Why Adobe Is An Unethical Business, The Path To The 1-person $1B company, And The Right Philosophy With AI

0:28I found this tweet the other day. snakes who charges people for canceling a subscription so i'm looking at this right now it says early cancellation fee uh cad 51.98 there will be a calculated fee charged to your master card um and then neval ravicant responds he said historically adobe products insist on hijacking your computer at the lowest level possible i treat them as malware and that's exactly how i felt about it before when i couldn't cancel out of um my adobe acrobat pro or whatever what the hell is going on here, man? And I think this is negative marketing when you have a Naval Ravikant tweet this.

1:04And then this tweet got 800 ,000 views or so. And then Naval added another 158K on top of it. I think, you know, it's generally a better idea. And we don't have to just refer to Adobe here. This is in general now. Generally, I think it's better to do what's right for the customer and make it as easy as you can for the customer because anything like this causes negative reputation don't get me wrong adobe's still a huge company they're massive but things like this it's like dude you're so big like you don't need to play games like this man but that's just one person's opinion no comment okay we can move to the next topic you pick the next topic let's talk about how's it you guys can all yeah let's not get it so has anyone built a large ad agency without mna i was actually looking for that online i haven't found one ad research this i did research grok or chat gpt uh i haven't used chat gpt i just actually did it by searching okay here i'm gonna run a i'm gonna run a deep search right now using grok um have any agencies um any ad agencies have any ad agencies gotten huge any gotten huge without mna ad agency i'm talking about billions okay all right a billion in revenue without uh let's see and i'm gonna use chat gpt yeah i'm gonna use chat gpt that's so yesterday man gotta use grok now remember i just reached a billion in revenue organically oh you're just using normal i'm using deep search i'm using deep search are you i'm at 70 right now i am looking at 80 sources now how many are you at Zero.

2:46I have to type my response. I'm looking for organic ad agencies. Well, while that happens, let me just tell you guys about Grok. Grok is amazing because it has a deep search function, which is doing the research right now. And it's a thinking function. So what you can do is if I want a really crisp prompt, I'll ask deep search to help me come up with an amazing prompt. And then I might dump that into ChatGPT, O1 Pro or something like that. Did you find something? No, it takes a while. It's okay. I'm already at 170 sources. There's nothing. I don't think there's any ad agency that's grown to a billion plus in revenue.

3:24Okay, well, tell us what research you found first while we wait for these to pop up. I haven't found one ad agency that got a billion in revenue without mergers and acquisitions. And you can't even qualify for that anymore because you've done M &A. So what prompted this? Even most the ad agencies that got to$100 million did some sort of mergers and acquisitions. So what prompted this question? Someone was asking the other day, like, how big do you think you can grow organically? And I was like, well, what do you consider organic? And they're like, no M &A. And I was like, well, we got to nine figures without M &A.

4:00Hey, I have the answer here. Okay, key points. Research suggests no independent ad agencies have reached billions in revenue without using mergers and acquisitions. this is on 200 sources so Omnicom WPB publicists have all grown the evidence lean stewards Horizon Media being the closest with estimated revenue around 1 billion but it has engaged in some M &A potentially disqualifying it Horizon Media has done acquisitions Horizon Media acquires it says like limited acquisitions it hasn't done like a lot of acquisitions that's what it says look horizon sports and experience marketing uh horizon has acquired companies how many like a lot a lot or like a little like relative relatively speaking but it's you can't look at the number you got to look at the size of the company that they acquire so uh i haven't looked at the size of the company but horizon media acquires controlling stake and digital experience company first tube what typically happens is is when i come and this was before they raised money by the way horizon has actually taken private equity money when you when you look at companies that have done mna when they're larger like a horizon they typically buy companies that are larger because it doesn't move the needle it doesn't make sense for horizon media to acquire a company doing a million or five million in revenue it's too small we should you know what's interesting do you think the pe game especially in agencies is going to change significantly especially in this AI world.

5:28Like a lot of us during this retreat, we're talking about how PE is probably going to AI-ify a lot of companies where they're just going to buy the companies and then just cut a lot of staff. And then that's what I mean. They could. I don't know how much that's going to happen in the agency world. I think a lot of agencies are already adapting. And when you look at private equity, most of them don't want to go in and clean up a business. They usually aren't operators. They're usually financial people People that want to put money into a business that's done really well without having to go in there and get their hands messy.

6:04Yep. And then there's a timeline, too, where you exit to more PE. Ideally, five years, seven at the latest, three to five years. They want to flip again. Let's call it five. Well, I got a Chinese agency for you. Okay. Given the global scope, Chinese agencies were considered my people. So with Blue Focus Group standing up, have you heard of Blue Focus Group? Okay. That's right. My people. so publicly traded on the shenzhen stock exchange since 2010 it reported 6.7 billion um cny um is that renminbi i don't know what that is um in revenue oh chinese chinese yen i don't know japanese yen um approximately 930 million dollar u.s dollars at current exchange rates this is close but below a billion usd so we can say this and its growth included uh acquisitions yeah of course suggesting mna uh usage i you know i think things were going to change because this actually if we're not if we're done with this topic it actually moves into my one of my topics around um how there's this guy that shared one person teams doing millions in revenue and sam altman has said we're going to get to a level where we see one person teams doing a billion in revenue i think we're far off yeah we're far off i think it will happen at some point i agree because like all records end up being broken in a long time from now sure you know in the next three to five years i don't think so no but i mean the fact that look let's just look at these some of these teams over here okay um so this guy listed on linkedin um here i'm just gonna start with this one well i'll go back i believe the first person to make a billion dollars without any employees is going to be someone with a personal brand that lends it to a corporation and they just get a huge payout because we've already seen things close to that i think that's where you're going to see the first billion bucks so i want to show two things over here so bullish on one person teams doing multiple millions rihanna and fenty i don't think she's in there running it with a massive team it's lvmh is running it for her yeah i think we'll continue to see a lot of those um it's funny um mint mobile ryan reynolds did you see mountains uh spinning off the ryan reynolds company mountain i mean is that the pe firm no mountain you know the ctv advertising company mntm or something like that.

8:15They bought Ryan Reynolds, what is it? Maximum something? MT

8:30acquires Ryan Reynolds. What is it called? MNTM. It stands for Mountain. They acquired Maximum Effort, Ryan Reynolds Marketing Agency. They're about to just spin it off and sell it again. Okay. And then Mountain's going to go public, but I'm guessing for them to sell it back to the original founders, it doesn't look like Ryan Reynolds is involved in it. It probably means something didn't work out. I'll just tell you one thing. During this, this mastermind, one of the people in the group, and I'm not going to get too into details here, but he was considering working with an influencer. And I told him that Ryan Reynolds with the Mint Mobile, here's what I think happened.

9:10So, cause I, I know someone that was one of the co-founders of Mint Mobile, Ryan Reynolds actually ended up making more than him. And at least for him, he's no longer on speaking terms with Ryan Reynolds. But we see a lot of these situations happen where these influencers no longer talk to the companies anymore. I don't know why exactly. He didn't give me the details. But when I asked, because I wanted Ryan Reynolds to speak at the YPO Global Marketing Summit, he's like, oh, can I help with that? I was like, oh, okay, got it. But I want to go back to this thing over here. So guys, let me tell you about this road to one person, billion dollar company chart.

9:44There's a leaderboard out there called lean AI leaderboard.com. Again, it's lean AI leaderboard.com. And this guy who founded a company called super.com has this, and here's what it says. Total revenue of all these companies listed right now, 2 billion. Okay. Average revenue per employee, 3.7 million average valuation per employee, which is a weird metric to me. I guess that's$144 million. Average team size is 23 people, okay? So we're on the way. So you look at Telegram. I'm just going to give you a couple examples here. Telegram, doing annual revenue, a billion, okay? Number of employees, 30.

10:17Average revenue per employee, 3-3, 3-3, 3-3, 3-3, right? So$33 million. Mid-journey, 500 million in annual revenue. I didn't even know it was at 500 million. Holy crap. Yeah, mid-journey is massive. 40 employees. Cursor, 100 million in revenue, 20 employees, okay? I'm going to give one more. 11 labs, 100 million, 50 employees or so. And they're getting there way faster now. And I think Stripe did an analysis too. The amount of time it takes to get to 5 million in AR, it used to be, I think it used to be like, I don't know, 52 months or something like that. Now it's, no, it used to be 37 months.

10:52Now it's down to 24 months. So it's happening a lot faster now. And do I think it's going to happen in the next three to five years? No, but maybe, maybe in the next decade. Maybe, but check out this leaderboard because this type of stuff motivates me at least. I think it motivates you too. Yeah. 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. Framer 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.

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13:07Go to shopify.com slash marketing school, shopify.com slash marketing school. The thing that you have to realize with these companies getting to 5 million in ARR or even 10, the biggest factor is not necessarily, well, technology can help things go faster, at least for you to release products. But the real key is if you look at the companies that get to 5 million quicker, they made people's life easier. Like if you can solve a massive problem that a lot of people face, it's easier to generate the revenue than if you're in a small little vertical and your solution isn't that wowing or amazing. Yeah.

13:46I think we can close it off with this one because we're on AI. So Aaron Levy tweeted this, but I wanted to talk about the right philosophy with AI. So usually when we talk about AI, it might be like, oh, how many calories does my cookie have? I'll take a picture of this, right? And it'll tell me how many calories. Like for example, I ate six tacos the other day. Wait, do you really do that? Yeah, no, seriously, I do. I do. Like when I was in Mexico, I think I had six or seven tacos in the night. I was like, oh my God, that's a lot, right? Each taco was 200 calories. And I ended up gaining six pounds in the past week or so.

14:15Really? Yeah, yeah. Yeah, but today I weighed myself, I was like, oh, I only gained three pounds, but maybe a lot of it was water weight. But point is, I do a lot of stupid things with AI, right? And a lot of people search for random things or when I argue with my mom or I need to explain something to her, I'll argue with her and she doesn't understand what I'm saying in Chinese, so I'll have it translated to Mandarin. That's base level stuff, guys. The way to think about AI, in my opinion, and I'm curious to hear yours, the right philosophy is you actually have a second brain that is probably smarter than your own brain, and you should be using it as a thought partner more than anything.

14:45so the deep research stuff we do whatever i'm not saying it's gospel but you should at least look at it and challenge how you think about things and so if i work for you if i come to you with an idea and it's not 90 there with me using ai i shouldn't be bringing you that idea right people are just lazy oh yeah i just have these ideas over here we should just well okay how much resource is it how long is it going to take what does success look like all those things now you should be workshopping now with ai you should be thinking about these things and you'll be way better than other people That's my philosophy.

15:12Dude, my main use case for ChatGPT is pretty much deep research. And I don't really use ChatGPT for anything else. Really? I know it can do a lot of other stuff, but I mainly use it for research. And that makes sense. I mean, Neil's very data-driven. He's a very detail-oriented person. So the deep research feature is perfect for Neil. But most other things I can do with Google. And it's a quick user experience, and it's great for it. For research, typically what I do is I type something into ChatGPT. I wait for it to ask me questions. I then respond, and then I go. because you can just come back and you'll get your answer.

15:43Because like even right now, I'm waiting for it. I don't want to wait 10, 20, whatever minutes it takes or 30 minutes. I'd rather just go and then move on with my day. But AI for research is amazing. Like people talk about, oh, chat GPT is going to change search and everyone's going to use it for search. I haven't seen the data on people really using it for traditional search like you would use for Google to buy a product. I just don't see it there yet. I see more people using Instagram and TikTok to find and discover and buy products than I do them using AI. I would say general consumers, I don't think we're seeing enough of a shift yet.

16:18But people like you and me and you and I know a lot of tech people. And plus, when you see people like Toby from Shopify tweeting this, like for me, I'm using AI quite a bit more than Google search. But I'm we're at the early research, though. But what do you mainly use Google research to Google search for? You're using it for research now and you've shifted it to AI. Yeah. what I use Google for now maybe to find restaurants I might want to eat at restaurants products simple questions it gives a quick answer it gives one of the quickest answers out there yeah to be fair yeah I if I'm looking to transact I just go to Amazon I'm searching on Amazon yeah so you still use a lot of the same things but when it comes to workflows around wait wait wait how'd you find out about this bottle this Yeti amazon.com but where'd you first learn about it I didn't Amazon okay I typed water bottle have you bought products from seeing something on Instagram or TikTok?

17:08Honestly, like have you ever saw a product on TikTok? Of course, yeah, yeah, yeah. Okay, have you ever bought products from doing a search on ChatGPT? Let me think about this. Yes, I have, I have. So my eye problem, so now after LASIK, I didn't know this, after 10 years, I have issues with the lipids and if the lipids aren't working correctly with my tears, they evaporate quickly and my eyes start hurting like hell. if I use my screen. But then it recommended me the right product and I was like, hey, tell me where I can buy this product near me. And it's like, there are three CVSs near you. I immediately went to Uber Eats and I bought it and it shifted.

17:44And then, yeah. And my eyes feel great when I use this now. Yeah, ChatGPT did not find any single ad agency that's grown to a billion dollars without acquisition. But going back to your eye thing, if you look at your eye, you did research probably on ChatGPT to figure out what's the problem. And then it recommended solutions to you. that's a more rare circumstance for you to buy something other than that did you do you usually use chat gpt as search to go buy stuff it doesn't go in your flow no if i'm if i'm doing if i'm usually buying stuff 99 of the time i'm on amazon yes or you're discovering it from social media yeah so on x or like i share a lot of stuff with you about microplastics and things like that right Or like loose leaf tea.

18:32You're not supposed to drink the tea bags because there's millions of microplastics in there, right? So now I bought a bunch of loose leaf tea from Japan and I went to Google for that. Yeah. Yeah. Oh, no, no, no, no, no. I went to Kettle because Kettle has this amazing tea. And where did I get that recommendation? When I ate sushi in New York and the tea was amazing. I was like, where'd you get this from? And then I spent, it was like a, it was an expensive order. But yeah, it's good stuff. But I think behaviors are slowly changing over time. but I think we can agree that the philosophy on AI is it's a second brain for you and if you work for somebody yeah it's not a place to go to go find products it's a place to go figure out how to solve problems and do research yep and and it can help you with things it's like an assistant as well that can help you with tasks there's a lot of useful cases for it but a lot of people I tell you like oh yeah everyone's just gonna go to chat gbt and go find products and buy them from them like I don't see that as use case I see more people going to instagram and discovering products and buying them than using ChatGPT and then buying a product.

19:31So I think the final thing we can talk about, and I used this use case last time, but we didn't go over it that much. And I think you would like this because you're very numbers driven. But I like using Grok to give me a deep, deep search on Omdicom or any of these holding companies, right? I'll say, okay, analyze the 10K. Tell me the good parts and the bad parts about this company. Then I'm 99.99 % sure, Neil, you've never done a discounted cashflow forecast in your life, correct? Correct. Okay, nor have I. But when I watch videos on YouTube and I see people doing a discounted cashflow forecast, just so everyone knows, you're mapping out the cash flows for the next five to 10 years maybe and trying to figure out the intrinsic value of a stock, what Warren Buffett would say.

20:10So you're trying to figure out if a stock is overvalued or undervalued, right? Complicated, okay? Takes a lot of time. You haven't done it, I haven't done it. But now I take the 10K, I'm using Grok. Deep search is on the left side. Boom, deep search is done. Then I switch it to thinking mode because it's much better at math and thinking mode. I said, okay, now do me a discounted cash flow forecast for Tesla, for example. It's like it did all the discounted cash. It did all these equations, right? And then the final summary is, okay, Tesla's trading on what, 400 bucks a share right now, 450? You got to look at market cap.

20:43Okay. But it's just valuing on a share basis, right? So it's like the intrinsic value right now is$52. So Tesla is overvalued right now. I'm oversimplifying. but it gave me all the breakdowns all the math and everything and if i wanted to get a sense for um how a stock is doing if i wanted to invest in a stock this is this is the thing at least that's been missing for me um i've always wanted that and i think you would use it too yeah i would use that i think grok is i still prefer chad gpt over grok but grok is improving at a very rapid rate dude look at what he's done in 18 months yeah give it another year i think grok will be amazing at least from a research standpoint ChadGPT produces more accurate, thorough results for me than Grok but Grok is also faster at doing the research from what I tested I mean, I got mine done pretty quickly here's like 10 minutes came to the same conclusion alright guys, so that is it for today please don't forget to rate, view, subscribe and we will catch you tomorrow