First or Fast Follower? 3 AI-Era Rules for Marketers

Today we have a great podcast with the one and only Mark Schaefer. We're going to talk about pioneering risk in the digital space, first mover or fast follower, and finally, 3 secrets for success right from the mouth of Mark Schaefer. Okay, thank you and welcome all our listeners for the Marketing Companion. And today, what an interesting guest we have. We have Mark Schaefer as a guest on the podcast. He's not doing me.

Did you miss me, everyone? It hasn't even been that long.

Everybody misses you. And this one is going to be a great, great show. You all love hearing Mark's wisdom. And today we're going to talk about kind of the pioneering days of being digital. And Mark, you and I were chatting. And, um, you just told me something that I thought was very interesting about your first, one of your first. So why don't we start out there? So you were, believe it or not, the first at your company. I don't even know what company it was to ask for an internet account. So talk to me about why you did that. What did you see that others didn't and how did that response go?

Yeah, it was, it was kind of an interesting time of, of life. And I, I, you know, it's funny cuz I've never really talked about this. Usually I'm always talking about the future or what's next, but how everything got started is, is still really interesting. And I think there's some good lessons for today. Well, you know, I was a young marketing guy and I was working for this company called Alcoa at that time. They were a Fortune 100 company, Dow Jones Industrial, blue chip company, and, and they were a great company to work for. Well, uh, you know, I was eager to try new things, and my boss was like 45. He wasn't going anywhere. And I thought, you know, what, what's next for me? What's going on? And this thing called the internet was beginning. And, uh, so I started playing around with it, experimenting with it.. And I thought, look, there could really be some business opportunities here. And I had some ideas. I wanted to play around with it. I went to my boss. There was no internet at that time and, you know, no, uh, enterprise, you know, ERP system or anything. And I said, I want an AOL account and I want to put it on my expense account. So I can experiment with, you know, with the internet and learn what it's about. We had a big argument. He thought this was a stupid waste of time. I think we were just starting to get into email at that time. He wouldn't even go into email. He said, look, I've been around business long enough, I want a paper trail on everything. And finally, he finally moved to email. Because, uh, his boss, who was the vice president of the company, said, hey, I'm sending all you— sending you these emails. You never respond to anything. What's going on? Well, so I had this idea, Sandy, that, um, you could buy and sell scrap. So I was working for a big metals company. We needed— I mean, aluminum. You— we need aluminum. To recycle. And so we created this thing, it was called a reverse auction. Have you ever heard of that?

Oh yeah, we do them today actually.

Yeah, you know that they— in the early days of the internet it was so popular, and you don't hear about it so much. They're also called a Dutch auction because in the early days when like the, the big— the thing, the, the crypto of like the 1700s were tulips, right? So tulips, tulips were this hot investment commodity, and they would have reverse auctions on tulips. And so they're like, you have this transparency and everybody's bidding on the tulips, or in my case, everyone's bidding on the scrap, and you could see it in real time. And the price goes down, down, down, down, down, which if you're buying the scrap, that's what you want. So I had this idea and it worked. And all of a sudden, then the— so I was working for one certain, you know, business unit of this company, and the business finally woke up and said, oh my gosh, we need to create an e-business department for our whole company. Who's going to run this thing? Well, I was the only one doing anything. They said, this idea you have, Mark, this is bigger than you. This is bigger than this business. Come run this department. And it was so fascinating because Alcoa at that time— it's been split up into different companies now— but at that time it was basically a holding company of 45 different companies. So I had to go and talk to 45 different companies about getting onto the internet, and, and we created this, this, uh, this intranet, like this internal, uh, system where people could order their, their products and change their orders. And we were so early, Sandy, we had to install computer terminals at our customer locations.

Oh wow.

They didn't have the computers to see the screens. And I think we might have created the first intranet in the world. I mean, I don't know how to measure that. Yeah, but, but the, the people that were working for me back then, if, you know, we, we reminisce and they said, do you realize how far ahead of our time we were? I mean, nobody was doing it back then. But the— so to me, it was just doing my job. It was like, this is the next evolution. When I look back, gosh, I mean, it was, it was a big risk It was a homemade, homemade system. There were no— there was no Oracle, there was no SAP. It was a homemade internet system and it worked great. It worked beautifully. It was reliably saved us millions of dollars. But how— so like, how— what was your early experience? Because you were, you were a pioneer.

Yeah. So I still, I remember two. One, I was at IBM when e-commerce came out too. You just reminded me of that. And we actually hosted the first Victoria's Secret ad on the internet. It was gonna run on TV and it was gonna run on our commerce site.

Wow.

And it, it took us down and we got back up quickly, but we had no idea how popular that was gonna be. Most people in the company felt like, why were we doing something digital if you've got it on TV? Like TV is the media. But then we shifted and it was pretty awesome. And then the second one was we used to run these major IBM conferences and I held one for WebSphere and we were the first, we were told anyway, it was featured in the Wall Street Journal, the first conference to use a hashtag for Twitter, now X of course, for our event and we streamed it on the screen. So anything anybody tweeted with that hashtag, was actually shown on a screen. And the thing that the Wall Street Journal thought was so cool about it was that, like, it just kept rolling off the screen because everybody was like, no one's going to tweet. Like, what the hell is a tweet? Yeah. So it was kind of interesting. So I'm curious, Mark, just for everybody listening today, what do you see today that reminds you of those early days when you did this for the internet? And what feels fundamentally different? So now we're in the age of AI. Anything remind you of those early days? And what's different than when you did this for a Cola? A Cola? Is that what it's called?

A Cola? Alcoa.

Alcoa.

Okay.

Alcoa. Okay.

Short for Aluminum Company of America.

Oh, interesting.

Okay. For our international listeners, aluminium. I think, I, I, I think one of the advantages to having been around a while is you see these patterns where it's very, very familiar. If you look at the early days of the internet and the early days of social media, and now you look at the early days of AI, well, there was this sort of panic at first, like, okay, What do we do? We know this is big. We know this is, you know, something we need to do. What do we do? Then you have like this fragmentation where there's all these different services. There's all these different web browsers for social media. Oh my gosh. I mean, there was, there were a million different tools every single day, some new tool and some new tool. Then eventually what happens? Consolidation, right? People start buying up. These companies. There's a little bit of a bubble, right, which was needed, which was needed. There was an internet bubble, there was a social media bubble, there's going to be an AI bubble. And that's, you know, that's— I'm not afraid of that. I mean, that's, that's healthy. That's, that's what we need to do. You know, I think there were also a lot of people taking advantage of the situation, maybe not in ethical ways all the time. And I mean, some of the things in the early days of social media and search optimization was just appalling. I mean, you probably remember the black hat days. They used to call it black hat. And I'll tell you, Sandy Carter, I remember it was one of the first social media conferences I ever went to., and this, this fellow was giving this presentation about, um, he was paying people who were, um, they were disabled and they were like working from home. He was paying them to like create these fake accounts.

Oh wow.

And, and create all these fake comments to help SEO and everything. It was just totally unethical. And I listened to this presentation and when he was done, My question was, how do you live with yourself? You know, what you're doing is totally unethical.

Yeah. And we're seeing that today already too.

Same thing.

Yeah, same thing.

And we're actually— it's on a bigger scale. This guy said, if I— look, there's big brands paying me millions of dollars to do this. If I didn't do it, somebody else would. And so it's, it's, it's, it's like there— and then You know, my view always was stick to your values, do what's right, even when it hurts. Like, even if other people are having some advantage because they're using these unethical tools, I'm not going to do that. And part of the, part of the, um, idea behind that was, look, if you're doing something that's screwing Google, you're going to lose. I mean, just wait it out, you're going to lose. Now we look at things like AI where it's the same furious move to get ahead. And like, what are these companies doing? They're breaking the law on purpose.

Yeah.

I mean, they basically, they basically say, we're gonna just scrape everybody's comment. Basically, I, I just, um, I'm gonna be awarded money from a lawsuit against, uh, Anthropic cuz they use my books. There was a class action suit and I think in the spring I'm supposed to get money for compensation. And, and, but that's— it's like, hey, you know, we, we just have to win. We just have to move ahead. And, uh, we'll, we'll, we'll raise money later for the lawsuits, but we're just going to break the law. And, uh, so they're definitely patterns that, that, that repeat. What, what, what do you see in your career?

Well, let's see. I think one of the interesting ones as a pattern is when you're first, I think you find a lot of fast followers. And there was then and there is now a debate of do you want to be first or do you want to be the fast follower? I don't know if you just saw, but iRobot is going bankrupt. And one of their comments, iRobot does the little Roomba. Yeah, the little Roomba. They're the parent company. And in their statement, Mark, they said we were the first to do this and all the fast followers were able to do it cheaper, et cetera, because we were innovating. And their advice was don't be first, be a fast follower, don't be first. And so I was told that when we came out first with the digital ad and the first event. I disagree, though. I think that there is an advantage to being first.. But if you are going to be first, you need to make sure that you're innovating at a record pace. You need to make sure that you are, you know, that you're really, you know, cutting your costs, being efficient, coming out with new things, listening to your customers, being customer obsessed so you don't go off track. I don't know. How do you feel about that? Don't be first, be a fast follower. What do you think?

Oh gosh. Personally, Well, I don't know. I'm both, I guess, in some ways, because I certainly have innovated in lots of ways, pushing the envelope on everything that I do.

Yeah, I'm just looking at your book back there. You were the first with that QR code, right?

With the QR code on the COVID yeah.

You were first.

Yeah, just be bold and take risks. But I look at companies like Apple. I mean, Apple was always a fast follower. You know, they didn't have the first PC. They didn't have the first, you know, music player. They didn't create the first smartphone, but they just made it better. And I think that is really the key idea is that you just, you've got to replace yourself. Just being first is not enough. You've got to have the courage to reinvent yourself. And say, what's going on? And that you, you, you bring up a, a, a point that I'm gonna be writing about soon around listen to your customers so well. This is a concern I have with AI because market research is basically dying right now. And I have a lot of friends who are in market research. They said all our work is dried up. With AI, you can get, you know, maybe an 85% solution, and that's good enough for most companies. But the, the thing that troubles me about this, and it's very relevant to this point that you make, is that if you have an 85% solution, there's nothing that differentiates you. Everybody's going to have the same 85% solution. The real gold, the real source of innovation is in the 15% that you're not getting from AI. And there, there's a, there's a very famous example for— it's not famous, it's, it's, it's famous for me that I'm gonna, I'm, I'm gonna use in this, in this post that I'm working on where when I was the marketing director for this company, we would go out and we would have formal listen to the customer visits. And it wasn't a survey that we sent out. It wasn't an email. We went out and listened. And so, we went around the world. We met with all our customers. And it was the last session of the whole year. And as we were leaving, this researcher for Coca-Cola says, 'Yo, we were packing up our bags, right?' He said, 'By the way, Did you hear about this government research they're doing that they may outlaw this one certain chemical ingredient in coating for packages? We said no, we didn't hear about that. Well, if that research was validated, it would basically destroy our whole product line. Hmm. And we never would have heard about this. If we hadn't listened and we hadn't been there in person and talked to our customers. That is not 85% research. That's the 15%. And that saved our business. We were able to get into this. And even though the research hasn't— hadn't been complete yet, we said, look, we need to address this because if they find a problem, we need to be ready. And our competitors weren't. And so literally, That little nuance saved our business. And so how are you going to find those micro trends that are going to turn into something big? How are you going to find those little micro threats that are bubbling under the surface right now if you're just settling for the 85% research that your competitors, they've got the same information. So it's very troubling.

And this is why I loved working at Amazon Web Services. One of the things that we would not do is we would not just read research reports or even just do focus groups. We really emulated startups. So if you think about a startup, Mark, and you think about a founder, where does he or she spend most of their time? Well, 80% of founders of a new startup spend their time with customers because they're trying to sell their product. They're going to customize it and they're so successful and they move so fast I would argue because they're hearing directly from the customers what's working and what's not working. So at AWS, we had a leadership principle called customer obsession. And it was not okay for an executive to only have their teams or the marketing or research telling them what customers were saying. We had to spend at least a, a majority of our time with customers. And I think it made all the difference in the world. When people ask me, You know, what was a secret moment about AWS? It was that requirement that up top and down the organization, we were all listening to customers. But Mark, you said something interesting. You talked about digital trends and you talked earlier on that you've watched every major digital shift unfold or a lot of them from the very beginning. So I'm curious, this question, how do you recognize the right signal or the right pattern so that, you know, this is it? Like, just think about how many things come up, right? You're not jumping on every one of them. How, how are you dissecting the micro trend, the micro signal, or the bigger signal that you're going to jump on, and which ones you're going to kind of leave behind as noise?

You know, that's— no one's ever asked me that question before, and I don't I'm not sure I have an answer, but, but I, you know, I do have some discernment. I don't know if it comes from just experience or what, where you just see something. And, and do you remember the— there was a service called Blab. It was a forerunner of, a forerunner of, of Zoom. It was before Zoom, it was before, you know, all the different services. That was Skype. And, and, um, so there was this thing called, called Blab, and it was like, it was video conferencing where you could create content just like we're doing today. Uh, you know, we're recording the audio, but there's also, you know, you and I are watching each other on this Zoom call. As well. So the first thing that was— it was Blab. And I thought, oh my gosh, this is it, this is it, this is the next big thing. And it was, but it just wasn't Blab because they ran out of money because it grew so fast. They couldn't scale the server power that they needed to handle all these different calls, and they, they unfortunately went out of business very quickly. But, you know, I could see that the idea was right. I think for me it was like this. When I was in the early days of the internet, and it's the same now with AI, it was the same way with social media. There was a lot of fluff. There was a lot of jazz hands going on. About, you know, what this could do, what this could do. And it was kind of fun and it was kind of sexy. And, and I concentrated on one single thing: does this technology help a company make money or save money, period? If it, if it, if there was not an obvious case that's going to make money or save money, I dismissed it. And so for me, being— I mean, I basically created the, the e-business, you know, enterprise system for this Fortune 100 company, including digital marketing, including CRM, including intranet, including, you know, you know, digital marketing and advertising, social media. And it basically got down to how do we make decisions. Okay, everybody thinks this is going to be oh so cool, but does it make money or save money, period? That's what we're going to prioritize. And that served me very well. So maybe that's part of the filter for me that, that, that, um, can help determine what, what's really going to take off.

I think that's a great one because, you know, I had a boss once, Steve Mills, who used to say, you know, Basically, all we do is we make stuff and we sell stuff. And if it doesn't help you make something better or sell something better, it's not going to be helpful. So, Mark, I have another question for you. As being this digital pioneer, you grew up, you had entry-level jobs, and a lot of the entry-level marketing jobs now are being touted as AI agents, right? So I was just with a company yesterday and they were asking me to look at their agent strategy. And, you know, there was an agent for market research, there was an agent for landing page optimization, there was a landing— there was an agent for copy. Essentially, it was all the, what I would consider, entry-level roles where you kind of learn the business, right? And for this company, all those roles are going away now. And, you know, when you do those, you develop kind of an intuition, and you have a great intuition. I'm curious, what, what do you think about all these companies now trying to use AI for entry-level marketing jobs? And how does that impact in the future someone being a pioneer if they're not growing up with something that can help 'em develop that intuition?

Well, it's a difficult question, isn't it? Because I think every company has a financial responsibility to run their company as efficiently as possible. And where the state of AI is right now, it's basically entry-level position. I mean, you can treat it like an intern and talk to it like an intern, and it does a pretty good job. So that, you know, the, that part of me, I can, I can certainly understand why companies would, would use it that way. I mean, I use it that way. I mean, I use AI to do things that, you know, maybe 3 or 4 years ago I would have hired a person to do it. So I mean, I'm guilty of it too. The difficult part for me is like, I just remember when I was a young guy, I mean, I was just so green. I knew nothing. I knew nothing of the world. I knew nothing of, you know, business and leadership and just, I was so fortunate to have amazing bosses who are patient with me, and they taught me, and, you know, they just let me make mistakes. And they— and, and the, the beautiful thing about this company that I worked for, Alcoa, is that I was— my whole career, I was always the youngest person in the room. They just, they just let— they just pushed me to get— to give me the most opportunity to just see how far I could go. And those, you know, a lot of those opportunities are drying up, and I don't know what the solution is. I think there's going to— I mean, at this point, I think people will over-index on technology, they will over-index on AI, and at some point they're going to come back and they're going to say, where are our young leaders of tomorrow? Oh, we don't have any. We're going to have agents. Yeah, we're going to have to create some kind of leadership program to have— to still have some human beings in this, in this business. I mean, I, I think that's what, that's what will, will happen. But, um, there, there's a— it's a big gray area of uncertainty right now, isn't it? Because it's not just you know, where are the entry-level jobs, but what do you even study in school?

Yes.

To, to get a job these, these days. So what are your thoughts on that?

Well, and I think it's also not just marketing. I'm having people come to me. I teach at Carnegie Mellon Silicon Valley. A lot of coders there and a lot of the entry-level coding roles of testing and documentation are now going to AI too. I think it's a, it's a mega challenge that we have to figure out. I don't I don't know if anybody really has the answers for it, but, um, a friend of mine is a pilot and he was telling me, you know, what do we do to train future pilots? Um, we get them on a simulator, like they, they work out some things on a simulator. So I was thinking the other day, could that be a way? I don't know if it gets you the same intuition, but is that a way that we could train, like develop a simulator for young marketeers and it stimulates all of these kind of entry-level jobs and maybe get them up to speed faster. So they kind of jump over that entry-level role that now AI agents are doing. I thought it was an interesting concept and an interesting way to approach it. You know, looking at some other industries that have, you know, I mean, think about a plane. They've kind of had, you know, go on autopilot for a while. Uh, and so anyway, I just, I just thought it was kind of an interesting—

I think it's, I think it's more than kind of an interesting idea.

Yeah, you like it?

Well, because here's what was, what's been in my mind. About a year ago, there was an article in the Wall Street Journal talking about this issue, and it quoted, uh, leaders as saying, um, university students today should be prepared to go right into a management job because there aren't going to be any entry-level jobs. So I thought, oh, how's that going to happen? Well, yeah, maybe it's you have this simulator to, you know, to get people up to that level, you know, maybe after college. And look, when I think about some of the most powerful learning experience of my life, it was some sort of business simulation. Yeah, we learned some incredible, just incredible, uh, lessons through these, you know, role-playing, game-playing, uh, you know, simulations in business.

In fact, I just did one the other day which was very interesting. Um, a company had an agent, so it simulated a company going with an agent that had gone rogue in the company. And what do you do? You're the marketing leader, right? They assume marketing and comms were together. You're the marketing leader. Here's what happens. How does everybody work? And it taught me a lot. I'm not going to say it taught me as much as had I really gone through it, but I felt like it really did teach me a lot. Well, Mark, we're coming to the end of our time, so I wanted to close out with some kind of actionable insight from you. People look to you as a mentor, as providing some good advice. So, you know, there's all these things we talked about today, being a digital pioneer, you know, how do you make it when there's no more entry-level roles? You know, how are you discerning a signal or a trend from something that's really out there? If you had to give 3 pieces of advice, only 3, to marketeers out there, regardless of level or size of company, or maybe they're a solopreneur, Yeah. What piece of advice would you give them right now in the age of AI?

All right. Well, number one would be work on your personal brand. It's the only defense you have against AI. It's the only asset you have that's transferable from company to company or whatever you decide to do in your life. So, and I shout this from the rooftops, especially if I do guest lectures at universities, you know, work on your personal brand. That would be number 1. Number 2, dabble in AI no matter what level you are. And sort of the traditional model for leadership is you delegate, you know, the experimentation. But to lead, you don't have to have all the right answers. You can't have all the right answers, but you should have all the right questions. But you're not gonna have the right questions unless you know what's possible. So you need to spend a little time every day on AI applications. You know, make images, make movies, make, you know, make business strategies. Use, look into AI agents. So dabble and experiment. Every day. So that would be number 2. And then, you know, something that you said, I think, is really important, and that is, you know, don't overlook this idea about don't be overwhelmed by AI and overlook customer research. When, you know, you talked about this very wise thing at AWS that you spent, you know, 75% of your time with your customers. I got to study under Peter Drucker, and he told one of the signs of a sick company is because someone asked him one time, you know, Professor Drucker, you go in all these companies, how can you possibly know so much about these companies? He said, oh, it's very simple, really. You just look at these signs, and if you see one of these signs, that means there's a deeper problem. And the first one is, are people in meetings all the time? Because if they're meeting in meetings all the time, there's fear in the organization. They're not being empowered to do what they're supposed to be doing. He said 75% of your time should be spent with your customers, either internal or external. And so that would be the third thing is just don't abdicate that to AI. That is your competitive position. Your competitors can copy everything except how you treat your customers. So you've got to get out there and listen to your customers and don't be satisfied with that 85% solution.

That's awesome. Uh, Mark, thank you so much. I know everybody misses you, so thank you for coming on and being here.

Oh, thank you, Sandy, and congratulations on the show and best wishes for all your exciting new episodes.

Well, thank you so much, Mark. Thanks for coming on today. And don't forget those 3 lessons from Mark. This is the, um, version of Marketing Companion, and we'll be back again in 2 weeks. Thank you.