Bootstrapped SaaS co to 8-fig ARR. Helped take another from 0 to 9-fig rev & NASDAQ IPO. Lucky husband and dad of 2
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Joined November 2011
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I am one of these young Americans
I was living paycheck to paycheck
I bought a 20yr old used car for $3000 using money I saved up from mowing lawns in high school. Drove it for a decade
When that broke down I replaced it with another $3000 car which I drove for another decade
Only did oil changes, no other maintenance costs. Total cost of ownership worked out to ~ $30 / mo over 20 years
Everyone starts out living paycheck to paycheck
You break free of that by being frugal, investing every penny you can and outworking everyone else around you
Not by being entitled, bitching about boomers, or whining about the $8400 / yr car payment you chose being too expensive
Take ownership of your situation
Stop being a victim
Realize the only person who can fix your finances is you
Be more frugal than your peers
Work harder than your peers
(including 2nd jobs and side hustles — whatever it takes)
Invest the difference every month
That’s how you break free
Not by being a whiny bitch
My boomer uncle just said something that genuinely made me furious.
“If you have a $700 car payment, don’t complain about living paycheck to paycheck.
And don’t forget your $9 daily latte and $150 monthly phone bill.”
This is exactly the problem.
Why is this generation constantly being told to give up every little comfort just to afford a decent life?
What does a morning coffee have to do with being able to afford a home, build a future, and get ahead financially?
We’re dealing with a generation of people in positions of power who still don’t understand the financial reality younger Americans are living through.
And somehow, we’re the ones being blamed.
Anyone who has ever done conversion optimization or A/B testing on a website can tell you with certainty:
For any process that involves humans filling out a form, you will always see a normal “bell curve” distribution of how quickly vs carefully people fill out that form
Some will go slow, read all the fine print, and triple check before making their choice
Others will rush, scan quickly and just tick the first option that appears right at first glance
Most people do something in between
So if you want to artificially suppress the rate at which a given option gets selected, it’s remarkably easy to do
You simply target the folks on that far left tail of that quickly vs carefully distribution
There’s a time-tested method for how to do that. Namely:
1) place the option you want to suppress at the bottom of the list
2) insert a superfluous option that looks similar above it
3) place the option you want people to select above both
You don’t have trick everyone (or even a majority) of people filling out the form
The median voter will see right through your trick, and that’s fine
You’re only targeting a few % of the most rushed people on the far left tail of the curve
All that was required to swing the AK senate seat race was 0.6%
They got 3%
97% of voters went slow and read carefully enough to notice and side-step the trick
3% did not
That’s not surprising
It’s exactly what you’d expect from a normal distribution of any set of humans filling out this form
But it was more the enough to decide who gets a seat in the US senate
Pumpkins in the trash
Christmas tree went up at 12:01am last night
It’s officially THE MOST WONDERFUL TIME OF THE YEAR
My house will be waking up to peppermint hot chocolate and Mariah Carey Christmas at obnoxiously high volume every morning this week
> be reddit
> foster culture of rampant anti-capitalist woke circlejerking on the platform
> advertisers can’t make $ from ads b/c reddit users are commies who think all businesses are evil
> realize only way to profit is to license content to AI labs for training
> AI labs already scraped all the content
> require login to prevent future scraping
> SEO traffic goes to zero
> usage drops 90%
> die a slow unremarkable death
The spread between how much value a business creates vs. how much value it captures is stored-up potential energy for the future earnings growth of that business
It's a pool of easily available incremental earnings the business can capture essentially any time it wants to
Capturing that potential does not require the business to create any new value in the world
Which is important because creating new value in the world is:
a) hard
b) not entirely in the business's control
c) must be done against market forces + competitors who push back
d) highly uncertain
Whereas a business simply increasing its take rate on the value it already created is:
a) comparatively easy
b) often entirely within the business's control
c) generally cannot be impeded by competitors or other outside forces
d) highly certain overall
For these reasons, a large potential energy justifies a large multiple atop a company's current earnings
For Google, for most of its life up until recently, this spread was MASSIVE
Google created orders of magnitude more value than it captured in Search for the better part of two decades
This (quite reasonably) justified a high a multiple
That spread is now closing fast
Google has been rapidly driving its value capture / value creation ratio in Search towards (and even through) 100%
The vast majority of Search advertisers today already operate the channel at breakeven or a loss
In most segments of Search, Google already captures near 100% of the value it creates. And in many segments >100%
Google stored up an enormous potential energy in Search over 20+ yrs, and is torching the entirety of it to fund its AI capex today
This is not necessarily good nor bad strategy. It's simply a statement of fact
And it is clearly an intentional strategic choice by Google
Only time will tell whether that strategy was correct
But one thing is already settled:
The spread that justified a high multiple on Google's Search business is no longer there
And it's not coming back
As someone who has personally spent $500k / mo+ on Google Ads for years, I can tell you with certainty:
This revenue growth in Search is artificial & extremely unhealthy for Google’s business long term
Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries
Google’s response?
Manufacture revenue growth via short-sighted, highly extractive, customer-hostile tactics. I.e. charge advertisers more for lower quality clicks, including clicks they do not want and explicitly did not approve Google to charge them for
A few examples to illustrate:
For all of its history until recently, Google operated on a 2nd price auction model
I.e. if you bid $5 CPC and the next highest bidder bids $1 CPC, Google charged you $1.01 for the click (one penny more than the 2nd highest bidder) rather than the $5 you bid
This was a genius move by Google early on as it incentivizes advertisers to input their true maximum willingness to pay rather than trying to play the game of bidding low and constantly adjusting to try to stay just ahead of the next highest bidder while still not paying too much
However recently, Google silently deprecated the 2nd price auction and began charging advertisers as much as their bid and budget caps allow, regardless of what anyone else is bidding
It’s a short-sighted cash grab at the expense of the long term health of the advertiser ecosystem
Making thing worse, Google also recently nerfed keyword targeting precision
Google previously had precise keyword targeting settings that allowed advertisers pick individual search phrases to bid on, defined down to the character w/ exact match or phrase match targeting
This was one of the core features that made search advertising magic, enabling advertisers to run extremely precise campaigns based on exactly what their target customer typed
But now, even if you bid on a specific term or phrase using the strictest exact
-match targeting settings, Google will show your ad across 1000’s of unrelated keywords, labeling them as as “exact match (close variant)”
The definition of “close variant” means whatever they want it to and changes constantly. The result is advertisers get billed for clicks that are totally irrelevant to their business and that their targeting settings explicitly forbid Google from targeting. Google does it anyway and there’s no ability to turn this off
So now exact match is broad match, and broad match is just meaningless spam
This is all very bad for advertisers, but for Google, it allows them to show your ad and bill you for clicks across 1000x more searches that were previously going unmonetized (mainly because they’re garbage queries no one wants)
This is how you grow revenue atop declining search volumes
Lastly, and perhaps most egregiously, Google quietly stopped respecting budget caps by a factor of 2x. For example campaigns we’ve been running for years with $1000 daily budget caps suddenly began spending $2000+ per day
And the extra spend is entirely on the garbage keywords Google arbitrarily throws in as “exact match (close variants)” which have no value to our business, but can’t be turned off
Google offers no refunds nor any recourse for overspend or spend on keywords you explicitly did not target
These are not the actions of a healthy business. These are the actions of company whose core business is in decline but desperately needs to pump quarterly earnings so Wall Street will continue to fund insane capex while hopefully looking through their rapidly deteriorating negative free cash flow
Google operated a benevolent monopoly for the better part of 25 yrs
Meaning the value Google captured from Search was but a small fraction of the value it created, and that spread produced a potential energy that justified expectations of high earnings growth far, far into the future
This is now no longer the case
At the alter of AI capex, Google is sacrificing the golden goose
As someone who has personally spent $500k / mo+ on Google Ads for years, I can tell you with certainty:
This revenue growth in Search is artificial & extremely unhealthy for Google’s business long term
Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries
Google’s response?
Manufacture revenue growth via short-sighted, highly extractive, customer-hostile tactics. I.e. charge advertisers more for lower quality clicks, including clicks they do not want and explicitly did not approve Google to charge them for
A few examples to illustrate:
For all of its history until recently, Google operated on a 2nd price auction model
I.e. if you bid $5 CPC and the next highest bidder bids $1 CPC, Google charged you $1.01 for the click (one penny more than the 2nd highest bidder) rather than the $5 you bid
This was a genius move by Google early on as it incentivizes advertisers to input their true maximum willingness to pay rather than trying to play the game of bidding low and constantly adjusting to try to stay just ahead of the next highest bidder while still not paying too much
However recently, Google silently deprecated the 2nd price auction and began charging advertisers as much as their bid and budget caps allow, regardless of what anyone else is bidding
It’s a short-sighted cash grab at the expense of the long term health of the advertiser ecosystem
Making thing worse, Google also recently nerfed keyword targeting precision
Google previously had precise keyword targeting settings that allowed advertisers pick individual search phrases to bid on, defined down to the character w/ exact match or phrase match targeting
This was one of the core features that made search advertising magic, enabling advertisers to run extremely precise campaigns based on exactly what their target customer typed
But now, even if you bid on a specific term or phrase using the strictest exact
-match targeting settings, Google will show your ad across 1000’s of unrelated keywords, labeling them as as “exact match (close variant)”
The definition of “close variant” means whatever they want it to and changes constantly. The result is advertisers get billed for clicks that are totally irrelevant to their business and that their targeting settings explicitly forbid Google from targeting. Google does it anyway and there’s no ability to turn this off
So now exact match is broad match, and broad match is just meaningless spam
This is all very bad for advertisers, but for Google, it allows them to show your ad and bill you for clicks across 1000x more searches that were previously going unmonetized (mainly because they’re garbage queries no one wants)
This is how you grow revenue atop declining search volumes
Lastly, and perhaps most egregiously, Google quietly stopped respecting budget caps by a factor of 2x. For example campaigns we’ve been running for years with $1000 daily budget caps suddenly began spending $2000+ per day
And the extra spend is entirely on the garbage keywords Google arbitrarily throws in as “exact match (close variants)” which have no value to our business, but can’t be turned off
Google offers no refunds nor any recourse for overspend or spend on keywords you explicitly did not target
These are not the actions of a healthy business. These are the actions of company whose core business is in decline but desperately needs to pump quarterly earnings so Wall Street will continue to fund insane capex while hopefully looking through their rapidly deteriorating negative free cash flow
Google operated a benevolent monopoly for the better part of 25 yrs
Meaning the value Google captured from Search was but a small fraction of the value it created, and that spread produced a potential energy that justified expectations of high earnings growth far, far into the future
This is now no longer the case
At the alter of AI capex, Google is sacrificing the golden goose
Q2 was an amazing quarter, with our AI investments redefining what’s possible across every part of our business.
Alphabet revenue grew 24% YoY and Google Cloud accelerated to 82% growth. We saw exciting momentum across the board from Search to YouTube to the Gemini app (which reached 950M monthly active users). Our model APIs are processing 22B tokens/min (up from 16B+ last quarter) driven by our workhorse Flash models. We’re also seeing great adoption of Gemini Enterprise, used by 90% of the Fortune 100, as well as strong demand for our security solutions.
Outstanding results and momentum, and such an exciting moment—thanks to all of our partners and employees around the world! 🙌 About to hop on the call!
3 months later Google is still doing all these same shenanigans to artificially inflate search rev at the expense of the long term health of the search business (and to the extreme detriment of their advertisers)
Google is not slowing down on this at all
If anything they’re getting more aggressive with the same highly-extractive, customer-hostile tactics
As Google wastes a higher % of each advertiser’s budget on garbage traffic, and makes it harder for the advertiser to stop them from doing that, ROI on ad spend for advertisers mechanically declines
What you’re seeing in the data now is simply an increasing % of Google’s advertisers doing the math on their ad spend ROI, and pulling back on spend partially or entirely in response
As someone who has personally spent $500k / mo+ on Google Ads for years, I can tell you with certainty:
This revenue growth in Search is artificial & extremely unhealthy for Google’s business long term
Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries
Google’s response?
Manufacture revenue growth via short-sighted, highly extractive, customer-hostile tactics. I.e. charge advertisers more for lower quality clicks, including clicks they do not want and explicitly did not approve Google to charge them for
A few examples to illustrate:
For all of its history until recently, Google operated on a 2nd price auction model
I.e. if you bid $5 CPC and the next highest bidder bids $1 CPC, Google charged you $1.01 for the click (one penny more than the 2nd highest bidder) rather than the $5 you bid
This was a genius move by Google early on as it incentivizes advertisers to input their true maximum willingness to pay rather than trying to play the game of bidding low and constantly adjusting to try to stay just ahead of the next highest bidder while still not paying too much
However recently, Google silently deprecated the 2nd price auction and began charging advertisers as much as their bid and budget caps allow, regardless of what anyone else is bidding
It’s a short-sighted cash grab at the expense of the long term health of the advertiser ecosystem
Making thing worse, Google also recently nerfed keyword targeting precision
Google previously had precise keyword targeting settings that allowed advertisers pick individual search phrases to bid on, defined down to the character w/ exact match or phrase match targeting
This was one of the core features that made search advertising magic, enabling advertisers to run extremely precise campaigns based on exactly what their target customer typed
But now, even if you bid on a specific term or phrase using the strictest exact
-match targeting settings, Google will show your ad across 1000’s of unrelated keywords, labeling them as as “exact match (close variant)”
The definition of “close variant” means whatever they want it to and changes constantly. The result is advertisers get billed for clicks that are totally irrelevant to their business and that their targeting settings explicitly forbid Google from targeting. Google does it anyway and there’s no ability to turn this off
So now exact match is broad match, and broad match is just meaningless spam
This is all very bad for advertisers, but for Google, it allows them to show your ad and bill you for clicks across 1000x more searches that were previously going unmonetized (mainly because they’re garbage queries no one wants)
This is how you grow revenue atop declining search volumes
Lastly, and perhaps most egregiously, Google quietly stopped respecting budget caps by a factor of 2x. For example campaigns we’ve been running for years with $1000 daily budget caps suddenly began spending $2000+ per day
And the extra spend is entirely on the garbage keywords Google arbitrarily throws in as “exact match (close variants)” which have no value to our business, but can’t be turned off
Google offers no refunds nor any recourse for overspend or spend on keywords you explicitly did not target
These are not the actions of a healthy business. These are the actions of company whose core business is in decline but desperately needs to pump quarterly earnings so Wall Street will continue to fund insane capex while hopefully looking through their rapidly deteriorating negative free cash flow
Google operated a benevolent monopoly for the better part of 25 yrs
Meaning the value Google captured from Search was but a small fraction of the value it created, and that spread produced a potential energy that justified expectations of high earnings growth far, far into the future
This is now no longer the case
At the alter of AI capex, Google is sacrificing the golden goose
I tried to warn you
As someone who has personally spent $500k / mo+ on Google Ads for years, I can tell you with certainty:
This revenue growth in Search is artificial & extremely unhealthy for Google’s business long term
Search volumes are declining as legacy search is being increasingly cannibalized by non-monetized LLM queries
Google’s response?
Manufacture revenue growth via short-sighted, highly extractive, customer-hostile tactics. I.e. charge advertisers more for lower quality clicks, including clicks they do not want and explicitly did not approve Google to charge them for
A few examples to illustrate:
For all of its history until recently, Google operated on a 2nd price auction model
I.e. if you bid $5 CPC and the next highest bidder bids $1 CPC, Google charged you $1.01 for the click (one penny more than the 2nd highest bidder) rather than the $5 you bid
This was a genius move by Google early on as it incentivizes advertisers to input their true maximum willingness to pay rather than trying to play the game of bidding low and constantly adjusting to try to stay just ahead of the next highest bidder while still not paying too much
However recently, Google silently deprecated the 2nd price auction and began charging advertisers as much as their bid and budget caps allow, regardless of what anyone else is bidding
It’s a short-sighted cash grab at the expense of the long term health of the advertiser ecosystem
Making thing worse, Google also recently nerfed keyword targeting precision
Google previously had precise keyword targeting settings that allowed advertisers pick individual search phrases to bid on, defined down to the character w/ exact match or phrase match targeting
This was one of the core features that made search advertising magic, enabling advertisers to run extremely precise campaigns based on exactly what their target customer typed
But now, even if you bid on a specific term or phrase using the strictest exact
-match targeting settings, Google will show your ad across 1000’s of unrelated keywords, labeling them as as “exact match (close variant)”
The definition of “close variant” means whatever they want it to and changes constantly. The result is advertisers get billed for clicks that are totally irrelevant to their business and that their targeting settings explicitly forbid Google from targeting. Google does it anyway and there’s no ability to turn this off
So now exact match is broad match, and broad match is just meaningless spam
This is all very bad for advertisers, but for Google, it allows them to show your ad and bill you for clicks across 1000x more searches that were previously going unmonetized (mainly because they’re garbage queries no one wants)
This is how you grow revenue atop declining search volumes
Lastly, and perhaps most egregiously, Google quietly stopped respecting budget caps by a factor of 2x. For example campaigns we’ve been running for years with $1000 daily budget caps suddenly began spending $2000+ per day
And the extra spend is entirely on the garbage keywords Google arbitrarily throws in as “exact match (close variants)” which have no value to our business, but can’t be turned off
Google offers no refunds nor any recourse for overspend or spend on keywords you explicitly did not target
These are not the actions of a healthy business. These are the actions of company whose core business is in decline but desperately needs to pump quarterly earnings so Wall Street will continue to fund insane capex while hopefully looking through their rapidly deteriorating negative free cash flow
Google operated a benevolent monopoly for the better part of 25 yrs
Meaning the value Google captured from Search was but a small fraction of the value it created, and that spread produced a potential energy that justified expectations of high earnings growth far, far into the future
This is now no longer the case
At the alter of AI capex, Google is sacrificing the golden goose