The Reason Why $14.6B Klarna Stopped Hiring

0:00$14.6 billion valuation Klarna has stopped hiring. Why is that Neil? I saw the post on TechCrunch. They decided that they can end up replacing a lot of people with AI, combined with they just naturally have turnover. So their CEO said this. Klarna Steel stopped hiring employees last year because, quote unquote, AI can do most jobs and is down negative 22 % headcount to$3 ,500. So the private Swedish buy now, pay later company is worth$14.6 billion, up from$6-ish billion or so. Sorry, my thing just time limit. $6.7 billion in 2022, but down from$45.6 billion in 2021. It's trying to go public next year.

0:40That's pretty contrarian. But guess who they're hiring right now? It's almost like mostly engineers. so yeah yeah no um i i think you're gonna see more and more of this coming in the future and i think you got it spot on i had other people tell me the other day don't you think ai can just replace all the humans within your agency i'm like it can replace some but the people that are around that embrace the technology i'm like they'll be more valuable and they're gonna be more expensive and then you're gonna have to pay for the say technology probably as a business that can help with margins but i'm like you still need the humans in the loop and you need ai technology You need both.

1:16Yeah. Look, the ones that are actively learning, those are the ones that are staying ahead of the curve. And those are the ones that are actually creating versus the ones that are just doing. The humans that are just doing, they're at risk. That's what I believe. If you're just a doer long term, I think you're at risk. Yep. Yeah. So let's pick your, let's talk about the Supreme Court ban with TikTok. Yes. What do you think is going to happen there? I'll tell you what I think is going to happen there. But what do you think is going to happen there? I think TikTok is still going to be around. So whether they have to divest or not, that's another story.

1:48But I think they're still going to be around. Yeah. And I think what's going to happen is the US is going to broker a deal with some sort of company to buy it or a group of companies. Yep. So, I mean, it is what it is. I don't think TikTok is as high as it was before on Trump's list. No. He's just got other things to worry about now. Totally agree with you. And it's funny because I see so many people just being like, hey, if we don't end up doing this, we're going to end up being screwed. We're going to end up losing a lot of money. You know, we're spending all this time on TikTok. It's going to go away.

2:25What should we do? I'm like, you think TikTok, the Chinese parent company ByteDance, is going to let go of a multi-billion, probably 100 plus billion dollar entity and let it vanish because no matter what, they want to own it. they want to try to own it no matter what but if they can't they'll probably take their 100 billion dollars and then people are telling me oh these group of people are raising money and they're going to create a consortium and buy it i'm like dude it's so hard for private equity or group of people to buy this it's going to be some big businesses because let's call it 100 plus billion dollars you're going to have like a google or facebook probably not facebook because monopoly issues but you're probably going to have like a google or microsoft or walmart just being like cool we'll put in 30 billion oh yeah we'll put in 30 billion oh we'll put in 40 all right you got 100 billion.

3:09Cool. Transaction done. Because a lot of these guys are just sitting on tons of cash on their balance sheet. Like Apple could just buy it with cash. Microsoft can probably get a full bank loan for the amount and put zero out of their pocket just because I believe the last time I checked, Microsoft spits off roughly 80 billion a year in free cash flow. That's a lot of money. You can do whatever you want when you're spitting off 80 billion. Yeah, a bank will finance you for that purchase. And Alina Khan won't stop that. So, you know. No. Yeah. By the way, you mentioned, Let's just go back a second to the AI agents piece.

3:41McKinsey said that by 2030, AI agents were replaced 70 % of office work and add$7 trillion to the global economy. Goldman Sachs said that. Isn't that interesting? It's ridiculous. Yeah. Who knows how accurate McKinsey is? McKinsey and Goldman are obviously respected. Let's talk about the best SEO tactics for 2024. Bless you. That's not a bless you. The best SEO tactics for 2024, I guess that would be this year. So you can go first. You want to change it to the best SEO tactics for 2025? Yeah, let's change it. So these are the best SEO tactics for 2025. Or shall we pick one each and go over our favorite?

4:22Yeah, but what if I just stole yours? I'm going to go for it. I'm not going to steal yours. So the best SEO tactics for 2025, in my opinion, we're going to see a lot less focus on links. Pick one, pick one. That is one. I'm going with one right now. Oh, because you're saying best SEO tactics. Just give one. Okay, let's redo. Okay, so guys, we're doing this for reals right now. So the best SEO tactic for 2025, I believe, is actually diversifying away from SEO. And I'll let Neil elaborate on that. But what I mean by that is we look at this Google exploit, which we can talk about in a moment. We can talk about some of the takeaways there.

5:02And there's also a lot revealed with the Google's algorithm earlier this year, right? But one of the things that sticks out to me, because I watched that exploit video. That was a 37-minute video. I watched it earlier this week. And towards the end of it, the speaker, I forgot what his name is. I think it's Mike Williams or something. That's like an NFL receiver, but it's close to that. Mike McWilliams or something. So the point is he showed a SERP and he's like, the number one result, the number two result, they didn't necessarily have all the links. They didn't have the biggest authority out there.

5:31And so it just goes to show that the algorithm is changing quite a bit, right? And that was only one search engine result page. But I think the quote that sticks with me, Ran Fishkin, who founded Moz, said that SEO used to kind of stand on its own. Now it's kind of a side effect of all the work that you're doing, right? And so I do believe more and more people are going to diversify away from SEO. And I also think it's too risky to rely on SEO. It's happening slowly right now. people's traffic is going down and down, but I think it's going to be like all of a sudden thing, right? So you have to look at getting away from it and Anil can elaborate on what that means.

6:01Yeah. And I'll give my tactic after, but what Eric's talking about is what we call at our agency search everywhere optimization. People are searching on all these platforms. There's 45.1 billion searches a day. Google makes up roughly 18 % of the market with 8.5 billion searches a day. ChatGPT is at roughly a billion a day. You got 6.5 billion a day on Instagram, 3.5 billion on the Amazon App Store. Bing has quite a bit. Even the Apple App Store, you have around 500 million a day. I don't recall all of them, but those are some of the ones that I know off the top of my head. And the purpose of searching on all these platforms vary.

6:42On the Apple App Store, you're searching to download an app, but there's still money to be made there. It could be you're You're searching for an app for e-commerce or buying something. Or on the flip side for Amazon, you're searching to buy something. Very transactional. Those are very key money searches that drive a lot of revenue. But if you look on the other side with just businesses like Instagram, when you search on Instagram, you're looking for content for educational, recreational, or just pure entertainment or shopping like you're looking for a purse or whatever it may be. Or you're looking for a friend or their content or just doing research.

7:17So the purpose of searching on all these platforms varies, but the only way to do well is to optimize for all of them because the attention is truly divided no matter what people say. Yeah. And this comes from two people that love SEO. I mean, I grew up in SEO, same for Neil as well. But it's also important to understand where the puck is skating to, sorry, skate to where the puck is going. That's what I was trying to say. Yes. And in essence, what we're saying is SEO has evolved from search engine optimization, you know, being traditional Google to search everywhere optimization, where you had to optimize for all the platforms and channels people are using.

7:49And when we look at people on TikTok or Instagram, they all want to optimize for the most likes and engagement. But yet these platforms like Instagram and TikTok have so many searches a day. We rarely ever hear from companies saying, hey, when someone types in X, Y, and Z like a purse, we want our purse company to show up. And these are little things that are going to start becoming much more popular because they can drive a lot of revenue, especially with these channels becoming easier to create a shop on and letting people click a button and just buy your product. Search Everywhere Optimization is YouTube, it's Amazon, it's App Store Optimization, it's LLMO Optimization or Generative Engine Optimization.

8:27It's really where anyone can search, right? Because humans will always search for things as long as humans are around because we're curious. So that's what it is. So the next one is we'll talk about the - Now I got to give my best SEO tactic. I thought you gave your tactic. Oh, no, you didn't. Oh, no, I was just going into what you're saying. Oh, okay, go ahead, go ahead. My favorite tactic for 2025 is going to be global SEO with AI. And here's what I mean by this. If we look at our traffic and most big corporations' traffic from SEO, they're not getting it from the United States or just one language like English.

8:57English makes up usually less than 30 % of their traffic if they're doing global SEO right. It's from a lot of other languages that add up. But it's a pain to do this. You have to hire a lot. But with AI, you can translate and transcribe your content and then have a human review, make sure you're using the right keywords and adjusting the titles and meta descriptions. It allows you to scale out your global SEO strategy much quicker and just generate way more traffic faster. Make sure you use hreflang and build links to those pages that are translated slash transcribed. And you should see your traffic go up in all these other countries without having to hire tons of people within each country.

9:34And then what you'll find is you now have new markets to sell to. You know what I want to do with this podcast? I want to take it to 11 Labs and translate it to Hindi, to translate it to Mandarin, translate it to Spanish, Portuguese, everything, right? Because it just keeps getting better and better. Hey Jen's getting better and better. 11 Labs is getting better and better. And I was looking at some of the case studies from 11 Labs earlier this week. And, you know, by the way, there's like, there's some examples where someone just makes it global, like they globalize their podcast. And some other examples, they take someone's voice and they take all the books that she's written and they just make it into podcasts because she doesn't have time to make audio books, right?

10:10So I think we're going to see a lot more use cases there. That's an interesting growth tactic for people. But speaking of growth tactics, we're going to give you our number one growth tactic for 2025. So my number one growth tactic for 2025, it's an oldie but a goodie. it's building products and service products mainly, sorry, products or tools and Neil has on his chart it shows that tools have some of the highest ROI I believe it's 5x or more, right? That's what I saw and if you can build, because I do believe the cost of software is coming down so the cost of software is coming down that means you can build more things and I saw Jason Lemkin tweet this he's like, in today's day and age because the cost is coming down you have to ship a lot faster your velocity has to be a lot faster so if you don't have a good CTO you're basically screwed, right?

10:53That's what he was saying that in nice words. So if you can code, great, amazing. You can think about building products and what happens with some of these products because things are happening so quickly now, you can build a product that pulls you because there's a lot of solutions that people need out there. I've seen some products out there where it just pulls you and if it pulls you, not only is it going to drive more leads for your business, it's going to drive more revenue and you have more opportunities to cross sell and upsell. And Neil's done this quite a bit with his, like these probably five, six plus tools, products that you built at least, right?

11:27Yeah. Yeah. And they've worked out well. Uh-huh. Yep. Tools have done really well for us. My number one growth tactic for 2025 is automatically translate and transcribe your content within the platform. So here's a problem with just using like a hey-gen or any of these tools. You translate, let's say this podcast episode from English to Hindi. Now you got to build a whole new YouTube channel for Hindi. pain in the butt. On the flip side, YouTube has a feature now. I don't know if you've seen it. You can actually click a button and they'll transcribe. Yes, they'll automatically do it. I forgot they had that.

12:00And it's not available to everyone, but it's going to be soon released to everyone you watch. And I know for a fact, other social networks are already working on this. I've talked to some engineers at Meta and I've talked to engineers at TikTok. It's a question of when will they all release this? This way, you, Eric, or me, Neil, we won't have to create 20 different social profiles. Now our content that's great is just applicable to all regions, all languages, one social profile. We don't need 10 or 20 of them. We will all start doing way better with our social content, get way more reach, likes, and engagement.

12:35You just have to enable it though, right? I don't think people will do that though. You actually triggered an idea here. So Gemini 2.0 came out and so they also have an API for their agent, just like how Cloud has an API for their agent, which can run your computer. I can see a lot of the situation where we just have a bunch of computers. It almost reminds me of when I went to Neil's place in Seattle, when he had a computer that was just focused on following people on Twitter. So the beauty of this is I think we're going to see that. We're going to see a lot of agents doing this work because it's complex stuff.

13:02You have to click around and things like that. And so translating a blog post, that's going to require some clicking around, right? And then posting it and then also repurposing that content and then posting it to different platforms. I think that's going to become a big thing. And that's almost like you're basically going to need an AI agent manager. That's what you're going to need. You're going to need a human managing these AI agents. I think we're going to see that. And I think that's going to be a great growth tactic, maybe not in 2025, but definitely for 2026. So I'm getting ahead of myself a little bit here.

13:32When I first started my business, the overwhelm was real. I didn't have the tools to help me scale. If only I had Shopify from the start to handle all the behind the scenes work. Shopify is the platform behind millions of businesses globally from huge names like Mattel and Gymshark to the smallest brands just getting started. The best part about it, it has everything you could need. Say you're ready to launch your own design studio. Shopify has hundreds of templates to create a beautiful store that matches your brand style. Or if you need help with content creation, Shopify has got AI tools that write your product descriptions, craft page headlines, and even enhance your product photos.

14:06Shopify lets you easily create email and social media campaigns to reach customers wherever they are, whether they're scrolling or strolling. If you're ready to sell, you're ready for Shopify. Turn your big business idea into with Shopify on your side. Sign up for your$1 per month trial and start selling today at shopify.com slash marketing school. Go to shopify.com slash marketing school, shopify.com slash marketing school. If you've ever built a website, you know how tough it can be to keep a strong design while ensuring site performance is fast. That's where Framer comes in, and it totally changes the game.

14:42Framer is the design-first, no-code website builder that lets anyone ship a production-ready site in minutes. I recently built a custom landing page in just a few hours, animations, fast load times, responsive layouts, all without writing a single line of code. It was easy to use, and the end result was polished enough to look like a developer spent days on it. One of my favorite things is that Framer's AI handles translations with a single click. So your site can be up and running in multiple languages almost instantly. And with real-time collaboration, your whole team can jump in and work together.

15:12No issues with versions or miscommunication. Whether you're starting from scratch or using one of their templates, Framer lets you focus on design while handling the technical side for you. Animations, responsive layouts, search optimization, and all the things that matter. Ready to build a site that looks hand-coded without hiring a developer? Launch your site for free at framer.com and use code MS to get your first month of pro on the house. That's Framer.com, promo code MS. Framer.com, promo code MS. Rules and restrictions may apply. I agree with you. I think it's going to be a great growth tactic and it's going to be really efficient because unlike back in the day, you won't have to even buy computers.

15:48They'll just spin up instances for you on the cloud and it'll save you the 2000 bucks for an Apple computer. Yep. All right. So there's an interesting tweet here from the founder of Morning Brew, Alex Lieberman. But he said, Today's brand marketing is tomorrow's performance marketing. CEOs and CFOs must understand this to work well with their marketing org. So I think we should try to unpack this a little bit. My interpretation is that brand marketing... Can you read it again? Yeah. And then you can tell me your interpretation first. I'm going to read it slowly. Today's brand marketing is tomorrow's performance marketing.

16:21CEOs and CFOs must understand this to work well with their marketing org. I agree with that. brand marketing drives a lot of revenue. If you look at the most popular Google search queries, I believe seven out of the 10 are brands. And if you build a brand, you'll perform better in all aspects. Your performance marketing goes up. It just drives a lot of revenue. Um, it, and the way I interpret it as well as it's your moat, your brand is really your moat and what separates you from the competition. It's what causes people to engage with you on social media. It's what causes people to search for you on Google.

16:58It causes the algorithms to rank you higher. You have to build a brand. And if you don't, I think you'll end up losing out in the long run. I think maybe a decade or so ago, everyone was like, it's all about performance marketing because it's trackable, blah, blah, blah. You do that. But I think you need both, right? I think there's a tweet, there's a response here. Brands, the spark, performance is the flame. I think both are needed. But in my mind, when you're branding, I think both you and I, maybe I'm speaking for you as well. But back in the day, it was like, oh, let's just not spend on brand.

17:28Let's just focus on performance. But you're actually leaving a big part of the pie out to dry. And also a big part of branding too, like what works well, it's often organic social, but you have to be smart about how you think about branding there. Otherwise, you're just not going to do that. And by the way, if you do well with organic social, the content that performs well organically, you can make it a performance ad. And so the two kind of go hand in hand. But also when you're doing performance marketing, like people are seeing your ads everywhere. It is branding at the same time too. Performance marketing will help you build your brand.

18:00Yeah. I think both are needed, but I think people in the last decade kind of threw branding to the side, but now it's back. And I think the sooner you get on it, the better it's going to be for you. Dude, a great example of this is people like, why do you travel to all these conferences? And I'm really cutting it back. But one of the conferences I traveled to in Asia and met a company there, one of the biggest clothing companies in the world. And they're just like, oh, cool, we want to work with you. We're going to end up submitting RFP and let's figure out how to work together. All because of conference.

18:29We closed direct revenue from it. We've spoke a lot. People get to know us over a year. Some of them move different jobs and then they include us. It's branding. You're getting out there. You're making noise with your ideal customer and it works. Not everything in branding will have a direct ROI. A lot of it, in most cases, does not have a direct ROI, but in the long run, it does pay off. Yeah. And the thing is, to me, branding is really just building relationships at scale. What Neil was just talking about is relationships, right? Humans do business with people at the end of the day. And, you know, as much as we like to think that we can sit behind a computer all day and then sit in our boxers and be anonymous, you're going to have to go out there and you're going to have to be out there shaking hands and breaking bread with people.

19:10That's just how it is. I don't care if you're extroverted or introverted, you just have to do it. And if not, then, you know, and you're trying to start something and build something for yourself, you're going to struggle. yep anyway that's it for today and we'll catch you tomorrow