Why Most Business Owners Are Using AI Wrong (And How to Fix It)

Welcome to the AI Profit Leaders Podcast. We have Jerem Morris with us here today. Welcome to the podcast. Welcome to HQ, Jerem.

Thank you. Thank you. It's a really nice area. It really is.

I like it. I don't know. The area is a little questionable.

Well, the office I was referring to. I do like the getup. It's nice.

Yeah. No, it's good. We actually spent about 3 hours here on Saturday straightening up and just making things nice and It needed a woman's touch.

So what you're saying is it's normally a pigsty.

Well, you know, Chris has— I tell him that he has like these little projects everywhere, you know, it's like, oh, there's this project and I'm working on that and I'm breaking that computer down. He's still a tech guy at heart.

Yeah.

So we just had to come in and move some things around.

I understand.

So I'm so excited to have you here, Jerram. We have, you know, obviously done some work together this year. I've watched you and your technology business really take off. You guys have just doubled down on so much service with your clients and just really changing the way that you do business. So I am so excited. To have this conversation today. So am I. Yeah, yeah. Okay, so tell us a little bit about your company, where you guys are based, your background.

Yeah, take us there. So we are located in the East Valley of Arizona, so we're really east of Phoenix. We service the entire valley. We have about 50 clients in the valley. We actually have some clients here in Texas. I'm actually going to meet one right after this. Okay. And we've been in business for 10 years. We started as kind of a breakoff of another IT company that I had joined and I didn't really like the business model. They were more of a break-fix, and I was like, this isn't gonna work. So I left and started Data Tech and here we are.

Wow. And when did you start that?

It was 10 years ago.

10 years ago. Yeah. What year are we in? 2015?

It was 2015.

Yeah. Okay. You're young.

Yeah, I'm 35.

Yeah. You're young. You're, you're established though, you know, it's so good to see someone like mid-30s and you have like, you kind of have it together. Thank you.

Yeah.

And you guys are really growing and really bringing like AI to the forefront and yeah. Okay, cool. So tell me, so whenever you came into your technology business, you went straight into managed service provider business. Like you didn't even go down the break-fix route because you knew that's what you did not want. Yes. Okay.

Yeah. And I, I knew that because I was raised in a, a home of of business owners. Both my parents own their own businesses, and I saw the ups and the downs of their business. I saw— I mean, we had years of no Christmas. We had years of plenty. And growing up in that environment, I saw the kind of stress that, that is put on the business owners and the, the fluctuations. And I knew in my gut that Brake Fix was that. Brake Fix was not a good steady stream of income, nor was it the best way to serve your clients. People need more than that to have a stable business. So because I had that in my gut, you know, a decade ago now, I knew, okay, I want to be different. I want to be better. I didn't, I didn't know what an MSP was at that point. I just knew that, hey, I like solving problems and I like helping people. So I'm going to start this business because it's what I know and I'm good at it. And, and then I started DataTech and slowly built out this model and then kind of looked up a few years later and I was like, oh, Wait, there's other companies like me and they're called MSPs. It's like, okay, cool.

I found my people.

Yeah, I found my people.

Yeah, that's cool. Okay, so tell us, we are, we are in a transition right now. You know, like AI. I remember the first time I like really played with AI, there was this app that was, I don't even remember the name of it now. It was like 2022. There was like this content creation app that you could go in and you could say, write me this piece of content or like create me a post about this. And I don't even really know if it was actually AI. It was AI-esque.

Yeah, it's probably a If This Then That or something.

Yeah. And then ChatGPT came out in like 2022, 2023. I was like, oh my gosh, this changes everything. So tell us a little bit about like your journey in the technology space into the AI world, what that looked like for you personally to begin with. Maybe if you started kind of dabbling here or as in the business and then how you guys are, you know, weaving that into what you do with your clients.

So AI started for me a few years ago. It was really when ChatGPT came online. There were some rumblings before that, some, some small things here and there. But once that large language model came online and people started seeing what it could potentially be capable of doing, because this is the early days, I started messing with it myself and I got into self-hosting these free open source large language models. And I, I still host today. I do a lot of my own hosting on my own hardware for privacy concerns because that is a big thing in AI. There's, there's seems to always be some type of issue. In fact, I know that, I know that ChatGPT was just recently compromised. It was a connector to a third party. It wasn't them directly, but these are valid concerns. So I, I started with self-hosting and I really started just because I'm a tinkerer. I, I like to try new things and that's just, that's the entrepreneurial spirit.

Yeah.

Is, well, how do you grow? How do you progress? How do you learn? I just do it and I figure it out and I'm willing to make the mistake and get bloody and, and look like an idiot doing it. But the reward on the other side is, is so wonderful. And for me, the reward has been with AI that I'm now in a position where I can tell clients, hey, I've been using this for years. I know how it thinks. I understand how it processes information because I've been literally like building it and hosting it myself. It's not just some tool you put in. I can actually coach them on how to communicate with it. It's like communicating with another, with another person. I mean, all these models have their own personalities, in essence.

Yeah.

And you kind of have to know how to talk to them. And you wouldn't know that if you weren't down in the trenches and, and just, and really just playing with it, just tinkering with it. So it, it started that way. It's just transformed into this. I'm now, I'm now coaching people. I'm now coaching business owners and I'm seeing their businesses transform. Where they're identifying areas that they're not replacing people, but they're augmenting workflows. They're augmenting their thought. So we'll sit down in a board meeting and they'll be talking about something. I'm like, guys, let's get AI's opinion on this and let's throw it in and let's poke holes at what you're thinking. Because as you probably know, it tends to just agree with you.

Yes, you're so brilliant, Lindsey Badillo.

So instead it's like, I want you to be my devil's advocate. I want you to intentionally disagree with me to get me to think outside the box. That's your specific role. And it's, it's been really powerful for, for my business. We're right in the middle of, of taking that leverage we have, that relationship, the, the professional relationship with our clients to the automation part. So that's one of my big goals for next year is to now put like rubber to the road and automate some of their stuff for them. So that, that's the business side of it. For, for me personally, it really has provided me an opportunity to to be the professional business consultant, not just the IT guy.

I love what you said, that you are coaching people and that you are in the boardrooms. Has that always been the case for you in your business?

With some clients, yes, because I've had those relationships. So the majority of the clients, no. So, so again, just, just rewinding. I come from a household of 9 kids and 2 parents, and my both my parents, they run their own businesses. All my brothers, they own their own businesses. And it's just what I know. So I've never really been just a tech guy. I've always seen myself as an entrepreneur, as a business owner. So I already naturally have these conversations about business structure with these people, and I'm just their IT guy because they already trust me. So it's been easy to transition into, well, hey, I'm your IT guy, but I'm also going to help you understand business because that's what I know. I actually know that better than IT in a lot of cases.

Yeah.

So it, it hasn't always been like the natural thing for like new clients.

Mm-hmm.

But I'm finding that it is way more powerful for them to see me and my team of not just IT guys. Mm-hmm. That, that, that was hard to find within myself too, to a degree, cuz I do it naturally, but to verbalize it and to convince clients of that was difficult. I had to get myself out of the tech., and I had to hire people that were better than me so I could then trust them to do it. Not assign tasks, but assign outcomes. That, that's what I was going for.

Mm-hmm.

And once I kind of like, once I finally realized that and how I was hamstringing myself, it just opened the gates. And now I'm here in Austin. I'm not thinking about work. I'm like, guys, don't call me. Yeah. Don't text me.

Don't call me.

Nothing. No, no telepathy. Just leave me alone.

Don't even think about me.

Don't even think about me. Just figure it out because I trust you to.

Yeah, that's good. I tell my team, I'm like, just ping me if you need me. Try not to need me though. Like, try not to actually need me.

Yeah. Ransomware, just take care of it.

Just take care of it.

Like, we've got our processes figured out. Just go for it.

That's true freedom though, as a business. And I'm sure growing up with your parents as entrepreneurs, I don't think that that generation was in tune with scale like we are in this generation. Like, we're always thinking about scale. We're thinking about, okay, if I had 100 clients come in, what would break today? You know what? In the process would break. I don't think that that was for the vast majority of business owners in that era. That's— they were just like, it was okay, we had to make ends meet. You know, we're going to show up, we're going to provide the service, we're going to provide this product, and we're going to make ends meet. And so it wasn't— there weren't these huge conversations around scale or longevity or even profit margins for a lot of, you know, for most business owners, like it's still a lot of that, that, you know, I'm just trying to survive and make ends meet. I think that this is where AI has the potential to revolutionize the small business. Oh, oh yeah, totally.

Because You have these, these business owners and a lot of them are still baby boomers.

Yeah.

And they don't, they didn't grow up with technology like I did and the generations, you know, after me. Well, because they're baby boomers and they're, they're in their, hey, I've been doing it for 20, 30 years this way.

Yep.

Well, once they get AI, AI can now tell them the things that they are unwilling to read about, unwilling to have conversations about. It can poke holes at how they view business. Mm-hmm. So you're going into, to someone that's been in business for 30 years. I just did this and, and tell them like, like, hey, you need to know what your revenue is per person. You need to know what your revenue is per hour. You don't even know like your costs. Like, you don't even know what you're projected to make this year. You don't like, how are you even in business? Well, I just provide a service and I just do my thing and I'm happy. Okay, great. But how, how is that? How is that stable? Like how, how I, I couldn't sleep like that. So, so they, they, they're stuck in this mindset. But then when they, when they have AI, then they can be like, hey, I'm a business owner and this is what I do, and you know, I've got this problem, what should I do? Well, it can then be like, well, you need these metrics and you need these goals. And it's like, oh, I've never thought about, for example, what are my, what are my standards of care? What's my motto? What, what's my why? Yeah, because you just get lost in the day-to-day grind.

Yeah. Whenever you started rolling this out to your clients, because you came to your technology clients first, right, like your MSP clients, and you started having this conversation with them, what was like the general consensus?

People are not ready for AI. Oh, they're, they're really not. I have a lot of clients that are doubters of like, oh, AI is just a fad, it'll go away. So you have to, you have to educate them, not convince, but educate. Let them feel like it's their idea, that they realized on their own that AI is not just a fad, that it's, it's here to stay. So we have that camp of doubters, and then we have those that are so hyped up about it that they're, they're skipping over the education part. So I, I had a lunch with a client. This was 2 weeks ago now. And again, he asked me the same question. He's asked me this question so many times. Hey, what AI tool should I use to do this, this, and that? I was like, stop. It's not about the tool. You're not going to just drop an AI tool and it's going to solve your problems. First, you need to understand how AI works, and then you can start to then use it yourself. And then we can find where you can actually implement into your workflows. Because if you're just looking for a tool, it's not an app to download on your phone. Like the tool is actually going to cause more problems because you have really bad internal processes or maybe your communication sucks as a business. Like you got to work on that first. So it's, it's actually highlighted these underlying issues for people because it'll exasperate that. AI will just make them worse. So it's like, okay. It's like, slow down, I know you're excited. We can't skip these steps though.

Yeah.

So those are kind of the big two camps I've seen.

Wow, that is like spot on. Even like the internal stuff with AI, you know, you go to your ChatGPT and it'll tell you all the things that you want to hear. And so if you are— gosh, have you ever tried to argue with someone or have like a healthy debate, we'll say, with someone that's using ChatGPT for all their responses? And how do you even have a conversation with that? Because it's like the heels are in the sand and they're just so stuck and then they have all the right words to say and it's like, I just can't even. Yeah. This is, this is pointless. Yeah. Yeah. So, okay. So what about bringing this to your team? So it's one thing to take it to your clients. You've kind of got these two separate camps, but what about taking it to your team? You know, because the team is the backbone of the business and they may be thinking, well, what if my job is taken? Or like, what if, what if it's smarter than I am? Or, or for them it's, I gotta learn something else now. Like, what has been your experience with that?

So the end of January of this year, we had a, a team meeting. We have team meetings every month. Mm-hmm. And, uh, in that team meeting I said, we are an AI company now. You can either learn to use AI or you're out.

Yeah.

I'm not hiring anybody anymore that doesn't know how to use AI. And instead of just putting the responsibility on them, because that's not fair to do, instead I set up like, I'll, I'll call them metrics for me to help them learn AI. Mm-hmm. So we immediately bought a license for the business version version of ChatGPT for everybody. And then we talked, we, we talked about it, we trained them how to use it. And then every morning we have what's called a huddle at 9 AM, and we talk about it every morning. Every morning I have the question, okay guys, what have we done with AI in the last 24 hours? What did you use it for yesterday?