Use The World’s Smartest AI For Free

ChatGPT’s o1 reasoning model has been crowned best in class for the last month.

The issue is that it costs USD 200 a month to use it.

Yesterday, Deepseek R1 came out.

It’s free and outperforms ChatGPT’s o1 model in multiple areas.

So, as a business owner, why should you care?

With AI getting to a point where it is more intelligent in reasoning than math olympiads or Nobel prize-winning physicists, the key thing is that intelligence isn’t at a premium any more.

When hiring, we’re told to find the most intelligent people, but if you look closely, we now have intelligence on tap using these AIs.

The people we want to hire now need agency and skills to execute opportunities.

Intelligence can be accessed for free if we use these tools properly; agency and the ability to act are rare - hire for the latter.

Using Loss Leaders

I've always believed that lower-value products attract lower-value customers.

But over the past six months, I've been comprehensively proven wrong.

When I launched our infinite leads campaign ($95 for a nine weeks gym membership) at Compound (which I wrote about here) all I wanted was a “free” marketing budget. I didn't care much for what happened to those "leads."

After a while I noticed nearly 50% of them were becoming fully-fledged members. My free-marketing-budget was finding us high-value leads.

Learning from that experience, I wondered if we could use a loss leader to sell our small group training programs. Our programs are $95 per week, well above what most gyms think is a feasible membership price, and are a very difficult cold sell.

So, in September last year, we launched our loss leader "courses." We wanted to use these courses to build trust with people and then upsell them to our small group training programs.

Our "gym fundamentals" course leads people to our strength-focused small group training program.

Our "bulletproof running" course leads people to our strength training for runners' small group training program, and so on.

It worked.

Folks taking our courses were asking what's next? before we even get a chance to pitch them on our small group training.

Loss leaders are an old concept.

What I found interesting from these experiments, beyond being proven wrong about my "low-value" customers belief, was where the work is.

Our infinite leads funnel took me a fair amount of work—to find the right offer, write the right copy, build the automations, and so on.

Far more than it takes us to sell them a standard membership down the track.

Our courses are taking 10x more time and effort to set up, market, sell, and deliver than our upsell, the small group training programs.

I think many business owners would be put off trying these loss-leaders because, intuitively, it feels like you should do the most work for the highest-value sale.

Whereas here, we're doing all the work upfront on the low-value sale and almost nothing on the back-end high-value sale. It's a traditional sales funnel inverted.

I'm not advocating for this approach—we kind of just found ourselves here, and it requires a far longer-term view on selling to work. But it does work, and it's another way to get the job done.