The Data Stack Show - 220: From Box Office to Big Data: Bridging Marketing and Technology Through Data-Driven Leadership with Brian Schwartz of SIZE

Episode Date: December 18, 2024

Highlights from this week’s conversation include:Brian’s Background and Journey in Data and Marketing (0:56)AI and Data Strategy (2:12)Experience at DreamWorks Animation (3:15)Marketing Timeline for Movies (5:18)Data-Driven Decisions at Expedia (9:04)Advising High-Growth Companies (14:59)LinkedIn Connections and Networking (17:57)Tension Between Marketing and Data Teams (19:59)Technology Spending in Marketing (22:07)Advice for Tech Leaders Facing Brand Marketers (25:50)Frequency of Replatforming (30:11)Understanding Data Accessibility (33:58)Data as a Product (00:37:58)Overhyped AI Applications (39:00)Underutilized AI Opportunities (00:41:51)AI's ROI Challenges (47:01)Effective AI Support Systems (52:33)Potential Ventures to Pursue Outside of Data (56:04)Final Thoughts and Takeaways (1:00:11)The Data Stack Show is a weekly podcast powered by RudderStack, the CDP for developers. Each week we’ll talk to data engineers, analysts, and data scientists about their experience around building and maintaining data infrastructure, delivering data and data products, and driving better outcomes across their businesses with data.RudderStack helps businesses make the most out of their customer data while ensuring data privacy and security. To learn more about RudderStack visit rudderstack.com.

Hi, I'm Eric Dotz. And I'm John Wessel. Welcome to the Data Stack Show. The Data Stack Show is a podcast where we talk about the technical, business, and human challenges involved in data work. Join our casual conversations with innovators and data professionals to learn about new data technologies and how data teams are run at top companies. Welcome back to the show. We are here with Brian Schwartz from Size, which is an advisory firm for late stage companies. And they also do investing. We have

a lot of questions about that because it's a really unique model and lots of other things to talk about. Brian, welcome to the show. Thank you for having me. Well, you have a fascinating background. We were talking about movies right before the show because you have experience in that industry, but just give us a quick overview of your background. Yeah. So I'm a longtime marketing guy. I was at a digital agency in London for four years, spent about six and a half years at DreamWorks Animation doing marketing for the films and global retail marketing. And then most recently led global marketing for the lodging group at Expedia, focusing on all of our hotel and vacation rental partners around the world. Kind of what I call life 2.0, which is post-corporate world. I now advise a host of

high growth companies, send a handful of boards. And kind of along the way, one of the companies I've been with for a while, I saw lots of problems happening within the business outside of the marketing world, things like supply chain and finance and HR, and decided to build an advisory group with former executives to be able to help these late stage companies across a variety of disciplines. And then the idea is we get in there, we add a ton of value, we get a look under the hood, and then we couple that with an investment arm to be able to look to make strategic investments in companies that we're advising. So Brian, one of the topics we talked about before the show was the interaction between data and marketing teams, data teams and marketing teams. It can be tense at times,

and I think, but when I think you get that right, I think that's one of the magic of these really successful companies. So what do you think of that topic? What's another topic that you're interested in talking about? Yeah, I think that's a great topic. I've seen so many different good things and bad things happen within the marketing tech and data intersection. You know, AI is another topic right now that's very interesting to me. I also think enterprises and how they leverage data is very interesting to me. Everyone's a little bit different in terms of their strategy. Some of them have tons of data, but don't do anything with it. Others have lots of data and are amazing with it.

I've experienced both in my career. So I'm happy to kind of discuss that and explore that as well. Awesome. Well, let's dig in. Yeah, let's do it. Brian, I have a million questions for you, but I have to start at DreamWorks. So you're in an agency in London, but then you spend over half a decade at DreamWorks doing marketing for films, et cetera. And I guess your time there overlapped. I mean, I know a ton about this,

but it seems like it overlapped with what a lot of people sort of view as like the golden years of, you know, such a cool company, like the approach and everything. Can you just tell us a little bit about that experience at DreamWorks? Yeah, it was awesome.

I joke with friends that you can pay me nothing and I would go back there today just because the people, the culture, the campus, everything that was involved with DreamWorks. But in a nutshell, we were DreamWorks Animation. I think some people convoluted and confused the two of them because DreamWorks as a whole, the founding of it was one company with Jeffrey Katzenberg, David Geffen, and Steven Spielberg. And in 2004, they split. And Jeffrey led DreamWorks Animation. He took it public.

And we were focused just on the animated film. Steven Spielberg was on the Universal a lot. They were focused more on the live action stuff that some people know of today. But on the animation side, we did everything from Shrek to Kung Fu Panda to Madagascar. The last one I was working on when I was there was Trolls,

which I would argue is probably the most successful full funnel franchise that was ever created by DreamWorks, even better than Shrek. And it was just a wonderful experience. It was a great experience to work internationally, to be able to identify and understand how different cultures approach business, and then being able to build a business

both from a box office perspective, or retail perspective, a theme park perspective, in markets all across the world, ultimately, not only to drive fandom and excitement for the films, but real revenue and box office or DreamWorks animation. That's amazing. Can you one question I have is the timeline and how you think about that from a marketing perspective? Because, you know, it's not like you just sort of spin up a campaign in a week, you know, for a movie, the development takes a long time, there are multiple iterations, you know, there's characters, there's interaction between I'm sure, like the creatives who are developing the story and the visuals and then also the marketing. That's how long does it take? I mean, you're working on a film for probably a really long time to sort of fully get it to market internationally, right? Yeah. And I mean, animation is a beast of its own. So a typical film could take one or two years. Animation is probably four or five years.

I think some of the studios like Universal have done a better job spending less money and accelerating the timeline. But I think on average, it takes four years to do an animated movie. And my job as a marketer, and my father-in-law liked to joke that I sold Shrek around the world,

was to essentially pitch the story and tell the story. And I can't tell you how many times I've seen the story change and how many times I've shared footage of storyboards with big corporates or with exhibitors, et cetera. And then, you know, myself included, like with Trolls or Comfort Band or something like that, I'm like, man, this, I don't think this is going to be a good film in in like year two and then by year four when I see the final footage of I'm like oh my god this is incredible so being able to see how the storyline develops how the architecture develops how the graphic and the lighting and

all that comes into place is a pretty incredible experience and then I think like you know what I kind of miss a little bit too is you know everyone know, everyone on my team, when box office day came, and most people don't know, but internationally, it's staggered in terms of when the movies are released, it's not necessarily day and date with the US. So you know, the US might launch, you know, a month or two earlier than internationally. So in those international markets, we're all excited for that day following deadline.com and hollywood.com to be able to see the box office reporting to see all that work coming to fruition seeing everyone actually going to the theater to enjoy the film that's great also you're now sort of you know you adjust the daily drive and dj

playlists and spotify for all the parents out there who get the you know the songs that come up from i have the troll soundtrack on uh totally so thank you for that by the way uh so then you go to expedia and i would guess that like in terms of pacing and sort of managing like a funnel where you know people are booking lodging uh the turnaround time super fast on a lot of them right so the there's just transactions you know happening at a really rapid rate 24 7 what was it like to sort of go from you know the super long multi-year timeline, you know, and then like a multi-phase, multi-month international rollout to, you know, we probably have, you know, petabytes of data, you know, from all this transactional stock browsing data, everything. And then you have to turn that into revenue now. Yeah.

So it was night and day. It was the biggest eye opener of my career. You know, what people don't realize, and this has changed, and you look at Netflix and Amazon and some of these disruptors, this is why the legacy studios are not doing nearly as well, is they have no idea who their customer is, right? If you look at Disney, I don't know, four or five years ago, they literally revamped their entire business with Disney Plus to be very customer-centric and have customer data and identify it. If we go back to DreamWorks and we think about how do we know who our customer is, well, let's look at all the different mechanisms. The first is the box office and exhibitors.

The exhibitors like AMC, Regal, they wouldn't give us any customer granular data. The next is retailers who sell our product. they wouldn't give us any customer granular data. The next is retailers who sell our product. They wouldn't give us any customer granular data. The next is theme parks, which we don't own. They're not giving us any customer granular data. So we had no idea who our customers. And by the way, you know, we'd spend upwards of a hundred million dollars in marketing for a film and really have no idea what the ROAS is. So then I go to Expedia and I'm like, oh my God, like they do A-B testing 600 times a day on the website, right? And everything is test and learn and everything is so data driven. And it just, like I said, night and day, and it

really changed my career, both as a marketer and a business professional in terms of like, where data comes into play when it comes to making decisions. Like I still like I was once listening to a podcast, I don't know, like five, six years ago, and someone was like, look, at the end of the day, data is very important, but I make decisions with my gut. Cool, right? But like, to me, like, my gut is important. But like, if I'm not really focused and honed in on the data, I can't make informed decisions with my gut. So it's one thing to go from having zero visibility to having way too much visibility. So, you know, if I kind of combine the two, I just love something in the middle, right, where you are using data to make really conscious decisions. But at the end of the day, you know, you still use your street smarts and what you've learned throughout your career

to be able to make articulate decisions to ultimately drive whatever business outcome you want. I love it. Okay, then tell us about the next step, which is Expedia, and then to size and how size even came about. Yeah, so I think most people don't realize with these marketplaces and let's call Expedia marketplace is they're two sided, right? So there's a supply side and demand side, and it's very secular, right? Like I think marketing is the third piece of it where, you know, if you don't have the supply, you're not going to get the demand. So I was focused on the supply side, but my team was armed with getting more hotel partners around the world on board of all of our 200 points of sale. You know, most people don't realize this is a SPAC.

I think booking is like an $85 billion market cap business. XB is like a $20, $25 billion market cap business. They just got farther ahead in terms of the supply side. They were able to bring on tons of independent hotels in Europe and Asia and really build that supply to then fuel the demand. So, you know, we were really strong with the chain hotels, but it was all about really focusing on independent hotels and driving more of those folks on board of all of Expedia's points of sale. And then ultimately, when you are working with existing partners, there are things in search and sort, et cetera, that you can monetize as well to be able to drive additional revenue from those

partners. So, you know, at XG, I think it's public knowledge. I think it's like 70% of their business or 75% of their business is hotels. Just with the commission rates that you get on hotels versus airlines, etc. It's a very large majority of the business. So it was a really important group that we were focused on in terms of being able to drive these efficiencies and acquisition and retention and all that stuff. And then along the way, just as I was leaving, we acquired HomeAway, which is really more about ramping up the vacation rental side of it. So Vrbo, V-R-B-O, however you want to say it, was kind of their

pride and joy. And we were starting to ingest that inventory into the Expedia platform as well to be able to really drive demand full circle, not just on hotels, but on vacation rentals as well. And then to answer your question, so that's kind of the Expedia days on the transition to size. You know, when I left Expedia, I kind of went on like a personal journey to figure out what's next. I hired an executive coach. I worked with him for a year. And ultimately, you know, he asked me, like, what do I want to do with my life? And I said, I want to be the CEO of a Fortune 500 company by the time I'm 40. And, you know, I me like what do i want to do with my life and i said i i want to be the ceo of a fortune 500 company by the time i'm 40 and you know i'd move up the ladder relatively quick i think i was like 31 or 32 when i was a vp at expedia and it just seemed like the natural

progression and then he asked me why and i'm like i don't know people tell you to do that like like you just constantly go up the ladder until you get to the top. And, you know, I sat back and I was like, wait a minute, this is stupid. Like, I don't really want to do that. I don't think I really want to do that. And then he also helped me work on like a life plan, which is interesting, right? You hire executive coach, why are you working on a life plan? Well, I think the reality is, you know, it's 50, your life is 50% personal 50% work, right? It's about that balance. And even when you're gender, like a male versus a female, female is even harder, right? It's about that balance. And even when you're gender, like a male versus a female, female is even harder, right? Because then you have the family component too, and being a mom,

etc. So for me, I came back with like, what is my life mission? And it ultimately was to help people and give back. And I just felt like I wasn't doing that in the corporate world. I wasn't that being a CEO definitely wasn't going to be there. So I said, hey, this is kind of what I want to do. How do I build a life around kind of these two priorities? So at the time I was living in Seattle, I told my wife, look, I think we need to move back to LA. That's where my network was. And I started to selfishly meet a lot of people to kind of figure out what's next.

And I really stretched myself like, you know, marketing, technology, data. Sure, that's like table stakes. But I started to like meet people that like I just had not come across before. I kind of fell in this world of family offices. I met a lot of board members. I started to meet people in government, started to meet professors and academics, really just starting to understand like what is out there and what are people doing and what do I ultimately find exciting and a really good fit for me. So that journey lasts about two and a half years. And, you know, luckily I did well and I saved a lot of money so I could afford to do that. But throughout that journey, my friend who used to be the chief marketing officer at McDonald's, he told me,

look, go meet 300 people and you'll figure out what you want to do with your life, which I thought was great advice. And I took it. I probably met like 2,500 people over two years. And what it ultimately led to is kind of this world of realizing that I could actually add a lot of value personally to founders of high growth companies. So I think what we don't know when you're sitting in an office with your head down, just doing work all day is, you know, all these things you've learned along the way in terms of process and structure and being able to really lead large teams is actually super relevant for founders who are growing like crazy because they need all of that to be able to professionalize

that business. So I kind of fell into this world of advising a lot of these high growth founders and then ultimately sitting on a handful of boards as well. So that's what I was doing personally. And then one of the companies I've been with for about six years is GoPuff. And while I was in there doing things I'm really good at, like digital and marketing and growth and partnerships, I started to see other issues arise and things like supply chain and HR and finance.

And throughout that journey, I wanted to help them. So I was like, could I go find some adults or former executives to throw out the problem? And that was kind of the aha moment where I said, why don't we bring everyone together as kind of like a dream team of all these former executives, where collectively, we can add a lot more value to these late stage companies than we can individually. So Brian, we actually met through that, we were friends in that journey. And I was hoping you were going to bring it up because I specifically remember, I guess it was probably our first conversation you saying that I am journey and i was hoping you were going to bring it up because i specifically remembered i guess it's probably our first conversation you saying but i am you know part of like where you have

reached out was like i'm on a mission to reach you know whatever it was the time 300 people or or i i even i even think you had some kind of like monthly goal i don't know if you remember at the time but i was and and it was via linkedin and I you know, a lot of us get like, I'm sure Eric would agree, like just time you expand on LinkedIn, like, like, kind of random people reaching out, I guess, unlikely that it feels unlikely in this day and age, you know, like connect with real people that I remember that, like, I think it was part of your message like, man, like, okay, like, I support this, like, This is a really cool idea. I still do it to this day. Whenever someone questions me, I'm like, look, I did it as part of my own journey.

I just loved it when you meet someone with no intentions and I just do it. I think the downside is the platform of LinkedIn, right? Even myself, I've been out of the corporate world for, I don't know, five or six years and I still get like 50 people trying to sell me stuff on LinkedIn every day. So it's really hard to find and get genuine networking. You know, luckily, people like you, John, respond to me and they're open to meeting and I'm able to, you know, be helped to kind of do my mission, right? Help give back to folks as I'm chatting with them.

But it would be great if there was another platform that was much more organic when it came to genuine networking. I mean, yeah, and we could talk about this all day because it truly is a monopoly. Like it is one of the most like monopolistic things out there that I can think of. Yeah. I actually have a good founder friend who told me, he's like, yeah, Brian, I deleted Facebook. I deleted Twitter. I deleted Instagram. I just go on LinkedIn. He's like, I'm obsessed with LinkedIn. I am on it 24-7. It is my go-to social media platform. I mean, the good news, Ryan, is if size doesn't work out,

which I think is very unlikely, you can definitely use your LinkedIn skills as an SDR somewhere, right? You don't have to get through to me for it. There it goes against everything I just told you about. And not only that, you can become a LinkedIn influence. Can I both dream of that? I've had a conversation with my partner, and it's interesting to see where you guys sit on this side of the table.

At some point, I kind of had to make the conscious decision, like for the longest time, I only accepted people I knew on this side of the table. At some point, I kind of had to make the conscious decision. Like for the longest time, I only accepted people I knew on LinkedIn. I kept getting more and more people and more following that at some point I was like, you know what? I'm just going to accept people regardless because of the following. Now I almost have 20,000 people I'm connected with on LinkedIn because of that. Whereas my business partner is the complete opposite. I think he's got like 2000, but it's literally only anyone he's ever linked to.

It's who he actually accepts or connects with on LinkedIn. And that's such a, like, and I actually completely sympathize with like, Hey, like I want this to be a real network, like that viewpoint, but it is such a weird balance where like,

where if somebody has a like small enough connections and this is actually true like the latent tools like you'll get excluded from like all searches i think it's like 500 or 200 connections like recruiter like like you will be like basically blacklisted from a lot of people getting defined too which is bizarre, but you know. Wow. Yeah. Anyways. We need to get something from LinkedIn. Yeah, that would be fun. Yeah, it'd be really fun. Yeah.

Okay, let's get a little bit more tactical. So one of the fascinating things about your background, Brian, is that you understand and have wielded technology and built data stacks to do some really amazing things in a number of different contexts. And you also have experience as a marketing executive. And that's pretty rare, at least, you know, in my experience to find someone who has both of those skill sets and has proven them at an extremely large scale because usually you know when you know if you think about someone on the data team we

don't think about a lot of our listeners right there okay we're gonna get in marketing in the in here to like help with the data stack that's generally like well we're the world you know brown the book yes at a minimum you're gonna say like okay that gives me pause like let's talk about this because there's a lot of baggage historically, right? You know, and some of it's legitimate, some of it's not legitimate. But I'd love to hear your perspective. Actually, let's start with this question. Why do you think that dynamic exists where there's this sort of tension?

You know, it's almost a cliche, right? There's tons of memes out there around, you know, marketing, scaring up things for the data team or vice versa. Why does that exist? Yeah, I mean, look, let's start in the data side of the equation. If you're a data analyst, you're an engineer, you're a technologist, that's what you grew up in, right? Like that's your lane within the corporate world. If you're a marketer, historically, you've either grown up in brand marketing or performance marketing. So some point as you're going up the chain and you become like a chief marketing officer, vice president marketing, someone's going to take a chance on you because no one grows up in brand marketing and performance marketing. So let's go with the brand marketing first.

I mean, we talked about DreamWorks. I mean, it's all brand marketing, right? There's zero attribution. It's above the line. It's out of home, right? It's everything to build brand awareness, which, you know, you have NPS, but it's really hard to actually measure.

And then you get to the performance marketing side and it is more measurable, right? And you do need platforms to be able to actually understand your ROAS and all this stuff. But, you know, collectively, that CMO is still not necessarily a data-driven CMO. The thing I find most interesting is McKinsey did a study in terms of where money is spent within a marketing organization. And most people would assume paid media is probably number one. That was actually 24%.

26% of marketing budget went to technology. So the question is, why is a marketer, brand marketer, performance marketer, not a technologist, right? Like if the majority of the spend from the marketing budget is going to technology, shouldn't that be what the marketing head looks like? So I think we're kind of in like this new world order where you're seeing probably over the next 10 years, and this is no offense to

these people because a lot of them are my friends, you know, all these brand marketers who are leading marketing organizations that are now kind of slowly being replaced by performance marketers, which I think in the next 10 to 15 years, they'll slowly be replaced by technologists who understand technology, understand data, but really understand the customer. And that's where that intersection all happens. So I think historically, that's the biggest issue when it comes to marketers and data teams is marketers just don't have those chops with their expertise. And then what I see a lot of times, because we work with a lot of high growth technology

companies at SaaS. So I'm constantly talking to enterprises, retailers, et cetera, about their tech stack. And what I see is every organization is structured differently when it comes to decision making on their tech stack. So I'll give you an example. I won't use names because I don't want to offend anyone, but I'll give you an example. A large QSR that sells coffee. For example, they have a business team and a technology team, and they were looking for a customer data platform. And I had a whole conversation with them.

And you would think the marketing team is more open to more like emerging tech, things that are better useful for them, that they really understand. It's not the typical Salesforce, Adobe that's so big. And the technology team would be like, look, Salesforce is easy. We can do commerce cloud, new data cloud, we can do everything like, let's just do Salesforce. And ultimately, they say they collaborate on decision making, which is probably true. But the reality is the business is actually making the decision. So when I talk to the technology team, they're like, Brian, we love emerging tech. But the problem is Adobe salespeople and Salesforce salespeople are so aggressive that they're all over my business team.

And my business team is pushing for this legacy tech. So that's one example. And then you flip to another example where, you know, another big retailer, like the decisions are actually made on the tech team, right? Technology is more centralized. It's not just marketing, but it's HR, it's supply chain, it's tech for the whole business. They're making the ultimate decision. And then they have to work with the marketing counterpoints to implement it. I think the smart ones will take feedback from the marketing team. So it's not like they're just being pushed to technology onto them. But at the end of the day, the marketing team is not actually making decisions. So I think you have this world where

in some organizations, the tech team makes decisions. In some organizations, the business marketing team makes decisions. And I think the best organizations, it's actually more of a collaborative approach where the tech team is really understanding the implementation and the issues that might come as a result of putting that tech into the stack. But the marketing team is really defining the business problems, the business issues that the technology is going to solve. Can you speak to our listeners who aren't in a leadership position on the tech side or the data side, and the CMO or the marketing leader at their company is more of the brand marketer type that you talked about? Give them some advice, help them navigate that. Because like you said, and I 100% agree that over time, technologists,

marketers are going to actually take over those positions. But there are a lot of companies who are still in a place where maybe the data leader, the technology leader sees a huge opportunity to leverage data to accomplish some things in the business, but it's really hard because of the brand marketer mindset and the marketing leader. Yeah, I mean, it's a bigger problem where ego, EQ, emotion, all that stuff starts to come into place, right? Like I have some brand marketers who are very successful, worked at big brands who like are in their 40s and 50s who are taking courses on AI.

They're trying to educate themselves. They realize they're not the smartest person in the room. Those people are great. They're probably going to be super collaborative. I think when things like ego come in or the saying, hey, we've always done it this way. We're not going to change. When that type of mentality comes in, it's really hard for that data or technologist to be able to work with the marketer. But I think what the marketer

needs to realize is, look, marketing touches everything. The average tenure of a CMO is 18 months because it's either working or it's not. And your job within an organization is to get buy-in from all of your executive stakeholders and partners. And I say the two biggest ones, in my opinion, that the marketer should be hand in hand with is the CFO and the CTO or the CIO. You know, those are going to be your biggest champions when it comes to being able to be successful in your role. Yeah. I love it. I love it. John, I've been monopolized. I realize I'm just asking you a bunch of questions here, but I know you probably have a bunch of questions,

so just interrupt. Yeah, I think there's so much to talk about in this data marketing relationship space. I had the unique experience of data background, collaborated with marketing for a couple of years, and then ended up running data and marketing together at the same time. So I kind of have a couple different avenues of like, one, like you're kind of the data producer, and you like flip and you're kind of the data consumer. I think through that experience, one actually like kind of what brian said was like

man i do think the future of this is going to be a lot more technologists in marketing but and two like i do wonder if there's going to be more companies that choose to basically organize around like digital like hey we'll just have like a chief digital officer or something depending on the company size that's basically i have technology and marketing yeah but aside from that assuming it's more of a traditional which most companies still are of marketing and technology separately yeah brian i guess i'm curious like if you think of any like specific specific examples that you've dealt with where there was conflict over, I'm thinking maybe a technology decision or just a general path forward and just any

insights of what was a breakthrough moment for the teams where they could see each other's perspectives or where somebody could jump in and help clarify anything that come to mind? Well, I think, look, because we work with a lot of technology companies of size, what we see all the time is there's a lot of either competitive players, legacy players, there's something that they're doing or replacing. And a lot of times where there's conflict

or where something comes to head is when you're doing something to the stack. The big example is a replatform, right? If you're replatforming, it's all hands on deck. Everyone in the organization from the CEO to all the executive team is really focused on the replatform. So like that's where you, it comes back to, it's like, it's bigger than technology and it's bigger than marketing. It's more about like the emotional intelligence and the buy-in of the executive team to all be on the same page and stop in the same direction. I think when you have problems and conflict is when there's not alignment, right? There's not alignment from the top. They're not stopping in the same direction. There's ego alignment, right? There's not alignment from the top. They're not stomping in the same direction. There's ego involved, right?

Things that make it so there's not uniformity in decision making. To me, that's where I've seen problems come up when it comes to, you know, like a replatform or something like that. Yeah. Speaking of replatforming, I'm curious, since you've dealt with a lot of different companies, how often do you think companies needlessly replatforming, I'm curious, since you've dealt with a lot of different companies, how often do you think companies needlessly replatform? And how often do you think it's actually the right time? What a great question. I think every two years, right? I think I'm going to rephrase the question, how many companies are currently in a digital transformation?

Right? Like, and then replatforming comes into that, right? It's like, I don't know, I think it's another McKinsey style, like like I think 75 percent of companies are currently in a digital transformation. Right. So like when are you not in a digital transformation? When are you not replatforming? Just like a broken structure of like a broken structure that, you know, who benefits the most of it? It's these big consulting firms. Right? They benefit the most of it. They constantly have work because everyone's constantly going through a digital transformation.

I forgot who I was talking to the other day, but they said, hey, we're done. Like we finished our digital transformation. It was five years ago. We're at the end of it. Like, we're good. We're transformed. I'm like, wow, that's like the first time

I've ever heard anyone say that when we start a transformation, we're done and it was successful yeah yeah good yeah good for them i i think this is my quick take on that i don't i don't feel like i have a good a good number per se but i think there's two interesting components to it one is when i like i got to talk to this company the other day and they got acquired like a year or two ago. And then it had been like 30-something years prior to that, and they just got by for so long with like no budget, like some homegrown things, like a couple developers.

And really like just in an impressive way, made a ton of money like in their little in their niche and i just have a ton of respect for that when people are able to do that however like fast forward they're still running that way and they were in one of the one of the areas impacted by one of the hurricanes this season and they had a i think it was over a week downtime which was like a multi-million dollar like problem for them so it's just interesting when in your marketing and probably in a lot of ways like constantly think about rois but when you think about like this transformation of the tech piece of it like

you can get like so far right and it often takes some kind of event for these companies to decide to do something. But was it worth it? Like, yeah, probably. Like, over, like, 20 years, if they got by for this and they had one event, like, even though it was, like, a million-dollar event, it's probably still worth it. Yeah, I think the other thing, too, is with the bigger corporations is the question is, is the CEO still the CEO by the time the quote unquote transformation timeline? Yeah. Right. Because like you might have completely new management and then it's like, do you start all over?

Do you stop? What do you do with so-called transformation? Yeah. Yeah. When you think about a data stack. So let's just talk about about in the context of size. So you go in and you have executive advisory across a number of different functions in the organization. And a tech stack obviously impacts, or let's say a data stack specifically, impacts a number of those functions.

How does size approach that? Like how do you, you know, let's go into a later stage company and I'll just paint a scenario for you. So let's say we have, you know, some data, but we're not drowning in it. We have, you know, some stack, but we really aren't using the data to sort of drive the customer experience or, you know, or drive decision making at a scale that would have, you know, sort of stepwise impact on the business. So from a technology standpoint, of course, there's people there, but like, where do you start from a stack standpoint? Yeah, I mean, usually, how good is your data? And how accessible is your data, right? Everyone's

like, I have data. But there's like okay cool like what can you do with it right and then like the next evolution is okay do you have data then do you need like a customer data platform like you need a cdp to be able to actually leverage that data can you access it from snowflake how do you actually get to the data so my my first question to everyone is like what's the story with your data? Is it structured? Is it unstructured? Do you have access to it? How are you using your data? And then the next question is, okay, let's say it's all pretty good. And the question is, okay, how are we then going to put the marketing hat on, use that data to really focus on customer

lifetime value and our cost of customer acquisition, right? And be able to really hone in on personalization, marketing orchestration, being able to really get our customer LTV up exponentially, and then figure out a way to use data to make better informed decisions on the acquisition side when it comes to where our organic and paid media spend is going. Makes total sense. And in the late stage companies, and you see a number of these, what state are they generally in when size engages them? You know, because, and part of the reason I want to bring,

like I bring this up is, I think each of us, when you brought it up earlier, Ryan, when your head's down day to day, right? You know, I'm grinding it out. I'm trying to do good at my job. I'm trying to advance my career. It can be hard to sort of zoom out and say, OK, like a larger perspective. And so a lot of times you can feel like, is every company, like, is their data screwed up as ours? Is there slack?

You know, all that sort of stuff. You see, you have a very wide purview in these later stage high growth companies. What is it like? Yeah. I delineate between consumer and tech because we kind of play in both worlds. So on the consumer side, it's not great, but here's the thing. It's also not great with the bigger enterprises too. So it's not just a problem for the high growth companies.

Now the solution set is different, right? Things like a Klaviyo or Shopify, you know, the platforms for these smaller, more emerging companies is very different than what a tech stack could or should look like for a larger enterprise. So I think they're both screwed up, but the solutions are a little bit different.

For our technology companies, it's probably the opposite. Their data is awesome, right? Like, they are literally selling a product based on customer data. Like one of our companies, it's a company called Signified Free IPO Company. What they do is they essentially take all of the different transactions that are happening for e-commerce companies. And they essentially see 98% of shoppers across the US and they're able to identify fraudulent or abusive customers. The only way they can do that is by having a killer data stack and data support to be able to do that, but it's foundational for their business. So that's where I kind of delineate. I think these consumer companies, D2C, what omni-channel companies, that's where you see

problematic issues with the data. I think a lot of these technology companies, the data sound, the question now is how do you layer on things like Gen AI to be able to make the data a lot more useful? We have a company called Quantumetric. What they do is they follow the customer journey and identify digital friction along the way. So right now there's session replay, someone has to go watch 2000 sessions, figure out problems that are happening in 2000 sessions. How do you take Gen AI to essentially tell you what's happening in all the sessions? You don't have to go watch 2000 sessions. You're taking all that data, but you're making it so much more useful for the end user to be able to then leverage that data in a way that's most

impactful. Do you see a lot of tech companies, you know, just say like SaaS companies, right? So we're providing software, you know, to some business, to solve some pain point that they have. Do you see an increasing number of those productizing and monetizing data as a product or an asset as opposed to just delivering a software product, you know, that people use to accomplish, you know, whatever testing you do accomplish. And I think it's a hybrid of both. Again, I think it depends on what the technology is and what the business is, if that's a feasible solution. But I've definitely seen both. I definitely see companies like I have a company right now that I've definitely seen both. I definitely see companies like, I have a company right now that I've known the CFO for a very long time. He comes from the family

office world. Their whole business is focused on unstructured data, right? Is somebody put something in a Google spreadsheet or Word doc or something like that, and you actually have data there. But how do you get access to it? How do you be able to leverage it when it's not in a centralized platform? So there are companies like that where literally data is their whole core infrastructure and business. And there are other companies where it's exactly where you're saying it's truly software SaaS product, but they're leveraging data on top of that to be able to optimize their software sales offering. Yeah. Yeah. Makes total sense. Okay. We would be remiss not to discuss the AI.

We have to talk about AI. I mean, we've tried to see how far we can get into the show without talking about AI. I don't think we've ever done a full show. Okay, John, you get the first question on AI. I would be curious because you've got such a broad view over a lot of different companies, like kind of this, what do you think the most overhyped part of AI is as far as application? Because we're talking about AI amongst sales, ops, like all these different things. Maybe overhyped and underhyped would be fine. What is most overhyped for this application or for this group and maybe underhyped or was underhyped for?

Well, I think overhyped is the entire category, right? Like AI is very broad in terms of the use cases and what you could actually leverage it. You know, I mentioned before the show is that, you know, I met a woman whose grandfather's thesis in 1923 was on AI. So like AI has been around for a really long time. Now the evolution is very interesting. I think all of this craziness of AI started when people actually saw what OpenAI could do with chat GPT. Like the examples and the use cases of literally like language translation and tutoring and like things that you're like, oh, my God, like this is crazy.

It could totally take over. Now, are we there yet? Probably not. Right. Like, I don't think people are using. Let's talk in the consumer versus business. I don't think consumers are using AI on a day to day basis to be able to better their life. Now, I mean, we saw what Elon Musk

launched with his robot. That is something that consumers could use using AI and robotics to actually better their life. My wife would be the happiest person if a robot folded her laundry or our laundry every single day, right? That would be a win for everybody. So I think that's kind of the overhyped, which is like, it's just such a catch-all for everything right now. And it doesn't really have use cases for everything that people are actually using. I think the underutilized aspects, which we've kind of previously talked about, which is just different business units that can leverage AI that you just don't really think about, like customer call center, for example.

Somebody who's leading a customer call center who's been seeing staffs of anywhere between 200 to 5,000 people who are answering phones all day who are now being succumbed with, hey, I could actually have voice AI do this and you don't actually need a person to do it. And it sounds just like a person. And they're coming back to the conversation like a marketer versus a technologist. You know, at least the marketer is a little savvy with tech because they're, you know, it's so critical to their business unit. The question with a customer call center person is outside of whatever their CRM sales force is to be able to track customer call centers, like how savvy are they when it comes to like AI,

like influencing and potentially, you know, changing the way that work is done in their business unit? You know, I think they're getting a really big like learning right now. And the companies that I see are doing the best with it for our conversation before is when that customer call center lead P&L owner reaches out to their CTO or CIO, and they're like, please help me partner. Please help me figure out how to best optimize my business area. So I kind of think that's the understated part when we look at businesses and we look at kind of low hanging fruit where in that case, you could save a bunch of money with voice AI, you can have just as good of a customer experience. There's a real business case for it that's totally under leveraged and underutilized because it just comes

from a legacy leader who doesn't really understand that category. But the best ones are the ones who are educating themselves, partnering with people who are much smarter than them to be able to really take advantage of it and be at the forefront of AI for their business unit going forward. And the other part of that too, I think specifically in that call center and I think ops, I'd say ops in general, right? And then there's other things like maybe call center that I think is a great like underhyped area. It's interesting too, like it's not just like the people and the teams, it's also the tools. Like if you, like I worked, one of my first data roles was in a call center.

And, you know, like some, you can get like some of these, some of these tools, not there's some neat ones too, but like some of these tools are like, you know, 30, 30 years old. And you have this big implementation of some kind of call center software. It's not like, it's not Salesforce. Salesforce is clearly kept up with technology. So they're your own Salesforce, just to give an example. They've been kept up and they can integrate things wherever. But if you're stuck on this, you've got multiple sites connected together, all this complex networking, and you're in a physical call center,

it's like, oh, let's just slap air on top of this. From a technology standpoint, it doesn't work. Whereas in marketing and sales, it's like, oh, let's just slap air on top of this from a technology standpoint. It doesn't work. Whereas in marketing and sales, you're like, oh, cool. Salesforce has agent for this new thing and we can call them and they'll implement it or focus on what they'll implement and we can

do it. Time to be a platform. Yeah, time to be a platform. It is interesting, though, just how things have evolved because i and we take for granted i think sales and marketing like tends to be like close to you know like more technologically advanced but there are yeah many areas that like maybe could have been that way but because there's no like sales force to build on or whatever like they aren't yeah yeah i would just add to like when i was at expedia we had like a tier one a tier two

and a tier three call center right like agent so you know in tier one are taking those like basic question the tier two is more advanced the tier three is like hey brian just got an email from some dude yelling at me because he found me on linkedin about an expedia experience send them to the tier three customer call center person. The reality is like, I think with things like voice AI, like it could replace the tier one call center agent, but it's actually making the tier two and tier three call center agents more impactful. I think that's what we don't realize. We think of it as like, it's replacing a job or a call center, like it's replacing a person, but it's not just doing that. It's actually making your employees better and

more impactful at their job. Because in theory, all of the small things or even the small things, all the things that the person's calling in for and the issues is already self-identified before it actually gets to that call center agent. So they're just much better at their job when they're having a conversation with the customer. Brian, do you work with any AI tech companies? Or like, you know, have you looked at any AI tech companies? Yeah. Like from a size standpoint? Yeah, we have a handful.

Okay, so one of the questions I had is on the COGS side of the business, because, you know, it's not cheap to rent GPU space. Earlier, we talked about, you know, supply and demand. And so getting costs under control for an AI company, or even, you know, if you just think about a business that's trying to implement AI, let's say it's, you know, a large corporation, right? We want to implement AI. You got to look at the options.

Well, to do this at scale actually isn't cheap in a straightforward manner. Can you just speak to your perspective on the cog side of it, both from just a pure technology standpoint, right? Like I want to go, you know, rent some APIs, or I want to, you know, sort of build some DIY based on, you know, something where I want to buy SaaS, and especially the companies that you work with. I'd just love to get an update on it. We've talked about it on the show a couple times, but I think it's been a while since we've talked about how are the COGs going to work? Because we know it's high impact. But to your point, you'd have to show ROI from the technology investment somehow, and companies have struggled to do that. Yeah, I think our best companies are either replacing costs, like they're making it

more affordable, or they're driving incrementality in revenue, right? Like, I think that's their pitch when it comes to the end user as to why they use AI. So you know, one of our companies, for example, they take a product catalog from a retailer, then they use Gen AI to create upwards of 50,000 landing pages to help them organically win in long tail search on Google. Crazy, right? But you know, like for a big retailer that should not be named, that's a big electronics retailer, you know, they drive like 7% of site traffic to them. So you know, that's not a COGS thing. But that's an incrementality in revenue and site traffic that ultimately drives real sales. So that's one side of the equation.

And then I think on your side of the equation is like, are we saving on some physical cost, right? Or some cost that we're spending that we don't need to be spending on. I think that's where like that call center example comes back up where, you know, like the cost, I'll just give you an example, like the cost per minute with a live agent might be $3 or $2 for the retailer or brand, but the cost using voice AI is 80 cents. So that like, it's a no brainer in terms of the business case. But then the question becomes is, is the customer experience going to change at all? Right? Because it's like, if you think for some reason, the customer is not going to have as good of experience, is it worth the extra $1.20

or $2.20 that you're going to spend on that live person versus using AI? Yeah. That makes several cents. And I think on this topic, it is expensive compared to

servers. Compared to what we're used to. It's not expensive compared to like servers, like compared to like what we're used to. Right. It's not expensive compared to people. And I think that's where a lot of the hype is from. Whereas I'm thinking about hourly time, DPU time versus hourly people time still comes out ahead. I think every scenario, but to Brian's point,

like it's like, did they, cause we've all, I'm sure at this point, I know I have had some frustrating experiences with automation and then even the AI automation. You know, I can tell that they're using some kind of AI, but it's annoying. And I want to start with like, I've already read your help center.

Like, that's why I'm here. Contact us. Like this, I really want to name who this is, but I won't. This was a very major technology brain that I'm dealing with. And their portal was broken. Because I'm a friend with them. Their portal was broken. And it was hitting contact us.

And it pushed you through an AI agent first. And then it'd be like, it went in some kind of loop. And then I had to grab a dropdown to fill in something in the dropdown. No, it was actually impossible to get in touch with their, with, with their whole partner's team. So I had to reach out to like the consumer team to get like transferred into the partner's team to talk to somebody and get it figured out.

And it took like four or five days. That's still a really important topic because like, you know, they, the companies think that they're doing a great job by having you self-service and use the ai to solve the problem we don't actually have to talk to someone i think the reality is most of the time it just doesn't work and they're actually doing a terrible job and creating a poorer customer experience like the times i've talked to people like i think

there's a case study in corona with their call center and how many people they were being able to service using AI and chatbot and all that stuff. But I've had experiences even with companies I've advised, big companies, where the customer has a terrible experience. Because I'll pick on GoPuff. I know they're going to hate me for this. I used GoPuff. My order was not delivered. There was no customer call center. They were so happy that they didn't have a customer call center. I'm chatting, I'm chatting, I'm chatting. There's no response. There's no response. I finally get a response. By the way, it's like 11 o'clock at night. I go to bed. I finally get a response at 3.15 in the morning from a physical human as to like what happened with my order. And I still couldn't call someone. So like, of course,

they're my guys. I'm going to keep using GoPuff. I love them. But if I was any other customer, I'd be like, I'm never ordering from you again. Like I couldn't just call someone and figure out where is my order. It's an awful customer experience. Yeah, exactly. And even, and I'm going to put my data hat on, even the tracking is an nightmare. Imagine you're like AI agent, I can't get to this group and then you end up like reaching out to the wrong group. So I'm wasting like somebody in another business team that's time to get me transferred into this other group. So it's horribly inefficient. And even for the company, if I could just reach the right person directly, I'm more efficient.

I will give another example on the positive side. And I'll name the company because, you know, both of you are sort of, you know, have to be veiled in secrets. Yeah, you mentioned good enough. So I was helping my wife with this little venture that she's creating and you know she creates a squarespace site and you know a number of other things you know sort of getting doing this cool thing going and she tries to create a google workspace um instance through squarespace and that experience is generally like so smooth and they've done a great job with that and it just fails and it gets into a crash through that's like pretty inexplicable you know so i sit

down and look at it and it's like i can't figure this out and then i try to go log in through google you know with the domain eric would be like the page calls like your inspection i mean i was like i was trying to figure everything out right and then you eventually through, you try to log in with Google and reset the password and everything. And they're like, oh, this is actually, this is created by a reseller. So you have to go to the reseller. It's like, oh yeah, we've got some issues in Squarespace. Right.

So eventually I was like, okay, I can't figure this out on my own because, you know, Squarespace holds the keys to this. And so I go through their support and I end up with a chat and it was really helpful like it asked me a few questions it pointed me to like the right documentation that didn't explain everything but gave me a few things to try I tried the documentation you know the things in the documentation it didn't work and then at the end of that journey, they said, okay, you need to email someone from support. And I emailed someone from support and they like, I don't know.

I don't know. I actually don't care if it was AI or a real person. It felt like a real person. And they're like, you need to do this. And then it got resolved. And I was like, that was great. Like, it was really nice. And I'm sure that AI is all throughout that. But like, I didn't even

think about that. It was just like, Oh, it just felt natural that, you know, I'm sort of they're pointing me to the right place. Okay, Brian, we're at the buzzer here. But I have one more question for you. And I'm just going to tell you right now, it's a little bit of an unfair question. Because you talked to 2500 people, you have your life plan. But if you had to 2,500 people, you have your life plan. But if you had to go start a company, what problem would you try to solve? Like what problem space would you go after if you were just going to go start a company and be the CEO of a company? So I would never start a company and be the CEO of a company. But I like helping people.

And this is probably not going to be the answer you thought you were going to get. And it's probably a little bit of premature, but do you guys have dogs by chance? I don't. I don't actually. I have multiple kids, which is why. Multiple dumb children don't play team.

I think my wife had this idea. So the thought was, can I help her commercialize it? I think 50% of people who have dogs care about the dog's paws after they go for a walk and 50% of people don't care. So let's talk about the people that don't care. Dog goes for a walk, gets dirty, disgusting, goes on the couch, goes in the bed, whatever. 50% of people like my wife are like, oh my God, this is the grossest thing in the world.

So what do we do? What do I do? You know, I have a little poodle. He's like 12 pounds. I pick him up when I get back from a walk. I take these like wet wipes. I like wipe the paws. And then he tries to eat me and I let him down.

He tracks like little paw prints. Same with you. So her thought which i think is a great idea so we'll see if we can work to commercialize it was actually build something that's like a contraption that is kind of like half golf ball cleaner for the paw or they can walk in and they can damp it half like dyson hair dryer to immediately like make the paws like they're getting groomed as like fluffy as possible. And then the cool thing is, you know, what I learned is the paws are actually meant for

the elements. So soap on an ongoing basis is actually not good for the paws, but being able to build some type of soap like material that you can create a subscription product as well that goes into this contraption. So every two or three months, you got to refill it. So she had this idea like three years. And by the way, the reason I'm sharing this idea is everyone has ideas. It's all about can you actually do something? I'm okay with sharing it because it's like, okay, go build it if you could build it. So like three years ago, she had me reach out to an executive who did just like Dyson. And I paid for a consulting call. And she's like, this is great, you should do it. Like and she gave some like Dyson. And I paid for a consulting call. And she's like, this is great. You should do it. And she gave some advice and guidance. And then my wife just

never did anything. So this idea is kind of stuck in the back of my head. And now that I'm in Austin, one of my good friends who used to live in Hong Kong who lives here, he has a product development studio. So they actually build consumer products. And then my other good friend has literally financed most of the consumer companies here in Austin. So the three of us are kind of getting together and saying, hey, should we like build this thing and find product market fit and sell it on Amazon and D2C and all that good stuff. Now, the reality is not one of us could actually be the CEO and run it because we all do 100 different things. So we'd actually bring in a CEO.

So it's not you're a, hey, here's a tech company or whatever. Something that's fun that we're working on. I will leave you with two other ones that are probably more in line with what you were asking that I'm unfortunately never going to solve. But I think there are two big pain points that if someone listening to your podcast would like to solve, I'm happy to help finance it.

One is health insurance. So I had like One is health insurance. So I had like the best health insurance you could pay for at Expedia and DreamWorks through my employer healthcare. I do just as well, if not better now in my kind of life 2.0 and my health insurance is terrible. And the question is, you know, why can't I pay for that health insurance as a individual independent contractor that I had at DreamWorks and Expedia? And what was crazy to me is when I was in California during COVID, my wife was consulting,

but she was on payroll as a consultant. So when she left, she was, quote unquote, unemployed. But because she was on payroll, and she left not because of COVID, just because of her term, when I was talking to Covered California, which is the one that does health insurance, you know, they're like, oh, do you have any unemployment income? And I'm like, yeah, sure. So, you know, they're like, okay, here's your new deductible. Here's your new costs. Here's your, what you get. I had to pay $3 a month for my insurance. I got 97% coverage, no deductible, no fees on medication. It was like the best insurance you could possibly get because of the CARES Act with COVID. So the government was

funding that. So my question is, why can't I essentially unionize 1099s, independent contractors, not the Uber or Lyft drivers, but people who want to be this way because of tax purposes and want to own their own business to be able to buy that type of insurance. So that's idea number one. And then the second idea is I just think college education is flawed. You spend anywhere between $50,000 to $300,000 on college education. And what do you get from it? I don't know about you guys, what you studied in school, I studied political science and economics. I don't use either of those right now in my career, I never have. And I think people go to school for kind of three reasons. One is to get a job. Two is to go to more school to get a job. Three is to kind of

come of age and figure out who they are and do stupid stuff. And then I guess there's a fourth, which is like society tells you and your parents tell you to. So my thought is like, could you essentially figure out some way to solve those four problems without going to college? And the idea is like, could you essentially create the equivalent

of like a gap year where, and I guess this is very telling to this conversation topic, will you create best in class education and things like data science, programming, engineering, digital marketing, things any company essentially needs, and be able to do that when you're 19 years old in a rotational program in places like, you know, Sao Paulo, Tokyo, Barcelona. So, you know, and then the idea is that the big corporates who've now said you don't need a college degree, like Google and Facebook can recruit directly from this program. But so can the small to medium business here in Austin,

Texas that needs an engineer or digital marketer. So the thought is, look, you get a job, you come of age because you get to do stupid stuff in fun places around the world. And hopefully, you make it a lead enough that it ticks the box that you don't necessarily need to go to college to ultimately figure out what you're going to do with your life. So if anyone wants to do either of those, I'm happy to support that. I love it. My eight year old son was asking me about college because some of his cousins, you know, are sort of, you know, starting to look at college and all that. And he this resonates with me because he was asking me like you know where do you think i'll go to college and without thinking my gut response was i hope that by the time you're ready for that college is a drastically different thing than it is you know for your cousins so i really resonate

with that yeah the last thing i'll say is i have a friend who you know saved for college for his daughter and he said when it came time to go to college, he said, look, you can go to college. I have no problem. Or I'll give you $25,000 of the $200,000 now and you can go start a business. And I'll be here to support you and we can learn along the way.

And if the business is successful, we'll keep investing more of your college fund and education into the business. Love it. Love it, love it. Well, Brian, and education into the business. Love it. Love it. Love it. Well, Brian, this has been an incredible show. Thank you so much for giving us some time and keep us posted on the various ventures. Sounds good. Thank you guys. Really appreciate it. The Data Stack Show is brought to you by Rudderstack, the warehouse-native customer data platform. Rudderstack is purpose-built to help data teams turn customer data into competitive advantage.

Learn more at ruddersack.com.