What ChatGPT Means for Business Owners
Over time, Shawn Busse writes, the chatbot may change everything, but for now he’s a little skeptical.
Here are today’s highlights:
A mixed martial arts fighter’s TikTok reviews are rescuing Las Vegas restaurants.
Buy with Prime will soon be available to third-party sellers.
Will a wave of tech layoffs bring a wave of startups?
In-N-Out decides to risk being just another McDonald’s.
With the observance of Martin Luther King Day on Monday, the Morning Report will next hit your inbox on Tuesday. The 21 Hats Podcast Dashboard will be published as usual on Monday.
Shawn Busse weighs in on what ChatGPT means for business owners: “ChatGPT is the stock photography of writing. Hear me out. When I started my career, stock photos were just hitting the scene. The ad agency I was at would buy these ‘discs’ of photos, and I would have to dig through hundreds of banal images to make something work for the client's design. These images were a far cry from hiring a REAL photographer who could generate a unique image that fit the client. But, my employer cared more about margin than quality. The clients didn't have access to these discs, so my employer could charge a stiff fee for these images. Not as much as a ‘real’ photographer, but also a LOT more than the cost of the disc. Over time, stock access became ubiquitous. Clients eventually figured out there was only a low value for it, and came to assume most imagery should be free (or nearly so). Smart agencies and clients realized that hiring a photographer was now a path to differentiation.”
“ChatGPT will change everything. The algorithm makes producing cheap, ‘okay’ copy infinitely available. Clients of digital marketing agencies will start to wonder why they are paying ANYTHING for a blog post if they can just tell a robot the outline of an article and keywords to use.”
“So what is a business owner to do? First, don't pay for something that has low value. Stock photography is great for some things—if I need a photo of a wrench, I buy a 99-cent image. But, if I have a page on my website that talks about the team and how great they are, I need to show REAL PEOPLE.”
“With writing, tools like ChatGPT can be great for summarizing a set of information. Like meeting notes—I can see recording a meeting and pushing it into the computer to summarize the findings. Conversely, when it comes to communicating remarkability, showing something new, or talking about your specific culture, trust in humans.” READ MORE
Keith Lee, a professional mixed martial arts fighter, is saving Las Vegas restaurants with his TikTok reviews: “Now at 8.6 million followers, the 26-year-old professional athlete began posting on the video-sharing app in 2020 to help with his social anxiety and interviewing skills, Lee told Insider. He started by sharing cooking videos and clips centered around his wife and two children. His relatable family content earned him a large following, but it was his extremely honest food reviews that made him the 13th most followed account on TikTok for December, according to Lee.”
“Lee began using his growing platform to highlight food from small restaurants in his area that struggled to attract business after a viewer contacted him asking if he'd review their parents' restaurant, he said in a TikTok video. His positive review of the food garnered over 20 million views and tens of thousands of comments.”
“In January, he responded to a similar request from an employee at Frankensons Pizzeria in Las Vegas. This time, the video raked in nearly 35 million views and gained the attention of local news. ‘You literally change lives with one video … amazing,’ one TikTok commenter wrote.”
“Frank Steele, owner of Frankensons Pizzeria, told Las Vegas ABC-affiliate KTNV he went from only making $400 a day to selling out daily after Lee posted his review of the restaurant. ‘Our phone never stopped ringing. I've sold more lemon pepper wings in the last two days than I have in the past four months,’ Steele told the outlet, adding, ‘I have people coming in from Iowa, people from California, Lake Havasu. I had people come down from Utah, all because of this video.’” READ MORE
TikTok is launching a talent manager portal where managers of influencers can negotiate with brands: “The new service allows talent managers, with creator authorization, to log into the Creator Marketplace to manage deal flow, negotiate contracts on behalf of their talent, handle the creative feedback and review various reports and metrics about a campaign’s performance. The expansion allows TikTok to now not only serve the needs of creators with tens or hundreds of thousands of followers but those ‘celebrity-level’ creators, as well.”
“The system aims to complement the Creator Marketplace’s existing offerings targeted toward brands that want to capitalize on the performance of creator-led advertising, which TikTok says delivers higher ad recall among 71 percent of brands surveyed.”
“First launched in 2019, TikTok Creator Marketplace plays a key role in the growing creator monetization ecosystem, joining similar platforms offered by Facebook, Instagram, Snap, and YouTube that aid creators in developing relationships within the influencer marketing space.” READ MORE
Buy with Prime launches on third-party sites on January 31: “The service, which allows third-party merchants to offer Prime benefits like free shipping and returns on their own apps, was initially only available to those merchants who were already using Fulfillment by Amazon to handle their shipping and logistics. The service was first introduced in spring 2022, with FBA merchants and other select merchants on an invite-only basis. With Buy with Prime, consumers get fast, free delivery, similar to Amazon.com’s Prime service, plus seamless checkout and easier returns, allowing merchants to establish their own direct relationships with customers, Amazon says.”
“Since its April debut, Amazon claims the offering has increased shopper conversion by an average of 25 percent. It notes that it measured Buy with Prime’s success by comparing conversions on the sites where Buy with Prime was offered as a purchase option to those where it was not during the same time period.”
“In a press release, Wyze confirmed it was seeing a 25 percent higher conversion rate on Buy with Prime and noted it has added the option to all items in its catalog.” READ MORE
To understand where inflation is trending, it helps to compare the first half of 2022 with the second:
In-N-Out has decided to risk its ‘luster’ and go national: “For decades, In-N-Out was an avatar of California cred. Transplants to the East Coast who had grown up devouring its burgers and ‘animal style’ fries spoke wistfully of the fast-food chain back home, and visits to a drive-through were often the first order of business after their planes touched down at LAX. Even as In-N-Out, which was founded in the Los Angeles suburbs 75 years ago, oozed like its signature special sauce beyond the state’s borders and into Arizona, Nevada and Texas in recent years, it remained a Western brand, and proudly so. ‘I don’t see us stretched across the whole U.S.,’ owner and president Lynsi Snyder-Ellingson said in a 2018 interview, vowing never in her lifetime to expand any farther east than its Texas outposts. ‘You put us in every state and it takes away some of its luster.’”
“Which is why the news this week that In-N-Out plans to open a corporate headquarters in Tennessee and, eventually, its first locations east of the Mississippi was surprising. The move was greeted with excitement — first from the jubilant governor of Tennessee, who announced the news himself on social media.”
“‘It’s a special day today,’ Gov. Bill Lee said during a news conference touting the company’s expansion. In addition to the Franklin, Tenn., corporate office, the chain will open several Nashville locations by 2026, the company said.”
“Others, though, worried that the chain could lose its distinct identity as it forges eastward. ‘Well there goes the quality and the novelty of only getting it in California,’ wrote one commenter on the governor’s Instagram post. ‘Will it just become another McDonald’s?’” READ MORE
Will the wave of tech layoffs produce a wave of startups? “For the past year, high inflation and tumbling stock prices have turned the tech market’s boom into a bust. Dozens of tech companies have laid off workers and put expansion plans on hold — and just this week, fitness-tracker maker Whoop and data company Definitive Healthcare announced new cuts. But while most laid-off workers scramble to find new jobs in a downturn, some decide to strike out on their own and start new companies. And that could eventually benefit the Boston startup scene. ‘We know that a huge number of VC-backed entrepreneurs are corporate refugees,’ Harvard Business School professor Josh Lerner said. ‘We also know that there is a strong connection between large layoffs and more entrepreneurship in general.’”
“So while local job cuts at Amazon, Meta, and Twitter — alongside layoffs at smaller companies like iRobot and Wayfair — reduce employment in the short term, they also prompt startup formation and future job growth, Lerner said.”
“‘Unemployment is potentially a destructive experience,’ concludes a 2014 study from The Ragnar Frisch Centre for Economic Research. ‘But unemployment also triggers creativity.’”
“At least one Boston VC firm wants to feed that trend. NextView Ventures started taking applications for its fourth annual startup accelerator program this week and is looking for ideas from groups of people who have worked together in the past and may have been laid off. They also see potential in groups who are still in Big Tech but are stymied by spending cuts.” READ MORE
Here’s your periodic reminder that even small businesses need to take cyber security seriously: “[Tiffany Kleemann, clients and markets leader for cyber and strategic risk at Deloitte] says that job one for every company looking to safeguard from cybercrime should be to conduct a cyber risk assessment. A cyber risk assessment is a process for evaluating the potential risks to an organization's technology infrastructure, business processes, and security controls to identify vulnerabilities and the potential impact of a hack or data breach. Kleemann likens the process to identifying your company's ‘crown jewels,’ and then formulating specific plans for how to safeguard those valuable assets.”
“[Frank Shultz, chairman and CEO of business resilience solutions firm Infinite Blue] also says that companies of all sizes should consider getting cybersecurity insurance, which he claims can be a lifesaver if you have no other option but to pay out a ransom.”
“If you have any suspicion that an intruder has breached your network, trust your gut and immediately take all communications with your employees to a separate, secure network that isn't being monitored (examples include Signal and Wire). Shultz says that he's seen hacks in which the infiltrators impersonate an employee in the company's Slack channel, and then are able to watch along while the company formulates a plan to counter the hack.” READ MORE
THE 21 HATS PODCAST
How’s your compensation plan holding up? This week, Shawn Busse, Liz Picarazzi, and William Vanderbloemen discuss what it’s been like trying to make sense of employee compensation in a time of COVID, the Great Resignation, inflation, and a looming recession. Shawn’s business model is evolving, and he’s trying to adjust his mix of employees to fit the new model with as little disruption as possible. Liz is expecting a year of big growth and is assessing how that will affect her staffing needs—especially as she introduces new benefits, including health care. And William is trying to create a more sustainable compensation structure while also breaking his employees’ expectation that they will always get a year-end bonus. Plus a listener asks: What tasks are the owners still doing, even though they know it’s not worthy of their time?
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Thanks for reading, everyone. — Loren