2Bobs

Demand Is the New Supply

2Bobs with David C. Baker and Blair Enns

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Blair recognizes that AI has triggered a knowledge product oversupply and now we have a signal-to-noise ratio problem. He sees reputation and reach reshaping the knowledge economy, consolidating a lot of power and wealth among a smaller number of experts who demonstrate their trustworthiness and rise above the noise.

Links

“Demand Is the New Supply” by Blair Enns for winwithoutpitching.com

Transcript

David C. Baker: All right, Blair, today I'm interviewing you on Demand Is the New Supply. Now, that's the title that you gave it. Did you play with any other title? What's another way to say this?

Blair Enns: You're laying a trap for me.

David C. Baker: Yes. Duh.

[laughter]

David C. Baker: What you're saying is that there's way too much supply and not enough demand?

Blair Enns: What am I saying? I'm saying the old world, the pre-internet economy-- I'm channeling my inner Ben Thompson from Stratechery. In the pre-internet economy, if you could consolidate supply, you won. The way you consolidated supply is mass production, mass media, and then distribution in the big retail stores, typically. If you had supply, you won, and demand would find you, and now it's the other way around. What's the trap that you want me to fall into? What's the punchline you're looking to deliver?

David C. Baker: Oh, no, it was actually an honest question. I know this is shocking to you, but--

Blair Enns: Since when do we open with honest questions?

David C. Baker: [laughs] I know. If we flip this around and said, "Supply is the new demand," I know what that means, but I'm less clear about what it means when you say, "Demand is the new supply." Essentially, you're saying there's way too much supply. The marginal cost is basically zero because of AI, and now we have to pay a lot more attention to demand and how that relates to running our businesses.

Blair Enns: Now you've got me thinking. Is my headline backwards? Is supply the new demand? No. What's king here?

David C. Baker: Demand.

Blair Enns: Yes, demand. You look at your inbox, and your inbox is filled with people selling these AI products and services. They're all living in their parents' basements, broke. It's not even them sending their emails. It's their agents, and they're spamming the whole world. Obviously, I'm overstating this, but every one of these things that I no longer reply to, it's like there's another fleeting business that's not going to make it.

David C. Baker: Not just your inbox, but LinkedIn too.

Blair Enns: Yes.

David C. Baker: I don't want to presuppose this. I guess this should be a question, but you're presupposing that agencies, the people who listen to this, are seeing both sides of this equation. They're having trouble cutting through the noise, and they're also getting inundated with people who want to sell them things.

Blair Enns: Yes, and some of them are developing new products, which we've talked about before. They have a client relationship, they solve a client problem, and they solve it increasingly through some sort of technical innovation using AI, and they realize, "Oh, this is a product. We could spin this up into a product business." They create a separate little product business, as many thousands of other people and other businesses have done, so used to a world where, "Oh, I've got a novel product. I have supply. I can sell this thing." The problem is everybody's got supply. Everybody's got a novel AI product, an AI agent, an AI solution to a problem. Even the clients do.

There's a lot of supply of solutions out there, of new digital AI-based solutions, and they think, in the hangover from the previous world, it's like, "Supply is everything. I've got something nobody else has. Now let's go find somebody to sell it to." The reality they're running into is that the relationships are-- It's one thing to have supply, but everybody's got supply now. Who's got the demand? The demand is being aggregated into an increasingly smaller number of sources, and that's why you have-- not to jump ahead a little bit, but you have things like the rise of the expert influencer, and all of a sudden relationships are more important.

David C. Baker: This is another one of our non-AI episodes about AI. [laughs]

Blair Enns: It's not an AI episode, but it's steeped--

David C. Baker: In AI.

Blair Enns: I would assume our listeners just accept that, like I said in a recent episode, it's the water we're swimming in now, so we're not going to not talk about it.

David C. Baker: Yes. I can't remember any sea change that occurred this quickly. AI has been around a long time, but about the last two years, it's been really pretty remarkable. You tell a story in your article, which is by the same title, 'Demand is the New Supply'. You tell a story about how somebody asked you a question, and you were able to help them, and it bypassed all the public channels. Talk about that and why that was different and what it prompted in your mind about the difference between this approach, demand is new supply, and supply is new demand. How it sparked the thinking around individual relationships and trust.

Blair Enns: At about the time, I'm just sick to death with the crap that's in my inbox, and I'm thinking, "Maybe I'll just make a policy about-- as a matter of policy, I will no longer reply to unsolicited emails." I'm thinking about that. Then I get a text from a mutual friend, and he says, "Hey--" somebody else that's very close to him that I also have a relationship with. He said, "I'm helping this person who's a family member launch this new business. Really highly specialized. It's so highly specialized that it's basically podcast booking appearances for a very specific type of professional in very specific situations."

He said, "Do you have any clients that match that description?" I thought about it. I said, "I can think of two off the top of my head. I'm happy to introduce you." I sent email introductions to both of those people, and it dawned on me. I'm overwhelmed with solicitations, email, and social media, LinkedIn. Those channels are dead to me as a way of hiring somebody. I no longer respond to unsolicited electronic inquiries. Unless somebody can prove deep knowledge of me. Unless somebody can prove that they really, really, truly know me.

Like, "I've read your book, I've been following your podcast," and these very specific things, observations that clearly aren't AI, and there are a lot of attempts at that. At the time when I'm considering implementing this policy, I'm thinking about, wow, a friend of mine reached out. I think highly of this person and of the person that he's helping. I know he wouldn't ask me for something unless it was very good. I can tell by the description of the thing. I think that's really smart. He's a good, upstanding person so is his family member. I have no doubt that if I have a client that they would be able to add value to my client's business.

I do the work, I think about it, and then I do the introductions. I'm happy to make the introductions. Then I think about that. What's going on on my client's end? Surely the same thing is happening where they are inundated with these unsolicited requests. When they get one from an introduction like this, from somebody they trust, now, that's assuming that they trust me. I'm making assumptions that they trust me too. I want to be helpful to them. I want to be helpful to my friend. It's an age-old scenario of being referred into an opportunity. I'm realizing, oh, this is one of the few channels left in this new world where the electronic avenues in or channels in where you can easily spam your tam.

You don't even have to do it. You can set up agents to do this. You can shield yourself from all the domain damage it will do by getting all these different email domains, et cetera. You don't even have to be involved. You can try to stir up some business. In that world, this scenario where you're referred in by a trusted colleague, friend, or advisor, that's got way more value.

David C. Baker: I have a question about this. You went on in the article to talk about the professionalization of influencers, and you and I both have rolled our eyes at traditional influencers. I can't stop laughing just thinking about it. You're saying this is a different angle on influencer. What if you became a professional influencer? Would people still trust you?

Blair Enns: Are you saying me, myself, or the listener?

David C. Baker: This person that you contacted on behalf of your friend, these two people, they gave it the time of day because they trusted you. If all you did as a business was connect people, would they then think about you differently? In other words, you didn't make any money by referring these two different people to your friend. It was just something you wanted to do, and there was a level of trust that facilitated that. If you're making money from being a professional influencer and connecting people, does that change the equation?

Blair Enns: It's an interesting question because a section of this post I call the Rise of the Expert Influencer. I'm just extrapolating out from my experience of referring somebody in, and both of my clients engaging with my friend. I don't know if they got hired or not. I don't know what the outcomes were, and I don't really care what the outcomes were. Both of those invitations were warmly received, and conversations ensued. I'm thinking, "How do you scale this up?" I hesitate to use the word "scale," but are there other ways that this can play out?

When I was thinking through it, I thought influencer culture starts to make sense to me now because there's so much noise out there, at some point, you decide that an individual, maybe a corporation, but it's more likely to be an individual, you will trust an individual to be the definitive source for you in an area, and you will take their recommendations seriously. Now that's a expert influencer business. I tend to think of an influencer as somebody who's famous for being famous or famous for their ability to promote themselves. I give a really good example, I think, of an expert influencer in this post, my friend Hector Garcia. You're going to speak at his conference in a couple of weeks, right?

David C. Baker: Yes, exactly.

Blair Enns: He's famous among accountants and bookkeepers. Basically, he's a deep well of knowledge on the subject of QuickBooks. He's got a YouTube channel with 300,000 subscribers. He has over a thousand videos. The QuickBooks help desk sends people to his videos. He's got the demand. He's got the eyeballs. He can sell these people anything. Hector's got some really interesting businesses. He owns an accounting practice. He owns a community for accountants. He runs an annual event for accountants. He's got a software business. He's got a few other things running. All of this is powered by his YouTube channel.

He created the demand and the relationship, and he's become this trusted advisor. Then he refers things to people. Some of those businesses are his, and some are referrals to QuickBooks. When you think about that business, if you're an accountant, and you've got a question around accounting software, Hector would be the source. Hector has multiple businesses, the point I make in this post is his business model is not under any kind of existential threat because he has multiple business models. He has multiple businesses, but they all stem from the fact that he is seen as the authority, a trusted authority on subjects.

He's not the classic influencer per se. He's the influencer who actually knows something, and that's me being a little bit demeaning to other influencers. Then I have another friend, you know him as well. I won't name him. He's got a big YouTube following, and he runs an advisory business. He made the point to me recently that-- he said his audience is so big that brands are now seeking him out. He had this great line. He said, "Brand is now more important than product." He's held in high regard by his audience. They trust him so he can recommend things to them.

He is an agent who brings them deals. He only does deals with businesses that he knows, uses, and respects. I think his audience trusts him that he's not going to recommend anything-- even if there's money in it for him, he's not going to recommend anything that he himself doesn't use, and he wouldn't feel comfortable recommending. Then he's pointed out to me that some of the most famous podcasts in the world, many of these people, their business models are, they end up owning equity in some of the businesses of the guests that they feature. I'm not going to name names. Some of it's not above board. Some of it's a little bit shady to me.

In those cases, it would be maybe the influencer stepping over the line. Maybe if it was known, there would be some erosion of trust. I think in the example of my friend, let's say the two friends, let's include Hector in this, they're both highly regarded in their space. When they make a recommendation, people trust them. Even if it's obvious, they disclose the fact that this is a paid relationship. I think that is a sign of things to come simply because of this point that we've been touching on, which is when there's so much noise and there's so many people selling different things and you don't know who to believe and who to trust, you will increasingly turn to a small number of trusted advisors or influencers in different space.

Let's say I follow David Baker because I like David Baker's advice. I think one day I'll hire David Baker, maybe I'll hire David Baker a couple of times. I'm still listening to 2Bobs Podcast. I'm still reading the punctuation weekly blog posts. Then David Baker says, "Hey, I'm entering into a formal paid relationship with so-and-so. I've known them for years. I trust them, et cetera. I recommend them." That recommendation is going to carry a lot of weight for a lot of people. Your audience will let you monetize that relationship. It will all be okay as long as it's above board. If they trust you, they will trust your recommendation.

I think increasingly, you, the listener, the expert advisor will increasinly-- the forces will push you to either become that person or you will feel pressure to work through that person because they will have the eyeballs, they will have the trust, and you will need them to recommend you. I think that's the world we're moving toward.

David C. Baker: There's some categories where I just know I would never do something because I think it's wrong or whatever. I'm not saying it's wrong for other people. Then there's other categories where I have a preference, and I'm not sure I'm right, but I just have a preference, and I'm just going to stick with it. I'm open to changing. This is one of those things where I have left so much money on the table because over the last 30-- it'll be 33 years in March, I don't take referral fees, and I don't pay referral fees. I have turned down hundreds of opportunities.

I hear what you're saying, and I think back over all of those times I've turned it down and think, "Well, did I make a mistake or not?" It's not like I don't make referrals. We actually have a Google sheet that's I think 11 categories and in each category there's anywhere from 3 to 20 different places people will refer. Somebody will say, "Hey, can you recommend somebody that does fractional accounting or a lawyer or something?" We'll go to our list, and I'll find out a little bit more about what they need. I'll say, "Hey, I probably would work with this one. If that doesn't work, then maybe the second one. If you want me to write an email introduction, happy to do it."

It's all free, and I've had many people want to do paid posts and all that stuff, and I just have never done it. I don't know that I'm right. I feel like I could be a little too precious about this stuff, but there can never be any question in people's minds about my opinion being for sale. You listen to talk radio, for instance. There's two shows I listen to, one's on politics, and one's on sports. They'll pause, they'll read a commercial. I don't believe that they're either using it or that they care about it, even though they might. I just don't know how to distinguish. This is an area where I'm taking a different path, but I'm also saying, "Yes, I might be wrong on this one."

Blair Enns: I don't know if you saw this. We're recording this October 26th, 2026. Last week, Ben Thompson from Stratechery, and you and I have been reading and listening to Ben for years. He announced that he's taking on a sponsor.

David C. Baker: Yes, I read that.

Blair Enns: He's never talked about the money he makes, but other people have speculated on his business model. It appears that he makes about $15 million a year writing a daily post and then doing some podcasts. He's the world's leading independent business analyst on technology and media. He is at the top of that heap. He's probably the most highly respected business analyst in the world. It all started out as a blog. Last week he announced that he's taking on Stripe as a sponsor and he had this lengthy, lengthy, unnecessarily long post explaining why he's doing this and how it will affect his covering of the financial services space.

He was very apologetic about it. I've never emailed him before. I just sent him a one-line email saying, "Dude, we trust you." He's built up so much trust that he could take on anybody as a sponsor, and he's very careful about this Stripe powers his business and it's going to change the way he's going to cover the financial tech space a little bit less because he doesn't want people being worried about his bias towards Stripe. He has built up so much equity. He could take on any sponsor, maybe not any sponsor, and his audience trusts him. I think you're in the same place.

It doesn't mean that you have to go that way. I'm just saying, I think increasingly relationships are more important, these things. If you do have an audience who trusts you, they actually want to know what you recommend. I've never been super comfortable with this either. I've always been worried about bias in my recommendations. Increasingly, I'm starting to embrace it. There are other people where I want to know, "Okay, you're talking about the problem, but who do I call for the solution?" I want them to tell me. I think increasingly that's the world we're living in.

David C. Baker: Yes. You just said something that really struck me. Your listeners, your readers, the people who follow you want to know what you think. That's interesting. If that's true, then that does change it a little bit. I have reached out to two people to see if I could be a promoter of their stuff for free, but it didn't have anything to do with this space. One was a tool brand, and one was an RV brand. Nobody took me up on it, just for the record. I'm not that interesting to them, but "I love this stuff so much. I'll be a promoter of your stuff for free." [laughs] They didn't take me up on it.

Blair Enns: I could see you doing a second career of any of that thing because you have deep interest, and if you know something about a topic, you know about it deeply. You understand it. You love to know how things work. You understand how things work. When you get into it, you know everything about a subject once you get into it. You would be an amazing-- I think, okay, everybody, are you with me? Should David become an RV influencer?

David C. Baker: Newmar RVs, Festool tools, Sako sniper rifles, Leica cameras.

Blair Enns: RVs, sniper rifles, and cameras. [laughs]

David C. Baker: How do all those go together? [laughs]

Blair Enns: Only in America. That's raised a lot of questions.

David C. Baker: For some reason, his name slips my mind, but the Canadian guy that writes--

Blair Enns: Shane Parrish?

David C. Baker: Yes, Shane, right. Every once in a while in his emails, he will promote something, and he'll say, "Listen, I'm not making any money on this. This is just something I think you need to hear about." I have never seen anybody else do that. I thought that was really fascinating. Then there's others that are sponsored, but then every once in a while he just says, "Hey, this is something I've just seen. They're not paying me. I just think y'all really ought to look into this."

Blair Enns: I think there's some people listening to this thinking, "Come on, guys, you're just catching up to this. We've been aware of this for a while."

David C. Baker: True of many of our episodes.

Blair Enns: [chuckles] You and I have not been. Like you've said, and I say this in this piece, I've long disdained influencers and influencer culture, but now I understand. I still have a huge disdain for the get-rich-quick people, all that stuff. I have my trusted sources I go to on all topics and those trusted sources, I want to know what they think. I want to know, in some cases, what products they use. I don't need to know what kind of bed they sleep on.

I'm currently shopping for a mattress, and I'm not really going to listen to anybody's opinion on this. If Ben Thompson was selling a mattress, I'd be like, "Oh, come on." If I listen to sleep podcasts-- are there sleep podcasts? I had a trusted source in that, I would take their recommendation. Hit me up, anybody, if you know about a-- I need a firm mattress. [laughs]

David C. Baker: Oh, you are going to regret that question so much. Let me wrap this up by asking you a question. I'm listening to this, and I'm buying it, and I want to be somebody that earns people's trust. How do you earn trust? You're running an agency, you're a principal. How do you get that? It doesn't happen quickly, obviously. We know how to destroy trust, but how do you earn trust?

Blair Enns: Yes. We could talk about that maybe in a future episode. We'll just answer it in a sentence the same way you always have. You make your thinking public. You and I talk about this a lot. You and I both agree that we have to think through our fingers. You do your thinking through writing, you publish that writing. That's how you earn trust. As soon as you have AI doing that writing, then that's an admission that you're never going to get to that place. Because, again, we've talked about this, that the output is a proxy for the input, for what's going on inside us in our brains. As soon as you start faking that by using something else to help create the output, you're not going to build trust with anybody.

David C. Baker: In a sales conversation, you're not talking about you so much as asking really great questions, and you're turning down opportunities that are not a good fit. Talk about earning trust. That's a really great way to do it.

Blair Enns: Yes, you're not chasing everything. You're being selective. There's lots of ways. We could talk about that in more detail in a future episode.

David C. Baker: All right, people. If you know anything about beds, I'm looking for about 200 people to email Blair.

Blair Enns: What's the Dutch-- No, it's Swedish, the Hastings. What's the $80,000 bed?

David C. Baker: I have no idea.

Blair Enns: I want something more expensive than that.

David C. Baker: I must listen to different influencers than you do.

Blair Enns: That's a story for another day.

David C. Baker: All right, Blair. Thank you.

Blair Enns: Thanks, David.

Inside the Head of a CMO

2Bobs with David C. Baker and Blair Enns

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Given the data from recent research about Chief Marketing Officers, David has four things creative agencies should keep in mind during sales and work interactions with them.

Links

“Inside the Head of a CMO” by David C. Baker for punctuation.com

The Boathouse Fifth Annual CEO Study

Confessions of a CMO: A Field Guide to How CMOs Are Evolving to Thrive Under Corporate Pressure

Transcript

Blair Enns: David, our topic today is Inside the Head of a Current CMO. I've read the piece and I've read the surveys that you referenced, but tell the audience, what was the impetus for this topic?

David C. Baker: I wanted to get inside the heads of deeply depressed people. [chuckles] I thought, who better than CMOs these days? No. You don't see too many studies that come out that really, I guess, challenge your thinking. In this case, it was not just one, but two that came out pretty close to each other. One was the Boathouse Annual Survey of CEOs, and included in that were some questions about what they thought of CMOs.

The other side of it was called Confessions of a CMO, where 30 CMOs were asked to provide anonymous feedback on their relationship with the company that they work for, under Chatham House rules where you can't say anything that would reveal specific names or anything like that. It was just fascinating to put those two together and, I guess, to see the mismatch between them.

Not just the mismatch in terms of how one group thought, the other group thought of them, and vice versa, but also the movement and perception in such a short period of time, over one year. That's what got me to thinking. It really challenged me to think differently about how we, as running agencies, might think differently about how we do it, because of that unique environment in the CMO world these days.

Blair: Now, to clarify for our non-agency and non-marketing audience, a CMO is a chief marketing officer. There are probably other CMOs. There are all kinds of CXOs now. One of the things you were referencing there is this change in attitude from year to year. That specifically is the Boathouse survey on how CEOs perceive their CMOs. Do you want to speak a little bit on how, in the span of just a year, CMOs have changed in the eyes of their bosses, this chief executive officer?

David: Yes. CEOs, just a year ago, would think of CMOs like the whole marketing department that they were running, they would think of the marketing department as a profit center. Two-thirds of CEOs would think that. In other words, any money that you allocate to the marketing operations would be more than earned back. It would be an investment in the company. Now, that has dropped, in just one year, from 65%, so two-thirds, down to 40%.

The bulk of CEOs now think of the marketing department as a cost center. In other words, it's just something you have to do. It's not a direct ROI. It's sort of like employee benefits. You need to do it, otherwise you'll lose employees. It's not a core function of the company that gives you a return on investment. It's not. That's really sad when you think about marketing. [chuckles]

I'm not even in marketing. I advise marketing firms, but if I were a CMO and my CEO thought that of me, I would be acting very differently, which turns out to be the case.

Blair: I think it was Peter Drucker who said there are only two functions in business, innovation and marketing. Does that ring a bell?

David: I know Drucker, but I don't know what he said.

Blair: Yes. Essentially, coming up with new products and services for your client and then marketing them to the client. The idea that in the space of a year, CEOs would go from seeing the marketing function as a profit center generally, and I think you said 65% of them saw it as a profit center a year ago, to a cost center. Today, is it 40% or 45%?

David: Yes.

Blair: The numbers have basically flipped. Only 40% or 45% see it as a profit center. The rest see it as a cost center. In a year. is that a statement about the CEOs? Is that a statement about marketing in general? Is it a comment on the economy or something else going on? What do you think?

David: I think this has to be muddled. There has to be something in here about the economy too. If you just picture what people would have said if the economy was strong and sentiment was strong, which it's not in the world right now, you would think that they would have given more credit to CMOs. When sales are down, they're looking for places to blame. This is part of it, right?

I don't think it's quite as bad as this indicates. It's got to be influenced by the larger economy, but it's not good news. There isn't any way to spin this as good news.

Blair: Let's talk about the letter grades that CEOs are giving to their CMOs. That's changed too. What are those numbers? Same shift?

David: Yes. Still, in the same year, 24%, so a fourth of CMOs would have gotten an A grade from their CEO, so the highest grade. In one year, that 24% went down to 15% got an A. Sounds a little bit like university before grade inflation. [chuckles] Whether they deliver ROI, 13%, where the CEO has said, "Hey, does your CMO deliver ROI?" In 13% of the cases, "Yes," that's what the CEO said. The rest of the time, "No." That's really staggering. It just sets up this big question.

If that's the perception of the CMO, that is frequently your contact-- Sometimes you have a contact higher, sometimes you have contacts lower, but let's just use that as a proxy. If that CMO's relationship with their job is that way, how does that change the way you would work with them? How would you think about how you would present your ideas, the relationship you would have, how invisible or visible would you be? Would you go over their head sometimes? It just gets you to really thinking about what might change.

Blair: Yes, that's the crux of your post, really, is that one year later, your client is a different person. It may be the same person, but you're effectively selling to and working with a person in a different set of circumstances, who is more worried about their job, who has less influence with their boss and the other members of the C-suite.

David: Yes. They're not going to waste personal capital on some mistake you brought to the table, some campaign that didn't work, or something like that. I don't think this has influence. Now, this is just anecdotal on my part. I don't think it's influenced how CMOs frequently will take you with them to their next job. I think if you've established a good rapport and you've made this CMO look successful because of the work you've done.

I think that transference, where you follow them to their next job, is happening just as much as it did before, maybe even more. I don't know. That's just my sense. With the current relationship, it seems like you could wreck your relationship with the CMO a lot easier than you could before. They're not going to step in and save you because they're looking for scapegoats more than they were in the past.

If you do something bad, they're going to say, "Well, yes, I need to fire them. I need to bring another firm in. That was bad. That's my bad for hiring them, but I can fix that." Yes, staggering.

Blair: The CMO has gone from last year, and again, we're generalizing here, but last year, it's like, "Yes, I'm willing to take risks, I'm the man, or the woman. I've got influence. I'm willing to stand up in front of everybody and make bold recommendations." Today, they're just trying to keep their head down.

David: Yes.

Blair: That's it in a nutshell. Isn't it? I think some of the best quotes in your piece here come from the Confessions of a CMO study. Can I just read a couple of them and we'll talk about them?

David: Yes.

Blair: Every quote here resonated with me as somebody who teaches selling, where I was yelling, "Yes, yes." Even each of your four recommendations, when we get to them, I thought all of them aligned perfectly with how I think about selling. I'm just giggling here because this is just a great mechanism to talk about some of my favorite subjects. These quotes are from CMOs talking to other CMOs about what they're experiencing, knowing that they're not going to be named, so we're going to name these people.

David: [laughs] Yes.

Blair: No, just kidding. We don't have their names. Here's a quote. "I've always had to come in sideways because the minute you say brand, people's eyes glaze over, so I start with culture." What was your reaction when you read that?

David: Well, that's what I was saying 15 years ago when you all started talking about brand, and I'm saying, "Stop it."

Blair: Brand, brand, brand. Oh my God. [laughs]

David: Then storytelling. Yes. It's just one thing after another.

Blair: I've coined some insults over the years that I'm too mature now to be able to throw this.

David: Oh, really? Did you go to some summit last week or something? [laughs]

Blair: Okay, here's one. "I know you're lying because you've got a PowerPoint deck and you just said the word brand." [laughs]

David: [laughs] Is that the first time you've said that publicly?

Blair: No, no, but it's been a few years.

David: Okay, so it feels good to get that off your chest.

Blair: The worst one, I would say. "I've always had to come in sideways because the minute you say brand, people's eyes glaze over." Haven't they always glazed over, or is that just you and me? We're just so immersed in this. This is a different rabbit hole we could go down. I've always been down. dismissive of agency owners talking about their brand because, to me, that was code for, "I'm ignoring the difficult decisions about what business I should be in and how can I be meaningfully different, and I'm focusing on the soft stuff, brand, the color palette, the use of space."

Obviously, you can hear from the tone of my voice--

David: We just lost 2,000 listeners. [laughs]

Blair: I know. It's just you and me, the two old guys from The Muppets talking to each other. Nobody left. Anyway. I understand when CMOs are experiencing this, you start talking about brand and people's eyes glaze over. There are better words. Culture is a better word. Reputation is a better word. Status in the eyes of our customers and prospective customers, that's a better phrase than brand. I loved reading this comment.

David: I'm just letting you hang yourself here. My feeling is, and I think this is all subconscious on the part of the brand pushers, is that brand is under the umbrella of unaccountable spend. It's like whatever you do for a company from a branding standpoint, it is the most difficult-to-measure thing you do. I think we take solace in that rather than getting down deep in the trenches and saying, "Hey, are we moving the business needle?"

I'm not saying brand isn't important. I'm saying that a lot of other things need to be built on top of good branding. We stay away from those other things because they're too measurable.

Blair: I think that's a great way to articulate it. I should point out that the very best brands out there, they do talk about brand. They do so in a meaningful way. They are all in on their brand. I think most of the blowback you're getting is from organizations that-- they've built a good business, but not a good brand. It just doesn't make sense in the eyes of the people at the table to keep spending all this time on brand when we're trying to push a needle.

I understand the counter-argument to that. I know how I would argue against this, brand is always important, et cetera. I am, as I've already confessed, a little bit biased from people talking about brand when they should have been talking about more meaningful things. I suspect that this CMO probably was not working at a company that we would recognize as a big brand and was running into that kind of thinking, rightly or wrongly.

David: It could also be somebody who worked on the external side, went to the client side, is now the CMO, and is talking about brand all the time, like they did when they ran an agency. [chuckles]

Blair: Yes. The next quote, "I call everything a pilot. When it's all a test, debate ends and data decides. One didn't even ask the CEO's opinion on a rebrand element, just put the logos on the wall and waited." I love that idea of the marketing person talking about every marketing campaign as a pilot. I wrote a post on this recently, I don't remember if we did an episode on it or not.

I think we did, it was the Rory Sutherland one, where one of my takeaways from his body of work is that marketing success is fat-tailed. Basically, the odd marketing experiment will account for an outrageous percentage of your overall success. Therefore, you should see marketing as an experiment. Therefore, you should go into all of these things as a pilot. I thought that was a really astute approach by this person.

David: The other thing I like about the pilot is you're just saying, "Listen, it's an experiment, we don't have enough information to know if this is going to work" so that you're not staking your reputation to something working. I really like that thought too. As long as you kill the pilot quickly, if it's obvious it's not working.

Blair: Yes. Managing people's expectations around this as a pilot, I think that's a great way to think about it. Last quote here and then we'll move on to your recommendations of what the listener should do in light of the new environment for CMOs. Here's the quote. "I was successful if everyone believed the idea was theirs. The outcome felt inevitable and nobody recalls exactly what role I played." I think that is a really astute observation of a CMO.

You don't want your CMO-- I'm putting myself in the CEO's shoes. I think that's what I would want my CMO to do, is to bring ideas to the table, different ideas, to talk about the pros and cons. It's almost like a three-option proposal in my world, where you're not going in with a strong recommendation, you're going in with an idea of the place we want to get to, and the different paths that we could take to get there.

You put those different paths on the table for discussion and one of the things that discussion does, it lets people get invested in the decision, so when the decision is made, they are part of that decision rather than a yes/no. If you ask me to make a yes/no decision on your idea, then it's your idea and you get the credit. If you ask me to participate in a broader discussion about different ways that we can do this, and I, in concert with you and others, we come to a consensus on one direction, we are now all invested in that decision.

I think it's a brilliant quote.

David: Yes. It also brings up the point to me about how important it is for you to understand the different personality types of the people you work with. I don't mean with necessarily personality theory, but just understand people and what motivates them, what embarrasses them. Then you introduce your ideas differently, based on the kind of person that you're talking to at that point.

I almost interrupted you earlier, but this is a good time to do it and say that when we hear the word selling, I think we just default to the idea of what happens in those early conversations when somebody is turning from a prospect to a client. I think it's a mistake because selling starts then, but it never stops. You're still selling your ideas. There's so many good principles that you don't just use to bring new clients in, you use them in the relationship too.

You ought to write a book about when the selling doesn't stop, or something. You know what I mean?

Blair: When the selling doesn't stop.

David: This is just another example of how our entire relationship, like you were saying, the outcome felt inevitable. Nobody recalls exactly what role I played. All of your big ideas, I have introduced those to you. I just want everybody to know that. [laughs]

Blair: [laughs] This is a great segue to your Why This Matters to You section in this post, where you list four or five-- I think it's four different things. What's the first thing that you should think about when you're onboarding this information about the changing role of the CMO? What do you have here in writing, David?

David: First, the big reveal is dead.

Blair: Okay, stop right there. I'm going to read for you, from The Win Without Pitching Manifesto.

David: Oh, no.

Blair: The second proclamation, we will replace presentations with conversations. We will break free of our addiction to the big reveal.

David: You're saying this comes from you? [laughs]

Blair: Did you hear that? We will break free of our addiction to the big reveal and the adrenaline rush that comes from putting ourselves in the win or lose situation of the presentation. When we pitch, we are in part satisfying our craving for this adrenaline rush. We understand that until we break ourselves of this addiction, we will never be free of the pitch. Presentation, like pitch, is a word that we will leave behind as we seek conversation and collaboration in their place.

I'm sorry, what were you saying [chuckles] about the source of all--?

David: Nobody's listening to a 15-year-old book.

[laughter]

David: Okay, point taken. Your Honor, I take that comment back.

Blair: I retract the question.

David: Yes. What I meant by that was that you want to co-build with somebody, but when you do the big reveal, then you go off and you do your thing, and then you come back with it, there isn't all that middle ground of building something together, where the CMO may even forget that it was your idea in the beginning.

Blair: What a novel idea. [laughs]

David: Yes, I agree. I came up with it 16 years ago, as I recall. [laughs]

Blair: Yes, okay, all fun aside, you're right. This idea, the big reveal is all about you, and you go in and you're going to be the star. Meanwhile, there's this trepidation and uncertainty on the side of the client. If you get it wrong, they're thinking, "Oh, I never should have fucking hired you. Oh my God, do you know what kind of shit I'm in? Do you know what I'm dealing with over here?"

You're standing up there going, "Ta-da." Could we not have worked through this together? Did you have to hold everything behind a dam and come out and go, "Surprise." Now, look at the position you've put me in. That's what I'm imagining is going through the CMO's mind.

David: You know what would make that better, is if we outlawed presentation decks and said, "You must update the client twice a week on the progress you're showing," and it must be handwritten, like a sketch or a picture of something on a whiteboard, or whatever. Maybe it doesn't need to be that extreme, but that presentation deck has influenced us in the wrong direction.

Blair: I agree. There should be no big reveals, just a series of ongoing little reveals, where the most important people on the client side have bought in. If you are in this moment where you're doing a presentation to the CMO and their team, the CMO should already know what you're presenting. You should not be putting this person, your most valuable client, in this position where if you get this wrong, they look stupid.

David: If you have to back up, that beep, beep, beep-- I've got one vehicle that does that, and I hate to leave a campground early because it wakes everybody up. If you've got to go beep, beep, beep in your presentation, that beep, beep, beep shouldn't last very long. You should never have to back up very far.

Blair: Got you.

David: Man, the way I can come up with images is just remarkable.

Blair: [chuckles] I was thinking of that meme you sent the other day of the old guy saying, "I hate all this new technology in cars. I put it in reverse, and now they're showing me a video of a guy getting run over."

David: [laughs] I know. That's a great one. Oh, goodness.

Blair: Second thing that you should adapt to under your banner of why this matters to you is, your ideas should be designed to make them easily stealable. Explain that. What do you mean stealable? I think you meant the CEO should be able to take credit for this.

David: Yes, that's it. All right, let's go to the third one. That was pretty obvious. Speak the CFO's language calmly. The CFOs, instead of brand, talk about financial performance, growth, innovation. Just speak in a way that not just the CMO that you imagine wants to hear things, but speak in language so that when the CMO repeats what you're saying, they're using language that makes sense to other C-level people.

Blair: I really like this point. I'm imagining many creative people in front of the CEO doing some pitch or presentation and speaking CMO or marketing language to the marketer, and the marketer is thinking, "How do I sell this to my CFO?" In an ideal world, you on the agency side, you're a financial literacy advocate for the CMO. You're helping to frame the decision and the benefits in terms of return on investment and other financial metrics.

Rather than forcing the CMO to be the translator of marketing speak into financial speak, you should be speaking financial speak to your chief marketing officer or client.

David: Yes, because there are certain times when you cannot control what I call the representation problem. You can't be in every meeting where they talk about your input. You just got to give the language to the person who's going to represent you so that they can do it well.

Blair: It's almost like creating a deck for this CMO, knowing that deck has to travel into the organization on its own. The deck is a bit of a sales pitch, not to the CMO, but to the people that the CMO is going to have to sell to. I'm not in favor of doing that, but it's a similar idea, is-- You're coming to the CMO with language that you want them and they want to use with their CFO.

David: Yes, and that's the fourth point too, is really talk about enterprise growth. Try not to even use the marketing word because that's turned a little bit dirty. It's not all doom and gloom here because there was something else in this survey that really caught my eye. I referenced it at the beginning of this article. It says, "CEOs like their CMOs more than they ever have." 79% say they're strongly aligned with their marketing leader, which is a five-year high.

Now, they don't think they do a lot and they think they're a cost center, but they really like these people and they have a good relationship with them. That would be my advice to CMOs. It's like, okay, use that relationship. Try to get super candid feedback from your boss, and then use that. Maybe you as an agency would help the CMO improve their relationship with the CMO. They already have a good relationship. They just don't have a good value story there. Maybe that could be something you could help them with.

Blair: Yes, the CMO has to sell to the CFO and the CEO primarily. They need to be able to speak the language to both of those other executives. We did an episode on bounded rationality where we talked about the idea that, for anybody to make a decision on anything, you have to draw a circle around the amount of information that you're going to consider. Otherwise, we'd all be impaired with too much information and we could never make a decision.

Bounded rationality in an organization tends to break down along silos. I've long observed that people in a large organization tend to be aligned to the goals of the department and not the organization. The only people in an organization who are aligned to the goals of the organization itself are the CEO and people who are potential future CEOs. There are two audiences that you want to imagine yourself speaking to through the CMO.

One is the CFO, who's concerned about return on investment. The other is the CEO, who doesn't really care about marketing per se but is deeply concerned with the overall direction and performance across multiple dimensions of the organization. The CEO is the person who is unbounded, un-siloed in their thinking. If you can think and speak like a CEO and a CFO to your CMO client, I think you're just two steps ahead.

David: If it's true that marketing departments are viewed more as a cost center, they're going to have to start understanding how to talk to CFOs. That's who you talk to if you're a cost center, right? If you're more about growth, you're going to relate more to the CEO. The other thing we're not seeing out there is too many CEOs being replaced by people who come from the CMO track. It's more CFO, COO, CTO, which, if we can turn that around, we'll start to see more activity on that side of things, probably, too.

Blair: Yes. I think a good future topic for you to tackle, certainly not me, is speaking the CFO's language to your CMO client.

David: Oh, yes. Okay. I'll think about that and it'll be my idea when I do it.

Blair: [laughs] Fell flat. Okay. All right. This was fun. Thanks, David.

David: Thanks, Blair.

Get Your Freak On!

2Bobs with David C. Baker and Blair Enns

Download

Blair has been thinking about how, as AI continues to streamline more administrative tasks over time, we will be left to focus on the things we humans are good at – interacting with other humans. Because of this, the interesting people will win in selling their services and expertise.

Links

“The Interesting People Will Win” by Blair Enns for winwithoutpitching.com

“The Fertility Crash Will Make the World a Small Town” by Tyler Cowen for The Free Press

Jesse Ratner’s March 27 LinkedIn Post about AI

Transcript

David C. Baker: Today's episode title, I think, is Get Your Freak On. I actually don't want to know more about that. [chuckles]

Blair Enns: You don't know that line, get your freak on? I don't know where it's from.

David: Oh, I do. I just don't want to know what you mean by that. We're just going to leave that. [chuckles]

Blair: Okay.

David: We've made this pledge publicly many times: we're not ready to do an AI episode, and then we're freaking talking about AI every episode. What is going on? Should we just admit we're doing an AI episode?

Blair: [sighs] Well, it's like a fish trying to avoid water, I guess, is your point. We're swimming in it, right?

David: Yes.

Blair: How did this happen? I guess the inspirational trigger was Tyler Cowen's article in the Free Press titled The Fertility Crash Will Make the World a Small Town. In that article, he talks about-- The global population is still growing. I just looked this up. It's still growing, but the pace of growth is slowing. It's going to peak in the year 2080 at about 10.3 million, then it's going to start a gradual decline from there. Hans Rosling, when he was alive, he was a physician and a statistician, and he did some work for the UN on population growth and other things, and his gift was he was an excellent communicator. He did some talks-- including, I think, a TED Talk, on how the global population is going to peak at about 10.5 million.

David: Billion.

Blair: Oh, billion. Sorry. Then we're going to have problems because I remember Ed Kless talking about this on his podcast with Ron Baker, The Soul of Enterprise. He said, "We don't have an economic system that has been tested in a world of declining population." If you think how fundamental growth is to the economy, when the population starts to decline, there may be some challenges to the economy. Now, that's a bit of a ramble. The population is going to decline. AI is going to take some jobs, and we don't have to go down the rabbit hole of how many jobs, how quickly. Can we both agree that AI will take some jobs?

David: I would be comfortable agreeing with some. I just don't think it's going to be a large number.

Blair: Do you think not many get taken, or that the jobs that get taken will be replaced by other new jobs that we can't conceive of now?

David: I think both. I think AI is primarily going to contribute to greater productivity, not job loss.

Blair: Yes. I agree with you. I don't remember if we talked about this in a previous episode, but I was writing a post recently, and the slant I was taking was that the history of these predictions of the impact of new technology is all littered with these overly excited claims, none of which ever came true. When I looked at the data, almost all of these predictions came true about what would happen when people started watching more television.

Through the history of the introduction of new media and new technology, they almost all came true, just a lot slower over a longer period of time. These concerns that we're hearing today about rampant job loss, if I just take history as a guide, there will be job loss because of AI, but it's going to be farther out into the future, and it's going to be a lot more gradual than we imagine, even though the pace of this technology is faster than all of the previous ones.

In a declining population, so there's fewer people, and there's fewer people required to do the jobs because there are now billions of these smart agents out there that are doing at least some of the work. Cowen's point was that the humans will be left with the work that only humans can do, and that is some form of human interactions. He said, "Therefore, the most interesting humans will win." I wrote a post on this called The Interesting People Will Win.

David: [chuckles]

Blair: He didn't use that term exactly, but I extrapolated that to the current market. Listeners to this podcast are in some creative business. They are the expert; this language that you and I use, talking about The Business of Expertise, the name of your book, and this idea that I often talk about: the fact that you can either be seen as the expert or a vendor. I think in the not-too-distant future, the most interesting experts will be the people who win, and I think you can also extrapolate that to the expert's second job of selling their expertise.

If you think of the best sales experiences you've had, there was some component about that human, that individual, that you found interesting, fascinating even. I think the most interesting sales people-- typically when the most interesting experts might have some edge, but I think as time goes on, the edge that accrues to interesting individuals will do nothing but increase.

David: Let me unpack that just a little bit. AI is clearly not interesting on its own. AI will replace a little bit of the expertise that is demanded of experts, or at least it will enhance the expertise that they bring to the table. Why is it that being interesting is more important in an AI driven world, than it was before an AI-driven world?

Blair: I think in an AI-driven world-- and I'm already starting to see this, and we've talked about it or alluded to it a little bit, we start to value the more human things. We start to value human connection. I think of a child who's a software developer and I toured him through a friend of mine, his business, years ago. The person who is [unintelligible 00:06:10] 1,000 people in this business, quite developer heavy. It was a technology consulting company.

The person giving the tour, she was touring my son and his friend. She made the point that you can't just be a good coder. We will not hire a coder, or a developer who wants to sit there, and just develop, and doesn't write code, and does not want to interact with other people. You have to be a social, interesting, outgoing person. You have to have interpersonal skills, because it's not enough to just be a coder. I thought, "Oh, that's really interesting. I hope these boys are taking this on board."

Jump forward a few years in time, AI can do a lot of these kind of more roach jobs. One of the jobs that's being prophesized that's going to go away almost entirely is driving, and I wrote about this in this post of mine. I was in Miami recently. I'd been there twice in the last six months, seven, eight months, I guess. There's Waymo in Miami, so I choose Waymo over Uber. I want to know how you feel about this. I would prefer to not have to deal with a driver, than to have to deal with a driver, but there are exceptions and the exceptions are the really interesting drivers.

There's one time I couldn't get a Waymo, so I called an Uber. Had an Uber Black. This guy who looked like a hip-hop star pulls up in this pimped out Escalade. He had the attitude, he had the dress, he had the music going. I thought, "Yes, I would pay extra for this." I don't want to ride with the average person in the average experience. I'm willing to pay more for the interesting experience with the interesting person. Does that resonate with you? Your preference for Waymo versus Uber, but still room for an interesting Uber driver?

David: Yes, it does.

Blair: Or you just hate all people equally?

David: No. I'm just really uneven about it. There are times when it irritates me when I'm trying to have an interesting conversation with a driver, and the driver doesn't want one. Then the opposite also happens, where they are trying to foist a conversation on me and I might just be exhausted, having struggled on the mat with a client or something, and it's like, "I just don't have the patience for it." One of the biggest skills, I think, an interesting driver has, is to very quickly determine whether the person that's in the back seat wants to have a conversation or not. Then they follow that lead based on what the passenger wants.

If we take this to LinkedIn just for a minute, I don't know if you saw this or not. One of the best AI writing detectors is called Pangram. It's pretty much undisputed as the best at the moment. There are some false negatives. Not too many false positives. There may be other tools that get better at it than Pangram, but at the moment, that's the one. They just finished this big study and they discovered that, of the long-form content on LinkedIn, 41% is AI generated. 41%. That's the most on any platform. Just below that would be Medium, and then Twitter, and then Reddit and then Substack.

Which even Substack has 10% of AI generated content, which is higher than I would've guessed. They're starting to put some gates in Substack just to detect that, so that you aren't subscribing to something that AI wrote. Anyway, that as the background. Yesterday, this person, they were philosophizing about their use of AI when they write posts for LinkedIn and she said, "Well, why wouldn't I be my best self on LinkedIn? Why wouldn't I use all the tools that are available to me to put my best foot forward? That's what AI does for me."

Blair: Because that's not you.

David: Well, that's the way I responded. My first comment is, "What's going to happen when I'm in a conversation with you, in a sales conversation with you, and you show up not looking anything at all like the way you presented yourself with AI?" Like going to a date with somebody and it's, "Wait, this is not the person that I got to know on some platform."

Let me just say one other thing about LinkedIn. If your premise is true that the most interesting people are going to win, that is an argument for being interesting on LinkedIn and not turning it into your personal Facebook, but to at least talk about interesting things related to your life so that you register, so that people don't just see what you've written and move right past it because it looks like everything else everybody else has written.

Blair: I found this guy on LinkedIn from you yesterday, his name is Jesse Ratner. He's a non-fiction writer. I'm going to try to read this really long post here, and I'd like the listener to bear with us. This is so prescient because we were convening today to talk about the importance of being interesting.

I reposted it with a note that said, "Anybody who tells you that they have trained AI to write just like themselves see in that statement an admission basically of their blandness, of the fact that if you can train AI to write like you, then you don't have a voice. You have not developed your own unique voice." I say that from the advantage of being a writer, and you are a writer too. You and I are of a certain age, and so we have decades of experience of writing and writing publicly, so we have honed our voices. When somebody makes the comment, "Oh, yes, I trained AI to write like me," I think, "You know what? Write without AI for another decade, find out who you really are, and then see if you can get AI to replicate it, because I can't get AI to replicate my writing."

A bunch of my clients have said, "Hey, Blair, I've trained an AI to write just like you and give answers just like you," and I look at all these things and they're all garbage. I mean, they're not without value, they're not without opinions like me, but I think that's not me, content-wise, tone-wise, it's not me at all. I will read Jesse's post in a minute here. Do you think I'm overreacting to that? Do you think AI will at some point get good enough that it can write for people?

David: Yes, it will be able to for decent writers, not for amazing writers. Because AI is essentially a confident consensus machine. That's how I think of it. It has read everything out there in the world, but it hasn't experienced anything, nor does it have any judgment about what style of writing to bring. It'll be like an amazing assistant who has learned everything about you, who could probably pass off as your writing, but nothing magic will happen. This could just be me trying to preserve my life in this world.

Blair: I worry about that too. Here's Jesse Ratner's post. "Sam Altman can build a cathedral of wires and call down GPT-7 like a chrome angel from the bloodless heavens, but it still won't know the smell of your father's rage in the kitchen, the particular religion of your loneliness at 2:13 AM, the wet salt of your own body after grief, the cracked neon prayers, the motel lusts, the bus stop humiliations, the beautiful garbage fire of your obsessions, the one joke you tell when you're dying inside, the weird little wound you turned into a worldview, the heartbreaks that tattoo your syntax, the years you spent dragging your voice through broken glass just to make one true sentence sing.

Because art is not a prediction machine. It is a possession, a haunting, a feral weather system of memory, nerve, shame, and desire. AI, for all its speed, shimmer, and statistical sorcery, is still just a brilliant amnesiac in a rented face, still untouched by mortality, still unbitten by love, still too clean, too obedient, too unscarred to make the kind of language that crawls out of a life actually lived.

Give the machine your patterns if you want, feed it your footprints, your fever, and your wreckage, but do not forget that the holiest data is the weirdness you survived, the trembling singularity of being exactly yourself. That is why the future belongs not to the smooth or the synthetic, but to the freaks, the poets, the liars trying to become honest. The men and women with wildfire in their rib cages. The people whose souls still arrive on the page with dirt on their shoes." Fuck me, can AI do that?

David: [chuckles] I actually think AI could probably write that kind of stuff, but it will be meaningless because it's not written by a real human. I listen to this, and I'm picturing the person who wrote this desperately wanting to ask them questions about the specific phrases. Like, "What made you come up with that phrase?" I want to interrogate. I want to go deeper. There's a hunger, there's a lack of fullness with something like this because this just points to deeper meaning, and I want to know more about that deeper meaning. I don't want to get to know an AI engine.

Blair: Yes. It points to pain and a lot of really human stuff. This is only the second post of his I read. You sent me another one of his, and then I clicked through to Amazon to look at his book, and I read the description of his book. You can tell from the three things I've read that he has had a traumatic childhood. He references his father's rage quite a bit, even in the novel that he's written. It's surprising that he's posting this on LinkedIn. I love that he is, but honestly, on LinkedIn, most of what we're reading is marketing, right?

David: Right.

Blair: I think AI can do a pretty good job at writing marketing language, and I've said before, there's certain marketing things that I use AI to write. I mentioned I think I'm writing a personal book. I'm almost finished it, and I'm just absolutely loving this book. It is so deeply meaningful and personal to me. The thought of letting AI anywhere near this fucking thing, it just sends shivers down my spine. I would not let it near this. I would not have it change a word.

I'll let a human editor make some recommendations on changing some words, but no, this is me. I'm pouring me into this thing. I don't want the machine near it. I don't want anybody accusing me of letting the machines near it, and I hope when people read it, they'll get that sense. I'm not as eloquent with words as Jesse Ratner is. I can't write what I just read of his. I read language like that, and to your point, it speaks to this inner life. It speaks to human experience. This is art.

The art comes from the suffering and the experiences of the individual. Anytime we're doing anything personal, we want to communicate some of these elements of ourselves, and even when we're doing things professionally, we want to let some of that come through.

David: We want to be different. We want to have a perspective, a point of view. If I could tie something in here that I talked about in The Business of Expertise, and that's how your personal life needs to be a little bit different than your business life, and the ramifications of that. Because the world is so much more complex now, you simply can't be an expert at as many things as you used to be. You have to be very narrow in that expertise, and to get really good at that, you're going to have to spend a lot of time in there. It's almost like you have your head down; you're ignoring the rest of the world.

How do you balance that perspective and not lose your mind? Because you aren't looking up and around you all the time. That's where I feel like you have to have such an interesting personal life to balance that weirdness that you have because you're so focused as an expert. I don't think that was as important in the past as it is now. If you're going to be an interesting person, and if you also want to be an expert that gets paid a lot of money and people listen to you, you have to have a very, very interesting personal life that feeds some of the stuff that you talk about. It helps you shape perspectives and sharpen your curiosity.

It also, if I could just add one last thing about that, it puts pressure on your business so that if you put a boundary around your business, it should yield enough extra time to have that interesting life, and it should give you the money to have that interesting life, although I think time is more important than money in having an interesting life. I just wanted to make that point, that our world is so complex now that to be interesting people, we need to be really interesting outside of work too.

Blair: Yes. I've heard you say that for years, and I know you wrote it in the book, but you've also been saying it from stages for years too. I heard you say your personal life should be so deep, rich, interesting, and rewarding that you don't want work to intrude into it.

I think that's a powerful idea. Today, this morning, Colette said to me, "Hey, did you see that New York Times article about the two different perspectives on time?" I hadn't read it, so she explained it to me. She said, "Basically, there's monochronos, and there's polychronos, and there's monochronic people and polychronic people." She said, "Monochronic are people who do one thing. They get into a task, and they finish it to completion. They ignore everything else." Then she said, "Polychronic people are people who do different things at the same time. They multitask." I go to the store for milk or sugar-- I don't drink milk, but whatever the basic ingredient is that we're missing. I come back two hours later because I ran into all these people and stopped and had conversations. She goes and comes back and does it. She's purposeful in everything that she does, and I wander more in work, too. She made the observation that in your job, especially at a certain age-- because I think earlier on this doesn't really apply, but in your job, you should be monochronic. You should be singular-minded and focused, but in your personal life, you should be polychronic.

I would translate that to say in your business life, you're focused, and in your personal life, if you want to be interesting, yes, you have to have some depth view, but probably more importantly, you have to have breadth. That means being polychronic. I'm probably misusing the term, but that means getting distracted, going off and doing interesting things, having interesting hobbies, having varied experiences, having traveled and experienced different cultures.

I guess what we're trying to do is get at the root of the question of, well, if the future belongs to the interesting people, how do you become interesting? I think it's this combination of breadth and depth. A lot of breadth, a lot of different things, you tried a bunch of things, you had a bunch of mistakes, a bunch of failures, and then you went deep into a small number of things. Does that resonate with you?

David: Yes. Some people like to master something, not really master, sort of master with a low M, not a big M. Then, what's next? They want to achieve a certain level of competence so that they can say, I've learned 90% of that, I'm ready for the next challenge. Then other people pick something and they never leave that. The depth never ends; they can keep going deeper and deeper.

Did I ever tell you the story when our youngest, Nathan, was looking for a way to make money? His older brother was mowing lawns, and Nate decided that he would charge people to have dinner with him. [chuckles] It was $100. Now, this guy is 14, 15, 16. Somebody did it. I don't know who it was. I don't remember, but maybe it was out of pity. That got me to thinking when I was going over some of this stuff in my mind before we started recording today. Would anybody pay to have dinner with you?

Blair: No.

David: That's a good test. Would anybody pay to have dinner with you? No agenda. We reverse this and we say, if you could have dinner with anybody in the world, who would it be? Somebody picks Abraham Lincoln or whoever it is, Martin Luther King. Would somebody pay to have dinner with you? I just love that question. I don't want to test it, but I do love the question.

[laughter]

Blair: Well, I don't know if we solved any business problems, but this has been an enjoyable conversation.

David: What do we want people to take away from this?

Blair: I have no idea.

[laughter]

David: God Almighty, I need another partner.

Blair: None whatsoever. I don't know. Be more human, permission to be more human. Not only permission, there was a guy that you and I reposted Jesse Ratner's post with my own little diatribe attached to it, there was a guy that you and I both know, and he replied, in all sincerity, I think. He said, " You can tell this is AI because of the use of the phrase shimmer and statistical sorcery." Then he named the model that would come up with those words.

First I thought, "Are you an idiot?" Then I thought, "I know him a little bit, he's clearly not." There is this issue of it's easier for some people than others to be human. I sometimes have to remind myself of that. When we do our spoof episodes, and people are offended by what is so obviously tongue-in-cheek, not everybody picks up on tongue-in-cheek. Not everybody picks up on the emotion, and the pain, and the life experience behind the words.

I think if that's you, you're probably at a disadvantage, but if you can perceive these things, try to imbue your life with more of that. Try to be more interesting, and try to bring your freaky self-- it's not like the Google or whoever had this idea of bringing your whole self to work, and then after a decade, it's like, all right, enough of the whole selves, just bring your professional self and leave your political issues.

David: Leave some of yourself at home, please.

Blair: It's not that. Some people make the mistake of going too far.

David: Yes, performatively interesting.

Blair: Yes, like influencer, YOLO, bullshit, too far. Just let a little bit of your freaky self shine through. I would say if you're younger, and you think, "Now is the time to focus, like deep focus in the business," yes, sure, probably, maybe you're a little bit early, and we've talked about this before, don't focus too early, and certainly don't focus your personal interests. Don't go all in on one endeavor personally. You want to be interesting to others and to yourself, have a broad variety of interests, live a life where you experiment and fail a lot, and you have some wonderful stories to share about those failures.

David: Yes, you want to be more interesting than just to the nine people in your Facebook group.

[laughter]

Blair: Or your podcast partner.

David: Or your podcast partner, yes. All right, Blair, thank you.

Blair: Thanks, David.

Do You Need an Advisory Board?

2Bobs with David C. Baker and Blair Enns

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We all know how valuable external input from trusted advisors can be for our business. But what does that look like for independent agencies who don’t have investors to answer to?

Links

“Do Independent Firms Need A Board?” by David C. Baker for punctuation.com

Transcript

Blair Enns: David, our topic today, your topic on which I will interview you is a board of advisors. You've written a post on this, but before we get into it, I didn't look this up. What is the 13th Amendment? What is the 13th Amendment? Marcus is going to keep all those takes in, to the US Constitution. I know what the 14th is because there was just the Supreme Court ruling on something to do with the 14th Amendment. What is the 13th?

David C. Baker: Slavery.

Blair: Oh, really?

David: Yes.

Blair: The 13th Amendment outlawed slavery.

David: Yes. This is so surprising that you didn't know that.

Blair: Being a Canadian, you're surprised that I haven't memorized the US Constitution. The reason I referenced the 13th Amendment is you have a line in here. The subject is a board of advisors. It begs the question, does an independent creative firm, ad agency, design firm, et cetera, do they need a board of advisors, a board of directors? What you do in this piece is you go quite deep into the history of boards of directors and the role of a board. I found it fascinating.

You start this piece by asking, what are the forces that influence the principal's behavior? The answers are really revealing. As an owner of an independent creative firm, you don't have a boss. You don't have one big boss. You make that point. You also say, well, you do have these other sorts of bosses. One of them is free market labor where your employees are, in some small way, your bosses. That's your reference to the 13th Amendment. Do you want to start there?

David: Yes.

Blair: Who's protecting the firm from you?

David: That's the question. In a publicly traded company, you've got a board, and they can fire you. You don't have that in a small independent firm, which you love, but it also means that there's a lot of small independent firms that really aren't doing all that well because some of these things haven't caught up with them. What are the consequences if you don't do a good job leading your firm? One is your employees can just leave you, and that happens.

I'm surprised that more employees don't leave. The only reason they don't leave more often is because it's hard to find another job sometimes. The ones who leave a lot are the ones that leave to go start another job because they think they can be a better boss than you are. Then all the clients, too. This one's hilarious to me because you think, "Okay, I can't have a boss. I've got to get out of this job that I'm in." Then you discover now, instead of one boss, you've got a dozen bosses, each one of your clients.

Blair: Sucker. Yes.

David: Investors, there aren't many of those investors in this space, but if there are investors, and I've worked with maybe 20 firms that do have investors that don't participate in the daily operation of the place, they will have something to say to you, especially if the results aren't great. Then partners sometimes, right?

Blair: Yes. I was going to say on partners because I'd skipped over that one. These are all forces on your behavior. I love the way you framed it. These are the people protecting the firm from you. I often think about myself and my business. Who's saving when without pitching from Blair?

David: They've all left. I'm fond of saying this business has been very good to me, but I haven't been good to it. Maybe I needed a board of advisors.

Blair: Take us back in time a little bit and talk about the role of investors up until the current day of the role of board of directors, because it took a long time for the incentives to be properly aligned when it comes to boards and board members and management, didn't it?

David: It really did. In fact, some of the best movies out there, they cover those periods when those incentives were not aligned. I find this just captivating to think about. If you go all the way back to the beginning, the boards were comprised of the people who provided the capital for the business. "Hey, I've got money. You go start a business. You've got a great idea. Now, I'm going to stay in touch. I'm going to give you some counsel around that."

These businesses became so big that private funding-- this was the second stage. Private funding just wasn't big enough to keep these businesses rolling. That's when funding from the public markets came along. Now, though, there's lots of little shareholders, and they don't really have any power like the private shareholders, the funders of these businesses, had in the past. We have all these little shareholders with no power, like, what's going to keep this company from misusing the investment that millions of us have made? They decided to change. It wasn't the investors now on the boards. It was just like, who are my friends? This was very predictable. This turned out to be bad because these friends on the boards just let the runners of these businesses get away with all kinds of bad things. The checks and balances that swung the pendulum back was the takeover market. If your stock doesn't start improving, then we're going to buy a bunch of it up, and then we're going to insist on changes. We're going to get seats on the board and so on.

In response to that, as the pendulum swung all the way back, was poison pill, takeover, protection kind of stuff. That was the last phase before we got institutional advisors that said, "Okay, there has to be some standards here." That's when the National Association of Corporate Directors stepped in and said, "All right, the ultimate responsibility for this company is not the CEO and the president, it's the board." The board exists to do one thing, and that's to protect the shareholders. You and me, the millions of people that buy stock on the publicly traded markets.

That's not true if we take this back to private companies because they don't have shareholders. They are the shareholders. We have this problem of how do we protect the company from bad decisions that the main and only shareholder is making? That's where we find ourselves today. It's like maybe it's a partner. Maybe if you're really bad, your team's going to leave you, your clients might leave you, and so on.

It's just an interesting problem to me to think about this unique situation. We have little kingdoms without many checks and balances. There are some checks and balances, but not like a publicly traded market.

Blair: I have to confess, the first few times I encountered clients of mine-- this is going back many years ago now, where they were independent creative firms on the smaller side, so less than 50 employees, sometimes less than 25 employees, that had boards of advisors, I gave that a little bit of an eye roll. I thought, "Oh, this is like somebody playing at business, kids pretending to run a big business." As the years went by and some of my stupidity was shed from me, I began to see the role of said advisors.

Now, tangential question. Have you ever found yourself in a sales conversation with somebody who is considering hiring you? They chose not to hire you. They went away, decided to think about it, and then they came back with a request for you to serve on their board of advisors?

David: Yes, that has happened. I've done it in a few cases. I don't do it for free anymore. I did it for free on a couple of occasions. That's where I find myself wanting to do more work, honestly. I don't know what the percentage is, but probably somewhere between 5% and 10% of the kinds of firms that you and I serve have an informal board of advisors, not a very formal one.

I found that that usually is better for the business. It's usually staffed with pretty decent people. The mistake is not formalizing it and not necessarily getting all the right people. It's somebody that retired because they owned a life insurance agency in the neighborhood and didn't necessarily run a firm like this, or it's a really big firm that somebody ran and now they're serving on the board, and the stuff that they might recommend is not all that applicable.

I really think there's room for more advice in this field. By that, I mean on boards, advisory boards. Fortunately, we are pretty open. I think we're pretty open, aren't we? Or are we not that open? I don't know. I think we're pretty open.

Blair: What way? We as an industry?

David: We as an industry. We're pretty open about the strengths and weaknesses we have, and we learn from each other. Some of that learning from each other is just dragging us all down to the median. I don't know.

Blair: Yes. I realized the first part of what you're saying there. You and I might be doing this wrong because neither you nor I have formal board of advisors, but you've pointed out one way to do this is to be in a little-- I forget what you call it, but a little collaborative group. You and I have one, and to a lesser extent, another friend where our businesses are pretty much open book to each other. We do try to hold each other accountable. Now, I hide the really, really dangerous stuff from you, the things that you would never, in a moment, put up with.

David: I know. I don't see the real financials.

Blair: You don't have an audit lately.

David: No [laughs].

Blair: I've faked my financials for the last 20 years.

David: Yes, but I'm going to be spending a little bit of time in Tuscany, and your wife is going to be there. I plan to pull her aside and get some real financials from her.

Blair: Yes, good luck with that. Although on the subject of financials, she's happy to share everything. Especially, she loves to share bad news.

David: We've done this with other people too. You remember we had several people together in Chicago a couple of years ago. One of them was April Dunford. People that are running businesses that we really respect, and I'd like to know how she does that. How do you think about pricing and packaging your services, and what's your new business? I'm very curious and eager to learn, so I'm not afraid of any of that sort of information. This is something that's missing in our field. We don't have enough formal boards of advisors for small independent firms, and I think we would benefit by having those.

Blair: Do you want to talk about what a good board would look like and what you would ask that board to do for you?

David: I would ask them about what my role should be in the firm. That would be a big one.

Blair: Say more about that. What do you mean?

David: What I should be doing. If I'm running an agency and I want to have an advisory board, one of the big questions I would ask them is, what do you think I should be doing in this firm, and what should I not be doing in this firm? Because that's one thing that people really get wrong. Does that make sense?

Blair: Yes. I'm just internalizing this for a minute.

David: It makes sense.

Blair: You know the rest. The other would be a business strategy. We talk about positioning, which is really about business strategy. What business should we be in, and with an eye towards the future and how this is changing and so on?

David: I would want my board to have direct access to my direct reports without it being filtered through me. I would want them to be able to hear from those people how ethically, how I'm leading them, how honest I am. Am I giving them my attention? I wouldn't want all the information that goes to the board to be mediated through me. I'd want them to have access to those people so that they could go around me and say something that needs to be said to an advisor that I would then be duty-bound to listen to more carefully. Finance? I don't think that's the big one. I think we're decent enough on that front.

Succession and M&A planning, that would be a really big one. I don't think we consider the next stage of our businesses until it's a little bit too late. I would want us-- you've said something, and I've said something that are opposite that are both really fun to think about. One is, what would I need to change if I could never sell this business? That was something you said. Then I flipped it around and said, what would I change if I had to sell my business within a certain period of time? Both of those perspectives should be built into the advice that we are given running a firm.

Something about risk management, that's one of the biggest areas that a public board of directors does for a publicly traded corporation. We don't think about that much. We don't think about it enough.

Blair: Are you talking about capital allocation or something else? What other forms of risk?

David: Something else. I lose my mind, or I die suddenly, or my head of sales, who's really good at it, all of a sudden leaves, or the market that I'm in-- we have a pandemic, and now I'm focused on travel and tourism. Now what do I do? We don't think about risk management enough until we're right in the middle of it. That's one thing that a board would help you with.

Blair: I'm now accepting applications for a win-without-pitching board of advisors.

David: How much is the pay? I'll bet it's nothing.

Blair: The fee is $50,000 a year.

David: Oh, the fee?

Blair: Yes.

David: People are going to pay to be this close to you in life. Right.

Blair: If there's a way to make money off of this, I will. Those are all really great points. As you're going through the list, I'm thinking, "Oh, yes, this makes so much sense. I love that you said, maybe you didn't say it this way, but the financial analysis, financial performance, that's actually the easy part. I wanted to ask you, how big should a board of advisors be? Would you want at least one of those people to be beyond financially literate, maybe financially astute?

David: It depends on the size of the firm. If you're a bigger firm, then you probably need somebody with financial chops on the board. I would think your board needs to have at least two people on it. I'm talking about not including you, so you plus at least two, no more than four. If you're a big enough firm, you need to pay them something. $20,000, $30,000, $40,000 a year. With very specific expectations, you have a right to expect specific things for that money that you're paying them. If it's a much larger company, then they might need to be incentivized if a sale happens too, if that's one of your big goals, I would say.

Blair: Right. The reason I asked if you'd ever been approached by somebody who considered hiring you and chose not to be on their board of advisors is it happens to me about once a year where it's like, "Yes, we're not going to pay you $50,000 for that thing that we're talking about, but would you be on our board of advisors for $2,500 a year?" There's an easy answer to that question.

David: Yes, the answer is no.

Blair: Yes. At the right remuneration level, I don't think that would work for me, but I could see you, if you ever chose to ease into semi-retirement, it would probably make sense for somebody like you, who you've seen inside well over 1,000 firms. It'd be great to have you on.

David: Yes. I'd like to do more of it, honestly, not as a way to get less expensive consulting or daily coaching, but if somebody really wanted to tap into how I think and the directness, then I think that would be fun. I've been on quite a few boards, both associations, one publicly traded company, really enjoyed the process each time, so I would be open to that. I think people generally-- this isn't about me. I think you ought to be open to formalizing a board and putting the right people on it, maybe paying them if you need to, if you'll get better, work out of them and seeing what it can do for your company.

Blair: All right. I'll send the paperwork over shortly. Thanks for this, David.

David: Thanks, Blair.

A Proposed AI Contribution Scale

2Bobs with David C. Baker and Blair Enns

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Categorizing AI-generated copy as “human vs AI” is not as binary as with AI-generated images or video. So Blair has developed an AI Contribution Scale to help us all be more transparent when using LLMs in the creation of written communication intended for prospects, clients, and peers.

[This episode’s notes are AI-0]

‍ ‍

Links

AI Contribution Scale

“The Coming Collapse of ‘Thought Leadership’” by Blair Enns for winwithoutpitching.com

Curt Jaimungal’s 5-minute YouTube video on why you shouldn’t let AI write for you

Transcript

David Baker: All right, Blair, today we're going to tackle another AI topic.

Blair Enns: This is not the AI episode [chuckles].

David: One of these days, maybe in 2029, we'll talk about AI and be willing to stand behind it. So far we're just terrified of our own thoughts about this.

Blair: Dancing around it.

David: Yes, really, but I'm interviewing you on a proposed AI contribution scale, the idea being that we should probably identify, self-identify how much we used AI. I'll tell you, it's like I got an email from a competitor of mine, yesterday-- Well, a friendly competitor. They do slightly different things, but somebody might hire them instead of me. I've always gotten their emails and I always loved getting them, because I would get some interesting ideas in there. This one just smacked of AI, so I copied it and pasted it into the AI detection thing, and it said immediately, "100% AI."

I just wanted to unsubscribe and never read anything from that person again, which is an overreaction. Is that what prompted this, or am I--

Blair: Yes, that's part of what's going on here. I want to contrast that with something else. We were recording this September 1st, last week. I didn't read it, but I think it was The Wall Street Journal, Stanley Druckenmiller wrote an op-ed. Now, Stanley Druckenmiller, if you're not a finance or an investment geek, is probably one of the world's foremost macro investors. "Macro" meaning he basically invests in economies of countries or currencies, and he's famous for-- I think his first big trade in the '80s was being long on the Deutschmark at the time of German reunification when everybody else was short.

He made a few billion, and then he shorted the British pound a couple of years later, made a few billion more, and he just kept going after opportunities. Anyway, so he worked for George Soros. Scott Bessent, who is the Treasury secretary. Is that right? I think he's the Treasury secretary.

David: Yes.

Blair: Of the United States.

David: At least this morning he was. [laughs]

Blair: Yes. He was Druckenmiller's protégé. The geeky stuff is, Bessent's been buying US Treasuries--

David: With borrowed money.

Blair: Yes. US Government is printing a whole bunch of debt, as it does, along with every other government in the Western world, and then Bessent is buying it to keep the interest rates low because they've got to refinance $10 trillion in debt in the next 12 months or so. Then Druckenmiller, his former mentor, wrote this op-ed, again, I think it was in The Wall Street Journal, saying, "This is a bad move." He wasn't really criticizing Bessent. He was essentially criticizing-- and this is somebody else's take on it that I just heard last week, and it makes sense. He was essentially criticizing the US Congress for putting Bessent in this position where he had to do this.

He publishes this substantive piece that says, "Hey, listen, we're headed towards a cliff here." The consensus reaction was not about the substance of his piece. It was about the fact that it was so clearly written by AI. People started saying, "AI wrote this," and he said, "Yes, I had AI write it." He had no qualms about it. Now there's this big discussion about, should you write an opinion piece in one of these big papers using AI? The answer is probably not. In Druckenmiller's case, I want to make the distinction between that piece of thought leadership that you read, and you were so disappointed by the author, because in that example, you were using that writing as a proxy for that person's thinking and their intelligence.

You're making some mistake, because that's the world we're coming from, where somebody's writing was a proxy for their thinking. The output was a proxy for the input, for what's going on in the brain of this person. In Druckenmiller's case, he's already regarded as one of the most accomplished investors of all time, and he's simply trying to communicate a point. Getting the AI to better communicate that point, I give him full props for that and for owning it. I want to make the distinction between two different types of writing. There is the writing to communicate, and that is writing that you might do internally.

Even my marketing writing, the marketing writing that we do, we use a fair amount of AI to help us in that writing. Then there's the writing that you do to think, to further your thinking, to deepen your thinking skills, to find out what it is that you actually know and understand. When you publish that form of writing, that is thought leadership. Let's make the distinction. I'm not saying AI is bad for writing, but I'm with you. There are certain types of writing where people are effectively lying, using AI to lie about the thinking that they did not do.

There's a lot of discussion in the world right now, and I think the EU is mandating watermarking of AI-created works, including writing. We can go down that rabbit hole, but that makes sense for images and video, perhaps. It doesn't make sense for writing, because there are a lot of valid different ways that you might have AI contribute to your writing. As long as you voluntarily disclose how you used AI in your writing, I think that's the answer. It's not watermarking. The problem with watermarking is it's binary, this is AI or this is human.

I created this AI contribution scale of 0 to 5, so six different levels, where you can voluntarily disclose the extent to which you used AI, and then you can let people decide for themselves whether or not the thinking is yours or the machine's.

David: I read through these six levels, from 0 and then 1, 2, up through 5, and I'm not sure I would list everything I've written in the last two and a half years as AI-1. In other words, it's AI-researched. To expand on that, you say that's written entirely by the author, with AI contributing research. AI might be used after the fact for proofreading and formatting or identifying awkward passages without suggesting corrective language. No substantive AI-generated language was retained unless cited. That's an exact description of how I use AI and have for the last two and a half years, and every single thing I write would fit in that category.

My first thought as a user, like if I didn't know you and I was just reading this suggested contribution scale, I would just have on my website this statement that says, "Everything you read here is AI-1, and AI-1 means this." Then I wouldn't call it out every time I wrote something. You're suggesting that people might use AI to different degrees, and so they might identify each use if it's different, right?

Blair: Yes, that's right. I published this about a week or so ago, and I have committed to, on my public blog posts, so not in the Win Without Pitching Academy, where I don't use any AI, but on my public blog posts and on LinkedIn, I will just list the AI contribution scale. I will say, "This is AI-0, human," or, "AI-1, AI-researched," and then there's "AI-2 is AI-assisted," "AI-3 is human/AI collaboration," "AI-4 is AI drafted," and "AI-5 is AI-generated." There are some governing principles at the top of the scale that we can talk about. If you want to look at the scale in detail, you can go to winwithoutpitching.com/aiscale, and we will put a link in the show notes.

David: I read about that. I didn't read it myself, but I think even if the content was really good, I imagine I would have quit reading early on, because everything that I have run through that little tester that has been 100% AI is too long, and it bores me to death. Maybe that's just me. Even if you're using AI to generate something that's really useful and good, it might still be very boring. I just don't understand why you would even do that.

Blair: I'm giving Stanley Druckenmiller the benefit of the doubt here, because he's quite an accomplished human being. His track record speaks for itself, and when he speaks, you should probably listen. If he chooses to use AI to help communicate his ideas, that's valid. However, I suspect it's also a person a little bit older who is a little bit behind the curve on AI usage here, and doesn't fully appreciate the negative responses that these things incite or inspire. I think if he were to write this a year from now, he probably would not use AI, or he would use it as a draft and then clean it up so it's less AI-y.

David: He might have been surprised at the reaction that his piece got, because he just thought it was a normal way to use AI. I'm waiting for the day when, let's say, that there isn't this scale and I'm reading stuff, and I get to know this person only through their writing, so that's the proxy for the person, for the thinking. Then I meet this person at an event. In conversation, they don't strike me at all like the pieces that I've read. I'm waiting for that day to come where there's such a divergent personality between the person who uses AI slowly to develop content, and then the person who's talking without referencing AI.

Although maybe at that point the glasses will probably be whispering something in his ear to make him more intelligent or something. [chuckles] Oh, goodness.

Blair: I have the sense that we're headed to this moment and fairly quickly, but I think the vehicle might not be going off the cliff. The vehicle is humanity's ability to undertake critical thinking. I thought we were headed off a cliff, but I think this thing's going to correct a little bit in that people who didn't write or people who were maybe part-time marginal writers, they didn't write because they weren't confident in their ability to write, started writing and putting out this generic bland content. I could just see humanity getting dumber by the day, and I was rubbing my hands in glee because in the land of the blind, the one-eyed man is king.

David: You could stand out from the crowd.

Blair: I think the backlash is coming. Now, let me argue the other side of it. The other day, yesterday, somebody posted in the Win Without Pitching Academy a comment about, "Using AI makes me better at things," and my response is, "I get that." I use Gmail, and I'm drafting an email, and Gemini is constantly suggesting edits, and it drives me crazy. I find it infuriating. At the same time, when I look at the suggestion, I am reminded of what a verbose, cumbersome writer I am. I'm a little bit pissed off at myself that I couldn't have arrived at a more succinct way of communicating this point, and the AI had to tell me that.

I don't write "content", "thought leadership" using those sorts of tools because I live in terror of my voice being robbed and being homogenized by AI, but in my day-to-day communications, AI is making me a better writer, so there is some validity to this. Again, in writing, unlike in other artistic domains, I think-- and let's come back to that, but in writing, it's a slippery slope when you start to use AI. I think this scale is great. Let me read the four statements at the top of the scale, if you don't mind, because I want to speak to the fact that when I published the post, it was the first post where I disclosed my use of AI.

I said, "This post is AI-4, AI drafted." The reason the post has such a high AI contribution is, when I came up with the idea of an AI contribution scale, the first thing I did is I prompted an LLM, and I said, "I want to create this AI contribution index or scale. Help me think through what the scale might be." AI drafted the first version of the scale. I then edited it. I posted a version of it in the Win Without Pitching Academy for our clients to see. I got some fantastic feedback from clients. I made some changes, then I posted it on LinkedIn.

Because the initial concept, a piece of the post itself, which is the index itself, was AI-drafted, I, by my own rules here, had to designate this post as AI-4, AI-drafted. Here are the four statements. At the top of the scale, it applies to each level of the scale. The first is, "The author uses this scale to disclose their use of AI in the creation of a written piece of work." The second is, "AI for spelling, grammar, and dictation is allowed at all levels." The third is, "The highest application level governs the entire piece." That's what I was referencing. I wrote the post myself.

It was AI-0, human, except for the index, which was AI-prompted or AI-drafted. Then the last governing statement at the top is, "At all levels, the author takes responsibility for the finished work."

David: At the bottom of this too, you've cited the Creative Commons. You said AI Contribution Scale by Blair Enns, Creative Commons Attribution 4, which implies certain things we don't need to get into. I don't think you can copyright something that's been written by AI. Was AI not used enough in this to keep that from happening?

Blair: Yes, it's a good question. I don't know. You can't copyright something that was written by AI, but then is that a binary statement? "This was written by AI, and this was not?" That question that's implied in your statement is the reason why this scale exists. The question of, can you copyright it? I don't know. I'm not copyrighting it. It's free for anybody to use. If you're going to use it, I'd like you to attribute.

David: Interesting. Can you imagine? I'm already falling asleep listening to the arguments in court over something like this.

Blair: I thought you were going to say listening to this conversation.

David: Oh. [laughs] I just think we're in this very uncertain, turbulent time and there's going to be some clarity some time next year in 2027. There's going to be some clarity, and we won't be talking quite as much about this. I think the people that are all gleeful about suddenly now, they're amazing authors are going to realize, "Oh, people don't think I'm an amazing author. They're not even reading my shit because it's so boring." They're going to come around to a little more reasonable place at some point. I don't know. I'm still very confused about it.

I just know I'm just having this very strong, visceral reaction to anything that looks and sounds like it's AI-written. The problem is that I'm coming across some things that were not written by AI, but I'm not sure, and I don't give it the benefit of the doubt, which is my problem.

Blair: Well, I think that's why trust is more important than ever. We talked about this on a previous episode. Relationships and trust are even more valuable, because at some point you're reading the output of an author enough, you come to accept that this is really them. You probably also accept that, they're probably using AI for research and some basics, but this is their voice. The moment you discover through whatever means, that it's not them, that it's substantially AI, that relationship is over.

David: That's what this is meant to do, is to cut that off at the pass and say, "Listen, I'm going to tell you upfront the role AI had in this," so that the reader doesn't lose trust in the writer.

Blair: Yes, exactly. Do you have any feedback or critique of the scale itself? 0 is human. One is AI-researched, 2 is AI-assisted. 3 is human/AI collaboration. 4 is AI-drafted, and 5 is AI-generated.

David: I read through them and they all made very clear sense to me, and I knew exactly where I would fit, how I use it, and I thought of some other people how they would use it too. I really liked the fact that at the beginning of the second statement you said was AI for spelling, grammar, and dictation is allowed at all levels. I'm not sure I would've included grammar there because that strikes me as essential to writing, but spelling, absolutely. I don't understand why anybody wouldn't run everything they write through Claude. Not emails, but if I'm writing a weekly piece or something, I'll just copy the Word file. I write in Word.

Most people write in Google Docs, I think, but I still write in Word. I just copy it and then I just have this thing I paste right into Claude that says, "Check this for obvious typographical errors. Don't touch my strange use of punctuation and grammar." It says something almost exactly like that, and the stuff it finds-- and this is after I've run it through spelling check on Word, which misses things regularly. It's amazingly good. I don't know why you wouldn't do that at whatever level, but I think maybe I wouldn't include grammar in that one thing.

Blair: I'm with you. This governing statement came from a client of mine who's a lawyer who has some experience in AI disclosure in some regulated fields. My reaction was the same. I generally don't use it for grammar, but spelling and dictation-- I don't use dictation either, but I can understand how people would. Grammar is the slippery slope, so like you, I have a prompt that says, " Critique this for sentence structure and clarity, but do not suggest new language." Tell me what's wrong with it, don't tell me how to fix it, because that is going into the domain of now I'm using language given to me by AI.

David: I haven't gotten any complaints from the typos that used to always pop up no matter how carefully I tried to keep them out, which has been great. No, other than that, I think this is really good. You're going to start tagging anything that you write, not the daily stuff you write for your group, but LinkedIn posts and blog posts and so on?

Blair: Yes.

David: Well, that'll be interesting to see what kind of feedback you get.

Blair: I have to tell you, for the very first post to put AI-4 on there killed me. It was so hard to put that on there, and then I explained why it's AI-4. I think if I ever get anything above a 1, I will explain why it is what it is, and exactly how I used AI.

David: If nothing else, this should really prompt people to discuss this. I'd love for people to listen to this episode, print out this five-stage scale, I guess it's six stages, and then have a conversation about a policy. What are the policy decisions at work when you're doing work for clients? Should you disclose this to your clients? What are you expecting of your people? I think it'd be good to at least have a discussion, even if there isn't clarity at the end of it. At least have a discussion about it.

Blair: I agree. If people want to look at the scale, it's winwithoutpitching.com/aiscale. Feel free to use it, link to it, modify it. It's yours.

David: All right. Thank you, Blair.

Blair: Thanks, David.

[Trascription by GoTranscript.com is AI-2]

How Sellable Are You?

2Bobs with David C. Baker and Blair Enns

Download

In a recent article, David discloses the questions all creative agency principals need to answer whenever they are ready to find the right buyer and successfully navigate the merger and acquisition (M&A) process to complete the sale.

Links

"How Sellable Is Your Firm?" by David C. Baker for Punctuation.com

Transcript

Blair Enns: Listener, David and I have been talking for half an hour, and I just said, "Do you want to do a podcast?" and he went, "Sure. Why not?" Why not. We're here anyway. Our topic today, as he shuffles his papers, why podcast at all? No. Our topic is, how sellable are you? Is this a post or is this going to be a post? The writing that I'm looking at.

David C. Baker: If you read my stuff, you'd know it was a post.

Blair: Is it a post?

David: It came out a couple of days ago.

Blair: Oh, well, it was the weekend. I don't read your stuff on the weekends. Or during the week.

[laughter]

David: You don't read my stuff at all.

Blair: All right. The topic is: how sellable are you? I really love the way this opens. You list a bunch of edge cases. Your firm, Punctuation, one of the things you do is the M&A side of the business that your son, Jonathan, runs. You help entities buy and sell agencies?

David: Yes.

Blair: We're going to talk about the common variables that make you more sellable, but you start by listing these edge cases, and you say, "For some examples across the 200 equity transactions we've led, here's some that were successful. 100% down, all cash, no earnout. Client concentration of greater than 80%. Sold to a client with buyer, even knowing all other clients would then leave." Client buys it; they're clearly not buying the revenue.

David: Done that three times.

Blair: "Internal transfer when no bank would fund it and seller refused to carry the note." I want to dig into that one. "Zero recurring revenue." Not so much a surprise, even though I think we all know that recurring revenue is valued higher. "No profit," and then, "Sudden death of the owner, a young owner with no partners." These are the edge cases, and you pointed out that "You can still sell firms that are edge cases like this, but you really want to be in the middle part of the curve on all of these variables." Before we get to the boring stuff, let's talk about some of these edge cases.

David: I was rolling my cake and eating it too. I was like, "Okay, I'm going to paint the ideal firm here, but don't not call us just because you're not the perfect firm. Give us a chance." That was my goal here.

Blair: Got you. No profit. How does a firm sell with no profit? Obviously, the acquirer is buying revenue with the expectation that they can turn that revenue into profit. Is that it?

David: Sometimes. Yes, actually, that's true if they've had a rough year and they need to fill a gap that happened. They lost a client or something. It's usually more likely that they're buying a capability, and they don't care too much about the profitability. They're just buying a capability. They want this team of people that they're bringing revenue; it's not like hiring people that don't bring revenue, they're bringing revenue with them. There's not profit, but there's revenue, and they know how to work together, and they've got a reputation, and so they're buying a capability.

Blair: How does a firm like that get valued? It's not on revenue. It's not a multiple of revenue or a profit. What is it?

David: The answer is very carefully. We have an inverse multiple, which is just a way to look at it and say, "Okay, if this firm were profitable, what would it be worth?" Sometimes you just use that, but instead of a lot of cash at closing, you just throw your risk, not into the purchase price, but you throw your risk into the terms.

I'm working with a client right now that's just about ready to close. There's this single operator that does hundreds of thousands of dollars on his own, and he's ready to quit. We can't just give him all kinds of money right up front, because we don't know if the clients are going to stay. We're accepting the purchase price, essentially, but we're throwing the risk into the terms so it gets paid over time.

Blair: What about the one where there's a client concentration of over 80%? Clearly, the acquirer really values that one client, or is it something else they value?

David: Yes, that one client, and it came with something. It came with a physical attribute that was very useful for them, and the client was a perfect fit with their established focus. In some cases, it wasn't in this one, but in many cases, somebody might buy an 80% client, because now that lessens their existing client concentration problem. It helps both firms, essentially, to combine them.

Blair: Adding that one client to the acquiring firm actually dilutes the risk that they have with their own client concentration problem?

David: Exactly. Yes. There's so many interesting things here that can happen. I just don't want to discourage people, because nobody's going to read all the rest of this stuff and say that they measure up in every one. There are lots of edge cases.

Blair: I know you know John Warrillow, who wrote Built to Sell?

David: Yes.

Blair: It's probably time for me to reread that book. In that book, there's a story of, I think, a design firm owner who gets fed up with his business. Goes to a business consultant or a broker and says, "I want to sell." The broker or advisor says, "You have nothing to sell." The guy can't believe it. "I've been doing this for years," et cetera, et cetera.

Then this sage, the business broker, sends the hero, the agency owner, on a journey to make his business more saleable. I'm curious: the opportunities that come to you, the agency owners who come to you and say, "I want to sell," roughly what percentage of these firms would you look at and go, just like the sage in the book, "You have nothing to sell." Versus the other end of the spectrum, which is, "Oh, you've got something really valuable here," and then obviously probably the messy middle. What does it typically look like?

David: It depends on what their mental state is when they come. If they come to us and they want to sell, and they have already flipped that switch that you and I have talked about in other episodes, then, listen, we're just going to have to make the most of it. It's not in the cards for them to go back for three years, or two years, and fix the things that need to be fixed in order to maximize the sale price. We just need to work with it.

In other cases, that happens, and nobody's in a big hurry. They're just curious, and so they do a valuation, and they'll say, "Oh, that's actually better than I thought it was, but I'm going to stick with it for a while." Or sometimes they'll say, "Oh, that's not quite as good as I thought it was." We try to plug that gap.

We have a program we call Prepare for Sale that does three things for them. It does a benchmarking first. We're looking at how their firm is performing regardless of whether there's a sale in the future or not. Just, "How's your firm performing? What are the gaps that you could fill? What are the levers you pull in what order?" and so on. Then, we do a valuation to look ahead to how a buyer will look at the firm.

Then, the third and final module for that is to put a plan together. We identify who is the most likely buyer of your firm, not specifically, but categorically, who's the most likely buyer, and let's move in that direction. It should happen by this time. These are the things that need to happen, and so on.

I would say that the clients that come to us and talk about this are more sophisticated than they ever have been. I think it's simply because growth and acquisition, either on the buy or the sell side, is a part of our business language these days. Chances are good that in their neighborhood, they know one or two people that have gone through this. It just seems more likely. It doesn't seem like something that only happens on Wall Street and so on.

I don't know exactly how this plays into it, but people are clearly open to the idea that they may have three or four different careers in them that might have very little to do with each other. Owning an agency doesn't feel like a sentence as much as it used to. Part of that is because they're not tied to any long-term lease. There were times in the past when if you were in New York City, you were signing a lease for 15 years, at least 10 years.

Those days are well, they're still here in some cases, but not to the same degree. When we get conversations with people, they're usually pretty smart about this, and there aren't nearly as many surprises as there used to be.

Blair: How often do you encounter somebody who comes to you and says, "I want to sell," and you look at it, and you go, "You have nothing here. There's nothing to sell"?

David: Probably 1 in 10 conversations, I would guess. We say that, but not quite like that. We're just honest with them. There's always an option, but the option is not a lot of money sometimes. The option is to be acqui-hired by somebody else or just merge without any money changing hands.

Blair: Can you point to the number one reason why something wouldn't be saleable at all? It's probably on this list, is it?

David: It's almost always no profit. Somebody just thinks, "Why in the world would I buy this? There's no profit." That's the usual reason why there's not much of a market for a firm is because there's not much profit. You, as the principal of the firm, you've always got your reasons for it. You've been growing really quickly, or, "We tried this great experiment. It was worth doing, but we lost a lot of money doing it. We've corrected it now, but that's why there was no profit," or, "We lost this one client. That's in the past." You always have reasons for no profit. Those reasons, you've got to be able to articulate those, and the buyer wants to hear them, but there's still no profit at the end of that story.

Blair: That's why in that preparation for sale, one of the things you have to do is start to show profit and say, "Well, you've got to take profit to show that this is a profitable business." Is that correct?

David: Yes. Oddly enough, there's an optimum amount of profit. Too little is bad, obviously. Too much is bad, too. People look at you for different reasons there, too. There's this optimum range of about maybe 15% to 20% at the lower end would be pretty ideal. You really wouldn't want to go below that very often. Then, up to 40%, 45% after that, people are going to start looking. It's like, "Wait a second, how is it this profitable? What's going to fall apart at some point?"

Blair: The idea is that you're taking all your profits now instead of reinvesting in the business.

David: Exactly.

Blair: Interesting. The rest of this piece is about the questions that you would ask a potential seller if they came to you and said, "Hey, I'm thinking of selling. What's this thing worth?" You go through a list of questions. We're not going to go through them all. I think the listener can imagine what some of the more common questions are, but the second one on your list is where are they working from? It's a question of, "Are your employees onsite or remote? Why is this so high on the list?" You make the point here that it always comes up among the acquirer.

David: It does. Partly, it's just curiosity. If the buyer's going to buy the firm, they want to know, but there's also an HR component, too. We'll work with buyers who would never buy a firm with a single employee in California, for instance.

Blair: Really?

David: Yes, because the HR rules are so different there. If you have 1 or if you have 10, it's all the same. The first employee you have in California, everything changes. Now, people that have firms out there, they're used to it, and what they just heard shocks them. If you're working for another state with very different employment laws, you know what I'm talking about.

They want to know how complicated is this going to be? How expensive will it be when we have employee retreats? Are these people nearshored or offshore? There are very legitimate reasons for that, because they're going to be finding new clients for the firm they acquire. How will that employee spread contribute to the story that they're trying to tell? You wouldn't make any changes in your workforce because of this question. It is what it is, but buyers are going to ask about it.

Blair: They're going to say, "You get rid of the California-based employee first before we buy you." Or anywhere in Europe.

David: We're exaggerating here.

Blair: One of the questions is what's your profit percentage? You also make the point, we talked about that more is not necessarily better. There's a window that's expected. You also make the point that beyond the percentage, you want to know what the actual number is because when the EBITDA crosses certain boundaries, the valuation changes.

I think we talked about this before, but can you just tell us, generally speaking, what are the boundaries and what are the multiples of EBITDA at the various boundaries?

David: That would be a question that's probably more specifically answerable by Jonathan. This is what drives some roll-ups because, let's say you buy two firms where the EBITDA, regardless of the percentage, that wouldn't matter in this story. You buy two firms and the EBITDA is 800,000 each. Together, the EBITDA is 1.6 million. That story together means that the EBITDA has crossed that magic million-dollar EBITDA line. I'm just pulling numbers out of the air here, but let's say the multiple was 3X before; maybe it's 4X after that. Then there'd be other boundaries at 2 million or 3 million and so on.

The larger the number, regardless of the percentage, the more that impacts the EBITDA. Now, there's lots of other things that impact an EBITDA multiple, but this is one of them. Even if you have a firm that's, say, 25% profitable, but that yields 500,000, that's not going to be as good a story as an EBITDA that's above a million.

Blair: I've never understood why the multiple would be higher at a higher number of profit.

David: The way the buyer thinks about it is that there's a certain amount of administrative overhead and it doesn't scale. That's what they're thinking of primarily. Then, you have one new business program for a firm, whether it's a big firm or a smaller firm. It just scales better. That's the reasoning.

Blair: Rather than going through the whole list, what else on your list do you think might surprise people about the list of questions that you ask them when they come to you wanting to discuss selling their firm?

David: Some of them don't realize that to maximize a sale, two things that might surprise them. One is how much cash at closing are you going to require? If you're open to an earn out, which means you hit certain targets. They could be very simple targets that you get that money later over time. That just aligns your incentives with the buyer's incentive. Then the other surprising question that sometimes comes up is the impact of an earn-out so your willingness to stay on.

Now, in the past, earn-outs were always five years. When I would get an offer, an LOI across my desk on behalf of a client, they were so formulaic. It's almost as if they just copied a template, and the earn-out was always five years. You never see an earn-out that's five years. It's three years is the max anymore.

You might want to stay there longer, and there might be incentives for you to stay there longer, but you're not going to only get the full purchase price if you stay longer than three years. Some earn-outs are significantly shorter. We do a lot of SBA 7A work where an internal employee or an external buyer is going to purchase a firm funded by the Small Business Administration loan called the SBA 7A loan, and in that case, there can't be an earn-out.

The seller is going to leave right away. They can still help with the transition, but they're gone really soon. The SBA wants this new employee to have the full entrepreneurship experience on their own, and that's how they fund it. In those cases, there's very little earn-out at all. For a traditional purchase that isn't funded that way, there's almost always going to be an earn-out, and if there isn't, then you're probably not maximizing the sale. That's one reason why we encourage people to think ahead.

If you're running out of personal engagement or energy towards your firm, you don't just have to anticipate how long it'll take for you to find the buyer; you also have to back up how long you're willing to work in an earn-out.

If you're starting to see your engagement level drop and you imagine that, "Oh, I could do this for another three years." If you want to maximize the sale price, you want to start looking for a buyer now. That way, you can maximize it because you can stay for the whole earn-out. Those are the two that come up pretty frequently as surprises.

Blair: The last question on your list has to do with new business. How do you land new clients? I'm curious, as somebody, this is the focus of my business, how deep do you dig? What's the information you're looking for? What are the answers that, when you hear them, you think, "Oh, this will make it easier," versus, "This is going to be hard?"

David: Yes. That's when we ask this question, and we're on, say, a Zoom call, and the person on the other end says, "Oh, can I share my screen?" They pull up something, and they show where prospects are in the funnel. They can tell us the average tenure of a client, what the drop-off rate is, and so on. Then they say, "Now, we usually have this many conversations a year with interested parties, and X numbers, this percentage turns into clients, and so on."

That gives me tremendous confidence that they have a system. Somebody that's relying on referrals doesn't have a system. They can't pull up a chart like that. As flattering as it may seem for you as the seller to say, "Oh, marketing is for little people. We don't need to do that."

Blair: Word of mouth, they say with pride.

David: Word of mouth, yes.

Blair: Which means we don't really know.

David: Or they also say, "Oh, thankfully, that hasn't been a problem because we have clients working with us that have been there since the entire length of the firm's existence, 13 years." I'm dying inside because that's not a good thing. They're thinking this longevity of clients means we don't have to worry about new business.

That is not what a buyer wants to hear. A buyer wants to know that you have a system that drops opportunity in regularly. They don't usually think you have a sales problem. If they think you have a problem, they think it's a lead problem, a lead generation problem.

Blair: That system, friends, is called Win Without Pitching. [laughs]

David: I knew that was coming. I just knew it. [laughs]

Blair: Let's pick one more question from your list of questions that you would put to a potential seller of an agency, David. What kind of buyer are you looking for? This is interesting. It didn't really occur to me that the seller would be particularly interested in a certain type of buyer or would reject some buyers.

Although one of the sub-questions that you would pose is "Are you open to a PE buyer?" Then you say, "Note, you always should be." I want you to unpack that one. What is it about a PE buyer that would cause some people not to entertain them as an acquirer, and why should they entertain it?

David: This, I think, comes from firms that have been around quite a while, and they have an older view of PE, informed by some movie something. Where they think that the PE buyers are soulless, only care about growth, and the earn-out is going to be more of a sentence than anything. Obviously, there are PE buyers like that out there, but we would never let one of our clients be bought by one of those. We found that PE buyers are, across the board, very good buyers.

They're sophisticated. They can provide funding for growth. They're great to be on boards to help you with that. They have reasonable expectations. They have an exit path. They may ask you about rollover equity, which another buyer might not. You have the opportunity, and it's actually a good sign for you to do this. You have the opportunity to say, "Hey. Listen, let's turn 20% of my equity into a second bite at the apple down the road," which isn't going to happen outside of a PE buyer. We just find that PE buyers are consistently a pretty good choice, and you at least ought to be open to it.

The reason we're going to ask this question now is just to find out what the truth is in their mind if they say, "Well, I never would want to be bought by such and such," or what if they say, "I think our best buyer is going to be one of the holding companies," we're going to say, "Oh, click. Hang up the phone." That's just not the case anymore. Jonathan wants to know how sophisticated are you because it's easier to find certain kinds of buyers. We just want to know what's in your mind so that we know how much we're going to have to talk you into something else if it's not an accurate portrayal.

Blair: You're more likely to buy a holding company these days than to be bought by one.

[laughter]

David: You got an extra $10 lying around now.

Blair: My friends at the holding companies, I'm sorry, I just had to get that kick in. All right. This is interesting.

If somebody wants to take a first step with you on this, let's just complete the commercial for Punctuation.

David: Now that you've done your own commercial.

[laughter]

David: Just contact [email protected].

Blair: All right. Thanks for this, David.

David: Thanks, Blair.

Positioning, Strategy, and AI

2Bobs with David C. Baker and Blair Enns

Download

Blair and David are hearing all kinds of people talking about how their positioning needs adjustment because of AI. Blair does see an issue developing for many creative firms, but more with business strategy instead of positioning.

Links

Positioning: The Battle for Your Mind and The 22 Immutable Laws of Marketing by Al Ries and Jack Trout

Good Strategy / Bad Strategy by Richard Rumelt

Playing to Win by Roger L. Martin

The Lords of Strategy by Walter Kiechel, III

Transcript

David C Baker: All right, Blair, positioning and strategy. Wait, is that the title?

Blair Enns: How's this for being on topic? Let's not title this, and let's title it at the end. Let's see if it even makes it.

[laughter]

Blair: Do you want to share your skepticism with the audience?

David: Well, if people could just see how the sausage is made, it's like-

Blair: [laughs] Looks like sausage.

David: -you send me this little text, "Okay, here's the topic." It's like, "What? This isn't the topic. This is just a little text from you, and then you say, "Well, I'll--"

Blair: Then you qualified that, and you said, "I haven't even been drinking."

David: Yes, I know. [laughs] Yes, I said, "I have no idea where you're going with this, and I haven't even been drinking," right. Then you said, "I'll flesh this out later." Then early this morning, I get this thing, and it's like, what's this shit? [laughs]

Blair: Oh, weren't you referring to that stuff I sent you when you sent me that text?

David: Yes, I was.

Blair: Okay, got you. What's this shit? It's material. It's raw resources for a fantastic conversation that you and I are going to have, and the audience is really going to enjoy. They're going to go on LinkedIn and just talk about, "This is the best 2Bobs ever."

David: Yes, right.

Blair: They're going to give us five stars on whatever platform that they listen to 2Bobs.

David: There you slipped a little thing in.

Blair: Yes.

David: Yes, and before we started recording, you said, "Bring your skepticism to the table and I could talk for 40 minutes about this," and I said, "Do I have to be here for that?"

[laughter]

David: Oh, God.

Blair: This is already the best episode ever.

David: Yes. Okay, but this actually brought back some memories because you and I did an event in Atlanta quite a while ago where we used this business model canvas. It was a really interesting event, so it was nice to look at that, but we'll get to that in a minute. You've been hearing all kinds of people talking about how their positioning needs adjustment because of AI. Is that right, what I just said?

Blair: Yes, roughly. Are you not hearing this?

David: Yes, I am hearing it too, but I'm interviewing you.

[laughter]

David: I'm asking the questions today.

Blair: Yes, Your Honor.

David: You have heard that?

Blair: Yes.

David: Okay. You think this is brought on by AI. What is it about AI that's making them rethink their positioning? We're going to talk about how you don't think they should be rethinking their positioning, but what do you think it is about AI that's making them be introspective?

Blair: It's like a hand grenade that's been thrown into your business and the entire ecosystem. Everything's being disrupted, so everything's changing. It might be a bias on my point. I feel like I spent the first 15 years of my business talking about positioning, and then at some point it's like, "You know what? I don't want to have the positioning conversation anymore." I feel like we, all of us together, have had this conversation a million times, and maybe the hiatus is over, but I've just noticed agency owners revisiting their positioning and I'm like, "People, this isn't a positioning problem."

We've touched on this, so I looked it up, and I don't know how many episodes we've done on positioning, but positioning comes up in a lot of them.

David: A lot, yes.

Blair: We've probably done seven or eight directly on positioning. I wanted to make sure we didn't cover the topic directly. I don't mean the topic of AI's impact on positioning, but the topic of positioning versus strategy, because I know I have talked about it a couple of times before, but I think it's worth going into this.

David: Yes. You're saying it's not a positioning issue. There is an issue, but it's not positioning. It's about strategy.

Blair: Yes. Let's define the terms. What is positioning? Where did positioning come from? The book came out in 1981, Positioning the Battle for Your Mind by Trout and Ries. They had written, I think in Ad Age, a series of articles for like a decade, since 1969. These two, were they professors? One was a consultant.

David: Yes.

Blair: Eventually they were both consultants. They were observers of the marketing and in particular, the ad agency space. I don't even think they coined the term, but they popularized the term. Positioning, according to Trout and Ries, is the act of placing your brand on a ladder in the mind of your customer. You choose what's the ladder, and I haven't read the books in years, but it's like Volvo. It's not on the car ladder. We want to be positioned on the safety ladder, and we want to be number one in safety. This is your idea, your construct of how you want your customers, prospective customers, to think about your brand.

When the customer hears your name, you want them to associate it with a benefit of some kind. Then there's this implicit ranking. Are you the best in this category? Are you the second best? Are you the third best? There's a saying from back in the era, and I read all these books, Trout and Ries's books, including their other one, The 22 Immutable Laws of Marketing when I started in advertising. I don't know if it was their saying or somebody else's, but one is wonderful, two can be terrific, three is threatened. This idea that there's really only ever room for two in a category.

You would have to decide, is there room in this category? Can we be number one or number two? The number two is really the idea of a challenger brand, or I guess three or lower might even be a challenger brand. You have to pick the latter. Then you're in this messaging battle with your competitors to try to occupy a place on that ladder. Positioning is the domain of those who do not have the ability to affect the product. You're handed this baby shampoo or whatever, and it's like, "Go find somebody to buy this." You look at the marketplace, you look at the needs and the demands, and you think about, "What's the messaging? Where are we going to try to position this relative to the competitors?"

My thesis is because people of my age in this business who grew up using that language and those constructs from Trout and Ries, we often think about positioning the brand of our agency when, as a business owner, we have complete agency over the products. Therefore, we shouldn't be thinking about positioning at all, or positioning should be downstream of the more fundamental thing. The more fundamental thing is business strategy.

David: Are you saying that business strategy should be an interchangeable concept with positioning?

Blair: I'm saying it's conflated in the independent creative firm space. A lot of times these agency owners and other leaders are thinking and talking about positioning the brand when really, they should be revisiting the strategy. We define positioning. Now, what is strategy? One of my hobbies is collecting answers to this question. I've received hundreds of responses, three, four, five, maybe good ones. I've had a recent revelation about good strategy and bad strategy. Somebody wrote a book called Good Strategy and Bad Strategy, but let me take a good definition of strategy. I think it's Roger L Martin, who wrote a book called Playing to Win.

Strategy is deciding where you're going to play and how you're going to win. What's implied in that? Everything is implied in that. You don't have to be an ad agency or a video production company or a marketing agency and decide where is this thing that's in a box that I call an agency or a service provider going to play and win. You can re-imagine the box. You can re-imagine everything. I wanted to have a conversation about instead of revisiting the positioning, the language that we will use to place our brand in the mind of our competitor and maybe shift that language so we can shift the position, I want to have a conversation about rethinking everything about the business, everything.

David: The way you just described positioning isn't the way I've used the word positioning, and I'm not saying I'm using it the correct way. I might very well not be. Using your definition of strategy, where we're going to play and how we're going to win, so that first part of that, where we're going to play, we would narrow that field so that we have fewer suitable substitutes for what we do. Then how we're going to win would often be how we deliver those services, what sort of service offerings, how we start, how we weave them together, and so on. That would be how I would understand positioning.

Your definition of strategy is how I would understand positioning. Back to this question about AI. Has AI been so disruptive that people are afraid that their business model will be disrupted? Because of that, because they see AI as such a disruptive force, they feel like they need to be first in the potential client's mind around how AI will be delivered in the services. Is that also a part of it?

Blair: I see that going on. I see two things, like almost a fully bifurcated market here. Tell me if you're seeing this. It's mostly on the consultant side, the independent side. Are you seeing like a herd of lemmings running to the AI space?

[laughter]

David: Yes. Just like they've run to lots of other spaces, yes.

Blair: Yes, and if they were running a business in 2000, they changed the name from whatever it was to whatever it is dot com. It's like there's a parade, so everybody's trying to get ahead of it. Some people have gotten ahead of the parade, and I've watched with admiration as some of the early movers in the marketing space really saw the parade and gotten ahead of it. Now everybody else is just joining the parade. You look at it and go, "Yes, I understand why you're doing that, because it's the big new thing, but how long is that value proposition going to last?"

You think of all the big consulting firms. How much of their business today, and I have no idea what the answer is, but I'm going to assume it's a significant and quickly growing percentage of their business, has to do with helping their clients adapt to AI. Would you imagine that's a sizable and growing percentage of their business?

David: Oh, yes, absolutely. In fact, I just finished listening to the Lords of Strategy, and it didn't even mention AI, but it's still 100% applicable to the consulting field without even mentioning AI.

Blair: Yes, and so are McKinsey and Deloitte and all these other, are they--

David: Punctuation. You forgot to mention Punctuation as one of the leading consulting firms.

[laughter]

Blair: Are they changing their value proposition to be AI-specific? No, they're not changing how they want to be positioned. They're not. All of a sudden now we're all AI. Even if internally they're saying we're all AI, whatever language they're taking to the marketplace, whatever message they're transmitting to their customers, it hasn't fundamentally changed. The shift in technology, the disruptive thing, whether it's a macroeconomic thing, a socioeconomic thing, a technology as it is, doesn't really matter. It's not causing them to shift. On one hand, I would say it's mostly people in small firms rushing to the AI thing.

Look at the people who comment on your LinkedIn feed. Not necessarily the people that you follow or are connected to, but the ones who comment. It's like every third or fourth person has AI in their bio. I think that's largely a mistake, not universally a mistake. I think it's largely a mistake, and maybe we've talked about this all before. What are you going to do after AI is so mainstream that it's just the water we're swimming in?

David: I was thinking about that the other day. I went to the, I think it was called the Sign Museum or something in Cincinnati.

Blair: Oh, I saw your pictures. Pictures of signs. A museum for signs.

David: Yes, and they had a lot of hotel signs. I was talking with the friends that we were there with, and I said, "Do you remember in the early days out on Route 66, it's like we have air conditioning. Then it was we have cable. Then it was we have Wi-Fi." That was to differentiate all of these hotels from all the other ones that didn't quite have it yet. You see the same thing with agencies saying, "We have AI." Okay, well, that might work for the next 47 hours, but after that-- This is an important question I want to ask you. You may not have seen this.

I don't know, you'll be able to tell right away when I ask it. When you notice this happening, is it happening from firms that are already tightly positioned and they're revisiting things, or is it happening from firms that are not tightly positioned, and they think this is the answer to it?

Blair: I'm not going to give an answer that suggests that I have done any research or even have a solid point of view on it. I think anecdotally--

David: Can we stop and talk about that for a minute?

[laughter]

Blair: Is what keeps this lighted, real, and interesting, isn't it?

David: Yes.

Blair: Anecdotally, as I already said, I think it's largely consultants and really small firms. They're just trying to find their footing like they were trying to find their footing with the last cycle of whatever the hot new thing was. There's just a lot of good, honest people trying to find their footing, and looking for the next thing and maybe not thinking through. Maybe they don't need to think in this day and age. I actually want to come back to this. What is strategy? Is it planning or is it action? Increasingly, I'm in this camp that strategy really is this thing that you determine by looking backwards. It's a set of actions that you took in the past.

I think we've probably, and I maybe fueled this, at least in my own mind, is that we've probably gotten too theoretical about strategy. I've been searching for the definition that describes a model for how you think about and plan for the future, but I'm not a great planner. I'm a big fan of that saying, I think it was Eisenhower or one of the US generals who said, "Plans are useless, planning is priceless." I think in the category of strategy, strategy is really, and I could read you a whole bunch of quotes on this that I have in front of me, the world's most famous, most successful entrepreneurs almost universally are dismissive of strategy or more correctly, will state it as an action.

Here's Jensen Huang, founder of Nvidia, "Strategy is not words. Strategy is action." We don't do a periodic planning system. The reason for that is because the world is a living, breathing thing. We just plan continuously. There is no five-year plan. Herb Kelleher, Southwest Airlines, "We do have a plan. It's called doing things."

David: I like that one.

Blair: I could read more and more of these. These ideas of strategy is action, it's so important right now. I'll push back on what I just said a little bit earlier, some of these people just rushing to the AI thing, I think you want to modify your business so that you can be really relevant, create value, make money in this time of AI, but just simply slapping the AI label on what you do, I don't think that's the right thing to do. Now, I still think that's true, but at the same time, how are these quick pivots going to pan out over the long term? I don't know how long-term anybody's thinking or even should be thinking right now.

I'm trying to imagine my business as an AI-native, agent-friendly business where my client's agents can come to us and get what they need. For the life of me, I have no idea what this business might look like in three years.

David: You mean your own business?

Blair: Yes, my own business, and I imagine there's a lot of that going on. The world we're living in three years, it's probably going to be quite different from today. I'm not in a doomer camp. We could talk about how many jobs are really going to be displaced and are humans all going to be sitting around earning universal basic? I think that's all nonsense, but I do think things are changing quickly and our businesses are going to look a lot different. On one hand, I look at these people just slapping the AI label on their business, and I chuckle about it.

On the other hand, I think, "What are you going to do? A five-year plan?" Fuck that. Sorry for the language. The idea of a five-year plan today is absolutely ludicrous.

David: Yes. I used to say that your positioning should last at least 10 years. That was a long time ago.

Blair: It was a different era.

David: Then I went to five, and now it's three. Maybe it's even less. You've talked a lot about positioning and strategy. Can you lay over this stuff and tell us what value prop means in this world?

Blair: To me, strategy is, if we take the backward-looking definition, strategy is basically action. It's the series of actions that you took that allowed you to get to a place. Therefore, it can only be determined in hindsight. You start to break that down. If I'm saying strategy is on the table, your fundamental business strategy is on the table, I was asking myself, "What do I really mean by that? What are the components of strategy if it's really just the actions that you take?" I thought the best framework that I could think of for looking at your fundamental business strategy is really just any framework for looking at your business model.

Therefore, the business model canvas is a pretty good model to look at. The business model canvas has nine different sections. It's got key partners, key activities, key resources, value propositions, customer relationships, customer segments, channels, cost structure, and revenue streams. We're not going to go through all of them. I just went through these, and I thought, "What is a typical creative firm, ad agency, design firm, digital firm, et cetera? What are the activities that it's probably most likely that they should be revisiting, and what are the ones that are least likely?" I just wanted to talk about the top two or three.

I think value proposition is at the top, customer relationships and key activities, and then your cost structure and revenue stream. That's one, two, three, four, five. Five different areas of your business, all somewhat related in some ways. I think almost everybody should be revisiting these. I need to make the distinction here. I'm a salesperson. I'm a new business person. I think of your firm, dear listener, in terms of the firm that you are creating in the future by the next new client that you bring in and the way you work with them, the way you charge, et cetera.

This idea that you reinvent your firm one new client at a time, I'm largely thinking of this through the lens of what is the message you're taking to the marketplace, who do you want to work with, how do you want to work with them? At the same time, however, I recognize that there's a whole bunch of people listening to this who are pivoting their current offering to their current clients too, so you're actually doing both. There's a lot going on here. One end of the spectrum of the mistake is just slap the AI label on everything that you do.

At the other end of the spectrum, the problem is thinking that this is a positioning problem, a problem of language rather than a problem of strategy or business model. For those people and the rest of this conversation, I want to talk about what's on the table. What should you be rethinking?

David: I'd like to draw an inference from what you just said because if you're talking about what the marketplace wants that hasn't bought from you before, then that experimentation needs to happen mainly in new business conversations, and I think you need to be listening way more carefully than you ever have. You need a lot of at-bats too. At-bats are really important nowadays so that you can test some of these theories with new clients. In terms of who's actually going to be willing to trust you with something that you haven't done before, that's going to be your existing clients.

The front line, your new business people and your account people who should be responsible for growing your accounts, there just needs to be a lot more listening than there typically is and a lot more experimentation, probably less planning, which may sound strange given all the planning we've talked about, but if planning is really action, there needs to be more action. You need to be willing to spin up more experiments and kill them quickly if they don't work. You need to have a team that, by God, they cannot have their feet in cement. Your team needs to be very willing to pivot and listen and experiment.

When we talk about how you have to recreate yourself before somebody else does, your people are going to need to be willing to job themselves out of a job, in a way. Your very best people are going to have to have that openness to all of this stuff. I don't think AI is all that different from some of the other things that have happened, except that it's just happened so much faster and it's spread so much more widely. There's more fear about this. Some of this is just not going to come to pass, but it's true. You can't just ignore it because your clients are talking about it all the time. I keynoted a conference about AI recently. I said these three things. I want to know if you agree with them.

Blair: Sure.

David: The size of your firm will be less relevant. That's the first. Second, your positioning will be more relevant. By positioning, I meant how I use that term, not how we've described it here. Third, your collaboration with clients will need to be even tighter. Do those three make you itch?

Blair: You said your positioning is more relevant or less relevant?

David: More relevant.

Blair: More relevant. Yes, size for sure.

David: You're not sure about that positioning one?

Blair: I want to go back to something you said a few minutes ago. You said your clients are the ones who are going to allow you to experiment. That's so vital here. Your clients are going to bring you in because you have this relationship and you're creative. You probably have some technical chops and you're going to get in there and you're going to create a solution to their challenge. Then you're going to have this thing, and that solution is going to look like a product, and we've already done an episode on this. It's going to look like a product or productizable.

You'll be tempted to launch a product business, and you probably shouldn't, but you can go back and listen to that episode, but you want to close New Business now. For firms who are doing good work for their clients and coming up with some really innovative, interesting things, winning New Business is as simple as demoing what you just did for your client to somebody who's not as far along ahead of the curve as your client. Somebody who's a little bit behind you. Take what you just did for a client. Go find somebody who doesn't move as fast, is not as innovative, and show them what you did for that client.

I just keep hearing stories of people who are just like, yes, we just build this stuff, and then we show it to somebody. Some of the biggest companies in the world, and they just go, "Oh, we can't. Can you just do that for us?" Then doing that for us, there's obviously customization, back to that earlier episode, a lot of customization. Then you get in there and you do the cool thing for them. Then you go to somebody else, "Do you want to see the cool thing that we just built?" We don't like to do timely podcasts. This is a timely podcast. I don't know how long this will be valid because it's a gold rush out there.

Everything's moving so fast. At some point, everybody's just going to be inundated with pitches, messages, but right now, if you just take the cool thing that you built, go show it to two other businesses, you will close one of those two businesses.

David: The reason I say that your positioning will be more relevant is because you're not selling a product that will be used by all of your clients. You are customizing processes for each client.

Blair: Yes.

David: That requires deep specialization, deep knowledge of a particular type of client, whether that's vertical or horizontal. That's what I meant by your positioning will be more relevant because you're not selling SaaS, which is the same solution to everybody. You're selling a very customized solution to everybody.

Blair: Yes, so I agree with you. I think positioning is more relevant, but at the same time, I think today relationships are a pretty good substitute for positioning because, again, it's so easy if you've built something cool and you have somebody you can ring up and say, "Hey, can I show you this thing that I built?" Somebody who has the ability to hire you. Pretty good times right now.

David: How long do you think this podcast episode will be relevant?

Blair: We're recording this on June 1st. It's going to come out in probably August.

David: August, yes.

Blair: It might already be still started.

[laughter]

David: We'll say September 2026.

Blair: Yes. I think it's good for the rest of the year. Maybe it's good for 18 months. I don't know. I want to say it's so different, but to your point, it's not different at all. It's just so much faster.

David: Yes, right. All right, I think I need to go rewrite a lot of the taglines that I've written for my clients because I don't think they have resembled a value prop as well as they should have. We need to do it opposite.

Blair: Amen, brother. We used to define positioning as discipline for market, and now, I think it's helpful to be able to say we do X for Y. We do this discipline for this market.

David: Here's an example of a weak one that I probably would have written in the past. We provide strategic operational consulting to help healthcare organizations improve efficiency and patient satisfaction. Okay, that's the weak one. The stronger one. We help regional hospital systems cut emergency room wait times by 30% within six months without adding staff by redesigning the patient flow. Unlike large generalist firms, we only do ED throughput, and we've done it 40-plus times.

Blair: That's great.

David: Too long, but yes, that's a whole lot more compelling.

Blair: Yes, but it's getting better, though.

David: All right. Anything else to add here, Blair?

Blair: No, I think that's the conversation I wanted to have, so thank you for bringing your healthy skepticism.

David: [laughs] Thank you, Blair.

Blair: Thanks David.

Employee Retreats for Remote-First Teams

2Bobs with David C. Baker and Blair Enns

Download

David recommends regular in-person company-wide gatherings for remote workers as an opportunity for creative agencies to help build their organization’s culture in our post-pandemic economy where online video meetings continue to fill our calendars and working from home is the new norm.

Links

"Investing in Ee Retreats at Remote Firms" by David C. Baker for punctuation.com

Transcript

Blair Enns: David, our topic today is, checks the screen, investing in EE, which is-- what's an EE? Employee?

David C. Baker: The people that don't want to work for you.

[laughter]

Blair: That's a lot of people. Investing in employee retreats at remote firms. We've talked around this. We've touched on this a little bit lightly here and there when the subject of remote work comes up. I know you have a strong opinion on it. You've written a post on it. I've just read the title of it. We're going to get into the details of how you make remote work before we get into this. Has your opinion on remote work changed at all in the last couple of years or since the last time we've talked about it in a podcast?

David: Yes, it has.

Blair: What is your opinion on it?

David: Yes, it's actually hardened against it, honestly. I've come to the point where it's unfightable. It's not a fight you're going to win. What did they say? You can't put it back in the bag? What is it that's out of the bag?

Blair: The genie out of the bottle.

David: Yes, you can't put the genie back in the bag. You can't put the genie back in the bottle. Once you've allowed people to move, for whatever reason, or you've hired people from outside your geographic area where you're not going back to-- I've had all kinds of principals tell me, "I can't say this publicly, but I'm tempted to close my firm down and open up a new one and have everybody in-person." None of them are really going to do it. When I say I'm hardened on it, I'm hardened in the sense that we can't put the genie back in the bottle, but I also feel like we are missing a lot by having all remote teams. I really believe that. Yes, even though I work remotely. What's your perspective on that?

Blair: We've been hybrid for a while. Right now, there's only two of us here in the office. We just sold the office building because there's only two of us here in the office. I think we're going to work from home. I don't know. I'm with you on the hardening of the position on it. I would have previously stated it as, yes, I think my preference would be to have everybody together if that's possible. Now, if it's not possible, you let some people move away, then at some point you start to hire people not based on the location. That's obviously an advantage. We'll come back to that.

You can't really change your mind, to your point, the comments that you're hearing from your clients. The only way to undo this would be to shut down the firm realistically and open a new firm where the policy is everybody shows up to the office at least a certain number of days of the week. That, to me, might be the sweet spot. I also think I would have a small number of exceptions. I don't know. Maybe I'm just trying to argue both sides of the same argument.

David: I know I would be very flexible. If somebody wanted to go live in Italy for three months and work from there, fine. It would either be all remote or all in-person, with a lot of flexibility if it's in-person because I'm very sympathetic to how difficult that is for people. I've had lots of thoughts about this.

Obviously, I've been doing this for long enough that I was here during the whole transition because of the pandemic, obviously. That came up a lot. What I hadn't done is finished a research project where we did a deep survey of 168 firms. When I finished that, then I thought, "Okay, I need to write about this." I need to make specific recommendations because it's very rare to see a firm that is in-person anymore. How do they adapt to this new world? How do you maintain culture when you have a remote-first environment? That was the question I was trying to answer.

Blair: That was the impetus for the post and then ultimately this podcast. You make the point right at the top of your post that we still haven't really adjusted to the post-pandemic world. Do you want to explain why or in what ways we haven't adjusted?

David: The easiest way to understand that, I think, is, now, before the pandemic, there were a lot of firms that were remote. The pandemic came along and there was disruption with their client base, but there was no disruption with their employee base. They'd already been remote. Then there were a lot of firms that were working together and then those people scattered to their homes in the same city. That wasn't that big of an adjustment either.

What I think we didn't understand was how difficult it was to incorporate a new employee who hadn't been there before into a remote-first culture. They couldn't learn by sitting next to somebody, by listening to their phone calls, by just passing them to and from the break room and so on. This is going to be even more difficult, I think, when we talk about incorporating entry-level people who have never worked in a real business environment before, and you're expecting certain behaviors from them, and they don't even know what those are, much less how to learn them, how to incorporate them into their work lives.

There's that. There's eroded work-life balance. People are working from home while their kids are there or their kids are home from school. How does that work? I don't know. It just goes on and on. I think it's probably going to be another 10 years before we really exist in this environment and thrive because we understand exactly how to operate in it. I don't think we figured out how to operate. Incorporating new people, especially, is the one that keeps coming to mind all the time.

Blair: Yes. That one really hits home with me. Our most junior employee is my youngest son, who graduated from coding school right after the pandemic into this new world order, and he didn't get work in the first couple of months, so we snapped him up temporarily. He's still with us temporarily. He's still looking to move on. He's an incredible asset to have around, but every day, I'm keenly aware of the fact that he should be in an office.

He's working remotely in a different city. Happens to be the same city as his brother, so they get to see each other, who also works for us. I'm just so keenly aware of the fact that he should be in a business in an office sitting next to other people, learning via osmosis rather than learning bad habits from his shitty manager father over the distance. I feel for him and people in his situation because I think the fastest way to get up to speed on what it is that you're doing and the business that you're working for and the clients that you're serving is to be in an office with your colleagues in the trenches doing battle and building that camaraderie. Sorry, that's a lot of time on the setup here.

David: Can I mention one other thing too? This is a smaller thing, but I see confusion out there. In the pandemic, when we first went remote, we were hungry for person-to-person interaction, and so we naturally gravitated towards video meetings all the time, is something we wanted. It was like, "I see a human out here. Oh, there's other people. We haven't all died yet." Now it's become the norm, and I see people asking a very legitimate question, it's like, "Why does every meeting have to be video? What happened to the old conference call stuff?"

Apart from my own sensibilities around that, which are weird, but just normal people, not me, normal people are saying, "We're sitting in a chair looking at a screen all day. We were more mobile when we were working in person." It's just an odd thing that I think we haven't adjusted to yet.

Blair: I'll build on that. I was just on a video call with my video guy, and he made the offhand comment that video is the most intimate medium. I didn't correct him, but I don't believe that to be true. Marshall McLuhan certainly didn't believe that to be true. I know, as somebody who produces a small number of videos, who does in-person events, who's met some of my clients, and who podcasts, most intimate medium is an audio-only medium.

That is more intimate to have somebody in your ears than it is to have them in your ears and looking at them on a screen, and McLuhan would make the distinction between a hot media and a cold media and basically say audio is a hot medium, and then there are various types of videos. Some are hot, some are cold, but the idea is you think about the concentration of a message within a channel. When you're spreading it out over multiple channels or medium, audio and video, you're diluting the intensity of that message.

I think we adopted the technology and we thought, "Okay, well, let's look at each other," and here we are looking at each other. I don't have the objection to it that you do, but I don't agree that it is the most intimate way to do this. I think phone calls, good old-fashioned phone calls, are more intimate than video calls.

David: I do too. For the people listening to this, we never do video when we record this.

Blair: Yes. We're not looking at each other right now, are we?

David: No. I find that I listen far more intently to a client call when I'm not on video. Anyway, it's just another thing that I don't think we've really caught up. This hasn't settled. One of the things that hasn't settled is how do you continue to build culture with a remote-first team? I think there's ways to do it.

Blair: That's the part of your post where you call countering remoteness, and it really is about getting together in real life, and you have a certain cadence, certain recommendations, but I want to go back to what you alluded to fairly quickly and moved on. You did some research on this recently. Talk about the firms that you surveyed. What did you find when it comes to how to counter the deleterious effects of being remote?

David: I found it was all over the place. That was the most interesting thing. The ranges were all over the place. Firms that have been working remotely for a decade, way before the pandemic, that don't ever get together. That just really surprised me. Then you have folks who do it very seriously. It was actually hard to synthesize the research because there was very little commonality between firms. It was hard to find this. We ended up, instead of just reporting the averages or the medians, we decided to actually make specific recommendations, too.

This comes from the fact that years ago, before people worked remotely, we had to set a benchmark standard on how much they should spend on their facility. It was always all in. It was facility, cleaning, security, taxes, insurance, and so on. All of that should never be more than 6% of your AGI. Then when people decided to sell their facilities or not renew their lease, immediately their mind went to, "Oh, this is 6% that will drop to the bottom line." We kept saying, "No, no, no, that's not how to think about it. You should use this money to build the culture that you're losing because you're not working face-to-face."

That wasn't very scientific. We just said, "Don't drop that to the bottom line, spend it on culture." It's like, does it really need that much money and so on? We wanted to put together some specific recommendations. It's not like these are in stone, they're just a starting place. You have to decide. You may have clients over in Europe, and maybe you're in California or something. You have to adapt these to yourself. After interviewing 168 firms, we decided to say, "Okay, this is how much you should spend per person, and this is the cadence of how you should get together, and then modify that for whatever works for your firm."

Blair: Start with the budget. How much should you spend per person?

David: $5,000 to $8,000 per person. It'd be interesting to hear the reactions from people when they listen to that. I wish we could. I wish this was a two-way medium. I imagine some firms are going to say, "What? That's way more than we had budgeted." Other firms are going to say, "No, we spend a lot more than that." I'm talking about the cost of getting together in person. You're going to pay for hotel, you're going to pay for airfare, and rent facility, food, that kind of thing. $5,000 to $8,000 per person per year to cover all the times you need to get together.

Blair: Let's talk about the cadence of these in-person get-togethers and maybe how they should be structured.

David: Yes. I think there should be two get-togethers, one primary one, and that would be the minimum. If you can't get together twice a year, you really should get together once a year. That's the primary one. If you can add another one six months later, that's great, but it wouldn't be as big or as expensive. The big yearly gathering, think of it as three days together in some central location, a place that's fairly easy to get to.

It's not three days of meetings, though. This is three days of being together. It's a mix of updating people on maybe a positioning change or a new service offering. Then carve some time out for people to get work done for clients, but people are hanging out together as they do that. Maybe they're on a call together with a client or something. There needs to be work stuff happening for clients, not just work for the firm itself. Then lots of play time that's unstructured so people can just gravitate to the folks that they feel more comfortable chatting with, hanging around with, and whatever you want to do. Your company has its own unique culture, so you figure out how to do that.

Ideally, it's at some large Airbnb where everybody can stay in the same place, if not probably at the same hotel, so that you can eat together and all of that. One big yearly gathering, and then a shorter in-person one, if you can swing it. Then at the three-month intervals, you would have an online meeting that's maybe three or four hours with lots of breaks in it where you're covering very structured stuff that is suited for everybody to hear at once. Introductions from new people, new initiatives. You're not going to struggle to fill this time. In fact, you're going to struggle to overfill it probably.

Just do the things that only work best when everybody is there. Reporting on financial performance, all those things are pretty obvious. One big yearly gathering, a small in-person one six months away, if you can swing it. Then between those three-month intervals, some online meeting. That's how I would do it. There's lots of software tools out there. Some of them are good, some aren't. I don't really keep up on all the best ones, but you could use some of those as well to structure online casual gatherings and so on. Is that what you were expecting me to say in terms of what you would want people to do, or would you want people to get together more frequently than that?

Blair: I don't know. I think depending on how distributed you are, you could have little reach and meetups too, like how large and how distributed the firm was, you could have regional meetups too. I know firms that have a lot of, say, developers and content creators in the Baltics, as an example, or South America, maybe they could have their own meetup. You're pretty adamant that the big one every year, it's mandatory. This is a delicate question. How do you enforce compliance? Not everybody's always going to be able to attend, but what do you do to deliver the highest certainty that most people will attend?

David: In online discussion groups, I see this pop up a lot, where you have people on the extremes, like on one side is mandatory compliance and on the other side tends to be empathy. You're going to pick something that fits your personality, but it's either required or it isn't. Let's say that somebody's close relative gets sick right before, well, obviously they can't come and you have to, bless that, help them any way you can.

If something always comes up, even if it's a mental or emotional health or something, frankly, I think the job requires you to be with your people except in extreme emergencies. Something comes up and you can't come. Something comes up the next time and you can't come. We're putting an ankle monitor on you now. This is a part of the job. If that is difficult for you to do because of your life circumstances, we're not being cruel, we're just saying, "This is what's required for the job. If you can't do this, then we're going to have to move on."

You've got to put your foot down. That's going to be very awkward in today's environment because of the expectations that employees have. You need to be very specific about this when you're interviewing somebody so that they understand what they're signing up for. Then you also need to give people lots of advance notice because they live very complicated lives.

Most of the time, the other spouse or partner is working. There may be kids involved that they have to work around. You want to be sensitive to schooling schedules, to weather patterns, that kind of thing, and just pick it and stick with it. You're only going to get maybe 80%, 90% of the people there. They better not miss two in a row unless it's something really extreme. That could happen. I think you've got to be comfortable being firm. Otherwise, these things are just not going to have the result that you want.

Blair: Do you have a point of view on whether or not spouses should be involved, kids, et cetera, or do you think that's a firm-by-firm basis?

David: I think it would be fantastic, but I don't know how you make it work, because if you are in one central place where everybody lives and it's not remote, but it's an in-person culture, then I would absolutely involve kids and spouses and partners wherever you can. In this case, no, I don't think you can afford to do that, which is why you need to not have them gone more than two or three days because it's difficult to be away from family for much longer than that.

Blair: Then you wrap up this post saying you should have a standardized debrief, like an after-action review on that. Any context or detail you want to add to that?

David: Just learn from it. Don't just plan this from the top down, but explain what are we trying to accomplish here, and then use the team to come up with something that really works for them, involve them. Then say everything is up for grabs. "After each one, we're going to have a feedback form, we're going to have a quick meeting, and if something doesn't work, then we'll just scrap it and we'll do something else." It's okay to have standards, but it's not okay to have rigid standards that you don't re-examine all the time.

Blair: You said earlier that there's different software that can help you to plan these events. Are you aware of any venues that are specifically going after this market, or even like a party planner category, corporate retreat planner person who maybe even has a venue? I would imagine that if these things aren't popping up yet, they will, but have you seen any?

David: I haven't. I've written about it extensively, though. If I had stupid money, I would build something like this. It would be a campus that's built specifically to foster this kind of working retreat, where you have outdoor stuff, you've got indoor stuff, there's a kitchen, there's a list of people you can hire to come cook for you, there's transportation.

Blair: There's David Baker showing up to do a keynote talk.

David: Yes, [unintelligible 00:19:34] obviously, with the highest tier room.

Blair: It's actually not a bad idea.

David: Yes, I think it'd be really cool. I don't see anybody doing it, which must mean it's not a very good idea.

Blair: Do you remember a few years ago, I think it was in the middle of the pandemic, one of my stupid ideas was, "Hey, why don't you and I buy a small hotel in Palm Springs, and we'll do that?" We got really excited about it for about two or three hours, and then it was like, "Yes, no." It'd be fun the first time. Maybe the second time. After that, it'd be like, "Let's dump this turkey." This was really helpful, David. Thank you. We're not going to do another episode on it, but I'm sure, once again, it's one of these tangential topics. It's going to come up again. It's going to get a lot of mentions, too. Thank you.

David: Thanks, Blair.

Productization (Again)

2Bobs with David C. Baker and Blair Enns

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Blair changes his mind on productized services. Again. And AI is the reason.

 

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"The New Age of Consulting" by Blair Enns for winwithoutpitching.com

Transcript

Again. I'd rather title it Blair's Apology Tour Version 3.

Blair Enns: I'm not apologizing for all of my past mistakes. I think that was all part of the journey of where-- I wouldn't be where I am today if I did not follow that path.

David: Yes, you'd be a lot further ahead. [laughs]

Blair: In my defense, we'll get into this. I have made some-- mistakes might be a little bit strong. Yes. No, okay. I've made some mistakes on this idea of productizing your services. Then there are also situations in which times have changed. I think we're in one of those times now where times have changed. I am changing my mind yet again on the subject of productization, should you productize your services?

David: Essentially, you're saying, no, or be careful about it. It's not the wholesale endorsement that you made back in, what, a year ago?

Blair: May of 2025, one year ago, yes.

David: I think this is wrong too, just honestly. This is the penultimate episode. Come around a year from now, you'll come right back to this. Frankly, what I'd like is a little bit less customization of your productization ideas. "Oh, I'm so proud of them. I'm so proud of that phrase."

Blair: You worked on that all weekend, didn't you?

David: I did. I'd have it written down too. Okay, so take us back. Let's get through the phases first. January 2018, what happened here?

Blair: I released Pricing Creativity, now out of print. In that book, I strongly suggest that you should resist the urge to productize your services.

David: Is that why it's out of print?

Blair: Among other things. [laughter] That book has made a lot of people a lot of money, including me. It's jam-packed with valuable advice, but it does need updating, and that's why I pulled it.

David: Okay, so that was January 2018. Fast forward six years to December 2024.

Blair: Do you want me to talk about why I had that position in 2018, though?

David: No, I just want to lay out the facts before we call the jury in.

[laughter]

Blair: Okay, yes. January of 2018, I say, yes, you should resist the urge to productize. Then December 2024, I publish The Four Conversations, and I say productization is just fine, so is customized services still just fine. Just be aware of the trade-offs. I had this two-by-two on standardized versus customized across the two different dimensions of your delivery and your pricing. In the delivery domain, standardized services would be productized, and then customized would be, well, really, it's a form of consulting. That's December of 2024.

David: Right. On this pros and cons theme, let's just remind people, one of the main cons of productizing your services is around what happens to pricing when you productize your services, right?

Blair: Doesn't have to be. You can productize your services, and then you still have the decision of are you going to price the services, or are you going to price the client? If you decide to productize services where you're pricing the client, and I forget where I got this, and we talked about it in the last episode we did on productization, I think it may have been Greg Alexander from Collective 54, the most lucrative business model for professional firms seems to be this combination of productized services and then customized prices, where you continue to price the client, and therefore it value prices your productized services.

David: Okay. January 2019, Pricing Creativity, stay away from productization. December 2024, when The Four Conversations book came out, you were a little bit more open to it and just wanted people to think about the pros and cons of each. Then May 2025-

Blair: You notice that these timeframes are getting closer and closer. Six months later, I publish a post saying, you should probably productize. The impetus for this was the pressure that AI is putting on productivity and therefore labor-based pricing models. You're selling time. You're getting more productive. You can do things faster and faster. You're effectively making less money if you are charging by the hour or the sprint or the FTE.

David: That's May 2025. You called for rethinking, maybe some productization because of how AI is killing labor-based pricing. Then April 2026, so up to the current, where are you now on this?

Blair: Where I am now is it is so clear to me, and there are a few different sources and we can dig into it. We are in a time of transition with AI, right? Everybody would agree with that. The tools are changing everything. Now, because AI lets us spin up products like that, instantly, "Just check your inbox to validate this," we are drowning in pitches for all kinds of AI-generated products, most of which are designed to help us use AI to be more productive, but it's so easy to create a product. Therefore, everybody's creating products exactly at a time when your clients want customized help.

This is 2005-ish, Web 2.0. You remember, you and I have, for the last few years that this value proposition of digital transformation, it's over, and there were too many historically web firms who got into the digital transformation business were clinging onto that message long past its relevancy. I think you and I would both agree, and correct me if you don't agree, that there was this period of roughly 15 years, from roughly 2005 to roughly 2020, just before we went into COVID, when there was a lot of money to be made in helping analog businesses get up to speed in the new digital economy.

Maybe the last five years of it were a little bit sketchy, but certainly from 2005 to 2015, there were a lot of really good firms out there that got to be quite sizable that were this blend of design, software engineering, and consulting. They were working with the largest companies in the world to help transform their business into the digital economy. They started to compete with the pure consulting firms. The consulting firms started to buy them. There was lots of money being made by lots of different parties.

Part of the Venn diagram of the three services that overlapped, design, software engineering, and consulting, we did see some people from some consulting companies come into the space. I'm thinking of some clients that come to mind right now. The playbook was a consulting playbook. You went into your client's organization and you took the time to learn their business, to figure it out, and figure out exactly what they needed to do to transform their business into this new economy.

All that money that was made from that digital transformation value proposition, it was made in largely customized services that we can loosely call consulting. Now we're in this very similar period of transition where all of these businesses need to adapt to the new reality of AI. The last thing they want to do is they want to buy a product. What they really want is to work with a consulting company to help them leverage these new tools and get to this new AI-first mindset and business.

David: I have a question about this. It's not a pushback, it's a genuine question because it feels like we're missing something here, in the sense that, if you think of a Fortune 5000 company, and they have a marketing department in-house, and they're working with agencies and so on, that in-house department might consult with the agencies about how to use AI in their marketing efforts and so on.

The rest of the company isn't going to talk with this agency. What I'm asking is, do you think there's a difference between the AI revolution and the digital revolution? Because these big Fortune 5000s are going to be working with huge consulting firms right out of the gate about how they can go AI-first. Agencies are just going to be asked about how to bring AI to marketing. Whereas in the past, they were asked about how to bring digital to more things than just marketing in the digital revolution.

Blair: No, I think it's exactly the same thing. I think at the very high end of the market, the largest companies, you're largely going to see the large consulting companies going in and doing the big enterprise-wide AI stuff. I think that's going to be hard to do. I think the independent agencies, in particular, with smaller clients, they're going to have all kinds of opportunities to go well beyond marketing into the C-suite. I'm seeing this happen with all kinds of firms right now. The stories that I'm getting back in just the last two or three weeks, it's basically, as I think I said to you in a text about a week ago, it's a gold rush right now. There are so many different firms doing this, but there's so much need.

Maybe think of it as the capacity that was sitting there in independent agency land with all these digital transformation businesses petering out wondering where do they go next. Some of these firms have just been re-inspired, and not just inspired, reinvigorated, and their results have been reinvigorated from them going back in, dusting off a playbook that was relevant just a few years ago. They're wondering where to go next. They still have a lot of the same people. They still have the mindset. They still have the playbook memorized. They're technology-first businesses, or at least highly technology-curious and capable businesses.

They're small and nimble. They're creative. They're at the front end of thinking of working through how do you use these tools. It really is now as simple as if you have a relationship where you can get in front of a business and you can simply show them what you did for another client, or even a product, and we'll come back to this, a product that you've built, there are just minds being blown every day by these firms sharing with their clients stuff that they've done for others. I just hear story after story of, I think I said to you in a text, selling right now, if you're in this space, is as simple as demoing, just saying, "Here's what we built for somebody else."

Then you even get-- and I'm hearing stories of large companies, sophisticated buyers looking at this stuff that was spun up pretty easily for another client and looking at it going, "We want that. How much for that?" I don't know how long this window will last. I imagine it's going to be three years. Maybe it's going to be as much as five years, maybe even a little bit longer, but it feels to me like the early days of digital transformation, again, and the playbook is consulting.

There's so much uncertainty. We're still in the early days of all of this. The client doesn't want to buy a product. They want somebody who knows what they're doing to come in and tell them what they need to do in their own business. Now, I'll plant the seed. We'll come back to it. In that moment, there is room for these products that you've built and applying them and customizing them. The big mistake would be to say, "Well, we built this product for so-and-so. Let's launch this. Let's spam our TAM and go to the market with a message of, 'Hey, buy our product." I think of it as product-enabled consulting. Like tech-enabled services, it's product-enabled consulting. I think that is the model, and the money is in the consulting.

David: I hope you're right. I hope you're right. I don't feel the same way.

Blair: I think you can hear from the tone of my voice that I'm pretty confident that I'm right. I'm hearing in your voice that you're not as confident as I am.

David: I'm not.

Blair: Why is that?

David: For one thing, I felt like the digital transformation play was a temporary one. It lasted longer than I thought it would, for sure. What made me sad about it is that all of these firms that jumped on that felt like it was a positioning. It's like, "Oh, we do digital transformation." Yes, you do, but so do thousands of other firms. To me, that's what's going to happen with this AI. It's going to put off the hard decisions that firms need to make around positioning.

I think positioning is going to be more important in the future than it is now. I think doing what you described for AI is going to be absolutely fantastic, lots of money, lots of impact. I think of it as a service offering that's attached to a positioning. What discourages me is the movement which I see out there, not everywhere, but most places, is people jumping on this and assuming that this is the new gold rush. We just all need to go to California with something to put in rivers and find gold. I think that part of it's only going to last a year and a half or so. Then they're going to be struck with, "Oh my God, look at all this competition out here."

Blair: I think the fool's gold gold rush, which I'll just use that term to describe what you just talked about, I don't think it's going to last at all, is in selling AI products, because you made a product, do you think you're going to spin it up and sell it to everybody else? It's just too easy for everybody to roll their own. You're competing against everybody else who's selling products, and clients don't want products right now.

Then the period that we've already been through that I think is largely going away is these AI products that were really just thin UI and prompt engineering vehicles layered over a model, and then they got featurized by the model. I think we're already through that. I think there's a lot of people falling in love with their AI products, trying to spin up a product company. I would not want to be in a product company business right now. Just like I wouldn't want to be in SaaS unless I was Mark Benioff or one of the huge enterprise SaaS businesses.

I wouldn't want to be in a SaaS trying to sell software to a business like yours and mine. We're busy building our own customized versions of these software, and we're slowly doing away with all of them. I think it's conceivable that by the end of this year, we don't have a CRM. I think it's just going to be a snowflake database and an agent.

David: If you think about what's the role of consulting for, just picking a number out of the air, a 15-person agency working with a $100 million client, they're obviously going to infuse AI into their own work for that client. I think there's going to be a big market where they help that marketing department infuse AI in an AI-first or an AI-forward sort of a mode.

I just wonder if that $100 million client's actually going to let them do their new version of digital transformation across the whole enterprise. That's what I don't see happening. Truth is, I don't really know what's going to happen. I'm skeptical because of the actual argument that agencies are making, but I'm also skeptical just because everybody thinks it's true.

Blair: Yes. I think that's a healthy skepticism, too. If I could go back to your point about positioning, I think maybe you and I agree that there's a whole bunch of money to be made right now. I think the positioning problem, it's not a today problem, but you should be thinking about it today. If I were one of these firms and I were going to market with this AI transformation value proposition, I wouldn't even include the letters AI. I think that's a mistake. I think that's leaning too much on the tool.

If you think of, what do these things have in common? What did the digital transformation era and the AI transformation era, if that's what we're calling it, what do they have in common? It's this combination of creativity and technology and consulting. Again, that Venn diagram of the three things overlapping. I think that's a valuable space maybe forever. How do you position that? I think it's a type of consulting company. You and I have talked around this subject before. I think it's some sort of creative consulting or creative technology consulting that there's a label that has more legs than something that risks looking like a fad in 24 months.

I think if your firm was in the digital transformation space and you've been revived in the AI transformation era, you should think about what's coming after. Not that any of us are going to make good predictions about what's coming next, but I think the way in which you frame your offering, it has to be that you do not lean on your tools. Don't go too heavily into AI. Think at a higher level about the nature of the problems that you're solving and where you fit in relative to the IBMs of the world, the Accentures of the world, et cetera. I think there is an advantage there with the creative element, the creative aspect of it that allows these types of firms to compete with the big boys over the long term.

David: I think the mistake would be to slap a label on it that's going to be obsolete in 24 to 36 months.

Blair: You know what's also fascinating about all of this movement? Then I want to summarize what I think you're saying to see if you agree with it. One of the things that's pretty fascinating about this is that, for once, the young folks entering don't necessarily have an advantage. The only advantage they have is that they're starting from ground zero. They're reimagining things as if this is a new industry.

It's the people in their 40s and 50s in the agency world that are really experimenting the most and leading the charge here, which is pretty nice. Finally, it's just like, when you're a little bit older, you have an advantage, which hasn't necessarily been the case. Let me see if I can summarize. You're saying, fast forwarding in your view on this, is that there's such chaos in the client world right now that customizing is really the way you have to go until some of the fog lifts anyway. Would that be a fair statement?

David: Yes.

Blair: When the fog has lifted and everybody's got a lay of the land and everybody's reoriented to this new world, you want those consulting clients to be using your products, but if you go in selling products, your value proposition is not going to align with the client's need. They need help. They need-- I'm going to keep using the word consulting, even though that's a big suitcase word. They need consulting.

In the execution, when you're helping your clients, you are going to develop products for them. Some of those products you'll implement in a slightly different way because it's so easy to customize products now. You'll have these standard products and you will customize them to your different clients, and maybe there's some sort of lock-in or subscription revenue at some point down the road once the consulting revenue starts to ramp down, and you've got some ongoing relationships where your clients are using your products that probably have some degree of customization.

There is a role for products. Products are, again, because it's so easy to make products, you'll be making lots of products and installing them in your clients' businesses. Down the road, I think when we're through this window of opportunity, it's those firms that have an install base of some sort of products [unintelligible 00:20:38] that are going to have the best longevity with the clients that they're landing today.

David: I just gave a talk last week, and my last sentence was, "It's a great time to be alive."

Blair: Isn't it?

David: I really believe that, yes. It's just so much fun. I recognize that there's creative destruction, and half of that phrase is destruction, but it's still a really exciting time to be alive. To me, way more exciting than the whole digital stuff that happened 25 years ago.

Blair: In hindsight, doesn't it look like we wasted maybe not 10 years, but we wasted a bunch of time. When I say we, maybe the broader business world, we were a little bit too focused on SaaS for a little bit too long. I can't quantify this, but I'm pretty sure SaaS drove the economy quite a bit. I don't know if you remember when we were in 2021, so we're a year into COVID, maybe it was Rand Fishkin, maybe it was somebody else who said, basically, going into COVID, we were in a software recession.

They had the numbers to prove it, and I've since lost them, but that whole zero interest rate environment that funded the entire venture capital ecosystem, which funded SaaS, that was already drying up. Then COVID hit, interest rates go up, the VC ecosystem basically dissolves. Everybody wakes up and goes, "I have all these seats in all these different products that haven't innovated in forever, subscriptions."

Again, I think it was Fishkin. He was saying, we were going into software recession. Then all the COVID money kind of propped SaaS up, propped everybody up. Then we started coming out of it. Look at the pace of innovation right now. In hindsight, there has not been a lot of innovation, pre-transformer model AI. What the hell were we doing for the last 10 years? This feels like the world we should be living in with everything is exciting and moving fast and everything is changing.

David: To your point, I absolutely love it. Yes. I would just say that adding feature bloat is not the same as innovation. Zoom, cough.

[laughs]

David: Referencing the conversation we had before we hit record.

Blair: Yes.

David: Thanks, David. I really enjoyed this conversation. I like that we're not perfectly aligned on it. I think it's a good fruitful conversation. We'll see how it plays out.

Blair: We'll see you in a year from now, audience. I think it's going to be four months we'll come back. Thanks.

David: Thanks, Blair.

Thirteen Signals Your Website Should Send

2Bobs with David C. Baker and Blair Enns

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David shares a quick list of website elements he sees is missing from a lot of creative firms’ websites which could help them attract more new business.

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“13 Signals Your Website Might Send” by David C. Baker for punctuation.com

Transcript

Blair Enns: David, are websites still a thing?

David Baker: I almost made fun of you, and then I realized, oh, you're from Canada. You probably haven't caught up with the news.

Blair: Oh, burn.

David: This will be a thing in Canada soon, we're hoping. [chuckles]

Blair: [chuckles] Websites are coming to Canada, people. I can make some money here. 13 signals your website might send. Websites are still a thing.

David: Yes.

Blair: A lot of the people who listen to this podcast are in the business of designing or developing websites or both. What was it that made you think that you needed to tell these people how to do websites?

David: No, I'm tired of looking at shitty websites. It's like, oh my God. I'm not talking about not having the time to do a website. Fortunately, we're past that stage, but these could be so much better. I'm talking about agency websites. I'm not saying websites for other kinds of companies. I'm just talking about for the people listening to this podcast. I didn't criticize websites. Well, I guess I did in a backhanded way, but I essentially just said, "Hey, here are the things that you could do on your website, each of which would send a really cool signal about your firm."

Blair: You said there are 13 signals that your website sends about you and your firm, whether they're there or not there, they're done well, they're done poorly, or they're missing. Let's go over all 13. Some we'll just skip through pretty quickly. Obviously, the ones at the top of the list are of the higher importance. The first one is insights. You have to have insights on your website. How many expert firms, let's just guess at the audience here, what percentage of them would not have any, what you call insights, thought leadership on their website?

David: Oh, I would guess 85%. Don't have them. I use the word insights specifically. I think you ought to call it insights. Don't call it blog.

Blair: Okay, because you want to make the distinction between content and insights?

David: When I hear blog, I think of somebody that's at home and has made a commitment to write something every day, so they just write it, but it's not all that useful. Insights signal something, and I think you ought to call it that. You ought to have them on your website. I think the reason people don't have them on their websites is not because they don't know how to write. It's not because they're not smart. It's because they're not tightly positioned, and so they don't know what to write about because the stuff they could write about is so general that it's already on the web everywhere. Once you've got a tightly positioned firm, goodness, insights are easy to write.

Blair: Okay, I've just done a quick check of our website. Our blog is indeed titled Insights, so pass that test.

David: Oh, good. Okay. Yes, 1 of 13.

Blair: Second, good imagery. Of course, good imagery is important, especially if yours is a creative firm. A listener and reader who runs a design firm also teaches in design school. He wrote me recently, and he said, I had my student do a business analysis of your website, and this is a design student. His first reaction was AI-generated images was an immediate turnoff for him. He said, if the audience is creatives, his first thought was you shouldn't have AI-generated images on it. Then he came around to it. That prompted an interesting discussion internally here at Win Without Pitching. My argument is, well, the alternative was shitty stock photos. What constitutes good imagery? Do you think AI-created imagery could be included in good imagery or no?

David: Probably not, unless you just are really good at prompting that stuff. It's just so easy to spot. It's oversaturated. It's caricatured. I was reading a Facebook group for our neighborhood the other day. There were hundreds of responses on this Facebook post where somebody said, this was a college student at MTSU, which is right next to where we live, Middle Tennessee State, the original post said, "Hey, I've been noticing a lot of AI imagery for your local restaurant and your store." He's talking to small commercial family-run businesses. He said, "If you use AI imagery, I am not ever going to buy anything from you, and I'm encouraging everybody to not buy from you. Instead, you should contact the art department, and we'll do all that for free."

Blair: What?

David: I thought, wait a second, what kind of message is that? It went back and forth by hundreds of comments. I weighed in, which probably was a bad idea, but what are you saying? Anybody that buys a car and doesn't buy a buggy whip, I am not going to give them my business anymore. You can go to homeschool. You just can't dress like you went to homeschool, right? [chuckles] I went to homeschool, so I can say that. You can use AI, it just can't look like AI, I think. It could be very simple illustrations, even, which could be very effective.

Blair: You use an illustrator, Emily Mills. Shout out to Emily, very good. You have this consistent use of imagery across your website and your books and your presentations and all your materials. If you're familiar with your work, it just jumps out. It's a look that nobody else has. That's good imagery. Also, just think about website. When you talk about imagery, are you talking about imagery for the insights, because that's the regular content that gets posted, correct?

David: Yes. I think it could be there, or it could just be like avenue-ink.com in Chicago. They have a section about where you are in the journey and how we work with you. There's illustrations for each of the, I think it's six or eight different things. Those are really effective, I think. It could be to illustrate when you might hire us as an agency or how we work with you, or it could be in the insight section. You can't have all text, so what are you going to have? Stock images are a really bad mistake, I think. Like somebody at a conference table, I can't believe people are still using that stuff, but they do, right? AI would be better than that, but really personalized AI would be even better than that, I would think.

Blair: Okay. You're talking about using good imagery to tell a story, and it's not just about making things look nice. You gave an example of somebody who's communicating a concept through a visual rather than stock images or obvious AI. The third one on your list of 13 things your website signals is your primary CTA. You think it should be for insight emails?

David: Yes, I really do. I don't see hardly any firms doing this. It's one of the first things I look at when somebody wants feedback on their website when we have an engagement. The call to action is not contact us because that's not what you should expect from somebody visiting your website the first time. Instead, everything ought to drive an email subscription, and then you let them get that thing regularly from you, and then they reach out to you and say, "Hey, let's talk about working together." In other words, most people are not going to come to your website and say, "Hey, let's work together."

The way it should work is they have some assumptions about you based on your website, and then those assumptions are confirmed over time as they get your regular emails. I would like the primary call to action is to sign up for the emails. Now, if you're not doing emails, obviously, that's not going to be all that useful. [chuckles] You send out one Christmas email, that's not going to be useful. If you're actually doing emails, make that the primary call to action.

Blair: When we redid our website two months ago, we made the primary CTA insight email subscription right at the top of the website, just as you have it. I haven't looked since, but 30 days in, opt-ins were up 240%.

David: That's amazing.

Blair: Too many competing CTAs.

David: Yes.

Blair: Fourth, you say you should have a speaking page. What if I've never given a speech? Should I still have a speaking page?

David: Yes. You just view it as hope.

[laughter]

Blair: I like your thinking here because you're saying it signals that you're in demand, right?

David: Yes, it signals that you're in demand. Then when you do get that occasional thing, then you just send them to this page. I don't have a speaking page, so I'm not eating my own dog food here. Yes, speaking page, it just sends the right signal. Ideally, you would have multiple people who speak, and they could invite this person or this person or this person. For each speaker, you would have some bio material they can pick through and use. You'd have multiple portraits that they could choose from, some sample topics, and so on. It just sends the right signal. We're professionals. We've got expertise everywhere, and we love to share it.

Blair: I think that's really smart. I think it's good advice, and I, too, do not follow it. For years, I've thought, yes, I really should put together a good speaker page. I've been doing this for 24 years. Just give me another 24 years. I'll get it figured out.

David: Plenty of time.

Blair: Yes, plenty of time. Fifth, city, state, country. You're adamant. You need to anchor your firm somewhere in a geographic location. Why is this important?

David: This is the only one that I did some research on, but I had a very strong opinion completely devoid of actual research. I just thought this is important. Then I checked myself like, well, is this just my preference, or is there any research around this? It turns out there's a lot of research that a prospect wants to picture you somewhere on the map, a pin. Even in the days where most of your staff, all your staff are remote, they still want to think of you as a place somewhere. I've seen that disappear from more and more firms, and it puts you at a very slight subconscious disadvantage. People need to think of you as tied to a pin on the map, so go ahead and do it.

Blair: I think back in the day there was maybe some novelty in subtly communicating that we're everywhere, we're on the interwebs, we're not bound by geography. I think those days are long over, and it's refreshing to see somebody stake a claim to a specific geography.

David: Yes, I think this is important.

Blair: Staff photos, you say humans only.

David: We're real humans. Yes, we could combine 2 of these 13-point staff photos, but no pet photos. Really? Come on, people. I love dogs, and I'm sharing pictures of my dogs all the time, but--

Blair: I know.

David: Yes, you're bored with my dogs.

Blair: [laughs]

David: I'm just struck there's not a single other segment of the professional services field that has pictures of dogs on the website. What are we doing here? I don't get it.

Blair: I agree with you, but I'm going to argue the other side-

David: [laughs]

Blair: -because I wrote a post this morning about a cougar killed a skunk in my carport the other day, and the skunk sprayed my car. I can't get the skunk smell off. I live where I live, so that's one of the interesting things that happened. This morning I had to write a post in the Win Without Pitching Academy, as I write every day, and I thought I'm just going to start by telling the story because it's a little bit of personality about the location where I live. I thought I'll find a way to bend it into something relative to selling, and I did. It was very thin veneer. It was just a little slice of life stuff. My argument is surely sharing pictures of dogs or other interesting things about the place and the habitants of the office, surely that says something about the character of the firm. Does it not?

David: Yes. Is that something you want to share? I don't know. [laughs] It does. I have a hard time arguing against it, honestly, because I'm such a dog lover, but where does this come from? I don't get it.

Blair: I have the same eye roll, too, when I see somebody's got a dog on there.

David: Especially with the stupid name like-- This is the-- [chuckles] Yes, say more.

Blair: Okay, staff photos, people-only staff photos, tight focus. This is positioning. We know who we are and what we do well, duh.

David: Yes, duh, we know.

Blair: Description of your ICP. This is surprisingly lacking in a lot of websites, isn't it, your ideal client profile? Who are you? We come up with solutions and results for our clients or for you. We can help you benefit and benefit. I wrote a post years ago called Seven Words You Can't Say in New Business Development. One of them was you, and I meant in this specific context. The idea is that everybody who reads this, the claim is valid to whoever shows up. That is proof positive that you are not well positioned. That's the idea here, right, is if you're talking broadly to your audience and you're not explaining who this is for?

David: Yes, and I've shared this example before, but I'm going to read just briefly from a website called interruptdelivers.com. If you go to the website and choose the work with us section, the middle of that says, "We engage with a limited number of clients due to the depth," yada, yada. That one's not good. Second one. "Our minimum annual level of client engagement is 400,000 in agency fees, with most clients generally spending between 500,000 and 2 million. Our minimum initial engagement is 100,000. We do not charge by the hour. We charge a fee for our services that is aligned with the value of our thinking and is agreed upon in advance."

Now that's the kind of thing I want to see. I want to see that kind of confidence in there. The people who are afraid of putting something like this up here are afraid of losing opportunity. These people are not afraid of losing opportunity. They know exactly who they are.

Blair: All right. 11, I don't understand. I'm playing a little bit dumb here. Award not winning.

David: Oh, I guess I reverted to my negative thing. Almost every firm says we're an award-winning something or other. It's like on a dating app saying I shower before every date. You don't need to say that. Everybody is award-winning. That doesn't say anything for you. It says more about you if you don't feel the need to say award-winning.

Blair: Should you pursue awards and put the awards that you've won on your website? Is that what you're saying, or you're saying don't bother, it's a cost of entry, everybody assumes you've won some sort of creative award?

David: Well, if it's a real award.

Blair: What's a real award in your mind?

David: A Clio, something like that.

Blair: That's still a thing?

David: Yes. That'll get to Canada eventually [laughs] along with the websites.

Blair: Okay. If you've won a big award, put it on the website.

David: Yes. Otherwise, just don't.

Blair: Okay. Real testimonials. A quote from Tim Cook at Apple is worth including, but a quote from Tim C. at a notable tech firm doesn't mean squat. Unless it's got the name of the person and the name of the business, don't bother.

David: Yes, don't do it because we all know that they just made that shit up. It's not a real quote. It's not a real person, or it was, but that person has gotten fired since then because their work was so bad. Make it a real testimonial or don't. I think real testimonials are really effective. I would work to include those, but they need to be real.

Blair: Sometimes it's hard to get real testimonial. I got a note from somebody that you know, sold his business recently, and he sent me this very nice thank you note. He said he got a way higher multiple than he ever thought possible. Thanks in part to the work that we did. I said, "This is great. Can I use this as a testimonial?" He said, "Yes, let me just check with my new boss."

David: Oh, yes. [chuckles]

Blair: Then he came back, and he said, "They don't like that." [chuckles]

David: Yes, because it sounds like they got snookered.

Blair: Basically, I said they've overpaid. Yes.

David: Yes.

[laughter]

Blair: Okay, so that's 12, real testimonials. The last one on your list of 13 signals that your website might be sending.

David: You're not going to like this one either.

Blair: Well, no, I'm really intrigued by it because as you've probably seen me publicly go back and forth on this a little bit lately, productization. I'm always changing my mind on productization, and I've done so again recently, so explain.

David: Well, I think you can't have good productization for a generalist firm because there's just so little similarity between the clients that you're working for, but assuming, and we're assuming here that you're a tightly focused firm, you could be productized, and it could just be one. It could just be the way you start an engagement. The reason this should be on the website is I picture it happening like this.

You're in first class, you're flying somewhere, you start to chat with the person next to you. It turns out that their CMO at some kind of a firm that's a perfect fit for what you do, and they say, "Oh, wow, that's interesting. We're working with," and they name some agency. "Have you heard of them?" "No, we haven't." He said, "But we're not totally happy with them. We're actually thinking, if we worked with you, what would that look like?" Wi-Fi is still working. You flip open your laptop, and you go right to this page and say, "Well, this is how we start."

That's what I mean. It's productization, but particularly around how you start an engagement. I just think it's so powerful because that's a big question that a potential new client has when they work with you, because the best clients are the ones that have used an agency before. You're not the first one. They're working with somebody right now, and there's a fear of leaving them. The other side of that fear is how easy it will be to transition to a new agency. That's where productization could really fill a need.

Blair: That is really smart.

David: All of these are smart.

Blair: [laughs] Some smarter than others. What you're saying is package up your diagnostic and put it on the website. Basically, "If you're unsure about X, about changing firms or whatever problem you have or the nature or the cost of your problem, hire us to do this thing. It takes this long." I wouldn't put the price on the website because I think you want to reserve the right to price the client. The idea that where you start with your firm is productized in what I would call a diagnostic. I think that's really smart. I haven't thought of that use of it before. I don't think I've ever advised anybody to put their diagnostic on their website, but I think you're right. It is smart. It is a wise thing to do. Look, I learned something.

David: Yes, good, 13. There's probably more, but I just ran out of steam.

Blair: [laughs] 1 out of 13. Just kidding. There's lots in here. Any parting advice for people on how to implement any of the changes that they feel like they might want to make after listening to this?

David: Don't overthink it. If you assign this to a department, then you're 19 months away from getting it done. Don't do that. Just two or three people put a little kind of skunkworks thing together where two or three people do it. There's not a lot of getting approval. Then you can massage it later, but just make the changes and don't overthink it. Don't involve too many people and just get it done.

Blair: I think that's great advice. I was listening to Jonathan Stark's podcast while I was mowing the lawn this weekend. I was getting caught up on some episodes. I haven't listened in a while. He was interviewing somebody who had launched a podcast 100 episodes ago, and she had done a 5-day podcast challenge with him. He spent most of his guidance about starting a podcast is, "You don't need to do that. You don't need to do that. You don't need-- All these things that everybody tells you need to do, you don't need to do that. Just start recording. Get a decent mic. Just start recording. Okay, just publish. Okay, there. Now you have a podcast. Keep going."

David: Yes.

Blair: I thought it was great advice just to cut it out, simplify. Don't overthink it. Don't have a big, long meeting about it. Just start working on the changes.

David: Yes.

Blair: All right. I actually learned something. I made a couple notes here going back to the website.

David: We're changing the world with this podcast. My God.

Blair: [laughs]

David: People are rushing to take their dog pictures down right now.

Blair: Thanks, David.

David: Thanks, Blair.