2024 bankruptcies show where the economy is really at, Are plus-sized and trans beauty queens good for beauty pageants?, and The best marketing strategy ever (Instagram)

0:00You know, we're spending more on paying back our debt as a United States versus the debt we're adding. the debt we're adding so we're spending more more than our defense budget for you and our defense budget is large i thought we're spending more on paying back our debt than the debt we're adding i think i think it's both yeah and here's the thing um last month i was like oh my god the you know we added 250 000 jobs but what wasn't reported was we lost 685 000 jobs and there's 8.4 million people working multiple jobs right now and so this account you should follow this one, Neil. I think you would actually enjoy this account.

0:37You might follow it already. It's the Kobisi letter. Have you seen this one? So check this out. No, I haven't seen it. US consumers have added$3.4 trillion in debt since 2020, bringing the total record to a record$17.7 trillion. Credit card debt alone is up by$400 billion during this period and reached a record of$1.3 trillion in Q1 2024. This is a two times faster pace in the four-year run-up to the 2008 financial crisis. At the same time, interest rate of this debt has spiked from 16 % to 23%. And you can see that over here. In the black line, this is the annual interest rate. And then the consumer credit outstanding, look, it's like spiking over here in the red.

1:17And so all these things are pointing to, hey, it's not such a strong market. You're looking at potential bank failures in the United States. You are looking at a lot of commercial real estate, those loans are coming due. And you see a lot of people, like the building, I used to, remember the office they used to have at downtown LA? That one sold for$150 million less than it did a decade ago. Wait, what did it sell for? It was a nice office building. Aon downtown office sales. So it sold for a bargain. It sold for$148 million. So basically it was$300 million before. And 1.1 million square foot office tower.

1:55So anyway, the point of Neil and I saying this right now, okay, so how does this affect business? How does this affect marketing? Fact of the matter is if Europe is starting to stimulate and Canada is as well, the only thing that we have now, the tool that these governments have is to stimulate the economy, right? And that's not necessarily a good thing long term, but for the short term, that means hopefully things rip. I hope so. It's just a question of time. I think we need to be patient. and I agree with you. There's a lot of issues that are out there that people aren't discussing like a lot of these commercial real estate owners, which there's a ton of commercial real estate throughout the whole world, but specifically in the United States, there's a ton and interest rates are high.

2:38So when they all have to refinance and there's not as much occupancy, what are they going to do? Because their revenue is not as good and you're starting to see people get creative. Like did you see the baseball stadium that sold for pretty much a dollar and then uh investors turned it into a uh it was either apartment complex or a condo building yeah and uh it was pretty cool and they're showcasing the units and they're making money from it but there's a lot of real estate that was built and it's going to end up being sold for less than what it actually costs to build today and the main reason for that is you know there's not as much demand in certain regions like in southern california where eric and i live a lot of people don't go to the office period and yes people are starting to have let's go back to work but some of these locations have the culture of no we're not going back to work and i don't see it changing for a very long time so it's either people gotta be able to hold down the fort and have a lot of money in their bank account and reserves or it's just gonna end up being where people are going to get really hurt.

3:42And like in the office building space, I'm seeing that people really want class A office space, like really nice, fancy office. And a lot of class B and C are struggling to be like, well, if we're going to go back to the work, let's just get really nice office. And it's just much, it's cheaper than it used to be. And oh yeah, we don't really care for the B and C and the stuff that's mediocre. Cause a lot of people just work remotely from home. Dude, check this out. So going on, this is another post. So again, Neil, you should follow this account. The Kobisi letter. So they look, they're so legit that they have a gold check mark.

4:18And I think you have to pay a thousand bucks a month for that thing. So breaking in the first four months of 2024, the US has seen 210 corporate bankruptcy, second highest since 2012. Okay. In April alone, S &P Global recorded 66 new bankruptcy filings. This is up from 61 in March. and the third highest monthly number since the 2020 pandemic. The most bankruptcies have seen consumer discretionary and healthcare sectors at 28 and 27, respectively. Higher rates for longer have, higher rates for longer have taken, have are taking their toll on US corporates. Is this really a quote unquote soft landing?

4:56Well, and that's just for the first half of 2024 because we're not even done for the year and the numbers are already ridiculously high. I think they're going to have to ease. Well, no, very quickly. Did you know this coming Wednesday, we're going to see the inflation report, and then also they make a decision on Wednesday too on whether they're cutting or they're holding rates. Yeah, but they're saying that there's pretty much zero chance that they're going to cut at this one. They probably need to wait a couple more months, but yeah. I don't know if they should wait a couple more months or not.

5:26I'm not an economist. I just hope that they figure it out because people are bleeding on all ends. We would love for them to cut it right now. But, you know, if a government official listens to this podcast, but wishful thinking. And Eric and I don't know what's best for everyone. We just know as business owners, when rates were lower, even though inflation was higher, we were clipping much more growth and our revenue and our EBITDA than what the inflation was. So people like Eric and I were cool with it. But at the same time, that may not be good for everyone. There's people who work normal jobs.

5:59And when milk prices go up 30, 40 % in a year, it's ridiculous. How are they going to sustain Eric and I don't want our gains to hurt other people as well. Right. So we want to have our gains, but not have anyone else suffer, which isn't realistic. If they just lower rates, sadly, you know, I was watching CNBC last week, your favorite channel, but so McDonald's. So basically if you want a big Mac meal, it's like$12 now. Right. But if you go to sweet green, which is like, they're, they're, they're publicly traded now. Right. And sweet green, they, they used to do salads. Now they do like bowls and then they have, they have fish, they have steak, they have chicken.

6:35Um, it actually comes out to only like a little, like two to two to three bucks more. If you go into their store and buy it, um, that's why they're doing so well. Right. I think one of the reasons is one people, Americans want to eat healthier, but they don't want to spend a lot more money. And then also they've eliminated seed oil. So they're going, they're following what all the health influencers are saying. And so when people are like, I want to eat something healthy, but not expensive. And it's fast. People think about sweet green. So I think that was a nice way for them to kind of ride the wave of what other health influencers are talking about.

7:03And just doing the right thing, right? Because, again, they don't cook with seed oils, which is inflammatory, according to health experts. They cook with olive oil, right? And it's like, oh, the healthy meats over here, organically sourced, right? So how you brand yourself goes a long way. I think it does, too. Now, the real question is, do you actually go into Sweetgreen or do Uber Eats It?

7:255 % of the time I go into it. So, yeah, I have a markup. I have a little bit of a markup. But each meal comes out to still like$25. You know what I mean? It's not as bad as, you know, Erwan. Dude, I was at the airport in Turkey this morning. I was with one of my buddies, and we were flying to Madrid where I'm right now and I'm recording. And I was joking with him, and I was like, all right, I'll find you a McDonald's for breakfast. He's like, yeah, I was with that one. He's just like, McDonald's, all right. He's like, I don't know. All right, I'll do it. I was like, I'm kidding, dude. I'm like, I don't need McDonald's.

7:59He's like, I thought you get McDonald's. I'm like, every once in a while, because my kids want it. But I'm like, other than that, I don't get McDonald's. I don't eat french fries and chicken nuggets unless they're just laying around. It's just, whether they've improved their menu or not, that I don't know. It just has a perception, the branding that it's unhealthy food. And it's really hard to get away from that. My mind's just made up. especially when you start doing commercials like now made with real chicken for chicken nuggets well what was it made for before exactly so it's like that kind of stuff just makes me not trust that it's a healthy company even if they have salads on their menu even their potatoes the reason they don't have spots on their potatoes is because they make these farmers put pesticides and then these potatoes have to sit in these massive barns for i don't know how many days or weeks before people can go into them because it's so toxic.

8:54And it's just like, why would you want to give your kids McDonald's franchise after hearing that? All right, everyone, quick message from the Agency Owners Association. So this is the peer group for agency owners that Neil and I both put together. This is for people that are doing six figures, seven figures, eight figures, even nine figures as well. And we're all here to help you grow your agency faster. In this group, we share leads, we share learnings with each other. It's a community where people can ask questions, their most burning questions personally, professionally. We'll share templates, reports, things like that.

9:22We're constantly adding more value to the group. I will tell you that the price is continuing to increase. The good news is that there's no long-term commitment. So you can just learn more by going to marketingschool.io slash agency. Once again, that's marketingschool.io slash agency to learn more. And we hope to see you inside. You want to talk about something controversial? It's not on the docket over here. Go for it. Okay. Well, we'll decide if we want to cut this or not. So did you see that? So

9:49So Miss Alabama, do you know what I'm talking about? I do not. Okay. So there's these pictures on Twitter. So it shows the Miss Poland contest, right? Wait, Miss Alabama contest or Miss Poland contest? I'm confused. I'm talking about two. So Miss Alabama, let's just say it was a plus-size woman that won it. And then I think Miss Tennessee, it was a trans person that won it, right? And so on Twitter, there's like this uproar right now. But then someone showed a picture of Miss Poland where it's all like thin females that are really like attractive people, right? And so the branding here – we're going to cut this out.

10:33No, no, no. Don't cut it out. Just keep going. Keep going. All right. I'm going to keep going. But okay. It's like – And by the way, Eric is not saying one is right or wrong from my understanding. I don't think you're making an opinion on that. Or maybe you are. Well, okay. So I think when the brand starts to become skewed from what it was before to kind of what it was now, it starts to become – I think when these social issues start to creep into the original mission of a company, that's when we start to see distortion in the results, right? And so what we saw 30 years ago with Miss America or Miss whatever state is drastically different than what it is now.

11:13And I think it's because a lot of these social issues have chimed in. And I think that's why a lot of companies like Coinbase, for example, are saying, hey, we're just going to focus on the mission. Same thing with Google recently where they had the sit-in, people talking about free Palestine. And unfortunately, those people had to be fired. Um, but I think the company needs to focus on its mission. Um, while, you know, whatever other views people have, they probably need to be kept outside because otherwise the product itself starts to become affected at the end of the day. And, um, then you start to, then you, you might start to lose a viewership.

11:46You start to, you might actually lose business for your, um, because you're not following your original mission. So the way I look at it as it's a business and you got to do ideally what's best for the business and as well follow the ethics and values that the people running the company as well as the board has, right? Because in theory, the board should be the major shareholders and people can take a vote if they want changes or whatnot. And I'll give you a great example of this. Victoria's Secret used to do a fashion show and it used to be like skinny runway models. You know, I don't know what Victoria's Secret focuses on, but if you think about the lingerie market, there's much more money in creating lingerie for the average person.

12:33The average person is not tall and skinny and has had two kids and only weighs 100 pounds, right? Like, that's just unrealistic for 99.99 % of the world to be. I don't really know what the real stats are, but there's no way someone can pop out kids and be that skinny. And I personally think it would be miserable to be that skinny. Like, if I was those girls, I would want to go eat some hamburgers or chicken nuggets or french fries or pizza or whatever right after because it's like at the end of the day yes you ideally want to be healthy um it's better to be healthy than not healthy but also being that skinny is unrealistic and from a business aspect i believe i don't have the data on this but i believe if you just look at the population there's more money to be made selling laundry for normal people and plus size people than it is to sell laundry for really really skinny people.

13:28Yep. Yeah. And so look, I don't think we're really trying to add our opinions in here. I think we've done a good job of avoiding adding any opinion here, but I think it's, it's focused on the mission at the end of the day. And that's what it's want to take a second to tell you about my podcast co-host agency. So NP digital, so Neil Patel digital, what they do is they do a whole host of marketing services and they are global. They're worldwide. They have SMB services as well. They have mid market to enterprise services as well. They cover the entire gamut. So you can just go to mpdigital.com to learn more about it.

14:02And now back to the episode. Have you seen Nicole, the intern? Do you know who she is? Nope. Check this out. So the best marketing strategy ever. So this is her Instagram handle. So she has 526K followers and she only follows one person. That's the company she works at right now. And I think she's an intern at this company right so check out some of the videos that she's done she did a collab over here with Gary V check this out all your four clocks here send them in reporting for duty let's smash them in cans I mean that that one alone got like 60 ,000 likes or so. Um, and 2.6 million views on that collab.

14:52Look at how many views she's driving and she's trying to promote. She, she's coming up with all these ideas and she's shooting these and look 1.7 million views, 700 K views, 523 K views, right? 547 K views. In a lot of these comments, people are like, Oh my God, um, you're doing way too much for them. You should be paid way more money. And by the way, don't get me wrong. I think that's probably true. I think she's amazing. Um, but I just think, man, if more people were like this as interns, I, I, for sure she's going to become some type of entrepreneur or like really highly paid exec. I think she's going to do fine in her career.

15:23And by the way, there's a lot of people taking this concept now all over Instagram saying like, my boss wants me to do this, but I think I'll actually get to 500 ,000 followers faster by smashing a can or, uh, uh, running over X, Y, and Z with a car, like whatever it may be and you're seeing these accounts blow up this works extremely well for consumer it doesn't work as well uh for b2b and speaking of videos go viral did you see the tiktok girl that says like that created a song i'm looking for uh what was i'm looking for uh the husband yeah a finance dude trust fund six five oh yeah yeah yeah and then everyone reversed her dude that was entertaining I listened to it probably like 10 times.

16:11So I think I saw people making parodies of that, basically saying how unrealistic it is. So people, like guys would make videos on their unrealistic expectations of women and then vice versa. So I think I saw the aftermath of it, not the original video. But hers was, of course, a joke. It was really obvious that she's like, if you look at her account, it's all humor and funny stuff. She's not actually saying like, this is what I want. I expect someone in finance with a trustee. And maybe other people responding like with humor too. Like, I don't know. Well, some people are beating her up on it, which sucks.

16:43She's just joking around. But the whole purpose of it is she's trying to say like people just have unrealistic expectations of a spouse these days. They expect the world. They want someone who's super rich and handsome and fit and all this kind of stuff or super pretty, super rich, super smart. Like they have everything, right? it's just like how many people are there out there that are multi-millionaires both men and women graduated from harvard uh super successful super fit you know it's like one percent times one percent times one percent times one percent times one and it's like point zero yeah you'll never find cooking clean can make you know make fix up a car can build a house like this is just unrealistic stuff that people are looking for these days.

17:31Yeah. By the way, speaking of unrealistic, one mutual friend that we know, I'll tell you after we stopped recording, she showed me her ring. It's like a$1.5 million ring. And she just got a very expensive home close to the value of the home that you're buying. Okay. And she also got the value of that in cash as well I don't know anyone else who lives by me don't worry I'll tell you after do I actually know him uh yeah yeah yeah I just can't think but hey sometimes you keep your expectations high and maybe you will find something like that good for that person for getting the ring and the home and congrats look I have no hey if someone comes up however they come up as long as they both people in that relationship are happy, who are we to judge?

18:23It's their life. Yeah. All right, everyone. So that's it for today. Speaking of which, the agency accelerator, or sorry, agency owners association, I should say, Neil and I will both be doing a session this week. And so we do these group coaching calls every now and then. So that's happening. You can learn more about this group, marketing school.io slash agency. Please don't forget to rate, review, and subscribe. It helps this podcast grow and we will catch you later.

18:49Thank you.