Eric Siu and Neil Patel examine why geo and AI SEO startups are struggling despite heavy funding. They compare companies like BrightEdge and Semrush to newer entrants, questioning whether the unit economics actually work, and argue that bootstrapped businesses like Valve and Raising Cane's built real wealth without venture capital.
Chapters
I do want to talk about all these geo startups, right? Because you had another one that just raised money this week about— let's just call it like tens of millions of dollars.
It starts with a P or something. I saw an ad in Europe for it.
TechCrunch. Oh, you're talking about Peak AI. I wasn't even talking about that one.
Not Peak. It was sort of like Para or something.
Profound? No. Check out— I have a table over here. You like tables? Yes, I love tables.
Okay.
BrightEdge. They raised $61.9 million. Current AR is $120 million. Okay. Moz. 2004 founded, they raised $30 million, $50 million ARR, they sold to Constant Contact, right?
Wait, their current ARR is only $50 million?
Well, that's 2015, this is old data. Semrush, so current ARR is higher than this. This says $171, but it's higher than—
It's $400 million.
Yeah, yeah, yeah. So, but they raised $40 million, right? And then you have AirOps, they just raised $60 million, $8 million ARR. And then Profound, 2024, they raised $60 million, $3 million ARR estimated, right? Peak AI just raised $8 million and $715K ARR. My point is, How?
$750K?
Yeah, $715K ARR. It's probably higher than that.
And they raised $15 million.
$8 million on Peak, uh, $60 million for Profound, um, and then basically $60 million for AirOps.
TechCrunch, GEO. I don't know why it's putting geothermal. I'm trying to type in GEO on TechCrunch.
Um, as you, as you pull it up, um, If you look at traditional SEO platforms built in pre-2015, they raised $126 million combined, okay, over 6 to 8 years. AI/Geo tools 2024 to 2025 have raised $168 million in 12 to 18 months, only $11.7 million in proven ARR. And so that's 0.07x revenue.
I don't know how Perfection's doing in revenue. There's another one that's called Scrunch.
Oh yeah, yeah. Did they raise money?
It's P-E-E-C.
That's what I said, Peek. I said AI. That's what I said.
Oh, but mine is they raised $21 million.
Even more. So my point is, I'm like, my thing is like, are these GEO startups like, are you fucked? Like, what is going on here? Because it's point zero.
Annual recurring revenue is now more than $4 million for Peak. Great.
So here's the thing though. If we go back in time, pre-2020, pre-2015, $126 million raised for traditional SEO platforms. Now the revenue now is BrightEdge $120, you know, Semrush $400.
Let's just combine those 2, like $500 million.
Let's add in Ahrefs. Well, they didn't raise money. $520 million, okay? So you basically have like a 4x revenue per dollar raised. On the AIGEO tools right now, you have 0.07x revenue per dollar. Now that's not saying they can't figure out some new things to grow into it, but I'm just like, what is the moat here? Like everyone's talking about LLM service tracking, all these things.
HubSpot bought a company. There was an analytics company, Amplitude, that gave away a lot for free.
We're giving stuff away for free. We're building around this area too. So like, what is the moat?
There's no moat.
Right. I do, you know what? I actually like the spot that you're in and I am in here because it basically, you upsell them the services and you're okay.
Yeah.
So we have the infrastructure for this.
Yes, because what I believe is going to happen is these AI tools, we're seeing it, they have these content writers that help them get quick rankings and it's not going to be as effective unless you combine services like digital PR and link building. Some of them are doing reciprocal link farms, which I don't think is going to last.
Yeah.
The only real way to keep scaling this in the long run, these algorithms get more competitive is digital PR. You and I can offer that. Our competitors are going to struggle to build that type of software.
And then they're like, oh, we need CRO too. Oh, we need a human in the loop to review. Oh, we need all this other stuff. And then it just grows and grows. So I think the model here, if any of them are listening, is you want to build services in the backend. And that's how SaaS eventually goes into services anyway. And it becomes service as a software.
One of my favorite people who speak on this is Ryan Deiss. And he's like, man, everyone takes their agency revenue to go build software companies because they think it's more lucrative and And their services business is funding software that keeps losing money and their services business keeps growing because it's easier to generate revenue and scale up. I'm not saying it's more scalable, it's easier to just hire more and scale up than it is to collect software revenue because it's so much more competitive and expensive. And the pool for people paying for services is just much more massive. And I agree with him on this. It's like people don't want to do services because—
Enterprises are used to paying for services.
Dude, I have a friend who has a service-based business. He's been in business for, call it roughly how old I am. And he didn't take any outside money. Take a guess how much profit he makes on an annual basis. He's the only shareholder.
$200 million a year?
No, around $500 million a year.
I was going to go $500 first, but the way you said it made me want to go lower. Okay.
No investors, no debt. He doesn't really acquire companies. He's acquired some over the past, but doesn't really acquire companies. He does every once in a while. He's just been doing it a long time, has over 10,000 employees.
How long has he been doing it?
Roughly the age I am. So roughly 40 years.
40 years. Yeah.
Roughly.
Yeah. You just keep compounding.
Yeah.
This is why, aren't you so grateful to have what you have right now?
Yeah.
Are you so grateful you didn't sell?
Yeah, I'm happy. But 40 years, that's a long time. And he's not on the Forbes list. No one would know that he has money. But $500-ish million a year in profit.
That's an exit every year.
That's an exit every year. That's so much. And let's say he doesn't collect all the money and he only sees $300 because of cash flow. Who cares? He can't even spend $300 million. You buy whatever you want. Like, that's, that's like filthy rich. And if I had to guess, because he's still growing, the company, my guess is probably worth Call it $10 billion. You know, some could say less, some could say more, but I know some of the offers that he's gotten, some of the offers were way better. They do quite a bit in the AI space right now, but let's just say the valuations are lower. So let's call it, you know, $5 billion to $10 billion valuation.
Mm-hmm.
To be conservative on the $5, I think he can do potentially better than $10 because I've seen him get offers better than $10. But yeah, it's really good just having optionality. And like you said, you get to exit every year.
Dude, okay, so Dyson, I think the founder owns the whole thing basically because nobody would've given him money. He failed for the first 14 years. Dyson, the vacuums.
Does he own the whole thing?
I think he does. So 2024, 6.6, this looks like euros here, 6.6 billion in 2024. 2023 was 7.1. I don't know what 2025 was, but sluggish economy growth. What does it show you?
He owns 100%.
Yeah. And dude, this guy, Failed for 14 years and he, I think he had over 1,500 vacuum inventions and he kept working on in, in, in his back shed. Nobody believed in him. He kept trying to get money. He couldn't get it. Same thing for Raising Cane's. Could he get, how old is he? 14. Okay. He's worth $14.8 billion. How old is he? He's like 76.
I'm trying to pull that up. 78.
78. Okay. So my point of Raising Cane's, this guy's like fairly young right now, right? You know that. Have you had the Raising Cane's chicken fingers ever?
I, I didn't even know there's a Raising Cane's here, but I saw his story. He's worth a crapload of money now. Okay.
So that company's worth $20 billion. He didn't take outside money. I don't, I think he took like very small outside money to save the company. He took like a bunch of debt that he shouldn't have taken, right? And he almost lost everything. And so, but he actually said this, he's like, look, if you end up selling your company to private equity, your baby will no longer be special. And that's why he always wants to be involved. It's the same thing with Dyson, right? It's the same thing with what you're doing too. And so Trader Joe's, you know what Trader Joe's, remember they started in Monrovia, which is right where I grew up in Arcadia. Okay.
Yeah, you're right. $22 billion.
See, raising kids.
I didn't know he was worth that much. I knew he was worth like $5 billion or something like that.
I've never had it. I actually want to try it one day.
Yeah, me too now.
So when you land in LAX, there's one right there. Um, I, maybe I'll stop by next time.
Which Trump? Oh, you're saying by the airport, not inside? Yeah, yeah.
By the airport. Yeah. Okay. Trader Joe's, the founder sold. This was like in the '70s. Um, and he wrote a book about it. He wrote a book about his journey. The one thing he regrets at the end of that book is what?
Selling?
Exactly. He regrets selling it. He did consulting in real estate and he sold his baby. And what he says is he sees people that sell and all he sees is regret most of the time. So how lucky are we to be in control of our destiny to keep compounding for a long time? And that's what we want. The message I think is just keep going. I actually have a bookmark on my X thing. It's no longer called philosophy. It's just keep going. 'Cause I realize all the shit that I save that you see me post on my Instagram is just keep going.
Yeah.
Yeah.
I'm with you. Just keep compounding and going if you love what you're doing. I think the moment you don't love what you're doing and you really don't want it and you can look yourself in the mirror and be like, I really don't want to do this anymore, by all means, sell it.
Totally fine. Yeah, totally fine. All right, so I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or global organization. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side. Pop quiz for you, okay? What is the best bootstrap company ever that does $17 billion a year and $3 billion in profit?
The best bootstrap company?
Or just tell me which company you think is the best.
I know the biggest bootstrap company, but that's not them.
Yeah, go ahead, go ahead.
Probably Cargill?
Cargill, Cargill.
Cargill's probably the biggest bootstrap company, but they don't do that. I think they do $160 billion in revenue.
Okay.
Family owned.
Do you know what, here, watch. I'm giving Neil a headline over here. Inside billionaire Gabe Newell's new $500 million superyacht, which has a submarine garage and its own hospital. Who is this guy?
I have no idea.
If you didn't play games, of course you wouldn't know. So I would know. Valve. So Valve is, they did like—
Half-Life?
Half-Life, yeah, yeah, yeah, yeah. So Half-Life, which led to Counter-Strike and everything. So bootstrap—
Wait, he still owns it?
Yeah. Yeah. So $17 billion in gross revenue, $4 billion in commissions paid out, $3 billion profit, only 336 employees.
$3 billion in profit last year or in total?
Yeah.
Last year.
Yeah. Look it up. Wow.
What's his name?
Gabe Newell. N-E-W-E-L-L.
Yeah. He's 63 years old. Mm-hmm.
And they have one of the greatest—
I love it. Forbes is like, he's worth $11 billion when he does $3 billion in profit per year. How many years has he compounded the profit? But yeah.
Yeah. By the way, like, let's talk about the Forbes thing real quick. You can, it's nice to look at, but you can never trust it.
No, it's so off. I know so many people who aren't on the Forbes list that have money. Dude, remember that California's trying to pass a wealth tax where they charge people?
That didn't go through.
They're going to try to get it on the 2026 ballot. So if you have over a billion dollars, you would pay 5, you would pay 5% of your net worth and you own the cash and whatever you defer, you pay, I think like 5 or 7% interest on per year. So it compounds.
Okay.
I don't know if it'll pass and I'm not saying it should pass or not. I'm not trying to get into political discussion, but here's what's interesting. Forbes does this rich list, billionaire list for marketing. So someone said there's like 200 billionaires in the state of California or 200 and something. I don't know where they're getting that from, but I'm assuming it's somewhere like Forbes.
Mm-hmm.
I could be wrong. I personally, like personally know 7 billionaires, all right?
Mm-hmm.
That are close to me in Southern California, not California, I'm talking Southern California.
Mm-hmm.
That's a good amount of billionaires.
Yep.
And like really know 'em and I know their businesses well, 'cause like they'll hit me up for marketing advice. And some of 'em generate amounts like $300 million a year in profit with no investors and no one knows who they are and they have ugly, boring businesses and they've been doing it for many years and they own hotels and apartment complexes, or they parked in a lot of stocks and they've had these businesses for a long time. Most of them are quite a bit older than me. Call it 20+ years older than me. I'm 40, so context, they're 60+. How many of them do you think are on the Forbes list?
0.
2.
Out of 7.
Out of 7.
Yeah. So I think what—
And out of the ones that I know who are worth the most, The 3 that I know that are worth the most—
Are not on there. Are not on the Forbes list. Yeah, 'cause it's better to be wealthy anonymous.
Yeah.
Yeah, yeah. But I think part of the reason us saying this too is like, if you look at compounding, which is what Neil just mentioned, if you're at a certain, even if you're like, let's say, I don't know, 40 years old or whatever, and you have a nice exit or something like that, you're going to compound to a very healthy amount over a long period of time, unless you're like really stupid with your money. So guys, Long-term, if you love what you're doing, stick with it, keep compounding, and there's no doubt that you'll do very well.
Yeah, dude, the richest guy that I know, there's a group of 4 of us that are on a text thread and he was trying to figure out how to grow his declining business. And it's only been declining during the downturn, but it's been doing well. The business is more than 30 years old. And he's like, man, we're having a really bad year. I need help. If any of you guys can give me advice on growth, or any ideas on how to implement AI to make things more efficient. He's on the older end and he's like, Neil, what can I do to get more business from ChatGPT? And then I'm like, is it really bad this year? And he's just like, yes, profits down. We'll only do $670 million. I'm like, $670 million? He's like, yeah, a million. I'm like, in profit? And he's like, yeah. And I'm like, that's really a bad year. Perspective, uh, perspective, right? Yeah. And I'm like, I wonder, I didn't ask him, but I'm like, I wonder what a good year's like.
Yeah.
And it's, it's, it's self-owned by him. No one else.
Probably like $1.5 billion. Yeah. Yeah.
Even if it's only a few hundred million more, he probably gets close to a billion dollars in profit.
Yeah.
On a good year.
And by the way, guys, we're not saying money is everything. 'Cause I do believe that if money is your goal, you're, you're going to live a shallow life. And Neil has, Neil and I have seen this, like we have very successful friends that have some of the ones that are wealthiest, they end up being the most miserable, right? So money, we're not saying money's everything.
No.
But money's a nice scorecard. So that's what it is. So Naval has this topic here. Actually, no, I want to talk about this because we're talking about friends right now. So before we started recruiting, not recruiting, recording, we talked about the difference between a real friend and a transactional friend. And a real friend, we should define this. So in your mind right now, what is a real friend versus a transactional friend?
A real friend is someone you can count on.
That's—
I really just break it down to that. Like, if I really needed something from you, even Noah, who's recording this, I don't hang out much with Noah. I actually really hang out with you more so when we record than anything else, similar to Noah. But I genuinely, if I believe I needed anything from either of you and I texted you, I think you both would genuinely do your best to try to help out.
And not think about what I can get back from it.
Yeah, totally agree. To me, that's a real friend. You don't have to see them all the time. They're there in your time of needs, whether it's— I'm not talking about financial support. Sure, if they can help out financially, sure. But I'm talking about more like emotional You can rely on, that they're like, if someone gets sick and you need help, whatever it may be, your tough moments in life. And people usually don't have a lot of them. And they, people may think like, I got a ton of real friends. Well, when shit gets really bad, so excuse my language, if you reach out to most of them, most of them will not be there to help you out in your time of need.
They'll disappear. Exactly. Correct. And then let's define a transactional friend. What do you think a transactional friend is? And then I'll give you this story.
Transactional friend is you only hit 'em up when you need something and they probably hit you up only when they need something.
Yeah. And this is weird because we've made a lot of internet friends, okay? And I would say most of our internet friends that we made are transactional friends, whereas some, there's a very small percentage that become real friends, right? So when I was in Thailand with Patrick Campbell last year, had ProfitWell, right? We were talking about real friends versus transactional friends. And he's like, a transactional friend is someone who always wants something. Okay. But a real friend is, to your point, going to be there no matter what. And then we mentioned someone and he's like, this guy's very popular. Just leave it at that. You know, like, we'll just leave it at that. He's like, this guy's extremely transactional. And he looked at me. I said, Eric, you know, you're different. You're a transactional friend when you start, but you're a real friend once you let people in, right? It's kind of similar to you too. You don't let many people in, right?
Yeah.
But my point is, You know, we talk about business, we talk about money, we talk about being more successful, things like that. But what matters ultimately at the end of the day is the real friends, right? Because Neil had a situation where someone was— someone would always go to him and ask for something. Always. He'd be very engaging, right? But the moment Neil goes back to him and asks for something, that person ignores him. Not only that, actually, I'll just leave it at that. Well, I don't want to reveal any more. But the point is, like, you don't want to go in life just thinking about money and then just think about how you can get more out of people because people can see right through that and they don't want to engage with you anymore.
And by the way, I wasn't asking for anything that's material or anything like that. It actually would've helped them out, but I was just curious and I messaged them. But for me, I like the definition of how you see friends versus transactional friends. I look at it mentally as friends and acquaintances. So to me, you're not a friend unless I can really count on you and you can count on me. And I don't care if you're rich or poor, if you're a shit person.
Yep.
You'll never be a friend. And I'll give you an example of this. And it doesn't have to be something that you do for me. A lot of it has to do with your character. So I was meeting with someone who was trying to convince me to let them manage my money.
Right.
And they're like, you're married, you got kids, what's going to happen with your legacy? Let me manage your stock portfolio, your cash, help you set up, you know, Will and trust and all this. I'm like, dude, already got a lot of this stuff all figured out. And they're just like, who's going to manage your estate, take care of bills when you're gone? Don't you just want peace of mind? And they work for a really, really massive bank. Everyone's heard of their name, probably globally. That's how big the bank is. So they're trying to pitch me. They bring me into their office. I don't know how expensive their office is, but it's probably over a billion dollars.
Mm-hmm.
So it's super expensive. And this is just one of many offices, right? This is a really large organization. So when I'm going in there, they take me out to dinner. They're trying to wine and dine me. I had a few buddies with me because sometimes I travel with friends. They were really rude to the waiter.
Ah.
And they told the waiter, hey, stop interrupting me. I'll tell you When I want you to come over, can't you see we're talking business? And usually when you get wined and dined, they try to pay for everything. And they were, they invite me to like things like Formula 1 races, golf tournaments, tennis tournaments. Like I'm talking about the final, right? These are really expensive things.
Wimbledon.
Yeah. All this stuff. And I get invited a lot by this bank because they want a relationship. And they even offered to invite my dad and get him a ticket. And I'm like, dude, I'm good. I'll just buy my own ticket. At that dinner, they tried to pay for the meal. I refused to let them pay for the meal and I paid and I tipped the waiter double.
Yeah. Right.
And you know me when I eat, I'm a really cheap date. Would you agree with this?
Yeah.
Yeah.
Yeah. Chicken, chicken salad, always chicken salad.
Chicken salad or just chicken. Or if I go to sushi joint, it's avocado with rice. I don't even eat fish. So like, and I don't eat much. No, you agree with this?
You're undernourished.
Yes. So I just, I don't really have appetite. So I'm a really cheap date. So if a bill comes out to $100, of that, maybe $20 is me. So if I go to expensive place, I don't know what the bill was, call it, you know, like $600, $700. No more than $40, $50 of that was me with, for 4 people. And I will never work for them. And they want to be a friend with him, work with him or her.
Yeah.
Right.
Yeah.
Uh, and I will never let them be a friend and they still hit me up and they want to hang out because friendship to me is not how successful you are. It's not just how you can rely on them. Cause I could probably rely on this person if I needed it.
Yeah.
But they're just a shitty character. It's just like, if you don't have a good head on your shoulders, why do you want to be around that person? And I think the same goes with business. Like when people talk to me about growing your marketing and make it successful and, or growing your business, dude, yes, we both want people who grind really hard. We want people who are smart. We want people who understand systems and processes and can execute really well. But if they're not a cultural fit and they don't believe in the vision and we're not similar from that aspect on our values, screw them. I don't care how good they are. I don't want to work with them. Yep.
And by the way, you guys might be wondering like, well, how does this relate to business or marketing? It has everything to do with it because everything is driven by relationships and your life is so— your time is so limited that you don't want to waste your time spending it with people that have low character. And it's not— it takes work to become kind and it just shows you that these people didn't put in the work, right? So that's why we think it's important to talk about friend friends versus just acquaintances at the end of the day. It's everything. Because we realized as we've gotten older, relationships are everything.
Yeah.
So that's why, by the way, guys, like just because you become famous as a content creator or whatever doesn't give you permission to become a transactional person because it's so easy to see through that.
Yes.
So easy.
Yes.
And what feeling does it give you? It gives you the ick.
Yes, it gives the ick.
Anyway, guys, that's it for today. Please don't forget to rate, review, subscribe, and we'll see you tomorrow.
