Price Tag

Welcome to The Beat by Rockstar CMO. I’m Ian Truscott, a CMO and trusted advisor, and in this newsletter, I’d like to share a mix of marketing street knowledge that I hope will help unlock the rockstar marketer in you.

Hello!

You may have heard me briefly mention this on the podcast with Robert Rose this week, but I listened to an interesting conversation on the What’s Broken in GTM and How to Fix It podcast that compared the “golden age” of access we have today to generative AI tools, with the early days of LinkedIn.

In those early days of LinkedIn, it was a land grab for attention and subscribers. I am sure that if you’ve been on LinkedIn for a decent period of time, you will have noticed that in the beginning, we had a wonderful experience with a free product, which, as time goes on, is being eroded as their strategy required them to, well, make money.

Broadly speaking, the power of reach on LinkedIn is not organic, but increasingly a paid offering.

As such, social media marketers, content creators, and anyone with an interest in maintaining their personal brand have had to adapt, to rethink their approach to the platform.

These changes have had a business impact, and some use cases for the platform have become less viable when the potential for organic reach for free is diminished and to get the same performance, we need to pay.

Rather than trusting the organic reach and algorithm you ask; what is the ROI of boosting this post?

And of course, the same is true of many of the other use cases for LinkedIn, from recruitment to new business development, they now have a paid solution for you.

And, by the way, if you don’t fancy paying LinkedIn, there is a whole market of tools that promise to give you what you are missing for one, low, low monthly fee.

And I think the observation of the parallel with AI is spot on, at some point, AI platform companies will need to wash their faces, make some cash, and the fun will stop.

Today, Open AI, the company that is as synonymous with generative AI, as Hoover is to vacuuming, or Coke is to cola, with its annual recurring revenue projected to reach $20 billion this year, is not expected to be profitable until 2029 (according to this recent CNBC interview)

And it’s a good bet that they will do this through pricing, degrading the free and cheap offerings, and launching premium offerings that actually make a margin.

I am not suggesting there is anything wrong with this. Many years ago, I discovered an all business class airline, “Silverjet,” that flew from the UK to New York, a route I was flying frequently at the time.

It was a great service, at a great price, but when the oil price rose, those great prices meant that there was no resilience in the business, and it went bust, and as a consumer, I lost a product I’d enjoyed, and on reflection, I kinda wish they’d charged a little more and stuck around.

It’s in our interest as consumers that the companies we depend on are sustainable.

I’ve digressed; it’s hard to predict these things, but I think the suggestion that we are in a golden age of AI is a good one.

Access to this technology may never be cheaper, but if we are building our strategy, hiring plans, resourcing, processes, and budgets based on the current price point, we should be cautious and maybe a bit circumspect on the technology stack and its dependencies.

Does the new AI SDR tool you are betting your pipeline on depend on other tools, like ChatGPT, and what happens if that access gets more expensive?

Don’t get me wrong, these are exciting times, and maybe we’ll look back on them as a golden age. But it’s something I think we need to plan for.

In the track that I’ve chosen to give this issue its subject line “Price Tag”, Jesse J sings “Wanna make the world dance, forget about the price tag” and that’s AI today, it wants to make the world dance, while conveniently ignoring the cost.

But soon, that will change.

Cheers!

Ian

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Ian Truscott | Managing Partner | Velocity B

What caught my eye on the topic and a bit more from me…

You know it “Ain't about the, uh, cha-ching, cha-ching // Ain't about the, yeah, ba-bling, ba-bling”