Around the Horn - Episode #4

And here we go. Hey, good morning Tom, how are you?

We are live. Yeah. Good morning Kevin. And welcome everybody to this is already our fourth episode, can you believe it? Of around the horn. And I know we have quite a few people that are planning to attend today. So welcome everyone.

Yeah, it's good, good to have folks here. We see you on a, on a phone today. So that's the beauty of lots of different technical, technical tools I guess are technology tools. We've got computers, trash. So up we go.

We're a multi device, we live in a multi device world.

That's exactly right. That's the beauty of it. You know it's funny, people laugh at me sometimes and I'll walk into a conference room and I've got iPhone, iPad and laptop and those are redundancies for me just like we have redundancies in other places in our lives. So works out pretty good with that. So you know what, you mentioned that we're week week four I guess this is right of doing this and each week we get more and more people coming on. But what I'm kind of excited to share is that in the last two weeks we've heard from a handful of pretty call them industry heavy hitters both on the distribution side and the buying group and association side. So you know, we're going to start mixing in some guests and I think folks will probably get get tired of seeing us on an ongoing.

Well don't we have a really cool guest next week? Next week we do, yeah.

It's all confirmed. Watch for the exciting announcement. But we have an executive from a major trade association and it's going to join us and we're going to talk about quite a few different things as that comes up. So you'll see some announcements about that and I'm glad you you brought that up Tom, but I think we'll probably be mixing guests in every couple of weeks to share the screen with us and share the discussion with us as well. So positive stuff. So let's kind of dive in and talk about some of the things that went out in this morning's email. And you know the one thing I wanted to mention before we fully dive in today is that if you're not getting our emails again, they're just called around the horn, check your spam folder, your junk box, whatever it is for those and if for some reason you're not there just and you got this message through myself or through tomorrow or you just saw it on LinkedIn or Twitter and Facebook, wherever it might be Just send us a direct message and we'll make sure to get you added to that because we've got this newsletter going out every week. Point behind it is just to share some thoughts and ideas about what's happening in the economy, in the business world and then in the distribution world as well. So it's powerful. Last thing I wanted to say before we dive in because today's the first time we've done this. We're not just on LinkedIn but we're on YouTube live today, Facebook, my personal Twitter which is eadsmartceo and lead smart tech on Twitter as well. So we've got handful of different places we're live. So we're everywhere.

That's scary.

So hey, just to kind of dive in here and usually we just pick a couple of things to talk about but today we're going to talk about most of these but we'll move a little quick. I just, you know there's this first thing in our email today was about this confusing job market that came out from CNBC the other day. And I just, I'm really kind of struggling right now and I'm encouraged kind of to see where we're at when we're seeing some of the results with the distribution companies out there. The major players in industrial distribution and other areas are, are staying strong. But you know, we just went from, you know, a year of people not being able to get employees hired. You know, we've probably all been to the restaurant that has closed early or the service is not what we expect. We hear that in a lot of industries. I know you were on the phone with one of our, our great customers, a large national manufacturer, actually international manufacturer of PPE products. And they're, you know, kind of have some challenges in finding salespeople. So we go from that can't find people to now we're seeing all of this stuff on layoffs and so forth going on. So it's, it said this article talked about confusing job market and I think we're going to kind of see this back and forth a little bit for a while longer. What do you think?

Well, I think it's super relevant if you saw the job report that came out this morning, right. And this is my opinion, so I'm saying my opinion on the whole thing. They added, we added twice as many jobs as expected in July. And with that, you know, tells me is I think the great resignation, if you want to call it that, is coming to an end. And the reason I believe again a lot of my opinion here, but a reason I believe is right. The, the money and everything that was available that was allowing people to not work is probably drying up a bit, and people are realizing they have to go back to work. But here's what's interesting, and I think this is where the article, the CNBC article that you referenced is, is in the same way that, you know, buyers want to buy the way they want to buy, workers want to work the way they want to work. And I believe there's a lot more picking and choosing going on when I go back. If I were going to go back to work and go look for a job, I may not want to go back to the last job I was doing. I may want to go do something I want to do more. Yeah, there's also. And I'm going to. I have some stats on this and we can share them even next week. I'm planning on writing an article about this over the next week that we can share is the whole work from home and the number of workers that are refusing to go work for a company where it's entirely in the office and that they want to have a hybrid approach, at least minimally, to be able to go and do that. So I think what you're seeing is people getting back to work and knowing that they need to go back to work, which is great, but I think we're seeing a lot of selective where am I going to go back to work? And maybe I don't want to go back to work in a restaurant, but I will go work somewhere else, especially if I can have a flexible hybrid work from home schedule and all of that. And I think that's where a lot of this tumultuous sort of job market situation is evolving. And it's just really interesting. When you look back, it all kind of makes sense, right? We all got to learn a new way of doing things during the pandemic, and now it's certainly carrying over and it's not, not going away. So that's my take on it.

Well, I think that's good. I was just looking real quick and I realized we're using a online streaming tool called Streamyard, where there's an opportunity for people to post comments there. But I don't think people can see that. But if you're kind of seeing my head popping up and down, I just kind of brought up LinkedIn on my phone. So if you're watching this, there's a spot there for comments. So if you have any comments or agree or disagree or have Additional insight, just kind of jump in there if you'd like. I'll be kind of looking down and watching that here and there through our discussion. I want to move quickly past this topic so we can talk about the others here. But I want to make one last point and I think, I don't disagree with anything you said. I think what's interesting is, you know, a lot of our audience right now are companies that are in the distribution world. So whether they're a manufacturer that has a, a dispersed regional team or national account team or whatever it might be, or it's a distributor or a dealer network that has outside salespeople, I think what you really can kind of look at is those folks were kind of already working in a hybrid environment, but you have all of the office staff, so you might, you know, we'll probably have some, some close friends here that run large distribution companies. Yeah, you've got an inside team, right? You've got inside sales, customer service, accounting, finance, procurement, whatever it might be. Those people are where this is really going to impact them. Because the first thing that might come to mind is somebody is, well, you know, my people were already remote before all of this and we don't have much to worry about. But anyways, let's kind of jump ahead. But I think we're going to keep an eye on this. I think obviously it's something that people need to be thinking closely about is, you know, return to work. And it's funny, you and I have been talking about this recently as business partners as we're getting ready to open another office. Well, what does our policy look like? Fortunately, we have an operations and HR consultant that works with us that's pretty much an expert in these things. So we'll get that squared away from.

We're all learning together on this. Right? I mean, there's no playbook for this. But I think again, a tight hiring market is clearly unemployment as low as it's now been. I think even pre pandemic is you gotta be aware of what the worker is looking for and be willing to adapt. But we'll talk more about this over in the coming weeks for sure.

Yeah, exactly.

Right.

Well, let's kind of skip this issue today about Tesla that's there. But I did think that that article is kind of unique in the fact that I put it in there because this week, because of the idea of we're seeing companies that need to adapt and overcome challenges that are out there and in the market for them. So I think that's kind of interesting that they're rewriting software to work around chip problems. We have lots of our, our, I'll call it our community in the distribution and dealership world and so forth that they're all struggling with inventory issues and supply chain issues. So it's interesting to kind of watch how people have worked through that challenge. Let's chat for just a minute though, before our bottom row. I want to talk about two of the three topics there. We, we try and keep this to 15 minutes or so, but I'm guessing we'll go a little bit longer today. But this whole concept about the cloud market booming and I wanted to kind of unpack that a little bit. We're a cloud software company. You go way back from the 1980s being in technology from big mainframe computers. And I remember my first laptop computer was the size of a suitcase just about and a real struggle to work with. So here we are in this cloud age and I kind of wanted to try and talk about this a little bit and kind of adapt it to the world of the people that we work closely with.

Yeah. So again, I think that there's a lot of actually synergy between this cloud data and what we were just talking about, about the whole worker environment. As companies become more hybrid, the need to have cloud based applications becomes even more critical. Right. Then you're not having to deal with somebody working at home and do I have a right VPN or do I have the right network connection or the right security or all of those types of things. So the cloud is, you know, there's a lot of reasons again, I believe that we're seeing chips, big, big growth in cloud is one is just what we talked about, right. People are more, they're more distributed. They're distributed and so they need access to technology in a secure way. And you know, traditionally you would use a virtual private network or something like that if you have an on premise application. But why, why have all that extra infrastructure and deal with all of that if you can have a secure cloud application? Right. You know, again, work from whether you're on the road, all of those things. And, and speaking of security, right. The, the cloud companies are investing so much in security. You know, we know in our partnership with Salesforce how much money they're investing in their cloud and to have that secure. Why, why do you want to reinvest or reinvent that wheel? Right. If you're a company, why do you want to reinvent what is, I won't call it a commodity, but not something that I have to go to completely try and keep up with and invest, you know, potentially millions of dollars in something that I can get through that cloud situation. So there's a lot of, I think there's a lot of dynamics, in other words, that are driving this market. And, and we're in the early stages of it too. That's what's interesting. Yep.

Well, I mean, just think, you know, when was the last time you saw that, you know, CD ROM drive on something or, you know, or computer? It's, it's just tough to even look at that concept. But I think where this really matters is to our kind of marketplace and a community that we're kind of developed. This going live, you know, scenario with around the horn each week is kind of back to that manufacturing, distribution world that we work within. And you know, I know your team. You know, for those of you that don't know Tom and I or know us at Lead Smart is we are a CRM, a business intelligence and a channel collaboration platform. Our software is built very specifically for the channel or distribution and we make versions of our software for manufacturers, distributors and independent sales agents or manufacturers rep. And we've done that. Tom referenced salesforce.com where what's called a global strategic partner with Salesforce, and that allows us to actually build our standalone software on the same platform that they built their software. The value to them for that is that we go in deep, deep, deep into specialized tools and systems for specific markets that they would never do. So that's where our partnership works. I wanted to caveat that a little bit, but back to the cloud concept, Tom. I think it's really relevant because you run the technology side of our company, I run the revenue side, and you do a phenomenal job with that with your team, with our developers and architects and so forth. But I know one of the challenges that your team works with is many of our customers, our distribution customers in particular, might be working on older systems. Right. They're their on premise based software.

Right.

They've got updates that they've been doing and we're starting to see people wanting to migrate out of that and they're kind of starting that migration to the cloud, not with erp, but they're starting it with some other tools and now with our products that can allow them to get into that phase. And the reason I talk about this is because I think it's something for people to really be thinking about because, you know, obviously changing an ERP system is a, is a big deal and the mindset behind it being a big deal comes from the people that remember when they installed it.

Right.

So we have lots of these companies who have a closet down the hall with a little vents in it and they've got a server rack in there. And the reason I really wanted to share this is most of these companies that we talk with and you, you talk with them even more. Their IT people are busy dealing with that on a reactive base of taking care of and managing. Did I need an update? Did I do this? Is this working right? Are the connections good? Is the VPN so the sales people can get in working properly? And the cloud takes all of that away.

Right.

And that's the beauty of this. And I kind of wanted to boil it down a little bit to impact the folks that are in our community that I think this would be a benefit to. You know, if you're, if you're still working in that on premise software world, not mean you need to snap your finger and go to the cloud on everything. But when you do now that IT resource that you're paying to be reactive can now start being proactive with opportunities to help you grow your organization. So we'll talk obviously a lot more about the cloud. I wanted to kind of jump ahead to this industry scuttlebutt section that we have that we send out every week. We had kind of three things to talk about here, by the way. This is a dialogue. And then you kind of chatted for a long time than I did. Do you have anything else to add on the cloud thing before?

No, no, no. I mean, we need to keep moving. I could add a lot on the cloud.

Sure.

We won't do that now.

Yeah, well, maybe over time we'll expand this out a little bit or, or if we get some feedback from folks like we have been getting so far, we'll maybe add an extra day. The beauty of the tools that we're using is, you know, we can go live on social media anytime we want now. And thank you for the work that you've done in getting all this set up. So, you know, we mentioned both ad, Wind Supply and Granger, so I want to talk about to each of those kind of quickly. But I want to unpack this Wind Supply thing with their, their moving to drones for some delivery stuff a little bit further. But first, you know, phenomenal results that AD is having. They just announced theirs last week, which is why this is here. But interestingly enough, I was talking to an executive leader at one of the major buying groups recently and, and they're all doing quite well right now. And it's interesting and I hadn't unpacked this clearly, but you think about it is we're in an inflationary period, so prices are up. Prices are up also because of supply chain issues.

Right.

We've got all these pressures going in and the buying groups that process transactions are doing phenomenal because distributors are looking to get their hands on just about any inventory that they can right now to load their warehouses while the supply chain issues happen and prices are up. And those transactions that are going through these buying groups obviously are much higher. So they're doing well. The AD folks are just, you know, I don't want to single them out because we've got great partners in that arena, but what a professional organization, great group of people. So if anybody from AD is here, keep up the good work. We love being your partner, we love working with your members. So I hope the rest of the year continues strong for them as well as all of the buying groups across the board. You know, if you want a harbinger of the, the economy, you know, look at the, the results that Fastenal posted recently, Motion Industries last week and pick MSC the week before. And now Granger out with, you know, 19% ahead of the previous time. My friend Andy Mitchell just jumped in here and said AD is number one. So Andy, thanks for that feedback. We, we love them as well and I don't think that AD would be as strong as they are without some of the volunteer work that you and Tim at Mallory do for, for ad. So thanks, Andy. It's nice to see that comment coming in. Granger's results though, you know, and by the way, Andy Mitchell that just made this comment, he's going to join us here in the next few weeks as well and we're going to schedule a little extra time that day because when Andy and I get talking, assuming there's.

No bourbon, maybe I won't be there that day.

Even without bourbon, craft beer or red wine, we tend to pontificate quite a bit. And he's a close friend and a great partner in the industry. But you look at some of these organizations that are just having great strong years. So I think it's important for us. And the reason I wanted to share this is that this is kind of a personal thought for folks is that, you know, we, you can click on MSNBC or you can click on Fox News or you can click on CNN or whatever your news sources and you're going to see the news, which is the doom and gloom, right? Oh, this is going wrong and this is going wrong. But you know, look to some of these organizations within our industry and marketplace and there's a lot going on in not just the US or North America, but around the world. Bridges are still being fixed and repaired and built, hospitals are still being built. So this distribution world is going to continue to do well, we hope. Last topic I wanted to talk about today. I'm hoping that we get some comments on this, but this, this article about wind supply that. It's a bird, it's a plane. No, it's a pipe fitting. That was my, my quote that went with that article. But boy, I've been struggling, you know. You know, and the folks that might know me here, I live close to the beach, I'm a, you know, race sailboats, love the ocean. And I do quite a bit of stand up paddle boarding down in the harbor by our house. And you know, I think drones are kind of cool when I, when I see the video images, but I get out there on a quiet evening in the harbor and drones start flying by me, I want to smack them out of the sky. And it just has had me thinking a lot. In fact, we just had a drone sitting over our backyard while we were having a little barbecue with some friends recently in our yard and don't know where it came from, don't know why it was there, but, you know, wanted to shoot it out of the sky. So this concept of, you know, Amazon and Walmart's already testing and the idea of products being delivered day in and day out, I can just see like a, you know, a flock of crows or seagulls going by of these drones that are out doing deliveries. I love the concept, right, that you could be on a construction site and need one last little part or fitting or something to finish a project. And, you know, you'd probably be willing to pay a premium to be done with that job that day or the, the factory that has a conveyor line down or something. But I don't know, what are your thoughts on this whole idea of drones flying around the sky everywhere we turn and dropping stuff off?

Well, I, I think, you know, right now it's a novelty, right? And if it became more of a, a common use thing, there's a lot of variables that I think, you know, there's safety issues, right? There are, you know, what if somebody drops, if the drone drops the pipe or drops the box or whatever the case may be, what if the drone crashes? What if somebody like you shoots it down? Right. What if, you know, I think there's a lot of, a lot of practical issues that we don't know how that's going to play out. That said, I can see that, as you said, I think there are some practical reasons to consider them. So I don't honestly know enough about, you know, what the master plan is. Like, for example, it'd be interesting to know what they're really looking at, like the volume of that and how often. Right. You know, is it more, again, is this more of a novelty or is this something that they're really looking to bake into the DNA of their business? That's, that is what I think is, is the, the big difference? Because I think it's an interesting thing to talk about right now. I don't know if it's practical as a business strategy at that, this point, but we'll find out.

Yeah, I think, I think you're right. I think what, what you heard me whining about a little bit there is just the idea this.

Sure.

You know, everywhere we turn and.

Sure.

I think, I think we've turned into this, you know, immediacy society. You know, I, I, I saw this. Well, here we go back to social media, right. And how we get attached to things. I, I saw the other day a Facebook reel and a guy was talking about, you know, the morning routine that he has and this workout and his prayer and things that he does. And he does 30 to 45 minutes in the morning without ever looking at his phone. I know, I got up this morning, first thing I did. Oh, look at this. They just got a message from Tom Harvick, who's manufacturers rep with H3 safety here on the West Coast. He says he has a factory that uses drones for rooftop safety survey. Tom, let's talk sometime soon. I want to hear more about that and we'll share it in an upcoming discussion that we have. Thanks for sharing that. But I think we've now become this society of immediacy. You know, we want it, we want it now, and I think so. Our phones and devices and technology has created that. The other thing that's created that, though, is Amazon, right? Wait, you can't get something to me in two days. I need it today. I want it today. Amazon can get it to me tomorrow. So it'll be interesting to see how this works out. I can totally see it, like, you know, emergency response, disaster response, things like that. It'll just be interesting to see if this becomes a. I just, as I think about how many times A day. In my neighborhood, I live in a small little development that I see Amazon trucks and UPS trucks and FedEx trucks. If we had that many drones coming into the neighborhood throughout the day or even more, it'd be interesting if you added in when the plumbers here. Right.

Well, and again, we don't. And we can talk on this, I'm sure, all day, but if you had lots of drones doing delivery, especially if they're going down, think of what it does potentially to pets. What does it do? I mean, there's just a whole bunch of ramifications that we don't know about. And I think it's even a big difference between using it to deliver something versus even looking at using it with cameras or, or things like that where it's surveying an area. But when it's actually physically delivering something and it's. It's again, an interesting concept. I don't under. I don't know how the practicalities are going to play out. Well, we'll.

We'll keep track of it here. We'll keep track of it here on around the Horn and talk about it again.

I'm sure maybe we'll have a drone come in on one of our.

Yeah, there you go.

Good.

So before we go today, you know, in our email that comes out every week, there's a list of upcoming shows and events and calendars. AD has a lot of their meetings coming up. Net plus alliance has their big fall meeting. NSC is coming up. We'll continue to add to those. We'll probably start posting those on our website as well. I did get a message this morning from. Oh, man. My old buddy Tom Mays with us this morning. He just said the FAA is going to weigh heavily on how drones will be used in commerce.

Yeah.

And I think that's. That's going on. Right. So thanks for that. Tom, we need to do a call soon. It's good to see you today. Last piece of this today though is I got an email this morning from Joby at the Industrial Supply Association. They've got a big fall meeting coming up, so that'll be on here. Brendan, Joby and the ISA team, we love you. You guys do great stuff for the industry. And we'll have that posted here next week with the upcoming fall event, which is a women in industry event. Sales works for manufacturers and manufacturers reps to come together. I think it's in Orlando and I know there's a third topic and I'll be more informed on that when we talk next. So we went long today. I knew we would. Boy, things worked great with your phone, so we know we can do that now. Tom, Tom May, Tom Harvick and Andy that made comments today, we greatly appreciate you. We had quite a few people today, more than last week. Thoughts, comments, questions, suggestions? Thumbs up, thumbs down on what we're doing. Love to hear it. And if we can be of any service or help to you, let us know. Have a wonderful weekend. We'll look forward to seeing you next week. Tom, I'll talk to you later today on our Friday afternoon call.

Yeah. And we'll have another guest next week.

That's right.

Listening to. Yeah. Have a good weekend, everyone.

All the best.