Is AI Making You Dumber?

Did you know that AI is making us dumber?

Yeah, there's been a lot of studies on this. It makes people think less. I think Harvard or one of those colleges released something on this a few months ago.

For the sake of this clip, he doesn't know. So, so, so, so this guy, I don't know if I showed you this one, but this is from Derek Thompson. So it's a new newsletter. It's called The End of Thinking. So doomsday predictions about AI taking our jobs in the future shift focus away from where it belongs. In present reality, the age of screen tech has coincided with declines in literacy, reading, and writing. We are deskilling ourselves. So, if you look at this over here, you can see that adults, the numeracy and the literacy is just going straight down like numeracy, right? That math and the literacy has gone down quite a bit here as well. And then you look at teenagers, it's gone off a cliff, right? Science has gone down, reading, maths has gone down quite a bit. And these are average scores on assessments across different domains in high-income countries. Teen and adult scores use different scales. So, it went from like 510 up here for math all the way down to— now it's down to like 480 or so. Wow.

That's crazy. But what's interesting with— keep going.

Change in 12th grade NAEP math scores. So 2005-2013 versus 2013-2024, you can see that in the black line, lower performing students are getting even worse. This is a change in 12th grade math scores, right? And so you can see statistically the lowest performing students are getting a lot better. They used to get better Over time, but they've— they're getting worse progressively over time. And then the last one over here is in the US, the so-called National Report Card published by the NAEP recently found that the average reading scores hit a 32-year low, which is troubling as the data series only goes back 32 years.

So every year it's getting lower.

Yeah. Yeah. We're getting dumber and dumber over time.

Yeah. But dude, you remember the talk you had with me maybe 3, 4 months ago? About AI and kids. Uh-huh. Because you asked me like, oh, do your kids use devices? I'm like, not really. Sometimes they do watch TV though.

Yeah.

Um, but not often. And then you said, oh, are you gonna give your kids ChatGPT or any of these tools at their age? Mm-hmm. You know, at a young age? I was like, no. And you said, that's good. And I said, why? And the reason we're not doing it is we just don't want 'em to rely on devices and we want them to use their brains and play outside like normal kids, like the stuff you and I did when we were kids.

Yep.

And you had a little bit of a different response on why I shouldn't, but you're like, oh, you're already doing it, so you're good. And you were pulling up some studies and you were pulling up some studies that if you don't give kids AI at an early age and you let 'em learn to think, and then eventually you end up giving 'em AI, they'll perform that much better 'cause they know how to use their brain and think. And then you combine it with AI, they're much better off.

And you did put an asterisk.

You're like, look, this study is really early. There's no way they can, you know, have concrete data on this because AI hasn't been around long enough where they haven't tested it out on kids on sample size of having them go for, you know, 10, 15 years versus ones who are given AI right away. But yeah, you broke this down to me months ago.

I think what we're getting at was you need to have a certain level of base intelligence. So, you know, the right— you have experience and you know the right questions to ask because you start with nothing, you're going to end up with nothing. It's just going to be slop. at the end of the day, right? And that's why the people who learn the most, who pick up the most, the people who are most curious, they're the ones that are not going to be replaced by AI anytime soon.

Yeah.

Yeah.

Yeah. Because when I was breaking this down about my kids' school and you were asking, I was like, yeah, they go to like a hardcore school where it's just like multiplication at a really young age and all this kind of other stuff, reading comprehension. They learn Spanish and Mandarin at kindergarten, right? Like it's pretty hardcore.

A good analogy of this, and my— I had an AI call me out on this.

He's so—

so like, imagine this. Let's say your child is like a toy race car driver, right? That's all they know how to do. But imagine if they become a Formula 1 race driver, meaning their brain is like super firing on all cylinders. That's a lot more helpful if you're in a Formula 1 car. But if you put them in a Formula 1 car right now, they wouldn't know what to do with it.

Yeah. Right?

So they have to train up to get to that point. And I think it's actually, it's going to become, I think many parents are going to, just like you are already, are going to limit the AI use for a very long time, maybe even until like the teens.

I can so relate to this because for my son's birthday, we got him— he loves racing and pedaling super fast, driving little race cars, like the remote controls super fast. So we got him a little buggy, a kid's version, but it goes like 15 miles an hour while he's sitting in and driving it.

Mm-hmm.

All right. And we have a big driveway, so I was just like, cool, go at it, have fun. He did not do well with it. Didn't like it. A little bit too scary. And it hit me that even though he likes speed, he's just not ready for it yet. And let him keep playing with the toys and stuff, and eventually he'll be at a place where he'll want to play with those, like the real cars where you can sit in and drive at a fast speed.

Dude, you'll like this. So that's amazing. So he's going to pick it up. But my— remember I told you about the book The Great CEO Within? This is like a CEO, like Matt Moschari is his name, and he coached like Naval and all these like CEOs, right?

Yeah.

So really good book. So I use this note-taking tool called Granola, and Granola like takes notes in all your meetings, all these things, right? I even do it like if I'm in a meeting with you, I'll take notes, right? Now what it's done is it's added a recipe. So there's a, there's a Coach Me, Matt Moshari, right? And so here's what it said at the very end of it. It was so funny. It's like, you know, the thing that pisses you off the most, Eric, is that you're an F1 driver in a Honda Civic right now. And it's like, you're, you're like, you're up there, like your thinking is there, but like you need to let the organization catch up, right? And I was like, Yeah, that's fair. And then I just sent it to a few of my leaders and then I was just like, guys, we need to build, we need to build the Camry. Then we need to build, eventually we need to build the F1 car, right? Because I can't sit in this Camry forever. The poor.

Yeah. And then go for the Ferrari and then the F1 car.

But it's cool how it breaks it up because it literally sits in all your notes and it knows what you're working on. And it literally like is coaching me saying, hey, you're working on this, that's good. Okay, here's a leverage here. You should be working on this instead. I'm like, oh, this is cool because you and I, we sit in meetings, you're on the phone a lot. And guess what? It records your phone calls too.

That's cool. Yeah, I'll have to check it out. It's called Granola.

Yeah, I'll share it with you at lunch. It's— you would love this because there's nothing more you love than like feedback driven by data.

Yes.

Yeah.

But speaking of AI and, you know, crawling, then walking before you run, I had a call right before I came down here. So this person, I don't know them. They said I'd reached out to like their dad or something like that. Had a call with them. They're based somewhere on the East Coast. And they kept texting me and I didn't know who they are. So they're like, can you just gimme 3 minutes? So I answered them, talked to 'em for 3 minutes. They're like, look, I'm bringing, you know, a lot of amazing marketers. We're building something really cool. It's going to be AI for marketing on steroids. Imagine like a Hyros combined with, you know, GoHighLevel and a few other products. And he's like, imagine if you're running an ad campaign, we come up with the best creative, the best copy, we adjust your landing page, everything just works and it continually tweaks and it just makes you more money with great tracking and you don't have to do anything and AI does it all. And the first thing I responded with is, that's great. I hope you can build it and I hope it works. Let me know once it's done, you have some solid case studies. And even if it works like 50% of the time, I'm open to trying it out. Just let me know when you have some case studies and it actually works.

Mm-hmm.

Because right now when it comes to AI, At least in the marketing realm, people believe they can automate everything. And there's so many people trying to go after this. Like I just talked to a person yesterday as well. He worked at Facebook, Microsoft for ages, then Facebook, then Snap. And we were laughing because his wife is one of the most well-known lawyers in the United States and she runs like big law firms. I'm talking about like the head honcho. They don't call him CEO, but I think it's called like managing partner.

Yep.

And she's running the US office for law firms that have, you know, like 1,000+ lawyers just in the United States. They're global.

Yeah.

And I was telling him like, dude, you know, you probably made more from your stock than anything else. And his wife makes a killing. And I was like, Facebook, Microsoft stock. I'm like, if you haven't sold, you made more from that than anything else. And he was laughing. He's like, you're totally right. And people like just look at me as an employee. But long story short, he had a call with me because He's building a tool for AI that just does people's marketing. I'm like, dude, this is really hard to do. You need to focus on a vertical like home services, dental, you know, plastic surgery, whatever it may be. Get as much work as you can for the mundane, boring tasks. And it's more cookie cutter when you're focusing on industry and then replicate it to multiple industries.

Dude, I had a conversation this morning. So, you know, I like to publish the nerdy stuff I'm doing with the agents, agentic workflows, right? So a guy reached out to me, global CMO, and then he's like, hey, do you guys do this for your clients? Right? I'm like, we've been piloting for our clients right now. This is the most interesting part. So I was like, okay, your marketing budget, not a big marketing budget, right? But the conversation shifts because I was like, wait a minute, like, if what we build for you replaces like 4 headcount or 8 headcount, he's like, we're much more willing to have that conversation. He's like, we're like owned by private equity, and our CEO used to be a CFO. I was like, oh, you guys are very numbers driven, right? So the conversation now is no longer just about the marketing budget, it becomes the headcount budget, right? Yeah. And so I think I think that's going to continue to shift in this way. And most people, I'm sure you guys are having those conversations too. But it's just like, dude, ultimately what it comes down to is not like, oh, this new solution can do all these things. It's what problems are you solving for me and have you proven you can solve it? So I yesterday, I don't know if I introduced you to this guy yet, but I met this guy that runs a thing called Stan, stan.store. Have you heard of it?

I think Gary Vee is an equity holder or something or investor.

I hosted a dinner like 2 weeks ago and the founder John was at the dinner, right? And we've been talking and he Posted a video yesterday with him pitching Gary Vee. And so here's the thing, Gary Vee is not going to take a pitch unless you have traction. So his traction was already 30 million, right? So then Gary Vee got it and they met, like he filmed, like he vlogged like the whole thing. And but that's what you're talking about. Like you need to see traction. Like everyone's saying they can build all this stuff right now and a lot of it seems like a lot of slop, right?

Yeah.

So you need to have some case studies. You need to prove that you have some traction and then you'll be above like 99% of people.

And I look at marketing and AI similar to development and AI. So if you look Look at what Cursor's done for the whole development space. It hasn't replaced developers. Um, you know, people talk about Lovable, great product, but I don't know anyone who's building a full-blown product with Lovable without any engineers, and then you can go and just market it and make a ton of cash. I'm not saying we won't get closer to that over time, but I think we're really far away from it.

Yeah.

And you're still going to need humans.

Yeah.

And Cursor just makes engineers more efficient. So I don't know what we pay an engineer, but let's just use simple numbers like $100 grand a year. And if your engineers become 40% more efficient, let's call it $40,000.

Yep.

And Cursor costs, I don't know how much it costs, but let's go with $5 grand. It's a really simple, you know, calculus. Yeah. And we pay for Cursor for every single one of our engineers. I don't know what it costs, but I know we save more.

Yeah.

And I think that's where marketing is going to go. I don't see people building something in AI that just replaces everything. Because if you do what everyone else is doing, marketing is not that effective.

Yeah, you have no alpha. That's what it is, right? If you're constantly at the frontier and then everyone's just copying you, like you need to be ahead, right? Otherwise the alpha goes down. But by the way, you get this. So because we hadn't recorded for 2 weeks, this is the first time we haven't recorded in 2 weeks in a while. It's a nice break. But so that AI founders dinner, so we were talking and then one person at the dinner was like, dude, with 2 engineers now we have built what used to take us, you know, 6 months to do, but used to take 30 engineers to do. 30 to 2, right? And someone else said, we had 50 people, and then now it's like 5 people doing the work, right? And these are all engineering teams. And so that is—

I haven't seen that big of a change for most well-run companies, like 30 to 2. I'm assuming they're really inefficient when they had 30 engineers if they only need 2 now, like something's wrong with how they're structured before.

Yeah, I don't know about that. One I'm pretty close to, I'll just— I'll leave it at that. And his engineers were pretty good. He's just saying that with all the stuff now, not even just Cursor, with everything in It's down to like 2 can do the work of 30. And so that's— I think we're going to— by the way, you just mentioned that lovable, you think we're pretty far off. How far off do you think we are from like you and me being able to deploy something and put it out to production?

That I don't think we're far off. I think we're there today.

Okay.

I don't think we're there from a standpoint where you can produce something from a lovable, monetize it.

Yeah.

And add in a lot of customization and features because there's too many edge cases for software where you're building a lot of different stuff for different people and it's just too much customization that you need and a lovable is not perfect for that. I think a lovable is great for you to get something off the ground.

Yeah.

I think you're going to still need engineers. We haven't seen too many, like I know a lot of people who are in the Bay that have raised a ton of money for their startups. And if you look at even the Curses of the world, look how big their engineering teams are. I haven't seen the 30 to 2s in most cases. Typically when we see that, there's something wrong with how they're running a 30-person team. But I have seen the, you know, 6 engineers go down to 2, or I've seen that, you know, 30 engineering teams go down to 10.

Still huge.

3x. Yeah, still huge. Right. And in many cases we're seeing like, I would say the average, and this is just a ballpark number, I would say people are getting like a 30 to 50% reduction.

Yeah, I think it just, it depends also if you're like an early stage startup, it's a different story. But I think, look, What I'll say with Replit now, Replit's gotten a lot better and it's got like an autonomous coder, right? So I think probably a year or two, I think someone like you and I will be able to push things out more. But to your point, there's still going to be a lot of bugs and edge cases that we don't know how to fix. And that's where we need developers to solve the last 20%, the last mile. And I think there's going to be a lot of shops for solving that last mile.

Dude, when I was talking to my buddy Ash, he's the one who's building—

From Pokémon?

No, Ash is the guy who's building the marketing automation or using AI to market different verticals, right? And when I was talking to Ash and we were talking about, you know, a popular, I think it was VO3.

Yeah.

And I think he was asking for something with a white background and he's like, they couldn't get the damn white background right. And the point I'm getting at is like when you use AI, like we're coding up the new Answer the Public and we use Cursor, but there's just so many, there's still bugs that the AI just doesn't fix. And they got to get some of these basic things down. And these nuances may seem like, oh, this is easy. They'll fix it in a month or 2 months. It's not that easy for them to fix these things.

Yeah. And the problem with the bugs is if you don't catch them, they compound in your product and then you have to come back and do it. That's, that's, that's way more work.

So dude, when we were using Cursor to help our engineers code up Answer the Public, we're releasing a new version of a wheel because the way we report data is in a, in a wheel format and it kept just breaking everything and it couldn't get it right and it just kept making it worse and worse. And we, we eventually got it to be a lot less buggy, but it was done by a human.

Yeah.

Again, I don't think— I'm not saying that AI is not valuable. I'm not saying humans are more valuable. I'm saying I think the winning combination is a mixture of both.

Yep. Okay. Before we move on from the AI topic, this topic is kind of blowing up right now, but we should have a conversation, maybe even a debate on this. But do you believe that AI is in a bubble right now? More specifically, AI stocks. So when you look at like Nvidia, for example, or you look at any of these other tech stocks, do you believe it's in a bubble? Do you believe it's more— do you think it's like 1999 or what do you think it's like?

Are you talking about the valuations or the revenue?

Both, actually. So let's, let's, let's, let's look at that because people tend to look at valuations first. But I like to look at both valuation and revenue, right? So like if we look at it in aggregate, how do you, how do you look at it right now?

So I don't know if valuations are in a bubble or not. What I look at the NVIDIAs are is they're the shovels, the picks, the ax of the gold rush. Do I think there is a lot of fluff in AI and companies that are going to fail? Yes. Do I think the energy companies, the NVIDIAs and stuff like that are going to get crushed? No, I think they're going to keep generating more revenue for a very long time. Does that mean that their stock is going to go up or down? That part I don't know. But they have so much demand because think about how much AI can power from helping with cancer research and new drugs and formulas and all this kind of stuff. It has solid use case. The problem I'm seeing in AI, and this is what some people could assume is a bubble, And the— what's a 24-hour VC? Harry something?

20VC.

20VC. What's his name? Harry—

Harry Stebbings.

Stebbings, yeah. And he talked about how the valuations are just becoming ridiculous. And he posted something on X, I think a few weeks ago. We're seeing a lot of crap companies generate tons of revenue— I'm not generating tons of revenue, get a really high valuation when they shouldn't be. A perfect example of this was I was talking to an AI company and the video space. They do well into the 8 figures in revenue, and they're talking about how, you know, their company is worth, call it, half a billion-ish dollars. And I looked at it and I was like, Google has a better product.

Mm-hmm.

And Google's product is free to cheaper.

Yep.

Right? And I was like, I don't understand why people need to use your product when Google's product runs circles around you. And oh, by the way, they can make it free. And they're Like, no. I'm like, yes. If that video product helps advertisers spend more money on Google Ads and they go from, call it, $300 billion in ad revenue to $350 billion, they don't mind losing $1 billion to give away that product for free completely to generate $50 more billion in ad revenue.

Mm-hmm.

And that's where I see a bubble in which a lot of companies, like the Jaspers of the world were funded with high valuations when it never really made sense because it's what? So OpenAI creates an API. You can do this on ChatGPT. Sure, Jasper is creating some unique features, but you can do most of it with the OpenAI.

Jasper was interesting back in the day before ChatGPT came out because it was ChatGPT-esque, right? And that's where they were accruing the value. And then, well, what happened? Not so much anymore. They actually still have a lot of employees. You see that? I checked on LinkedIn.

Yeah, the ex-Dropbox president, Tim Young, is the CEO and runs it. I don't know what their revenue is, but I've read something online of $50, $60, whatever million dollars. Yeah, don't get me wrong, great business. Yeah, but SaaS companies are not valued at a billion dollars plus.

They had a multi-billion dollar valuation.

I know it was more than a billion. I don't know if it was multi-billion, but I know it was more than a billion.

I think it was like 2. That's what I read.

Yeah, I think it was 1 and change.

You could be right. I remember 2 or 1.5. If you want to, you're compelled to search it. Okay, let me give you my take on this. So the reason why I brought this topic up, so is AI a bubble right now? I don't believe AI is in a bubble. Go ahead.

1.5.

1.5.

See?

Okay, so is AI in a bubble? I don't believe so. And here's the reason. Because if we go back to the concept of Jevons paradox, right, you think about the electric— the electricity, electricity back in the day, you think about the internet back in the day, when you and I, when our internet speeds started to get faster and faster, started to happen. We started using it more and more and more.

Uh-huh.

When we're getting more and more tokens now, really what we're buying is intelligence, the cost of intelligence, right? The cost for us to code things like we just mentioned, the efficiencies we're seeing with our engineers, our developers, right? So I'm literally arguing with a finance YouTuber right now on this, and I bet him $10,000 that— here's my bet. You can tell me if my bet's unreasonable, but I basically said, look, you look at the usage, it's going up right now. Companies are literally cutting headcount. Not saying that's a good thing, but they are cutting headcount. That means they're seeing value somewhere, right? If Accenture is going to cut 11,000, Salesforce cut 4,000, and Walmart's like, oh, we're going to keep our headcount flat. Okay, something's happening, right? So if he says, okay, well, you know, Nvidia, this is a— he's talking about the round tripping with the revenue where like, you know, they're investing $100 billion in OpenAI and then like $300 billion OpenAI is paying to Oracle and like they're round tripping this revenue, right? And he's saying it's more— this is like Enron, like red flag type of stuff. I'm like, dude, like OpenAI has 800 million users. And he's like, well, that the $20 a month is never going to grow into the revenue that they— I'm like, dude, in startups, you go for the users, and then you can turn on ads later, you can do whatever you want with the users later. It's not just going to be a $20 a month thing, right? And he's arguing with me back. I'm like, okay, I'll bet you $10,000. Okay, I bet you OpenAI, Anthropic, Cognition in the next 5 years, I'll even give you 10 years on it, their valuation plus their revenue, valuation or revenue is going to be higher. Okay. And if you want to look at the Mag 7, he was using Nvidia. He's like, why do you think Warren Buffett Warren Buffett doesn't use Nvidia. You talk about Warren Buffett all the time, right? I'm like, yeah, I'll tell you what, Warren Buffett doesn't invest in tech stocks. He's tech stocks. I'm like—

Some he does. He has Apple.

I think— sorry, I said that. I said Warren Buffett tends to avoid tech. And so he does have Apple, he does have Google. But guess what? It's his lieutenants that put in that money. He has said in his circle of competence that he doesn't touch that stuff, right? And but you and I both understand technology and we know how this stuff goes in the long run. So I was like, look, okay, you can take Nvidia, you can take Microsoft, even take Amazon as well.

You can take Google.

I'm telling you, in the next 5 years, revenue valuation will be up. Okay. And I'll bet you 10 grand. I'll bet you more than that.

How many years? 5 or 10?

I can do 5. I said 5 first.

I said even 10 is fine. I agree. I think within 5 years, they're all worth more.

Yeah.

But this is not financial advice from Eric and I. This is just our own opinions. We're not financial experts or economists, and you could lose money. But I agree with you. I think his comment on Enron is very non-relatable to what's happening with like Nvidia investing. Enron was taking revenue And let's say the revenue was over 3 or 4 years. They're booking it all right now, which you're not supposed to do in accounting. If someone pays you over 4 years, you can't just count all the revenue today.

Yep.

And that's where Enron got into a big issue. If Nvidia is making money from selling GPUs and OpenAI is trying to build massive data centers, and you know that company's growing in revenue, These companies have venture arms. Why can't they invest in them? It's like it's taking money off your balance sheet.

Yep.

Yes, they're spending some of that cash and investing it back into you, but you end up becoming an owner in that organization that's growing very large.

Yep.

I look at OpenAI and Nvidia in a world where there wouldn't be— where a world where monopolies would be allowed, you would start seeing these companies gobble each other up because they're so dependent and you would grow even faster. But we can't do that in today's world.

You know what, Jensen? Jensen said, so I was listening to a podcast where he was talking to Brad Gerstner, right? They're doing an interview and then one of his partners was there too. And so they brought it up. It's like, what about this round trip? And he's like, dude, like, I believe that OpenAI— Jensen saying this— that OpenAI is going to be the next multi-trillion-dollar company of our generation. I can see that, right? And he's like, we regret not putting in more money because we were poor, right? Before everything took off, right? And now here's a chance for us to put in more money and we're going to put in more money. And that was his reasoning. And like, it actually goes to what you said. You, I'm sure you didn't listen to that podcast. That's just you like, it's the same logic.

It's the same logic.

Yeah.

It's like Google invested in Uber early on, right? Or not that early, but early enough. And Uber started using Google Maps, right? So what, Google sending them money, then they're making money because they're using Google Maps. I don't know what the deal or the terms of the deal are for them to use it. You could say it's going in a roundabout way, But Uber's map technology sucked compared to Google's. They use Google's, it became a better product. It's a win-win scenario for both of them.

I look at this as just the, to kind of wrap it up. I think it's, look, you, there's real revenue, there's real products here. And then I think if there's any investing lesson, not advice for you guys, it's Warren Buffett himself. Uncle Warren Buffett has always said, you want to invest within your circle of competence. And the beauty with investing is you can wait to swing on all the pitches you want and you can wait for the fat pitch and then you can swing, right? And so, and he has said like, tech is not my circle of competence. And so he doesn't bet there. And so, but when you know this, this area, you can afford to bet more than— not financial advice, right? But when you understand your niche, you can press hard.

Yes. But no.

Yeah.

And you're right. He tends not to invest in tech. It's his team members that do. And it works out for him because they understand it. And you and I are similar. We only invest in what we understand, whether that's right or wrong.

Yeah, well, I mean, you and I have been stupid with angel investments, but yeah.

Angel investing has worked out for me.

It has?

Yeah, it worked out really well.

I would say I— net-net, it's worked out, but I feel stupid because most of the bets don't work out. That's why I say it's stupid.

So I stopped doing angel investments. I don't know how many years ago, but it's been a while. And then I shifted to just being an LP in funds. So when I got started as an angel, companies never really raised more than $100 million in total. I'm not talking about one round, I'm talking about in total. And they would just go public if you You know, you raised 10, 5.

This is a long time ago.

Yeah. $1 million, your Series A, $4 or $5 million, your Series B, you know, and then you got to D and then you've raised maybe $100 total, you go public. And the returns were actually really decent if you picked the right ones. The problem that I started facing towards the latter part of my angel investing quote unquote career, but it wasn't really a career, more so a hobby, Yep. Is I invested in quite a few companies and I was one of the first checks, if not the— or I was in the first round. So I was, you know, one of the first checks, right? If they raise a round of $2, $4, whatever million dollars or $5 million or a million bucks, I was participating in that round. I wouldn't take up the whole round, but I would write a check. And some of these companies started becoming worth $2, $3, $4, $5, $6, $7 billion, whatever over time. And they were growing. But the problem that I ended up facing as an investor is when they start raising rounds like $400, $500 million, you started seeing things like liquidation preferences and all this kind of other stuff that makes it harder for you as an angel to get return versus what I used to see before.

Yeah.

And people were starting to, they started to pay up because when you look at most financial investing, some of these venture funds were starting to get 30, 40, 50% return. There's a lot of other people who are like, well, we'll pay up for these and we're okay with 20% returns. And some of the top-tier venture funds do 20% because they have so much money and so much capital's being deployed. Entrepreneurs are getting diluted and that's fine, but there's also higher valuations. It's just the angels don't, from what I've experienced, I'm not saying this is everyone, this is just what I experienced. My returns aren't as great as it used to be 15, 20 years ago. Maybe I'm just picking the wrong companies, but people look at like Anthropic And I know some of the behind-the-scenes deals and people are like, oh, look at this, they're worth $150 billion. Look at the early angels. They made a killing. No, they're not getting these crazy valuations with some, call it liquidation preferences and guarantees on how much return they get, which really does screw up the returns for the original angels. And I know some of the angels or earlier investors on some of these deals, and I've talked to them about their returns on some of these companies. Like, it's not as good. I'm like, some of these late-stage companies or late-stage rounds, these companies that are putting in, you know, $5, $10, $15 billion, they're not just being like, cool, we'll do it at $100+ billion valuation. Whatever happens, happens. They have terms in there that really protect their downside, which hurts the returns for the earlier angels. So now I just stick with being an LP in the funds. Let those, those guys do it and grind it out.

Yep.

And if I get my 20% returns, great. If it's 30, great. But the bigger the funds that I'm in, the harder it is for them to produce 30, 40%. The smaller the funds, like call it sub-$100 million, They have a higher chance. But when some of these funds have like $7 billion, $10 billion just for one fund, it's hard for them to produce 30%, 40%, 50% returns.

They call that the law of big numbers. But here's what I'll say. So yes, as angel investing been like, my very first one was a 50xer, the very first one, right? But here's the thing. A private equity guy recently tweeted this, right? And I was like, oh, this makes a lot of sense. And you and I have talked about this. It's like, dude, if you put money into a fund or whatever, you go into private equity or Like, and you sold the business before, you will never have the same returns you had with your business. And that's what we learned. Our business is the best ROI machine by far. And I think at least for me, I got distracted by all these things in the past, right? But then you start to look at it. I think a lot of people when they sell their company too, they expect to have the same returns when, you know, by deploying into these funds and all that. It's just not the reality.

So it's not. And like, dude, I've invested like there was one company I put $100 grand in. I think it returned $6 or $8-ish million, $6 and change. or $8 and change to me.

Wow.

So it's like I've had some good wins on it and they make up for all my other investments.

Yeah.

But the problem is, is like, it's not just picking. I've picked companies that are worth $4 or $5, $10-ish billion and the returns just aren't the same when you're the first check compared to what it used to be. Because now they just raise so much and they stay private forever.

Yep. All right. You can pick one.

All right.

So I wanted to take a moment to tell you about my podcast co-host, Niels. agency called NP Digital, and they work with a whole host of global companies or a global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side.

Uh, did you see, uh, so there's 2 things and I have to— they're both similar topics on here. So there was a post on Reddit. It says, uh, disguised promotion on Reddit for the sake of GEO has And I saw it on Reddit. And funny enough, I also saw that on Tim Soulo's account, the Ahrefs CMO. And I was cracking up when he took a screenshot of it and posted it. And he said, he's like, no, no, no, this is just starting. And I was cracking up because I'm like, this is so true. I'm like, if these LLMs are going to cite Reddit all the time, what the heck do you think marketers are going to do? They're going to spam the crap out of Reddit. And I'm not saying they should. I'm just saying this is the reality.

This is a game for every channel.

Yeah, this is a game for every channel. This is what all marketers do. We've been using spam really loosely, but on Reddit, people really try to spam. It's going to make the community crappier. I'm not saying you should. I think it's short-sighted and I think it's a waste of time of doing that. But Reddit, and I think this was very well due, Reddit stock sinks 12% as ChatGPT references to its content plunges from 10% to 2% in September.

And here's the headline I had originally, Reddit drops 5.3% billion because of an SEO report.

I believe it was from Yahoo. I saw it from Yahoo Finance. I don't know where it first came out.

So they pulled this. So there's a guy, there's a software called PromptWatch and it shows you the big drop, right? And then some, some, a guy tweeted it and then it got cited by all these news sources.

But no, I think that was great because the problem— I'm not talking about the stock dropping. I don't want anyone to lose money. But when you look at Reddit and the citations that are happening on Google and on ChatGPT, it's insane in a bad way. They're referencing it too much and the quality is really low. I get Google has a deal with Reddit for data, and I get that Sam Altman owns a percentage of Reddit shares, whether it's through his fund or indirectly, however it was. And sure, he benefits from it. And they made an announcement before Reddit went public.

Yeah.

But for me, the quality of Reddit information Yeah. Wasn't—

It wasn't the best to begin with. No.

And they were just citing it like crazy on ChatGPT. And it has nothing to do with Reddit. Sure, if I really wanted to, I could figure out ways to game Reddit. I know so many top users, but I, you know, I'm not focusing on that, nor do I care to do that because I didn't believe for the longest time that they're going to continually cite Reddit all the time because of quality. And the same goes with ChatGPT. Dude, you know how many people I know are just guest posting on junk websites? And they're doing comparison tables with like structured data comparing their SaaS product with other people's.

This is no different than the early days of SEO.

Yes. And, and people are like, why aren't you doing that like crazy? It works so well for ChatGPT. I'm like, no, no, no, no. I've seen this show before. It works well right now. Eventually they'll realize this is making ChatGPT data more crap and they'll filter out crappy websites and it won't work the same.

For sure. At best, they will only filter. At worst, they'll start to ban people.

Yeah, they'll start going through. Sorry for the—

Yeah, it's okay. No worries. Neil's drinking a cup of water right now. Yeah. You know what's interesting as you drink? We have a mutual friend here in the Beverly Hills area. So I saw him at a YPO event recently. He's like, and he was kind of talking down to me a little bit. He's like, oh, you got to go on Reddit. Yeah, I'm all in on Reddit. I'm going to go hard on the stock. And I was kind of making the same points that we're making.

Is he the same one who got us both into YPO?

Yeah, yeah. Okay. And then he was like, also like dismissing me as if I don't know anything I'm talking about, right? He's like, no, no, no, trust me, trust me. This Sam Altman owns this. Da da da. I'm like, yeah, man, like it doesn't help if we spam the internet, we add more crap to it. Like we've seen this with SEO.

Yeah, Sam Altman owns portion of Reddit. Let's talk once he sells all his Reddit shares, right? If he already did, I don't know if he's a long-term holder, but eventually he'll look at as, oh, either I sold all my Reddit shares, so I don't care anymore. Or B, yeah, I still hold shares and my shares are worth $50 million, but man, my ChatGPT experience is becoming worse and that could potentially cost me $5, $10 billion in net worth. So yeah, it's all right.

It's okay if you lose the Reddit shares.

Yeah, I'll lose all my Reddit shares or dump 'em and then, you know, that's what a logical person does.

Yep. By the way, I mean, kind of related to this one, Oh, so I have this topic here on why SEO attribution is dead. So, but I can't log into my LinkedIn right now, so you can pick another topic.

That's okay. We can just go with SEO attribution is dead and why we agree with that. I don't know what you're referencing there, but I believe SEO attribution is dead for 2 reasons. I don't have the chart in front of me, but when we look at where people learn from a company versus where they buy, SEO is a big chunk of where they learn about a company, but it doesn't pass as the last conversion source a lot a lot of times from where they convert. 2, SEO has evolved into optimizing for, you know, AI overviews, these LLM platforms like ChatGPT, and you're getting the brand mentions, but it's really screwing up your conversion tracking because a lot of people are learning about a company through these LLMs, assuming you can get your brand cited more. But the conversion source isn't always where they first found you. So you got to do, you know, multi-touch attribution. Plus it's not all trackable. When someone sees your brand, they don't necessarily convert right away or even click right away, but they come back. And I think attribution, not just for SEO, but for SEO, organic, social, a lot of these channels are dead. And the attribution for paid, what we see is it skews more where the platforms try to take credit for the conversions when I'm not saying they didn't help assist, but they weren't the only touchpoint.

Remember what was said a long time ago with advertising? It's like, you know, 50% of my marketing on the dollar works. I just don't know which 50%. And this is where we're going again, because back in the day when we first started doing this, let's call it like 15, for you, like maybe a little longer, 20 years ago or whatever, you had attribution, you can see keyword attribution, you see this, everything was very much last touch, but you can't look at it that way. And this post actually came from our mutual friend, Guy Tano. And like AI traffic could go to your homepage, your pricing, your solution, Like, you don't know what's actually driving. Like, sure, you're good. We're not saying don't look at your analytics, but it's no longer gospel. I think you and I in the very beginning, we looked at it as gospel. It's not like that anymore.

When's the last time you checked your analytics?

I actually checked it like earlier this week, but I was looking at— I was looking at AI traffic data. That's what I was looking at.

I don't think I've logged into my Google Analytics for probably 6 months.

And Neil used to look at it every day. Whenever I went to Neil's house, Google Analytics was pulled up.

I used to look at it like 5, 6 times a day.

Yep.

But on the flip side, I do have a decent-sized team at this point. I don't know how many people are marketing, but we have over 1,000+ people. So there's so many people that log in and send me reports. I don't need to log in. So that's one—

To be fair, Neil gets a bunch of text messages in different text groups. That's your team. Yes.

And they break down all the data for me. And some of it comes from Google Analytics. Some of it comes from our own homegrown solution. Some of it comes from, you know, things like Recurly, Stripe, you get the point. But I do look at data probably 2 to 3 times a day. It's just, I don't have to log into Google Analytics. But I agree with you on attribution. I think there's been a big issue for attribution for a long time. Eric had this headline on his Single Grain homepage for a long time. I'm going to butcher it, but you know what I'm talking— actually, you better be able to say it.

I think it's 78% of CEOs don't believe that marketers measure ROI.

Yes, it was something like that.

Yeah.

And I think it's totally spot on in which most marketers never really measured attribution and executives never really believed in it. But back in the day, it was easier to measure than it is now. I think it's just, we have more tools to help us, but it's more complex because data's in so many different areas and all the sources don't give you the data. And then the second problem is, is because of that, you don't really know what's fully causing the conversions. So you can show reports, It's just making marketer— it's making a marketer's job much harder in today's world.

Yep. By the way, speaking of attribution, I have another topic here on attribution, how to get B2B attribution right. So literally, literally, this guy Cody Schneider tweets this: obsession with attribution in B2B is rookie. Okay, focus on blended CAC decreasing over time, layer marketing channel pixel conversion event plus UTMs, plus a required how did you hear about us form, you have a 90% accurate picture without crazy tech. I don't know about 90%, but it's Certainly more accurate. But what we're basically saying here is like, yes, okay, yes, you want to have pixels on your website measuring conversions. Yes, have UTM tracking. Okay, that helps looking at source, your campaign and all that. But what I really like is how did you hear about us? But even that's not good enough because oftentimes people, they forget. And you mentioned that your guys will interview them a lot more and people will just kind of make something up when it's like, how do you, how did you hear about us when it's required?

Yep. Yeah, no, look, I agree with you. On a side note, on your sheet, you have something here I just clicked on.

I have a lot on my sheet. Yeah, I know you today.

It's a great day. I barely had to put anything in the sheet because Eric—

Technically, that was risky because you only had 4 going. And then when I came in, I like deployed it all. No, no.

But at that moment I was adding stuff to the sheet.

Yeah. Oh, then I came in. Oh, okay.

And that's why I texted you. I'm like, hey, I think I erased your top one to add it back.

Yeah.

But Eric has this LinkedIn message. It's from Robert Darrow and it says, AI is shaping retail traffic. ChatGPT is quickly becoming a major traffic— a major force in online shopping referrals. In August, It drove 20% of Walmart's referral traffic, 20+% for Etsy, 15% for Target, 10% for eBay. And he's citing a blog post from modernretail.co. And keep in mind, this is not 20% of their total traffic. This is just of their referral traffic. I don't believe ChatGPT drove 20% of Walmart's referral traffic in one month.

Well, you have this other one over here that's related to it talking about So Google traffic's actually gone up, right? 0.22% versus ChatGPT has gone up 0.03%. But also keep in mind that when we look at search, Google's 41.35%, ChatGPT is only 0.24%, right?

So this is from Tim Soulo. Tim Soulo, yeah, from Ahrefs. And they took a lot of analytics data from a lot of different sites, 60,000, and they ended up breaking down that ChatGPT is driving roughly 0.24% of traffic. Now I get Walmart's a really big brand, but we have access to analytics for literally million-plus websites. It's actually well into the millions. I think it's like at 3-ish million at this point. We don't see ChatGPT driving 1% of people's traffic. And we have everything from, you know, when we aggregate the data, we have big brands to small brands. We rarely ever see it more than 1%. So for them to say that ChatGPT is driving 20% of Walmart's referral traffic, not total traffic, What Tim and I are talking about here is percentage of total traffic.

Yeah.

Even referral traffic, just 20% of referral traffic. I just think that number is way too high based on the data I'm seeing. Yeah, but it is a popular referral source and it converts really highly. It's just 20% is just way too high.

I think so. 20% seems high to me, but I also think it depends because when I was looking at my analytics earlier in the last 7 days, because I was curious, I was like, I do see it moving up in general. I'm like, oh, 4,000 visitors from these AI services. I was like, we were sure at a high point, we're getting like 400,000, 500,000 visitors a month. But now it's like 80,000, something like that. So that's a pretty sizable chunk, right? But I think it just depends. So that's only one sample.

Yeah, but 20% is high.

20% is too high.

Especially for a big brand, because the bigger the brand, the more diverse their traffic sources tend to be. You know, their biggest channel is typically going to be brand name. Because, you know, that's what happens with all multi-hundred-plus billion-dollar companies.

Outside of brand name, they're mentioned everywhere across the web.

Yeah, you know, there's no way that one traffic source is bringing in 20%.

I'd be keen to see you do one of those like data visualization studies on the different niches and like what percent of ChatGPT is driving referral traffic.

Dude, we should actually do that.

See, look at that.

That's a good idea.

This podcast is useful. That's a good idea. That's right.

I'll actually have my team break something down.

Yep. Speaking of which, I think it's helpful for us before we pick other topics here to reflect on our HubSpot experience because you and I have been texting on it. Is something wrong with your eyes?

No, just itchy.

But yeah. Okay. So Neil and I spoke. Neil spoke on the main stage of HubSpot's event. I think you had a couple of thousand people on the main stage. It capped out at 7,500. I feel like you probably had like—

There's no way there's 7,500.

It could fit 7,500. Oh, got it. But how many, how many people do you think were watching? Because I could see the whole stage. I was in the middle of the stage too.

I don't know. There was in the thousands for sure. It's a great event. I'm not trying to bash HubSpot, by the way, but There was quite a few people. I just don't know how many.

I think you had like 3,500, 4,000, something like that. Okay. Now you and I did a marketing school session together at HubSpot Inbound, great event. And I think we probably had, that room could fit 2,000. Let's say we had, I don't know, 1,500, something like that. And then my solo session, 1,000. And then your session, if you're comfortable revealing, 4.7.

Yeah. Right?

Like if you're comfortable revealing, you can just give it out. Yeah, a good 4.7.

Sure.

You look like you're comfortable. So I You just said it. And then our session together was a 4, and then my solo session was a 4. Last year my solo session was like a 4.5.

Was our— was solo was a 4.3 or no, the average was 4.3.

Average was like 4.4.

I think average was 4.3.

Was it?

4.3 or something.

I don't remember now. Yeah, you'd have to check now. But we have a couple lessons to impart here.

And wait, your solo session was a 4 or 4.4?

Last year was 4.5.

Okay.

This year dropped to a 4. And so I'll just tell you some of my lessons from the 2 sessions that we did, right? One is we're never going to do Q&A again. Q&A, at least at HubSpot's Inbound, and again, great event, but we've noticed whenever we've done Q&A, the churn, the audience churn is insane. Like people drop off.

And we can tell from the comments too, people don't care for the Q&A as much as just us talking.

No, they don't. Yeah, even though we love doing Q&A, I think it's like at other conferences we do it and then most people stick around. It's just different here. The other thing I'll say is with my talk specifically, I rewatched it and we just posted it to YouTube the other day. I was like, yeah, I was way too technical. Remember we talked about how— Wait, your talk this time or your talk last? My solo talk this— my last year talk was simplified and that's why it went over well, right? And then I want to come to you in a second, but my talk was about MCPs and how they work and how we're, you know, making these agentic workflows, these sub-agents. The thing is my topic was too technical, but it was also covering too many subjects because I was so excited, right? And we talked about this before. When Steve Jobs did marketing, he wanted to have 5 messages in his ad and his ad person was like, no, and he threw like 1 paper at him and caught it. When he threw 5 papers, Steve, like, didn't catch anything. And so it's really important. This is like a mistake that I've made before, but sometimes you make the same mistakes. It's just like, keep it simple to one message and simplify it, which goes to Neil's session, the 4.7. It was just about graphs and data.

30 charts that'll show you where the marketing is going, the future of marketing.

Yeah, I'll flip it to you for a second. Go ahead.

But see, the way you speak at conferences is the way I used to speak at conferences. This is like 5 to 10 years ago, somewhere in that timeframe. And what I learned is, because I used to give technical talks and I would like to show step by step—

This one was too technical.

Yeah. And when I used to go step by step and talk about different SEO tactics and how to change your code or do things through JavaScript, what would end up happening is, is you would lose most of the room. And what I found out from a business standpoint, there was a guy who worked for us for a bit and then went off and did his own thing. Graham. I'm probably butchering his last name. British dude, good guy. And when he would give talks, and we both talked, I believe it was an internal summit for Adobe or one of our customers, he would be really high level and strategy, and I would be more how-tos and tactical.

Mm-hmm.

And what I learned from that experience working with him was If you're trying to generate revenue and you want to win over people, give the concepts and the strategies and the data, simplify things, and then if they want more, they'll come to you.

Yep.

But when you give them the step-by-step, there's a lot of people in the room that you'll just lose. You'll get the people who are the implementers, but some people in the room aren't implementers. When you give data and strategies and from a high level, whether someone's an implementer or an executive, it's valuable to them because they, if they want to go and implement, they'll go and dig deeper. But everyone in the room can understand the strategies and the concepts and it's useful to them to a certain extent.

Right. Which is why the year before I kept it high level, just data, right? Just charts and things like that. 4.5. Oh my God. Amazing. Right? Neil, I remember I was walking with Neil. He got stopped a couple of times. Oh my God. I really love the charts. Right? I bet you did. And so I think it's to Neil's point, that's exactly how I've been in the past. But this time, I think I got too excited because I naturally assumed that if I knew it, most people would know it, right? That's just not the case.

But it's not just this time. It was also the YPO marketing event, but different crowd. It's— I would actually put it into something very specific because you're so into AI right now. And I know a lot of people people are, but Eric's in the weeds testing, playing coaches, which I think is really valuable and smart for him to do. You love talking about the stuff that you're doing yourself, and most people can't relate because one, they don't understand. Two, when you try to break it down for them, they're never going to do it.

That talk was interesting. So I know everyone's ratings from that talk and from that conference, right? And so the 2 that did better than me was Sharon, who now works for acquisition.com, And then Kat Cole, right? And they were more like strategic, high level. I know you were there too. So they scored number 1, Kat was number 1, Sharron was number 2, I was number 3 overall, right?

Yeah.

And so it just, it's also to the point that you're making too, it's also different crowd because when you have a crowd of entrepreneurs, they're more down to like try these things, right? But I do think that your way of doing it where it's not necessarily your way, but it's more like you keep a high level data and then like get them asking for more. That is the way to do it. And that's how I did it exactly at HubSpot last year.

Yeah, I've always found that to work for most audiences.

Yeah.

And then when you go too specific, like the YPO event, I gave a talk specifically for agencies. You're going to neglect half the people in the room.

Yeah. Yeah.

Right.

Yeah.

Because I think they wanted my talk to be focused around agencies or something like that for topic.

Well, here's the thing with that event. I think 40% of attendees are agencies.

Yeah.

So, but you talked about global expansion and all that, so it's Yeah, yeah, yeah.

But most of it was centered around agencies, which would be hard for most people to relate to.

Yeah, I don't know. It's just like, it's, it's you, you like for us, like we're saying we're not gonna do Q&A as much if we, if we were, if we're welcome back to HubSpot in the future. But it's like we learned your audience over time. Yes. Yeah. Anything else that you want to share on that before we move on?

Also think about what's your goal.

Yeah.

If your goal is to If you want to have clippable moments for Instagram, then give a talk where you're giving some wowing stuff where people are going to be shocked so that way you have clippable moments.

You need stories, yeah.

Yeah. My purpose of a talk is, at least the HubSpot one very specifically, I gave a talk to educate and build brand awareness for my agency. agency to the people in that crowd because a lot of them work at corporations and eventually they will— even though we have an SMB division, most of the people in the room aren't a fit for working with us from an agency perspective, but a lot of them will eventually go to work for a Fortune 500 company.

Mm-hmm.

Because when the job market gets tough or whatnot, the big corporations typically have money. I'm not saying they're always going Hire. So the brand awareness helps us potentially get included into future RFPs, and we see that. So I'll give a talk to a lot of people that work at smaller businesses. Eventually some of them go to large corporations like, oh, I wanted to work with you at this other company, we didn't have the budget, but now I'm at Oracle or wherever it may be, and now I can include you in a pitch. Not guaranteed to get the money, but at least, you know, it helps build up our pipe 2 to 3 years later.

This is part of the reason why we do this, because 99% of people aren't ready to buy, and like, you just have to stay top of mind. And this is one of those things that you Stay top of mind. Plus you're going to put it on your channel too. You might clip some stuff too. And so in my opinion, it's like, sure, you might generate some immediate leads now, but long-term, I think this is going to help the longer tail.

So in Brazil, I gave a speech at Web Summit Rio.

Yeah.

And I've been giving a speech for them for a while. Someone in the audience saw the speech years ago. They now moved to a corporation that's in the pharmaceutical industry, massively large. Everyone knows who they are. You may not know the company name, but you know some of the drug names. And they ended up moving to a different company. And at their current company, they included us in a pitch because now they had a budget while their previous company was too small. And that's what happens when I speak. I know that my goal is to just build a relationship with people who are in marketing. Eventually they'll grow older, get promoted, move around different companies, and we'll get included in pitches if they like what we have to say.

And one thing too, I mean, just to make this more relatable to everyone too, it's, you can start speaking at small things first. Eventually, for the larger, you'll get invited to a bunch of things eventually. And then what you're going to have to do is to speak at a larger conference. Sometimes you're invited to like maybe speak at these PE or VC, you know, private events. But some of these you can just apply to too. So as you get better over time, you can make a sizzle reel of you speaking, you'll probably get selected at some point. One funny thing that we saw in the comments too. So Neil and I, we tend to bicker a lot. And the audience really didn't like the bickering this time. No. Yeah.

And we bicker in a loving way, like brothers, not in a— we're hating on each other.

Yeah, no, not at all.

want to see each other succeed.

Yeah. So that was, that was funny. But again, you have to know your audience. Anyway, you can pick the next one. If you're in B2B, here's the deal. LinkedIn account-based marketing sucks, but it doesn't have to. With Carrot, 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 carrot.io. And you can join the waitlist. Again, it's Karrot, K-A-R-R-O-T, .ai, and we'll see you on the other side.

The $300 billion man hates the worship of wealth. I don't know who's worth $300 billion.

That sounds good. Okay, let me give— so Andrew Carnegie, you know Andrew Carnegie, right? I think he did trains back in the day, right?

I think it was trains or steel.

It was something like that. Okay. One did steel, one did oil, one did trains. So here's what he said. So Andrew Carnegie, at age 33, his aspiration was to retire in a year or two. So it's $100,000 per month passive income. At the time, $100,000, a lot of money.

That's a lot of money.

I think that's worth like, let's just say his net worth was like $80 million or something and he's wanted like $2 to $5 million a year, something like that, right? Which is significant. So his whole thing was to study philosophy and become a poster, but instead he ended up pioneering the steel industry. That's what you said. And building a $300 billion fortune. So here's what he said in this thing. This might be interesting to you. He said, look, man must have an idol. The amassing of wealth is one of the worst species of idolatry. No idol more debasing than the worship of money. Whatever I engage in, I must push inordinately. Therefore, should I be careful to choose that life which will be the most elevating in its character. To continue much longer overwhelmed by business cares and with most of my thoughts wholly upon the way to make money in the shortest time must degrade me beyond hope of permanent I will resign business at 35, but during the 2 ensuing years, I wish to spend the afternoons in receiving instruction and reading systematically. And then he builds a $300 billion fortune.

I'm assuming $300 billion in today's time is what it would be worth.

Yeah. But I think this is wise, right? I mean, he— I'm curious to know what changed after, and maybe I'll go find a book around it. But I do believe that the worship of money, and I don't know, I feel like you've changed on this too, is probably the worst things. Money's not going to follow you.

I used to worship money. I loved money and my only goal was to try to make money.

Big time.

And Eric's right. It was all I like dreamed about, obsessed about. And I still want to make more money. I still want to build a bigger company. But as I got older, I realized that money isn't everything. Like you can't, you know, replace a loved one with money. And I have a friend whose child is sick. And they're spending whatever they can. If, if someone told me, would I sell my business and everything I had to make sure that my kids could live longer and not feel any pain? I would. I don't care if I'm broke or living in a shoebox. It is what it is. Money has purposes. You need it to survive. But I think people go through different stages in life. When you don't have money, you want it.

Mm-hmm.

When you feel like you have enough, you realize there's other Like, you know, I have back pain. So my kids, we call it surfing every night when I'm home and I put them to bed.

Oh, they stand on you?

They stand on my back and they surf and they think it's fun.

Yeah.

Although they're starting to learn they can jump on my back, which I do not like, and that hurts more.

I used to surf on my mom's back.

Yeah.

Yeah.

It's like in Asian cultures, they do that.

I never jumped on her though.

No, but my kids think it's funny. No, like they'll just jump, like jump up and then their bottoms will hit my like lower back or upper back. It's painful.

Yeah.

And they know it's painful and they think it's That's funny.

Yeah. They learned from you.

No, I never would do that to my, you know, when I would walk on my parents' back or my uncle's back, I would not walk on the spine, on the edges.

Yeah.

But, you know, like, would I be willing to worth less money right now to have better health? Yes, I would do it in a heartbeat.

Yeah. Well, honestly, okay, health is obviously really important, but the most important thing long-term is never money. It's just relational wealth.

Yes.

And like, we, I think you and I both know people that are like, billions and billions and they're miserable. There's a reason for that. It's because they, they obsess, they idolize money. And, and I think, remember I sent you that thing about how like none of this matters if like your 2 kids hate you at age like when they're 20 years old, your extra IRR of like 5, 10% doesn't matter.

Yeah. So Eric sent me a tweet from someone and it was talking about how making extra 10, 20% a year doesn't matter If your kids don't want to hang out with you. And what the tweet said is, if you don't hang out with your kids now, when they get older, why would you expect them to want to hang out with you then?

Yeah.

They'll hit you up for money, but other than that, why would they want to hang out with you at all? And I think that is spot on. And what I've learned is hang out with them now, build the relationships. You won't be worth much. And that's a sacrifice. Some people are built for just making money like Elon Musk, but I do think he tries to spend time with his kids.

He does.

And some people, like my brother-in-law, he wants to be there for all moments, be there with them. And he does work, but like he's a much more attentive father than I ever would be. He's changed way more diapers than I have too.

How many have you changed?

I can count on one hand, probably. A few maybe. No, I've done more than one, but it's not much more than than that. But I think it depends per person. And what I've found is like, I have a friend who's on the Forbes list, does really, really well. And he's, when I say he's on the Forbes list, I'm not talking about a billion or $2 billion, like substantially more. And his kids are off to college. I think one has graduated. They don't ever want to hang out with him.

Oh, is this the guy that we talked about before?

Maybe.

Okay.

Yeah, yeah, yeah.

I know who you're talking about.

And when you look at it, it's just like, you have all this money, what are you going to do with it?

Well, not to go into any details on him, but it's like, when you talk about him, it kind of seems empty.

Yes.

There's a lot of emptiness.

Yes.

Yeah.

So, and don't get me wrong, I got a great relationship with this person, but who cares if you have all this money and no one wants to hang out with you? If your family doesn't care to talk to you or whatever it may be, like, what are you going to do with the money? You can't buy relationships. The ones you buy, they're fake.

Let me ask you this. So I never asked you this before, but ever since I first met you, I knew you were obsessed with money in the beginning, right? Yeah. What— there's always a story to it. So what was the reason for you? Was it just you didn't have money, you became obsessed with it, or was there some type of chip on your shoulder? I'm going to show you.

No, I always wanted a better life because I didn't grow up with a great life. I didn't grow up with a bad life.

Yeah.

When we were— when I was really young, we were in low-income housing, but we weren't poor poor. Yes, my parents would save up money and they were losing money, more money each month than they're But we have an amazing family and my dad's siblings helped us out and my mom's siblings helped us out. So we had a lot of love and family who helped us out and get through tough times. So I don't think we really struggled because struggling is when you're spending more than you make and you have no other options.

Struggling is like you're about to get evicted.

Yeah. My dad's brother and sister helped us out and my mom's Mom's brothers helped us out. So it was just like, we weren't really struggling. Yes, financially they weren't doing well, but you know, we had help. But the point I'm getting at is, is when I was younger, my parents did well, middle class well.

Yep.

Right. And when we were struggling, it wasn't because my parents didn't have any ability. It was, we were moving to the United States and starting from scratch. And we had savings to help us out. So it wasn't too bad. And when we were middle class, we hadn't struggled at all. Mom and dad bought us a car. They paid for food, paid for groceries. College, we had grants or scholarships depending on if it was me or my sister. And for whatever wasn't covered, parents covered, right? We started a business. I think my parents gave us around $200,000 and something.

Wow.

So it wasn't like we— yeah, it wasn't like I really struggled. Like my parents did fine. They don't live in the biggest house, but they saved a lot money. They just never spent it.

So you might actually have the same thing I have where it's like, well, if somebody else can do all this and they have all these things, I want to have it too.

Yeah, I want a better life. I wanted the luxuries.

Yeah.

And my parents weren't broke at all. For them to give me $200 grand, that's a lot. And you're talking about, uh, 24 years ago. $200 grand back then was a lot. You could buy a home for $500 grand. Yeah, right. In Southern California.

Is that for ACS?

The funding was for Crazy Egg.

Okay. Wow. Wow.

So it was partly ACS, but it started adding up. And then between my business partner, brother-in-law, parents combined, they gave us more money between his dad and my parents. It was over a million bucks.

You guys got initial funding. And so that's why they get dividend checks basically.

Yeah, we don't really give them dividend checks, but yes, they don't ever have to work again.

Yeah, yeah, yeah, yeah.

We take care of them.

That's awesome.

But it was more so I wanted to do well. And if you actually look at a lot of the entrepreneurs that have done well. There's a guy who lives in this building. His name is Michael. He works at a company called Wellington and he does private equity. And he was telling me an interesting stat. He's like, if you actually look at a lot of the successful entrepreneurs, they come from well-educated affluent backgrounds where, you know, they had a leg up from relationships, money, whatever it may be, education. And I can kind of see it. I didn't have the education, but we actually did have good education. It was more so not an Ivy League education, but my sister and I did really well in school because my mom was a teacher, so she pushed. And we had money. And if we didn't have money, no joke, I wouldn't be anywhere near where I am today because not only did parents give us money for a business, I had enough to buy my own Mm-hmm. But they offered down payments on a home.

Yeah.

Okay. And they even said if things went bad, because we had a few businesses like Vision Web Hosting, which was a cloud computing company that went under and we burned over a million bucks.

Yeah.

They said, it's okay, you don't have to pay it back. We eventually did, but they said we didn't have to pay it back. And not only did we have a place to go, a home to, they would pay for food, cars, whatever, They would support me in any times, dude. Even like if I have a bad time in my business, my parents are like, you need money? We have money. I'm like, it's okay. I don't need money. But they still support even to this day. Now we don't take anything from them, but they offer to, and I just wanted a better life. But what I was getting at is I wanted to make money so I could have luxurious things. And you've known me for a while. I went through phases. I used to buy fancy watches and all that kind of stuff.

Yeah. really expensive too.

Yeah, everything, all my clothes, my jackets. Now I just wear, uh, Fiore.

Fiore.

Yeah.

And it's still expensive, by the way. Each shirt's still $50.

Uh, no shirts. I do Buck Mason.

Oh, Buck. How much is that?

I don't know, dude. I buy like 20, 30 at a time.

$40.

$40.

$40.

No, it's telling us. All right. And, uh, and then I buy like the same pant.

And what brand is that sweater?

The sweater is probably Loro Piana.

I know it's Loro Piana.

Yeah. So for some reason, sweaters, I mainly still wear 'em. I know like there's Brunello Cucinelli and stuff like that that's nice. But the Loro Piana stuff is just so comfortable. And I don't give a crap how it looks. Yeah, it is what it is.

Speaking of Brunello, and then I want to talk about the death of the corporate job. So thank you for sharing that. But you talked about Brunello. So Brunello Cucinelli, so just for those that don't know, it's really expensive clothes. Basically, this guy lives in Italy. And he always works from 9 to 5. Oh, he stops work at 5 PM, right? His philosophy, he's one of those people in the world where it's like, huge company, he's made a lot of money, right? Yeah. But his philosophy is to hang around, you know, at the local cafes and all that and have a really chill life, right? Right? It's not— and Michael Dell is kind of the same way, like all shucks kind of guy, right? There's not a lot of these people, like, if you look at the top 400 richest people, like a lot of them are just killers, right? And they are very driven by money, right? But Brunello's a good example of a guy. If you search Google Brunello schedule, you should be able to find like how his ideal day looks. It's very similar to how Benjamin Franklin has scheduled his days. That's worth taking a look at. Go ahead.

And they're doing, funny enough, I got a message from them. They're doing an opening party, I think starting tomorrow Oh, are you going? No, dude. Yeah, I don't give a crap about fashion anymore. Yeah, but that's the point of money. I wanted it for luxuries. Now I don't care for it. I want it for comfort. And if you look at Eric—

Your luxuries have changed. You're looking for different luxuries now. Your luxury is like, maybe it's time with your kids or whatever.

Sure.

Yeah, it's a great place to live.

I'm like thinking, I'm like, what can you change to?

But yeah, from that aspect, it's not clothes anymore.

So no, it's not clothes or it's cars. I don't care for any of that.

Luxury for me is like Nice iPhone, or nice technology.

You're right. Yeah, I think both of us splurge. My if I if I say one thing that I splurge on every single year is if there's a new iPad, I always buy it even if there's a slight to no change. And if there's a new phone, I tend to buy it. And I only bought the new iPhone because it's like almost half the weight. And I was like, oh cool. I've had it for a while now.

The new one over here.

Yeah, let's yeah.

Oh. Wow, guys, I'm holding his iPhone Air and it feels amazing. I'm going to get this next year.

Yeah. And I'm not going to get the double fold. You know, they talk about like the double fold where you can do more and I'm like, what am I going to do more on?

Do you run out of battery quickly?

No, it lasts all day. Wow.

Okay. All right. Well, that's what we spend on. Your luxuries change over time and also your wealth dials change over time. Mine's convenience, right? Ramit made a post about this, like yours, your money dial is probably convenience. Yes.

But when you first started working, why did you start working hard?

I wanted to— I'm like, other people have these things and they're able to get them. Why can't I get them? I'm like, if other people can build these things, why am I any different? Right? Yeah. And so am I like, I learned it over time and I'm just like, oh, it's not like you need to be the smartest person. I don't think I'm the smartest person. It's just like you just need to keep doing it for a very long time. Yeah, that's how I see it. By the way, this one's interesting to me. So this This is the death of the corporate job. So get this. The most honest person I met recently was a VP at a tech company who told me, I manage a team of 12 people who create documents for other teams who create documents for senior leadership who don't read documents. I make £150,000 a year, £150,000 a year. Okay, so let's call that like $180,000, something like that, right? It's completely absurd. And I'm riding it as long as I can while I'm building something on the side. So this, this, this is a Substack post, and it's called The Hidden Economy of Nonsense. And I literally, I met a friend recently who works at a Large multi-trillion dollar company, right? And he's— I'm like, so what do you do there now? He's like, oh yeah, like I go into meetings and I make sure that everyone's connected and they know they're aligned. And then I go into other meetings and he's like— I'm like, you sit in meetings all day to make sure people are aligned? He's like, that's my job. I'm like, oh my God. So this person's posting this. I'm like, man, the death of the corporate job. There's a lot of nonsense going on.

There is, especially bigger companies because they're making over $200,000 a year.

Yep.

For creating documents for— you lost me here. Creating documents for someone else who creates—

I'll read it again. So I manage a team of 12 people. This is a VP at a company, at a tech company. I manage a team of 12 people. All 12 of these people create documents for other teams who create documents for senior leadership who don't read the documents. And this team leader gets paid, let's call it $180,000 a year.

No, no, 200 plus.

200 plus? Is that— I don't even know what the pound is. The exchanges though.

I know this because I have—

You look at it?

No, I have so corporations in so many countries. Yeah, 202,000 as of today.

Wow.

Yeah.

Wow.

When you have all the offices in different countries, you have to manage money because when things go up and down, it can cost you money. That's why I know—

There's a whole treasury strategy I'm sure you have.

Yeah, yeah, yeah. But, um, $200,000 a year to create documents for another department who uses that to create more documents.

For senior leadership who doesn't read the documents.

Dude, this straight up, you know, when my team team, they don't send me documents anymore because you want to know why?

I don't read the documents. Yeah.

So you know what they send me instead? Text messages. Text messages with stats and data of our business. And I'm like, I don't want the fluff because they just waste their time creating. Like, you can get other stuff done.

Dude, I had someone on my team, she made, and bless her heart, she made a 22-page slide to show. I'm like, dude, I'm not going to read that, man. So, so to your point, if executives only have time to get to the point, um, this is a whole nother thing, but I do believe the death of the corporate job, a lot of these are going to get replaced. But again, we looked at the avalanche of layoffs happening. Again, we talk about Accenture, we talk about Salesforce, we talk about all these companies. It's all starting now.

You saw the ADP jobs report, right?

This is yesterday, right? I missed it. What happened?

It was either yesterday or the day before.

I think it's bad, right?

I think 2 days ago, ADP, they announced a 30,000 job decrease. They only manage the private sector.

Yeah, right.

Not the government.

And now we have to wait a little for the government one.

Yes. But if you look at the revision that the government released, they Also released in negative for the previous month.

Down a million. Didn't they say it was down a million?

Remember jobs?

There was a revision over like the last year or something like that. It was revised down a million net.

No, no, I was just talking about the previous month.

Oh yeah, yeah, yeah.

Right. And what you're seeing is I prefer looking at the ADP numbers over government numbers because I think it's more real time and more accurate. That's just my two cents.

You can also game the government numbers too, which is why they revise it all the time. Yeah.

What are they considered unemployed? Oh, you stop looking for a job after X amount of time, so you're out of the system. And it's like, well, some of them are still looking for jobs, but, but yeah, I don't even know where we're going with this conversation.

It's okay. I got a good one here. Just so we can end on this one. So bullshit business advice. So this is, this is something we can share off the cuff here. So I, you and I have heard a lot of advice over the years. I think you're generally more skeptical of people where I'm, I was, I've been more optimistic and more believing of people in the past. So I'll give you an example. So let's talk about some bullshit business advice. One, hire an operator and get out of their way. Literally someone tweeted this the other day and I was like, yeah, you know, the best way to make money right now is to start a holding company and buy a bunch of businesses and just hire a CEO and get out of their way, buy a bunch of boring businesses. And then one of my friends, a YPR, he's like, God, this guy's an idiot. Like he replies, he replies. I'm like, yeah, like I used to drink the Kool-Aid where it's like, yeah, you can just hire these people. They're more experienced than you and then get out of their way. It doesn't work. Yep. You and I have both felt the pain.

Yes.

Yeah.

And you also have to look at some of these experienced people. Someone yesterday was talking to me about one of their friends working at one of the big holdcos. It was either Omnicom or IPG, but they're merging anyway. So it doesn't matter. And this person's a CEO of, you know, a big division. When I say a big division, I'm talking about billions and billions and billions in revenue. And if you look at their background, they're a financial person. They used to be in all financial roles and now they're an operator. I'm not saying they're not good at their job. There's a lot of CFOs that, or financial people that go into CEO roles.

Yeah.

But would I put a financial person in a CEO role. No, that's just me. I'm not saying I'm right. Omnicom and IPG are bigger companies than, you know, my own business, but I would definitely be micromanaging that person and giving them ideas because a lot of these people have worked at other organizations, have a different way of running things, and some of them are great at quote unquote maintaining or just cutting costs. They have different strengths and weaknesses.

Yep.

And no matter who you hire, they're going to have some weaknesses. I don't care No matter what their experience is, you got to fill in those weaknesses. So you got to be involved.

The CEO, by the way, one of the CEO's jobs is to be the keeper of the vision. And oftentimes, unfortunately, the vision, if you come from a financial background, your vision is numbers, right? And your vision is optimizing for efficiency. If that's what you're looking for, that's fine. But if you're optimizing for creativity and growth, you're going to have to probably have someone else. And you mentioned a keyword here. So this is number 2 bullshit advice. And I'm keen to get what else you have in terms of bullshit business advice. Micromanagement is bad. I used to think like when I, because you've never worked for somewhere, right? Like at least— Not really. When I worked for companies, Oh yeah, you read all these books like, yeah, you know, micromanagement is horrible. We don't micromanage here, blah, blah, blah. It's like, no, no, no, no, no. Micromanagement is actually not a bad thing. It's not good or bad. It's just a tool. Like if it's a, if like, you know, your kids are responsible for the nuclear codes, you probably want to micromanage that, right? Right. It's like, it's too risky. Right. So like micromanage is not bad, guys. It's just a tool. That's the second one.

Yeah. You already know I like micromanaging, but I pick and choose and I'll give you an example. with my CEO, Mike Gullickson. He and our CFO, Paul, report on financials and they'll talk about projections and what happens if you lose a client or gain a client. And when they talk about half the stuff and send me those emails, I ignore most of them.

You don't pay attention.

I don't pay attention. Why? Because they know the numbers like the back of their hand. And when they say in the email, it was a good month and we're ahead of forecast on X, Y, and Z, I just ignore the rest of the email.

You tune out the rest. But if it's bad, you're like, oh.

Yeah. So when it's bad, I mean, like, and I start diving into the numbers because they send the numbers. And I look at division by division, country by country. I'm like, where was it bad? Why? They have their summary. And instead of reading their summary, I just skip to the data and I draw my own conclusions. Then I read their own summary and I try to see if there's any differences. The reason I skip their summary is because I want to— I don't want their summary to affect what I think is wrong or messed up. So I want to look at it with like a clean slate.

Yep.

preconceived notions of why something went wrong. And then I'll look at their summary because sometimes I may see something that they don't, or they'll see something that I don't.

Yep.

And then I'll get in the weeds and I'll work with them. But, you know, I don't believe in micromanaging where someone's better than you.

Yeah.

But I do believe in micromanaging where someone has a weakness and you can help them in that area.

Yeah. Or if you see something they don't see. And so, my take on it, by the way, this goes back to number 1, hire an operator and get out of their way. So my new CEO was like, so like, you know, in a year or 2, like you're going to, you know, not be as involved. I'm I'm like, no, no, no, I'm going to be involved the whole time. And like, I think she was trying to get to like, oh, like I'm going to like let go. I'm like, look, if I see anything that's like broken or it's big, I'm going to jump in and you're going to gain a lot of leverage from that. I just want you to know that I'm not backing out at all, right? I've tried that like 4 or 5 times.

Doesn't work.

Yeah. Last one here. We've talked about this kind of, but bullshit business advice again, like, oh, if you're burnt out, you need a vacation. But we talked about this. If you're burnt out, Usually that means you don't have momentum. Something's not working in your company.

Yes.

So you come back from vacation, that shit's still going to be there.

Yeah. And then you're going to be like, oh, the vacation was so great. And then, oh, come back and now you're feeling it all over again. For people like Eric and I, and we're not saying this is wrong or right, if something's going wrong and we go on a vacation, all we're thinking about is what's going wrong and how to fix it. So we don't really enjoy a vacation. And I remember my wife told me, you know, the first time we were in Hawaii, we had such a wonderful time. And this is when we were dating. And then the second time we were in Hawaii, she's like, it wasn't as good. You weren't there mentally. And I'm like, yeah, because my business had a lot of fires that I had to put out. So I couldn't think about anything.

Yeah.

And I was like, the first time we were dating, I was having not just a good week or a month, but I was having a good year in business. So there really wasn't tons of fires to put out. So I could focus on her and having fun in Hawaii.

Yeah.

And I would still work each day.

Yeah.

But the work was crammed down to maybe like 3, 4 hours in a day versus like 10 or 12.

Oh yeah, you weren't there at all.

So then the second time I was like, dude, I was working like 12 hours and I was like, she's like, oh, I set this enough. I'm like, cool, so when's it going to be done? When do we have to leave? And then when I was there, I was on my phone working all the time and she's like, what's wrong? And I'm like, oh, business isn't performing well. Don't want to, you know, bore you with the details. I gotta fix problems.

Yeah, yep. Look, do you have any other bullshit business advice that comes to mind? Those are 3 off the top of my head.

The riches are in the niches. I've heard that advice too many times. I've never seen anyone get wealthy off of a niche.

Yeah, maybe you start in one.

Start and then you can expand. But some people just get into too many like small niches. Like someone tried selling me a business one time and they got pissed off that I didn't buy it. It was on best man speeches. And I'm like, too much of a niche. I don't know how you expand that out into a non-niche. You know, bridesmaid, I don't know what it's called on the other side. There's nothing wrong with it.

If you don't want to scale it, it's okay. But if you want to scale it, the total addressable market matters.

Yes. And with some niches, people believe like, oh, I'll start with a niche and then yeah, I'll scale it out to be not in a niche. But some things like a best man's speech, that's too hard to get out of a niche. Even if you do the bridesmaids version, what are you going to do next? So bar mitzvah speeches, you know, like funeral speeches, funeral speeches, you can start picking them, but they're all niches and they're too small. When you add it all up, it still doesn't make Yep.

And the demand's not quite there for those either.

No, it's not.

Yeah, that's funny. All right, so that's it for today, guys, and we'll see you tomorrow.