ChatGPT is Killing Your Strategy...

They ask investment managers, "How often do you use CHPT and how much do you like it?" Different investment manager says like, "Well, I use it every day. I use it 3 hours a day, whatever, and I really like it. It's so stunning." Or like, "Yeah, you know, it makes mistakes. It's kind of annoying. It's too friendly, whatever." So, they rated those answers and then they compared it to the investment success of the investment managers. And lo and behold, the more you trust JBT, the worse your investment decision was. Why? because people don't understand the shortcomings. What do you think is the biggest shakeup in ecom that's coming that most people that are in ecom that maybe are the sellers are just not paying attention to that they need to wake up and smell the coffee if you are an aggregator via Amazon or via Google that business model is going to break down. You're watching marketing misfits with Norm Ferrar and Kevin K. What's up Norm? How you doing, man? I'm doing great. In fact, I'm having a cup of coffee. I I I I think uh you and our guest today, uh I'm I'm maybe the only one not not drinking the coffee cuz I hear that coffee and AI go together really really well. That's what I just heard. So, I can't wait to get into this podcast, by the way. Or is it is it AE? I was listening to a podcast the other day and this guy kept calling AE. And when the AE does this, I'm like, what? No, dude. It's AI. And then he's like, "No, the AE it's like it's like it's like we know like my ex from Latin America because the I is pronounced like an E. So it's not Wi-Fi. It's wee and it's AE." And I was like, "No, it's AI." It's just like, "Is it Aeo? Is it Is it Geo? Is it AIO? What What What is it? Nobody knows. I either domain." Yeah. But but nobody knows. And you know there's there's a lot of people out there jumping on this AI bandwagon right now and agencies. We have an agency, you know, that's doing AOS for some people for e-commerce sellers and they're jumping on this and there are no experts right now. Nobody is truly an expert and um and but there are people our guest, right? But there's people that are way ahead of the pack and are on the cutting edge because but it's a rapidly changing industry and you and I both keep up with it pretty pretty thoroughly. And our guest today is one of those guys that's on the cutting edge. Uh and I think he's going to blow some minds and and uh including possibly even ours. He promised to. So we're going to hold him to that. Um and this is going to be I think a really cool discussion that uh everybody needs to listen to. I think this is going to be one of those episodes. We haven't even recorded it yet, so we'll cut this out if if it's not true. But I think this is going to be one of those episodes that's going to be gamechanging for people that actually listen to it and actually uh believe what they're hearing and understand what they need to do because the world is the world is about to radically change. Uh this is going to be cool. Can I call you Kev? You can. No, it's K E V I N. So yeah, Ke Kevin give in. All right, I I'll say something. All right, let's introduce our guest, Kev. All right, let's do it. Uh, we got Lux Lutz Finger coming on as soon as Norm figures out how to hit that button. I hit the button. There you go. There you go, Norm. Fresh coffee ready for you both. Awesome. How you doing, man? Good to have you on. Life is amazing. It is. It is. It is. Uh, so uh, not a misfit. Not a misfit. Amazing. Life is amaz Well, yeah. People People always ask me like they say, "How are you?" And I say, "It's another day in paradise." Yep. I I always say it's another day in snow. But that's cuz you're up in Canada. That's That's another white day, right? Yeah. Um welcome. Let's uh so uh you I mean I think I had heard about you uh the reason I tracked you down uh is I think it might have been the Jason Scott show or it might have been some something like that where I heard you or you were mentioned as and I started looking at some of the stuff you're doing. I was like wait this guy is someone we got to get on the podcast. So I reached out to you um I think back in the in the summer of uh of 2025 and actually uh finally we got you on and uh we were chatting a little bit before and I think this is going to be going to be cool. So for those that don't know who who you are, just give us a little bit of a a background uh uh of of where you come from. Yes, absolutely. So I'm a faculty member of Cornell University. I teach about AI and data and products about since like 15 years or 13 years. I have been in that data space. Um you know like we call it AI today. Uh we called it machine learning before we called it data before that. So, I made every of those hypes. I built a couple of companies out there, sold them. My last company I recently sold to X-Gen AI and I'm now the head of AI. Um, go figure, right? I'm the head of AI for XGen and we are helping e-commerce to um adapt to the new world. Awesome. And you you did some work at Google and LinkedIn, a few other big boys, Snap. Yeah, totally. I sold my last company like the the company before I sold and then I went to LinkedIn. I built up the analytics team. Then I went to Snapchat. Uh like was there as we went public. So I I cleaned up the data and tried to set some data sanity there. Then I went to Google. Um I um was one of the founding guys at Google Health. So we went into healthcare and used you know stuff like you can use data to predict um that somebody goes to a hospital 6 months before that person actually enters the emergency room and if you have that knowledge then you can save people save health care cost. I then went to a NASDAQ LA company in New York where I became the president um of AI and products also in healthcare and then I started my own company um the second one where I built essentially generative AI models and AMI recommener systems for e-commerce as well as I dabbed into um and we should talk about this the new space of GEO generative engine optimization also called llm o or a whatever o like there is somewhere an o everybody should have an o so a lot of people don't understand that this that AI is not new a lot of people think that AI when chat GBT came out to the public uh in 2020 was that 2022 late late 2022 that was their first exposure and they but it's been around for like you just said for for ages uh it oh let's do a pop quiz. Let's do a pop quiz. And I won't hold it like that7 or something like that. When when did AI start? When did AI start? So when was the first discussion of people thinking about this AI thing to be? It was in the 40s when 1940s or something, right? Yeah. A little bit like 56. So the first like mathematical models are now honestly if we think about AI about um data helping us to predict the future um you know then like a linear regression could be considered AI and I think because you have data for linear regression and then you use a data point to inference on that linear regression and so you have an artificial intelligence way telling you something. And fun fact, neural networks, chbpt and all of that is nothing else as billions of billions of linear regressions stuck in a kind of a function. But it's it's essentially that. So if you did your K12, you know what is AI? What so so those that don't know what's a linear regression for the audience? Okay. Okay. Like everybody knows how babies grow. Let's start there. Like a baby comes to the world has a certain size and then you feed it and it is growing a freaking linear meaning every day the baby becomes taller and heavier right so if I know what the start rate is of a baby and I know the growth rate of a baby I can tell you how heavy and tall the baby will in one month two months 3 months at some point it's done this stops to be linear that is a linear growth right so now how do I know what a growth operators of a baby. Well, I I train a model. It sounds to totally funky. It's nothing else. I go to a hospital, grab a couple of baby data, month and size, and chart them on a on a like month over weight. And then I have a linear line through it. And that's a linear regression. And that is AI because now I can ask my super fancy model. Oh, let me ask how heavy is a baby with eight months. So I look at my data. I have a bunch of points there and that get gives me the amount of um the weight for baby in a month. So if this is like guys and I didn't want to drive this down to a technical like I promise you that knowledge about um how linear regressions work will help you to skew like to sell better on chat GPD and perplexity. Trust me it's really true. Understanding a little bit AI goes a long way. How old are we as uh are we an eight-month baby yet? In terms of AI, well, I mean um AI is a tool, guys. It's kind of like yeah, like we like people get so excited about chat GPD, but essentially it's just a new interface, which could be pretty exciting, right? I mean like as we had the last interface changed. We called this the worldwide web and everybody every shop had an interface called a website and every marketing guru was meant to understand that website and now we have a new interface. We can chat to it. We can ask a question. It finds the right things for us. It's an interface. Yeah, I I it's it's a very powerful interface that's growing super power more powerful by by the day it seems like and but a lot of people I think I agree with you when you say it's a tool I agree Norman I agree that it's a very powerful tool if you know how to use it but most people what's it chat GPT has like 800 million that they users they say I don't think it's really 800 million people I think there's businesses and other accounts I think that's accounts or something but anyway whatever it is most of those people have dabbled they've written an email if they've done something and maybe a little bit of research asking a couple questions. They don't a lot of people don't understand the true power of what it can do or they're playing with Sora or with V3 or something and making some some graphics. What what are we looking at here on true gamechanging, earthchanging, humanity changing power of what is happening right now and what the future holds when it comes to AI in in your opinion? Wow. That's uh that's like how many hours do we have? So I I I do a whole course on this about like I think 100 hours. Yeah. The quick summary is ask Chad GBT about it. No. So I so if AI is a new interface then this means how we interact with the worldwide web currently is about to change meaning all the shops who are selling via a homepage or like a web page need to reconsider. It's going to be like they're going to have like notion pages or something. Yes. Not quite. This will be a different interaction and we can go into where the horizon is, but it's the um it's not that we haven't like I I tell you a dirty secret about academics. We always look backwards, right? So, um it's not that the world hasn't seen this before. Like the internet came around and suddenly news organizations around the world suddenly said it's not this paper thing anymore. we create the homepage. Well, Facebook came around and killed that homepage and now it was the feed, right? So, we here we have a new interface. It's not the feed anymore. It is our chat interaction and our conversation and that will change. But it does way more than this. And therefore, Kevin, if you ask me what what does the future hold? loads of things. But um definitely the way we shop will change because it goes from the web page, Amazon's web page is essentially not as important anymore over to your trusted chat conversations. Uh OpenAI just recently launched their agent commerce protocol in order to facilitate exactly that. But you can go further. You can saying hold on I can copy everybody in this um um universe. I for my own course I copy myself and create a Lutzfinger copy so that my students can 24 um hours a day 7 days a week talk to me if they want even with a German accent right so that is helpful because I support them throughout their journey with my knowledge way better than I could do in person. Now if you can copy me then you can copy anybody. That has a completely change on service workflows, customer interaction workflows but it has as well obviously a complete um change in the notion how to represent yourself. What is true? You might recall the song from Drake and the Weekend um um Something Up My Sleeves which wasn't really Drake and the Weekend. It sounds like it, but it's not him. It was fake. Drake got very upset about it. But hey, he shouldn't. Somebody took his image, his vision, his his space, and made a copy of it. So, what's the new world look like? We have a completely different question on IP rights. We have a completely different question on brand rights. We have a different questions on marketing. And we have a different question on um selling and sales approach. All of this is changing. Hey, Norm, you'll love this, man. I talked to a seller the other day doing 50K a month, but when I asked them what their actual profit was, they just kind of stared at me. Are you serious? That's kind of like driving blindfolded. Exactly, man. I told them you got to check out Sellerboard, this cool profit tool that's built just for Amazon sellers. It tracks everything like fees, PPC, refunds, promos, even changing cogs during using FIFO. Aha. But does it do FBM shipping costs, too? Sure does. That way you can keep your quarter 4 chaos totally under control and know your numbers because not only does it do that, but it automates your PPC bids. It forecasts inventory. It sends review requests and even helps you get reimbursements from Amazon. Now, that's like having a CFO in your back pocket. You know what? It's just $15 a month, but you got to go to sellerboard.com/misfits. sellerboard.com/misfits. And if you do that, they'll even throw in a free two-month trial. So, you want me to say go to sellerboard.com misfits and get your number straight before your accountant loses it? Exactly. All right. You know, I was watching and I don't know. Lit. Are you frozen? No, you're not. Good. Um, I'm so cold. Join me up here in Canada. Canada, man. I was watching the news and they were talking about this actress, AI actress. Yeah. And she was being represented by an agent. And what they were saying during that uh uh during that that episode was that uh this is going to happen more and more that people are going to develop the character in AI and these agents are going to represent them. That's where the money is. And I was just I was sitting there saying I didn't even think about you. Then you bring up Drake and you know what's going to happen to people like that that you duplicate. Like who owns the rights to Drake's image? Yeah. Well, Drake should own the rights. No, you like and like think about Drake. I'm Look, Drake is somebody who has not reinvented himself many times. He has a certain style and he is copying the style over and over again. I would even claim that he's most likely not even writing his own songs. He has a team and he is directing this team to write his songs. Now I can create an AI that represents his songs and creates in his image in his idea. And um you know if you think about um um princess and princess Leila from Star Wars Mhm. in her latest appearance where she kind of is at like what like the latest Star Wars film she has a comeback despite the fact that she is dead. Mhm. We don't need that human person anymore. We can superimpose images and Hollywood does it all the time. Um, when you start a Hollywood movie, they normally copy the body of the person just in order to make sure for the case you die that not the whole investment goes waste. Therefore, they will keep you alive for the movie that what you signed up for. They did that in Fast and Furious. The guy that what's his name that died in the car wreck uh you know go um when they were filming that uh Paul whatever. Uh yeah they did that exact thing. Case in point. Yeah. Now it was expensive. Now with Sara I can you know if like if your audience wants to follow me on Sora I'm at Sora too. Follow me, I follow you back, and then you get access to my liking and you can make any cameo you want with me in it. Essentially, I rent out my space. So, we definitely, if you talk about marketing misfits, we definitely should talk about that there is a whole space in GEO, LLMO, AO, AO, whatever. Meaning, how do I impact the new aggregator in town? How do I impact perplexity? So when I'm as a consumer talk to perplexity that my brand is vision there, right? That's level number one. Level number two is how do I represent myself? How do I make marketing image theory like image from something? Look at black forest labs. One of the best tools out there in the market in terms of image creation. It's not you like you remember the times where you kind of created an image and suddenly you had six fingers or five fingers and it was always give away. That's quality like and the quality issue is fixed. You need a control issue. How do I if I create an image for Cartier the puma jumping how do I make sure that this puma is really the size of the puma the brand image from Cartier wants that that's the control question. So then I work on that. Now the third level is obviously now I have not only found a new sales channel. I've not only found a way to create lower the cost of marketing creation. Now I give now my image out my liking my brand out and I let others create my brand style and I make every of my customers a creator. So here you have it. If and this is only like Kevin, I'm only only touching here on e-commerce marketing space. Um like I can go in way more depth into what it means in healthcare, what it means in uh finance, what it means in social networking. There's more to cover. I do this actually in my uh like it's an open to the public course from Cornell building AI solutions. But um if we spend only the moment looking at what does it mean for e-commerce, it means a different sales channel. It means a different interaction with your brand. It needs a different way to create marketing and it needs a different opportunity how you protect and recreate your brand. So is that where web 3 or the old web 3 know NFTTS were a hot thing for a moment and but and all the little cartoons and characters and stuff but the underlying technology under that is sound. Is that something that you think is going to see mixed in with AI to protect these IP rights where it's going to be blockchain type of stuff that's that's helping so when you share your likeness that that there's a something on the blockchain or an NFT that goes with that and it comes back and you're getting a little Scooby snack off of that or you think you think something like that is coming? You're trying to get me on the hype hype route here. I'm like does he follow the hype actually? So I never got on to web 3.0. I kind of thought it was BS and I still stick to that. Um, blockchain is definitely the right technology for us to have distributed um, knowledge or distributed uh, quality. It's totally not clear how this works. Look, I mean, one of the MCP is a concept which was hyped six months ago. I always said I'm not sure how we do this with security, how we do this with payment, how we do this with uh um privacy. It's still not solved. And yes, it happens as we would expect it to like the biggest player in the market tries to determine what is the best protocol for their needs and the biggest player is in that space is no longer Amazon. know where it is shared GPD and open AI and they're using AGP not instead of MCP right exactly and how did they do this they solved exactly those problems which we described I mean look this is like MCP is a P is for protocol I can have any protocol I want if I see you I can fist bump you I can shake your hand you wouldn't care less as long as you know who I am right so like protocols are anybody can create a protocol the question is do you get this implemented? And the move was open AI just did brilliantly go to the number two in the market which is Walmart and tell Walmart look you're number two we can get you to number one if you just play nicely with us. We have seen this Verizon against AT&T as Apple came around. Well, here we go. Next chapter in how do you dominate a market? Well done to Yeah. Well, they started with Shopify and Etsy and then shortly came out in Walmart and then Walmart originally people were worried is it just the one P products and no it's the all the third party products too. Yes. And then a month ago uh at the time of this recording Amazon says we're going to block it off. We have Rufus you we're going to block all the uh the uh you know the the GPT the service. And I think that was a massive mistake. I I do too. I think that's a huge mistake. Huge mistake. Um, and they may have to rethink that, but I' I've been saying for like a year that Amazon is not going out of business, but the way you shop and you don't go to the mall anymore uh to shop. Um, and you but Amazon has such a strong fulfillment system that they if they adapt properly, they'll be okay. But Walmart has that, too. Um, and so, um, it's going to it's interesting, um, to see what's going to happen here. And I think a lot of people are not on this bandwagon yet in the ecom world, the sellers, the people that are making their living. Not the consumers, I'm saying, but the sellers. I don't I I keep saying that guys doing $5 million a month right now on Amazon are going to be doing $500,000 a month um or 500,000 I'm sorry, 5 million a year are going to be doing 500,000 a year uh in a year or two from now because they're not paying attention. They're still doing things the old way with keyword based instead of intentbased. They're not doing any AEO and LLMs and getting their brand mentions and getting into the social media and getting the structured data and doing all this stuff. And you don't have control if you're just selling on Amazon on most of that stuff. And so it it's what are you seeing when it comes to ecommerce? You know, you have the the browsers that just came out, several of them that have the Agentic uh capabilities and they're kind of clunky right now, a little, you know, a few issues, but that stuff will get dialed in. Uh it'll it'll get better. What What are you seeing? What do you think is the biggest shakeup in ecom that's coming that that most people that are in ecom that maybe are the sellers are just not paying attention to that they need to wake up and and smell the coffee. Smell the coffee. Smell the coffee is always a good one. He know how to wake me up. Coffee. Um I think for um you can for e-commerce you can break it down in those three different areas. Area number one is how do you sell your sales channel? Area number two, how do you market? And area number three is how do you uh what do you work with your brand? Um very clear if you are an aggregator via Amazon or via Google I don't care that business model is going to break down. So if you now look into the whole world of our sales like shops, most of them are aggregators. Most of them kind of have figured out you're talking about the marketplaces. Yes, exactly. Well, aggre aggregator of intent because they go and grab keywords. Yeah. Okay. Right. Amazon is an aggregator from like and you're right. Amazon has a distribution network. Um, I actually wrote, so I'm I'm publishing at Forbes, uh, the the research I do and the stuff I I talk about. So if you look up Litzfinger and Forbes, you find me. Um, in in June this year, June, I think, I wrote about, okay, what will that mean for Amazon, Walmart, and Best Buy? because these are very three distinct abilities um um category leaders can play for Amazon the homepage will be more or less less and less important because you don't go anymore to the Amazon page you talk to your trusted LLM and order from there as we see happening now um Amazon tries Rufus honestly I I did a public show comparing Rufus it's so bad And it is bad because it doesn't have the long tale of knowledge as openai has or perplexity has. Um and I can give you a technical explanation to it as well as a product explanation but let's not go on down the rabbit hole. The second part is uh Walmart. Walmart has been a price leader and they will continue to be a price leader and they will um position themselves within that perplexity ecosystem as a price leader and then Best Buy doesn't have a distribution system doesn't have a price leader advantage. However, they have complex products and they will trying to be the most knowledgeable about their product specifications in order to help the customer. So and that is the business model which is most critical to where open AAI positions themselves themsself. So you have those three buckets in the sales part. So if companies don't wake up at the moment to understand that their trusted distribution strategy is completely going down under then they're going to miss out. That's on part one. Part two, we can talk about how do you make marketing? How do you brand? How do you place imagery? Because there's a complete change in the market. Part three is do you have a brand? Do you have a brand story? Then you're probably about to survive. And now we can talk about what that means. So getting into part two, I'm really interested to hear what you have to say about marketing. How do we how do we go out there and compete? How do we market? Yes. So essentially and we um here it's a little bit important to understand how AI works and what AI can and what AI cannot do. Essentially, I can go to chat GPT and ask me, write me a a nice marketing pitch for marketing misfits session with Lutzfinger. And it probably knows Litzfinger. It knows you guys. So, it will come up with something nice. Will it be exactly the style you guys like? No, because it has all the weirdness of the worldwide internet and it just takes averages and it doesn't fit do exactly the style as norm has it. So you need to tweak it, you need to train it, you need to massage it so that it's norm style, right? Um but it reduces your cost once you have it and you can do this for text and you can do it for imagery. So very high level we will see focused models for each brand containing norm style. And the two things you need are actually the three things two things the two things to look out for anybody who tells you about AI and look I mean I'm the the head of AI for XGen and we are right in the middle helping e-commerce companies doing this. For us, it's two big questions, quality and control. Make sure that the text about the show is the right quality. Don't use swear words. Don't be too complicated. Um, don't have too old-fashioned wording only because you ingested a bunch of old books, right? Um, quality. And then the second one, control, because Norm might say, "No, no, no. This is not my style. I wanted a little bit less little bit more flashy and no not too much flashy a little bit more flashy. So here it's a control problem. So quality and control are the two things we need to bring in. And by the way is the same thing not only for text, same thing for images. I mentioned earlier on one of the companies I personally admire is uh Black Forest Labs. Why? Because they see pixels as an infrastructure. They allow you to create the right imagery of um let's take a brand and then control that image according to your brand guidelines and that's the important part right if you are let's say you are cartier I mean let's look at this cart here they have this puma made out of diamonds running through the night obviously this is all AI generated now you want to make sure that that Pummer which stands for the brand is really the Puma you want to have. You don't want to have a cheap copy of a Pummer even if it's an AI generated Puma, right? So that quality and control is what becomes important for the second part. If you have that, you can drive down cost dramatically and create way more appearance in um in that space which is in a aentic commerce space and like this is important. We see I see so many people creating web pages now using charg. That's so stupid. Let me say this again. If you are in the business of creating web pages with CH GBT, it's stupid. Why? Because you put the page out and then you are totally happy that CH GBT crawls that page. Look at this. They're crawling the page. Yes, but they're not using it for training. Okay, let's come back to the babies. I talked about earlier on. How do you know how heavy an eight-month-old baby is? you select a bunch of baby data. So probably in your data set on eight months, your baby is somewhere between I don't know 15 pounds and 20 lb. And there's a distribution of data, different data points. Okay. If I now use my model to give me the answer about an 8-month baby, it will take me exactly to the line which I drew, which means it's 16.5 pounds. If I create now create data using my model, I get only 16.5 16.5 16.5 16.5. I lose diversity and my future model looks way worse. This is called model decline. Sorry, small technical detour. However, if you use chat GPT data to train Chat GPT, the model quality of CH GBT goes down. And what will chat GPT not allow? that the quality goes down. If Alan Musk reportedly spent billions of dollars a month on training the engine, the team will make damn sure that the quality doesn't go down. Meaning all of your Chad GPD created web pages, yes, they get crawled, but they get never used for training. Are you looking to quickly boost new Amazon product launches or scale up existing listings to reach first page positioning? The influencer platform Stack Influence can help. That's right. Stack Influence pushes high volume external traffic sales straight to Amazon listings using micro influencers that you only have to pay with your products. They've helped upandcoming brands like Magic Spoon compete with Cheerios for top category positioning while also helping Fortune 500 brands like Unilver launch their new products. Right now is one of the best times to get started with Stack Influence. You can sign up at stackinfluence.com or click the link in this video down in the description notes below and mention Misfits. That's m i sf ts to get 10% off your first campaign. stackinfluence.com. So what you're saying then is basically any AI generated content whether it's your web page or maybe you're creating UGC video content with AI or whatever that will maybe accomplish one purpose but it's not going to give you that brand authority and that recognition and that the training so that AI then uses you as a human like what is the humans that's why Reddit and LinkedIn and some some of those where it's human interactive are are weigh heavily in Wikipedia weigh heavily in the training data and and authority. So you're saying that all these people that are creating a thousand UGC videos and putting them out there, maybe they're going to make a few sales, but that's doing them zero good in the future on getting any kind of brand authority or brand recognition or any zero. So you got to be the human doing it and the AI can tell. I know there's some watermarks and there's some tools and some people say, "Well, this nobody would ever know this is AI." But but there's actually ways to figure out that most of this is AI. So that's that's a I think a myth. Um but so that's that's an interesting an a very interesting point because I think a lot of people don't realize all this AI content, all this, you know, whether they're writing a newsletter or they're writing blog post or they're creating websites or they're creating video content and they think they're putting out massive amounts of content that's going to help them and it's actually could backfire. It may be a short-term win. So, let let's clarify that like if you create content, you might have two users. One is a human user, right? And creating content for human users might be helpful. Okay. Yeah, you're right. Right. I if like I would have written this by myself. I need somebody to to read it. I want to help people. Therefore, I create content. Awesome. Human user gets it. Says thank you for the summarization. This was awesome. This was helpful. Human users is good. If you think about however, and this is bucket number one, the sales channel. How do I make sure that I get positioned correctly in CHBD perplexity in other models? I need to influence those models and I can influence those models with content. If I use if I have that as a use case in mind, that won't work. Now Kevin, it's not easy for a computer to differentiate is this a human generated content or computerenerated content. There are tools out there. I believe this is all snake oil. this doesn't really work. Technically, it doesn't make sense. There is no no way to distinguish. That's how we build it, right? Maybe you find a stupid mistake like five fingers on a hand. Maybe something is a nutshell. Then it's a quality issue. We solve this over the time, but technically there shouldn't be any differentiation. The same way you cannot technically decide whether the 19.5 pounds which I just told you are because I really had a baby with 19.5 pounds or whether this was just the answer from my line. Now you understand why I brought this very simple use case up front. So we cannot differentiate the thing is somewhere else. If I train a model I used to work for Google. So we get data and then we use the data to train but then obviously we look is it doesn't model nos more is it better now after I trained and if it's not I just delete the model meaning if I take BS data my model is not going to learn I don't know what worked but the model so it's in like a loop okay I I see okay it's it's like I I might scrape the data I sample the data I test it. I realized the model doesn't really care. Now, let's uh let me tell you something. Um if I tell you, Kevin, I today saw something amazing. I saw Hold it. Hold it. I saw a cat. You kind of like Flitz, you saw a cat. Yeah. So what? Because you Kevin saw so many cats in your life. Meaning I showing you yet another cat is really not amazing. Right? If I would tell te tell you that I saw in something like this an anteater. You haven't seen an anteater before. I guess I like okay now he is like oh that's an anteater. That's cool. Oh interesting. Looks you saw an anteater. Like where where are you living right now? Totally. And that registers with you because it's special. It's novel. It's new. Your neuron network gets trained. So would be any AI network. Meaning if I cannot impress with novel unique content chat GPT or perplexity or any other training set, they're just not registering it. It's just like me showing you yet another cat and you couldn't give a damn about it. And recency matters too, right? On that. Yes. So when just going back to the content, let's say you have something and you have a whole bunch of cats in your content. If human intervention, like if I took that information and I decided that I was going to bring in my editor to add some information to change it around, does that help or does that still it's just still a whole bunch of cats? like depending on how the editor is adding the cat. But yes, like essentially um it might help because a human has put and like the problem if you want to impre like if you like we are back to bucket one. How do you get your brand into the sales channel and perplexity? The answer is we don't really know because the people who built the models don't really know. What they do is they test if it's something novel and unique then it's okay the model get like the model is impressed and learns it meaning for anybody out there they need the human interactions to actually create content good enough to be bored and taken up. Meaning if if you are a brand or a community that has a lot of good discussions about your brand, about how your brand is used, then you're more likely to be recognized because humans come up with new ideas. Very good. By the way, um and we know this from marketing. So you hire this marketing agency and they don't know anything about your brand and then they come up with those concepts and you look at them it's like dude that's not us. No matter how much drugs you take in order to come up with smart ideas it's still not us and then they say oh you know what we do user interviews because they want the user input. So they talk to your users and they come back with wow you know what your user like about you and then they make the story based on human input. I AI is exactly the same way. We need human input. So why is it then like like Norm had this case where there's there's some backdoor quote unquote hacks or whatever right now to get ranked in LLM. So he can issue he has a press release company. He can issue a press release company on the right press release you know a tier one press release and within hours uh sometimes if he get certain intentbased things if they're included in that press release starting to show up and be recommended on an LLM for those questions. So, it's that's the recency. It's the authority. Excuse me. But those things are probably short-term things and back doors. Just like with SEO, there are back doors that'll get closed at some point with Yes. So, if you um seem to be a lot of those right now that people were exploiting uh for the short term. Yes. So, if you go to query edge.com, that's a company I built, queryedge.com. This is essentially a geo monitoring company. And fun fact, I like I started building this. It's it's focused on e-commerce. I can see which shops get recommended. I knew way earlier like very early on that um uh OpenAI is working together with Etsy because for some miracle they always recommended to buy something Etsy, right? It's kind of like it comes up in my monitoring now. Um, if you now want to impact it, meaning you put your stuff on Etsy, you create millions of pages on Etsy with always the same product in the description in order to impress OpenAI. Maybe that works. Up till the moment, OpenAI realized this is degrading my effort. Then we are down to an SEO type of arm length race, right? It's kind of like smart minds like us tries to figure out how can we impact perplexity and uh um open AI. We measure we build it in up to the moment that those tools recognize and then the reduces. Now that said, I very strongly believe that there are opportunity like to to do this. Um, especially end of this year, OpenAI will come out and offer you probably paytoplay, right? They offer you advertisements and now you can actually evaluate what what effort pays me more and you kind of like can start moving between should I try to um place a message with open AI or should I rather pay for the message which openai. So you can have you think about this as a potential triaging um totally to a total opportunity in the long run. Companies who have a brand story, who have a real brand will succeed. Um companies who are just an aggregator on top of Amazon will die. That's and that's the importance of just being wide like having a wide brand rather than just doing a press release and hoping that that's going to happen. You know, you have to build that community around the brand and you can do that and that's another question the community that we can build with AI right now where where are you seeing that going where can we build that brand that brand community? So this is super interesting. So there is um you have a product and obviously people love your product. As you both know, I'm a coffee nerd. I love coffee. And the machine behind me. It's a decent espresso machine. Um it's an open-source project. The machine is amazing. It allows me to measure 10 different things with each coffee I shot. Like coffee shot I create. I can um buy extremely novel beans or like with tastes like melon or strawberry or whatsoever and then um um work on the setup. I can download profiles. I can do loads of stuff. It's complicated. Coffee is complicated. And now what you have here is a community that supports each other on usage of this machine. So now you have a community around a product. That's one that is has always been there that still continue to be a big driver for good marketing. Well, there's another way which is upcoming and that's the third bucket. Once you have a brand, you can actually create a lean in experience for your brand. Right? Um, if I buy Armani, Armani as a brand or Cartier as a brand or coach as a brand or like you name all the brands, they give me a brand identity which I put on. How about I I'm allowed to participate in the brand identity because I can now go and create an Armani like suit on Sora as much as I could give you guys if I say join like follow me on Sora at Lutz and I follow you back and then you can create my image as a cameo. You're totally fine of doing this. So I give you my brand identity. Meaning if I enable a brand identity to be copied, then there is a new business model, there is a new opportunity for me to lean in as a as a brand. And let's take Drake and the weekend. If Drake would have said like, by the way, Drake went ballistic against this fake music and says, "That's not me." And he bullied everybody to not give the music out. So the only way that you can listen to that AI song from Drake in the weekend is actually YouTube. Everybody else wasn't allowed to carry this. Um, now if Drake could have said, "Look, this is my style. I endorse certain styles and you can make money with it and I because I endorse it, I get a cut from anybody who creates Drake like music, right? You can think about a complete new brand experience which is going to be the future. And you could also create inerson experiences where all the people that have the the u the brand name uh clothing or whatever can come. And we're having a Louis Vuitton event in Los Angeles and all the Louis Vuitton people. So you have you have you have that. So that's going to become even more important in an AI world. People are going to crave human interaction more than they they may have in the past. And so the world is going to go more experiential uh in in in some ways. Is that what you're saying? Yes. Totally. So essentially if you are thinking about a marketing approach and you go like like you can actually take the five PS but like let's at the moment do not the price because it's not helpful but like the place we go from Amazon and go into an agentic experience meaningd perplexity. You take the promotion, we go from stock photography or photos and text and music we had to create with a lot of cost to a lowcost budget thing where quality and control is important. And then um the the third one is that you are able to open up the brand to a larger creator audience and you create more of a community around your brand in order to carry you forward. What about on the user side on this? A lot of people are saying the the bottleneck is the users getting used to a different way of shopping when it comes to e-commerce. Getting used to this agentic thing and it's a it's a different way. It's like going from listening to to music on uh you know it took a while for some things were I don't know may maybe music's not the best example but from the eight track tape uh to the the streaming um you know it it we're buying CD now you remember that yeah there's a progression there where people had to get used to consuming or interacting in a different way. How long do you think it's going to take for the average consumer when you know Chad GPT is talking about putting out a browser and know agents built in where they're going to get comfortable enough to where they'll say go uh I need some new shoes uh I whatever size I bought last time go find them find the best price uh and and go ahead and buy it for me uh and and make sure that they're here because I'm leaving town on Friday. Make sure they're here by Thursday. How long do you think it's going to get to where, you know, over half of the consumers are going to be comfortable doing that versus the old way of typing in keywords into a into a search engine? So, this is interesting that you asked this, Kevin. I would see this the other way around. Okay. Um, we can talk about how fast the adoption curve was from Chipet. I mean, amazing, right? Amazingly fast. men first, women followed, but amazingly fast. Now, I have no question that this is um like that people will shop in a heartbeat. They already do. I do user interviews. I like I had one user interview I talked in my LinkedIn channel about it. Um, one person I interviewed says, "Well, I uploaded all my blood values from my doctor to chat GPT." And then I went uh and it recommended me to buy all these vitamins uh at this website where I've never been shopping before. I've never shoed for vitamins. I've never been at this website. So, I just go to the website and buy for $200. I mean, that's reality already today. So, your question about how long will it take it way faster than you think. The question is a different one. How long will the ecosystem take to react? Yeah, that's yeah. And it is so easy for you to go on shbd and have a conversation and if they offer you a buy link, you buy and like and then you're amazed that it's there and next time you do it again. That's easy. It's way harder for an e-commerce company to saying I sold through Amazon. Now I I need to figure out how to do the agentic commerce protocol. I need to figure out what's the privacy thing. I need to build it out. There is where XGen AI is helping, right? So, I need to be enabled to go out and to place myself. That's harder. But then a whole industry has to change because the whole industry of Shopify parts needs suddenly are is disrupted. So users change fast, companies are change painfully. industries are very hard to change. Again, dirty little secret, let's look backwards. It wasn't the media industry. How difficult, Kevin, was it for you to pick up an iPhone? Not at all. You actually thought it's pretty slick. You got your iPhone and suddenly you could swipe and scroll and man, were you happy. How hard was it for New York Times to change their news approach? way harder and the whole news like or media industry almost went bully up. Mhm. Same approach here. Uh I've got a question about uh just personal habits and routines. I am getting I've got uh shiny object syndrome. I don't know which way to look. I don't know which platform. There's a thousand tools coming out at all times and they're all hitting me at different angles and everyone is look at this, but I don't ever get a chance to become an expert in them. Like there's certain ones that okay, I'll do this, this, and this, but there's so many great tools out there. How do you even or what should you be focusing on? Value creation. How about that? Don't do shiny objects. do stuff which makes your life better, your business run faster, your bottom line looks better. It's a it's it's it's a dumb MBA answer. I'm sorry, but it is true. People run behind shiny objects. And then the MIT makes a publication saying all the guys who ran behind shiny objects now saying shiny objects are not as cool. Yeah. because they're running behind shiny objects. We have one of the big problems we have using AI is not everything which says has AI is good. Not everybody who's like I can do U AIX well whatever does it help me does it help my workflow does it help me sell better does it fit my bottom line that's very often forgotten there's one study which I love they ask investment managers about how often do you use CHP and how much do you like it so you know different investment manager says like well I use it every day I use it three hours a day whatever and I really like it it's so stunning or like yeah, you know, it makes mistakes, it's kind of annoying, it's too friendly, whatever. So, they rated those answers and then they compared it to the investment success of the investment managers. And lo and behold, the more you trust JBT, the worst your investment decision was. Um, very cool study. Why? Because people don't understand the shortcomings. They they don't understand that it is not shiny which counts. It is does it impact your bottom line. Hey, Kevin King and Norm Ferrar here. If you've been enjoying this episode of Marketing Misfits, thanks for listening this far. Continue listening. We got some more valuable stuff coming up. Be sure to hit that subscribe button if you're listening to this on your favorite podcast player or if you're watching this on YouTube or Spotify. Make sure you subscribe to our channel because you don't want to miss a single episode of The Marketing Misfits. Have you subscribed yet, Norm? Well, this is an old guy alert. Should I subscribe to my own podcast? Yeah, but what if you forget to show up one time? It's just me on here. You're not going to know what I say. I'll I'll buy you a beard and you can sit in my chair, too. We'll just You can go back and forth with one another. Yikes. But that being said, don't forget to subscribe, share it. Oh, and if you really like this content, somewhere up there, there's a banner. Click on it and you'll go to another episode of the Marketing Misfits. Make sure you don't miss a single episode because you don't want to be like Norm. So, is that why you're seeing a lot of companies, there's a lot of stories been coming out like, "Yeah, we invest in AI, but we're not getting ROI and a lot of these big companies, they jumped on the the bandwagon, the shiny object, and they're like, oh yeah, we've done this, but we're not seeing really any difference." By the way, again, look backwards. We had this before. There was the thing where everybody got excited about it. It was called, help me again, internet, I think. And then there's like we will shop everything overnight and we will buy only online and Amazon skyrocket and then people turned around so it's like but hold on I still have all the brick and mortar and it's like I'm actually not all shopping and Amazon crashed brutally. called the bubble. And if you look at the Amazon share price today, that bursting of the bubble is not even visible anymore. If you look at the full scale of where Amazon is today, we are extremely bad in um understanding impact in the long run and the impact which we are seeing is huge. And I hopefully helped with those three buckets to describe it. But that means still somebody who is selling on Amazon as an aggregator is not going out of business tomorrow. But they will if they don't take the right steps today. So what are those steps? What are like three steps that every e-commerce brand should be taking right now? What what in your opinion? Because if you go to them and say, "Hey, you need to do AEO or GEO or whatever you want to call it." There's sometimes there's not immediate results off of that. I mean, sometimes there is. Sometimes it's more of a long-term plan. They're like, "Yeah, but we need to go send some emails or we need to go run some Facebook ads or something cuz I can I need to put some money in the bank." So, so what So, what are like three things that they should really be doing right now if you're an e-commerce brand? So, definitely you invest in a in a in a tool to monitor. Query edge would be one. There are many others. Um, you go and start monitoring. That's number one. Number two is you need to prepare for how do you get the human element into your brand. Meaning you build up a community. You um um understand how people search. So XGen is extremely good in search and discovery. So we help customers and like help brands to distill the knowledge of user interactions into something you can build off. meaning you invest in community, you invest in um in customer care, you invest in a in a close relationship because that is the human element you need in order to impress um chbetd and not just showing more cats to it, right? And then the third one is you need to experience about how do you lower your cost in brand and marketing and you like depending on your brand you can even experience with the like like experiment with the lean forward approach. I gave you now four steps. There we go. And we are at the top of the hour. So let's thank you so much for coming on. I do have a question for you. Uh, and we ask this of all our misfits. Do you happen to know another misfit? The biggest misfit at the moment is at um is that people believe that being an aggregator of demand is sufficient. That's the biggest misfit. It's not. Awesome. If people want to reach out and uh learn more about you or follow you uh or get in touch with XGen or Query Edge or follow you on LinkedIn or what? So they they can follow me on LinkedIn, they can ping me on LinkedIn, they can follow me on Forbes for my Forbes articles. Um they can reach out to me, they can take my course at Cornell. Um if you take the course on canal you are not only getting uh an indepth like knowledge about AI all of my students are afterwards in a big community on WhatsApp where we discuss and builds on stuff. Um we are over 700 people there like chatting and talking about AI and how to make AI useful um for businesses for themselves. Awesome. Awesome. All right. Well, this has been great. Appreciate you coming on and sharing. This has been uh really cool. Really fun. All right, Liz. We will see you later. See you later. Have a good day, guys. All right. Thank you. Enjoy your coffee. Oh, I will. [Music] Uh, every time we talk about AI, Norm, I don't know about you, but it's like, like you said, you know, your head just explodes like, all right, what is there's so much going on. It's moving so fast and it's like you just got to core like you said what's the shiny object stuff you just got to c just drill down to the essentials. What is the core things and only pay attention to these little shiny objects if it actually is something very useful in your business. Otherwise uh you know what what's the point um of of doing it? You know about them know about you know if SOAR 2 or VO3.1 comes out and it has this new feature that doesn't mean I got to go run and play with it. uh it just means that okay that's there as a tool if I need to use it uh for some or need someone on my team or something to use it but yeah I I think the like he said the world is about to change and I think a lot of people out there not just in ecom but across across all genres of life don't realize the drastic changes that are about to h are going to happen you know we'll look back and and these may be some of them are going to be very quick some of them will be a little bit more gradual uh but um it's going to be interesting 10 years from now to look back just like it is when you see an old Steve Jobs uh interview or Bezos interview from 30 years ago. You know, it's going to be interesting to see. And you know what's not going to change, Kev? It's going to be old school. It's going to be history repeating itself. It's understanding marketing. It's it's just like Lutz was saying about community, about the brand. You have to have a brand. You have to have that community. And this reminds me back in 2013, but 10 times faster right now. Amazon. Amazon all of a sudden all the service providers came out, you know, around 13 to 7 2017 and everybody, well, lots of people had shiny object system. Every or u shiny object uh syndrome. People were getting hit left, right, and center. And it was the same thing like I was talking back in the day to a beginner who had invested $3,400 a month in multiple things. What was he doing investing in all this? He just wasted, you know, a ton of money. You have to learn what and I think let's uh said it exactly was, you know, you you you take your core group and understand it, you know, understand the value. But uh anyways, well speaking of understanding value, uh if you listen to the Marketing Misfits podcast, you understand value because every every Tuesday we come out with a new episode. Ain't that right, Norm? Yes, we do. And if you want to check out those episodes, you can go to uh marketingmisfits.co. That's the website. If you want to go and check out the long form videos, go to marketingmisfits podcast on YouTube. And we also do something special for you guys. It's 3 minutes and under clips where you can find them on YouTube. They've got their own channel. Uh it's Marketing Misfits Clips. That's right. That's about it. I think that's it, Norm. That's a wrap. We'll be back again uh next week. See you guys then. All right. See you later. Ciao. [Music]