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School of Hard Knocks Podcast
Neil Patel | Why Followers Don’t Pay the Bills, and How He Built Real Wealth Through Marketing Mastery
01:20:12
Neil Patel became a millionaire at 17, lost it all by 20, and came back to build a 9-figure global marketing company. In this episode, he reveals the hard truths about fame, money, and the business of content — why followers don’t pay the bills, how A...
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- [00:00]
James
How old were you when you became a millionaire?
- [00:02]
Neil Patel
I don't know. I was young, I think sub 20s.
- [00:05]
James
You were 17 years old?
- [00:06]
Neil Patel
Yeah, but I lost it all by the time I was 20, 21, something like that.
- [00:09]
James
16 years old is when you started your first company. At the time, it ended up becoming a failure, but it taught you one of the greatest skill sets, which was SEO marketing.
- [00:17]
Neil Patel
You know, was broke, frustrated, had no choice but to learn it on my own. I would say it was one of the most expensive lessons I ever learned.
- [00:23]
Jack
How can they get started actually ranking on AI search platforms? And what does that even look like to start building out?
- [00:29]
Neil Patel
In reality, ranking on LL platforms like Chat, GPT and Perplexity is actually very similar to traditional SEO. The key with LLMs is, and what we found is I want to talk.
- [00:39]
Josh
AI and AI agents. And this being a massive opportunity, these.
- [00:42]
Neil Patel
Companies don't know how to use this technology. They're just gladly willing to give someone a thousand bucks a month to do it.
- [00:48]
Josh
Where do you see short form organic content going in the next five to 10 years?
- [00:52]
Neil Patel
Following with no revenue is almost useless.
- [00:54]
James
Neil, if me and you died tomorrow and you had one more guiding principle to leave with the younger generation, what would that be? What's going on, everyone? And welcome back to the School of Hard Knocks podcast. I'm James and I'm here with Jack and Josh, and we are out in Beverly Hills with an incredible guest for you all today, one of the most respected and renowned Internet marketers of all time, Mr. Neil Patel. Neil, it's great to be with you today.
- [01:20]
Neil Patel
Hey, good to see you as well again.
- [01:22]
James
You know, and for the people that don't know, maybe this is their first time hearing from you, you know, you really have become one of the most respected markers in the digital marketing space in a world full of a lot of people where you got to kind of question especially digital and online marketing, you know, you've built real businesses working with some of the biggest companies in the world. I believe under President Obama, you were named a top 100 entrepreneur under 30 years old, which is in a hell of an accomplishment. You built numerous multimillion dollar companies. You have one of the biggest marketing agencies in America. And you know, when I first met you, I was fascinated to find out that, you know, I guess we'll ask right now, how old were you when you became a millionaire?
- [01:57]
Neil Patel
I don't know, I was young, I think sub 20s. But I lost it all by the time I was 20. So what do you really count as being A millionaire?
- [02:04]
James
Yeah. But you were 17 years old. Yeah, you were.
- [02:07]
Neil Patel
Yeah, But I lost it all by the time I was 20, 21. Something like that.
- [02:11]
James
Yeah.
- [02:12]
Neil Patel
So, you know, when I look at millionaires, I look at someone, I don't really look at net worth. I really look at, like, cash. Okay. So I made cash when I was really young. I reinvested a lot of the cash, and I blew it all. Plus I blew more money because I was borrowing money. At the same time. I was able to pay it all back in a year. So all the money that I owed. But the reason I say that is, like, what is really a millionaire? You know, on paper? Sure, a lot of people are millionaires because of their house, cash. You know, less so. But still, there's quite a few people because of 401ks and stock. Like, I know someone that I met a little bit ago, and they're in some of the biggest tech investments that you could ever imagine. Okay. I'm talking about some of these AI companies that are worth over a hundred billion dollars, and they're at angel. And they were telling me something like, do you know where my best return came from? And I was like, what? And I was naming off some of the AI companies that they invested in, and everyone here has probably actually used those products. And they're like, nope. They're like Apple stock. They're like, I bought around 20, 24 years ago, and I had the highest return from that than over anything else. And I forgot how much the return was, but I think it was like 6 or 800x or something crazy like that.
- [03:29]
James
Yeah, that's crazy. And. But I want to go Back to again, 16 years old, is when you started your first company, Advice Monkey. At the time, it ended up becoming a failure, but it taught you the greatest lesson that you had ever learned, one of the greatest skill sets, which was SEO marketing.
- [03:44]
Neil Patel
Yes.
- [03:45]
James
What is a venture in today's world? And maybe one of your most recent failures that you've had that's going to lead to one of your biggest successes?
- [03:53]
Neil Patel
Oh, I think right now, I wouldn't say it's my biggest failure, actually. Yes, it actually is probably one of my most expensive mistakes. It's not necessarily a failure, but I spent so much money over the last three years expanding globally, like to Malaysia, Singapore, Hong Kong, Australia, you know, Germany, Italy, France, like, literally all these countries and pretty much around the same time. So when you do that, you're not burning like a million bucks or 2 million or 5 million. You're burning a Lot more money. Because imagine setting up the team in all these regions. So we're recording this and it's 2025. It's one of the last years I would have spent money expanding so much overseas. And in the grand scheme of things, if you fast forward five years, dollar wise I'll spend more money, but percentage wise I'll spend less. And here's why. I would say it was one of the most expensive lessons I ever learned. If you look at the economy over the last two, three years, it hasn't been that great. A lot of the job growth has been coming from the government sector. If you look at a lot of the private businesses, many of them aren't doing well. Yes, I know. There's all these Nvidia and Google and Facebook. If you exclude these AI driven companies like the Walmarts of the world, the targets of the world, they're not growing, you know, hand over fist like these AI based companies are. And what we're seeing is most of the world has, most of the business world has struggled over the last, I would say three years because mid-2022 the government started hiking up interest rates and it really started slowing down business. And that was their intention and goal to try to bring down inflation. But when I look at my big investment, it costs so much money. But now if I look at the majority of the corporations that are hitting us up, it's global companies being like, oh, you have a global footprint. We want to work with you in Latin America, we want to test you out in these regions and see what happens. And a great example of this is there's a privately owned company that does over 100 billion a year. Okay, family owned company that does over 100 billion a year. Just in perspective, not publicly traded.
- [06:16]
James
What space is that in?
- [06:18]
Neil Patel
If I tell you, then everyone's going to know the company. Okay, so, but there are no wide variety of spaces, but they're global and it was created in the United States. That business hit us up to test us out in Latin America. If we get the contract, it's not going to be much. Call it 300 grand a year. If we do well with them, they'll give us a few countries in Latin America to potentially all the countries in Latin America. So maybe you go from 300 grand a year to a million bucks a year. Okay, you do well there, then they start giving you more countries. So then maybe you get APAC and then eventually Europe and then, you know, North America. Now you got a contract that's 3 million bucks a Year, Right. I'm just rounding, but it's probably roughly accurate. And then you do well there. Then they're like, okay, you're working on two divisions, we're going to give you six more divisions. Now you got a $10 million contract, right. With scale, things go down. Some divisions have more money, some have less. But that land and expand game is truly how you build a B2B company, at least in the enterprise space. And that international investment, if we didn't make that investment, we wouldn't have the opportunity to work with all these global brands. That is what's going to make the company boom in the future. But that's caused us pain and suffering for the last three years.
- [07:43]
James
Right. I want to go back to the origin story, but you know, you brought up something right now that I've referenced a bunch. And it's a lesson that you actually kind of had taught when you spoke to our private community. And so it was this, this concept, globalization. Somebody had asked you on a call, I don't know if you remember this, but I actually referred to this exact moment that I'm about to bring up. We just gave a lecture on social media at Harvard recently and somebody had asked, you know, hey, we're huge fans of your guys channel. We've seen a whole bunch of people kind of copy and imitate you guys. Now your exact same question, style of content. And I just, they were curious to kind of get what your take is on, on copycats and how you do that. And one of the things that I had brought up was just how important it is to be an innovator in whatever space that you're in. And in particular, when you did a call with our community, somebody had asked what you saw the future of content creation being. And the answer that you gave was the globalization of content. Yes. To where, you know, and the way that I look at it is in two ways, right? Obviously you've got, you know, dub channels, right, where you can do Hard Knocks Espanol or Hard knocks Arabic, and you're dubbing the channels with the AI and all that type of stuff. But also I look at when we had some of our biggest growth ever, you know, in our, on, on our channel was when we did our partnership with the UAE government. And the UAE had us go out there and interview a lot of business owners out there. When you go do content out in Dubai, in the uae, now you're tapping, now you're tapping into an entirely different audience out in the Middle east because of how geographical, a lot of these platforms are. At what point do you think you kind of recommend people go global? Because the way that I look at that and that conversation that you had with the one member in our community actually made me think a lot. We actually recently just started working with people to do a bunch of dub channels, but then also this concept of going to film content overseas. I feel like there's just so much untapped growth in other markets. At what point do you, as a business owner kind of evolved, evaluate and be like, hey, it's time to kind of start thinking a little bit bigger and get out of our, you know, local, even national market and kind of go global. What's your thought process there when you're.
- [09:40]
Neil Patel
Already starting to get traction globally? If you look at your analytics on a lot of these platforms, like social media included, they'll start telling you where you're getting viewers from, like what countries. If you start seeing big upticks in some of these other international markets, that's a key sign to potentially go out and expand into those countries. Now before you do that, you want to make sure you have enough capital. You can invest in that market for two, three years before you can, before you may break even. And if you can do that, then I would say it's the time. And when you start anything, whether it's content or a business, even if you're not going global from day one, you should have globalization in your mind from day one, because that's the only way to do marketing to create a business. If you look at the largest corporations that are global, you could say, oh, they're born in San Francisco, they're SF or Silicon Valley company. No, Google's not a Silicon Valley company. Sure, they may have been founded there, but they have offices everywhere. So does Microsoft and even Walmart. Did you know there's Walmarts in China? Right? Like, you gotta think global early on. That's the quickest way to grow because the majority of the population is not in the United Kingdom or it's not in the us it's not in India. It's in the whole world. Right? No one country makes up 50% of the world's population. It's the long tail that really adds up.
- [10:57]
Jack
I'm kind of curious how you go about building teams in other countries because I mean, hiring as it is is very time consuming and hard. I mean, we're going through a bunch of growth right now at Hard Knocks and I probably spend about 50 to 60% of my week at this point just hiring on Interviews because we don't necessarily have an HR department. It's on us. You know, I don't, I can't, hey, you guys do these interviews. It's, it's still very much so founder led hiring. And so I'm kind of curious like what does it look like to build teams in, in different countries and just different markets? Like are you acquir different agencies that have had success in that market and then, and then pretty much putting your infrastructure and systems in place or are you just building it from the ground up?
- [11:34]
Neil Patel
So we do a combo of both. We definitely do acquire and then we put our systems and procedures in place. But the majority of our expansion efforts have been boots on the ground and starting it from scratch. So we look for someone who works at a competitor who's gone promoted multiple times and ideally has multiple competitors that they worked for. And then we go and try to recruit that person, the one who is leading up that competitor. Because they usually have relationships with the clients. They have relationships with talent in the market. I'm not saying talent that just works at the company they were at, but talent in the whole ecosystem. Right. Because typically people have non poach agreements where they just can't take talent from their existing business. And when you find people who work for competitors have done well and you have them on the ground, they'll understand the culture, the nuances and they'll be able to kickstart things and get it moving faster than if you hired a random person, not from your industry and expect them to grow. The other key thing is when they work for the competitor, you need to make sure that that competitor is not too big. And here's what I mean by that. So we work with a gentleman named Dan who's a managing director of our APAC region. He led up, I believe Canada at one point, maybe the uk. I know he worked somewhere in Europe, maybe he wasn't leading it up, but he worked in Europe for one of our competitors, he led up Canada for one of our competitors. And he spent quite a bit of time in APAC leading that up for one of our competitors as well. And he got promoted throughout that whole organization. When we look at Dan, even though Dan worked for a publicly traded competitor, the division he managed was still small. If you take someone who is used to managing a thousand people and that's what they've been doing the last five, ten years, and they don't know how to have a small scrappy team, they're good, they're just not good for starting it up. So Dan was great at running smaller and mid sized divisions. It doesn't mean that he can't run a large division. But typically those regions generate less revenue than let's say the United States does. So he was a perfect fit because he had the experience of starting these regions when they were small and kicking them off the ground and then scaling them to decent size for those regions. And the reason I, I had that little asterisk by saying for those regions in countries like India, you're just not going to generate as much revenue as the United States because of currency exchange as well or GDP per capita and things like that.
- [14:18]
Jack
So what you're saying is, is there's a saying that I love, is that the team that takes you from 0 to 1 is not going to be the same team that takes you from 1 to 10 and then 1 from 10 to 100. It's because there's different skill sets for every single part of managing that team. You know, some people are good at, you know, having that small scrapp, but it's a different, completely different set of skill set to go from managing a small team to managing like you said, like a thousand employees.
- [14:42]
Neil Patel
Yes, but I do business a little bit differently. So typically like you're saying in business the person says, hey, the person that takes you to 0 to 1 is different than the person that takes you 1 to 10. And that person is different than the person that takes you from 10 to 100. And at that point you need a different person from 100 to a billion. Right. That's usually what people say in that saying. The way we believe that you get from 10 to 100 and 100 to a billion is you set up a lot of regions where they're just doing 10 million $20 million in revenue so that person doesn't have to take you to 100. We think it's very hard to build a business where one person generates $100 million in revenue. If you look at a lot of publicly traded companies, they have a lot of divisions. Some of these divisions only make up 20, 50, 100 million bucks in revenue. Now of course, the Googles of the world have divisions that make up over 100 billion in revenue, but they're rare. If you look at majority of small and medium sized businesses, it's a lot of divisions and regions and when you add them together it becomes a meaningful amount. And we find that to be an easier way to grow than to just try to get one thing from zero to 100 million or a billion in revenue. Like Open AI. I know OpenAI has many regions, but it's just one product. And I bet you a large chunk of the revenue is coming from the United States. And yes, Europe probably does well for them as well. But they're just like, all right, we got this one thing, let's go and just try to make a ton of money from it. That is much harder to do. Forget that it's AI, but that's just much harder to do than being like, I'm going to build a $20 million business hypothetically in the United States, another 5 million in Australia, 5 million in India, 10 million in the UK. You start adding it up with all the major countries. Next thing you know, you got like 200 million bucks in revenue.
- [16:32]
James
Yeah. You know, you had brought up how one of the things that you do to kind of go get that town people to kind of go run these global regions is you'll go find your competitors, find some of the guys that have been running the scene there. Kind of reminds me of that Zuckerberg model, what he was kind of doing with OpenAI where he paid 100 million bucks. But so what is it that you did to incentivize those people to le those comfortable companies that they were in? They were having some success. They probably had built some experience up there. Were you offering some ownership or kind of. What was that model like in mindset when reaching out to these people that you're like, hey, I know how to get this person to kind of come and build with my company.
- [17:04]
Neil Patel
Yeah. So there is a perk if someone stays long enough. You know, we sell, there's equity there, or if we do really well, maybe we distribute out, you know, some bonuses to executives. And it's a version of equity. A lot of people own equity in a startup and majority fail and the equity becomes zero. So we pay competitive wages similar to what the competitors would pay. We offer no bureaucracy because we have no investors and people like that. So you're getting paid similar to invest, similar to the competition. There's no bureaucracy. And whether we sell or not, there's ways to make more money that we can incentivize our leaders that publicly traded companies can't do, nor can investor owned companies because if you're backed by private equity, you can't have really flexible comm structures because you have someone else who has skin in the game and they want to dictate what you do.
- [18:01]
Josh
I want to talk AI for a second real quick. I want to apologize. My voice is super raspy. I'm a big Dodgers fan. And so I was at game three of the World Series last night, longest game in World Series history. So I'll just throw that out there, but I want to talk AI. I saw that you posted a video about AI and AI agents and this being a massive opportunity for people out there, AI being the next Industrial Revolution. So I'd love for you to break that down for us. Kind of what you talked about in that video and that opportunity with AI agents for people to make millions coming forth, this opportunity that's at hand for us.
- [18:35]
Neil Patel
Yeah. So think about all these businesses, from H vac companies to roofing companies. There's even tech companies and traditional businesses like the Walmarts of the world. But these bigger corporations, they're already on the AI bandwagon. You guys see it all over. You know, PayPal just announced today that they're going to be the default wallet, I believe, or something like that, for OpenAI, I think their stock boom, like 13% or something like that in a day. But there's a lot of traditional businesses that need adapt to AI and have it. And if you can create agents to help them get things done, like help them with their website, help them with their marketing, help them with spreadsheets, and automate a lot of the stuff that they do manually, there's good money in that. And these companies don't know how to use this technology. They're just gladly willing to give someone a thousand bucks a month to do it. Now, if it costs you $100 with the agent and you just had to set it up and you just make sure nothing's broken and you're keeping 900 of it in profit and you're just a solo entrepreneur. And then you go get ten of those businesses, all right, you're now making nine grand a month. Now scale it up and do it for more divisions, offer more services, different types of ages. Next thing you know, you're starting to make, you know, 20, $30,000 a month in profit. It's a great way to get something started and then you can expand from there.
- [19:57]
James
So I want to touch on this, though, because, you know, you're. You're huge on AI. And we recently interviewed another gentleman, Thomas Healy, who took a company public in 2020. I think at their peak, they had like a $10 billion evaluation. And, you know, he was mentioning in our interview that he was having a conversation with a, you know, senior executive at Amazon. And, you know, they're saying that the CEO of Amazon's core focus right now is to utilize and leverage AI in every part of their business. And we just saw Amazon just fired 30,000 employees. Which 30,000 employees that are.
- [20:27]
Neil Patel
They revised the job number. I believe it was 13 or 17,000 still. But yeah, it's still a lot of damn people. Yeah, because the rumor was. Yesterday's rumor was 30,000, which is going to be the biggest cut that they ever did. Because I believe the one previous was around 20 something or around there, but I believe it's 13 or 17. It's in the teens somewhere.
- [20:46]
James
So, you know, if you're a younger person, whether you're entrepreneurial or even not, you know, going in the business world, what are some skills that you would really be adopting right now to ensure that, you know, there's this concept of like being recession proof to no matter what happens in the economy, you're always going to have work, you're always going to be able to, you know, find, you know, make money, essentially maybe being AI proof. What are some of the skills that you would be adopting to ensure that, hey, you know, obviously, you know, that's why the trades is a beautiful thing, right? Is not going to replace a plumber anytime soon. But if you're a business person, you're an Internet marketing, right? Because we're seeing that it's doing a lot of stuff from accounting to I'm sure even SEO now, which is a business that you're in. What are some of those things that you'd be really, really looking to get ahead on from a skillset perspective?
- [21:31]
Neil Patel
So I look at the skill sets as different than most people. Most people look at skill sets for AI, like, oh, you need to be good at coding and using some of the apps that just help you become really efficient. Or some people are like, you need to be a good prompt engineer. I look at every single business as a little bit different. And what I recommend to people is you should be good at just experimenting and testing things out. Because AI is changing so fast on a monthly basis that if you're not just experimenting and testing things out, you're going to be left behind. You're not going to know what's working, what's not going to work. And the reason this is also important is what's useful today may not be useful tomorrow. So just like we saw Facebook crush MySpace, think about these AI applications. There was Jasper. Jasper was this application that helps you create content in an automated way. I don't know how many people use Jasper these days, but it has to be a lot less than previously. And I know they went upstream, but quantity wise, people are like, oh, I can just do a lot of this stuff with OpenAI. In other words, you have products replacing other products at a fairly quick rate. If you don't experiment and test things out, you won't know how to adapt and you won't know how to implement some of these technologies and tools into organizations.
- [22:55]
Jack
I'm kind of curious. You got your start really with SEO and right now with AI, one of the biggest untapped, I think versions of SEO is like actual results base within OpenAI or even just Google search is, hey, if I want to find this product and then OpenAI actually showing the product and pretty much ranking on, you know, chat GPT, how, how can people who, who may not understand that, how can they get started actually ranking on AI search platforms? And what does that even look like to start building out?
- [23:32]
Neil Patel
Sure. So there's a lot of different factors that GPT uses to rank a website. Some of them are brand mentions. How many times is your brand being mentioned around the web? Another thing is relevancy. So if we talk about marketing and we talk about the school of hard knocks and you guys talk about marketing, that's relevant, right? So it's in good neighborhoods versus a plumbing website talking about marketing. Another thing is reviews. What are your reviews? Whether it's a podcast, someone's searching for a podcast on ChatGPT, or actual physical product or service, how many reviews do you have and what are they saying? So think about like sentiment. Are they positive, are they negative? And how does the sentiment compare to your other competitors? Another thing that they look at is your own website and your own content. So do you have structured data? Is your information easy for them to pull? Are you using schema markup? All this stuff makes it easier for them to index and understand what the content on your webpages have. So those are some of the factors with ChatGPT. But in reality, ranking on LLM platforms like ChatGPT and Perplexity is actually very similar to traditional SEO. There's some nuances, like some of the things I mentioned. Like they look at brand mentions, while traditional SEO looks at how many other websites linking to you. There's things like they look at sentiment while traditional SEO does it. But doing some of these things is what's going to get you mentioned more. Now the key with LLMs is, and what we found is they love human written content, human created content. I know all these LLMs can help you create AI generated content, but we find that they cite and they push human generated content more than anything else.
- [25:18]
James
I wanted to. We've been talking a lot about tactics recently. I feel like we kind of brushed over a little bit more of your origin story, getting into entrepreneurship. I mean, you started building a company at 16 years old. Could you go back to kind of that turning point and what inspired you to ultimately do your own thing? Was it family? Like, like, what was it for the people that may not understand how you got into business at such an early age?
- [25:38]
Neil Patel
So when you're 16, this is 24 years ago, almost all high paying jobs required a college degree. At 16, I'm not an Elon Musk or Bill Gates. I did not have the intellect to go get a college degree at a young age. I know they didn't either, but they're, they're smarter than at that age probably than most college graduates from a, you know, reading a textbook perspective. So my only way to make money was to be an entrepreneur. And on my mom's side of the family, a lot of people were entrepreneurs and still are. They actually do quite well.
- [26:12]
James
What types of businesses were they running?
- [26:14]
Neil Patel
Yeah, a lot of random stuff. Old people, homes, like, you know, like the elderly care, retirement communities, gas stations, hotels or motels as well, public storage, you know, like the self storage. So a lot of brick and mortar in traditional businesses, pharmacies, things like that. And I was like, all right, let me go become an entrepreneur. And I started because I was like, that's the only way to make money without, you know, the requirements and the pedigree that a lot of high paying jobs required. Now if I was 16, I could get a high paying job that paid six figures. I don't know if I ever would have been an entrepreneur, right, because I would have just went down the corporate job route.
- [26:53]
James
And why was it marketing at the time?
- [26:56]
Neil Patel
It was marketing at the time because my first website that I set up was a job board. When I was trying to find a job online and I didn't qualify for any of the jobs I wanted, I noticed that Monster.com, one of the sites I was browsing, was publicly traded. Saw their financials. I was like, man, this company makes millions of dollars, hundreds of millions of dollars. If I make 1% of what they make, I'll be rich. Let me just go set up a competing website. I created a terrible copycat. It had no traction. I paid a marketing firm with whatever money I had from picking up trash and cleaning restrooms and, you know, selling car parts to other school kids who wanted to like soup up their cars, took that money, paid a marketing firm, didn't get any results, you know, was broke, frustrated, had no choice but to learn it on my own. I did. I got good at it, Got a ton of traffic. And then I was like, huh, I don't know how to make money, but I'm really good at driving traffic and visitors to websites. And where it really clicked for me was when I was giving a speech at a college class at night, and it was speech 101. I was taking nighttime college classes when I was in high school. At 16, I gave a speech on how Google's algorithm works. It was a topic I was interested in, but probably put the audience to sleep. But someone in there liked it, said, you gotta meet my boss. They paid me five grand a month and they hired me as a part time, you know, high school kid. And I helped them drive around 25 ish million dollars in revenue per year. And they introduced me to three more clients. I each paid five grand and I was making 20 grand a month at 16. That's how it all started.
- [28:35]
James
Incredible. And in your business today, how much money are you making at your company today?
- [28:40]
Neil Patel
Not that much as you would think. Well, compared to what? Probably most people or almost everyone listening, But I think I told you guys this earlier, before we started the podcast. This is my first down organic year. We'll be down 1%.
- [28:57]
James
Just 1% though.
- [28:58]
Neil Patel
1%. We grew if you include acquisitions, but I don't like counting that. But it was the first year I.
- [29:03]
James
Was down 1% revenue wise. Could you give us an idea of how big the company is?
- [29:07]
Neil Patel
Sure. We've been in the nine figures for a while.
- [29:09]
James
The nine figures? Yeah, absolutely.
- [29:12]
Neil Patel
When we were starting off and when we were even, you know, getting to nine figures, because we've been there for a while, we were starting to grow out. Like our growth was slowing down. But you're still talking about 40 to 60% growth a year. And it really slowed down in the last 12 months with tariffs. Right. And that's what caused, I would say, the negative growth.
- [29:35]
James
So what is it that that does to your mindset and how do you react to that? Do you go back to the drawing board? Do you reevaluate, like, kind of. I'm curious to kind of get your thought process as the entrepreneur that you are. You're consistently going 40 to 60% year over year. What is your thought process and mindset?
- [29:51]
Neil Patel
Yeah, so some of my competitors would blame Trump and the tariffs and being like, I can't believe he passed this or whatnot. And the way I look at it is like, dude, you can't blame a president, whether you like him or hate him, for your business downfall. There's a lot of external factors like a bad economy or things that happen that aren't in your control that can cause your business to grow and not grow. And when things are good, you never really see people giving acknowledgement to political people or leaders. When things are bad, they'll point blame wherever they can. Okay? And I'm not really political. I really genuinely am center on the political ban. But the tariffs had a negative impact in which a lot of our clients sell physical goods. Like, let's say you're Mercedes selling a car. Well, if you're Mercedes selling cars and you know how to pay more tariffs, you're going to cut back in certain areas. One of those areas is usually marketing, because the easier to turn on and off that or adjust that knob or turn it on and off versus firing people. Corporations tend not to want to fire people first. And I don't blame them because it's a shitty thing to do and it's a shitty feeling. So while some of my competitors may blame, you know, the political environment or the economy, I look at things as, okay, this is a situation. I've been through bad markets before. What can I do? That is interesting, and we should have had a much worse year than 1% because of the tariffs. But we were able to recuperate a lot of those losses that we had in earlier in the year once, I believe it was April, sometime 99%. Sure, it was in April when they really started talking about them, because, you know, I could see the revenue hit, you know, during that time and customers also telling us. But I was like, AI is booming. And I was like, why not start introducing a new offering where we're helping companies get mentioned on ChatGPT, perplexity and some of these other platforms. So we introduce a new stream of revenue. Now, people in our industry will argue that's the same thing as traditional SEO. But if customers are talking to me at conferences like, yeah, we Already know about SEO, talk to me about ranking on ChatGPT. And when I tell them it's similar, they're like, okay, I get that it's similar, but how can you just help us on ChatGPT? We already got the other portion covered. We're not doing as well on ChatGPT. And I was like, man, I'm going to all these conferences. And this is the number one thing that people are asking me for. And I was even in conferences in Hong Kong where you can't use ChatGPT. And everyone's asking me about ChatGPT and how to rank, even though it's not available in Hong Kong, right? Or at least the last time I checked, it wasn't. So they're using VPNs to use ChatGPT, and that's the number one thing that they're asking me about. And I'm in a room full of enterprises. These are like publicly traded companies like Pfizer and just giant corporations like that. And they're talking to me like, hey, how can we make it where anytime someone asks a medical related question, a Pfizer drug is recommended on ChatGPT. Like I'm getting these type of questions from a room full of companies and I don't think any one of the companies is worth less than $10 billion. They were all publicly traded. But my guess is the smallest company in the room was probably a 20 or $30 billion company. And I'm just like, man, this is something we should push hard on and pitch to every single company. And if I pull up my homepage of our website and you won't, no one here will be able to see it. Okay. But if I pull up my homepage, it ends up saying, we adjusted our copy so much so that we knew that this space is gonna boom. We ended up adjusting our whole pitch to being around this. And when we ended up doing it, we saw a bit more than 30% more leads and we started to see a higher close rate and a faster close rate. And the text isn't loading because the Internet's not working right now or wherever I am, but it doesn't matter. I can end up telling you roughly what it is on our NP Digital website. It's something like, we help you get found. We help you get traffic from everywhere, From Google to ChatGPT and everywhere in between. It's something like that, right? So when we adjusted our copy to including ChatGPT, we started seeing way more leads and way more interest in business. And that was husherous. Here you go, I got the real copy. Now we make sure customers find you everywhere from Google to ChatGPT. And then the sub headline was, we help you show up everywhere. Customers are searching, swiping, scrolling, streaming, and shopping. And then on the homepage I have tick boxes on how we can help you. And the first one is AI SEO. I know people call it different stuff like a SEO or Geo or ChatGPT Marketing. We picked that one because it was just easier. And we found that it not only drives more leads, it drives bigger leads. And it was really, that messaging was really relevant to our ideal customer.
- [35:11]
Josh
So for one of those areas for the future, obviously short form organic content is massive for our business. And where we see it going, you obviously see things like live social selling on platforms like TikTok Shop. Where do you see short form organic content going in the next five to 10 years?
- [35:28]
Neil Patel
I think it's going to be more and more popular. It's the number one type of content that's consumed on the Internet right now. People like it, it's addictive, it's a drug. There's some recent studies that are saying Gen Z is actually starting to use it a little bit less. I think they're tired of some of the AI generated short form, but I think it's going to become more and more popular and companies should create it. And there's this big misconception that, oh, if you're creating short form content, it's only relevant to B2C. We work with B2B and B2C companies. I forgot the percentage. I know. It's in the low single digits. It's around 4%. When we did a study, it was something like around 4% of Instagram users are interested in B2B content. That's a lot of people who are interested in B2B content. And yes, there may not be as many eyeballs, but those eyeballs are worth more.
- [36:19]
James
You have a beautiful perspective on building a following that I love, which is that you don't necessarily think you need to go after having tons and tons of followers. You rather focus on building an incredible audience, even if it's not as big of an audience. Right. You want intentional followers, people following you for the right reasons. Can you kind of break down your philosophy on that and why people shouldn't be too focused on just growing a massive following, but rather having more intentional followers that follow them for the right reasons.
- [36:46]
Neil Patel
Sure. But first off, I want to be very transparent. I don't have what it takes to have a massive consumer base following.
- [36:56]
James
Why?
- [36:57]
Neil Patel
I don't have the personality. It's not what. Not just not what interests me, some of it is also luck. You guys know this. Why does one video go viral, more viral than the other one? When one of the people that you interview is Tom Cruise or Shaq, a lot of it's hit or miss. Would you agree with that? Fair. Sure. Right.
- [37:14]
James
But you went more viral than both of them.
- [37:16]
Neil Patel
Yes, exactly. But in theory, I shouldn't have gone more viral than them. Would you agree with? They have much bigger brand names than I did.
- [37:22]
James
But the tactics, though, that's the one thing that I'll say that's kind of set you apart.
- [37:26]
Josh
Like talk our audience, they obviously you have a big brand as well, but they look like for a lot of people in our audience, that was probably the first time that they ever met you.
- [37:38]
James
Yes.
- [37:38]
Josh
Online. So they love that introduction to somebody they've never met before. And seeing this person with this incredible story, that's something that our audience loves.
- [37:47]
Neil Patel
Storytelling does well typically on social media. But what I'm getting at is whether I want to post modeling pictures. I don't have the looks or the physique, but whether I want to post modeling pictures or try to be a singer and have a beautiful voice, even though I don't have any tune in my body, a lot of it is luck. There's a lot of people who are amazing singers, yet have a very small social following. It is hard to go viral and create a massive audience. Just being quite frank. Anyone listening, if that's what you're trying to do, it is a big hit or miss game. It is much easier to educate and give a ton of value and tactics and get views and followership for that. It doesn't matter if it's B2B or B2C. The reason I picked that route was two reasons. One, you have a much higher likelihood of success. Two, they follow you for something specific. So when you're trying to monetize, it generates way more revenue than the people who have massive audiences that have a million, 2 million, 5, 10 million followers. Now, if you have 200 million followers, like Cristiano Ronaldo or Kardashian, that's a different story. Very, very few people will ever get there. And that's why I recommend going after a vertical and just going after a specific core audience and only creating content around that because it's much easier to monetize. Following with no revenue is almost useless.
- [39:16]
Jack
You have to know the audience first and foremost. And I think that's one of the core principles that I think I would love for you guys for you to kind of teach is like when you're selling or marketing, you have to know who exactly you're talking to.
- [39:29]
Neil Patel
Yes.
- [39:30]
Jack
And if you could job just maybe two or three principles you feel like every person should know in order to be successful within their marketing.
- [39:38]
Neil Patel
So the first is, who is your ideal customer? For us, even though we help SMBs, our ideal customer is a global company that is publicly traded and they operate in at least 20 plus countries. Because an organization like that typically is looking for a global agency, they'll take the time to decide who they choose. It takes a while to get that contract, but it tends to be really sticky and it stays for a much longer period of time. We have financial clients where our employees are working on their corporate laptops. Not our corporate laptops, their corporate laptops. You know how tricky it is for them to just switch out our people and hire a new company and get it set up and everyone on the laptops and background checks and security checks. It's not that simple. These contracts become much more sticky. My audience isn't ever going to be 10 million followers for them. But when I produce content, I do create short form content, but I produce a lot of images with charts and data and I release those on a daily basis. It does really well. Why? Because my average, not my average, my ideal customer will use those charts to make marketing decisions. And when they have internal meetings and presentations, they use the charts and they spread them around globally. So then our brand starts spreading to people in different regions and it helps us get more and more contracts over time. Really ugly, boring marketing that'll never get a million views, but it generates revenue.
- [41:17]
Josh
We often like to think about if you have a large following on an organic social platform, you don't necessarily own that audience.
- [41:24]
Neil Patel
Correct.
- [41:24]
Josh
It's borrowed. And so one way that you can own that audience is if you drive that audience to a lead magnet and collect a phone number or an email. Basically starting a newsletter as well is a great way to do that. Where do you kind of see newsletters in 2025? Is that still a big opportunity and maybe just drop some game for us on, on newsletters as well as driving leads to lead magnets in order to collect that. That data.
- [41:48]
Neil Patel
Yeah. So you asked for a couple strategies. My second strategy that you have to keep in mind is it's hard to monetize people on the social platforms. So now that you have your ideal customer, you need to post content that's specifically for them. You need to focus on driving them somewhere where you can collect an email address or ideally a phone number where you can SMS message because the open rates are better. Either one works or ideally actually both. And if you're not doing that, you're not owning your audience like you mentioned. But what you'll find is it's really hard to monetize. And the third thing that I like telling people is if you're going to create social content, you want to build up an audience. Not only do you have to focus on your ideal customer and create content for them, not only do you have to have an email list and an SMS list, but the third thing is you need to go to industry specific events and start meeting people in person. It's hard to build a personal brand because that's really what social media is all about without connecting with people one on one in real life. And I think too many influencers mess that one up. And when you connect with them in real life, a lot more monetization happens. We have so many people who follow us, we, yet we make very little money from it. But when I go to events and I speak and I meet some of these people, our close rate is extremely high and it generates way more revenue than what we do directly from social media. Yet these people first found us on social media. So in theory I do attribute some of the revenue, but if I never met them in person, we wouldn't have closed those deals.
- [43:22]
Josh
Dude, doing the unscalable is there even besides that? A lot of times, I guess Paul Graham with Y Combinator, he put out a paper about, you know, founders should do more of the unscal like, like in order to scale, do the unscalable. Are there other things that you've done in your business and building your business that were unscalable that maybe most people overlook because they're just like, oh man, like I don't want to get in the weeds and do that sort of thing. What is, is there anything that you did to help scale your company that maybe most people would overlook?
- [43:52]
Neil Patel
Yeah, we got permission to record sales calls. I started listening to every single sales call that my team was doing. I still do it to some extent now, but not anywhere near that I used to. And we critique the sales reps and we give them feedback on how they can improve their pitch. And then as they pitch again and adjust, we listen to the new recorded calls and we keep giving them feedback until they do it the way we want. And I'll do a lot of things like that that people are like, oh, you can just have AI do it. No, just give me the call. I'll listen to it myself and I'll critique it and I'll tell you where to improve. And then I'll even have that person, after I critique them, practice pitching me and see if they're going to do it the correct way. It'll take them some time, but they get better over time.
- [44:34]
James
And they got to see if they can. Objection. Handle Neupatel.
- [44:36]
Neil Patel
Yeah. And my co founder does this even more than I do. But these are the kind of things that aren't scalable that produce results. When we expanded to 20 plus countries, a lot of our international sales teams weren't performing as well as the US sales team. My co founder and I spent so many years perfecting the U.S. team and we're like, oh, just copy the U.S. here's all their scripts and everything that they're doing. A lot of people didn't follow it. We started getting involved, flying over there. My co founder technically actually did that one. He flew over to each of those regions, did sales trainings. I did trainings when I was there in person. I even hopped on pitches with them. And I was like. And I would jump in and talk about the things that I felt were relevant when I felt, you know, things were going the wrong direction or they're missing some areas. And I would even give them feedback after the call. Even yesterday afternoon, I was on a sales call and when I did a sales call, I ended up telling the other person three things that they could do to improve. And I gave them the feedback. I was like, look, I know you and this person's really good. I was like, you didn't do nothing. Industry case studies for this person, we have them. 2. You didn't paint a picture like, they own a ton of local businesses. You should have showcased in a chart how many total searches happen on the Internet per day. What percentage of them are local searches. Like on Google, it's 13.7 billion searches a day, 5 trillion a year. Roughly 40% are local searches. That's 2 trillion searches a year that are local. How much revenue they're missing out from that. And then break down where they show up local versus their competitors. How many reviews that's gotten them versus them and showcase how, hey, you could do all these 10 things, but if you don't do the fundamentals, which is what's driving revenue from your competitors first, the rest doesn't matter. And I was like, you didn't paint the story. You kind of described that, but the story wasn't painted. And the third thing that they ended up doing was they gave the pitch, they show the potential prospect what we can do, but they didn't bring it all together. And what I mean by that, they were just like, here, here it is. Do you like what we hear? We answer the questions like, cool, let us know what you think. Instead of being like, this is the problem and this is how bad the problem is. Here's how much revenue is costing you, this is how much it's going to cost to fix it. When do you want to get started? You can talk it over internally. I'll follow up with you tomorrow. This is what you need to solve this. And after we solve this, we're going to do B. And after we solve B, then we're going to move on to C. And here's the timeframe that it's going to take to make all of this happen. And oh, don't worry, your website isn't up to date fully. No problem. Creating a website that's perfect first and then doing all this is a waste of time. Because if one, your business doesn't have time to wait, two ones. If you create the most pretty site and no one comes to it because it's all structured and done wrong, what we're going to do is we're going to fix page by page and get you more traction. And over time you'll have your redesigned, beautiful, functional site. But it's going to be done in a way that's growing your revenue versus costing you time and money.
- [47:45]
Jack
Should I send the invoice over right now or what?
- [47:47]
Neil Patel
Let's do it. But I'm not a salesperson. I just think from a very technical, logical perspective as a business owner, you don't want to waste three months doing a redesign. You want results now and you want this site redesigned in three months.
- [48:00]
Jack
Yes.
- [48:01]
Neil Patel
And you don't want to pay extra for it either.
- [48:03]
James
How, how big of a factor has with social media, the organic content becoming so popular? I think it was recently like, you know, they said that TikTok had kind of overtaken. Google is like the largest search engine.
- [48:14]
Neil Patel
For Gen Z. Yeah, for Gen Z.
- [48:16]
James
Has that had a big effect? And, and what emphasis do you put on SEO for content creators and just people, you know, making content in general. Right. Because you even see on Google now, now there's the short videos tab. Has that had a big effect on your business? Are you putting an emphasis for businesses on SEO on social media platforms too? I'm curious on your perspective on SEO and how it meshes with the short form platforms.
- [48:36]
Neil Patel
Yeah, we get paid by publicly traded companies to do their SEO on social platforms.
- [48:40]
James
And is that just through the caption and hashtags or what is that through.
- [48:43]
Neil Patel
Caption hashtags, what the video's on? Because when you create the video, you're talking, they're able to transcribe and Understand it as well. What's a comment, what's a sentiment, what's engagement? They look at all these things to determine what videos should rank. And we help companies rank higher because if you're Louis Vuitton selling purses and sometimes in handbag, whether they can afford your handbag or not, you would want all Louis Vuitton bags to show up. And it'd be inspiration, motivational one day for people to buy a Louis Vuitton handbag. That's example of how social can drive revenue. And Instagram has 6.5 billion searches a day. A day. Google that, 13.7 billion. But Instagram's number two. Very few people talk about that now. Sure, a lot of people are searching on Instagram to find friends, but a portion of those searches are people looking for content services, products to buy. You know, shopping on Instagram is massive. Same with TikTok.
- [49:41]
Jack
Something I just thought about was really interesting is how marketing changes as your company grows over time. I feel like for most companies that, that what applies to probably 99% of people, it's very much so direct response. I put X dollars in, I get X dollars out. But when you talk about like global brands like a Louis Vuitton, I think a good amount of that budget probably goes to just like aspirational purchases in the future of like maintaining that brand equity, maintaining a good face. And so like even though a lot of these purchasers in the audience, they can't buy it right now, but it's something that they are going to aspire to buy in the future.
- [50:17]
Neil Patel
Yes, and not just that with marketing, majority of the dollars, you know, I look at whether you're doing Google Ads or Facebook ads or SEO, even though it could be classified as performance, all type of advertising is really performance and branding. Like Airbnb in the early days spent a crapload of money on just Google Ads. But how many people saw Airbnb and clicked over to the site? That's branding. Right? And when you do a lot of brand advertising, like connected tv, like think of like advertising on Netflix or you know, television, but through YouTube. A lot of those people eventually go see a brand and later go to a website and buy. All forms of marketing can be performance and branding. And you got to push on all these areas because if you're not, your competitors are and they're going to just gobble up your market share.
- [51:11]
Jack
So I'm kind of curious how, how should someone go about splitting up their, their budget when it comes to advertising? Should they be spending, you know, If I had to assume a majority on probably more direct response in terms of most cases for most people. Correct. And then I guess also in terms of like these higher, like the higher echelon of companies, I'm, I'm assuming that maybe like 30% goes to like brand marketing. What does that kind of look like for the companies that you kind of work with?
- [51:37]
Neil Patel
It varies corporation to corporation, but majority of the budgets these days that we're seeing is very split. It's not just Google, it's not just SEO. It's a big mix. There's too many channels. People use TikTok, they use Instagram, they use Facebook. The average person according to Sprout shows who uses more than six social networks per month that they're logging into. People don't just use ChatGPT, they use Google and ChatGPT. Right.
- [52:03]
James
Chad.
- [52:04]
Neil Patel
GBD pulls from Bing. So you also gotta optimize for Bing for local results. So you kind of have to be everywhere. So budgets are really split is what we see.
- [52:12]
James
You know you mentioned branding and I wanted you to talk about. You had did a test recently where I think you spent like $160,000 on like upping your like fashion or something along that.
- [52:23]
Neil Patel
I did that when I was younger, but it was entertaining.
- [52:24]
James
You did a test there to see if you would make more money?
- [52:26]
Neil Patel
Uh huh. And I did.
- [52:27]
James
Can you talk about that and explain what went down there?
- [52:30]
Neil Patel
Yeah, that was a long time. That was when I lived in Las Vegas.
- [52:32]
Jack
Yeah.
- [52:33]
Neil Patel
So I live next. I just want to say this is.
- [52:35]
Jack
The most marketer thing I've ever heard is I did a test on my, on my outfits to see if I.
- [52:39]
James
Would make more money.
- [52:41]
Neil Patel
Yeah. So this is when I lived. What is it called? Crystals, I think is a mall in Las Vegas. I think it's called Crystals. It's like next to Aria. I lived in like the Mandarintal for years. I think it's now the Waldorf Astoria. And this was on the Vegas strip. So you always see these clothes.
- [52:57]
James
Why'd you leave Vegas?
- [53:01]
Neil Patel
So I've gone back and forth to Vegas, but I have a six year old and a four year old. The school system here from an academic standpoint are much better. The taxes suck, but the school system's better and I'm willing to pay the taxes to give my kids a brighter potential future academically.
- [53:18]
James
Love that. I just wanted to ask. Curious, but go ahead.
- [53:20]
Neil Patel
Yeah. So when I was in Vegas I was younger, I think I was in my 20s when I ran this experiment. I'm 40 right now, to give you context. So I was either in my 30s, early 30s, or late 20s, and I spent one hundred and something thousand dollars on clothes to see if people would take me more professionally. And what I found was they did. People felt that it was more successful. And I bought clothes like Tom Ford and Burberry. I don't know what other brands. Lotto, piana. Now I dress, you know, some say like a bum. I wear. Have you heard of a brand called Vuori?
- [54:00]
James
Yes.
- [54:01]
Neil Patel
So comfortable. I'll speak on stage with, like, Vuori sweatpants. I'm wearing them right now. I have, like, 10 of the same ones. And, like, my wife will be like, you're tying your string, you know, because, like, they have, like, a string to make the pants. Like, ta da. Yeah. So she's like, you're tying it and you're tucking in your shirt. Everyone can see your string. It's not professional. Back then, people cared, and they would judge you based on your appearance. And I would have nice watches like Patek Philippe and, you know, Breguet and different watches and jewelry like that, and briefcases. And people are like, wow, this guy dresses nice. He must be super successful. Because they felt I was successful, and I was, to some extent. They were willing to do more business with me because of that. Now, in today's world, I don't think they care as much, but they kind of do. Like, I pulled up here. You guys didn't see my car. I drive a Honda Odyssey. You guys know what a Honda Odyssey is?
- [54:58]
Josh
Oh, yeah.
- [55:00]
Neil Patel
So I drive a Honda Odyssey. I love the car, by the way. I'm waiting for next year where they come out with the electric Honda Odyssey and I may upgrade. But I pulled up to the Waldorf in Beverly Hills, and I pulled up to valet. I was doing a meeting on their rooftop, and the valet guy goes, you know, like, move forward. So I move forward, and then more cars are behind me. They help the car behind me get out, and they valet their car. They help the car behind them get out, and they valet their car. Then all the people are gone. Then valet people are just standing there. And then they come to me, and they ask me to roll down my window. So I roll it down. They're like, can we help you with something? Are you looking to pick up someone here? Like, they're asking if, like, I'm Uber indirectly. I'm like, no, no, no. I'm here to meet someone for a meeting. They're like, valet. I think he's mentioned, like, 20 bucks. He's like, valet is going to be $20. Is that okay with you? Yeah, no problem. Here's my car keys. So I went up to the rooftop and I have my meeting. But now I don't care about appearance. I just do whatever's comfortable for me and it doesn't always look the best and I really don't care, you know. And a great example of this is I recently did a meeting with all the first grade students in my daughter's class. So all the parents were meeting, meaning, like the head of school, the head of donations. People are dressed up. I'm in VUORI sweatpants, a white T shirt, and I tuck in the T shirt into my VUORY pants and I tie the string and I had like a hoodie on, but it wasn't zipped up, so you can see the white string. And I did not care what people think. I'm like, whatever.
- [56:42]
Josh
We did an interview with Robert Herjavec and in the interview he was basically talking about how on Shark Tank Mark Cuban would walk into a room when they would have a meeting or something like that and everybody's all in their suits, but Mark Cuban would walk in T shirt and just regular pants. And he's asking Mark, everybody's dressed up, why aren't you in a suit? And he's like, because I can. Yeah, because I can. And I don't. I don't think you're necessarily doing it for those reasons. I think you're just doing because, like, it's comfortable.
- [57:12]
Neil Patel
It's comfortable and it doesn't make a difference anymore. At my phase in life. I also don't think it makes a difference for like a Robert Herjavec anymore either. Maybe he enjoys doing it. But where I'm at in life, and I'm not saying I'm more well off than him or anything like that, but where I'm in life, it won't affect revenue. It doesn't affect anything like, dude, I go to meetings with C level executives at publicly traded corporations and I'll wear yoga pants and a white T shirt and tennis shoes and not care. And they don't care because it's like at the end of the day, if I can produce results from them and I'm making them millions of dollars in profit, they don't care either.
- [57:51]
James
You know why my favorite saying of all time is that credibility kills all bad attitudes?
- [57:57]
Neil Patel
Yes, I agree with that.
- [57:58]
James
And you produce results.
- [57:59]
Josh
Yeah.
- [58:00]
James
Another, another thing I wanted to touch on because it's this concept of like, perception. I think you have a really interesting philosophy on this. You are very against this whole, which rightfully so, against this whole. We like to call it the wisdom economy. All of the, all of the business coaches that are on social media now, you think it's one of the biggest scams.
- [58:19]
Neil Patel
Yes, I do.
- [58:19]
James
That are odd lied.
- [58:20]
Neil Patel
Yes.
- [58:21]
James
Why is that? And give us your perspective and philosophy. If you are business coaches, you can.
- [58:25]
Neil Patel
Get anything you want from Chad, GPT or YouTube or wherever for free. Like there's so much content, I don't know why you need to pay. If you want to be part of a community and you're there to help each other and you're there for support, that's different. But paying some coach $10,000 or something, I'm like, what are you doing? You don't need that. But paying to be part of a community where you can, you know, spitball with other similar like minded people and help each other grow, that's fine. I think it's gone too crazy where people like, I'm gonna go to this person's house and I'm gonna learn so much from them and I'm gonna be there for the weekend and it's five grand. And I'm like, why, what are you getting for? One of my friends just was at Richard Branson's island. He spent more than ten grand just on travel and accommodations. And I was like, why are you doing that? He's like, oh, I'll see Richard Branson. I was like, cool. It won't make you a dollar more goes does it? On his way back, he's like, yeah, I met some cool people, but I can see what you mean. I don't think it's gonna even make me a dollar more in revenue. I'm like, exactly right.
- [59:33]
James
Do you think though, right? Because one of the things that I've. Cause you see it a lot and one of the thoughts that I've had is that there, there's two sides of it, right? You've got the guru, the person selling the course or the coaching that never has actually built something successful with like what they're selling. But then on the flip side, maybe say an entrepreneur that sold a company for $20 million or $100 million and they are now kind of their next phase is kind of going into more like the coaching role.
- [60:05]
Neil Patel
Why do they need to be a coach if they sold for like 20 million or 50 million or whatever dollars, they have enough cash.
- [60:10]
James
But I mean maybe in like the entrepreneur in them, it's like now it's like, hey, I've got the skill sets they can kind of teach you. Here's my question for you, right? Is, is it how, where do you differentiate? Like, like let's say business coaching but also consulting. What does Deloitte do? What are those big four companies do? Aren't they essentially consulting for businesses problems? So like, would you consider those to be the same?
- [60:29]
Neil Patel
No. There. When someone has 20, 40, 50, whatever million dollars, if they want to help people, they can do it by giving out the information for free. What Deloitte and a lot of those consulting companies do is they go in, they find problems and they fix them for you. And they'll actually go and send people and do the work on a lot of different divisions and different departments. What a lot of these coaches will do is say, hey, you're at a million dollars. I'm going to help you get to $10 million a year. A Deloitte doesn't come in and say, hey, you're at a million dollars. I'm going to figure out how to 10x you. They'll be like, we'll go help figure out the problems in your organization and solve them. My biggest gripe with the coaches is they promise wealth and that's the majority of the ones that make money. I haven't met too many coaches that do really well without promising returns. If someone just wants to help coach you to become a better manager or basket players, don't get me wrong. Yes, there's a certain place or time and they're probably valuable. Like someone helping Michael Jordan be who he can be. Like a Phil Jackson. Right. You didn't have to pay him, but assume, let's say hypothetically he paid him. Some of those people are okay. I wouldn't give a blanket statement saying all coaches are bad, but I would say the majority of biz op and marketing and entrepreneur coaches are bad because they try to focus on we will help you become rich, which is just a bunch of bull and all you're doing is paying them so they can become rich.
- [62:00]
Jack
I just think, you know, it's really, really interesting to see is, is agree on the business model or not, which, I mean, I'd agree. I think the majority of business coaches are, are honestly garbage. Is what they really are, is just really good marketers.
- [62:14]
Neil Patel
Yes.
- [62:15]
Jack
And that if you can look at them and like objectively, like with the marketing tactics that they use of like, like you said, like using a clear promise, having urgency on your offers and stuff like that, it's like if you just look at it objectively and then implement it into your business. It's like, hey, you don't necessarily need to do business with them, but if you study them, some of them are great.
- [62:33]
Neil Patel
But if you look at you guys, you guys have a massive community. You don't need to pitch anyone 5,000 bucks. I'm not saying you guys do. There's more money to be made by doing stuff with your community and doing businesses with them and making money together. Right. The problem with coaches that I see is that's their monetization model because they don't know how to do anything else. And that's the quickest way they know how to get rich. A better model is to make money by solving problems, not by pitching people that you're going to help them make more money.
- [63:07]
James
So in other words, kind of like the joint venture sort of model where you go in there, maybe get some equity in the company, like you make money together.
- [63:14]
Neil Patel
That's right. If you look at you guys, you have a community. I don't see you shilling $10,000. Come over the weekend and we'll double your revenue. Never once heard that from you guys. You guys do just fine. There's ways to make money without telling people you'll double their revenue. I'm.
- [63:34]
Jack
I'm kind of curious with. You have a business partner. How long have you been business partners with him?
- [63:41]
Neil Patel
Eight years. This will be our eighth year in business. Eight years.
- [63:43]
Jack
So I mean, if you were scaling so aggressively, right. I mean, I look at like Hard Knocks. The three of us have very different roles in what we do.
- [63:52]
Neil Patel
Okay, what's a role breakdown?
- [63:54]
Jack
James? I would say like face to channel connections, networker. Like, like genuinely like the. He's the engine that runs the entire business on the front end. Jack and I pretty much take the back end half and half. Jack. It does a lot of with our community product, front end sales for our marketing agency. And then I do, I run the marketing agency, brand partnerships and then just help with like hires operations for Hard Knocks as well as Jack. So it's pretty much like two, like we kind of split back end operations.
- [64:26]
Neil Patel
Cool.
- [64:27]
Jack
So I'm kind of curious for you. How did you and your first of all, do you think people should have a business partner? Two, how did you and your business partner split up, you know, responsibilities and then three, has that changed over time as the company has grown?
- [64:43]
Neil Patel
So one, I think people should have business partners because when you're starting off, the biggest issue is there's not enough time and money. So when you have business partners. You can divide and conquer just like you guys do two, I don't think you should have more than three business partners. I think having two people founding a company or three people is fine. The moment it's four, five, six, it tends to be too many cooks in a kitchen. So think of a two or three person founding team and third roles change over time as a company grows. Just like how you say there's a different. The person from 10 to 1 is different than 1 to 10 million in revenue. 10 to 100 is a different person. My co founder was a CEO when we started he got us really fast to I think 18 million. I think our second year in revenue was 18. I think our third year was like 30 something or 40 or I know it's under 40 but we're pretty much doubling every year for a while. First year was five mil and he was great. Eventually we brought on a president. I think on year two that helped us scale and go more, become more grown up. And then we brought on a new CEO. I think maybe year four I could be wrong who helped us grow even more and really go enterprise. And it's just something my co founder and I don't know how to do. We don't know how to deal with C level executives from a politics standpoint, a procurement standpoint and just dealing with all the red tape and having the relationships and the patients and what issues are going to come up and what causes churn and what they're looking for in a sales pitch. So we hired someone who's done that and the person we hired, his name is Mike Gullickson. He ran one of our competitors and I think at the time they were smaller, bigger than us of course, but I think they had maybe around 7,000 employees somewhere around there I think now. And he was running that ship. I think now they probably have that same competitor, has maybe like 13, 14,000 employees. But he scaled us up to a thousand plus people really fast. More contracts, more revenue, lower churn like he just knew what to go in and do. So then my co founder and I, we focus on our strengths. I'm good at marketing, my co founder is really good at sales and recruiting. So he spends his time on market sales, I spend my time on marketing. And we just divide and conquer.
- [67:10]
James
I love it. And I wanted to go back to the whole coaching mentorship thing. Not to talk about coaching but you know, one of the most common pieces of advice that we, that we receive on this channel is the idea of find a Mentor. Find a mentor. In your case, you know, instead of business coaches, you like the idea, which I love, is having like a board of advisors. If you are a young entrepreneur right now, you know, first of all, first part of the question, then I'll finish it. Did you have any mentors early on that helped guide you as you were building your businesses that you could kind of, if you had a problem in the business of bottleneck, that you would be able to go to and ask them a question. Hey, I'm dealing with this. It's causing a lot of, you know, struggle. Did you have that when you were building your company?
- [67:51]
Neil Patel
I did. I moved to Seattle for that specifically.
- [67:54]
James
Really?
- [67:54]
Neil Patel
I had a lot of friends who are entrepreneurs more than 10 years ago. Maybe like 15, 16. No, actually closer to 20 years. I lived in Seattle for six years straight.
- [68:05]
James
And how was that relationship built?
- [68:07]
Neil Patel
I would travel over there to help out a few people who are entrepreneurs. Some of them already sold companies. I eventually ended up moving there. There was a guy named Edward Yim who paid for me to move there and paid for my housing. Really nice guy, still based there. And I would just give him advice on his company. And he paid for rent. Rent back then was cheaper than now, but still wasn't cheap. I think he paid like maybe 2 grand a month or something like that for a one bedroom. Appreciate what he did. And people like him would give me business advice. And there was another guy named Andy Liu who sold his first company to Aquaniv, which then got bought up by Microsoft and then his second company sold to Vizio, the TV company. And then now he's a venture capitalist. He would give me a lot of feedback and advice anytime I ran into problems. But yeah, I just had a good support network.
- [68:57]
James
So if you're a young entrepreneur in today's world and you know how valuable the concept of having mentors, a board of advisors is, right? I love this concept that it's like, it's like wisdom without the wounds, right? There's people that have dedicated, you know, years, decades of their life to solving certain problems, building certain companies. A lot of them, they have the answers. They can save people a lot of trial and error. But obviously that young person, they don't want to go the route of having to shill tens of thousands of dollars to get coached by a person. And obviously, like you said, the right people that are, that are going to give you the real guidance to help you build probably aren't going to be the ones that are selling information, right? That's what it is selling information. How would you go about building that mentor relationship with that successful person? Because we know for people like yourself, the, the most successful people, time is the most valuable asset, right?
- [69:46]
Neil Patel
Yes.
- [69:46]
James
You know, you're not just going to be giving your time to any person. Right. And maybe people like you and just in that threshold of people, maybe they're not even open to being that kind of role in somebody's life. How would you go about though, if you're a young person starting out, maybe go back to young Neil before you even had that board of advisors. How would you build that relationship with that person to be able to kind of give you the keys to the kingdom?
- [70:08]
Neil Patel
I would just help them out. Most my mentors that I had weren't built by them helping me. It was by me looking at whatever I'm good at. Let's say you're a young kid starting up and listening to this. You may be great at social media content. Help out people where they need help and where they lack. And help them out and don't ask for anything in return. Those are the people over time that will gladly help you out and pay it back tenfold and do whatever it takes to help you succeed and accomplish your goals.
- [70:38]
James
Beautiful advice. I love that. You got to be a go giver.
- [70:42]
Neil Patel
Yes.
- [70:42]
James
If you add value to that person, they're going to remember that. And just like if you can connect that person to somebody else that can really help them out, they're going to always remember that.
- [70:49]
Neil Patel
That's right. But most people don't want to give.
- [70:52]
James
Right.
- [70:53]
Neil Patel
They want to give knowing what they're going to get, which is very different than just giving. When you give selflessly and you just try to help someone out, that's truly where I find it to work. When you give because you expect something in return, it usually doesn't work.
- [71:07]
James
I love that. Another concept that I, that I had to touch on when I had interviewed you last in on Rodeo out in Beverly Hills. You gave an answer that a lot of people chimed in on and they really, they really liked is that you like the idea of going after a large TAM where there's a lot of competitors, a lot of sharks in a massive total addressable market. Right. Because your mindset is all I need is a small 1% of a multi billion dollar industry and I'll do well. You're going to have a piece of the pie.
- [71:37]
Neil Patel
Yes.
- [71:38]
James
Why did you adopt that mindset as opposed to, you know, going after, you know, the opposite, where it's like maybe A smaller market, but a lot less people in that space. Give us your breakdown on the types of markets that you'd like to go after.
- [71:52]
Neil Patel
So when you go after a big market that's applicable to everyone or a lot of people, there's. It's easier to just market and sell because you have a lot more people to target. Now when I say a lot of people, it doesn't have to be people in volume. And like if I'm selling toilet paper, that's applicable to almost everyone other than a baby, but they have wipes. But on the flip side, I can sell marketing to companies. There's a lot less companies, but they're willing to spend more dollar wise. So when you look at the total market size, it's a formula of number of people times the dollar amount that they're willing to spend. And then if that's well into the billions, like tens of billions, I don't like a market that's a billion. I like tens and tens of billions. Then it's easier to get a fraction of a percent. If you get a fraction of a percent, you're rich. If you, you go after a market where you know is only 100 million bucks and you get a fraction of the market, you're not rich. And it's roughly the same amount of work from a marketing and sales perspective, that is to go after a really tiny market versus going after a really massive market. So that's my whole philosophy with that. And I learned that from a guy named Michael Delaney who is a, owns a private equity firm, I believe called Court Square. And at one point we were talking to them and you know, he said something really interesting. He's like, the reason I like the marketing space, it's a big punch bowl. And he's like, there's so much punch to go around, everyone can get drunk. And I was like, I love this concept because when you're going after a small market, you're competing and it's really tough. If you go after a big market, everyone gets fat and happy and rich. And that's the key. Now when you're going after market, not only do you want a big tam, you also want something in my opinion, that isn't innovative. A lot of people are like, man, I'm gonna revolutionize coffee. And instead of coffee, you're gonna take this one pill. And it does everything that coffee does without the side effects. I'm making it up. Creating a brand new product in a new market is tough. That example of that is like five hour energy Right. You're innovating. At that time when five Hour Energy first came out, people were like, oh wow, this is cool. And then they started having like five hours snooze or sleep or whatever, right? Variations of it. Those businesses, you can make a ton of money, but they're tough. But on the flip side, selling wood, nothing novel about that. We need wood for everything. Desk buildings, chair furniture, you know, homes, like literally everything. Selling stuff that just people need, it's easier to make money and it's less risky. You don't have to be different than the competitor. You just have to do one or two things better than them and they may do one or two things better than you and you'll do well enough to make some money.
- [74:46]
James
I have to ask you this because another thing, we're just breaking down the interview that we did right now. You brought up the gentleman that you know, owned the private equity firm. Obviously private equity. They're doing a lot of roll ups of a lot of industries, in particular boring businesses. And when I asked you in our interview, Neil, if you had to start from zero and make a million dollars in one year, you know, what would you do? Your life depended on it. And the answer you gave was you would go buy a boring business and kind of implement some of that new technology to grow that thing, market it really well. Curious your perspective on buying boring businesses. Is that something that you're actively doing or are you just like a huge opportunity there where you're like, this is what I would do if I had to start over because of the immense amount of opportunity that's there.
- [75:24]
Neil Patel
So we buy boring businesses for our space. Most people don't want to buy marketing related companies because they're not sexy. We don't go buy H Vac companies and plumbing companies invested in them, but we don't go buy them because that's not our core focus and we already have a business that's up and running. The reason I would do boring business while starting out is because businesses like mine is hard to get a loan on. A plumbing company, an H Vac company, you can get seller based financing, okay? Because typically when you're getting a loan, you have to put a certain portion down. You can get a seller to put up some of the money and you can get the rest from a bank. So then that way you don't have to come out of pocket. And if you structure it that way, they have assets, they have machinery, they have equipment, it's much easier to get the bank to give you a loan than if you are trying to buy a marketing company that doesn't really have tangible assets. Hmm.
- [76:23]
James
We like to end these podcasts off with two questions. Okay, so my first one for you, and then Jack will ask the last one here is that, Neil, if me and you died tomorrow and you had one more guiding principle to leave with the younger generation, what would that be?
- [76:37]
Neil Patel
Live life and enjoy it for what it is. They're going to live to over 100 years, right? We. I hope you guys live longer than me, but my generation, if we live to 100, then that'll be great. Hopefully. You know, our bones don't deteriorate and it's not too painful. I know some people live over 100, but no one wants to live a painful life. Right. You want it to be enjoyable and you don't want your health to deteriorate. At least stuff like bones and bone density, it's hard to recuperate it and have bones like you're 20 years old when you're 100. But they have so much time, this younger generation, that I don't think they should start trying to generate, create businesses when they're 16 and 20 and try to just become rich. Enjoy life. Really live it up. You have so long to live that you should just go enjoy and experience different things in the world.
- [77:33]
Josh
I love that. And if it was all said and done, how would you want to be remembered?
- [77:42]
Neil Patel
I don't really care how I'm remembered by most people. I want my wife to know that I loved her, and I want my kids to know that dad was there and they had great memories and experiences with me. But I don't want them when I'm gone to think about dad too much. I just want them to enjoy their life and live peacefully and move on and experience things for what they are. Right. It's life. You don't want them to be like, oh, dad was great in this or that. No, just go and enjoy life. I don't want them to think dad was bad, of course, but that would make me happy. I don't care if people, like, look at Neil, look at his home or look at his cars or how much money he has. It's all irrelevant.
- [78:24]
James
It. Yeah. Neil, this was a. This was a masterclass and an extremely insightful one for all of us and for everybody tuning in right now. So we just want to say thank you so much for coming in and to pour into our podcast. Really appreciate that.
- [78:36]
Neil Patel
Thanks for having me.
- [78:37]
Jack
Yeah.
- [78:37]
James
For everybody watching right now, be sure to like and subscribe for amazing content every week. Every week we're bringing you guys the most unique and incredible business owners to give their advice to you on how to become successful in today's world. And if you guys want to go a step further, we can follow along with Neil Patel on social media. I believe it's eilpatel N E I L P A T E L He posts some incredible content. So go stay tuned into Neil Patel. Any events, anything coming up that people should be aware of? Anything to check out?
- [79:02]
Neil Patel
No, no, not really. Appreciate you guys. If you ever need help with marketing, check us out at NP Digital. But the big thing I would tell the audience, I did not know that you guys create content for corporations. If I had to pick one thing people should do that are listening. This is just me really being objective. You guys actually do a really good job creating content. I don't know why more people don't hire you guys for that. I never knew you guys did that.
- [79:27]
James
We do. We have about 20 clients or so right now so we're looking to scale and grow a lot. We've got an incredible team.
- [79:33]
Neil Patel
Yeah, I should check out your guys like results for some of your clients but I know the type of quality of content you produce. But I probably have customers for you.
- [79:43]
James
Cool. Would love that man. I'll definitely be talking. And lastly for everybody else here in the audience, if you guys want to get involved in one of the top and most powerful entrepreneur communities and network in the world. Every week we guys we host live calls with the millionaire and billionaire entrepreneurs that we interview where you ask your questions directly to them. Online calls every week and you connect with a community of nearly 7,000 like minded entrepreneurs. So we can't wait to see you on the inside. The link's down in the description. We'll see you there. With that being said, we'll see you in the next episode.