Answering Mailbag Questions
How much work and what roles are you seeing agencies "replace" with AI? I’m aware of an agency that replaced FTEs with contractors and then contractors with AI. Working for big brands. Highly profitable. Is this the way I want to work? No. Frankly struggling with the role AI could be playing in my agency. —Principal of PR firm in California
The problem with my answer is that I’m giving it at a point in time, and each AI model changes the equation just a bit. But some things will never change, and here are the absolutes I try to keep in mind. 1) Every agency employee should be using AI for research, analysis, role playing, and code-driven scenario planning. That implies that it’s a very able assistant, though, and not agentic on its face. 2) Your AI policy should be disclosed to clients, and it should be reflected in updated client agreements (and insurance!). Here’s a suggestion of how to disclose that, covered in a recent episode of 2 Bobs. 3) There’s nothing I would let AI do in an unsupervised framework, at least at the moment, and that includes content and customization in your scenario. In the end, clients want better and more work for the same money. To whatever extent AI allows that, I’m in favor of experimenting, with the client’s permission. Otherwise you’re in a six-month period holding your breath that AI doesn’t destroy your client relationship.
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Here's one: when an expert's judgement is the product, how do you separate what the firm can sell from what only exists in their head? Every valuation method wants repeatable process, but the thing clients actually buy is often unrepeatable pattern recognition. Where's the line between packaging expertise and quietly destroying it? —Sarra Richmond, England
I’d think of it this way. Expertise comes from pattern matching; pattern matching comes from exposure to similar scenarios; similar scenarios are delivered by tight positioning. None of this replaces human judgment, but rather renders your judgment more impactful because you’ve “seen this before” and clients (and prospects) feel like you have a camera in their office. Nothing will replace human judgment; it’s just that the human judgment is more valuable if it’s built on repeatable expertise.
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I’ve always wanted to know the steps and process you used when writing your website. I love the transparency and packaging of your solutions. I’m sure it’s more complex than a step by step process. But I love a good template 🙃 —Misty Klobucher, Peoria
There are certain signals your website should always send, but from there I think it’s important for it to be concise, in your voice, and confident. In my case, I don’t think case studies are honest or useful (we don’t have them), I don’t want to write proposals (everything someone needs to know is right there), right-fit clients are an obsession (see FAQ), and I also don’t want to overthink it. So quick writing, quicker corrections if it lands wrong, and careful attention to where prospects get things wrong keep it a living document. I don’t have a template, unfortunately, but I do think you and a few trusted teammates or friends should do it in a weekend with a little bit of your substance of choice. Most firms are losing business from their website because they overthink it into a noisy monstrosity and let too many people have a voice in its final state.
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As our AI tooling takes real hours out of a build, holding the old fixed price just grows margin until a client does that math for us. Do you defend the price, or move up the value chain before the client forces it? — Marcelo Alejandro Russo
Do better and more work for the same price, always. Move upstream. Be transparent about everything.
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What's your take on the "capture demand vs create demand" debate? Are you of the view that 99.9% of creative/marketing firms are really here to capture demand - and should position themselves accordingly? Or do you believe firms can and should be looking to push past the confines of the category and create demand that wasn't there before? And how has AI changed your position on this? —Dave Vann, England
Oh, my. So glad you asked this. It’s yet another example of our industry smoking its own supply with silly notions of inflated importance. One out of maybe five thousand firms is truly a category creation firm. The rest are pretending to be to lure prospective clients into a relationship. Yes, you might have been the app dev or product marketing firm that worked with Uber or Airbnb in the early days, but you didn’t create either of those categories. You influenced the process and then maybe took that experience to another client, but we need to calm down and sit down in the back about this category/demand creation. Aspirational? Yes. True? Seldom.
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It is my impression that LLMs have a particularly pernicious effect on those of us who live selling expertise, and in particular those with horizontal positioning. My impression is that the effect is twofold: 1. Content marketing works less well as LLMs steal, digest and regurgitate the content from experts and therefore less people get in contact with the original work, the voice and the brand of the expert. 2. Specialized expertise seems more readily and easily accessible. LLMs can provide some answers and while the quality of these answers is questionable at the very least it devalues expertise as before one either paid or did not access expertise at all, while now the impression many have is that an LLM can provide “some” answers. A client just pays for the delta between a so and so answer and a very good one. This means that some clients will be ok just using the LLM and the ones who don’t will want to pay less for it. These things make it harder to sell expertise, and I would love to hear your thoughts on this. —Federico Tomassetti, Italy
I think you’re right and I have very little to add. At first I was excited that much of my 2.5 million words of content have made it into all the LLMs. Now I’m realizing that those answers are probably good enough for many of my potential clients. Will an expert’s business suffer as a result of this development? Possibly, maybe even probably. The trick will be to stay resilient and climb upstream. I don’t yet know what that looks like.
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I run an agency for bespoke software development. How would you market a bespoke service that we don’t have a defined ICP for? We build custom software to run business operations (managing offers, ordering, fulfillment, mailings, reports etc.). Since it's all bespoke for each client, we don’t have a single product or service. Our service is software development, very broad and not the best-selling title in this AI era. We struggle to market this as we're not specialized or focused to one avatar, since it's all bespoke. —Chris, Germany
I’m sorry to be the bearer of bad news, but you’re screwed. “Bespoke,” in your telling, is just another word for generalist, and the most at-risk firms these days are small, generalist dev shops (especially mission-driven ones). The good news is that solving this is probably not as painful as you might think, but what’s stopping you from solving it at the moment is fear that new business will be even tougher than it already is. That’s not the case.
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What's a big opportunity most custom software companies might be overlooking right now? — Mark Modesti, Dallas
Well, specialization is the obvious one, but I’ll give you a specific example of the many opportunities being overlooked to illustrate what I mean: home services. That’s because home service firms are largely AI-proof, need strong interfaces for clients, and could use a serious revamping of all their in-field tools. There’s also some consolidation happening, which always creates more opportunities.
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Women finally got the rights (yay!) but... the entire linear growth model was clearly designed by a guy with zero household chores and a full night's sleep. They're still shouting to this day: endure the pain, do more. Do more? I take that as an insult at this stage lol How does a female expert step out of that "more" trap and actually succeed? Because the stats don't lie, fewer than 2% of women-owned businesses reach 1M in annual revenue. —Edita Mo, Lithuania
I haven’t checked your stats, though I’m going to assume they are accurate. “Working harder” is seldom the solution, though; nor do I think framing the challenge through any framework like that is going to be helpful (age, sex, education, etc.). The market doesn’t care about our challenges, and every minute lamenting our lot in life is a minute that could be spent on more impactful things. Those things are tight positioning, a constant stream of good decision-making without being obsessed with being correct, mental discipline, appropriate risk-taking, small experiments, and knowing yourself better than anyone else knows you so that you can adapt and kick some ass. It’s not a perfect world, for sure, but disadvantage will always be with us. Note it and move on, doing what you can to reverse it in little ways.
