‘The General Purpose Agency Is Doomed’

[Music] Hello everyone. Welcome to the 21 Hats podcast. I'm your host, Lauren Feldman. This week we're joined by special guest Alan Pence, who recently stepped back from his government contracting business to start the Owner Institute, which draws on lessons he learned the hard way to help business owners scale their businesses. In his new role, Allan has immersed himself in the world of generative AI, and he's come to some intriguing conclusions. One of which is that AI will eliminate most B2B agencies, marketing agencies, public relations agencies, professional service firms. Why is that? Well, because Allan says businesses will no longer be willing to pay agencies retainers of $5,000 or $10,000 a month once they realize they can get similar or even superior work from an AI chatbot. In general, Allan says most technology waves end up with a few big winners and most people are just roadkill. To explore the theory that agencies are likely to be roadkill, we invited Jackie Russo, owner of a marketing agency, and Sarah Seagull, owner of a public relations agency, to have a conversation with Allan. Spoiler alert, there were no tears, no threats, and no insults. Even in good times, owning and running a business can be a lonely pursuit. Our hope is that these weekly conversations will let owners know they are not alone in facing challenges. In fact, that's the whole idea behind the 21 Hats community, engaging with other owners to get the kinds of insights only another owner can offer. If you're interested in learning more, step one is to sign up for a free trial of the morning report, which helps you navigate this interesting world in which we live. every day. It highlights the most important news for business owners and also tells them how other owners are coping with that news. Step two is to get on our Slack channel where you can ask questions, get vendor recommendations, and tap the wisdom of a very impressive crowd. Just search the 21 Hats Morning Report to subscribe. Joining me this week on the podcast are special guest Alan Pence who is founder of Corner Alliance and the Owner Institute, both of which are based in Washington DC. Allan is joined by regulars Jackie Russo, CEO of Brand Russo, a marketing agency based in Lafayette, Louisiana, and by Sarah Seagull, CEO of Seagull Communications, a public relations firm based in San Francisco. The episode is titled The General Purpose Agency is Doomed. Before we start our conversation about how artificial intelligence is turning the marketing world upside down, Jackie and I have a special announcement to make. We do, Lauren. AI has already taken over. No, but seriously, this Friday, June 13th, you and I are partnering up for a very special webinar that is free to talk about AI and how to use it for good in your company. What kind of things will we learn? Oh my goodness. We're going to learn from my own experience how we've incorporated different AI tools into our company and it is permeating every bit of emails, notetakings, meetings, proposals, efficiencies. We sound smarter, we move faster, we are more profitable. And so we're going to cover actual real tools and how we use them. Got it. So tell us again, this is Friday the 13th, but it will be lucky. It will be a lucky Friday the 13th at 12 Eastern, 11 central and it's an easy sign up. It'll take an hour. I will give you actionable steps. I will show you real world examples and I'll give you the deck I'm going to present from and a tools and guide sheet that walks you through the best AIs and how to use them. And if somebody wants to sign up for this, they can do that either by responding, just hitting reply to their morning report, which is very easy to do, or if you have any problem, you don't have your morning report, just shoot me an email. I'm at lauren l o rn21hats.com. That's the number two, the number ones.com. Did we cover it, Jackie? I think we did. And I think y'all are going to feel like this is some time well spent. All right, so let's get back to talking about how AI is turning the marketing world upside down. Welcome Jackie, Sarah, and our special guest, Alan Pence, who is founder of a couple of businesses we're going to talk about. Glad to have you here, Alan. Oh, I'm glad to be the new guy in the pod. Thanks for having me, Lauren. One of those businesses, uh, Corner Alliance, you built to I I believe you've written $35 million in annual revenue. Yeah, that was my first business and we're in government contracting. So, that's been a little challenging this year. I can imagine. Yeah, I built that. I was ran that company for about 17 years until uh stepped down formally on January 1st as CEO. And when you stepped back from that business, you started another one uh called the Owner Institute, which offers guidance to small business owners. From what I've seen, it draws largely on the lessons you learned building Corner Alliance. You you write a very savvy weekly blog post that I frequently highlight in the morning report. And I believe you're working on building a generative AI tool that you are designing to guide owners through the process of building a business. Do it. Do I have that right? That's right. That's right. So, the tool is called owner rx, like ownerprescription.com. And uh when I launched out, I I hadn't really intended to build a company. Um but of course, I'm an entrepreneur, so that's the first thing I did. Um that's I got a hammer and that's a nail, right? And uh so I I tried to do some coaching for small businesses. I got really frustrated with a couple of things. One, just quickly, you know, the cost to make it worth my time to take dedicated time on that. very difficult to charge enough to hit the small business market that I want to serve. Um, you know, I could do that with groups, but trying to schedule five entrepreneurs is like hurting cats with ADHD, right? Tell me about Exactly. You got you got three. You've only got three on the podcast. You can't get five, right? But I need a panel of 12 to get those three. That That's right. That's right. Yes. Exactly. and uh you know and then a lot of the planning methodologies out there I felt like are very process based. So you got EOS scaling up. They're all great, right? But they actually don't tell you how to do anything. And that's what I was really seeking throughout my career and joining entrepreneurs organization and YPO and going to entrepreneur education events, you know, just hunting and pecking all over the place to get these lessons. And so I really wanted to figure out a way to put them all in one place and then take advantage of the new technology out there. So I'm basically trying to build a strategic business coach uh that's AI powered in an app form. Um so that's that's what I'm launching later this summer. That's very exciting. I'm sure we will talk more about that. But we're here today because I attended a webinar you offered recently to help owners create their own AI GPTs. During the webinar, kind of as an aside, I think you you you noted that you believe AI is going to force small agencies, marketing agency, PR firms, and the like to alter their business models pretty dramatically. Can you explain what you have in mind with that? Yeah. Yeah. I mean, I quoted Sam Alman, the CEO of OpenAI from, I don't know, last month sometime, saying that he believes 95% of what ad agencies do today, marketing agencies, will be done by the AIS. Um, and I think he's saying basically the general LLMs, although that might be a little much. I'm in it all day long. And it's really driven by the newer models, which cost a little more. um they're the $200 a month instead of 20. I get this sense that they make me 10 to 100 times more productive. And when you start working in them every day and you start realizing what you can do, you start thinking, you know, I'm reflecting on the small businesses I'm working with and I'm like, "Oh my god, you are going to be able to reach a thousand times more customers, but you're going to have to do it at a tenth or a hundredth the price because people can do a lot of this on their own now and they'll be able to go to the AI and make it happen. And if if you're charging $3 to $5,000 to $10,000 a month, it's worth it for someone to go and get the AI to do it for them. You're charging 50 bucks a month, they probably aren't going to bother, right? They'll just have you do it. But with that 50 bucks now, I can serve a thousand clients, right? So, I think that's going to be the tradeoff we see. And we're just going to see most, you know, the the vast stack of work that agencies do just get eliminated. I mean, go listen to Mark Zuckerberg, you know, talking about what Meta's going to do where you just come and say, you don't even have ad copy. You just say, "I sell this." And they go tell you exactly. They they basically do it all for you and deliver you customers. That's that's what's going to come. So, Jackie and Sarah, you both own the kinds of agencies Allan is talking about. Any questions? I agree 100%. I I agree to a point. I believe that it's going to increase productivity 100%. And that we will be able to deliver as an agency more, you know, results and um content and, you know, project um deliverables because of AI. But I don't think that it's going to eliminate our value to small businesses because for at least for my my business, most of the time that we're brought on board with a small to mid-size business is when the internal team goes, you know what, we've been trying to do this oursel. It keeps getting put on the back burner. we need somebody else to take this off our plate and somebody who knows what they're doing. It's one thing to say, you know, we can give you the tool to, you know, do marketing or PR. It's another thing to know what you're doing. And you still need that skill set. And so that is the value of an agency regardless of what a AI does for you. And that's my take on that. You know, PR might be a slightly different. You know, I wrote that from a marketing agency standpoint. Yeah, but it's my sense that it's not necessarily the client themselves that will do it. It's that your comp they will become competitors who are able to do 95% of what you do for 50 bucks a month. That's what I think is going to happen. You're going to have a competitor that's embedded basically what I'm doing with small business coaching, right? take all the knowledge I have, put it into a either a wrapper around the AI or eventually they'll probably build their own models. And so it's going to be the competitor that comes in and does that 95% not the necessarily the client. Yeah. But still what I do is relationshipbased. You know, we've had this conversation on the podcast and in in in real life many times where you know AI is great but it can't have relationships. And when you're talking to journalists, influencers, you know, and and doing that part of the job, I don't know that AI is going to ever be able to replace that because the reason why I get coverage or reason why we can tell a story about our client or work with an influencer is because we've established a relationship with them. I know a lot of, you know, reporters and influencers now that are really irritated by AI and that they're getting these crappy, you know, processed pitches that they can see that are AIdriven like 100 miles away and it's offputting to them. I'll let Jackie respond too, but I I do have a response to that. I was gonna let y'all keep going and I'll jump in with my own paddle on the ping pong table after. Okay. Okay. Yeah. Yeah. I mean, I I think that's very true today. One thing I would do is think through how your entire industry is going to change. So influencers and news are already going to change completely. So I think to get to the conclusion of what the PR agency will do, we've actually got to look at what's going to happen to journalism, news gathering, and influencing, right? And I think that that whole thing is getting changed. Oh, yeah. The whole idea of this open web is going away, right? So people are going to be doing these things at scale in and for the actual LLMs, right, for the AI companies. So I think we're moving to a different kind of internet. Oh, 100%. And at that point, I think people are going to be able to do things tailored at scale that they're not able to do today. So like for instance, I would say the journalist of the future is probably writing for an AI and is all they're doing is taking all these submissions and figuring out through what other algorithm what's going to perform best to get them the goal they're trying to get, you know, with communicating the message in the AI. So I actually think the tools and everything the way we do it around it will completely transform. Yeah. I mean I I journalism is always transforming. I mean it's gone from this, you know, one reporter, one story a day kind of thing to where it's more crowdsourced information at this point. I have two teenage children that never read the news, never look at thing and they get they get their information through Tik Tok and then most kids these days they get through Tik Tok and then they'll verify it through a third party um you know another source hopefully. But you know with that you still need a reporter a journalist on the scene or you know other people that are contributing to that story on the scene. I think I agree with you that it's going to transform and that as an agency like I need to make sure that I'm incorporating AI into what I'm doing. I'm and I am doing that and I'm doing it now to create efficiencies and we're keeping up with what's happening. But like I think old school PR professionals um are going to be in trouble if they don't adopt AI 100%. But like I don't think that it's going to impact businesses that kind of see it coming. I mean it's like I when I started you know we were pitching people via facts like you know like we had to figure out like how to do things differently over time. So there's always a transformation in in a you know 50 years from now it's going to be a whole different um playing field as well. So I think that we're naturally inclined to keep up with that. Well that's good and I would agree. So I said 95%. I do think there's going to be 5% that will probably be relationship knowledgebased and I think the ability to charge for that will actually go up. So I do think there's going to be a judgment relationship. The other things I've talked about is building communities, gathering data about your um customer set and whoever. So Sarah, for for example, I would say could I figure out a way to build in a way to do 80 whatever percent 85% of what you do into an application which I can now basically write myself by prompting so that it takes the client through auto through most of the stuff. There's a few places where you're using relationships, but by scaling that offering to more people, you get more data, more specific about your customer set, what they're doing, what they care about, what works. That data is yours. That's not going into the LLM, right? And you create community data, and then you have experience and judgment, and that's where you're going to get that 5% value that the LLM's won't get, and then you can charge a lot for that. So, I don't think it's a total doom and gloom story. I just think that most of it's going to get commodified. I'm dying to hear what Jackie says. Jackie, why why do you agree with Allen and what are you doing about it uh with your agency if you agree with him? Well, I'll actually start at a different point and then handle those two. Okay. As you have heard me mention a time or two, Lauren, I am angry that my industry doesn't take itself as seriously as every other professional service industry does, and that we've never put in place education and licensing and certifications the way that contractors and architects and accountants and hair stylists and nail technicians and my gosh, every single one of them. This is how that problem gets solved because this is going to be the thing that eliminates I'll go with 95% of the and I'm using air quotes here agencies that exist right now because so many of them are doing entrylevel work that is already been replaced by the AI. So, I'm glad I think it's going to clear out in some ways a lot of the entities that don't have the strategic mindset, the value partnership, truly bringing something to the table. They're now going to have to find new ways to elevate and and I'm not in charge of them, so I'm not worried about it. But that's going to change the landscape. So, on that hand, check. I'm happy. I agree. I think it's a good thing. In the answer to your other questions, I think that um it's going to be a problem for a minute because it's going to have more clutter because we can all create so much more content than ever before, so much faster that there's going to be a lot more stuff. There's already a lot of stuff now. There's going to be even more stuff. And I see the benefit of that because the really good stuff, the human inspired, still had a human involved, still feels kind of personal and real, that's going to rise to the top because the good stuff always rises to the top. So, I think that's good. Last but not least, what am I doing about it? A couple of things. You and I have talked for probably two years now about how we've incorporated AI here. We've ramped that up even more so this year. And I agree with Allan's point about um the more you pay the better the quality is. And so we're seeing that on our side as well. We are not just using it to make ourselves more efficient, which I think is always the first step. We are now starting to use it to help our clients be better at things outside of just marketing. So, it's going to end up probably being a different entity, but I think that it is the way we provide value because value is no longer let me just write a blog post for you or make a social media post for you or um do a design for you. Those things can all be done in the AI. So, how do we elevate our value and our strategic partnership? That's where we get to stay in business. So Jackie, you don't think it's going to have a huge impact on the way you run your business other than infusing AI into everything you do, but not necessarily changing your business model. Is that fair? Well, I think the business model continues to evolve. Uh, and just me personally, you want to talk about how this agency has changed in 25 years. On February 1st, 2001, this agency was a freelance media buyer who was nine months pregnant and needed to be able to take a maternity leave. And her former employer, as of January 31st, 2001, told her that she could have a maternity leave if she scheduled the delivery on a Friday and was back on a Monday. So, that's how this agency started. So, sure, we've evolved. Um, our freelance media buyer in this story had five clients. They were restaurants, furniture stores, and car dealers. And we bought TV, radio, newspaper, and billboards. Wow. I'm trying to think of the last time I I did that. You know, it's been a minute. Those aren't our clients, and that's not the work we do. And so we evolved into a full-ervice agency because I am married to a graphic designer. And so Michael left his agency where he was the art director and came to this agency. So now it's an agency because it's two people. And then we evolved again because we saw social media coming like a ton of bricks and knew the old model wasn't going to we weren't just going to buy TV and radio and newspaper anymore. And so we evolved again. Well, now we're just tactical and we didn't like that. So then it became let's do what we're really good at. It was strategic brand planning for in the B2B space. So it's professional service companies, it's manufacturers, it's industrial because not enough people were paying attention to them. And we had a real strength there. And I'm looking at the year-over-year gains of our clients. There's an ROI that keeps us around even though we're on a 30-day out clause with every one of them. There's no contracts. And our average lifespan is six and a half years with our clients. Wow. work with Jackie. Yeah. Right. So, here's another opportunity to evolve and grow and I'm excited about it. I like coming to this building every day and I like working with these people, but every single person that works in this building would tell you what they are hired for and what they do today, not the same thing because we evolve and grow. I think the one thing that's coming that we haven't really talked about is the and I'm going to use the horrible catchphrase buzz word of the agentic web right Alan I'm going to interrupt you for a second some of our listeners might appreciate it if you define what you mean by an agent so right now if you go into chatbt there's a thing called operator you push on it and you say hey go open this website and try to book my plane ticket and it like it it's a mess it doesn't really work. But what we're moving toward is an open standard that will allow United Airlines and American Airlines to build a website that's just for agents so that they can autonomously come in on your instructions and book your plane ticket for you. Right? So that's what we're moving to. Maybe this reflects my bias as an old school journalist, but here's my question. I guess first for Allan and then for Jackie and Sarah as well. I hear what you're saying. You Allan, you've acknowledged that, you know, relationships are in fact important and there's, you know, room for judgment there. I would go even a little bit further and say, well, we know that AI is great with structuring information and it's great with analyzing information, we really haven't seen that creative spark out of it yet. Um, maybe it's coming. Um, I don't know. And maybe you're saying that that would be represented in that 5% of the agency business that goes on. That's more or less the way it is now. And I guess I just want to push back a little bit and say, isn't that more than 5% of the industry? So I guess uh to be clear, it's not 5% of the value, it's 5% of the current activities that happen, right? Work, effort, right? So it could be 50% of the value. I could argue it might be even more. The other thing I would push back on, Lauren, is I've seen the spark of creativity. No question. Tell me about that. How so? Yeah. So, I don't think it's like 100%, you know, the AI alone. It's the AI working with me, right? But the AI is bringing things to the table that are have transformed my business multiple times. And I would say this is definitely more working with the most advanced models and the more expensive subscriptions. If you're in professional services and you're not paying 200 bucks a month to get 03 and 04 mini, like come on, this is so valuable. And I've had creation sessions with it that have blown my mind and created entirely new ways and and things I'm going to do with my company. We need an example, Alan. So for example, I started talking about um hey, can I build this small business app to you know give my lessons and help people do it in small chunks every day? It says yes. I'm like what else could I do with it? Well, I came up with the idea of like why don't you make it into a platform that other people can bring their ways of doing things and you become the platform and they sell in their own user journeys and and ways of doing things. So right there it's like oh my god like it just came up with a major pivot to this business that could blow it into a whole different category. Right? So it's not like I wasn't involved in that but it brought it to the table and I didn't think of it. Right? The other example I give you is like I did the in the webinar I did that board of titans Lauren with I set it up to take I think AI is very good at taking personas. So I set up persona for Jeff Bezos to come in and talk about customer centricity, Elon Musk to talk about first principles, blah blah blah, a bunch of other titans that are known. Every strategic idea I put through that and it's blown me away like every time it upgrades what I'm doing. So I think the creativity is there. It doesn't mean that humans don't have a part of that. I think it requires a human AI interaction, but it isn't just a dumb agent that, you know, does research for you. Jackie or Sarah, any thoughts? I mean, I don't think it's a dumb agent. I just think that it's there's a human element to creativity that is not replaceable and and I think no matter how much technology exists you you still need that human element uh to make it better to make it interesting to to connect with people cuz that's what people connect with when they're looking at an ad or a post or a Can I interrupt and ask a question? Yeah. Okay. So this is what I heard Mark Zuckerberg talking about the other day. What if you this is a marketing example so sorry it's not your industry but he said look we can you can come in and say I target um you know B2B companies for this for you know public relations whatever it is and you bring in no copy no you just have a customer you want to reach and to be honest they're now getting better at finding the customers that will buy your services than you are and they just create a thousand different versions all of every possible permutation of how they would get you someone to buy your thing and then they see what works and they just put more money behind that and then they deliver you more than any creativity you alone could ever come up with an ad and put it out. So they're just taking care of that by doing it a thousand times. Right? So, in the PR industry, like when when we talk about um pushing out a news story, there are people that uh prey and spray is what it's called, where they just blast out, you know, pitches. And yeah, it sounds like, you know, AI will help customize that to the audiences a little bit more, but I just worry about the recipient. It's less about whether or not it's going to help me scale my execution, but it's how people on the other end are receiving it and are people ready for are are people seeing it? Do they like it? Do they want it? Like I'm getting, you know, AI email messages and phone calls at this point and I I delete and I hang up because it's not a real person and I don't want to not talk to a real person. Yeah. I think the answer to that is the you first of all, you know, what's happening today? I'm not going to say, hey, this is perfect, right? Yeah. And the answer to AI is more AI, right? So you're going to have AIs on the other end that are helping you sift through things to find the things that you like as a human, right? So I what I see is the AIS get better at talking to each other and they better they get better at surfacing the things you want. Now again, I'm not going to say there's no human creativity involved in here. Like my examples of collaborating like I I look at it as collaborating with the AI as a strategic partner. It's like having my own Mckenzie consultant next to me, right? So it doesn't take me out of the loop, but it just radically transforms the content. It it allows me to make leaps I never could have made. Radically transforms what I can do. I can now program apps that I can serve to people in a couple of days, you know. So it's just it it's so different. It's going to change all our business models and we need to start thinking through how do we make sure what we do is uniquely you we've we've captured what we do that's unique. We are embedding it into technology that can scale it way past our current client set that allows us to collect data, right? And how do we build community? And so that's what I think the professional service owner needs to recognize. Not that no human will ever be involved, but that these are going to allow people to come in and take your customers for 50 bucks a month if you don't do it first is sort of the the warning I come with. Jackie, have you seen the spark of creativity in AI? And um do you see the potential that uh that Allen's talking about? I would say yes. Um an example of that would be Lauren, if you may recall that last year, uh in on the Brand State side, Allan, I I run two companies. I I run the strategic B2B agency Brand Russo and then an offshoot of that um that's been in place for about five or six years now called Brand StateU that is online primarily marketing training is how it started for people who can't afford an agency. See there's a pivot. We got bigger, we got better, our prices got higher. We had to start saying no to people who wanted to hire us but they couldn't afford us. So now I can send them somewhere else to get a different kind of help. um so they can learn to do it for themselves with a little bit of guidance. So that's kind of taken care of both ends of the spectrum. It's worked really well. So last year um the Brand State team did something we called the growth acts conference and it was two days with um first stage businesses who know enough to have started up but don't know enough to scale. Huge huge positive feedback. So my brainstorming partner Chad GBT and I spent some time talking about um why that went well uh reviewing the survey results from the participants talking about what this looks like, how it can grow, what it should grow into. And it is now GrowthX Academy uh that will launch in September. We've got two states uh one state firmly committed, one state I think that'll be committing in the next week or two uh to do some uh a pair of six-month cohorts that is going to be a blend of two-day retreat, six months of weekly weekly sessions with subject matter experts covering the seven pillars of business. I maybe would have eventually thought of that on my own, but the creative brainstorming of me saying who, you know, this is who we're doing it for. What do they need? Well, these are the problems. Okay, well, how do I help solve those problems? Okay, what about this? Well, what would those people object to that? Well, these would be their objections. Well, then how do I overcome those objections? you know, going through that process that we all do when we're working with our AIS, all of a sudden I've got a fully fleshed out, built out curriculum, uh, that got run through subject matter experts who tweaked it and modified it for where their expertise is. I made some wild guesses in the finance area because that's not my strong suit and was um, pleasantly course corrected by the CPA who's teaching the classes. Um, and I can't wait to attend his stuff because there's some things I obviously need to learn. So, it's not just like the AI is teaching us, which I do still have some pauses on because I've seen it with Brand State. The here's the information. Go teach yourself. We still need connectivity. We still need community. We still need cohorts. We still need peers. And so, this is a blend of that. I don't know that I would have come up with it without that brainstorming partner. I think Jackie that's awesome and what I see is the evolution of that. So what you did with Brand State youu I could see that becoming the basis of creating agents. So instead of people going to classes anymore, you just have an agent that walk or you know it's like a program right that walks them through how to create all these things for themselves and then operates it for them, right? So they tailor it to their need based on, you know, your curriculum, but it's not like going to a class and then you go off and do stuff. It's like you're just building it right there and then you have a fully operating business at the end. Well, and that's what we're doing through this is each of these sessions is incorporating AI teaching the prompts. So for example, in the finance section, they're going to learn it because they run these companies. They're the founders and the CEOs. They need to understand it. But here are the prompts for you to take your financials, plug it in with these prompts to understand so that you're not just learning it today, you're learning how to learn it 6 months, a year, 3 years. So here's what I want, Jackie. I would love to see that business become like the wrapper around all that, right? So they don't just get prompts. You have a platform, right, that helps them build all their stuff. It's stored there and they operate out of there. And then now all of a sudden you're the SAS provider to all these people helping them adopt AI, right? And power their business. So instead of a course, you're now building a SAS application that everyone customizes to themselves and it's all powered by AI. That's where I think we're going in the future. Can I share a prediction? Yeah, of course. So, you know, my my feeling about a lot of marketing and or uh service-based industries is that you get what you pay for, right? And if it's too good to be true, it probably is. And my feeling about, you know, AI becoming so accessible to everyone in the world, right, is that there's going to be a lot of crap out there for a long time where people are like, "Oh yeah, for 50 bucks a month, we're going to get you in the New York Times or for 50 bucks a month, we will increase your followers on your social channels and drive x amount of clickthroughs to your website." And I just think that there's going to be a lot to wade through and we've seen those time and time again where the agencies will promise like amazing results um and people will buy into it and then be dis disappointed by it and disillusioned by the industry. So I think that there needs to be some caution taken by the industry marketing in general in that people are going to sign on for some of these things and they're not going to be well managed by a human like Jackie like they're going to be um disappointed in the outcome. And so I I just I I'm anticipating a lot of crap for a while before we weed out the quick result um applications. I wouldn't disagree that there's going to be a lot of crap for a while. That that I fully embrace. I just do think that a lot of the things we're doing will not require humans to be a part of it. Yes, there's a human overall in your campaign and as a strategist and partnering with the act, but a lot of the interaction that you have junior people doing or even like mid-level managers will just be agent to agent. And then at that point, you get what you pay for because there's no human involved. it's just agent to agent. So, it's it's scalable. And I think we've seen this software has done this in industry after industry. And um I think it's just going to happen here. So, I think you know the key I see is the person that's able to serve more and more clients and collects data that they know that the LLMs don't have, that person is going to be more valuable. They have a viewpoint, they have experience, and they have data. And that's where you're going to pay. you're going to pay double, triple, quadruple for that. So, that's what I urge people to go do now is start setting it up so you get the data. Allan, let me ask you this. Um, I think, you know, we're all kind of agreeing here that there's a future for the the best in the industry. Uh, but but you describe kind of two alternatives. One is, uh, being among those who are able to kind of continue on mostly the way they are now. and the majority who have to find a different business model probably uh you know not able to get the big retainers having to charge less but have a lot more clients for somebody who's listening to this who owns an agency and who isn't confident that they're going to be among the best for all those others that sounds like a race to the bottom to me and most of those other agencies are just going to disappear is that how you see it yeah I mean welcome to the social mediaization of of everything, right? So, I mean, that's what we've seen over and over with tech with some huge winners and a bunch of, you know, people who go out of business. I do think in this case, you know, what do you do? It's pretty typical stuff. So, you should go on Owner RX and go through the business model exercise, but it'll tell you, you know, you got to niche down. You got to figure out, can I get a better niche? Can I do something very specific that I can then make more? And again, think about it this way. If I can learn how to do something, I can now scale it to millions of people within days, right? We're not quite there, but we're be there soon, right? And so then I start collecting data about that thing and that niche and I can use that to create more value. That's where the niche smaller players will survive. But yeah, I think you're right. In general, most technology waves end up with a few big winners and most people are just roadkill, right? So, if one of those companies comes to you looking for your help, either as a one-on-one consultant or through uh your uh AI GPT, what are they going to be told? Yeah, I mean, I I think you have got to figure out what your niche is, whether that's a customer base or a thing you do. You've got to then embed that into software and you've got to create a mechanism for you to build your own data layer, right? And start figuring out how I scale this to more people. The general purpose agency is doomed. I actually I think that there's a positive side to this that like needs to be articulated that the AI is going to help us do so many things that we shouldn't be spending our time on. Like when I first started out in television, we do an interview with a an individual and I'd have to sit there and log that interview to figure out the sound bites, the time codes, all that kind of stuff before I put the story together. Now that's instantaneous. So like you know uh reporters can like spend their time on other things. I think the same goes for in um agencies is that we're not all of a sudden going to become obsolete. We're just all of a sudden find all this time where oh you know what we can do this and we can do this and we can expand on this project that we've been wanting to do. We want to more do more live inerson events. It's going to help us spend our time more wisely um if we do it correctly. So, I see AI as not a doom and gloom, like it's going to take away our jobs, but more like it's going to take away the stuff that we shouldn't be wasting our time and the brainless stuff that a a 2-year-old can do. Even like taking notes, right? We all take meeting notes when you're on a agency call, right? Uh I'm sure Jackie has automated this already and that you know they have their otter or what have you taking notes and and writing summaries of it. We do that too to a limit though because um there are nuances and what we discuss with our client that isn't picked up well on any of the note trackers. But yeah, why would we have someone do that all the time when they can do something else? I just came up with an analogy while you were talking, Sarah. So I think this is going to do to agencies what social media did to journalism, right? So, there will be a New York Times. There will be a Wall Street Journal and Lauren can tell you not much else, right? And then we're going to have the Substacks and the bloggers and an explosion of these specialists who are building like little communities and things around them. So, it will help democratize that part of it. You know, newspapers were based on classified ads, right? And 976 numbers and they just got wiped out. That's what's coming. That's it's that level of destruction. I agree with all the stuff about hey, it's going to take away the stuff we don't want to do. I think it's going to fundamentally change with this as well. So, it's like what the internet did to Encyclopedia Britannica. Maybe I would say I would say a little bit. There's still a New York Times, right? There's still a Washington Post. There's still a Wall Street Journal. Um, so maybe it won't be extinction for everything, but it's really going to take a few people or a high agency who do the stuff I'm talking about and reinforce their win. And I think it's going to hollow out most of the rest. But you are going to be able to build a business around your unique thing and your take and your community and the data you collect, but it's going to have to be highly differentiated, right? And highly niched. I think about lamp lighters a lot more than probably I should. Um but really there used to be you been watching Mary Poppins. I have not although I I I might. Um but there used to be people and that was their job and it was a necessary and important job and electricity came along and we didn't need people to go light the lamps anymore. I would imagine sitting around some dinner tables there were some people who were very concerned about their future because that is how they put food on the table for their family. However, I think the world is a better place for having electricity. And I would imagine that those lamp lighters became chimney sweeps or electricians or plumbers or something else that utilize their skills. I don't think this is an extinction level event for the people that do the jobs. I think the jobs change. Yeah. And so every time I read the doom and gloom articles about unemployment, I'm like, really? Did unemployment skyrocket when lamplighters went out of business? No. When Ford developed the assembly line? No. People find new ways to use their skills. And the great thing is the tool that's eliminating your ability or need to do this one job is the same tool that can help you learn a new skill to do a new job. So, we should benefit from it. basically. So, well said. Totally agree. Alan, I think we we've been talking primarily about how this all affects smaller agencies that tend to have smaller B2B clients. What do you think it means for big corporations? I mean, is Coca-Cola going to have agency work that it handles the same way it always has, or are big companies going to make this change, too? Yeah, I mean, I think they are for it's going to start from the bottom up, right? I don't think it's going to start at the top down. So, it's going to eat away, you know, again, it'll get there someday. Now, I think they are going to be the ones that pay the big big money for the decisional people who have that experience and knowledge. So, there's clearly going to be a place where someone's making, you know, millions a year just advising on what the AIs are doing and looking at the data and saying, "No, I don't think this, I think that." And taste making kind of things. So that last 5% is 5% of the work right now, but it's going to become 50% of the dollars maybe or something like that, right? And uh but yeah, I think if they if they see that things are done just as well by an AI, why are they going to pay people to do it? I have a question that kind of stems off of that. I think about it like as malls and mom and popop shops, right? Where the malls are the big enormous agencies that we see, right? And then you have the mom and pop shops which is is more along my size, right? Is AI going to change um how people hire agencies? Will they hire smaller agencies knowing that those agencies can do the same thing that the larger agency does because they have the same tools and AI, but they're going to get more attention as opposed to hiring the big agency where they are, you know, just a a name and a number. I don't know. Well, what I see in the future if we get this pro this layer that's sort of the new internet for agents, I kind of see you're a person at a company, you got to do like a campaign and so you go to some place with your AI and it has all the agents that say we get these kind of outcomes at this cost and you're kind of going to like an app store almost or it's automated somehow for you and you're selecting. So it won't it probably won't even matter what size a agent or person or group of people built that. it'll be the outcomes it gets for this very very very specific niche, right? And then you select it and pay for it based on that. That's I think it's all like agentbased at some point. And then there's this layer, right, where someone's super famous for this idea and they have this persona and they have this knowledge and then corporations contract with them where agents are doing 99% of the work and they're just kind of this person architecting the campaign or bringing a new perspective, right? That's how I see it kind of playing out. Interesting. We're uh just about out of time. Allan, I'm curious. So, you started a business 20 years ago and now you're starting one here in 2025 at the dawning of the AI age and you've already indicated to us that you've been surprised at the things you can do now that obviously you couldn't even dream of 20 years ago. Are there other things like that? Uh are there other things you are able to do today that might surprise other business owners who haven't started a business recently? Yeah. Yeah. So, I mean, like Lauren, I was telling you before, my new website, I went into a program called Replet where you just it's like one of these coding agents is a little easier to use than some of the more advanced ones where you don't have to be a coder to code. That's right. So, I went in and said, "Hey, I want a modern looking, you know, SAS like website." I gave it my logo and designer fonts and or colors. It built me a website in an hour and it's up at owner rx.com if you want to look at it and it was amazing, right? And then I started building an app today to help record leadership team meetings and um and take you through like a a method, you know, sort of like an EOS kind of method or something of an L10 meeting. It helps you go through the meeting, record everything, and then distributes the action items and all that. They call it vibe coding now in replet and within a week or so I'll be able to release it and have people use it. So it's incred. You can have an idea and within a few I would say a few days you can do basic applications and websites. I would say within a year or two you're going to go from idea to being able to serve an app to millions of people in hour in hours. Jackie, when when Allan said that, did you look at Owner RX? I haven't yet because I always think the thing's going to fuss at me if I'm not paying attention to your podcast platform. It gives low engagement warnings, but stay focused. I wrote it down. I'm looking at it. So, you created this using prompts. Yeah. And so, like five minutes before the meeting, I had it so that it was um you know, like sign up for the product. Well, I'm building my weight list right now. So I was like, "Oh, change the button to join the weight list and use this um landing page address." And I did that. Two minutes later, I redeployed and that came out on the podcast. But you have testimonials. Those are fake, right? So right now, but I will I will um I don't have a product out yet, but when when I get the testimonials, so I'm doing an alpha group pretty soon. And I just signed up some people and as they go I'm going to capture that stuff with their picture and I just go back in and say, "Hey, replace the testimonial with what this person said in this picture." And it goes and does it in 5 minutes. It's incredible, right? So yeah, caveat, not everything on the side. I put it up today. So there are a couple things I still need to work on. But yeah, and and like like I said, this application actually has a database. It has fields you go through. Um, it can plug into, you know, your Otter or your Fathom or whatever noteaker you have and then auto go through the notes of your, say, leadership team meeting, put it in there, pull out the action items, assign them to people over time using Gemini API. I can have it look at trends and blind spots and other things in your leadership team meetings. and oh by the way, you're going to go into your next quarterly meeting. You just go back in and say, "Hey, I'm doing my quarterly meeting." It'll hit the AI and say, "Here were all the trends and things you talked about. Here's what you accomplished. Here's what you didn't accomplish. And here's our recommendation for what you should talk about in your quarterly meeting." Right? I mean, that I can do that in days. And what did you build this through again? This is replet. You know, it's it can get frustrating. You you have to stop and start. It'll choke on certain things. So you got to be somebody who's willing to work with it. U but you can do pretty basic applications in those and then you can move them over to things like cursor which are what like real coders are using. But even if you just want to mock something up and it doesn't work perfectly, you can mock it up and hand it to a developer and cut out half the development process. Jackie, what do you think? I'm fascinated. It's a pretty good website, right? Yeah. Yeah. That's it, Jackie? Well, I you know I'm Lauren. not paying attention, so I'm not able to really dig into it. Um, I signed up for his list. I started going through his type form to get the feedback thing to see how that works. But I mean, I I see the similarities between what I'm doing with Brand State and what he's doing with owner RX and how because by being a couple of years later, he's a decade smarter because there's more technology now to do some things way better than we did five years ago. Yeah. Well, I would tell you, Jackie, I couldn't have done this four months ago. So, it is changing that quickly. It's a different game than it was 3 months ago. All right, we are out of time. My thanks to Jackie Russo, Sarah Seagull, and especially Alan Pence. Uh Allan, you gave us a lot to think about here. Thank you. I appreciate it. I I like being the new guy. It was really fun. Hopefully, I didn't like make everybody want to jump off a bridge who owns an agency there. There's a way forward. A small bridge. We'll be fine. Thanks everybody. One thing before you go. Everything we do at 21 Hats is created by entrepreneurs for entrepreneurs to help us all learn together. If you get something out of listening to these podcast episodes, consider joining the conversation. You can do that by joining the 21 Hats sounding board, a Slack channel where you can tap the wisdom of a very smart crowd or by becoming a founding member and joining our monthly Zoom forum where you can be part of conversations much like the ones we have on the podcast. You can sign up for both by subscribing to the Morning Report. If you have any questions, you can email me at lauren21hats.com. And if you get something out of this podcast or out of the morning report, please tell a friend, tell an enemy, tell every business owner you know. Your word of mouth owner to owner will always be the most effective way to build this community for all of us. Thank you. It means a lot. This episode was produced by another entrepreneur, Jess Stubberon, founder of Blank Word Productions. Thanks for listening, everyone. [Music]