Steve Blank

When I was a new VP of Marketing I got a painful lesson of who my PR (Public Relations) agency actually worked for. Later I realized that it was true for all of my external vendors. And much later I realized what I really should have been asking them to do.

The lessons still apply even though AI Agents will upend all of this and PR will end up being one of the many businesses that will no longer exist in its current form.

Here’s why.

We were a new public company about to launch our first product. I had given an exclusive story to a major publication whose name is now lost in the midst of time (either the Wall Street Journal or NY Times) to what I thought was an embargo. (An embargo is a fancy term for the publication agreeing not to release the story until a specific date and time.) To my surprise the newspaper published days before the date we had agreed on, screwing up what was supposed to be a perfectly synchronized press campaign.

Furious at my PR Agency, I naively told them to tell the publication that our company would never work with them again. While I don’t remember the exact conversation, today I can just imagine our PR agency’s CEO smiling with amusement on the other end of the phone line. 

It took me years to fully understand who my service providers and consultants actually worked for and the long-term relationships they really cared about – hint it wasn’t me. 

Background
I thought working with a PR agency was pretty simple. My role as VP of marketing was to first, develop a communications strategy that answers, “What are we doing and why.”
For example, our marketing goals were:
– Create demand for our products and drive it into our sales channel
– Create awareness of our company and brand for potential customers
– Create awareness for fundraising (VC, angels, corporate partners)
– Create awareness for potential acquirers of our company
Next I would figure out how to apply this strategy. The “how” required just four steps:
– Understand my audience(s)
– Craft the message for that specific audience
– Select the media where the messages would be read/seen/heard on
– Select the messengers you want to carry your message
Finally, I wrote up my hypothesis of what I thought audience, message, media and messenger should be. Then I used this  to search for and hire a PR agency. I based my selection on the answers to two questions:
1) What did they think about my first pass of the audience, messages, media and messenger.  Hopefully they could do much better than I did on my first pass.
And 2) Could they execute tactically – meaning did they have, or could they acquire the relationships with the right media and messengers to get me press mentions and stories in the media my customers would see.

They Work For Me
I thought the business model between my PR agency and my company was a simple single-sided market –  I was the PR agency’s customer and the PR agency worked for me. Talking to the press was what I paid them to do for me. Their place in the universe orbited around me. Pretty straight forward.

The reality was not so simple.
Yes I was the PR agency’s customer, but their long-term relationships, and the core of their business, were the people in the media outlets – their most valuable assets. I was actually part of a multi-sided market.

Since that was the case, there was no possible way they were going to yell at an important news outlet, regardless of what I demanded as a client.

And I Was Just Another Customer
Not only that, but I was just one of many of the customers for my PR agency’s services. And as I learned later, I was one of their smaller accounts. The agency served multiple companies and while they were happy to take my money and (mostly) liked working with us, if they thought I was too unreasonable or asked them to achieve the impossible, they could just replace my relationship with another client. So the world actually looked like this.

In actuality, my place in their universe was pretty small.

This is true for almost all external vendors and consultants who supply services to companies and individuals. Think of lobbyists – they’re not going to get crosswise with government officials – those are their long term relationships. Or architects and building contractors who have essential long-term relationships with subcontractors, planning commissions, etc.

One Last Thing – Learning What They Know
It wasn’t until much later in my career that I learned my most valuable lesson about service providers and consultants.

I had hired a consultant to set up distribution and manufacturing for our company in Japan. I knew nothing about those areas and got connected to a world class consultant. I made one trip to Japan with them but they did all the relationship building and knew their way around like a native. In our case, the relationship worked out– at least on the surface. But in hindsight, I realized I made an enormous strategic error. I had learned very little about how distribution and manufacturing worked in Japan. 

I got the “service” I paid for, but didn’t realize the opportunity I lost. What I should’ve been doing to make me a better CEO was using them to teach me how Japanese distribution worked, not just doing it for me. That’s a trap I find many founders falling into. If you would have asked me then, my excuse would have been, “I don’t have enough time or bandwidth or even interest.” But the downside is that it not only makes you beholden to a service provider/consultant forever, but also you and your company can never get smarter than that single point of contact. Think of Apple’s dependence on Foxconn and China Inc..

While I was hiring someone to set up distribution and manufacturing, I should have also hired them to teach me how and why what works and doesn’t. This would have made me smarter and  helped me to shape a better strategy of how to use them– and eventually replace them..

In the case of my PR agency, here’s what I didn’t understand: The most successful client-PR agency relationships aren’t transactional. They are partnerships marked by give and take — around messaging, communications strategies and tactics, etc.

Had I realized this early on, I could have asked my PR rep to explain how PR worked and what made for a great story. Understanding things from their perspective would have made me a better client – and a better source for the reporters we wanted to help tell our story. Instead, it would take me decades to learn.

Some service providers won’t share their knowledge claiming it’s their proprietary secret sauce.  More want to sell you their services time and time again. But others are willing to do so if you’ll pay for their time. Find them and hire them to become a wiser manager.

The Future Will Be AI Agents
Here’s why this is relevant to you now, whether you’re fresh out of school or over 40 (or even 30!) Faster than we can imagine, most of these services are going to be done by AI agents. Several already do a competent job and the rate of improvement is staggering.

For our PR Agency example, while the message, media, messenger, audience loop will remain, it will be completely run by AI Agents.

Today, PR agencies already use AI to draft initial versions of press releases, blog posts, and social media updates (thank you ChatGPT.) There are now AI tools that can customize content to target and pitch journalists based on their coverage history and interests. The same AI agents generate personalized email subject lines and body copy. Meanwhile, to proactively manage and protect a company’s brand, PR AI agents can monitor and scan millions of sources to track brand mentions, sentiment, and competitor activity, as well detect emerging negative narratives, and forecast potential reputational threats – weeks before they reach the mainstream.

Meanwhile bloggers and journalists will be using their own AI tools to scan and filter these pitches. The question is whether they’ll trade off the personal connection with PR professionals or welcome making their jobs easier sorting through the noise?

Welcome to the machine-to-machine age of media communications.

PR Morphs or Disappears
Today, these AI tools are standalone, bespoke apps. It’s not long before they are complete workflows with the AI agents perform the majority of tasks autonomously, with humans supervising. However, it’s inevitable that these tools will move to just one more type of  vibe coded apps that internal marketing departments and even small business will spin up themselves. Companies that lag in adopting these tools will be act a competitive disadvantage. PR agencies as they exist today will likely disappear and/or morph into providing higher level services.

This is just the impact of AI on one business that depends on high-touch humans. More will follow.

Most of how these agents will accomplish the tasks we send them out to do will be black boxes. We’ll get great results, but not know how they happened. Currently none of them have an “explain how and why you did this” mode. 

I wonder if this will make us smarter or just create more AI slop.

Lessons Learned

• Your service providers/consultants have relationships that are more important than you
  • They will preserve and protect those over you as a client
  • For most service providers/consultants you’re one of many clients
  • You only think they work for you
• Using service providers/consultants as only a one-way street misses a strategic opportunity to get smarter
  • Pay them extra to teach you how they think
  • It will make you a better strategist
  • You’ll get better results in the long term
• Future service providers/consultants will be AI Agents
  • They will be black boxes – they’ll get the job done but we won’t know how and why
  • They’ll get smarter but we won’t
  • Welcome to our brave new world

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