Lakers' $7.9M bet on Bronny James, Fortune 100's AI use, Intuit layoffs for AI, Fed & China updates

So the Lakers made a $7.9 million marketing investment with Bronny James. If you haven't seen his contract or—

Well, first of all, who's Bronny James?

Bronny James, a good point. LeBron James is an NBA All-Star player who is one of the best basketball players in the world.

Ever.

Yeah, and he plays for the Los Angeles Lakers. Bronny James is his son. LeBron has talked about for many years his dream is to play in the NBA with his son on the same team, not against him, But on the same team. Now, if you watch basketball, you know, the Summer League has been going on. Uh, Bronny has not been doing well during the Summer League.

He played one game, shot 2 for 9, and then he got hurt. That was it.

Yeah. And, uh, when you look at Bronny, people are disappointed in his performance, but it's not that he isn't an NBA player or can't be in the future. He needed to stay in college for a few more years to build up his skills before potentially going to NBA. But everyone's like, he shouldn't have been recruited this early in round 1. He was picked 50-something.

No, he was round 2, 55.

I thought he was round 1, 55.

No, round 2.

Either way, round 2 was still early.

Round 1, you can only go 32 teams. Okay.

Round 2, he was still too early at 55.

Very early.

And he has a guaranteed 4-year contract of $7.9 million. So roughly $2 million a year guaranteed. Over those 4 years, which is extremely rare for round 2 pick 50-something.

I'm curious, Lakers rookie salaries. I'm curious what the first guy got because the first guy's a really good shooter. He's— excuse me, he's a little, um, older, but, um, I kind of want to know. His name's Necht, last name's Necht. Keep going, I'm gonna look for it.

And when you look at this, the amount of news and press that the Lakers have generated from Bronny James, I bet you they'll generate more than the $8 million in revenue from recruiting Bronny just from all the press and people wanting to see, can he actually play? How is he playing with his dad? And all this kind of stuff.

You're right. So what Neil means here is like, who knows how— like, by the way, Bronny, I will say to his credit, I've watched some of his videos. He looks pretty good. But it is a marketing play. It's like the first father and son duo. There's so much— there's t-shirts you can make. There's so much content you can make around this. It's going to get so much more views. $8 million should be a drop in the bucket compared to the amount of attention they're going to get. And Lakers are like, they are always the premier, like, uh, team when it comes to attention. Like, they're one of the premier teams, like Boston. Like, they're in one of the major cities. By the way, the first rookie, the first guy that got picked, he made $18.4 million.

So yeah, the salaries are much higher because of the TV deals.

Yeah, the TV, they're just gonna keep getting bigger.

But Bronny won't make the majority of his money At least in the next 4 years being a Lakers NBA player, he'll make it from endorsements, guaranteed. Oh, for sure.

And his dad's good. Like, by the way, people are going to give him crap. Oh my God, you know, daddy's money or whatever. It's like, you know, he gets credit too because he's actually pretty good. So.

You know what's funny? You and I both started as entrepreneurs and we mainly did it on our own. We had good parents. We grew up in middle-class neighborhoods. And, you know, a lot of people look at like, oh wow, you came from rags to riches struggle. I'm not saying you and I, but people look at that and they respect that. At the end of the day, you know, people have said to me many times, aren't you glad you just weren't given all this money? I'm like, no, I'd rather have had my parents being filthy rich than normal to poor to normal. Like life would have been easier if they're filthy rich. If I could go back and change it and have my parents be filthy rich, I prefer them to have hundreds of millions of dollars versus very little money.

Really? I see. So I see it the other way, right? Because there's a lot of people I've grown up with where the parents had everything and they gave the kids everything. And a lot of them turned out to be not that useful and helpful. So I'm kind of glad I got to struggle to learn, because maybe I wouldn't have been motivated to do all these other things, right? Maybe I would have just been a bum. Like I was, I always wanted to find ways to be a bum when I was younger, right? And I was always jealous of the rich kids, but now I'm kind of grateful for the experiences that we got to go through.

Okay, let me rephrase this. You, Eric, Would you rather have your mom give you $250 million and grow up rich because you're the only child? Because Eric is the only child, your mom and dad. Or would you rather have them give you nothing and built it and try to figure it out on your own?

Let's be honest. Okay, fine, fine. The first one.

Exactly.

Okay. We're talking about inheritance here.

Okay.

That's, that's a little different. Yeah. Yes.

But that's what I mean by being rich, having a leg up, parents giving you money for whatever you need.

Okay. We're both in YPO, right? In a lot of cases where the, there's like the rich parents, like they, they brought up the kids and the kids end up joining YPO. Some of the kids are really good. Like, they're amazing. They work really hard. They work even harder than their parents now because they have something to prove, right? Some of them though are complete screw-ups, right?

But it goes both ways. Majority of the people who I know are entrepreneurs for the first time and their parents had no money are usually complete screw-ups and they do a terrible job and they don't make money. Hence, most entrepreneurs fail.

Okay, okay. Yeah, we're talking about successful ones though.

Yeah, yeah, yeah.

But there's always exceptions. Yes.

And, and it's funny, so in the building I, I live in There's this guy who works for one of the largest wealth management private equity companies in the world. Like, they're massive. They do later stage deals. And he was telling me an interesting stat. You know, when people talk about entrepreneurs succeeding, the ones that came from nothing, did you know the majority of the ones that have done well actually came from affluent backgrounds?

Really? I didn't know that. What percent?

I don't know the percent. He's like, it is the majority.

You know what though? I will say like the ones that have done well, their parents are really good. The family is really locked in. And they try to make sure that they don't spoil their kids, right? And actually, to your point though, I wouldn't say it's half-half. Like, I would say probably 70 to 80% of the kids that, you know, grow up in like YPO families, they're like, they're pretty good. They're not screw-ups. Yeah.

And when you say spoil the kids, it's not about having your kids fly first class or spending too much money on clothes or cars. I don't think those things actually impact their success that much in the future. What really impacts it is the values more than anything else.

Yeah. And it's hard to instill good values, especially someone like me, Neil, who likes to spoil his kids.

Yeah, but I try to teach my kids, hey, all these clothes that you get, you see this stuff, it costs money. You want this stuff, you need to make it.

How are they making it right now?

They're not making it right now. They just nag and cry.

Yep.

That's how they make it. They take it.

Yep. Neil's like, don't cry, stop crying, don't cry. I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie, and we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Ollie, and he says, the ability to really post whatever I want and need, and the group responds. Great experienced members. Getting a lot of insights from conversations with other members, getting a lot of value from sessions from Eric, getting advice from others as well. And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside.

All right.

What's this one over here about a unique way Fortune 100 brands are using AI for marketing?

Dude, so it was funny. So I was in Spain and when I was in Spain, we did a roundtable with a lot of Fortune 100 companies and they were actually Global 100 companies. And I was talking to this lady and I've seen this before, but I was shocked on how many people around the table are doing this that were in a Global 100 type of company because it was a small roundtable. Call it like 5 businesses and literally every single one of them was a Global 100 company. No joke, one of the ladies comes in and we're talking and we're talking about AI and we're talking about experiments. She's like, yeah, our company, and this is a company that's massive, not like a $100 billion market cap, but much larger. And they're like, what we do is we load up a lot of our experiments in the past, the stuff that's worked, the stuff that's failed. and we put in why into AI and we try to end up educating the system. So then that way when we're doing future marketing experiments, we actually have the system analyze the experiment and give us feedback on will this work, will it not, why? And we do similar things. It's our version is a little bit different. I want to say our version is a little bit different. With performance marketing, a lot more of it's black and white. We input not just our current data, all our past data, and then we run scenarios and see and ask questions to see what has worked and what hasn't worked. So then when we're coming up with new ideas, we're coming up with ideas that are most likely to work based off of past history, right? And if something's failed miserably, it doesn't mean that we won't try it again or a variation of it, but we're using the AI to analyze our data to figure out Are these new things that we're doing have a high likelihood of working? But what this— and literally majority of the companies, if not all of them around the table, were doing it to some variation. And I wouldn't say that they're all doing it perfectly, and they all admitted that they weren't actually doing it perfectly because they're global and some offices and regions don't really do it. But the ones that are advanced are doing it, which they're analyzing their marketing experiments. or campaigns before they even invest a dollar into them to see what the likelihood of them succeeding are. So then that way they don't waste money. And this is for things that are experimentation. You're not asking the system, hey, if I run Google Ads, which I've been running for the last 10 years, will it still work, right? You're not doing stuff like that. You're more so asking for new type of experiments based on past data.

And how accurate were their tests?

So the AI isn't always accurate at predicting what is going to work or what's not. But directionally, it should get better and better over time if you keep training it and putting what's working and what's not.

I did this over the weekend, but I uploaded a couple of storytelling frameworks to Claude 3.5 Sonnet. I said, okay, based on these storytelling frameworks and then the South Park but and therefore storytelling frameworks, rate my storytelling for this video over here. I take the transcript and then it rates it and it's like, here's all the things you can fix. This is similar to it. I was like, whoa, this is actually really good. 'Cause I want to improve my storytelling, right? And then I ended up telling the storytelling behind the 2 acquisitions that I did in 2021. I was like, okay, what's missing from this? And then first it rated it like a 7 out of 10. I was like, okay, what could be better? And then I changed it up a little bit. Okay, this is now a 9 out of 10. I was like, what would make it a 10 out of 10? It's like, well, if you added more specific emotion here and more stories over here, blah, blah, blah. And then I changed it. I was like, and then I read it afterwards. I was like, damn, this is pretty good. And so then the cool thing about Claude is like, you can make these projects, like this one's to help you with storytelling. Yours can help you with, Improving your Google Ads, for example, right? We're going to see a lot more of this. And this is just the beginning. 'Cause like we're doing it so manually right now. I'm uploading PDFs and stuff. What these guys are saying, I think in a year it's going to be really different.

Dude, I'm with you. And by the way, with your story that you made the modifications, did you end up publishing it online?

No. 'Cause then I realized it's not favorable for me to publish online yet.

So—

Why? I'll tell you after.

Oh, I know why.

Yeah, yeah, yeah.

Once all that stuff is done, then you'll publish it?

Yeah, yeah, yeah.

So how many more months?

Well, no, no, that stuff's all done. But I'll explain afterwards.

All right.

Yeah, yeah, yeah. There's a good reason for it. I was like, it's a really good story. But I'm like, oh, yeah, probably not a good idea. Because I'll tell you after.

Because I'm like, why don't you just tell me right now? I know why you can't tell me.

But yes, all right.

I kind of have an idea of why.

Yeah. By the way, we're speaking about AI. Did you know Intuit just cut 2,000 employees? So that's 10% of their staff. And one of the reasons is to invest further into AI.

Yeah, but when they cut the— they cut like a good chunk of the bottom performers.

Yeah, they— I mean, that's what they said, right? It's like, we're cutting low performers. I'm like, oh.

More than low performers, but the largest chunk were low performers, and then they're investing in AI. Did you see how their stock, last time I checked, it was down a few percentage points?

From today?

From the news.

Yeah.

Yeah, it was 2.57%. So they announced the news and then their stock drops more.

Yeah.

I don't know why, but sometimes, these stocks go up or down. Just like Tesla's like, we still delivered less vehicles than we did the previous quarter of last year, but we delivered more than you thought, and their stock just went on a bull run.

Yeah, it's a lot of it's emotional, right? But, um, I think this is interesting. I think it's like, it just one that just goes to show that the economy is still not in a good spot right now. I think we're gonna find out, uh, inflation print, um, Thursday or Friday this week. And yeah, I mean, the whole investing further in AI, who knows?

Like they said, Thursday is inflation print.

Yeah, we're cutting, we're cutting people on low But also they wanna invest in more in AI, like who knows? So the number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is, Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation. That also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would've in the last couple years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing. They've been a great asset for us, and I believe that they will be a great asset for you. All you have to do is go to marketingschool.io/hire. Again, it's marketingschool.io/hire to learn more. You can fill out the form there and we're going to place you with the best marketing hires that we can help you find.

Did you see what the Fed ended up saying about rates?

I didn't see that. Yeah. Yeah. What did he— what did— What did Dr. Powell say?

So Fed Chair Powell says holding rates high for too long could jeopardize economic growth. Federal Reserve Jerome Powell on Tuesday expressed concerns that holding interest rates too high for too long could jeopardize economic growth. Reducing policy restraint too late or too little could unduly weaken economic activity and employment, Powell said in remarks for appearances this week on Capitol Hill. So, you know, I'm just reading what they pretty much said on CNBC. I'm not an economist. I'm not that smart. I have no clue what they're going to do or not. I just hope they reduce rates.

So that sounds, that sounds kind of like he's moving towards reducing rates. You know, what's interesting, we say these are high rates, but it's all relative because back in the, I don't know, I think it was like '70s, '80s or so, interest rates were like, you know, 5%. Um, in some cases, '70s, '80s, I think they had raised it all the way like 20% or so, but then it kind of settled around 5% or so. Um, so, you know, the guy from Oaktree, Howard Marks?

Yeah.

He thinks rates are going to be high for the next like 5, 10 years or so. And like, he thinks they're going to stay settled around 5% or so. So we'll see what happens.

Well, it benefits him if they stay high.

Oh yeah. It's good. I mean, he's like, he's a distressed, uh, investor, distressed debt, I think.

Right.

Yeah. Did you see that China launched 24/7 robot factory with zero live workers? Yes.

I saw that continuing.

On the whole AI trend, so China has unveiled a 24/7 robot-operated factory to produce Xiaomi phones, dubbed a dark factory quote unquote by the brand's head. This facility will operate without live workers, revolutionizing phone manufacturing—not just phone manufacturing, in my opinion, all manufacturing. So what what are businesses incentivized to do? Keep costs down. What is this going to do? Keep costs—it's going to bring costs down, right? So we can keep saying, oh you know this stuff is bad, whatever. It's like. Doesn't matter. The business is going to do what the business is going to do.

Dude, for sure. You got to keep costs down. Everything is so expensive. Speaking of things that are so expensive in factories and producing stuff, did you hit up the— what is it called? Italy Mall? How do you call it?

Well, I'm going. So next week I'm going.

What's the name of it?

It's called The Mall.

It's called The Mall. It's an Italian mall online. I've been texting some of the people. You can get clothing from all the major brands for— what's the discount?

Well, it's like 60 to 80%. Remember I told you I saw this jacket for $6,000 and then I checked the store, it was $1,500?

Wow. It's called firenze.themall.it. The Mall. The Mall Firenze or something like that.

It's in Florence. Um, there's another one in Milan. And so again, my friend told me about this. He's like, yeah, this billionaire goes there to shop all the time. So even like, by the way, billionaires like to keep costs down too. Just because they're rich doesn't mean they like to spend full price.

But do you get the latest stuff?

I will find out. I'll FaceTime you from there.

I've been messaging them on WhatsApp with some of these guys.

Dude, they're probably busy as hell right now.

They're busy. Yeah, dude, even one of them, and I just sent him something random. I'm not looking to spend $3,600 on something, but I was just curious to see. I messaged a guy and he was—

If you guys can see us, Neil's wearing like a Henley. I'm wearing like an Alo shirt. So it's not like we like expensive things.

So I messaged this guy who works at one of these fashion brands, a $3,600 jacket. And I was like, I'm just looking for a jacket like that. He's like, size? I'm like, whatever size, small, extra small, medium, it doesn't matter. And he's like, I'll find out. And I'm not interested in this jacket. It's like green in color. I don't wear green. I was just like, how do the prices compare to the store? And I just want to know if something's like 50, 60% off. So I just go to the website, click a random item. Like, how much would you sell this exact product for?

You know, part of him is probably thinking, is this guy a tire kicker or not? So you should end all your messages with, I'm rich. So then they will respond to you. See, it's all about messaging at the end of the day.

But I'm not rich.

No, I'm not saying you are. I'm just saying you say that so he becomes more interested in you. You know what I mean?

If it was 60% off, 80% off, I would find stuff to buy. And then I would go on eBay and I would see—

Oh, you sell it. I would resell it. You don't have the time for that.

No, I would so do it. I'd be like, wow.

You know what? You should do that with your kids to show them what you're doing. And then they would become entrepreneurs off eBay.

Dude, I would, no joke, I really would buy a ton of stuff, hundreds and thousands of dollars worth of stuff and resell it all.

What's the first thing you sold before CDs?

On eBay?

No, just like in general.

Like when you're a teenager. CDs.

Okay, how much were you making? How much did you make the first year doing that?

I don't know.

Okay, so I made— I think I made $12,000 when I was like 12 years old. Um, I was selling in-game helmets and I was selling—

What the heck is an in-game helmet?

No, so like, okay, let's say we go kill a dragon, you know, like with World of Warcraft, you go kill a dragon and it's like a rare dragon, right? It's like you need a really good team to kill these dragons, right? So I was part of the best team. And then, then I take the product and I go sell it to somebody else. I sold a helmet, not even the character, like a hat that you wear on your character, right?

Does that even make a difference to kill a dragon?

It does. It's, it's, it's, uh, that hat is like pretty good, right? Like good stats, it boosts your character's strength, whatever, right? Um, I sold it for $3,000 to this guy in Europe, right? And then I sold like other stuff too.

Stupid helmet, someone paid 3 grand to kill a fictional character?

Yeah, well, you, but, but like it's You can't kill it unless you're like top. And like, you have to— when you get recruited to, to like a top team, like, you know, it's high standards. And it's— to get that item is very hard, let's just put it that way. And so they're paying for the time.

Well, if you can make money from it, who cares?

My point is like, your kids can learn from like playing games and selling stuff off games too.

Dude, eBay. I'm telling you, I would go buy hundreds and thousands of dollars of clothes per month, resell them on eBay, go find them—

Hundreds of thousands?

Of dollars, yes.

Wow.

If I can make 30, 40% of the money, it's not about the money.

So that should be the rule for them. Hey, you get this allocation, you can't keep the money, but you have to make a profit above this. And then whatever you make above this, you get to keep.

It's teaching them the concept of making money.

And you take 70% of the profits.

No, I would have them pay taxes and fill out the paperwork. My kids are too young. And then beyond that—

But you still take 70% of the profits.

Oh, the government took 50%.

Taxes. Yeah. Well, no, but you should also take 70% because I'm dad, right? Because J. Paul Getty's dad did that to him. It's like, hey, I'm going to give you— I'm going to fund your oil rig or like whatever it is, right? Your first oil company. He's like, but I'm not just— it's a loan first and foremost, I think. And then I'm going to take 70% of all profits because his dad wanted to teach him that there's no free lunch.

Well, I do that with our ice cream. So when they eat ice cream, I take a Big bite, and I'm like taxes, and they do not like it. But they're learning that you lose some stuff that you love and you like because you don't have a choice. Teach them that lesson.

You get diabetes too. Yeah.

Well, I think that's it. Make sure you guys all go to marketing school dot io slash agency to join the Agency Owners Association.

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