20Growth: Meta CMO Alex Schultz on How All Founders Have to Change...

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20Growth: Meta CMO Alex Schultz on How All Founders Have to Change Their Marketing Playbook in a World of AI | Is AI Plateauing, What it Means if China Wins the AI Race and Why Zuck is a Generational Leader

Summary

Meta CMO Alex Schultz discusses the evolving marketing playbook in the age of AI, emphasizing that all marketing is performance marketing and that authenticity and creativity will remain crucial differentiators.

The conversation also delves into the implications of AI advancements, the geopolitical landscape of AI development with China and the US, and the future of technology interfaces.

Key Points

• A clear North Star is essential for company direction, with the metric serving to describe that goal, and a metric is always imperfect.
• Pre-product market fit, retention is the most critical metric; focusing solely on MAU can lead to issues if retention is poor.
• For broad audiences, a growth team should focus on the marginal user, while the rest of the company caters to power users; this split becomes necessary at scale.
• Building a central growth team with expertise is beneficial, but individual product teams also need their own growth teams for product-specific initiatives.
• A significant portion of AI development's future progress is predictable, similar to semiconductor advancements, with mega-scaling data centers, continental-scale training, and NVIDIA's chip improvements being key tailwinds.
• AI capabilities are advancing rapidly, with potential for companies to be run by a single person leveraging AI for various functions.
• The debate on AI's timeline ranges from "Max Doom" scenarios to optimistic "Gentle Singularity" views, with a mid-case also considered.
• Founders' need for capital can influence their narrative around AI timelines, with those needing funding often promoting sooner arrival of advanced AI.
• China's AI capabilities, particularly in distillation and rapid iteration, are significant, leading to a potential geopolitical AI race with the US.
• Europe is currently behind in the AI race but has the potential to catch up with the right policy decisions and will, though it may be weaker relatively.
• Authenticity and creativity are expected to be the last aspects of content creation to be automated by AI, becoming key differentiators in a world of infinite AI-generated content.
• Performance marketing is essentially all marketing, and brand marketing, while harder to measure, is crucial for long-term success.
• Meta's rebranding from Facebook to Meta was essential to overcome the negative connotations of the Facebook app and to represent the broader company's ambitions beyond legacy social media.
• Business messaging, particularly through platforms like WhatsApp, represents a significant and growing revenue stream for Meta, especially in markets where messaging is the primary digital interface.
• Meta's success with Threads is significant, particularly in markets like Japan, indicating a strong product-market fit, though it may not be as widely adopted by VC and tech circles who often favor Twitter.
• Meta's strategy involves numerous "at-bats" or attempts at new products, accepting failures as part of a high-speed innovation process, exemplified by the iterative development of Reels and the pivot from initial failures.
• The transition to AI-powered ranking and content delivery has fundamentally disrupted Meta, leading to significant strategic shifts and stock price dips, but ultimately positioning the company for future growth.
• Google's proactive approach with Gemini at the top of search and building its cloud business shows a willingness to disrupt itself, a crucial factor for long-term relevance.
• Quantum computing poses significant security risks by breaking encryption, but is considered a more "solvable" problem than a malign AI superintelligence.
• Meta's business messaging, particularly click-to-messaging ads and verification services, is a highly valuable and underappreciated revenue stream, especially in emerging markets.

Conclusion

The future of marketing and content creation will be heavily influenced by AI, but human creativity, authenticity, and genuine connection will remain paramount.

The AI race between the US and China has significant geopolitical implications, and while Europe is currently behind, it has the potential to catch up with strategic policy decisions.

Companies must be willing to embrace radical disruption, like Meta's pivot to AI-driven ranking and content, to remain relevant and achieve long-term success, even if it involves painful transitions.

Discussion Topics

• How do you see AI fundamentally changing the role of a CMO in the next five years?
• With the rise of AI, which aspects of content creation do you believe will remain uniquely human and valuable?
• What are your thoughts on the potential for AI to create entirely new industries or render existing ones obsolete?

Key Terms

North Star

A guiding principle or ultimate goal that provides direction for a company or individual.

MAU

Monthly Active Users, a common metric to measure user engagement with a product or service.

Product-market fit

The degree to which a product satisfies strong market demand.

Distillation (AI)

A technique in machine learning where a smaller, more efficient model is trained to mimic the behavior of a larger, more complex model.

Agentic behavior (AI)

The ability of an AI system to act autonomously and make decisions to achieve its goals.

Continental Scale Training

Training AI models across multiple geographically dispersed data centers to handle massive computational demands.

Scaling Laws (AI)

Empirical observations that describe how model performance scales with increased data, compute, and parameters.

Breakthrough Superintelligence

A hypothetical future point where AI surpasses human intelligence across all domains.

Innovation Workspace

A collaborative environment, often digital, designed to facilitate the ideation and execution of new product or service development.

Incrementality

Measuring the additional impact or value generated by a specific marketing activity or channel.

Click Target

A clickable element within an ad or digital content designed to direct users to a specific action, such as a purchase or website visit.

CPM

Cost Per Mille (or Thousand), a pricing model for advertising where the advertiser pays a fee for every thousand times their ad is displayed.

TAM

Total Addressable Market, the overall revenue opportunity available for a product or service.

Innovator's Dilemma

A concept describing how successful companies can be disrupted by newer technologies or business models because they prioritize existing successful products over potentially disruptive innovations.

XR

Extended Reality, a term encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR).

Quantum Computing

A type of computation that uses quantum-mechanical phenomena, such as superposition and entanglement, to perform operations on data.

Malignant AI Superintelligence

A hypothetical AI with superintelligence that has harmful or destructive intentions.

Click-to-messaging

An advertising format where clicking an ad directly opens a chat or messaging interface for communication with the advertiser.

CPMs

Cost Per Mille (or Thousand), a pricing model for advertising where the advertiser pays a fee for every thousand times their ad is displayed.

Product Market Fit

The degree to which a product satisfies strong market demand.

At-bats

In the context of business, refers to opportunities or attempts to achieve success, akin to batting attempts in baseball.

Timeline