You Think Your Views Matter?, The Government Paid $620M for a Website, SEO Is Back!, $22B vs. $3.5B Startup

0:02All the views in the world don't matter if you don't have this. So, for example, let's say Neil was like a bikini OnlyFans girl. Let's say he had all the views in the world, millions and millions, 11 million followers on Instagram, and then he had millions and million views on each video. The problem with that is it only converts in one way if Neil decides to start an OnlyFans. But it doesn't really convert it to revenue. Like Neil can't influence me with that bikini account on buying enterprise software, for example. Now, for example, if somebody else decides to talk about, let's use the Cluely guys, they want to talk about their consumer product, right?

0:38And they're just showing it in action all the time. And each video is getting like 3 million, 4 million views or so. They're actually driving more sales, more adoption that way. So all the views don't matter if you don't have the influence to get people to purchase a product. And so you have to think about the value of an audience based on that influence. yeah i was talking to a dude um a few months ago male model um you know jack good looking and has i don't know how many millions of followers on each platform he has millions of followers all right and he does like these high-end campaigns and stuff like that with like fashion and whatever else like you know car companies and stuff and he was asking me you I have way more followers than you, Neil.

1:27Why can't I make more money than you? And I said, followers don't equate necessarily directly to the amount of income you make. I'm like, we'll walk down the street, more people will know you than they know me by far. But the problem is, is people know you for what? And I asked him and he was like, for looking good and taking pictures. I was like, cool. So where's the money value on it? And he said, well, the money value is, I can make their products look good because if a good looking person wears a specific watch, maybe other people will want to buy that watch. I said, okay. And how many good looking people are there out there?

2:06And he's like, a lot. Right. And I was like, I'm like, you probably know better than me. Cause you know, I hate to say it. Eric's a handsome gentleman, but most of my friends are not male models. And I'm assuming you would agree with this, Eric, you're not a male model. I'm just an average guy, just an average guy, just trying to make money online, just like you, Neil. Eric's above average. All right. He's not average, but he's definitely above average. But this guy, you know, I don't know what the rating scale of 10 would be, but let's call it a 9 or 10 or whatever. Right. Because he has millions of followers.

2:38I'm just basing it off of that. And he was just like, well, Neil, you know, you have a lot less followers. There's a lot of marketers, though. And I said, yeah, there's a lot of marketers. but a how many of them can actually produce results within the budgets companies have and within the time constraints and b how many independently owned ad agencies are there that have a global reach in 28 plus countries that can help companies with their global campaigns and things like ai you know ranking on chat gpt are getting mentioned there and app store stuff and traditional seo and ctv and all the services and he's like i don't know i don't know your space and And I'm like, the list starts going lower and lower because one, companies don't offer all services.

3:21And B, most companies don't offer it in a lot of regions unless you're typically a publicly traded organization or a massively large holding company. And he's like, oh, OK. So I was like, so my market's just bigger, right? There's a lot more being spent on things like Google Ads and taking a portion of it than how much people pay for someone to be in a picture with a watch or a car. And I think people forget two things. How big is your market and how many competitors do you have? Well, I think what's also important, too, is the value that you're adding. So if an enterprise is paying you, let's say, a dollar, they're expecting a multiple on that in terms of return.

4:06Yes. The 3X or 5X or 10X or even higher than that. Now, he might argue, oh, he puts his beautiful face on something and it helps it convert. But no, he can be replaced by any other beautiful person on the street. And that's the thing. Yes, yes, exactly. Dude, and some of these AI models, I'm sorry to say, they are beautiful. They are gorgeous. Sometimes it takes me a little bit to figure out that it's AI. And I'm like, damn, but that's pretty good, right? And pretty soon, we won't be able to tell anymore. So the thing is, it's one, you guys are harder to find, right? The business that we do is harder to find.

4:38Two, the value we add is why we get paid. Dude, I was, you know, my wife was showing me this Instagram video in bed yesterday because she was just scrolling before we were going to bed. And it was a video on, you know, someone saying like, draw me an M &M eating spaghetti. Okay. So she's watching it at the same time because I have my iPad out. I go to chat GPT and I say, draw me an M &M eating spaghetti. Mine took a little bit longer than the Instagram video. Keep in mind Instagram, you know, speeding up, but whatever. By the time the person was done, even if it was faster, and let's say they did it in a minute, chat GPT took me multiple minutes.

5:22When I showed her, mine was like 10 times better. And, you know, I don't know what I paid. I don't know if I needed a paid account for that I have a paid chat GPD account but I don't know if you even need a paid chat GPD account You can do it for free but you get very limited but yeah, that's how it works By the way, you want to know a crazy stat? I found this on Instagram today So this is just random because we're talking about good looking models, right? So here's a crazy stat Only 1 in 25 ,000 men over 35 have a visible six pack That's just 40 out of 1 million In a city like Austin, Texas that means only 40 men with abs Isn't that crazy?

5:58So is your goal to get a six pack now? No. You could already have one. No. By the way, by the way, our videographer, Noah, a very handsome man. He has a six pack. So he's clearly one in 25 ,000 men. It's actually even rarer to be over 35 years old with a six pack versus to be a millionaire. I don't know if you know that. Yeah, because most millionaires are created by them just owning their homes for a long time. That's also true. That's also true. But even then, I'm not saying, you know, because people are like, would you rather have a six pack or be a millionaire? I'd rather be a millionaire than have a six pack.

6:30The millionaire definition. So like, what is it? That's just your assets minus liabilities. Most people above 35 are like, if you're living in the United States and if you're listening to this right now, you're probably going to get there. I would hope. Yes. Yeah. By the way. So do you want to know about this one website that the U.S. government paid$620 million for? No, I want to know, but I have no clue what it is because one website. I'm curious how one website costs$620 million and it's probably something silly. Okay. So recreation.gov was a pay for performance deal. So they signed with, I think, this web dev shop.

7:08And basically they said, okay, we're going to do pay for performance. So we're going to take a small fee of every transaction for these park passes, right? These campsites or these event lottery tickets. Like if you don't want to get to Yosemite, sometimes there has to be a lottery to get in, right? Right. So initially, this agency projected that they would make$87 million for the first five years and then$182 million for 10 years. They funded 14 websites and 24-7 call centers, and they actually ended up making$620 million. And so they got a good pay for performance deal done. So are we saying everyone should do pay for performance?

7:44Not necessarily, but we've talked about Spiralize in terms of how they structure their deals. If you can figure out how to structure it well with good upside for you guys and good upside for the client, then it's still a really good deal. I hate to say this. I'm guessing you'd be on the same page as me. But if I was running that department in the government, I'd be like, screw your contract. We're not going to do paper performance anymore. You're getting a flat fee. And that's how it works with large corporations. If we crush it for them, they're not going to pay us more. If we don't do well for them, you get fired pretty quickly.

8:16And they're like, this is it. Screw you. And if you make them 10 times the money, they're like, cool, do it again or else you're not going to get a renewal. I think the key is to negotiate these deals early when it's like it's very clear that it's very unclear that you're going to win or not. Right. Because when you think about Formula One, the Formula One TV rights initially, I think this is back in the 70s or the 80s or so. But there's this one guy that offered all the Formula One teams, hey, buy him 100 grand and then you guys can have the TV rights too. Right. Nobody wanted to buy in. So he got all the TV rights and I think he got a huge profit share as well.

8:50And that's how he became really rich with Formula One. I don't have all the details, but again, if you can figure out how to get to somebody, this is why we talk about how small businesses, probably mid-market makes more sense where you reach out to them and say, hey, I'll do pay for performance. They'll do it because they're not sure if they're going to win completely yet. And they're not at the scale of enterprise where they can't take the risk on it. So yeah, but I've always had the issue with performance based deals. I don't know how many times you've tried it or not. I've had the issue where a lot of people will agree upon it up front.

9:24It doesn't matter how ironclad your contracts are. Legal just costs money and large corporations know it. Most of the time I can't get it through. And the times I have gotten it through, if you start performing really well, no one wants to keep doing the deal. They hate it. I agree with that. Eventually they'll be like, we just can't do the deal anymore. I remember I had a friend in EO. He would help companies get into like Costco or Target and these other distributors back when people didn't really know how to get in. And he would take a 5 % cut. And then eventually, no, sorry, 10 % cut. Eventually got whittled down to 5%.

9:57And then every year they would call him to whittle it down more and more and more. Yeah. It's tough. And the business knows that, hey, if Costco is carrying my product and they're doing really well, yeah, you may have the relationship and I don't. But at the end of the day, Costco is not going to want to lose, you know,$100 million in revenue or$200 because it all adds up. So, yeah, I don't want to pay you anymore. Yeah. The leverage has been flipped. Like maybe let's say I was selling it to you. I might have had leverage initially to get the deal done. But like that goes down over time. So, yeah.

10:28Yeah. How's it worked out for you when you tried doing performance based deals? You know what's funny? I was talking to, I forgot who I was talking to yesterday. But in 2017, I got these SaaS companies. Like remember Mixmax, the email company? So, um, yeah, yeah. So I knew I could, I knew what was up and coming. So I got six of these performance deals signed. Okay. Now here's the thing. The team didn't know how to perform on it. I thought I can just delegate it and let them figure it out. Right. So I knew what exactly, okay, we're, we should do the landing pages for them. We should run Google ads over here to make it all work.

11:00Um, we just didn't do it. Right. And so, um, it's easy. It was easy for me to close the deals because I had the relationships cause I was doing the podcast and it was just focused on SAS founders at the time. And so I got the deals done, but we just couldn't execute at the time. But I will say we're trying to do that now again. We're going to probably focus that more on mid-market if we're going to guinea pig it. 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.

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13:31i i think it's a beautiful model what's the one that does it starts to see is it cloverfield or something like that that does it centerfield centerfield my bad yeah centerfield so okay you want to know the story how they started because one of my one of my uh my friends work there back when they were like a two million dollar a year agency um he went to work there and so this is funny because we're at a networking event and one of the guys he met ended up hiring him okay and um him and the other guy were like ad buyers they were both in the affiliate space and so centerfield went from this affiliate agency or sorry this marketing agency standard marketing agency they were saying okay we're just going to focus on telecom companies and then what we're going to do is we're going to drive them leads on a cpa basis or to get paid per lead what eventually happened was they got so profitable um i think they're doing 10 figures in revenue i could be wrong um but now they will handle the entire funnel they will handle not just the paid ads the landing pages but they'll actually have the call they buy call centers too to have the entire oh wow or a gift wrap for them at the end and that's how it's like it's like a red ventures yeah yeah i mean to me it's it's affiliate yeah it's good yeah um but i think it's like a classier version of affiliate marketing so yeah all right so i wanted to take a moment to tell you about my podcast co-host Neil's agency called MP Digital and they work with a whole host of global companies or a global organization also Neil has SEO tools such as Ubersuggest 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 on a side note you have something on the list on how SEO is back once you read into it yeah so So SEO is back.

15:14This is a tweet from Alayda Solis. So Alayda's amazing SEO. And Dejan SEO said, GPT-5 just made SEO irreplaceable. So a couple of bullet points here. OpenAI just made an executive decision to focus on raw intelligence and leave the rest to search engines. Now, number two, without grounding. So grounding is grounding it on maybe pulling the data from Bing or pulling the data from Google. So without grounding, this model is virtually useless. it's designed to be the brain on top of tools and information it's provided with number three and four bullet points here this means seo has never been more relevant than now and the last point here is open ai appears to be designing models that think and reason well but don't attempt to internally store all world knowledge instead leveraging retrieval augmented methods such as tools search plugins large context to pull in fresh information as needed and this approach is motivated by efficiency cost and performance considerations as evidenced by recent statements, research, and product releases.

16:11Because they're burning so much money on these tokens, they have to figure out efficient ways to do this. So that's why I said SEO is back. And people want cheaper prices for the APIs over time. And they have reduced their pricing quite a bit. I know they've lost a lot of money, but I think they lose money on purpose. They could charge more for all their products, but they choose not to try to gobble up more market share. Yeah, totally. And I actually have some slides. So you and I are speaking at HubSpot's event. actually in a couple of weeks now. I'm going to work on our slides tomorrow a little bit, but check this out.

16:44So I have this. Okay, you're going to like this. Let me share this. You guys are getting a sneak peek to my talk. You're getting a sneak peek as well. Do you see this? I do now. Okay, so if you're just listening to this, the slide basically shows that the cost of intelligence is dropping. So I actually shared this at a talk I did earlier this year, but a couple months ago you would pay for let's say like an input api price for like uh like deep seek right which is a chinese model you pay 55 cents over here and for chat cpt's o1 model which is the best in class at the time you were paying 15 for that okay and then you can see on the very right output api price is 60 from o1 now today look at what it's dropped to so deep seek maybe still 55 cents for this one but look instead of 15 dollars for 01 it's dropped to two dollars instead of 60 dollars over here on the right side it's dropped to eight dollars uh well 01 is 15 here right it's two for 03.

17:45this needs to be adjusted over here just 01 preview ignore the orange we're actually taking that out um because no one really talks about 01 preview but but right here no no go to the next slide it's 03 that's cheaper right you see in the cash it's 2 versus 15. Yeah, you're right. I didn't see this 03 pop in, so I actually need to make some adjustments to this slide. But point is, it's getting cheaper. So the fact that it's 03 on the right side here, 03 was one of their best models at the time. And by the way, now it's just ChatGPD5. Yeah, but 01, you put$15 over time. Did it stay 15 or did it decrease?

18:19I'm pretty sure it decreased, so that's where I need to fix the slide. But main point is this has dropped by a lot. Yeah. So the pricing is all going downwards like we're talking about. Yeah. Exactly. We're just saying this is very deflationary. And I think we all know, like you and I both know that, okay, energy is going to be really important. GPUs are going to be really important. And we need the price to continue to drop down because we're just paying for intelligence ultimately. Yes. All right. Yeah, I agree with that. You're just paying for intelligence at the end of the day. You want to know the difference between a$22 billion startup versus a$3.5 billion startup?

18:57up? Sure. Is it growth rate? No. Okay. So two credit card companies, different stories over the last five years, which credit company, credit card companies would these be? If you're going to go one was Brex. I could be wrong, but I'm going to go with Brex. Yeah. Yeah. You're right. Um, I don't know what the other one is. Brex is probably the 20 something billion dollar one. If I had a guess. No. Okay. So, so this ramp came out of nowhere. Oh yeah. Ramp's the one that raised money. My bad. I was confused. They both raised a lot of money, but Brex started earlier and Brex had the lead. Brex was like all over the place.

19:29Like, dude, when crypto was going crazy, there's always like a Brex representative at all these crypto dinners when I was in Miami. But Ramp, from what I've seen, they've just executed better. And they have, from what I've seen, their engineering, their product is just better. And so if you're looking this over here,$3.4 billion company, Brex over here, and then you have Ramp,$22 billion. and so it says over here in this tweet from Teddy, the valuation gap between Ramp and Brex is a sobering reminder that execution is all that matters and the job is never finished. And I met the founders of Ramp, super nice people, very humble.

20:06I'm not saying the Brex people aren't, but I think the Brex people, they were very sales focused and they're like every single party, whereas Ramp, they're just always shipping new features. I think this year they ship like hundreds of new stuff, but wanted to call it out because a lot of my friends do use Ramp. I don't think you and I use it, but worth calling out. Dude, remember that house I was going to buy on Beverly Drive? Beverly and Lowe? Oh, yeah, yeah, yeah. Was it the Brex people? The Brex founders were renting it because I was like asking the real time, I'm like, who the heck spends$180 ,000 a month on Ramp?

20:37Like at that point, you should just buy a house, right? Yeah. And they're like, oh, this company called Brex. And there was something like that. They were paying like$180 ,000 or something ridiculous every single month. And I'm like, that's a few million bucks a year. Like, just go buy a house. It may not be as big or nice, but who cares? You're just throwing money away. We don't know the founders of Brex, but like, I do think how you do anything is how you do everything. And so if you're going to do that as a founder, you know, if I'm an investor, I'm on the board, I might have a problem with it.

21:08And by the way, you look at the Ramp people over here. This is a guy, I think he's on the product team, Ramp Economics Lab, right? He's just writing about their analysis on their data. they're always sharing interesting data that gets retweeted on X. I've never seen this from Brex, right? And so for me, I'm just like, they show you credit card spending across different industries and to show that maybe there's like a recession coming or whatever. I just think it's stuff that people who are interested in the markets are interested in reading on. So kudos to Ramp on the execution. I hope they keep going.

21:39Yeah, and either way, both the companies are going to do really well. I think it was Rem that announced things like if you're using them as a corporate card, they'll automatically have like AI analyze people's travel and expense reports and make sure that they're following in line so they're not trying to like hurt the company. It was one of them that's using AI for like corporate cards for people expensing or, you know, doing meals or whatever it may be while they're traveling. But I thought those features were pretty useful. i've never used this technically a lie at one company that i was working with for a while they gave me like a brex card or a ram card but it was more so just for the credit card number and it was virtual um but for my own companies and at that time i never really used it it was just more so i had it um but for my own companies i've never really used anything outside of amex we do have visa cards because some places don't take amex but i've just found that if you're trying to scale your business, it's easier to just go with like American Express because you can just get the line limits and it's just easier to scale up faster.

22:48I like Amex because of their superior customer service. And it's just, it's been convenient, right? But I can see a world where ramp starts to out execute. And I can see a world where you and I are on ramp in the next, I don't know, five, 10 years or so. We'll see what happens. And that is it for today, guys. And we'll see you tomorrow.