ENCORE REPLAY! Society’s Meltdown of Money, Energy, Labor, and Transportation

Everybody says, well, you know, we're just going to enter into a world of abundance. I said no, we're just leaving the only world of abundance the human race is ever going to see. It was here for 30 years. And everybody said, well this isn't, this isn't it.

It's going to go on. And I said, no, we, it just ended.

Yeah, I think in the race of AI right now, the first people to be using it effectively are gonna get like it catapults you so far ahead and you're having conversations and you're thinking differently. It is a reboot and it's a full operating system upgrade.

The two number one industries that are gonna determine everything else I think probably for the next 30 or 40 years is people living healthier lives for longer and AI allowing people to get greater intelligence out of their everyday work by using.

Really smart who's or using really smart AI to make themselves 20% more productive per year.

One of my favorite things about capability amplifier working with Dan Sullivan is he is always great at coming up with awesome first principles. And this is your chance to get a taste of a brand new book he's working on and it is about and called the Great Meltdown. What determines when things are moving fast or slowing down are these five letters. M, E, L, T which is or 4. I can't even count. But it's money, energy, labor and transportation. I know where my five came from. I was thinking about something you make with them. But here's what's important about this is if you're wondering right now where are the greatest opportunities going to be for entrepreneurs and entrepreneurships for the next 10, maybe even 25 years, it's by using this framework and thinking about how do I work outside of melt. Dan, what's your big takeaway from this episode?

Yeah, I think the big thing that you live in a totally different universe than I do, you know, in terms of places that you go and people you talk to. And I'm, you know, I'm basically in my basement a lot of the time. So one of my great breakthroughs over the last since 2000, early 2000 was Zoom, which reduced the cost of transportation almost to zero. And I can go anywhere around the world without leaving my basement. And I actually feel I'm in a room someplace with Mike that's not where my butt is, you know. And you know, if I can really connect with someone mind, that's where I am. It's where I connect with other people's thinking and I just really Appreciated your added insights and your questions on the MELT acronym. And so I think it's an easy thing to remember. And you say, okay, so what's the cost of this? What's the cost of this? What's the cost of this? And what's the cost of this? So I really appreciate the conversation that we're now going to have.

All right, well, here's what's great. You're going to walk out of here with some really great insights and tools and mental models that you're going to be able to use right now to value what you're providing and what you want to provide in the future. So this is Capability Amplifier. Enjoy. All right. This is called the Great Meltdown. It's another one of Dan's big ideas that's actually being put into a book right now. And it's what determines what things are moving fast or slowing down. And he uses the acronym M E L T, which is what Dan. What is MELT all about?

Yeah, well, what I've learned, you know, I'm a great.

Fan of watching how the world changes.

And what I've thought probably since.

1990 or so that we're living under fairly unnatural conditions. And there's a great thinker by the name of Peter Zion who probably does the best job of explaining why.

The next 20, 25 years is going to be a period of slowing down of progress all around the planet, except for one place in the world. And he said that the key ingredients. And he didn't say all these, I put some of them together. But he said there's four things that determine the speed at which especially economic change can happen. You know, you get economic growth. And he says the first one is how expensive is money? You know, and there's two things to think about there. One is, if you're borrowing money, what's the cost of borrowing the money? And the other thing is getting money for investment into new ideas. What is the cost of that? And he said, for the last 30 years, it's been really cheap to borrow money. It's been really, really cheap to get investment money. Okay, and then the next one is energy. That, of course, energy is crucial for.

Energy is just really crucial, you know, and how much juice you have, you know. And to give you an example, the Germany is considered one of the great manufacturing country countries in the world. And because they've kind of screwed up their energy because they became totally dependent upon a country that you should not be totally dependent upon, Russia.

They lost 40% of their energy supply as a Result of the Ukrainian war. And nobody to this day knows who did this, but their pipeline from Russia to Germany, the main natural gas pipeline exploded. Exploded. And there's a lot of evidence that this was not a natural event.

Yep.

Yeah, somebody blew it up. Okay.

Yep.

And so as a result, it's. The cost of energy in Germany as compared to the United States is nine times for manufacturing. Nine times you're paying for energy. Not 9% higher, nine times higher. And that makes. That slows down things. That really, really slows down.

Just think about how much more competitive you have to be. And I, I don't know, but I'm guessing, like how much of the cost of a product, not the value of a product is, is a factor of. It's the energy in. Right. So how could they possibly remain and be competitive without immense innovation? But yeah, this is a.

So yeah, we got money. And these of course are related. Money. Money and energy are related. These have a compounding effect.

Yeah.

If one is more expensive, the other one is going to become more expensive. And then. So that's the me of melt and the L of is labor. Labor. And one of the reasons why labor is getting really expensive is that the biggest generation of knowledgeable and skilled people are retiring.

So it's the biggest whack to the marketplace in history of losing people who really know how to do things, really know how to get things done. Really, you know, everything you can't write in the road book. They know and they're disappearing and they're being replaced. Replaced by much fewer, 20, 30, 40 year olds. So everything is getting more. The labor is getting way, way more expensive. Okay. And we can see that. I mean, the.

Wages have gone up more since the, you know, the emergence of COVID in 2020. March, February, March of 2020 have gone up. The people are getting the highest wages they've ever got.

But they're using their higher wages to have to pay for things that are a lot more expensive. So it's probably.

They'Re not getting really ahead. So we have Mel and again, cost of labor, cost of energy, cost of money. They compound each other, they multiply each other. And the last one is the most crucial one. It's really transportation. That 90% of all, what we call global trade happens on water. 90% of all the global trade in the world happens on water. And in the last 30 years, at the end, just before things started getting expensive, the cost of cost of transportation in final product of all products was 1% of final cost. Now it's up to about now, it's up to about 7%, 8%. And that makes half the products in the world being manufactured in the world not profitable. So you put the four of them together.

Money cost of money going up and cost of energy going up, cost of labor going up, cost of transportation going up. That means progress in all areas slows down.

So a couple questions.

So it's melt. Because of melt going up, progress is going down. So a lot of technological predictions and that either are not going to happen or they're going to be delayed for five years, 10 years.

Except if you have technology that doesn't require money, energy, labor or transportation.

That'S where what you and I are doing is. One of them.

Costs no money to do a podcast. Yep.

Costs no energy, really, to do podcasts. Doesn't require any labor to do a podcast. And.

This is the transportation. You're in San Diego, I'm in Toronto. We're in the same place. Right.

So two questions come to mind, the.

First of which is, remember I made an exception to the rule. I mean, at the beginning I said there's one place in the world where this is not going to be a problem.

As much a problem, like relatively minor problem.

And where is that?

United States of America.

Okay, I just want to make sure we're talking country. So I want to skip to, to two big ideas here.

Where does technology fit in this? Do you see it as being a byproduct of money, energy, labor and transportation? So it's a byproduct because. And then the next one is, I've one thing I've thought about. So first of all, I love this acronym. It's brilliant and it's simple and it's catchy as hell. And this may sound like so routinely basic, but it was like, it felt like an aha to me when I realized one day that I was thinking, what is power? And power is money and energy, you know, because you can, when you have power, most likely you have money or it makes it easier to get. And energy is power because anyone who has it can buy a combination of all these things. You know, it's like.

You know, everyone can whine about the billionaires and.

Oil until they have no electricity, and then you'll see how quickly they give up their moral standing. Right. Or they can't buy their plastic or I mean, non leather. You know, it's like the whole point is your morals go out the window as soon as the conveniences go away and electricity is going to be the first one to to push it. And you know, usually the biggest whiners and complainers who don't know where anything comes from, I e. Haven't studied history.

They've never lived without before. They haven't lived where it's really cold or really miserable in. And I'm projecting all over that I don't know that with absolute certainty. But it's what my cynical brain has to say when I observe the complainers super glue themselves to a road, for example. Not well thought out. Not well thought out.

No, no, I think you're dead. Everybody says, well, you know, we're just going to enter into a world of abundance. I said, no, we're just leaving the only world of abundance the human race is ever going to see. It's if it was here for 30 years. And everybody said, well, this isn't, this isn't it.

It's going to go on. I said, no, we, it just ended. Yeah, it just ended. And the one class of people on the planet who are going to most take advantage of this is the entrepreneurial class.

Yes. That's because this is forcing entrepreneurship on a, or, or rather innovation and rapid innovation on a massive scale. And where, when, when you think about, I'll give you an example that pops into my head right now. Nvidia is quickly becoming one of the most valuable companies in the world.

As of right now, it's, it's 1.3 trillion.

Yeah. And some of the guys I listen to right now, it turns out as we're recording this, I'm about to leave in a couple days to go to something called the All In Event, which is, there's this podcast I listened to. I've told you about it before. There are four Silicon Valley insiders. They're really bright. They know global politics, economics, they, they, they invest in political candidates on both sides of the aisle. It's a big mixture and they don't all get along. They fight a lot and they have great insights. But they're doing a big event in Los Angeles this weekend. I'm heading up there and they're talking about Nvidia. And one of them in particular says he still thinks it's, it can go, it can be easily be a $700 stock. And yesterday I was with a big wealth manager last night and he's, you know, again, right now it's in the 550 range, I think. And he says he thinks it's going to go well into the seven hundreds, maybe more. Anyway, one of the things that they've done recently that's Pretty remarkable is.

They started using AI systems to help with their lithography systems and they figured out how to basically use prisms and angularity and all sorts of cool stuff that they couldn't have possibly have done without AI to effectively do the metaphorical equivalent of folding more stuff in one place. Because they've reached the point where it's virtually impossible to print smaller than they already are. And the calculations just to figure out how these chips need to be made can take six months. And with their new AI systems and they're basically building tools that help them build better chips. It reduced it down to like 1/6 or something like that. And these are semi made up numbers. But I know I'm in the right realm. So the fact checkers might not, it would not be perfect, but the concepts are accurate and then that is, it puts them so far ahead of everyone else because they've got the chips, they've got the calculations, they've got the fabrication and they're years and years ahead of anyone else.

And you know, Los Angeles, that's in the United States of America, right?

Yes, sir. Last, I think four people, the four.

Key people who are talking are Americans.

Yeah. Oh yeah, yeah.

And the thing, the technologies that you're talking about, these technologies are more available in the United States of America than anywhere else, right?

They are. Even though like tsmc. Well, Nvidia, but TSMC for example, is over in Taiwan. Although, you know, the big fear is moving to Phoenix.

They're moving to Phoenix. Well, they've got a big chip factory, a 20,000 person chip factory. It's already operating north of Phoenix, which.

The people in Taiwan have thought, you know, which is safer from China, Taiwan or Phoenix, Arizona.

Right?

Yeah, for sure.

And Phoenix is in the U.S. united States. Right.

So. Well, there's two, two comments on that. One of which is even if the Chinese were going to do anything, the Taiwanese have their finger on the button and they don't have the personnel or the resources to rebuild or do it. They're so, they'd be triple screwed. I mean there's just, there's nothing about this that's real. It's a bunch of, you know, hand signals. But the, the, the point is, if there was one shameless plug I'll put in this in our podcast is check out all in podcast because these guys are really smart. They know what's going on. I, I'm always lit up and I'm purposely going to this event because there's, I don't know how many people are going to be there, but some of the best and brightest.

Smart folks around in technology, software, economics, media, and it should be a hell of a mastermind experience. Kind of on the order of a, a360, but different.

Yeah, but this meeting isn't taking place in Taiwan.

It is definitely not. It's like there has never been a better time.

Or it's not taking place in Beijing or Shanghai. No, it's not, it's not taking place in Berlin. It's not taking place in London. It's not. It's taking place in Los Angeles. Yep.

And, and yeah, I don't know what else to say there. So I want to go back, though, to the big melt idea. Go ahead.

Melt idea?

Yeah.

No, no, I mean, that's, that's my basic take.

That is the melt. Yeah, I mean, the melt's happening here and people are coming in from all over the place.

Yeah, yeah. And, you know, dominance is a relative thing. It's, you know, and you know, Peter Zion, he alluded to this, and I kind of rephrased it. He said America has so much going for it that Americans are the only people on the planet that can treat domestic politics as a form of popular entertainment.

Now, we have disagreement on what I'm going to say now, but there's only one politician in the United States that knows this.

Trump guy. Yeah, look, I, I, this is worldwide.

Wrestling.

On a political, on a political stage. You know, there's good guys, bad guys.

It's, I've, I, I have, I spent a lot of time thinking about him and observing and.

What, what an amazing communicator. And I can't wait to look back 10 years from now through the lens of what either I, or we don't see about the times and what went, what went on there. You know, it's, I know I, I'm still blind to it to this day.

So I, I don't, well, here's the thing. He gets indicted once, he gets indicted twice, he gets indicted third time, and the DA who indicts him in, in Georgia.

Says, not only am I going to indict him, he's going to have to take a mug shot. And so he gets all ready for the mug shot, takes the mug shot and uses it to raise $10 million in the next 72 hours, and I'll probably be on his campaign as mug shot. And he just said, he said, anything you throw at me, I'm going to make money on it. Anything you, yeah. And, you know, so the whole point is, and the Reason is that it doesn't really matter which party's in.

Power. I mean, we all have our annoyances more with one than the other. But.

The system, you know, it's really interesting. I really studied the founding fathers of the United States.

Yes.

Okay. And there's two things about them. They were very young, except for.

Really.

Except for two of the founding fathers. They were. They were in their 20s and 30s at the time of the revolution and then the forming of the country. And without. With just a couple exceptions, they lived an incredibly long time. You know.

Yes. They.

I showed the ages at one of the workshops. I showed how long they lived. Mostly they lived into their 80s, when the lifespan was between 35 and 40.

Yep.

They lived. And the only two. Franklin was old and he lived, but not Franklin lived into his 70s. Washington died at 69.

Probably because of medical malpractice. And. And Hamilton took up dueling as a pastime, as a hobby and.

Not a good. Yeah, don't do dueling.

No, no. It's a bad idea. Exactly. You need that other half of your head.

And he couldn't have been president because he wasn't born in the United States. He was born in Nevis, Caribbean.

Yeah.

So anyway.

But the whole.

The whole point about it, near the end of their lives, all of them were pessimistic about the future of the United States, except for one.

Yep.

And it's Madison, who is really the architect of the Constitution. And he was asked about this, how all These enthusiastic people 20, 30 years before were now pessimistic about where the country was. And he said, no, no, he says, we've created an operating system that's called the Constitution, and it really doesn't matter who comes along. The system's gonna work. And he says the only reason. He says the only reason that they're pessimistic is that the people coming along are not like them.

Yep. Yeah, it's good.

Yeah. But this is the operating system of the country, the United States. And nobody gets to assume much more power. They have checks and balances of everybody who's powerful. And a president can be stopped by a judge. The president can be stopped by the Congress. The president can be stopped by the governors of the states, you know, and everything like that. So we don't allow people. We don't allow political change to happen really fast because the economy can move things forward really fast. Right.

I think so. If you were looking at. And I'm trying to. Future pace and leverage. So maybe a better. I. The question I want to ask is, let's say you're a business owner, founder right now and you're presented with.

The great meltdown and.

Knowing that things are slowing down, observing what you have over your entire career through the lens of an entrepreneur. What would the opportunities be that you're both most excited about and you see.

Staring at you in the face like, what's.

What'S your projection over the next three, five, ten years where you'd say, here's what you should be focused on, here's what you should be thinking about?

Well, I think just I'll start with my own preferences.

Focus wherever.

AI intersects with.

First of all, because it would be a good thing to plan on getting another 25 or 25 to 50 years of productive life.

Yep. Hey, this is Mike Koenigs. Sorry to interrupt the podcast, but if you're an action taker and ready to transform and reinvent yourself and your business, go to connecttomike.com to learn more and book a conversation with me right now. All right, back to the episode.

The two number one industries that are going to determine everything else I think probably for the next 30 or 40 years is people living healthier lives for longer and AI allowing people to get greater intelligence out of their everyday work by using really smart. Who's who are using really smart AI to make themselves 20% more productive per year. Regardless of what it is. Regardless of what it is.

I've got a great hook for you before you come up with your next one, which was, you know, I've been doing this collaboration with Reagan and Brian Sweet and another guy who does the full body scans. It's, it's different than Fault in Life, for example, because it's a different collaborative environment.

It's not a system there.

This is a collaboration. It's an experience. We've turned it into an experience. Now here's what.

I came up with as a hook. The best retention program and the best customer retention program you'll ever have is to keep your clients mobile and alive. So our hook to bring people together.

Excited and excited. Yes, and excited.

Totally. Yeah. And that comes through the collaborations that you create in this environment. Because one of the things that I wanted to do, and this came from one of my own personal pains, is I'd say, hey to Vivian, let's go do this thing. And she goes, I don't want to be in a room full of you entrepreneurs. It's like, it's not going to be fun for me. And we created the content in a way that it's Actually exciting for the spouse because we start with the full body scans and the blood work. And one of the things that Reagan does, for example, is you get your readings that are super deep. And the fastest way to get a couple on the same page is to show them the truth of where they are, to give them a diagnosis because you'll get a on the spot commitment from both parties and you'll get very aligned. And, and that was. I, you know, I. Maybe that would seem obvious to someone else, but it wasn't until I watched it happen and we literally saved a couple people's lives. We had an undiagnosed.

It's not obvious until you have the experience.

Yeah. And of course you, when you throw amazing people in a room, amazing things happen. You know, it's like the conversation you have and the creativity and the deals that get made. And so it was. So I. That's my way of confirming what you're saying. I think combining AI and regenerative medicine, much like what we saw with what Nvidia and TSMC have done with chip manufacturing, it's like, boom, light years ahead and.

Competitors are going to have a harder and harder catching up. And I think in the race of AI right now.

The first people to be using it effectively are going to get like it catapults you so far ahead and you're having conversations and you're thinking differently. It is, it is a reboot and it's a full operating system upgrade. What else, what else do you have?

Well, I think, I think the big thing is that.

I think that the future becomes more and more unpredictable for non entrepreneurs and I think it becomes more and more predictable for entrepreneurs. And I don't know, I don't mean predictability in the sense of, you know what's going to happen.

Predictability in the sense is that it doesn't matter what happens. I'll be able to take advantage of it. That's real predictability.

I don't care what happens, I'll be able to take advantage of it. I mean, I don't know if you can get any more certainty in life than that.

It doesn't matter one way or the other what happens. I always know that I have a mindset that lets me take advantage of anything that happens. Yeah, I say it's only the entrepreneurial class and not all entrepreneurs because there's a lot of entrepreneurs that are ballast in the ship. They're not the, they're not the, they're not the sails and the rudder on the ship. So you Know, we figure, you know, that one. One entrepreneur out of one entrepreneur making more than $100,000 a year out of 400 qualify for a strategic coach.

And that's from mindset standpoint. That's from an ambition standpoint. From an, you know, most of them got a job, they've created a job for themselves and, you know, they. They actually have more certainty about their job than people who are lifetime employees inside large systems.

Yes. And so I'm going to interpret that.

In the way of. From an opportunistic and entrepreneurial point of view. Is anyone who's using any of these tools to create more certainty and to reduce a fear of loss.

That is a huge competitive advantage. I think it always has been now, but now so even more in times of slowing down. And.

I think anytime you start feeling and recognizing a loss of lifestyle, that's another, you know, that's. Loss of lifestyle is very anti American. Very anti American.

Yeah, yeah, yeah.

No, these are good.

And you could see that, that Burning man last week.

Yeah.

They have a severe loss of lifestyle.

Oh, yeah. When the toilets get full, they can't.

They turn vicious. You know, I always say when the trough gets smaller, the pigs get meaner.

Yeah. Yep. Well, the funny thing about that is I will say because I have a lot of friends who are there and on the ground and they were all like.

Bunch of media hype. So know that, you know, the media needs more garbage to keep the idiots at bay and keep. Keep their attention. And I think their projection on what this means fed in the media frenzy because it just. A bunch of my friends were there and I'm dialoguing with them and they're like, I'm getting so much done because they brought in Internet and they had power and they of course prepared. It's the.

And they're not bothered by all the events of Burning Man.

But then it's like, you mean I get three days to just be somewhere and I don't have to be. Yeah, it's perfect.

That's. We call it a free day in the program. You don't have to go to Burning.

All how you reframed it. And other people like, oh, I get to spend more time with my friends.

So.

It was interesting.

Now what it means is a lot of people were there.

They had bought the commoditized version of Burning Man.

Oh, hell yeah.

And.

The moment that all the billionaires found it, you knew it was over.

Yeah. In this case, I'll tell you more than the billionaires. It's the Social media models, they're the ones who ruined it. Because these self centered narcissists who didn't understand, didn't ever read rule number one, which is radical self reliance. Okay. And that's about being prepared for a desert that sometimes gets to freezing temperatures and back up to 100 the next day and wet. Yeah, no, it can get very. It is a test of the human condition.

But if they went there as consumers rather than creators, they had a rough week.

Yep. And then nothing better to keep the. Nothing better than a little Darwin. You know, I got one of Mike's little rules is I don't like being up high where you could fall down and die or being somewhere where I could fall into something and freeze to death. So anyone who ever falls off a mountain, free climbing, I'm like, well, all right, you know, if you're up, up there on a mountain and you freeze to death, it's like, yep. I don't know what you got to prove to who it is, but.

Feels like a whole lot of stupid to me.

Or if you try to pet buffaloes.

Yeah.

Grizzly bear. Yep.

Yeah, exactly. Take it in. Take your. Take a selfie with a grizzly bear. Yeah.

Well, yeah, it's.

Thank you, Darwin. Yep.

It's a bad guess and a bad bet.

That's right.

That's right.

Well, it's sort of like I have a hard time mustering up any empathy whatsoever. So I don't.

Anyway, so anyway, that's the great meltdown.

I love the great Meltdown. I think it's genius. And the book will be out there.

But it's a real shift because in fact, the.

Projections of unlimited exponential growth of everything is just hitting a wall.

And I think the first indication that we had is when all of a sudden the high tech companies just laid off 300,000 people. And what it meant is that they were no longer planning 10 year projects. I mean, they were just hiring people and say, you know, they'll be working on things that will bring out 10 years from now. I think their window is now down to maybe 12 months like most businesses are.

Yeah.

And they're hiring for the next 12 months. They're not hiring. But for the 300,000 who laid off, it coincided with the emergence of.

AI. So it happened basically from August till November. And on the 30th of November, ChatGPT came out. So all those fired 300,000 people will probably use artificial intelligence now to fire the big corporations.

Yeah, it's a great idea to lay.

Off the big corporations.

You know, it's, it's more opportunity for us.

Yeah.

Never a better.

And the other, the other, the other thing was the sudden bankruptcy of the Silicon Valley bank. And I'll add a third one. It was the.

The arrest of the FTX guy.

Oh yeah. You know, Sam.

Damn. You know, and you know, and so those were like a trifecta that happened, you know, within a 12 month period, you know, and you know, and it was an indication that.

Bad guesses were being punished faster.

Yeah.

Yes.

Bad guesses were becoming bad bets more quickly.

Yeah. And they, and they, and they broke some common sense rules which are the way they created leverage and.

In the way they, they, they technically weren't breaking any laws, but they were doing stuff that was only recently not made illegal for good reason, which is what a bank is and what it isn't and what it shouldn't be.

What a currency is.

Yeah.

What a currency is.

Yeah. And I think that that's the, and I think that's.

Don't borrow from the house to play against the house.

That is exactly right. That's a bad, bad idea. And.

Yep. And, and like someone wasn't doing good math. And when you start believing everything's going to stay the same, that's on a straight line.

Upward projection, you know.

Yeah. Hubris. Hubris is a very big tax.

Yep. So. Well, this is, well, what you get.

Out of it, out of. It's just an acronym. But I said whenever you're looking at any industry, check off the M, check off the E, check off the Ellen, check off the tee. Look at WeWork, you know, we work is trying to negotiate all their mortgages.

Yeah.

And a mortgage is, you know, mortgage or their, their, what do you call it when you rent? Long term leases, 10, 15 years. What you call that? A long term lease? Yeah. You know, and you're paying a lot of money for empty space for the next, you know, 10, 15 years. And you know, and yeah, I mean we switched over to no receivables in 1984. So all the money's up front, you know, for. Since 1980. I went bankrupt twice because of receivables and I didn't need a third bankruptcy to get the lesson.

Yep.

And I said I had done the work, I had billed for the work. They just withhold payment from to three months to six months. And I was too close to the cliff, I was too close to the edge and I went down and I said no receivables. People say you can't run a business by asking People to pay up front. I said, I'm going to run. I'm going to create a business where the type of customers are willing to pay up front. So we had that.

No other thing. No governments and no large corporations, then that's the rule.

Number one in 1989. Since 1989, it'll be 35 years next year. 80% of our income has been in U.S. dollars, and 80% of our expenses are in Canadian dollars.

35% raise you give yourself.

Well, it's 26 for 26 is what it is now.

Okay.

Right. Okay.

For 35 years, it's been 20.

That's what it's averaged out to be. Okay.

Yeah. You know.

Yeah.

A month ago is $1.32. Today it's $1.36 and, you know, and everything else. But only.

Twice in 35 years has the Canadian dollar been greater than the American dollar. And then for maybe three months, and then it went back down, you know, so anyway, so. And then keep your employees for a long time because firing and rehiring is a very expensive.

Yes, it is.

It's very expensive.

Yeah, I like it. Well, what I got out of this, first of all, is I love frameworks and first principles. And I think.

Frameworks and principles represent historical right thinking when they're. When they're made properly.

And.

Like, every. What I can use this for is whenever I'm thinking from an opportunistic point of view, I'm gonna just plug in, melt, and I'm gonna say, how much? How much? How much? How much? And know that I, I can create an unfair advantage if I'm doing something that doesn't depend on all or most of them, meaning in the case of innovation, technology, or like something as simple as a referral, a multiplier, a mindset, you know, you can change an entire business model by thinking differently.

And I'll give you one, one tiny example of this that I, I wouldn't have connected unless we were here having this conversation today. But it's relevant because it just happened this morning. So you know Keith Ferrazi, right? Keith and I have been friends a long time, and we're talking today, and I showed him how we do our business model now. And I was demonstrating him saying, we built this business in a week. We built this business in a week. And here's what happened. And he's asking me these how questions. And I showed him. I kind of walked him through and I showed him a couple. And one of the things that we started doing is when we're doing these vision days. We'll build the brand and the pitch and the platform, the media. But now we're bringing in AI. So we're actually prototyping and thinking through three lenses. One is how do we.

Use AI to increase your revenue, your productivity? So let's call it, call it like applying the tools. Right. But the next one is how could we ampify the business? In other words, how can we take labor out of the equation and create more certainty and more automation? And what we do is we're building little apps within two days that are actually workable and usable. So if you appify your business, you're increasing the, the equity value of the company, not just the income and the profit. Right. So I'll give you a real life example. So we're working with this guy who's been in the automotive retail business for 30 years, sold a half million cars, over $2.3 billion worth of vehicles.

Which is a lot. Okay. It's one of the top guys. Well, there's 16,341 automotive franchise dealerships in the United States and they're all looking for how do I stay alive and how do I sell more cars and make more money? So he went through his business and realized there were eight things, so we'll call it frameworks, that it's made him successful. And we AI ified one of them already. And one of them is he wants to completely.

Disrupt the automotive retail experience. Now I know that he's a dealer now, so we started building a couple AI like chatbots and sailbots. One's a voice based one, one's a text based, but it will help you find a car faster, buy it quicker, and then it'll provide higher end service after the fact. So now the net result is, let's say we, we appify him, which we've already done very quickly. He's going to use that in his own, in his own business. So we built it for him and then we could sell it. So imagine we had 100 dealers paying $10,000 a month for this software service.

Library of tools. Well, a hundred at ten grand is a million dollars a month. A million mrr on a software based business can get a 12 to 20 times revenue multiple. Okay. That's a hundred million dollar company.

Yeah.

And then see what you've done?

You've taken the cost of money very, very low.

Not much energy involved.

That's right.

You know, very, very little energy involved. No labor costs and no, no transportation issues.

Yep.

Or if there's a cost to each of those. The cost of their malt is less than anybody else's. See, the only thing I have about it, I never have a goal of disrupting something. Always have a goal of creating a higher value creation model that's available to anyone who wants to use it.

Yeah.

I still believe that Newton's three laws operate in the universe, our gravitational system. And the third law is for every action, there's an opposite reaction. And if your intent is to disrupt.

Yeah.

You get disrupted.

You're gonna make enemies. Yeah. And I, I think. I think being able to say will. Will make the customer experience 10 times better and help you generate more revenue with fewer people and less effort. But more importantly, keeping your best people focusing on the things that matter most.

Productive.

Yep.

Yeah. I would never, I would never define something as doing bad things to other people.

And I fundamentally agree with you. And I think knowing him, he would agree with that. I think it's a catchy word and a catchy phrase to say, I think it's bankrupt.

I think it's now bankrupt.

Is it? Okay.

Disrupt something is no indication of value creation.

Yeah, yeah, yeah. It could mean. Yeah, it could literally mean Hitler was.

A great disruptor, but there was no value creation.

Yeah, yeah, yeah. Not a nice man.

Not a nice man. Look what happened. Look what happened to him.

Yeah, I think you're very, very accurate there.

Well, at the end, I think you got to watch out for karma. You know, I. I just think you have to. And karma starts with how you're thinking about things.

Yes, very much. Well, I think the, the way we ended up framing this whole.

Thing is the mindset that we created is using AI and automation to have more time to create deep connections, trust and engagement. And those are human qualities.

That's a wonderful thing. That's a wonderful. That's a wonderful statement.

Yeah.

Yeah.

So I'm, I'm gonna. I am gonna properly erase the word disrupt based upon this, this conversation. And I think what I see out of Melt is another mindset that can come out of this is where are there more opportunities to create intimacy, connection, and an engagement and trust? I mean, it's, it's, it's taking away.

The mechanical, Long term productive relationships. Yeah, long term productive, Creative, productive, profitable relationships. You know, that's so there.

That's what I got out of this. And I had to weave through the dialogue to get here. But it's been. Like I said, I love frameworks, I love first principles, and I think this is a fantastic thinking tool to get rid of the most costly, expensive parts of creating value.

Yeah, yeah. But everybody I've talked to, they said, geez, you know, and, but Peter, Peter Zion says the number one is transportation costs. And he says it's, it's actually dependent upon one factor, transportation costs.

That's where the U.S. navy chooses to patrol.

Yeah.

Like Saudi Arabia wants the US to guarantee they'll make peace with Israel if the US Will guarantee. And the US Is saying, no, no, we're out of there. We're out of there. You know, we'll allow there to be US bases in Saudi Arabia and say.

We couldn't get anybody to go there. Yeah.

Can't drink.

Go ahead and work on your bricks with all the malcontents.

Yeah, yeah, yeah. We're not, we're not doing that.

Yeah, right.

Well, let's, let's wrap up this one because this was super insightful. I got a ton out of it again, as usual, and I can't wait to read the book.

I'm just arming you for MIT next week.

Oh, yeah. I'm not going to use the word disrupt at all.

No, don't use disreputant. Just have a higher value creation. Higher. A higher way of creating value for everybody who's engaged in the new relationship, you know.

Yeah. Deep connection.

I think it's worn out. I think it's, you know, I think it's dead. I think woke is dead. There's all these narratives that I think are dead.

Yeah.

And I think that lady Alyssa, who thought that enlightening and elevating the tone of Bud Light, she's going to be probably famous for the next 500 years in branding schools and business schools and everything. How to.

Take a iconic, world famous, number one brand and just basically gut it in about three months. And you know, it's not a good brand because Bill Gates just invested in Bud Light.

Oh, really?

Yeah. And that's another reason not to drink it.

Well, I've got a. I've got one rule, and that is I don't drink cold horse urine, so don't touch it.

When it comes to beer, I have a rule if it's, if it's below 10% alcohol, it's not beer.

That's good. Well, I prefer mine.

When I remember your first sip, it's not beer.

Yeah.

Good job. Good job.

Okay, so I'll wrap up here. I think you wrapped up last time. And I said, well, this was just something.

Mike, that I found. First of all. The fact that you find it useful tells me that it's, that it's a go and from a branding standpoint and for a memorability standpoint and everything else. So I just really, really appreciate your feedback on it and allow me to go through and give the examples and. But when you're at the.

Special session in Los Angeles next week, so you're going to be an MIT and Los Angeles and ucla.

Yeah, UCLA for one event. MIT to speak.

Yeah. Well, you're going to get a taste of transportation.

Yeah.

Anyway, anyway, I just want to say, just as you're going through there, if you would just keep meld in mind as they're talking about things and you know, and actually it's, I think it's a good diagnostic of what kind of future something has, I would say over the next 25 or 30 years. Anyway, it's, you know, if it calls for high money costs, if it costs for high energy costs. Well, technology is always high energy. You know, it's high energy. I mean, we do not have the energy on the planet now to deal with just the yearly increase of service, service farms and, you know, everything else. So, yeah, these are constraints. These are constraints, you know, and.

But if you're going to be one place on the planet when this meltdown is happening, we're living, you're living in the one thing and I live off the place where that you live. So anyway, thanks a lot for doing this and I hope everybody's enjoyed this. And as Mike always said, if you like it, tell your friends. And if you like it, leave great comments with five stars attached to.

Right on. See everyone.