HighLevel Is Giving AI Away Free. Neil Patel Calls It a Bold Bet (Full Episode)

Growth Newsletter: https://levelingup.beehiiv.com/subscribe Need marketing help? Visit: https://www.singlegrain.com/ and https://npdigital.com/Want to recruit great marketers? Find them here: https://marketingschool.io/hire Neil Patel opens on HighLevel giving AI away free, and why its CEO says that sometimes you just have to eat the cost. Eric Siu explains why he gives his own workflows and bots away too, now that an AI visibility report that once cost dollars costs 18 cents. They cover what AI compute costs now, from Eric's DGX Sparks to a MacBook Pro quote of about $14K, Andrej Karpathy's 0.2% figure, a Chinese glass company's Paris riots post, and simple security steps for Black October. Then how AI agents pick local businesses, Spawn's 10-person team spending 30x payroll on AI tokens, Jen Abel's startup sales list, and why GPT-6 Astra being distilled means your IP is dying. They finish on the FlexJet CEO's view of M&A, the listen-to-talk ratio on sales calls, daily AI performance reviews, pay-for-performance risk, Granola's AEO workflow, and Google stock falling 12% after earnings. AI keeps getting cheaper, so the bold move is to give more of it away. Key takeaways◾Giving AI tools and workflows away for free builds mindshare and leads◾Move fast on trends, from events to security news to earnings◾Use AI for daily feedback instead of waiting for yearly reviews Chapters00:00 Neil's week: HighLevel, Experian, Milan01:00 HighLevel gives AI away free03:33 Give your workflows and bots away05:32 AI costs, DGX Spark and Anthropic-SpaceX08:43 Andrej Karpathy: only 0.2% use AI this way10:10 Scale founder's big bet12:01 MacBook Pro $14K quote14:21 Chinese glass company and the Paris riots18:06 Black October hacks and passkeys20:30 Hit trends fast: Eric's AI summit23:01 How AI agents pick local businesses28:23 Free AI visibility report32:58 Spawn: 10 people, 30x payroll on AI35:10 Iterate fast, change less36:54 Money Prompt and experience38:22 Jen Abel's startup sales list40:53 Founder-led sales advantage43:31 Win rate over 50% is a warning47:08 GPT-6 Astra distilled: IP is dying49:01 Make the offer a no-brainer51:06 FlexJet CEO on M&A52:52 Neil Patel defends M&A58:05 M&A is a tool, not a rule1:03:36 Sales calls: listen 60, talk 401:06:00 Daily AI performance reviews1:08:13 Gokul Rajaram on short vs long work1:11:21 Pay-for-performance risk1:14:40 The $14K laptop bet1:15:57 Granola's AEO workflow1:17:54 Google stock falls 12% after earnings1:20:40 Wrap-up

• 0:00Speaker 00

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• 0:42Speaker 00

  And then, and then I am still in LA right now, but we're gonna be swapping time zones next week. I'm gonna be going to Turkey next week. I don't know where you're gonna be at. But yeah, why don't we talk about our travels, recent travels? So you're, I think you're at the, in Dallas for an event, right? And now you're in Milan, so you go first, and then I'll talk about my travels. And we can talk about anything you learned and what we expect to learn as well.

• 1:06Speaker 01

  Yeah, I did, I did three events this week. High Level in Dallas, Experian London, and Intersections, which is in Milan. So that was, it was really fun doing all three.

• 1:26Speaker 01

  One thing I learned is, actually, I didn't really learn anything new.

• 1:34Speaker 01

  That's actually a lie. I learned something that was actually quite interesting. So when I spoke at the High Level event in Dallas, before I spoke, I met up with the founders. One of the, the CEO's name is Sean. And Sean was like, have you heard of any of our announcements today? I'm like, no, I haven't. You know, I've been working all day. And he's just like, we're giving AI for free. And I was like, oh, that's a really good idea. I'm like, that's expensive. And he's just like, yes. And he's like, if you want your business to survive in the long run, you should do what's best for your customers, and sometimes you just gotta eat the cost.

• 2:15Speaker 01

  And what was interesting is when he was saying that, it made me remind, or it made me remember the days I was doing Uber Suggest back in the day and just giving a lot of stuff away for free. But what was really interesting, just with interacting with the CEO of High Level, you know, it's very few entrepreneurs, in my opinion, are willing to make big, bold, expensive bets. Like, imagine this, if you're a company and people are using tokens, and you're just letting them do a free-for-all, and letting them use a lot of tokens, imagine how expensive your costs can go up, right? You know, you're talking about multi-billionaire company, tons of users.

• 3:00Speaker 01

  Your costs can just go through the roof. But it's very rare that I see at least companies that are funded, because they've raised money, it's public, that still make bold bets. I would say, I think you would agree with this, because you've also invested in companies. Typically, people who have raised money, they'll make bold bets, but the bold bets usually aren't extremely expensive.

• 3:28Speaker 00

  Yep. Yep. So that's what I've seen. And what I would also say, though, is these bets are becoming a lot cheaper. Because remember back in the day, HubSpot had, had the website Grader, right? And let me just ask you real quick, with Uber Suggest, you gave a lot of stuff away for free. But for, do you remember how much of your, your, like, a free account would cost you? Or like, how much a free report would cost you back in the day, maybe like five, 10 years ago?

• 3:52Speaker 01

  I don't, but I remember the overall product and the usage, when it was purely free, started creeping up to around like $320, $340, $350,000 a month. Which, that's a lot of money right now, but back then, that was definitely a lot of money for me.

• 4:11Speaker 00

  Yeah. So what I would say is this, one, you, I, I had a debate recently with, so our, we had a new managing director join the team, and then we also had, we're talking with my, my CTO as well. And so the new managing director was thinking, okay, well, we should probably have, you know, IP tied to the workflows, the agentic stuff that we do. And then my, my CTO and I were like, we should give it away for free. And then the thing is, it's like, well, why should we give it away for free? And then my reasoning is, anything right now that you're building is gonna be out of date in the next three to six months or so. So it doesn't matter. You might as well just give it away for free. Whether it's an agentic workflow, or whatever, you have a product that can run like an AI visibility report or whatever, just give it all away for free, right?

• 4:55Speaker 00

  Because what's gonna happen is, people are gonna use it, and they can use it themselves, sure, vast majority of users use it themselves. But there's gonna be a small percentage of people that just want you to do it for them. And so if you're constantly on, living on the edge, you're giving away as much free as possible, you know, you're going to collect mindshare that way, and then people are gonna be using your thing. The other thing, too, is we give a lot of our, we've been starting to give away our templates, our bots away for free. But those bots also have a, also connect directly to our single brain gateway, which has like, which, which is what we want people to connect to anyway, right? And then that, that kind of backdoors into, you know, our services. Because then we'll, we'll continue to service the right workflows and, and, you know, bots for them. So I, I'm on the same page with the, the High Level people. I think more people should give this stuff away for free.

• 5:39Speaker 00

  And more people can afford stuff for free now, or a lot cheaper. Because it used to be, like, we just started this, this new AI visibility report on our site. And it probably would cost like a dollar, $2 plus, maybe even $10 or so to do a report in the past. Now it costs us 18 cents to do so. So even if we do 10,000 a month, it'll cost us 1,800. And if that 1,800 drives us, you know, a couple of these SQLs, it's still worth it at the end of the day.

• 6:06Speaker 01

  Yeah, costs are cheaper now, but you know what costs you're getting into. Imagine having a product with tons of usage and just say, using AI features is now free. You don't know what your cap on your cost really is, right? Like, that's where I think it can get tricky. That's why I was shocked that High Level ended up doing it. I'm like, all right, that's a big, bold claim to make, because you don't know what your cap is. Like, let's say you get to 10,000 users, right? You can just say, all right, I'm spending $1,800. If it's not panning out, I'm gonna switch it off. But on the flip side, if you, let's say you have a massive user base,

• 6:49Speaker 01

  and you're just willing to make something for free, and you don't know what your costs are, and you're just willing to eat it, that could be a very expensive pill to swallow, but I still believe you would make that bet. Just because I know you long enough as an entrepreneur.

• 7:02Speaker 00

  My, my take is this, costs are gonna come down quite a bit, right? And here's, there's actually two sides to this, Neil. So I was looking at my, my DGX Sparks. Remember, I bought two of them earlier in the year? So at the time, I bought them for $4,000. And I knew instinctively that the price was gonna go up. I didn't know it was gonna appreciate this much, but each one now from $4,000 now is now worth $8,000, so it's doubled. So instead of buying Nvidia stock, you probably should have just bought a bunch of DGX Sparks and sold them, right? Like, Neil's drinking fancy water, guys. He's drinking the Aqua Pana Stillwater, but it's in a green bottle, because he's in Italy. That's how fancy he is, okay? So anyway, anyway, guys, so, so when I think about this, I'm like, okay, compute's gonna get more expensive. Electricity is gonna, you need more compute, you're gonna need more electricity, right?

• 7:46Speaker 00

  And I think that's gonna drive the cost of this stuff down. And I think the High Level people know instinctively that costs are gonna come down there. People are gonna use stuff more, and if they don't hold the mindshare, if they don't drive the usage here, because there's a lot of feature parity, like people are just copying each other all the time, then they're not gonna be able to retain their customers as well. So I believe it's an existential thing for them. Plus, remember, we talked about Meta, Alexander Wang, like, saying, hey, we need to bet on all these data centers. Like, we don't know what it's gonna be, but we do know if we don't do this right now, and if we're behind the, we're behind the curve, we're gonna be in trouble, right? And remember, Anthropic, they didn't go hard enough on data centers. Thank God, they got, they got a deal done with SpaceX. But these are, these, you can't quite pencil out as easily. So I think the data center bet is way more scarier, but I think the High Level bet is still scary enough, so.

• 8:32Speaker 01

  The, the, I remember you telling me about the meta story and how he was telling the CFO, it's gonna be super expensive and uh, I would have been, it would have been nice to be a fly on the wall. You know, hearing, yeah, we don't know what it's gonna produce. You're just gonna have to spend the money CFO. Just be okay with it.

• 8:55Speaker 00

  Yeah. So the, okay, the CFO's name is Susan Lee. So Susan Lee pulled him aside of not just once, but to like a few times said, hey, I need, like, I just need to let you know that if this doesn't work, this will be very bad for the company, like multiple times, right? Um, and, and she's doing her job, like we said last time, but even Mark Zuckerberg agreed when he was doing the podcast. He's like, look, you see all these other companies building out right now. You just don't know what it's gonna look like. But I think what we can say, Neil, is if we go back to what Karpathy tweeted, right? Andrej Karpathy. So the, the, the AI researcher. If only point two percent of people in the world, which is 20 million people are using AI like this. Um, when you have half of the world using it like this, we're gonna see way more usage, right?

• 9:37Speaker 00

  Even if they use it to 10% of the ability that you and I are using it at right now, Neil. And I do believe, I ran the numbers on this, right? I was like, okay. You have 20 million people that are working like this right now. There's only, uh, there's 3.55 billion people in the world that are employed, okay? And of the 3.55 billion people who are employed right now, only about, uh, let's say, uh, 6% of them have a company, okay? And of that 6%, only 4% of those people employ 20 or more people, which means, forget about 20 million people right now. There's probably only around 17,000 AI native firms in, in today, right? If you wanna move to a company, and I'm looking at these AI executive chats and then someone, um, put it, put it like, these are all nine, 10 figure revenue companies, right?

• 10:22Speaker 00

  And uh, someone posed a question the other day. It's like, hey, so like, do you guys think AI transformation is worth it? Yes or no? And also like, what do you do about the brain drain when your top 10% of talent all wanna leave to other companies to work with other AI native people? Cause other AI players wanna work with AI players. So anyway, all, all these numbers are, they, they make sense to me, um, based on, you know, what we're talking about, right? I think it's, it's all starting to become a little clearer, at least to me now.

• 10:46Speaker 01

  You, you, you do know what the scale founder said to the CFO, when she said, we're gonna be in big trouble if it doesn't work, right?

• 10:53Speaker 00

  What, what, what happened?

• 10:54Speaker 01

  He said, man, I got 14.3 billion dollars in cash for my company. So either way, it works out for me.

• 11:02Speaker 00

  Did he really say that?

• 11:03Speaker 01

  No, but that's probably what he was thinking partially. I'm just being honest.

• 11:07Speaker 00

  I don't care. I'm good. What about you? And she's probably good too.

• 11:11Speaker 01

  Yeah, she's probably good too, but he did make 14.3 to 14.8 billion dollars technically split between him, co-founder, other investors. And I looked it up. The payment was in cash, not stock. So either way, you know, the guy walked out pretty, he was pretty.

• 11:28Speaker 00

  He was, let's be honest, he was good before anyway, so.

• 11:31Speaker 01

  No, he was, he wasn't that successful or rich. He was okay, but nowhere near that level.

• 11:36Speaker 00

  On the value of scale, right? It was good, right? I'm not saying, like, he would have been poor is my point, right?

• 11:42Speaker 01

  No, he, he wouldn't have been poor, but paper money versus cash money, you know, those are two very different things.

• 11:50Speaker 00

  Yes, but I believe knowing him, knowing his capability, like, he would have been fine, okay? His worst case scenario is like a couple hundred, you know, million. So, yeah.

• 11:59Speaker 01

  Yeah. Yeah, he was good, but being a billionaire sounds nicer.

• 12:03Speaker 00

  Yeah. But here's the thing, you, you look at, so I remember listening to, um, you know, him talking about Mark Zuckerberg. The thing he said he appreciates, appreciates about Mark Zuckerberg is he's just making these bets. He doesn't need to make these bets anymore at this level, right? When you think about someone like a Mark Zuckerberg or Elon, for example, they're making these bets. They don't need to work as hard as they do right now. They don't need to do all these things, but they do, right? And so, um, anyway, all, all that to say is, um, I think we're gonna see a lot more of, uh, high level giving this stuff away for free. I think they're probably gonna be running a lot of stuff on, on local compute. They'll probably be buying a lot more compute. Speaking of compute, Neil, I was looking, I got, I was looking at the new MacBook Pro, um, quote, okay? So I got a, I got a quote for the, the laptop fully loaded, $14,000.

• 12:45Speaker 01

  Are you talking about the new touch laptop or something else?

• 12:47Speaker 00

  The new touch one. So I got a quote for it. I'm like, okay, if I get this $14,000, I was like, okay, what does it look like if I get a Mac Studio fully loaded? Um, with like, you know, 512 gigs of RAM and it, it's like, oh, it's gonna be $21,000, right? And so again, this stuff is just getting more and more expensive, but uh, my, my argument is like, I'm like, if, if I'm gonna be asking these things to do a lot more, then, then why, why not just pay for it?

• 13:11Speaker 01

  By the way, if you do get the new MacBook Touch, let me know. And then we can try recording the podcast without you using a mic, cause their laptop supposedly has a built-in studio grade mic.

• 13:22Speaker 00

  Really? Okay. Then we can both, we can both get one. All right.

• 13:25Speaker 01

  No, no, no, no, no. You get one and test it out. And if it works and we're happy with the quality or you're happy with the quality, then I'll buy one. Yeah, it's too expensive. $2,899 to start off with. I'm like, uh, that's expensive microphone.

• 13:40Speaker 00

  Okay, we, we should talk about this for a second too, from, from a, from a marketing standpoint too, right? Like, it's, just a marketing execution standpoint. When your laptop starts to slow down, like my laptop starts to slow down, like I can't even like screen share quickly or do, record a webinar or do things quickly, it makes sense to get a, a, a nice one, right? And the way they market it's like, oh, it's touchscreen now. The touchscreen doesn't even do much, right? But the fact of the matter is, um, you know, people, they're, but they're marketing to the technophiles and it works. Because the technophiles always want the, the latest and greatest.

• 14:09Speaker 01

  Did you end up buying the Duo?

• 14:11Speaker 00

  Uh, so our mutual friend was texting me this morning on the Duo. Despite all the cracks and all the other issues, he's like, it's growing on me. He's like, I'm, I'm getting a lot more done. It's way faster. Um, so I'm gonna ask you more questions and then I'm probably gonna keep my order.

• 14:26Speaker 01

  That's not bad. Yeah, I just didn't do it cause it was so expensive and I was like, yeah, let's just see what happens.

• 14:32Speaker 00

  I just want you to let you know that you look at the hotel Neil's staying in right now and you look at the water he's drinking and the robe he's wearing, okay? He can afford, and in fact, you're not far from walking to an Apple store either.

• 14:44Speaker 01

  I, I, I didn't pay for the hotel room, so, so I did pay for the water, but I didn't pay for the hotel.

• 14:49Speaker 00

  They got you a very nice hotel room.

• 14:51Speaker 01

  Yeah, every time I stay here, uh, for this event, they give me this hotel.

• 14:55Speaker 00

  Yeah. Well, okay, great. So let me, um, I wanna, since you're, you're in Europe right now, I wanna talk about how this Chinese company used the Paris riots as free advertising, okay? I don't, I don't know if you saw this, but.

• 15:06Speaker 01

  The window.

• 15:08Speaker 00

  You did see it. Okay, great.

• 15:10Speaker 01

  Yeah, I was cracking up. But I was like, how do they know it's their window?

• 15:14Speaker 00

  Well, it's their store.

• 15:17Speaker 01

  Oh, the, the, the store is actually a Windows store.

• 15:21Speaker 00

  Yeah, here, check this out. So do you see my screen?

• 15:27Speaker 01

  Yeah, I do now. You wanna play the sound?

• 15:29Speaker 00

  Yeah, so here.

• 15:34Speaker 00

  So literally on the screen right now, you can see people hitting it with a chair. They're kicking it. They're throwing stuff at it. And it says, this Chinese glass company was able to take advantage of the riots in France by literally doing nothing. They found a video that came from the riots in France where their glass was the only glass that the people could not break. So what did they do? They posted the video on social media. That's free marketing. And then you look at this post alone, 22,000, right? I wish they called out the, the, the company itself, cause that would have been, I mean, this one got like a lot of views on it, probably hundreds of thousands of views. But, um, I think this is cool. When you just have a product that works, it does what it says on the tin and there you go.

• 16:09Speaker 01

  I would have bought it because of those, uh, you know, the safety features.

• 16:13Speaker 00

  Yeah, but do you know what company it is?

• 16:15Speaker 01

  Uh, it's a Chinese company.

• 16:17Speaker 00

  Yeah, but what, what's the name of the company?

• 16:18Speaker 01

  I don't know how to pronounce it, but I saw the name of it.

• 16:21Speaker 00

  Oh, I didn't see the name. Yeah.

• 16:23Speaker 01

  Yes, listed out there online when I saw the video. But no, it's a good product.

• 16:28Speaker 00

  That's, and, and so like, by the way, um, when you think about, when you think about the best products in the world out there, right? When you think of, like, they just kinda speak for themselves. Now, that's not to say just don't do anything and just launch it. But uh, whether it's, you know, glass that works or whether it's like an electric car that works, um, most, it, it doesn't matter how good your marketing is if, if the product is shit at the end of the day. Because if you're polishing a turd, it's still a turd. So, um.

• 16:55Speaker 01

  When I was buying windows, one of the sales guys was like, I'm gonna shoot the window for you. He's like, the bullet won't go through. And I was like, yeah, shoot the window for me.

• 17:06Speaker 00

  Did he do it?

• 17:08Speaker 01

  Someone else ended up doing it, but it didn't go through. I was like, sold. I'll buy it. That's how I decided what windows to buy for my house.

• 17:14Speaker 00

  Let me ask you this. How much more expensive would it, was it over like the, the, the normal window?

• 17:20Speaker 01

  I think it was another two or 300 grand on top to have the feature where you can't, it doesn't go through. You can kick it and all that and it doesn't break, similar to the clip. You can do like an ice pick and you can't get through. But, um, the bulletproof or resistance. Now, if someone has a sniper rifle or a big machine gun, it's gonna go through the glass, right? But, um, you know, if someone's just shooting with the gun, uh, you're pretty safe. And yeah, I was willing to spend extra money. But for me, it was also equation of, uh, I don't have, really have valuables in my house, but my valuables, in my personal opinion, are my family. So I was willing to spend money for safety.

• 18:01Speaker 01

  Because I don't know if you remember during, uh, Black Lives Matter, there was a lot of protests in Beverly Hills and people rioting and going through the streets and stuff like that of all the residences and crime and stuff like that. So I, you know, got windows where in case people bring out the pitchforks, um, hopefully I'm safe enough until the police come.

• 18:24Speaker 00

  What if, what if the police don't come?

• 18:28Speaker 01

  Then I protect myself.

• 18:29Speaker 00

  How?

• 18:31Speaker 01

  No comment.

• 18:33Speaker 00

  All right, we'll leave it at that because I honestly don't know what you have. So but um let me, by the way, I just got a text message from one of my friends. So this is one of my elementary school friends. He is, he runs security at a publicly traded company right now, publicly traded software company. And so um you know, we're right now, we're thinking about because because of Black October, all the all the hacks, all the security incidents that are going on with AI right now. You know, I'm talking, I'm like, hey, are you getting more inquiries right now? I'm like, okay, he's like, yeah, like a lot like I'm getting a lot of people just reaching out to me out of the blue, right? And I'm like, okay, so what do people do here? He's like, honestly, like I'm just reading the text over here. He's like, you know, a lot of this stuff is there where there's gonna be, there's gonna be way more.

• 19:14Speaker 00

  But you know, all you really need at the end of the day is you need to make sure that you have pass password managers with the unique passwords or ideally pass keys, right? And a strong two, strong two factor authentication for the things that matter. And so he, he was gonna book a call with me this week because we're trying to um, I'm trying to get his second opinion on how we're securing our, our single brain gateway, right? Where we have a lot of connectors for agents, where people can also like buy Apollo credits or clay credits or like, you know, other credits. And so he's like, he's down to help, but he didn't book until we talked last week, he didn't book a call until today. He's like, hey, look, sorry, man, being slammed. More and more security incidents. So guess what, Neil?

• 19:55Speaker 00

  In a world of more, we're gonna need more electricity, we're gonna need more compute, and people are gonna be spending more. So you all you need to do right now is a marketing thing. You need to off give buy as much mind share as possible with your customers. So they don't don't turn and go somewhere else. That's, that's, I think, today's strategy.

• 20:09Speaker 01

  By the way, this is more marketing advice, not legal advice. I actually had someone hit me up a few weeks ago and they had a massive security incident. And they were just like, what do you think we should do from a marketing message? I'm like, you should be transparent with your customers and let them know there's a security incident. And you know, there's a breach of data, who it impacted, what it means, all that kind of stuff. You should do whatever legal stuff, right? But from assuming you do all the legal stuff that's required, from a marketing standpoint, crap happens that you don't like in a business. People appreciate when you're transparent.

• 20:49Speaker 01

  You still may get some slack or you still may get some crap for what ended up happening. People may be angry with you. But people are gonna be much more angry with you if you try to hide things and you're not transparent, just as FYI.

• 21:01Speaker 00

  Yep.

• 21:02Speaker 01

  And eventually, things do come out.

• 21:04Speaker 00

  By the way, so, so Neil, Neil's in Europe right now. I'm gonna be in Europe slash Middle East next week. And I want to talk about this event that I did because Neil spoke at my YPO Global Marketing Summit about a year and a half ago on his birthday. So thank you for, thank you for that, Neil. And you know, that one was actually harder to sell, I would say, right? So that event, you know, we had, I don't know, let's just call it like up to 180 people or so, but that took till to the last minute to sell out. Now, here's the thing, this global AI summit that I'm doing, we sold out. It's, it's like two weeks before we sold out, okay? It wasn't a lot of hard work. It was work for sure, but it wasn't that hard to get it to where it needed to be in terms of sales, right? Now, why is that? Number one, it's a trending topic, AI, okay?

• 21:49Speaker 00

  So you're gonna get more sales naturally. So if you have a good topic. Two, it's tied to an event where there's already gonna be like a thousand people or so there already. And so sometimes if the trend is there already, you gotta hit on it quickly because what I've also noticed, like that applies to throwing an event. But that also applies to like my YouTube videos, for example, when I hit on a trend quickly, right? I can't wait. The moment I delay even two, three days, the video doesn't do as well. But if I hit on it immediately, it's gonna do really well, right? So my point is, if you can somehow, part of what you do is tied to being on top of trends or being on top of the news cycle. You can't wait on it and you have to go very quickly. And that's how this event got to be, got to be sold out.

• 22:30Speaker 00

  And the cool thing is with this one, you know, you have a much livelier audience too, where everyone's like, everyone just wants to learn. They're excited.

• 22:38Speaker 01

  Yep. The one thing to keep in mind with trends, if you're leveraging them from a marketing standpoint, you don't also want to be too early. Because it's just not as effective. I remember listening to Eric give speeches on AI and he also would talk about AI agents. And I remember when he was doing this, maybe a year ago, I could be off on the timeline, but it was something like that, right?

• 23:01Speaker 00

  Yeah, HubSpot.

• 23:02Speaker 01

  Yeah, not a lot of people, A, understood it and not a lot of people cared as much as I believe they should have. But now, if you talk about agents because of Muse and Dots and Grokba and all the kind of stuff out there, people are much more likely to pay attention and they're interested in the topic. So it's, you can be early, but if you're too early, what you'll find is it just doesn't resonate with people. So you just got to figure out the right timing if you're gonna leverage trends from a, you know, marketing standpoint.

• 23:36Speaker 00

  Yep. By the way, Neil, what, what cool stuff have you done recently with, with, with marketing?

• 23:44Speaker 01

  Uh, honestly, I haven't done tons of cool stuff other than play around with algorithms, Muse, Dots, Grokba, etc. to try to figure out how they recommend companies when you're searching. So we started off doing tests with local listings. So for example, Mike moved to a new house in Las Vegas, okay? In Las Vegas, the water is tough. So he wanted to schedule appointments for people to come in and get a water softener. He did one manually. The first person quoted 7,000 something dollars, call it closer to 8,000. I think it was like 7,600.

• 24:27Speaker 01

  Had Grokba go and find companies that are good reputable, that would ideally do it under $5,000. Of course, people don't give quotes over the phone usually for home related improvements. So it scheduled the appointments from him in his calendar. He picked one of them. I believe the winner that he picked was $4,800 or something like that. But we've been going and asking a lot of the agents to do things for us when it comes to finding businesses, specifically service based businesses. And we're really spending a lot of time analyzing their algorithms to figure out what factors they're looking for

• 25:11Speaker 01

  for some of these businesses. Now, with some of the factors, they're not in any particular order. We're still slicing and dicing a lot of the data. I'll put charts on it once it's all done. They're looking for a lot of reviews and not just the number of reviews, but they're looking for recency of reviews for a lot of the agents that we're seeing. So like if, if Eric has a thousand reviews, but I have 100 reviews and I'm getting 15 new reviews a month on a lot of variety of platforms and he's only getting one review a month, I'm just creating a hypothetical scenario here. They're actually looking at recency and seeing that, hey, this new company that's getting 50 reviews a month may be the up and comer.

• 25:50Speaker 01

  And even though they don't have a total, larger volume of reviews, it seems that people prefer them right now. The second thing is, is we see a big discrepancy on what they choose for companies that have

• 26:06Speaker 01

  strong messaging is the wrong word, but um consistent messaging is actually the right word, consistent messaging across all platforms. So we're doing tests with some of the local results because we know some of the businesses. If you have an inconsistent messaging on certain platforms, we're trying to figure out which platforms. So we're actually trying to play some of the inconsistency, inconsistent messaging out there. We're noticing that they're not picking you. But the reason we're doing on a specific platforms is we're trying to figure out which platforms they care for most when it comes to messaging, deciding, you know, if they're gonna showcase your business or not. But consistent messaging is very important. If they see some inconsistent messaging, even if you have great reviews, great digital PR,

• 26:50Speaker 01

  we're seeing that they're not really choosing you because it's confusing them and they don't want to give a recommendation to someone that could just be off. Third party mentions are really massive. At all the content that we looked at, what ends up doing the best isn't just like someone mentioning you on a website. It could be posted on your own website. It could be posted on someone else's website. But it's actually the comparison based articles. We're finding that drive a lot more appointments for local businesses from these agents than anything else. Like if you have a really detailed comparison article of you versus the competitors, but here's the kicker. If the comparison article is you and other competitors who aren't as well known, it doesn't work.

• 27:33Speaker 01

  But if they're the main competitors, like let's say in your region, there's three main people that are known for roofing or three main people that are known for HVAC or cleaning services or whatever it may be. If your comparison article is around you and those other people, great, you're much more likely to pull up. But if you're putting one of those three in there and then a few unknown ones, it doesn't work and most of the time they're skipping it. They're looking, but if you're continually being compared to the main ones that they like, we're finding that they're pulling you way more often than these agents are recommending you.

• 28:07Speaker 00

  Yep. So I think definitely take a look at Neil's study and I definitely think you should test and play around with this. But you know, as you're talking about this, the more I'm thinking about this, I'm like, if you're into AI, you're building skills right now. You kind of intuitively know that when you're building like a single brain or a company brain, you know that your, your most recent data, depending on what type of data you're looking at, is probably going to be more relevant. And there's gonna be more weighted. And if you had, what Neil's speaking to too is the velocity of people talking about you as well. And if you think about it, like you're starting to build skills for yourself, it's like, well, yeah. And then it's like, well, that's obviously how people are going to, to, to build these algorithms as well, right? And so the more you start to play with this stuff, the more you start to kind of be in tune with how people would build this stuff as well.

• 28:52Speaker 00

  I'm just saying that that's kind of a side effect and there's not real any, any, any takeaway on that one. But I do have some takeaways for you, for you here. So we, we have this, I was mentioning this free AI visibility thing that we built. We built this this week and we use Jev images for, for this, right? And so let me just share my screen. So using Jev images and this, this, this AI visibility report. So you can see it's grayed out over here. Okay? So it's like, oh, okay, you know, a single grain AI visibility report, you know, you're named in 31% of the answers. This is the biggest gap over here. Okay. Well, I want to see the full report. Like, well, you know, what, what does that look like, right? So you know, Eric at singlegrain.com, put that in there, right?

• 29:35Speaker 00

  And then you get the full report over here. Okay. So this is nothing more to me than a lead magnet. Now, this used to cost you more to do, but when you have the power Of like a Jev, you can do this very quickly now, right? And so instead of it costing, you know, a dollar, two dollars, three dollars to do this and, and you know, having someone analyzes for you. You can do this for a couple of cents, right? So that's one example of this working. And by the way, when I share Jev, this is our Jev account. Seven hundred eighty-six million tokens, okay? Four hundred sixty-eight thousand requests and thirty-one dollars spent, right? And so, by the way, you can do a lot more with this. You can make like a competitive ad, a competitive ad tracker as well, if you want to. So a ton of different ways to, to, to play this.

• 30:19Speaker 00

  But another thing that we built is now, instead of having a talent team source for us, we just have this talent bot source. And better than any recruiting agency I've worked with, better than any recruiter I've ever worked with. But it's literally sourcing us people for point zero zero four, five, nine pennies. Okay, so it's not even a penny, it's a fraction of a penny, right? And it's, it's, it's finding their information that way. But I'm, I'm literally staring at the bot right now. I'm like, whoa, it's like, it's, it's actually sourcing people and it actually, these people pass our bar. So if you're looking for AI native people, you gotta run something like this. And it, it just makes things easier because your, your AI players only want to work with AI native people. They don't want to work with non-AI native people for most companies.

• 31:01Speaker 01

  You want to hear something interesting with Legion? We tested a free AI visibility report.

• 31:05Speaker 00

  Frictionless Growth Marketing hosted by Sonya Thompson is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Frictionless Growth Marketing hosted by Sonya Thompson shows how modern brands grow by removing the friction in their marketing and customer experience that pushes customers away every single day, often without leaders even realizing it. Each episode delivers practical insights, real brand examples and conversations with marketing leaders, showing brands how to win with the new rules of growth, identity-driven marketing, cultural relevance and frictionless customer experiences. Listen to Frictionless Growth Marketing wherever you get your podcasts.

• 31:40Speaker 01

  Capture leads.

• 31:41Speaker 00

  Real quick, if you want to acquire customers faster and more efficiently this year with the latest strategies and tactics, then check out singlegrain.com. That is my ad agency, again, www dot singlegrain.com. Check it out and if it seems like a fit, we'll get in touch and help you with a free marketing plan.

• 31:57Speaker 01

  We've tested a lot of stuff to generate leads for agencies and then you end up selling them. We've also tested a lot of stuff for B two B lead generation. The more it's report looking and the more charts and the information you get, we typically see a decreasing close rates from the leads.

• 32:16Speaker 00

  Yep, so here's what happened.

• 32:18Speaker 01

  People don't want tons of information. You, you have to figure out, it sounds bad, a mousetrap to get people in. But we found that typically if you're giving them too much information on a specific topic and you're going really granular, it doesn't convert well into closed revenue. Not for all B two B, but in most cases, we find that simpler things, less of a reporting format, more of like, there's a glaring problem and showing them where there's a problem or like, hey, there's eight things you can do to fix it. Here's a top two or three, set up a call to get the rest. We find that kind of stuff to work much better from a lead capture and a close ratio.

• 32:58Speaker 00

  Yep, so here's exactly what I told my team this morning, okay? And then let me show you this too. So I'm actually good to show you something from Jen Abel, who I, I really like the stuff that she shares with, when, when it comes to enterprise sales. So she shares a lot of interesting stuff with enterprise sales, right? So literally at the very end, the more technical your pitch, the faster you've delegated down the chain of command, right? You want to make it simple and call out the issues. And so what I had called out to the team, I was like, look, just call out the gaps that they have. You don't need to send them like the complete report. And if they want to talk to us, you can just send them like, hey, here's the benefits of, of getting on their chat, right? But the, the key thing is this, you start out running this and then what happens afterwards is you iterate, right? You don't just build it once, you build, you measure, you iterate. And that's what I've continued to communicate to, to the people that we, the people that we work with.

• 33:44Speaker 00

  But to Neil's point, the more technical your pitch, in this sense, it's not a pitch, right? But it is fairly technical, there's a lot of stuff going on. But I will say this, it's, we, we just launched it this week and literally it's, it's booking us calls, right? These are actual hand raiser sales calls. There's a company, I think it's like nine hundred twenty-seven million in revenue or something like that, so pretty good, right? But the team is going to continue to iterate on this. And, and now it's like, you can just iterate the day of, you don't have to wait anymore. The day of, you can make multiple iterations, which actually brings me to my next point over here, which you look at this company, okay? This guy Jacob over here, he's building this company called Spawn. Ten humans, apparently he's saying he's, he's spending thirty-two million dollars a year in Claude spend, okay? So he said, he, how I built the most AI-pilled company in the world.

• 34:27Speaker 00

  So Spawn is ten people who, who spend thirty times payroll on AI tokens that ship almost as much as Anthropic. In the last thirty-eight, we shipped seventy-seven thousand substantial changes at about one hundred eight an hour using the fleet of permanent AI agents. Each agent uses, owns an area, like owns an area, like the engine or finance with real permissions and memory. And this only works with Anthropic's Fable. We killed pull requests, PRs, so agents coordinate through the living code and product likes, uh, Stigma G, shipping hourly while fixing breaks themselves. Five of us now focus on taste and entropy while AI judges two years of recorded decisions, so nothing waits. So that's, that's, I mean, there's, there's way more that he's putting in here and you can kind of see this chart where he's, he's doing more and more.

• 35:10Speaker 00

  But I think there's a couple of things here. One, when I was talking to my CTO about this earlier this week, it's like, we had to fundamentally reimagine how we work. Because marketers, it used to be for marketers, it's like, oh, well marketers shouldn't touch the code, they shouldn't ship PRs. But now you can today, right? These are things that, that were unreasonable before. And you look at these guys now, they're spending thirty X payroll on these tokens. I'm not telling you to spend thirty X on, on, on tokens. But what I am asking you to do is, I'm saying, go to your, go to your people on your team and say, hey, what's the most unreasonable thing that you've asked your agent to do in the last seven days? And you can even ask your agent harness too. What are some unreasonable things we can do based on the things that we've accomplished in the next seven days? What should I be asking you that's unreasonable?

• 35:55Speaker 00

  Because the way that we're used to working right now is we're, we're used to working with humans. Oh, can you give me that report? Oh, can you give me that data poll? Oh, can you give me these numbers? Oh, can you text it over to me? Oh, can you just send me the charts? It doesn't work like that anymore, right? You can ask your agents to do anything you want. Can you spend, spend me at twenty iterations of this? Can you test five of these landing pages at the same time? Can you spend up twenty thousand ads right now? Can you iterate ten trial reels at the same time? What are the most unreasonable things you can do? And that's why I say that the demand for this stuff is, is limitless.

• 36:25Speaker 01

  Just be careful though, when you are making changes on the fly. So let's, let's go back with Eric's Legion mousetrap, right? You got a free AI visibility report. You can end up making changes on the fly with it, but keep in mind, it takes you time to actually get usage to figure out if your new iteration of your mousetrap is better than the old one. So yes, you have no excuse but to iterate really fast. But just make sure you're not making fifty changes at once or too many changes at once, where you're not sure which changes are actually helping you or hurting you, drive more conversions or sales or more leads or more revenue. So that's just one thing I would keep in mind.

• 37:05Speaker 01

  Because in this new world with marketers using AI and not having to rely on developers or designers and just gaining ship, the big thing that I'm seeing in, in our agency is people are making changes really fast, which is great. But they're making too many changes and they're not sure which ones are actually helping versus hurting. Think of this as like A B testing. With A B testing, you need statistical significance. You need enough data to actually show that something's helping you or hurting you. Now with whatever you're using AI for, if you're getting, you know, if a hundred people see it and forty-something of them are complaining about something that's broken or something's wrong or not usable. Of course, in those kind of scenarios, don't wait, just go and fix.

• 37:49Speaker 01

  But just generally speaking, you're like, oh, if we try reducing our form fields from seven to two, we should collect more leads. Well, if that's your test and you don't really need to test that, but let's hypothetically say you're testing that, you'd want to have enough data going to both variations to figure out if it actually is helping.

• 38:06Speaker 00

  Yep, one more thing I'll, I'll say on that too. So earlier this week, so I was talking to some of the engineers on the team and I said, hey,

• 38:15Speaker 00

  you know, I, I, I have this revenue, it's, it's a, it's called money prompt, okay? So what it does is it analyzes your code and analyzes the entire funnel, it looks at drop off rates and it comes up with what, why, where your funnel is failing. So for example, for one of our, one of our products, it's like, hey, you're actually not sending activation emails. If people are failing to, to, to, you know, move to the next step. Oh, you're actually not reminding people to, you know, top off their credits if they're running low on credits. And you're not giving them a deal either. Oh, uh, you know, you have like a twenty percent, uh, twenty percent of people abandoned at this page over here. So when I walk through those numbers with the engineers, I was, they're like, well, we don't know this stuff, right? I'm like, exactly, right?

• 38:59Speaker 00

  So that whole taste and judgment and experiment thing, experience things matter, it matters a lot. Because I can't expect the engineers to know that. And also at the same time, the engineers can't expect me to know everything about, you know, having a very, uh, you know, rock solid build with whatever it is that I'm shipping, right? So experience still matters a lot in this day and age, despite the fact that you can do way more. And so just a heads up to everyone that, you know, you can, you can expect the engineers to kind of just logically figure these things out. But it takes years and years of experience still to, you know, detect these patterns.

• 39:31Speaker 01

  Yeah, and speaking of engineers, one thing Eric and I should have clarified earlier. I know Eric showcased that tweet or X post of someone talking about, I'm paraphrasing here, but the more technical you're going, the more down channel or the people you're losing. So you want to be careful when you're becoming too technical with your pitch. There's always a caveat where it depends what you're selling. If you're creating marketing material for a company selling GPUs like Nvidia, you better be super technical because a person on the other end making the purchasing decision is probably super technical. They make it approval to send you a check. From executive who may not be as technical, but the person who decided to choose your Nvidia GPUs

• 40:15Speaker 01

  instead of AMDs or instead of Intel's or whoever, that person's probably super technical. So you want to make sure your, your marketing copy appeals to your ideal customer profile.

• 40:25Speaker 00

  Yeah, actually, you know what, Neil? Let's go through her list because I want to go through the ones that stand out to me. So you can, I'm going to pick the one that I like first. You can maybe pick one that you like. But this one over here, so she has a list of 15. So she says a round of startup sales thoughts. Okay. So number 12 on her list, this is Jen Able again. So number 12 outbound sales often has the highest average contract value. So that can be intuitive or, or counterintuitive to, to a lot of people. But this is her experience, you know, selling, you know, enterprise SaaS, for example, right? So that might not be something that's, that's common for everyone. People might think, oh, you know, maybe inbound is, but, but you know, often it's not right. Oftentimes the biggest deals are going to be these, these people that are, you know, putting RFP out. Or you're outbounding for the RFPs, but what, what, what else stands out to you here?

• 41:08Speaker 01

  So I'm reading them all and it's kind of small for me, but I'm going to go with number three. And I'm going to do a variation of her number three. Her number three is, uh, demo should, so demo product should be never focus on the product. Focus on how it increases or grows their influence in the organization. I'm not saying that's a bad way to pitch a demo. The way I like pitching demos that I've seen that converts really well, we've experimented with this a lot. Is you're focusing not on the product, but how it solves problems and makes their lives easier. So if you can show organization how they can solve X, Y and Z problem. And specifically you can tie it into money made or money saved.

• 41:52Speaker 01

  That usually increases sales. Typically, if you can tie it into money made over money saved, that usually performs better. If you can't show money made, money saved is the next best thing.

• 42:04Speaker 00

  I'm curious, Neil, if you look at her number one over here, having the founder involved in sales process is a natural competitive advantage. I, I think, I'm pretty sure you and I both agree with that, but at a certain point, the founder can no longer be as involved. So, so yeah, go for it.

• 42:18Speaker 01

  Yeah, the, the reason I like the founder involved at the beginning is the founder typically, and hopefully knows the product or service that they're selling. So they're, they're going to be able to answer objections, know the issues that people are having with their potential solution, and they can go back and modify the product or fix things or identify issues that need to be changed in the future roadmap. I haven't seen the founder being involved

• 42:50Speaker 01

  in the long run really impact close rates from a success ratio. From them saying like, this is how you should pitch, uh, because a lot of founders aren't great in sales. Where I've seen the close rate increase from the founders has nothing to do with the pitch. It's more so by the founder being on the phone call. They can figure out issues that people have with the product or service. And they can go fix the product or service. So that way there's less objections in the future. And, you know, a founder can just make things happen in an organization way faster. It's like, do you remember when, um, Google was struggling to get out anything related to AI? And then Larry Page just came in and people were causing him issues and he's like, Sundar, these people are your problem.

• 43:34Speaker 01

  And he just cranked and got out whatever he wanted and Google just started jamming when it came to AI. Uh, and people were like, oh, wow. Google's actually catching up and building some really cool products. But it really happened after the founder got involved and just didn't care to deal with any, uh, crap that certain people are throwing out of him and he just moved him out of the way.

• 43:55Speaker 00

  So I think the, the, so, so there's that. I mean, you know, he didn't want to deal with the, the, the corporate politics. But, um, I remember when I spoke to Jason Cohen from WP Engine, you know, he, the way he put it was pretty elegant where it, it just said that the founder, it doesn't matter if you, like, the founder has this power. It's not the hired gun CEO usually that has this power. But the founder has this invisible hammer where they can just make things happen. And, you know, I, I visited a mutual friend's office, um, a few weeks ago. And, uh, you know, people were chasing him around because they're just trying to get him to unblock things, right? So there, those people were blocked on things. So they're trying to get the founder to unblock, right? So to your point, yes, the founder definitely unblocks. Um, and I think in the early days, now I think I know and you know as well, that in the early days, especially with a startup, like you have to get sales, right?

• 44:39Speaker 00

  Like that is the blocker in your way. So you should be involved with the vast majority of deals before you, you pass it off to other people. But it definitely is an advantage.

• 44:47Speaker 01

  Yeah. One other thing I love from her list is number nine, a high win rate, 50 plus percent is often not a positive, but negative signal. I totally agree with this. If your close rate is too high, you're usually selling wrong. Expectations aren't right. You're going to get pissed off people or you're underpricing or there's something that's usually wrong. You should not have a 50 plus percent win rate. Um, there's something wrong. Either with the product or you're lying or you're being deceptive or people don't understand what they're getting. Or, you know, another big problem is you're not charging what you should be charging for the product. Like, I know some people, uh, I remember this in the early days of NP Digital.

• 45:30Speaker 01

  We closed a lady that sold, um, those hats from, uh, Latin America, I think Mexico, you know, sombreros? I think there's sombreros. I could be pronouncing it wrong.

• 45:43Speaker 01

  And she wanted to work with us and was not happy with the results. So she emailed me. I got on the phone with her. And before I got on the phone with her, we were going back and forth and she was really pissed off that she wasn't getting the results. Can you guess how much my team sold her, someone in my organization, they no longer work with us? Sold their marketing services for to do all their SEO and rank them on Google and all this kind of stuff?

• 46:10Speaker 00

  I don't know. Uh, $3,000?

• 46:13Speaker 01

  $250 a month.

• 46:17Speaker 01

  For $250, Eric, do you think a lot of people would sign up for us to rank you higher and get you?

• 46:23Speaker 00

  Oh, everybody was like, your conversion rate should be like 95%.

• 46:25Speaker 01

  Uh huh. Yeah. Really high close rate this salesperson had. Do you think it's possible for us to generate a ROI or even break even?

• 46:34Speaker 00

  Not today. Not today.

• 46:36Speaker 01

  Even with AI, it's not possible at 250 bucks.

• 46:39Speaker 00

  Not today. Yeah.

• 46:40Speaker 01

  Yeah. We, and back then with AI wasn't around like it is today, your losses were even more. So I helped her. I said, look, I want to give you back all, uh, I, I, I want to give you back all the money you ever paid us. I apologize.

• 46:56Speaker 00

  All 250 of it.

• 46:57Speaker 01

  Well, she paid us for a few months and she's, uh, she's just like, I don't want the money back. She's like, I want you to promise what was given to me in a contract. Now, being the owner of it, if my team did something wrong, the buck comes up to me. So I was like, all right. I'm like, look, someone should have never sold you for 250. That's not your fault. That's my fault. I can't even make this profitable, but here's what I can do. I'm going to give you back your money. I know you don't want it. I'm going to get on a handful of calls with you and we're going to go and fix your business and grow your sales. It went from making very little to making thousands of dollars a month really fast in less than three months. I think I did less than three or four phone calls.

• 47:42Speaker 01

  Uh, and she was really happy. And then after she started growing revenue, she was making very little to nothing before we started. She's just like, hey, so how do I sign up now? I'm ready. And I'm like, we can't take you on. You're not ideal customer. But I gave her quite a bit of feedback. I introduced her to people who could potentially help part-time basis. But she was happy. I don't know what it cost me in time, probably more than the money we refunded. But at the end of the day, it was my fault because my team sold something they shouldn't. The buck stops with me. I had to figure out how to make it up.

• 48:16Speaker 00

  Yep. And so that's good. And, and by the way, Neil, uh, I just want to show you one thing on, on the sidebar over here. So you can see it says, what does it say over here? It says, Astra gets distilled. So just so everyone knows, Astra is ChatGPT six's model, right?

• 48:30Speaker 01

  So where are you showing?

• 48:32Speaker 00

  It's on the, it's on the right side of the screen where you see where my mouse is.

• 48:34Speaker 01

  Okay, I see it now. Yeah.

• 48:36Speaker 00

  Yeah. So there's a live on X right now. It's, it's basically like a live audio session where, um, MTFs monitoring the situation. I think which is owned by Andreessen Horowitz. So GPT six Astra, which is, uh, OpenAI's, it gets distilled, meaning distilled means that they've, they've basically, you know, copied the model, right? Like it could be like a Chinese, uh, company or something like that. Um, and a lot of these, you know, Anthropic complained about distillation attacks. Um, and, and which is funny because in both Anthropic and, and OpenAI, they have distilled the internet, basically. They've distilled search, right? But my point of showing, even calling this out right now, you have 3600 people in this live is because, uh, I'm just saying that all this stuff is, you know, software parody is happening so much faster.

• 49:17Speaker 00

  And then Elon retweeted something yesterday where it's like, you look at a, there's like a AI created drug that's in phase three trials right now. There's even a hair loss drug, Neil. There's a hair loss drug now that's in phase three trials that was enhanced by AI as well. And then there's, um, there's something that, uh, basically doubled your lifespan from like a pancreatic cancer or something like that. So he's just like, we're in a hard take off with drugs. But even with this right now, that's why I'm just like, guys, just give all your stuff away for free right now. Because a couple of weeks ago, you had Shama from the All In Podcast, like, you know, IP, uh, you know, intellectual property as we know it is, is dead, right? Like it's, it's going to have to evolve quite a bit. So why not just give it away, uh, as much as you can right now?

• 49:57Speaker 00

  And, uh, you know, try to, try to maximize more value for your customers because they're, they're just going to want more, just like you want more with AI right now. But from a software standpoint, I think all this stuff is going to become distilled and you just have to ship a lot faster. So anything else we want to call out from, uh, this Jen Able here?

• 50:13Speaker 01

  Hmm. No, I, I think that's pretty good from the list. That was a good list though.

• 50:19Speaker 00

  This one's good too. Like oftentimes when salespeople pitch, they just want to just keep talking. And they just want to talk about their features. They want to talk about their company. But what they don't think about is how good is the offer at the end of the day, right? How is this such a no brainer where the other party would be stupid not to take it? Uh, and that's not something people think about because oftentimes, even if you're doing agency deals, like the types of deals that we do right now, it's like, okay. They come in and they're like, oh, you know, we're, we're, we want SEO, but it's like, oh no, you, you actually need to do, you should do outbound more. Like you're a consumer company and consumer companies haven't thought about outbound, but like, we have one consumer company we're working with right now. You know, they're doing nine figures in revenue. They're like, we're like, what, what if you guys did, uh, cold outbound to med spas and, and, and, you know, started B2B?

• 51:04Speaker 00

  They're like, yeah, you know, I, I think that's a really good idea because they're trying to go to, grow to like, you know, 500 million in revenue, right? So if you're able to somehow, um, tie it in.

• 51:15Speaker 00

  Price is really good, value is very clear. And they feel like you're smart and they feel like you've done it and you've been there before, right? Then you're gonna have a much better chance of winning a deal. So these are good.

• 51:27Speaker 01

  Yeah, uh, one tool that you can end up using, there's a lot of replicas. I don't know some of the replicas names. I know we've used some of the replicas. There's Gong. Gong will track how often your salesperson's speaking on a call versus the potential customer. And if you notice that the salesperson is speaking way too much and not listening, you cannot adapt your pitch to solve their problems. You need to listen more than you're actually talking in sales and marketing.

• 51:58Speaker 00

  So in sales, we prefer that the salesperson is listening at least sixty percent of the time versus talking, at least, if not even more, sixty to seventy percent of the time talking, right? In fact, I'm, I'm, I'm just gonna ask my AI right now, one of our salespeople, what percentage of time he spends time talking? And I'll, maybe I'll get an answer towards the end of this podcast, but you know, I wanna share something. I wanna get a, a reaction from you here. So let me first ask this.

• 52:24Speaker 00

  I want to have a call. Okay, check this out, Neil. So this is from the, um, this is from the Founder's Podcast. And, uh, it's from the, he's interviewing the CEO of Flexjet. You know Flexjet?

• 52:38Speaker 01

  Mm-hmm.

• 52:39Speaker 00

  Okay, here we go. Ready, Neil?

• 52:41Speaker 01

  Yeah.

• 52:43Speaker 01

  I can't hear.

• 52:44Speaker 00

  Sorry, let me, let me turn the volume on. Okay, here we go.

• 52:49Speaker 00

  So let me redo this again. So he's talking about mergers and acquisitions here. So he says he hates them. Here.

• 52:55Speaker 02

  For me, I think they're a sign of weakness because you can't build your business on your own. You can't, whatever this company is offering you in terms of, let's say it's market share. Let's say they have a part of the market, you have a part of the market, and you say, gosh, we'll capture the market. Well, do you really need to spend twelve, ten times cash flow to gab the market? Would you invest that money yourself and get, grab the market share? Or do you not have a good enough product to do it? So I think we don't analyze enough what it costs. For whatever your logic is for bringing that in, give me the logic for why you're doing that. And I would tell you ninety percent of the time, you could probably do this yourself without the acquisition.

• 53:36Speaker 02

  Now, once you do the acquisition culturally, if you have a business built on culture, which is essential for me, it's essential for us, it's impossible. You can integrate a culture if ten percent of the workforce is being added. Adding thirty percent, forty percent culturally impossible. And then you're gonna destroy your culture. So you probably had, you probably overpaid. You, I don't know if your business, if the business be, you need to sound, and you, you really put your culture at risk. So that's why I don't like them.

• 54:01Speaker 00

  All right, Neil, go ahead. 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 a global organization. Also, Neil has SEO tools such as Uber Suggest and Answer to Public. All you have to do is go to npdigital.com to learn more, and we'll see you on the other side.

• 54:23Speaker 01

  Yeah, so example of what he's talking about, because he's saying majority of the time he doesn't like M and A, especially because of culture and you're overpaying. I'll give you a prime example of this. Facebook overpaid for Scale fourteen point three-ish billion dollars. It made their stock price pop eventually over two hundred billion dollars. You may not say that's worth it, but I think that's a pretty good ROI. I assume Eric would agree too. You may say that people don't like the culture of, I don't know the Scale founder's name. You know it.

• 54:51Speaker 00

  Alex Underwing?

• 54:52Speaker 01

  Uh-huh. People may not like the culture. And you know what? He went in there and cleaned up the whole house when it comes to AI and all the engineers and changed the culture to whatever he want. And you know what? If I own the company, thirteen or fourteen billion dollars to two hundred billion dollars, I'll take that win any single day.

• 55:10Speaker 01

  And you can change whatever culture.

• 55:13Speaker 00

  Also, at the same time though, you should share your experience too, because you've done a handful of acquisitions, right? So I, I just wanna hear your reaction to it, then I'll give my reaction to it.

• 55:23Speaker 01

  He, he is spot on on culture. We've bought companies, like we bought one in Southeast Asia. And we bought it because they had the customer logos we wanted. They were in business for a very long time and well-known in the space, and they were getting RFPs from brands that we wanted to get RFPs from within that region, and we weren't being included. We knew they had a team problem and a culture problem. We went in there and in day one, started adjusting the culture. I walked into the office, I remember the first time, this was a while after we bought it, and people like, check out our office. We got gaming here, ping pong there. And people wanted to play all these games and do all this fun stuff instead of actually work.

• 56:07Speaker 01

  The second thing is, we had a conference in the office space where we invited a lot of clients. And a lot of the people at the time who were working for the company, I say at the time, because they're not really working anymore, decided instead of hanging out with customers, they wanted to play ping pong and mess around instead of actually doing what's best for the clients. And you know what? I was okay with this and we knew there was culture issues before we wrote the check. We still signed, we wrote the check, and we went in and cleaned up the culture and changed it to the way we wanted. It, it's not easy. It is very painful. Do I recommend it? No.

• 56:44Speaker 01

  Would I have preferred buying a company that fit all the boxes where I didn't have to change that? Yes, it would have been easier. I couldn't find one though. At least I couldn't find one in the price that I was willing to pay either at the time. But sometimes the things you want aren't going to be easy. And you gotta figure out if it's worth it for you to do them or not. I also believe if you look at a lot of the largest companies in the world, Microsoft, Google, Amazon, you know, Nvidia, the list goes on and on. I've done tons of M and A. I think M and A is a great way to grow. You just gotta pick the right ones. Private equity is known for this. They always say one plus one equals three. I understand from a mathematical formula, one plus one equals two.

• 57:29Speaker 01

  But when they say one plus one equals three, they're saying, I'm, I'm gonna give an example here. This is not a true example, but let's just imagine. Let's say Eric owned an SEO agency named Single Grain. Right? And Single Grain only does SEO. I know he does more than that, but again, I'm going hypothetical. And I, Neil, own an ad agency called NP Digital. And let's say I only do pay-per-click advertising on Google and, you know, Facebook. And I only do that. I know my agency does more than that, but again, go with this hypothetical. If Eric bought me, or I bought Eric, or we merge, I could in theory sell all of his customers on paid advertising, because now it's a service he can offer that he didn't before.

• 58:15Speaker 01

  And I can sell all of my customers in theory on SEO, because I didn't offer it before, and now I can say I offer it. I'm not gonna sell every one of my customers on SEO. You're not gonna get a hundred percent take rate. He's not gonna be able to sell all his customers on paid advertising. You're not gonna get a hundred percent take rate. But what you have is, when you combine the companies, it's not my revenue combined with his revenue. It's my revenue combined with his revenue, but a fraction of our customers, maybe twenty percent, maybe thirty percent, over time, we're able to get multiple services. So the revenue actually increases. In addition to that, when a customer pays you for multiple services, they're more reliant on you. And you find that your revenue may not grow as much as you have thought or you would have liked,

• 58:56Speaker 01

  but you'll find that because people pay you for more services, they're more reliant on you, they stay with you longer. So you're also growing your revenue, not necessarily from making more money, but from reduction of churn. And that's how you get one plus one equals three in this example.

• 59:14Speaker 00

  So here, here's what I'll say. When it comes to, to, to M and A, I understand where the Flexjet CEO is coming from here. But I also don't think it's helpful to think in absolutes when it comes to most things in life in general, right? So I, I'm like, okay, yeah, you know, you don't, you don't wanna mess up your culture. Like, I agree, okay. You don't, maybe if you have ten percent of people added to your workforce, it's not gonna disrupt the culture much, thirty percent more. And I, I've seen that, right? When I've added thirty percent, well, you know, through, through, through a transaction before, that was not good for our culture, right? And that, that's, that's a harder thing to, to change. Now, that being said, I think about the founder-led companies run today. Nvidia, okay, Jensen Huang, been running that longest-running CEO, public, public CEO, right? For thirty-plus years or so. You have Mark Zuckerberg in there as well, right? Those two in the game.

• 59:59Speaker 00

  They've done a lot of mergers and acquisitions, and they've figured out how to maintain their culture while doing it. And, and they've, they've certainly made their mistakes along the way. Not everything has been perfect, right? And so I would say you, you kinda have to.

• 1:00:15Speaker 00

  Just like anything, it's a tool. Mergers and acquisitions is, in my point, from my perspective is a, it's a tool in your tool belt, right? There's no perfect solution to any of this stuff. There's gonna be trade-offs to everything. And Neil's done his, his, his, uh, his share of, of acquisitions and there's certainly trade-offs, right? Again, yes, your culture does get disrupted, but if you do it the right way, I think about Brad Jacobs, for example, who's done, I think he's had, he's, he's, he's built seven different multi-billion dollar companies. And his entire playbook is built off of M and A, right? And so I don't think it's perfect, but I don't, I also don't think it's a good or a bad thing, right? I think it just is, and then you can utilize that tool if you want to use it. It's just like, you know, if, uh, if you're cooking in the kitchen, right?

• 1:00:59Speaker 00

  You can choose if you want to use a blender or not. That's just how I see it.

• 1:01:03Speaker 01

  Yeah, and I, I just did a quick Google search and using their AI overview to compare Flexjet, which I believe is his company, that's what it's called, right?

• 1:01:11Speaker 00

  Correct, yeah.

• 1:01:12Speaker 01

  Compared to NetJets. NetJets does around three times the amount of flight hours per year, so roughly they're around three times the size. NetJets is owned by Berkshire Hathaway. And NetJets grew to be the number one player in the space and they have amazing reputation. They grew through NetJets, but also acquiring Marquee Jets, Executive Jet Management, and Seren, Seren Tani Aviation Group. They bought those in 2018. And that helped them grow quite a bit, like, there's nothing wrong with M and A. But I'm, I'm not trying to talk trash on the Flexjet guy, and he makes a lot of valid points.

• 1:01:53Speaker 01

  And if you look at him and he, if he's not big in M and A, um, you know, has, actually, let's type this in. Has Flexjets done any acquisitions? I'm actually curious on this. But either way, he's grown.

• 1:02:10Speaker 00

  I mean, his initial business was an acquisition. He bought the company for $27,000.

• 1:02:15Speaker 01

  Oh, look at this. Yes, Flexjet has pursued an aggressive acquisition strategy, particularly under the umbrella of its parent company, Directional Aviation, led by Ken Ritchie. Is that, Ken Ritchie was on there?

• 1:02:26Speaker 00

  No idea.

• 1:02:28Speaker 01

  Okay, they bought Constant Aviation, they bought Flying Colors Corp, um, brokerage, they bought the jet business. So, uh, they've bought Associated Aircraft Group, they bought Halo Aviation. It looks like here it's saying Sentinel Jet and Flight Operations, uh, Flarejet and Private Flight. Yeah, they've done tons of acquisitions.

• 1:02:53Speaker 00

  Yep. Well, there you have it. I think that, that's our reaction to that. You want to say something else? Your mouth is open.

• 1:02:59Speaker 01

  Yeah, and they, and then LVMH acquired a stake in them for $800 million.

• 1:03:05Speaker 00

  Yeah. Look, I, I don't think there's any perfect solution to this, guys. There's just, there's trade-offs to everything.

• 1:03:11Speaker 01

  I, I don't know too many, I, I can't actually think of any trillion dollar company or massive organization that hasn't done M and A, even at a small scale, like, people end up buying others. Sometimes you just buy companies because of the talent. Like, dude, I met up with a company when I was here in Italy. They specialize in TikTok shop marketing.

• 1:03:33Speaker 01

  I won't say the name of the company, but it was too small, right? And I was like, ah, do I, do I try to buy this? Maybe as an aqua hire?

• 1:03:41Speaker 01

  And, but the revenue was only 400 million, uh, uh, sorry, not 400 mil, $400,000 a year. $400,000 is a good amount of money. But the issue is, and Eric knows this, for me, Eric, would you buy something that's doing $400,000?

• 1:03:58Speaker 00

  Nope.

• 1:03:59Speaker 01

  Why?

• 1:04:00Speaker 00

  Cause it comes with big hairy problems.

• 1:04:03Speaker 01

  Uh huh, and eventually Eric would have said it would, it's just a distraction, just focus on the, the, the core business. Now, if they're doing like 10 million, 15, 20 million, sure, all right, good tuck in, it can help us grow. But you, you gotta make sure what you're doing can move the needle. If I bought something that was $400,000 in revenue, even if I ran it internally, we have legal in-house, we have accounting. If we just did it as much as possible in-house, I probably would have spent $300,000 just in fees internally buying a company. So I have to make sure that it's worth it to spend that much money internally on just buying something.

• 1:04:44Speaker 00

  Yep. By the way, I asked, um, so the, I, I got the answer back a little earlier. So, uh, it looks like when we talk to customers on discovery calls, it's about 50/50, which I would prefer to be 60/40. But when it comes to a proposal call, it's more 60, 60/40, um, where we talk a little more, obviously, because we're presenting. So food for thought, I would prefer it with 60/40 that we're listening more on discovery calls, and Neil's the same way, I'm sure.

• 1:05:11Speaker 01

  Eric, we, yeah, we track it. We're, we're well above 50% on listening. But he's right, when you're doing the pitch or proposal and you're going over it, you're gonna end up spending half the time, if not more time, talking than the other party, because you're the one presenting. People will talk because they have questions. If you're talking the whole time and no one has questions and you're presenting a proposal, that's a really bad sign as well.

• 1:05:36Speaker 00

  Yep. This is great, though, like, because I just get the metrics and then I just, I just ask, and this is in a public channel, right? And I just ask the salespeople, hey, what do you think about this? What do you think it should be? And then everyone learns in public, right? So there's, there's, there's nothing hidden here.

• 1:05:50Speaker 01

  Yeah, so we don't need to know names or anything, but what do people respond to? Because you just asked them. I know you. You're just like, hey, guys, this is high, do you think it should be 60/40? I'm guessing you put something out there, and you probably asked them, what do they think about it being 50/50 and what ratios are and what could be improved?

• 1:06:07Speaker 00

  I, I, the question I just posed was, hey, what do you think the number should be, right? And I'll just let him tease it out, and then he can work with the AI in, in public. But the reason why I like this in public is because one question that he spawns might spawn other people to ask questions, and then they follow up, and everyone gets more ideas, and the more ideas you get, most ideas are gonna suck, but some ideas are gonna be good and people will take action on those, so.

• 1:06:26Speaker 01

  Yeah, and, and to be clear, very crystal clear, this is learning in public. Eric is not belittling in public or criticizing in public. He's just asking, as a company, what do you think the number should be? And then they're having a discussion and they're all trying to figure out together, they're not pinpointing, hey, you are at 60% talking, uh, instead of being 40%. This person's at 50, he's not doing any of that. He's just saying, hey, guys, what can we learn from this? What do you guys think it should be? Um, and how do we go for it?

• 1:06:56Speaker 00

  Yeah, but I'm looking at the channel, I'm like, I'm looking at the questions they're asking. I'm actually proud of the questions that they're asking. Hey, you know, because yesterday there was like a four-hour meeting hosted where someone was talking through, um, like, uh, just processes internally, right? And there's 11 people talking there. Hey, give me the, give me the, the, the flow chart of how that meeting went, give me the state chart related to this. I want to learn, and other people started chiming in with questions in there, so that's great. And by the way, Neil, you want an example of an unreasonable thing I've started to ask AI to do? So, um, instead of, Neil, let me just ask you, when you, when, you've never done a performance review, because you've never worked for anybody, you've probably never, ever hosted a performance review either, right? But when your company does performance reviews, how often do they do them? Um, just give me a number.

• 1:07:38Speaker 01

  I don't know, but I know it's at least once a year, if not more than that, but at least once a year.

• 1:07:42Speaker 00

  Okay, so that was the, um, that's like what we're used to, right, as humans? And so I'm like, huh, what's something unreasonable we can do? Well, now that we have this, I'm like, we can just ask, okay, so Neil, let's say, let's say, uh, let's say I work for you, okay? And, uh, you know, you're just, there's like daily stand-up, hey, Eric, what's the, the highest leverage thing you got done today? And what's the highest leverage thing you got done yesterday? And what are you, uh, what are you blocked on, right? Just very simple questions. But over the course of 365 days, you should be able to see if I'm bullshitting you or not through these, correct? Yes or no?

• 1:08:14Speaker 01

  Yes, I agree with that.

• 1:08:16Speaker 00

  Very quickly, right? But you wouldn't have the time to identify and look through every day. Well, is that high leverage? Is that not? Is he blocked on this? Because you're too busy with, you have STDs, shit to do, it's right? So, so, so anyway, I say that in jest, guys. But my point is, Neil wouldn't have time to look through each and every one of these. I wouldn't have time either. But when you have something like a Jev that can classify something as high leverage or incremental leverage, or perhaps unacceptable, then you can figure out who needs to be coached. But this is performance management, you're, you're getting a performance review every single day, right? And then that can, that can fold into your quarterly review or your, your one-year review. But that, you're, guess what, Neil, let me ask you this. Your A players, do they appreciate feedback or do they not like feedback?

• 1:09:00Speaker 01

  They appreciate feedback and they want it when something is off or they should know how to improve. They don't want it on a quarterly basis or annual basis. They want it when they can improve. They don't want to wait for it.

• 1:09:11Speaker 00

  I want it now, just like, I want it now so I can get better now. I don't want to wait quarter for that, right? So these are unreasonable things, you can ask these things to do, right? And so, uh, that's all I got to say about that. So Neil, let me, let me show you something real quick. I'm, I'm curious to get your thoughts. Um, there's this, uh, Gokul Rajaram, and I'm gonna let you pronounce this. You're, you're, this is, uh, this is in your wheelhouse, not mine, Neil.

• 1:09:32Speaker 01

  I still do terrible pronouncing their name. I can't say it.

• 1:09:36Speaker 00

  Right here?

• 1:09:37Speaker 01

  Gokul Rajaram.

• 1:09:39Speaker 00

  See, Rajaram, you, you got it, Rajaram. So, so, um, so these people are both investors, so, you know, Goko, look at this. I have so many buddies on, on, on, on X, but, so he's an investor and Signal here, who's a popular investor as well, I think. So I think it's a she, or maybe it's a he, but, "I am short companies whose margins depend on the cost of performing verifiable work. I am long companies whose margins depend on owning very, very consequential outcomes. This applies to both public and private markets." Let me explain that real quick, then we can react to this. So, short means you're, you're, you don't believe in the long-term viability of these companies, right? Where that, that company's margins depend on the cost of performing verifiable work, such as, uh, writing code, okay?

• 1:10:24Speaker 00

  Writing code is very verifiable work. Math is very verifiable work, right? Are you following so far, Neil?

• 1:10:29Speaker 01

  Yeah.

• 1:10:30Speaker 00

  Okay, great. I just want to make sure this, this is a, I'm explaining myself. Okay. So, "I am long companies, so long-term investor in companies whose margins depend on owning very, very consequential outcomes." So if you deliver a customer, if you deliver a lead, for example, right? And so what Goko says here, I don't know if I'm pronouncing that correctly, um, but he says, "However, verifiable versus consequential might not be the true axis. Some consequential work is verifiable, such as tax filing," which is, it's definitely very verifiable, right? But it's not as, uh, you know, it's, well, it can be high value depending on who you're working with, okay? So a sharper delineation might be who bears the risk when it is wrong. So companies that absorb risk keep margin, companies that hand risk back to the buyer get commoditized.

• 1:11:13Speaker 00

  So Neil, when I think about your business, when I think about our business as well, we are absorbing, um, we are absorbing some risk here when we're, because we're running marketing, a lot of stuff's not gonna work, right? But when there's not as much risk, you get commoditized, such as coding, or in some cases, math. I saw Lex Friedman do like a interview with these math scientists, and they feel like maybe they're losing significance, um, in their careers, because a lot of their work is verifiable.

• 1:11:39Speaker 01

  Yeah, um, your connection is unstable. Move closer to your router and switch. Hopefully you can still see me.

• 1:11:45Speaker 00

  You're fine, you're fine.

• 1:11:47Speaker 01

  I'm not going to reload that. Um, but yeah, no, I, I, I agree with you in which, or I agree with Gokul and what he's saying. Yeah, like when I look at tax stuff, um, it is essential and it is verifiable, but it is essential. And depending on the person you use, it could cost you a lot more money or save you a lot more money.

• 1:12:10Speaker 00

  Yeah, but what do you think about just, they both have, they both share the same investment thesis, right? So they're short on the verifiable, um, work companies, but they're long on the companies that are doing consequential work that where there's like risk, right? And I'll, I'll put it on a, on a, on a.

• 1:12:25Speaker 01

  Harder work. Yes. It's, it's the people that are trying to solve real problems and do challenging stuff.

• 1:12:30Speaker 00

  Yeah. And Neil, I would say probably the furthest on the risk curve for our type of business is if your peer pay for performance. Where you take on all the risk before the customer pays. Would you agree with that?

• 1:12:42Speaker 01

  I would agree with that. That is the most riskiest. And I know people who have those kind of businesses. Um, like one of the guys I know, his name is Gajan. He has a CRO agency called Spiralize. They'll do performance based stuff. It's in his contract. He's doing free work. Now imagine when he starts performing, and I know this because I've talked to him many times, and starts increasing the conversion rates drastically, more than people expected, and they got to pay on performance. Some of those people get really pissed and don't want to pay on performance anymore. And they're like, but you signed the contract and this is what you agreed to. They're like, oh, I didn't think you were going to double up my revenue, but I did, and I did it in a very profitable way. And then sometimes people just don't want to pay and then you fight them and you have to deal with it.

• 1:13:24Speaker 00

  Yeah. Customer size matters in that case. And here's the thing, right? If, if you work with enterprises, they won't want to sign that deal, but they're the most reliable payers, right? So.

• 1:13:34Speaker 01

  Dude, I get this question all the time when I deal with marketers, okay? I get this, uh, there's this guy, I'm not going to repeat his last name. Uh, he sends me a lot of messages. I believe his name is, uh, Richard or something like that. Okay? It is actually Richard and he'll send me pictures of his daughter and stuff and how my sales process and my forms are all off and how we can improve and how we can make us a lot more money. And he's like, dude, you should do performance based stuff. I can make you a lot more money. He's trying to partner and work together. And, uh, what hasn't clicked for Richard yet, and I've told him this, I'm like, we're mainly enterprise. So like when they're trying to use the sales taxes, like dude, I can take your business.

• 1:14:16Speaker 01

  I can add in extra 20, 30 million in revenue. I can do X, Y, and Z and upsell here and that. And I'm like, majority of our clients are enterprise. They're not going to agree with these strategies like, we grew your traffic 20%, so you owe us a kicker, right? The enterprise businesses want flat fees that are very predictable because they have quarterly earnings and they're publicly traded. They need to know how much something costs and they're paying you to get a certain result. If you get more than that, that's their advantage. If you get less than that, you're probably going to be replaced over time because you're not helping them meet, uh, meet numbers. And they told you in advance what numbers they're looking for.

• 1:14:53Speaker 00

  Also, they have budgets, right? They don't want to go above a certain percentage in many cases.

• 1:14:58Speaker 01

  Yes. And in a few cases, dude, I've worked with publicly traded companies where they have kickers. If you hit certain incentives and the kickers are capped, and I'm telling you, dude, nine out of 10 times when we hit the kickers, most of them don't want to pay. And they do pay, but they renegotiate and they're like, hey, let's just change it to this. And you don't have a choice because if someone's a big customer and they know they're paying you a lot of money, you're going to accept it because if you don't, they're not going to renew the contract and you're going to lose them as a customer.

• 1:15:26Speaker 00

  Yeah. And by the way, this, this is what I'll say. I think that's why the, I think the, the happy medium for agencies is, you collect a managed service fee still, and then maybe you negotiate some kickers, maybe some bonuses here and there. And that's icing on the cake, but you want to make sure you cover your nut first and you make your margin. And then, you know, maybe only a very small percentage, you can decide to do performance, but, um, I, like, I, I, I think it's just two different beasts. So.

• 1:15:52Speaker 01

  Yeah. And you need the performance capped so that way the customer isn't upset.

• 1:15:56Speaker 00

  Yep. Great. All right. One more thing I want to show you here, Neil. So check this out. So do you see my screen here?

• 1:16:05Speaker 00

  See, I don't want to break your computer because you have a, see, this is why you need to get the new computer.

• 1:16:09Speaker 01

  After Eric, he can test out the microphone and then let me know if it was worth spending $2,800 for a laptop. So I don't have to carry around a microphone like this.

• 1:16:17Speaker 00

  Well, not if you lease it for $14,000 and then end up paying like a couple hundred bucks a month and then just keep upgrading.

• 1:16:23Speaker 01

  Wait, 14,000? Whoa, the laptop starts at 2,800. Where'd you get 14,000 from? Oh, you added all the features.

• 1:16:30Speaker 00

  Try putting all the upgrades in.

• 1:16:32Speaker 01

  Yeah, but I wouldn't put any of the upgrades in other than the nano screen. That's the only one I would add.

• 1:16:37Speaker 00

  You gotta get all the upgrades. In my, in my case now, I'm like, who knows what capabilities we're going to have in the next six to 12 months? You might as well just get all the upgrades. So that's my logic.

• 1:16:46Speaker 01

  And then I'll, or I'll, I'll just buy the cheapest one. If I need to upgrade six to 12 months from now, I'll then go buy the version I need and then sell the one that I didn't buy. I don't want to spend.

• 1:16:54Speaker 00

  But what if it's double the price, just like my Nvidia DGX Sparks doubled in the last few months?

• 1:17:00Speaker 01

  I'll take that bet because I don't think it's going to be double the price. 14 grand is a lot for a laptop. I just don't want to spend that much on a laptop.

• 1:17:06Speaker 00

  It is. It is. You're completely right. Okay. So this one over here. So, um, uh, we spread jam. Okay. Here it says, Granola, a $1.5 billion company increased monthly new users from AI search by 4,600% in just seven months. Here's the genius A, AEO workflow behind it. They started with buyer decisions, not keywords. So Granola mapped the questions people ask before choosing an AI meeting tool. Then they turned the same decisions into both Google keywords and AI prompts so they can measure where the brand actually showed up. And, uh, every prompt got diagnosed. Okay. If Granola's wasn't showing up, they asked why. Okay. So my bet here, Neil, I don't want to read all this stuff, but it seems like they probably pressed hard on a programmatic strategy.

• 1:17:43Speaker 01

  Uh huh. Just creating articles for every single prompt.

• 1:17:46Speaker 00

  Yeah. And they probably got, they're probably, they might get torched at some point. So let me just ask, uh, Grok to summarize this piece over here. And, uh, okay, here we go. So their work, okay.

• 1:18:02Speaker 00

  So their workflow prioritized diagnosing why they lose specific prompts, distinguishing missing pages from week one, studying third party sources, AI trust, and using an own claim earn contest framework for target, okay, they targeted actions, including focus Reddit engagement. The attached screenshot demonstrates successful Granola ranked first for best AI meeting note taker for founders, highlighting bot free recording and integrations as key advantages over Fathom and Firefly. Okay. So.

• 1:18:31Speaker 00

  They are number one.

• 1:18:33Speaker 01

  Yeah. Uh, uh, I'm assuming they're just creating content at scale on mainly their own website. There's always so much you can get done on Reddit with that community if you're being self promotional. So I'm assuming it's a lot of content on their own website, but, um, that's not as, it's, it, it works, but it's not as effective in the long run as getting other people to host that content on their website if you can convince them, uh, without paying them. Uh, which is a challenge, but that's ideally what you need to do. Again, without paying them. Um, but on a side note, before we leave, did you see how Google's stock tank like 12%? They've never had this much of a tank after releasing earnings.

• 1:19:09Speaker 00

  No, what happened?

• 1:19:09Speaker 01

  No. People are afraid that AI is going to kill Google search because their ad revenue miss on Google Ads grew by 12% and it was a miss by a few percentage points. And like, wow, people are making remarks like they're showing signs of crack that AI is, uh, taking over Google search. I'm like, in a bad economy, they still grew 12%. And their cloud revenue grew by, I think, 103%. And I'm like, is it me or are all these analysts just smoking crack and they don't realize how many people still use Google?

• 1:19:43Speaker 00

  I, I hate to put it this way, Neil. Um, let, let me be very crude here. It's not you saying it. This is definitely me saying it. If 0.2% of the world work like this, the 99.8% of people, when they talk about this stuff, have no idea what they're talking about. That's just how, that I'm oversimplifying it, but so when you're talking about the, like, by the way, I'm looking at this 12% drop. By the way, they're a $3.46 trillion company. Their PE ratio is only 14, right? I'm like, huh, should it be time to buy some now? Is, is, is what I'm wondering.

• 1:20:10Speaker 01

  Yeah. It, it is a, a cheap stock. Keep in mind their PE is inflated because of SpaceX.

• 1:20:16Speaker 00

  Oh yeah, that's right. That's right.

• 1:20:18Speaker 01

  Their PE is closer to the last time I checked, including stock based compensation, because a lot of people exclude that from P. But when you look at it fully burdened, again, not financial advice, you should double check. It's around 26, 27 times. Um, but I still think that is very cheap. Again, not financial advice for a company, uh, that can grow, you know, 24% uh, a year. If you're growing 20 plus percent a year at that scale, I think that's very affordable and you're talking about, uh, a company that's pretty much at roughly, you know, a half a trillion dollars in annual revenue growing at that clip. How ridiculous is that?

• 1:20:58Speaker 00

  Hey, not financial advice, but would you rather have the S and P 500 or Google if you had to choose one?

• 1:21:03Speaker 01

  Again, not financial advice, but I would choose Google over the S and P 500.

• 1:21:06Speaker 00

  Okay. So let me just read a couple of things and we can get out of here. Okay. So Google search and other hit, uh, 63.35 billion of 12%, okay? Now, Microsoft search and advertising reached 6.55 billion, up 10%, okay? And then you have, uh, Amazon's AI managed campaigns, uh, people using it are seeing 67% higher long-term role ads and 29% lower new to brand CAC. So it seems guys, there's nothing wrong with advertising. It just all kind of going up and it's always continued to go up. And as long as humans are hanging out online, as long as the agents are hanging out online, there's going to be more and more transactions. Um, so Neil, I didn't know about this. This is, thank you for this. I'm actually excited about this.

• 1:21:45Speaker 01

  Uh huh. You can buy stocks after hours too, depending on what broker you, account you're using.

• 1:21:49Speaker 00

  Yeah. Not financial advice, guys. Anyway, that is it for today. Please don't forget to rate, review, subscribe and we'll see you tomorrow.