I have spent the last twenty years of my life in the SaaS trenches. I love this industry. I love the expansion revenue, the predictable seat counts, and the way software used to solve every problem by adding more humans to a platform. I have seen the SaaS 1.0 era turn into a gold rush, and I have benefited from every bit of it.

Because I invest in what I know, a massive portion of my net worth is tied up in private and public tech. I want the party to continue. I want to believe that land and expand is a law of nature and that the desk-bound corporation is a permanent fixture of the economy.

But the last twelve months have been brutal.

I am seeing a structural fracture that no amount of optimism can paper over. The music is not just slowing down. As of March 2026, the needle is skipping across the record. We are moving from a world of software hosting work to a world of AI doing work, and that shift is a localized extinction event for the traditional per-seat license.

When you sit where I sit, you have two choices. You can double down on the last castles of the old guard, or you can recognize that the walls are thinning.

The Three-Front Attack

The market is currently sniffing out a reality that has not hit the mainstream consensus yet. The SaaS model—the foundation of the modern tech portfolio—is facing a coordinated collapse of its primary growth levers:

The Death of New Revenue: New ventures today are not hiring forty people after a Series A. They are hiring four Alphas and architecting forty agents. The new logo math for SaaS has fundamentally changed.

The Evaporation of Expansion: You cannot expand into a department that is actively being automated. The historical 120 percent net retention rates were built on the assumption of human headcount growth. That assumption is now a liability.

The Seat Churn Crisis: As companies fight to keep their revenue per employee above the 250,000 dollar uninvestable line, they are cutting the very humans that justify the software seats.

We have already seen the casualties. Atlassian is down nearly 70 percent from its highs, trading near 70 dollars. Salesforce has seen a 30 percent compression as the market realizes the manual BDR is an endangered species.

These are not just bad quarters. They are the early tremors of a total tectonic shift. And the job numbers for recent college grads support the cause for concern.

The Reorg Signal: Why Microsoft is Next

Microsoft remains the last castle because the market believes it is too big, too integrated, and too infra-heavy to fail. They think Azure will save the Office seat decay. But history teaches us that you do not reorganize a winning team.

In a move that mirrors the panic reorgs I have seen in failing startups, Microsoft just shifted Mustafa Suleyman—the high-profile lead of their AI and Copilot division—away from the product front. As of last week, he has been moved back into the research lab to focus on models and superintelligence. Jacob Andreou has been tapped to lead a unified Copilot team.

You do not reorg when a company is working. I have never been a part of a leadership shuffle of this magnitude where there was not some core issue or existential threat. Moving your AI heavyweight away from the core revenue driver is a quiet admission that the Copilot as a seat-premium strategy is hitting a massive wall of friction.

Microsoft 365 seat growth has stagnated at roughly 6 percent. Their attempt to force a 30 dollar premium on a workforce that is actively shrinking is a bet against gravity.

The End of the Desk

The consensus is that Microsoft is the safe haven. I believe it is the final domino.

The SaaS Era (2006–2024)	The Agentic Era (2026+)
Scaling = More Headcount	Scaling = More Compute
Valuation = Seat Count	Valuation = Revenue Per Employee
Success = “Hosting” Work	Success = “Doing” Work
Microsoft = The Foundation	Microsoft = The Last Bottleneck

I hate that we are here. My portfolio would be much healthier if we had another decade of the seat-count era. But the GTM Engineer and the Alpha Mind are the new architects of demand, and they do not need fifty seats of Excel to build a dynasty. They need high-leverage systems that route around the legacy bloat.

Microsoft is a bet on the bureaucratic corporation. It is a bet that the desk—the central unit of value for the last century—is still strong.

The market is still pretending the office is full, and getting fuller. At best the office stays the same size, at worst companies like Microsoft lose 50% of it’s seat licenses over the next 5 years.

Software used to be hard. We paid Alpha Engineers like professional athletes because they were the only ones who could turn a vision into a functional machine. For a decade, the legacy software engineer was the most expensive line item on the P&L.

Google famously paid Principal Engineer Zach Lloyd a retention package so lucrative he could have comfortably retired in 2013. Meta once offered a $100 million package to a single engineer just to prevent them from moving to a competitor. We did not do it because it was fair. We did it because engineering was the bottleneck.

That world is ending. We are witnessing a massive correction of a decade-long imbalance.

Former Facebook CTO Bret Taylor has noted that we are moving away from the era where writing code is the primary value driver. In the old world, a great engineer was paid five times more than a great marketer.

Today, even seasoned coders are seeing their jobs in less demand. As of March 2026, entry-level engineering roles have seen a 40 percent drop in job postings compared to 2024. As the cost of production drops toward zero, the cost of distribution and business strategy goes to infinity.

The bottleneck has shifted from building the platform to building the demand.

The Shift in Value

The GTM Engineer is not a traditional marketer. The traditional marketing leader was a manager of humans. They spent their days hiring, delegating, and resolving interpersonal friction. Their success was measured by the size of their headcount. They managed coordination loops where a strategy was handed to a manager, who handed it to a specialist, who eventually produced an asset. It was a slow, expensive, and fragile way to scale.

The GTM Engineer is the highest-paid marketer because they do not manage humans. They architect systems. They are responsible for the plumbing and the pipes of the organization. They build the system first. They design the logic and the data flow before they ever think about a hire.

I am seeing this shift in my conversations every day. We are currently getting the math wrong. We are used to paying a product marketer $150,000 to write blogs and build case studies that an AI agent can now do in seconds. Meanwhile, we hesitate to pay $300,000 or even $500,000 for a GTM Engineer.

When one person can replace entire roles in a week by architecting the right system, you are talking about millions in value add for a single individual. We paid engineers because they built the platform; we must pay GTM Engineers because they build the demand.

Old Bottlenecks vs. New Reality

Old Bottlenecks (Legacy Tech)	New Bottlenecks (AI Era)
Building a new platform	Pricing and packaging the platform
Hiring a website designer	Getting the first 10,000 users
Writing sales & marketing content	Solving complex attribution
Developing a new feature	Optimizing the GTM funnel

The GTM Engineer follows a rigid hierarchy of execution:

• Build AI First: They architect the solution using agentic workflows and autonomous systems. If an agent can do it, a human should not touch it.
• Try Second: They iterate on the system until it breaks or reaches its limit.
• Resort to Human Last: Only after failing multiple times to automate a process do they resort to hiring a human.

In 2026, the GTM Engineer is ten times more in demand than the traditional CMO. They solve the only problem that remains: making the product matter in a world of infinite noise. When the cost of building software is near zero, the bottleneck shifts to the market.

If you are a legacy engineer waiting for a Jira ticket, you are obsolete. If you are a marketer who cannot build an agentic workflow, you are invisible. Hire for the bottlenecks. In 2026, that is not a traditional marketer. It is the architect of demand.

The future belongs to the builders who understand that the code is just the beginning. The real work is making it win.

We were halfway to San Antonio yesterday when I realized I had not looked at a single Yelp review or scrolled through a TripAdvisor list. Usually, planning a spring break trip out of Dallas is a week of open tabs and second-guessing.

This time, I let Gemini handle the architecture. It chose a specific cabin at Rough Creek Lodge, mapped out UTV trails on the 9,000-acre ranch, and even timed our Tesla charging stops in Marble Falls at Blue Bonnet Cafe nearby. It told us to stop in Hamilton and try Woody’s Hamburgers two blocks from the Tesla charger, because of it’s “In-n-out vibes” and Dublin sodas.

LLMs don’t hand us results to sift through, it hands us a finished experience.

We are witnessing the end of “top 10” lists. The end of bronze medals for businesses that aren’t the top choice.

And yet most businesses are not #1 in their industry. By very definition 100% of your competitors can’t be #1 if you are first. That’s why it’s been “ok” up to this point to have a brand that is just about being present. Being present somewhere at events, being present on some result somewhere on Google, being present on social media. Not winning, not being #1, being “visible” online.

In 2026, curiosity has been replaced by the Answer. The leaderboard has not just shrunk; it has collapsed. We have shifted into a world that is Gold, Silver, or Invisible. If you are not the definitive #1 or #2 choice for a specific need, you effectively do not exist.

This is the end of the middle. There are no more Bronze medals.

The data from March 2026 is clear. Nearly 60% of decisions are now influenced by AI. You do not just lose market share by being third; you stop existing in the consumer’s consciousness.

This comes back to culture. It’s funny how the old things are new again? So many companies got away with Bronze medal cultures. Bronze medal teams. Bronze medal leaders. Not the best, but not the worst. They were “ok” and that was fine. No point in chasing Gold when Bronze got it done.

Today it’s different. You need a culture of chasing for the Gold. You need people who view the mission as their own skin in the game. In 2026, the complexity of agentic systems means that a part-time mind will never catch a full-time architect.

For many businesses, that likely means you need less managers, but with more commitment from each one. This also means for every agency, contractor, vendor, you better be sure of the value they provide vs. the trade of being “one of many” things they are care about.

In a “Winner-Take-All” AI economy, the only defensible moat is proprietary institutional context. Transitioning from external agencies to internal FTEs is no longer just a culture play, it is a mandatory move to capture the massive productivity margins and velocity gains that AI now offers.

A simple analysis outlines the strategic trade-offs between talent models. While agencies and contractors provide temporary elasticity, they represent a “leaky bucket” for your company’s intellectual capital and speed.

In the current landscape, every hour outsourced is a missed opportunity to train your internal systems and compound your organizational intelligence.

Employees vs. Contractors vs. Agencies

Feature	Full-Time Employees	Independent Contractors	Agencies
Mission Alignment	High. Owners of the “Why.” Driven by equity and long-term vision.	Low. Task-oriented. Driven by the next contract.	Zero. Profit-oriented. Driven by their own firm’s margins.
AI Integration	Seamless. Prompt engineering is applied to your proprietary data/context.	Fragmented. AI efficiencies benefit their personal workflow, not your org.	Extractive. They use AI to lower their costs while charging you the premium.
IP & Knowledge	Compounding. Stays within the “brain trust.”	Transient. Walks out the door when the project ends.	Leaky. Best practices learned on your dime are sold to your competitors.
Culture Impact	Foundational. Builds the “Tribe” and shared language.	Neutral. Often treated as “other,” creating a two-tier social class.	Disruptive. Often ignores internal norms to force their own processes.
Velocity	High (Long-term). Minimal friction in communication and hand-offs.	Medium. Restricted by specific SOW boundaries.	Low. Burdened by account management and “meeting theater.”

The move toward an FTE-heavy model is a strategic capture of the “AI Margin” that agencies currently arbitrage. As the cost of execution collapses through automation, paying an agency for labor is paying for overhead you no longer need.

By owning these roles, you ensure that your unique business context is codified within your own team, creating a compounding advantage in speed and innovation. This isn’t just about reducing headcount costs, it’s about owning the engine of growth rather than renting it from outsiders who do not share your risks or your ultimate rewards.

The companies winning right now are not hiring for roles. They are hiring for ownership. They are building tribes that refuse to lose because their identity is tied to the result.

When the AI models look for the definitive choice, they find the brands built by people who stayed in the room when it got hard. You either build a culture of owners or you prepare to be forgotten.

I have managed hundreds of people over my career. The companies I’ve worked for have had nearly 100,000 employees combined. I know corporate, I know startups, mostly, I just know people.

I know the weight of that responsibility. I know the late nights spent worrying about career paths, interpersonal friction, and the general health of a large organization. It is a role built on empathy and coordination. However, the fundamental nature of that work has shifted in a way that we can no longer ignore.

In 2025, we talked about high performers being 10 times more valuable than the average employee. By 2026, that gap has widened to 100 times. This is not hyperbole. It is a mathematical reality driven by the shift from human capital to agentic systems.

We are witnessing the end of management as a coordination layer. When I say “management” I am talking about the idea that executives exist to manage people, their emotions, their expectations, and their games.

For decades, middle management was the glue. These were the people who translated strategy into tasks. They could be “fake” and bring drama into the workplace.

They were the essential filter between the vision and the execution. Today, that filter has become a bottleneck. Data from early 2026 indicates that 70 percent of traditional coordination tasks are now handled by autonomous agents. Scheduling, status updates, and resource allocation no longer require a human translator.

Now, before you push back because legacy companies aren’t even using AI yet, I’m not talking about laggards. I’m using early adopters as a predictor of where things are going. As long as you are ok living a few years in the future, read on.

So, back to the mandate I’m seeing more and more each day. It’s about building systems not managing people.

Let me say that again, the new mandate for leadership is not to manage people. It is to architect systems. Companies like Listen Labs are already setting the standard by refusing to hire non-technical staff. It does not matter if the role is in sales or design.

Every hire must be a builder. Their BDRs are not just making calls. They are building the AI agents that automate their own lead generation and deal creation. They have moved from being supervisors to being architects.

This shift feels brutal, but it is actually about clarity. The CEO Genome Project, a ten-year study of 17,000 executives, found that high-performing leaders are twelve times more likely to succeed because they are decisive.

They do not wait for consensus. In a world of agentic workflows, consensus is often just a polite word for stagnation. If you are waiting for a technical support team to validate an idea or a designer to build a prototype, you are a passenger. In a world where agents can build and iterate in minutes, waiting for a human translator is a competitive disadvantage.

Think of the scene in Apollo 13 where the engineers dump a box of parts on a table. They have to fit a square peg in a round hole with only what is in front of them. The managers are the ones looking for a requisition form to buy a new filter. The builders are the ones grabbing the duct tape. In 2026, if you are not grabbing the tape, you are taking up oxygen.

Transitioning people out is the hardest part of the job. I have been in that seat. It feels like a failure of the culture you worked so hard to build. But keeping a passenger on a ship that requires every hand on a tool is a failure to the mission.

You cannot manage your way through an AI revolution. You have to build your way through it. If your team is waiting for technical support to start, you have already lost. The future belongs to the architects who can look at a box of parts and build a solution before the clock runs out.

Most leaders are still stuck in a linear mindset. We have been taught for decades that to double our output, we must double our headcount. It is a simple, comfortable equation that is now completely broken. In the age of AI, thinking of hiring as a 1:1 ratio of people to production is a structural error that will leave your company behind.

Think of the movie The Matrix. When Neo finally understands the code of the world around him, he does not just become a slightly better fighter. He becomes a multiplier. He can manipulate the environment and move at speeds that were previously impossible. He is no longer bound by the standard rules of the simulation.

AI is that code for our modern workforce. I wrote about this recently in The End of Entry Level, and this post expands on that concept.

You should no longer be looking for “employees” to fill a seat and perform a task. You need to hire multipliers. These are individuals who understand how to leverage AI to achieve 10x or 100x the output of a traditional hire.

When I was the Head of Growth at Superpages, we took organic revenue growth from 11% to 164%. We did that by focusing on high-leverage growth strategies, not just by throwing more people at the problem.

Today, that same level of acceleration is possible with a fraction of the team size if those people are multipliers. You do not need thousands of people if you build a structure that prioritizes high-value impact over raw headcount.

If you are an investor or a CEO, you have to stop asking how many people a company has. Instead, ask about their leverage. A small team of multipliers using AI can now outperform a legacy organization with ten times the staff. This is not about cutting costs, it is about creating value for others at a scale that was never before possible.

The goal of business is to generate cash flow (money) in a repeatable and scalable way. And the goal of money is to pass the point of diminishing return so you can buy your time back.

If you hire traditional employees, you are just building a bigger machine that requires more of your time to manage. If you hire multipliers, you are building a legacy of efficiency and innovation.

Stop trying to win the talent war by counting heads. You win by finding the people who can rewrite the code of your business. That is how you move from the chase of the money phase into the freedom of the time phase.

I have spent fifteen years in the trenches of high growth SaaS. I have seen the 2 a.m. board deck revisions and the desperate hunt for data gravity. I know what it feels like to earn every dollar of true ARR, recurring revenue through blood, sweat, and manual onboarding. The type of revenue that you can model out 3, 5, and even 10 years into the future.

That is why the news cycle of February 2026 feels so surreal to me.

Every morning there is a new record on my feed. Lovable hit 100M ARR in eight months and is already pacing toward 300M. Mercor did it in ten. Cursor did it in twelve and just crossed a billion. OpenAI just tripled to 20B in a single year. The timeline of growth has effectively gone vertical and we are all supposed to be applauding the efficiency.

I’m not clapping. I’m concerned.

There is a line from Jurassic Park that keeps playing in my head: “You wield this power like a kid.”

When Ian Malcolm says that to John Hammond, he isn’t just talking about the danger of dinosaurs. He is talking about the lack of humility. He is talking about the difference between standing on the shoulders of giants and actually being a giant.

In the movie, Hammond didn’t do the hard work of evolutionary biology; he just bought the labs and extracted the DNA. He skipped the centuries of trial and error that nature requires. He thought he owned the power because he had the key to the cage. And in so many ways I feel like all of us in technology (whether you want to call it SaaS, AI, etc.) are kinda sitting around having this very existential conversation right now about the future.

I just believe in the 30,000′ foot view. And rather than chasing vanity metrics, we should be having deeper conversations about what this all means for the future.

The people using the term ARR right now haven’t paid the price to use it. Because by nature ARR is a predictable and long-term metric. AI is not even focused on annual right now, or even the quarter. It’s a daily grind of beating the next news cycle.

We are witnessing the rise of Hollow ARR (HARR).

Hollow ARR satisfies the technical definition of a subscription but lacks the structural integrity of a real business. In the solid era of SaaS, revenue was a proxy for a moat. It meant you were embedded. It meant you were a utility. In this new agentic era, revenue is often just a proxy for a temporary efficiency gain. The speed is intoxicating but the math is terrifying.

It’s not annual. It’s not recurring. Yes, I’ll concede it’s revenue. But a big chunk of these are pilots, monthly usage fees, and math that assumes that in an age of everything changes every 5 minutes, that nothing will change for this revenue to be modeled into infinity.

The Architecture of Revenue: Solid vs. Hollow

Feature	Solid ARR (Legacy SaaS)	Hollow ARR (HARR)
Primary Moat	Data Gravity & Workflow	Viral Vibe & Model Access
Gross Margin	80% – 90%	30% – 50% (Inference Tax)
Switching Cost	High (Implementation Friction)	Zero (Plug-and-Play)
Growth Driver	Sales Efficiency & Land/Expand	GPU Availability & Social Proof
Revenue Source	Software/Utility Budget	Payroll/Discretionary Budget
Customer LTV	High (Multi-year stability)	Unknown (High Volatility)
Value Proxy	Business Integration	Temporary Efficiency Gain

I am not saying some, or all, of these hyper-growth AI platforms will go the way of the dinosaur. I’m simply saying in our chase to brag about ARR, we aren’t stopping to think. It brings to mind Ian Malcolm’s other stinging rebuke from that dinner table scene: “Your scientists were so preoccupied with whether or not they could, they didn’t stop to think if they should.”

We have built tools that can scale to a hundred million dollars in revenue before they even have a customer support department or a security team. We are celebrating the “could” and the raw capability of a model to generate cash at light speed, without pausing to ask if the foundation of that revenue is something we actually should be calling a business.

We're about to close our first $1M ARR enterprise contract.

Fastest company to close enterprise pipeline with zero sales team, zero outbound, and a 48h old product.

SOC 2 compliant thanks to @getdelve https://t.co/RBPsQobHqZ

— FW (@fawiatrowski) February 14, 2026

We are so enamored by the sheer velocity of the “HARR” growth that we’ve ignored the fact that we are building on shifting sand. We aren’t asking if this revenue is durable, or if it’s responsible to value it like traditional software.

We are wielding the “could” of AI to inflate numbers, but we haven’t stopped to think if we should be calling this success.

These new winners are struggling with 40 percent margins because every dollar of revenue carries a massive, variable tax in compute. If your gross margins look like a hardware company, you are not a software company. You are a reseller of tokens.

SaaS was built on sticky seats. AI is built on fluid tasks. When software is generated on the fly, the switching cost is zero. If a competitor launches a better vibe tomorrow, that annual revenue evaporates in a weekend. Most of what we call recurring revenue right now is just a series of one month trials wearing a tuxedo. I mean, do we all really need a reminder of what ARR is? I think so.

Even the source of the money has changed. These literally are the “one time” or “irregular payments” that traditional ARR excludes. Usage, tokens, credits, adoption, are all irregular by nature.

Sometimes the oldest wisdom is the best. Easy come, easy go. The best things, often take time.

These companies are winning because they tap into payroll budgets rather than software budgets. That is a trap. Payroll is discretionary. Software licenses are utilities. By selling the outcome instead of the tool, these firms have exposed themselves to macro shifts that traditional SaaS never touched.

Whose to say that in 18 months we will be skipping humans entirely? This entire crop of AI “unicorn” tools that humans use, might be replaced by different platforms that cater entirely to AI Agents.

Now, I know the counter argument. Legacy SaaS is being cannibalized. I see it every day. The old “systems of record” are being replaced by “systems of reason.” Some of the tools I spent fifteen years watching in the SaaS space will likely be eaten by these very AI agents. The old guard is vulnerable because their moats were built on friction, and AI is the ultimate lubricant.

But there is a deeper irony in the pricing error happening in the markets right now.

We are punishing legacy SaaS because they are “boring.” We are slashing their multiples because they are only growing at 15 percent. Meanwhile, we are giving 50x multiples to AI companies with 30 percent margins and a churn rate that would make a gym owner blush. But they got to $10M ARR in 30 days, or is it $9M in HARR and $1M in true long-term ARR deals?

It should be the opposite.

Legacy SaaS revenue should be valued higher today precisely because it is solid. It is proven. It is hard to kill. The new AI revenue should be valued like a high beta infrastructure trade. It is a bet on the cost of a token, not the value of a firm.

We are currently valuing the house that was built in a weekend with a 3D printer higher than the one built with stone and mortar, even while the printer is still running up the electric bill.

The record setting growth we see on my feed is not the birth of a new Golden Age. It is the final vertical spike of an old one. The winners won’t be the ones who hit 100M the fastest. They will be the ones left standing when the novelty wears off and the bill for the compute comes due.

The vertical line is not a victory. It is a warning to pause and think deeply before sharing the next ARR record breaking company in your feed.

You might just be sharing the fastest company to $100M HARR.

Private equity likes to call itself the rational antidote to sentimental founders, bloated corporate structures, and quarterly-obsessed public markets. The narrative is tidy: disciplined investors step in, unlock efficiency, and deliver superior returns through operational excellence.

But inside the model is a more unvarnished reality, a world where companies become spreadsheets, people become ratios, and innovation becomes the tax paid in exchange for predictable IRR. And despite the industry’s polished reputation, the incentives baked into modern PE often push leaders away from long-term value creation and toward short-term arithmetic.

This is the quiet truth most CEOs already suspect: private equity isn’t inherently evil, but it is inherently numerical. And once numbers dominate the worldview, everything else becomes secondary.

The Rise of the Spreadsheet Era

Private equity controls more of the economy than at any point in history.

Private equity hasn’t just grown, it’s taken over.

• $13.1 trillion in global AUM as of 2024 (Preqin).
• Over 12 million U.S. workers employed by PE-owned firms (American Investment Council).
• PE-backed companies now account for nearly 6% of U.S. GDP.
• More than one out of four M&A deals globally involves PE capital (Bain).

When an industry with that kind of scale brings a singular incentive structure — protect capital, amplify returns, minimize uncertainty — it reshapes entire sectors.

PE doesn’t just buy companies. PE sets the operating logic of modern business.

The Incentive Machine Behind the Brutality

The defining characteristic of private equity is not leverage.

It’s time.

Funds operate on a 7–10 year cycle, but the median hold period has collapsed to 5.2 years (Bain). That means every decision must mathematically contribute to a future sale at a higher multiple. Innovation? Uncertain. Talent development? Slow. Long-term bets? Risky.

So they gravitate to what can be quantified and controlled:

• SG&A compression
• Headcount efficiency
• Price optimization
• Working-capital release
• Short-cycle capex deferral
• Bolt-on arbitrage

Bain reports that over 70% of PE value creation now comes from EBITDA improvements and multiple expansion — not true operational transformation.

Translation: the model is not designed to build the future. It’s designed to engineer a higher exit.

People Become Ratios, Not Resources

A 2023 HBR study found that companies acquired by PE cut an average of 13% of their workforce within two years.

Research from Chicago Booth showed that wages at PE-acquired firms lag industry peers by up to 4%. Another study found PE-owned hospitals increased patient volumes while decreasing staff, leading to statistically worse patient outcomes.

That’s why employee sentiment, culture, happiness, all fall when Private Equity comes in.

But none of this is irrational. It’s arithmetic.

Labor is the most flexible cost lever with the fastest path to EBITDA impact. In a compressed hold period, the best lever wins — even if the workforce loses.

To PE, headcount reduction isn’t personal. It’s line-item physics.

Innovation: The Silent Victim of Predictable Returns

The National Bureau of Economic Research found that after PE buyouts:

• R&D spend declines an average of 12%
• Patent output drops
• Patents issued are less original and less impactful

Why?

Because innovation introduces two things PE can’t model easily:

• Long payoff windows
• Nonlinear outcomes

PE’s worldview optimizes for control. Innovation’s worldview optimizes for exploration. One of them is spreadsheet-friendly. The other is not.

The PE firm’s job is not to dream. It’s to de-risk.

The Human Cost of Capital Preservation

CEOs in PE-backed environments often describe the same shift:

• Suddenly every conversation becomes about numbers.
• Everything turns into a dashboard.
• I stopped talking about customers and started talking about cohorts.

And it’s not because leaders suddenly lose their imagination. It’s because the system punishes anything it can’t quantify.

PE doesn’t mandate brutality. The model incentivizes it.

And incentives always win.

Why Smart CEOs Still Work With Them

Here’s the nuance no anti-PE narrative admits:
Sometimes the brutality is exactly what a company needs.

PE capital can:

• Professionalize a founder-led business
• Bring needed discipline
• Create accountability
• Accelerate industry roll-ups
• Unlock scale through systems and shared services

The best PE firms truly do create value, not just extract it. But the model still shapes the outcome more than the intentions.

Even the most visionary investor must answer to the IRR timeline.

The Uncomfortable Future of Value Creation

The world is moving toward AI, automation, product innovation, and new business models — all long-horizon, experimentation-heavy, probabilistic bets.

The world of PE is moving in the opposite direction: toward faster cycles, more leverage, stricter diligence models, and tighter operational control.

This is the tension CEOs are walking into. PE wants certainty. The future does not offer any.

When an industry optimized for predictability collides with an economy optimized for reinvention, something has to give.

And increasingly, what gives is innovation.

So What Should CEOs Take Away?

Three truths matter:

1. Private equity is not built to create the future, it’s built to monetize the present.
2. If you sell to PE, your company becomes a spreadsheet, for better, often for worse.
3. Success comes from protecting innovation from the gravitational pull of financial engineering.

The firms that win the next decade won’t be the ones with the cleanest models. They’ll be the ones that let math guide decisions without letting it dictate imagination.

Because the hidden flaw in private equity’s worldview is this:

Not everything valuable can be optimized.

And not everything that can be optimized is valuable.

Sources

• Preqin – 2024 Global Private Capital Report
• Bain & Company – Global Private Equity Report 2024
• American Investment Council – Private Equity’s Economic Impact Report
• Harvard Business Review – What Happens to Companies After PE Takes Over
• National Bureau of Economic Research (NBER) – Private Equity, Jobs, and Productivity
• Chicago Booth Review – How PE Buyouts Affect Wages and Workers
• NBER – The Impact of Private Equity on Innovation
• Health Affairs – Private Equity Acquisition and Hospital Quality
• McKinsey – Private Markets Annual Review 2024
• PitchBook – Global M&A Report

I’ve been in SaaS for over two decades. I’ve seen it all—from duct-taped onboarding flows that accidentally convert, to UI tweaks that unlock $10M ARR bumps. But this? What HubSpot is doing right now is one of the biggest unspoken sins in SaaS: decoupling the user experience from the value layer.

They’re inviting customers to plug ChatGPT directly into their CRM. Sounds harmless. Feels smart. Probably even tested well. But if you’ve spent time inside billion-dollar SaaS companies, you know exactly where this leads:

You just trained your customer to stop logging into your product.

In SaaS, the UI isn’t just a skin. It’s your engagement layer, your onboarding loop, and your upsell engine. It’s the billboard and the highway. You don’t let someone else paint over it, and you definitely don’t tell your customer to bypass it entirely.

But that’s exactly what this “Connect your CRM to ChatGPT” push does. And it’s going to accelerate a shift the industry is absolutely not prepared for.

SaaS is About to Get Rewritten by Internal Tools

In the Bahamas last month, I sat with a CEO who built a thriving SaaS-like company at $10M ARR with 5 full-time employees and 50 AI agents. That ratio used to be laughable. Now it’s becoming default.

Instead of buying bloated tools, teams are wiring up:

• Internal databases
• Natural language interfaces
• Lightweight UIs powered by ChatGPT or Claude

They don’t need your dashboards. They want answers.

A recent case? Slack cutting off third-party access to its message history APIs. Why? Because customers were piping Slack data into their own internal copilots and skipping the product entirely. Slack saw the future—and yanked the cord.

And yet HubSpot just invited that future into their front door.

The Next Wave of SaaS Isn’t a Dashboard—It’s a Brain

Here’s the shift no one wants to say out loud:

Executives don’t want dashboards. They want decisions. They don’t want data. They want direction.

And now that tools like GPT-4o and Anthropic’s Claude can synthesize context, teams are replacing entire categories of SaaS with internal agents that operate on company data. No clicks. No screens.

Just “What do I need to know?”

Zapier’s CEO recently shared that enterprise customers are building GPT-powered Slack agents that automatically summarize pipeline risk across all deals—and output recommendations, not just data. That’s what SaaS used to do. Now companies are skipping the middleman and building the brain themselves.

If They Stop Logging In, You’re Not a Product—You’re an API

This is what makes HubSpot’s move so dangerous.

When your CMO hasn’t logged into the CRM in 3 months because ChatGPT does it better, the conversation isn’t “Which plan tier should we upgrade to?”

It quickly becomes…

“Why are we still paying for this?”

You’ve become a backend. A glorified structured database. And if you’re just an API, the pressure becomes:

“Can we rebuild this ourselves without all the unnecessary features we don’t use?”

“Can we swap this out for something cheaper if it’s just a back end database?”

“Can we train our own internal model directly on our raw customer data?”

And you better believe someone in the room will at least want to explore it. And that’s the first step towards churn.

So What Do You Do If You’re Building SaaS in 2025?

Here’s the truth: the SaaS model isn’t dying. But it is mutating—fast. And if you’re not adapting, you’re getting commoditized.

Here’s what forward-thinking founders need to do now:

1. Own the interface. Never route core engagement through someone else’s product. Build the insight layer into your UI or risk becoming invisible.
2. Think like an AI orchestrator. Don’t just be a system of record—become the system of reason. Bake in agents, recommendations, and automation before your customers do it without you.
3. Design for executives. The future isn’t dashboards—it’s “give me the summary.” Design around the user who doesn’t want to click anymore. Build for the boss, not the analyst.

SaaS isn’t dead. But the passive, login-and-hope model is.

If your product isn’t smart, embedded, and essential—you’re building someone else’s roadmap for them.

In the swiftly evolving landscape of artificial intelligence (AI), we find ourselves living in what I call “The Mirage Age.” This era is marked by a fascinating paradox: the entities we interact with – our jobs, companies, and even our cultural norms – are simultaneously real and illusory. They exist, yet not in the forms we traditionally understand. This article delves into the three primary mirages of our time – Careers, Companies, and Culture – and explores how AI is reshaping them.

The Mirage of Careers

The concept of a career is undergoing a radical transformation. Traditional job titles and roles are becoming increasingly fluid, thanks to AI’s rapid advancement. A report by the World Economic Forum predicts that 85 million jobs may be displaced by a shift in the labor division between humans and machines by 2025, while 97 million new roles, more attuned to the new division of labor, may emerge.

In this mirage, what seems like a stable career path today might become obsolete tomorrow. Conversely, roles that didn’t exist a decade ago are now burgeoning. For instance, the rise of AI has created demand for machine learning engineers, AI ethics officers, and data scientists. This fluidity challenges the very notion of a ‘career ladder’ – it’s less about climbing and more about adapting and evolving.

The Mirage of Companies

Companies, as we know them, are also part of this mirage. The traditional brick-and-mortar business model is giving way to more agile, AI-driven operations. According to a survey by McKinsey, more than 50% of companies have adopted AI in at least one business function, streamlining operations and offering innovative services and products.

This shift is not just about technology adoption; it’s about a fundamental change in how companies operate and deliver value. Businesses that once seemed solid and unchanging are now fluid, constantly evolving entities. They exist in a state of perpetual transformation, driven by AI’s capabilities to analyze data, predict trends, and automate tasks.

The Mirage of Culture

Perhaps the most intriguing mirage is that of culture. Our cultural interactions are increasingly mediated by AI. We talk to Alexa or Siri, not just search on Google. This shift represents a profound change in how we access information and interact with the world.

A study by Pew Research Center highlights that 46% of Americans use digital voice assistants. The way we seek information has shifted from actively searching to passively asking. This change reflects a broader cultural transformation where AI becomes an integral part of our daily lives, influencing how we think, make decisions, and perceive reality.

Navigating the Mirage Age

In this age of the mirage, the key to navigating these transformations lies in adaptability and continuous learning. For careers, it means being agile and open to acquiring new skills. For companies, it involves embracing change and leveraging AI for innovation. And in culture, it requires us to be mindful of how AI shapes our perceptions and interactions.

The Mirage Age is not about the dissolution of reality but its expansion. It’s an era where the boundaries between what’s real and what’s possible are constantly being redrawn. As we move forward, understanding and embracing these mirages will be crucial in shaping a future that harmonizes human potential with AI’s transformative power.

More importantly, if you chase the mirage, it may not exist by the time you get there. The Mirage Age requires smaller, iterative changes, with less big bets and more disruptive flywheels.

Citations:

1. “Artificial intelligence is transforming our world — it is on all of us to make sure that it goes well. How AI gets built is currently decided by a small group of technologists. As this technology is transforming our lives, it should be in all of our interest to become informed and engaged.” by Max Roser, December 15, 2022. Our World in Data.
2. “AI’s influence on technology is due in part because of how it impacts computing. Through AI, computers have the ability to harness massive amounts of data and use their learned intelligence to make optimal decisions and discoveries in fractions of the time that it would take humans.” Built In.
3. “The power and pitfalls of AI: creating a just, equitable society with technology. From developing personalized learning platforms tailored to different abilities to identifying patterns and creating interventions to decrease homelessness, artificial intelligence (AI) can be used to transform lives across the society.” by Karen Shih, November 07, 2023. Heller School for Social Policy and Management at Brandeis University.
4. “The rapid deployment of AI and its potential impacts on human society and economies is now clearly in the spotlight. What will AI mean for productivity and economic growth? Will it usher in an age…” The Conversation.

I was having lunch with a friend last week who leads HR at a Fortune 500 company. They just finished a large round of layoffs and are preparing for more. After years of taking free tax credits to keep people at work, quite the opposite is happening now.

It’s almost like after being stuck at home and keeping payrolls to comply with government laws, everyone is going through a great reset. But before we talk about the path forward, it’s helpful to understand a little about where we have come from.

One of the biggest reasons for the reset we are going through now, is that for years there was little to no change in many corporate payrolls. The impacts we are feeling now, comes from two years of not making any changes. At all.

Governments of the world encouraged businesses to keep their employees on payroll regardless of whether or not they were actually working. It didn’t matter if you had a great employee or a toxic one, you simply completed a form that had the number of full time employees on your team, and got paid for it.

This lead to nearly 40% of people starting a side hustle, and companies seeing employees as nothing more than $26,000 in free tax credits.

$26,000 Per Employee

Just look at what you still see, even in 2022, if you search for employee retention credit on google. It’s simply focused on the $26,000, instead of about hiring great people to do their best work.

Now we enter into a time period of rising inflation and a tight labor market. At the same time, businesses still have many people on their payroll that probably shouldn’t be there.

For a moment, let’s consider the impact ERCs have had on the business landscape, and what challenges that might pose in the future. Government programs were designed to help make sure that employees could retain their jobs and businesses would remain open. Especially local businesses. Everyone recognized that in general, the Employee Retention Credit was a necessary thing durning global lockdowns.

The Shift to Remote

But even while ERCs were intended to keep people at work, a majority of businesses that were able to do so, moved to a completely remote environment. So, the risks of catching covid were way down, and yet company after company continued to claim retention credits.

For many employees and employers, the situation worked well for a time, but now that COVID regulations no longer exist, how and when do employers insist that everyone returns to the office? How do you shift your mindset away from trading full time employees for tax credits? Who has been quietly quitting while collecting a paycheck?

There was a certain unspoken agreement during the ERC era, even if CEOs didn’t talk about it. Companies didn’t care about productivity because firing team members wasn’t in their best interest. They’d lose the tax credits. And on the other side of the equation, team members didn’t want to quit jobs that they didn’t have to quit.

A Tight Labor Marketing (That’s Exhausted)

One thing is certain. As leaders, we are going to have to reset goals, have clear strategies and most importantly, have clear conversations with our employees. The great reset is inevitable for most companies, regardless of industry.

To make matters worse, many HR teams are under pressure to deal with a workforce that is exhausted. The last two years have taken their toll on everyone, whether we admit it or not. People have had to restructure their entire lives. And at the same time unemployment is at record lows, and wages continue to spike for many workers.

Think about the data above. There are millions of people that might not be in the right job today. And on top of that, 40% of people are thinking about quitting their job soon. And on top of that 50% of companies say they are expecting layoffs in the near future. If ERCs were mean to freeze people at their current jobs, I guess we are going through the great unfreeze.

The Great Reset

Companies have been paid for multiple years not to let anyone go, regardless of whether or not they were unhappy, not contributing, or downright toxic. Two years changed everything, and the future isn’t clear if anything will go back to normal, or even what the new normal is in a hybrid world.

The workplace is currently going through the great reset. Mainly, resetting goals and teams to ensure success in this changing environment.

How to think about the great reset:

• Evaluate your overall team from top to bottom, leave no one out, including yourself.
• Acknowledge that there will be more, not less, team transitions going forward.
• Offer surveys to better understand the well being of your employee. Setup tools like Culture Amp or Lattice to measure how you are doing.
• Be ready to have a plan in place to hire and replace team members that leave during this time. Invest heavily in HR and recruiting talent.
• Make investments in the overall health and well being of your employees. Encourage counseling, education and mental health services.
• Explore the idea of a hybrid workplace and to reshape the hybrid environment to match a changing financial market. Find what works for your business instead of chasing a one-size-fits-all approach.
• Stress the companies financial and future goals. Be candid about current situation and desires for the future, even if it means making fairly radical changes.

The majority of these goals deal with employees and the relationships formed with other members within the workplace. The last couple of years have taught us that the human connection is so important to success, whether it be in business, personal life, or in educational institutions.

Chase Simplicity

Clearly, the work environment has changed. 75% of hybrid or remote workers agree their expectations for working flexibility have increased, according to Gartner. And at the same time work feels more complicated and confusing for many than ever.

How would you rate your workplace? Is it simple and at a times complicated? Or complex and at times chaotic? It’s time to chase simplicity and ditch complexity. Google calls this their new Simplicity Sprint.

How to eliminate complexity:

• Reduce the number of goals down to only ones that matter. If your team has 8 goals, ask yourself if 3 will work instead.
• Eliminate standing meetings that could be replaced with asynchronous work and collaboration.
• Create a new human-centric model for a hybrid environment. Design work/projects around employee-driven flexibility.
• Understand that the current economic climate will foster a need to optimize costs. Review your tools and technology and eliminate waste. You’d be surprised how many companies leverage Box, Dropbox, Google Drive, and Sharepoint at the same time for file storage.
• Use of data collection might be used more for effective results. Consider technology to track productivity, employee engagement, etc. 
• Research an ever growing interest in a shorter work week. With inflation on the rise, many companies are finding it difficult to raise pay and attract/retain talent.

When looking at strategies, we must analyze what we already have in place. What have we done in the past that has worked? What hasn’t? There is probably no better place to start than at the beginning. Once we determine our needs, strategies will become clearer.

Candid Conversations

Goals and strategies can be in place, but unless we have open conversations with our employees, we cannot guarantee success. It’s important that we reset our expectations, set clear goals, eliminate complexity, and then follow on with candid conversations to move forward.

How to have more candid conversions:

• Remember the goal is the best outcome for the company and the individual. Companies have big visions and missions, and people want to do their best work in a place that is a good fit.
• Every discussion should be factual and structured. Start by asking employees questions. Listen and be positive. Remember the goal is the betterment of the team.
• Be clear and honest about the issue at hand. No one wants to spend hours hashing out a problem because people are not forthright.
• As employer and manager, it is your responsibility to lead the discussion honestly and factually. Put personal feelings and pride aside.
• With that said, it is okay for you to personalize the issue before the difficult conversation. Empathy can go a long way in conversations that are difficult and often help to drive the best results.

Never has open and honest conversations been more important than in today’s workplace. And with a hybrid model being the model of choice, it is more important than ever that we are taking time to reflect and talk. 

Final Thoughts

It is clear to many employers that a hybrid workplace may be here to stay. And that we all need to reset our thinking after a few years of lockdowns, employee retention credits, and added complexity.

Like everything in life, maybe we do best when we revisit everything from the beginning. We go back to the start and what made us great. This is a critical thinking skill called identification. I believe once we have identified the problem, we can then take that information and apply it to the current workplace.

As long as we set clear goals, implement creative strategies, and participate in open conversations, I believe we can stay ahead of changes and problems.

The last few years has been one of the most challenging events of our time. And while some of have pushed forward, many are still afraid and stuck in a type of holding pattern of sorts.

For those of us in the business of leading, the stakes are high when it comes to how we handle this fear. I think it’s helpful to understand just how deep some of these fears permeated into our society.

• People struggled with simple everyday tasks. I can’t even begin to count the number of times I heard people struggle with whether or not they should go to the grocery store versus whether to have their groceries delivered.
• For the first time, parents struggled with their child’s education. The very school that had educated previous siblings was not safe enough or compassionate enough.
• People let fear embed its way into family conversations often causing tension and anger with the people they loved most; this was especially evident in decisions about the vaccine.
• Then, there was the workplace; everyone was scared, and the fear was real. Employers had to lead during required stay at home policies; employees struggled to work from home while their family literally “watched.”

There are now entire fields of study dedicated to understanding the fears that have come out of the last few years. There is even a Covid-19 fear score. And despite life returning to some form of normalcy, the fear still exists. And it impacted almost everyone equally.

Fear based leadership attempts to get results by instilling fear in employees. Most CEOs recognize that this form of leadership is destructive and destroys the confidence of the team.

It is believed that leaders turn to fear based tactics when they feel unsure, less confident in their own abilities; leaders become fearful of current, changing situations and feel the need to regain what they perceive as lost control.

Fear is the key here, and to many, these are fearful times. In the last two years our world has been turned upside down, and one only needs to listen to any news channel for even a brief time before they begin to fear; fearful of financial future; fearful for our health; fearful for our freedoms; fearful for our future.

Here are three ways that we can lead during difficult times.

Step back

As leaders, if we internalize these fears without putting all in perspective, we run the risk of becoming a leader who rules by fear simply to survive. We will lose the respect of the people we need most-our employees. Perspective is often hard to find, though. Where do we find it in a world that on the surface can seem negative? Where do we find perspective when we ourselves are fearful?

Be transparent

We find the answer in honesty and transparency. We find the answer by listening to our employees–truly listening, not just hearing. We work to pick up on subtle cues that our workers are stressed and try to find ways to relieve that stress. 

When we can’t change the situation, we are honest. Sometimes as leaders we can’t change the situation but we can soothe it. We can offer many tangibles, but sometimes all anyone needs is to hear, “I hear you.”

Set goals

We find the answer in setting clear goals and expectations and recognize that sometimes situations change. As a leader, we must be able to create a team that is not scared to make mistakes but is willing to grow from the mistakes. If fear is prevalent, very few mistakes will be made but neither will ground breaking ideas and growth. Our employees must trust themselves to do what it is they need to do to meet our expectations.

We find the answer in ourselves. The world’s greatest leaders lead by example; if we rule with fear, our employees will respond with fear. If our perspective is fearful and negative, our team will be fearful and negative. It is our jobs as leaders to look within; to find perspective. 

The world can be a scary place or it can be a place of ever-changing wonder and beauty. When the world changes, we have to change with it; we cannot fear change or fear itself.

We are in the midst of the one of the most fascinating shifts in modern labor. Businesses are desperately trying to get teams back to the office, while many people are considering whether they even want to work at all.

The culprit is not remote work, millennials, or corporate real estate. Those are a red herring. The central issue is productivity.

If I hired a brilliant engineer that could code more in 25 hours than a mediocre one could in 40 hours, would I care if she worked 25 hours a week? Not really.

If I hired an amazing admin who could balance a calendar and optimize my world, would I care if he could do it in 30 hours a week instead of 50? Nope.

The gap that exists is what I call the illusion of output. The gap between what a company assumes is done each week and what is actually accomplished each week.

Organizations by their nature are terrible at translating goals and initiatives from the top all the way down through the entire organization. And now some of the smartest people in the world, have had 2 years to think about this gap. Even if they don’t have a name for it.

People are quitting their job in record numbers, working multiple jobs, getting raises, and exploiting this gap to their advantage.

The 40-hour workweek has stood in as a poor replacement for well-written strategy and great middle management. That illusion is now gone. And while it’s easy for companies to blame remote work, the location where employees work is irrelevant.

Work from home? Try work from anywhere. That is where we are headed. And it only needs one thing to thrive. Clear goals.

Corporate America doesn’t realize it yet, but they are geared for remote work. The typical earnings call has a “give me the highlights and don’t waste my time” feel to it. No filler, no illusion of output, just results.

Is it really that hard to imagine a future in which companies only care about results, instead of where and when you work?

100 days on the job. Most new employees are barely out of formalized onboarding in 90 days, let alone quitting their job. But a CEO’s role is different. They are brought in to champion a vision and then bring it to life.

Kevin Mayer was brought in from Disney+ to TikTok to do much the same. To take one of the fastest growing apps of all time and help it scale globally. Then things all changed due to circumstances largely beyond his control. And now he’s announced he’s leaving the company immediately.

After all, we are in 2020. The year where one minute we are planning summer vacation and the next we are quarantined by the CDC in our homes.

The only thing constant it seems this year is fear, uncertainty, and doubt. Was Kevin right or wrong for bailing on TikTok? Was he forced out or was this his decision?

It seems from his statement that he had a goal to be the CEO of a global company, and won’t settle for anything less.

“I understand that the role that I signed up for—including running TikTok globally—will look very different as a result of the US Administration’s action to push for a sell off of the US business. I’ve always been globally focused in my work, and leading a global team that includes TikTok US was a big draw for me.”

That is really the only thing that any of us can do. Know your values. Know your goals. Stand up for yourself. For what you believe in.

Was his decision to bail on the company right or wrong? Only time will tell.

9 years. It’s a long time in the real world. And an eternity in the tech world. That is how long of a head start Tesla has had on big auto makers like GM, Ford, and Chrysler. That is why I couldn’t help but smile a bit when CNBC wrote about the Tesla competitor the new Ford Mach-E coming in early 2021.

Ford has a lack of innovation. The CEO even admitted this on stage several years back. And this lack of innovation, and slower pace of innovation, will be readily apparent in the e-vehicle copy cats that hit the market over the next 5-10 years.

From the exterior design to the interior style, big auto will find it safer to draw their cues from Tesla than innovate themselves.

What an incredible scene we get to watch play out over the next few years. Ford is excited their Mach-E gets to compete with the new Tesla Model Y. Meanwhile, Tesla says hold my beer Ford, and announces the Cybertruck. If you need any proof of the market Tesla just entered, do some research on America’s best selling truck, the F-150.

We should measure companies based on how quickly they iterate with new models, how reliable their software platform is, and how fast they can adapt to new technology.

Congratulations on the Mach E! Sustainable/electric cars are the future!! Excited to see this announcement from Ford, as it will encourage other carmakers to go electric too.

— Elon Musk (@elonmusk) November 18, 2019

That is what I invest in more than anything else. The pace of innovation. It’s why I’m a Tesla shareholder and not a Ford shareholder. And that is why big auto will never catch Tesla. They can copy them, but they will always be in Elon Musk’s rearview mirror.

Just an interesting note from my project Facebook fan page this morning. I crossed the 30,000 fan barrier and wanted to see how much Facebook would now let me spend on a sponsored post.

So, I asked the question to myself plain and simple. Are Facebook Ads better than Google Ads at reaching people effectively?

As the fan base has grown from 20,000 to 30,000 the amount of money Facebook will allow me to spend on a given post has grown from $100 to $1,500 with more than 10x the reach from 85,000 to an estimated 1,000,000 users.

It seems so far that your estimated reach grows exponentially as your fan base does. I wonder how much Facebook would let Coca-cola or Disney spend?

This seems like such a minute amount of money compared to the massive reach that is promised here. That is why I asked the question, is it better than Google now?

Of course the money spend on sponsored posts lets you access the untapped potential of Fan’s already in your network, which in my opinion is a genius play by Facebook here.

The real question is would you invest money into not only heavy Facebook PPC and CPM campaigns, but also sponsoring key posts to the limit of what the open graph will allow? And would this eventually replace SEO as a means of large scale traffic generation?

Facebook Will Never End SEO

If you are like me you followed TechCrunch Disrupt with great interest, especially as Mark Zuckerberg took the stage to talk Facebook’s IPO, mobile monetization, and even social search.

I’ve seen a lot of buzz online lately about why Facebook search would or would not end “SEO”. I think both of these arguments are absolutely moot points. Let me explain.

I remember getting into the marketing industry, one of the first things I was told was that I was not doing SEO, I was doing optimization for Google. And it is the same thing with Facebook.

Facebook is simply another channel to optimize, it is not a replacement for Google Ads, Local SEO, or anything else. In addition to Google, there are many other dominant channels for marketing emerging:

• YouTube’s Search Engine
• Facebook’s EdgeRank News Feed
• Twitter Search API
• Apple’s iTunes App Store Rankings
• Yelp’s Local Search Powering Siri
• Zagat’s Restaurant Search

Yes there are many other “Search Engines” that I LOVE to work with. They all have algorithms I can pick apart, reverse engineer, and test against.

No matter what company powered that engine, I promise they would have patents that Bill Slawski could write about for years to come. Like Bill, I am passionate about learning, not about keeping Google in business.

Thinking It is Facebook vs. Google Limits You

Arguing with your social media friends about the merits of Facebook search vs. Google doesn’t hurt anybody but you. Google will keep right on going, and so will Facebook.

If you are loyal to a certain medium or method, you will always dependent on it. I for one, welcome a Facebook search engine if it does happen, or any other intelligent form of gathering information. Even if it eventually completely replaces Google, it’s just another green field ripe with potential.

Ultimately, you need to take a more strategic channel optimization strategy. This will help you make the right decision both now and 3, 5, and 10 years into the future.

Often I hear website owners paranoid about what people post on their site. Of course nobody wants spam, but why are you so worried about what people say on your website? Think you are going to get sued for hosting defamation? Think again.

The CDA, or Communications Decency Act, specifically section 230, protects websites from what other people say. This includes comments, posts, and anything else you can think of.

Don’t think that’s such a big deal? Imagine the impact this would have on the amount of content available online today if the CDA didn’t exist.

Without the CDA, product reviews on Amazon.com and user feedback on eBay.com would no longer be allowed because one false comment by a user could result in these sites being dragged into court and sued for unlimited damages.

• Without the CDA, Facebook.com would not exist because the site would have to fact-check every posting made by all of its 500 million+ users.
• Without the CDA, Youtube.com would not exist because the site would be liable for any inaccurate statements made in a video posted to the site.
• Without the CDA, there would be no Twitter.com, Wikipedia.com, LinkedIn.com, Craigslist.com, Blogger.com … basically no sites that allow users to post material.
• Without the CDA, you wouldn’t be allowed to post comments about any other site.
• Without the CDA, huge amounts of content on search engines like Google would vanish because search engines would be required to verify each comment made on the 30 trillion web pages they index or risk liability for anything inaccurate that appears on an indexed page.

UGC (User Generated Content)

Now that you know Section 230 of the CDA protects you, it’s time to introduce you to another 3 letter acronym, UGC.

There is a reason why Facebook recently added Q&A to their website. There is a reason why Twitter has built an entire business model off user generated tweets. UGC (User Generated Content) is powerful, and it does more than most will ever realize.

What is it? Quite simply it is content that is not created by you, but rather the users of your website, blog, or social media network.

User Generated Content is the YouTube comment, it’s the guest blog post, and it is the long Facebook rant. It is the content you know and read each day, but from the perspective of the company that hosts that content. And this is all protected by Section 230 of the CDA.

There are people all over the world mindlessly plugging away writing blog entry after blog entry trying to generate traffic to their website. Then there are those of us (myself included), thinking tirelessly about ways to get users to generate that content (and traffic) for free.

Instead of working so hard at research, writing, and gathering data, why not put consumers to work for you and have them create your content for free?

With that in mind here are three reasons why your next website craves user generated content, and why it will succeed much easier (and faster) if you plan on incorporating it from the start.

Predict Trending Topics

You can read and monitor tweet deck all you want, but nobody knows what’s trending faster than millions of people worldwide. Instead of actively trying to figure out what’s hot and what’s not, why not allow people to post trending topics in your niche? This is one of the huge benefits afforded by the Communications Decency Act.

For example a huge mobile sms scam hit the web a few months back, and luckily for me I have a website that targets scams just like that. Right as millions of sms messages were hitting cell phones worldwide, a user was generating a detailed description of the scam on one of my websites.

Guess what? As thousands searched for that scam in the days to come I already had the article in one of my UGC sites. Thousands of hits in mere hours and I didn’t have to pay a dime for it. The research was free, the content was free, and the approach was completely passive on my part.

Mining Free Content

Paying for content is overrated, just ask facebook. They have convinced the whole world to be their personal band of content writers, constantly writing and promoting the facebook brand worldwide. They used the CDA to protect themselves and enable a billion users around the world to work for them for free.

Then Facebook took it one step further, turning users into freelance photographers and videographers, uploading rich media content 24 hours a day, 7 days a week.

Why would you pay for content writers when you can just find somebody’s emotional hot button and get them to write for you for free? Call it whatever you want, but people are willing to contribute to something they are passionate about, just look at any message board or forum on the web.

Gathering Consumer Intelligence

This is the last reason the CDA is so powerful, and in my opinion the most powerful one of them all. What’s more valuable than content or revenue? It’s the ability to predict the next big thing to hit the web, and that comes from consumer intelligence.

Learn what people need, and you have your next project. Instead of trying to market your product to consumers, intelligence allows you to create your next product based on a need. You are basically guaranteed demand and revenue from the get go, anything after that is just a sweet bonus.

People start businesses all the time hoping there is a need for them, why not gather the foresight ahead of time to all but bank on that next start up.

By leveraging Section 230, you can host UGC (have your cake) as well as store the consumer data (and eat it too). This is, as long as it’s not private or personally protected data of course.

User generated content, much like Google trending topics, always assure that you are feeling the pulse of consumers. While the rest of the world is throwing darts at a board, you can bet on sure things.

Get it now? The internet is what it is today because of free speech, and because the federal government doesn’t expect you to run around policing every square inch of your website.

So spend less time policing what people say on your site, and more time getting additional traffic to your site through UGC.

Quit worrying and just hide behind the CDA.

Some would call SMS marketing the most effective marketing channel ever invented. They wouldn’t be wrong either.

With a bone-crushing 98% open rate, if text messaging were an Olympic athlete, it would win all the medals in every sport, even figure skating.

Running a text messaging campaign isn’t rocket science. It’s actually the complete opposite of rocket science. It’s as simple as you typing your message and hitting the big send button. Congrats, you are a mobile marketing expert already.

Who isn’t utilizing text messaging nowadays? You have political candidates reaching over 10 million subscribers during some recent campaigns, to American Idol receiving more votes via text message than the President received to win the presidential election.

Want Value, You Get Value

With a 98% open rate for text messages, there couldn’t be a more efficient use of your marketing dollars. And when we say dollars, we actually mean cents. It’s really that affordable.

Text messages are quick, only taking a few seconds to hit thousands of phones at the same time. Once it’s arrived, the average time to open is 4 minutes. That’s scary fast!

Outside of senior citizens who still very much need a landline phone, everyone has a mobile phone. Maybe not everyone, but it’s getting very close. In the United States, 91% of people have a mobile phone; that’s a lot of mobile phones!

72% of all mobile phone users regularly send and receive text messages. According to the CTIA (Cellular Telecommunications Industry Association), in 2009, Americans went crazy for text messaging, sending more text messages than actual phone calls.

Did you know that 82% of all Americans never leave home without their mobile phone? Did you know that half of all Americans sleep with their mobile phone? If you want to reach your customers where they are, mobile is the only solution.

More Great Stats on Mobile…

• More than four in 10 Americans say they “can’t live” without their mobile phone.
• Nearly half of Americans say they sleep with their mobile phone nearby.
• 79% of smartphone users would find it useful to download money-off coupons to their phones.
• 73% of smartphone users would receive instant money-off coupons as they pass by an item in a store.
• 72% of all teens ages 12-17 send and receive text messages.
• 35% of 12 year-olds say they text daily.
• 54% of 14 year-olds say they text daily.
• 70% of 17 year-olds text everyday.
• Girls are more likely to text than boys with 77% of all girls texting while 68% of boys do.
• Older girls ages 14-17 are the most avid texters – 69% say they text their friends every day, while 53% of boys the same age report daily texting.
• More than 7 in 10 (71%) of cell-phone owning parents of teens 12-17 say they send and receive text messages on their cell phones.
• 65% of all adults 18 and older send or receive text messages.

Experian Hitwise released a recent study touting that 1 Facebook fan = 20 extra visits to your website. They studied top retailers, and came away with the conclusion that since big companies are winning online, anybody can just as easily. I couldn’t disagree more with their blanket statements about Social Media, and thought they hid some key findings in their study.

Just like each business is different, all Facebook campaigns aren’t created equal. Understanding your goals and setting realistic expectations are much more important than knowing the value of a fan for Coca-Cola. If you are a small to medium sized business on Facebook, you aren’t going to see these same results. If you dig a little deeper into the numbers, you’ll see what I mean.

Building your fan base on Facebook, doesn’t necessarily translate into massive amounts of traffic back to your website. The Experian Hitwise study claims ROI on average 1 Facebook fan equals 20 visits. What they failed to mention is that this is more a multiplier effect than a baseline. Even if you don’t have a Facebook fan page, large companies can still expect to see thousands of visitors from Facebook on a monthly basis.

“Our data shows that for the top retailers, even if they have no Facebook fans they can still expect to receive on average 62,000 visits from Facebook each month. However….within retail each new fan acquired will drive an additional 20 visits to a retailer’s websites, which in turn will generate extra sales both online and offline.”

I want you to go out and try something sometime. Build a website about a random product or service, and then build a matching Facebook fan page. This website can’t piggy back of a similar brand already in existence, I want you to create something that isn’t on the map at all.

The whole point of ROI is to determine a set return so that others can follow a template approach. The problem is that unless you already have 62,000 people coming from Facebook every month, you’re going to have a difficult time proving the ROI in terms of visits to a website.

Facebook is designed to be a closed system that makes money off internal traffic. If I was an executive over in Palo Alto, I might refer to users leaving Facebook as leaks. Your incoming traffic means less revenue and time on site for Facebook. Think about that.

Google beat Facebook to one billion monthly visitors, but Facebook still crushes Google in terms of time on site. It’s this same metric that drives them to want to keep users inside their system longer and longer.

So if your business revolves around getting traffic back to your website, you’re fighting a losing battle against a company bigger, better, and stronger than you. So keep that in mind whenever you hear “Social Media experts” talking about Facebook ROI for your small business.

Today I was able to attend the Hoth‘s webinar about SEO link building. It was lead by Alex Pyatetsky, and discussed a wide range of topics surrounding link building. There were a few mentions of the Hoth and their product, but for the most part Alex stayed on topic.

I’m not going to discuss everything that was said, because a lot of it was introductory stuff, but I had a few good takeaways that are worth sharing. Alex came across with an interesting way to look at link building. Very similar to the way nutritionists use the food pyramid, he discussed a link building pyramid to maximize your efforts when creating links to a brand new or existing website.

There were three steps to this method, and all of them involved getting the quality, authority, and relevant links we know are vital for improving organic traffic.

Foundational Link Building

While most people want jump out of the gate running, Alex said that foundation link building was key to this entire process. Dominating your niche starts at the bottom, by getting authority links from your inner circle. He called this the circle of family and friends.

You can also recruit investors, employees, and people you have existing relationships with. These foundational links are the easiest to achieve, but they are the most crucial to your overall SEO strategy. Without a base of solid authority links, the next levels won’t be as effective. You will only be as strong as your foundation.

Online Activity

Once you get a good foundation, you can move onto to general link building, or online activity. This includes things like blog commenting, forum posting, guest posting, and paid advertising. This part of SEO link building is a little bit more difficult. You don’t have as much control over these links, and the weight they hold.

Most people want to immediately start with services from companies like the Hoth, but he said that would be a mistake. It was refreshing to hear such honestly from a link builder!

I found it interesting that Alex still valued blog commenting as an important part of the second stage of SEO link building. He stated that blog commenting is under valued by many people. His logic was that blog commenting still allows you to place choice, relevant links on pages across the web. These links can come from authority pages, and there are plenty of opportunities out there.

Another interesting blog commenting strategy was the, “be first to comment” idea. By being one of the first few people to leave a quality comment on an authority blog, you are getting the attention of not only the blogger, but everyone who visits the posts and browses the comments.

Alex’s strategy was the follow important thought leaders in his industry, and be the first to leave an insightful post that adds value to the original. He had some great examples of this working very well to his advantage. Here is a great quote from Alex’s thoughts on blog commenting…

It’s more than just link building for the sake of the link, its getting the attention of the right people!

Another good nugget was taking advantage of commenting Loyalty programs, who give the most frequent visitors a link back to their website. Commenting regularly on an authority blog can be just like adding a blogroll link that you have control over. That link is powerful and just as relevant to your niche.

Online Activity

For blog commenting, Alex discussed commenting tools like Comment Kahuna to help you find relevant content. The big theme for the second part of the SEO link pyramid revolved around relevant blogs, it was definitely a big them.

Another really cool point he brought up was paid advertising as a form of link building. Not in the sense that your are buying links, but that the best way to network online with a blogger is to buy ads on their website. I’m sure this is a technique they have used frequently for the Hoth, as I have seen their ads all over the web.

Once you are a paying customer you have an automatic in with them, which can lead to guest posts and further discussions that wouldn’t be possible otherwise. Here’s Alex on buying ads for link building again…

Buying ads is probably something you are doing anyways, realize that it’s important for relationship building, which will lead to quality links.

Surgical Link Building

The last part discussed by Alex from the Hoth was surgical link building for SEO. This includes social bookmarking, article marketing, guest posting. This is also I’m guessing where a large part of the Hoth’s business comes from. While I’m sure they would help with any aspect of your link building efforts, surgical building is their specialty.

This is the final part of your strategy, and luckily you have control over things like anchor text, location, keywords, and scale. Surgical link building is the difference between the winners and losers.

Risks of Automated Link Building

Beware of picking up link building software from an affiliate store Link building tools are great for casual pushes, but you just can’t game Google like that anymore. Sure you can build hundreds of thousands of links in a few days, but at that point you aren’t doing anything but hurting that website. The other unfortunate thing is that many of the bookmarking sites that come standard on bookmarking demon have been spammed to the moon and back.

These have all turned into bad neighborhoods on the web you definitely want to stay away from. So if you need something to submit a few of your best articles too in mass, go pick up a tool, but trust me it’s not going to make or break a website. The best way to build links is still time and effort, it just doesn’t come that easy anymore.

Summary from Alex @ the Hoth

Unlike some other surgical link building methods, The Hoth is safe to use on new sites, etc. The reason is because we model the authoritative link -> multi site syndication model. In other words, all of the links we build *make sense* to the search engines and we do see new sites rank just by using our product.

It would therefore be easy/convenient to conclude that its the only thing you need, for really solid, sustained rankings. However, as I mentioned in the webinar, this isn’t the smartest approach. Although you do get authority, relevance and popularity from a tool like ours, its not a replacement for the foundational authority of links like blogrolls from friendly industry blogs.

Likewise, although our links provide relevance through relevant content and anchor texts, they are not coming from root-domains that are relevant to your niche. Therefore, its smart to supplement what we do with the activities I suggest in the “Friends, Family & Fools” and “Online Activity” portions of the link building pyramid (the bottom & middle levels).

We have seen some people rank for over a year just using our tool, but it would be arrogant for me to say that everyone can achieve the same thing. Using the tool as part of a well rounded strategy (i.e. “The New Link Building Pyramid”) is a much more consistent way to achieve rankings, and much more stable for keeping them.

Part of a Bigger Picture

Think of this as the seasoning on your dish, you may have all the ingredients, but it’s that last pinch of salt that makes it happen. The problem is most link builder’s won’t be patient in waiting for this last step, and that’s understandable. We live in an instant results world where people want traffic and revenue almost overnight.

The temptation is to only build only surgical links, but without the foundation of link building, you might rank well but you won’t stay near the top. This can lead to huge swings in traffic, but also frustration Alex from the Hoth says.

If you just build surgical links you might rank, but your totally at the whim of the search engine. You’ll see volatility, and you’ll be pulling your hair out more often.

As the webinar came to a close Alex offered more great advice about your overall link building strategy, talking about going after the low hanging fruit, and then branching out from their. Link building can be a science, so stop reinventing the wheel. There is a smarter, more consistent way to build links for SEO.

The following is my rough outline from the 11AM SXSWi session featuring Pinterest Co-Founder and CEO Ben Silbermann. There was lots of great advice on monetization, design, building a successful business, and social communities. And I felt like sharing a few of those things with you today.

The questions covered everything from his job history, to early challenges at Pinterest. There are lots of great learnings here as well.

Job History

• Started in sales support for Google, working specifically with Adsense.
• Quit Google to develop iOS applications, before starting Pinterest.

Background

• The idea came from visiting people’s homes, and seeing “collections” of people’s lives that needed to be shared online
• Wanted a person’s “board” or collection on Pinterest to be more beautiful as a whole than each image could be individually.

Design

• Quality was the most important aspect, with meticulous testing done on layouts, contrast, colors, fonts, and how the site would work in different people’s devices.
• Ben liked to go to bookstores and look at lifestyle magazines, to gauge interest in certain verticals.
• In a world were buzz dies after 24-48 hours, the Pinterest boards have a timeless elements.

Early Months

• For the first 9 months Pinterest had 10,000 users.
• Growth happened much slower than they had hoped.
• Ben personally emailed the first 5,000 users thanking them for signing up, and opening ongoing communication.
• Up until the middle of last year it was only 5 people working in his apartment.

Interesting Uses

• Each day people find a use for Pinterest that they would have never thought people would use it for
• Lot’s of museums have joined lately, to share their art with the world.
• Travel boards are also new, and people create elaborate travel guides to cities all over the world.
  Competition.
• Clones have always happened, now they just happen faster and faster with the low barrier to entry of technology.
• Most of your focus shouldn’t be racing against competition, but against making the greatest product possible.
• The competition doesn’t come from similar design, layouts, or code, it’s all about the people.

Copyright issues

• As a company they care about that issue, overall it is part of their culture, and giving value back to each of the users.
• The mission of the site isn’t to keep people on the site forever; it’s driving traffic out in the world, and driving real actions to build their content.

Monetization

• Long-term monetization will have to be something that speaks to the heart of the product itself.
• Helping people discover things they wouldn’t have found on their own.
• They have a lot of work to go on the discovery process before they continue with monetization.

Future Innovations

• Redesigning the profiles on Pinterest, to make your profile very different from what you have on Facebook and Twitter.
• A visual snapshot of what you are about, and to make it easier to discover new people based on pins
• Expanding the number of things you can pin to include Vimeo and Netflix.
• Platform expansion with a common and stable API framework for developers.

Social Community

• We have to invest in social norms the same way we invest into infrastructure and technology.
• Getting the right kind of behavior in a social site is important to growing the community in the right direction.
• Early on they personally reached out to users, to make sure they were cultivating the community correctly and encouraging the right behaviors.
• They character different kinds of users, because each has it’s purpose in the overall growth of the website.
• New ways to share are simply new ways to connect with other people; we are always actively seeking out ways to connect in new ways.

Launching a Successful Business

• Most people generalize whatever they did, and act like that was the strategy that made things work.
• People will say great founding teams have a certain look and feel, but every company cuts it’s own path.
• Every company is under a lot of pressure to look and act like the last company that was successful.
• Be good to the people that you build relationships with along the way. It will become part of your DNA.
• Identify those people that are passionate about your products from the start, which will be immensely valuable as feedback.

Mistakes

• Sometimes they overthought problems, as long as you can see failure as one more option that’s off the table; you’re in a good place.
• Do not be paralyzed by so many options, the best way to find out is to ship, the worst thing that users and customers can say is no.
• It’s important to have people outside your business that you have good relationships with, don’t get tunnel vision in the way you think about your company.

Closing Remarks

• Pinterest is still small, 20 team members, 10 joined in the last four months.
• The team culture is the core of their business; rather than have a figurehead, they want to grow as a team.

Ultimately, I felt like Ben shared things in this session that he probably will not share as much of as CEO of Pinterest as they grow in the future. So, I hope to capture some of that here in case one day they find themselves a much larger company, prepared to IPO or get acquired.

One of the problems facing digital strategists currently is that of duplicate content, and search engine’s like Google are working harder than ever to discourage website owners from publishing it on the web. Duplicate content is just that, content that is a duplicate of something that already exists. If you aren’t familiar with this problem, here’s why you should care.

You’re going to be presented with people wanting to sell, co-brand, and white label duplicate content. You will have more than enough chances to host duplicate content on your website, and at least a few people will tell you that you can get away with it. Here’s why I think that in 2011, I’d limit the amount of time and money invested in content already found elsewhere on the web.

For a moment let’s say you aren’t starting up a website, but that you are starting a local library in your community. Let’s call this library Google, and say that it contains books that summarize all the world’s information.

You finish construction of your beautiful library and find that you’re missing one critical piece to the puzzle, books! You have all this empty space, hundreds of shelves just waiting to be filled with everything from encyclopedias to sports almanacs.

So you begin searching for books, looking everywhere you can find them. In the beginning your focus is filling every shelve with a book, so you aren’t as picky with what you grab. Donated books, used books, and maybe even multiple books focusing on the same topic will do for now.

You finally fill your library to the brim, and people begin to come looking for information on what is relevant to them. As word gets out your library becomes popular, and people begin using your building as a trusted source for information. A few years go by and people begin requesting books that you don’t have, and often people want a newer edition.

Now your task becomes not just filling up the library with books, but making sure those books are of high quality for all your customers. You begin tossing out old books in favor of new ones, and making sure that you only keep the most popular books on hand for people.

After awhile you begin noticing that you have multiple copies of some books. In your haste to fill up those shelves you grabbed 3 volumes of the same encyclopedia, as well as six copies of the exact same 1988 sports almanacs.

Rather than keep that stuff around, you decide on the best copy to keep on hand, and throw away the rest. Space is now at a premium in your library, and it’s pointless to keep around multiple copies when usually 1 or 2 at most will keep your customers happy.

Fast forward a few years more and you’re library is becoming one of the most popular places in the world! People come from all around the globe just to read your books and use your information for research. Now authors have taken notice too, and famous publishers and authors from around the world line up at your office hoping that you will include their books in your library.

But now you can afford to be picky, you can afford to reject more and more books each day. Space is limited, but you are still open to adding new books to your index, as long as they are worth it to your customers!

Google built a library, and now it’s the largest in the world. It’s also the most important one in the world to be listed in, and that means they can afford to be picky. Would you have two copies of the exact same book in your library? I don’t think I would either. Can you blame them?

There is a reason why Facebook recently added “Q&A” to their website. There is a reason why Twitter has built an entire business model off user generated tweets. UGC (User Generated Content) is powerful, and it does more than most will ever realize. There are people all over the world mindlessly plugging away writing blog entry after blog entry trying to generate traffic to their website.

Then there are those of us, myself included, thinking tirelessly about ways to get users to generate that content and traffic for free. Throughout my career I have learned one thing. Instead of working so hard at research, writing, and gathering data, why not put consumers to work for you?

With that in mind here are three reasons why your next website craves user generated content, and why it will succeed much easier (and faster) if you plan on incorporating it from the start.

Trending Topics

You can read and monitor tweet deck all you want, but nobody knows what’s trending faster than millions of people worldwide. Instead of actively trying to figure out what’s hot and what’s not, why not allow people to post trending topics in your niche?

For example a huge mobile sms scam hit the web a few months back, and luckily for me I have a website that targets scams just like that. Right as millions of sms messages were hitting cell phones worldwide, a user was generating a detailed description of the scam on one of my websites.

Guess what? As thousands searched for that scam in the days to come I already had the article. Thousands of hits in mere hours and I didn’t have to pay a dime for it. The research was free, the content was free, and the approach was completely passive on my part!

Free Content

Paying for content is overrated, just ask facebook. They have convinced the whole world to be their personal band of content writers, constantly writing and promoting the facebook brand worldwide. This is the benefit of creating a community and watching it grow.

Then they took it one step further, turning users into freelance photographers and videographers, uploading rich media content 24 hours a day, 7 days a week. Why would you pay for content writers when you can just find somebody’s emotional hot button and get them to write for you for free?

Call it whatever you want, but people are willing to contribute to something they are passionate about, just look at any message board or forum on the web.

Consumer Intelligence

This is the last reason, but is in my opinion the most powerful one of them all. What’s more valuable than content or revenue? It’s the ability to predict the next big thing to hit the web, and that comes from consumer intelligence. Learn what people need, and you have your next project.

Instead of trying to market your product to consumers, intelligence allows you to create your next product based on a need. You are basically guaranteed demand and revenue from the get go, anything after that is just a sweet bonus. People start businesses all the time hoping there is a need for them, why not gather the foresight ahead of time to all but bank on that next start up.

User generated content, much like trending topics, always assure that you are feeling the pulse of consumers. While the rest of the world is throwing darts at a board, you can bet on sure things.

In the last few years, social media has exploded into our lives in a way that it would have been almost impossible to predict even a decade ago. If Facebook were a country it would be the third most populated country in the world, coming in above the United States with a staggering 400 million users as of 2011.

Recently, television adverts have started to feature “Find us on Facebook” badges directing people to their company Facebook page, and there is no doubting social media’s ability to get more people involved with your company, building brand awareness and loyalty in the process.

But if you are a small business owner, just how relevant is social media going to be to your company and how can you best utilize it in your company?

Small Businesses

Social Media was one of the buzz words for small businesses in 2010, and it stands to reason that 2011 will be much the same. Still, you shouldn’t have a social media campaign just to have one. Over and over people think that having a Facebook or a twitter account is their gateway to thousands of new visitors.

Then after awhile they give up thinking that they just don’t get “social media”. The bottom line is that some markets just don’t need social media. Did I just commit blasphemy? Everybody needs a facebook fan page right?

I would say that every small and local business needs to be involved in social, but from a reputation management standpoint. For some markets Facebook isn’t going to make or break your business, but it will sure help your customers connect with you if they have a problem.

I love the ability to use twitter to keep people updated on recent happenings, but I definitely don’t expect it to be my main source of traffic. If you have a product that is viral or revolutionary, by all means tweet it and watch social at it’s best. But for most of the people I work with that just isn’t the case.

They are in a competitive market, and are just looking for more ways to get new customers. For that I’d say Google is still your best source of traffic.

Accurate Expectations

The problem with most social platforms is they tend to be a replacement to the web. Don’t believe me? Create a facebook fan page for a website and watch how many people leave that fan page to interact on the website.

The majority of consumers on facebook are comfortable with it, and see no reason to leave to do their commenting, liking, and sharing. After all can you blame them? Is there anything they can do on your website that they can’t also do on facebook?

Well I can think of a few things like purchasing products, downloading software, and reading articles. But those are very specific things that all need to be taken into consideration before you dive head first into social media.

The most important thing you can do before going into any Social Media campaign is to drop all your unreasonable expectations.

Simply creating a Facebook Fan page will not skyrocket your business into the stratosphere overnight.

Creating buzz in an already noisy space can be challenging at times. High expectations can lead to discouragement early on, at a time when you should be allowing yourself a learning curve. Any form of digital marketing, including Social, takes a substantial investment in time and energy.

Building Awareness

Build Brand Awareness Through Community
Brand awareness is a great benefit of a good Social Media strategy. Whether you are marketing to 1 or 1 million, you need to convey a message and work to create a community around it. That is why Facebook makes it so easy to advertise in small increments to build your brand.

The biggest mistake people make early on with Facebook is to constantly blast out there message, without engaging their target community at large. Key players in your niche are actively seeking out fresh content, if you build it they will come.

Don’t assume you have to be “in your face” for people to notice you. Authentic social communities stand out in a world of copy cats and spam.

Learning from Consumers

While everybody else is out there gunning for thousands of fans and followers, you can be quietly gathering the next million dollar idea. Consumer intelligence is everywhere, but all businesses seem to notice are the actual consumers.

You might only have a core group of 100 fans on Facebook, but what does that sample size tell you about the whole? Watch for trends, segments, and techniques that drive better bottom line results. You’ll begin to see how key members of a community can really move the needle for you.

Don’t be afraid to launch side projects, and always be testing. Forget about gold for a second, those who have the data make the rules.

Social Media is a great tool to have in your digital marketing arsenal, but it’s not an end all be all solution. Give yourself time to learn, and don’t be too disappointed when your first tweet doesn’t go viral overnight.

There are lots of people out there just like you, and some have been doing this a lot longer. The great thing is that Social Media is still free to use and relatively easy to understand.

So drop the expectations, work toward building a community, and gather consumer intelligence.

I love to read lists of the best companies to work for each year. It is no secret what separates the good places to work from the great places to work. It is the classic battle of the good company culture vs. the bad company culture.

You don’t need a degree in HR to understand that the companies with strong cultures, led by level 5 leaders, are usually at the top of the list year after year.

Happiness is really just about four things: perceived control, perceived progress, connectedness (number and depth of your relationships), and vision/meaning (being part of something bigger than yourself). ― Tony Hsieh

Instead of looking for a company, why not work for a great culture? Instead of trying to build a company, why not birth a culture? So what if you go down swinging, in the long run we need more thriving corporate cultures, not mediocre companies.

How do you define a thriving company culture? It’s group of people with not only the same behaviors and ideals, but the same core values.

In the end you end up with an incredible group of human beings who don’t mind battling side by side each day in the trenches. They understand that they are more than individuals. They are a team working together towards a shared set of values and goals.

Here are a few attributes of strong company cultures that I have worked in:

• Leadership
• Honesty
• Professional development
• Humility
• Transparency
• Work/life balance
• Kindness

Great company cultures thrive on open and transparent communication. They do not have anything to hide, because they act with integrity and do the right thing for employees and customers alike.

I love the Zappos interview process. One person interviews the candidate for technical savvy, the other for culture fit. If the candidate doesn’t ace both interviews, they don’t hire them, period.

Now that we have a better idea of what to look for in a good company culture, here are a few attributes of bad company cultures. Unfortunately, I have also experienced some of these firsthand as well:

• Politics
• Micromanagement
• Gossip
• Poor communication
• Internal competition

In a bad corporate culture you will not only be fighting against your external competition, you will actually have to battle your fellow employees for recognition and resources. Gossip will be the primary way communication flows, and management will have no choice but to micromanage their teams.

So, the next time you are considering a job change, why not look for a great role inside of a company with a great culture. It will be far more fulfilling than simply looking for jobs that fit your profile. You need a company that fits your values too.

A great company culture culture is formed by bringing together those with very similar core beliefs like passion, curiosity, trust, reciprocity, courage, dedication, integrity, and humility.

There are already enough obstacles to overcome in the competitive free market. Your culture should not be another challenge to overcome. So, the next time you consider joining a company ask yourself one question. Are you joining a good culture or are you joining a bad one?

Over the years I have learned a great deal about reputation management and the anatomy of a customer complaint. In fact, I just realized I have read more than 100,000 customer complaints in my lifetime through HissingKitty (the complaints website I founded)

Surprisingly enough, the problem of a customer filing complaints online is only getting worse with time. Ripoff Report now has nearly 1,000,000 complaints indexed.

So, why does this happen? In short, corporations keep growing, and then outsourcing customer service, and ignoring customer feedback. It seems to be an unavoidable and dangerous cycle.

How Do You Stop Complaints?

There are a ton of reputation management companies out there who “specialize” in all kinds of digital marketing and online marketing. Dealing with consumer complaints are big business for both consultants, customer service software, and 3rd party websites.

There are now dozens of online complaint sites including:

• Google
• Yelp
• BBB
• Consumer Affairs
• Pissed Consumer
• RipOff Report
• HissingKitty
• My3Cents
• Complaints Board
• Complaints.com

Customer Complaints Are Usually 100% Preventable

The bottom line is, almost all of the negative feedback and complaints against businesses are 100% preventable.

You can stop customers in their tracks from even thinking about going online to complain about your business. If you read between the lines, almost every complaint posted online follows a very similar pattern.

A customer is upset (usually at something very small), and the business ignores and agitates them to the point of no return. The point of “no return” is what I like to call the point at which a customer is so upset and frustrated with you that they will do anything to ease the pain.

I can’t emphasize this enough, customers don’t want to destroy your reputation online, they just want someone to listen to them and fix the problem.

The Anatomy of a Customer Complaint

With that in mind, I present for your consideration a nearly 900 word complaint submitted recently about a Target store in Jacksonville, Florida. This came in through HissingKitty, and it was so interesting I decided to post it here instead.

This is a great example of a customer starting off with a minor problem, and the company slowly frustrating them so much the customer took to the Internet with their story.

I would argue, in my professional opinion, if at any point Target had just listened, justified, and comforted the customer, we would never see this complaint live on the internet.

Part 1 — the background:

A Personal Complaint to Target in Jacksonville, Florida. On Monday Oct 10, 2011 I went into the Target on Beach Blvd in Jacksonville, Florida 32224. I went directly to the pharmacy and dropped off my prescription as usual and then went to pick up several additional items. I then went back to the pharmacy to pickup my prescription and pay for the items. The cashier came to the counter and starting to check me out she had totaled $97.00.

I then laid out a $100.00 for payment of said products, she then realizes that she had misses two additional items and added those, while this was going on another customer came up and she looked over her shoulder to inform the girl at the back pharmacy counter that she would take care of that customer as well and then my sale was completed, I then put out $3.00 more dollars to pay in full.

Customers complain about bad service because they have an expectation for good service. Notice the expectation instantly formed in the customers mind when the girl at the pharmacy counter verbally stated she would “take care of the customer”.

Part 2 — the problem escalates

That is were everything went crazy, she couldn’t find the $100.00 she looked into the bags, the register the floor and the patted herself down. Then looked at me and asked where did the money go, I then started looking and I gave her the benefit of the doubt and thought well maybe I accidentally picked it up in all the confusion. So people started to line up I then said let me go ahead and pay another $100.00 and we would get it settled and not hold up the line.

Wow! The customer see’s the line forming and offers to help out by paying again, so that other customers behind don’t get held up. In the case, the customer is already displaying more “customer service” than the business.

Part 3 — management only makes it worse

She then called in the supposing manager. The cashier explained her side I told her mine, and even explained to Jeanette that I would recount my monies since I just cashed my Social Security Check that I knew exactly how much I had in my wallet. If she could lend me a calculator I would check my balance.

At this point she starts telling the cash register is right there, and there is only $100.00 in the register and I stated that would be correct since I paid the balance, but where was the other $100.00 all of this going over her head. I then became so frazzled after her rudeness, unprofessional and downright bad attitude.

Nobody likes being called a liar, but sadly that’s what this manager is assuming. Instead of talking off the floor, or going somewhere more private, the manager has a conversation about money in a public place. By calling the customers integrity into question, a rational level headed person is now backed into a corner.

Part 4 — escalation to corporate customer service

I reexplained to let me check like I said in the beginning I wasn’t sure what had happen. After being treated in this manner I just got so fed up with her attitude I told her what I thought about her demeanor and how unprofessional she was, because we were going nowhere. The cashier never came back to the register at all.

I feel that we both would had worked this out so much more effectively, I then left the store got into my car and called the store for the Target store in question to speak with the manager. The customer service representative answered I asked to speak to the store manager, and guess who comes on Jeanette the one and the same the same one that I had a problem in the store with.

Never allow personal feelings to escalate a customers complaints further. Always have a third party or alternate person ready to be a fresh face without preconceived opinions. Most people are just ready to vent at this point. So let them vent, and allow the cool down process to begin.

Part 5 — corporate makes it worse

I asked her if I could speak with the manager and she informed me she was it. Right! I asked for corporates number she then tried to apologize for all the confusion. To late for that one. In the meantime another person (Mike) came on the line I then asked him for the Target Corporate Office number.

He gave it to me, and then I asked who was the store manager he stated at first Jeanette, but he stumbled I knew then that she wasn’t it. I really knew all along she has couldn’t be it. No manager handles a situation the way she did. I then repeated my question who was the manager of the store he (Mike) then said Micah. So Jeanette totally misrepresented herself and her company.

Another key mistake that businesses make is trying to ignore the problem instead of addressing it. Most people aren’t buying a simple apology. They want your empathy, and to know you have the situation under control. Fumbling the ball at this point is costly, and just reinforces to the customer they need to continue to escalate this to get results.

Part 6 — corporate makes a promise they cannot keep

After reviewing all this I realized a few things. I took the responsibility of the cashier errors. She was the one that was distracted trying to multi-task and causing the confusion.There was other workers who were available and trying to work and she stopped them.

I then called the Corporate Office and explained what had happened. Ron words were this would be handled swiftly. I hope so. It seems in todays world when you try to handle a problem and is willing to work through something with someone like this cashier and all you want is to retrieve the items, the money that is owed to you without any problems.

I truly realize after this incident stores like Target just don’t care. I said to them I would never come back for anything.

This was a great place for Ron at the corporate office to make things right and win back the customer. Of course he probably thought by saying “he would handle it”, that everything would be OK.

But you can see that this simply wasn’t enough of a response for the customer. The level of response has to meet and exceed the level of frustration.

Part 7 — where you finally lose the customer for good:

They have lots customers to fall back on but no accountability on the behalf. I stated to Ron that this was a major competitors move. Well I was wrong about that one, the competitors, I’ve never had this happen with them, so that is were I will take my business, monies, and purchase happily.

It only takes one negative experience to lose a customer for life. And today’s digital world, that lost customer can cost you thousands more customers if they take their complaint to the Internet.

Negative Reviews Online Really Hurt

Every time I am involved in a new venture I get a chance to learn about a difference industry. Different groups carry with them different consumers and customer behavior, and lately I have been all about reviews and UGC (user generated content).

Consumer and editorial reviews continue to gain swagger in search engines, and a good review is an easy way to get that bump over your competition.

Bad reviews, on the other hand, also present an easy way to lose customers. Consumers keep getting smarter, and more each day are searching for reviews online before they make a purchasing decision. So what’s a bad review worth to you?

Now why would anybody want to buy a bad review? I’m really not sure, but companies do it all the time. One of my fun little side projects right now involves consumer reviews, and many of them are negative.

Complaints Are Easy to Prevent

In the majority of these cases the company could have avoided the bad review with a settlement of less than $50, and most times it is far less than that.

Do people like to post negative reviews of companies? Think about it if they are upset enough to find a website online and go through all that trouble then they have been really inconvenienced (at least in their mind).

If at all possible, why don’t companies pay off these bad reviews and complaints? We are coming into the age of the consumer, where a person can go online and absolutely wreck your companies reputation based on 1 single incident that wasn’t handled properly.

Now that company is going to go out and hire a professional to do reputation management (or at least try to pick up the pieces). Which costs more paying for Johnny Q’s faulty $5 widget or $10,000 a month for reputation management and damage control after John Q posts his story all over the internet?

I don’t think companies should bend to every single consumer complaint and bad review, but I definitely believe a corporation that has a blanket policy of ignoring them all is asking for trouble.

If there is one thing I see inside and out of a successful website it’s passion in one form or another. Don’t get stuck in semantics, all I’m saying is that good websites form an almost immediate and long lasting emotional connection with visitors.

This connection drives everything from referrals to repeat traffic, and guess what it also drives new ideas. Consumer intelligence is key, but I’m going to take it one step further, leverage consumer passion for the easy win. If there is one thing gathering consumer intelligence has shown me, it’s that passionate connected consumers are active consumers.

You might have heard this argument before, but rarely do you get down to the psychological nuts and bolts of what makes people tick. Have you looked at the woman in the picture yet? Her job is to illicit an emotional response, all processed and computed in your brain within a fraction of a second.

Make Up Your Mind

I couldn’t make my mind up in college on what to major in, I just liked studying too many different kinds of things. One of the areas I loved to focus on was psychology, specifically behavioral and developmental. People are incredibly predictable at scale, you just need a large enough sample size to predict varying responses in a group.

There is a process to the way people think and react to stimulus, and when you’re building websites you need to be leveraging that process for your own means. It might sound devious, but it’s exactly what all the major players are doing, so why are you any different?

You don’t think facebook knows that a “like” becomes a positive reinforcement for good behavior. What could facebook possibly want to reinforce? Oh maybe posting a status update, uploading a picture, or maybe creating a fan page?

Drive Revenue

All these things drive revenue, so it pays them (well) to connect you emotionally to their KPI’s. I’m sure you’ve figured out by now that they are leveraging your emotional wants and needs for their own ends. Ouch.

Over and over I come across websites that have great concepts but no passion curve. Where is the emotional connection, where is the hook? There are too many neutral websites out there, don’t throw you’re hat in the ring with every other largely ignored piece of content on the web.

You don’t have to be TMZ, but you should probably be closer to Huffington Post than the national weather service. Learn where people’s emotional hot buttons are, and you will learn how to make money online.

Think Backwards

You have this wonderful idea, but you have to make sense of it all. How are you going to monetize it? What’s your long term plan? Too often we think of websites as a quick and easy way to make money. We look past traditional planning and decide to “wing it” as we go along, figuring that your ideas will come to you with time. The important thing is getting that idea up and running right? Wrong.

Before you build, before you recruit help, you have to have a long term plan. You have a great idea? So does everybody else. Why doesn’t every great idea make it’s creator a millionaire? Well obviously it’s never easy starting an online business, but I happen to believe most people (as I once did), go into online ventures without thinking long term.

Hence the idea of planning backwards from the start. Your end goal is to make money, so why not let that be the driving force behind everything that you do. When I started building websites I would get an idea, work countless hours to build up traffic to a site, then sit and rack my brain as to how I was going to make money off all those visitors. I had arrived at the end goal, but now had become my own worst enemy.

Begin with the End in Mind

Your model has to start with the end goal, what is going to make you the most money. Everything will be driven by that force, and should be centered around it from the start. Your subject, conversion methods, user testing, keywords, articles, site structure, SEO, social media, rich media, and the list goes on.

People create and create and create and then try to figure out the financial gains to be made. Too often you will find that unless you plan to make money from the start, you won’t make much money at all. There’s that old saying I can’t seem to get out of my head, an ounce of prevention is worth a pound of cure.

Well the same can be said of internet marketing and online business development. Plan ahead, think ahead, and you will get ahead.

I tried to make the title of this post as confusing as possible, because that’s how most business plans start out. You have this wonderful idea, but you have to make sense of it all. How are you going to monetize it? What’s your long term plan?

Too often we think of websites as a quick and easy way to make money. We look past traditional planning and decide to “wing it” as we go along, figuring that your ideas will come to you with time. The important thing is getting that idea up and running right? Wrong.

Before you build, before you recruit help, you have to have a long term plan. You have a great idea? So does everybody else. Why doesn’t every great idea make it’s creator a millionaire?

Well obviously it’s never easy starting an online business, but I happen to believe most people (as I once did), go into online ventures without thinking long term. Hence the idea of planning backwards from the start. Your end goal is to make money, so why not let that be the driving force behind everything that you do.

When I started building websites I would get an idea, work countless hours to build up traffic to a site, then sit and rack my brain as to how I was going to make money off all those visitors. I had arrived at the end goal, but now had become my own worst enemy.

Your model has to start with the end goal, what is going to make you the most money. Everything will be driven by that force, and should be centered around it from the start. Your subject, conversion methods, user testing, keywords, articles, site structure, SEO, social media, rich media, and the list goes on.

People create and create and create. And then at some point down the line try to figure out the financial gains to be made. Too often you will find that unless you plan to make money from the start, you won’t make much money at all. There’s that old saying I can’t seem to get out of my head, an ounce of prevention is worth a pound of cure.

Well the same can be said of internet marketing and online business development. Plan ahead, think ahead, and you will get ahead.