8,000 People vs. 1 Chatbot – Who Does It Better?

In this episode #3007, Eric Siu and Neil Patel discuss how AI is reshaping jobs and transforming marketing strategies. They explore the power of brand and distribution as moats, the rise of LLMO, and the use of controversial marketing and synthetic customer development to drive growth. TIME-STAMPED SHOW NOTES (00:00) The Impact of AI on Employment (02:26) The Changing Landscape of Marketing (04:36) The Moat in Business: Brand vs. Distribution (06:13) The Rise of LLMO and Content Strategies (09:54) Controversial Marketing and Its Implications (11:53) Synthetic Customer Development and Future Trends To suggest a topic, go to https://www.marketingschool.io. For more content from Eric and Neil, check out Eric’s Leveling Up with Eric Siu YouTube channel and Neil’s Neil Patel YouTube channel. Connect with Us: Single Grain << Eric's ad agency NP Digital << Neil’s ad agency X @neilpatel, @ericosiu Instagram @neilpatel, @ericosiu Drop Us a Review If You Enjoyed the Episode!

• 0:00Speaker 00

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• 0:35Speaker 00

  I want to move over now and talk more around kind of how things are changing in marketing in general, because there's a couple of things we can touch on here. So marketers are using Cursor now, what people actually want for marketing services, and then also the fact that IBM just cut 8,000 people against one thing.

• 0:50Speaker 01

  AI.

• 0:50Speaker 00

  Yeah, so maybe we can start on that one first. So 8,000 people versus one chatbot. So who does it better? Obviously, the chatbot did it better because IBM cut 8,000 people, yeah. So I'm just looking at this one over here. And IBM laid off 8,000 HR employees. Not for budget, not for performance, they got replaced by a chatbot. That bot is called AskHR, and it runs on IBM's own AI engine, Watson X Orchestrate, okay? 94% of HR work automated. Pay, vacation, paperwork, even terminations. 3.5 billion in productivity gains. 40% drop in HR costs. IBM built a system that made these types of layouts possible, now they're selling it to everyone else. Package, no code, enterprise-ready. But you're gonna start to take a look at this afterwards.

• 1:33Speaker 01

  They don't have that many people in HR, but yeah.

• 1:35Speaker 00

  IBM calls it innovation. Let's call it what it is, y'all. One of the first at-scale white-collar replacement experiments, and it worked.

• 1:42Speaker 01

  Yeah.

• 1:43Speaker 00

  I think, I was just texting with a mutual friend this morning, and I'm like, so how many of these AI automation people do you have now? A couple of weeks ago, it was two. Now it's six. It's growing pretty quickly. I'm like, so what's the job? Automate everything they can, and then replace where we can. And build these flows where we can. And then they're like, we're on a mission right now to replace our internal gong. I'm like, that doesn't seem really difficult to build. It's gonna take a little time, but he's like, y'all, it's going really well right now.

• 2:08Speaker 01

  Wait, why do they want to replace gong? It's expensive. Yeah, but Freshworks, is it Freshworks as a company? They have a gong alternative that's really cheap.

• 2:17Speaker 00

  How much is it?

• 2:18Speaker 01

  It's like a fraction of the money. It's not like half the cost.

• 2:21Speaker 00

  Yeah, I think they want to see if they can build workflows to just replace it.

• 2:25Speaker 00

  Sometimes it makes sense to just pay for the cheaper one.

• 2:28Speaker 01

  Yeah.

• 2:29Speaker 00

  So I instead of trying to build it, but like, you know, they have their own philosophies and then there's no right or wrong answer for that. But I I think we're going to see a lot more of this and look, we saw it happen with customer service. Now this is HR. We we're kind of seeing it happen in in in sales a little bit. I think what's up next, maybe creative, maybe marketing.

• 2:47Speaker 01

  Yes, but looking at Gong, I just checked this out. This is a March five, twenty twenty five article. Gong has passed three hundred million dollars in annual revenue. I did not know that.

• 2:58Speaker 00

  They're a good size.

• 2:59Speaker 01

  They're still growing.

• 3:00Speaker 00

  They're still growing.

• 3:00Speaker 01

  Yep.

• 3:02Speaker 00

  All right. So this one. This one is interesting. What do you think the only moat? That's left in business is now.

• 3:12Speaker 01

  Uh, I think the only moat in business, and there's only one, in my opinion, and I could be wrong.

• 3:18Speaker 01

  Or let me rephrase. For most businesses, because there could be some moats. Like, for example, you saw the Pentagon invested in a rare minerals earth company for four hundred million or four hundred billion dollars or no four hundred million dollars or something like that. There's some moats like there's only so many natural resources and I own them like you can't.

• 3:36Speaker 00

  That's called a cornered resource.

• 3:38Speaker 01

  Yeah, but if I look at like moats for most businesses, the real moat that I see is a brand. I think there's not really much of a moat other than that. Because if you and I go try to create shoes that are better than Nike or Air Jordans, let's actually use Jordan as a brand. Jordan has a strong following. It's not about you and I creating a more comfortable shoe or a better looking shoe. We don't have that Jordan cachet, at least when it comes to athleisure wear footwear. Because we're not Michael Jordan. That to me is a true moat that is just too hard to uh get around, even with AI or technology and even time.

• 4:15Speaker 00

  So I I think we're saying similar things here. I believe that the only moat in business now is actually your distribution. So if you look at Google ten years ago, and you you know this a little bit, ten years ago, two pages scraped one visitor. Six months ago, six pages scraped one visitor. Today it's eighteen pages scraped one visitor. And then Anthropic, six months ago was six thousand pages scraped per one visitor. Today it's sixty thousand. Pages great for visitor, right? So the CloudFlare CEO said that if the business model of web has been searched fundamentally for the last thirty five years, you get valued by subscriptions, ad or fame. All three of these things are going away and they're going away fast. And so this guy, only CFO, not only fans, but like only CFO. So he's like, look, as a finance leader at a software company and a small scale influencer in the finance accounting space, I have been seeing the problem firsthand. Everyone is fighting for eyeballs. Competition is greater than ever.

• 5:00Speaker 00

  AI is commoditizing software. Traditional content strategies are breaking. I think we can agree with that. AI is radically changing the methods of getting attention. Yes, which we can talk about in a second, like what we're seeing people actually want. Customer acquisition costs are rising. So there are a lot of companies wasting absurd amounts of money, making money, uh, marketing money in twenty twenty five running the old playbooks. The joke used to be half of the marketing budget is wasted, but I don't know which half. Today, for many companies, it's like eighty percent of the marketing budget is being wasted. So yesterday, when I was at this AI potluck, one, one person manages a bunch of influencers and like here. I'm like, so how, how does it work? How do you decide how much to pay? It's like, oh yeah, we just throw fifty grand here. Meta will, will give us money, we'll throw a hundred here. I'm like, so how do you measure? Oh, we don't, right? But he's like, she's like, that, that's how the game is played now.

• 5:43Speaker 00

  And no wonder it's like, you know, Adobe or Snap will, will come to us and try to throw money at us. And then they, they like, they don't know how to measure it, right? But I do think to your point, brand is the moat, distribution is the moat. In, in this world that we're in now. And then I just think like you look at what people are looking for now. They want L L M O. They want, um, they want YouTube. They want Reddit. They want stuff that isn't the stuff that people were looking for, like at a much more aggressive pace a couple of years ago. It's shifting quickly.

• 6:11Speaker 01

  It's shifting really fast. I also think there's going to be a day of reckoning in the AI marketing space where companies are going to be like, whoa, whoa, whoa, we're spending all this money on this technology that's going to make us more efficient, but we didn't see our revenue go up or profitability go up. What the heck are you burning all this money on? It doesn't mean that the technology is bad. I think there's a big issue with how marketers are using the technology. And many of them are just spinning their wheels and doing a lot more, uh, work with AI. But this work is irrelevant, has nothing to do with their bottom line. They think it looks cool, but at the end of the day, your CFO, your CEO, none of them care unless you can move the needle.

• 6:49Speaker 00

  Yep, hundred percent. And you're seeing the same thing, right? People are looking for L L M O, YouTube, Reddit. Like what, what, what else are you seeing the increase in?

• 6:56Speaker 01

  We're seeing it in everything LLM related.

• 6:59Speaker 00

  Yeah.

• 7:00Speaker 01

  And we're just seeing crazy inefficiencies and people burning money and not having good KPIs in mind before they burn the money.

• 7:07Speaker 00

  Here's a question. Are you charging more for LLMO?

• 7:12Speaker 01

  No.

• 7:12Speaker 00

  Run the same, but you're not, you're not charging for rankings or you never charged for rankings.

• 7:17Speaker 01

  We never charged for rankings, but when you're looking at LLM optimization, we look at it as a lot of the fundamentals are similar to SEO, but there are some other different stuff as well. So we charge for what the work is. Uh, and it really varies company to company because some companies have like, they're in 20 different countries and all these different languages. And they have like 50 different divisions.

• 7:41Speaker 00

  Yeah.

• 7:42Speaker 01

  So it depends how many you're helping, how hard it is. And it's the same thing, just like SEO.

• 7:46Speaker 00

  Dude, I got, I got a good one for you here. So you know, uh, Jason Cohen from WP Engine?

• 7:50Speaker 01

  Yeah.

• 7:50Speaker 00

  So, okay, WP Engine, they used to do four.

• 7:52Speaker 01

  Smarter Bear or whatever it's called, right?

• 7:54Speaker 00

  So he tweeted this. Um, so his, his basically premise is like, no successful SaaS company has a strong social account. And I, I think it's actually more no successful B to B SaaS company has a strong social account. Do we have any counterpoints to that? Because if you think about it, who, who actually is, wait, repeat the line again? No successful B to B SaaS company has a strong social account, like Salesforce, HubSpot? Oh, HubSpot actually does. HubSpot with their YouTube. Is it strong? Ahrefs with it has a good YouTube. HubSpot is pretty good. Ahrefs is pretty good.

• 8:27Speaker 01

  Yeah, but even then it's not strong like the consumer ones.

• 8:30Speaker 00

  Yeah.

• 8:31Speaker 01

  You agree with that, right?

• 8:32Speaker 00

  With that, yeah.

• 8:33Speaker 01

  Like if I look at like HubSpot's Instagram, that's a great example of it. They have 621,000 followers.

• 8:41Speaker 00

  What's like the average view?

• 8:43Speaker 01

  I'm looking at the reels. Nah, dude, like 10,000 real views, 16,000, 11,000, 20,000, 17, 14, 26. It's not bad, but, and, and this is not, I'm not trying to hate on HubSpot. We have the same problem for our B to B company or even our SaaS.

• 8:59Speaker 00

  There's just not a lot of viewers in our space.

• 9:01Speaker 01

  No.

• 9:01Speaker 00

  Yeah. So I think here's the thing, it's hard to say strong social account because strong compared to what?

• 9:07Speaker 01

  Yes.

• 9:08Speaker 00

  If you are trying to hit your TAM, I think they're hitting a good amount. Cause they're just like, if you say strong social account compared to consumer, it's not fair. Cause there's way more eyeballs for consumer. Let me, let me give you an example here. So you know that company Cluly, right? We're talking about them a little bit.

• 9:22Speaker 01

  Uh, yeah, yeah. The one place that the company that helps you cheat on everything. Yeah.

• 9:26Speaker 00

  So like they're, they do controversial marketing, right? But they, they also do, have you seen this one? So there's this, this gal over here, right? She's talking and then, um, basically this view, like one million views over here. 2.1 million views over here, right? Let me show you the video itself. Um, so this video, let me, let me go back to it. Is basically, here, check this out.

• 9:52Speaker 01

  What's Prime Neymar or Prime Hazard? Is this soccer players?

• 9:56Speaker 00

  Yeah.

• 9:58Speaker 00

  She has no idea who these players are.

• 10:01Speaker 00

  Yeah, yeah. So, but then everyone in the comments on like YouTube or Tik Tok is like, what is she using? Cluly, Cluly, Cluly. But four million views on that video. And so all of these content creators that they're hiring, like it's working really well for them because they know how to drive, um.

• 10:15Speaker 01

  I think Cluly is blowing up from this because everyone's just looking at like, oh, it helps you cheat on everything out.

• 10:22Speaker 00

  Yeah. Controversial marketing, I think it, it works to an extent. You just can't, um, I don't think you can do it forever. But this viral four million view formula, that's what they do to, to get massive signups. And I think they're growing like a weed right now because you can cheat on everything in so many different things.

• 10:36Speaker 01

  Yes, but why things can end up happening is they're going to be like Jasper. Remember when Jasper came out?

• 10:40Speaker 00

  Oh, yeah, yeah.

• 10:40Speaker 01

  And they were just like, create content easily, click some buttons. What happened with Jasper in the long run? Massive churn.

• 10:46Speaker 00

  Well, they didn't really have like a moat. And I do think that the, the moat that Cluly has is actually they're pretty good with distribution, which is why they're hiring these people. I don't think they have a product moat. I don't think they're stronger right now, right now, from a product standpoint versus like other companies, but they can always hire for that, right? I think the distribution piece they have pretty good right now because it is a consumer SaaS product. 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,

• 11:29Speaker 00

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• 11:41Speaker 01

  Yes, but with um with uh Cluely, you're gonna end up getting a lot of users and they're gonna end up joining, but you start cheating on certain things, okay. Why do you actually need to cheat on a lot of this stuff like Neymar versus Hazard, like just reality wise?

• 11:58Speaker 00

  Well, I'll give you some, so I do, I would like to cheat on if I'm talking to, let's see, I'm interviewing you for a job, right? And then I have a heads up display over here that tells me all these things about you. Oh, you went to Michigan. Oh, you went over here. Here's an interesting fact, or like maybe some other things I found about your, your work, like that heads up display would be very interesting to me.

• 12:16Speaker 01

  Yeah.

• 12:16Speaker 00

  Be useful to me.

• 12:17Speaker 01

  It would be useful, but I don't think it's useful enough to spend money on every single month. Like, I don't think it's that useful.

• 12:24Speaker 00

  I do, I think the one thing that's worth copying from Cluely though, is if you watch his interviews, like this controversial marketing. Um, so this guy Sully tweeted us, he's Cluely, he's cheat on everything. Soha, that guy Soham, um, the, the Indian dude that had like a bunch of different jobs at Y C. Lie and deceive, right? And now we have founders fabricating lies and chasing attention by any means necessary. This is what startups have become, just whoever can become the most controversial. Now, this is not necessarily new. You, you look at the news cycle, even if you look at ESPN or CNN or whatever, everyone looks for controversy. And um, I think it can work, but again, I think you can flame out your audience um, over the long term. So.

• 13:02Speaker 01

  Yeah. Time will tell. And you know, Clouly has, there's a product, what's a product name that competes with Clouly and they just release it for free?

• 13:10Speaker 00

  Oh, they, they posted it. Something like, oh, we just took their core, their code and we open sourced it or something like that.

• 13:15Speaker 01

  It was something like that. They just made it all free.

• 13:17Speaker 00

  Yeah. You know, okay, let, let me give you a cool thing. I, I, um, this was at the, this AI founders dinner that I, I hosted the, the other night. So have you heard of synthetic customer development?

• 13:28Speaker 01

  No.

• 13:29Speaker 00

  So to build like billion dollar software companies, you have to be doing a lot of customer development. You have to be talking to customers. Like the CEO of Intuit, again, you know, the CEO of AOL, they're like, talk, it's about the customer stupid. And synthetic customer development, so instead of having me, I have to book a call with you, Neil, or book a call with Noah. What you can do is you can take all of your call recordings, like your gone transcript, for example. So I had a friend, he basically took seventy thousand of his transcripts and he made a custom GPT from it, right? And from then, all these people are just talking to that custom GPT. Especially like the last ninety days or two, you're just looking at sales calls. What are people looking for? What are customers struggling with?

• 14:04Speaker 01

  Okay.

• 14:04Speaker 00

  And so now you have synthetic data, um, that's being created and you can train off of that. Instead of always having to wait to have these customer development calls, because those calls are important. But this is a good example of people using synthetic data to drive business outcomes, and I think it's really smart.

• 14:19Speaker 01

  I think it's smart too. I think we're going to see a lot of people doing things to help them grow faster, generate more revenue, become more efficient. What I'm really waiting for is, there was a rumor that Meta may end up buying, uh, what's that eyeglass company, Ray-Ban? Ray-Ban?

• 14:36Speaker 00

  Meta?

• 14:37Speaker 01

  Oh, yeah, yeah, yeah. Yeah, Ray-Ban, right? They have the partnership with them?

• 14:39Speaker 00

  Yeah, because they have all those glasses.

• 14:40Speaker 01

  And i- if you look at most of eyeglass solutions, like, did you ever try the Vision Pro?

• 14:45Speaker 00

  No, you did.

• 14:46Speaker 01

  I did, but did you ever even go to the Apple Store and try putting it on or anything?

• 14:48Speaker 00

  Never.

• 14:49Speaker 01

  It's really cool and amazing. It gives you a headache and it's just too heavy. It's not practical.

• 14:54Speaker 00

  Uh huh.

• 14:55Speaker 01

  Meta's version, I'm not saying it's as good. I doubt it is as good because it's too small. So how much can you fit in it? The concept is really good. And if everyone starts wearing a version of that or contact lens, how much new inventory do we now have for advertising?

• 15:11Speaker 00

  A lot.

• 15:12Speaker 01

  Yeah, yeah.

• 15:13Speaker 00

  And people buy multiple ones too.

• 15:15Speaker 01

  Yeah.

• 15:15Speaker 00

  Yeah, not that that matters. You can only have like one human using it at the same time. Yeah.

• 15:20Speaker 01

  Even in like the iPhone, we have a phone. Apple doesn't really showcase much ads within our phones.

• 15:25Speaker 00

  No, but Meta will.

• 15:27Speaker 01

  Yeah, and I if Apple, this is just my take on it. I bet you more people would have iPhones if Apple made it for free and then they made the money by showing ads.

• 15:36Speaker 00

  But they don't, that's, you know, it's just business models and philosophies. Meta is an advertising company, so they'll drive more.

• 15:41Speaker 01

  Yeah.

• 15:41Speaker 00

  You know, Apple's about this privacy and simplicity thing in design.

• 15:45Speaker 01

  Yeah, that's true.

• 15:45Speaker 00

  So we're gonna end the episode here. See you guys later. Please don't forget to rate, view, subscribe.