225. Profitable Scaling, AI, and Content Marketing with Neil Patel

225. Profitable Scaling,  AI, and Content Marketing with Neil Patel

Neil has a wealth of experience in guiding individuals and businesses towards success in the digital landscape. We explore Neil's journey and how he has revolutionized the way people approach digital marketing. With his proven strategies, Neil has empowered countless individuals and businesses to achieve their goals in the ever-evolving online world. Don't miss out on this opportunity to gain valuable insights from Neil Patel's expertise. Whether you're an aspiring entrepreneur, a seasoned professional, or simply curious about the digital realm, this episode is packed with practical advice and strategies to elevate your digital presence. Tune in and discover how Neil Patel's wealth of knowledge can positively impact your journey in the digital space.

Links Mentioned:

• www.productiveinsights.com/1 
• www.productiveinsights.com/147
• www.productiveinsights.com/200
• www.productiveinsights.com/222

KEY TOPICS EXPLORED:

00:42 Neil's Humble Beginnings

01:27:05 Building NP Digital

02:03:08 Neil's Expertise in Digital Marketing

02:29:08 Dealing with Growth Slowdown

02:41:19 Leveraging Technology and Staying on the Cutting Edge

03:23:22 Scaling Internationally

15:52 Starting and Scaling

00:18:43 The Challenge of Saying "No" and Focus

00:19:33 Saying "No" and Focus on Profitability

00:21:34 International Expansion and Growth

00:23:31 Balancing Revenue and Profit

00:26:26 Hiring Strategies for Success

00:30:57 Generosity, Empathy, and Content Creation

00:35:15 Choosing to Stay Private

Ash Roy and Neil Patel Video Transcript (This transcript has been auto-generated. Artificial Intelligence is still in the process of perfecting itself. There may be some errors in transcription):

Transcript:

Introduction

Ash Roy 00:00:00:02 - 00:00:25:10

If you're looking to build your brand using digital marketing strategies, then you're in for a treat. Today's episode on the Productive Insights podcast features the legendary Neil Patel. Neil is someone I'm proud to call a friend. He's received multiple awards over the last 20 years and has also been recognized by President Barack Obama for his incredible contributions in the field of digital marketing and entrepreneurship.

Neil happened to be the first guest on the Productive Insights podcast. You can go back and check it out on episode one and you can listen to how green I was back then. And in this episode, Neil shares his story, which starts from a very humble beginning, where he was picking up trash at an amusement park.

Neil Patel 00:00:42:04 - 00:01:10:14

I'm 38. That was when I was 15 and a half. I was able to get my first job and it was from minimum wage at that time was $5.75 an hour. Technically, they're able to pay me a little bit under minimum wage. I don't know why. Maybe because I was at 16 and it was clean restrooms and picking up trash at a theme park.

And I loved cleaning the restrooms because when I clean the Russians leave, they're paying extra $0.25 or $0.50 an hour to clean the toilets was a really messy job because of the theme park.

Ash Roy 00:01:10:16 - 00:01:27:04

He worked his way through some very challenging situations. He started KISSmetrics, he sold it, and then he built his own consulting business, which later on turned into an agency now known as NP Digital, and it currently makes around about $100 million a year in revenue.

Neil Patel 00:01:27:05 - 00:01:44:20

It tried to create a cloud computing company before that was really popular. Before there's Amazon Web Services. From my understanding, maybe I'm getting my timing off, but I'm pretty sure before AWS this was big, we're trying to do cloud computing and it didn't work out and burn $1,000,000 of borrowed money and eventually had to pay it back. So it's like.

Ash Roy 00:01:44:20 - 00:02:03:07

Neil Shared his entire story from his very humble beginnings all the way through to where he is today. He shares what he's done to become a dominant force in his chosen industry, which is digital marketing. Neil is an expert in search engine optimization, content creation, pay per click advertising and lots more.

Neil Patel 00:02:03:08 - 00:02:15:14

I don't really see AI being able to have six months to year ahead where they're integrating stories that are so amazing that people want to read. I think people under or overestimate what AI can do in the short run and they underestimate what it can do in the long run.

Ash Roy 00:02:15:18 - 00:02:29:07

In this episode, we also talk about what you can do when growth starts to slow down and how you can stay on the cutting edge of your field while still producing results and leveraging technology efficiently.

Neil Patel 00:02:29:08 - 00:02:41:18

I learned this great piece of advice. I'm going to use it. If your company is growing at a nice pace, just tell these folks and keep doing what you're doing. The moment your growth slows down. Start looking at other things to do to speed it up.

Ash Roy 00:02:41:19 - 00:03:02:07

In today's world of AI. This is particularly important and relevant. And finally, we talk about how to build amazing products, create great user experiences, and build services that your customers continue to come back for and enable you to build a brand that prevails and succeeds against all the odds.

Neil Patel 00:03:02:08 - 00:03:23:16

Let's give you a hypothetical right here. If someone's established business, you make over $100 million a year in a market like the United States. When you have a bad market, it most likely your numbers are going to start getting hurt your growth. Then suddenly number three and start going backwards. But on the flip side, if you're in a new market, let's say you could just expand to the United Kingdom, which has a good GDP and you're at $0 in revenue.

Neil Patel 00:03:23:22 - 00:03:42:01

Good market, bad market doesn't matter. You're going to close something you shouldn't be. So you're going to be better off than where you were before. And in a good market, close more in a bad market cause that'll be slower. And that's why we're growing still at a decent clip is because we're adding a ton internationally.

Ash Roy 00:03:42:01 -  00:04:20:02

So tune in and enjoy. Before we go, there's one more thing I wanted to share with you. Only about 10% of you that are watching this video have actually subscribed to our YouTube channel. So please go ahead and subscribe. Because the more you see these videos, the more you like them and the more you leave comments under the videos on YouTube, the more likely they are to be seen by more people.

The bigger our audience gets and the better quality guess we can get you. You've got some great guests lined up for 2024. Please do like and subscribe and share this with other people who might benefit so we can get you more content just like this. Thanks again. Thanks again. I appreciate your support and I look forward to seeing you in the comments.

Body
Ash Roy 00:04:20:04 - 00:05:20:23

Welcome back. Today, I am delighted to welcome the oldest friend of the Productive Insights podcast, our very first guest from episode number one, and that's Neil Patel, the founder of NP Digital. The Wall Street Journal calls him the top influencer of the Web. He's a New York Times best selling author and was recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35 by the United Nations.

He's received congressional recognition from the United States House of Representatives, most recently NP Digital. That's Neil's company was awarded Best Workplace in 2023. For the second year in a row, they were chosen out of 591 applicants as an NP digital partner. We at Productive Insights are delighted and proud to welcome back Neil Patel from NP Digital.com

And today we're going to talk about profitable scaling, artificial intelligence, content marketing and lots more. So welcome back, Neil, to the Productive Insights Podcast.

Neil Patel 00:05:21:03 - 00:05:28:04

Thank you for having me. And if I can keep in mind, it's not you, it's me. I have jetlag. So I just got back from the UK.

Ash Roy 00:05:28:06 - 00:05:37:18

Wow. So you've been traveling a lot and actually I was watching a conversation you had with Matt Gray and you were saying you travel 35 weeks of the year, which is a lot. How do you manage that?

Neil Patel 00:05:37:18 - 00:06:32:06

You get used to it over time, but right now it's a little hectic because I'm traveling every single week internationally. So it was funny because one of my buddies has a private jet and he's just like, Do you know the average person It takes flights that are under 3 hours. And I'm looking at my most recent flights over the last like ten flights.

And I think my average is a little bit above 10 hours. Wow. So it's very heavily international in London and a few days off to go to Germany. Then I think after going to Dubai after that, then Romania, then Dubai again. And when I do these trips, keep in mind, I go there, I fly back to the States, I go there, fly back to the States.

Well, when I was single, without children its easier because I just go from location to location, which saves a lot of time. But I miss my kids and my wife and my family also misses me. So I can go back for a few days and then I'm back on the road.

Ash Roy 00:06:32:08 - 00:06:45:03

I was going to ask a really young family that must be hard. And just to give our listeners some context, I want to put some clarity around the private jet remark because a lot of people would take the wrong idea from it.

Neil Patel 00:06:45:04 - 00:06:52:09

I'm flying commercial, by the way. I was saying, my friend has a private jet was telling me the average flight that someone takes is under 3 hours.

Ash Roy 00:06:52:13 - 00:07:05:08

Thank you for clarifying that. And that's something that I really like and admire about you, which I don't think you do a lot of justice in your content because focused on technical value driven.

Neil Patel 00:07:05:10 - 00:08:00:20

I've thought about a private jet. So I go to India. India is roughly, call it 40 hours total roundtrip. I'm around me, it's roughly 40. If I get a deal on a plane, that can take me far enough. You're roughly looking at $10,000 an hour because keep in mind, there's cost for landing and fuel and plane maintenance putting up the pilots and the crew.

You need multiple pilots. When you go to India, you need a massive plane because it's such a far journey. But when you just think about that just for a minute, you're talking about the means cost me $400,000 for a round trip. I'm not saying I do this, but if I wanted to splurging on first class on Emirates, which has a shower and everything, 20 grand, they're better off donating.

The $380,000 is someone who needs the money. Then you're waste 400 grand on a flight that long. Now, if I was Elon Musk or Bill Gates, it probably doesn't matter at that point in life, but I'm not them. For me, I'd rather donate the money.

Ash Roy 00:08:00:20 - 00:08:15:21

 And that's what I want to talk about a little bit. You donate a lot of your money and your wife specializes in this and I really like that you guys have this sort of combination, right? You're the guy who makes the money and your wife gives the money away a little bit like Warren Buffett and Bill Gates.

Neil Patel 00:08:16:02 - 00:08:54:18

So talk to us and then clarify. I does not specialize in it. That's what she focuses on. She's been learning quite a bit over the years, but she loves it. It makes her happy. It also makes her cry a lot. So we joke is my wife's donation varies a lot based on the tear factor that my friend and I joke with my wife about this.

The more she cries, the more she does. She don't. It's from her heart. I donate based on logic. I'm like, you want the money? Okay, you're trying to solve poverty. How much more kids were less hungry in the last 12 months because of your efforts. Like I look at the stats in the data and my wife who genuinely donates from the heart, I'm not saying my approach is right or my wife's approach is right, but a combo of both them is genuinely pretty good.

Ash Roy 00:08:54:22 - 00:08:59:14

So at what point did you start donating money like go?

Neil Patel 00:08:59:16 - 00:09:04:04

When we first started this interview, I was donated. Back then I wasn't donating as much.

Ash Roy 00:09:04:04 - 00:09:07:13

Right? Approximately what proportion of your wealth you give away?

Neil Patel 00:09:07:19 - 00:10:02:13

Not that much. Right now. Presented to the world that single digit for percentiles really, really tiny on an annual basis. And it's actually very, very low single digit percentile just be super clear. Even when I look at portion of income I generate on an annual basis, I'm donating less than 10% of my income on an annual basis. By the time my wife and I pass away, we will end up donating close to 100%.

Right. But I do hold most my cash. I'm not the most generous person. I'm not trying to paint myself out to be a saint. I'm not that I'm capitalist, just being transparent. I love making money for the sport of it and I don't know why, but I can't stop. And sometimes I wish I could just stop and just be that dad because it plays soccer football with my kids and go to the park.

That's honestly not me. I just love business and making more money. I'll spend time with my kids. I read puzzles with my kids or random stuff.

Ash Roy 00:10:02:13 - 00:10:04:18

You're a good rafee, is that correct?

Neil Patel 00:10:04:20 - 00:10:05:05

I'm good.

Ash Roy 00:10:05:06 - 00:10:06:20

Off the blood, man.

Neil Patel 00:10:06:22 - 00:10:36:02

Yeah. I should donate more. I'll donate more before we pass. I keep majority of the cash for more business to grow and make more money. And again, I should change that. But it's hard right now in my prime when I love what I'm doing. And I hope that by me investing more into business, it compounds faster. We still give some every year, but maybe at the end when we give it all away, it'll have a much greater impact.

My wife is on the flip side. She's like, People need it now. We should give more of it now. So just to try to find a balance.

Ash Roy 00:10:36:04 - 00:10:51:10

Well, I just want to thank you for your transparency and your honesty. I really appreciate that. I know you also said in the first million podcast that you don't want to just give money away to your kids, which I deeply admire and respect.

Neil Patel 00:10:51:15 - 00:11:27:05

The biggest mistake I made was I put one of my businesses shares in a trust for my children. As my children are walking around in Elizabeth, they're too young to understand. I put some shares of a company in a trust and I ended up giving them too much. You know, at this point, I don't know what happened, but in theory, my kids will walk away with nine figures each at the age of one and three right now.

So I wish I had that as much in a trust. So when I say I don't want to give them anything, some of it's already too late. Legally, I can't just break the trust. It's irrevocable. That was the biggest mistake.

Ash Roy 00:11:27:07 - 00:11:31:01

Your view is to give away the money where it's needed most. Is that right?

Neil Patel 00:11:31:06 - 00:11:36:12

That's right. And when I made those changes, I was much younger and it was a big mistake. But living life.

Ash Roy 00:11:36:17 - 00:11:37:16

Yeah, well.

Neil Patel 00:11:37:19 - 00:13:12:02

So my goal is to give it away. And for the people running the trust to also use it for nonprofit and donation purposes and instilling that in my children, I'm not going to be a cold parent. And what I mean by that, and that's actually a bad way to put it. I don't think that if someone doesn't give their kids anything that's not called, that's actually a very incorrect statement to me to say I will give my kids something if they need it.

And here's what I mean. If my kids are on the street with no food and they're sick, you better bet I'm going to give them a house. I'm going to give them a house in Beverly Hills, but I give them a normal house and food and shelter. Or like if my kids are cancer and they can't afford a treatment, I will gladly pay for that treatment.

So, like, there is nothing and more importantly, what they don't even understand the amount of relationships and business connections that they've already met at their young age is quite ridiculous. Imagine a three year old and a one year old doing dinner with your friends, and your friends are billionaires and they've done this multiple times with different people who have billions of dollars.

And I'm not saying having those dollars makes you great or not having it makes you bad or good. Those who have lost sight. But if you look at it from a neutral perspective, typically people for that wealth are usually business owners of the people I know who are that wealthy are business owners. And if my kids want to do anything in their life, they're getting to know these parents for willing.

Well-off parents are getting to know the kids. The kids are getting to know their kids, and their kids are getting like they're building amazing network and Rolodex at such a young age.

Ash Roy 00:13:12:04 - 00:13:14:05

And hopefully they'll use it for good.

Neil Patel 00:13:14:07 - 00:14:08:21

That's correct. You never know. The time will tell. And I'm still bad. Like the other day, I was at a jewelry store and as expensive when I was called Harry Winston and they had a mother's Day present for my wife. They give mothers a present like a gold plated plate or whatever it was, cookies and stuff. My little three year old love story and her birthday's coming up soon.

I was like, What's the cheapest jewelry you have in here? And there's like, this pendant for  $3500. I show it to my trailer and she's like, I love it. And she's turning four tomorrow. And I'm like, You want my honey? And then she's like, She looks like a princess. And then, here you go. So I'm like, not again.

I'm not a saint. I shouldn't be buying a little kid that 30 $500 a jewelry piece and a butter, many pieces of jewelry to probably break it up for a month and that's it. But like the see the smile on my little kids face? And she's like, I'm going to be a princess for my birthday. And I was like, You go get it, honey.

Ash Roy 00:14:08:23 - 00:14:49:08

Fair enough. So let's switch back to when you started. You started from very humble beginnings, and I want to sort of undo this million dollar this and million dollar that. And everyone's talking about revenue and not talking enough about profit or cash flow, which we'll touch on a little bit later. But you started cleaning toilets at an amusement park.

So talk to our viewers about that. And at one point, if I'm not mistaken, you were $1,000,000 in debt. So let's talk about the really difficult side of business. You're doing $100 million a year now, but that's not how it always was. And I want people to hear and understand that it doesn't happen overnight. So can you talk to us a bit about that?

Neil Patel 00:14:49:12 - 00:15:52:11

I'm 38. That was when I was 15 and a half. I was able to get my first job and it was from minimum wage at that time was $5.75 an hour. Technically, they're able to pay me a little bit under minimum wage. I don't know why. Maybe because I was at 16 and it was cleaning restrooms and picking up trash at a theme park.

And I love cleaning the restrooms because when I clean the restrooms, the paying extra $0.25 or $0.50 an hour to clean the toilets was a really messy job because of the theme park. You can imagine a theme park with roller coasters and kid roller, not the little kids. So I did it to make more money. I wanted a better life.

So you do whatever for the cash and eventually I tried starting some businesses. My first one was the job board failed miserably. Eventually, I tried to create a cloud computing company. Before that was really popular. Before there's Amazon Web Services for my understanding, Maybe I'm getting my timing off, but I'm pretty sure before AWS was big, we were trying to do cloud computing and it didn't work out and burning million dollars of borrowed money and eventually had to pay it back.

So it's like.

Ash Roy 00:15:52:13 - 00:15:54:00

How did you get yourself out of that hole?

Neil Patel 00:15:54:05 - 00:15:58:20

I was doing consulting at the same time and helping people grow their traffic on the Internet, so that helped a lot.

Ash Roy 00:15:58:22 - 00:16:14:10

So that brings up another question, and this is about scaling. I have found that there's a lot of talk about blitz scaling and scaling, but before you scale, you have to own scalable stuff. Would you agree or you don't agree? And why or why not?

Neil Patel 00:16:14:12 - 00:16:48:11

Depends on the business. If I'm trying to start a software company from day one and it's a meta software company, I'm creating a CRM. Let's take a deal with Salesforce and HubSpot and the list goes on and on. Zoho Sugar CRM, you may not need to do as much manual stuff because you're in a older industry that's established that already has a lot of systems and processes built.

So you may not have to worry too much about scalability because you can get that early on. On the flip side, if you're doing something new, a lot of times you're going to have to grind it out and things aren't as scalable as they should be.

Ash Roy 00:16:48:11 - 00:16:54:01

So when you started, did you start off with scalability in mind or did you start off with.

Neil Patel 00:16:54:07 - 00:17:15:03

Wanting to wrap up by just thinking about making money? And how has it there is no like, I need to make it scalable or I need to make it super efficient. And so my marginal profit, I'm just like, how much revenue can I make and how much of that drops to the bottom line and goes in my pocket?

That was it. When you're starting off, it's for most people it's much more basic.

Ash Roy 00:17:15:08 - 00:17:39:18

Yeah. And in your conversation with Matt Gray, I noticed you said one of your pet peeves is people don't make revenue fast enough and they don't ship fast enough. They sort of sit in paralysis for a long time. And I have to confess, I was guilty of this and I'm still sometimes guilty of it. How do you bring yourself to get too done and not get caught up in the whole perfection thing?

Neil Patel 00:17:39:20 - 00:18:43:19

That's a tough one. And I don't know the honest answer for that. And here's why I'll say that when you're going out there and just trying to get things done, you just have to have the mentality that it's okay not to be perfect and just ship stuff and get feedback. I don't know the real secret or solution. I think it's more the mentality than anything about putting a rocket into space that falls.

There's not that many repercussions. First rocket into space. Sure, people could die, but you know, when you're talking about building a software company, you have no paying customers. Who cares? Just get it out there and give feedback. What do you have to lose? And I think that's where people make the mistake because they overanalyze. They genuinely just overanalyze.

And I don't know why. Instead of just trying to get it out there, get no secret shit out there, you do. Okay? You don't get other you don't do those, okay? Like not rocket science. If it's not perfect, you got it out there. You're dead. You learn from your mistakes if it's great. lucky you, because most people don't experience that right away.

Right? Like it's more of a mental thing. Can you get over it?

Ash Roy 00:18:43:21 - 00:19:14:13

I really like how honest and open you're being in this conversation, So thank you. Something you also said was one of your biggest mistakes was not being focused enough when you were younger and you are more focused now. In episode 147, I spoke to Noah Kagan about this as well, and he said, you know, being able to say no is an important skill.

How do you say no? And more importantly, what things do you say yes to? What sort of filters do you have in business when picking projects?

Neil Patel 00:19:14:17 - 00:19:33:11

I say no to most things and I'll say yes. So my main business and that's it. So I was at dinner one time and this guy does not remember there was a guy named Brian Leder, Brian Lee, critic. She does a lot with Kim Kardashian, legalism and honest company and a few other companies. Honest companies with Jessica Alba.

Ash Roy 00:19:33:15 - 00:19:34:09

That's right.

Neil Patel 00:19:34:11 - 00:21:34:18

Brian taught me something and I didn't understand it back then. And they took their advice for granted. And when I say I took it for granted, I was like, yeah, I learned this great piece of advice. I'm going to use it. And I didn't take it from Brian from a mental note standpoint, but like bullshit on me for not using it, right?

I did not use it and I was super arrogant. I was going, Do you know, I know what I'm doing. But Brian once said, If your company is growing at a nice pace, just tell these folks and keep doing what you're doing. The moment your growth slows down, start looking at other things to do to speed it up.

So. NP Digital. All right, you're based in Australia, right? We have Australia Division. I don't know if you knew that we have NP digital in Australia as well. I do because there you go. And Dan ends up running it. That's right. So now and we have a lot of different divisions economy is bad. I'm not here to tell you we're booming when a lot of people in marketing are struggling animals, competitors and they know a lot of their numbers because they share.

Did you know our international when you look at year to date numbers and you compare the year to year has grown roughly 74%. Wow. In this economy. So what are we doing to create more growth? We started the year with Australia, UK, Brazil, India, Canada, the US would make it six. We also had Germany, but the Germany guy didn't work out and he didn't want to do any work.

We both decided to part ways, not try and talk trash is the reality. Yeah, so he just wants something else . So those are the five regions right now. We're in roughly May 19, May 28 that in a year time zone is May 20th while recording this. So you got those by region six if you include the United States.

We've already added Italy, Spain, Singapore, Mexico, Colombia, Malaysia, Hong Kong, Japan. We're about to add France. So now you're looking at nine regions that we've topped up in roughly five months.

Ash Roy 00:21:34:18 - 00:21:35:18

Wow.

Neil Patel 00:21:35:20 - 00:22:12:01

Because we're seeing growth and the growth isn't coming from these new nine that we've popped up. It's coming from the existing five and we're like  the revenue really is international, which we knew, but we need to see the data because it's expensive to spend all this money to expand overseas. It cost millions of dollars per region.

Our original projections are nothing for region, but that's not the case, sadly. It's much more by the end of this year, including the United States will probably be somewhere around 23 to 25 regions that will be in countries. When I say regions like we're pushing hard for future growth and international expansion.

Ash Roy 00:22:12:04 - 00:22:17:07

So what's driving this growth? How are you having this success when the rest of the market is shrinking?

Neil Patel 00:22:17:09 - 00:23:12:07

We're not just focused on the US. If you're established business, let's give you a hypothetical right here. If some of the established business you make over $100 million a year in a market like the United States, when you have a bad market, most likely your numbers are going to start getting hurt. Your growth is going to suddenly start going backwards.

But on the flip side, if you're in a new market, let's say you could just expand to the United Kingdom, which has a good GDP and you at $0 in revenue, good market, bad market, it doesn't matter. You're going to close something you shouldn't be, so you're going to be better off than where you were before. And in a good market.

Close more in a bad market, close a little, be slower and that's why we're growing still at a decent clip is because we're adding a ton internationally. You are not seeing the revenues from all these international regions yet because we've been adding so many. I think not next year, 2025 will be our year is not done with, but.

Ash Roy 00:23:12:13 - 00:23:31:04

Okay, let's talk about revenue versus profit. You know, I put on my CPA or my MBA hat and I can tell you that if you're doing and I'm not talking about you, I'm saying if a business is doing 10 million, 100 million, whatever a year, but if they're spending 11 million or 111 million to make that revenue, you're worse off than the guy on the side of the street in the cardboard box.

Right? Because you're broke.

Neil Patel 00:23:31:04 - 00:24:16:15

In theory, yes. Unless your company is valued on revenue, which some are like a lot of SAS are. But the public markets now want profit and investors now want profit unless you're growing like 40, 50% year over year. They're a little flexible. But if you don't have the growth numbers, which most people don't have the profit.

And then the other problem that's changed is before there were okay with no profit, we have 40, 50% growth. But if you keep having 40, 50% growth and your losses just keep compounding each year faster than your growth, there is a problem. So that's why yeah, I'm a good draw. The end you're familiar with with my kind that we were taught at young age that a business is someone that makes profit, not revenue irrelevant number.

Ash Roy 00:24:16:19 - 00:24:42:04

So let's talk about that. I want to just drill down to that. How do you ensure profitability? Because I'm sick and tired of hearing people talking about revenue numbers. Revenue is not important and it doesn't impress me. What impresses me is profit. And I know you're profitable, but my question is how do you focus on profitable revenue, as it were, and as importantly, if not more importantly, how do you ensure cash flow is always healthy.

Neil Patel 00:24:42:09 - 00:25:59:06

Good financial team? They do going to economics and they make sure everything we do is profitable and good leadership. See, my CEO was president of Iprospect, which is an agency global agency. He managed I don't know how many thousands of people, but a lot and he works at a publicly traded company and one of them was one of their best divisions.

So he had to run things based on a quarterly basis. Now, we don't run things on a quarterly basis, but you got to optimize for revenue and profit and things like that. So that's important. The other one to think about for us is in this economy, our profit is going down drastically, not because we can't maintain it and grow it.

It's going down because we're investing so heavily internationally and technically that's not considered profit. When you look at accounting rules, we still have great profit, but we're taking the cash flow, we're looking at the profit, we're paying taxes on it, and then we're reinvesting it for international growth based on our auditors. RSM and BDO. That's the correct way we need to do it.

So technically we still have great profit, we have terrible cash flow because we're taking all the profits and reinvesting them for international expansion and growth, which is going to make us suffer from an income standpoint for the next two years, which I'm okay with.

Ash Roy 00:25:59:06 - 00:26:12:19

And you know, I've got to say that I double revenue for a few years in a row, which was great, but I was reinvesting all of my profits back into the business. And that is what I've found. If you want to drive growth, you've got to reinvest. Would you agree?

Neil Patel 00:26:12:21 - 00:26:26:18

You do. It's painful. Hey, you got it. I wish that wasn't the case. I'll be much happier with my pocketbook if that wasn't the case. But it's like. And you know what? If you love what you're doing and you believe it, then go for it.

Ash Roy 00:26:26:18 - 00:27:02:23

As you say, if you love what you're doing and you don't work a day in your life, which is the case for me. I used to hate working in the corporate world as an analyst, but ever since I started Productive Insights, I've never been happier, so I couldn't agree more with that. You mentioned you have hired good quality financial people.

Tell me a little bit about your approach to hiring, because I think hiring is one of the most important skills when it comes to building a great company with a great culture, which also your press release said that one of the reasons you were voted for the INC workplace thing for the second year in a row is because you have a good culture.

So talk to us about hiring and culture.

Neil Patel 00:27:03:02 - 00:28:35:19

I'm not the right person to talk to about culture. I don't want to bullshit you and tell you this are critical to good culture. My co-founder does all that hiring. We use one simple strategy. We look to see who's worked for multiple of our competitors because if they worked for multiple competitors, they know your space. We look for people who stay there for a while because that means they're loyal and we look for people who got promoted consistently at our competitors.

So if you're hiring someone for a role that they've done in the past and they worked at your competitors and they've continually got promoted, that means other people found them valuable. See, when you interview people, people tend to bullshit. I did really well and I dropped this revenue and I'm the best and this is why this company was successful.

The truth is usually somewhere in between of what they're saying, what the company says and when you hire someone who's worked at your competition or multiple competitors, they've gone continually promoted at both places. It means other people found them to be valuable. Those are the people you typically want because when they say they can do something, usually they can or else they want to be continually promoted.

That's the strategy to hire, hit them up on LinkedIn, and we don't ever say, Hey, Ash, love what you're doing. We want to hire you. That we found that doesn't work. We'll be like, Hey, Ash, love what you done in Australia. This ad agency, assuming we're hiring you to run an ad agency in Australia, we're actually looking for someone just like you because your skill set.

Do you know anyone who would be a great fit? And that's it. And then a lot of times you ask, we'll be like, Actually, I'm interested, but that's a job to people.

Ash Roy 00:28:35:19 - 00:28:37:19

And it's also a great way to actually.

Neil Patel 00:28:37:19 - 00:28:44:15

Sort of go directly and say, Come work for us. We found that to be too direct and not reference. Well, that.

Ash Roy 00:28:44:15 -  00:29:20:15

Also applies very well to sales, right? Because when you say to somebody, I'm looking for some I have a membership program, for example, I often reach out and say, I'm looking to get other members just like you because similar to a company, I think if you want to build a great membership and I've got some really great members in my membership program, you got to hand-pick the people and you got to build a good culture.

You've got to bring the right members in because one crappy member can just poison the well. So that's a great way to ask them if they know other people like them. And it's a very nice, noninvasive way to recruit members, as it were.

Neil Patel 00:29:20:17 - 00:29:21:06

Yes.

Ash Roy 00:29:21:06 - 00:29:25:13

I didn't know you had a co-founder. I assumed you were the only founder of NP Digital.

Neil Patel 00:29:25:14 - 00:29:38:03

I owned the majority of the company by far, and I have a co-founder. His name is Mike. Amazing Guy has done an extremely well in operations, great background for recruiting and sales. And then funny enough, my CEO is also named Mike.

Ash Roy 00:29:38:07 - 00:29:45:08

Okay, right, Neil, tell me about NP Digital's mission and how did you arrive at that mission?

Neil Patel 00:29:45:11 - 00:30:32:09

When we started, our overall goal was to do marketing. I'm a marketer and I was tired of paying marketing people to help us out and they just weren't doing it right. And when I say right, it was just to my standards, whatever they may be. And I'm not saying my standards are great or bad or good, you know, people can judge them on their own.

And I was just looking for people who are scrappy. I was tired of hearing like, you need more budget, you need to spend more. I'm like, okay, how about you get creative, You need budget. Your competitors spend way more than you. So then I want to build a team that was creative and and who were willing to try cutting edge experiments and tactics.

Not unethical because I know a lot of marketing stuff can be unethical, but more cutting edge and try to produce results for people and be super creative while doing it and leverage technology to be more efficient. That's how we ended up starting.

Ash Roy 00:30:32:13 - 00:30:57:11

On the ethical point, I spoke to Seth Godin about this in episode 200, and we talked a lot about empathy and he talked about generosity. Now, I noticed that you are very generous, not just in terms of, say, donations. You're more generous than most people I know, but also in terms of your content and in terms of the value you're trying to give to your audience.

So can you talk a little bit about that? It's not spoken about enough generosity and empathy in business.

Neil Patel 00:30:57:13 - 00:32:01:18

And generous in money is debatable. I know you said it, but it's really a percentage. And there's a lot more richer people who donate a much bigger percentage than me. So I don't really consider as generous right now. Maybe when I'm closer to death than we give everything away, sure, then maybe I'll be generous, but also giving away content.

I love it. Selfishly, I don't just do it to help people out. I also do it because I love educating and I learn just as much as I'm giving. Because all those comments, people like, well, I tried this and I did that and I'm having fun. You know, I'm not a saint and I'm doing it because I love it.

I'm doing it because I love helping people. But I'm also learning a lot, too. And people don't think about that when it comes to content creation is a two sided marketplace. You create content, you educate, you build relationships, you learn more, you become wiser. I meet a lot of young people, kids who are doing some really cool stuff because they see my content.

Then they teach me stuff because I'm starting to get old. And even when it comes to using this like iPhone, I'm not the best person to figure out this kind of stuff. So just imagine all the other cool technology that's out there Getting to know some of these young kids is great because they teach me a lot that I'm not familiar with.

Ash Roy 00:32:02:00 - 00:32:11:17

you learn more when you teach. I think as much when you teach as you do when you actually intend to learn, you know, how do you guys decide on who's going to be an NP Digital partner?

Neil Patel 00:32:11:17 - 00:32:27:19

I don't know. So like you said, you're a partner. I apologize. I didn't know about that. Also, when you have like seven, 800 employees, it's really hard to keep track of everything and you're expanding globally. I don't know. Everything that goes on in the business day to day doesn't mean I'm not working day to day. I probably work 60, 70 hours a week on the business.

Neil Patel 00:32:27:19 - 00:32:29:16

It's just I don't know everything that goes on.

Ash Roy 00:32:29:17 - 00:32:36:04

I'm loving your honesty and your transparency, and it's totally okay that you don't know. I completely understand that.

Neil Patel 00:32:36:06 - 00:32:38:02

But I should. And I am sorry.

Ash Roy 00:32:38:04 - 00:32:59:14

I don't think so. As a leader in the business, I think your job is to set the tone, set the direction, and look for opportunities and drive growth. It's not always possible to be across everything and you have hired people to do certain things, so that's fine. Let me ask you this. What does an ideal customer of NP Digital look like and what problem do you solve for them?

Neil Patel 00:32:59:18 - 00:33:53:04

A global company who's looking for more traffic and sales or leads from the internet and they need to tackle this in multiple regions and languages. That's ideal Customer Technically we can do it in any region and technically we can do it for eight companies of any size. But that's ideal world because I think what makes us dangerous is we can do international work extremely well.

And if you look at most holding companies who are our biggest competitors, they're able to do so. But it's not in a way where all the international divisions work well together because a lot of the ways they expand is they acquire companies and they're put in silos and the teams don't want to work well with each other because some people are earnout and some are so they're fighting for the revenue or how much goes to them.

It's pretty much my company. I don't care if someone pays us in Australia, India, the US or Brazil or Mexico. I want to do great, amazing work from wherever they're based and I'll help them out globally and I don't care which division they pay.

Ash Roy 00:33:53:04 - 00:33:54:01

Yeah, fair enough.

Neil Patel 00:33:54:04 - 00:34:30:19

You don't have the bureaucracy. In essence, a lot of those guys have the financial numbers. When you're in these global ad agencies and the regions work separately and in silos. So they're competing for the revenue. So it'll be one region collects the majority of the revenue and then they assign work to the others and then they're fighting thing like, Hey, but you're getting the revenue on the books, we want more.

And then they argue and they don't put as much time. They don't have those issues because we're not publicly traded. And it's just me who's a decision maker for most things. Technically, the team is the decision makers and they're amazing at what they do. But if you look at it from a shareholder perspective, I'm the majority. I can dictate whatever I want and I want to dictate what's best for our customers.

Ash Roy 00:34:30:19 - 00:34:44:21

And I was going to ask you this question later, but I'm going to ask it to you now about public versus private. But before I do, I just want to mention that that is an advantage of staying private, because as I understand it, if you're publicly traded, there's all these transfer pricing issues and stuff that come into play.

Neil Patel 00:34:44:22 - 00:34:50:20

You talk about transfer pricing when you're working in or company in different regions, right? Yeah, we're required to use transfer pricing.

Ash Roy 00:34:50:20 - 00:34:52:17

You are required to do it.

Neil Patel 00:34:52:19 - 00:35:08:23

Just the CFO says maybe I'm wrong, but I know for a fact he says we need to do it and you got to allocate. But again, my CEO came from a publicly traded company. He may be saying that because that's what they do. I don't care either way what they do or they don't do. I just care that the clients get results and we are doing what's best for them.

Ash Roy 00:35:09:00 - 00:35:15:00

That's it. I love that simplicity of the approach. Talk to us about why you've chosen not to go public and stay private.

Neil Patel 00:35:15:01 - 00:36:00:07

We've had offers when the market was big. I mean, we still get offers. And when I say offers, I'm talking about not like the Canadian Stock Exchange, like the TSX for Toronto. I'm talking about some of the exchanges in the US. People want to do SPACs. It's about money from a growth perspective because then I know I'm doing better, but it's not about money.

Like, I got this big payday and I got this checks I want public. Yeah, And when you go public, you can liquidate your shares over time. Maybe you can liquidate more at the beginning depending on how you do it. But I look at that as a pain. Who has answered all those shareholders? It's not even about the money.

It's like this. It sounds miserable. I don't want to answer to all these people. you want to expand internationally? Well, your quarterly numbers are terrible. Why do you want to do this? And like, I don't want to answer that. I just want to do what I feel is best for the business and the team feels it's best for the business and best for our customers.

Ash Roy 00:36:00:07 - 00:36:08:16

And I feel exactly the same way about external funding. And that's why I've never accepted external funding, because the minute you do, you lose independence.

Neil Patel 00:36:08:18 - 00:36:20:07

Unless you get it from the right people. Like there's a lot of wealth funds out there that just give checks and they stay out of your way. That's the dream. It's like, how do you get this more capital to grow faster and just stay out of our way?

Ash Roy 00:36:20:09 - 00:36:38:20

That's it? Yeah. I don't know how common that is, but from what I've seen, if you bring in VCs and stuff, they generally, after the honeymoon period is over, it's like, show me the money and then there's a whole lot of pressure and then you're not running a business anymore. You're working at someone's employee, and then you ask yourself why corporate in the first place?

Neil Patel 00:36:38:22 - 00:36:39:16

That's correct.

Ash Roy 00:36:39:20 - 00:36:51:12

Okay. A lot of our listeners and viewers say six figure five figure business owners, how to increase sales in this interest rate environment and this challenging economy.

Neil Patel 00:36:51:14 - 00:37:12:06

The same way you would do if you were in a good economy. You do things like SEO and omnichannel marketing and participate in the social web or run webinars or run paid ads and optimize your landing pages and your conversions. There's not much that changes in a good economy versus a bad economy. It really is the same fundamentals.

You just got to make sure you're okay. From a finance perspective in your healthy.

Ash Roy 00:37:12:11 - 00:37:47:01

How is SEO changing in this rapidly evolving artificial intelligence environment? One thing is for sure when it comes to content creation, which is I suppose intricately linked to SEO, we need to infuse more stories and more experiences into our content. It's not just going to be about tactics because you can just get that from catch up or whatever, right?

But what else are you doing besides that, if anything? And how do you see artificial intelligence impacting content creation down the track? Do you see AI being able to do the stuff that we are doing, which is infusing stories and stuff, say, six months or a year hence?

Neil Patel 00:37:47:01 - 00:40:14:02

I don't really see the AI being able to have six months to year ahead where they're integrating stories that are so amazing that people want to read on. I think people under or overestimate what AI can do in the short run and they underestimate what it can do in the long run. I do think ads are going to change a lot.

In the long run, it's going to blow people away, but in the short run has a lot of work to be done and it's still really new. The way search is changing is people are adjusting their queries more than anything else. Forget about how Google showing results for a minute. It's very rare that in the past because we track a lot of the keywords and the search volume and data, it's very rare that people say, I have a three year old and a one year old and I live in Las Vegas and I'm looking to do a summer vacation in a place that's not more than 70 degrees Fahrenheit.

Where should I go? That would work out really well and is affordable and would cost less than $100 a night or $200 a night. You get plenty. This is like so specific. That's not how people search, but that is how people are starting to search because of AI answering their questions. That's the big thing that we're seeing shifts in.

What we're also seeing shifts in is the results and how things are place, just like how you have the knowledge graph and things like Google saying, what's the weather in Las Vegas, Nevada, or Sydney, Australia? It used to be where you would click on Weather.com to see the weather. Now they just show you the weather. If you ask them what's two plus two, they just gave you the answer.

It's a similar thing. So that may decrease some clicks, but this will also cause more usage in Google, which in theory in the long run should still drive enough traffic and they'll generate enough revenue. I think in the really, really, really long run. And they're so far away from this. If you type in I want to buy some red trainers or shoes, the I will know that this is your size.

This is Neil searching you prefer for Michael Jordan's shoes. So here's the all the Jordans select one. Boom. You click a button and you buy it through Google Pay. I really believe that's what search will end up coming to in the long run. I don't see that happening in the next few years. That is going to be really hard for them to read my mind and predict exactly what I want to know, what size that I am and know that I prefer the next day because of my calendar and I need it for this basketball game.

So that is what I see in the long. But we're far from there and they're not going to kill off their big revenue generator, which is ads. And even if they implement all this stuff, they'll figure out how to move to more of a CPA model and still generate the ad revenue.

Ash Roy 00:40:14:03 - 00:40:21:04

So just to be clear, when you said that people aren't typing in, you know, I have a kid that's three and 11 and all that sort of stuff.

Neil Patel 00:40:21:10 - 00:40:24:23

They're starting to now. They were in the past. They weren't getting that specific.

Ash Roy 00:40:24:23 - 00:40:27:20

So people are actually typing that much detail into a search query.

 Neil Patel 00:40:27:21 - 00:40:30:11

Yes, because they want the air to just give them the answer.

Ash Roy 00:40:30:13 - 00:40:42:19

so I was , you don't think already it has all this information on them and assumes that these are their demographic and psychographic traits. When they type in the question, they have to actually type it in. At the moment.

Neil Patel 00:40:42:22 - 00:40:54:19

The more specific they get, the better the AI is. Okay? It's not a place where you can be broad and get amazing answers that work for everyone. But when you get super specific, the answers are really good.

Ash Roy 00:40:54:23 - 00:40:58:06

Okay, Chat GPT versus Bard, Can you share your thoughts on that?

Neil Patel 00:40:58:06 -00:41:40:00

And Stout I've been saying this for a long time. Google has the biggest index out there. They have a better data set. It's more fresh. They're gonna win, when your output is based on your input, their inputs are better than GPT, so their output should be better. They've been working on Bard for a very long time. I get the first version they botched.

I still believe that they're going to be a winner. They showcased what the recent stuff is and it looks great and looks better than Chat GPT, you bet. But I believe they'll win in the long run. And yes, more people are using Bing, but Google's not losing any traffic and it's not like less people are losing Google. That's really awful.

And people are like, they're going to go from Google to Bing. No, they're not. We're not seeing any of that. Okay. We're looking at the damn traffic says in the data. We're not seeing any of that stuff. People can make whatever assumptions they want.

Ash Roy 00:41:40:01 - 00:41:46:21

Now, Google is going to be scanning websites less frequently, going forward to be more energy efficient and so on.

Neil Patel 00:41:46:23 - 00:41:48:02

They're better on the environment.

Ash Roy 00:41:48:02 - 00:41:59:16

Yep. So what does this mean for us as content creators? If we publish content or update our content more frequently, does that mean our website is more likely to be scanned more frequently by Google? Because Google picks that up.

Neil Patel 00:41:59:21 -  00:42:22:20

They want to update it when it's as fresh, but there's a lot of websites out there that don't update their old content, and if they have a history of doing that, Google doesn't need to crawl it as often. But there's a lot of websites like Wikipedia that continue up data, and I bet you Google will still crawl them very frequently.

It's just fine tuning it so that way they're not wasting energy and having as much impact on the environment when they don't need to.

Ash Roy 00:42:22:20 - 00:42:31:01

And that's one of the best SEO hacks I've come across that I don't see people using enough, and that is go back and update your old content.

Neil Patel 00:42:31:03 - 00:42:41:17

Element relevant and it's not even hard. Just go to Google search console and look at your traffic and look at the pages that decline the most and go to those first because then you're more likely to recover your traffic and grow it.

Ash Roy 00:42:41:19 - 00:42:54:20

That's such a simple hack. Speaking of simple hacks, in terms of growing email lists and growing an audience, you talked about using Code Canyon to get cheap or free software, which you can then use.

Neil Patel 00:42:54:20 - 00:43:35:06

As they do that. You're right, in the past they talked about Code Canyon to go get tools and release them on your website. If you look at my email database, because I have tools, the tools out at least 200,000 net new emails a month, which is a lot. But the reason we do extremely well is when you give away tools for free that people are used to paying for, it does really well and we don't give everything away for free, but the majority of the features are for free.

Now what you can do is you can just use Chat GPT or Bard, haven't code you up at all. It code it up the game pong in less than 60 seconds. You can have them code you up on anything or you can pay code canyon, ten, 20, 30, 5000 bucks, whatever it costs usually doesn't cost 100, usually much cheaper than that and you're off to the races.

Ash Roy 00:43:35:11 - 00:43:44:17

So talk to us a little bit about that model where you offer people some kind of a utility in terms of software to build an audience and get them to use your website.

Neil Patel 00:43:44:17 - 00:43:56:06

Yes. So figure out what people are paying for in your industry that you can make for free and give it away for free and you'll naturally just get traffic without doing any marketing over time. It takes time. You won't want you won't see the results one day.

Ash Roy 00:43:56:06 - 00:44:15:01

And that helps you build a brand, which is another thing you say is very important. And I completely agree with if you can get searched for by a brand, all of your business becomes a verb, like, you know, Google it, or as you often say, Nike is searched for far more than the word shoes. So building a brand like that is critical.

Ash Roy 00:44:15:01 - 00:44:15:16

Would you agree?

Neil Patel 00:44:15:19 - 00:44:17:01

Yes, I think it's very, very.

Ash Roy 00:44:17:01 - 00:44:22:14

Critical from an SEO standpoint, business standpoint, every standpoint. Yeah. Google's Maggi update. What's that.

Neil Patel 00:44:22:14 - 00:44:47:04

About? Maggi is a new project ads. Remember the example I gave? What shoes like red basketball shoes. It just shows you what you're ideally looking for. More prompt based question based. That's what they're working on and that will really impact search. But I think it's years and years away from being amazing. I'm not saying losing a bad job.

This is hard to read people's mind. You can't do that stuff in one day or one year. It doesn't matter how long they've been working on that.

Ash Roy 00:44:47:04 - 00:44:58:07

Last question. Sam Altman's recent Senate hearing was quite an eye opener, and some people were concerned that AI could be a threat to humanity. I'm curious to get your take on it.

Neil Patel 00:44:58:09 - 00:45:07:15

I leave that for the smart people. I have no idea. I don't think it is. But I don't know any better Elon Musk than Bill Gates and people like that. I will have a much better perspective than me.

Ash Roy 00:45:07:16 - 00:45:41:09

But look, we've talked about quite a few things. I'm just going to do a quick roundup. We talked about profit versus revenue, the importance of building a good team and how you find good team members by looking at team members who work for multiple competitors and have risen through the ranks because they clearly have a skill. We talked a bit about NP Digital's mission.

We talked about your approach to profit versus revenue, the importance of brand, a bit about Google AI, how to create better content. Is there anything else you want to add in any quick action steps our listeners can take? If they want to get better at building a brand and a business?

Neil Patel 00:45:41:13 - 00:46:01:02

If I was telling people to build a brand and business, obsess about your customers, create amazing product or service, and in the long run, that's how you win. It's not marketing, it's not SEO , it's not paid ads, it's not social media. All those things help you, but what you really need is amazing product or service. Without that, it doesn't matter how much marketing you do, you're not going to win at the end of the day.

Ash Roy 00:46:01:04 - 00:46:29:13

I think that's a great point to close on. And if you're watching or listening, check out episode 222 with Derek Silvers, who built and sold CD Baby for $22 million, completely driven by a customer based approach. His story is remarkable and he shared it all on the podcast. So Neil, you've been generous as always. Thank you so much.

And it'll be great to have another one of these conversations sometime down the track and check in and see what's been happening in your world. Sounds good. All right, buddy. Thanks so much for your time. Thank you.

Neil Patel 00:46:29:18 - 00:46:33:17

You know, the content that you're producing, the questions you're asking were amazing. And I had a lot of fun.