This week on the podcast, Andy & Brian discuss:

– Sora, the new generative AI text-to-video tool

– The demise of Amazon product aggregator Thrasio

– The changes in how B2B practitioners find job nowadays.

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Brian Beck: Andy Hoar, welcome to the Friday 15 everyone, Brian Beck here. And it’s my birthday. 

Andy Hoar: It’s your birthday. Happy birthday, Brian. 

Brian Beck: Thank you, sir. I can’t stop this progression. I’m not getting younger. You know if I was born one day earlier, I would only get older every four years, right? Because of the leap year. But I have been born on March 1ist, not February 29th. Anyway, welcome everyone, we’ve got a great topic today, and a lot to cover. So let’s get right in, right, you know, Andy with our, with our breaking news. Let’s see, where’s our breaking news? (upbeat music) All right, first off, Andy. AI continues to astound us in what it’s doing, and the things that come out incredible. Tell us about Sora, this is a new open AI thing.

Andy Hoar: Yeah. You know, this one, frankly blew me away. I mean, I’m thinking back to the last time I was blown away, and it was when chat GPT was launched what a year and a half ago. If we’re going to keep getting hit with these kinds of announcements, you know, buckle up because there’s a technology Open AI released recently, which is text to video called Sora, S-O-R-A. And I think this headline actually says it all, it’s fascinating. It says, Open AI’s Sora has left AI experts either enthused or skeptical. It’s left most everyone else terrified. And the reason why is because literally with, in one sentence, you could create a video on your own. So there’s a couple of examples here we wanted to show. So this is a video, and we’re not going to show the video, but for those of you who can see it, it’s a group of labs, dogs that are playing in the snow. We ran the video. Now, this would have taken professional graphic designers to create something like this, or a film crew, quite a bit of time to create. Instead, in a couple of seconds, there it is. Another one is a video of an animation that they created that they shared, which will rival anything that you’ve seen on Pixar. This is a little goblin creature that’s looking at a candle, and you can see the reflection in the eyes, et cetera, the detail on it. The point of this is, this is what Pixar’s animation studio would have spent months or years creating, like at the detail level, with Sora, it’s done in a matter of seconds. So, what’s funny is, we’re not just surfing the internet looking for videos, maybe you are Brian, but, you know, we’re not out looking for videos and looking for evidence like this, but we did see an interesting article that prompted us to consider Tyler Perry. For those of you who don’t know Tyler Perry, he’s Medea, he plays his character in these comedies, and he’s also a movie mogul because he created his own series of movies and he produces other people’s movies, well, this headline caught our eye because it said that he announced he was going to hold off on an $800 million studio expansion in Georgia, which is where he was building out his own version of Hollywood, basically, after having seen Sora, and he said, “How could I possibly justify, investing, if you’re creating all these studios with professionals who are using cameras and fake backgrounds to make it look like somebody’s on the moon or on Everest, when I could just literally use this Sora to create it. He said, He’s already tried using it to put makeup on his face, that he would have to sit in a chair for hours to do, and Sora can do it now instantly. So, you know, within one week of announcing this new technology, this happened. 

Brian Beck: I saw another article, I wanted to highlight, Andy, because, you know, I’ve been saying for five years that these aggregator and accelerator models in Amazon selling and for brands to sell on Amazon, they don’t work. So, let me give you a little bit of context here. So, five years ago, a business model called aggregators came about where small 3P Amazon sellers were selling their business to these aggregators who would then instantly improve the business with better supply chain and marketing and data and analytics. But the problem with the model, Andy, is that, is that there’s no differentiation that, when you go and you buy these small companies, you don’t control the channel, like they’re all dependent on Amazon. And you don’t control the product either. I mean, there’s no real product differentiation, they’re small brands and they’re all selling through Amazon and a couple of other marketplaces. So, this company called Thrasio, which is one of the biggest Amazon aggregators, it raised a billion dollars in 2021. That was three years ago, they just filed chapter 11 this week. Oh my goodness, there was another one called PharmaPacks, that filed bankruptcy, they were doing a billion dollars in revenue on Amazon, a billion dollars. So, you know, think about it, if you don’t control the channel, and you don’t control the product, then you can’t differentiate. I mean, what do you control? What do you control? Well, what you control is your declining margin. I mean, you have no margin left, the P&L doesn’t work. 

Andy Hoar: There’s no barrier to entry.  Yeah, we can just scale your way into this business and out of this business. And, you know, if there are, if you’re not making something or selling it, then there’s no barrier to entry, other people can raise money. But I think the real issue here and reading the articles about it was that you’re not making the product. Forget about the channel for a moment. There’s so many variables associated with selling somebody else’s product that really does require some expertise. You can’t just genericize it and scale it. And I think that was another dimension here, but interesting how three years ago, worth $10 billion, actually less than three years ago. 

Brian Beck: Economies of scale do not solve a bad business model. Sorry, you can sell, you can’t build volume and make up negative profits in volume, sorry. Anyway, so there’s better paths for brands and ways to approach Amazon and the other marketplaces, but fascinating development, I continue to follow. As I posted on it yesterday in LinkedIn, this also gets to our core question, which is, you know, with all these folks going, now coming on the market, you’ve got obviously people that have a lot of digital skill, e-commerce skill from businesses like Therasio and others that are going to become available. And you and I, we talk to people frequently, how do you master this B2B e-commerce job search process? What are some of the biggest obstacles that people are finding in terms of finding the next role? Get all these people coming on the market. And the same time you and I hear about people looking for talent, what’s going on? Why aren’t they matching up and why aren’t they getting into the roles? What’s getting in the way? So you found an interesting article, Andy, about this, from Harvard Business Review. Why career transition is so hard? Do you want to tell us about this? 

Andy Hoar: Yeah, so you’re right. We hear companies complain constantly by not being able to find talented people. And we hear talented people complain constantly, I’m not being able to find the right kind of role. It’s, in this case, we’re going to take the perspective of the job seeker. They’ve done a lot of research around this. They just still did find really two reasons why job seekers struggle. One is that when you leave a job, you lack the institutional support that you had when you were in the job. You know, it was pretty clear what a promotional path was. You went from, you know, director to senior director, senior director to vice president. There were markings along the way. You sort of knew what was in front of you, but today it’s a more of a gig economy where people are working in kind of amorphous areas, like digital transformation, you can’t really point out in a structured way, what value you’re adding, plus it’s hard to tell people what value you did add when it’s like, I thought about digital transformation. Like how would you justify to somebody, you did a great job of digital transformation. You got some metrics, but a lot of that soft stuff, like we changed the way the company thinks. Those are hard to explain to people, especially when you’ve got a pretty significant comp package and they’re saying, okay, what does that really mean? Did you just manage a bunch of people? And what happened? The other thing is you kind of lose your professional identity, especially if you work for a company a long time, all of your network is within the company that you were just laid off from. But the other kind of high point in this article was that, the biggest barrier is that people don’t know what they want to do. They know what they don’t want to do, but they don’t know what they do want to do. And again, if you don’t do this very often, you’re not really accustomed to sort of explaining to people, hey, this is my ideal job. I know when we talk to people, I always ask that question. Money aside, what would you like to do? And half the people really don’t know. They refer to what they were doing before, which is the state that, I get social psychologists call liminality, which is halfway between a past that’s over and a future that’s uncertain. And people are not comfortable in that area. Again, sales people are because every month is like that, right? But the average person is not. And so that’s why sometimes it forces you to think about stuff that you’re not used to thinking about. And why do we always hear stories about:  I never would have jumped, but when I did, I found something I really love doing. Let’s be honest, you weren’t in that mindset. And so you’re stuck in that middle ground.

Brian Beck: So how do people find jobs? We pulled this data together too, about the traditional paths to, you know, finding the next role, right? And these are kind of the ways people do it, networking using LinkedIn, right? And we see people endorsing one another on LinkedIn. That sort of thing, recruiters obviously, but you know, the recruiter world is one where they know about the jobs, but also it’s very focused. I find that it has to be what they’re working on today, right? So the recruiters, you have so many of them. And if you’re a job seeker, going to a recruiter, making sure that you’re networked to them, et cetera, but in terms of actually, you have to fit what they’re looking at, right, at that moment, right? And then there of course traditional, you know, job sites and boards, right? And this is the way that most people think, particularly they’ve been working for a company for 40 years or 30 years or 20 years, they go and they go, oh, let me look  on Indeed, or Career builder, or Zip recruiter, or LinkedIn, right? So any thoughts on this, I mean, this is what I see. 

Andy Hoar: Well, just that, you know, the article, I’m going to point it in this, that too, about the networking part. That’s clearly the most important. It’s also the idea of the strength of weak ties, called the bond group, and that’s the group where you go deeper with the existing friends and they’re kind of your emotional support network. But it is, they studied this, LinkedIn and article about this, 20 million people in this research study, and they found that the vast majority of people who got jobs through LinkedIn or reported having success got it by networking with people in the second, third and fourth concentric circle. 

Brian Beck: Well, so we’ve got this unconventional and conventional way. This was generated by AI, right? 

Andy Hoar:  Yeah, so just very quickly here, you know, people don’t do this very often, so the last time people did it was maybe years ago, and so they think the way to do this is to create a resume and apply for jobs. Now, you can potentially get a job that way, but we’ll talk in a moment why that’s not very effective. The new way of doing this is, and we’ve even talked about this before, that, you know, it’s better to, I like to joke, work for a company before you work for a company. So the unconventional way of doing this is, see if it’s a good fit. The only way you’re ever going to know whether the company is a good fit on both directions is to work there. They can hook you up with a CEO, they can wine and dine you, you can put on a good show. At the end of the day, you’re not going to know whether you like it there, and whether they like you there, and so you actually do it. So why not just do it? That way you kill a couple of birds with one stone. Now, it’s not always possible to do that, but with executives when they’re, for example, RIF’ed, they do get packages and there’s time. So take advantage of that time to do some work. Work for a couple of companies, see what you like. I think that’s a good way to get over the hump too. And this is you should target companies, find out which ones and leverage your experience. 

Brian Beck: Right, and of course, I find the networking is the key to that, but we went out and asked some folks firsthand to give us some color on this. Andy, you interviewed a job seeker, I think just yesterday, right? What did they say? 

Andy Hoar: Yeah, so the comment was about executive recruiters and they said, they often keep new positions confidential or the executive recruiter prefers to reach out to candidates directly who are most often already in the role. So it’s kind of like, don’t call us, we’ll call you. And because of that, the other point was, it makes it hard to find top jobs on LinkedIn, for example, because a lot of the top jobs are hidden, which we’ll talk about in a moment. The other point was that said, there are some maybe opportunistic chances on LinkedIn. And this person said, I actually started my job search by applying for jobs on LinkedIn. This is a very senior person and had an interview with the recruiter for head of commerce in a few hours. He said, unfortunately, the role was too junior, but it shows that for the right kind of roles, LinkedIn could work.

Brian Beck: And you also talked to a recruiter, this is interesting, this is some interesting data here. 

Andy Hoar: Yeah, it just was fascinating. So this person who’s been doing this for a long, long time, you’ve seen through multiple generations of recruiting said, look, networking’s the name of the game, that’s where most of the jobs are filled. Your odds of landing a job through a job posting is something you’re on 3%. Well, that’s not very good. Those aren’t very good odds. So just blindly applying for jobs probably doesn’t make sense. This is the biggest insight. 30% according to this individual, 30% of the job market is hidden, meaning there’s no job requirement that’s been created. The company oftentimes wants to keep the job confidential, especially the more senior the position, or a person literally just left. And they haven’t a chance to do this. You’re on top of mind. If you’re Johnny on the spot, so to speak, you can slide into some of these opportunities before it ever gets out because that’s the other problem. By the time the job description is published externally, this person said, the company is late in the recruiting process because the job has already been socialized internally quite extensively. So when you see something come available externally, chances are several internal candidates are already on the docket and it’s really hard to compete with people internally. So you’ve got to be there when the roles open up and that’s somewhat difficult to do. But the way to do it, to your point, is to have extensive networks. One last point he said is create a target company, set of companies and reach out to those companies and basically offer your services. And he said most people here are pretty talented marketers, and turn it into a marketing campaign where you measure your success. 

Brian Beck: 100% Andy, you know, the best way to do this, my opinion, just take some time to publish some things about where you’re an expert. Go on LinkedIn, publish stories or blog posts or put a perspective out there. Jobs will come to you if you do those things. Market yourself a bit, you know, build your personal brand, that’d be my advice. And it’s worked well for you and for me, through our career for sure. So we asked our community what the biggest obstacle to finding a new job and B2B commerce was. We asked on LinkedIn and we offered four choices and the one that came out of the top, Andy, was the old way doesn’t work, 55%. When we say the old way, what we’re referring to is the build a resume and go on Indeed and Zip Recruiter and LinkedIn and look for a job and submit, it doesn’t work. Trying to find the perfect job was number two at 30%. So not to your point at the McKinsey article earlier, you know, not trying to find, not to solve her perfect, right? Also, limited professional network was 15%. Nobody said they needed the security of a big company. So the one thing, Jason Hein, by the way, chimed in on this on LinkedIn. Thank you, Jason, for your comment. He said, hey, you know what the number one obstacle to finding a new job is that the company that’s hiring doesn’t understand what they’re hiring for. So yes, Jason, I agree with that. There’s not much a job seeker can do about that, but I would agree it is a big issue. But the nice part about all this Andy is, you know, the networking piece, which is very important is something that we at Master B2B, solve for.