Wait, Did AI Just Put My Agency Out of Business . . . (#188)
What is our unique value proposition to clients? Why do they pay us? Why do we exist? If we don't define that and we're not very clear on that, if it's not AI today, it's going to be some low cost provider who's going to come in to put us in a pricing war.
Speaker 2:I'm Jim Huffman, and this is If I Was Starting Today, a collection of conversations about half baked startup ideas, growth tactics, and stories from founders, including my own journey as a business owner. All of the content is centered around one question. What would you do if you were starting today?
Speaker 3:Alright. So, Jonathan, we actually did an episode earlier this year on, like, our top AI tools and actually did pretty well. Ben, you and I have been tinkering with AI. I'm using chat GBT more and more, but we're working on it. But I would say there isn't the urgency there that maybe there should be.
Speaker 3:But I went to a talk the other night that the urgency is there now. It was, oh, wow. This is happening. This is fast, and it is about to take our company out. But I can hit on that talk that's kinda rocked my world.
Speaker 3:I feel like in the past few hours, I think you got a late night Slack for me about it. Jonathan, I went to an event that rocked my world on AI, and I think our company can be out of business in 18 months if we don't do anything about it. Should should we talk about it? Absolutely. Let's do it.
Speaker 3:So I got to hear the founders of Forum 3 talk. And so who are these guys? So the first guy is Adam Brotman. He's the the cofounder of Form 3, but more possibly, he was the chief digital officer at Starbucks. He made, designed, and launched the Starbucks app that in itself is a juggernaut of the business.
Speaker 3:He then went on to be the co CEO of J. Crew to make it a digital first company. He's just like a a baller in the digital space out here in Seattle. Him and Andy Sack, who's obviously a a founder there, he was part of Techstars. He advises Satya Nadella of Microsoft.
Speaker 3:He's like VC royalty. These guys basically raised a whole bunch of money to make AI products and invest in AI startups. And so they did it because they're writing this book called AI first. I'm intrigued. I'm interested.
Speaker 3:There's free apps and and drinks. I'll go to this. And after 1 hour of this talk, I was basically, like, 3 pages of the notes in thinking, like, we need to pivot the company. And the the thing that they literally opened with that they had as a throwaway line was this quote from Sam Allman was, 95% of what marketers use agency strategists or creative professionals for today will easily, nearly instantly, at almost no cost, be handled by AI. And so as they're investing in AI tools and building their own, they're going after marketing and customer service first.
Speaker 3:And you probably saw all these examples of companies that have doubled their revenue while cutting their staff in half by using AI. So the latest one is Klarna. They went from, I think, 5,000 employees to 3,000 employees by cutting marketing, cutting customer service, and still growing. And so if anything has inspired me to make our agency and buy first, it is definitely this one. But, anyway, man, it's something that I'm like, wow.
Speaker 3:Need to go bigger on this. And I can kinda hit on the top five points. But what's your on a scale of 0 to terrified, where are you feeling on the AI tear scale right now?
Speaker 1:You know, to be honest, with that example and the Clarity example and and a few others, I don't know if it's because they like, AI is subtly doing the work of everyone they've just fired or the team was already bloated and inefficient to begin with. Because you've heard the story of how when Musk bought Twitter, now x, he gutted the entire team. And it still continued to function as is, which goes to show that the team was already extremely inefficient. And I know many organizations, teams that we work with, that over hire. And you know the people on those teams are not necessarily pulling their weight, or there isn't enough work to justify their presence on those teams.
Speaker 1:So it's a mix of both. So I don't necessarily think Klarna fired all of those people and, like, AI bots are suddenly running the organization. It's more that they had a come to Jesus moment and decided to trim the size of the the company. And that itself is creating more efficiency because they realized there was a lot of work that did didn't need to be done that could have easily been done by other tools. So it's a mix of both.
Speaker 1:But to answer your question in terms of my level of alarm, I am not as alarmed because I don't think other people have woken up to it. But still very much in the early adopter phase, where it hasn't reached anywhere near a critical mass, where the bottom could fall off tomorrow. So there's time in that sense, but that doesn't mean we could get complacent and, not get up to speed with what's out there. So that's my take, Carter.
Speaker 3:I see it a few different ways. One is clients on sales calls. They're like, oh, have you tested this AI tool or that AI tool? A lot of the savvy ones, they're already getting their their hands dirty playing with stuff. The second thing is it is impacting our perceived value because it's like, oh, you're gonna do ad creative?
Speaker 3:Cool. I just made 5th ad creatives with this AI tool. Why am I paying you? And, yes, you can make ad creative, but we also are seeing that it's not very good right now, but it will be. You still need someone to take it over the finish line.
Speaker 3:So I think our jobs are somewhat safe because of that final mile of the curation and expertise we put on top of it, but it doesn't mean that a lot of things are going to be taken out from under us because I see it as strategy and execution. It's probably better at the execution on some things than the overall strategy just because it's so hard to give all the context to something to really drive strategy and to be nimble. It'll probably get there. There are some tools we're playing with, but, man, it's moving very quickly. And so one thing they said, they're like, you're either going to get disrupted by this or you could be a part of the the disruption.
Speaker 3:And they're basically like, you need to they're kinda pushing this idea of being AI first, which, by the way, great marketing on their part. This AI first movement. Mobile first, web first. And so that part I like, but they're like, okay. To be AI first, you need 5 things.
Speaker 3:Well, there's AI training. There needs to be a level of AI literacy across the entire company. Right? The second, you need an AI council, essentially a team that is in charge of what are the tools we use, how we integrate them, how we do training. And then the third thing is a use policy where if you're working with clients, how you can use certain data.
Speaker 3:If you're a big company working with really sensitive information, the do's and don'ts of what data you can and cannot use and how to use it, how you connect all of your inputs. And then the the final 2 are the AI impact assessment. What are you doing and how does that impact top line? How does that impact profit and efficiency? And then the 5th one is building and launching an AI with my app to deploy and test things.
Speaker 3:And, basically, they're going through all these examples of companies that have embraced this AI first model, and they embrace it by almost burning the boats to go all in on it. And so it just got me thinking, you know, it's kind of like innovator or the founder's dilemma of you build something that's working. But the truth is as the market and the landscape changes, we're going to have to change and disrupt ourselves. But at what speed and at what cost? So that's where my head was kinda spinning as I left this event.
Speaker 3:I'm walking to my car. When are you Blockbuster versus Netflix where you don't move fast enough? Or, you know, on the flip side, it's Facebook acquiring Instagram at the right time to really own mobile. And it's what's the timeline we have here. And you and I, as we run growth at how aggressive do we go into this initiative?
Speaker 3:So that those were the things that were percolating in my head. But what are your thoughts on balancing what's working now versus where the landscape is going and how you need to change?
Speaker 1:Yeah. The way I see it is that whole execution versus strategy rule. What is our unique value proposition to clients? Why do they pay us? Why do we exist?
Speaker 1:What makes us better than any other agency in the world? And if we don't define that and we're not very clear on that, we're already very commoditized. If it's not AI today, it's going to be some low cost provider who's going to come in to, you know, to essentially put us in a pricing war. We have to kind of figure that out that is not easily done via AI or any other tool for that matter. That's our molt, if you will.
Speaker 1:And that's what gives me a bit more confidence. It's like having that IP or experience that we can bring to the table. But if you're talking about the execution side of things, I think that's inevitable. And there's literally nothing that you can do to stem that tide because it's commoditized. There are tools that can produce the output of humans in seconds.
Speaker 1:There's no way you can compete against that. That's At that point, you just have to be a master of those tools and kinda weave it into your practice. But where I think we have a solid footing is the IP, the experience, the know how, the frameworks that we bring to the table, and the way of doing that, the experience. And with that experience comes comfort. Like, clients wanna know that they're in good hands.
Speaker 1:Like, it's for the same reason that you'd go to, the specialist for something. That person knows what they're doing so you can rest in confidence and focus your attention on something else, I think, for the foreseeable future. There'll always be a human point of contact. Companies will want to know that there's someone in charge of that function, whether it's an internal person or someone that they fired outside like an expert. But a complete hand off to AI to operate their entire business, I don't think we'll ever get to that point where essentially all companies will fire everyone in their marketing or customer service roles and just, you know, let AI run the business.
Speaker 1:I don't think we'll ever get to that point. But it's just about making sure that you're valuable enough to not be cut when all of that happens. Yeah.
Speaker 3:And it's also what will be valued. We've become good at learning the ad manager tool. We've been good at using testing tools like convert or designing in Figma or using HubSpot. I mean, our next wave of hires need to be amazing prompt engineers or amazing at at using these tools, right, at at their prompts. And so there's a whole new skill set that will be needed as we're still valuable to do that final mile and have that that kind of human intervention.
Speaker 3:Because the other exciting thing is with our existing team, how can we do more, take on more to maximize the impact with the resources so we can have the most lean team? Because that's a good point with Klarna. There's probably some factors they're growing and scaling, whereas bootstrap businesses like ours, where we're already pretty efficient in lean just because we have to be out of necessity. These tools could be a a supercharge for us. Jonathan and I have created we're starting to form our AI counsel at our company.
Speaker 3:By the way, I'm truly drinking Kool Aid. I sent an overnight Slack to the entire team. Like, we need to do this. And Jonathan's like, by the way, we're already doing it. You wanna hit on some of the things we're testing with AI that that I think could be interesting?
Speaker 1:There's several tools that I'll hit on, but the one that I think is by far the best positioned tool to take advantage of people shifting, non technical people. Might I add as well, going from, you know, being complete novices to being experts using AI tools is Zapier. And Zapier has already built the infrastructure of connecting all the tools that we use in our day to day work. So they're strategically positioned. And they've now created Zapier Central, which is where you interface in a very user friendly way without, you know, having to deal with code editors, linking all your data, training lang these language learning models, and creating output that's useful.
Speaker 1:So that could be, here are the last 10 best performing emails, generate our next 5 best performing emails. Or here's our data sources connecting you to Amplitude, GA4 or anything else for that matter. And, you know, generate ideas for us. Making use of data that's essentially sitting idle, that would require an expert to come and kind of find insights, Zapier is able to generate very useful output for businesses and you can connect any tool that already connects with Zapier. So that's We're just scraping the surface there and there's so much in terms of application and output that that itself is its own big project that can consume many months.
Speaker 1:So that's number 1 by far. And number 2 that I think that's really caught my attention, I still don't know if it does what it says it does, is Needle. But Needle promises a lot. Again, it connects especially if you're an ecomm brand, it's a must. You must experiment with it because it connects with all your tools, like your data sources, your Klaviyo, for example.
Speaker 1:And it suggests ideas. That's what's very powerful about this one. It's not just output, but it also suggests ideas in terms of, hey, your AOV is down. So and so products are selling in combination. Why not offer a bundle that might go together?
Speaker 1:That's unbelievably powerful. That's something that you'd expect from at least a junior level marketer that's well worst of e com. That's very impressive if that's what it's able to do. So we're still testing it out. But that's another promising one.
Speaker 1:Another one that I think is a very good example of those very targeted solutions to very painful problems that almost all businesses have is a pricing tool called Pria. So Pria gives you essentially, you do a lot of pricing tests and pricing optimization. Most stores have static prices unless you're going to change the prices for sales or promotions. It analyzes multiple data points to put, like, your traffic, the season, your product composition, your inventory, and suggests different prices so you get maximum revenue. This tool pays for itself.
Speaker 1:It's a one time setup and can pretty much run itself. So these are the 3 tools that are really exciting me that we're studying right now.
Speaker 3:I mean, for me, it's having that hub of data. If we can pipe in Google Analytics, Shopify, customer reviews, a product catalog, you know, add data, and then get insights and strategy, get reports, That's such a huge unlock that that we're trying to test. Well, there's one that the guys at form 3 launched called Spok, s p o k. And it it's interesting. It's more so for keywords and content strategy and SEO.
Speaker 3:There's a few others out there, but I think that's just the tip of the iceberg. I think they're going into other traffic channels and whatnot. And the other thing that we're realizing is that the oil during this boom right now is is data. So with us, what's our data set? And really, as we're thinking about it, it's like, okay, it's past experiments we've run on websites and designs that have performed really well.
Speaker 3:It's past ad creative that has performed really well because we have a high velocity of testing and learning from that. So we're building that database to hopefully start to predict things that that we would want to do. How are you forcing yourself to use AI and chat GBT more? So for me, I have the desktop app. I have it on my phone.
Speaker 3:And I I enable the audio version where I refuse to write emails anymore. So what I do is I always talk into it, have it say it. I'll upload this one's amazing. I'll upload a sales transcript from an hour long sales call. And then I'll talk, pull up the main notes, the takeaways and action steps, and then boom, it it cranks out an email.
Speaker 3:Like, I I'm even able to upload financial models in there to get insights and analysis. And it's it's a forcing function where before I send an email, I'm like, wait, don't type. Do this all through audio. And it's it's just such an accelerant doing those those little things. Because for me, it's about changing the small habits that I do to incorporate it into my my day to day.
Speaker 3:But those are the things that I'm doing to kind of build it into my routine. How have you been able to work it then?
Speaker 1:Yeah. So there's some new plug ins. And one thing I've noticed is AI is coming into where we currently work. So if you noticed on Google Docs, for example, you can essentially generate or run scripts or commands or prompts and generate entire, you know, such like essentially produce the work that you try to produce with a single prompt. I'm a Notion Power user.
Speaker 1:So, like, if I'm trying to produce a script, for example, if you remember for Adaptive Marketing, I'll go in and essentially ask it to here are 3 videos on this topic. Here's an article in the book. Produce a 5 minute video script for it. And boom, there you go. You have it.
Speaker 1:Even in Slack, in the command, you can use it to generate prompted messages for clients. I think that's something that I've seen a few videos of people using. I haven't used one recently, but that's could be a game changer fairly shortly as well. And even in Superhuman as well, I've seen that being rolled out as one of features, you know, drop in a prompt that you're sending an email within 3 seconds.
Speaker 3:No. It's awesome. We did a talk 2 weeks ago. Very long. But Craig Swanson recorded the whole thing.
Speaker 3:So we have the video and the audio, and then he uploaded the transcript. And then he basically the tool within WordPress. You've seen what he's he's done where based off the talk, he's making content marketing from it. And it's just genius because it's using your own words and case studies, and then it's building all these different things that I wouldn't even thought of. And so that's the thing that I think it'd be cool if we can create this hub of data for or even for need.
Speaker 3:Right? Pulling in the product catalog, pulling in the customer views, pulling, like, the top ad creative. I got the email content calendar for the next two and a half months, basically, 12 emails. And I was, like, here's all the old emails we've written. Here's the 12 that we wanna do going forward.
Speaker 3:Write 12 emails. Give me 2 subject lines to test. Keep the copy between a 115 to a 150 words. Give me a call to action, and then it just spit it out. And it was amazing.
Speaker 3:And I had
Speaker 1:to do, like, minor tweaks to it. Think about this, for example, like, all that work could output you just dis you just mentioned. Like, how many man hours, like, how much cost, and how many people would it take to produce all of that? Especially, brick and quality. Like, I don't think we'll get anywhere near that.
Speaker 1:But even just volume the output, like, you can just imagine how much cost savings there is on something like that. Last point to add to this is, I think the biggest advantage that that we have right now is we're a bit adventurous. We're willing to tinker play with items, learn new things, go to those conferences and learn about what's coming and, you know, how to, you know, what to prioritize. But they're when you think about it from a CEO or founder's perspective. Right?
Speaker 1:Like, they're just operating their business. They're trying to grow their business and scale it. And they understand the impact and importance of AI, but they won't know how to use it. They won't even know what's possible with it. A CEO won't know if it's possible.
Speaker 1:And that's where we come in is knowing what's possible with AI and packaging it in a way that makes sense, that's value adding, that's efficient, that will wow them the level of quality that they anticipate. That's where I think our unique value comes in because most people don't know what's possible with AI. So that's the big advantage.
Speaker 3:Yeah. And the last thing too, I think, is to get buy in from the team because I think everybody else, like, wait. Is my job all of a sudden gonna go away? So we've been trying to be very vocal, like, hey. We're creating an AI council to be involved.
Speaker 3:There's certain criteria on who can be there, but the goal is not to lose anybody on the team, but here are the tools to do even more, do better, and ideally make more. If you are able to get buy in from the team so they're excited to test things rather than hide things, it would basically make their job obsolete. We've got some amazing designers where we're like, hey. Test these tools. Let's see what can make us do our job better.
Speaker 3:So the I think that's something that just from a culture perspective, getting people on the same page so they feel secure and safe that, like, okay. This is something that is to my advantage and not to my detriment.
Speaker 1:Yeah. And that's why this whole AI project is so important because it's a forcing function. Right? If you're a designer at growth and you you're just going about your business, it's, you know, it's just another day in the week doing the same type of work. But if you're working on an AI project, there's an AI council, for example, you're learning from different people like what's possible, how to use tools and how to take your work to a different level, then that designer will go from thinking about, like, how can I, you know, adjust these pixels to produce something better to how can I use these tools to produce all this work in a fraction of the time and potentially get paid the same amount?
Speaker 1:Right? So I think that's the outcome. I think that's exciting for me and everyone else on the team. It's that they're learning a lot more and, essentially, thinking outside of their very siloed roles. It's using AI to take their work and their career to a completely different level in a very short time as well.
Speaker 1:So Yeah.
Speaker 3:And we'll see who's got the growth mindset to really take this to the next level. Well, this was awesome, dude. We'll have to do a check-in on how this goes.
Speaker 1:Awesome. Well, thank you very much, Jim. Have a good one.
Speaker 3:I'll give a few plugs.
Speaker 2:First, I send a weekly newsletter each Thursday featuring 5 articles or tools that have helped me. You can sign up for these weekly updates at jimwhuffman.com. 2nd, for anyone running a startup, if you need help growing your business, check out Growth Hit. Growth Hit serves as your external growth team. After working with over a 100 start ups and generating a quarter 1,000,000,000 in sales for clients, Growth Hit has perfected a growth process that's hell bent on driving ROI through rapid experiments.
Speaker 2:Plus, you'll get to work with yours truly. So if you wanna work with a team that's worked with startups that have been funded by Andreessen Horowitz or featured on Shark Tank, then check out growthhit.com. And finally, I wrote a book called the Growth Marketer's Playbook that takes everything I've learned as a growth mentor for venture backed startups, and I've distilled it down to a 140 pages. So instead of hiring a growth team, save yourself some money, get the book, and you can just do it yourself. I hope you enjoyed this episode, and I'd love to hear feedback.
Speaker 2:I'm on Twitter at jimwhuffman.
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