Navigating the Challenges of 2025: AI as a Strategic Partner in Business

Hey, everybody. Welcome to another episode of Business Lunch with me, Roland Frazier, and the wonderful Richard Lindner. Richard, how are you doing? Happy New Year to you.

Happy New Year. I feel like a real boy again. I feel like it's a new year and it is already a new me.

I love that. Let's talk about that a little bit. Let's talk about 2025. I. I just did a year in review with Ryan Dice, and we talked about a lot of the, you know, like, kind of takeaways and things like that. I think that generally and with the operational view that you've got and all of the deep operational involvement that you have with a lot of the clients that we've got, it'll be kind of fun to. To say, you know, what if you had to put like a slogan around 25 and say it was the year that. One of the things that you and I were just talking about before we started recording was it was the year that everything seemed harder and there didn't seem to be any more money, at least the first half of it. What, what would you. 25 is a TV show and you have to put a title on the episode. What. What are you going to call it?

I mean, the rallying cry of 25 was don't die. Like, winning is. Winning is you live another day. I mean, that it was, you know, we're still here. Yay. Everything was so hard last year. Like, nothing was easy. And I. I don't know why.

What happened, though, was that as we went into Q3 and particularly Q4, we end up wrapping the year and, and this was. I was on another call with another Portco, you know, before this, the. These two companies had their best month, I think, of all time. So what happened, do you think, between let's try not to die to, gosh, we just had the best month we've ever had. I mean, obviously it's brilliant operational, you know.

Yeah. I've got to say, for us, it had to be the operator. You know, I think if we. Look, obviously this year was loaded with all types of geopolitical and. And economical, and we had Macro Micro, we had all the headwinds, and just really a lot of things that didn't make sense. If you looked at it like, if this is up, then shouldn't that be up? And shouldn't I have more money or shouldn't this be down? And nothing made sense. And I think any. Anytime that happens, it. It just leads to indecision. Like, if I can't. If I can't track these trends or if these trends aren't doing what they normally do, then I'm just gonna not do anything because nothing makes sense. But I think that at some point we all accept a new normal. We all just go, I, I can't, I can't do nothing. And especially if you're in markets like we are in B2B, I think entrepreneurs are used to kind of creating their own reality, creating their own environments and just saying like this doesn't make sense, but I'm going to refuse to kind of live in this indecision any longer and I'm going to move in this direction. And I think it just complacency was done and I think we all decided this isn't okay anymore and we're going to move forward and we're not going to wait. I don't know, I've got nothing to point to, but it feels like everyone just decided, at least in the entrepreneurial B2B space, that it's time to move and we're just going to have to do it ourselves.

Do you think there was anything in terms of systems that were put into place or decision making frameworks or anything else that kind of was driven by the decisions that we had to make to stay alive during the first part?

Yeah, I don't know which company you talk to, but I know of our portfolio companies and our clients and us of the companies that had amazing Q4s, the ones that fall into that category didn't wait to make really difficult decisions in the year. They didn't hold on to products or if they had to make cuts. And maybe those were people or maybe that was software or tools or locations or whatever it was. I think the people that installed systems and that made difficult decisions or that had the insights into their business, into scorecards, into the financial health of their business and knew that we need to be okay for a while and made those difficult decisions early. When things started to change, they were able to benefit from those decisions that were made then that allowed them to stay default alive when things were bad. When it kind of swung in the fourth quarter for those businesses, they weren't just good, they, they flipped the other way.

And do you think there was anything like, do you think it was anything we did or do you think it was just kind of the feeling of the times was everybody made the hard decisions that is still alive. The people that didn't make the hard decisions basically are gone now. And therefore it was like, okay, we've got to get back to business and all the stuff that maybe we've been putting off. Let, let's go on and get it in by the end of the year, get the tax write offs, get the, you know, like, like it seemed like people were, who were very tight on the purse strings, were willing to spend more at the end of the year. And that's not typically what we experience.

We don't. And that's never made sense to me why we don't have a lot of people at the end of the year that are looking to like tax benefits. Yeah, I know, I know we think that way. You know, it is really, really tough to say. I think there were plenty of companies that we spoke to. I think our biggest objection when, when we were having sales conversations was not the price and was not, was not capital, which was, was weird. It was truly indecision. Like I don't know what's going to happen. People were holding on to their, to their, their capital, which, hey, so were we, right? We weren't making any massive capital investments at the time either. And I think it was a point where maybe things did start to turn around because we all decided maybe things started to turn around a little bit more or maybe the compounding effect of difficult decisions starting to add up and we all just kind of woke up and we were default alive, not trying to get there. And I don't know. I mean, I know for us we had some things that we had to do at the end of the year for tax purposes. That was nice. I didn't hate that. But you know, I don't know, but it definitely felt like there was a changing of the tides or the season.

It did. And it seems to be continuing into the first week or so of the new year.

It does.

How did your AI usage and your working with it changed during 25?

Great question. I did not use it for nearly as many tasks. I really used it for strategic thinking, partnership and really building people. I used my CFO a lot. Right. My AI.

When you say you're. Yeah, exactly. When you say building people, you built agents that were agents.

Right. I mean, and, and even going into this year, I mean, I've spent the majority of this year validating the pro forma for all of our companies and just making sure that it's defensible and, and validating key initiatives and, and what we're doing and what we need to be thinking about as to when the model breaks. I mean, on our partner call this morning, I'm talking to you about the model potentially breaking mid-2027, if we don't make a switch here, that's coming from me, leveraging my AI agent, CFO and not only building Performas, which I've always done for our companies, but really stress testing that Performa and I've done that with our AI or my AI CFO and CMO and CRO and really using those as strategic thinking partners, not only to help solve today, but to model out and say, where does this break when it's good, where does it break when it's bad? How do I solve it? And I've really just built a team of strategic thinking partners. Even though we have those employees that are fantastic at what they do, that are incredibly intelligent, they also have calendar commitments. And I don't want to take our head of sales out of leading the sales team. I, I, I want to be able to talk to the head of sales or the, the sales agent whenever I, whenever I'm processing through something, but I don't want it to, to show up negatively on our P and L or our sales report.

So what I had kind of identified was that for me it was a change between tools and prompts to labor to basically it was replacing labor.

Absolutely.

And when we say replacing, it doesn't necessarily mean that you're letting people go because what you're doing is you're replacing the calls to the head of sales or head of marketing or head of finance that you would otherwise have made that would have been helpful to you, but also taken them away from other things they did and maybe cause the need for either lower performance, diluted performance, or the need to hire additional people in those departments. But you still get the benefit of having the council of the labor that you would otherwise have hired. So you're replacing, hiring somebody new or diluting their time. So I think that's an important thing to think about.

It's the duplication of key labor, it's the addition of labor that maybe we can't justify hiring. I mean I've hired and by hired, I mean trained and built AI agents, roles that, that frankly would be nice to have at best and could not be justified any year, definitely not last year. But I've hired AI agents that have been incredibly beneficial. Now on the duplication of these high value roles that we have, I haven't excluded those people from the conversations, but I've validated some of my thesis and made sure that what I had was sound and it would have an impact and it wasn't going to be overly disruptive before I took it to them so that I'm not living in that entrepreneurial blue ocean and have the tap on the shoulder, hey, what if we did this and they're going, hey, what if I hit our numbers this month and I didn't take this call? Or, you know, what if I was able to go through and do a cost analysis and see where I could save us an additional 15% so that, that would drop straight to the bottom line and we weren't having, you know, this blue ocean call. So I don't know. I just, my, my oldest daughter makes fun of me because she says I, I basically am the oldest person with imaginary friends because all of my best friends aren't real.

I like it. So now you took that also to the next level by productizing the things that you were doing, the agents that you built and making something that was offered to other people. How has that gone in terms of how are you finding? Not like, you know, did you make a bunch of money selling it, but more like, how are the people using that? What's the feedback that you're getting from people that are taking the AI agents that, that you've built that they're using?

It's been, it's been really cool. I had a, had a chance to sit down at, at our annual conference a couple months ago and, and talk with, with one of our clients that, that basically said, you know, I have a, I have a full leadership team now and frankly, our company is more of a lifestyle business now. We're high revenue, but we're very low people. And the people we have there are very few employees, so we couldn't really justify a leadership team. And watching the transformation that that company's had from building and training AI agents to be employees and strategic thinking partners was just really, really cool and humbling. And I don't know, it was fantastic to see the impact there. But, you know, I built basically 36 templated trained agents that were trained on different methodologies of a specific role and then gave the instructions on how to train that agent on the company and made that available to our clients. And it's really amazing to see not only who these, these different clients are hiring from that catalog, but who they're building following that methodology and how they're using them. I mean, they're having meetings and stringing the agents together now because you can, within ChatGPT, you can just at another agent. So one of our clients the other day sent me a loom of their, their text chat meeting where they were literally having a leadership meeting. With three AI leadership team members and themselves going through their scorecards before they had their leadership team meeting with their true human leadership team so that they could kind of get all the insights from the, you know, from their AI agents. I don't know. It's been, it's been really cool to see.

What do you think would you say are some of the things that were done Most right during 25?

I think there was a lot of cost adjustments that were made. Right. I know in some of our companies, I say hard decisions, and they were hard decisions. So I don't. I'm not backtracking on that. They were hard decisions, but there were a lot of decisions that we knew needed to be made. They were just more hard conversations. Right. And. And things that we knew were maybe frivolous or maybe a better way to put that isn't frivolous, but we were making investments that were producing a negative roi and that could be in any category. So I think there was a, there was a right sizing of expense in, in 2025 for a lot of companies that just said, like, we can't. We can't do this. I think there was a. I think a lot of companies flee to simplicity. And, and once they got to simplicity, there was a systemization of that simplicity, like, what is our core competence? How do we, how do we create value and how do we deliver value and then how do we document that so that we. We're really, really good at doing this. And, and it caused an alignment to the company and the customer right there. The company and the client. However you. You think about that person, because if you were going to take a dollar from someone, then there needed to be an. A value exchange there and you needed to protect that relationship. So I think a lot of things realigned. The relationship between, you know, the company and the client or the company and the customer. The, you know, the accounting side of things with the expense ratios were realigned. And I think we all got a little bit more honest with the state of our businesses and where they were in 2025. And the people who did had tough realizations and probably conversations with themselves and the ones that didn't, you know, probably didn't have the best fourth quarters. And that's tough. You kind of maybe kick the can. And I'm sure there's plenty of businesses that didn't have tough 2025s, and God bless them. That, that's great.

Yeah. What would you say we did wrong or could have done better.

Did wrong or could have done better in 25. I think there was the initial, the initial reaction when things go wrong is always to throw volume at the issue. At least for us internally. When we, we, because we are so quick fix, solution oriented, we will throw 10 or 15 solutions at a problem rapid fire. And I think there's, you know, the thing that makes you great can also lead to your downfall. And I think we lived in that 10 or 15 solution. Kind of throw spaghetti against a wall and see what sticks for months at a time. I don't think it was good for the duration that we lived there. For us both as a business. I don't think it was good for the clients because it was probably exhausting. I know it was exhausting for us as humans. Right. And I mean we, the three of us partners have all, all talked about this. I made it through about November and I've never been as, as tapped out as a human being as I was, I don't know, November 18, call it.

Right after the thing. Yeah, right after the event, you know.

I was, I was done. It was putting one foot in front of the other was, was challenging and it was just going through the motions until the year was over. So I think we did too much in an initial reaction to things not going well instead of maybe pausing and being a little bit more intentional about our reaction.

Not an unnatural response, but.

No, not at all.

Not the most, not the best, I would say. What, so what are the takeaways and insights that drive what 26 is going to look like?

The first, the first one is there's, you know, there's. We have a coin. I've got it right here, that, that we give to all of our clients. And it's on one side says success is temporary, and on the other side it says failure is temporary. And I think the way last year ended versus kind of the majority of the, the way the majority of the year felt, I think the takeaway is there's two sides to that coin. And we've got to remember that both success and failure are temporary conditions. So if you're having success, be grateful and be humble. And if you're failing, just remember, don't freak out, don't. Don't do too much breathe. So that's the one thing that really, as I reflected remembering that there's two sides of those coins and how to react depending on which side the coin is sitting in my pocket at the time. I think the other takeaway is it's better to, it's better to make adjustments in good times than bad. So, you know, let's, let's make sure that, that our, our house is in order. Our, our business is efficient. Let's remember that businesses don't have expenses. Businesses make investments, and investments are expected to produce an roi. And you know, we need to, we need to look at, at all of our investments more often. And just because maybe we're producing an ROI from other places that are covering poor investments, that we shouldn't allow those to continue for whatever reason. And I think just the alignment with the customers as well, the fleet of simplicity. I think we overcomplicate our business sometimes when, when we get bored, when things are going well and, and you know, we're bored, so we want to play. So I think fleet of simplicity, you know, document what works and make sure that it's always happening. Make sure that, that your house is in order. Businesses have investments, not expenses, and both success and failure are temporary conditions.

I like it. I like it. Anything else that you'd like to leave people with before we close out?

I'll say that I have high hopes for this year. I really do. For us and for everyone else. I don't, you know, I'm not, not an economist. I don't have any, you know, anything that I'm, I'm, I'm necessarily going to go on record here for basing that on. But I think that, I think that this year is going to be a good year. I think that we're going to, we're going to, we're going to continue to have to do the right things as, as businesses and as, as business owners, as operators, as executives. But I think there's going to be opportunity for those that continue to make difficult decisions and do the right thing. And I think this year is going to be really, really fun. And I hope that that statement is true for as many people listening to this as humanly possible.

Me too.

But I plan on making that true for us.

Love it. Awesome. Well, thank you for taking the time today, everybody. If you enjoyed this, we would love for you to share it with a friend. Give us a review. If you have questions, thoughts, want to share something, feel free to reach out to Richard or to me. We are at our names on social media and we'll see you next time on Business Lunch.

Hey, business owners, I've got a quick question for you. Do you feel like you're missing the data you need to make strong business decisions? If so, it's probably time to build a CEO dashboard. It's an easy way to get everyone in your company literally on the same page, focusing on the numbers that matter. So the scalable company put together a free spreadsheet template that will give you everything you need to deploy your own dashboard. And to make it even easier, Ryan Deiss recorded a short training on how to use it. If you want to get your hands on the template, go to businesslunchpodcast.com dashboard that's businesslunchpodcast.com dashboard and you can download it for free.