00:10 Welcome back to the show and today I'm bringing to you straight from the islands, Cody Schneider. Cody will you please tell us who you are and what you do?

00:20 Yeah, it's all thanks for having me. Yes, I'm Cody. I'm the co -founder of swell AI. Basically, we're building content marketing powered by AI. So we're kind of obsessed with how you can use these AI tools to repurpose content for your business. So a lot of the times people are making like long form content, chop it up into all these different variations. So yeah, that's kind of the high level.

00:38 I love it. I love it. And obviously being a content guy myself, this is a keen interest to me about what you're doing and how you're doing it. So who are you hitting? Like who's your avatar? Who do you try to serve with this? Cause obviously it's guys like me, but there's more to it than just that. Who are you serving?

00:54 Yeah, totally. Great question. So initially we started out in the podcasting space. Now it's really evolved to like more up that marketer funnel. So like any, we have like marketing teams that sit on top of us as an example, where they are basically trying to create tons of B2B content. It's a lot of B2B businesses that are in the marketing side. Cause it's way more like high touch. How do I make thought leadership content? And so we're really a tool that we're seeing those types of individuals use. So.

01:22 Awesome, it's awesome. And so, as you see, is it more the individuals going B2B or is it entities like companies who are trying to build lots of content for other B2B? Like, what are you seeing there?

01:33 Yeah. So kind of a breadth, like we have like, you know, solo podcasters to like traditional media networks that have like 500 shows, um, to like, uh, you know, it's a marketing team of five people. They're trying to be super efficient with their output and kind of the volume of content that they can create. Uh, so really hitting all of those kind of segments, um, you know, with most early stage companies, you start in that lower end, like where it's like a solo, like, you know, entrepreneur to solo podcasts or whatever and then kind of move your way up that chain as you provide more and more value. But yeah, it's definitely kind of a breadth at this point. As a founder, I'm trying to wear all these hats because it's definitely different like selling mechanisms for each of those individuals. So, but yeah, that's the high level.

02:19 It is definitely a challenge, right? I mean, trying to zoom into which part of who you can serve, right? 

02:27 Totally. Totally.02:29 So in your journey to Niche Town, you do serve so many different types of people that I'm curious, what, if any, who's your favorite type of plant? I know I want you to dig yourself in a hole here, but is there a certain type that you feel like has added more value to your growth than to just, hey, it's another podcast or hey, it's another thing. Who generates you the most revenue or the most profitable revenue at this point?

02:56 Yeah. Great question. Uh, I think the, I mean, for any company, it's like larger enterprise organizations, right? Like they're going to be your biggest, you know, your meal ticket. Uh, the challenge with that, especially for early stage, we're only a year and a half old, right? So, um, like the sales cycles on those types of deals can be six to 12 months. And so, you know, when you're early and starting out, like you have to still eat during that period. And so that's why you'd like go after that, like kind of smaller ends and have some type of pricing tier that is available and accessible to them. I mean, long term, I think for every company, what you do is you start out in this lower tier so that you get enough product reps so that the product becomes a really unbelievable tool or platform. And then that allows you to make a great product that you can then take to enterprise and then sell basically at the enterprise scale. So, I think that, you know, it's a tough question. Like we need both really is like what it comes down to. Like at this stage that we're at five years from now, 10 years from now, it might be a different conversation where it's like, oh, we probably, you know, we just need these larger enterprises. Um, but at the moment it's like, you have to have both to just to survive when you're an early stage company.

04:07 You know what though, I appreciate you saying that because for those of you listening who are in that early stage right now, you do need both. You can't just depend on the big fish that might come down the way and at some point gobble up all your user base. That's not what you should plan for, you should hope for it. But if you can build a steady grassroots effort of lots of little clients, guess what you learn? How to make their lives easier, which ultimately makes bigger companies' lives a lot easier. when little guys can handle themselves. Is that right?

04:39 Totally, yeah. I mean, I think it's the classic saying like crawl, walk, run, right? Like you can't skip those steps. And for a lot of businesses, like, I mean, unless you have deep relationships that are already in the industry, right? So like say I was already in traditional media and then I'm going and selling like news organizations, like we're gonna sell you clip creation, right? From your like live broadcasts. Selling those individuals would be nearly impossible coming from the background that we have, just starting out, if it was day one again. Because there's no trust built into what we are and what we're doing. There's no way that we could even get a conversation with them. But as you grow and just get more reputation within the industry that you're building and working in, and again, this is why I'm obsessed with content, especially as a marketer in this world where attention is the only differentiator that's really left. Like I can go and hire an offshore team and clone almost any software in like probably three months, right? Like that's becoming more and more of a thing. So if you're trying to create something that's like, you know, a sustainable long -term business, there is only really one lever that's left. And that's like, how do I create such good educational content and have some type of own media strategy where nobody else can like, that's the moat, right? So yeah, I mean, we can go so deep on that. I won't try to digress too far, but.

05:58  I love it. No, dude, dude, I think it's worth diving into later because I do feel like you're bringing up a lot of things that a lot of people don't think about. And I do think that to your point, you have to have a viable product that can grow in scale before it can grow on scale. You have to crawl, walk, run. And I do 100 % agree with that. How have you been able to see which parts of your crawl are working and which, you know, I think of that imagery of crawl, walk, run, and I do think that there's a lot of people crawling. Some are determined to stay crawling longer than others. How are you able to get into the walk mode and visualize where you want to run to?

06:40 Yeah, that's a great question. I think for us, probably the best way to describe this is just go through the phases of the product's lifespan. So in the beginning, we had this idea. The first version of it was a Google Drive folder that I had friends upload MP3s to. And then we'd download the MP3 files locally and run the software and send them back content. And we got our first five customers that way. And it was just friends that had podcasts for their businesses. And then from there, it's like build a web app. And then from there, it's like build in all of these multimedia features. And like now we're starting to build in like email marketing and social media scheduling and SMS marketing and like these other components. But with each of that, it's like your customer a lot of the time, like if you're having good customer conversations and good customer interviews, they're going to ask you for these things or be like, a lot of the times anymore what I'm really like in these calls, like going forward is like, what are you doing currently? What do you hate of that process or? And from that, okay, what can we basically abstract from that? So like a lot of the times, especially when you're building an early stage company, it's like, how do you wedge into a market? So like our wedge was just like, we're going to write podcast show notes for podcasters, right? And like now it's like, okay, like you can, I mean, we're working with a client right now and they're going to write like a thousand blog posts and their tone, style and voice based off of target keywords that they provide and all the source material. And like, we built this like templated workflow for them so that it generates like a thousand word article in like three seconds, like based off of the source material that they provide, right? So like, I would have never known that it could have gotten to there unless we just kind of did these like very simple basic things. And so I think that that is like, you know, a lot of people try to think too far ahead. And in reality, it's just like, if you ask your customer, like, what do you want, like what, like, what do you want to pay me for basically? But you have to ask, like, you can't directly ask that question. You have to like ask around that question to actually uncover it, but that is really what's gonna lead you in your product development and where does the direction of this go? How do we get to that place where we're now running? Right, so.

08:44 I love it. That's honestly really fantastic. The fact that everyone around you is running around saying, I got AI solutions, I got AI solutions. There's a lot of people building startups right now based off AI, which I think is smart. I actually am old enough to remember when that was happening with .com, and that was exciting, and it was fun, and it was actually really cool. But very few people had a product that was as valuable as what you're building. I mean, you've already got thousands of customers. who are using your service. You went from those five buddies who you're cutting and dicing and re -editing stuff for them. Now you've got thousands of people using your application. Where do you see this going and how do you see yourself climbing out of the hole where I'm an AI company?

09:32 Yeah, totally. I think for us, it's like if we can get marketing teams to sit on top of us, and this is really something that I'm moving towards. And it makes sense too, right? If you look at majority of podcasts, they actually exist as a top of funnel marketing engine for companies or businesses. And so, 

09:49  Like this podcast, is that what you're saying?

09:50 Exactly or just everyone, right? And that doesn't mean that they don't provide a lot of value. They can provide a ton of educational material and you get to hear these conversations that normally would happen behind closed doors, they're suddenly in public. And I would pay money for that. People do, right? They have masterminds and all this thing, all these things. So with that said though, I think for us, how we're just approaching it is very focused on what is the customer asking for? And this is like podcasting is just an aspect of a marketing engine. So, okay, what are the other aspects? Like we know that writing content is a piece of it. We know that sending email is a piece of it. We know that social scheduling is a piece of it. So just continuing to kind of build out these features where it's like, oh, cool, like now you have a team of 10 people and they can sit on top of a tool like this. And we dig our roots so deep into their kind of like biology and their, you know, you know, existence as an organization that it's very hard for them to then tear us out later. I mean, that's more of the strategy side of all this. I mean, this is the hardest part with software though, right? It is a lot of the times very replaceable. So how do you create such an embedded system within an organization that it's almost impossible for them to live without? And we're still figuring this out too, right? It's like in all reality, there's tons of competitors in this space. I mean, there's days where we're like, why are we even building an AI? Because every day we get 10 companies that almost exactly clone us, right? And so.

13:03 Totally. Well, yeah, no, there are a lot out there. There's no doubt about it. So, I mean, with that being said, looking at your growth thus far and your client acquisition model, like, what do you see as a key pivoting decision you've made in the last year and a half that where you're like, okay, that was probably the smartest thing we've done at this point to achieve growth. Could you pinpoint one or two things?

13:24 Yeah. Yeah. I think the big, the big moments were like, I mean, for us again, when, uh, like chat GPT dropped in like December of 20, what is that? 22. Um, yeah. So I think there was a zeitgeist moment where everybody was like, okay, how do I do this? And we had started in October or technically September of 2022. And so we were positioned really well to ride that wave. Um, like my big thing as a founder is like never build something that people don't want, right? And it's like, how do you surf a larger wave that's happening? And so that is like, our focus has been on that. So I think that was kind of just like a right place, right time, right product, right team, the actual ability to build this thing, etcetera. The other thing that I think that we did really well just early on was doubling down on the things that we saw were working really effectively in the beginning, and then just like, going as hard as we could until that marketing arbitrage evaporated. So like an example of this is like we saw Google ads were like incredibly cheap for target keywords that were related to our brand. Um, and we're getting like dollar signups, right? So we just like put as much money as we could into that as we, as we totally. And so, um, now fast forward, it's about a year later, right? And the CPC on that is a dollar 15 and like we've got.

14:45 Just for the CPC.

14:46 Totally. And so it like, that is a great example of like, when you find this arbitrage, like you just have to like pedal down as hard as you can and deploy as many resources. And so then from there you like branch out and you add other, but I think for a lot of companies, like, and this is something again, that I think we probably did pretty well just cause I had experience in this already. But when you like so many companies, like they try to do like 10 different like marketing activities, like all at the same time. And in reality, like for most companies, especially early stage, you can have like one or two channels. And if you just focus on those one or two channels, like you can get to a million ARR in that way. And so yeah, anyway, I think that's kind of the, the things I would say to like other founders is like, if you just do one or two marketing activities and some, a lot of the times they're in parallel, right? Where it's like running Facebook ads to a lead magnet that does like an email nurture, like that alone can make you a massive company, right? And so, or, you know, a really healthy company. So anyway.

15:44 Totally. Love it, that's great advice. Honestly, that's great advice. And I think a lot of people go out there and they try to say, okay, I've gotta be everywhere all at once right away. And they just don't master anything that way. And so I love your advice. Master one platform, really get down to it, and then email nurture. If you don't have a good email nurture sequence or even text message sequence. You really got to start there and then work back to a platform to send the traffic to that thing, right? That's kind of where I think that's kind of what you described. Thoughts on that?

16:17 Totally. Yeah. I think the, the thing that we see most often is that the, like what it comes down to is you have to look like where your customer is and then focus all of your like energy there. Right. Like, so there's no one, like, you know, like one size fits all solution to all of this. Like, and you get asked this question. I mean, I imagine you do as well as like you teach people like hot here's how to do this. Right. Um, in reality it's like, where's your customer. Like what's the media that's most receptive on that place that they are. Okay. How do you get in front of them? So if it's like, if they, if eBooks are the channel, then it's like, cool. Like, you know, are you trying to get those emails? Like what's the thing like, and it can be a course, it could be an email. It can be all of these different like lead magnet assets. Um, it's like, okay, how do I build that thing? And then where are they right now? And how do I get them to go from, you know, this place to this place to get that, you know, that download to occur. So.

17:14 Love it, love it. Fantastic, man. I love that. So, so mistakes. I mean, all of us try to think that we did an awesome job at building and growing our business, but what were some unexpected hits you've taken that they weren't really ready to have? Hit you.

17:31 Yeah. Yeah. I think, uh, one of them was just like loss of focus at one point. So we ended up building this internal tool, um, for programmatic SEO. Um, and I was talking about it in public on Twitter and it ended up going viral. And then, uh, people were like, Hey, I wanted like, I want this thing. Like, can you make this thing? So we spun it up in a weekend. It got to like 10 K MR in the first 30 days. Um, and we were like, all right, cool. Like, I guess we have to build this now, but in reality, the economics of the business like weren't really sustainable. Where like churn was just incredibly high, right? And the kind of tagline for this company was, and it's called Drafthorse AI. It still exists and we still serve some customers, but what it does basically is it's like, right, hundreds of SEO optimized articles in minutes. So you can give it a list of target keywords you're trying to write for and like, it'll just go and like crank out a thousand articles and you can have them live on your website in like under five minutes. Um, so yeah, it's kind of wild. Um, but the, the thing that we saw with this, um, was that for that type of user, like a lot of it was just like a data dump and it's not like it's something that they're doing on a continuous basis. And so as a software, it's not really a great solution as a service business, you could probably crush it where it's like, hey, we're going to write 100 SEO optimized articles for you a month. It's going to cost three, you know, two grand. And we're going to do all this optimization and all these SEO pieces. Cause like a lot of these people, they'd come in, they'd write all these articles and it's like, oh, well, why isn't it ranking? And like, as we all know, like, you know, SEO, you don't see anything for the first 90 days. Like six months, you just start to feel it. Nine months, you're really starting to feel it. And then at 12 months, you're like, holy shit, why didn't we do this earlier? You know? So anyways, yeah, I think that was the biggest mistake though, was just like getting kind of like shiny object syndrome. And this is the hardest thing as like, as a founder to do, is like how to say no to more things. And that's really my mantra currently is like, how do I, I don't want to say more to like, no more to everything around me. So.

19:38 I think that's great advice and I think it's definitely a common problem with every CEO. And you know, how have you been able to steer around that? I mean, do you have a good team? Do you have a good management team with you right now? Like who kind of keeps you focused on what you should be?

19:55 That's the hardest thing I think every day. Um, yeah, I mean, we're super small still. We're under 10 people. Um, it's, uh, been, I think the thing that I look at is like, what's the biggest, most impactful thing that I can do today. Um, from like, uh, you know, for most companies you can grow in four ways, right? It's like, or really you can grow in three ways. It's like, you need to increase your like signups, like in basically like new subscriptions. You need to increase your average revenue per customer and you need to decrease your churn. Right? Like if you pull those three levers, like you can basically make any company grow. So my job every day is to look at like those three things and like, what are the most detrimental, like of those three things, like what's your, what's, what is the most detrimental currently? And then like, how do I, you know, go deeper on each of those? So like something we just did recently is like, we're doing all these pricing, uh, like tests to see if we can increase our average revenue per customer. Um, and so like, it'll be a two week process. We basically like increased pricing, did some changes and like so far it looks like it's working, but we won't know for that two weeks. But if we can increase that average revenue per customer, then it's like, that's more money for us long -term. Um, same thing on, so like looking at the like new sign -up side or like new subscriptions, like we have all these tests that we're running, um, like basically to try to increase that. We don't know what's going to work yet. And we don't know where those resources are going to be allocated. And then on the churn side, same thing. Um, but like another way to think about this is like acquisition, activation, engagement, retention. Like I'm trying to get new people in with acquisition. I'm trying to activate them to get them to use or do the thing. And like the same process can be used for like an agency or any other type of company. I'm trying to get them to engage. So it's like, how do I get them to use it on a daily or a weekly or a monthly basis? And then how do I get them to stay? So they never leave and they continue to pay me money for as long as I can get them.

21:44 So. So how much are you using your product as the bait for the agency to like, hey, use this to build your agency, use it to build your clients? 

21:57 We have tons of clients like that, tons of clients like that. 

21:59 Okay, that makes sense. Yeah.

22:00 So we built from the beginning, like where you could have multiple like clients or projects within an account. So imagine like you have 25, you know, like we're working with a company and they, they just work with like early stage founders to help build personal brand. Right. So I think he has like 30 clients or each paying them like 5 grand a month. You can do the math there real quick of how much they're making. He has a team behind him, I think of like four -ish, four or five like offshore team members that are basically like kind of doing all the operations. And then his job is he basically like goes and he does, he does like lead interviews with founders to get them to say interesting things. And then he basically chops that up into content for all of their socials and handles all their scheduling and writes all this like, you know, blog content, et cetera, for them. So why, why are they even doing that? Like what we've seen is that like when you as a, individual business owner, and it's different for every industry, but the more media and just attention you have, the more leverage you have within your community. So say I'm a VC backed company and I'm trying to go raise more money. If I'm in front of the whole startup ecosystem more and more, I'm just going to have more notoriety so that when I go for that next round, there's already trust built in. And we've seen this time and time again, where podcasts are becoming this as well, where it's like, founder of a company as a podcast, they sit down for an hour a week. Everything else behind the scenes is automated. An hour a week, they talk to somebody else that has some type of domain expertise within their industry. And then they distribute that to the whole industry. And like, so my friend is doing this with this company and like for him, like he just, it's funny, I got a text message from him like probably three weeks ago and he's like, Hey, one of our guests like just raised their next round, like because they came on the show and now they're like relating, you know, they're relating basically like that activity to being with us and they're a customer for life now. We've now got somebody that's going to champion us. And so I think just some anecdotal examples of that.

24:04 Love it, love it. Dude, I love it. I love models like yours. I love how they grow from the user. It's kind of like a go high level function where they started off as an agency platform just for agency owners and now they've got something like 120 ,000 active agency partners. It's nuts. And I think you can build the same way that organic growth of like, hey, use it to grow you, use it to grow your clients and just grow. And I think that there's a lot of applications out there like that, especially SaaS companies. But dude, I love what you're doing. I love the I actually have not used the product yet. I will. I actually am. I am committed to trying the product out here in the next few weeks. And I'll do a write up on it and post it. But, dude, I love what you're doing. Love where you're going with it. Who would you say is, do you have people in your corner who are kind of holding you accountable or maybe are pushing you through this to get it to fruition? Who's your shout out today?

25:07 Yeah. My specific one is like, I had this boss, his name was Jeff Reynolds. He kind of taught me, so he went to Y Combinator and did the whole SF thing where go to Mecca, see God, come back. And then, so now he runs a B2B marketing agency, but they specialize in like doing like marketing for materials manufacturing companies. So things like wood manufacturers, like home products like windows, door, like it's very unsexy stuff, but we're talking about like, you know, some of the, you know, Fortune 500 companies in the US are these companies. So anyway, yeah, he like, I think is the, he has a great newsletter. If you just go to their website, I think it's reynoldsandmeyers .com. Like it just, it's really insightful. But yeah, so I think that it just like taught me how to do customer like focus things, right? Which is so necessary for like, if you're any company, like if you just obsess over that. But then I think the other thing, and you know, this is for every founder, is like, try to get a group of people that are in the same, like, the same starting point of growth, so that you're like growing at the same time. And so you almost have that same, like you're a vintage, right? And that group can be incredibly valuable. Because like, I don't like, you know, for how I think about it, is I'm not like advice from somebody that's in a different point of the company journey, like, you know, where they're way larger or way smaller is very uninteresting and not valuable to me. But like somebody that's like in that moment, like also in the, you know, in the arena with you at the same time, like that is where you're going to actually get like the most value from, from having that peer group. And so again, I just think that that's like a very, and a lot of the times it's just like, yo, find people that are like on LinkedIn talking about their business or like on Twitter talking about their business and like get into a group chat with like five to 10 different people and be like, yo, I'm having this problem happen. Like any, have you guys handled this or seen this before? Do you know anybody that you can intro me to? And like, that'll be incredibly valuable, especially if they're repeat founders, etcetera. So,

27:11 100%. And that in and of itself is a fantastic marketing strategy. For those of you who aren't doing anything like that, you need to be. And Cody, I just appreciate your time today. I think this has been a fantastic interview. I love your journey. I can't wait to test the product, but I love the concept of the product because I have a full team doing all of what you're describing AI doing for other teams and I'm a little jealous. I'm a little stubborn sometimes when it comes to changing my operations, but keep on going, buddy. I love what you're doing and I'm glad to be associated with you.

27:48 I appreciate it. Yeah. How are we going to help Todd? No, same man. Yeah, whoever we can help and whoever's out there, yeah, just reach out. If you Google me, just Cody Schneider, I should come up. If I don't, I'm really bad at my job. But yeah, I'm pretty active on Twitter and LinkedIn. And you can reach out there or just reach out through swallowai .com. So thank you.

28:03 Awesome. I'm totally putting all that stuff is in the show notes. 

28:08 Appreciate it.

28:09 So please, please, please check it out and take a look at it and we'll catch the rest of you on the next episode. But Cody, thank you so much for taking time to be with us today.

28:14 Thanks for having me, Todd. Excited to come back in the future. Cheers.