Why distribution is more important than product in digital content marketing.

Hello and welcome to this episode of The Unnoticed Entrepreneur with me, Jim James, your host here in the UK. And as always, we're going to try and solve a problem that you're facing in your business.

And if you're creating content, which we've all been told to do, especially if you're creating maybe long-form or audio and video content, you probably know that creating the content is difficult, but not nearly as difficult as the distribution and getting that to engage and to land with your target audience. And my guest today has a theory that actually your distribution is more important than your product.

And he has a new business that he's going to tell us about called Swell AI.

He's an entrepreneur, serial entrepreneur, and Cody Snyder is his name.

He's joining us from Denver in Colorado. Cody, welcome to the show.

Jim, thanks for having me. Super excited to be here.

Well, I'm excited to have you here because we're going to talk about AI. And the problem that most people have with creating content is distribution. I find this even with my own show, that creating the content isn't necessarily the hardest part, but getting distribution, getting downloads and engagements and click-throughs through to a call to action is really the pain point. You've got a solution for that. We're also going to have you to give us a case study for one of your clients, one of your customers at Swell AI who managed to use your platform to generate a large number of leads, I think in the insurance business. And you're also going to talk to us about a mistake that you've made as you've been building your business and how you've maybe missed an opportunity to arbitrage online ads.

And, and then you're also going to give us some advice on what we can do to get noticed.

So Cody, explain about your theory that distribution is more important than product.

Yeah, happy to. So this is my core thesis, right? And so just for context, my background was in early-stage startups and, you know, people build great products all the time, right? But they don't see the light of day and they get no traction. This is a classic thing that happens, especially with first-time entrepreneurs. There's that, you know, old trope that like first-time entrepreneurs focus on product, second-time entrepreneurs focus on distribution, third-time entrepreneurs focus on like leverage, right? They're like And so, with distribution is more important than products, this is really kind of talking about this idea that we have to think about distribution as the same side of the coin or one of the sides of a coin of a business, right? So, those 2 sides are like, I have a product that people want to buy and I have a way to sell it. So, distribution is that way to sell it. So, content marketing is this classic way for people to create distribution and really create brands like zero-to-one brands. But just making content, it does nothing like you're just talking about, right? Like if nobody sees it and nobody interacts with it, nobody consumes it, it does nothing for your company. You're going to see no revenue impact based on just it existing. And I used to actually, I started my career at a B2B marketing agency and we saw this all the time. We did a lot of work with Fortune 500 companies and for them it was the classic thing where they built this article or white paper or whatever. And then they're like, cool, like this exists now. Like they check their, you know, that box on their list. And it's like, you have done 20% of the work, right?

Yeah.

The only thing that actually makes an impact is now we have to get that out in front of our target customer and we have to get them to consume that. And so, yeah, that's kind of the core thesis is that, and like an example of this as well is like NetSuite. I always use them because like they're a terrible CRM, right? Like they are But tons of people use them for email marketing. And we see this all the time where it's like they had built out this distribution engine that was more powerful than their competitors and they can win based on that. And so, that's kind of the core idea when you break it down.

Well, I think, Cody, you're absolutely right.

And one of the CEOs of Sony said that, you know, of a successful business, 1% is the idea, 10% is the product, and 100% is the marketing, right? And I guess when we saw with Microsoft OS that really whilst it wasn't the best operating system, Gates managed to get it on every IBM-based computer, right? It was the distribution that established that.

100%.

And I thought you were going to mention Netscape actually, which of course died with the Windows browsers instead. So Cody, one of the challenges for companies and entrepreneurs is that the content creation actually takes quite a lot of time, you know, and so they kind of run out of time to do the marketing, which is why so much effort is spent on building content, whether it's articles, videos, podcasts, and then the distribution often gets kind of short shrift, doesn't it? Or maybe just gets put up and there isn't really the quality of content. And management of that distribution. How are you helping with that, Cody, with Swell AI?

Yeah, yeah. And so I think the best way to kind of go through this is the workflows that we're seeing people do that are really effective. So kind of the biggest opportunity is like making like, and this isn't a new idea, right? It's like I make this anchor piece of content, which is a long form, you know, it can be a fireside chat, it can be a webinar, It can be a podcast like this. And then I take that long-form piece of content and I chop it up into all these different forms. I repurpose it into all these different forms that feel native to each platform, right? So an example of this would then be, okay, I take that podcast episode, I turn it into clips for Instagram Reels, for YouTube Shorts, for TikTok. I also then take the transcript and I write tweets based off of the key takeaways or the core ideas, the insights. I write LinkedIn posts based off of those insights as well. I could then also write a newsletter that includes all those insights that I send out to my list that's promoting the episode or just its own standalone piece of educational content based on the ideas that occurred, were brought up by that conversation. And so it's kind of endless what I can do with that single piece. On the time that it takes to do this, so previously, I worked at this company called Rupa Health. I think I was an employee 6 or 7 there. And, one of my jobs was basically I had to zero-to-one the media arm of the company. And so, what that looked like was we hired this whole team to come in and then we hired contractors to help us with the video production and all the post-production processes. And at the end of it, it's like 10+ people that are all working on this content production side. And now what AI is changing is it's basically like I can build these automations that are doing a lot of that heavy lifting. 80% of that legwork for that production can be done now with this. But when I am talking to other founders, I have these conversations all the time. They're like, hey, I'm trying to figure out how do I do personal brand? Like podcasting or just weekly fireside chats with industry experts that are in your industry is one of the most high leverage things that you can do. And it's not a lot of mental energy for you, right? So it's like I, as a founder, can sit down for an hour a week. I have a conversation with an industry expert. We take that recorded video. Now all of a sudden I have all of these clips that I can distribute across all of my social profiles. I can write all these posts. I can write long-form articles. And that process that, again, I used to have to have a team of maybe 5+ people to accomplish, that can all be done as a single individual. And like we're seeing, like my friends built this podcast. It's like in the, I think it's a top 20 podcast now in the UK in the marketing category. And for them, like it's 2 dudes, they sit down, they have an interesting person on, they talk to them about whatever it is that they're doing. And then they built this workflow where it's like they record in Riverside, they put it into the scripts to create the studio sound effect and remove all the ums, ahs, and then also like make it so that it's like higher quality. They then take that, they export it, they put it into Swell, and Swell writes all of their like tweets, newsletters, blog posts for their website, all of that media. They basically have built these customized prebuilt templates within Swell. so that it produces that media anytime they give that raw material to the software. And within 2 hours a week, they can basically create all of the media that they could need for both of their personal brands. Right. And they work as C-suite individuals at different companies. But for them, it does 2 things, right? It gives them leverage within the organization that they're at, but it also gives them leverage if they're trying to go and start their own thing or trying to go and work for another company. Suddenly it's like if you have this audience where it's 50,000 followers on LinkedIn as an example, that creates this opportunity for you to basically use that in the negotiations for salary or for like, you know, even when you're doing cold outreach or talking to like potential customers, if you go and you found a company. So a lot to unpack there. But yeah, that's kind of the high level of how we're seeing this all play out.

No, that's great. And someone, you know, I record in Riverside and then currently we use the Riverside platform because they have a, you know, a magic, uh, clips section. Then you have to download that and put it into Descript, for example, and then take that and put that into Anthropic Claude or into ChatGPT to write it. And then I had to go to VAs, um, because you end up with kind of an avalanche of content. So Cody, I think that's absolutely fantastic. I see on your website as well, on swellai.com, that you could build chatbots For podcast episodes as well. So that AI is going to liberate smaller business owners to generate content is a big part of my thesis actually, that it will democratize competition, right? Smaller companies can take on bigger companies by being swift. And you're talking about content creation, but also distribution here. I will ask you the question about quality control because You've mentioned about repurposing. So LinkedIn has one audience, one format, and that AI, their algorithms reward certain kind of content. Facebook, another. Instagram obviously is more pictures. YouTube is different to TikTok. So can you just tell us, does Swell AI, if you like, take into account the platform, or does it just make the content, if you like, landscape or different letterbox, uh, and, you know, different duration. Because that's, that's the key that I haven't understood yet— an AI platform that really manages the nature of the content at an intrinsic level rather than just reformatting it from a production level.

Totally. Um, so 2 things there. The— what we found is that the LLM has like general knowledge of what each platform like What the piece of content for each platform should look and feel like. And so we can specify like, hey, this is going to be a LinkedIn post. It's long format and it's going to write, you know, maybe it's like 3 sentences per paragraph type of thing. What we've suggested and what we have people do most often though is give it an example of the output that they're looking for and like in a templated format, right? Like it's like, I want it line by line with a ton of white space that it's really readable. And we see that like on LinkedIn, that's a great way. I can— so then, you know, from a user standpoint, I can just give the AI an example of what I'm wanting it to write, right? Tell it, hey, now make a piece of content like this, but based on, you know, uh, this transcript that I provided, right, that I— that the AI generated for us.

Right.

And I can then, you know, we, we call it prompt chaining, but I can chain these prompts together to create these complex outputs. So as an example, I can say something like, List the tone, style, and voice of this episode. It defines that tone, style, and voice. I can then say, okay, now list 5 LinkedIn post ideas that are related to marketing from this episode. It lists those 5 ideas, and then I can chain another prompt where at the end it's like, okay, now write 5 LinkedIn posts about this episode or about each of those 5 ideas listed above, but write it in the tone, style, and voice that I had the AI like defined in that previous part of the chat. Okay, that can all be saved. That whole prompt chain can be saved as a template so that anytime I provide raw materials, it creates that output that I'm looking for, right? And this is where we see kind of like the— everybody's trying to create like their cut. Like, how do I make AI sound like me? And this is one of those ways that you can do that really effectively is basically providing it like that context of like, here's my tone, style, voice. And then also saying like, here's the output example. And just to give you like a specific, we have a client that they're like, hey, we're trying to do mid-roll ads to promote previous episodes of the podcast. And so they gave us an example, like they give the AI an example of the mid-roll ad that they're doing currently, like the script. And then we just say, hey AI, like make a mid-roll ad that's like the one that we provided you, but for this episode, for this transcript that's provided, right? And so then it does like an almost perfect output. And for them, it's like they have like 400+ shows that they're doing this for, right? And they're publishing a show a week. So that's 1,200 mid-roll ads that they, you know, previously a team member was having to write. And suddenly it's now that whole process is like automated. All they do is they come over the top and that creative person, like that marketer, what they really turned into now is they are a curator rather than like the ideator. Right? So like when we think about content production traditionally, it's like, you know, find an interesting idea. I then like have to ideate, how do I expand on that idea? And then I then, you know, have the curator, which is that copy editor that's coming over the top, et cetera, and making sure that it fits brand tone, you know, whatever those requirements are. Now that AI, it's really good at finding that core idea. It's really good at writing that first draft. And really that person, like all they're focusing on is like, what are those final touches that I can add to this? Um, so, and what I always am trying to emphasize with people is like, this is just another tool within that production tool belt. Like 10% of the inputs and like 10% of the outputs is what the humans are focusing on. That 80%, all that heavy lifting of like going through an hour-long transcript as an example, that can be done by the AI, like, you know, in seconds. So let's give that heavy, that, that kind of, uh, time-consuming work, uh, to like this tool rather than, you know, traditionally again, using off— using VAs, using, you know, a group of VAs, etc., to accomplish that.

Yeah, you know, Cody Schneider, that's fantastic. Uh, and we were drawing the analogy the other day about having like a sous chef and that the AI is like a sous chef, right? But you could be the head chef and all the chopping is done by the AI, but you get to check the taste and so on. Um, can you give us a case study, Cody? You've talked about some of the the principles and some of the workflows.

Can you give us a case study of a business that's used Swell AI to some effect?

Yeah, absolutely. So, we worked with this client. This is actually the origin of Swell. I was doing some consulting for this company. They were an insurance CRM for insurance agents. And, you know, very traditional industry. It's all like, you know, kind of, it's old school and it's like handshakes and like that, you know, that kind of style of of industry. And for them, they're like, okay, how do we get trust within this industry that's super competitive? And so what we found is that a podcast could be a really easy vehicle for that. The CEO of the company, the co-founder, she could sit down and have a conversation with their target customers, sit down for an hour a week and record this episode. We then took that episode and they took that episode and they chopped it up into social media clips for all the channels that their target audience was on, which was LinkedIn, And Facebook, and so then they did. They basically used this social media scheduling app to schedule those posts out. So they did like one a day across all those channels, and then they ended up bumping it up to two a day just because they saw the impression reach was like you know it was so large and it was making such a like high impact for their their brand and organization. But then they would then take that conversation; they turn it into articles. But the big thing that they ended up doing was they scraped all of the target customers' email addresses and they just basically added them to a newsletter over time. Like they would sequence in like 200 people per day to a newsletter and they would email them out this podcast like every week. And that audience, like, you know, within 12 months that this company didn't exist. And then they go to a conference and the CEO is like, recognized by voice. People are like, oh, you're Sarah. I listen to your podcast every week. I love your content. I've learned a ton from it. And that gives them all of this negotiation leverage and an ability to create inbound leads, right? So there's kind of all of these effects that are happening. And just to list off a few, it gives an excuse for CEO to get in relationship with target customers. It creates content that they can repurpose for all the channels they need to do distribution through. It also creates this vehicle for them to create inbound leads as well, right? Like, if I have this entire community, like, if I have 500 people that are listening to my podcast every week, that's not a huge number, right, in the grand scheme of things, but that's easily a $10 million ARR company if it's B2B, right? And they're high value, like high value customers. And so that's kind of the tactical examples that we're seeing this employed in that are super effective, especially to early stage companies. But you can do this in enterprise, you can do this at any scale. It's just like taking a microset. An example would be if I was HP Enterprise, I go and I make a podcast about AI, and this is exactly what they did, right? So here's this new wave of technology. HPE wants to be a thought leader in that space. They have AI experts that talk about that process, and suddenly they have this piece of owned media that they can then use across all all of their marketing strategies. And that's how these larger corporations can do the exact same thing rather than doing one show. Okay, let's do 10 different shows that are all focused on different aspects of business. Like maybe it's AI in finance or AI in customer experience or whatever, right? And that's these— it's the same tactics and strategy, but just used over and over again for the different departments or the different angles that you can come at your target customer with.

Yeah, Cody, that's wonderful, wonderful. And seeing podcasts as really both the audio and the video as kind of the head end, really, because everyone can chat and guests love to come on to shows or to be a guest as well. It creates such a wonderfully rich source of content.

Now, as an entrepreneur yourself though, Cody, let's just switch gears slightly. Swell AI, um, can you just tell us, you know, what have you been doing to build the brand?

I'm going to ask you about what you've been doing to build the brand and then, and then one mistake that you'd share with me that, you know, you wouldn't recommend that I try myself. So what about building the brand of Swell AI? Tell us first about that, how you've been doing that because it's been very successful very quickly, hasn't it?

Yeah. Yeah. So we started Swell in October of 2022. We were kind of on that early wave. So we were positioned really well when, you know, ChatGPT hit in December and January, everybody was trying to figure out how do I do this? And so we kind of built this whole content production pipeline from like generating transcripts to now I'm repurposing it into this content that I'm using across these channels. But on the brand building side, like what I am seeing like the large opportunity for currently is like personal brands by the CEOs of these companies. We're seeing like more and more agencies actually spin up in this space. And so if you're like, what company do I start in 2024? This is something that is Like just low-hanging fruit for any entrepreneur that wants to start an agency business. But basically what they do is they like, you know, they find, they ask the CEO like, what's, who are your target customers? Okay, let's get them scheduled on this podcast. They come on, they have this conversation for 30 minutes, and then they distribute that across all, you know, their LinkedIn, their Twitter, you know, any place else that they're trying to like get distribution and reach. That could be TikTok, Instagram Reels, et cetera. And So like we're just taking the same strategy that I'm preaching and just applying that as well. For us though, like some of the tactical things that we did that were really effective in the early days is I like cold, I scraped every podcaster's email in the US that we could find. So there's like massive public databases that you can get access to all this, all of their websites, like their URLs. We took those and then we used a tool called Hunter.io or Snov.io to basically go and find all the emails that are associated with those companies. And then we extract those emails, we validate them with an email validator, and then we use a tool like Instantly.ai to do cold email. And so in the early days, we were sending out like 500,000— sorry, I think last year we did 500,000 cold emails. At the peak, it was like 100,000 a month that we were sending. Now we've become way more targeted because we're focused on more of these enterprise, larger clients. And that's where— but to get those first 500 customers, that's a really easy way for you to do that, right? It's just like bulk cold email, get time on your calendar schedule, have a VA live in your inbox and work those leads. So we did that. But then the other component of it is we took those emails and then we did a customer match within all of the distribution channels. So Facebook ads, Google ads, LinkedIn ads, and then we basically would run ads to those same people that we were cold emailing, right? So like when we think about the user, like, or the customer, the target customer experience, Like maybe I get served an ad that's talking about Swell and then I get a cold email from the CEO that's like, hey, I built this tool, right? So you're just creating as many touchpoints as you can for that same audience as possible. And then going even further down the chain, we then ended up doing like LinkedIn direct messages. We did direct messages on Twitter, et cetera. Again, just combining all of these layers, but it's the same group of people that I'm going after, right? And then just hitting that core offering. We automate, you know, our piece in the beginning was like automate writing show notes, social posts, and clips for your podcast, right? And that's how we got it off the ground. And then it's just like be in front of those people indefinitely for all of time, right? And that's how content is this like great vehicle for this because I'm basically just going and I'm just showing them new ideas that are related to the industry that they're in. Over and over again, day after day. And so that's really the whole process that we're going through. We'll be back after a quick break.

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Cody, that's amazing. And, um, you're really there looking at the whole sort of customer journey, as you say, from the customer side, but also that it's not just distribution, uh, that beats product, it's repetition, isn't it? It's kind of, uh, taking distribution and keeping the, the pipeline open and having that content flowing through it consistently over time to the same people. Cody, if there's something that you've done that you'd say to me, Jim, don't try this, this doesn't work, would you mind sharing something that you'd remind me not to try?

Yeah. So I don't know if I— I think when you're an early-stage company, like, try everything. But I think the mistake that a lot of people make is they don't cut the fat early enough. Like most companies can get to $1 million ARR with 2 channels, right? Like again, with cold email and Facebook ads as an example. And the challenge is like not spreading yourself too thin. Like we have limited resources in marketing, right? It's time, money, and mental energy. Every company, depending on where they are in their lifespan, has different amounts of those resources. When you're early, you have a lot more time and a lot more mental energy, but less capital. Right? That's typically how it goes. And when you're a more established company, you have more money, you have less time, you have less mental energy. And so then it's like figuring out, okay, what is the combination? What's my portfolio of resources look like and how do I allocate them based on that? So I think that's kind of the high-level thing. An example of this that was very specific to us is in the early days, we were getting signups at like $1 to $2. through Google Ads, we saw it to be like just an incredible channel for us. The CPC was super small. And, you know, fast forward now it's 12 months later and the CPC is like 10x. Luckily, like we optimized the ads so that like our cost per signup is like not 10x what it was previously, even though it's like close. It's like right now around, you know, it's a higher number. But anyway, the kind of key takeaway there is that like when you find a marketing arbitrage opportunity, It's like double down on all of your, like everything you can allocate to that, like you should have, right? And I should have done that in that point in time where it's like, we're going to deploy as much capital as we possibly can to this arbitrage that we found just because we know that it's going to go away. And this is how companies are built, right? Like wish.com as an example, they became a billion-dollar company because they got Facebook ads at 1-cent clicks, right? Like this was back in 2014 or whatever. And if they tried to do that same thing now, there's a 0% chance that they could do it on Facebook, right? Because it's just become way more competitive. The CPC has increased. With that said though, it's kind of funny. I have some friends that are building companies that are focusing on the Asian markets, specifically like the Philippines and Vietnam and kind of all of these developing economic zones. And what they're seeing is like what we saw in 2014 with Facebook ads, right? Like incredibly cheap CPCs, like a really receptive audience. And so again, there's arbitrage, like it just goes in waves in all these places. But as soon as you find one, it's like, okay, how do I exploit this as aggressively as I can? And kind of the analogy I use is like, it's like having an ATM where I put a dollar in and $5 comes out, right? I'm gonna go to that ATM for forever until it stops giving me like a higher amount of money back. And so taking that same kind of mental framework and then applying it to your marketing activities is something that I always try to emphasize when I'm talking to like other founders that are more like product focused and like trying to learn the marketing side. And just, you know, a reminder for myself as a marketer, like, hey, this is the, you know, the most impactful thing that I can do.

Yeah. So to focus in on that. Cody, switching topics slightly, I'm going to ask you as we come to the end of our interview, can you recommend a book or a podcast that you have found to be inspirational for you as a founder?

Totally. Yeah. I've been reading a lot of science fiction again lately and I just reread The Foundation by Isaac Asimov. It's his trilogy. But a lot of it just talks about psychology, which I think is interesting. It was a good reminder of how do I interact with huge groups of people? And I think it's always great to just read as a founder, especially when you're in the technology space, reading old sci-fi and how they thought the future was going to be is kind of interesting to see where we ended up being. And also plants these new ideas of how is AI going to be implemented and what were they thinking about AI as? in those previous times. So that's kind of a book I would suggest for people to, you know, you could read it in a weekend. And then the other podcast that I've been pretty excited about is actually my friend's podcast. It's called In Growth We Trust. It's a top marketing podcast in the UK now. They started it in like February of last year and then just basically the 2 co-hosts are both like growth people is how I would describe them. Their focus is on D2C. That's their backgrounds. But like one of the, my friend Yon, who's, I'm more close with on that podcast, he was the head of growth at Deliveroo, at Depop, and now at Nude, which is like this next app that he's working on. It's a financial app, but Deliveroo and Depop are now billion-dollar companies. So you hear like all their stories that they're like basically that they've done to grow these organizations, but also they have on these guests that are super interesting. That are, you know, as an example, like, how are we working with 1,000 different like TikTok influencers simultaneously? And like, that was an episode of like, here's how we even like organize that and coordinate that. And also the arbitrage that exists when it's like, this kid is 20 and in college, if you tell them, hey, like, if you make a video a day for us, we'll pay you a grand a month, right? And they're like, of course I'll do that, right? Like, that's the easy, you know, easy money for them. And that's this arbitrage that they found for growing like specifically D2C apps. So anyway, yeah, there's things like that on there, which are super valuable.

Great.

We'll put both of those in the show notes.

And you've been super valuable, Cody Schneider. If you wanna find out more about you and swellai.com, which incidentally people can use for free as a starter option.

So Cody, where can people find out about you if they wanna get in touch with you and hear more wisdom from you?

Yeah, yeah. So I'm most active on Twitter and LinkedIn. Just reach out to me there. You can also email me at cody@swellai.com. swellai.com and get access to me there as well. So yeah, however we can help. And again, we're— I love early-stage companies and talking to founders about their companies or like anybody that's starting businesses. So however I can be helpful, reach out.

Wonderful. Well, thank you for agreeing to come on the show to share both energy and insights, Cody. Thank you so much. Cody Schneider, the founder of a company called Swell AI. Thank you so much for coming on the show.

Thanks for having me, Jim.

It's been brilliant. So we've been listening to Cody Schneider, and of course we'll put his details in the show notes.

And a couple of takeaways, you know, one is that this idea that distribution is more important than product.

I think for all of us that have built something and then been disappointed by the results, it'll resonate really what Cody's saying, that it doesn't matter what you build if no one knows about it. We've all got to lean more into the marketing distribution than maybe we've done in the past. And also this idea that there are arbitrage opportunities. I personally think that podcasting is one of those at the moment. If you're an entrepreneur or a CEO, the cost of podcasting is very low and the impact is very great. So that's why I run this show. And if you're not involved in podcasting as a guest or as a host, really, really encourage you to consider it. It's a great opportunity. And my name's Jim James. Thanks for joining me, The Unnoticed Entrepreneur, today on this episode.

And if you've enjoyed it, please do review it.

And rate it because it really helps me know what you think of the show.

And until we meet again, just encourage you to keep on communicating.

Hit my own mic. That's a bit annoying, right? Yeah, beginner's mistake.