Is SEO worth investing in for early stage companies?, Utility friends VS friend friends, and more

Should your early-stage startup invest in SEO?

Dude, I've been getting this question a lot because people are like, oh, we got a startup. Should we choose SEO or should we choose paid ads or should we choose email marketing? And I always tell people the same thing. I was like, the world is not the same that it used to be 10, 15 years ago. Because a lot of people give the example of like Facebook. And I'm like, yeah, when Facebook first started, they grew through one channel. They would send out an email, scrape your email address book, and invite all the people in there and say, hey, Eric invited you to join Facebook. Click here to join. Dropbox grew through, hey, share Dropbox on your favorite social network and you'll get more space. And that caused them to go viral. But the landscape for marketing has just gotten so much more competitive. All these channels are super saturated. You have no choice but to leverage all of them because one channel will no longer make a business like it used to.

Yeah, Neil likes to call it search everything optimization, which I think tends to be an accurate term.

Yes, in which you should do SEO. And you don't have to do SEO for Google. You can do SEO day one for Instagram if you're already creating Instagram content or Facebook or LinkedIn or YouTube. But eventually, you should do SEO for Google as well and ChatGPT and Perplexity and You.com and all the other tools that come out there as well.

It's really wherever the attention is. Marketing 101 is bringing attention to the point of sale. And that's something that's always stuck with me. You have one here on—

But wait, what Eric and I do that's very specific when we're starting off, we never try to do all the marketing channels from day one.

Oh yeah, that's a mistake we've learned through.

So you pick and choose one or two, you get really good at it, and you keep adding more to the fold until you have enough channels. And we say enough channels because sometimes a channel just isn't relevant for you. Like Eric and I are both on TikTok, but our customers really aren't on TikTok.

Yeah.

Maybe 5 years from now they will be, but neither of us spend that much time on TikTok because it's just not a big revenue generator for us.

Yeah. And by the way, when you try to do too many marketing channels at once, what ends up happening is you spread your resources just like doing too many businesses at once, right? You're not going to do any of them well. And what's going to happen is you're going to get subpar results and you're going to blame someone, right? And you're not going to take responsibility for it. So I was having a conversation with one of our mutual friends who sold his company for over $200 million. We'll just say that, right? And, um, we were talking about the concept of utility friends versus friend friends. I don't know if you saw my post on that.

No, but I know the friend you're talking about. That's why I'm smiling.

You probably know both friends in this case. Um, so, you know, we're talking about— I'll just reveal him, Patrick Campbell, right? Yeah. So we're sitting at a— we're both speaking at a mastermind. We're just sitting, we're just like, yeah, you know, there's utility friends and there's friend friends, right? And then it's funny, I'll explain it first and then he'll tell me what I am. And then actually I'll get your answer first on what you think I am, um, before I tell you. So utility friends versus friend friends. So utility friends are the ones— Agency owners, if you want to grow faster, my partner Neil Patel and I, we are hosting live agency owner workshops in Beverly Hills, and you're going to learn how to get more clients. You're going to learn how to take yourself out of the day-to-day. You're going to learn how to recruit the right people, and you're going to be hanging out with like-minded people such as yourself. So if you want to learn more, just go to marketingschool.io/agency. Again, it's marketingschool.io/agency, and we'll see you on the other side. Utility friends are the ones that are constantly looking for some type of angle, like some type of transactional value from you. Like let's say if you make more money than them, they want to get the insights from you. Or if you know people that they want to know, they're going to try to get that from you. They're trying to take from you. Okay. Now, friend friends, they love you for who you are. They love you. They'll hang out with you and they don't judge you for, you know, maybe some decisions that you make, even though they might think it's wrong. They're just genuinely happy to be around you. Right. And they're happy for your success. They're not jealous of you or anything like that. And so, He named one person, he's like, this person is a utility friend because as popular as they are, when they look at certain people that have more money than them, they are constantly just, you know, they're fawning over them, right? They want to get something from them. But if anyone has less money than them, they don't really care to engage with them, right? Now, friend friends, he's like, yeah, you know, he looked at one guy across the table, he's like, I look at you as a friend friend. And then he looked over to me and then he said something, right? So what do you think I am?

I don't know your and Patrick's relationship.

So no, no, but you and me.

Oh, you and me? Yeah, friends.

Yeah, friend friends, right? Yeah, yeah, like we'll do things for each other, like random things. Just there's no need to like, oh, I'll do this for you and you need to do this for me, right? It's just how it's been set up.

Now half our conversations even aren't about business or anything. It's just about random—

Yes, random things.

Let's just leave it at that.

Random things. Okay, you don't need to go deeper. All right, so he said, you know, he's like, Eric, you know, you're kind of a mix between the two. You're like, um, You keep people at arm's length, but when you let them in, you're like, you're a friend friend. Like, yeah, I'm like, yeah, like when they— I'm gonna try to vet them first, but once they're in, like, I'll do anything for them, right? So there's kind of like a middle ground too. And so this goes over to like, is money everything, right? Because we talked about the utility friend, and all they care about is— they seem to care about like their validation comes from money, right? And you know this person too. So is money everything?

Wait, does this person live in Florida?

No, I know who you're talking about, but no, that's not this person.

Okay. So is money everything? If you asked me that question 10 years ago, I would've said yes.

Fuck yeah, you would've. Yeah.

And I really, when I was younger, I did believe it is everything. As I got older, I still believe money is extremely important, but I don't believe it's everything. Money can't solve health issues. Money can't solve family issues or anything like that. And do I want to have money? Of course. Would I want the most amount of money in the world and then have all these other categories in my life be terrible? And what I mean by that is like health or family not wanting me to talk, not wanting to talk to me. I would not want all the money in the world and miss out on a lot of other stuff.

Yeah, I think part of where I got this from too, this topic is I remember reading a book called The Psychology of Money. And then there's a passage in here where this billionaire is kind of like looking down on people, And then there's this kind of regular guy. He's like, I have something that the billionaire doesn't. I have enough. Um, and, um, Andrew Wilkinson actually, he posted a passage from his book. Um, I forgot what his book's called, but it was this whole—

Is it Barista to Billionaire or something?

Yeah. Barista to Billionaire or something like that. Never Enough. Never Enough. That's what it's called. Right. And so he talked about how him and his co-founder Chris, they met someone, uh, they met a banker first. He's worth like $50 million. Right. And then he, she's like, welcome to my shack. Right. And because his home was sandwiched between 2 like really big homes. So he's like, It was not enough, right? And then the banker's like, okay, you should meet this person over here. This person's worth like $200 million. They meet the person that's $200 million. That person's like, oh, I don't have it. I need this boat over here. I need this. I need that, right? Complaining that they don't have enough. Okay, boom. You should meet this person over here. This person's worth like $2 billion or something like that. It's like, oh, you know, my jet's not big enough. I need this, right? And then eventually they meet this publicly traded company CEO. He's worth like a couple billion dollars and he has servants and everything. He's like, So, what jet did you guys come in on, right? And it's like, came in like a normal jet. And but like, he has like a Gulfstream, like what do you call it, the 650 or whatever. And then he was basically like, oh, he didn't want to talk to them after that, right? So, it's like this whole concept of like, is money everything? And I think you and I, especially growing up in Asian cultures, you're taught like, Asian people, we don't have God, we have money God. That's what we have. We have a money God, right? And so, all my parents ever talked about was money. And that's fine, right? But I think as we got a little older, I think we both realized that money isn't everything. Good. Money's power, but it's not everything.

It's good. It's— you want to have money in life. It is hard to live life without it, but it isn't everything. And I know a lot of people who have billions and billions and billions of dollars, enough where they can buy sports teams like an NBA team or NFL team and still have billions left, and they're genuinely not happy. And it's just like, well, at that point, if you're not happy, Your family's not happy with you. You know, your kids don't want to talk to you. What's the point? And when I talked to them about life, they're pretty transparent in which they would have done things differently to have a better balance in life. They probably would have made less money. They still would have been billionaires. They just would have made less money, or they would have stopped earlier and just spent the time with the family.

Yeah, we've talked about this part before where I talked to the YPO that owns $3.2 billion in real estate. And so And you kind of adjusted on this, and I think this is the right way to look at it. I think if you're in your 20s or whatever, you don't have a family or anything, absolutely, business is number one, right? Because you don't have kids and family yet. But as you get older and then you have a business, you might think business should be number one, but it's actually wife number one and then kids number 2 and then business 3. Because if you don't get the first one right, everything crumbles below, right? Would you agree with that?

I totally agree.

Yeah.

So, okay.

Now, because we're talking about money and how it relates to business, one more thing I wanted to add here was, when I spoke at that mastermind, I realized that at this thing, small business owners in general need to evolve their thinking. And here's what I mean by that. All right, quick note, this is about my company. It's called Single Grain, and Single Grain is an ad agency where we're focused on driving innovation. Want to talk about a couple of new strategies, and if you need help with marketing, great. If not, here are a couple of new strategies that you should try out. One is programmatic CRO. So we are doing programmatic conversion rate optimization on our site. So it's building products that will automatically optimize your site to increase conversion rates. We're also auto-optimizing, auto-updating from an SEO standpoint. And we're constantly thinking about what else we can do in terms of enriching the visitors that are hitting your website and also tailoring custom messages for them using AI. And so there's a handful of things that we're doing from a marketing standpoint, and our mission is just to drive more innovation. So if you want to learn more, just go to singlegrain.com— grain like rice. So singlegrain.com to learn more, and we'll see you inside. So there's one guy there that makes $1.6 million a year in profit. Great, right? Fantastic. He's like, I want to sell my business. And I'm like, okay, well, you want to sell your business? How many people do you have? Oh, it's just me. I'm like, okay, how are you going to sell your business then? Too much key man risk, right? I'm like, okay, well then you sell your business, then what else are you going to do after? I'm going to go do real estate. So, I'm like, but like, you're going to do the thing that's working really well for you right now and then you're going to go try to learn a completely new industry which you don't really understand. And so, there's just a lot of things that don't add up, right? Like you want to sell your business, well, you have to make it sellable and then the second part is— And we've made this mistake before. Oh, let's just try to do all these different industries, right? So I've just seen the same mistakes that I've made and you've made, I think, in the past. And so we should just talk about some ways small business owners should evolve their thinking because I have a couple more.

Yeah. So the hardest lesson that I had to learn in life was in business life, it takes 10-ish years to really build a solid business with a solid brand, get word-of-mouth marketing really going for you.

Focused work.

Focused work. Focused 10 years.

Yeah.

And then all of a sudden you want to sell it. You got to start that clock all over again. And if it's growing 10%, 20% year over year, you're getting the cash flow, the profit, plus you're getting the growth. Why would you sell it and put it into something else like the S&P, which is going to get you what, 9% returns on average a year? I think it's somewhere around there.

Yep.

And if you start using some of the money, then it goes lower than 9%. People always believe, oh, it's better to sell. And in most cases, the buyer's not going to give you a crazy multiple. You're better to just cash flow and keep going and keep growing. And if you look at most people who have made their wealth, it's from focus. It's not from diversification.

And you shared that story before. It probably makes sense to share again where you talked to this, this, this billionaire heiress, right? And she shared the wisdom with you. I think we should just share it again. Sometimes people need to hear it again.

So I'll give you something even better than this. Look at Steve Ballmer and Bill Gates. Depending on the day or the month that you're looking at the Forbes list, Steve Ballmer sometimes has a much higher net worth than Bill Gates. The real difference is Bill Gates diversified into everything that you can imagine. He owns the Four Seasons. He owns a lot of random stuff that most of us never even think about.

Hmm.

bled Microsoft. And he just kept the majority of his net worth in Microsoft. And that's it. Sure, he has the Clippers and stuff like that. But that's not really where he made his money from. And he doesn't have tons of other businesses or investments. He's like, Microsoft till the end, I'm keeping my stock. Bill Gates, if he didn't sell any of his Microsoft shares, he would have been the world's first trillionaire.

And here's the thing. So I think it does make sense to still share the billionaire area story. And I'll share it for you. But Neil was talking to someone and she's like, hey, Neil, like, I haven't started any businesses before. But I know surrounded by people that have started multi-billion dollar companies. And she said that, look, the thing is, all of them, the trend is the same. They started one business and they focused on that for 30+ years. And that's how the outcome manifested, right? And so we were mistaken to think that, and I've seen this with this mastermind where people can just, you know, start one business here. One person had like 8 different businesses, right? It's like, I'm like, dude, I guarantee if you just knocked out 7 of them, you're going to do way better. He's a really sharp guy too, right? And I think, you know, he's younger right now, but I think eventually he'll figure it out. But he's super talented. I'm just like, just, you need to just focus on one. And then what this other person over here is trying to sell something that's kind of on its way down. I'm just like, you should just let that one ride out and then go into the sun, right? So, I think these are all lessons we've learned the hard way. So, hopefully you can sidestep them.

And also, the other lesson that I learned the hard way was you need a big TAM. It doesn't matter how cool your idea is. If you're going after a small market where there's just not a lot of revenue to be made, Then it doesn't matter. It's really hard to capture 100% of a tiny market versus capturing 1% of a $100 billion market.

And just to be clear again, we're talking about revenue here, overall revenue, because a big TAM, let's say you have all the world's kids, they still can't pay you much, right? Yeah, that's true.

That's just what it is. I'm targeting 3-year-olds, specifically 3-year-olds, not the mothers, not the parents, just the 3-year-olds.

They're like, oh cool. It's a good way to not make money.

They're going to pay you with poo and pee and diapers.

You have, okay. This happened recently. So Semrush bought Third Door Media and Search Engine Land.

Yeah, Third Door Media bought them. They're gobbling up a lot of attention in the space.

You mean Semrush bought them?

Yeah.

Semrush bought Third Door Media and Search Engine Land. You said Third Door Media bought them. So it's 4 AM Dubai time for Neil. It's 8:32 Japan time for me right now.

Yeah. But so SEMrush has been doing acquisitions for a while. They bought Backlinko, then they bought Exploding Topics. They probably bought some other stuff.

They bought some other stuff recently too.

Yeah, and then Third Door Media, which is just a holding company for Search Engine Land and MarTech something.

MarTech, I forgot.

And also SMX, all their events, although I don't know if they have any more in-person events.

I don't know. Yeah, I've never been to one of them. You have.

A long time ago when Danny was there.

Danny, who's now at Google, so Google bought Danny.

Yeah, well, Danny was a co-founder of Third Door.

I know, but like Google paid enough money to get Danny.

Yeah, and Danny is a search liaison at Google.

Yeah. So I mean, Semrush is going to continue to do these deals. So we, you know, just a couple weeks ago, I met with Nick who handles all these special deals. And he's the one coming up with all these ideas. And so, you know, he's looking for whoever has the marketing attention.

Which is smart. Go after anyone who has that attention, it can really move the needle and change your business.

Yep. Yeah. So I think what they're doing is smart. And so, you know, in this case, like there is a brand here, right? In some cases, in some cases you can buy it. Right. Um, actually when you look at LVMH, like he bought all those brands. Um, what's his name again? Bernard Arnault.

Yeah.

Yeah. So you, you can buy the brand if you have the money and I think it's a smart thing to do.

Yeah. LVMH is just a—

It's a collection of brands.

Yes. A publicly traded private equity company.

Yep.

And Yeah, he's one of the richest people in the world.

Top 5, I think.

Yeah.

So that is it for today, guys. Please don't forget to rate, review, subscribe, and go to marketingschool.io/agency if you want to learn more about the Agency Owners Association. And we will see you later. In fact, you know, I'll tell you what, Neil and I will be recording in Germany. I didn't even tell him this yet. We will be recording in Germany. I found a podcast studio. So, you know, that's another way you can make the most of your trips. So yeah, bye.