AI Operators Dinner Secrets, Marketing Loops & GPT Sol 5.6 vs Fable 5

So, Neil, I'm in New York right now and I'm here for a couple of investor meetings. I am here, I'm speaking at 2 conferences. I spoke at MozCon on Tuesday, which I've never spoken at before. And then today I'm speaking at an e-commerce conference, the Social Commerce Summit that we spoke at in Manhattan Beach. So, Stuart's doing another one. And then I also threw a dinner. Probably the highlight was the dinner that I threw on Tuesday and I wanted to share some learnings. I'm also going to prompt you with some of the questions I used because my Hermes came up with some questions that they're actually really good questions. And so this dinner was 9 to 10 figure AI operators. And then by the way, the restaurant I hosted at, I saw DJ Solomon. You know who that is?

No.

It's the freaking CEO of Goldman Sachs, man. He's this— remember he's a DJ?

Oh yeah.

Yeah, yeah, yeah, yeah, yeah.

He gets made fun of sometimes. I'm not saying people should. He should have hobbies, but I think Trump is the one who makes fun of him for being a DJ. Yeah, yeah.

It's for— I think it's—

So I think it's DJ Solomon. I'm like, I don't know what music he's creating.

So he was like, my friend and I were talking at the table and then I looked over, I was like, I was like, he's like, yeah. I was like, oh, it's DJ Solomon. And then like another investor came over. This, this place I hosted at, it is so interesting because it's, um, it was like all investors and finance people there. Whereas in Miami where it's the same restaurant, um, it's not like that. It's very chill in Miami. So anyway, I hosted this dinner. You had people from, you know, we're talking about, you know, 9, 10-figure companies, like revenue-wise. And I'm going to kind of just go down the list and share some takeaways and some questions. And then, Neil, we can kind of go back and forth here. And then I'm curious to see how your week went as well. Excuse me, I have a lingering cough as well. So first and foremost, Neil, one of the first questions I asked was, You know, where are you actually seeing margin expansion with AI, which is a very important question, right? Because we all like to talk about stuff we're doing right now. So do you want to answer that first and I'll give you some answers on it, then I'll give you another good question after.

We're seeing margin expansion by AI by cutting, and you got to be careful which models you use because if you use the wrong models, they're very expensive. And what we find is a lot of organizations use the most advanced models to do some of the most simplest things, which doesn't logically make sense when they can use older models that are Fraction of the cost, but we see margin improvement from mainly cost cutting.

Okay, so the table struggled to answer this one. Okay, now one of the guys was like, was very clear for us. This is a, this is a multibillion-dollar company. He's like, we're seeing margin expansion clearly in customer service, right? So customer service, we're seeing that because obviously that one is, you know, you look at a Fin, for example, it can handle a lot of these support tickets. And so, You're actually saving significantly there, but in other areas, not as much, right? And so for coding, you can say, yes, we're getting more output, but what ends up happening is you need to hire more engineers anyway. So it's not like anybody has created—

And pay them more. And pay them more. The good ones want more money. We're not seeing margin expansion in developers.

Yeah. And by the way, like one topic I started to bring up last week was this whole thought around If all these people, let's say Neil, you become more powerful with AI, but I don't, and you're able to do all these other things, how do we handle compensation with you? And this was a really, like, I asked it again at this table. I was like, how are you guys thinking about compensation when it comes to the AI pill people? And I might as well bring it front and center because I think a lot more people are going to start talking about this. And so one of the guys, he's like, yeah, I brought it up. And then the HR team's like, well, we already have these these structures and all that, and this is how it's going to be. And so he doesn't necessarily agree with it. He thinks that people should be compensated, AI pill people should maybe be compensated like athletes. Like if you're LeBron James, for example, you get a supermax contract. Or if you're somebody else, like, I don't have a good name here, but if you're, I don't know, I was trying to give an Asian player name, but there aren't many of those either. So my point is, when you look at an athlete, a superstar athlete, they get paid a lot more. So that's an interesting model. Someone else at the table, they compensate their developers just a lot of money, right? And I'm like, how does that work exactly? Because their developers can make up to 7 figures and they start at a good amount initially. And he's like, we charge them based on these story points. And I'm like, what's a story point? And he's like, a story point is like when you have a storyboard for a product, but we charge them per that. I'm like, isn't that just time and materials? And he's like, well, no. And he gave me some answer, but then I still interpret that as time and materials. So, There's a couple answers here, but Neil, I'm curious to get your thoughts. We should react to this in terms of how we're thinking about it.

Yeah, just honestly, internally, we're not thinking about margin improvement from AI. We're trying to figure out— we're not even trying to figure out where we're focusing our time and energy is how to get people more productive and do more. And I think the key is do more because When you're doing more for the customer within the same price point, yes, you're using this technology, it helps you be more efficient, maybe you don't need as many people in certain roles, but you are paying for AI and tokens, which can be costly depending on which model you're using. Net-net, we're not seeing too many margin gains and we're not seeing too much extra profitability because of AI, just being really transparent. We're able to do more that we've never been able to do before, but that costs more money, right? So I'll give you an example. We have— we work with a lot of franchises, and franchises are all different types. Some people are old people homes, some people could be like a dentistry franchise, some people could be a restaurant franchise, some people could be like an HVAC franchise. The list goes on and on. And what we found is, and this is obvious, every franchise has its own needs. So we started building custom interfaces for franchises to make the reporting better, to make the experience better, because some of these people have like over 1,000 locations and it can be really painful to manage it all in traditional systems. So building something custom for each of them would cost hundreds of thousands of dollars, if not millions of dollars, and then you got to maintain it. With AI, we're able to do this really quick, really cheap for a few thousand bucks or $5,000, $10,000, whatever it costs may be, including human time. Customers are happier. It makes life easier, not necessarily meaning we're saving money, but life easier from a reporting angle, making us making less mistakes, franchises making less mistakes, people being more clear on what's happening, the results. And what we found is AI's created the opportunity for us to do more for our clients and do different things that would've been too costly based on their budgets. Of course, we would've loved to do these things in the past. Client's not just going to fork over extra million dollars for a custom interface that's designed just for them, in most cases from what we've experienced. And these kind of things haven't made us more money, They haven't really saved us any money. We're just now doing new things that were not financially feasible for our client, but now are. That's a big thing that we've noticed as a marketing agency because of the technology.

You know, it's interesting. I was listening to this podcast with Lenny's podcast, Lenny Rachinski, I think is how you pronounce it. And basically they ran a large-scale survey around tech worker sentiment around AI. And so, the number one fear in AI right now is actually not necessarily losing your job to AI. That's actually second from the bottom. But the number one fear right now in tech is actually do more for the same pay squeeze. So, most workers are feeling— because you just mentioned do more, right? And so, with these people that are very excited about— I think you have 41% of people that are net excited about this stuff. Their whole thing is burn out more, right? And what's interesting is that the founders that were surveyed, they're having the most fun ever, but they would never recommend founder as a job. And that's funny. That's not really funny. But you and I, I don't think we'd recommend founder as a job to the vast majority of people because it's really hard, but we recommend it to maybe like 1% of people, right? But I thought that was really interesting that you brought up the do more thing. And it turns out that the number one fear in tech right now is the do more for the same pay squeeze.

Yeah, dude, you don't have kids yet. But would you ever want your kids to be an entrepreneur? Honestly, I'm just curious.

Nope.

Nope.

Oh, actually, hold on, hold on, hold on. Maybe my son, but I wouldn't want my daughter to go through that, which is, I feel like that's how you've set up yours. Can I, is that kind of how you feel?

Uh, so both my kids are great. Um, my daughter, she's young. She has made up her mind that she wants to— she's really well educated for the age of 7, and so is my son at the age of 5. I'm not saying that means they're more brilliant or anything like that. Just being quite frank, when you have more money, you can pay for private schools and tutors and all these things that help your kids get ahead in life. Right. And I wish everyone else had those opportunities as well, but— I'm just speaking real here. My daughter right now at the age of 7, a lot of times she tells me, I'm like, what do you want to do? And she has some ideas on what she wants to do. But then she says, in the long run, I want to have a family. I want to raise them. And I want to be home cooking for them, taking them to school, you know, and helping them be the best kids they can be and be successful when they grow up.

Right.

And some people are going to hate me for what I just said there, but I'll also say one other thing. I believe being a mother is the hardest job in the world. I think being a stay-at-home mom is much harder than working 9 to 5. This is just my personal experience. Even as an entrepreneur, I think what I do is much easier than raising kids. I cannot do it. I think it's way easier to get on a plane, speak at a conference, do some meetings, go back. I get to watch Netflix. You're a mother. A lot of these mothers have it even worse. They have to work 9 to 5 and they have to take care of the kids at home. I get they may get help from their significant others, but check this out. If you're a mother and you're sick and then your kids are sick, they don't care. They still expect you to help them out. Like, you never have a day off in your life. So when my daughter said that, if that's what she wants to do, more power to her. And then she asked me, I was like, so what are you gonna— or technically asked her, I said, what are you gonna do for money? She's like, I'll work for a little bit, but then, you know, I'm gonna live with you. I'm like, oh, you'll live with me? I'm like, I would be very ecstatic and happy if she lives with me. I'm like, you sure you're gonna live with me? You pinky promise? I'm like, don't change your mind. And literally before she pinky promised, she's just like, well, actually, it may be easier if I live next door to you. And then I said, how are you going to afford the house? And then she says, you love me, right?

And I'm like, yeah.

She's like, you'll help me. And then I was just cracking up. For my son, if he wants to be an entrepreneur, I would be okay with that. He's really into numbers. Like for Christmas, he asked for things like a calculator.

I wonder where he got that from.

Yeah. So if he wants to be an entrepreneur, I would be really happy. I wanted to name him Neil Patel II, you know, and that did not happen. It wasn't that I couldn't name him Neil Patel II. I wasn't sure. I was like, should I, should I not? And then I settled on, I'm like, eh, let's just—

I think it's better not to, because imagine if Michael Jordan named his kid Michael Jordan. I think he did, actually. That's— if he doesn't live up to the name, it's tough.

Correct. And I'm not saying I'm an Elon Musk or I'm— I know I'll never be that successful, but still, I don't want my kids to believe that they had to do what I did. And I don't think it's the best quality of life. What I think is actually better, like, you know, my son's like, maybe I'll get to be a scientist or I'll get to work with animals because he loves animals and animal facts. And he's young and I don't know what he wants to do, but I do want them both to work, and I do want them to understand how hard it is. Whatever they decide in the future is up to them. But if my son had a choice from making millions and millions of dollars and being miserable or being a teacher and being happy, I would tell him, be a teacher and be happy and go live in Missouri or something like that. Now, if he wants to be a teacher in Los Angeles County where he probably wouldn't be able to afford a home because It's just sad but true. And he had kids and he would be next to me. I would help him out because what's the point of me working all this hard, all these years to not have my family next to me?

We'll come back to the compensation thing in a moment, but my take on it is the way I see it is I would want my son to go through it because I see entrepreneurship as a rite of passage type of thing and you learn a lot. I think it's a great learning machine. I don't think I'd want to put my daughter through it. That's just my philosophy. And I do agree that being a mom is the hardest job. I looked at my mom, she had to be the breadwinner and she had to be the mom. That's double hard, right? I think your mom was like that too.

Yeah, the same.

And so I wouldn't want my daughter to have to do both. At the end of the day, I think one's already hard enough. So that's just us. But going back to the survey for a minute, Neil, so I'm going to read some of these things and then let's talk about AI and compensation. Okay, so you have the number one fear right now is doing more for the same pay. Okay. Most people in tech would not recommend their own role to someone else entering the industry today. Okay. Designers and researchers scored the worst. Founders came closest to neutral. That means you and me are closest to neutral. Everyone else is— they're not recommending their job to someone else. That's fascinating to me. Now, the one, the one final thing I'll call out here, then let's talk about the compensation piece, is AI is splitting the tech workforce in half. So when asked how AI has shifted their professional identity, 50% of respondents said they feel amplified. Okay. I feel like that. I think you feel like that too.

Yeah.

So we feel more capable. more productive, more excited about their future, right? The other half feel like their role is being redefined. So 27% that they're feeling destabilized, 14%, or that they've been diminished, 5%. So I would say maybe 19% of that is fairly negative. I think redefined is not necessarily negative. And which category you're in correlates with your career optimism, burnout, and layoff worry. And then the final thing, final, final thing for real now, burnout surged 10 points in a single year. While optimism fell 6 points. I think burnout the year before was like maybe like 44%. Now it's like, uh, 54% or something like that. So I— we've said this on the podcast before that my number one concern, especially with the AI pill people, is burnout.

Yeah, I, I definitely can end up seeing it. Um, and I think things will change within a few years because I don't see people going this hard, especially in certain roles like engineering where they're expected to do a lot and work a lot of hours and crank out more. I know the top players are getting paid well, but dude, they're saying, oh, the engineers don't have to code as much. A lot of the A-player engineers that I know now are working 6 to 7 days a week and they're working like 13, 14-hour days. It's just not sustainable. Just being realistic, I don't think it's sustainable, especially if you have a family. And I just think if you're not getting enough sleep, you're not as productive during the days that you're working. I don't care if you're using AI or not, you're just not as productive if you don't get enough sleep. But I think things will change. It's just a question of when.

So it says also founders are still the happiest people in tech. For the 2nd consecutive year, founders score highest on optimism, job enjoyment, AI excitement, and lowest on burnout and layoff worry. The there's never been a better time to build narrative holds emotionally, at least for now. So anyway, going back to compensation, Neal, so we've talked about some people look at it as, oh, maybe you have to pay your superstar athletes. Okay. The second piece is, okay, maybe you're awarding people based on these story points, or maybe you're giving people a percentage of upside based on, let's say a client's paying 10 grand a month and then they upsell to 100 grand a month. Then on that 90 grand difference, maybe you're getting like 10% of that, right? And so I think we need to reimagine compensation, and I don't think it's going to happen overnight, but I think a lot more people are going to start to think about this. And when we have better tracking when it comes to outputs or outcomes that people are delivering, and we're able to kind of tie things in with like smart contracts and things like that, then I think people will be more satisfied with their compensation. Because I don't think, Neil, you're necessarily wrong for saying do more, that's becoming more of an expectation. But I do think compensation needs to adjust as well. Otherwise, it's the rich are going to get richer, and then the pitchforks are going to come out.

When you say the rich are getting richer, I agree with you. It has to be fair for both sides. And I'll give you an example of this in a bit. But when I say that, if you're doing more, but your token costs are through the roof and it's very expensive for the business and their margins are going down, that's also not fair to the business. Assuming you're doing what's required as one individual, there has to be a balance. And what I'm getting at is it's like, If you're using AI and you can't replace any other people and the customer's paying the same amount of money, something's going to end up breaking. And I think companies are realizing that they're spending too much. A lot of these employees are token maxing, which I think is over now or is going to be over soon enough. And it's all about just making it fair on all sides. A real-life example of this is My buddy works for a software company and the software company focuses in the health service space. So him and their team members are on a thread. They're really friendly and they were complaining how they barely got enough of a raise to even meet inflation. So they're like, and this was just a raise for standard of living. This wasn't a raise for promotions or doing better. This is just a standard of living increase. And they were all complaining that they barely got enough money. And the first thing I asked was, does your company that you work for have investors? They said, no. I said, how is the financial performance of the business? And they're like, oh, we've been struggling over the last 2 years. We've been doing worse. So I look at that as, so the founders are helping you out. And I asked them, I'm like, do the founders live lavish lifestyles or anything like that? They're like, no, they're putting all their savings back into the company keep it afloat. And I'm like, so you guys are pissed off that they barely gave you enough money to meet the inflation rate, but the founders are putting their personal livelihood into the business so that way everyone gets paid and the founders aren't taking any salary and they're not living lavish lifestyles. And I'm like, you also have to look at it from their point of view and they need to look at it from your point of view, but they're just trying to keep everyone— you know, doing okay with the job. And I said, hey, have they thought about raising money? They're like, yeah, they tried, they weren't able to do it. So they're just trying to keep the company afloat and not fire anyone. And I'm like, look, that's pretty admirable, right? Not a lot of founders were willing to do that. They would just fire and just think for themselves and do what's best for them.

Neil, let me take the other side of that just to experience share. And then I think you'll find this I think you'll understand where this is coming from. So, you know, whether I've put millions of dollars back into the company a long time ago, right, or whether there's a period of time where I didn't get paid, nobody gave a damn if it was my personal sacrifices or if I didn't get paid a dime. And but they do give a damn if you are living a lavish lifestyle, right? Which, which, like, it's funny, they don't give a damn when, if you're sacrificing. And I won't even put this on anybody. I think it's just human nature, right? Human nature. People tend to look at their own situation. And then when it's like, oh, the founder's sacrificing even more, it's like, well, my situation still sucks, right? So I think I understand where you're coming from, but I just kind of sharing my lived experience here. The vast majority of people won't care that you've done that.

Yeah, dude, I totally agree. So, you know, and I'm not saying that people should care or shouldn't care or shouldn't switch and try to get a job. It's just finding not only the right balance, but this is why I think it's really important to hire people who are a really good cultural fit. If you don't, I think you just run into issues where they don't look at the whole picture or care as much for the company, and the company doesn't care as much for the people.

Yeah.

It needs to be both. Like, I think of company as a family. If the founders don't care for the team members and the team members don't care for care for the company, it's not going to work out. And I'll give you a real-life example of this. I had someone whose kid was sick, like really, really sick, really badly. And I'm happy everything ended up working out. We told them, don't work, just spend the time with your child, right? No parent should ever have to see their child be really sick or even potentially pass away before them. It should be the kids seeing the parents pass away and not the other way around. And we didn't care how much time they took off or whatever they needed, we'll still pay them, right? But you should support your team members when they are struggling and when they're really in a time of need. I've also seen people abuse this and say they're sick. I think you went through that experience where someone said they were sick and they took another job and they were just milking money from you and trying to take your clients. and create their own business that competed with you on the side that did the same exact thing while they're getting paid from you and they were just blatantly lying, right? To me, that's just unethical and people shouldn't do that. But yeah, you can see all sides of it.

Yeah. So the— okay, so we talked a little bit about the compensation piece. So a couple other things to share and then we can move on from this.

But wait, can we go back to your New York trip?

Yeah, that's what I'm doing.

I'm staying on the news because I was curious what happened at MozCon and how it was, because I don't think Rand speaks at MozCon anymore. I could be wrong though.

Yeah, I'll come to that in a second. I want— let me cap off the dinner piece over here. So I did ask another question. I said, hey, what part of the company would you rebuild from scratch if AI were native from day one? And almost everybody gave the same answer. What do you think the answer is, Neil?

My guess is customer support or engineering. It's one of those two.

IT. IT. Everyone would cut their IT team because their IT teams are the ones that are non-AI native right now that are blocking a lot. So they're, they're kind of digging in and you're kind of seeing a version of that with engineering. But whether it's IT or in a sense, it's whoever is non-AI pilled on the IT side, even on the product side as well, because we have a mutual friend where the interns are running circles around the product team. The product, they like that. I think they fired their product leader and then another one of them quit. And so the product team is in like flux right now. And then you have the younger people right now running circles around them. And he's actually doing it from scratch right now.

So. Yeah, with a lot of those departments, you have to end up rebuilding. Like, we let go some of our product people because they were just slowing things down and they were— had a different viewpoint on how things were— should be done. And I'm like, this isn't going to work out. And we made changes. And you know what? Product's gotten better. It moves way faster. And I'm not saying product's bad, if they're just not willing to adapt and they want to do things in an old school way when everyone else is changing, it's either adapt or die. I hate to say it, but that's reality.

So another one is actually the recruiting team, the talent team, the— you can call it the people team, the HR team. So someone had hired this super senior person and built out a talent team. He sacked the entire team. I said, so what are you doing now? And he's like, oh dude, so what I'm doing is We are— let's say Neil's an A-player. I want to hire Neil to my company. Okay. So usually what would have to happen is I would have to reach out to Neil. Neil would respond. We'd get on a phone call. Those screenings take a long time, right? But the difference now is I would research Neil. I'd say, oh, okay. I sent a message to Neil Patel. Neil Patel responds. Okay. Hey Neil, I made a custom landing page for you. It shows all the people that you'd be working with, all the projects that you'd be working on. And then instead of forcing you to go through a screen, which takes up a lot of time, they'll say, hey, Here's just a couple of questions I have for you because you went the extra mile to make that landing page. And then therefore now you feel a little obliged to maybe send a couple of responses, right? So he's trying that right now to save a lot more time on the sourcing piece because they can't hire fast enough. And so I thought that was interesting. And I think recruiting itself is going to change because the screens take forever. Real quick, if you want to acquire customers faster and more efficiently this year with the latest strategies and tactics, then check out singlegrain.com. That is my ad agency. Again, www.singlegrain.com. Check it out. And if it seems like a fit, we'll get in touch and help you with a free marketing plan.

It's not just recruiting. We use the same tech or AI in this case for also corp dev. And we're trying to do a deal right now in the Americas. I don't know if it'll close or not. That'll help us expand and have more depth in the Americas for specific service items. And then I'm trying to do 4 more deals in Europe. All right. So if you look at Europe specifically, we have Claude creating lists of agencies that have a certain amount of employees, certain amount of revenue, certain amount of profitability. And here's the kicker. Instead of having a human do this and paying for some random software, a lot of these countries require companies to report revenue and profitability publicly. So then it's just scraping all the data. We're then using the data to then figure out the right agencies, their contact information, sending out emails, and then boom, we're going from there and doing outreach. And then instead of having a massive corp dev team, you know, fielding all the calls. We're having AI field a lot of this stuff, sending out the emails. It then goes to my co-founder and I because we believe we're going to have better luck pitching the companies we want if him and I pitch it. Doesn't mean our team's bad, but we think founder to founder just works better. And then pass it over to our team once we get interested parties for them to do the diligence. But like, I'm trying to acquire 5 businesses or 5 types of businesses right now that are on our list that we're trying to get done ideally within a year and a half, 2 years at the latest. But we're just using AI. Before, we used to use corp dev people and they're some of the most expensive employees.

You should tell people what you're looking for on this podcast because someone might know someone and someone might know another person.

I'm looking for agencies in Spain, Italy, France and Germany that do performance marketing and are ideally at scale. The smallest we're looking for is like $3, $4, $5 million in revenue. That would be on the small end. Ideally, we're looking for agencies that are doing at least $10 million in revenue. And when I say revenue, we're not looking for revenue to include media. So if you subtract that out, what is your real revenue? Ideally, we're looking for $10 million or more. If you don't have $10 million, we'll take smaller, and we're looking for ones with enterprise logos. So working with big brands that are massive, that are global, because the model here is if I buy a France agency that has tons of logos and I buy an Italian agency, and you get the point, and keep doing this across all the major regions, I can then just cross-sell. The clients, right? And it just makes it easier and easier to grow faster.

Yep. So by the way—

And we would just merge their agencies with ours and we would have a bigger agency within that region.

Yep. So by the way, before we move on to the Moz piece, Neil, I came up with a new analogy this week. I quite like it, so I'm going to keep using it for a while. So Neil, when's the last time you went to the dentist?

2 weeks ago, maybe.

Okay. Who did you spend the most time with at the dentist?

The lady cleaning my teeth.

The dental hygienist, correct? Yes.

Okay.

And how long did you see— I don't know what her title is, but yeah. That's exactly— it's the dental hygienist. And how long did you see the dentist for?

I didn't see the dentist at all. It was just a regular cleanup. I get a cleanup roughly once every 3 months. I see the dentist probably once to twice a year.

Exactly. That's exactly what I'm saying. Okay. So my point is, I think a lot of the work that's happening right now, when you look at agency side, is you're going to want to have people and you want, you don't want most people doing dental hygienist work. It's very important work, right? It needs to be done. But a lot of this stuff can be handled by robots with a human oversight right now. The other thing is when Neil sees a dentist or when I see the dentist, for example, the dentist might come in, but then it's very strategic. Look at your x-rays. She'll look at your x-rays, right? Oh, okay, do X, Y, and Z. Oh, you need this over here. Do this over here. Okay, bye. See you next time, right? They might not see you for another 6 months or something like that, right? And so, but they're very busy, right? There's a lot of work to do. And so I think the future of agency work, you're going to have, it's going to be kind of like that model where you're going to have more and more people that are strategic that can be like the dentists. And you still have, you know, maybe there's some hygienists that are maybe, you know, humans, but most of the hygienist work is going to be done by robots. It's kind of similar to when you look at a chef in a kitchen. I don't know if you've seen that movie Ratatouille, Disney, where the chef is just going around like sprinkling salt and like tasting this and moving around. And I think that is the taste and judgment that a lot of people are talking about. And so, that's what I think. It's a dentist model that we're going to see more of. Yep.

Dude, I totally agree with you on that. But going specifically with the dental hygienist one, I don't know if I want a robot cleaning my teeth.

Me neither. Not for right now. Yeah, but here's the thing.

Not for right now. I'm open to it, you know, years from now. Just, uh, not right now.

When it's there. Like, if you're, if you're like William, for example, maybe if that's all you knew, you'd be down for a robot to clean your teeth.

Bye, Daddy.

Bye. I love you.

Enjoy your day of school.

Oh, look at that. Neil has a heart. Um, all right, so, so, but to Neil's point, you wouldn't want to be the first wave of the robots cleaning But maybe in 5, 10 years, once the accidents have all gotten over, like, then I'm down. Yeah, you nailed it.

I'm like, oh, when does the accidents start over? And when is it, you know, better than a human? And then I'm down.

Yeah, yeah. So, okay, going to Moz. So Moz, just so everyone knows, Moz, um, they're still a big brand when it comes to SEO. And, uh, you know, they, they, they were like the pioneers. Like, they competed with Semrush back in the day, um, you know, and then Ahrefs came out. Um, and so I didn't even know that they still had a conference. My AI actually reached out to Voss and it's like, oh yeah, okay, you're welcome to speak. I happen to be in New York at the same time. So they had about 400 people there, which is a good chunk. And their marquee sponsor was this company over here, which is, by the way, there's a lot to say about Profound because they raised a lot of money from Sequoia and they go heavy when it comes to sponsorships, sponsoring events and like having speakers there, having a big presence there. So they're, if they're not sponsoring MozCon, you know what they did when I spoke at Ahrefs? They sponsored trucks driving around telling people to stop using Ahrefs, right? So anyway, that's something that's interesting. So what do you want to know about Moz?

What did they mainly discuss? Have they adapted or is it just mainly SEO software still?

So here's what I'll say. I was at the dinner, like, it was like more of a happy hour the night before the conference. And there's people that attended, but many people aren't actually using Moz. So one of the salespeople came up to me and he's like, do you use Moz? I'm like, nope. And then he went to the person next to me, so do you use Moz? And she's like, nope, right? And so I think he's like, you know, I was like, so what's unique about Moz right now? He's like, oh, we have a very strong brand. I was like, okay, but like, what about your product? Nobody gives a poo-poo about your brand if your product ain't good, right? So apparently, I think they're doing more local stuff right now, and I think they're probably partnered up with Profound a little bit. on the data side, but they have a very strong GM. I met their GM, Willow, who's great. Their team's pretty awesome as well. So I trust that they'll figure it out on the product side because they were acquired by Ziff Davis and they have about 200 employees right now.

Okay.

Yeah. So we'll see. I think time will tell. I will just say this. It's not even just a Moz thing. I think— I feel like the SEO space in general is kind of lagging behind when it comes to product development. Again, I haven't used Moz for a while, so I don't know. Someone can prove me wrong here. But even looking at the other products that are out there, even the ones that have raised a lot of money, I'm just like, you look at what people are building on X right now and you look at kind of the SEO space and I feel like the SEO space is kind of lagging, so.

Yeah, yeah, they have AI visibility dashboards. So unless they have a partnership with Profound, I'm not sure why they would let them sponsor.

They probably do. I don't know, it's a good question, but they were a marquee sponsor, so.

Yeah, because I'm just looking at this. Most popular, $179 a month, all SEO features plus AI and GEO features, 2 AI visibility dashboards, 100 tracked prompts, 3 tracked AI models. So I'm confused why they would—

I think it's local. I think the larger contract sizes that they're doing right now are just companies buying a bunch of, could be local listings, but I think those are the ones that are adding up for them right now.

So I just Googled Moz and Profound partnership. There is no direct software partnership or business merger between Moz and Profound. This could be off, but I think someone made a mistake to accept the sponsorship. That's just my 2 cents.

I, I, yeah, I don't know. It's also with this, that sponsorship they had, um, they had a speaking slot for that too. Um, and the Profound, the Profound guy I met was really smart. Um, I think his name is Josh. So, um, anyway, here's the other thing I'll say though. Profound, I I think, I think it's a great product. I will say this too, when you raise a lot of money, you're inclined to spend that money too. So the amount of heads they had there, I think it had to be 6 to 8 people or something like that for a 1-day event. I think that's quite a bit. They had a sponsorship booth. They were the marquee sponsors for that. They had a speaker there as well. I think that's a lot of resources that they have outputting for these things right now just to maybe, maybe own the mindshare of the SEO space. But that's my take on it. I think it's, you know, you want to be frugal, even though you've raised a lot of money. And, you know, I like how aggressive they are, but I'm not sure it's the best use of money. That's just my opinion.

So, dude, I'm with you. So, but when you raise that kind of money, you nailed it, you have no choice but to figure out how to burn it and just try to grow faster.

Yep. All right. So, Neil, I want to show you something. I was testing GPT-Sol 5.6, which came out last week. It's their latest frontier model versus Claude Fable 5. But before I go into that, Neil, earlier you were just talking about token maxing and all that, right?

Yeah.

So I don't know if anybody on your team is doing this. I'm sure someone is. But the move now, if you want to save on tokens, is you're running something like an OpenRouter, which will route the different models. And maybe 5% of the time you're using like a Sol 5.6 or Fable 5, which burns a lot of burns a lot of tokens. And then maybe 80% of the time you're using like an open model, like a GLM 5.2. And then yesterday, I think an American model or like a non-Chinese open model came out called Thinking Machines. They released it. So the move is to use something like that. And then maybe 15% of the time you're using like a ChatGPT 5.5 or Opus 4.8. And then by doing that, you're kind of having a good balance. And then the open router knows how to kind of route. The funny thing is, Neil, we're talking to— so at that dinner, one guy has almost like an individual CFO AI. Okay? So it'll show you like, oh, how should I be saving money like a wealthy person? How should I handle my taxes like a wealthy person? It has all your connectors, right? All your bank accounts and things like that, right? And so he was like, yeah, we can't use open models. I was like, why can't you use open models? He's like, well, when you use the Chinese ones, because the Chinese ones are the best right now, he's like, They start to, you start to ask questions and they start to give you like communist responses, right? So, oh, you should just give your wealth away, right? Or like, oh, we don't look at it that way, right? They start to become very political responses. So he's like, yeah, for us, we can't use that right now. So we have to use the frontier ones. But I think, you know, looking at organizations like yours and mine, you know, you're going to have to have someone that's responsible for token optimization.

Dude, straight up. And then you went to 2 conferences, right? The second one was a social media conference.

I'm speaking at that Social Commerce Summit right after this. So I'm getting an Uber right after this and I'm going straight to speak.

Ah, so it was actually pretty good that I came on time for once.

Yes.

Yes.

It's pretty good. Well, I mean, Neil's, to be fair, Neil's usually not that bad. He's usually like, if he's late, he's like 3 minutes late. It's not that bad.

Yeah. But the worst is when I'm 3 minutes late in my own house.

Yeah. That's the worst. Yeah. And then he comes in on the phone too. And then I'm like, he comes in late. He's still on the phone right now. But anyway, yeah, that's the next conference.

Dude, it was so funny. So yesterday I'm recording videos in my house. So AJ, who Eric worked with in the past, Single Grain back in the day, does a lot of my video recording. So he comes in here with his brother, their team, and they have another third person and a few other employees who do like editing and stuff. So AJ comes into my house and all of a sudden, you know, I'm just on the phone. I'm You know, trying to do some business deals. I'm like, you recording? He's like, no. I'm like, cool. So I get back to the business deals and I'm trying to close them. Then we record 3 or 4 videos, get a call from someone that I'm trying to close a deal with. I pick up the mic, I take off the mic. I'm like, we'll redo it. And then, you know, rinse and repeat. But I think I did that to him like 3 or 4 times in 2 hours. So—

Wow.

Yeah.

Did he say anything about it?

We didn't get as much as we wanted done. And then the England-Argentina game was starting, so I gave him and his brother lunch. So they were very happy because their bellies were full. And then I have a theater, so I was like, you guys want to watch the game here? They're like, sure. So they loved it and they were happy, and that probably made them forgive the time that I wasted during Hey, beauty is in the eye of the beholder.

To them, maybe you wasted, but to you, it was not wasteful.

Yeah.

Okay. So one thing I want to talk about, because what I talked about at Moz and what I'm gonna be talking about today too, is this whole thought around, you know, sure, you could talk about AI all you want, but none of it's helpful unless the knowledge compounds. And a lot of people are talking about You know, they're talking about skills, they're talking about evals, and the latest thing is loops. So I want to talk about some AI marketing loops that you can use and some that we actually have live right now. But first, I want to explain what a loop is. So when people at Claude or OpenCLAW talk about how they don't prompt anymore and what a loop is, what a loop ultimately is, it's a workflow that compounds. It's a workflow that learns off of itself, right? So the whole idea is, I might say that, oh, my target state, my goal is to get all of my pages on my website to 50 milliseconds. Now, the current state right now is 150 milliseconds. So the difference between that, 150 minus 50, it's 100 milliseconds, right? And so the whole idea is that the— that loop can continue to observe over time and it knows how to improve and make tweaks to it. And so I want to make this clear for everyone because I think everyone needs to be able to build be building loops. The other thing is we have our Loops Creator skill available on skillsdojo.com. So I bought skillsdojo.com and it's public to everyone. You can have your profile there. Neil can have his profile. It'll probably have no skills on it, but everyone can make a profile, right? So go get that Loops Creator skill. You should start making loops. But I'm going to give you some ideas here on what you could actually do. So let me share my screen in terms of what you can do. So here's my screen. So Here are a few marketing loops that we actually have live. So here's a CRO loop. So one that optimized the conversion rate on a site by 30% by the next 4 weeks, right? And the connectors you have might be Google Analytics 4, Gong. That's one example of a CRO loop. And I'm actually running this right now on singlebrain.com. If you go to singlebrain.com, there's actually a test that's running that this thing came up with. And I'll show you the little tweaks that it made. The other thing that I've kind of called out on this podcast already, Is this Mr. Siu sponsorship loop, right? So I personally get about 20 sponsorship requests a week. I don't want to deal with them, nor do I want my team dealing with them. So therefore, I reply saying everyone's— my minimums are $25K and handles it back and forth until they say yes or go away. I prefer the second one, the go away piece. But the best part is that they all report back on how they get better after each iteration. So it's like, oh, here's the tunings that we made today. Here's the tunings that we made. So it's constantly getting better. And it figures out what, how it should adjust the email responses based on what a lot of people are asking for. And then we have this AEO SEO loop that will ingest my content, my call transcripts, and look for TOFU, MOFU, BOFU content angles, and then draft it in the CMS. And then we use ClickFlow API for that to draft the content. And then we use Syed's WP Vibe MCP for WordPress. And then we have these other connectors. So my point in saying all this is that you can use these loops. But I just want you to think about how does this apply to your business? What paid media loops can you make? What ad creative loops can you make? What SMS loops can you make? What email loops can you make? And then once you build the first one, you'll never look back. And then, you know, my whole thing now is I'm trying to get more people on my team to do this, but it's like pulling teeth sometimes. So just wanted to share that.

Cool. By the way, you know, Eric is in New York. You're in New York for the conference investors, and then you go to Rome, right? I go to—

no, I fly to Milan on Friday.

Milan. All right. From New York?

Yeah.

Okay. So you go to Milan. Question for you is, do you tend to do your meetups and stuff when you're in other countries like Italy or no?

I think if I'm speaking at a conference, yes, but this one's vacation. So I don't think any meetups are going to happen in Lake Como.

Oh, so you're not really staying in Milan, you're just flying into Milan?

Flying into Milan, correct.

Got it. So during the vacation, how many hours are you gonna work?

I don't know. I mean, I can't stop myself from working. It's too, it's too fun.

So— You should try taking some time off. I think the best thing I did was go on a cruise ship.

Well, you were forced to take time off. I mean, I probably won't work that much, but for recruiting calls, I'll take them because, you know, it's a, that's a time thing.

So yeah, dude, the same. While we were actually doing this podcast, I was messaging someone for recruiting and they responded back to me. I'm like, oh, let me set up a call right away. Yeah.

And that's, that's a big lesson. I think we should talk about that because you might think like, you know, you might have people that said, oh, oh, we'll meet with you in a week or 2 weeks or whatever. But like, again, each week is 2% in a year. Like, why would you do that? Just meet right now and get it over with. Because those recruiting calls, they want to talk to you. Like, you'll know within the first 15 minutes if you want to work with this person or not.

So yeah, the hardest part that I end up having is when I get an email from someone and they just shoot me an email and I'm trying to do a deal, I tend to just pick up the phone and call them based on the number I have in the email and try to do it right then and there. But a lot of people don't like that. Most people want things scheduled.

Well, okay. I actually, I think that I've always said that's a strength of yours, Neil. So, and I think it actually gets you a lot more than like the people that complain. So what percent of people actually complain about it?

Uh, less like 1%. It's not that many.

Worth the trade-off?

Yeah, yeah, I still do it. I, I can't—

How much more has that gotten you in life? Because it's not something I do, but I think it's something that's very helpful. I just, it's just not in my personality to do that.

Dude, so I'll give you an example from yesterday. Uh, I started going through my email, uh, people who introduced me to potential clients That never followed up. All right. So I literally started calling, like no joke. I started calling and I think I got through like 18 calls. Out of 18 calls, I got ahold of 3 people.

Okay.

Out of the 3 people, one was like, oh yeah, we're actually going to be putting out an RFP for marketing really soon. We have a $30 million ad budget. This is great timing. And I was like, cool. Where are you based? And they're like, oh, we're in San Francisco. I'm like, cool, I'll fly to San Francisco. My team can fly to meet you. And they're like, oh, we should do it. They're like, what works for you in August? And now we're already going back and forth on it by just calling. Now I could have had AI go look for all those emails, but already knew the main ones that people send me, like who are the main people that send me intros. I just look up their name and I just would go through the threads to see if they ever responded. But today, in like afternoon, I have a lunch meeting, but right after that, I'll go back to calling all the ones that didn't answer.

I think you should do both, right? I'm not talking about you. I'm just, I think for people, you do both. I think one, you do it manually, but then you have the AI that's constantly once a month, it's looking at all the deals that maybe stalled out or you didn't follow up with. Because I, for me, I need a reminder. I'm not as detail-oriented as Neil. Neil's like very high on detail-oriented. I think like 90+% I'm 6%. So, It's— I need both to keep me going. But again, whether it's to do a deal or whether it's to recruit someone, the move is to get on the phone sooner than later and not wait to set up a call. By the way, I think it's a huge red flag if you're trying to recruit someone who's more senior or a leader and they book on your calendar 1 to 2 weeks out. I'm like, what are you doing? Right? The will is not there. And then therefore that's a red flag. Yeah.

And then also when I cold call people to try to get deals, I do not leave messages. Because what I found is if you leave messages, at least with my personality type, I want to get ahold of people. And then if people I don't get ahold of, I leave messages and they keep calling, they're more likely to get irritated. But because I didn't leave a message, they probably don't know who I am. So eventually they answer and they don't get irritated as much.

What percent of people do you call that actually know who you are?

Like that I'm randomly cold calling?

Uh-huh.

For marketing or for business deals as well? Like business deals, like it could be financing.

Business deals, I feel like it's way higher. Yeah. Yeah.

Yeah. In marketing, it's really high. Call it like 60, 70%. Uh, in business, maybe like 5%.

Really?

Uh-huh. Wait, wait, wait, wait.

Let's, let's, let's clear this up for people. So when you say doing deals, I assume you mean M&A deals, correct?

No, I'm talking about deals like Let's say I want more line of credit from a bank and, you know, something like that, something random like that, like 5%.

Okay. So marketing, it's 60, 70%. Yeah.

If it's an M&A deal, probably 60, 70% as well, if not maybe higher.

Okay. Well, there you go, guys. The branding that Neil's been doing for quite a while now, that pays off. Yeah.

It does pay off when you're doing deals. People take the phone calls. They're much more flexible. I'll give a real-life example of this. So I had an agency that I wanted to buy in 2024. It's 2026 now, depending on when you're listening to this. They wanted some unrealistic number and they were just like, we're going to change because of AI and we're going to grow so much faster, way more profit. You guys know the pitch. I kept in touch with them and they kept in touch with me. I typically always keep in touch with anyone that I reach out to, especially if they have a good business. If they have a crap business, sadly, I don't really keep too much in touch. And as I kept in touch, they kept growing but not getting what they're looking for. And then I kept in touch and I was like, I'm like, so, you know, how's life? And then they were responding. And then they have some financial issues. They've had it for a while, so the company's healthy, but when you take on debt and you owe money, in many cases, even if the founder has a good business, they don't get to make any money because you have to pay off the debt first. So I was like, look, I'm like, how's your debt? You still have it? We're paying it off, but we have another year or so. I was like, so why not just do a deal? If I do a deal and give you cash upfront, you'll make money, you'll pay off your debt, And then you can make money over the next few years. And they're like, we need to get to X number. And I'm like, but your business isn't worth X number. And they're like, what if we just make more profit? And I'm like, sure, I can do an earnout where if you make that profit, I'll give you X dollar amount. But if you don't, I can't give it to you because it's just unrealistic. And they're like, all right, let's do it. And I was like, sounds good. Let's, you know, have our team look at all the numbers again, just make sure there's no hair on the deal, like you're not getting sued or anything, but assuming all is good, we should have no problem closing the deal. And it's just by staying in touch. Most of my deals that I get, it's always from staying in touch. If I look at most of our M&A, I never get the deal the first time I try to get the deal. I tend to get the deal in the second or third time because people come to reality with how things are going. There was a company in Mexico that I tried buying really hard and the guy's just like, We're going to grow so much because of influencers. We're going to, you know, we're going to get, we're just going to do extremely well. And it was a creative agency and they worked with some of the biggest brands in Latin America. Amazing work.

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 Answer the Public. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side.

And then the guy didn't end up hitting the numbers from influencer marketing, this new service that he was adding on. Then he said he's not worried about AI, they're going to do so much better. Then he had to end up making changes to a lot of his senior leadership because they didn't adapt with AI, and they've been flat. I know I can turn that company around because I can cross-sell their services to a lot of my customers. We do have creative globally, but they do different types of creative, not just digital. There's creative like booths and billboards or experience stuff where people bring out a digital truck and do a marketing campaign right when people are walking in for the FIFA game in Mexico City, right? So they do some different types of creative stuff that we don't do. And I just look at it and I was like, you would grow faster being under Our agency, we can pay you, but I can't pay you on the numbers that you were doing 6, 7 years ago. It's just unrealistic.

You know, this is no different than going back to the follow-up thing. This is no different than dating as well. So you might not get who you're looking for, but it takes a couple of shots. And, uh, the same thing— this is why, um, they— John Maxwell says the fortune is in the follow-up, right? Usually you're not going to get on the first shot. Maybe they might go with somebody else, but They— people end up respecting the person that doesn't go away. You're almost continually pestering them, and then maybe not— as long as you're not annoying, it's okay, right? So maybe you don't want to pester them, but you're constantly following up. And inevitably, they're gonna be like, to Neil's point earlier, oh, timing is really good right now, we actually have an RFP. Oh, actually, yeah, we're gonna sack our agency right now, we're gonna work— like, we're down to have a conversation with you. But a lot of this is just a series of conversations, which is why Neil might have said he only makes like one of these like outreaches. A couple months ago, right? But reality, she's making like 20+ calls a day, probably more than that. Neil, you probably make more than like, probably like 40+ calls a day, knowing you.

No, I don't think I make 40+ calls a day or anywhere near that, but it has to be more than 20, but it's definitely not 40. Are you talking about the people I'm trying to do deals with? Or are you talking about to team members?

In general, overall.

Yeah, I do over 40 a day. I thought you meant just like cold outreach. I'm like, yeah, there's no way I do 40.

20 is already a lot. Like, first of all, 20 is a lot. Okay. So like you might be thinking as a founder, right now or a marketer listening to this, yeah, I have nothing else to do today. I think I'm done with work. It was like, no, you get— have you made 20 calls today? Have you even made 5 calls today? Right? And then the other thing is, if you're calling your team members, keeping that rotation going, you're staying connected with your team members because you're not in an office environment. And so even if you spend— because when you call me, it's usually like very, very quick, like 2 to 5 minutes or so. But that 2 to 5 minutes, especially if you're calling your team members, they really respect that and they feel more connected to you. And I think that's a good retention mechanism too. Yeah.

But, and it's also, if you can't stay in touch with your team and all the people you're doing deals with, then they're going to leave you. Why should they work with you? What's the point of working with people if you're not going to stay in touch and figure out how to help them?

Yeah. So let me show you something real quick. I wanted to show you some examples, but first let's talk about this whole Anthropic and Blackstone bet on the next trillion-dollar AI business. So, you know, you've seen Anthropic, OpenAI, they've set up separate businesses and they've partnered up with like, I think they partnered up with like Ernst Young and these other like, what is it, Accenture or all these other consulting firms. But then now Goldman Sachs is involved, Blackstone, and they're helping fund this thing. So I think it's interesting because this group, I think it's called Ode or Ode, which is conceived by Blackstone. They noticed the gap when it had roped in large consulting firms and small AI services to implement AI across portfolio companies. One of these boutiques, an engineering services startup, stood out and then they formed a joint venture. So guys, like, it's like, oh, why do people need agency? Oh, can anybody just build this? Yes. But like I said earlier, more people are going to build stuff, therefore more people are going to be hired to maintain and optimize.

Dude. Yeah. Did you see the OpenAI deal on the funding? I think they raised $4 point something billion or whatever it was. It was something crazy ridiculous in which they're guaranteeing like 15 or 17% returns.

Wow.

Even OpenAI, right? A company, whether you say, oh, Anthropic's kicking their butt or not, to guarantee that much, right, in returns is just shows you how hard it is to get money at really favorable deals when you want that kind of money and that business isn't proven yet. Like people just expect And I don't blame them.

So I'm going to show this first. So Saul 5.6, in my opinion, has been kicking Fable 5's butt in some aspects of marketing. So I did— I did— I ran some tests over here. And so basically for a website build where they were building the same website, one took about 34 minutes, which is Saul, and then Fable 5 took 3+ hours and it kept getting stuck and it kept asking me questions back and forth. So imagine that when you're using the Frontier GPT's Frontier model 5.6, it's just the employee that doesn't have to do all this back and forth and it just gets the job done. The other thing is it does a really good job with thumbnails, right? So Saul, it shipped everything same day when I just stepped away from the computer. Fable 5 failed to download. I kept doing all this back and forth stuff again. I also had Saul do clips for marketing school. So Neil, our marketing school from last week, I think it was like 1 hour. It was like 80 minutes, right?

Yeah.

So I had Saul, I was like, hey, find— I want you to find the spikes from the content and then put a hook in the beginning of it. And I want you to chop it up for short form. It literally, it was one simple prompt and it actually rendered 10 of them and it actually looked good. Fable 5 got stuck in a loop, right? So, and some of this other stuff over here, I had Saul do an Amazon growth analysis and Saul took 9 minutes over here and it ranked the best. Fable 5 was just as strong, but it took way longer. And here's the crazy thing, Neil. When I had the Amazon analysis on what, as an investor, what area would I bet on if I was investing in Amazon or if I was running Amazon, Sol said it would bet on Amazon's new fulfillment services, like supply chain services, whereas Fable said it would bet on same-day grocery. Which one do you think is more appealing? Same-day grocery or The supply chain services where you can basically leverage Amazon's logistics networks to ship whatever you want.

The logistics is boring. Usually the boring stuff makes more money.

So I'm with you, right? And so Saul did the analysis faster and it came up with a better strategy. And so what I saw with my limited experimentation here was that GPT Saul did a better job when it came to marketing. And I just want to show you some thumbnails before we move to yours. So Look at these thumbnails, Neil. Like, this is—

hold on, what's this thing?

Okay, you see this?

The real work test. All right. SOL versus Fable 5. All right.

Yeah. And then this one over— like these over here, like it actually took our— it took my transcripts from a longer form video and it made these thumbnails. Like it's like saying, oh, SOL 5.6 is faster and cheaper. Okay. But then, you know, SOL is like, you need request all these permissions. So this is easy. I'm just chatting with the thumbnail designer back and forth, whereas Fable 5 can't even do this at a reliable level right now. And this is a Fable 5 logo. Notice that I changed the Claude logo. I said, I want the Fable 5 logo. Boom, you got this. So anyway, all that to say, your mileage may vary. I think you should test both. But, you know, these things are just getting better and better.

Yeah, they are getting better and better. People say OpenAI's version, their new stuff is better than Anthropic's. At least that's what I'm hearing from a lot of engineers, but I have no clue.

So I use— I secretly use my Codex, or it's not called Codex anymore, ChatGPT work, but we pay for Claude teams.

So yeah. Which one do you like better?

I like ChatGPT more right now.

Would you make your team switch?

No, because It's too much of a pain in the butt to do that logistically, so I'm not going to do it. But I would just say that anybody listening to this right now, I would suggest that you don't lock yourself into a long-term contract with Claude or OpenAI because they're just constantly leapfrogging each other. And then—

Yes.

Yeah. So—

You nailed it. And that's the way I take it. I'm like, it may be better now, but who knows if it's better or worse in a few months from now.

Plus the American OpenWeights that are coming out now, like Meta's stepping into the game, Nvidia's stepping into the game, Thinking Machine just came out with theirs. And so I think we're all going to be using a lot of open models and we're going to be using a lot of model routing as well. Yep. All right. So what did you find?

Uh, so they raised $4, it was either $4 or $4.5 billion. I asked Google the version 3 times and it came up with the answer faster and, uh, than ChatGPT because I can just modify it really quickly. Uh, and they ended up raising, uh, $4 or $4.5 billion with the guaranteed 17+% return. It was either 17 or 17.5. It was a massive return that they're promising.

Wow, that's crazy. And the other thing too is like all the deal— like I think Sam Altman offered the United States 5% of OpenAI or something, just maybe get that edge over their competitors. And then obviously you have like Anthropic doesn't want these open models to come out and gain more traction because that affects their business model. The other thing that I think is really interesting, Neal, is just from a business and pricing standpoint, Is when you look at— so Fable 5, by the way, as of July 12th, they were supposed to just move it all over to API. The challenge is ChatGPT just came out with Soll 5.6, and then they're just going to build into the model and they're not going to charge you API usage for it, at least from what I see right now. So now they're making Claude dance. It's like, oh, Claude's like, oh yeah, we reset your usage. It will be till the 19th, July 19th, before we move it to usage. Now they might not even be able to do that. And so you see, like we've talked about this, where Gemini might be squeezing everyone by just bringing the pricing down and making it free for everyone or cheaper. And then you have OpenAI where it's like, oh, we're going to make Fable 5, we're going to make Claude Dats, and they're doing that right now. And then now, like, Anthropic is like, oh crap, maybe we can't move it to usage only, which was what their plan was.

So. Dude, I just can't believe how much money these guys all raised. And I'm curious what ends up happening in the long run.

I think, you know what, uh, do you— have you heard any of Gavin Baker's stuff? The investor?

No.

Super smart. Like, super smart guy when it comes to AI chips and, and like bottlenecks. Like, everyone's doing this AI bottleneck, uh, trade right now. We're talking about it.

Um, so his whole thing is this bottleneck trade where they're just buying the stocks for the companies, uh, like the memory stocks, the ones that—

Exactly. Anything that's where it's constrained right now in the supply chain. Um, could be memory right now, could be cooling, for example, it could be other things. Um, but He said this, during the dot-com bust or dot-com boom before the bust, everyone was talking about you got to build out more fiber, more fiber for the internet, right? And then you know why they call it dark fiber? It's because 97% of that buildout was unused.

Wow.

But today you don't have any dark GPUs. All the GPUs are being used and more and more and more are being used. So I don't think the need for intelligence is ever going to come down because, Neil, keep in mind when you and I got broadband, what happened? It wasn't that we just got to use the internet faster. We got streaming, right? We got to do a lot of other things. We got voice communication, all these other things. So I think it's going to spawn a lot more. And I was listening to Howard Marks' podcast today and he's like, the interviewers were like, so when do you know when to bet hard, right? And he's like, well, you never really know, but if you know that investing will— not investing is going to hurt more, then you better make sure that you're investing. Otherwise, it's going to be a bad situation. Especially because he has a firm.

So I think these all things kind of— Oh, he doesn't have a firm anymore. He hasn't had a firm for a while.

Howard Marks?

Yeah.

You're talking about Oaktree?

Yeah.

Yeah. So this was back in the day. He was just saying back in the day when, yeah, when, when, but because he was scared, right? But he's like, well, if we don't do this, then we're not doing our job. So we need to do it no matter what.

So. Yeah. Uh, let's see. He didn't sell. Okay. Well, he sold it in 2 parts. The first in 62%. The final sale was actually recently, October 2025. Well, I know he's balling because he owns a home by me and it's a nice home. And then I believe it was one of his kids that wanted a home, so he bought the home next door and expanded and just hooked his kid up. He is a billionaire, so he could do whatever he wants.

Yeah. Sounds like something you'll do at some point too. Okay. So, okay, we talked about Anthropic's bet, I think. So just to be clear with everyone, Neil and I are saying that services aren't going away anytime soon, which is interesting. Neil, I was telling you at one of the conferences, one guy, you know, wanted to sell his company to potentially you.

So—

Oh, the—

Don't reveal.

Don't reveal. Huh?

The Spain guy?

Not the Spain guy. No, I gave you another name on Tuesday. It was an SEO company.

Oh yeah, yeah, yeah. I know what you're talking about. I thought you were talking about the Spain guy that we met at a conference a few years ago.

No, that wasn't a fit for you. Yeah.

It wasn't a fit because it wasn't growing. And then I talked to him on what he would take and he said, yeah. And then he told my team he wanted like 8 times profit for a declining business. I was like, yeah, this ain't going to happen.

So Neil, let's workshop this company. I mean, you know, we'll just give, we'll just give high-level numbers. Let's say this company is doing Let's say $4 million in EBITDA. Okay. And let's say the profits are— sorry, the revenue is $15 million or so. So this company considers themselves AI native, right? And, you know, I think that's something that you guys would like to have. And I think this founder is a very smart person. So what's your take on this one? Because you had talked to this company before.

I haven't talked to them in a long time, so it's a good company. I think they'll be able to sell if they can maintain the growth. They can probably get maybe close to $30 million including earnout. They won't get most of the money upfront, but they can get a good chunk upfront. The problem with AI-native consulting companies is, and this one was an AI-native consulting company, I think a lot of the revenue is non-AI. They are just pushing on the AI narrative more now. You have to look at what portion of their revenue is from these new services. And how sticky is it? But I think a lot of these players will have a ton of competition. And then if their margins are high, call it 25, 30%, I think there's going to be margin compression over time. The other thing that you have to look out is if the company is relying on one person, we call that key man risk. Sometimes it could be an influencer. Sometimes it could be a well-connected CEO who ran a publicly traded company. Has all the relationships. The list goes on and on. Sometimes it could be someone who published a book and they're a New York Times bestselling author and people read the book and that's what drives all the leads. But if there's key risks like that, you'll start seeing the deal starting to get dinged. And I do believe over time when people have higher margins, it's because they haven't built out their management team to reduce the risk.

Right.

And we constantly see that when agencies running like 30, 40% profit, Like I would say 4 on 15 is high profit and the chances are is they don't have as well established of a management team. That would be my guess on, you know, 26, 27% margin type of business and services.

And just so everyone knows, I mean, those, the percentage, the numbers I'm giving are, you know, modified a little bit so it doesn't reveal anybody. What's interesting, Neil, was that, that Earlier this week, I was talking to an AI consulting firm here in New York. So let's just say they're doing about $25, $30 million a year right now, and they are getting VCs hitting them up everywhere, and they don't want to raise money, right? And then they're like, okay, maybe they want to take on debt because one guy sitting at the table that I was talking to, he actually funds a lot of businesses, right? He actually— it's a business funding business, business loans business.

Yeah.

Right. So again, going back to the AI consulting firm, they're getting people hitting them up left and right, and then they're just like, wow, like, do we just take on more debt? But that's scary. I'm like, no matter what you do, you need to take on more money right now. My opinion is whether you raise venture or you take on debt, my opinion is if you don't, the problem is I just look at all these logos that you're going to pick up right now as expansion opportunities. And if someone comes in and vacuums them all up, Or vacuums a lot of them up. It's not to say that there isn't a lot of business everywhere. There certainly is. But I think this is a nice land grab opportunity in the next year or 2. I don't look at it as land grab as like Meta or like Facebook, like that type of land grab, but I think it's still very much a land grab.

I think they should take a totally different approach. They shouldn't take the debt. If— because if the guy's afraid of debt and the risk and he's already built something Amazing. I'm guessing this is his first big company that he's built.

First big company, but he's raised venture for his last few companies and none of them worked out.

Yeah. So what I would do if this is the first big company that he built, I would go and not take on more debt. I would not go and raise venture capital. I would go sell a minority chunk to private equity. He'll take chips off the table. Enough where he never has to work again. They'll put in money and debt into the company so that way he can grow and build something even bigger. If it doesn't work out, he's made enough.

So you're saying you would say he should go build a platform with a PE firm?

Not necessarily build a platform. He would be the platform and they would tuck in other companies to just make him larger. But I would go do it with private equity. That's his best bet because if he sold 49% or 40% and a minority, And they put in more capital to grow faster, and he's going to get diluted as they buy more companies, especially if the PE has to put in more cash. But he could take enough money off the table where he's okay. And if he really thinks it's a big opportunity and the amount of money he can get right now is enough where he's happy with it, then he should sell majority and take 70% off the table. And then if he takes 70% off the table, they'll go buy more. And typically if it's something hot and they do well, Whatever he made on the front end, even if on the back end he only owns 30% and that gets diluted down, the back end usually will be a similar size to the front end. So then he can make double the amount of money. And if the front end was big enough that he never has to worry again and his kids don't have to worry again, he's really good if the back end succeeds.

Yep. Or bigger, which could very well be the case.

So, but yeah, I also think a lot of these companies will go back down to normal valuations, just like Uh, I believe it was Scrunch that sold for $200-something million or something crazy like that on $20 million in revenue.

Scrunch?

Scrunch, the, uh, Profound competitor, right?

Oh.

It was something like that that got reported.

Wait, how much was it?

Yeah, like, okay, if you look at Profound, Profound raised well over $100 million, a billion-dollar valuation. Let's say they do $50 million in revenue. Do you think that valuation's going to keep climbing? I'm not saying they can't sell for a lot of money, but I'm saying 5, 10 years from now, do you think that valuation's going to be the same or it's going to come down to It's going to be normalized.

I think it's going to come down to earth because you and me being SEOs, I don't think it's something that— to me, it's like the new SEO and I'm like, how does this— how is this adding up? But we'll see. But they raised over $155 million.

Totally agree with you. So I look at a lot of these things, including AI consulting or implementation businesses that are really heavily valued right now, but in 5 years there'll be a ton of them and the valuations will drop down and they'll Yeah.

And so what Neil's really saying here is that strike while the iron is hot right now, take some chips off the table while the valuation is hot.

Because he could be like, we're growing really fast, but private equity is probably going to value his company double what it really should be valued. So then we should just take 70% off the table.

Anything that grows really fast, what do you think is going to happen? Of course it invites competition, and that means what goes up must come down.

Yes. And then you have People competing on price and giving away some of the things for free. We saw even with SEO, dude, a lot of the agencies back in the day would say, oh, SEO is hot and new. No problem. If you just do paid media through us, we'll do the SEO for free. Of course, they didn't put enough resources into it because they're giving away something for free. So they barely did much. But still people are like, oh, okay, sounds good. I'm getting this new shiny object for free. Now, granted, SEO is much older now, but People start doing creative things to get the business.

Yep. All right. So we got another 5 minutes left here. What do you got on your side?

All right. So, you know, right now we've seen a huge change in creative.

Okay.

And when I say creative, when you're running marketing campaigns, you're generating Facebook ads, you're generating Google ads. It could be video ads, CTV. So like ads on Netflix, And I remember a few years ago everyone's like, you don't need creative shops anymore. You can just have AI do everything. Now I'm giving creative as an example because that could easily be disrupted by AI. And it has in many cases because you can use humans for post-production. I mean, you can use AI for post-production and a lot of these other things to create more efficiencies. We're seeing a whole new shift in marketing right now. A year ago, companies were putting a lot of pressure on marketers and agencies If I actually look to now, customers and marketers are actually getting less pressure about AI than before. We also saw a lot of big corporations slowly remove or starting to cut in certain areas because they were getting pressure from finance, at least in marketing, on headcount. Why can't you do more with AI? To now they're rehiring because they found that AI is creating a lot of slop and they still need the humans involved in the process. But what I'm getting at is whether it's creative or whether it's just general marketing tasks, yes, AI has affected marketing, but we're seeing a lot less pressure from customers and just companies alike that everything needs to be AI forward and you need to do more for the same money and you're not doing enough and why are we using humans? A lot of them are actually reverting, not to back where it was, But somewhere in between that is more realistic. And I would have to say the pendulum is swinging more towards the human side than the AI side from what we're seeing from a pressure perspective from companies.

That's interesting because earlier when we started this podcast, you mentioned kind of the do more expectation. We called out the survey as well, right? The expectation is to do more from founders. But I'm like thinking, I'm like, okay, well, wouldn't that be the expectation too from clients to do more fees? But maybe not so much like because you're— the client is not necessarily the founder all the time. So I don't know. That's just a thought that I had as you were talking about it. Yep.

But realistically, majority of the calls we have, people aren't pushing as hard as they were a year ago. And the reason being is that they weren't getting the results from all this AI investment. I'm not saying that won't change, but they were pushing really hard, expecting people to be super AI forward. And when they look at the same budget that they spent with this new model, they're not really seeing any more growth. And when people started testing out some of the older models and the older ways, they really weren't seeing much of a difference either because a lot of these big corporations have like 20, 30, 50 divisions so they can run experiments, right? And it's the same agencies that they're paying that use technology versus that don't, or they select a few different ones. And what we're seeing is people are using AI in marketing. People just have to accept that. And people are accepting, expecting good results and a little bit more. But the crazy thing before was like, you should be able to do double, you should be able to do triple. When they're pushing that narrative, the quality just sucked.

Yeah. The way I see it before we wrap up here is services are here to stay. AI is here to stay, but what is also here to stay is you're always going to need, for the most part, human in the loop to quality check, to optimize, to maintain things. That doesn't change. If people are going to build more stuff, you're going to need more maintainers and optimizers and strategists. And so that's why I think Neil and I'm speaking for Neil as well. We see that more humans, we're going to need to hire more humans to do work, and a lot of people are going to be reskilled over the next call it the next 10+ years or so. So I think it's a net positive and I think people are still getting used to it. And then the good news is, to Neil's point, expectations have dropped a little bit because this stuff has started to normalize. Anything else, Neil?

That's it. Thank you guys for listening in. We'll see you tomorrow.