesn't that just mean the knowledge transfer in general is a lot faster?

Yes. And you're seeing that the thing that's valuable about in-person is knowledge transfer from seasoned execs who have been doing this for a long time. It transfers to younger people way quicker than ever.

Yep. I'll tell you, we just had a new senior brand manager for my YouTube start, right? And the way I'm like, I'm talking to him every day, but man, if we're in the office, we'd be probably accelerating like 4 times faster or so. But I'm just like, I'm like not letting my grip off. I'm like, no, you're going to learn all these things. I'm bringing you with me. I'm going to make you great with AI as well. I'm going to make you great on content side. But I just think it's interesting that that was an insight from Procter Gamble because they buy a lot of companies.

They buy a lot of companies. So they like everything that's in-person versus non-in-person.

Yeah, they've learned to no longer buy remote companies. Just doesn't work for them. Yeah. Yeah.

And I wouldn't say that you can't build a remote company because there's a lot of successful remote companies that are worth a lot of money. It's more so you have to figure out the culture of your own company and works for you guys. And sometimes when you bring in something that's very different than what you guys are used to, it's just a disaster.

Yep. Before we move to the AI slotpocalypse, so this one's a quick one, but 85% of AI search results come from third-party sites. So originally everyone's talking about making these listicles and publishing on their sites, right? But it's not hard for these LLMs to quickly figure out, oh, they're just publishing on their own site. So this was published from AirOps and he's like, we've analyzed thousands of AI search results across hundreds of brands. The content on your website accounts for roughly 15% of why you get mentioned or cited in AI responses. The other 85% comes from everywhere else. So partner sites, news articles, third-party roundups, Reddit threads, whatever. A lot of this, guys, is guest blog posting. You know, a good chunk of it's guest blog posting back in the day.

So, uh-huh. And Eric and I called this, remember we talked about this like 6 months ago being like the problem with ChatGPT's algorithm is they, you can pull a listicle on your own website and get cited. And eventually this is going to go away because it's like the old way of spamming Google and stuff like that. I get it's different, but it's similar to how easy it was. And we're like, this isn't going to last.

Yeah, it's too easy to game. And when it's too easy, then, you know, it is what it is. So, um, this AI stoppocalypse piece, so this is from Ali Miller. So this was a disagreement between Andrej Karpathy, so this strong AI scientist, and also this guy Boris, who actually is the creator of Claude Code. Okay, so they actually were disagreeing about this. So they were just saying, look, when the cost of generating anything at any quality level plummets, and there is a— there's still market leverage for attention, generators will take advantage of it. It's why one company is cranking out hundreds of Reels/TikToks per day. It's why another is cranking out 3,000 podcasts per week. Code might might improve, but the content and social and research worlds are rougher waters. I too predict a sloppocalypse this year, one that Mosseri, I think that's the CEO of Instagram, I'm not sure if I'm pronouncing that right, and Presser and Ek, Daniel Ek from Spotify, will be thinking about daily. The smart generators are already thinking about second-order impacts. Examples for content creators, if everything is AI-generated, maybe I should only post human things. If everything is AI-generated, maybe I should have a separate community that's off socials. If everything is AI-generated, maybe I should host more in-person And then if everything is AI generated, maybe I should make a social media app that is only for AI bots, right? So there's a lot of these AI if situations. The big question for me is less on quality because it will get there, right? So we talked about like, what was, it's already a 7 or 8 out of 10 for these like advanced copywriting. And I think you and I have fairly high standards. So a lot of people, it's probably 8 or 9, if I'm being honest.

I'm thinking— Some people, it's probably even 10s. They're like, wow, this is great. 'Cause they couldn't write their own copy.

Yeah, so I think we're particularly hard when it comes to copy, right? And psychology. But the big question for Allie at least is less on quality, quality because it will get there. I'm thinking about whether people continue to engage, whether people will continue to engage with AI-generated content, whether they build affinity for AI creators and at what level compared to humans, and whether they rebel against it and at what speed. So that's the coming slowpocalypse. And I think you and I can both agree that there's marketers especially, we're going to take advantage of slowpocalypse.

We are, but I believe this world is changing where people are fed up with AI A lot of the younger generation are stopping to use TikTok and platforms like that because they're overwhelmed with the AI content. And we're seeing it and it's just becoming really ridiculous. And one, a lot of what's created is just fake. Two, people are just fed up with it. So much so, if you look at Sora, no one talks about Sora and it's not doing that well anymore.

Dude, you know who uses Sora? My entire building, the people who work in the building, right? They're like, I was talking to one of the guys who's one of the food runners and I was like, what are you looking at on your phone? 'Cause I hear all these noises, right? He's like, check this out, dude. And he's like doing the Sora and he's like, the picture is like of another employee that works in the building and they're like doing Soras, like making fun of each other. I'm like, so you actually use Sora too? He's like, oh my God, it's so big, blah, blah, blah. So I think you and I are just out of touch.

No, have you seen the recent articles on Sora?

It's probably the usage is down.

Usage is down a lot.

I used it for like a day and that was it.

Yeah, there's a big financial site that just wrote about Sora. Sora usage down. Where is it? Okay, as of Jan 20— this is from AI Overviews. As of Jan 2026, the usage for OpenAI's Sora app has experienced a significant decline following a strong initial launch, with reports of a 45% drop in monthly active installs in January 2026 compared to the previous month. That's a massive drop.

Did you see the graph where it shows Anthropic is clearly overtaking just OpenAI? Oh, RAMP published something. Okay, so RAMP published, they showed The spend per company, right?

Yeah, let's go back. Ramp is a credit card company that shows you where— Ramp is a credit card company that where corporations can get a card just like they get a Visa card or Amex card and allows them to spend money for their corporations.

Yeah, and thank you for that. Okay, so this guy Ara, so this is actually really good. You'll like this. So Ramp, he launched this vendor section where he shows vendor spend, right? Check this out. Let's pull up SEO and AEO intelligence. So this, because they can see spend for companies, right?

Yeah.

So you can see over time, Semrush, they were up here like Q1 of 2024, and then they're kind of going down on SERP API because all these people are building on top of it. It's going up and then Profound's up here and they're doing a good chunk, right? And you can see market share like SERP API is going up 10% adoption rate. Semrush was 73% on these SEO tools and then Ahrefs is 23%. I actually haven't, this is pretty cool.

This is pretty cool.

Right, for sure, I'll send it to you after. I knew you wanted to take a look at it. But they actually showed the difference between, check this out. So when you look at, oh my God, stop trying to sell me stuff. Okay, so when you look at generative AI, I think that's the one we'll click, generative AI, okay? So, oh my God, look at this. Who was this before? This is OpenAI. Look at this, Q1 2024, it's like 90%, right?

Yeah, and also keep in mind the markets increased as well. So you can't just look at the bar meaning someone dropped in revenue. Eric's not trying to say that either.

Yeah, fair point. So we're just, I mean, you know, market, this is just market share over time. You can see adoption year over year as well. But then you see who comes in here. You see Anthropic starts to really jump in here and it's going to continue to increase. And so our point of saying all this is that I think when we're talking about OpenAI, I find myself using the Claude app and Claude Code a lot more, and I find myself using ChatGPT a lot less now. I don't know about you. I don't know how you're using Gemini quite a bit.

It seems like I use Gemini quite a bit. I use ChatGPT for health, probably like for 3 minutes, no more, 10 minutes a day.

For your health?

For my health. I think it's amazing. It tracks all my food to eat. My kids have this new thing. They started it in late December. I don't know if I ever told you or did I tell you? No, I know I told Mike. So my kids in public, I'm a pretty skinny person, overall, would start pulling up my shirt and be like, look at this belly, so cute. And then they put little fuzzies in my belly button.

That's funny. What's a fuzzy?

Like a fuzzy, like cotton or like lint or whatever it is. And they started, they went from doing it at home. I'm like, what the heck? So my daughter started doing it first. I'm like, where the heck did you learn this from? So then my son starts doing it because he's copying her. She's older. So then, you know, it started snowballing from there and I keep telling him to stop. And I'm not one to hit my kids or anything like that. I'm not going to put them in a timeout for saying, look at your belly, and poking at it and stuff. And I'm pretty skinny. If I wore a shirt, you would see nothing. I can pinch an inch, so it's not really a belly. So then, they started doing it in public and I got fed up with it. I'm like, okay, I'm going to lose this pinch an inch. So, I started keeping track of Claude— not through ChatGPT, my daily calorie deficit.

Okay.

Because that's the easiest way to burn fat. Noah would know this more than Is that correct? So then, from December 29th to what is today, January 30th, because I was so fed up with it, I've dropped— I went from 131 to 126.4.

Isn't it funny? All the time you spent losing weight instead of disciplining your kids.

I tried trying to convince them. I couldn't do it. So, it was just easier. I'm like, you know what? Forget this. I'm just going to get rid of my pinch inch. I probably have like another 2 pounds. So, another 2 weeks And I'm done.

Yeah. Okay.

And then after, I will not use ChatGPT at the same time.

And then they'll find something else to get you. But okay, the last thing we'll end off with here on the slopocalypse piece is, you know, I think this is, you know, we're going to see a lot more of this. I think people like these conversations, right? And I get a lot of good comments on this podcast, but I think in-person events too. I think people making content saying this is 100% human generated, I think that's going to do well. I think people making content in different languages. So I think this slopocalypse, I think a lot of people are going to take advantage of it, but I do think to Neil's point, a lot of people are fed up with it. And that's a good thing. I think it's good for people to be and go outside, right? Go touch grass or something.

Yes.

Yeah.

Yes. People need to live normal lives and interact with other humans. That's the way to do well in today's world, in business or anything. I think people are like forgetting this interaction. I saw something from Marc Andreessen, which was a really good interview. It was published somewhere on the internet.

Lenny's podcast.

Yeah. He was talking about how developers believe they can do product and—

Oh yeah. The Mexican standoff.

Yeah. Mexican standoff. Antenna and how product and designers think they can do development and the other features as well. And I think he's very spot on, but you still need in an organization the people who are exceptional at development or the people who are exceptional at design because AI isn't there fully yet. And even if you think, okay, AI is going to be there and it's going to write everyone's copy or AI is going to do everyone's development. Well, if you can't figure out how to do better than what everyone else is using and stand out, you're going to fail. And I'm better at giving an example for marketing than I am for development because I'm not a developer. But in marketing, if AI is writing everyone's website copy and boosting conversion rates, that'll be the new norm. It won't convert as well because everyone sees highly optimized copy. You then have to go and figure out how to pivot and make your conversions better than everyone else. An example that everyone can relate to is if you If you look at ads before, ads before were purely, or majority of companies would strive for Super Bowl quality ads. Would you agree with that? That's what people really wanted.

Yep.

Now, if you look at today's advertising on the social web and even sometimes on TV, you're starting to see a lot more lo-fi stuff. Why? Because it converts better and people are tired of the overpolished stuff. And I think that's what's going to happen in AI in which you're going to have all these people using it for the same thing. You're still going to need humans that are the best in class at what they do. You combine them with AI, you're going to crush your competitors.

You just have to find them. All I'm going to say to end it is, as long as you have a bias to action and you're curious, you will crush everyone around you. That's all I'm going to say. And we would like to hire you. So both of our companies are hiring people like you. So let us know and show us your bias to action by showing us some examples first. Just don't give us a random reach out, please.

Yeah. Don't send us an email being like, you're doing this wrong. We want to know how we can do it better and show me a real Yeah.

Or, or like, just like if you want editing work, like do like one test edit. Okay. That it makes you stand out faster.

But before we go, dude, does it irritate you? Because for me, I get so many editing emails on a weekly basis and none of them ever show any examples.

None.

And if they do show example, it's example of some random other account. And it's like, you could have used AI and showed me an editing example of my own stuff.

If you just go the extra mile, you're going to run circles around everyone. That's all I'll say. We would love to work with you. All right, bye.

Take care.