What You Need To Understand About Jensen Huang's Drama

Jensen Huang is out at NVIDIA and the stock is down 26%, so Eric and Neil look at it through an entrepreneur's lens. Neil explains why the company's quiet PR response let memes write the story and cost roughly a trillion dollars in market cap, and what a founder CEO is really worth. Then: HubSpot's founder returns for Day 1, why one-star Glassdoor reviews can help you hire, Mandarin Oriental vs Motel 6 companies, takeaways from the YPO Global AI Summit, the Turkish rug funnel, and what they changed their minds on over the last 12 months. Nothing here is financial advice. A grounded episode on owning your narrative before someone else does. Key takeaways◾If you don't control your narrative, the internet fills the space◾Honest negative reviews can attract the right hires◾Marketing compounds when you skip the shortcuts Chapters00:00 Jensen is out and NVIDIA is down 26%01:42 Neil's trade after the news broke04:27 The marketing lesson: sell the news05:21 The PR response that cost $1 trillion07:12 Memes filled the silence08:55 Should the board have ousted him?10:13 Why founder CEOs are a different breed11:34 HubSpot's founder is back: Day 113:51 When one-star Glassdoor reviews help hiring16:12 Reading the reviews out loud17:28 Mandarin Oriental vs Motel 6 companies19:24 How Neil picks a hotel22:44 Inside the YPO Global AI Summit23:32 The team that got 80x faster25:39 Speed vs quality is a false trade-off25:52 Technical debt as good debt26:58 Selling a cheaper fix for technical debt28:23 AI hustles: data brokers30:25 AI transformation theatre31:38 Why marketing shortcuts backfire33:13 Nine years to enterprise clients35:24 Compounding and the horse meme36:22 The horse riding upsell39:53 The Turkish rug funnel42:47 The gas station loss leader46:25 What we changed our minds on48:50 When travel is worth it51:36 Retraining vs hiring AI-native people53:47 Content we stopped making56:18 Engagement that never becomes revenue59:40 How GaryVee stays in his lane1:02:05 What we held steady on1:03:22 Elon: the general at the front lines1:05:31 Neil's M&A negotiation1:09:25 The agency deal that was too good to be true1:12:08 Buying the incumbents1:13:33 Agencies: a leads problem or a delivery problem?1:15:31 Cracked marketers vs cracked engineers

• 0:00Speaker 00

  Finding customer information shouldn't mean digging through emails, call notes and spreadsheets. HubSpot Starter Plan brings all of those details together, so it's easier to track what's happening with every deal and what to do next. It pulls information from calls and emails. Then it gets to work, logging and summarizing them. Right after your call ends, HubSpot pulls next steps from your call notes and drafts suggested follow-ups. And it stays up to date for you, so you can build demand, win more deals and spend less time on repetitive work. Your records, insights and next steps are ready for you to act on. And you don't have to miss a beat searching for any of it. Try the Starter Plan for $10 a month. Learn more at hubspot.com. All right, Neil. So Jensen is out and Nvidia is down 26%. So buy or nah?

• 0:39Speaker 00

  This is not financial advice, guys. This is just, we're thinking through our entrepreneurial, you know, lens about this business. And let me just start with this, okay? So Jensen's out, you know, unfortunate, very, the longest tenured CEO, most valuable company right now. They're down quite a bit. I think they dropped to like 3.9 trillion when I saw this morning. Um, up, but down from like 5 trillion, something like that, right? But here's the thing. When you look at the, the history, when Steve Jobs unfortunately passed away, uh, Tim Cook took over, right? Very operational person.

• 1:08Speaker 01

  There was a succession plan for Tim Cook.

• 1:10Speaker 00

  There was a succession plan and they, they grew in value, right? Now, uh, Jeff Bezos leaving Amazon, like, uh, Amazon has become more valuable, right? Now, I think the way Jensen is for sure the visionary. Without Jensen, there wouldn't have been this, this big AI push, not as much, right? I think the CFO, uh, Collette is, um, supposedly 40% chance, according to Polymarket, that she's going to succeed. And usually what we have seen in the past is when a financial leader takes over the company. The company does do well, right? Over the, the next, I think the next few years, they're just gonna be fine, right? Now, are they gonna innovate as much? Probably not, because when you look at Apple, when you look at all the products that we have, like, uh, um, Neil has a, the, the dual in front of him.

• 1:54Speaker 00

  Like, we have an iPad, we have iPhone, we have a dual. They haven't innovated that much, but they've continued to build solid devices that they, they've continued to, um, be relevant, right? And so I think when you're such a big company, it's very hard for you to go irrelevant so quickly. And when you go down 26%, I'm just saying, for me, I'm like, it looks attractive. So I'm not saying financial advice, we're not saying buy or not buy. I'm just saying what I'm doing. Go ahead.

• 2:16Speaker 01

  Yeah, so you already know what I did, because we were texting this morning. Um, I tried placing an order. So yesterday, when the news came out that there was a second affair, post-market, I was able to, uh, get around $159, $160 price. I was able to get 6,000 shares, uh, from extended trading. And then I was like, okay, I'll wait till the morning to see if he gets ousted and how much more the stock will go down. So then news came out in the morning before the market opened, that he was no longer going to be the CEO and he resigned. Stock started going down, went down to roughly around 150, I think someone told me 148. I didn't see 148 pre-trading hours.

• 2:59Speaker 01

  Um, and I was gonna place an order, but I was like, let me just wait for the market to open. Because you can actually, a lot of people don't realize this, you can trade stocks after the market closes, depending on, uh, where you're trading. And you can also buy stocks before the market opens as well. So I was gonna dollar-cost average, again, this is not financial advice, and try to get it at 150. And I was gonna buy a big chunk. Um, I placed the order. It did not go through. I was so pissed and it kept rising. Uh, and I got more shares, uh, at roughly $160.47 is my average. And again, this is not financial advice. I just think it's so beaten up.

• 3:44Speaker 01

  I think as we're recording this podcast, it's 165. I'm not saying it can't go down more. Um, but my prediction, and people should do whatever they want, this is highly speculative and again, not advice. I think I'll make 10% of my money in less than seven days from today.

• 3:59Speaker 00

  And it's a pretty, like, high possibility type of bet.

• 4:04Speaker 01

  Yeah.

• 4:05Speaker 00

  In our minds.

• 4:06Speaker 01

  In, in our minds. And we could be wrong and I'll liquidate at 10, 15% gains next week.

• 4:12Speaker 00

  Yep.

• 4:12Speaker 01

  And again, I could be wrong, but when we record next week, we'll actually see.

• 4:17Speaker 00

  Yep. And I will be in Taiwan next week when we record.

• 4:19Speaker 01

  You'll be in Taiwan.

• 4:20Speaker 00

  I will be, so it's funny, because I'm visiting Foxconn, I'm visiting TSMC, I'm visiting all the chips companies, right? Because it's like a YPO, like, private thing, right? And I'm like, man, I was like, I bet they're gonna be talking about how they do all these deals with Jensen. Before all these news came out, I'm like, I bet they're gonna be like, yeah, we do all these deals with Jensen. Now it's just gonna be like, uh. So, so yeah, but I'll, I'll, we'll be recording in Taiwan. Yeah. But talk about, okay, so but talk, I, I kinda gave my philosophy behind this. What's your philosophy around, around this bet in general?

• 4:48Speaker 01

  I just think it's easy money.

• 4:51Speaker 01

  I want 10% returns on my money in, in a week and I think I'll get it. I think I have a really low downside and a much higher probability that I'll make 10%.

• 5:01Speaker 00

  And, and so, like, how does this apply to marketing, right? Well, think about this, it's, one, he got a ton of pressure from the media, right? And this is a, I think this is a coordinated attack on him. Unfortunately, this happened to him, right? So perception matters a lot. Okay, boom, he had to resign. Um, but also, when it comes to, uh, investing in general, this is a very much, uh, sell the news type of deal.

• 5:21Speaker 01

  Yeah.

• 5:21Speaker 00

  Right? So a lot of people get hyped up, it's like, oh, they're like, oh my God, he's gone, the company's, like, did the company really? Is, are, are they less, like, 26% less valuable in the last 30 days or so? No. Um, they're still a very good company. They're still the market leader right now. Um, they're just probably in the search of the next person, which by the way, Lisa Su, because of what she's done at AMD, she's next in line, maybe she could be next in line, um, if it's not Collette, which is their, their current CFO right now. And she's stewarded AMD from kinda down the pits to, um, you know, who they are today, which is like a $1 trillion company, close to.

• 5:55Speaker 01

  So, but here's what's interesting. This fiasco cost the company on how they handled public relations and marketing and all of that. It cost them roughly a trillion dollars in market cap temporarily. Could come back, it may not, who knows? Um, I think it'll come back, of course, maybe not the full trillion, but I think they'll, uh, rebound quite a bit. Uh, again, not investing advice or anything, but when you look at it, New York Times broke this story in October. November 8th, he confirmed the news of the, of the affair, okay?

• 6:30Speaker 00

  That's a spy affair. That's the first one.

• 6:32Speaker 01

  Uh huh. And then November 11th, news came out about a second affair. November 12th, he resigned. When you look at it from this perspective, the stock tanked pretty much from 200 and change to 150 and change, right? That's a big hit. And they didn't do a good job on controlling the narrative. And instead, there was tons of internet memes about him and Elon and even memes on what happens when CEOs cheat of publicly traded companies. And they showed Bill Gates and they showed Elon Musk having multiple girls, although that's, I don't know if that's considered cheating, because he's.

• 7:16Speaker 00

  It's established.

• 7:17Speaker 01

  Uh, yes, established.

• 7:19Speaker 00

  Yeah.

• 7:19Speaker 01

  Um, they talked about, was it Sergey Brin who supposedly cheated? Um, and I'm not saying they did or didn't, I don't know, I haven't looked up each person and what the scandal was.

• 7:30Speaker 00

  Yep.

• 7:30Speaker 01

  And they're breaking down how, uh, there was quite a bit of ROI. So they're saying when a tech CEO cheats of a hyperscaler, and Eric and I are not encouraging people to cheat. Uh, they were just saying the stocks climb and it's actually good for the stock. Uh, and then there's tons of memes being like, but Jensen, we can't predict this. You're messing it up because it is potentially or allegedly with a Chinese spy, which could screw up the model, right? Uh, and then, I don't know if you saw the memes on Zuckerberg, they're like, he's one of the last men saying, they had Ellison there and a few others. And I saw people leaving comments being like, if you had an affair with Zuckerberg, please come forward. We would like the stock to increase and I will give you a percentage of my stock.

• 8:14Speaker 00

  Yeah, that's funny.

• 8:15Speaker 01

  People are offering some of their stock if it actually like skyrockets up. Um, but yeah, I, I think Nvidia, just as a corporation, did a terrible job. All they did was, we are doing an investigation. And the internet was just having a frenzy and making fun of the whole thing and painting their own narrative on what would happen with Nvidia if Jensen left or anything like this. They could have put out narratives like, hey, we're doing our investigation. Um, we haven't made any decisions yet, but just keep in mind Nvidia is a 30-year-old company. We have an amazing executive team who's competent. Ex-person's been running their largest division. Uh, you know, Ian, whatever his name is, Brockman, or I forgot what his, or Bach or something like that, who they say may also succeed him,

• 8:59Speaker 01

  is running the, uh, GPU division, it's the largest, he's been here for 20 years and doing this. And they could have went down the road and given the market reassurance that the team is solid. Right? And they could have said, hey, this young guy who does GPUs, he actually knows more than Jensen. He's been doing this for X amount of years. We're not saying anything is happening, we just wanna let you guys all know. This company, Jensen, has helped with the vision over the years, but it's, he's, it's not dependent on him. We've built out a management team, he has 60 direct reports.

• 9:32Speaker 00

  So here's a question. Do you think, so obviously he got, it was a, hey, you can resign to save face, or, you know, we're gonna, we're gonna oust you, right? Do you think the board should have ousted him?

• 9:45Speaker 01

  Um, I don't think the board should have ousted him. I honestly think the board is working with him to figure out what to do. Okay. Let's be transparent here. You've met quite a few billionaires over your time. I've met quite a few billionaires in my time. I'm not saying Eric and I condone what they do. But there's quite a few of them that have their own extramarital, what is it called?

• 10:14Speaker 00

  Deals?

• 10:15Speaker 01

  Deals, affairs, or whatever it may be. I honestly think his wife knew about it.

• 10:20Speaker 00

  Yeah, I think for sure she knew, and we're not condoning it, but I for sure think they had something going on where it's like, hey, okay, do your thing. Cause we know people that do this, right? But at the end of the day, it's also not.

• 10:30Speaker 01

  And it's a high percentage. Would you agree it's a high percentage of the billionaires? It's more than fifty percent.

• 10:34Speaker 00

  Very high percentage. I think much higher than that, right?

• 10:36Speaker 01

  Yes, I agree with you.

• 10:37Speaker 00

  I would just say that it's also not my business either, right? I'm just looking at, hey, how good has he run this company? Like Elon is open about it, right? Look how well he's run his companies, right? And so as a shareholder, I'm like, this is not good for the business. Cause without him, he, the, the reason why a lot of people stay with him, cause I've done a lot, I've read a lot of books about Jensen. It's because of him. He's kept a lot of these people in for a long time. He's kept driving the vision. And when the company was about to die, like fifteen times, he was there, right? When, when it's time to make bet, uh, bet, you know, big bets on, on AI, he did it when the board was questioning him. And so you need someone like that, like the founder CEO to take a certain amount of risk. And that's what you saw from Jensen. That's what you saw from Steve Jobs back in the day. That's what you saw with Elon. It's just hard.

• 11:21Speaker 00

  A founder CEO is a very different breed. I'm not saying these other people aren't going to succeed him. Well, I think the company is just going to be fine, but it slows the company down. And that's not good. And it also hurts us a little bit on, from an AI race standpoint. So there's all these other conspiracy theories, but we'll just leave that alone. But by the way, to Neil's point, there's all these conspiracy theories that fill the space of the internet. Because Nvidia didn't do a good job managing their perception. So everyone now is like, well, you know, Anthropic was planning to oust him the whole time. You know, they're planning this right after the midterms and you know, Anthropic and the Democrats are trying to get rid of him, da, da, da, da, da. And so people will fill the space with memes if you don't control your own narrative. So we'll just leave it at that. But Neil, let me, uh, let me, let me go to a different direction unless you're pulling something off right now.

• 12:04Speaker 01

  No, no, no.

• 12:04Speaker 00

  Which you definitely are. You're pulling, you're looking at something else right now. That's what you're doing. So, um, Darmesh.

• 12:12Speaker 00

  Nvidia is out, right? So Jensen's out, but Brian Halligan, former CEO, founder CEO of HubSpot, he's back.

• 12:19Speaker 01

  Yeah, it's a CEO.

• 12:19Speaker 00

  And he's completely refounding the company. It's day one, we're now a customer harness company. So I actually talked to a HubSpot employee today, this morning, right? Right before, I was like, hey, what do you think about this, right? He's like, well, I don't know if my job is safe. I was like, oh, okay. And then he's like, but I like it. This is good because we weren't, uh, we weren't innovating as much as we could. And then I think this is going to be good for the company. Basically kind of implying that they maybe lost their way a little bit. So I think it's good. You know, when he's saying it's day one, just so everyone knows, um, Jeff Bezos used to write in his shareholder letters all the time. It's always day one. It's day, meaning that they're not gonna slow things down. They're not gonna, you know, rest on their laurels, they're not gonna get complacent. They're always operating with that startup mentality and he's trying to bring that back.

• 13:02Speaker 00

  But this guy that I talked to, he thinks he's gonna cut a lot of people, uh, which I think is probably coming. So, which, which, which I don't think is like a good or bad, like a good or bad thing. I just think that he's trying to drive startup energy throughout the company. And that means that he might have to buy a bunch of people out, kind of similar to how Microsoft did, so.

• 13:21Speaker 01

  Well, they cut seven percent, you saw that, right?

• 13:24Speaker 00

  Today?

• 13:25Speaker 01

  No, they cut seven percent, I think in less than a month or something like that. You didn't see that? They cut seven percent of their workforce.

• 13:31Speaker 00

  Wasn't paying attention.

• 13:31Speaker 01

  Uh huh. Um, so I don't know if they're gonna do any layoffs.

• 13:38Speaker 00

  So I asked, I asked this guy, what's gonna happen to the current CEO? He's like, I don't know, fired? I'm like, so I guess the current CEO was.

• 13:43Speaker 01

  Yeah, she, she's gone. She'll transition till the end of the year.

• 13:45Speaker 00

  Yeah.

• 13:46Speaker 01

  So I saw the article early in the morning, their stock was up.

• 13:49Speaker 00

  Yeah, this is, there's a lot of comments, like your, your brother-in-law commented too. Looking forward to the refounding journey.

• 13:54Speaker 01

  Yeah.

• 13:54Speaker 00

  Yeah, this is great. Cool. So anyway, those are our thoughts. So on, on one side, Jensen's out. On the other side, HubSpot is, he's back in. By the way, did HubSpot's stock even move today?

• 14:07Speaker 01

  Yeah.

• 14:07Speaker 00

  Did it? How much?

• 14:09Speaker 01

  Uh, I can pull it up, but last I checked, it was like seven.

• 14:12Speaker 00

  On your iPhone dual.

• 14:12Speaker 01

  Seven, eight percent. Let's see if I'm still right. Look, I'm pulling it up.

• 14:16Speaker 00

  Yeah.

• 14:16Speaker 01

  Uh, six point six, six percent.

• 14:18Speaker 00

  There you go. See, when the founder CEO comes back, it's a good narrative, right? So, yeah. By the way, Neil, I wanted to talk about something, cause we're talking about CEOs right now, right? So, um, what's interesting to me, we've been recruiting some of these, uh, we've been talking with some of these engineers. So they'll, they'll read our Glassdoor, right? And so obviously we're gonna have some negative reviews on our Glassdoor, especially from the last twelve months, because I've been pushing AI so aggressively. But what's funny to me now, Neil, is he, I was like, I thought he was gonna say something like, oh, I didn't like the Glassdoor reviews. He's like, I really like your Glassdoor reviews. I really like the one star ones. I'm like, why do you like the one star ones? He's like, because it says pushing AI and it talks about, um, how the CEO is just all about AI, right?

• 14:58Speaker 01

  This is for a potential person you were trying to hire that was interviewing.

• 15:00Speaker 00

  Yes, yes, yes. And there's, there's been a few of these already. What ends up, I've never seen this in my career before, right? Where they're like, no, I actually want that. I want, their negative reviews now are actually a positive signal because it reinforces that I, I, I'm not just, hey, let's just AI. It's just, I'm very AI forward and we're trying to push that nativeness throughout the organization. And so, dude, I'm like, holy crap. Negative reviews that are now positive signals on Glassdoor. If it relates to that, because AI native people want to work with AI native people. It's just like A players want to work with A players. And I've never seen that in my career before. I thought that would just be interesting to share.

• 15:36Speaker 01

  Yeah, I even saw you, I think you put a tweet or Instagram post or a story or something about negative Glassdoor reviews can actually help you now.

• 15:43Speaker 00

  Yeah.

• 15:44Speaker 01

  And I agree with that, if the negative ones are transparent. So your negative reviews, when you look at it from a marketing angle, it's people saying what you truly are. You, you demand a lot, you want people who are AI forward. So if someone fits that narrative of they're really AI forward, um, they want an environment which is go, go, go and push hard, they'll like it.

• 16:07Speaker 00

  Yep.

• 16:07Speaker 01

  But if your Glassdoor review was like, I'm gonna give you extreme case here, this is not accurate. I'm making this up, just to be clear. If your Glassdoor review was Eric sexually harassed me.

• 16:17Speaker 00

  Yep.

• 16:18Speaker 01

  I think that'll actually hurt you.

• 16:19Speaker 00

  Of course.

• 16:20Speaker 01

  Right?

• 16:20Speaker 00

  Yes.

• 16:21Speaker 01

  Negative Glassdoor reviews, when they're honest, and it's, when I say honest, and it's about the work, about like the environment or the culture, sometimes it can really help you.

• 16:30Speaker 00

  Yeah.

• 16:30Speaker 01

  But, you know, Nvidia is a little bit different story, because they're so large and the story's out there. But if people had a negative Glassdoor reviews of like, yeah, it's tons of sexual harassment, really male dominated culture, they're really rude to females.

• 16:43Speaker 00

  Yeah.

• 16:43Speaker 01

  I, I didn't think the company is screwed.

• 16:45Speaker 00

  Totally. And by the way, I'm, I'm looking at some of these reviews right now, right? So here, I'm gonna give you some of the titles, okay? So, um, one says, uh, learn more in a few months here than in years elsewhere. Okay, that's one. The second one is cutting edge tech and high expectations. Okay, it's very clear on, on what we are. And these are all five stars. The other one, still, still love coming to work after three years, okay? Now let me give you a one star one. Let's see. Toxic environment with unqualified management. It just talks about AI. It's like, oh, like all he's doing is pushing AI, right? Right? And then, um, the, the, the next one, I'm looking below it. It's like, join if you want to be an AI native marketer in a fast-paced environment. So it's like, these are great, cause it's extreme. It's either one stars or five stars.

• 17:26Speaker 01

  Yes, but I think the one star on the AI native marketer and join, that is a good, honest review. Because you're looking for people who fit that culture.

• 17:35Speaker 00

  Yep.

• 17:35Speaker 01

  I look at that review, even though it's one star, doesn't hurt you at all.

• 17:38Speaker 00

  No. And even this one that's two stars over here, guys, by the way, if you want to join this environment, we're hiring, right? So, so one says decent, but could be rough at times. That's exactly what it is, right? So even though it's a two stars, it's, the still person, this, the person still calls it decent.

• 17:53Speaker 01

  Yeah.

• 17:53Speaker 00

  But rough at times. And that's exactly what we are, cause that's, that's what high expectations are. So, anyway, um, I thought that was interesting. So let's, let's, let's move to the next one here. Do you want to know what the difference is, Neil, between a Mandarin Oriental company versus a Motel Six company?

• 18:09Speaker 01

  Sure, I used to live in a Mandarin Oriental, so I'm very curious.

• 18:12Speaker 00

  Well, I used to live in a Motel Six, so this works out. So let me tell you. So.

• 18:16Speaker 01

  Wait, wait, let's go back. You used to live in a Motel Six?

• 18:18Speaker 00

  I'm joking, I'm joking. But Neil did actually live in a Mandarin Oriental.

• 18:21Speaker 01

  Two times in my life.

• 18:22Speaker 00

  That's true.

• 18:23Speaker 01

  One in Vegas and one in Beverly Hills.

• 18:25Speaker 00

  Yes. Okay, so get this. The difference between a Mandarin Oriental company and a Motel Six company. So Alfred Lynn from Sequoia. So he says, in the early days of Palantir, Gary asked, so Gary Tan asked Alex Karp, so the CEO of Palantir, why they were putting him up at the Mandarin Oriental? They were kids at a startup. Motel Six would do, all right? So Karp's answer, you're going to go and talk to some such and such general or such and such VP of Fortune 500 company. And you're going to show this incredible software that you built. Then as you go out the door, they're going to make small talk and ask, how long are you in town? All right? And if you say you're staying at the Motel Six, that says something about what Palantir is. And they're going to think that this is Motel Six software. And guess what?

• 19:09Speaker 00

  Palantir is not Motel Six software. Palantir is Mandarin Oriental software. And I thought that was really funny.

• 19:16Speaker 01

  Because, so this is when they were starting up Palantir. And he's saying they raised money from Sequoia, it sounds like.

• 19:21Speaker 00

  Yep.

• 19:21Speaker 01

  And they got this question from the board, like, why do you stay at a Mandarin Oriental?

• 19:24Speaker 00

  Cause they want you to be frugal, right? But it's like, no, this, this self-image matters, the brand matters around it. Like, if you meet a government official, I'm staying at the Motel Six, well, this is crap software, because you guys are clearly not high quality.

• 19:35Speaker 01

  Yeah.

• 19:36Speaker 00

  I think that's good perspective. Now, do I want my people to stay at Mandarin Oriental all the time? No, I'm not saying they should stay at Motel Six either.

• 19:43Speaker 01

  Yeah, we tend to be a Marriott company.

• 19:45Speaker 00

  Marriott is a great one. And Neil and I have stayed at Marriott's together before, not in the same room, but you know, when we spoke at conferences, we've even stayed at, I just saw recently you stayed at a motel and you saw me stay at like a motel is.

• 19:57Speaker 01

  Yes. Yeah, I stayed at a motel recently. I stayed at a motel not that often, but maybe like fifteen, twenty percent of the times.

• 20:07Speaker 01

  I stayed at Mandarin Oriental type quality hotel, less than like three percent of the time or two percent of times unless someone really puts me up. My average hotel that I tend to stay at is just a normal Marriott. My qualifications isn't the star rating. My real qualifications is can I get room service? And sometimes I can't in some of the places I'm staying, like the motels and stuff. But if I can go down to the lobby and get some sort of breakfast or something, that's good enough. I just want room service and laundry service. Those are my main two requirements.

• 20:43Speaker 00

  Laundry service? That's so expensive.

• 20:45Speaker 01

  I use laundry service so often.

• 20:47Speaker 00

  Dude, guys, just so you all know, laundry service, if you want to do one shirt, it's like twenty-five dollars.

• 20:53Speaker 01

  That's if you stay at the Mandarin Oriental. If you stay at the normal hotels, maybe you're paying like ten dollars, which is still a lot.

• 21:00Speaker 00

  That's so expensive.

• 21:01Speaker 01

  My shirt, I think it costs like sixteen dollars. No, sixteen.

• 21:05Speaker 00

  Sixteen dollars.

• 21:06Speaker 01

  Yeah, so I.

• 21:07Speaker 00

  You get a new shirt every time.

• 21:08Speaker 01

  Correct, almost. Pretty much. Depending on the hotel, yeah, I actually can.

• 21:11Speaker 00

  Yeah.

• 21:12Speaker 01

  But the reason I require laundry services is two reasons. One, I travel so much from destination to destination and I refuse to check in a bag. So I want to make sure there's laundry service. Two, because I go to a lot of random cities and countries, a lot of my flights are connecting flights and sometimes there are delays and you're stuck there for another day or two. So I don't want to pack enough, especially when I'm gone like for a week and a half, to be like, oh, I had to check in a suitcase and I'm fine. I'd rather have a carry-on and do laundry than than check in my bag.

• 21:47Speaker 00

  I've done that before. I can go both ways because when I came back from Turkey last week, I was there for a week and I went with checked bag because it's colder there. And then when I'm going to Taiwan tomorrow, actually, I'm going checked bag again. But it's way easier to do the.

• 22:01Speaker 01

  Carry-on.

• 22:01Speaker 00

  The carry-on, yeah.

• 22:02Speaker 01

  I refuse to. So even if it's really cold, like dude.

• 22:06Speaker 00

  You wore a jacket?

• 22:07Speaker 01

  Not last week, maybe the week before. I was in Dallas where it was warm. And then I went to Milan where it was cold. Okay? So I went on the plane with a sweater and a jacket because I refused to check in my bag. And I just hold it and it's hot while I'm in Dallas. But then when I'm at London, whatever, I'm good. Technically, I went to London and Milan, but still I was good because I didn't have to change. I just refuse to check in my bag.

• 22:39Speaker 00

  You've never checked your bag before in your life?

• 22:42Speaker 01

  No, I have. I have kids.

• 22:43Speaker 00

  Yeah.

• 22:43Speaker 01

  And I have a wife.

• 22:44Speaker 00

  Yeah. But when you're traveling, it's easier to not have to because you save the extra hour, the thirty minutes in the hour and the risk of not losing.

• 22:52Speaker 01

  When I travel with my family, it is up to my wife if I check in a bag or not.

• 22:56Speaker 00

  Checking with their family, no matter what.

• 22:57Speaker 01

  Right? So but when I'm traveling by myself, I never check in a.

• 23:01Speaker 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. Back. Yep. 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.

• 23:45Speaker 00

  That is my ad agency, again, www 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. So remember last week, so we did the podcast on Thursday, right? So I was still attending the YPO Global Business Summit. I hosted the YPO Global AI Summit the day after, okay? So I'm going to give you some takeaways from it. You can ask whatever questions if you have any. But I think it'll be helpful for the audience because this event, average revenue fifty-two million, it sold out once and we had to get extra seats and it sold out again. And we think it's going to be even bigger next year. So we had people fly around from all around the world, a lot of people from the Middle East, right? Remember I told you the guy that sells data centers? So that guy.

• 24:23Speaker 01

  And he told you not to invest in data centers.

• 24:26Speaker 00

  He said he wouldn't because, you know, he sees token cost dropping. He doesn't see capacity being filled, which I don't think is going to be the case. I think it will be filled. But anyway, so we had Ciki Chen who runs CFO.ai. He had the best talk by far. And this is interesting, Neil. So it's, and I think you'll like this, it's not even about AI versus not AI because he realized that his team is eighty times faster now, his engineers. And so if people, if Neil, you're eighty times faster, then that's just a new bar, right? And if you're unable to meet it, then that's unfortunate, right? So he, and then he was just talking about this, this book called The Goal. So this, Jeff Bezos used to have all his managers read this book called The Goal from this guy named Eli Goldrat, a really good book.

• 25:12Speaker 00

  So he's just talking about how you have all these bottlenecks in your system. So before the bottleneck, when you're building a product, Neil, you was what? Coding. Because you have to hire like a lot more engineers, right? You still need engineers today. But then what would be the next bottleneck? Code reviews. And the next bottleneck after that would be product validation and you have to merge something. So like, that's the whole life cycle of a product. But he kept methodically reducing the bottlenecks for each section. And then that's how his team became like ten X faster, twenty X faster, thirty times faster. Now they're eighty times faster. And he showed all the benchmarks. And then obviously you have companies like Spawn who are like shipping, you know, probably hundreds of times faster now, right? And you're seeing a lot of engineers do that. So that was a fundamental shift for a lot of people because even though, and this is interesting,

• 25:55Speaker 00

  you would assume that a hundred fifty people attending this thing, how many people would you say are super AI native?

• 26:02Speaker 01

  Five, ten percent?

• 26:03Speaker 00

  Yeah, exactly, right? Five, ten percent is exactly what I'm predicting. So and these are people, I made an introduction like Carlyle Group. Some of these are companies that are doing, you know, hundreds of millions and not billions in revenue, right? And some of these are founders. That one in that case, that was more like a director that you might have spoken to.

• 26:19Speaker 01

  No, he never got back to me.

• 26:21Speaker 00

  He's slow. He made some intros for me. That's a good thing, so.

• 26:25Speaker 01

  But I don't, I think there's a reason why he didn't get back to me.

• 26:27Speaker 00

  Why?

• 26:28Speaker 01

  Because I asked him what were the interest rates on the debt? And I'm like, let me guess, nine, ten, eleven plus percent? And I let him know what my interest rates are.

• 26:37Speaker 00

  Oh, so then he didn't respond to you anymore?

• 26:38Speaker 01

  Yeah, because I'm at two percent plus so far, like.

• 26:42Speaker 00

  You have a good deal.

• 26:43Speaker 01

  It's really cheap money.

• 26:44Speaker 00

  Yeah, you have a good deal. So he also made another important distinction here. So we used to talk about how speed and quality are trade-offs, right? You can have speed, but you can't have quality. He's like, that's now a false trade-off. You can actually have both now. And a lot of people, oh my God, that's amazing, right? And then interesting one that you like, Neil, is technical debt. Would you consider technical debt to be a good or bad thing?

• 27:07Speaker 01

  I think technical debt is a bad thing for most organizations.

• 27:11Speaker 00

  Okay. But now, remember Neil, when we talk about debt, there's good debt and there's bad debt.

• 27:17Speaker 01

  Correct.

• 27:17Speaker 00

  Yeah.

• 27:18Speaker 01

  Sometimes an organization has a ton of technical debt, so then they end up paying another company. If you're that company that they're paying, it's great for you that the organization has tons of technical debt and they're relying on you.

• 27:28Speaker 00

  So what he's saying is now, technical debt is not too different from real debt now, right? You can amplify something that's really good and you can ship much faster and the agents, like Agent Swarm can fix it and you can pay back later with compounding interest, right? In a good way now. You couldn't do that before. Previously, technical debt was all bad, right? So, and then I have a friend, he was spending about a hundred fifty thousand dollars a month on tokens. So he bought local infrastructure, used infrastructure, Neil, so like used H one hundreds. And, you know, he's cut his token cost down by ninety-five percent and it's like working for him. And I'll give you one more here.

• 28:06Speaker 01

  Really quick, going back to the technical debt. I have a friend in Texas who buys old school companies that are on-premise and aren't leveraging the cloud.

• 28:17Speaker 01

  And or more so, he helps companies who are on-premise and aren't leveraging the cloud. So these companies have a lot of technical debt. They have been adapted to AWS or, you know, Google's cloud or Microsoft Azure. And it's not necessarily for the whole company, but it's for certain divisions. His model, his marketing is, hey, you have all this debt. You have all this archaic technology to move off the cloud is going to cost you X dollars. We can get in there, we can give you the features and the products and we can help you solve X, Y, and Z. They deal with the very specific sector of, they sell to chief information technology.

• 29:00Speaker 01

  Officers, I think it's called, is it CIO?

• 29:02Speaker 00

  CIO?

• 29:03Speaker 01

  Is this right?

• 29:03Speaker 00

  CIO or CISO?

• 29:05Speaker 01

  Yeah, they sell them. So they have like some software or something like that.

• 29:07Speaker 00

  Yeah.

• 29:08Speaker 01

  They're like, we are the cheaper solution than you fixing your technical debt. And their churn is pretty much non-existent and it's a really good pitch. Because it's cheaper. No, I'm not saying it'll always be cheaper, but that's a really creative way in marketing.

• 29:22Speaker 00

  Yeah.

• 29:22Speaker 01

  To go after someone's pain and just say, we will give you the solution that is more efficient than you just adapting to the new world.

• 29:29Speaker 00

  That's a solid solution. You just sparked another thought in my mind, Neil. There's a lot of hustles right now when it comes to AI. So we just, there's like people selling data brokers, right? So they'll go to you and say, hey, Neil.

• 29:39Speaker 01

  Dude, I get so many emails for this. I was like, what the heck are all these emails?

• 29:43Speaker 00

  So we met one of those guys at the summit, right? Like he was trying to sell it and then I was kind of like breaking it down. And even like I'm in these chat groups.

• 29:51Speaker 01

  Break down the data stuff. I'm curious on how that works because a lot of people listening probably have tons of data.

• 29:56Speaker 00

  Okay, so basically these data brokers, they're basically, they will buy your data and then basically sell it to like the, the anthropics and the open AIs of the world. Okay? So some of it is based on how much data you have. Like if you're a services company, it's based on headcount because they want to take all your workflows. Okay? So, but if you're like a software company, they're buying like the terabytes of data that you have because you know, you're more of like a product organization.

• 30:20Speaker 01

  Is it, are they paying good prices or is it cheap?

• 30:22Speaker 00

  So let's say if you have like, I don't know, maybe a couple hundred people or so, right? They might pay you a million dollars for your data. Maybe it could be a couple million dollars actually, up to like five million or so. If you have like, I don't know, call it 50 people or so, they'll pay you a hundred grand for your data. And so if you're like a agency and you have 50 people, okay, you can get your hundred grand. You just have to consider, is it worth it for you to sell that data? Or if you have really sensitive information, if you're like, if you're financial services, if you're like medical, you probably shouldn't sell your data.

• 30:50Speaker 01

  Or if you're even legally allowed to sell the data because I think some people will probably consider selling the data when they don't own it.

• 30:57Speaker 00

  Yep. So a lot of people like, I was sitting at that table and then one gal was like, I'll sell you my data, right? But you need to think about it first, like one, to Neil's point, can you actually sell it? And then two, what are the legal ramifications? Like if you get in trouble, like indemnification and all that, right? So anyway, I was talking to the guy who's trying to sell, I'm like, but this is not worth it, right? He's like, well then I guess it's not, but like he didn't have a good response, right? He's just, so I'm saying that's more of a hustle right now.

• 31:23Speaker 01

  And he's a data broker.

• 31:24Speaker 00

  Yeah. But like, how did he magically just become a data broker, right? So there's like these magical data brokers coming out of the world, where they're like little leprechauns coming out of nowhere, everywhere. They're just like trying to sell your data, right? Now, the second hustle I see right now is people are trying to help with AI transformation, right? Because I think that's a bunch of bullshit. And I've said that earlier this year, right? You can't, like, companies will buy it right now because their boards want them to buy it. Or maybe their investors want them to buy it and say like, oh, hey, you know, you need to drive AI transformation. It's like, okay, you know, we're going to help you, you know, optimize your, your cloud usage. And then we're going to show you the right way and we're going to train you how to do it. That to me is a bunch of AI theater because I've tried that earlier this year. And you know what I did, Neil? I ran Jev through our, our conversations early in the year.

• 32:08Speaker 00

  And that's the one thing I actually changed my mind on, but mostly other things we've, we've held consistent on. Do you want to know them?

• 32:14Speaker 01

  Yes.

• 32:14Speaker 00

  Okay. Well, let me, let me finish my thought on the YPO Global AI Summit here first. This is, um, Siki Chen, and he has said here, okay, in a, in an AI regime or regimen, regime, I think, speed is the only defense that you have. And you like hearing that because you like to move fast. And speed is the only defense. You see everyone just moving faster with these forms. So anyway, that was the event.

• 32:37Speaker 00

  And I think we'll probably be doing it again next year. So thank you to all the speakers and sponsors that we had.

• 32:44Speaker 01

  Yeah, it's, it sounds like you learned quite a bit. I'm still curious on why, you know, it's just like you and I learned this in marketing years and years ago. I think maybe some of these people haven't learned it yet. We took a little bit of a different approach. When we started doing marketing years ago, we would take a lot of shortcuts that would hurt us in the long run. I look at people like who are pitching AI transformation. And I'm not saying there really isn't AI transformation. I think for some organizations, there really is AI transformation. But what the people are pitching online is not that.

• 33:21Speaker 00

  They're selling it for a quick buck. I do believe real AI transformation, some companies are doing it, but the rest, they're almost like, kind of like they gave the core sellers a bad rap.

• 33:29Speaker 01

  Yes.

• 33:29Speaker 00

  Yeah.

• 33:30Speaker 01

  And when you, same with like the data brokers, but when we were in marketing early on, we saw shortcuts. And when you took these shortcuts in the long run, they didn't pay off. They gave you quick hits. And then sometimes you went backwards all the way, if not even way more than where you originally started. And if you just did things the right way, it would compound and you would get much better results over time.

• 33:52Speaker 00

  Yeah.

• 33:52Speaker 01

  I look at these people who are just doing these kinds of things. You're spending all this energy creating new websites and marketing and pushing stuff out there. If you just pick something that was more long-term, had longevity, it was legitimate, you would generate a lot more revenue in the long run by just focusing on the right thing. And your marketing compounds over time versus if you just take quick shortcuts. And I'll give you a prime example of this. Someone was asking me the other day on SMB marketing versus enterprise. Because like, hey, at your agency, NP Digital, you do more enterprise than SMB. I said, yeah, we do. And they said, how do you get most of your enterprise customers? And I was like, well, they come from different places. He's like, break them down.

• 34:37Speaker 01

  And I was like, all right, we get some from RFPs, we get some from just leads coming through the website. We get some from employee connections, we get some from client referrals. So he's just like, if you had to pick the one thing that gets you most of your enterprise business, and what is it? And I was just saying, just being in business for a long time. I'm like, this is our ninth year. So he's like, really? And I'm like, yeah, if you do something long enough.

• 35:01Speaker 00

  And good and well.

• 35:02Speaker 01

  Well, and you market for it. And we've won like tons of awards. We, this year we had agency of the year from Ad Age. We won SEO agency of the year from Search Engine Land, right? I think we won campaign agency of the year as well. But I was just like, if you do good work and you keep pushing, you just grow and your brand builds. And the moment I've told him this, he's like, oh, nine years is too long.

• 35:29Speaker 00

  Oh.

• 35:29Speaker 01

  And I was like, this is why a lot of marketers, in my opinion, are very short sighted. They see the growth of anthropic or open AI and they're like, I want that kind of growth. No, those companies didn't spin out of nowhere. They, they've been in business for a long time and had a lot of capital. The part that you see is a tip, like you know, the iceberg image that you see on internet memes? It's like the biggest part about the iceberg is underwater. But there's a little tip that's, you know, above water. And that's a part of people seeing like, wow, look at how fast that success was, but they don't really look at the rest. And, you know, I genuinely believe if you're going to run any marketing campaign and you think it's short-lived, don't waste your time.

• 36:14Speaker 01

  Now you could be saying, well, Black Friday is short-lived. No, Black Friday is short-lived every single year. You should actually set up infrastructure to do Black Friday and holiday promotions really well on a regular basis. And build off that. So it just grows your brand and grows your revenue, but too many people are just short sighted.

• 36:32Speaker 00

  Let me show you this meme, Neil. This, so you mentioned the iceberg meme, right? Let me show you another meme when it comes to marketers or agencies in general. It's this horse meme over here where it's like, it looks really good, the back, right? The, what they're selling, and then it becomes stick bigger. It becomes worse and worse over time. Have you seen this one?

• 36:48Speaker 01

  No, I've never seen that dude.

• 36:49Speaker 00

  You should show it to your, your daughter and your son.

• 36:53Speaker 01

  My daughter would not understand. She's like, daddy, daddy, I ride horses. They don't look like that.

• 36:57Speaker 00

  Yeah, no, it's, it's funny though, but anyway, it's, by the way, like, I'm so.

• 37:03Speaker 01

  Go ahead.

• 37:04Speaker 00

  So I'm actually very grateful for, you know, we, we, we know this guy, Ramit Sethi. He wrote a book that I read called, I Will Teach You To Be Rich. I read it when I was like 21 years old, 22 years old. And I think what younger people don't learn right now is the value of compound interest. If they just learned that one lesson, things would be okay. Because by the way, we're in our early 40s now, right? We, it, it took a while for me to learn what that looks like. So we've compounded for a little bit, so.

• 37:29Speaker 01

  By the way, do you want to hear the craziest quote unquote, marketing racket that I've seen out there?

• 37:35Speaker 00

  What?

• 37:35Speaker 01

  It's actually in the horse industry because you showed a picture of a horse. So my daughter rides horses. I have a few other friends where their daughters ride horses or their wives or whatever, right? So one of my buddies, Sean, he owns a nice house in Florida and he has a ton of land. And he has like horses and stables and you know, like the circular path that people ride the horses in or jumps or whatever. It's something that's expensive. And he's just like, dude, you know, you better hope your daughter doesn't get into horse riding. It's expensive hobby. And he's like, there's no money to be made. And I'm like, no, my daughter's never getting into it. One day she's like, daddy, daddy, I wanna ride horses. And she tells my wife that too.

• 38:18Speaker 01

  And my wife bid on some like nonprofit thing and she won it. She, we're gonna donate the money anyways. So she got like a few free horseback riding lessons or whatever.

• 38:28Speaker 00

  Uh oh.

• 38:29Speaker 01

  So it wasn't expensive, like it was really cheap. I don't know what my wife.

• 38:31Speaker 00

  But it is expensive though.

• 38:33Speaker 01

  Like five hundred bucks or something like that, right? And that was a perk. We weren't trying to get it, but we just had it. So my wife did a few of them and my buddy Sean is like, you gotta watch out on their racket and how they pitch you and their marketing talk. And I'm like, what do you mean? So he's like, you ride a horse and they'll tell you really quickly, these trainers, wow, you're so good. We rarely see someone, you know, who uh rides a horse this well when they're so young. And I was like, okay. And then I'm like, what's next? And then he's like, he's like, they'll say, oh my God, your daughter would do so much better if you actually had a decent horse. Hey, did you know there's programs where you can lease them? You don't have to buy them.

• 39:15Speaker 01

  And they'll start you at horses that are like two, three thousand dollars a month or five, six thousand dollars a year, right? Depending on what they think they can get away with. And once they get you in, they keep selling you more and more. And they talk about like, oh, your daughter would be great at jumping. And this horse is amazing at that. We should rent this one, like I think she has potential. And a lot of them just, excuse my language, bullshit. I, I, I don't, didn't mean to cuss uh and lie and just continually upsell you. Everything, oh, I got this place where you can get really great gear from. I'm like, oh, there's this store over there. No, no, I know someone, they can get you really good gear. Uh, you should just go to them, here's their card.

• 39:57Speaker 01

  And they just continually upsell you on everything you do not need. I have not bought a horse or leased a horse and I refuse to.

• 40:05Speaker 00

  So how much have you spent?

• 40:08Speaker 01

  On gear?

• 40:09Speaker 00

  Mm hmm.

• 40:10Speaker 01

  Or the horseback riding lessons?

• 40:12Speaker 00

  Everything.

• 40:13Speaker 01

  Uh, the horseback riding lessons aren't that expensive. Let's say we spent less than a thousand bucks, including the donation on the horseback riding lessons. The gear, this is gonna sound silly or stupid to you. Uh, I told my wife to buy my daughter decked out gear cause I wanted the pictures and I didn't care if the gear was better or not. I'm like, get really cute gear so I can have pictures and memories. Um, so I don't know what she spent on the gear, call it a few thousand bucks at least. Uh, but for me, the gear was more so for the pictures.

• 40:48Speaker 00

  Mm hmm.

• 40:48Speaker 01

  Um, then, you know, buying something that was.

• 40:52Speaker 00

  So you're not, you're not fully in the funnel.

• 40:54Speaker 01

  No, I'm not in the funnel. I, I refuse to be, but they already pitched us on uh leasing horses. And I just, I just say no every single time.

• 41:02Speaker 00

  You just reminded me of something. You told me the horse story and I told you about being in Turkey, right? Let me tell about, did I ever tell you about the, the Turkish rug funnel?

• 41:09Speaker 01

  No.

• 41:10Speaker 00

  Okay, so the Turkish rug funnel, guys, this is a masterclass in high touch persuasion, okay? So I remember I had to be like twenty nine years old, thirty years old. I went to Turkey, right? For like a EO event. And it was me and my, my two American buddies. And by the way, we stick out like sore thumbs in Turkey. We were walking to Old Town area. So like I meet up with them and then um all of a sudden they're like, hey, hey, hey, come, come over. I'm gonna show you some stuff, right? So we walk into the rug, we're about to leave the rug store, right? Right, no, no, no, here's some tea, some Turkish tea, right? This is amazing. Let us show you some more rugs. Right, you see the people working hard, making the rugs, like it's, it's painstaking, right? But then what happens is they bring you into another room, okay? Now, in dating, when they bring you into another room, right? It's like a, it's like a scene change. You're always trying to, you know, bring people into different rooms, like in the, you, you know the game, Noah, right?

• 41:54Speaker 01

  But what, why do you wanna scene change?

• 41:56Speaker 00

  Cause they're trying to like, they're, they're getting closer to you. They're, you're getting, they're getting to know you in different areas, right? You feel like.

• 42:02Speaker 01

  Yeah, so they're, they're trying to make you feel like they've known you longer because you've had multiple locations versus one.

• 42:08Speaker 00

  So, so get, get this, I actually, I have this pulled up on Google right now too. So scout recruitment, they identified us, we stuck out like sore thumbs, so they pulled us in, right? So they spot targets via the street approach, that's exactly what happened. Then there's attention capture and a loss leader. So they, they lure the prospects in, inside with hospitality. So traditionally serving apple, lemon or Turkish tea. So we got Turkish tea. Then we go into the next room and it's like, we got some baklava for you, right? So it's a dessert. So they feed all of the, like baklava. And by the way, they owned the restaurant next door. So they're giving us.

• 42:38Speaker 01

  So their cost is lower.

• 42:39Speaker 00

  Yeah, their cost is low, right? And I'm like, what happens from the book, influence? When I give you something, you feel like you owe me.

• 42:46Speaker 01

  Yeah.

• 42:46Speaker 00

  They have already given us two things already and they've shown us such hospitality with the rugs. Okay, we're into the next room now. We, no, no, we go in the elevator and we go all the way upstairs now. We're in the third stage of the funnel now, right? And then now they bring us full on skewers, lamb skewers, beef skewers, chicken shawarma, all this stuff, this rice here, that, right? Like you see it all coming, right? And then they bring child labor out. So they bring kids out and then they start doing rugs and rugs. And this is like their family, I'm not saying it's child labor.

• 43:16Speaker 01

  Oh, okay, that's a little better then.

• 43:17Speaker 00

  Boom, boom, and now the rugs are just full on coming out. It's like a full on like, like rugs fireworks, right? And then the, my friend that's with me, he used to sell rugs. He's like, Eric, that's a very nice, so he starts selling for them too. He's like, that's a very high quality rug, Eric. Guess what, guys? And they're spending ten thousand dollars on a rug.

• 43:33Speaker 01

  You bought one?

• 43:34Speaker 00

  Yeah, I bought one, I bought one, but it was, it was a high quality, I still use it today. So, but what happens afterwards, I buy from them, they ship it to America. Every year they follow up, uh, the phone, rug, rug, like, like twenty pictures of rugs, right? And the guy's like, I am here in LA, I'm back, right? And every year he keeps hitting you up. So all that to say, guys, they won, they beat me.

• 43:56Speaker 01

  Yeah, you know, there was another interesting uh funnel that I ended up seeing from a buddy. So buddy owns gas stations. We actually have another friend who actually owns gas stations too, but this guy you don't know.

• 44:07Speaker 00

  Mm hmm.

• 44:08Speaker 01

  And he owns gas stations. Typically, there's places where you buy gas from and then you resell. You could buy it for Exxon and all that, those kind of places.

• 44:15Speaker 00

  Yeah.

• 44:15Speaker 01

  What I learned was some of those places like Exxon or Shell or whatever, they'll give you money upfront to change your gas station to their brand. You buy gas from them, but you're getting some money on advance. He went a little bit of a different route. He's buying gas from some other random company that's not Exxon or Shell and he's getting his price and he's getting a good deal on the gas. So he's taking his gas stations and making it the lowest cost gas that you possibly can. He makes pretty much no money from the gas. Now, when I say he makes no money from the gas, keep in mind when you charge someone for gas, there's credit card fees and stuff like that. So he's baking in all his expenses and just trying to be break even on the gas, all right? Which is substantially, or not substantially, it's cheap enough

• 44:57Speaker 01

  cause gas prices have risen drastically, cheap enough uh against the competitors where people start coming in. Then he has all these signs, right? He's in like free coffee inside, you know, he's trying to get people indoors, like free coffee, come get your free coffee. And, and he's not trying to give crappy coffee away for free, he's trying to give good coffee away for free.

• 45:20Speaker 00

  Yeah.

• 45:20Speaker 01

  So now he's getting people inside his gas station, right?

• 45:24Speaker 00

  Yeah.

• 45:25Speaker 01

  For free coffee. You know what happens when people come into a gas station? What do they start doing?

• 45:31Speaker 00

  They start buying other stuff.

• 45:31Speaker 01

  They start buying other stuff, candy, chips, knickknacks.

• 45:34Speaker 00

  Yep.

• 45:35Speaker 01

  And on that kind of stuff, he has a good, solid markup, better than his competitors. So he's making way more profit when people buy that stuff.

• 45:42Speaker 00

  Yeah.

• 45:42Speaker 01

  And he's just crushing it, just selling people on the inside. So he'll break even on the gas, give away free coffee, which is costing his money.

• 45:52Speaker 00

  Yeah.

• 45:52Speaker 01

  But the gas and the coffee are the lost leaders.

• 45:55Speaker 00

  Yeah.

• 45:55Speaker 01

  Cause other people try to make a small amount on the gas.

• 45:57Speaker 00

  Mm hmm.

• 45:58Speaker 01

  And then he sells them all the stuff on the inside. But when you're at a gas station, you know chips cost more than a grocery store, but you're not gonna compare being like, well, this bag of Doritos at a grocery store is only one dollar. Here it's a dollar and eighty cents.

• 46:13Speaker 00

  Mm hmm.

• 46:14Speaker 01

  Another gas station may be charging a dollar sixty cents. He doesn't care, he'll just charge a dollar eighty. But you don't know that another gas station's charging a dollar sixty. You just don't care and you just pay the twenty cents extra.

• 46:26Speaker 00

  Yep.

• 46:26Speaker 01

  From a competing gas station. Cause people, when you look at gas stations, they don't compare the price of the products inside the station. They compare the price of gas, which is getting you into the station, right? And making a killing. I think he has like thirty plus gas stations at this point, running this model.

• 46:45Speaker 00

  A loss leader, like I, I gotta tell you something, Neil, as I was searching the Turkish up sell funnel, guess who was cited first? Turns out it's me. So I didn't know I wrote about this in like twenty fourteen or whatever, right? But guess what, I pictures, like Istanbul over here, look, this is the rug guy. This is the scout, this is the guy that got me.

• 47:00Speaker 01

  You asked him to take a picture of him too, that was cool.

• 47:03Speaker 00

  I take a picture, so you can see them working hard, they're making these rugs over here, right? And anyway, I, I thought this was funny, this, this all came.

• 47:09Speaker 01

  Awesome.

• 47:09Speaker 00

  Yeah, yeah, yeah, anyway. 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. So this, anyway, we'll move on to the, the next topic. So let me, okay, so Neil, I did um a full analysis using Jev, which is a classifier that looked through the last twelve months of marketing school. So you wanna know what you changed your mind on, Neil?

• 47:43Speaker 01

  What?

• 47:44Speaker 00

  What do you think you changed your mind on the last twelve months? You tell me first, then I'll tell you.

• 47:48Speaker 01

  Well, I changed my mind on the last twelve months?

• 47:50Speaker 00

  Mm hmm. You can also say I give up.

• 47:53Speaker 01

  Yeah, I give up, I don't know what I changed my mind on.

• 47:55Speaker 00

  Okay, I got one for you. So in December, uh, a year ago, twenty twenty five, okay? So your positioning was more targeted events and more media, okay? Um, now you, you can, I wanna get your response to this. So later position, March through October, restricting interviews, delegate speaking, batch filming. I like staying at home now.

• 48:16Speaker 01

  Yes.

• 48:17Speaker 00

  Yeah, so that is something you changed your mind on and the judgment is strong on this one. That's pretty good, isn't it?

• 48:21Speaker 01

  Yeah, no, that is, I, I changed. I still do travel heavy, uh, but I have slowed down to, my big thing now is instead of trying to, cause I can't pick and choose when I travel for work. Always, but I'm more so intentionally now I'm just gonna slow down the summers. And if some periods are I'm like really heavy traveling, that's okay. But if I slow down the summers, at least I can do quite a few vacations with the kids.

• 48:47Speaker 00

  Yeah, yeah. By the way, I like I came back from Turkey, like I wasn't planning on going to Taiwan, but then I realized this is a once in a lifetime thing. Did I show you this stuff with my grandfather?

• 48:56Speaker 01

  Uh, which, no.

• 48:58Speaker 00

  I didn't, okay, so I was, I have this genealogy bot in Grok bot.

• 49:02Speaker 01

  Yes, that you did. We talked about it on the podcast.

• 49:05Speaker 00

  Did I show you the pictures of my dad too? The old pictures of my dad? Oh, this is crazy. So you should, you should run this with your family. So check, check this out. So, um, just so everyone knows, my grandfather, turns out, I didn't know this. My mom never told me these stories about my grandfather. But he wrote the securities laws. So he was like at the center of the stock exchange and we're, that's what we're gonna be visiting too.

• 49:25Speaker 01

  That's cool.

• 49:26Speaker 00

  This is my grandfather over here and I'm his grandson. Um, but check this out. This, this, this, this bot. This is a picture of my dad in his, his twenties, right? Like imagine what it can pull up with your family.

• 49:40Speaker 01

  He's in the front?

• 49:40Speaker 00

  He's in the front.

• 49:41Speaker 01

  That's cool.

• 49:42Speaker 00

  D E I, he's in the front. Everyone, everyone else is like, yeah.

• 49:46Speaker 01

  Yeah, you're right. I don't think there's another Asian in there.

• 49:49Speaker 00

  There's Indian in there, I'll tell you that much.

• 49:50Speaker 01

  Oh yeah, there's Indian.

• 49:51Speaker 00

  Yeah, yeah. Anyway.

• 49:52Speaker 01

  It looks more like Americans in most of that.

• 49:54Speaker 00

  That's why I'm like, I didn't wanna go, right? It's like, oh, let's talk about this. How do you weigh when to travel? Cause I'm like, okay, I just came out from this thing. I just hosted this event. I have to fly fourteen hours in a different direction right now to go to Taiwan. I haven't been there for thirty four years, by the way. Um, I'm like, but I get a private tour to meet Foxconn top management, TSMC top management, and all these like other semiconductor companies. And then I get to meet the securities guy and, and like mention that I'm like tied with, with my grandfather. And the food's really good there too. So for me, I'm like, I don't get another setup like this, so I might as well just go.

• 50:25Speaker 01

  Yeah.

• 50:26Speaker 00

  Yeah. But then obviously for you, I look at like, sometimes when we're traveling, it's like, okay, we're gonna speak at an event, but we can also meet with customers too. That's also worth it. And plus I just like traveling.

• 50:35Speaker 01

  Yeah, I, I, I don't mind traveling. Um, I think it's just finding a balance. And what I've really learned over the last few years, cause I went from, I'm gonna travel a lot to I'm gonna travel less. I'm gonna travel a lot to I'm gonna travel less. And I keep going back and forth. And what I found is, and I realized this year is, I don't control my traveling. Sometimes you just gotta travel, cause it's customer related stuff and you don't have a choice. So I end up traveling whenever I need to, but I make sure now, instead of being like, oh, I had to travel for Thanksgiving. I don't do that anymore. I'm home for Thanksgiving, cause the kids want me during the holidays. I'm home, of course, during Christmas. I'm home during Halloween. I'm home during the birthdays. And it used to be where my wife's like, just be home for their birthdays. You can't miss that. And of course, Christmas.

• 51:18Speaker 01

  But now I'm adding more holidays and I've even gone as far as I'm gonna be home for a good chunk of the summers and do vacations with them.

• 51:26Speaker 00

  Yep.

• 51:26Speaker 01

  And when I break it down that way, it's if I had to travel for work, it is what it is. I need to do what's best for the business. But I'm also spending enough quality time with the family where they're happy.

• 51:35Speaker 00

  And you don't regret it?

• 51:36Speaker 01

  I don't regret it. And that is what I found is the optimal solution. It's not ideal, but it, it works for the family and it works for business.

• 51:44Speaker 00

  Yep. And I'll tell you guys when I used to waste my time for travel and then Neil can share any stories here too. But when I used to get invited to speak at, by the way, Ukraine's a beautiful company, what, country. When I get invited to speak at Ukraine, you speak there. Or when I got invited to speak in Australia for like some like random event, those are the ones that are not so good. Because you waste a lot of time traveling there and it doesn't help drive customers and you don't meet customers either.

• 52:05Speaker 01

  Totally agree. And it's not that Australia is a bad country or Ukraine is a bad country. It's more so for Eric's business. He doesn't have customers in Ukraine or Australia.

• 52:14Speaker 00

  Exactly.

• 52:15Speaker 01

  So when you look at how much he's getting for speaking, he's getting paid, which is a nice dollar amount. But what people tend to forget to put into the cost equation is what is that time worth? If you spent that on your business instead of going traveling and speaking somewhere else.

• 52:32Speaker 00

  What we call the opportunity cost, right? So, and even if they paid you, you know, a hundred grand or whatever, it's still probably not worth it. Considering that you can have all these little touchpoints within your business that can drive way more value than that.

• 52:43Speaker 01

  Yeah.

• 52:44Speaker 00

  Yeah. So here, here's where I train, change, change my mind, Neil. And then also this is gonna call out where we held steady, where we've been consistent, cause that's probably more important than changing our mind. So for me, my earlier position in February through June was, we're gonna train our people. We're gonna train our people on AI. We're gonna do these hackathons. We're gonna do all these things. And so it was said, my earlier position was training people plus tougher selection. So tougher selection on talent. That hasn't changed. Later position, September through October, less faith in broad retreating. So my faith has got away because it just, I saw it with my own eyes. It doesn't work.

• 53:17Speaker 01

  It, it, I think it depends what you're trying to train people on, but I agree. If you're trying to train them on really complex stuff. Some people just have it in them and some people don't. It's easier to hire the people that already know the stuff.

• 53:27Speaker 00

  It's a mindset thing. It's like to know that stuff, you have to have the mindset for it. Um, like for you and I, like when we're texting each other about the stock market or talking, texting each other about business, that's cause we enjoy the game of it, right?

• 53:37Speaker 01

  Yes.

• 53:37Speaker 00

  That's, if you enjoy it, you're just gonna keep doing it. So, yeah. Um, okay. Now Neil, more for you on this one. So Neil, on content topics. So August, avoid most AI content. In October, selective AI topics tied to buyers. So you've expanded your topic ownership. Um, that's what it says.

• 53:57Speaker 01

  Yeah.

• 53:57Speaker 00

  So I'll give you one more on, um.

• 54:06Speaker 00

  Here. Eric's trajectory, train optimism, okay.

• 54:11Speaker 00

  Automation expanded while human review remained an explicit requirement. So I've always had the same mindset that yes, AI, but you need to have a human in the loop. And it's maintained through October through all the way up to now. For you, Neil's trajectory, and we can move on from this. He took more control of buyer specific topics. So this is where we started complaining about all the stupid content we had to make. But not stupid content, more so the topics we didn't wanna cover.

• 54:35Speaker 01

  Uh huh. Or topics that took our time, but did not drive revenue.

• 54:39Speaker 00

  Mm hmm. Exactly. So, um. Ask sales which problem generated the conversation, whether the buyer fits the capability and whether the content could attract the wrong type of contract. And so me, I'm, we were both kind of complaining about this, how we're just making content for the sake of making content. And I don't know where you stand on it now. Like, are you still, like, I saw you make a video a week or two ago and I commented on it on Instagram. And you were like, you had the, the clone video and you did not look like you were enjoying yourself. So I just commented like, for sure you hated making this video.

• 55:07Speaker 01

  I hate making the clones because it takes, when there's three clones, it takes at least five or six times longer for me to record that video.

• 55:15Speaker 00

  Yeah.

• 55:15Speaker 01

  Than a normal video.

• 55:16Speaker 00

  Yeah. And also, by the way, when you're, when you're like clearly like barefoot, like you extra don't give a crap. You're just like standing.

• 55:23Speaker 01

  Cause it's in my house.

• 55:24Speaker 00

  Yeah, but sometimes you, most of the time you have socks on.

• 55:27Speaker 01

  Uh, no.

• 55:29Speaker 00

  I noticed most of the time you have socks on.

• 55:30Speaker 01

  No, I only have socks on if I came from somewhere or, uh, if I came from somewhere, but I don't wear socks.

• 55:35Speaker 00

  Cause the clone shows your whole body. Usually you're like sitting down.

• 55:38Speaker 01

  Yeah, correct. The, the reason the clone is, uh, a lot more work is, if you're ever recording clone content for social media, you have to say what you would say to the clone or say to the camera. When the clone talks, you have to look at them and wait for them finish talking. So someone has to read their lines and you have to look towards them. Even though that's not being recorded, I have to look and blink and be natural during those periods of times to make it look more natural. That's what just eats up a lot of time. The new format that I like is talking to someone, but it's not clones and it could be talking to myself. So let's say if, if it was you and me, but it was me being both people across the desk.

• 56:18Speaker 00

  Yeah.

• 56:19Speaker 01

  And let's say I was wearing a hat in one version of me and the other one I wasn't. I can just record all my lines at once and then I go to the other side and they record, or then we record the other person's lines all at once. That is faster and it's not all the clones in the video at the same time.

• 56:35Speaker 00

  Yeah.

• 56:35Speaker 01

  You're just cutting. That performs decently well.

• 56:38Speaker 00

  Yeah.

• 56:39Speaker 01

  And what I found is it's just quicker to record and more efficient.

• 56:41Speaker 00

  I just, I feel like a lot of stuff is very gimmicky. I'm, I'm, and I'm just talking about these formats in general, like when you're like, it's like when you were doing like, okay, you're doing clones or you have like sixty things that you have listed. It's like, how are some, someone gonna do all sixty of those things?

• 56:53Speaker 01

  They're not.

• 56:54Speaker 00

  Um, and then I start, so we, we made a change on my LinkedIn. So even though I might get like two or three thousand comments on like a post. I was like, guys, if you keep giving away these resources, first of all, you're gonna get these tar kickers. It's like, if you, you know, uh, comment, you know, download to get this resource. You're gonna get a lot of tar kickers and whenever I comment download on something, I don't even download it, right? Um, so you're gonna get a lot of tar kickers. You're, you're, you're better off talking about a case study or you're better off talking about some success that you're seeing with something and then you get the opt-ins that way. And so that's what's worked for us and that's, that's kind of how, how we're, we're changing our, our content workflow. So.

• 57:29Speaker 01

  Yeah, dude, uh, what ends up happening is, is you do all this stuff and then you find out that you get engagement or you get popularity, but it doesn't drive ROI. And I think this is a big trap that especially SMBs get into marketing. Enterprises are much better. But SMBs want to be popular, will love the likes, love the comments, love the followers. But they don't realize that there's not a direct correlation from more followers and likes, uh, to revenue. Sometimes you can say there is, but in many cases or most cases, I would say when we look at client accounts, there's not a correlation for majority of the accounts. And the reason being is they're posting content that gets engagement, not posting content that drives revenue.

• 58:15Speaker 01

  And you start seeing a lot of companies, especially in B two B, doing things like doing dancing, dances in their office or showing pictures of like parties. I'm not saying this stuff doesn't help with recruitment or other areas, but typically with marketing, you're spending money. You wanna make sure you're generating revenue as well from the money that you're spending. And people too much focus on posting stuff for engagement versus on stuff that will generate a lot of revenue. And I'll give a great example of this. Um, I had a buddy who got, I think like four, five hundred thousand views in his SMB.

• 58:53Speaker 00

  For one video?

• 58:54Speaker 01

  One video, which is a lot. They decided to do a contest. So they took a lot of the employees and they're like, uh, the, the step one would be like, get the ping pong ball in the cup. And then after you do it, you go to the next station. The next station would be to be like, uh, flip over a cup.

• 59:13Speaker 00

  Oh, it's like a drinking game.

• 59:14Speaker 01

  Yeah, but it wasn't drinking.

• 59:16Speaker 00

  Yeah.

• 59:16Speaker 01

  But it was like flip over a cup and get it to land on, uh, you know, right side up or whatever it may be. And then, then the next station would be like throwing a dart and hitting, you know, uh, somewhere on the board, right? And they were trying to see who in the office could get the fastest time for it.

• 59:33Speaker 00

  Yeah.

• 59:33Speaker 01

  And it was just an entertaining game. So people watched it. And I'm making up which station was which. I, I, I don't remember all of them, but it was something like that. It was a silly game. They're like, look at all these views and they're so ecstatic and the people are all high fiving because, you know, they're getting recognition from being in the video and their friends saw and had a lot of views. I'm like. But this doesn't help your business drive any revenue. And I'm like, you guys are accountants. You guys are trying to get more people to give you their accounting work for more SMBs. Cause they're SMB themselves.

• 1:00:07Speaker 00

  It makes me not wanna work with them.

• 1:00:10Speaker 01

  Well, they're just like, it shows how cool we are and our culture and how we're fun to work with. I'm like, people hire accountants based on their price and how much you're gonna save them.

• 1:00:17Speaker 00

  Yep.

• 1:00:18Speaker 01

  And hopefully you won't make any mistakes.

• 1:00:19Speaker 00

  You've done it work well before.

• 1:00:20Speaker 01

  Yes, exactly. No mistakes. Cause if, if it's cheap, but they make mistakes, maybe you overpay in taxes. And I was like, this video is not gonna drive you any revenue. You fast forward, it hasn't driven them any revenue. But they still like creating content like that. Cause they think it's cool. And I'm just like, and they're talking about how well they do social media marketing and how they're growing the followers. I'm like, but there's no ROI from any of this. You're just wasting your time and you're wasting your team's time, which is costing you money.

• 1:00:46Speaker 00

  Yeah, but they're supposed to be generating revenue with that.

• 1:00:48Speaker 01

  Correct.

• 1:00:49Speaker 00

  So by the way, let's, let's use an example of Gary Vee, for example. Okay. So I, I look at his content now and I'm a big, big, big fan of Gary Vee. I think we both are. When you look at his content now, it's actually more geared towards business. If you look at it, it's like, he does talk about AI. He does talk about social media, but all the like, he does have a social media agency. They do a lot of experimental marketing as well. And almost everything he's talking about is related to business though. Like he is, he does, he still does some of the motivational stuff, but most of it is geared, like I look at the topics, the titles. And I'm gonna pull it up right now, but it is geared more towards business is, is what I'm finding.

• 1:01:22Speaker 01

  I, yeah, I think that could be true, but I think a lot of Gary Vee stuff appeals to smaller businesses. And if I had a guess for his agency, VaynerMedia, I believe they're more enterprise.

• 1:01:33Speaker 00

  Yes. So, and I think they're doing 400 million a year now, if I'm not mistaken.

• 1:01:36Speaker 01

  It's something like, they have VaynerMedia, uh, they have like some friends thing. I forgot what it's called, something friends, V friends?

• 1:01:44Speaker 00

  V friends. Yeah, yeah, yeah.

• 1:01:45Speaker 01

  V friends. And then they have like some content sites, Powwow or something like that.

• 1:01:48Speaker 00

  So, okay, well, let's just read some of the topics. I'm looking at his YouTube channel. So he has an interview with Mel Robbins. Then he has another one. It's, it's boring, but he likes to talk about garage sales, right? So he has this one, it's boring, but it can make you rich in the AI era. Then another one, the biggest social media shift nobody's talking about. Then this one, how I grew on social media if I started today. And then this one, everything you needed. So you can see a lot of stuff is about social media, social media. When to start posting, what is like, it is smaller businesses, but I think for him, he just wants, he said this before.

• 1:02:15Speaker 01

  I think he's looking for massive TAM and audience.

• 1:02:18Speaker 00

  As much, uh, yeah, people as possible. But I think he's largely kinda staying in his lane around these topics. I don't think he's veered off as much as he has before.

• 1:02:27Speaker 01

  No, like I haven't seen him produce a ton of content related to AI.

• 1:02:31Speaker 00

  Yeah. So I'm saying he has stayed in his lane.

• 1:02:33Speaker 01

  That's what I'm saying. I think he's, he's done a good job staying in his lane. I'm not saying he doesn't know AI. But you know, if, if you ask him, I bet you he would say Jensen from Nvidia knows more about AI than him.

• 1:02:45Speaker 00

  Oh, for sure.

• 1:02:45Speaker 01

  He, he speaks on what he knows really well. Doesn't mean he doesn't know anything on AI, but um, he's just doubling down on what works for him and his audience.

• 1:02:54Speaker 00

  By the way, I made a new marketing school clips channel for us. It's uh, I'm trying to pull it up. I'll, I'll pull it up later, but um,

• 1:03:03Speaker 00

  yeah, I'll pull it up when we're getting results from it. So we'll, we'll, we'll go from there.

• 1:03:08Speaker 01

  Uh, all right. What else? We have time for what? Two more?

• 1:03:10Speaker 00

  We have time for two more. So um, here's what didn't change and then we can move on from this. So Neil, what didn't change is um, M and A and international growth. So Neil's autumn comments, so this is last year, uh, retain these approaches while clarifying constraints. So you can speak to that.

• 1:03:26Speaker 01

  That I'm doing tons of M and A.

• 1:03:28Speaker 00

  You haven't changed your approach on, uh, you haven't changed your mindset on M and A and international growth.

• 1:03:32Speaker 01

  No.

• 1:03:33Speaker 00

  Yeah.

• 1:03:33Speaker 01

  I know today, for a matter of fact, I think my team has a call and like, or they already had it. Or within the next hour for a deal that we're almost final stages on the LOI.

• 1:03:42Speaker 00

  There you go. So that hasn't changed. Uh, customer fit and relationship. So the early event discussion in August, customer first SEO discussion, already prioritize these. Don't know what that means. Results of our activity, we just talked about that. We both agree with that. Both people, you and I, were rejecting token consumption as a standalone success metric on May 12th. Human differentiation, Neil's October 28th critique of an automation heavy agency reinforces his earlier emphasis on capable people. It does not prove a new anti-AI position. So we both talked about human differentiation. Yeah. So yeah, that doesn't change.

• 1:04:12Speaker 01

  I, I think people forget about the human differentiation. I think they believe you can just use all this technology and you'll produce amazing results. But they forget, a lot of the results end up being average and creating marketing content or marketing campaigns that are average, don't perform well. It just costs you money.

• 1:04:30Speaker 00

  Yeah. I wanna talk about, so Elon has this video here. So um, Elon said that, so he does, he's doing this interview with investor Ron Baron, who put a lot of money into his company. So um, he has said this, okay, so Ron Baron asked Elon Musk, how many CEOs live on site in an airstream and work hands-on with everyone? And then uh, Musk is like, airstreams are actually pretty nice. So that's the portable.

• 1:04:53Speaker 01

  Yeah.

• 1:04:54Speaker 00

  Uh, thing is, is parked right next to the power plant. We built this power plant that's producing over a gigawatt in about a year, as opposed normally about five years. There is no upstairs. He walks the entire site, um, up to five times a day. He's pulled power cables the size of an anaconda, so a large snake, run fiber, wired switches and worked on the power plant software. You know, he says, I try to do at least a little bit of everything, so I'm not numb to the pain, the pain of the people who are actually doing it. It's not as though I'm sitting in an office and somebody has to come to me. I'm walking the floor, asking them questions actively. And then he just says this, so he retweets it. He says, armies that win have the general at the front lines. Nobody wants to bleed for the prince in the palace.

• 1:05:37Speaker 01

  But did he say how many people also live in an airstream?

• 1:05:41Speaker 00

  I don't know of anybody else that's living in an airstream.

• 1:05:43Speaker 01

  No, no, it wasn't that, what Ron was asking, like how many other people are in airstream on site?

• 1:05:49Speaker 00

  He asked how many CEOs live on site in airstream. So it's nobody.

• 1:05:52Speaker 01

  God, I thought you meant like how many more of your employees are on site.

• 1:05:55Speaker 00

  But I, I think we can, we can agree, like he's probably the most hands-on public CEO that we've seen.

• 1:06:00Speaker 01

  I think he's one of the most hands-on CEOs, period.

• 1:06:03Speaker 00

  Yeah. Ever. I don't, I don't.

• 1:06:04Speaker 01

  Yeah, I don't know of anyone who's more hands-on than him.

• 1:06:06Speaker 00

  Yeah. But again, what he says is armies that win have the general at the front lines. Nobody wants to bleed for the prince in the palace. And when I think about how that's maybe applied to my experiences, when we, I've kinda sat back and waited for someone to do stuff. It just wasn't working, right? And so Elon, back in the day, he never wanted to be CEO. He didn't wanna be CEO of Tesla or SpaceX, but he knew he had to be CEO to drive things forward. And um, I've seen this before, like when I'm at the front, even the bookkeeper is like, I see when you're back, right?

• 1:06:33Speaker 01

  Yeah.

• 1:06:33Speaker 00

  And even though you don't consider yourself CEO, I still consider you CEO because you are driving things.

• 1:06:38Speaker 01

  I pushed really hard. Even yesterday, I knew my team had a call on M and A because the company we were negotiating with, I did the original negotiations. All right? And um, we made a snafu in the contract when we sent it out. When you're buying a company, you pay X dollars upfront and typically you pay more as they grow. Okay?

• 1:07:01Speaker 01

  Internally, we caught that we forgot to put as you grow. So they just thought they got the payments, even though over the phone, I described that they would have to grow. So you know, the founder of that company.

• 1:07:17Speaker 00

  So just to confirm, payout doesn't happen if you're, you're not growing?

• 1:07:21Speaker 01

  Well, you get money upfront. Yeah, your earnouts, you can't go backwards a lot and just still get money. Like if, if your business collapses and goes negative a lot, why would I keep giving you money? That means I paid, I paid you too much upfront, right? I don't want a negative uh, growing business. So I messaged them, I said, any update? Cause I told him to just let me know what they're thinking. And he says, yes, we have a proposal, we are finalized some of the details, I'll send you a message so we can talk. My time. I honest, in honesty, it's been challenging to reset expectations and come up with a proposal that works from both. So I messaged back and Eric knows me, how do I typically communicate?

• 1:08:01Speaker 00

  Very short messages and to the point?

• 1:08:03Speaker 01

  Yes. I said, same expectations from day one. Technically, you guys keep getting more and ask for more than what was originally agreed upon. Just making sure you and your team know that.

• 1:08:15Speaker 00

  With a winkie face.

• 1:08:16Speaker 01

  Yeah, I did add a winkie face.

• 1:08:18Speaker 00

  Yeah, see, I knew it was there.

• 1:08:19Speaker 01

  Okay? Just try to be reasonable because your team has asked for a lot more from the original deal that you and I originally agreed to. I think they forgot that and keep pushing and ask, and I mean, they are, right? I think they forgot that and they keep pushing and asking for more than you can get from any other buyer. Just being honest and transparent. And he gave me a thumbs up. And then from there, um, he sent something and it was pretty reasonable. My team will modify it a little bit, but I have to let them know in advance. Because if you don't, then people just start going crazy.

• 1:08:58Speaker 00

  They start making up stories.

• 1:08:59Speaker 01

  They make up stories and they ask for something reduced. Dude, I had a deal that was supposed to close at the end of this year. It was a company that was a good fit. It was another agency. The founder and I agreed upon a price. I didn't wanna pay it. He didn't wanna take it. We both were giving a little bit and he says, all right, we got a deal. Shook our hands. We sent them the LOI. They come back and they ask for substantially more money. And I'm at an airport and he's like, we didn't change it much. And I was like, I can't review it. And he's like, he's like, it's pretty much the same financial. I'm like, well, if it's pretty much the same financially, sure, you got a deal. But I'm like, I don't think it's the same financially. So then our team's like, look, we'll give in on X, Y and Z.

• 1:09:42Speaker 01

  And then, and they said, uh, are you going to adjust? Are, do you agree to the financials? We didn't respond to that and we're just like, look, as this is where we're gonna give in and we have a deal. Like, okay, we have a deal. There's miscommunication. They got so pissed off at us saying you guys are going back on your word. I'm like, there's no email that I said I agreed to this. Two, I told you what I would do over the phone. You're asking me to pay you more financially, which would cost me, call it, let's say a million dollars more. A million dollars more is a million dollars more. That is not insignificant. That is not roughly the same amount of deal.

• 1:10:18Speaker 00

  Yeah.

• 1:10:18Speaker 01

  Right? I'm like, why would I pay a million dollars more for no reason? Just because I have money and I can afford it, doesn't mean I should pay it.

• 1:10:24Speaker 00

  Yeah, totally. It's, it's a principle thing.

• 1:10:27Speaker 01

  It's a principle. So they're just like, they were pissed off. They're like, we don't wanna do this here. Okay, no problem. There's tons of other deals I can buy.

• 1:10:33Speaker 00

  You just reminded me of something. So Neil was very kind. Uh, about a year ago, he, he, he brought me this agency. He's like, hey, you can probably take it off this guy for free. Remember this one? It's a year ago. Guess what? I talked to someone recently that went to the, the company that acquired them. I was like, hey, just curious, what happened to this company where, you know, um, you know, I'm sure they got it for free. And what happened to all the clients and what happened to all the people? I was like, oh, we, we churned all the clients and they fired all the people. So it didn't work out.

• 1:11:01Speaker 01

  Wow, it didn't work out. But I bet you they paid for it or something, right? Or no?

• 1:11:05Speaker 00

  They probably paid something, but like, remember the deal I had and then like, I was like, hey, if I'm gonna offer you, and he wanted to talk about it, like, I'm just gonna do it. I'm not gonna pay anything.

• 1:11:13Speaker 01

  Yeah.

• 1:11:13Speaker 00

  Right? And he was willing, he was willing to do it, right? And I'm like, no, I can't do anything for this, right? And. Thank God, because I felt it would go in this direction and that's exactly what happened. And then there's another one you brought up recently. I was like, it's just gonna be more work and it's gonna cause more headache. And that's exactly what happened.

• 1:11:30Speaker 01

  It's also why

• 1:11:31Speaker 00

  Too good to be true.

• 1:11:31Speaker 01

  It's too good to be true. For us, well, actually with some of them, like the one I recently brought you, because you know him as well. If you're willing to put in the work, it could be worth it. But the way we looked at it when we analyzed the deals, the opportunity cost, the amount of time that we would have to put to fix it.

• 1:11:48Speaker 00

  Yeah.

• 1:11:48Speaker 01

  And let's say it would make us an extra million dollars a year in profit.

• 1:11:52Speaker 00

  Yeah.

• 1:11:53Speaker 01

  And I would pretty much pay very little to nothing for the business. My problem was is the amount of work my team would have to put in for the million dollars. Don't get me wrong. I would love a extra million dollars every single year.

• 1:12:05Speaker 00

  Yeah.

• 1:12:06Speaker 01

  But there's a bigger issue in which the opportunity cost, if we spent that time on something else that was a better fit, maybe

• 1:12:13Speaker 00

  10 times more value, 100 times more value.

• 1:12:15Speaker 01

  Or even two times or three times, right? Or even 50% more value.

• 1:12:18Speaker 00

  Yeah.

• 1:12:19Speaker 01

  So I'd rather just put in time that I think would pay bigger dividends than, you know,

• 1:12:26Speaker 01

  than something that is very, that requires a lot of work that's capped at a million dollars in profit.

• 1:12:30Speaker 00

  I also look at it this way. I look at it in relation to my Glassdoor, right? So how many, it's both gonna be positive reviews, either one star or five star. But how many, how more five stars and one stars am I gonna get ultimately from this, right?

• 1:12:41Speaker 01

  From that, you're gonna get a lot more

• 1:12:43Speaker 00

  A lot more one stars, right? Because Neil, what Neil and I are referring to here is like a cultural aspect. And that's something that's very hard to train. I do think though, and I think Neil's M and A activity is going to pick up significantly. I think probably the way I'm looking at it too is, you know why? Because you're just, I look at, um, I think it was Thrive, so Thrive Holdings, right? They bought like a bunch of accounting firms and they tied in with like accounting software.

• 1:13:07Speaker 01

  What is it, Josh Kushner Company?

• 1:13:09Speaker 00

  Yeah. So I think we're just gonna see more of that where they're just, they have the software already, they have the workflows. They're just gonna buy these other companies and just plug it right in. And there's an argument, you know, from my friend, I saw him tweet this yesterday, Jeff Wu. So he tweeted, he's like, you know, people talk about M and A buying like the smaller companies, why not just buy the incumbents? And I see that potentially happening. I see maybe you buying an incumbent at some point in time.

• 1:13:32Speaker 01

  I can't afford incumbents.

• 1:13:34Speaker 00

  Like get a good price at some point.

• 1:13:36Speaker 01

  I can't afford them. Some of the incumbents do 15 billion in revenue.

• 1:13:39Speaker 00

  Like get a good price at some point.

• 1:13:42Speaker 01

  I have money, but nowhere near that kind of money.

• 1:13:44Speaker 00

  At some point, at some point, could be 10 years, could be five years down the line, could be 10 years down the line.

• 1:13:49Speaker 01

  Yeah, I've tried actually buying some of the agencies within some of the incumbents. And then I didn't want to fix the mess.

• 1:13:56Speaker 00

  Well, I told you at this event, I met the CEO of one of these large holding companies in, let's just say like another region, Publicis, right?

• 1:14:04Speaker 01

  Yeah.

• 1:14:04Speaker 00

  And like he was, he's like, oh yeah, I was responsible for this deal, this deal, this deal. I think it's a very small world and I think they're kind of stuck in their own ways. He doesn't work there anymore, but like just the way I'm hearing about these deals and all these transactions, so.

• 1:14:18Speaker 01

  Yeah.

• 1:14:19Speaker 00

  Anyway.

• 1:14:19Speaker 01

  I remember talking with Densu when they were spinning off Muse6, so like, hey, do you guys want to buy it from us, right? Steve, mutual friend of ours, ended up selling it to Densu.

• 1:14:28Speaker 00

  Yeah.

• 1:14:29Speaker 01

  And I was looking at it and I was like, uh, how many leads do you generate and how many visits? And I'm like, oh, this is not gonna be good. I could see, you know, it was a falling knife. And I did not want to be the one catching a falling knife.

• 1:14:42Speaker 00

  You know what's interesting, Neil? I think you can push back on this one, but I've talked to, so a few people that joined recently, they're like, the hardest thing that an agency can do is generate leads. And when you first started MP Digital, you already had the leads, right? And you know, there's certain, like, like some of these people that joined are like, you know, we don't really have like a leads problem, right? But would you agree or disagree? Because there's three things here, right? You have marketing, you have sales and you have delivery, right? And maybe in the beginning, I think perhaps marketing is the hardest part, but I think as you scale, it's probably more of a delivery thing.

• 1:15:13Speaker 01

  Delivery is actually not an issue as you, what do you consider scale? I should probably ask that first.

• 1:15:17Speaker 00

  Scaling.

• 1:15:18Speaker 01

  When you say scaling, what size?

• 1:15:21Speaker 00

  I think you're going like 50, 50 plus.

• 1:15:25Speaker 01

  Scaling is hard, scaling is actually harder. Uh, and if you look at most agencies, they think they have a marketing problem, they have a delivery problem because their churn numbers are just ridiculously high. If they fix that, their business would naturally grow.

• 1:15:39Speaker 00

  Yeah.

• 1:15:40Speaker 01

  I do think marketing does become a problem eventually in the short run. So when you're starting, and I also think marketing is a problem once you've scaled.

• 1:15:50Speaker 00

  Yep, because it's a different marketing challenge.

• 1:15:51Speaker 01

  Correct. Like if you look at us, we have leads, but do we have enough publicly traded companies that are worth, let's call it 10 plus billion? No, I wish I had a lot more of them. It's hard to get

• 1:16:01Speaker 00

  You gotta rejoin YPO, you know, will she be back soon?

• 1:16:04Speaker 01

  I have a call with them next week on Tuesday.

• 1:16:06Speaker 00

  Which chapter?

• 1:16:07Speaker 01

  Uh, Los Angeles.

• 1:16:08Speaker 00

  Oh, welcome back.

• 1:16:10Speaker 01

  I'm not saying I'm gonna be in, maybe they won't accept me, but I'm at least having a call. It's the guy who owns that suit rental company.

• 1:16:17Speaker 00

  Oh, yeah, yeah, yeah, yeah, yeah. I met that guy before, uh, Black Tux.

• 1:16:21Speaker 01

  Yeah.

• 1:16:21Speaker 00

  Yeah, I met him at one of these dinners before.

• 1:16:23Speaker 01

  Yeah.

• 1:16:24Speaker 00

  Yeah.

• 1:16:24Speaker 01

  He seems like a chill guy.

• 1:16:25Speaker 00

  Very chill, very chill, like company does really well, but chill, not a lot like egotistical.

• 1:16:30Speaker 01

  Yeah.

• 1:16:30Speaker 00

  Yeah.

• 1:16:31Speaker 01

  Great. And when I was messing, I'm like, oh, I actually was a customer of yours just for a wedding.

• 1:16:37Speaker 00

  Yeah, me too, me too. Yeah, it was a good deal. Okay, this will be the last topic here. So, um, so Greg Eisenberg has tweeted this, let's react to this one. So he says, I think we've reached a point where the cracked marketer is more in demand than the cracked engineer. And then this guy responds, Ryan, he says, the next wave of millionaires will be 20 to 26 year old cracked marketers who grew up on the internet. We are very, very early to this exponential curve. And he says, I'm all in. So the green curve over here is cracked marketers and then below is engineering demand. So I'll just start by saying I don't agree on the cracked engineering thing. I think that's gonna be more and more demand for cracked engineers. I don't think that's gonna go down. But we are seeing a lot more people on Twitter, like there's this guy named Hector who worked at Whisperflow,

• 1:17:19Speaker 00

  put out a video, got like 2 million views and then jumped from 0 to 20,000 followers. And then he went and just got another job at WAP, right? I think because you and I now, if we go back 20 years, we can build whatever we want to build.

• 1:17:32Speaker 01

  Yes.

• 1:17:32Speaker 00

  Right? And I think one of the hardest things is having distribution. So.

• 1:17:36Speaker 01

  Yes.

• 1:17:36Speaker 00

  Yeah.

• 1:17:37Speaker 01

  And I, I think what's correct on this graph is the marketers who can just be scrappy and just get a lot done with very little. Of course, they're more in demand, but I still see the engineer who can get a lot done with very little is still very high

• 1:17:50Speaker 00

  I don't think this goes in this way.

• 1:17:52Speaker 01

  Yeah, I don't think this goes down. I think they're both go up.

• 1:17:54Speaker 00

  I think they both go up, correct. And then maybe to a lesser extent a little bit, because maybe there's less, maybe there's probably more cracked engineers than cracked marketers. So I think from a supply angle, these are rare.

• 1:18:05Speaker 01

  Yeah.

• 1:18:05Speaker 00

  Yeah. So that's what we think about it, guys. But anyway, we'll see you next week. I'll be calling in from Taiwan, but uh, yeah, goodbye.