S5E75
· 56:27
Hey. It's Matt. Welcome to Money Lab. In the brewery today, and I was trying to figure out what kind of podcast to record. And I go on Twitter to kinda look for just inspiration because I I, personally, I've I've I got so much going on in in my business that I was like, oh, let me just I've talked about all of my little detail things, like, exhaustively.
Matt Giovanisci:Let me just comment on something that's happening right now. And I know that this is like you're not hearing this at the time that I'm recording it because I'm backlogged, but I go on Twitter to just read, you know, like, what's going on in the world, you know, like, in the world of business. And the landscape has changed. It is, at least from my vantage point, and I and I have a very specific vantage point because I'm in a few different industries, but things are looking bleak. Time will tell, and it and it but I it's looking bleak.
Matt Giovanisci:AI is really fucking shit up. It's like and it's only gonna get worse. And what I mean by that specifically is that all of these major companies, I'm talking about Apple, Google, Microsoft, you name it, the big big guys, They are it it feels like they are really gearing up for a revolution in some in some sense. And let me explain what I mean by that. So what I'm seeing is, I I and this is just I'm just I might be correlating these things and they don't actually have any correlation, but I recently watched an episode where Jon Stewart was talking to the chair of the FTC, Federal Trade Commission, and he basically said, like, they they didn't like, Apple, the where he hosts his podcast, didn't want him to interview her because they're because the she they're currently FTC is currently suing Apple for monopoly monopolistic practices.
Matt Giovanisci:And but that's not even, like, fine. I I get that and people have an issue with that and I and I agree. Same with Google. Like, having a monopoly on search, and it's like, well, if they wanna make a business to change a business practice for their best interest, everyone's fucked, which is what's happening and what I see on Twitter constantly. So the other thing he said though was that they didn't even want him to do a segment about AI, about, like, kinda shitting on AI.
Matt Giovanisci:And I was like, that's weird. And I I think that it's just worrisome. That's all. Just worrisome. And so today, I'm feeling some kind of way.
Matt Giovanisci:I have been leaving for Portland in a few days, and I'm still jazzed. I'm still jazzed up about the business, but whenever I go on, you know, whenever I go on Twitter, I get really affected by the sadness that is out there. I just read this massive article from a company called Retrodoto, And they were just like a retro gaming content site that was started in 2019, so pretty pretty young. And they had built up a team of, like, 4 creators within this, like, media, like, mini mini media company. And, like, since September, their traffic has just taken a like a nosedive.
Matt Giovanisci:It's just been slowly dropping, excuse me, every month. And I was like, yeah. Yeah. That sucks. Because if you had built an entire business off of the back of Google, which felt pretty safe because, again, I mean, Google's been around for, you know, 20 plus years, and it felt pretty safe to create there, and it felt whatever.
Matt Giovanisci:And then you find out that, you know, Google had a vested interest in Reddit to help them with their AI stuff and all of these they have, like, deals with these publishers that are beefing them up, and smaller independent creators and publishers are not getting equal share. They're not getting equal share on the platform. But and so when I I see stories like that, I read stories like that, and I think about Swim University, and I'm like, man, that really sucks. Like, I could I feel that because that is exactly who I am. Like, that is that is what my business has always been.
Matt Giovanisci:It has always been an SEO company. We've we've used SEO to grow our our brand. Now we have, since the beginning, tried to at least spread ourselves out a little bit besides just ranking on Google, because I learned very early on that it's not like, being number 1 on Google is not a guarantee. And even if you do everything right and your content is better than everybody else's, you know, subjectively, but objectively as well, it doesn't necessarily mean that you're gonna rank number 1 or you're gonna get any traffic from Google. No matter how good of an SEO you are, no matter how good your content is, it doesn't matter.
Matt Giovanisci:Now this has happened before. You know, Facebook was people were getting a ton of traffic from Facebook, that changed. Now it's pay to play. All these all these little things like that. And, basically, what it is comes down to it and and and, you know, you gotta think of it this way too.
Matt Giovanisci:Like, Google for the longest time, like, that's just been the game. The game is like SEO. Let's let's let's do this. And, yeah, there were, like, bad practices and good practices, but, like, for many years, almost 30 years, if not 30 years. It that has been the game.
Matt Giovanisci:Now AI is out, completely fucked up the game. Right? Completely changed the game. Because now and this is what I said a long time ago, and this is nothing new, but it's like, oh, if you can just type into AI a question and get an instant correct answer, what what is Google? Like, what is Google?
Matt Giovanisci:Google had that that is what Google was. It like, that is what it was. But now we have artificial intelligence. And so Google has to figure out what it what it is now post artificial intelligence, what it's struggling to figure out, but it's not gonna take long, is they have to they have to continue to make money, and they have to continue to to just be on the minds of everybody. But I think they are seeing a mass they're gonna see a mass exodus if they don't figure out how to use AI better than, say, OpenAI, Microsoft, Apple, whoever.
Matt Giovanisci:Right? Because now here's the thing, is that Google the the the the sheer idea of Google, which is have a question, type in your question, get an answer. And I don't mean it like, obviously, like, we're not googling specific questions all the time. Like, there are other reasons to Google things, but that's essentially what it is. And so that idea is it's the same idea, except now there is a Google on every platform.
Matt Giovanisci:So now you can type in any search bar anywhere because of AI and get a Google like response. And it's only gonna get better. So Google has a a a problem, which is, are people still going to think, oh, Google it. Are they gonna still say that, or are they gonna say something different, like, you know, ask the robot or just say it into your phone? Like, why are you who's why are you going to a website?
Matt Giovanisci:What are you nuts? Like, just just ask your phone. It'll just tell you the answer, or it'll just give you exactly what you want. And so now Google has to be something new. But what does that mean for us, the people who create the content that the robots steal, let's be honest, steal, paraphrase, and then recite back to us.
Matt Giovanisci:Because that's all it is. It's like, it's the collective you know, it's a giant brain, and we contributed to that brain. Now is it actually stealing? I don't know. I don't know.
Matt Giovanisci:If you ask a comedian and somebody hears a joke, and so they they they've heard it once, and then many years later, they feel like, earnestly, they came up with an with their own with their own thing, but their brain has been loaded with data. And they end up writing a very similar joke that is to them joke stealing in that community. And I would say, yeah. It it's it is it is. But we're it's we're all working with it's all the same thing.
Matt Giovanisci:Like, you heard that joke. So you that that data has been put in your mind. But then again, you've heard you've watched the Simpsons. And so, like, all of those data points are kind of floating around in your brain, and it's allowing you to craft new ideas. But some of those ideas, because of the sheer number, will just be those things.
Matt Giovanisci:Even though you think it's organic, it really isn't. And I believe that that is what the AI does. It's essentially that. So I'm I it's it makes me feel a little down in the dumps. And the reason is is because, like, I you know, we had a site for a long time, and when I saw that happen, when I saw the AI come out, I'm like, uh-oh.
Matt Giovanisci:That's worse than anything that has happened. Because I can tell you that from long time ago, 2007, 2008, I was hit because I was doing unfavorable SEO practices. Now I was being taught this by people who I thought who people who I trusted, not that I thought, I did trust them. They were trustworthy. They thought that they were teaching the right thing too, but it turns out very quickly, almost overnight, all of their people in their in the academy that I was part of all, like, lost a ton of traffic, and they were like, oh, shit.
Matt Giovanisci:Like, you can't be doing the stuff we've been teaching you. Like, we have to change fast. And that that was the end of that community, essentially, at that point. And I had and I was one of those people that had lost an absolute ton of traffic. At the time, though, that wasn't my full time job.
Matt Giovanisci:So it didn't. It hurt because I had put a lot of work in, but I didn't feel like, screwed. Right? Now if you, like that was 2,008, and I had slowly grown from there. Right?
Matt Giovanisci:Not just on Swim University, but I had started other projects. I've gone I did client work. There's a bunch of things that I that kept me afloat as a human being. K? And over the years, there was a couple of problems that came into play.
Matt Giovanisci:That that threw, I would say, a monkey wrench or a Molotov cocktail into my business, but it didn't burn it down. It just fucked some shit up a little bit. The first one that I can recall besides the 2,007, 2008 Panda Penguin algorithm update, from there, it's been kind of, like, slowly getting more and more traffic even on months even on years where I didn't produce any traffic. So we just did well because we had good content in place, and we were really the only ones doing it like that. And I believe we are still the only ones doing it like that, so that's that's kinda where I am with that.
Matt Giovanisci:But in 2018, I had relied all really heavily on affiliate traffic up, you know, up until then or affiliate revenue, I should say. So affiliate link clicks to revenue, specifically from Amazon. And in fact, I had switched all of my affiliate links over to Amazon. It just made sense at the time, and I was making a lot of money from m from Amazon alone. Almost felt like I was like, oh my god.
Matt Giovanisci:I'm making so much money from Amazon. It's crazy. And then in 2018, they decided to completely change the commission structure. Now, thankfully, in that particular year, they they changed the commission structure to certain categories that were, say, already popular, like coffee, didn't they were paying out 3% commissions, but home and garden still at 8%, which is what I was making before. So I got lucky in 2018, but it was, like, right before I had boarded a plane to Austin, and I was drunk and I was sad because I got the email from Amazon.
Matt Giovanisci:I'm like, oh, no. Like, that's everything for me. Like, we we had we had products we were selling at the time that were our own, but they weren't doing that well. They weren't they were, like, maybe 10% or 20% of our revenue versus 80% coming from Amazon. Now, again, it turns out that, like, Rosie got hurt, but not but not, swim university that time.
Matt Giovanisci:2 years later, at the beginning of the pandemic, they changed the commission structure again, and that's when Sumit University got hurt. Now, thankfully, because of 2018, the next 2 years, I relentlessly focused on, selling our our physical products or, sorry, our digital products, like our own products. And traffic was good, so things were things were okay. Alright? And we were able to, like, do way more in product revenue than we were able to do.
Matt Giovanisci:And so we, like, more than made up for the for the the punch in the gut. But Swim University really hasn't grown since then. It has kinda stayed at that level. Now if you jump forward in time a little bit, just 1 year, I put something in place on the website that really skyrocketed our sales. And then in that same year, I also you know, it was the year of the pandemic, so, you know, at home companies, specifically the pool industry, did super well just because everyone was home that summer, and everyone decided to buy a pool.
Matt Giovanisci:So business was like that was a, unfortunately, a great year for us. Horrible year for me personally, but great year for the business. And the following year, 2021, also another great year because people all had these pools, these new pools that were built, and they needed to take care of them. And we were still ranking and traffic was growing and we were publishing content and we were publishing you know, things were good. In 2021, I made another decision to grow the business, and I extended I wanted to get into physical products.
Matt Giovanisci:And I was, you know, I I was influenced I don't wanna say that in a bad way because it was a good way. I I wanted you know, somebody helped me out to get into this business, and I tried it. Now getting into that business, I was like, oh, crap. Like, our revenue skyrocketed, but our profits didn't because or I should say our profits did also, but all that it was just like we became this, like, cash flow management nightmare and this inventory management nightmare that I was not prepared for. I was not prepared for the amount of cash.
Matt Giovanisci:Now we still had the digital product business kinda keeping us going. Right? So that that was the same, and in fact, did slightly better. So all of the digital product sales were basically like, we didn't make any money on it. It was just a large experiment in cash and inventory management and all those things.
Matt Giovanisci:So it was it it was when I looked at the numbers, it was a wash. Now I'll say that and what I am not taking into consideration in this is, well, how many people bought our physical products who wouldn't have paid attention to us otherwise and then ended up upselling or getting into our digital products. So, yes, selling those even at a wash probably netted us some profit in selling digital products. But I would say it's it's not as significant as, like, I want it to be or as that I think is even worth diving into the numbers. And so here we are.
Matt Giovanisci:2023, I'll say, is like the year of AI. Right? That's you know, we were using AI before that, where but it was mostly just, like, just do copywriting stuff, spin up stuff, but then, you know, chat gpt comes out. And it's fine. Chat gb4 comes out, and it's like, holy shit.
Matt Giovanisci:Okay. Now it's like a fucking arms race for AI. And when Jarvis came out, which was the they've gone through 3 different naming things. Who knows what they even if they're even a company anymore? That's how fast as shit moves.
Matt Giovanisci:But when they first came out, I was like, oh, this is great. Oh, shit. This is this is what Google has always wanted. And I had that same feeling before that 2018 plane trip to Austin where I went, oh, fuck. Things are about to fundamentally change in my business.
Matt Giovanisci:Now, I don't know how what I didn't know was how fast it would go into effect. Turns out, September of 2023 is when it started to go into effect. That was the beginning. That's the helpful content update. And we saw, at our company, a 50% drop in traffic.
Matt Giovanisci:Now we were heading into the off season, so we would have seen but I always compare this is I'm comparing traffic year over year, not month to month. So we're saying a 50% decrease year over year. Also, take into consideration that we did really well in 2020, 2021, 2022, 2023, and now people are all kind of back to normal. So there is some argument that I could make that those 3, 4 years were over inflated for us as a company. And now we're back to 2019 numbers, which are still really good numbers.
Matt Giovanisci:K? And if you look at our traffic, that's kinda where we are, is 2019 numbers. Because we didn't lose our traffic the way that some of these other companies are straight up losing their traffic. We are today, as of April, and I don't know how the summer's gonna go, down 30%, not 50. So I'm like, okay.
Matt Giovanisci:Somewhat better after the March update, but still a significant chunk. So seeing that in the industry, feeling it myself, feeling the, like, crunch of getting out of the physical product business because I just don't wanna run a cash intensive business. I am in this in between land, this purgatory, if you will, of I don't know what's gonna happen. I am optimistic because that is just who I mean, that is just who I am. No.
Matt Giovanisci:I mean, I mean, I am a pessimist. But when it comes to my skill and ability and talent and all of that, I am fairly confident in that. And I am optimistic because here's the the the truth of the matter is that I am I am rooting for me. Now here are some things that I am thinking about, and they're not the greatest things to think about, but I have to. What happens if our Google traffic disappears?
Matt Giovanisci:And what happens if it happens relatively quickly? That is something I have to think about because it is essentially happening. Right? And if I can put myself in the position of somebody who doesn't rely on Google or at least organic Google at all, then I can still operate a legitimate business. It may not be the absolute profit center that it used to be, but I can still do it.
Matt Giovanisci:And I think, you know, for many, many years, especially for SEO, it was like, look. If I do this one job of creating articles and publishing them, I without doing any backlink building, like, we just made more money. Like, that just happens because people click affiliate links, people organically sign up for our cheat sheet. People organically buy our products. Like, that's just gonna happen.
Matt Giovanisci:But without Google, that doesn't happen. We do get sales through YouTube. But and, you know, there the AI is gonna be tougher to replace on YouTube for sure, but we don't get the same rate. It's it's it's 5%. Yes.
Matt Giovanisci:Meaning, we get a 5% conversion rate from that traffic, meaning, like, the if there was a 100 people that came from Google, 5 of them would buy something from us. And the same for YouTube, it's just that our numbers on YouTube are not nearly as big as they are on Google. So that's why we we decided, okay, let's let's just commit to being a video first company. Let's just do that. Because, clearly, that is the first step in protecting ourselves from the AI, or at least this version of it.
Matt Giovanisci:But I gotta go even further than that. I gotta think, alright, what happens when it's it's not gonna work anymore? So here's it's it's so much there's there's alright. There are things that we can do because we are a digital media, digital education business. We are not selling physical goods anymore.
Matt Giovanisci:Or we are, but they're just they're they're education based, and their profits are good. But we are not doing what we were we're not selling chemicals now, and we're not gonna be selling physical products. I just personally don't want to run that kind of business because of the cash intensity of it. That's that's all. It has nothing to do, like, will it work, won't it work?
Matt Giovanisci:It'll work if I was willing to, like, ride debt. And it's just not my nature to do something like that. So while it is profitable and it can make us money, I personally just don't wanna do it. So I'm going, alright, I'm gonna double down on the higher profit digital side of the business in spite of AI existing. Because AI is not doing video yet, and I think we have some years before it can, especially the it for it to create the videos that I create.
Matt Giovanisci:And I also think that there is a there is something that gives me a little hope, which is the next generation of consumers. We, the millennial generation, are coming up to owning pools now. And next is Gen z, and they have no interest in things that are not authentically human. And so I go, okay. Hence, I've made a few decisions this year to protect myself and my business from getting gouged by specifically Google and AI in general.
Matt Giovanisci:And that is simply to inject the one thing that they don't have, which is my fucking face and name and voice. And you're like, but they will have it soon. And I'm like, yeah. They probably won't. I mean, that will be a absolute nightmare.
Matt Giovanisci:I mean, like, the world's over. I'm like, I that's not gonna happen. Right? Also, I can't win. Like, no one wins in that scenario.
Matt Giovanisci:So I'm like, alright. Well, then if we're all just AI clones, then what is who's buying things from it from humans? You know? Then then you know what? I'm that's a I I'm not even on the Internet at that point.
Matt Giovanisci:It's like, alright. I'm just gonna go open up a store in my local town. That's it. You know what I mean? So I just don't see it getting that.
Matt Giovanisci:I I just don't wanna think that crazy. I think more people are getting into content than ever before, and they're not going to to blog posts. That's web 2.0. They're going to video. And that's why, again, the fur the biggest decision that we made as a company to kind of protect ourselves a little bit is to is to say that we're a video first company, that we are primarily a video company.
Matt Giovanisci:And that means putting less emphasis on the written word. And so that's okay. I just you know, we there it still exists, but it is not gonna be it's if we were gonna rank on Google, it's not gonna be for it's gonna be for the text that we have, and we're gonna continue to do it until it doesn't work anymore. And then at one day, it may work, or one day it could come back. You know?
Matt Giovanisci:Like, that is also a possibility is that they realize that a year from now, they look at their numbers and they're like, oh my god. We have a mass exodus of people leaving Google. Let's be the first search engine that, you know, tries to be more human and give the small you know? And maybe that's what they they do the reversal. Who knows?
Matt Giovanisci:But can't bank on that because we're already doing that. Great. Google's probably gonna start ranking video more because it's authentic, and it's a human, and it's hard for the AI to replicate. And we have age in this, you know, in in YouTube. So let's go with that.
Matt Giovanisci:They're not gonna be a bunch of Reddit commenters making YouTube videos about pool care anytime soon, so I'm not worried about that. And and I also think, like, remaining small and touting that is to our benefit. The other thing that I'm doing to sort of protect us is to treat the business, especially the digital business, as if Google doesn't exist. Let's say or not only that, that organic doesn't exist. That's the hardest one because that is in one of my entire business has been based on is, oh, people search for a they have a problem.
Matt Giovanisci:They Google something. They YouTube something, and they or they maybe now now they TikTok something. I'm gonna come up. I'm your guy. But let's assume that all goes away.
Matt Giovanisci:How do you run a business without that? Well, there are fucking I'd say, I don't know the number, 100 of millions of businesses that don't do content and operate completely normally, like, that's also a thing. In fact, I kinda I find it kinda weird. If you're a local business, you know, if you're a local coffee shop, why are you doing Instagram? Honestly.
Matt Giovanisci:I just I to me, I'm just like, put your like, Instagram is reaching like, you're posting to reach the world, and I know that there's local SEO and I know that, like, but that's to me, it's like there's so many other ways to grow an audience offline that I I don't even know if I would do that. Of course, I would do it, but I just wouldn't do it aggressively. But you know what I'm saying? But that's kinda what we're doing is, like, I know that we're posting on TikTok, Instagram, YouTube shorts. Like, we're posting the short form content, and it's not getting us leads.
Matt Giovanisci:Like, I know that for a fact. Sorry. I know for a fact that it's not that I can't track that it's getting us leads. Alright? Because there is something I've been thinking more and more about, which is this feeling of brand.
Matt Giovanisci:And what does that actually mean? So the way that I look at it, and this is again a thought to like, the reason that we're gonna continue doing articles, continue doing YouTube videos, continue doing shorts despite me saying that we're not even gonna we're gonna pretend like those things don't get us anything organic. And when I say that, I mean direct people go from those sites, clicking a link, and visiting our website, and buying something from us. That that level of organicness. I just don't.
Matt Giovanisci:I just have to operate in a world where that's all gravy, baby. And the the so what it is doing, though, and what I can't measure as a as a, you know, direct marketer who wants to measure the effectiveness of a single, you know, sales letter, I I can't I can do that through email. I can't do that on these on these platforms. And, obviously, these platforms don't want me to do that because they're all trying to do what I'm doing, which is keep people in the ecosystem. So me going to YouTube even and being like, hey.
Matt Giovanisci:Click this link in the description. Like, that's gonna send people away from YouTube, and they're gonna be like, well, stop doing that. Like, that's gonna be against policy at some point. So, again, if all of these things don't bring us any traffic and Google's completely gone, how does Swim University make money? Well, again, we still do all those things because of brand.
Matt Giovanisci:It is the tippy tippy tippy top of the funnel where people are like, oh, I see an ad for Swim University. I know those guys. I trust them. I I I yeah. Hell, yeah.
Matt Giovanisci:Oh, I know that guy. Yeah. He's the guy. Because we're just fucking all over the place. If you right now, without googling anything, right now, if you were like, hey.
Matt Giovanisci:You just bought a new car and you need car insurance and you don't have car insurance. Name one company you're gonna type into whatever you're what or name one company you're gonna say to Siri, get me a quote from blank. Name that company. We're all gonna name something different, whatever one resonates with you. Me, it's GEICO, in case you were wondering.
Matt Giovanisci:Only because I think their commercials are better. But that's the thing. It's like, they're running commercials. It's for and their the commercials are fucking meaningless. And they've said the same thing for years.
Matt Giovanisci:But they have a brand, say 15% or more on car insurance. So that's who I'm gonna go with. And I didn't have to Google anything to find that because I already it's I've they're just in the zeitgeist. That's what I am doing. I am zeitgeisting the shit out of Swim University.
Matt Giovanisci:Swim University through the basically, the the idea is that all of this organic content is commercials. Commercials. And you just have to run a metric fuck ton of commercials. Ask GEICO. You've seen 100 of them.
Matt Giovanisci:Alright? You just have to do it. It's so tip top of the funnel, though, and it helps it helps the bottom of the funnel where someone's like, I need help with my pool. I wish there were something. Oh, that's the company yeah.
Matt Giovanisci:That one. Because I trust that one. They are typing Swim University into Google to find us, not the other way around. And that's what I'm looking for. That's why we do that.
Matt Giovanisci:Now what about direct mail stuff? Like, what about old, you know, like, that kind of marketing? Because there's direct mail and then there's, you know, just putting an ad in a magazine that just has a nice story. That's brand. That's high level shit.
Matt Giovanisci:That is that's mass stuff. Right? But what about the direct things? Look. If if Google and Facebook and Instagram and YouTube even, TikTok, TikTok not yet, but it's getting there.
Matt Giovanisci:If they're like, you know, it's really not organic anymore, you're gonna have to pay because now we got you, and we're gonna serve up there's so many people now creating content, you gotta now break through. If you got a legitimate business, because a lot of these creators don't, But if you've got a legitimate business, what's your pitch? Because the thing about specifically, like, on all these shorts platforms, where's the button? Where's the button to get my free thing from them? Where's you know, if I keep seeing Ben Heath talk about Facebook ads and I'm like, I like the cut of that guy's jib.
Matt Giovanisci:I wanna learn Facebook ads from him. And and then where where where where the fuck do I go? Where do I go? Seriously, I'm asking. Do I go to some description on one of his videos?
Matt Giovanisci:If I'm just seeing his shorts, am I what the fuck button am I clicking? The 3 dots? Like, you know what I mean? And then and then when I click the link, it's opening up the link in the YouTube app. So it's not even, like, I've not even left YouTube still.
Matt Giovanisci:Also, like, a website on a phone? Like, give me a fucking break. Website on a phone. I don't want a website on a phone. You know, I want a app.
Matt Giovanisci:That's another thing we're doing. But I think for us, it's like look I need the button the button has to happen So my job now is not is we're gonna, again, create content, but we gotta pay. We gotta pay to get in front of you. And that's it. That's the game right now is we're gonna run ads.
Matt Giovanisci:And the and the thing is is that that's the secret that all these other businesses that you've never heard of because they don't do content. That's what they're doing. Either they're running ads, you know, and I'm not talking about social media ads. They're probably running ads in, like, magazines and, like, trade magazines, on fucking billboards, circulars that get delivered to your mailbox, those kinda old school things. Or they're doing or they have cold callers that are literally just calling people.
Matt Giovanisci:That part's not that those things are not dead. They will always be a thing. A local coffee shop is always gonna have an audience if as long as there's people around. They just have to do different techniques or perhaps more old school techniques. For us, we're a new school type of company.
Matt Giovanisci:We don't have a retail business. You know, d to c was really popular. That's, you know, direct to consumer, ecommerce businesses. Basically, ecommerce stores that are on Amazon and that sell one type of specialty product or a handful of a line of specialty goods, specifically subscription. You know, those are still gonna be okay, but they're not doing as well as they used to.
Matt Giovanisci:I mean, because, again, Amazon and Google are not serving those people up. So that's who you're competing. You're competing against the biggest players. Now, again, this is not this is all of this is not really new. I think back all the way when I worked in pools, in in, like, the retail side of pools, Everyone hate it.
Matt Giovanisci:Walmart. Not Amazon. Amazon wasn't a problem yet. Online wasn't a problem. It was the big box stores.
Matt Giovanisci:That was the scary giant. It's the big box store. Walmart. Specifically, Walmart, Home Depot, Target to some extent. But they all started selling pool chemicals and pool floats.
Matt Giovanisci:And it's like, why the fuck would you go to a mom and pop or a small pool retailer? Why would you go to a tiny store? And the one thing that we had that they didn't have was water testing and expertise because we were specialty. But then Amazon became a thing. And so now the expertise is not at the local level anymore.
Matt Giovanisci:It's at it's on the Internet. Because now you can search for your answer and then buy a product to support it without ever leaving your home. So Walmart is not the problem anymore. I'm the problem, me, because I sell Amazon stuff. I became the problem.
Matt Giovanisci:But I thought of this back when just Walmart was the problem, and Amazon wasn't even didn't even have an affiliate program when I started. And, again, weren't really a thing. So here I am, and now what's that new thing? What's the new big box scary thing? It's AI.
Matt Giovanisci:AI is taking my job. If you can just ask AI a question, why do I exist? Because AI right now and AI and the thing is is that AI recommends products too. It is what Google is. Google is a giant answer machine.
Matt Giovanisci:And so when you type in how much chlorine do I need for a 10,000 gallon pool, it's gonna spit out an answer, and then it's gonna give you products that are chlorine. Google is now my new enemy. That's plain and simple. However, they have one Achilles heel, And this is something that the big box retailers, their Achilles' heel was Internet. Right?
Matt Giovanisci:So Amazon right in the Achilles' heel and then boom. Took them took those motherfuckers down a peg. Right? They still operate, but they're not doing as well as they used to. Alright.
Matt Giovanisci:So, like, what's the Achilles' heel for, you know, Amazon, what's their Achilles' heel? It they're just too big. So, alright, here comes d to c, and they're like, yeah. Everyone's kinda eating into it a little bit, but not really an Achilles' heel. Just just death not even death by a 1,000 cuts, just a bunch of cuts.
Matt Giovanisci:Right? But they're fine. Now AI, again, replacing me, that's my scary monster that's taking over my business or that's gonna eat my lunch. Right? There's always something, by the way, and it's gonna happen faster and faster.
Matt Giovanisci:So what's eating my lunch is AI. Again, Achilles' heel is that Google, in order to operate as a company, they need advertisers. That's how they make money. That is not the case for Amazon, you know, as an example. Like, Amazon doesn't need you guys, doesn't need us.
Matt Giovanisci:It needs us to to buy things, obviously, but we're gonna buy things as long as they get better at it. But Google, even if they become an answering machine, right, and they become basically their own swim university because they are and and not just Swim University, but their own everything because all they're doing is using AI to answer our questions and then recommending products, which is essentially all that I do. Right? It's all these mom and pop stores did too. We come in, We did things for you.
Matt Giovanisci:We recommend products. But their Achilles' heel is that they kinda need us to make money. So I can outrank the robot just by paying the robot, And that's I don't know. There's something there's something there. I haven't really put my finger on it, but that's that's the that's the Achilles heel.
Matt Giovanisci:It's like, is it? Is it really an answering machine if it's just all ads? Hasn't it just become a really bad magazine? Like, when was the last time you opened a magazine and actually read it and it was filled with really awesome stuff and not just a ton of advertisements? Magazines are fucking pointless.
Matt Giovanisci:They really are. There's only one magazine that I like, and they do home brewing stuff, but that's because they don't they're not riddled with ads. It's mostly content. But there's other home brewing ones that are just riddled with ads, and I'm like, this sucks. Like, I don't subscribe.
Matt Giovanisci:I'm done. That's what Amazon has to sorry. That's what Google has to balance. And so I, as a creator and a brand builder and a person with a business, if they're not gonna rank me organically and they're gonna just steal my stuff and spit out the answer. Okay?
Matt Giovanisci:If that's how you wanna play it, I'll just outrank the robot. And the only reason I can do that is because I have a more compelling offer than the robot. I can do things the robot can't do. And what are those things? Well, I am a human being after all.
Matt Giovanisci:I could do video consultations as an example. I could build an app that Google is not gonna be able to do to, like, actually help you with your pool. I could sell physical goods. I could just be different. I could just sell a book because not everybody wants to rely on the robot.
Matt Giovanisci:And so I have to meet people where they wanna be met and then kinda wait out the AI surge because I do think we're in. I've said many times we're in an overcorrection period. We're in a surge of shit right now. As the AI gets better and better, I don't think people are gonna like it. I don't think it's gonna become a reliable thing.
Matt Giovanisci:I think people are gonna wanna get away from it because it's kinda overloading. It's too much. And so great. As long as you ride the wave, we'll see what happens. But, ultimately, that's why in a previous episode, I said, now I am just relentlessly focusing on the customer.
Matt Giovanisci:It's the one thing that AI is not gonna do, because it's not human. So it's it can't. So I'm gonna help you, me. And as long as that is my driving force, but, one of the Steph had this phrase, it's really hard to quantify, but the phrase is helpful AF. And that's sort of vague, But, basically, the goal is to, like, take the consumer and go, alright.
Matt Giovanisci:What is gonna help them regardless of what the AI can do or not? Or if it's even using AI. But it's like, let us let's figure that out. Because the next competition for us is and I don't know if this will ever happen, Maybe. I don't think that this is, like, gonna be a big enough swing.
Matt Giovanisci:But when it becomes so affordable to hire a bunch of pool robots to just do your pool for you, what do you need us for? And at that point, you know, if everyone can afford that, which which there are pool robots now, just no one wants to afford them. But once that becomes a thing, which is inevitable, by the way, it's not like I'm not not naive. At that point, I think I'll have moved on to something else. Who knows what that is?
Matt Giovanisci:But or or I'm dead. Who knows? But, yeah, that's a long winded rant about the future. And that is what I'm gonna call this episode, just simply the future. Maybe I'll even throw in the word bleak.
Matt Giovanisci:But, again, I am optimistic, and I'm also nimble. And a lot of these companies are are not nimble. I also have been build building a brand for 20 years, so I have that going for me too. And worst case scenario is that it's just me. It's just me doing everything, And I can, you know, survive on that, and my family will be able to survive on that.
Matt Giovanisci:I don't think it'll ever get to that point, but just in case it does, you know, I'm still riding strong. And there's a lot of other things I could do on top of that. So, anyway, that's it for this episode. Hopefully, it wasn't too much of a downer. If you got all the way if you got all the way through, let me know.
Matt Giovanisci:Just shoot me a quick email, matt@moneylab.co. I'll talk to you soon.
Listen to Money Lab using one of many popular podcasting apps or directories.
