The 14% Conversion Boost That Most Companies Miss

In episode #2917, Eric Siu and Neil Patel discuss the impact of Buy Now Pay Later solutions in B2B markets, the importance of appearance in business settings, the effectiveness of Super Bowl ads, and key lessons learned throughout their entrepreneurial journeys. Don’t forget to help us grow by subscribing and liking on YouTube! Check out more of Eric’s content (Leveling UP YT) and Neil’s videos (Neil Patel YT) TIME-STAMPED SHOW NOTES: (00:00) The Impact of Buy Now Pay Later in B2B (02:59) The Role of Appearance in Business (06:02) Super Bowl Ads: Worth the Investment? (09:13) Lessons Learned in Entrepreneurship (12:06) The Future of Venture Capital (21:34) That’s it for today! Don’t forget to rate, review, and subscribe! Go to https://www.marketingschool.io to learn more! Leave Some Feedback: What should we talk about next? Did you enjoy this episode? If so, please leave a short review. Connect with Us: Single Grain << Eric’s ad agency NP Digital << Neil’s ad agency X @neilpatel X @ericosiu

• 0:00Speaker 00

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• 0:34Speaker 01

  Dude, I was reading an article by Stripe that most people miss. Did you know when you integrate Klarna or a buy now, pay later solution, the average conversion lift, according to Stripe, is 14%?

• 0:45Speaker 00

  Are people not adding that? I thought that's default now.

• 0:48Speaker 01

  I thought so too, but most people don't add it. Literally, the majority of the people who sell products online do not have buy now, pay later.

• 0:54Speaker 00

  That's horrible.

• 0:56Speaker 01

  14%.

• 0:57Speaker 00

  Yeah. That's horrible.

• 0:58Speaker 01

  I haven't done a one-to-one comparison.

• 1:00Speaker 00

  Yeah.

• 1:01Speaker 01

  We're starting to, we're now, we're now starting to test it in B2B. Because everyone does buy now, pay later for B2C. It's actually very rare to see it in B2B.

• 1:09Speaker 00

  Who does it for B2B?

• 1:10Speaker 01

  We're starting to test it out.

• 1:11Speaker 00

  Oh, you guys are just adding it yourself?

• 1:13Speaker 01

  Uh huh.

• 1:13Speaker 00

  Wow. So who's funding it?

• 1:15Speaker 01

  What do you mean, who's funding it?

• 1:17Speaker 00

  I mean, okay, so buy now, pay later, you have like Affirm or you have Klarna, right? Like, what's the, so how would you do it for it?

• 1:23Speaker 01

  You still do it through Klarna?

• 1:24Speaker 00

  Oh, okay. Wow.

• 1:25Speaker 01

  Okay.

• 1:25Speaker 00

  All right.

• 1:26Speaker 01

  And we haven't seen any results yet that are crazy, but we're testing it out. I actually think it can lift conversions.

• 1:34Speaker 00

  I think it'll do really well, because a lot of people have cash flow issues.

• 1:37Speaker 01

  Yeah.

• 1:38Speaker 00

  Yeah. Wow.

• 1:40Speaker 01

  Because in B2B, no one talks about it.

• 1:41Speaker 00

  Yeah.

• 1:42Speaker 01

  And I'm not talking about like a million dollar contract. I'm talking about like, oh, you have a software solution, like what you're doing.

• 1:48Speaker 00

  Yeah.

• 1:48Speaker 01

  Let's say if there's an annual fee and people want to be on the annual plan.

• 1:51Speaker 00

  Yeah.

• 1:51Speaker 01

  Well, yeah, they can just sign up and go through Klarna or Affirm or one of those. Why not? Instead of paying monthly, let's say it's cheaper.

• 1:58Speaker 00

  Yeah.

• 1:59Speaker 01

  And they want a little bit of savings and it's cheaper to pay the interest rate than it is to pay the monthly.

• 2:03Speaker 00

  I like it. This is a good example of where they say B2B marketing is usually four or five years behind B2C marketing. This is a perfect example.

• 2:10Speaker 01

  Yeah.

• 2:10Speaker 00

  Yeah.

• 2:11Speaker 01

  So, but I don't think it's going to cause a 14% conversion boost for B2B.

• 2:15Speaker 00

  Even 5, 10% is great.

• 2:16Speaker 01

  I'll take it.

• 2:17Speaker 00

  Yeah.

• 2:18Speaker 01

  All right. So, does dressing really nice help you in business? And the only reason I was thinking about this is... I was giving a speech the other day at someone's office locally. And it was just more so like their, their office members were asking random questions. So they're asking like, hey, do you think we should like buy a nice car? Do you think a car would help?

• 2:39Speaker 00

  Like a sales organization?

• 2:40Speaker 01

  A sales organization, yeah. And they're in real estate. They're like, do you think, um, dressing and all this? And I'm like, dude, I came to speak at your office. I'm wearing, at that time I was wearing Viori, Viori, I think it's called, uh, uh, leggings? Or joggers or whatever it's called? Uh, I'm actually still wearing them. I have like five or six of them.

• 2:59Speaker 00

  Yeah, but what kind of jacket are you wearing?

• 3:02Speaker 01

  Tom Ford.

• 3:04Speaker 01

  It's a sweater though. And I just wear it in the house.

• 3:06Speaker 00

  That, but that's, that's the thing you, we should also say about men. What, what do men have? We have our shoes. We have our watches and we have the jacket. That's all we have. Everything else is BS.

• 3:15Speaker 01

  Yeah. My, my pants are usually just, dude, I don't wear my Laura Piana pants anymore. I just wear Viori joggers, literally 24/7.

• 3:23Speaker 00

  Are they more comfortable?

• 3:24Speaker 01

  The Viori?

• 3:25Speaker 00

  Uh huh.

• 3:25Speaker 01

  By far.

• 3:26Speaker 00

  Wow. And they're way cheaper too.

• 3:28Speaker 01

  By far. I don't know what my pants are in Laura Piana, but it's probably 115. So 120 at the cost. I don't know what's Viori pants go for.

• 3:37Speaker 00

  I don't have any sweats, actually.

• 3:38Speaker 01

  Dude, they're joggers.

• 3:39Speaker 00

  I just wear their shorts all day at home.

• 3:41Speaker 01

  I've never tried their shorts.

• 3:43Speaker 00

  We're different there. Yeah. Yeah, you're a sweats guy. Anyway, but you know what? Let me preface this too, because Neil actually did a blog post on this 10, 15 years ago, on how he spent X amount of dollars and how it helped or didn't help with his revenue.

• 3:56Speaker 01

  Yeah. And I think I'm at a point in life, and you could be too. I don't know if you and I really focus on like dressing nice. I do think pre-COVID, when people were, everything was in person and you're doing meetings, I think it helped more. I think when we were younger, it helped a lot more because people took us more seriously. As you age and in a post-COVID world, I don't think it matters as much. But when I go to places like New York, I'm really underdressed. Places like Los Angeles, it doesn't matter. Places like when you go to Europe, I think they still expect you to somewhat dress up. I think it really matters on the place you're doing business and where you're going, doing your in-person meetings. But like places like Los Angeles and Miami, it does not matter one bit.

• 4:41Speaker 00

  I think when we both spoke at that European conference, it mattered because you were wearing a nice jacket. I was wearing a decent jacket. I think when we spoke at HubSpot, I don't think people cared as much. I just, bless you. I think things, I can't say that the way I've dressed has ever helped me in business.

• 5:02Speaker 01

  I think when I was younger, it helped me. People took me more serious.

• 5:06Speaker 00

  Yeah.

• 5:07Speaker 01

  Not enough for me to continually do it.

• 5:10Speaker 00

  I think I might have tried and I sensed that pretty quickly, so then I stopped. I'm not saying we dress like bums, by the way. I don't think we dress like bums, but we care less.

• 5:19Speaker 01

  I do, half my outfit is always underdressed.

• 5:22Speaker 00

  It's a Henley and sweats.

• 5:24Speaker 01

  I still wear the same Henley. This is the only T-shirt I have. I have so many of them from. They're, what is that Buck Mason? They're really cheap. I don't know, like 10, 20, 30, 40 bucks or something like that.

• 5:34Speaker 00

  Yeah. Yeah, but that's, I mean, look, Neil, that old blog post, I mean, that was one where he spent six figures, hundreds of thousands of dollars dressing nice. And Neil used to, he had all these like nice shots and everything. He had like really expensive bags and all that. Now it's, you know.

• 5:48Speaker 01

  I still have those briefcases. Yeah. Never use any of them.

• 5:51Speaker 00

  I never thought they were practical. It's just like.

• 5:53Speaker 01

  No, they're very practical.

• 5:55Speaker 00

  They're so small. It's like.

• 5:57Speaker 01

  Yeah, but I travel light.

• 5:58Speaker 00

  My backpack makes me look like a kid, so.

• 6:01Speaker 01

  So now when I travel, I tend to take a backpack.

• 6:04Speaker 00

  Oh, you do?

• 6:06Speaker 01

  Yes, but the only reason I take a backpack versus a briefcase is you have to keep in mind when I was doing a lot of that stuff, I had hair. So now if I travel a long journey, like for like a week or two weeks, I just start taking portable shavers and all that kind of stuff. So it's like, it just becomes hard to fit in a briefcase. But if I am traveling for like a really short trip.

• 6:29Speaker 00

  Yeah.

• 6:31Speaker 01

  I actually started switching to a backpack because I don't take a suitcase anymore. I just put the clothes in a backpack.

• 6:36Speaker 00

  You don't trust someone in like another country to just give you a nice shave?

• 6:42Speaker 01

  Why would I want to spend money on a haircut when I can cut it myself for free?

• 6:46Speaker 00

  Cause you have to carry all that stuff.

• 6:47Speaker 01

  I'm not gonna spend money on-

• 6:48Speaker 00

  Who do you support Brad?

• 6:52Speaker 00

  Okay, he's a-

• 6:53Speaker 01

  I'd rather save the money-

• 6:54Speaker 00

  Dude, you're on the roll with Brad today.

• 6:56Speaker 01

  I've never paid for someone to cut my hair being bald. Why would I spend money when I can do it for free?

• 7:02Speaker 00

  I don't know. Beats me. But, um-

• 7:04Speaker 01

  I've never used a razor either. I always use like a machine because I'm afraid I'm gonna cut myself and die.

• 7:09Speaker 00

  Yeah, that's a whole nother thing. But anyway, guys, I think, look, I think it depends on industry too. I think the guys you're talking to, if you're in real estate, I do think to an extent-

• 7:16Speaker 01

  It matters.

• 7:17Speaker 00

  It does matter. Yeah. And that's why I think you look at Patrick about David's office, what I've heard from the guy that does a podcast with him, Adam Sotnick, his entire office, everyone wears suits. And I think it's because he was used to selling like insurance before, I think. And then there's like, um, he just used to have like a, like a sales org. So everyone has to wear a suit all day.

• 7:35Speaker 01

  But it depends. My realtor, I think half the time dresses up like a bum when he shows me homes.

• 7:40Speaker 00

  Maybe because he knows he can.

• 7:42Speaker 01

  That's true. He was on that TV show.

• 7:44Speaker 00

  There you go. See, he knows he can.

• 7:45Speaker 01

  Yeah.

• 7:46Speaker 00

  Oh, it was, uh, Josh?

• 7:48Speaker 01

  Uh, yeah.

• 7:49Speaker 00

  Okay, yeah, yeah, yeah.

• 7:50Speaker 01

  So, but he, he, he, some, I think, he always rolls up in a nice car. But when I say bum, I'm not saying, like, uh, we shouldn't use that word, but, uh, I just say like, he's dressed down. It's probably still like expensive athleisure wear.

• 8:04Speaker 00

  Yeah. I also think like, it depends on where you are in your life too. It's like, you look at Mark Zuckerberg, before he dressed more bum, right? And now he's like chain, he's got all this, his hair's different and all that, right?

• 8:13Speaker 01

  He's trying to dress hip.

• 8:14Speaker 00

  Yeah, he's trying to dress, like, so, so I think, like, you know, things ebb and flow. Um, but at least in our life right now, if we move on from this, I, I think, uh, you know, we're good.

• 8:22Speaker 01

  Yeah.

• 8:25Speaker 01

  Well, we've, we've done quite a bit on this episode. I'm curious on, you know, I think this is a, this one, this segment could take a little bit. Um, we should probably actually do two. One, because the Super Bowl's coming up.

• 8:38Speaker 00

  Uh huh.

• 8:39Speaker 01

  Um, what's your concept? What's your thoughts on ever producing like high quality ads, like Super Bowl quality? Do you like them? Do you not like them?

• 8:47Speaker 00

  I like them. I think they're funny. Here's the thing. I don't, I, I can't remember one Super Bowl ad, aside from the Oreo one, which I don't really remember. All I remember is, because the Super Bowl, they lost power at halftime and I remember the Oreo one. So, actually, no, I remember the Coinbase one. Coinbase, Coinbase.

• 9:02Speaker 01

  Coinbase, GoDaddy, you remember?

• 9:05Speaker 01

  You know, back in the day, GoDaddy used to have commercials that really caused their business to boom.

• 9:08Speaker 00

  I don't remember. I just remember Coinbase one causing the crash and that that 60 second one was creative because it's just a QR code and they just shot to number one.

• 9:16Speaker 01

  You don't even need to pay someone to do that one. That was really cheap. What I've always found is every once in a while you hear of like a company like GoDaddy who says, oh, we did Super Bowl commercial and it was well worth it and it caused us to grow like crazy. But I would say 99 out of 100 times when we look at the data, almost all companies lose money on the Super Bowl. On their commercial, they spend an arm and a leg on the creative and on top of this, usually to buy Super Bowl airtime, you have to buy other airtime to get that slot. It's not like you just buy the Super Bowl ad. And the problem with really fancy creatives, like the ones that you create on Super Bowl, it's really hit or miss. You spend all this money and you don't know if it's going to work.

• 9:55Speaker 01

  On the flip side, when you do like lo-fi quality ads that are more authentic, we've seen them convert better. And if it doesn't work, you just crank out tons more. You don't waste a lot of money until you find the winning variation because dude, you and I, I would say.

• 10:11Speaker 01

  Are better marketers than the average person by far. Would you agree with this? I'm not saying we're the the world's best or anything like that, but we're above average.

• 10:19Speaker 00

  Above average digital performance marketers.

• 10:22Speaker 01

  Yes. All right. And when we look at ads. Would you agree that you can't pick an ad concept from day one and be like, this one, I'm going to create this ad. It's going to convert for certain. It's going to be money ad and it's just going to print cash.

• 10:37Speaker 00

  Not us.

• 10:39Speaker 01

  No, you would. You would assume that a lot of the stuff that you think would work may not work and some of the stuff that you think would fail sometimes work. Hence, you and I really go hard with experimentation.

• 10:47Speaker 00

  You'd have to test a lot.

• 10:48Speaker 01

  Yeah, especially with online ads. And I think the same goes with television ads because even though we're digital, Eric and I run CTV, which is the digital version of ads, whether it's like Netflix or any of those channels, Roku, etc. And we see in the same data, you got to test a lot. So if you want to go and spend an arm and a leg on a full-blown ad and you haven't tested first, you're just, it's a recipe for disaster.

• 11:15Speaker 00

  Yeah, I think. We're still going to continue to see this just because people are used to seeing this. I think, you know, there needs to be a dose for the entire advertising industry. That's what needs to happen. There's so much waste. Anyway, that's for another episode, but um, that's what we think about the Super Bowl quality ads. Are you gonna be watching it?

• 11:33Speaker 01

  Yeah, I always watch the Super Bowl.

• 11:34Speaker 00

  Oh, you do? While you have, are you gonna be with friends or at home?

• 11:38Speaker 01

  At home. I'll watch with my kids.

• 11:40Speaker 00

  Yeah.

• 11:40Speaker 01

  They're excited because I told them we can go grocery store tomorrow and buy all the snacks for a Super Bowl party.

• 11:44Speaker 00

  Oh, nice.

• 11:45Speaker 01

  So then they're gonna pick food. We'll put out some of the Girl Scout cookies. You got us. Thank you.

• 11:49Speaker 00

  Nice. Yeah, yeah, yeah. Awesome.

• 11:50Speaker 01

  And then, chow down, right? Um, for the last one, should we talk about the biggest lesson we've learned in our careers? Should we both pick a lesson?

• 11:58Speaker 00

  Yeah, I think we need to do two, though. Just to make, hit the eighty minutes.

• 12:02Speaker 01

  Cool. Go pick two. We've got four minutes left.

• 12:05Speaker 00

  No, you go for it. You go for it.

• 12:06Speaker 01

  All right.

• 12:07Speaker 00

  We're five minutes behind, so we actually have two more left.

• 12:10Speaker 01

  Oh, okay. We're five, I don't know, we're five minutes behind. Uh, all right, so I would say the biggest lesson that I learned in my career was

• 12:19Speaker 01

  when I was younger, I thought you had to create a differentiated business and you had to have something that's unique. Um, I learned that's totally inaccurate. You just need a business in a massive TAM. And if you do a decent enough job, you'll make some money. It may not be as much as you want, but you'll make some money. And what I think is more important than differentiation is a bigger TAM. And if you have such a massive TAM, like a market where people spend hundreds of billions of dollars a year, there's just money to be made. And even if you're a mediocre, average version, you may not make all that hundreds of billions. You may not even make one percent at a billion dollars a year,

• 13:01Speaker 01

  but you can make a fraction of a percent where you may make two, three, four million dollars a year, which may be enough for some people, right? Um, that's one of the biggest lessons that I've learned. And do I think you should have differentiation? Yes, I think those things are great and you can figure out your differentiation over time. But differentiation isn't as important as first going after a really big market. And I think fundamentally in business, if you're gonna be an entrepreneur and it's not after something that's a really massive TAM, right, total addressable market, you're just, it's a recipe for disaster.

• 13:37Speaker 00

  So I would say my biggest lesson, uh, and maybe this will help you too, Brad, um, you're getting Neil's life wisdom and my life wisdom here. What Neil is talking about with TAM, those are all things that are learned over time as you continue to level up in business and life. Whether Neil likes to learn through talking to people, which is valid. I like to learn through reading and joining these different groups and talking to people as well. I've learned and Neil's learned this as well, but as long as you, one, you keep learning and two, you don't stop. And then three, you eventually learn from all the learning that you need to focus. And then you learn from all the learning about the TAM stuff. So the learning never stops. Okay. And the keep going piece never stops. As long as

• 14:20Speaker 00

  you keep going, and we've talked about this before, 10, 20, 30 years or so, there's no way in hell you don't have an outcome that impresses the hell out of the 18 year old version of you. There's just no way. I don't care how dumb you think you are or how smart you think you are. It just is. You know what I mean? Because the vast majority of the most successful people like, okay, I think Elon is significantly smarter than us. But I would say a lot of the smart people that we know that some might have, some might do a lot better than us. Some might do like a lot worse than us or whatever. I don't think I'm way smarter than them, at least for me. I just think the hunger for learning never stops. And then the ability, the energy to keep going is heavily underrated. Frictionless Growth Marketing hosted by Sonya Thompson is brought to you by the HubSpot Podcast

• 15:03Speaker 00

  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.

• 15:34Speaker 01

  Yeah, I actually look at it where a lot of people that do worse than me or better than me, a lot of them are smarter than I am. And I don't think there's a direct correlation with

• 15:46Speaker 01

  Making money as entrepreneur, I'm not talking about making the billions of dollars or trillions or being on the Forbes list, but just succeeding as an entrepreneur and having a degree from Harvard. Most, the, most millionaires I know are the millionaire next door that had the plumbing business, or the HVAC business, or the roofing business, or was a successful Realtor and didn't go to Ivy League college. And Eric's spot on, for doing something long enough, it ends up adding up and driving a lot of revenue. If, which goes back to his first point, if you can learn from the mistakes. See, you don't have to be smart to do well. You just have to avoid making the same mistake over and over again, and eventually you'll be led down a path of success. Right? And

• 16:30Speaker 01

  a great example of this, and this was a big learning for me as well, you know, when I raised money for Kissmetrics, my co-founder did most of fundraising, though. I remember during our board meetings, we had a board member named Phil Black, and he would just be like, "You guys just gotta hire the right people. It's all about getting the right staff." And it didn't really hit me at that time, but over the years, I eventually figured out what he meant, in which you don't have to figure everything out as an entrepreneur. No one's expecting you to, but if you can just hire amazing people, you'll do well. Like, you look at Elon Musk, or even a Mark Zuckerberg, or Bill Gates, the reason they did so well, isn't because they're exceptionally smart. That is part of it. But the other

• 17:13Speaker 01

  big part is, and I think this is even more important, is they picked the right people to recruit, and they had the right culture and mindset for the employees that they recruited within their organization. And if you recruit terrible people, there goes your company, no matter how smart or how rich you are. If you can get the right people, you're gonna be better off. And the right person varies, depending on the stage you're in. Like, I believe when I was younger, "Oh, I hired this person. They're amazing. Look at what they got me to." Well, just because they got you there, doesn't mean they're the right person to get you to the next level. Every person has different skills. And a great example of this is, I've been hit up to be the CMO of publicly traded companies before,

• 17:58Speaker 01

  many times, and it's never been a good fit. And the biggest reason why is, one, I'm already an entrepreneur and I don't want to work for someone else, but B... I'm not the right person to manage hundreds, if not thousands of employees. I'm a terrible manager. Now I can put someone else underneath me, but it's just not a role that I was shining because I'm not passionate about it and I'm not a great manager.

• 18:20Speaker 00

  Yeah, yeah. And so I think the other thing here, it's interesting. Like you don't, you get a lot of advice, but you won't know until you're facing it. Like you, you actually have to scar tissue for it. But you talked about the funding piece and maybe this will be the last one because I actually have one here. Most companies don't deserve funding. And this is actually one where I workshop with AI. So I was playing around, I was walking back from the gym, I think last week. And I was like, hey, I already had decided it doesn't. The, the way I look at raising money for carrot, for example, is we don't plan on raising money unless it's down the road where it's doing like, let's say greater than, um, you know, 10 million ARR or something. And it's a very strategic investment. It's not traditional VC, right? So I had it in my mind. I didn't tell it anything. I was like, what do you think about this?

• 19:05Speaker 00

  Like knowing what you know. And it's like raising money, raising VC right now for carrot would be a mistake. I'm like, why do you think that? It's like, because if you raise money right now, what's going to happen is you're going to fall into their timeline and it's become growth at all costs. And you, there's a lot of stuff for you to kind of figure out right now. And, um, and then it's like, you also have an unfair advantage. You understand what to do to grow. You also have some distribution as well. And, um, you've got a great, you've got a great team already, right? And it's like, there's no need to try to go on the VC's timeline. And by the way, when you're on their timeline, it's not like they care completely about you. They have like 70 to 100 other bets. So by default, they're doing the same thing. You know what I mean? And so I thought that was, I, I kind of already knew that piece already, but it's like, it did give good reasons for it. You know what I mean?

• 19:50Speaker 01

  Do you want to know the number one reason why I don't think you should raise money? Which is very different than what Chad GPT told you.

• 19:55Speaker 00

  Go ahead.

• 19:57Speaker 01

  You already have money and you make profit. And I don't mean this in a bad way. You're single, you don't have a mortgage, you have excess cash flow that you can use to double down on something you believe in.

• 20:10Speaker 00

  It said the first part, it didn't say the other parts.

• 20:12Speaker 01

  Yeah. And when you look at some other people out there, they don't have the distribution channel that you have. Cause you spent many years building this up. They don't have the cash flow that you have. So some people don't have a choice but to like join Y C and raise some money. But you're in a much different position because you're not a first time entrepreneur.

• 20:31Speaker 00

  Yep.

• 20:31Speaker 01

  And you already have a business that generates millions in revenue and you have tons of profit.

• 20:36Speaker 00

  Yep.

• 20:36Speaker 01

  That you could just reallocate.

• 20:38Speaker 00

  Yep. I have an unfair advantage, I would say, or I would say it's an advantage that I worked up. But that being said, knowing what we, this is also an unfair advantage, knowing what we know right now, will we go back in time and raise money? You wouldn't because you've done it before. I wouldn't also because I've done it before too, and also because of these other things. So at the end, the answer maybe is it depends. But I do think the V C model, and Chamath tweeted this out, I think the V C model is going to be upside down in the next couple of years.

• 21:04Speaker 01

  Why?

• 21:05Speaker 00

  He, I'll kind of paraphrase here, and this will be the last thing. So he's like, look, the model is completely broken because like you can build all this cool software now for way cheaper. And you don't necessarily need the V C's. He had some other good reasons in there, but he's like, the whole A U M model is like going to be under underwater. Like to get in all these deals, like maybe they're not going to be priced as high as like what they're used to doing.

• 21:30Speaker 01

  And you don't need as much funding. I think the money now is used for sales and marketing. If you're going to raise, you're really raising for sales and marketing.

• 21:38Speaker 00

  Enterprise companies just light the money on fire. A lot of them do.

• 21:40Speaker 01

  They do.

• 21:41Speaker 00

  Yeah.

• 21:41Speaker 01

  And I think some businesses need the funding, like to build a chat G P T, it's too expensive. Whether DeepSeek did it for six million or a hundred million or five hundred million. Those kind of businesses require a lot of cash upfront.

• 21:56Speaker 00

  Yeah. Here's what he tweeted, and this will be it. So Chamath tweeted this, someone named Cash said ninety nine percent of software doesn't need to exist and basically does nothing useful. Yeah. And then Chamath retweeted it. He said, the software industrial complex will go to zero. And its place will be a bunch of semantic communication between models.

• 22:16Speaker 00

  So he said that. And then he tweeted all these other.

• 22:19Speaker 01

  I don't know if it's going to be that crazy, but sure.

• 22:22Speaker 00

  You can see it trending in that direction is the point. And he said, innovation, innovation means doing more with less. And I think we're going to see a lot more of that. I truly think you're going to be building a lot more shit, and I think I will too. I think we're going to be, because we're going to have so much resource available, we're going to be able to flex our creative muscles a lot more.

• 22:41Speaker 01

  I agree with that.

• 22:41Speaker 00

  Yeah. All right, guys. That is it for today. Please don't forget to rate, view, subscribe. Go to marketingschool.io slash agency if you want to grow your agency faster, and we'll see you tomorrow.