Agency Trends, Capitalism vs Socialism, and Gary Vee’s Blueprint for the Next Generation | Ep. 3038

Let's talk about what we're seeing in the agency world because you hinted on a little bit and I did as well. You're slowly starting to see things pick up, right?

It's been picking up, which is why when you— the signal from my end is when I tell you my main focus right now is on recruiting a lot of my time, that means things are— it's a good problem to have. But yeah, the leads are flowing pretty well right now. And then plus outbound is working for us.

How about revenue-wise?

Revenue-wise, it's picking up. So I— we can't hire quickly enough right now because the bar is getting higher and higher. And so, yeah, you're looking at numbers right now. Neil's looking at numbers on his phone.

So if I, if I, if I look at last year August versus this year August, I don't have the last few days in, but if I look at the numbers of what they sent me in a screenshot of sales of last year's August versus this year, it's up 170-ish percent. It should be more than that. I just don't—

Sales are up 100%?

170%.

Wow. Okay. I think for us it's—

Of signed contracts.

Yeah.

That wasn't the last day of August. That's a few days before the last day.

Yeah. I think we're pacing to maybe double, potentially triple.

So— Of last year?

Yeah.

Oh, that's awesome.

Yeah. So, which is good, but it's—

The whole year or just the month?

The whole year.

Yeah. So you'll double last year?

Yeah. Yeah.

We will not double last year.

Well, you, you guys are much bigger revenue-wise. Yeah. So it's, it's, it's, it's different. Different story. I would love a double.

Yeah.

Yeah. Yeah. But But the point is, like, we've sat through this because we did see a light at the end of the tunnel. But this just, again, this reminds me again that you need to have people on your team that can call out these celebrations and we can make it a celebration where people feel like they're winning. People need mini wins, but you can't— again, if you're listening and you're an entrepreneur, you're a leader, you probably don't celebrate as much as you should. And that— but that does burn people out. So.

But where are you getting the— you're doubling. Okay, let's say this year you're projected to double. Is it from Q1 to Q2 where you're really seeing the growth or you started seeing the growth really in Q3?

Q3. Well, we had a major difference. Let's just say that we had a— Nick does well for you, right?

Yeah.

Let's just say we started doing a lot better on the sales side.

Yeah, I know who you're talking about. Yeah, yeah, yeah. Okay, but when did that kick in?

Q3.

So your Q1 numbers were similar to last year?

Yeah.

Q2 were similar to last year?

Yeah.

So your Q3 Q3 and Q4 will be way more than double last year. You know, maybe 3x, I'm making up a number to get you to double for the whole year.

Yeah. So we got a better, a lot better at driving even more leads. We're already doing, we've always done decently on lead flow, same for you. But then now we're doing a lot better on the sales, the inbound and outbound sales closing side.

But I'm assuming outbound is not for Single Grain.

Outbound is for Single Grain.

It is?

It's working. Yeah. Oh, okay.

Good for you guys.

It was the experiment I was telling you about.

What was the experiment?

It was, we're basically, we tested like 14 different emails and the one that's working right now—

Oh, with the gift card?

Yeah, the gift card's working. So it's like a 17 to 20% response rate or something. Yeah. And then, yeah, it's booking legit meetings. Yeah, you should do it.

We found that we haven't done outbound well for enterprise.

Yeah.

For services.

That's interesting.

Do you do mainly for SMBs?

No, we're doing— no, we're doing it for B2B SaaS only. That's all we're targeting.

Okay.

Some, some we flip for Carrot. It's just Carrot demo with no, no, it's naked, no gift card. I don't know why I call it naked, but anyway, the second one is just gift card for Single Grain.

So we will do outbound, but we don't call this outbound.

Yeah.

Where me, my co-founder, CEO, and a lot of the executive team will continually hit up People that we're connected to.

Yeah.

Or companies, even if we vaguely know them and pitch them taking a call, but without saying it. Like, let's say if you're a moving company or— that's a bad example. Let's say you're a CRM company.

Yeah.

Okay. And you're Salesforce. Okay. I'm making this up, by the way, this is all fictitious. But the concept is where it's at. And we crushed it for you for internal reasons. Your budgets got cut. And you're no longer doing SEO, paid advertising, CRM, et cetera. What we would do is, and let's say I know someone at Adobe who's in a similar department, I would message them and assuming my Salesforce data was all public and I was allowed to release it and we have a case study, I would email someone at Adobe that I know, let's say their name is John and they're in the CRM division. I'm like, hey John, hope all's well. Not sure if you knew this, but we crushed it for Salesforce in the CRM division. We got them X more traffic, X more conversions. We had amazing team on them. We don't work with them anymore because of budget cuts.

Yeah.

But if you're open to talking, we would love to schedule a call.

And it was very brief, very brief message.

Yeah.

Yeah.

That works out really well for us. Yeah, I can see that working well. And we all do that. So all the executives, I don't know if that's, you would consider that outbound or not, because we're going after like LinkedIn connections, people we kind of know but not fully know. I think that's still outbound. Yeah, and that is how we're getting included into more potential deals that aren't RFP related. The problem with our space, and you know this better than anyone else because you're in it, is on the enterprise end, although actually you may not face it too much because you don't get a lot of enterprise, right?

We don't do RFPs right now.

Do you get a lot of RFPs?

We get a couple a month, like 1 or 2 max.

So the RFPs, The marketing world is very different in which most of the big engagements are RFP driven.

Yeah. And you guys, you guys are global. So RFPs, you can, you can win those. We know we can't win the RFPs because we're not global. So different, different type of story. And it's not worth the time suck for us. It is for you guys.

It's very expensive.

Yeah.

Because when you lose them, a lot of times we'll spend hundreds and thousands of dollars and lose the RFP.

Yeah. Yeah.

It sucks on that end too.

But yeah. But you've done the math on it. Like, you know, it's just like, okay, well, I'm going to spend a couple hundred grand, but my conversion rate's this, it's conversion rate's this, LTV is this, like it's worth it. So.

Yeah, but no, that's interesting with your outbound. We've tried outbound on the SMB side. We can't get the numbers to work out for us on the profitability end. We can get it to work out where closing deals is just not profitable. Yeah. And the cost per close is pretty decent, but just the margins are so low.

But you're lower, your SMB, it's like a couple thousand dollars a month, right? So it's hard to make the numbers work out.

It's really hard to make. Yeah, because let's say Let's call it someone could start off at $2,000, $3,000 a month.

They might only stay for like 3 months.

No, you want them on a year contract. But the problem with that is like sometimes you're only doing like 15% margins, 10% margins when they're paying you really small amounts. So there's this, there's not that much profit. And when you're doing outbound and you're spending all this money, you also run into cash flow crunches. So we look at the business in 2 separate ways. We look at it from, is something profitable, but also how long before we recuperate the payback expense? Because with the SMB, you're doing work, the margins are low, you may get paid 60 days later. So now you spent all this cash to get a customer. You're telling me it takes you, let's call it like 8, 9 months to start breaking even. So there's a few months worth of profit left, but your cash flow is so bad, like, is it even worth it? So then we just shy away.

That makes sense. I do think though, The— if you go kind of, let's say, mid-market enterprise level for these outbounds, it does work because the people that are responding now, they are significant companies and they are saying, hey, this is hitting us at the right time because the gift card one also includes the whole AI SEO angle. And so everyone's like, oh, this is hitting us at such an opportune time right now because everyone's like losing their minds over it.

But we're seeing something interesting with AI SEO in which companies are all about it right now. But the budgets are not there.

No, they talk about it because they're scared. But they also, you know why the budgets aren't there? Because they don't know. They don't even know what they're looking for.

No. And they don't know what the ROI is. And most of them don't track even though they say they do track because they have data and analytics divisions.

So they don't want to say— You know what it is? If you're an executive at a big company right now, you need to CYA, cover your ass, right? And the way you cover your ass, hey, do we have the AI SEO? Oh yeah, we're working with Single Grain or NP Digital over here. Okay. If Single Grain and NP Digital aren't doing great, you just fire them. You just blame it on the agency. Yeah, that's the game.

But what we found for the AI SEO, it's a great way to get into the door with large enterprises because they typically have agency of records, but AI SEO is not covered under there. So it gets our foot in the door, but then we got to work with them for a lot smaller of a budget than we would like for a year until they do a new RFP or 2 years. And then, you know, you try to expand. Yep.

I have a funny one here. Not funny, but it's interesting. So this is, this goes broader around business in general, but you know, Patrick Bet-David, David.

I saw the video where he even paid for her to fly to any communist country she wants.

Yeah. So you saw a clip.

Okay.

So Patrick Bet-David did this video on Jubilee and Jubilee, they do this whole like, you know, 1 billionaire versus 20 anti-billionaires or whatever. But this video was called 1 Capitalist Versus 20 Anti-Capitalists. And so the way this works is that he sits in the middle of the room and then he picks a topic and then, you know, people can go up and debate him and people raise the red flags or whatever. Once a bunch of red flags go up, that person has to, they get kicked off the stage. So anyway, I think this is interesting because what Patrick Bet-David, very successful entrepreneur, he came from nothing. You know, I think his family immigrated from Iran.

Insurance company, right?

Insurance company guy. Yeah. Sold it for a couple hundred, I think $400 million or something.

Bought part of the Yankees.

Bought part of the Yankees. Very successful podcast and just good entrepreneur all around. And so a lot of the way his talking points are always like, because his argument is like, oh yeah, capitalism is the best form of, you know, best ways to kind of drive the best outcomes for the economy. Or he has another one where it's like incentives matter. And then everyone's arguing with him. His sticking point is always to the point that you saw. It's like, hey, okay, so if you're so into socialism, so into communism, why don't I pay for you a one-way first-class ticket to live in one of these countries? And then he's arguing with one of these students, young woman. And then she was like, he's like, so she's like, name some communist countries. He's like, Cuba, Venezuela, North Korea. She's like, those are not communist countries. And then she's just there. Whenever he puts a point in front, they're not willing to argue it. And it's interesting to me, All you need to do in situations like this is just say, hey, why don't— if you love it so much, why don't you just move away from America? If you love us so much, just move. And they'll just like, they can't argue anymore. All right. So I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital. And they work with a whole host of global companies or global organizations. 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.

They can't argue, but people still do argue because I have some friends and Eric and I aren't political. You know, we tend to be in the middle.

So we are political, but just in the middle.

Yeah, but, but we don't really lean left or right. I would say we really are in the middle.

So just to clarify this, I think socially we're more liberal. I think fiscally we're a lot more conservative. Yeah.

So I had a friend, you know him, when Trump got elected, he was really pissed. Trump announced the new tax plan. He was really pissed. And he's like, I pay more in taxes because of Trump. And I'm not saying I like Trump or hate Trump, but I was just like, where the heck are you getting this from? So then I ended up showing him the tax brackets over the last, you know, few administrations. And I was like, And I calculated based on his income, 'cause he told me his income. I was like, this is how much you actually save. Oh, you actually went through this? Yeah, I went through it.

Yeah.

And I'm like, here's how much you save. And he's just like, I don't believe it. I need to verify all this information. I believe I'm paying more money and that the tax breaks only benefit the rich. The wealthy.

Yeah.

Yeah. And I'm not saying the tax breaks don't benefit the wealthy. They definitely do. And it may benefit the wealthy more than the lower class. I haven't looked at the data on this, but You can even try to make that argument. I would have to double-check that. But I was telling him, I was just like, dude, the data shows that you are actually saving money. And they wouldn't just accept the data. And then, you know, we were talking about marketing and how hard it is to get a job right now in this ecosystem. And they're saying, what could I be? How could I be better as a marketer to get a job? And I said, you could be more objective and look at data.

Yeah.

And I was like, what do you mean? I'm like, I presented you with data.

Yeah.

And you can't take your opinions out. Data is data.

Yeah.

You know, this is pretty black and white data.

Yeah.

And I was just like, and then we started going over marketing examples.

Yeah.

And with some of the marketing examples, they had their opinions in place with certain types of marketing campaigns because of what they politically believed. And I was like, dude, people are paying you to get them a result.

Yeah.

You got to stop talking about your opinion. And what you think. If the data shows it's great and you're doing something that's ethical and you're not breaking the law, that's what the client's paying you for. You may not like it, but this is the reality and the companies don't care because they're bored and their investors and shareholders just want an ROI. They give you a dollar, they want 2. If someone can create 2.50, they're going to fire you and go with the person who's getting them 2.50 on that dollar.

So these people in this video really hated that whole idea that incentives drive the world and they're like, no, like profit is the wrong incentive or whatever, right? And then Patrick Bet-David is like, you look at North Korea, I think it's $17 billion or something like that is their GDP, maybe a little higher than that. But you look at South Korea, it's like $1.7 trillion or something like that is their GDP, right? And so, and then to your point, when you bring up data, they're unwilling to accept it. So the final thing I want to say around this, this is interesting too, is there's a guy who applied on that thing. He applied for 477 jobs. He couldn't get one job. And then Patrick Bet-David offered him a job. He said, hey, I'm going to move you to Florida. I'm going to give you a job.

You work for 90 days.

Okay. I want you to work hard. And the other guy was like, the moment he got a job offer, he's like, I'm gonna have to look into it, right? So like, it's like, dude, you just got offered a job right there.

And he applied to 470-something.

Yeah, couldn't get something. And then Patrick Bet-David said, why do you think that is? Why you guys? Oh, this and that, this and that. Just excuses the whole time. And then another girl came up and she was like, it's like, yeah, so she has mental health issues. She's just saying whatever. He's like, okay, great. He was actually concerned. He's like, did you go to a psychologist? Whatever. He's like, okay, I wanna do this. I will pay for you to go to a doctor. Okay. Because nobody— she's like, I can't get any support, whatever. He's like, I will pay for that support, but would you be okay if I also helped you find a psychologist as well and paid for that? She's like, oh, you're going to find me a psychologist? No, I'm not going to accept that. Screw that. Right. And a bunch of red flags got up and then she got kicked out. But one other thing I want to call out too is—

And on a side note, I look at this as more entertaining content than political.

It's entertaining to me. Yeah. Because it's— because I think in your 20s you do think more like this, right? More socialist, communist in those senses. Because you don't, you're broke at that time, of course, right? In your 30s, you're a little more comfortable.

I was more capitalist when I was in my 20s.

Yeah, but you already knew how to make money starting at age 15.

Okay, fair enough.

Yeah, so same for me, but I still thought like I would like to be rich. But anyway, did you know that 1%, the top 1% end up paying 48% of taxes and the bottom 50% end up paying what? 2% of taxes.

Wait, the top 1% pay 48%. And the bottom 50% pay 2%.

2%.

That makes sense.

And another number. So guess this. So did you know that the— so we bring in what, like call it $4.5, $4.9 trillion a year in revenue as the United States. Okay. So guess the percentage that goes into welfare programs of that $4.9 trillion.

Let's call it 30%.

68%.

Oh, wow.

Yep. So like, and then he's like, dude, how much more do you need? Would you like 100%? Like 68% is a ton.

No, no one will ever do this, but I think one way to really stimulate the economy and create a boom for at least the marketing industry and most industries, I wish someone will do this because I've seen stats that the top 1% pay the majority of the taxes and I know the bottom Call it people who make less than $100 grand barely pay any of the taxes percentage-wise, right, of what the US collects. I'm not saying the people making under $100 grand are doing anything wrong.

Yeah.

But I just wish federally they charge no federal tax for anyone making $100 grand. If you're married, $200 grand in exemptions, pay zero. I'm not saying you or I need a break, charge us the same. And this isn't— this for me is not a left or a right thing. This is a pure capitalistic thing.

Yeah.

Because if someone's on the making under $100 grand, which is the majority of America, and you charge them no federal taxes, what do you think they're going to do with that money? Pocket it. Spend it.

Yeah.

Right.

When I say pocket it, sorry, the government likes to spend.

So— No, but if the government doesn't collect that money from you.

Yeah.

And even if they charge you and I in the top 1% a little bit more in taxes, I think we would actually make more money if they didn't charge anyone under $100 grand in federal taxes.

Yeah.

Look, they would spend more money on rent, cars, all consumer goods. Our clients sell goods and services. We would make more money.

Yeah. Look, this, I think at the end of the day, just to wrap a bow around this one, the capitalism versus socialism thing, we've tried socialism in many different— the world, we being human beings, right? We've tried it in North Korea. We've tried it in Cuba. We've tried in Venezuela. Why is it that everyone tries to escape to the United States? Why is it that we have the border— we had the border issue before, right, which has since been cut down a little bit. But why is it that everyone wants to come here? Because they are escaping socialism, socialist countries, right? Capitalism is not perfect by any means, but it does allow for more greater, I think, outcomes, better outcomes for society.

It's not—

again, it's not perfect. There's always going to be inequalities, I think. But if you want equality, what's going to happen? You and I are not going to be incentivized to work.

No, we're going to watch TV all day long.

If we're all the same people, then there's no point in working hard. Like, let's just be the same people, right?

There's no—

you don't— if you get equality, you don't get freedom.

The problem with the younger generation, and Gary Vee has a video that he published recently on this, is parents will celebrate like 8th place trophies with their kids.

Yeah. Participation trophies.

Uh-huh. And it's like, you lost. I do not give my children 8th place trophies. No. You know, they won in the boxcar, you know, boxcar derby.

What's that?

In Beverly Hills where like you race cars.

Yeah.

Who won? Some kid got number 1, older kid, they call it maybe like 11, 12 years old. And he built his out of scratch. I was like, good for him. They also provide you kits. We use the kits. My daughter's 6, son's 4. My daughter came in second place. My son came in third place.

Oh, nice.

And they won and we're like, congrats. And then we broke down, we said, you guys did a really good job on your cars. And there were people coming into the room using ChatGPT to build their cars. We didn't do any of this stuff. We used common sense. And then people would come into the room because you would build the cars in front of the community or you could take it home. But a lot of them were building in front of community. People would walk and be like, I was the winner last year. And they had all this ego. And I was like, just chill. I'm like, we're just kids building a car.

Yeah.

My kids did not rub it in any other kid's face. They gave some of their balloons to some of the kids who lost to show good sportsmanship. And then our kids were happy that they won trophies, but we also broke down why they did not win number one and what they could have done better. To beat number 1 potentially in the future.

Did they get 2nd and 3rd place trophies?

Yes.

Okay, so those you held onto?

We held onto 'em.

Gold, bronze, silver.

Yes, but we still wanted them to understand what they could have done better.

Yeah, and how did they respond?

Uh, they liked it. They were just like, so next year I can get 1st prize? I'm like, potentially. Yeah, can't guarantee it, but other— it's gonna be more competitive next year. Yeah, 'cause every year it gets bigger.

Yeah.

But the— yes, you should celebrate wins, but you should also give feedback and teach people how they can improve so that way they know that they could do better and not just be like, oh, I won. Like my son races me down the hall. I'll beat him. Sometimes I let him win and he tries really hard and I'm not going to just let him be like, oh cool, I'm fast when I'm not fast. No, work at being faster and get better. Yep.

By the way, so what you just brought up with Gary Vee, I mean, that is a content format, right? When you look at the Patrick Bet-David episode, for example, it's 1 capitalist versus 20 anti-capitalists, right? These are formats that work. I actually watched a video this morning. It was 5 WNBA players versus middle school prodigies, right?

Yeah.

Guess what? They almost lost. So these WNBA players, last time they played high schoolers, they lost, right?

The—

they played up to— they lost the 3-point game. They lost— there's like a couple other like one-on-ones they lost, like the women lost straight up. WNBA players, by the way. Professional women.

Yeah.

Then they end up playing 5-on-5. So the women won 21 to 18. It was really close at the end.

Right.

But it's— this is interesting because formats get repeated quite a bit. Like MrBeast just had a video where it's like $1 bunker versus like a million-dollar bunker or something like that, or like survive in a bunker. So When a format works, you want to repeat it over and over. And that's what Jubilee has done really well, which is why they have so many viewers.

People like extreme content. Another example that I saw of this recently, I think one of MrBeast's friends went on this date with something Bear or Madison Beer. Madison Beer or Bear?

Beer.

Beer.

I think it's Beer.

Is she an influencer or a celebrity?

Yeah, she's like a singer influencer type. Like everyone is like big on her.

Okay. I did Google her just to see how many Instagram followers she had.

Tens of millions, right?

Something like that. I thought it was more than 20 or 30 or something large, but it's funny how I use Google to find out how many Instagram followers someone has.

Oh, that's interesting. Instead of going to Instagram.

Yeah, yeah, yeah. But, um, you know, and the date was a failure and it was posted all over the internet.

She was dating someone. I think she's dating someone already.

So that was like, yeah, either way, I watched it because it was pure entertainment. Yeah, but people like extreme content like that. Like, uh, if you and I talk about Um, uh, why your content's going to get crushed by Google, uh, unless, you know, you adapt with this fear.

Fear-driven.

Yes. That also works extremely well in today's world of content marketing, whether you want to use it or not.

And that is it for today. We'll see you tomorrow.