Very few people have as much experience in, or perspective on, digital marketing and advertising as Roland Reichel. He has watched the paid-advertising ecosystem become overwhelmed and begin to fail the entrepreneurs and small businesses that need it the most. As an antidote, Rolan created Arrow AI, a digital content platform which helps businesses be seen, stay relevant, and earn customers.
We recently had a conversation with Rolan, and got his insights on business, the state of digital marketing, and how his tool Arrow AI can help small businesses.
Hello! Give us the simple explanation of what Arrow AI is and does.
For sure. So, we’re solving a really important problem here at Arrow, and the problem is this: For 85% of businesses, paid advertising doesn’t work. It sucks, it’s complicated, it’s difficult, it feels like a slot machine. You go to Facebook, you think, “oh hey, I’ve got ten-grand for digital advertising”. Maybe it’ll work, maybe it won’t, you are never quite sure if it does. Perhaps you’ve tried freelancers or an agency to help with digital marketing, and it didn’t work. This is the reality for most businesses. What’s happened is really simple; that business model of paying for discovery is done. Gone. Doesn’t work anymore. But a lot of businesses think, “Oh, that’s how Nike does it, that’s how I’m going to do it.” Well, it works for Nike because they can spend eight million dollars a month.
So, if you start from this idea that paid ads are broken, then what do you do? You still need to be online. You still need a voice. You still need visibility. You still need to get visitors. Content is the way forward for small businesses. So, we’ve built a content ecosystem. It’s easy to use, its free, any business can use it. Our tools are available in the Google Chrome Store. In about 10 to 15 seconds a day, a small business can start posting like a pro. The benefits are tremendous, you raise your profile in your community, you become a trusted voice. It’s about status and trust online, and when you post great content people trust you, they listen to you, and want to do business with you.
Why is the paid ad ecosystem broken for businesses that aren’t Nike?
Well, a couple things have happened. One is, that whole ecosystem has matured. It used to be the wild west, clicks were cheap online, you could figure out your Google account, put in ten bucks and get some traffic. Those days are long gone. I’m going to give you three numbers that tell the whole story. First, the cost of clicks has gone up 47% in 12 months. Second, the number of people who have a paid advertising account, where they can just buy ads on Facebook or Google, has gone up 43% in the last 12 months. So, the price of media has doubled, the number of people trying to buy it has doubled. Third thing is, according to NASDAQ and Intuit, 17 million new businesses are coming online this year.
So you’ve got this ecosystem that is holding on by a thread because there are only so many ads and so many eyeballs, the prices are up, and now 17 million new businesses are coming in being like “I want to buy ads! I need people to find my e-commerce store!” It’s not tenable. This has been a long time coming, and I know because I worked in the belly of the beast. I’ve sold five hundred million dollars worth of digital advertising in my career, so I know how those systems work.
What is the solve that Arrow AI offers? How does your system solve that problem?
The first thing I would say is, we’re really more of a community than a system. Arrow AI is a content platform. You have a business page on Facebook and you need to post every day, right? The more you post the more you raise your status. Comments, likes, shares; like it or not, these are the things by which we are judged in 2022. We have to shift our thinking. This is not about advertising, this is about social status in a business context. So how do you gain social status? Post. Post lots of trading, cool content. That’s what we do. When you log into Arrow, you can browse content channels specific to your business. Imagine Netflix, but instead of movies it is business content. Let’s say I own a bar in Pittsburgh, I want to post Penguins content, I can scroll through Arrow’s sports channels; post, post, post, all this great, engaging content goes on my page and I start to build that social status; the likes, comments, and shares are so important in this day and age.
So, Arrow AI is essentially curating content relevant to the business?
Right. This is about getting you into the conversation. We aggregate all this content and make it available to repurpose. Sports, local weather, news, etc. It’s personalized, it’s localized, and customized for your business. If you have a sporting-goods store, we have 10 sports channels you can subscribe to, so you can post about cool sports stuff all day long. We are really more of a community, because imagine going into a room with a thousand of your best friends and asking: “What are you talking about? What are you up to?” and coming out with all this content to slam on your page so you’re always in the conversation and always relevant. It’s quite different than anything else out there.
If I am a coffee shop owner, I just started roasting my own coffee and I want to sell online, how would I use Arrow AI?
So you have a brand new e-commerce site on Shopify, you make this amazing hand roasted coffee, but there is so much competition out there. Before you can sell, you have to engage, and people have to trust your brand. We work with many e-commerce brands and tell them: look, Mr. Coffee Shop Roaster, fire up your social media channels and just start posting to gain that online credibility. Post the things you love most about your brand. Post pictures of you walking coffee farms in Columbia. Post other people’s content about Columbia. Find out who the top three coolest coffee people in the country are and repost their content. Join the conversation! Do that for a couple months, people will find you, people will see someone with a ton of compelling stuff to say about coffee and think, “let me check out their coffee”. Now you’re winning customers. What I would say to that coffee shop is: you have to establish your identity and presence, and be in that conversation so people can find you, engage with you, and buy your products.
Using Arrow AI, the coffee shop could be curating different coffee blogs and other coffee related media channels for their audience.
Yeah! They can curate that content right there, post it on their pages, set up automation, target and boost that content. Arrow makes the whole process of getting into the conversation so much easier.
I’m guessing faster as well, because somebody running a coffee shop doesn’t have six hours a day to be posting to social media.
They don’t have six minutes! And what’s worse, one of two things happen. They either don’t do it–now they’re not establishing credibility, becoming voices in the coffee community–or, they hire a freelance social media manager which costs a bunch of money and is not really effective.
For business owners starting out, what do you see as the gap in knowledge around digital marketing?
I think the gap goes like this: you start a business usually because you’re really good at doing that thing, whether it’s fixing cars or painting houses. You have competency and skill and people will pay you for that. What’s happened–and this has been going on for a while, but it’s accelerated in the last two years–is you have to be competent in digital marketing or you don’t have a business. You can’t paint houses if people can’t find you online. It wasn’t like that ten years ago! Everyone is being forced to be good at this, and not everyone is.
Pulling back from our tool for a minute, and thinking about the social and macro ramifications of this, I think about 41 million people in this micro-business economy. If they can’t market online, they can’t succeed. If they can’t succeed, what are they going to do for money? So, digital marketing competecy is so critical, so important, that literally millions of people can’t make money if they can’t market online. The power of Arrow is that we are that first rung to crossing the digital divide. I’m not saying Arrow is going to make you into the next Starbucks. I am saying our tool is easy to use, it’s free, and it’s going to get you those first hundred followers that you didn’t have, right there in your community, who will come in and get a cup of coffee. If we can develop that digital marketing competecy in millions of businesses, it can transform the economy. That’s the really big vision of what we’re doing. Arrow brings together my life’s work, to build digital marketing competecy for millions of businesses.
What was the inspiration for Arrow AI? The seed from which this business grew?
I come from a family of small business owners! My dad was a hippie in the 60s and we lived in the back of this shop he had called Under The Sun. He would make hand-goods and rings, and go on buying trips to Guatemala, and bring back materials, beautiful little purses, and amazing handicraft to sell in our shop. I saw how dedicated his work was. You know, back then you could open a shop and people would walk in your front door! That doesn’t happen so much anymore.
Right, we need to know what the Google or Yelp review says before we go in.
I’ve done that! Standing outside of the store, with the door right there! And it brings us back to status. We forget how important status is online. That’s why just the simple act of posting good, relevant content is so important to build that status. We were talking about the gap in knowledge before; I think that’s the gap. You can be an amazing mechanic, the best at fixing cars, but unless you have that leadership status in your community, people won’t come to your shop. The other guy down the street might be half as good as you, but has twenty freakin’ reviews and gets all the business. Local businesses aren’t playing a competency game, they’re playing an online perception game.
You offer your product for free. How does the business model work for you guys?
So SaaS rules the world now. There’s a SaaS platform for everything, which has been very empowering for businesses. But there’s a way in which this hurts micro-businesses, and it goes like this: I’m the coffee roaster you were talking about, and I want to launch an e-commerce store. I’ve got my shiny coffee roasting machine from Italy, I have this incredible roasting process I’ve spent years developing, I make incredible coffee beans. I’ve already invested a lot of time and heartbeats and money into doing this thing, now I want to launch online. Day one: Quickbooks, 80 bucks; Shopify, 20 bucks; a template, 130 bucks. Then you need this account and that service and, before you’ve even sold one bean, you could be 800 bucks into the SaaS ecosystem. In a way it’s great to have all these tools, but it’s small businesses having to pay upfront. What we did with Arrow is turn the whole thing on its head. We made the content free, and we make money as a content network. We have all those content channels we were talking about, and we also have shopping and affiliate channels. So, we just tossed e-commerce right into our platform. Now I’ve got travel agents using our content, but also posting about cruise deals. When someone books a cruise deal we make a couple bucks, they make a couple bucks. That’s our revenue model. It’s all about affiliate traffic we push through. That allows us to give our tool away for free without having to do, what I call, a SaaS tax on that small business.
So, win win for everybody?
Yeah! Right from the start, we knew we needed to approach it this way. You know, you can innovate on the technology side – that’s amazing, and I think companies do a great job – but nowadays you have to innovate on the business model side as well.
Thanks for the chat, Rolan!