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Marketing School

Why People Hate Agencies

18 min episode · 2 min read

Episode

18 min

Read time

2 min

Topics

Startups, Sales & Revenue, Artificial Intelligence

AI-Generated Summary

Key Takeaways

  • Agency perception problem: People dismiss agency owners at conferences but engage with product founders because agencies represent labor costs while products offer compounding solutions to problems without human scaling limitations.
  • Geographic compensation strategy: Evaluate employee pay against local market rates plus performance incentives rather than matching US wages globally—a ten-year employee earning enough to buy a house every two months locally still left for potential double compensation.
  • Mantis AI capabilities demonstration: The tool finds podcast advertisers, identifies decision makers, personalizes outreach emails, and schedules sends from Gmail with a single prompt—eliminating lead generation excuses for sales teams using general AI agents.

What It Covers

Neil Patel and Eric Siu explore why agencies face negative perceptions compared to product companies, discussing team retention, AI integration, Meta's Mantis acquisition, and audience capture traps.

Key Questions Answered

  • Agency perception problem: People dismiss agency owners at conferences but engage with product founders because agencies represent labor costs while products offer compounding solutions to problems without human scaling limitations.
  • Geographic compensation strategy: Evaluate employee pay against local market rates plus performance incentives rather than matching US wages globally—a ten-year employee earning enough to buy a house every two months locally still left for potential double compensation.
  • Mantis AI capabilities demonstration: The tool finds podcast advertisers, identifies decision makers, personalizes outreach emails, and schedules sends from Gmail with a single prompt—eliminating lead generation excuses for sales teams using general AI agents.

Notable Moment

A Microsoft engineer demoed an unreleased Windows Phone in China, only to watch Chinese officials immediately pull up the exact same technology on their computers before official launch.

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Episode Transcript

One thing I think we should talk about. Let me ask you a question, Neil. Why do you think it is that we've tested this in the past. Whenever you've introduced yourself as a product person versus an agency person, you get a different reaction. Why do you think that is? So you're saying when I introduce people, like, hey. I'm Neil. I do product. Okay. Maybe I'll I'll just use myself as an example. Okay? So when I used to go to conferences, I would test, like, hey. I have I I I'm in software or, hey. I I I'm in, I have a marketing agency. Right? Whenever I would say I have a marketing agency, they start looking around the room. They they wanna walk walk me in a different direction. Or they look down on you. Or they look down on you. Yeah. I think it's both. They look down on you. They look in a different direction. Now when you say your product, they're interested. Tell me more. Right? Yeah. Why do you think that is? Well, I I think people wanna know what kind of product you have to offer. If you're in software and they're like, oh, can this actually help my life or make, you know, something easier for me? If you're if you're saying you're agency person, they look at it as like you're pitching them for their money. If you say, like, you're a software product person, they look at it as, like, oh, maybe you have a solution to a problem that they have. Yeah. So the way I look at it, Neil, is when you have good experiences with the product, you know the product continues to compound and you know it's reliable. The problem this is why I think a lot of people don't they they dislike agencies is they've had a lot of bad experiences. Because once you find a really good person at an agency, you wanna work with that person forever. You're gonna try to get maxed utilization out of that person. That person ends up flaming out sometimes. Right? No. That's why a lot of agencies, they they throw a lot of people at the problem. You you have four different forms of leverage. Code, capital, media, labor. Labor is the oldest form of leverage. Okay? So agencies historically have thrown people at the problem, and that's why they get a they they get a bad rap. Right? Versus with a product, it continues to get better. So my point of saying all this is the the lesson I was giving to my team is like, hey, guys. Like, I look at our people, like, how we build this company as a product too because we we're gonna need to scale and I we we need to continually bring revenue per employee up. But it's not to say we're gonna cut 30 to 40% of people just like that, but we need to continue …

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Tools

  • MantisRecommended

    by Meta

    Mantis AI capabilities demonstration: The tool finds podcast advertisers, identifies decision makers, personalizes outreach emails, and schedules sends from Gmail with a single prompt—eliminating lead generation excuses for sales teams using general AI agents.

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