Conference ROI, Google vs. ChatGPT, $3.6M SaaS Pivot & Zuck’s $250M Fail

All right, so I'm on the go, but the difference is I brought my mic. See, I had a mic issue before, but see, Neil thought I wasn't going to get it together. I have this other mic over here, wasn't working, but it was okay. I had a backup mic. Okay. So anyway, that's—

I digress.

So I wanted to bring up— so Neil and I, we're both speaking at HubSpot's Inbound next week, and that's a conference. It's sold out. There's— I think there's like 30,000 people or so coming. And it's in San Francisco. And, you know, HubSpot's a nice conference to talk about. And I think we can probably talk about how we're preparing for it, but also talk about how people can get the most ROI from these events. And if you are going to be at HubSpot, I'm sure, Neil, you had people hit you up. I've had people hit me up too. So come say hi to us. I think we're speaking at 2:45 PM next Thursday, 2:45 PM Pacific. And then, Neil, what time is your session? I think your session's the day before on Wednesday. What time is yours at?

I think it's like 4 o'clock or something like that.

4 o'clock, yeah. So, Neil will be on the main stage for that one and then we'll be on the education stage, which is upstairs that can fit 2,500 people. I think Neil's stage can fit like 7,500 people. So, we'll be doing a marketing school session at 2:45 PM on Thursday, again, September 4th. And then on the 5th, I'm doing my session, same stage actually, at 11 AM. And so, you can catch us for any of these. Come say hi and happy to hang out. I think we can probably just jump into our preparation a little bit and also how we're making the most of this one. So, do you want to jump in first and then I'll kind of talk about what we're doing?

So, when you mean preparation, like preparing to go on stage and speak or how we're trying to get the most out of the event or?

That's a good question. So, I really mean, maybe let's talk about how we maximize our ROI for these because Neil comes in and out for these. I tried to make sure that even though Neil and I are going to be in the same city, I I try to make sure we get a marketing school session in. And so, I found a podcast studio, or rather, one of my team members found a studio near us, and basically, we're going to get a recording session in. Usually, I'll try to throw a dinner as well. Usually, we'll try to meet with a couple of customers, for example, because you build the in-person touch, right? And I think a lot of people, they go to these events and they kind of just, they do it, they're not really thoughtful in terms of how they plan. They're like, I'm going to check out a couple sessions, maybe I'll hang out at a networking event for a little bit, and then I'll just go hide in my hotel room, right? Yeah. If you're going to go to these things, it's a lot of time and a lot of money to spend on these things. You might as well try to figure out how to maximize it. And even if you're not speaking, for example, I was looking at HubSpot. They have these things called brain dates. And so, if you're going to go to these events, SaaStr has these brain dates where you can hang out with people and talk to people you're interested in talking about. You can form little groups too. And it's really the relationships that you're trying to build from this. That's why I like throwing these dinners. That's why we like meet— we do sometimes, we'll do these little meetups, right? It's all about the relationships. And even if you might not do business with someone right now, you might end up doing business with them a couple years later, or they might refer someone later. So you don't know what's going to happen, but you do know that really relationships are the main currency from these things.

Yeah. And what I tend to do is I look at everything as, because we more focus on enterprise, and I don't know how many enterprise businesses are going to be at HubSpot, but they have been going upstream over the years. So there are more enterprise businesses that use HubSpot now than let's call it 3, 4 years ago, not just because they're a bigger company, but I think They've made a deliberate goal to not just help SMBs, but also help enterprises as well. And what I'll do is San Francisco being a big city where a lot of major tech companies are and even non-tech companies are, I'll just set up meetings with people I already know and just continually build relationships and foster them because a lot of these people are CMOs of large corporations or they're in product or they run different parts of marketing. And I'm not necessarily looking to try to get a business deal or anything like that from these meetings. It's just more so to maintain relationships because you never know when these people are going to bring you deals, whether it's that company or they move to another company. So you just want to maintain them. And if you're going after enterprise-type customers, what you'll find is most of your business is going to get— is going to be brought from referrals over time. And that is why we just continually network and meet up with them.

Yeah, if you guys are watching me on the camera, and the reason I'm like bending backwards because my back hurts. But so what I will say too is—

Why does your back hurt, Eric?

Well, no, I was playing tennis this morning. No, no, it's an innocent response. But so what I will say is, we have had— because LinkedIn is actually in the city. Okay, so Carrot is a LinkedIn account-based marketing product. We didn't know that Account executives, so salespeople from LinkedIn, were actually referring to Carrot. So a lot of the leads that we've had coming in on a more enterprise side, it has actually been LinkedIn referring them. So I asked for the name of names of a couple of these reps because that's how we got Snap as a lead, also Snapchat. And I I ended up reaching out to some of the reps, and I'm just going to hang out with them for a little bit and and you know break bread or you know drink tea at the at the tea gardens and things like that. But again, like you say, you're maybe you're you're trying to deepen a relationship, or maybe you're trying to start a relationship. But I think we've talked. about this maybe in the last episode, but financial wealth is nice and everything, but upstream of that is really social wealth, and social wealth leads to the financial wealth.

So you're going to SF, LinkedIn has a big office there, maybe their headquarters are still there. I'm assuming they still are.

They're in SoMa.

Yeah. So why aren't you having LinkedIn throw an event with all their top advertisers, and then you just give them advice and you help, and then you can plug in Carrot? You know they do that, right? We've done it quite a few times with LinkedIn.

That's a great idea. I don't think this guy has enough power or some of these people have enough power. I don't think we're talking to the right people.

Yeah, just reach out to people at LinkedIn who run like events. I forgot what title they are, but we go and we reach out to them and we'll do like events.

Is it just like app ops?

Event manager? I don't know what the title is. We've done it a few times with them, but here's the key. You reach out to them in advance. It's not going to end up working for this one coming up in like It's too fast. What we do with LinkedIn is we will, if you reach out in advance, they will invite their big advertisers on LinkedIn and they'll do an event. You speak and you help them out with marketing on LinkedIn as well as outside of LinkedIn. It's a value add that LinkedIn's providing to their top advertisers for free. You are networking and getting to know them. So typically when we did our sessions at LinkedIn, They'll fill a room with like 30 different companies. I'm making up a number, but it's somewhere around there. Call it 20, not really 40. We usually see like 20 to 30, somewhere around there. And these are like some of their big advertisers. They do a few different speeches. LinkedIn will talk, you will talk. They may bring in 1 or 2 more speakers. When I was doing one in Brazil, Ryan Bonici, who used to work at HubSpot, he was supposed to be a speaker, but he got sick sadly. Hopefully he was okay. And a few different people talk and then they set them up into groups. And what we like doing is everyone on the group come up with a few of their biggest problems, and then you go around and you help answer those issues and you help them solve it. And then you're building up good rapport with them. You're plugging in your own business when you talk, and it's like fishing with dynamite. We think it's one of the— Best events for us.

I think that's a very underutilized way of doing it. I remember we've done a couple of these things, but it's more been proactive from the other side. And I think what you're saying too is you're— it's better if you're proactive about setting them up because they have the budget to do it anyway. And they always like—

No, no, no, it's free. It's in their office. You're using their own space. And then after you're done—

What about food and stuff? Food, beverage, all that?

LinkedIn provides food and beverage.

That's what I'm saying. They have a little budget for this.

No, no, no. They provide food in their office on a normal daily basis for their employees.

Oh, you mean they're just pulling the same cafeteria food and the same snacks?

Yeah. So we would go to like, when I was— did it, the last one I did was in Brazil. We did it in there after, we like doing it in the morning and then you eat lunch with them.

Why do you like the morning?

Because then you can eat lunch with them and you can get to know 'em on a personal level. Okay.

And people are tired at the end of the day.

Yeah. And then LinkedIn has a cafeteria, so we all just go there and we eat their food, which they've already made. It doesn't really cost 'em any extra. Yeah, like maybe a little bit for food, but they probably have a lot of wasted food anyways.

That's a good idea. So guys, feel free to steal that one. I think it's worth it. It's definitely worth it for us on the carrot side. But that goes again, like, I think what we're really getting at here is if you're trying to maximize ROI from going to any conference or any live event, you have to be proactive. And that's, I think that's the takeaway from this one. But anyway, you want to pick the next one?

Yeah. Did you see ChatGPT is using SERP API now? So for a while now, they've been scraping Google. Was it The Independent or someone who ended up releasing the article on that?

I don't know, but I know they were hesitant to reveal someone. And I know like a year or two ago, there's like one company making tens of millions, maybe like close to 9 figures because OpenAI was paying this. And now we find out it's SERP API or whatever it is.

But here's the cool part, right? Or the interesting part, not really cool. Everyone's just like, Google search is dead. There was even an interesting article that I just read recently on how Google's traffic is declining by really, really, really small, like a fraction of a percent. So not even 1%. And they were saying ChatGPT is growing really fast. It'll catch up to Google. It's a question of when. And I get it. And they're just like, Google isn't relevant anymore. But yet you're seeing tools like ChatGPT still scrape Google because the results are relevant.

Yeah. Yeah. I mean, look, what is it? Google's still at 42% of searches. And then I think ChatGPT is like 0.19% or something like that, but it's growing quickly. But things like this don't die that quickly, even if it was dying. Right. I think it's— I do think website traffic slowing down a little bit, but I think search behavior is changing and I think we can all agree with that.

Yeah. And here's another interesting topic. This one's from Kevin Indig, I believe his last name is. I could be wrong on the name. So he wrote an interesting article on Search Engine Journal. And what was interesting is he put something in there and I'm just going to end up reading it. Recent data from SEMrush and Perfrance suggests that 1/3 to 2/3 of user intent when interacting with AI chatbots is generative, meaning users use ChatGPT to do and less to search. Right. And we see the same thing. When I use ChatGPT on most cases, I don't know about you, I'm not using it like search. I'm using it to more so help me do stuff.

That's interesting because I'm looking at my— so I'm looking at my ChatGPT log. Okay, so today I have my tennis training calorie burn because I'm on vacation right now. So I was playing tennis this morning for like 2 hours. So I was doing research, I guess. So you can consider that searching. Yeah.

Yeah, but you're trying to get it to analyze and help you figure out how many calories you're burning versus—

Yeah, and then, but I'm asking a lot of questions and I'm dictating a lot and it's not like 1 or 2 queries. And then also, I'll ask calories and macros and then human philosophical things. So, I think I'm doing much deeper research than I normally wouldn't have done before because it would take too long.

But how many of it is transactional when you just look at your history?

What do you mean by transactional?

Leading you to buy a product, learn about a product.

Okay, I got one for you here. No, no, but how many?

Because it shows you your log, right?

I'm looking at the last, let's say the last 10. Okay, so 1, 2, 3, 4, 5, 6, 7, 8, 9, 10. My last 10 searches, maybe only one of them were transactional because that led to me buying something for, I was buying like Korean skincare yesterday.

Okay.

Yeah.

So, but yeah, you know, and I find that most my usage on ChatGPT is to get it to help me do something or become more efficient or save time. I also do use it for deep research. I do not use it for the same purposes I normally would use Google for. It's very different.

Yeah. I just ask a lot more questions. I'll just say that, like, I'll ask a lot of philosophical things I normally wouldn't have asked. And so now I have a lot of useless facts in my head, but at least when I'm in the middle of a conversation, I can spit these things out. So I will say though, I looked at the top 11. So 2 of 11 were actually transactional. So the one right after it was transactional. So, and by the way, like we all behave differently, just like we process things differently. So I think it's still going to take a little more time to really have the data down.

Yeah, I agree with that. But going back to what you were saying on deep research, I think a lot of people use it for deep research. It's one of the most common use cases for ChatGPT. And Google, you can try to use it for deep research. It's just not as good. AI mode is not bad, but I think people have it ingrained in their head that if you want to do deep research in AI, you just go to ChatGPT.

Yeah.

Even if AI mode provided better results, I think they've just won the consumer. They won on the branding game.

Yeah. Yeah. So you actually have this one over here sticking on the AI piece real quick. So VC hit you up and wanted to— you wanted to use AI Use AI to make your agency better.

Use AI to make us more efficient.

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 organization. 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.

So this. This was interesting. We've been getting some emails and calls from people, from venture capitalists in the United States, more so in the San Francisco-ish area. I think one of them came from New York, but it was mainly San Francisco-based VCs. And I wouldn't say they're the biggest funds. I wouldn't say they're the smallest funds either. Assume they can write check sizes from $50 to a few hundred million. And when I say $50 to a few hundred million, They would lead a round and they would bring in other people. So then that way, you know, you can end up having more firing power. But I don't know exactly what check size they wrote, but most of them say, hey, we want to lead a round, right? And when we're talking to them, and I'm more so the one talking to them, and we're not trying to do anything, I'm just curious to see what they're seeing the market going, or they have a different perspective than us. No joke. We're seeing a common trend in which people are like, Yeah, we just want to take AI and automate what a lot of people are doing and we're going to make your agency like double or triple more profitable. And to clarify on this, they're not saying the next day we're going to be double or triple, you know, increasing in profit. That would be their goal and they're trying to figure out if they can help us do it and they're not sure yet. And go ahead.

It's just, it's funny how like to assume that you aren't doing a lot of this stuff already and they to think that a VC firm knows what's better to do from an AI standpoint is kind of funny to me.

Well, they're asking us our margins and our margins are low, and that's one of the indications on their end that they think they can do better. But one of the biggest, or actually the biggest reason our margins are low is because we've been reinvesting a lot of our capital for future growth and expanding to different countries, which is expensive.

You guys are C-Corp, right?

No, S-Corp. Okay, keep going. Well, that itself is a problem if you ever want to raise money.

Yeah.

But going back to it, or at least with VCs, right? I think most of them prefer C-corps, but either way, when I was talking to them, I was, and I was like, so what do you have in mind? They're just like, oh, you know, a few of them technically out of the 4 we talked to, 2 of them specifically said, you guys spend a lot on account managers. Why can't we automate a lot of this with AI? And the first thing I said is, have you ever dealt with a service-based company and worked with enterprise brands? Both their responses were no. And I said, a lot of what your account manager's dealing with is politics. And both of them are like, what do you mean? And I'm like, when you're dealing with Fortune 100 companies, a lot of times you're dealing with internal politics and you're trying to figure out how you can actually get something done and convince people to not be a roadblock. And they're just like, oh, you know, how can we do this with AI? And I'm like, I don't see how you can do this with AI. You're just dealing with internal politics. And I hate to say it, a lot of big corporations work with outside consultants and agencies because they got to deal with politics.

Look, I think the one thing or things that aren't going to go away as easily are relational capital. And so salespeople have to maintain a relationship. Client services people have to maintain the relationship. I don't think an AI is going to, at least for the next couple years, take that away immediately. And so I think for some things you can say, oh, why can't AI just do that? For other things where it's a little more intangible, at least for the next 5 years, probably can't touch it. Beyond that, I don't know, it's anyone's guess. And so I think the angle is the correct angle, but I just, again, I find it hard. This is why you haven't necessarily taken VC money or PE money yet. It's because—

Yeah.

One, you want to have control. We've talked about this before. 2, it's like, you want to have control to do things your way. You don't want to have someone telling you what to do. And plus, you're kind of doing this already. So what is the angle? What is the value add here? The value add, I guess— go ahead.

No, it tends to be mainly Ivy League number crunchers. These people tend to have gotten degrees from Ivy League colleges. Number crunchers telling me how they have a better way of operating a business when most of them have never operated a business.

Or started one. I'm not saying I know everything.

I actually think there's a lot of things we can improve upon. So many I can't even count on 2, 3 hands, right? But I want to hear it from people who have tried and tested these things versus someone who's looking at a spreadsheet and just saying, you can cut here, you can cut there. Business doesn't operate based on a spreadsheet.

Yeah. Wisdom comes from, wisdom comes from experience and actually being, being in the trenches. And so for example, if Marc Andreessen reached out to you directly, you would take that call, right? Like he started Netscape, so, and he's been through the trenches.

Yeah. And he did another company after that sold as well. But Marc Andreessen is an amazing operator. Same with like Ben Horowitz. I don't think most VCs are like them. That's just my 2 cents.

Yep. No, 100%. So there's, anyway, I don't want to belabor the point here. So I'm assuming you took the call and you might take more calls in the future, but you're probably not looking to do anything imminently.

Yeah. And for anyone wondering why am I taking calls is because it's not even the money. Some of these people, if you do 20 of them, 50 of them, 100 of them, some of them are going to give you some amazing ideas that you can run with and they may have thought of some things that you never did. And that could change your business. The reason for doing meetings is not because you expect every meeting to be a hit. A lot of meetings will be duds and you don't learn anything. Very small percentage of them will be amazing. And you know what? Those make up for all the duds.

Dude, speaking of this, so we're talking about operators right now, but we saw that acquisition.com. So again, Alex had a very— Alex did a very successful launch with his $100 million Money Models book, $105.5 million for the weekend or something like that. Recently, they made a hire, Sharan Srinivasan, who spoke at the YPO Global Marketing Summit. So he joined as their president. And what I'm noticing is that he's actually creating a lot more content. And so his Twitter is starting to get going now. And I've kind of noticed a pattern here where Sharan, this guy ran a publicly traded real estate firm, and then now he's the president for acquisition. I think they started like a venture arm or something, but he's creating a lot of content. There's a lot. He was already creating content for Instagram. I think, you know, Alex and Layla are helping him level up his content game in general. And I see his Twitter growing, right? And he's kind of posting like, I don't know, call it 7 to 8 times a day. And a lot of it's like philosophical stuff that, you know, I think, you know, that can warrant a lot of engagement, right? So the question I'm really posing here is, you know, if you're going to hire an executive, should executives create content overall? Is that a net positive? And I just got this idea just by looking at his Instagram because he does a good job and he's actually a very good speaker as well.

I think there's nothing wrong with having people create content and I think it can help you out. But it's what type of content. So I've seen his content. Have you watched a lot of it, Eric?

I've only seen the Twitter stuff.

So if his goal is to run acquisition or acquisition.com or venture, I think creating content is great, but I think he's creating the wrong type of content. His content is too broad and it's the type of content to go after entrepreneurs who are just starting versus people who have established companies and are growing. And I think that's the mistake. People create content for views and reach instead of going after your ideal audience.

Yeah.

Now, if you look at Alex, Alex's content is going after people who are starting off as entrepreneurs, people who are trying to scale as entrepreneurs, right? But more the SMB crowd. But that's who he's selling the book to. I don't see enterprise companies wanting to buy his book. I'm not trying to throw shade on Alex. It's just a reality. And I bet you Alex knows this. So he creates content for his ideal audience. That president, the guy you're talking about, I've checked out a lot of his content. I don't think his content is the right type of content if he's looking for venture deals or private equity deals.

Yeah. By the way, I'm looking at his Twitter right now. So, Shiran, you can feel free to reach out to me. Neil and I are happy to talk anytime. I hope you don't think we're throwing shade. We're not.

No, this is more so To help you out and hopefully your content starts generating you more revenue.

So it's Shiran Shirvatsa. I think you would know better than I would, Neil, how to pronounce his last name. But so here's what I see him posting right now. So 3 truths about work ethic. It's harder than it looks. It takes longer than you think. And he's starting to get a lot more likes. Like this is stuff that people can get. Anybody's going to engage with this philosophical stuff. So 147 likes, 2,400 views. And the next one after that is the best investment you'll ever make is in yourself. It's the only asset that can't be stolen, taxed, or devalued by markets. Now, He's posting in 3-hour increments. I think he's posting 7 to 8 times a day. I think the problem that I'm seeing, look, if you're Marc Andreessen or if you're Ben Horowitz, or even if you're Gary Tan, or let's say you're Alexis Ohanian from Reddit, they're all venture capitalists now, right? And they're only posting about stuff that they're working on, stuff that they're investing in. They're talking about their investments. Maybe they're talking about things that they're building. Even Chamath Palihapitiya, sure, he's got a new SPAC going on, right? He's talking about— Does he really? Yeah, he has a new SPAC going on. People are like, why are you doing another SPAC if you're so rich already, right? My point is they're posting on what they're working on in the venture space. They're not posting this high-level philosophical stuff that I think can get views and followers. But I think if we're trying to get— if you look at all these people, the patterns are already there on X. Like, these are what the venture people are doing. All you need to do is emulate them. That seems like a— I hate using the word first principles because I think it's used so much, but that seems like a first principles thing to me.

Yeah, but if his goal is to get mass following, and go a different route or sell books or something like that, then the type of content you're posting is great and you should do more of it.

Yeah, actually, so here, check this out real quick. I know we can move on to the next topic, but I want to share my screen because, uh, you know, we can share our screens while we're remote. So do you see this?

While Eric's sharing his screen, because we don't see it yet, but, um, keep in mind we're giving this feedback assuming his goal is to, uh, be a venture capitalist Or, you know, do deals like private equity stuff?

Well, dude, it literally says VC at Acquisition Ventures. So I'm managing partner over here too. And so it says My Next Billion, which is kind of a spin on My First Million, or— but then it's like my next billion. So maybe this is the angle. But I think, again, like, I think on Twitter, at least the VCs have already mastered the playbook. And so in my mind, I'm just like, I'm just gonna copy what the VCs are doing. And Shiran has a lot of great stories he can tell around that. And I'm looking forward to it. So anyway, that's my feedback. Again, hopefully that's no shade, but in my mind, I think if we're going to have executives creating content, it should be focused on driving business results. And who knows, we could be wrong here, but at least that's my feedback and that's your feedback.

And one quick thing I would love to give feedback is, because I want to end it on a positive note, if you are going and, you know, you've already done publicly traded companies, I think he's done 1 or 2 publicly traded companies.

It could be too.

Either way, you've had success. What I would love to see from content perspectives, if you shared what it's like going public, running publicly traded companies, how to grow, what to deal with when things aren't going your way, like sharing all of those insights, I think that's going to be really helpful and that's going to cause you to get more deal flow than more of the broader TAM content. Dude.

Okay, here, let me just read this off real quick and we can move on to the next one. So he has had— so he's a 4x Inc. 500 entrepreneur with 5 exits in the last 19 years. And he has helped build $2 billion companies. And then he's worked at Credit Suisse and Goldman Sachs. So very smart guy, very good speaker. He actually ranked number 2 when he spoke at the event. So I'm very grateful for that. So I'm actually interested in his experience shares and his stories that he can tell. I think those will get a lot more views and they'll get the right views.

Yeah. And even if it doesn't get a lot more views, he's going to be engaging with the right type of customer. Right. And I would, Love to read or watch content that breaks down what it's like to run, you know, 2 multi-billion-dollar businesses, the ups, the downs. He created tons of content about that, working in the corporate world and how he transitioned to entrepreneur, or when he knew it was the right time to go do a startup or whatever it may be, right? That may be a little bit too early unless they're doing early-stage checks. But I do believe He can just experience share and a lot of us would love that content.

How you can trick the algorithm into making your content viral. So I actually don't know who this person is. I'm going to share my screen real quick over here. This guy's name is Alex Landings. Um, so if you see this, Neil, I'm pulling up my screen right now.

Do you see this? Now I see it.

Yeah. Okay, so I think this kid's only like 15 years old. So he says, okay, interesting discovery. If 17 creators post identical content within 3 minutes, the algorithm thinks it's quote unquote breaking news. It pushes everything to trending. He tested this 32 times with a few in-house ghost creators. It always So manufacturing news greater than reporting news. And so when he says ghost creators, I'm like, what does this guy mean? Right? Again, so his profile says 1 billion views generated destroying ads with ghost content at 10% the CPM. And so he has this thing called virality.cc. I know that's like a Discord group. There's another Discord group called clipped.exe or something like that. And then you have WAP. And what's happening is hiring a lot of these kids and they're giving them these long-form pieces of content. They're having them chop them up and post it to different people. different, um, different accounts, and some will go viral, some won't. Um, but he's just saying that if everyone's seeing the similar account at the same time, it has a much shot— much higher shot on goal or a chance to go viral. And we've seen that. I mean, Neil, that's not what you and I do, but you and I have talked to a lot of people that do this, and I think it's worth calling it out. Like, it's not saying that we do it right now. I certainly don't do it right now. I don't think you do it either. But if we did it, um, we'd probably do something similar to this. Uh, maybe I'm speaking for myself. Go ahead, Neil.

The way I look at it is I think these are things that you and I would've done maybe 15-ish years ago, maybe 10.

True.

And I look at it now as you and I try to look at things from a lens of what's going to create sustainable growth and revenue and what aligns with us in the long run. And we think we'll keep working 5, 10 years from now. And if it doesn't, we usually don't do it because we just think it's too shortsighted.

Dude, you want to see something? So I think these founders, so this is a company called App Mafia. I don't know if you heard about this, but one of their leaders is, he's a founder of a SaaS. I think he's only like 18 years old and they're doing $3.6 million in monthly recurring revenue. So let's just call that like a little over $40 million a year in annual recurring revenue. The software's called Cal AI. So I'm going to share my screen with you over here. The thing is he combined with a handful of other quote unquote SaaS founders, and I'm saying quote unquote because Just watch this video real quick, and I don't know if you can hear it, but I'm going to play it right now. Are you ready?

Yeah. My name is Zach Dadigari.

I'm 18 years old. Can you hear it?

Yeah. Last month, I made $3.6 million. Now, I live in a mansion with all my friends, party almost every night, and shit, I got to go to class. Have you ever wondered why there are so many teenage millionaires now? It's because the game is easier than ever. Anyone can do it. And if you don't, you're just fucking lazy. The truth is society lied to you and money does buy happiness and you won't get there by playing it safe. VCs and tech billionaires have been gatekeeping this formula for decades, but we cracked it and now we're sharing it.

Fuck. Okay, so get this.

That's cool. I like the video.

So get this.

A little kid being like, screw you. We figured out a way to do better. I'm not saying it's real or not, but it's interesting.

So $70 million in combined revenue, okay? 237 million downloads, whatever that means. And then they're selling a course. I think the course is like $5,000. And then they have all these testimonials here, okay? Now, my whole thing here is I think it's great. I think these guys know how to get distribution. The Clue.ly guys actually came and they copied them. So you had a bunch of Asian people in there saying, hey, we're launching a course too, $5,000 or so. But there's people that are throwing shade at, especially the guy doing $3.6 million a month, saying that, look, if you're doing $3.6 million a month, why do you need to be selling a course right now? And why do you need to be selling this lifestyle and move into this course world?

Is it per month or per year? Per month.

He's doing $3.6 million per month.

So they're doing $70 million a month between all of them combined?

It says $70 million revenue. So some of the numbers are off because I saw another guy, it said $50 million in revenue. So I don't know what that is. I just know for the very first guy, it's $3.6 million a month in revenue for his Cal AI. Got it.

Yeah. So what are your thoughts on this? I don't understand why he's doing this if he's really making $3.6 million a month. That's just my 2 cents.

Yeah, I think if you're 18 years old and you're— I think so his justification was like, look, if there's a way to make money, we're going to make money. But that's what we would've done at 18 years old. I was still in college and I think you had just started working for 4 years or so. So I think he was way more successful than either of us at 18 years old. And I think you'll learn. I think this entire group will learn eventually that it's not about the Lambos. It's not about showing off your watch. It's not about partying. Like, I don't even know why you're bragging about the partying piece. And you'll eventually learn that it is about the focus later. Because you and I, I mean, you just hit the— in your 40s. I'm about to turn 40, right? And I think you learn through, again, what I said earlier, experience comes from— wisdom comes from experience and you have to kind of go through it a little bit. And I think once these guys learned that, hey, this course collab thing was probably— your time was probably better spent focusing on whatever it is your main app was, you probably would have made a lot more money.

Yeah. And I think focus is something that it took you and I a very long time to learn and we struggled with it in our early years, but I know it took me more than 10 years to learn. I don't know how many years it took you.

I don't think I learned it till like age 34 or 35 when I was going through it. Yeah.

Yeah. And I don't think I learned it until like maybe like 6, 7 years ago. Yeah.

But the thing is, it's not like we've solved it. It's always a constant battle. You're working it out every day.

Dude, so the other day I meet up with some guy for dinner and this guy from dinner, I won't talk about it too much. The first thing he tells me is like, hey, do you want in on this deal? It's a real estate deal. Someone has health issues and it's hundreds of millions of dollars in property, but keep in mind most of it is debt and loans. So he's just like, you can take it over, it cash flows, You know, in the mid-20s and your payments are, call it, you know, a million a month. So after the payments, you're pretty much making around a million a month in profit, which isn't bad. And I'm like, the first thing I said was, how much does the guy want? And they said $9 million. So the first thing that goes off in my head is I'm like, so you want $9 million for me to make a million a month in profit? So 12. So I make my money back in less than a year. The first thing I was thinking is, what's the catch?

Yeah.

Because I started looking at it. Sounds too good to be true. It sounds too good to be true. So I signed the NDA without getting into too many details because I'm not supposed to talk about the details specifically. And I look at it and I was like, oh, because I'm going through it and I'm like, if it's true, I'll do the deal. And the guy's like, when will you do the deal? I'm like, I'll close in less than 30 days. Like, you want to close next week? I'll close. Like, if it really is true, because on top of that, I'll get bonus depreciation, call it at least like $100-ish million, if not more. Right. I would say probably more than that, like $150 to $200 million.

You said this was a real estate deal?

Yeah. Commercial, like really big skyscrapers, right?

Tons of them. Yeah.

All right. But in cities where that aren't Los Angeles, so they're more affordable. But they're still expensive. You're spending hundreds of millions of dollars on real estate. And I was like, I would do this deal right away because then I save on 2 ends. One, I'm cash flow, I'm getting my money back quicker than a year or 2. I'm getting tons of bonus depreciation. So I had my team look into it. The first thing we started doing is we started calling every office building that's listed to actually look at the vacancy rates versus what they claim the vacancy rates are. Because you can just look at the square footage of a building and see how much is available versus what they're claiming is occupied. Right? That was the first thing. And then some of my guys on my end were like, hey, we need to double-check this with them because some of the people are reporting different numbers. And then the second thing is we started looking at the loan terms and I'm like, wait, call it 60 to 70% of the debt you have to refinance in less than a year, which costs money to do. And some of the buildings are underwater in which you're spending more than what you're collecting. But the only reason the numbers are working is because it's a package deal and some of the buildings are doing well. But I was going through all of this and I was like, you know, dude, if it's too good to be true, it usually is. And then the second thing that hit me right then and there as I was going through this, because this document was long, it wasn't like 10 or 20 pages.

You actually read it? Did you AI it too?

I AI'd it and ChatGPT just epically failed. Oh, it was terrible.

Yeah.

ChatGPT was like, There are 5 buildings for sale or 4 buildings for sale. And I'm like, what are you talking about? There's more than 10. And at that point it was giving me some stats and I'm like, this is just already going to be wrong.

Did you try doing this for fun? Try running it, try dragging in deep research for it and see how that does versus regular ChatGPT.

I tried both. You did?

And it didn't work.

Wow.

Anyway, continue.

Sorry. Okay. So, you know, I was going through this and I was talking to my team because we have an M&A team that helps us, right? And I was using my M&A team to figure out if this is worth it because it's my company anyways.

Yeah.

So then I was just like, dude, I'm like, I just need to go back to focusing. And the moral of the story is like, there's always these shiny objects and I'm like, I already got a good small business depending on how you want to classify it. Some would classify it as a medium business and it's great. Like it already makes good money, great revenue, employ a lot of people all over the world. I should just focus on this and ignore the shiny object.

But you see, even at our ages right now, we can still get distracted by the siren very easily. And you almost got— starts getting like, it's okay that you got sucked into it. Like that time is already gone, but to get sucked into it even more would've cost you dearly.

Yeah. And I look at it as it's like, it's the reason I got sucked in is because someone telling me, and it's someone I know, And I respect someone telling me $9 million investment, this person's sick, they just need out, and you'll make $12 million a year. And they've owned these buildings for a long time and they'll give you many years' worth of financials and they're audited. It's just like, all right, let me take a look. But it really is like, what's the catch?

Yeah.

Because it is too good to be true. And they're like, oh, their family has money, they don't care for it, they don't want to deal with it. I'm like, This is just too good to be true. But yeah, and then they also sent me another deal, which was interesting, and it was in a physical product space and it does well into the 8 figures in revenue. It's just mismanaged and misrun. And I was just like, huh, I can probably turn this from making a million in profit to like 6, 7, Pretty quickly. And then, but they don't want, they would ideally want 8 figures, call it 10+ million for the business. And I was like, dude, I don't want this distraction for 10 million. I'm like, if they want to give it to me for what it's worth, because I'm just basing it off of what it currently makes. You want a multiple on what you currently make? Great. I'll pay you that. But I'm not going to pay you based on what it's worth to me after my team puts in all the work and fixes it and gets it to where it should be.

I don't know. All of this stuff just sounds like a job. Like if it feels like a job, even though it's a good deal, it's still a job. And so, We have a mutual friend. I was just speaking to him yesterday and he was thinking about a deal buying a competitor. And this competitor's been declining for the last 2, 3 years or so. I was like, just tell them you're not interested right now. And I knew exactly what was going to happen. He told them that they weren't interested and they immediately came back and they were like, oh no, we're down to do anything. We're down to do seller finance. We're down to do it. I was like, tell them you'll take it off their hands for nothing and maybe give them a little bit of profit and give them— let them save some face, right? Just to say that they had an exit. And I think moral of the story is, The reason I told him to reject the deal initially is I wanted to see, I was like, tell me exactly what you feel after you reject them. And he's like, dude, the moment I rejected them, I felt relieved. I was like, yeah, that's why you shouldn't do these things that feel like a job. Like again, if you feel like you're buying a job, it is a job and you already have a job to do.

Yeah, no, I'm with you. I look at it as like, I have so many people though that can just do, that can deal with internet businesses. I can create a division called like NP Brands. And just buy quite a few of them, and then my team can just make them more efficient. And we've thought about expanding there. I just, A, don't think it's the right time, and B, I need the right deals. If people want to do seller-based financing, or I'm paying them when I liquidate their inventory, or deals like that, no problem. I'll pay off their debt from day one, you know, whatever bank notes that these people have, and I'll fix the business and grow them. But the big issue that people don't realize, when you have a declining business, Most buyers, even if it's free, like if someone had an agency that was doing $30 million in revenue or $200 million in revenue, then it went down to $100 million, then $50 million, then $30 million. And you're like, Neil, I'll just give it to you for free. Even if I knew that we can run it at 10%, 20% margins, I don't want to waste my time on a falling knife, right? That's what we all call it. When something's falling, you don't know how much more it's going to fall. And it just becomes a scenario where it's a falling knife and it's just like, this isn't worth doing.

Dude, speaking of falling knife, so remember we did that episode on interest rates a week ago? So George Gammon sent me a message, the guy I was talking about. I'm sorry, I have a poor connection. It's not Neil. So just so you know, Neil, it's me. So George Gammon, great macro YouTuber. Everyone should check him out. Really good at investing. Just his investing content is great. So he was just saying, remember, especially in a rate-cutting cycle, interest rates don't control the economy. They're a reflection of the economy. So lower rates means a worsening economy. Higher rates means an improving economy. Lower rates might reduce borrowing costs, but it'll likely come with less demand, aka revenue. And so the last part he said, so I responded. I said, "Hey, but this also means risk on, which means assets are going to jump, right? Especially risk assets because you're you're pushing into when when interest rates are low, you know, you kind of go further down the the risk curve, right?" So he said basically bullish risk assets like crypto. bearish economy until economy gets bad enough, crypto holders are forced to sell, then it's bearish for both. Remember, Powell rationale for leaning more dovish was deteriorating labor market. And I just said, I can see that. So I think my takeaway from this one is that things are going to go well first for equities and maybe crypto for a little bit until the economy kind of loses it. But we haven't seen the economy lose it for a while.

No, we haven't. Although the last 3 years have been bad, Yeah. At least in our world, it's been bad. And the other thing that I like looking at with interest rates being really high is for me, I have cash. And when I was getting 5%, now I'm getting, call it 4% on my money to just leave it in a bank account with pretty much close to no risk. I wouldn't say no risk, but close enough to no risk. It's just easier to leave it in a bank account and get 5%. But the moment the banks are like, hey, we'll give you 1% on your capital, I'll start deploying. Because at that point it's just crappy returns and you have no choice and you start taking on risk because no one wants 1% on their money. 5%'s not bad.

I'll take that all day long. You saw what Powell said, right? He basically said that, hey, we're probably going to get away from that 2% target, that arbitrary 2% target they had set in like the '90s or something like that. So what does that mean?

He said that.

He said that.

I didn't hear that.

Yeah. I mean, that's huge. So your reaction is huge, right? Yeah.

That means they're accepting the inflation numbers and they're switching purely to—

They're going to turn the money printer on. Yeah. I mean, it's already been on. So, okay. I want to talk about one more thing and then we can move into one more of your topics kind of around content. So this is a tweet talking about how one video formula generated 300 million views and $500K in revenue. So let me just share my screen so you can see this. So let me—

here it is.

Okay, this is from the Startup Ideas podcast. So this one video formula generated 300 million views and $500K in revenue. It looks like luck, but here's how it actually works. Number 1, farm content across multiple accounts until something hits. Number 2, turn that winner into a series. So same concept, slight tweaks. Number 3, post it 5 times daily across 24 accounts. Number 4, translate to Spanish, Mandarin, etc. 5, pay meme pages $50 to repost. Number 6, run the best ones as paid ads. So one winning video times 7 platforms times 7 accounts, each daily posting equals inevitable virality. This is Virality Science. And so this guy basically was interviewed by Greg Eisenberg. And I think this to me reinforces what we're talking about here. It's, you just want more shots on goal. I think we're talking about organic short-form content in this case.

And how much revenue did you drive?

$500K, which seems low for 300 million views, but if it's organic, then it's pretty good.

This one vid— how many videos? I'm curious to get that $500K in revenue.

That I don't know, but if you're posting 5x daily across 24 accounts and you're translating it, I'm assuming a bunch.

Yeah, yeah, well into the thousands.

I figured that should— Well, look at this. 7 platforms, 7 accounts each, plus daily posting. So is that 49?

No, the language.

Okay. Well, yeah, did you multiply it even more?

So yeah.

Yeah. So this guy, David J. Park, apparently he has a startup called Jenni AI. And I guess that's how he's growing it. And he looks really young too. Let's just look at him real quick. Looks very young. His Twitter says burn the boats. So hey, he's focused. Young guy, he's focused. When you say burn the boats on your Twitter, you're a focused guy.

What's the Jenni Group? What do they do? Do they have software that helps you do this? Because if so, that was a great interview and it helps him drive more revenue.

No. Okay, here, dude, this is funny. Check this out. Check this out. Let me share my screen. So he has this link on his Twitter and it's a dashboard to his revenue. So his MRR right now is $709K and then year on year he's up 14%. 57K subscribers, up 38%. Average churn 10.7%, which is pretty high. Trailing 12 months revenue, $9 million, but he's doubled in the last year. But I don't know what this product does. I don't know. Jenni AI. Here, let's check it out. Jenni AI. See, now you have us curious. Oh, it's an academic writer and research tool for students. So this, this, this is a consumer SaaS and short form does well, just like Clue.ly, Cheat on Everything. When you do consumer with organic, you crush it.

Yeah, because it's broad TAM. Yeah, I love it. Good for him.

But that's another, that's another signal, dude, dude, dude. If you look at the Clueless people and you look at this guy, they've all kind of figured out how to, as founders, they figured out how to crack organic short form. And I think that just goes to show you, if you're going to be like a young founder, and even the guys from earlier, like the Cal AI guy, $3.6 million a month, they've all cracked organic, organic social. And so I think as a CEO, you do need to understand marketing. You can't just say, oh, I'm going to hire a marketer. I've seen so many companies, some of our mutual friends, we've seen them fail because they thought they could just offload marketing.

Dude, a few weeks ago I was with Om Malik, you know, the VC?

Yeah.

Who invested in a lot of amazing companies. Before that, he was one of the most prominent tech journalists out there. And we were talking about Google and everyone's talking about how Google's afraid of ChatGPT. I actually think that Google's— because with AI, Google has so much data, I do think they'll figure it out in time. I don't think the company will go to zero. I think they'll still do well, but I also think ChatGPT will do well. The area that I think Google will struggle with is social shopping. So you look at Instagram and TikTok shops, it's like that's where Google is lacking and I don't think they'll figure that out. They don't have a platform. People use YouTube in a very different way than they use TikTok or Instagram. Social shopping, I think by 2030, the last stat I saw was supposed to be around $7 trillion a year. So it's a massive market. I think that's going to affect Google really poorly and it's going to affect Amazon. And neither of those 2 players have a solution to compete.

Yeah, well, I mean, what did they say? I was looking at— where did I hear this? But ChatGPT should be worth like easily grow into like a $1.4 trillion company in the next few years. And they kind of mapped out the details. I think it might have been on the All In pod. But I mean, key point here, you're not too worried about the big players.

No, they all do well and they'll figure it out. And by the way, ChatGPT has to still figure out how to be a for-profit company. Yeah, dude.

Speaking of ChatGPT, speaking of Meta, because we're talking about AI again. So If you're in B2B, here's the deal. LinkedIn account-based marketing sucks, but it doesn't have to. With Karrot, it allows you to create personalized ads towards your customers and also personalized landing pages that align with the ads. So you're going to have higher conversions and influence pipeline reporting to prove that your ABM works. So if you want to learn more, just go to karrot.ai and you can join the waitlist. Again, it's karrot.ai. Elon Musk just stole 18 of Mark Zuckerberg's best AI engineers. So Zuck has offered his engineers $250 million each to stay at Meta, but Elon gave them something money couldn't buy and they abandoned Meta. What do you think that was that Elon gave them that Mark couldn't?

Shares in xAI at a really good valuation because Facebook is already worth a lot. So what are they going to do, double?

You're probably right on the shares, but here's Elon's response. So he said, many strong Meta engineers have and are joining xAI, and without the need for insane initial comp. So the keyword, initial comp, still great but not unsustainably high. Also, xAI has vastly more market cap growth potential than Meta, and we are hyper merit-based. Do something great and your comp can shift substantially higher. And you've read about this on Twitter. He'll have like young kids going in. If they do an amazing job, he'll promote them quickly. He'll pull in engineers from different areas.

Right.

If, like, for example, actually, one of— I'm not going to name names here, but someone I know is a friend of a friend is married to a guy that came up with the chopsticks for SpaceX when they land, right? So, you can imagine he's doing really well now. But that was just a scenario where he just raised his hand and said, hey, why don't we just— nobody could come up with a good idea on how to land it and said, why don't we just use chopsticks, right? He didn't say it like that, but that's what it ended up being. And so, you know, just by reading about Elon, it's very merit-based. The other thing too is with When you work with Elon, you're working on something. The vision matters a lot. And you've seen like he's going to sleep in the office, he's going to do whatever it takes to get there. And he is right, vastly more market cap growth potential. We give him more stock, but I think he paints a very compelling mission and vision. And when he's pulling in SpaceX engineers and Tesla engineers to do whatever it takes to build the Colossus factory, you know that this is probably the best visionary founder of our time. Not saying that Meta is not interesting and Zuck isn't a great entrepreneur, but I think The fact that— by the way, you want to know some of the last names of these people he's pulling in? Let me tell you. Let me tell you, Neil. You tell me what kind of people these are.

Wait, let me guess. They're from China or India.

If I had to take a guess on the two, probably more from China. You're right. You're right. So, Xinlei Chen specialized in multimodal AI at Meta. Qingyao Chuan worked on vision and video. Okay, and Alan Rice, that sounds American to me, managed critical data centers. And so sometimes it's just not about— it's not about the initial compensation. I think the money matters a lot, but I think the long-term compensation and the vision and ambition matter too. And being able to work with a generational entrepreneur, maybe the best one, is great because I do think Zuck's a generational entrepreneur, but I think Elon's number one.

Yeah. And I don't know how true this is, but speaking of these AI platforms, I was talking to a VC that was breaking down, what is it called? Anthropic or Claude, right? Well, I don't know which one's the parent company name. Anthropic's the parent company, right?

Uh-huh.

And they were talking about their valuation was either 70 or 100 or whatever. And they were just like, do you know how much some of these early investors made? And I'm like, I don't know, 10x, 20x, 30x. And he was just saying, and I don't know how true this is, he was saying, no, more like 2, 3x. And I was like, what? He's like, they've raised so much money and with the warrants, it just makes it hard as an investor that's early to actually make Huge premium. And I was like, oh, that sucks.

Dude, you know what's funny? I bet your angel investment— let me speak to my angel investments. I'm like, oh, so-and-so company raised at a billion-dollar valuation or whatever. I'm like, oh cool. And I'm like, I look at it, I'm like, oh yep, my multiple is like 3, 4x on that. Okay. And then like another company that I invested in, oh damn it, the SAFE note was too high. Okay. So maybe it's still a 6, 7x return, but it's like that. Okay. And by the way, there's another company I invested in, Lime. Okay. I thought that was going to go to zero. Turns out they're driving a ton of EBITDA now, right? They're doing pretty well. I think it's like $150 a quarter or something like that. I could be wrong. But I'm like, oh man, I'm going to make a lot of money on that. Nope. I'm going to get like 3x once they go public.

Okay.

And so it just goes to show you that the game of venture angel investing, it's pretty harsh. And if you're not going to play full in, all out, you're probably not going to win.

Dude, remember our dinner with Kellan at Avra, the Fuse VC guy?

Yeah.

So I met him up at Spago like a few weeks ago.

Oh, that's nice. Yeah.

And we were talking about a company that, because I'm an LP in funds, I don't do as much angel investing anymore, but I tend to just stick with being an LP because it's easier. And he knew one of the funds I was an LP, and I'm like, yeah, I'm like, I keep getting reports from them because they have so many companies and they made this fund. It's more than 10 years old, so it's pretty much wound down. They just have a few outstanding investments. So I was like, yeah, I'm like, this company here, I hope it's going to do really well because it's a massive SaaS company that does well into the 9 figures in revenue. I'm not talking about like $100 million. I'm talking about well into the 9 figures, like hundreds and hundreds and hundreds. And he's just like, no, not so much. I'm like, what do you mean? And he's like, dude, they— and we both didn't know the exact amount of money they raised offhand, and we didn't search it, but we both knew they raised over half a billion dollars, so well over $500 million. And he's like, their churn is too high and their growth is nonexistent. It's a flat company. And I was like, oh, you know, even though we were the first check-in through that fund, there goes that money.

Yeah. Yeah. Plus, like, there's a lot of dynamics that we people don't think about, right? All the rounds of dilution, liquidation preferences, and all these things. Bad market to go public in, right? Or you have a tough government on you as well, the last administration, right? So you just never know. And it's just better to bet on yourself, and it's better to bet on yourself without many other outside influences. So when you have a board, when you have investors and things like that, I think a board's actually good if you have an internal board. But when I think you have too many winds of opinions driving you, I don't think you can make a proper decision on your own. And that's what caused a lot of problems for people, especially right after 2021. It certainly did for me.

Yeah, no, and this is why I don't do much angel investing and I stick with my own business. I'd rather just run Google Ads or rank a site organically or build up a brand and just generate revenue that way. It's more control and the returns tend to be better for people like you and I. That's actually the best part about being a marketer because people have asked me a lot of times, and I know you must get this question a lot, if you had to start all over again, what would you do if you only had like $100 or $1,000? You must have answered that like 100 times by now, right? I'm assuming you got those questions a lot.

Yeah. Yeah. You get that question on podcasts a lot.

Yeah. And I'm like, we're marketers. We would just start all over, launch a side hustle.

I would just do the same thing.

Yeah.

Yeah. Yeah. So it's a great skillset. I think, by the way, just to read, like, it's earlier in this episode, we talked about focus. But the problem with marketers is we know how to do so many different things to drive revenue. And then we think we're like God, and we think we can do everything under the sun. And that is what ends up causing problems for us. You're actually much better acquiring all these skills, learning how to drive revenue, and then just focusing on one area. And that's how things have gotten really big. But I read this tweet from Andreessen Horowitz. They tweeted this. And I thought this was an interesting concept. So You know, a lot of people, especially people, technical people, they think it's all about building the product, right? And the line here is really, ultimately, your job isn't to build a product. Your job is to solve a problem. So people in agency, they like to talk about the different service lines that they have and people in different service lines, they like to brag about that. Or people that are different product managers for different types of products, they like talking about whatever product they have. But ultimately, that's not what matters. Your job as a business is to solve a problem and then you make money from that as a byproduct.

Yeah.

So most companies, they avoid the messy, unsexy work, but that's usually where the biggest opportunities live. And you do the work that others won't. It's to solve problems. And that's it. It's not about the product that you have.

Dude, the money's in the messy. People don't like the messy. They like the cool and sexy.

Yep. Yep. And do you— here, you can pick one. You have this Cloudflare one that's interesting. This one keeps coming back, this topic.

Dude, it's just like Cloudflare, their stock is doing decently well. I think they have like a $70-ish billion market cap. This isn't financial advice, by the way. And by the way, Eric and I don't want to give you any financial advice. Do whatever you guys want.

Yeah.

But Cloudflare just keeps pushing, hey, make your website a toll, pay for it. And the reason I believe Cloudflare is big on this kick is because they're afraid overall website traffic will go down, which will impact their earnings. So they want to be the toll road of the internet to save their business. That's my 2 cents. I don't think their business will ever go to zero, but that's my 2 cents on why they just keep doing this.

Have you mapped out how much money they can make if, you know, 10% of the internet or 10% of their users went with pay-per, I don't know, toll?

Can you repeat again?

Yeah. So I'm just saying that, have you— this Cloudflare thing, have you done the math around, hey, like maybe 5 or 10% of their users opted into this or websites did, how much money they would make?

No. Do you?

No, I haven't done it. I'm just wondering because the fact that they're pushing it so hard must have meant that they've mapped it out. But I just don't think it's the way— it's too much friction for what it is. And you don't want resistance to happen on the internet when people just trying to browse around freely.

Yes. I also think their model is just going to screw up businesses and cause them to make less money in general. Yeah, dude.

Speaking of which, I had— it's funny, we were talking about WordPress, about how it powers 40% of the web, and you and I were talking about how a lot of this stuff is becoming for free because of Jason Lemkin's tweet. But WordPress was like, Automatic Matt Mullenweg, he responded to one of my Instagrams. I'm going to look for it right now, but I don't know, just that just brought it up. So let me see what he said.

Go ahead. But I know a lot of people that talk about how WordPress is powering 40+% of the internet. It doesn't matter how much of the internet you're powering. All that matters is, is can you make money from powering 40% of the internet? WordPress does a decent job of making money, but not like Shopify. Shopify doesn't even power 10% of the internet or 5% of the internet. It's a much smaller number, but look at their market cap.

Yeah. Anyway, it's too hard to find that tweet or that reel. So I'm going to move on to the next one. You want to pick the next one?

Let's go with the MIT report. Did you read that MIT report?

I read that one. But the problem with that one is Ethan Mollick, he actually looked at the methodology for that research and it was only on 52 companies or something like that.

Too small of a sample.

The sample size was too small. So I'm like, okay, of course this thing's going to get a lot of headlines because people fucking hate— sorry, people hate AI, freaking hate AI, right? And so sorry, whoever heard me cuss, I meant freaking. But anyway, go ahead.

They're in school right now, so we're good.

Okay. All right, go ahead. You can shed some insight.

And sorry if your kids are listening in the background. But one thing I do agree with the report in, and they talk about how 95% of generative AI pilots at companies are failing. Now, I don't know if that number is 95% for most people or if it is You know, 50% are failing. I do agree that a big percentage is failing. Does it mean generative AI is bad? No. Does it mean AI just in general is going to fail and it's a fad? No. It just means most people in an organization, I think this is very true, this is what I got out of the report more than anything else, don't know how to use AI effectively and you need training in an organization to teach people how to actually use it to do their job better, or you need to replace people with people who actually already know how to use it so that way you don't had to train up your existing. I think the more realistic solution is you have to come up with some sort of training program to help all the existing people in the organization, because once you have too many people, it's not like starting from scratch. Starting from scratch, you can just hire people who are good to go from day one, but if you already have thousands of people, you got to figure out how to train these people to use these products correctly.

I think there are 3 types of AI people at a company. You have, let's call it FCA. Okay, so you have people who are fanatics, that's the F. You have Cs, these are the converts. And then you have people, A, these are the anchors. So let's start with the anchors first. The anchors are the people who are unwilling and these people that are dragging when it comes to AI, and these people don't like AI. Okay, those are people you probably need to rotate out of your company. Not financial advice.

Let's rephrase. Those are people you need to rotate out if AI can help them with their job. Like if their job is legal and only going to court and they're just amazing at fighting and litigating and they barely use AI, but they have other legal people underneath them, you probably don't need to get rid of that person.

Okay, then the converts are the people who are willing, but they just, to your point, they need to be guided, they need to be taught, and they need to be shown the light and they need to be pointed in the right direction. So they're down to do it, you just need to show them. The fanatics, these are people that are talking about the latest things. Oh my God, this is happening over here. Oh my God, check this out over here. They're trying all the new things all the time. These are, you want to, there's only a handful of these people and company, these are the people that you want to bring with you. And we actually have a mutual friend that I was texting with the other day, Neil. What he does, and I think this is genius and I'll probably do the same thing here, is he has selected these fanatics and then he takes them all on a retreat, okay? And it's like the super exclusive thing. It's like, oh my God, all these people, like, I want to go on that retreat. It's like the super elite group. And then at that retreat, it's a hackathon where people are building things. They're only vibe coding things and people are sharing what's happening at the end. It's also grounds for him to see who they might need to let go, okay? Because some people will make excuses that, oh, I just couldn't build this, I couldn't do this, I couldn't do this. He's like, oh man, I can't have you anymore, right? And so, he decides to rotate people out. But the point is, doing this hackathon, he's probably going to do them once a quarter or so, but it gets the best of the best together and you get to break bread with these people, you get to build better relationships and you just get these fanatics together and point them in the right direction and then they'll start guiding other people. But this is no different. than what Steve Jobs did back in the day where he had his top 100 people or top 150 people summit. And I do know there's some other companies right now that are doing that top 100. I think Coinbase does that too, where they have those people get together. And I think it's really smart if you can get your top 10% of people together for this specific initiative.

Okay, so I have one issue with the fanatics, and now I can see you. I have one issue with the fanatics. We have quite a few of those fanatics in our business and a lot of my friends' companies, and I've seen them at publicly traded companies that have market caps, $50, $100+ And I've interacted with a lot of them. The one— this isn't all the fanatics, but a lot of the people in the fanatics bucket, they always tell me how the latest cool thing they're doing, and they say how this is awesome, and they show me the work. And most of the people I talk to that are in the fanatic category, they're doing all this cool stuff and has no impact on revenue generation or saving money. All right, I'll give you one or those two because that's the purpose of AI. Either make Make it so we make more money or make things more efficient so we save money. Just as a business owner or executive, that's really what those 2 things people are looking at. So what I found really useful is that C category. What'd you call the C category again?

The converts. Okay.

What I found is a lot of the converts are— there's a lot of people in that category that understand the concept that things need to either make more money or save money. They're just not as financially or tech savvy. And then having the fanatics help them be more efficient in those areas, we found to be a winning combination.

Yeah, I think it's helpful if you have converts, especially that are business outcomes driven, because the fanatics are actually usually the— I would say not usually, but a lot of the fanatics are younger people in their 20s or so and are really excited about new tools and things like that. And dude, in my 20s, when I worked at different companies, I was always the new tools guy, right? But now I think it's important for the converts or even people leading this, maybe if you're like executive of the company, you have to just constantly add, hey, this is really cool, but like what are the business outcomes that we're trying to drive to here? And just constantly setting it around that band. And then if they look at you blankly, like we have had people who are fanatics that can't, they just for the life of them, they can't tie it to revenue. If they can't do that, then they still can't be in this group and they still can't Come attend this hackathon.

I haven't met one fanatic yet that is over the age of 35. I know they do exist, but in all the companies that I've talked at and the teams I've met, all the fanatics tend to be 35 or younger. And to go more specific, most of them tend to be in their 20s.

Yeah. And I mean, even beyond that, some of them are like in their late teens. And then, you know, we have mutual friends that are hiring the late teens and these teens actually sleep in the office and they're like super fanatics.

We have one, he's early 20s, he's showing me all this cool stuff with AI, he's telling me like, if we don't do this in our company, it's going to die, right? Really loyal guy, great guy, I love him to death.

Yeah.

And he's showing me all this cool stuff, he's like, look how powerful this is, and for like 6 months now, I've kind of just been trying to drill down one point to him, I'm like, you need to focus on stuff that either produces more revenue, Or saves on expenses. And we're talking about doing stuff for customers and I'm like, yes, but the customers are paying us to help them drive more revenue. I get it's traffic or leads or sales, but overall they're paying and they need to see more revenue in a profitable way. And it has to be more profitable than what they're doing before, or they need to save money. And I'm like, and some of these younger people, I really struggle for them to get that concept.

Yep. No, it's, uh, even I just find that I need to repeat myself over and over, and if they don't get it past like, I don't know, the 4th or 5th time, then I, I'm probably moving on to like talk with somebody else. So that's just how it is. Well, you're wearing your watch today.

Yeah.

Oh, you must be going to work or something. I usually wear it.

You do?

I don't notice.

Yeah, even when we do our recordings, I usually have a watch on.

Oh, I don't notice. Um, but—

Actually, no, probably I would say 50/50. But, uh, when I have meetings or I'm going somewhere, yeah. Today I had kids go to school. So I had meetings and stuff.

Speaking of AI, did you know that YouTube— there's a guy, this guy named Ramiro, he's basically saying that YouTube is now in easy mode for new channels in 2025. So YouTube apparently made an update recently, so they now run on a dual algorithm system. So they have the old model plus Gemini AI. So Gemini prioritizes viewer experience, relevance, fact-checking, and emotion for YouTube. And so practical strategies now, it's saying that You want to use Google's ranking signals. So it says use— here, I'm just looking at it— use Google ranking images and thumbnails, add factual details, names, dates, locations, and descriptions, match background music to intended emotion, encourage context-rich comments by asking questions. So basically what it's saying is these fast edits and all these things and the suspenseful music and all that, Gemini can now detect that and that's not what it's looking for anymore. So Gemini is running quietly in the background. It's learning from videos, audience patterns, and after a year of training, Meaning Gemini now helps decide what YouTube recommends and ranks, working alongside the original algorithm, meaning that there are 2 now, which is what I said earlier. And they haven't really publicly announced it because they're still testing it. But basically, and I'll wrap this up here, so focus shift is now on viewer experience. So unlike before, it's not about flashy editing or transitions. Gemini focuses on individual viewer patterns. So what people have watched, what they're evolving to, and what they're likely to watch next. And it creates a profile, right? And that means that if you're a smaller creator, you want to get into YouTube. Neil and I have been talking about YouTube quite a bit. Smaller channels can now compete with larger wants by tailoring content to Gemini's priorities. So, haha, that means our Marketing School YouTube channel should do better theoretically. And you know what's funny, Neil? My mom kept telling me, she kept asking me why I wasn't getting any views. I didn't realize she was talking about my, um, my Marketing School channel or our Marketing School channel because each video before would get like 20 to 30 views.

And, uh, really? Yeah, she—

yeah, but like now it does better. But the content that we have, I think if it's going to go down this path, this algorithm, I think it's going to do a lot better. So it says success. Depends less on entertainment value now and much more on how well the content matches what Gemini expects and verifies. So let's talk about this.

Keep going. I had to send this text. Someone screwed up on my headline. They just published my video on ChatGPT.

Now Neil's pissed. So I know how—

Yeah, now I'm really pissed.

So Neil's out of it now. So I just think my reaction here is that if you are— if people are watching deep content. So let's say when I say deep content, like a screen share for 30 minutes or an hour or something like that, I've seen some people do it well. I know there's this guy, Wes McDowell, I think he does these 20 to 40-minute videos. And I like doing these screen share videos where I like talking for 30 minutes or so. And I think the thing to understand is that if you have a lot of people leaving comments and they're saying, I don't know why this isn't getting more views, That means your video is probably really good. It's just the algorithm hasn't picked up on yet. And if the algorithm is actually getting smarter, this means that smaller creators are going to have a shot. And I do think my bet in the next 6 to 12 months, if this algorithmic change is true, um, the Marketing School podcast channel is going to grow a lot faster. And, uh, it's about damn time.

Oh, that's good, dude. What pisses me off, and I know this is a side tangent, my team publishes content. You know, some, some of the stuff we use contractors. I'm texting the contractor right now. And I said, use the title, rank number 1 on ChatGPT, my 3-step traffic system. And then the video's not doing well. And then little do we see, they picked their title, is ChatGPT the new Google for traffic? And I'm like, guys, stop trying to like just do stuff that is like, oh, let me try to do something that's like a more evoking curiosity. And I'm like, dude, people use YouTube for educational The video breaks out how to rank on ChatGPT. Let's just keep it simple.

I just hate when— okay, so I run into the same problems that you run into. When instructions are given, instructions aren't followed. And then the thing is, I come back and I catch it later, and I feel like I'm constantly looking behind my shoulders. Is that kind of how you feel?

Yes.

Yeah. And I can't wait for the time where I don't have to do that anymore.

Yes, same here.

Yeah, because look, here's what I'll call out. So those of you that can't see the video right now, once this happens, it ruins your day. Like, I'm looking at Neil right now and I know how, like, because I feel the same way too. And I already know Neil's day is ruined for the next 5 to 10 minutes at least.

I'm pissed. Yeah.

And so I'm trying to— what's going to happen after this?

Yeah.

What Neil's going to do after this, he's going to send them like a barrage of text messages.

He's going to get in trouble. I already did while we're on the phone. 1, 2, 3, 4, 5, 6. I counted 6 ones as screenshots. 7. 7 text messages while I'm recording a podcast and then just wait till I'm done.

Dude, can I tell you something? So I was talking about this last week, but me, I've been used— I've been so impressed by ytjobs.co. So the YouTube jobs website, because it literally— I think I told you this, but it shows you who verified, who they've actually worked with, because the other channel has to verify that they work with them. So when people apply now, I have like Like, it'll score them like, um, like a purple diamond is like the highest rank. And they'll show like gold stars.

I'm a little confused. There's a site called what? YT Jobs?

Yeah, this, this, this will help you, I think, with your situation right now. Because this is YouTube related. Yeah, a little bit.

Yeah. But what's the exact URL? I'm confused.

YT stands for YouTube. So ytjobs.co. That's the website. Okay.

So it's not like a YouTube job, uh, website. It's a third party.

It's a third party. It's not owned by YouTube. Yeah. And, um, The good news with this website is all the creators that are applying to work for your company, again, they are verified. Whoever they say they've worked with, like, you know, this person, 6 million subscribers, 12 million subscribers here, and they have testimonials and things like that too. And I'll ask them, I'll say, hey, if you're going to apply for this job, show me 3 retention graphs, show me what you would do with this video. And the people that are serious, they'll do the work. And literally we've had one editor that we've been testing. He is head and shoulders above all the editors that I've ever worked with in the past. And they just know what to do. They'll like be proactive about ideas. They'll send Loom videos and things like that where it's like, I feel like instead of looking behind my back, I feel like they're watching my back. You know what I mean? And this is no different than, you know, Neil, the way that I stole from you around hiring people who have at least 2 promotions at 2 different companies. These guys have it. And so you look for the people with the gold diamond or sorry, purple diamond and the gold stars, give it to someone on your HR or recruiting team and just post everything that you're looking for, all the problems that you're having right now. I think this site can solve a lot of it because there's all YouTube-native people.

Oh, that's great. I'm going to try this out. But yeah, little issues when people don't follow instructions. And this is my problem as a business owner or a manager. I'm really detail-oriented and the little things, if someone gets it wrong, they bother me and I don't know how to get over that. I just can't. It's not my personality and I I expect everything to be done the way I believe it should be. If someone has a better way, show me data and I'm all for adopting a new way because I always want improvement and I expect everything to be as great as it possibly could be. And if it's not, I just get irritated.

I don't even know if it's a detail-oriented thing. I think it's a high standards thing because I'm 6% detail-oriented on that personality test. I remember when I still had your profile, you were like 99% detail-oriented, but both of you and I on that thing are 99% demanding. So, I think it's probably more of a demanding thing.

Yeah, yeah, I can see that. You and I are both demanding. And by the way, I know I'm a hard person to work for, right? This is why I'm not the CEO of a company because I know I'll just piss a lot of people off every single day.

Well, same here, but I am the CEO. So, that's the problem, right? And I think you have to have very, very thick skin to deal with you or me. Yeah, I don't know. We'll just leave it at that. Maybe that's it for another episode, but we do have like probably 2, 3 more minutes. So is there anything else you want to cover before we head out here?

No, but going back to the detail-oriented, I mean, being hard to work with, my CEO is detail-oriented and he holds people to a high standard, but he does it in a much more finesse type of way to not piss off a lot of people culturally. I don't. I'm like an HR nightmare to work with, but I don't manage any direct reports, so there is no HR problems.

Again, the Dharmesh— so Dharmesh Shah, co-founder, CTO of HubSpot, and the Neil Patel way of not having any direct reports is the dream, I think, because you can go in and fix whatever needs to be fixed, right? Whatever's broken, whatever's big, those are the things that you want to be applying your leverage to, because those are the things that you can affect the most that will have the biggest impact. You know, I will say that we have a new exec joining us in about 2 weeks or so. The good news is, have you ever worked with anybody that's Dutch, Neil?

Yeah.

You know, Frank Slootman from Snowflake, he's Dutch, right? So I've listened to him talk before on podcasts, like this guy's hardcore, right? He's respectful, but he's hardcore. And so what's been—

You're talking about people from Netherlands, right?

Yeah, yeah, yeah. Correct.

Yeah, we have office there. I don't know where. I've never seen it, but I've been there and met my team there, but I didn't go to the office.

And what's their style, you would say?

They're reserved. They can be direct, which is good, but I would say they're still reserved.

Yeah, they're direct.

It's a way of thinking.

They're direct, they're reserved, but they're also kind in the way that they're direct, right? And so I think this should hopefully help shift the culture a little bit because right now it's like me driving a lot of the pressure, but I think to have someone who's very direct but also very approaches it in a different way is going to be good for us. So we'll see how it goes.

Yeah, because I'm not the easiest person. Like me, I'm more like, I'll meet certain people in our organization or a buddy's organization or, you know, client's organization, and my personality is not the best, and I know it's a fault. Like, I'll tell people on my team, I'm like, this person's not going to work out. You should get rid of them. And I'm like, cut it. And they're just like, you only met them for 10 minutes. I'm like, I already know. I'm telling you, it's not going to work out.

Here are all the things you're going to Let me ask you, let me ask you, because I do the same thing too, but I think I'm right a good percentage of the time, but not always right. So what percentage of the time do you think you're right on that call?

Like more than 95% of the time. Okay.

I think mine is more like 85, 90%, which is still pretty high, but I think I'm still wrong sometimes is my point.

So in the 7 years in business at NPD, or 8 years, I don't know how long, how many years, I only made that call one time where I was wrong and that person still stuck around.

Yeah.

And the person stuck around because my executive team said, no, you're wrong. We've worked with them in the past. They're amazing. They just need a much longer ramp-up time. I was like, okay then.

But you're okay being wrong too. Like it's actually more convenient to be wrong. It's convenient to be wrong.

They'll call me out and I'm like, yeah, I know I'm wrong. I don't care if I'm wrong. I don't care if I'm right. I just want growth. And if everyone said, Neil, you suck, you should just pick up trash all day long and we would grow faster, I'd be like, cool, I used to pick up trash and clean restrooms for a living. I'll do it again. If you tell me that's going to provide more growth, tell me what to do. I will gladly do it. I don't care what it is.

Cool. All right guys, that's it for today. Please don't forget to rate, review, subscribe, and we'll see you later.