.png)
Firing The Man
THANK YOU TO OUR 25,000+ LISTENERS! We are so thankful to be one of the TOP E-Commerce Podcasts delivering high-quality authentic content to you! Serial Entrepreneur’s David Schomer and Ken Wilson share tips, advice, and insider knowledge about all things Amazon FBA, Walmart WFS, and E-Commerce. Discover how you can create multiple income streams by selling physical products online so that you can have the time and freedom to do what you love - whether that is spending more time with family or traveling the world. Ken and David have successfully created several six and seven figure online business ventures. During the journey, they have had major wins, losses, and lessons learned. This podcast will teach you about selling physical products online through platforms such as Fulfillment by Amazon, building a team, outsourcing, listing optimization, pay per click (PPC) advertising, driving traffic to your listings, and productivity tips / life hacks that will provide a path to be successful in building your online business. It’s a mix of interviews, special co-hosts and solo shows from Ken and David you’re not going to want to miss. Hit subscribe, and get ready to change your life.
Firing The Man
From Wall Street to E-Commerce Innovator: Chad Rubin's Journey and AI's Role in Future Pricing
Discover the captivating journey of Chad Rubin, a visionary who transformed his family's vacuum business into a thriving online enterprise and later pioneered innovative software solutions in the e-commerce realm. Chad's path wasn't without challenges; after a change in management led to his firing from Wall Street, he took a leap of faith into the world of e-commerce. His story is a testament to overcoming skepticism and embracing new opportunities, driven by his unwavering belief in the potential of online sales.
Explore Chad's fascinating transition from selling physical products to developing Prophecy, a dynamic pricing software designed for Amazon brands. Chad shares the hurdles faced in the tech world, from the arduous development process to recognizing the untapped potential of price adjustments in boosting Amazon sales. Our conversation uncovers the intricate dance between pricing strategies and advertising, demonstrating how synchronizing these elements can significantly enhance profitability. Chad provides insights into how brands can achieve impressive profit margins by aligning price changes with PPC efforts.
As we look to the future, Chad sheds light on the transformative role of AI in e-commerce pricing. Early adopters, he predicts, will hold a competitive advantage, and the rise of AI agents in the Amazon space could reshape the industry landscape. Drawing from insights by industry leaders like Sam Altman, Chad envisions a world where AI plays a pivotal role in strategic pricing. We also dive into Chad's personal inspirations, from his favorite book "Buy Back Time" by Dan Martell to the entrepreneurial lessons drawn from Seth Godin's "The Dip" and Horowitz's "WIFIO." Tune in for an engaging conversation filled with forward-thinking ideas and strategies for aspiring entrepreneurs.
How to connect with Chad?
- Website: https://profasee.com/
- LinkedIn: https://www.linkedin.com/in/chadrubin/
- Twitter: https://twitter.com/itschadrubin
- Book: https://www.amazon.com/author/chadrubin
Welcome everyone to the Firing the man podcast, a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable of more, then join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts, serial entrepreneurs David Shomer and Ken Wilson.
Speaker 2:Welcome everyone to the Firing the man podcast. In today's episode, we are excited to have Chad Rubin, a seasoned e-commerce entrepreneur and the founder and CEO of Prophecy, join us. Chad's journey in the e-commerce world began in 2008. And since then he has founded multiple successful ventures, including Think Crucial, skubana and the Prosper Show. His expertise spans across e-commerce operations, amazon strategies and leveraging AI to optimize business processes. Chad is also the author of the Amazon bestseller Cheaper Easier Direct, which guides readers on disrupting industries to uncover success. In this episode, we'll delve into Chad's entrepreneurial journey, discuss the evolution of e-commerce and explore how AI is transforming the industry. Chad, welcome to the show.
Speaker 3:Excited to be here and thanks for that intro.
Speaker 2:Absolutely so. For those of you who have not heard your story, you started your e-commerce journey back in 2008 by taking your family's vacuum business online. Can you share what motivated you to make that transition and how it shaped your entrepreneurial path?
Speaker 3:Yeah well, first of all I came from nothing. So my parent I grew up sort of trying to scrape a couple of pennies together, finding pennies in the couch cushion. So one parent I grew up sort of trying to scrape a couple of pennies together, finding pennies in the couch cushion. So one thing I never wanted to do is I never wanted to be in the vacuum industry and I never wanted to be an entrepreneur. So I decided to be a first-gen college grad and I went to Wall Street and while I was there, I was covering a stock which was Amazon, and Amazon had just launched the marketplace.
Speaker 3:And sure enough, I said to my mom and dad. I said you guys seem to be selling your stuff on Amazon Like Walmart just opened next door to you. And so that was really the beginning and the genesis of getting involved on Amazon. While I was on Wall Street, I would moonlight and my parents would use my credit card to buy inventory, my dad would do the shipping, my mother would do the customer support and I would do all the marketing listing, creation, marketing, et cetera, product ideas and opportunities. And that's how it all started.
Speaker 2:I really liked that background. And one thing we have similar backgrounds. So I was CPA, cfa, worked in financial services industry and that would have been 2013 era. When I talked about leaving this highly touted position and going and selling on e-commerce, I was laughed at. It wasn't taken seriously. Did you experience a similar thing?
Speaker 3:Totally so. My grandmother's best friend. We went to visit her and she sits down and she has plastic on the couches. So this is the kind of like old school mentality. And she's like, whoa, what are you doing? And I was like, well, I'm doing e-commerce. I'm trying to explain to her what e-commerce was back in the days before she passed.
Speaker 3:And she's like you need to be a lawyer, you need to be a doctor, what are you doing? Wasting your time doing this thing? And that I mean I think it's just like an old school way of looking at the world. And luckily, like I was able to also, by the way, I shared earlier that like I had no interest in being an entrepreneur, because to me, growing up with a family who's struggling and can't pay bills and my mother is literally trying to charge each credit card on the grocery line while everyone's heckling at her, was not a way that I wanted to live in the world or even have a family in the world. And luckily, even that narrative changed once I started seeing that that was a limiting belief changed once I started seeing that that was a limiting belief.
Speaker 2:Okay, okay, I really like that, and this podcast is called Firing the man, and so I want to dive into this story a little bit. So at what point did you say I'm going to try out e-commerce and, hey, this could work. I might quit my Wall Street job and do this full time? What was that process like?
Speaker 3:So funny enough. So I was on Wall Street, so you were on the other side of things. I was doing equity research, so I was advising investors to buy, sell or short stocks, hedge funds, institutional investors and to me I always believed in picking, not your job but picking your boss. So I always would pick bosses that really cared about my interest and growing and investing in me. So then I got assigned a new boss who came in from another company and I didn't even interview with him, I didn't pick him, I just was assigned to him and he had no interest in seeing me grow. Well, sure enough, he's making stock picks. That I disagreed on, and For good reason, because he was not actually being honest with his stock picks or being he wasn't being honest. And I slowly started seeing his phone was ringing and the HR, hr was calling him all the time and, sure enough, two weeks after that, boom, he fired me. So he fired me, my father.
Speaker 3:So I'm like still doing this moonlighting right. I'm like doing e-comm, I'm making a lot of money on Wall Street. My father drives into New York City to pick me up I don't share this story often and I've got my box of stuff on the side of the road and he, my father, drives into New York City to pick me up I don't share this story often and I've got my box of stuff on the side of the road and he picks me up and it's like kind of quiet and we pull over to my apartment on the Upper West Side in New York City and he looks at me and I live next to a school, an elementary school. Kids were getting out of school with their lunchboxes and he's like, hey, those kids are free, and so are you. And that was the really the ember that he kind of blew on a little bit. That really created this spark to say you know what? Let me see how this works. And the rest is history.
Speaker 2:I like it. I like it the day that you quit or so you got fired, I got fired, you were, so the man fired you.
Speaker 3:The man fired me, but I was miserable. I was like overweight. I was waking up at 5 am and sometimes I would sleep at the office and this guy was watching who knows what on his computer or skiing or not, around, not caring about me or my life or my family, and like something had to change. I just didn't want to give up what I had and then it was pulled from me. And that's really when you start to shine right, when you start experiencing these fires pun intended, you start experiencing that and that is telling of your character and how you handle these tough situations.
Speaker 2:Outstanding, outstanding. So you get fired, and where do you go from there?
Speaker 3:Well, I started to really explore private label further because we were just reselling a lot of my parents' products. So I started getting deliveries from China on the Upper West Side in my apartment fulfilling FBA, doing merchant fulfilled. And then my wife was like, hey, this is not a warehouse, it was a small apartment, it was a duplex, but it was a small apartment and she's like you need your own space. So I got a warehouse in Harlem and started growing tremendously. At that point there was not a lot of private label at all. Private label wasn't even a thing. It's just that I was tired of competing for the buy box. I didn't want to compete with other sellers, so I was like I need to own this and the only way to own is to have a trademark and create your own brand. This is way before amazing selling machine and all these courses came out. This is like high gross margin Amazon with no ad spend, pure organic, with no other private labels on the market.
Speaker 2:The Wild West. I remember those days and boy do I wish we could go back to 40 to 50 percent margins. Go find something on Alibaba. Yeah, those were the good days. So you founded several companies, Think Crucial, Skubana, the Prosper Show, which I'm a huge fan of and have attended several times and talked about on this program quite a bit. So what are some key challenges you faced when you were scaling these businesses and how did you overcome them?
Speaker 3:I think everything comes down well. I guess that's a very broad question I'm trying to think about. You know, I've had talent issues, which are people issues. I've had operational issues. We've had funding issues.
Speaker 3:If you think about the transition for me, right, I grew up not wealthy, first-generation college grad stepped into Amazon just by finding out, looking at the stock of Amazon and what Amazon was talking about during their filings, started selling on Amazon great. And then suddenly I go from selling vacuum filters, which is an interesting transition, to creating a software and co-founding a conference. There's not a lot of sellers that can go from selling to software. It's a very different competency and it's difficult to pull off. And so software in general, I think, is really hard because there's something called the J-curve, so you have to put out a massive amount of expenditure and R and D and engineering development until you recover that investment.
Speaker 3:Like so, on Amazon, if you're buying off Alibaba and you're putting $10,000 in, you list it, you get an FBA, boom. Okay. The turnaround time is like, let's just say, three weeks on the water unless you air ship it. Then you launch it on Amazon FBA and boom, it's in your warehouse. You're ready to rock For software. It's like you have to build, you have to iterate, you have to fix, you have to keep building, and you're funding all of this while it's happening, and so you're essentially in the negative for a long time, a long duration, and then eventually hoping to get to profit.
Speaker 2:Yeah, I have heard of some software nightmares. Software nightmares, uh, where, where you go to the bottom of that J curve, but but you don't hop out of it and uh, and yeah, it seems like you know, when you were talking about issues, there wasn't one particular type of issue that you mentioned, it was a lot of different types, and I think that's one thing I found with entrepreneurship is there's always going to be something, and if you're in entrepreneurship, you put out fires and it's just, it's part of it. And so now I'd really like and we'll talk about it more but I would like to know what was kind of the. Well, let's start with what is Prophecy?
Speaker 3:Prophecy is a dynamic pricing software for brands that sell on Amazon. So we dynamically change price to maximize your intention. It could be revenue, it could be profit, it could be velocity and BSR, but we're using price as a lever. Instead of throwing more money on advertising, we dynamically adjust price and use that as a lever to have it all drop to the bottom line for your business.
Speaker 2:Okay, Okay, and what was the aha moment where you said there's a need here? I'm going to, I'm going to move forward with this, I'm going to take this idea and, you know, bring it to fruition.
Speaker 3:Yeah. So after my I would say, like my, my my big boy exit of Skubana in 2021, I worked at the other company, but I was still finding purpose, and so I was still running my e-commerce business, the one that I started, the vacuum filter company and it was getting just nailed. We're losing money, it's blood everywhere and, um, you know, I'm, I'm, I'm listening to all the people in the Amazon space and they're saying, oh, you got to optimize your listing, you need to find a new PPC agency, and I started doing all these things that they were telling me to do and it wasn't working. Thank you, thank you, thank you, I'm working. So I was trying to turn around this company. Suddenly, I'm sitting outside looking at it. I live in Miami now. I'm looking at a palm tree and I'm like what's another lever? I can pull Price, and why don't we change price?
Speaker 3:Well, people say that you shouldn't change price on Amazon, or people just tell you to change price when there's inflation, so you go up 5%. But there's a second order of consequence that happens that makes pricing on Amazon super hard, which is the fact that when you change price, it impacts your discoverability, sometimes your ranking Not always, but it could have a knock-on effect. A second order of consequence happens when you make a price change and your price today affects your order volume tomorrow. So how do I? I have 250 private label products with bundles and kits. We're not changing price. Why? We haven't changed price in a very long time, just stale, outdated prices that we've copied from another competitor who's probably out of business.
Speaker 3:So we started to manually change price and I was like whoa, there's something here If I can intentionally and consciously change price to achieve an outcome for me, whether it's ranking or profit. Looking at all the data, I have something here. And then that's when this AI buzz happened. It was literally at the same intersection. So it was like profit intersecting with AI and I was like what if we automate this and build something that can actually make these price decisions strategically and smarter than a human and at scale? And we started building. So I resigned from that. I was working for the band again I was working for the band again. I was working for the company that acquired me for six months after the acquisition. So April to October 1st couldn't do it, just didn't have it in me. I resigned October 1st and then raised 2.4 million December of 2021.
Speaker 2:raised 2.4 million December of 2021. Okay, okay, and, and when you shared this initial idea with, uh, perhaps people at the prosper show or or people in your network, what was some of the feedback that you got?
Speaker 3:So it's funny. I went to a celebration dinner with a bunch of other entrepreneurs and, uh, we're celebrating my sale and another person had sold their company too at that time, or two or three people. And someone asked the question if you weren't like, if you're going to start a business today, what would you do? And I mentioned this and people were like, hmm, that's fascinating. Wait, so that doesn't exist on amazon today. Like there's no dynamic pricing system, kind of like uber or expedia or even hedge funds that they use to capitalize on inefficiencies in the market. It's like no, there's nothing that exists. And that's really when I knew that was the reaction and I was like I need to do this.
Speaker 2:Very, very interesting and one of the. So I personally have used Splitly Profit Peak AvaGuru and when I got the email for Prophecy I was like this cannot be done. This is a fairy tale and and we can get into some of those specific reasons, but I was when you were taking this from idea to fruition. Did you look at any of those other companies that had tried and failed?
Speaker 3:Oh yeah, I wouldn't have created something that already existed in the market. I needed to do something that was big, that was bold, but I didn't want to just be a copycat and, by the way, I'm not saying that's a good decision, by the way, sometimes, if you copy companies, it works out very well. I just personally wanted to challenge myself with something unique, and that was building AI, doing it as a single founder, and I tried out every single one of those softwares you mentioned and then some with demos, because I actually wanted to price better for my own brand. It actually was an honest. It was an honest research where I was like, okay, if this exists and I can automate this without having to manually change price and I can increase profit even more in a smarter way than doing it humanly, I'll use these softwares all day long. And when I looked at these softwares, they made empty promises. They would make all these claims and then wouldn't back it up. I don't know if you've experienced the same thing as you've used those softwares.
Speaker 2:Absolutely, and after my first experience, I would log into a portal. I would have a meeting with the agency once a week. They would say your profits are going way up. I'm a retired CPA, I love spreadsheets, my brain is organized into rows and columns and I'd look at my P&L and net income wasn't going up. And then I'd have a meeting with the agency and they'd say, yeah, your profit's up 50%. And I grew very skeptical and started.
Speaker 2:When I would engage with one of these companies. I would have a separate spreadsheet where I was monitoring what did profitability look like before? What did it look like after? Look like before, what did it look like after? And what I was seeing was that it just wasn't there. The cost did not justify. I was not able to increase net income enough to justify the cost of these programs. And so that was my experience.
Speaker 2:And the thing that I always ran into was as price goes up, conversion rate goes down and PPC gets harder. The opposite is true as price goes down, conversion rate goes up, ppc gets easier. But you have so many of these variables moving in opposite directions that it was hard to control for all of them, and so you know, in a typical, like brick and mortar company, if you have margin compression and you want to increase your margins, you increase your price. This is a unique industry where, when you increase your price, your net profit does not necessarily increase because your velocity goes down. So it was I. After trying and failing with three different companies, I was I was very, very skeptical of it, to be completely honest, and and I've been very impressed with the results, and that being skeptical has stayed with me. When I, from day one, when I had signed up with Prophecy, I had my side spreadsheet where I've been independently testing profitability through Helium 10, a totally separate platform, and what I found is my profits have increased by about 23%, which is huge, huge.
Speaker 3:On a gross level or operating profit.
Speaker 2:On a gross level before my operating expenses, and that's huge. The last three years, I've experienced major margin compression and you've seen a lot of sellers get squeezed out of the market. They had a 15% margin and a 10% tacos and no meat on the bone to pay their operating expenses or themselves, and as we've seen this margin compression, it almost seems like this is something that you need to do as an Amazon seller. It is getting more and more competitive. Five years ago, you didn't have to have awesome listings or a dynamic repricer and you could make 30%, and I cherish those days. But those days are gone. Covid brought a lot of new sellers in and a lot more competition, and and so I think being a very high level Amazon seller is critical to be successful here.
Speaker 3:Yeah, I'm all. I'm very happy to hear that you're loving Prophecy, and my mission in general is if we help sellers and brands flourish, we will get rewarded for it. That's it. So the goal is and I talk about this with my team all the time if we help other people flourish, we will get rewarded, and so that's where we focus our energy. I mean, you can tell that we're very hands-on. We really try to handhold you and optimize the outcomes. We're constantly meeting with you to go through the data and we want to make you more effective, and if we're not making you more effective, we're not delivering on our promise and we're not doing our job on our promise and we're not doing our job.
Speaker 2:Yeah, absolutely, absolutely. So one of the things that I would like to get into is, once you sign up for the Prophecy tool and I found with a lot of tools, they can be great tools, but it depends on how you use them, and there are certain things that are, as an Amazon seller, are in my control and you know, starting with what ASINs do I enroll, and so why don't we start there? And I'd like to kind of go through some of the user inputs and identify what are some best practices here. So, if somebody signs up for Prophecy, how can they maximize their outcomes with the tool?
Speaker 3:Yeah, there's a lot there.
Speaker 3:So in terms of just best practices in general, I would say you have to make sure you know your intention for your SKU. So you need to know, hey, am I looking to maximize profit, do I want to make more revenue or do I want to make more unit velocity? There's other really important things to make sure you apply in our platform, because we take into account inventory as well. So if you're overstocked in inventory, our model will start lowering price to offset the higher stock, and so really, what it comes down to is you need to put in some boundaries and parameters into the platform to get the most out of our machine learning models and our AI.
Speaker 3:So sometimes people might have a boundary that's too constrictive, so your floor price and your ceiling price are too tight, and we might say, hey, we need you to uncouple that and to make the boundary larger. You might not know that perhaps you're running low on stock, but you might not have set up the inventory model in our platform to take into account your low stock level. So these small little things that our customer success team is responsible for to help you with are important things to get started with to make sure that you're successful are important things to get started with to make sure that you're successful On that floor and ceiling price.
Speaker 2:any suggestions there on, you know, should you consider your PPC, what is a good starting spot there?
Speaker 3:So floor and ceiling price of your price itself, typically a good 20% boundary is perfect. It's a great starting point and if it needs to be larger, we'll let you know. But 20% gives room for the model to explore and part of that, I think, is whether you're AI or whether you're in life right is you need to give yourself room to explore whether, even in advertising on Amazon, right, you need to be able to explore and test. So sometimes wasted spend is okay in the beginning to figure out what's working. You're going to waste some money to figure out what keyword converts. And the same thing with price is that you need to understand and understand how does Amazoncom, how do your competitors and how do your customers react to price changes? And so if you give the model room to breathing, room to explore, it actually is going to have far superior data to make decisions with.
Speaker 2:Okay, okay. So 20% boundary, okay, and when you're coming up with that, should you be considering your PPC.
Speaker 3:So that's another great question. So when we first started Prophecy like I'm sure, a lot of people listening to this, entrepreneurs for the first time you sort of learn by doing, by walking in the desert, right. So we, I knew that brands were losing money, but a lot of brands don't know that they're losing money and by, you know, just setting their price once, throwing more money at ads. And so we started with the premise hey, we're going to adjust price and price changes alone. We'll typically we'll see, on average, a 10% lift in profit, sometimes 20, like in your case, 30, 40, 50, 70%, but on average we're seeing a 10% lift 40, 50, 70%, but on average we're seeing a 10% lift.
Speaker 3:As we started going further and this is to your point around demand. So if you increase price, typically, unless you're Apple or Nike, demand will drop. And so if that's the case, if we increase price but demand drops, so if that's the case, if we increase price but demand drops and your PPC team doesn't know that we dropped price, or your manager that's doing PPC, or your software or whatever, then there's a disconnect. And so we found actually, by harmonizing price and ad spend together, you can actually unlock nonlinearlinear outcomes for the business, meaning it's actually going to like explode the business forward. This is the Holy grail, in my opinion, of Amazon is essentially the idea that pricing touches all parts of the business, and all parts of the business have to touch price. Price, ppc and inventory go together Right, and so we started to actually build out models where we know where pricing is going, we know where spend should go at a specific price point to maximize what you're trying to achieve, and so we give either our clients where that's going, or we give this to the brand agency, or we do it ourself. We have a team in-house that's also doing this now.
Speaker 3:Now I have this chart on my website. I don't know, if I shared a screen here, people would see it. Yeah, absolutely. There's a really interesting math chart and since you're so focused on profitability, I think it would be a good thing to bring up. So I'm going to share my screen real quick. Tell me if you can see it.
Speaker 2:Yep See it.
Speaker 3:Yep, see it.
Speaker 2:Yes.
Speaker 3:And if I scroll down here to this chart, right here I'm just going to walk you through a really interesting example. So imagine this is $25 and we increase it to 20%, so it's $30. And we also do this with ACOS. We increase ACOS from 20% to 24%, so it's a 20% increase. Now most sellers would be like oh, I don't want my ACOS to increase, but bear with me.
Speaker 3:For a second Atlantic cost remains the same. We haven't changed our cost of goods sold Referral fee goes up 20% because the price went up, so Amazon's take goes up. The FBA fee remains flat, but gross profit goes up 60%, just with these changes. Now ad spend goes up 20% because we've, of course, adjusted our aid costs and now our contribution profit dollars double, adjusted our ACOS, and now our contribution profit dollar is double. This is what people aren't seeing is the contribution profit and your profit on your ad spend. So your ROAS looks worse. Your ROAS and your ACOS look worse because they're tied to revenue. But those are the metrics that sellers, those are the gospel metrics that sellers have been guided to for such a long time. And so we have to change our perspective on. Hey, you know what, if you harmonize and synchronize price and advertising dollars together, you can unlock a massive outcome for yourself that you didn't think you could.
Speaker 2:I really like this and I really like the connection between PPC and price, and what I had done for probably five years is I'd meet with my PPC manager and I'd give him a PPC mandate. Here's my breakeven ACOS. This is what I want you to target, and as prices move, I never really went back to reevaluate that. And you're hey, as your price goes up, your breakeven ACOS goes up, you can spend a little bit more, there's more meat on the bone, and so I really like that.
Speaker 3:And that example really drives that home. And I just want to say that nobody. So we have a report that we give to our clients where spend should go when a price change happens. I don't know if you're getting that internally on your side, and we're going to be even making it even more robust over time because we realize the value here. Now I was going to give you a fun example. Let me see if I can pull up an incognito here, because Amazon knows what I'm searching, but let's do this. So, okay, here's a great example. Look at these garlic presses. So you've got Zule. I don't know if you know Aaron, so he happens to be a customer.
Speaker 3:And this guy $29.99. Everyone else $9.99, $11.99, $9.99. This guy $29.99. Everyone else $9.99, $11.99, $9.99. So what's super interesting is that if you increase price, maybe there will be a less demand conversions, and typically there is. But there's a way to artificially inflate demand on Amazon and that's through advertising dollars, and typically brands are spending 50% of their revenue or 50% of the revenue is coming from advertising spend. So these companies at $29.99, way above the market norm, right, 11, 8, 14. At these prices that are way higher is because they are really harmonizing this price and advertising idea concept. So his profit is three times more than others and they're all paying the same amount of cost per click. And so this one is saying, hey, I'm stainless steel, there's no need to peel, right, it has all these reviews. They're selling a thousand in this past month and, if you can look at that, this is happening there as well, because they understand what the optimal price point is to advertise their product relative to their ad spend.
Speaker 2:That's huge. That's huge. I, I really like that. And and this is one I've noticed this where there have been certain products that we've been running this on prices gone up and I've thought, huh, I didn't see that coming, and profitability goes up. There are certain items where the price goes down and profitability goes up, and I've scratched my head and said, where the price goes down and profitability goes up, and I've scratched my head and said I did not see that coming.
Speaker 2:And that's where you know, if I look at kind of my archaic spreadsheets where all right, I'm going to change it on the first of the month and then I'm going to go in it for 30 days and I'm going to do a look back, a 30-day look back, and see what was the impact of this. There's just so many more price points that can be tested multiple times a day, and so I really like that example and it really does drive at home what Prophecy is doing. And so I like to talk about, just more generally, ai and its impact on e-commerce. Ai is the new kid on the block. It's growing at a very rapid rate. I am a ChatGPT fanboy and find myself using it more and more and more. And so what do you think are going to be some of the impacts on e-commerce?
Speaker 3:Oof. It's a tough question and I'm also a fanboy of ChatGPT and Cloud and Perplexity. I use them. A fanboy of chat, gpt and Claude and perplexity I use them a lot. I think there's a lot of directions we can take this conversation.
Speaker 3:If we're looking at what's happening today, I would say every software company in our space advertises that they're AI. Either they're not or they're just integrating to chat, gpt and it's some very loose integration, I think, where prophecy is different and it's important to really toot my own horn here on this, because we put $2.4 million into the business and it sucks that we're competing with people who claim to have AI and it's really artificial where it's not true AI and are just really it's really artificial, like where it's like not true. And so I think, in general, pricing is going to be a massive, massive thing and I think everybody in the space is going to be using AI pricing. It'll be the norm across Amazon and across Chinese competitors overseas. I think we're years away from that and so to me, like pricing and I right now, if you are an early adopter, you're going to dominate, and I think that goes along with anything that happens in the Amazon space. If you're an early adopter, just like the early private label brands, like me and you did when the Amazon marketplace was new is what's happening specifically when you adopt a new software and, by the way, there might be a software out there that does like AI, listing optimization. That I'm not aware of but like what I've seen is a lot of the same stuff just recycled in our space Reimbursement companies, listing optimization there's 50 million PPC softwares out there, and so to me, being an early adopter to this is important.
Speaker 3:But second, to your question around AI, I think that we're still in the early innings, not just of Amazon AI, just AI in general, and I'm concerned. I read the most recent blog post I think it was yesterday or the day before by Sam Altman wrote a post called Reflections, and he literally states that we're closed to AGI, which means essentially consciousness of an artificial intelligence software, for lack of a better word. And on top of that, agents are coming out this year, and agents, to me, are going to be a massive disruption to the entire Amazon space Because essentially, you'll now be able to just use, not only just get the answer, but you'll have someone actually be able to implement that answer, and it's going to be a output that you're not accustomed to, right, you don't have to pay this person extra, you don't need a water break or to go to lunch, and I think that this has a very interesting change in the entire community from an agency perspective and from a software perspective. Absolutely, it will be.
Speaker 2:I agree with you that we're in the early community from an agency perspective and from a software perspective. Absolutely it will be. I agree with you that we're in the early innings and it is every month there's something new and I'm impressed by a new tool and and so, uh, yeah, it'll be. It'll be interesting to do a look back in a year and see where we're at. So this has been an outstanding conversation on your background and on prophecy. As we wind up the interview, I would like to get into the fire round. This is four questions that we ask every entrepreneur that we have on the show. Are you ready?
Speaker 3:I am ready.
Speaker 2:All right, what is your favorite book?
Speaker 3:A favorite book I really like Buy Back Time just because it's very specific. It's written by Dan Martell and there's a lot of takeaway value and a lot of homework to take away from that and it really changed the way that I look at my time, how I'm implementing my time, and it actually has some interesting templates that I've adopted over the course of reading that book.
Speaker 2:Very nice, I'll add that to my reading list. What are your hobbies?
Speaker 3:Hobbies, a lot of family time. I have a five and a half year old that I really want to invest in and make sure he's instilled with the proper values that I either didn't get as a kid or I just want to give him a childhood that I didn't have. Two working out, uh, three reading and four Sometimes. I like to at least to wind down with a little hookah action.
Speaker 2:Very nice, very nice. What is one thing you do not miss about working for the man?
Speaker 3:Hmm, uh, don't miss man. Hmm, I don't miss. Hmm, that's a good question. I would say control of time, like I get to deploy my time the way that I see fit and live and die by the sword right. So if I misappropriate time or I squander it, I'm fully responsible and I think just having that autonomy and having that control of time is important to me and thinking about that makes me really focus on where I'm putting my time and making sure that I'm putting it in the most optimal place for the highest outcome and reward.
Speaker 2:Very nice, very nice. And the final question what do you think differentiates successful e-commerce entrepreneurs from those who give up, fail or never get started?
Speaker 3:So I read this book by Seth Godin which talks about this concept. By Seth Godin, which talks about this concept and you know, sometimes you hit a cul-de-sac, and anyway it's a great book. It's talked about, like, when to give up and when to keep going. It's called the Dip, and I think it's hard to say exactly when you know when to keep going, when to give up. But I think when things get really really, really hard and you have the feeling of wanting to give up in your heart, when things are hard, and by staying in it, sitting in that impatience and like feeling it and navigating a way around it, I think that differentiates the successful people from the non-successful entrepreneurs. So, being able to actually like sit in that horrible, horrible space, like another book, what's his name? The concept is called WIFIO.
Speaker 3:We're fucked, it's over, it's by Mark, not Mark Andreessen. By Horowitz, we're fucked, it's over. Uh, it's by Mark, not Mark Andreessen. By Horowitz, ben Horowitz. And uh, he talks about like there's all these moments where you're like hey, it's over, it's done, I can't do it anymore, it's like it's not going to work, and the startup and like a startup will see that experience many, many times. And if you can get through those moments, you're going to succeed, and so you just have to have the durability to make it happen. I know there's a long answer to your question, but it's an important one and a lot of times it's around just psychology and gaming psychology.
Speaker 2:Very nice, very nice. All right Now, if people are interested in trying out Prophecy, what is the best way?
Speaker 3:Yeah, so they can check out Prophecy. It's P-R-O-F-A-S-E-E, so prophets you could see, or a prophecy into the future, which is a biblical word. Anyway, prophecycom, check us out. Feel free to book a demo. I'm giving the demos. Actually, when you book a demo, if you're interested, you can also email me. Or if you want to talk shop about any of the stuff we talked about today, it's chad at prophecycom. And, of course, you can find me on Twitter and LinkedIn. I'm here to support the community.
Speaker 2:Outstanding, and we will post links to all of that in the show notes. Chad, I want to thank you for being a guest on the Firing the man podcast and looking forward to continuing.
