Jesse Cunningham Discusses AI and Websites as a Service

0:00In this video, let's look at this Alex Sremozi talk at acquisition.com. This guy to the left, and we're going to listen to him, he owns a company where they sell websites as a service for a little amount of money. And he's concerned about something huge, which we talk about on this channel often. Now, we're going to go into it. We're going to listen. We're going to do commentary. It's a pretty good talk that has to do with websites, SEO, AI, kind of a belief system. That shouldn't be a true belief system for some. But what's interesting is this person's fear, he expresses the fear in this, is something that we address

0:36in the Rank Expand Academy and we enable people to do, right? It's kind of two sides of the coin. I found it very, very interesting. So I figured to do this. So starting off the bat, let's just let them talk. We're WASS, so website as a service based company. So we build websites due to digital marketing services, that kind of stuff. We cater to small, medium businesses, small businesses, average revenue per customer is $450 a month. Okay. All right. So what he said there is he's selling websites as a service. So instead of selling the website for 20, 30 grand to a local

1:08business, he's likely targeting local businesses. I don't think he discloses that in the video, but he's likely selling to a plumber electrician. And he says, look, instead of paying 20 grand for a website, we'll charge you for $500 a month and we'll take care of all of it, right? A really good business model. If you know how to build websites quickly, subscription based company.

1:29And yeah, we're at 20 million bucks in revenue and notice example, right price, really small. You price it super low and it works. So the guy, he has $20 million agency and his margins, I'd imagine, and this is just speculation are probably 30 to 40%. So it's a really, really robust, kind of healthy company you can do if you know how to build websites at scale.

1:54Let's keep it going. And we want to get to 80, 80 million bucks of revenue in about three years. Okay. So the question we're asking ourselves is we're in an industry where AI is very disruptive. Every day that goes by, you know, it's constantly degrading and decaying our product. And at the same time, we have kind of this one channel. All right, so what he just expressed the main fear, which we're going to get into later, but he's concerned about AI. He's concerned AI degrades his product. And it comes out later what that exactly means. But it's very interesting to me that you have someone who builds a website who's scared about AI. All of our sales, 100% of

2:35our growth has been done through outbound cold calling. Love it. Yeah, it's great. But again, cold calling is becoming harder and harder and the industry is decaying. So that right there is pretty darn interesting. So instead of using like the conventional methods of outreach via cold email or Facebook, which is what these agencies often do, he is doing old school cold call and making sales via cold call. And that's impressive right there. Very, very impressive.

3:00We're constantly, we're trying to figure out. What do you mean by that? Churn is going up? Churn is slightly ticking up. But at the end of the day, you know, AI is making it easier and easier for our customers to be able to build their own websites. That was what kind of cued me in on this video. So he said, AI nowadays make it easier for you. If you are a website or a business owner, just do it yourself. And so in the Rake Expand Academy, that's exactly what we built around the whole darn academy. So you come down here, scale in microsites, boom, this is how you

3:34do it. So instead of, and this is what's interesting, I think, microsites take it to another level, right? Instead of building just one website for a business, we build 10, 20, 30 websites for a business to dominate a local area. And this is what he's scared about, I think, is people getting a hold of systems where they can just do it themselves, DIY-ers, you know, Bob who owns the plumbing business down the road, whether or not he does it or his nephew does it. It's very, very easy nowadays to build a website yourself. Yeah, I know. We're the type of customer we deal with,

4:05they're not usually super sophisticated. So we do have time. They just found out about Chad Jibuda. So yeah, exactly. So we have time, but some of you guys still fax. So I think you got time. Yeah. But this is the question, right? So do we double down on marketing and create like an inbound channel and really invest hard into that? Or do we do, do we try to innovate on the product and figure out what else they need and like build a revenue engine? Right now we're kind of, we're trying to do both, but it's obviously limiting. Interesting. So before Alex Hermosi's talks,

4:39he is convinced that the customer, the typical customer that he has, you know, it's not people that will usually make a website for themselves, which leads me to believe, and mind you, this is all speculation. He's probably catering to local businesses. There's so many in the United States, local businesses is where it's at. This is really, really good. I love that you asked this.

4:59So I went on this long rant the other day about this particular topic, which is solving problems that don't exist. Okay. So because like you have a narrative, you have a story around AIs decaying the business, but all I hear is that you have customers and your job just got way easier. That's fine. So, you know what I mean? Like if you were like, our churn is escalating by 10% per month, I'd be like, we have a problem. We need to change something. But if it's not really showing up in any meaningful way in terms of the business itself, I think there's plenty of people

5:35who will just be super laggards on this and are not going to be replet vibe coding. They never bought your shit to begin with. Yeah. Like the person... It's interesting. So I see it across the board too, and I hate to interrupt Alex, but when people talk about AI disrupting things, you know, I consult to different companies, local businesses, and people are freaking out about it, but it has no tangible effect on these businesses yet. It's like a three to five year, you know, waiting period on like the supposed big effect of AI for say a plumber, right? Of course,

6:07you can do marketing better, but it is a narrative I see kind of repeated over and over again that AI is going to disrupt, but it's not yet. Who is super into AI right now? Wasn't hiring WaaS anyways. They built their own website before AI made it quote easy, right? Because I mean, to be fair, website building software, not that complicated, right? So you said there's two paths. So one is, you know, change the product around. My opinion, I wouldn't, that's probably wouldn't be where I'm focused unless I had some business metric that was way off that I'm not seeing. I would be

6:42doubling down on the acquisition side. What's your number? Okay, then he gets into like the numbers of the business. So what Alex said there's, you know, don't change anything. You have a good business. Keep doing what you're good at. And something he did say, if he called it, he said basically, this isn't like a hard thing to do to build an AI website generator. And the guy admits that he's got like, yeah, okay. So coming back to the Rank Expand Academy, I would say, I mean, we've seen people do it tons of different ways. So what we use is a flat CMS system. So we're

7:12getting technical now. It's not WordPress, but we've seen people build on WordPress. We've seen people build on Replit and it's all viable. And we're surprised because the rate at which things are changing so quick, right, how people are able to do this for quite literally less than a dollar. I saw someone in the Academy last week on the community called Build a Replit website, the most beautiful website that I've seen for a dollar, right. And so if we take a step back and think about this guy's kind of conundrum, right. And he's got a stuff together, by the way, he's running

7:43a $20 million agency. He knows what he's doing, right. But if we think about his concern, his concern is for people, right, business owners being able to do this themselves, which they are. But to Alex's point, there's always going to be, you know, Bob the plumber, whoever it may be, who's never going to want to do this. So there's always going to be, and I dare say always, right, things will change. But there's always going to be a need for helping local businesses, which is something that we really focus on the Rank Expand Academy. So we encourage two ways, microsites, which are Rank and Rent websites, right. You can use them for a primary website,

8:18but Rank and Rent is where you build a website, it produces leads and you sell those leads back to the company. Awesome, right. The other way is to have a micro agency and build it up into a sizable agency through the 90 days to freedom using AI. But this was just like an off the cuff video. I thought it was cool to see him talking about things that are so relevant to this channel.

8:37So anyways, hope you liked it. Comment below what you think and I'll see you on the next one.