You Think Your Views Matter?, $620M Website, SEO’s Back, Startup Wars | Ep. 3025

All the views in the world don't matter if you don't have this, right? So for example, let's say Neil was like a bikini OnlyFans girl, okay? Let's say he had all the views in the world, millions and millions, 11 million followers on Instagram, and then he had millions and millions of views on each video. The problem with that is it only converts in one way, if Neil decides to start an OnlyFans, right? But it doesn't really convert into revenue. Like, Neil can't influence me with that bikini account on buying enterprise software, for example. Now, for example, if somebody else decides to talk about, let's use the Clue.ly guys, they want to talk about their consumer product, right? And they're just showing it in action all the time. And each video is getting like 3 million, 4 million views or so. They're actually driving more sales, more adoption that way. So all the views don't matter if you don't have the influence to get people to purchase a product. And so you have to think about the value of an audience based on that influence.

Yeah, I was talking to a dude a few months ago, male model, you know, jacked, good-looking, and has I don't know how many millions of followers, but on each platform he has millions of followers, all right? And he does like these high-end campaigns and stuff like that with like fashion and whatever else, like, you know, car companies and stuff. And He was asking me, you know, I have way more followers than you, Neil. Why can't I make more money than you? And I said, followers don't equate necessarily to directly to the amount of income you make. I'm like, we'll walk down the street, more people will know you than they know me by far. But the problem is, is people know you for what? And I asked him and he's like, for looking good. And taking pictures. I was like, cool, so where's the money value on it? And he said, well, the money value is, is I can make their products look good because if a good-looking person wears a specific watch, maybe other people will want to buy that watch. I said, okay, and how many good-looking people are there out there? And he's like, a lot, right? And I was like, I'm like, you probably know better than me because, you know, I hate to say it, Eric's a handsome gentleman, but most of my friends are not male models. And I'm assuming you would agree with this, Eric. You're not a male model.

I'm just an average guy, just an average guy just trying to make money online, just like you, Neil. Eric's above average.

All right. He's not average, but he's definitely above average. But this guy, you know, I don't know what the rating scale of a 10 would be, but let's call it a 9 or 10 or whatever, right? Because he has millions of followers. I'm just basing it off of that. And he was just like, well, Neil, you know, you have a lot less followers. There's a lot of marketers though. And I said, yeah, there's a lot of marketers, but A, how many of them can actually produce results within the budgets companies have and within the time constraints? And B, how many independently owned ad agencies are there that have a global reach in 28+ countries that can help companies with their global campaigns and things like AI, you know, ranking on ChatGPT or getting mentioned there and App Store stuff. and traditional SEO and CTV and all the services? And he's like, I don't know, I don't know your space. And I'm like, the list starts going lower and lower because one, companies don't offer all services, and B, most companies don't offer it in a lot of regions unless you're typically a publicly traded organization or a massively large holding company. And he's like, oh, okay. So I was like, so my market's just bigger. Right? There's a lot more being spent on things like Google Ads and taking a portion of it than how much people pay for someone to be in a photograph, in a picture with a watch or a car. And I think people forget 2 things, how big is your market and how many competitors do you have?

Yeah, well, I think what's also important too is the value that you're adding, right? So if an enterprise is paying you, let's say a dollar, they're expecting a multiple on that in terms of return, right? So 3x or 5x or 10x or even higher than that. Now, he might argue, oh, he puts his beautiful face on something and it helps it convert. But no, he can be replaced by any other beautiful person on the street.

AI.

Yes, yes, exactly, dude. And some of these AI models, I'm sorry to say, they are beautiful. They are gorgeous. Sometimes it takes me a little bit to figure out that it's AI and I'm like, damn, but that's pretty good, right? And pretty soon we won't be able to tell anymore. So the thing is, One, you guys are harder to find, right? The business that we do is harder to find. 2, the value we add is why we get paid.

Dude, I was, you know, my wife was showing me this Instagram video in bed yesterday because she was just scrolling before we were going to bed. And it was a video on, you know, someone saying like, draw me an M&M eating spaghetti. Okay, so she's watching it at the same time because I have my iPad out. I go to ChatGPT and I say, Draw me an M&M eating spaghetti. Yeah, mine took a little bit longer than the Instagram, uh, video. Keep in mind Instagram, you know, speeding up, but whatever. By the time the person was done, even if it was faster, and let's say they did it in a minute, ChatGPT took me multiple minutes. When I showed her, mine was like 10 times better. And, you know, I don't know what I paid. I don't know if I needed a paid account for that. I have a paid ChatGPT account, but I don't know if you even need a paid ChatGPT account.

You can do it for free, but you get very limited. Um, but Yeah, that's how it works. By the way, you want to know a crazy stat? I found this on Instagram today. So, this is just random because we're talking about good-looking models, right? So, here's a crazy stat. Only 1 in 25,000 men over 35 have a visible 6-pack. That's just 40 out of 1 million. In a city like Austin, Texas, that means only 40 men with abs. Isn't that crazy?

So, is your goal to get a 6-pack now?

No.

You could already have one.

No. By the way, our videographer Noah, very handsome man, he has a 6-pack. So, he's clearly 1 in 25,000 men. It's actually even rarer to be over 35 years old with a 6-pack versus to be a millionaire. I don't know if you know that.

Yeah, because most millionaires are created by them just owning their homes for a long time.

That's also true. That's also true.

But even then, I'm not saying, you know, because people are like, would you rather have a 6-pack or be a millionaire? I'd rather be a millionaire than have a 6-pack.

The millionaire definition, so like, what is it? That's just your assets minus liabilities. Most people above 35 are Like, if you're living in the United States and if you're listening to this right now, you're probably going to get there, I would hope. So, yeah. By the way, so do you want to know about this one website that the US government paid $620 million for?

No, I want to know, but I have no clue what it is because one website, I'm curious how one website costs $620 million and it's probably something silly.

Okay, so recreation.gov was a pay-for-performance deal. So they signed with, I think, this web dev shop. And basically they said, okay, you can do— we're going to do pay for performance. So we're going to take a small fee of every transaction for these park passes, right? These campsites or these event lottery tickets. Like if you don't want to get to Yosemite, sometimes there has to be a lottery to get in, right? So initially this agency projected that they would make $87 million for the first 5 years and then $182 million for 10 years. They funded 14 websites and 24/7 call centers. And they actually ended up making $620 million. And so they got a good pay-for-performance deal done. So, um, are we saying everyone should do pay-for-performance? Not necessarily, but we've talked about Spiralize in terms of how they structure their deals. If you can figure out how to structure it well with good upside for you guys and good upside for the client, then it's, it's, it's still a really good deal.

I hate to say this, I'm guessing you'd be on the same page as me, but if I was running that department in the government, I'd be like, screw your contract. We're not going to do pay-per-performance anymore. You're getting a flat fee. fee. And that's how it works with large corporations. If we crush it for them, they're not going to pay us more. If we don't do well for them, you get fired pretty quickly and they're like, this is it, screw you. And if you make them 10 times the money, they're like, cool, do it again or else you're not going to get a renewal.

I think the key is to negotiate these deals early when it's very unclear that you're going to win or not, right? Because when you think about Formula 1, the Formula 1 TV rights, Initially, this, I think this was back in the '70s or the '80s or so, but there's this one guy that offered all the Formula 1 teams, hey, buy in $100 grand and then you guys can have the TV rights too, right? Nobody wanted to buy in. So he got all the TV rights and I think he got a huge profit share as well. And that's how he became really rich with Formula 1. I don't have all the details, but again, if you can figure out how to get to somebody, this is why we talk about how small businesses, probably mid-market makes more sense where you reach out to them and say, hey, I'll do pay for performance. They'll do it because they're not sure if they're going to win completely yet, and they're not at the scale of enterprise where they have, they can't take the risk on it. So.

Yeah, but I've always had the issue with performance-based deals. I don't know how many times you've tried it or not. I've had the issue where a lot of people will agree upon it upfront. It doesn't matter how ironclad your contracts are. Legal just costs money and large corporations know it. Most of the time I can't get it through. And the times I have gotten it through, if you start performing really well, no one wants to keep doing the deal. They hate it.

I agree with that. Eventually they'll be like, we just can't do the deal anymore. I remember I had a friend in EO, he would help companies get into like Costco or Target, these other distributors back when people didn't really know how to get in. And he would take a 5% cut. And then eventually, no, sorry, 10% cut. Eventually got whittled down to 5%. And then every year they would call him to whittle it down more and more and more.

Yeah, it's tough. And then with— and the business knows that, hey, if Costco's carrying my product and they're doing really well, yeah, you may have the relationship and I don't, but at the end of the day, Costco's not going to want to lose, you know, $100 million in revenue or $200 million because it all adds up. So yeah, I don't want to pay you anymore.

Yeah, the leverage has been flipped. Like maybe let's say I was selling it to you, I might've had leverage initially to get the deal done, but like that goes down over time. So Yeah.

Yeah. How's it worked out for you when you tried doing performance-based deals?

You know what's funny? I was talking to, I forgot who I was talking to yesterday, but in 2017, I got these SaaS companies, like remember Mixmax, the email company? So, yeah, yeah. So I knew I could, I knew what was up and coming. So I got 6 of these performance deals signed. Okay. Now here's the thing. The team didn't know how to perform on it. I thought I can just delegate it and let them figure it out. Right. So I knew what exactly. Okay, we should do the landing pages for them. We should run Google Ads over here to make it all work. We just didn't do it, right? And so it's easy. It was easy for me to close the deals because I had the relationships because I was doing the podcast and it was just focused on SaaS founders at the time. And so I got the deals done, but we just couldn't execute at the time. But I will say we're trying to do that now again. We're going to probably focus that more on mid-market if we're going to guinea pig it.

So I think it's a beautiful model. What's the one that does it? Starts with a C, is it Cloverfield or something like that that does it?

Centerfield.

Centerfield, my bad.

Yeah, Centerfield. So, okay, you want to know the story how they started? Because one of my friends worked there back when they were like a $2 million a year agency. He went to work there. And so this is funny because we're at a networking event and one of the guys he met ended up hiring him. Okay. And Him and the other guy were like ad buyers. They were both in the affiliate space. And so Centerfield went from this affiliate agency, or sorry, this marketing agency, standard marketing agency. They were saying, okay, we're just going to focus on telecom companies. And then what we're going to do is we're going to drive them leads on a CPA basis, right? To get paid per lead. What eventually happened was they got so profitable. I think they're doing 10 figures in revenue. I could be wrong. But now they will handle the entire funnel. They will handle not just the paid ads, the landing pages, but they'll actually have the call— they buy call centers too to have the entire customer gift wrapped for them at the end. And that's how they get the deal done.

It's like a Red Ventures.

Yeah. Yeah. I mean, to me it's affiliate.

Yeah, it's affiliate.

Yeah. But I think it's like a classier version of affiliate marketing. So.

Yeah. On a side note, you have something on the list on how SEO's back. Why don't you— Read into it.

Yeah. So SEO is back. This is a tweet from Aleyda Solis. So Aleyda is amazing SEO and Dejan SEO said GPT-5 just made SEO irreplaceable. So a couple bullet points here. OpenAI just made an executive decision to focus on raw intelligence and leave the rest to search engines. Now, number 2, without grounding. So grounding is grounding it on maybe pulling the data from Bing or pulling the data from Google. So without grounding, This model is virtually useless. It's designed to be the brain on top of tools and information it's provided with. Number 3, and 4 bullet points here. This means SEO has never been more relevant than now. And the last point here is OpenAI appears to be designing models that think and reason well, but don't attempt to internally store all world knowledge. Instead, leveraging retrieval augmented methods such as tools, search plugins, large context to pull in fresh information as needed. And this approach is motivated by efficiency, cost, and performance considerations. As evidenced by recent statements, research, and product releases, because they're burning so much money on these tokens, they have to figure out efficient ways to do this. So that's why I said SEO is back.

And people want cheaper prices for, you know, the APIs over time, and they have reduced their pricing quite a bit. I know they've lost a lot of money, but I think they lose money on purpose. They could charge more for all their products, but they choose not to, to try to gobble up more market share.

Yeah, totally. And I actually have some slides. So you and I are speaking at HubSpot's event actually in a couple of weeks now. I'm going to work on our slides tomorrow a little bit, but check this out. So I have this. Okay, you're going to like this. Let me share this. You guys are getting a sneak peek to my talk. You're getting a sneak peek as well. Do you see this?

I do now.

Okay, so if you're just listening to this, the slide basically shows that the cost of intelligence is dropping. So I actually shared this at a talk I did earlier this year. But a couple months ago, you would pay for, let's say, like an input API price for like DeepSeek, right? Which is a Chinese model. You pay $0.55 over here. And for ChatGPT's O1 model, which is the best in class at the time, you were paying $15 for that. Okay. And then you can see on the very right, output API price is $60 from O1. Now today, look at what it's dropped to. So DeepSeek, maybe still $0.55 for this one, but look, Instead of $15 for O1, it's dropped to $2. Instead of $60 over here on the right side, it's dropped to $8.

Uh, well, O1 is $15 here, right? It's $2 for O3.

This needs to be adjusted over here. This O1 preview, ignore the orange. We're actually taking that out. Um, cause no one really talks about O1 preview, but—

But right here, no, no, go to the next slide. It's O3 that's cheaper, right? You see in the cash, it's $2 versus $15.

Yeah, you're right. I didn't see this O3 pop in, so I actually need to make some adjustments to this slide, but point is it's getting cheaper. So the fact that it's O3 on the right side here, this is— O3 was one of their best models at the time. And by the way, now it's like, it's just ChatGPT-5. So.

Yeah, but O1, you put $15 over time. Did it stay $15 or did it decrease?

I'm pretty sure it decreased. So that's where I need to fix the slide. But main point is this has dropped by a lot.

Yeah. So the pricing is all going downwards like we're talking about.

Yeah. Exactly. We're just saying this is very deflationary and we're— we all— I think we all know, like you and I both know that, okay, energy is going to be really important. GPUs are going to be really important and we need the price to continue to drop down because we're just paying for intelligence ultimately.

Yes. All right. Yeah, I agree with that. You know, it's— you're just paying for intelligence at the end of the day.

You want to know the difference between a $22 billion startup versus a $3.5 billion startup? Sure.

Is it growth rate?

No. Okay. So 2 credit card companies, different stories over the last 5 years. Which credit company— credit card companies would these be if you had to guess?

I'm going to go one was Brex. I could be wrong, but I'm going to go with Brex.

Yeah, yeah, yeah. You're right.

I don't know what the other one is. Brex is probably the $20-something billion one if I had to guess.

No. Okay. So, so this Ramp came out of nowhere.

Oh, Ramp.

Oh yeah.

Ramp's the one that raised money. My bad. I was confused.

They both raised a lot of money, but Brex started earlier. And Brex had the lead. Brex was like all over the place. Like, dude, when crypto was going crazy, there's always like a Brex representative at all these crypto dinners when I was in Miami. But Ramp, from what I've seen, they've just executed better. And they have— and from what I've seen, their engineering, their product is just better. And so if you're looking at this over here, $3.4 billion company Brex over here, and then you have Ramp, $22 billion. And so it says over here in this tweet from Teddy, the valuation gap between Ramp and Brex is a sobering reminder that execution is all that matters and the job is never finished. And I met the founders of Ramp, super nice people, very humble. I'm not saying the Brex people aren't, but I think the Brex people, they were very sales-focused and they're at like every single party, whereas Ramp, they're just always shipping new features. I think this year they shipped like hundreds of new stuff. But wanted to call it out because a lot of my friends do use Ramp. I don't think you and I use it, but worth calling out.

Dude, remember that house I was going to buy on Beverly Drive? Beverly and Long? Oh yeah, yeah, yeah.

Was it the Brex people?

The Brex founders were renting it because I was like asking the realtor, I'm like, who the heck spends $180 grand a month on rent? Like at that point you should just buy a house, right? And they're like, oh, this company called Brex. And there was something like that. They were paying like $180 or something ridiculous every single month. And I'm like, That's a few million bucks a year. Like, just go buy a house. It may not be as big or nice, but who cares? You're just throwing money away.

We don't blame the founders of Brex, but like, I do think how you do anything is how you do everything. And so if you're going to do that as a founder, you know, if I'm an investor, I'm on the board, I might have a problem with it. And by the way, you look at the Ramp people over here. This is a guy, I think he's on the product team, Ramp Economics Lab, right? He's just writing about their analysis on their data. They're always sharing interesting data that gets retweeted on On X. I don't— I didn't— I've never seen this from Brex, right? And so for me, I'm just like, they show you credit card spending across different industries and to show if maybe there's like a recession coming or whatever. I just think it's stuff that people who are interested in the markets are interested in reading on. So kudos to Ramp on the execution. I hope they keep going.

Yeah. And either way, both the companies are going to do really well. I think it was Ramp that announced things like if you're using them as a corporate card, They'll automatically have like AI analyze people's travel and expense reports and make sure that they're following in line so they're not trying to like hurt the company. There's one of them that's using AI for like corporate cards for people expensing or, you know, doing meals or whatever it may be while they're traveling. But I thought those features were pretty useful. I've never used— This is technically a lie. At one company that I was working with for a while, they gave me like a Brex card or a But it was more so just for the credit card number and it was virtual. But for my own companies, and at that time I never really used it, it was just more so I had it. But for my own companies, I've never really used anything outside of Amex. We do have Visa cards because some places don't take Amex, but I've just found that if you're trying to scale your business, it's easier to just go with like an American Express because you can just get the— the, the, the line limits, and it's just easier to scale up faster.

I like Amex because of their superior customer service. And it's just, it's been convenient, right? But I can see a world where Ramp starts to out-execute. And I can see a world where you and I are on Ramp in the next, I don't know, 5, 10 years or so. We'll see what happens. And that is it for today, guys. And we'll see you tomorrow.