Eric Siu and Neil Patel break down MrBeast's VSC flywheel: video to stream to clips. They explain why AI multiplies what you're already good at rather than leveling the playing field, and cover hiring strategies, burnout, and customer acquisition for agencies.
Chapters
So this tweet is from Ashnee Christ. So Ashnee says, this is a new creation media stack. So the new creation media stack, I call it the VSC flywheel. MrBeast uses it. So basically V stands for produce video that drives traffic to S. Okay, what is S? S is a stream, a consistent live show that becomes C. Well, what is C? C is clips, brand awareness generation tactic to drive traffic back to V. In a reality where everyone is a media company and competing for the same eyeballs, community is defensibility, and the VSC flywheel is how you build it. So, you know, they're also talking about like a 24/7 community hub, like a Discord, Telegram school, etc. By the way, if Neil and I were younger right now, I would say, Neil, if you and I were in our 20s doing this show, we'd probably have a school group. We'd probably be doing this. We'd probably go hard on clipping and all that, but we have a primary business. And so, as much time as we'd like to put into this, we have other things that are higher leverage. So, you just got to decide what's highest leverage for you. Don't just listen to whatever we're talking about because if we're younger, we'd be doing this for sure.
Yes, but our older selves have learned that the money is in the boring and the ugly, not the cool and the sexy. The majority of the biggest companies in the world are companies you've never heard of, dude. At the end of this year, it'll be the 9th year that I've been running NP Digital. I think you've been at— how many years for Single Grain now? 12?
I joined Single Grain 2013, I want to say. So 13 years.
This is 13. Okay. So this will be my 9. This will be your, I think, 13 or 14. I don't know which year you're going to end up on. And the amount of companies we get hit up by on an annual basis, is a big number. The amount of companies we work with is much smaller. And a lot of it's dependent on, can we, A, produce results? Because sometimes people have unrealistic expectations. And 2, they don't always have the budget for their expectations or unrealistic expectations. And even if they have the budget and it's unrealistic, we'll tell them that it's not worth doing because they're not going to get the results that they want. Because sometimes it's their CEO or CFO who puts it on them. They're like, I got to quadruple the business. And they're And I'm like, you're a 50-year-old business. You're not going to quadruple your leads with the same amount of money or cutting back on money. And we've seen situations where people have less budget and they want way more leads. But every year, if I look at the majority of the companies we sign, I would say probably 40 to 50% of them I've never heard of. I'm talking about publicly traded companies or large enterprises. Like never heard of them. And I'm like, huh, oh, looked them up, never knew they were a $16 billion company. Like there's just so many companies that make a crapload of money that most people have never heard of. And it just goes to show, literally the money is in the boring and ugly.
Yeah, the money is really in the boring and the ugly, but also the money is really in sticking with something for a long time.
That's true. But the boring and ugly typically has massive TAMs. And just people don't want to do it because it's not cool.
Both. You need both. Like if I, if I have a poo-poo shoveling company, which is important, you need fertilizer, right?
Poo-poo.
Um, and you can do a lot with poo-poo, right? And so, but my point is you do it for a very— or even trash, for example, you look at 1-800-GOT-JUNK, right? It took a very long time for them to grow. Like you just, you have to, you have to be willing to go through the roller coaster of entrepreneurship. Um, so that's what it is.
And if you look at 1-800-GOT-JUNK, you know what they've done really well? from a marketing perspective? They've outspent their competition, hands down. If you look at their marketing, I've analyzed it quite a bit, they really do outspend their competition and they want to make sure that they're top of mind. Now you can't just go from a marketing perspective and be like, we're just going to spend more money and it's going to work. Your marketing has to be good, your product has to be good, your funnel has to be good in which the way you convert people, it'd be pretty efficient as well. But assuming you can fine-tune those other things, Outspending does work.
There you go. And we've— I mean, you and I used to go to this mastermind where I think it was Ryan Deiss, I always would like to say, talk about like you have to outspend your competitors.
Remember that? Oh, War Room. Yeah.
Yeah. War Room. Yeah.
Okay.
By the way, this Andrew Chen tweet over here caught my eye and I wanted us to react to this one.
So check this out. So Andrew Chen, the recent Horowitz guy?
Correct. Hot take, the biggest and most productive people in the AI era are the folks who are already good at their jobs. AI as a multiplier, not an equalizer, democratizer. So basically this is saying that this actually increases inequality.
I do, I agree with that. You and I have been talking about this for ages. I think the amazing marketers and the amazing people in organization are going to come even better, and the crappy people, it's going to be really obvious that they're crappy and you're going to need less of them.
Yeah.
Again, I think the workforce is going to look like a diamond. So typically people talk about a workforce as a pyramid. If you're on video, you can see me creating a pyramid. And when I say diamond, take a pyramid and then take another pyramid and flip it upside down. And then so you have a pointy top, a wide middle, and a pointy bottom. In other words, like if you look at a marketing department, you'll need your A players at the top, You'll have a good group of people who are senior, mid-level, and you won't need as many people at the bottom.
You know what I've been finding, Neil? Because I'm ground floor in terms of— I'm really in the trenches when it comes to bringing my team to AI fluency because I naively believe that I can get everyone there because I think I can change people still. But you really can't, guys. This is me talking to myself. You believe you can change people, you can't. But anyway, I still believe I can. So all that to say is that it's very easy to see who's got it and who doesn't, right? And so the people that You know, one person built, you know, an ad creative tool that can crank out ads. And then that's combining with our agents that we use inside of Slack. So you can go inside of Slack and say, hey, we want to crank out more ad creative here. Or on the sales side, literally I see, you know, someone from my sales team, he is cranking out all these different sequences and then finding new leads, enriching them, and then putting them into Instantly and then constantly refreshing them and adding more scaffolding to that. And so you can quickly see the ones that are hitting it head on versus the ones that are kind of shying away from it, right? And so what I want to say that I've been saying to the team is it's not an AI versus your work. It's not versus, it's and. So people are like, oh, Eric, I don't have the time to learn AI right now. If I learn AI, then something's going to have to suffer. I'm like, no. Like, do you— did you need time to learn the internet first? No. Like, you need to do both right now. Like, are you— And I'll say this too, Neil, the most joy I get, like there's people on my team that are working till 1:00 AM or 2:00 AM. I'm like, hey, don't work so hard. And I wasn't telling them to work till 1:00 or 2:00. I'm like, why are you working so much? It's because I want to, Eric, because I'm having so much fun. I'm like, okay, that's great, but still you need more sleep, right? All that is— and so like people are working so hard right now because it's so fun and there's not enough time in the day. So when I'm on the— when I'm working with people who are AI-enabled, It's such a joy to do that, right? When I have the— unfortunately, when there's people that are resisting, it's very hard. And so I would just tell you that companies can't hold on that much longer when it comes to that. And you have to learn this stuff. That's all I'll leave it at.
Yeah, but you do need to get good sleep. And Eric and I have seen this as entrepreneurs in which if you're not sleeping, like ideally you want a solid 8 hours, like really try to get into deep sleep for as much of those 8 hours as possible. You'll actually be much more productive and you'll perform way better, whether it's in marketing or business. Sleep is really huge and people take it for granted.
Yeah. And Neil, here's what I'll say too. I, I've— I'm realizing something now. I'm like, if there's any big trade-off right now with the AI stuff, I'm like, guys, because you love to work so much, because work is so fun now, I'm realizing that there's more— like I used to kind of, you know, people are like, okay, you need a mental health policy. I'm like, this time you probably do need a mental health take a break policy because if you don't put the brakes on your team, they're going to keep working so hard. And they're going to burn out. I've seen so many people burn out before. You and I haven't really burnt out. I don't think I have, at least. I don't think you have either. But there has to be some type of rest policy to stop from the AI psychosis.
Yeah. And the reason most people burn out is because they don't see progress. That's what I really think. We've talked about this in a past episode. It's just like, if you can see progress, it doesn't necessarily mean revenue has to be going up or traffic has to be going up. But if you can see that you're going in the right direction, it's a good feeling. If you keep trying and you can't, find any progress, we find that's when people tend to get burnt out the most.
Real quick, if acquiring customers has been a struggle for you and you are trying to figure out how AEO works, answer engine optimization, or the new version of SEO, how paid works, how all this AI stuff is going to play into your customer acquisition strategy, then check out my ad agency, Single Grain. It's singlegrain.com. And if it looks like it's a good fit, we'll help you with a free marketing plan. So again, go to singlegrain.com and we'll see you on the other side. You want to give me— you want to give me— let me give you something else. I don't think I talked to you about this, Neil. So I've been talking to a lot of these agency holdco people to potentially join the company. One of them, I don't think I told you about this, but he helped one agency exit for a couple hundred million or so, was the president at this company. And I talked to a handful of these companies. So one thing is for sure, if you're working at like an Omnicom or a Dentsu or something like that, All these people are looking to get out. I'm like, why are you looking to get out? Oh, it's a sinking ship. Our labor arbitrage model doesn't work anymore. I can't just hire people offshore and it works like that. It doesn't work like that anymore. I'm like, okay, great. So tell me, what does your AI fluency look like right now? What are you paying for AI per month? Oh, I just paid $20 a month for ChatGPT. I pay for Gemini. I'm like, okay, so what workflows? Oh, I haven't gotten that far yet. I'm really interested in it though. I'm like, okay. So in my mind, I'm like, you want to jump ship. You want to be saved, but then you don't want to save yourself. And it's just funny how the world works, right? You want— like, everybody wants to win. Nobody wants to prepare.
Dude, I was talking to a marketer that I was interviewing the other day, and I was talking about what are some unique use cases that you've used AI for. And they're just like— and they were showing— I'm like, look, you can tell me anything. I'm like, what are you doing with AI? And they were giving me some examples of what they're doing with social media, crawling the latest news. From there, seeing what's trending, from there coming up with variations to posts that are text-based on LinkedIn and X, and then from there it writes in their tone of voice, adjusts it, shows it to them. If they approve, it then just gets posted. And I was like, cool, can you show me an example of, you know, what you've built with an agent that's up and running right now? Right? Because they had access to their computer and all that kind of stuff. They showed me them taking a DMV test, like a traffic school online.
Yeah.
And they were saying how there's a minimum number of hours, how it acts like a human, goes through it, then clicks the next button. And then for the quiz, for each section, it copies and pastes in ChatGPT, gets the right answer, plugs it in, answers it. And they're like, This is how I'm going to pass my speeding or pass my traffic school for speeding ticket or whatever it's called. I was cracking up. I'm like, well, you should probably actually take it for this reason because you were doing something and you broke the law. But I was just cracking up. I'm like, oh, this is pretty creative. I was like, how long did it take you to do this? And they're just like, I did it in less than 40 minutes. And I was like, oh, that's not that bad. Wouldn't it just be faster to just zip through it? And they're like, No, because with these traffic school systems that are online, they were telling me that you have to do like a minimum of, I don't know what it was, like 300 or 400 or 500 hours. So they're like, it's just easier to build an agent to do it for you. And I was like, oh, okay.
So are you moving him along the process or her?
Yeah, actually. Yeah.
Okay.
But I did tell them my recommendation was that they do traffic school actually themselves and not use the agent for it. Because I do think some things can be harmful. Like there's a reason why they're doing Travis School, and, uh, they said, oh, now you're making a good point. They said they are gonna do it manually. I don't know if that's true or not. No, come on, come on. But the reason I liked them was the creativity.
Yeah, here's what I'll say, and I think you're doing the same thing too. When I'm talking to people during interviews, all I want is an exceptional conversation, and usually an exceptional conversation revolves around AI. Because AI covers all 4 of our core values, because it— all the things, right? And so all I want is, is I want to feel energized after I leave the conversation. I want them to show me examples as well. I want them to be able to riff with me because that shows how it is in real life. And one thing I learned about Elon, Neil, is when Elon hired people, he— when he hired the president of Tesla, he just literally brought him and, and, uh, up to like the factory office or something and say, hey, let's work on this problem together. And after the interview, the guy's like, where are you gonna go now? He's like, I'm gonna go down to the factory. I'm gonna go solve the same problem we've been talking about. And so he's literally testing you at different levels to see how far you can go. And I think that's how it has to be now. Because you really, like, if you don't do that, what ends up happening? Because hiring— what was Gary Vee that said this? Hiring is guessing, firing is knowing. I'd rather have a very well-educated guess, especially nowadays, because you can't afford not to.
Yeah, but even if you have a really well-educated guess, The amount of people I've hired in marketing, and I know marketing well, and I would say Eric, same level, he knows marketing really well. And I would say, and we're not trying to be arrogant, Eric and I know marketing better than most people. Even then, when you hire, you're not going to hit 100%. I don't care what you're an expert in, you can never be 100%. But we both learned over the years, don't just jump in and hire, take your time. You still do need to fire fast. Eric knows this. I'm great at the firing fast part. Remember Mustache Man?
Oh yeah.
But the mistake I made there, I hired Mustache Man way too fast. And the reason I'm calling him that is he had a really cool mustache. Hired him too quickly, didn't work out, fired him really fast. But now we're much more picky on our hiring process. But even then, no matter how picky you are, how much you test people, you'll find that either A, some people are just great at interviewing or going through the processes, but they actually suck when you work with them. B, some people are amazing, but they're amazing for the time you needed them. And as a company changes, sometimes you need new people for your new problems and the old people can't adapt. But those are the 2 biggest things that I've seen when it's coming to hiring and it just not—
You know, Neil, I want to— one thing that we have seen in our careers doesn't get talked about enough. And I think it really does come down to How good are you at layering employees? And what I mean by layering employees means that let's say I go to work for Neil's company and he hires me, I'm a marketing manager, and then I'm pretty good. Let's say I get promoted to director, but what ends up happening is he finds that I cap out at a certain level. Okay? So he could just not talk to me and hope that I get there, but then I don't get there and then he starts to feel resentment.
Okay?
Then I don't get there and then I'm still holding that slot. And then if he tries to promote over me, maybe I'll threaten to quit or something like that. So what I mean by layering is that if you're good at doing that at your company and saying, hey, Eric, I think you're good at this and I'm going to give you a chance to get here and here's what you need to do. And then if you can't get there, we're going to have to layer above you. The good thing is I will quit or I will get better or I'll be open-minded to it, right? And so I don't think enough people talk about that, but that's one of the most important skills because, Neil, you've actually mentioned this a few times with people at your company. Where like they were really good, but they weren't ready for the next level. Yes.
And sometimes you can help them, sometimes you can't. And, you know, it's not really hard to figure out what to do once you know where people are. But what I've also found is when you're hiring, if someone's not really passionate about what they're doing, it tends not to work out. Dude, I was interacting with this guy named Chase from this company called GoHighLevel. And Chase, no joke, on a Saturday, okay, on a Saturday, he doesn't work for me. I'm not his boss. We have separate companies. He's messaging me the cool stuff that they're doing with AI and marketing, like with their landing page builder and the results and the progress people are making and the usage and how their products, you know, the usage is showing that their product's really good based on the results. But here's where it really got interesting. He's showing me like new commercials that they're creating, such as like a person who is a home service business using AI or software through GoHighLevel. It pretty much, someone can call in, sets the appointment for a roof repair, you know, sounds like a human, guides them, books a call, schedules it, follows up, all that kind of stuff, right? To help the conversion rate from a lead to a close. But he's sending me this stuff on a weekend. He knows that I'm not his boss. He knows I'm not going to report to his boss or the owners of the company on how he's amazing or anything like that. Yet he's communicating with me and showing the cool stuff he's working on, on a Saturday. Why? Because he's passionate. And what I've found is when people are trying to go through different levels, the ones who tend to succeed the most tend to have a real passion for what they're doing. And a passion for the business. You can't just be passionate about what you're doing and hate the company. You got to love both of them. That's when you really see people put in like the time, the energy, and really thrive.
You know what I'll say too, as this is for fun, I've noticed kind of a trend with the— obviously we have, you know, great, great team members in America or even offshore, nearshore. The people that are offshore, for example, let's say they're in Europe or Eastern Europe as an example, they're passionate because they're passionate about their survival. Okay. That's one thing, but they're, they like, Their work ethic is at another level. I'll just leave it that way. And sometimes it's a cultural thing. Sometimes it's— and obviously we have that in America too, but I noticed, I think, more of that. And that's just my personal observation, probably not Neil's. And that being said, we will catch you all later. Goodbye. Have a great weekend. Bye.
