The New B2B Revolution: AI, Segmentation, and The Hidden Revenue Model

Sa. Sam.

You know, we were just talking about the review, right. That said that the show was somewhat entertaining. I can only assume that it is attributable to your dancing and your spinning at the chair at the, at the top of the show. So well done. I'm being kind. I'm being very kind. I'm being very kind.

All right. Very good. That was a nice note.

We got.

So. Yeah, good, good stuff. You know, the did do a chair spin this morning. I think that's maybe a little passe now we got a few. Figure out some gymnastics or maybe a backflip. Do you be hosting by yourself from there forward, you know? You trying to get rid of me?

Yeah, I'm being kind.

I was just joking with somebody the other day about that. I said, you know, my, my driver's license says I'm 60. My mind thinks I'm 35. My wife says I act like I'm 12 and my knees and my ankles think I fought in the Civil War.

So it sounds like you need to get your knees and ankles taken care of then.

That's right. That's a series of surgeries that I'm not crazy about, but they're coming, they're going to happen. So. Good. How are you today?

All right.

Good, good. What's the weather like up where you are? Cloudy this morning?

Yeah, sort of the usual, sort of a little bit of sun, I think.

Just a fantastic week so far. But this morning we've got June gloom going on, but, man, we had some high 80s during the week and sunny in the morning and it's good, good, good stuff. So. And then I'm off to Chicago. We're going to talk about that a little bit later on, on Monday morning for a few days. And it's going to be in the 90s in Chicago.

Oh, wow.

Okay.

90S in Chicago. Mean. Typically means sticky too.

It doesn't mean you don't have to leave the hotel though, right?

That's right. Other than. Other than a couple of dinners and some things. Yeah, I, I will not be leaving the hotel. So that is it. So anyways, why don't we. Sorry, go ahead.

I said let's get on with the news.

Yeah, let's talk about that this morning. So I'm Kevin Brown. I'm here with my lifelong friend and business partner, Tom Burton. We get together every Friday morning. We talk about the happenings in the world related to the economy, supply chain mergers and acquisitions, tariffs, obviously. We've been talking a ton about recently and the human side of Business. We talk a little bit about hr, talk about AI, cybersecurity, robotics, all kinds of interesting stuff. And what we do is we try and take that news of the week. We plug that into the newsletter that we publish every week called around the Horn and Wholesale Distribution and Manufacturing. And we apply that to how it relates and how the news relates to wholesale distribution and manufacturing. So we enjoy you being with us. We're appreciative of that. If you don't get the newsletter that we publish, we would love to get that to you. And there's three simple ways to get that out. You can reach out to us directly through LinkedIn, which is pretty common way for people to do that. You can either go to the Lead Smart technologies page on LinkedIn and check the newsletter box there and that'll give you the option. Or you can search by around the Horn and wholesale distribution will allow you to follow the podcast there as well as get the newsletter. You can send us an email to helloeadsmartech.com again, hello, leadsmartech.com we'll get that to you. Or we have a website for the podcast and that is www.aroundthehornpod.com, aroundthehornpod.com and Twitter ath pod and lots of different ways to go about that. So we'd love to get that out to you. But if you're not getting it, then you will not be able to follow along as quickly if you don't have that. Most specifically, if you're listening to the podcast, we're doing this live this morning at 9 O' Clock Pacific on Facebook Live, LinkedIn Live and YouTube Live. But if you do not see us and you're listening to the recorded version on Apple or Spotify or any other formats later in the day, you won't be seeing the newsletter because we have that up on the screen. So we'll be scrolling through that, looking at a few different charts and some things as we go. So we'd love to have you join us in the future if you like what we're doing. We've got a great request for you. Please go into Apple Podcasts or Spotify, subscribe and leave a review. And that is the best possible thing you can do with us. We go back and forth in the top two or three podcasts or first through third podcasts globally in wholesale distribution. We'd like to take that front spot. But not only that, and probably much more important is when we get those follows and likes and subscriptions, depending on the platform you're on. The algorithms bump up a little bit and gets us out in front of more people that are in the same industry that you're in. So love it if you could help us out. Last and certainly not least is we couldn't do this every week if we didn't have the sponsorship of the company that Tom and I work for. Lead Smart Technologies. Lead Smart, we've developed a product called the Channel Cloud. And Channel Cloud is an AI enabled CRM and customer intelligence platform. It's solely developed for wholesale distributors and manufacturers. So you won't find the blank slate technology like you would typically get from an ERP or a CRM provider where you have to go figure out what to do with it. We've developed what we describe as deep customer team and business insights. We bring siloed data. In fact, the slide here says corral silo data from across the organization. And what that does is it allows companies to gain never before seen insights and that are actionable and achievable within their organization from bringing that silo data from erp, marketing automation and E commerce data warehouses, data lakes, bringing all that together. So we use some great AI tools to uncover opportunities and even expose risks within the organization. And we work again solely with wholesale distributors and manufacturers. So if you're trying to get a handle on your data, getting ready to start on a journey related to artificial intelligence and digital transformation, we would love nothing more than to support you on that journey and help guide you with the tools that we've developed developed. So Tom, the news episode 147. I. I keep seeing this and realizing in three weeks and we're gonna, obviously we'll be dark on the fourth, but put it this way, I won't be here on the 4th. I don't know if you're gonna have.

A show, but who knows, we'll see what happens.

You might just decide to go live and see what, you know, I've see what happens. Probably actually would be kind of fun to do that because it's gonna be a lot of people out getting the barbecue ready or cleaning the pool or whatever it might be. It might even tune in. Listen.

But it'd be one of the best, you know, best attended shows we've done.

Let me know how it works out. I'm gonna sleep in. All right. But the. You're going to be loading customer data or something. So probably I shouldn't say I'm going to sleep in. But the. Otherwise, you know, we've got 1150 coming up and who would have ever thought we would get to 150 episodes. I think most podcasts was it 90 some percent never get past 10 episodes.

I think that's correct.

Yeah. I've seen a couple others pop up and related to wholesale distribution. I saw one a couple weeks ago and they a couple of big announcements, but they haven't done a show yet. So I thought that was kind of amusing. So we'll see. But here we're trucking along. 150 coming up. We've got to figure out something to do. Papa Bob, bottle of champagne. We'll figure something out for that in the next few weeks. So anyways, we start each week in our segment called the Economy and Supply Chain and well, the Fed Fed held interest rates again this week, just like you thought. Right.

Hey, before we started, I wanted to say good morning to Brian and I wanted to thank him that he finds the sessions both entertaining and informative. That's a true friend. Thank you, Brian.

Yeah, I bought him lunch a couple weeks ago.

Oh, okay. Now, now that explains everything.

Okay.

I knew there must have been something behind that.

Yeah, no, no, we, we got a couple of nice notes and you know, it's, it's nothing better than to get the compliments. There's a lot of work that goes into this. We've got John on the back end that takes care of the editorial and the production stuff that goes on in the back end and Lily doing all the preparation with the articles with me during the week. And you know, we look at typically minimum of 100 articles that we could talk about related to the, the categories that we discussed. So a lot of work goes in. So compliments are well received because of the work that goes in.

So anyways, so back to interest rates. So, yeah, I was reading this this morning and then the news or one of the news items from this morning is one of the other Fed chairs, Fed Reserve, I think Waller was his name. Governor has come out and said pretty boldly that he believes they will make a at least a quarter point cut in July in the July meeting, which kind of flies in the face of what was stated in the Federal Reserve meeting this weekend, which is, well, we're going to wait and see how the data actually plays out. And I think you've brought this up before is there's, I do believe the political heat looks like it's turning up as well. Yeah. And you know, there's, there's more to this than Trump. I mean, if we can reduce, you know, even. Well, Trump wants to reduce what 22 basis points or, you know, 200.

He said, do, do at least one right off the bat, but you should do two. We can. And his point was you can crank it back up as soon as you need to if you need to, right? Probably not that simple.

Well, it probably is, but it could be, you know, again, that's sort of disruptive, right. To the same thing. But the point being, I think on, on the side is we have, you know, the national debt and the, in the interest on the national debt, there could be major, major, major impacts by reducing the interest rate some as we go down here, which I believe is a lot of what the political pressure is going to be related to, especially as we have some refinancing and some other things that are coming up related to the, to the debt.

Well, that's, that's a great point that you bring up. Related to that is that the impact. Right. Is so much greater. And I actually did a little. I used Gemini for this one and I said, what is the alternative view of Powell's decision to not lower rates? And, you know, I talked about prioritizing economic growth and employment, talked about the challenge with tariffs and so forth, and then concerns about overcorrection. And I think the one, the concern about overcorrection in my mind is they were late. You know, I wouldn't say he. I'll say they were late to the game, right. When we saw inflation pushing up to start raising rates. And I think sometimes I wonder, I listen to him talk and it's just, it feels like he's just talking from a playbook that's, you know, from, you know, from Vince Lombardi, you know, or something like that. It just, it's just the same kind of stuff over and over again. And there's so many other factors going on right now, you know, and, and anxiousness, I guess I'll call it. I mean, when you think about it, right, you've got, you've got the issues going on in our economy in this country. You've got the tariff pieces looking internationally. You've got a war going on in the Gulf states that the US Might be involved with. He's got a lot of factors to look at with this, and I think he's playing the game. It just seems like it's easy to go. Well, we'll wait and see. We'll wait and see. Because now with tariffs, he's been a wait and see guy as long as we've been on this show talking about him, right? But now with the tariffs he's got that ability to do that. But I think, you know what, where the president is pushing and I think the supporters of that and I think you're going to see that from more and more lawmakers along the way is to your point is, you know, the implications to the deficit right now and could be huge. Right, right. You know, if you, if you lowered one point, right. You look at what that, you know, the bond market changes, everything changes in that setting. And there's, there's pretty dramatic. And then, you know, what this administration is talking about, right. Is they want to get, you know, near shoring and on, I shouldn't say near shoring, but onshoring go. And we are seeing capital expense.

Right. They can capital expenditures which make it easier with a lower rate.

And you think about, you know, our listeners, right. That are looking at opening branches or doing an acquisition or whatever, if the cost of money, you know, talk about being able to leverage your balance sheet. We've got people that are growing and you know, on a consistent basis opening new branches and doing things already. But if the cost of money is significantly better for them, they don't have to leverage the balance sheet to the same way that they did before. They can leverage somebody else's.

Yep.

You know, so I think there's going to be, you know, one of the things that, when I did this little additional piece of research was, you know, it said, focusing on alternative monetary policy said instead of solely relying on interest rate adjustments, some argue that the Fed could utilize unconventional monetary policy tools like forward guidance and asset purchases to support the economy. While interest rate adjustments are a key tool, there are other approaches to monetary policy focusing on quantity of money or the price of money, that is exchange rates. So it's, I don't know, I guess this will be a wait and see. I think we, I want to put this best, I think you're, what you're going to see is the Fed bowing to some pressure, not just from the president but from some others with a lot of rhetoric that goes with it in supporting data that shows. But I think at the end of the day, it's going to be kind of bowing to some of the pressure.

You mean the bowing to the pressure in terms of cutting in July or.

Cutting.

Yeah, cutting in July. And I, I, I don't, we're not gonna, if put it this way, you know, I, I don't know, I don't even know what to say, how shocked I would be if we saw the two points, the President's call. But to see. But to see 500 basis points in July, that wouldn't shock me.

Okay. Okay. Yeah, I, I think that I'm not.

Gonna bet on it.

Yeah, I'm not gonna bet on it either, but. And we'll wrap up here. I think that Powell has, By doing nothing. Right. He can avoid blame because he didn't do anything and he's following the data. But I do think that, I don't know. You know, they said that the President is going to announce his replacement here soon, which, because his term is up in 2026, I think early part of 2026. I'm wondering if Waller, the Fed governor that spoke out, is trying to bid for that job. You know, so there's now sort of, again, I think there's multiple. I mean, that's the first time I think someone's come out that boldly and said, you know, this is bs we need to do something different. I think, like I said, I wouldn't bet on it, but I do think there's a reasonable chance for that quarter point cut in July. I don't think we'd get anything more than that.

I would be surprised if we don't see something in July from that standpoint. Right. The other thing I actually, I wish this was an original thought, but I heard somebody talking about this the other day was that there's also the chance that the President says who the replacement is going to be, and that guy becomes a talking head for the President, throwing out all of the options and the whys of what should be done now. And it puts even more pressure in that case on Powell. So we'll see what plays out of it. Good. All right, where are we headed next? Consumer sentiment rebounded.

I was reading. Look, the consumer sentiment, I think, is based on the stock market predominantly, and people's 401ks and how they feel with the wealth effect. And obviously, I think the market is only 2%. The S&P is only 2% off its high. I don't know, taking into account today, I don't know exactly what's happening today, but as of Yesterday, it was 2% off its high. I mean, you talk about a V recovery, right? On April, whatever, it was second or third, and it was down close to 20%. And it's recovered 20% in less than two months. Yeah, I mean, that's pretty remarkable. And I think everyone is starting, you know, it was two months ago. We're like, oh, crap, you know, what does this mean to my, my wealth and my Savings and my 401K. And I think everyone's very relieved now. Yeah, I mean this is consumer. Right. This isn't small business. This is consumer sentiment.

But the reason that we talk about that and is is those things are go right across right to B2B and so forth of a similar feeling. Right. Because all of the people that are in that setting, they, they go home to their families. I'm just looking at the, the market right now. It's, it's at 42, 214 and it's.

An S P is what, around 6,000.

Give or take S P Is it Pretty darn close? Tom5968 so it's off slightly this morning. It's off my basis point. Yeah, it's, it's something and to talk what you're talking about, about that spike or big drop off, you can see, I wish I was sharing my screen. You can see that this to your point about that big V. Right. And how fast that came right back this year. And I think there's a bigger component than the stock market though. I think really what you were seeing this is the data from this and this article is from cnbc. It's from yesterday and I'm sorry, it's from earlier in the week. But they were the other component of this, you know, they're using the University of Michigan survey, which is, you know, other than, I don't know what other, what else comes out of Michigan other than a pretty solid college football team every year and in these reports. But there are a lot of economists and so forth that are using this consumer sentiment data and it's a great baseline, just like we see lots of other baselines. But you know, this article even talks about the fact that, you know, it's not, we had kind of goofy consumer sentiment going on with that was tied to the big risk of tariffs.

Right.

So I think we've got a geopolitical component of it and we've got a stock market component. And, and the other part of this is, is I think it was referenced in the article. I was going to look at my notes here real quick. But the, but remember that the cause and effect, right.

The tariffs created the, the drop in the market.

Right.

And so I don't know if it was the tariffs that were causing their confidence to drop or the effect of the tariffs, which was a significant drop in the, in the market.

The. It said this was the quote. It said consumers seem to be adjusting to the new normal of higher prices, an expectation for inflation over the next year. So, yeah, this is interesting. Well, it's a. Dan, Dan here sharing is he looked into that sentiment data. He says there are a few other things that jumped out at him. So, Dan, share them with us if you want and we'll, we'll, we'll bring those out as we go. But I think, you know, this is a, to try and say we're going to look at any one thing in the environment, it's just really crazy.

Yeah.

So to right now because there's so many components of it and I think, you know, you're, you're not a news watcher. I'm trying to remember when we were together last week, what had happened. Something major had happened in the world, like three days before that LA riot thing. That's right. Yeah, we were, that's right. We. And it started three days before. We were having lunch in Ventura at your neighborhood Thai place. And I was, I started talking about it. You looked at me like I was crazy. So good for you. You stayed away from the news and. But I think we're, we're in a place right now where there are so many factors going on.

Right.

We've got the instability of that. And it's interesting, you know, when you were talking about. And by the way, it's, it's, we're looking at. And this is a little off track here, but I'm going to talk about. Anyways. I'm, I'm starting to, and I'm watching, trying to watch big picture on this. Right. So regardless of what anyone thinks of the President, the President has some extreme goals, which is what he was elected for. And I'm going to go back and make the comment about, you know, the hat that he wears every day does not say make the world great again. And so his view of things is what is, what is the best for this country. And he's doing some, you know, pretty dramatic things. But what's interesting is, you know, just you. We were talking about this last week and the week before about tariffs and the, you know, being taken to court on. Could he use those? Well, those are all on hold. We're going to talk about tariffs for a moment shortly. But it looks like the way the courts have gone with him is the time frame that those are pushed out. He's going to be able to get a lot of things done and those things are going to be in place. And then you look at the situation in LA right now where it looks like that might be the testing ground for immigration and immigration enforcement. And Governor of California Just got slapped down again yesterday twice by the courts. Wait, Tom, you're nodding your head like you saw the news.

I realize that. No, I didn't see the news, but I'm not surprised. Okay.

Yeah. So the courts came back and said, at least for now, you know, the federalizer nationalizing of the California National Guard, it's okay. And so I think, I don't want to suggest that they're winning, but they're not getting, because a lot of these things are getting pushed out. But while they're getting pushed out, there's things that are getting accomplished along the way. So it's interesting. So Dan was talking about here, thanks for this comment of some of the research he did on this University of Michigan study. So there's heavy political split on expectations about the economy. Republicans feel more confident than Democrats. I, I think that's a probably pretty straightforward ongoing thing, right? This splitting on party lines. Right. The, the, the Democrats are right now trying to figure out what happened to them last November and what they need to do to not let that happen again. And the worst thing that could happen is that the economy does well under this administration, you know, so they're going to be got to be split in that setting. Good. All right, let's roll ahead, my friend. So we've got an article here that in fact, I heard from Scott Costa earlier the week in the week who's the publisher, he's been a guest with us a couple times of the Electrical Distributor magazine and then Electrified as well, which is a, all part of the national association of Electrical Distributors we're publishing here. And it's a great link. But if you don't get this, just check this out. It's, it's again published by the, the electrical distributor publication from nad and it's called Tariff Tracker. And it's, this was a great one. Tom, did you get a chance to listen to the video?

I did. I thought it was really well done.

Yeah. So they've got an economic group that they're partnered with on these things. And it's really, was what was really intriguing to me about this that they came up with out of this whole piece was the, you know, we're working on trying to get things balanced. Right. And the, I think their, their position, if I remember correctly was basically we're going to kind of see this 10% thing across the board. We're going to see a number with China kind of settle in probably in the 30, 30. Do you remember what the number was? I thought it was 30, 35.

30, 35.

Yeah, yeah. It was their, their assumption of where that was going to end up, which was great. And this was the, the data is coming from the Armada Group, which is Keith Prather and Chris K. And they've been doing this for 25 years. And But a handful of interesting pieces for me kind of came out of that were, you know, the, basically with what I had mentioned a few minutes ago, you know, with the courts, you know, not making any final decision, there is a fast paced race, right, to get these things done and in place and get these commitments done. So I, they, they said, and I didn't, hadn't noticed this or researched it, but they said the deal with the UK was done, got major projects going and they said what do they say? Out of the hundred or whatever things, there were 17 or 18 of them that were critical to get done.

I think that was an important point.

Right.

What they said was is there were eight, there are 18 countries that are strategic trade partners, if you want to call it that, with the U.S. and then there's everybody else.

Right.

So what they're working on right now is those 18. The UK is one of those and the UK is the only one that supposedly has a done deal in terms of the structure of it. The other remaining, the people that are outside the 18, it looks like it'll probably just remain that flat 10% back and forth. But what I found interesting about the 18, and I think this is what is going to be to see how this plays out from a time perspective and they said on there is that the 18, this is more than negotiating tariffs. Yes, this is negotiating trade relations. Okay, that's. And what he said in some cases, a lot of these negotiations in the past related to overall trade relations can sometimes take years to pull together. I think it was what, you know, documents and things are like thousand page long. I mean these are not, you know, a couple of bullet points on a sheet.

Well, and they comment in that too. Right. These are usually months and months if not years of negotiation. They're trying to get them done in.

Days and 90 days or so. I think the 90 day window will certainly get pushed out. Yeah, at least another 90 days. But these do need to get worked out sooner than later for a lot of reasons. So they're definitely trying to fast track. But these negotiations are not just going to be about tariffs and what you're paying on a tariff. The tariff is going to be a component of that and that will fit into the overall broader trade relations. For example, with China and the fentanyl and.

Right.

You know, each country sort of has its own nuance. Right. Of what the trade relation agreement could look like.

The other. Thanks for recapping a lot of that. The other piece that was interesting to me was the, the issue and I think we've got a chunk of this taken care of now with the rare earth minerals and so forth with China is, you know, they were talking at depth about the and again this is from it's the URL is TED electrified.com so the electrical distributors electrified.com website and they were talking about the mass amounts of components that are needed for the military infrastructure of the US that are related to rare earth minerals and so forth and the magnitude of I can't remember what the percentage was but the magnitude of those that we rely on an adversary for in this country. Right. So getting that done was obviously the critical thing, especially with the geopolitical issues that are going on right now. The thing that I have a big question about and maybe somebody listening in can share with us if you're listening on a recorded, you know, send me a message on LinkedIn or if you have my info, send it to me. I'd love to hear people's thoughts and know more about this than I do. One of the biggest factors and you see tons and tons of business people and we've had people talk about it here on the show with us related to the tariffs is outside of the fentanyl issue and then just the free trade is business practices. And obviously out of all of these related to tariffs, the most important one of these is with China. The biggest implications, there's significant implications with Canada and Mexico. Mexico, as I've talked about over and over again, I think is actually probably one of the after China might be the most important one to make sure things, not even just tariffs, but things in general are in trade relations.

Right. Trade relations.

Trade relations. Great point, Tom, with that. Exactly right. But when we start talking about, you know, so, so Mexico or Canada are not going to based upon these tariffs going to go do use government resources to backstop the economy with pushing and boosting the the valuation of their currency. They're not going to manipulate term I'm looking for is those countries aren't going to manipulate currency to support the issue.

Right.

Canada is not going to go in and put dollars behind the lumber mills that are shipping to the US Based upon the tariffs. So and then we don't have the IP theft and the other major issues that are behind these things. So these I'LL call them. They're not secondary issues, but I'll just call them soft issues versus hard issues. These software issues. But that are critical ip, you know, currency manipulation, the other things that go along with this. It's getting those done fast to me seems.

No, that's what I mean, it's hard the trade. To negotiate a trade relation deal which ideally would include the things you talked about. It could include in the event of, you know, China, that a US person can't go create a business in China without partnering and having the Chinese national own 51% of the business.

Man, don't you do that in California. I would love to be on the side of that.

But. So again, the trade relationship negotiations that go way beyond tariffs.

Yeah.

Right. And honestly I think some of the things that are, I think the terrorists were just being in some degree uses a hammer or a big stick to get some of these other issues to the table to be having those discussions around.

Yep.

So it's not even that tariff has, is the most important thing in those trade relations, but the tariff is the stick that has been driving a lot of those. But anyway, there's 18 of those. I believe that what they were talking about here, 18 countries. We need to be those, build those strategic relations.

One with one down. And we've got one down. Right. What is it, July 9th or something like that.

It's not going to get done that quick, but it can't take years either.

So I, I would have to assume it's going to go the way of the, of the tick tock ban. Right. It's gonna get pushed out and pushed out. You know Tom, I was just thinking, a good friend from distribution strategy group, Ian Heller, published a novel recently. You've written a book. I think you could take this whole tariff thing with China and write a whole like espionage novel with Tom Cruise in it that you know, talks about what's going on in the back room and you know, what's what the impact of those have on what's going on in Iran and Israel right now. And there's a, there's a story to be written here.

There's a great Netflix documentary there to be created.

Well, I think there's a documentary the other side of it is. And the reason I joke about that is part of these things. I mean these people are not dumb. And it's what we get together on Friday mornings and take a couple hours off of our day to day job to talk about things like we know what we're talking about and these People are working, you know, you've got the entire State Department and other governmental departments with, you know, career politicians who are working on these things and on the other side of the table and you know, in the China setting you've got the same thing in China. I wonder how much of this stuff there's been back channels on all going on previously about it and or people knew what their pushing points were, you know, because it wasn't like you just use it, continue to use China as an example. It wasn't like China didn't know that, you know, this was going to come. Right. The entire election cycle there was discussion about these things. Okay, well maybe they've got their positions figured out now. They're, they're, they are able to move fast because they know what they will and won't do. So that's where my thinking is that, you know, this is a, there's probably a movie behind all of this with a, some action packed scenes. So anyways, let's move into our manufacturing distribution. You know, before we go, Tom, real quick, there's a good, good article that we reference in that here about from Reuters. Probably the fastest growing business right now in the US is freight brokers. Freight brokers that are, you know, and it talks in here about, I think it was DHL has hired like 3,000 people or something like that to support what's going on with all the tariffs. And even they even talked about in that right now that even a lot of the technology that they're using related to managing tariffs, they don't work well with what's going on. And again, I don't want to spend a lot of time on this one because we've got so much to cover still today. But if you get a chance, look this article up. It's called US Importers Turn to Brokers to Navigate Trump Era Tariffs at a Cost. I think one of the interesting things, and I'm sure this is going to be a study that somebody will do when we get this tariff stuff settled out. It might be a year or two before somebody does this, but the incremental costs or the soft costs or whatever that have hit businesses trying to manage all of this. Right when you, we've talked about it on the show many times about people that I've talked to that they could literally, you know, have additional staff members right now to try and manage all the change that's going on with things. So that'll be an interesting one. So anyways, why don't we jump ahead and into our Manufacturing, distribution. The article there about commercial construction market outlook, that's from Supply House Times. You go to supplyhousetimes.com and saw that article. It's good outlook. That's the publication is related to PHCP marketer, plumbing and pipe valve fitting and heating and air conditioning market. But it goes across the entire commercial construction market. It's good info there. Then at electrical wholesaling they put out their new top 100 electrical distributors. So I love it when these things come out because we're a technology company that sells the wholesale distributor. So I drive.

Yeah, I was noticing that I look like a prospect list for you.

It's exactly right. Well, you know what's funny is that port board, Lily and Hari that work on all of this stuff for us is like they just think they've got the, you know, the top 250 or the top 500 and the, the, the, the marketing lists done and the work done to you know, get those people invited to the podcast and some of the other thought leadership stuff that we do at Lead Smart is they just think they're done and I send them another updated list. Now the good news is they just have to cross match it to, to see the changes. But yeah, another good list here. We're going to talk further about another list that's out but that was good from electrical wholesaling.com but the next article we're talking about is from Industrial Distribution. I wanted to chat about this for a few minutes. It talks about the 70% rule for manufacturers and to stop chasing perfection. Did you get a look at that one?

I did and I actually think there's a relationship between these next two articles even though it may not look that way on the surface. Right. With this next article beyond that about the obsession with cost. But yeah, in the first article here and I'll explain the relationship here in a couple minutes, but in the first article it's basically saying, hey, don't let great get in the way of good. And when you try and you know, get perfection and perfection, you know, perfect answers, especially related to all the data and everything like that, all it does is just, you know, stop. Slows things down.

Yep.

And gets in the way of it actually creates more harm than it does good. And the way that that's relevant to the second article, which I thought was interesting is we can talk more about the second article about cost cutting and what they're basically saying is well, maybe focus less on cutting cost and, and focus more on making fast and, and efficient decisions. And I Think that's what both of these articles are talking about is hey, rather than overanalyzing or obsessing with, with cost cutting or whatever, maybe there's more energy and time that should be put into making efficient and fast decisions and moving things down the, you know, moving the ball down the, down the court.

So what I liked about this is specifically from the first article and the point here, right, is that chasing perfection and they're talking mostly about manufacture, but I think it fits whether it's warehousing operations at a distributor or whatever it might be or you know, and even, you know, even waiting till the right time, apply this to our business. Right? Even waiting for the perfect time to, you know, do a technology implementation, right. You've always said this, that you know, there's never a perfect time, right? You just need to make a move. We use in the technology world, you know, with our company is minimum viable product, right? What, what could we, what could the development team push out? We saw one this, this earlier this week, you know, of a, of a new tool that's going to be added for quoting within our software that is rapidly prototyped and ready to go to production. But we even quicker made a pivot on a product change for a particular customer because it was of great value and it got done in, you know, not even a week. And we use that, we use the term related to that as minimal, minimum viable product. They talked about here of minimum lovable product. And I would, I would really throw out the idea that in your businesses again you use the phrase, well known phrase of, you know, not letting great get in the way of good and you can get to great but don't bypass good along the way and get the benefits that come from good. So I thought it was, it was pretty interesting on that.

But so what do they consider, what do they consider a minimum level, A minimum level product?

Yeah, well, I mean this, this. So the, this again is from industrial distribution.com and they were talking with a gentleman from Amazon Web Services but he runs the automotive and manufacturing side of Amazon Web Services. So what he's really talking about is in this setting as I understand it, is getting manufacturers who are really moving towards new technology in things, right, who are going to be using their platform is to get going on things. And he talks about, you know, he uses the quote here as we partner directly with customers to co design solutions and test them in real environments. And the point here is, you know, and we watch this in the setting of our business is people, you know, we what's the old phrase, paralysis by analysis? You know, we've got way too many cooks in the kitchen and we've got way too many what ifs and way too many well, can the product do this and the product do that? And people get wrapped up in things that they would never even use but they want to know versus and the whole point of this article is get moving, get something in place, get something done. Don't make bad decisions. Don't make decisions that can't be unraveled. But, you know, get moving and get things done. But it does tie to your point to that next article there about this again is from Industrial Distribution. Another good, good article is why an obsession with cost is damaging your profitability and handicapping your growth. And they use the phrase here, con confronting the demon. Looks like you can hear. Maybe Cooper likes this article too. In the other room.

Yeah. Sounds like he's impressed with it.

He is. Yeah. Either that or a delivery is coming.

Does he, does he have something he wants to say? I mean, we can bring him on.

He's.

Or at least allow him to comment. I mean, he is.

He's extremely insightful sometimes.

Yeah.

Yeah. If you want to know anything about an Amazon or a UPS delivery in the neighborhood, he is as insightful as they come.

You mean like, you know, still two blocks away he knows or.

Yeah. You know what happened? The UPS guy told me this one time specifically with UPS is the, the braking system that they have on their trucks. We can't hear it, but it's so out of our hearing range. But the dogs can hear it and it bothers them. So I don't know if that's true or not. That might be a perplexity question over the weekend when I have free time. But anyways, this. I wanted to go back to this article about the obsession with cost. Right. And it says managers of industrial organizations are often obsessed with unit costs. And this obsession flavors almost every management decision, damaging organizations profitability and competitive strength. And the point was they were talking about this as, look, you know, he uses the phrase, he says to invoke the notion that unit cost, the notion of unit cost. To make a management decision is to fail to understand the basic mathematics. While he says calculus, he says core problem is that the standard formula for profit, profit equals revenue minus cost, only works when analyzing the past. We cannot use it for predictions about the future because revenue and cost are dependent on two other variables. But he talks about a little bit more about pricing. But I think what's important with this is that they're talking about all of the other things that when we're trying to cut costs so two components, right. Looking at cost of a product and cutting costs in the business. We're taking out the potential of the value added tools that we can bring to a customer. We're putting ourselves in a position where if that's all we're thinking about is cost of a product and margin and cutting costs within the business is we're then maybe eliminating the support network that could be there to be of help that really are those I don't say intangibles but they're not dollar and math driven that are important. The value added propositions you don't have the money for anymore.

But. But it's also the speed. Right. So that's what he was talking about is okay. Rather than obsessing on cost or accessing is looking at right. How fast can you make the decisions and take action. And one of the things that we don't talk a lot about related to AI, but I'm, I'm seeing it in our own business. Right. You can make a decision, let's just say about business building software, right Back in the old days, what a year ago or whatever is if, if you said okay this is, we want to add this feature to our software and we make that decision to do becomes, let's say it's a four week, five week project. Well then let's decide that maybe halfway through you realize that was a mistake or there's another priority or whatever. You've lost two weeks. It's hard to turn the ship and so forth when you can do things so much faster and get feedback so much faster. The ability to have confidence on a decision that even if you need to make that decision. So what we were going through yesterday is something that would have taken a month to build. We believe could be build it built in a couple days. Right. With AI and using some AI tools. Well, okay. Making the decision then to do something over a couple day period versus a four week period is way less risky and way less with us impact if we have to change that decision down the road. So I think that we. There's a philosophical approach to and I think this article and both articles are talking about this. You know, they had the formula one right, the pit stop. And I think there's a philosophical mindset shift that we need to be thinking about in business is how do we think about making decisions and taking action much faster but then offsetting the risk of that by using the AI and using AI and using AI data and capabilities to minimize the impact if in fact you decide that it was the wrong decision or it's a pivot that has to be made off the decision because we're all used to. We're all used to making decisions based upon long term ramifications. Right? Right. And it doesn't have to be that way. Anyway, I'm done with my.

No, it's good and it's not, it's not a. What are these. What's that old saying, Ready, shoot, aim. It's not at all. It's you. You can have a very well defined and specifically as we're tied by this and this. The article didn't talk a ton about AI, but I think you and you bring that together with this is. I think it makes a lot of sense. Tom is the standpoint is you can model you're out but even before you build something, you can model the desired outcome and identify if that is right and then do additional modeling on top of that by different markets and so forth and to see the value of it.

Right.

And well, and even just think about.

Mnl, you do this frequently. Is using AI as a sounding board. Right. So if again prior to AI, if you'd make a decision, your sounding board might be a consultant, a board member. I mean who knows. Right. And then the ability to have that person or persons on demand to be available to be a sounding board tomorrow or the next day, maybe they're not available. They're not there. You have a quarterly board meeting or whatever. If you use AI as a sounding board, you can. Then again, okay, maybe was that the best or I have some more data. How does that factor into the decision? Right. It just allows you to have way more efficiency and way more speed and think about the competitive advantage. And I, I'm not even sure I know I'm not, I'm not even going to say I'm not sure I know I'm not fully appreciating the impact and the potential impact of on business and business results by speed. By incorporating speed into what you're doing and making those decisions faster. And because you have the ability to pivot into maybe not pivot but adjust much, much, much faster with minimal risk compared to what we used to have to do.

You know, I, I think that that's all great. It makes me think about too is we're going to talk about this more in a few minutes about, about the use of AI. I'm going to make this. We've got A handful of other really good articles ahead that we want to talk about with limited amounts of time today. But I'll make this final point and I'm just going to use an example because, you know, it would be easy for somebody to come back and say, yeah, but you know, AI still hallucinates and this and that. And I'll just use a quick example for people. People are oftentimes looking for examples of things. We were meeting last week, one on one, the two of us as the founders of our company, and we were working on the core values. Now we had developed the core values of the company years ago, right? Getting ready to do a lot of hiring right now. And because we use the Entrepreneur operating system or eos, how you hire is tied to your core values. So we did a bunch of work on Reef. What do I say? Refining the core values and restating them with some sub points to them that would be valuable. So we ran those as we were talking about it. We were sitting at a conference table and looking at a screen and I was running those through ChatGPT and we really put our heads together with some of the things that it was bringing out. We thought we had it done, but I decided to run it through a different model and I ran it through Claude and Claude came back with, yeah, but these two are not redundant. But there's overlap here. And what if you said this instead? Does this. And it. It not only saw the different differences that we weren't getting out of ChatGPT, it was understanding what we were trying to accomplish to support the company. And so it was asking questions back basically about in the context of what you're trying to accomplish, would this make sense? And so we have these tools now that, I mean, how much we could have spent days racking our heads together about how do we want to tweak this one and not just do we want to tweak what it says, like if we were writing a magazine article, this is the future of the company and the core values that we were trying to just refine. So I think those tools are to get things done fast are really going to just continue to improve for us.

And we're seeing a lot, I won't say a lot, but I'm seeing in the last six months more and more, especially from private, private equity owned companies that we work with this sort of renewed, focused on cost cutting. And while I understand there may be some bloat and you know, there's everyone that wants to do their own doge, right. And kind of get rid of the things there. But I don't see that being balanced with the, what we just talked about. And I think if you can balance the efficiencies in the business with cost and expenditures, but at the same time balance that out with how do you speed up?

Right.

I think then you have one plus one equals five. And as it says here. Right. It's the damage it can just become by sort of myopic cost cutting in this day and age is pretty significant.

Hey, Tom, that's great. We've got, we've got to kind of move along here with our time today. Let's. I want to do this though because of this thread that we're talking about. Let's come back to our E commerce and marketing segment and let's bump ahead to our technology, cyber security and AI because there's a great article from McKinsey that we put in here that just ties right into this discussion, doesn't it? And it's, it's two of the three articles. So the first one is McKinsey, when can I make good decisions? The rise of AI corporate citizens. And then the, the follow up there is from Time magazine. And really what they're talking about there is an MIT study that they did about ChatGPT maybe eroding critical thinking skills. Why don't we talk about those two kind of briefly. We'll tie those together and then we'll kind of come back to the other ones. Is that all right?

Yeah, sure.

You want to take the lead on that or you want me to dive in?

Well, go ahead and start and then we can, I mean there's a lot of different direction that, that of McKinsey article, like almost all McKinsey articles is so good. Very, very comprehensive and very good. Right? Yeah, we could do a whole show around that.

But yeah, I mean we could do a host, we could do an hour on this article. Yeah, right. So it's, there's just so many things that they talk about in here, but they're again, the title of it is when can I Make Good Decisions? The Rise of AI Corporate Citizens says as AI genic. As a genic AI begins to influence decisions, to scale forward looking organizations need to reimagine government, governance, trust and operating models or risk falling behind. And they do a nice job of kind of going, you know what, talking about what traditional AI was talking then about generative AI and then agentic AI and the roles that these kind of play within an organization.

Well, you know what we need here? We need somebody who's like going to have an AI conference coming up that really knows this stuff to come in and help us sort this out for us because.

Got any ideas?

I don't know. I mean, do you think we can get Ian here quickly or.

Oh, wait, you saw me.

Oh, wait, look. Look what happened.

Look at that.

See, that's why I talk about speed, man. Speed.

Speed.

Right, Speed.

What are you guys doing?

Hey, my friend, we are just talking about the need that we have for additional wisdom. Let me rephrase that.

We.

Adult supervision and some wisdom. Yeah.

And you settled for me instead. I appreciate that.

No, no, no. I don't know if you could hear us.

I could. I've been listening since almost. Since the start.

Okay, well, then you know that we need help now.

We were.

We've just been spending quite a bit of time. So first off, Ian, thanks for being with us. This is Ian Heller, the co founder of the distribution strategy group. We've got some great things to talk with Ian about his upcoming event today. We want to tie you into this discussion that we're having. We've just been doing a few different articles and all tied to AI. We're going to talk about the AI event that your organization is having next week in Chicago. We started the event, the discussion today talking about how hot it's going to be in Chicago next week, but good thing we're going to be inside the whole time.

But we've been kind of air conditioning in the hotel.

We checked. We.

I'm confident.

Is that included? Is that included?

It's included in the room.

We paid the extra. We paid the upcharged.

Okay.

All right.

Wow.

Tom, do you want to. Ian, I don't know if you were listening. We've just been talking about speed of making decisions and. And so forth. And we just have this McKinsey article that we were starting to talk about and you know, we're. We're kind of tying these things together about usage of the tools, usage of the right tools, understanding deficiencies. But a lot of what we've just been talking about, we use some examples of some things we're doing in our organization is the speed that you can do things. Any thoughts you might have on what you're seeing from. I mean, you're hosting your podcast, your webinars. How many times are you. Are you guys live a week? It's seems like it's almost daily. I know it's not, but you have so much.

About four webinars a month. Usually one. Usually one to two of those is wholesale change. Our podcast Y. And then the others are, you know, tech leader panels, distribution leader panels, original research, webinars. But we, we average about one a week.

Okay, that's great because it feels like more. So that's good. And you know what, Tom? We should just do this because not everybody. There are people that listen to our show that have been living under a rock who might not know Ian. So Ian, why don't you just kind of quickly. Sure. Tell us about yourself and about Distribution Strategy Group and then we'll kind of dive in and that'll get a bit of a preface to the value of your thoughts as we're here today.

Oh, thanks, Kevin. Yeah, so I've been in distribution since 1984 when I was a truck unloader at a Granger branch in college. Thinking it was a summer job, I left Granger 15 years later as the VP of marketing. I've done that kind of, you know, VP marketing, E commerce category management for three other publicly held distributors in different verticals. The last one was at Whitecap, which was a division of HD Supply when I was there and I ran E commerce and marketing for them. That was about 8 years ago since I left and I co founded 5 years ago distribution Strategy Group with Jonathan Bine, who's got a PhD in computer science. Comes out of. He's got a very similar background to Tom's, but they both come out of the technology sector. But in both cases, you guys have spent many years working in distribution.

That was the biggest compliment Tom might have ever had.

I think you guys are pretty comparable.

From what I can tell.

Oh my goodness. We're never going to hear the end of this anyway.

We do a lot of thought leadership stuff, including this live conference, supplied AI for distributors. We also just released three software products. They don't compete with anything you guys do at all. In fact, they're complimentary. But one.

No, we're integrated. We're integrated with one of them.

We are.

Right.

And that's the. The Customer Experience Rx which measures customer satisfaction. We have Employee Experience RX for employee satisfaction and we have Demand Rx, which measures wallet share. So there's some good opportunities for us to collaborate. You know, the two. I think the two firms have no competition and a lot of.

No, absolutely. And, and complimentary content that we.

Yeah, that's right.

We're. We're not a media company. We're a software company that babbles a little bit on Friday mornings.

So you guys do a great job though. I really like this this show, I think it's really well done. I like your use of streamyard. In fact, thanks to you, we're going to switch to streamyard.

But anyway, so the affiliate link. Quick, Kevin.

Yeah, that's right.

Yeah, I saw that.

Well, you know what's interesting? It's funny.

They do that.

So what Ian's mentioning there, for those of you listening in, this is why I'm not a great host. I could just hang out now and talk to Ian, my friend, as opposed to running a show here. But we use a platform to stream to multiple platforms called Streamyard. And what they just started doing is we have that little capability to say our guests can do it. And I log in not as a host, I log in as a guest so I can put it out to my LinkedIn network and. But it's worked great forever and about three weeks ago now they put a little plug for Streamyard in when you do that. So I just. I got it.

It's working, see. Yeah, changing.

Yeah, so it's kind of funny. Anyways, let's now get back to the articles. Yeah, I was gonna say now that we know that Ian is a thought leader in, in this segment and talking to people, Dan, day in and day out about this. By the way, Ian, were you on when I was talking about writing a novel?

I. I was. Thank you for the call out.

I appreciate it.

You want to just quickly tell everybody the title of your book that you wrote?

Sure.

It's called Perun's Hammer. P E R U N apostrophe S Hammer.

Sci fi thriller. What. What did you call it?

Yeah, it's an action adventure thriller with a sci fi twist.

So I think, I think one of your. Tom are probably the only, you know, published authors that I. I'm sure I know plenty of them. But become the top of mind, one of you needs to go write an article about or a book about what's going on behind the scenes. It's a Tom Cruise Mission Impossible thing about what's going on behind the scenes with tariffs in China right now.

Yeah, yeah, I, I heard that. From China with love. Something like that.

Perfect.

Yeah. All right, we're on our way.

We're on our way. That's right. Pierce Brosnan maybe play the lead. Good. So let's get back, let's get back to this. We were kind of combining, you know, a series of these discussions, these articles that we had shown about moving fast with AI then this McKinsey article is, is talking about influencing decisions at scales for forward looking Organizations as we see here. And Ian, I know I'm putting you got a little bit of a disadvantage because I didn't send you the newsletter or the articles. We are we invited you here because we want to spend some time talking with you today and we're going to close the show out. Spending quite a bit of time talking about your upcoming event which is why we wanted you to join us today to get the word out about that. But if you heard us kind of talking earlier, any takeaways or thoughts kind of on this moving quick and using the right tools for the right job.

Are you talking about specific to the McKinsey article?

Well, I would say kind of in general because you know that we had the discussion about pricing and people that you know are doing the pricing piece and kind of tied that together with that other article from Industrial Distribution about you know, letting Tom quoted it as letting you know great or great get in the way of good. And, and I think right now we're at this place where and it, it'll be interesting. I'm. I'm looking forward to tying back to your event next week that we'll spend time on shortly is I'm really looking forward to being there and seeing hopeful hopefully seeing a big shift in mindset of attendees, mostly wholesale distributors from your first event a year and a half ago of tire kickers, of lack of a better term. With all due respect to all my friends that were there that are also going to be there this next week but is moving out of that. I know I need to do something to doing something and not not just the big guys because in a market like this there are always, you know, first movers. Right. If we look at, look at that from a standpoint of crossing the chasm. Early adopters, there's going to be a narrow group of those but now getting some more mainstream movement. That's where I kind of wanted your tie in on some of this. Ian was with the articles we've discussed.

Yeah, I mean I think this conference in particular has the most progressive thinking distribution executives there by the nature of the subject matter. So it's a little less of a Luddite conference than you sometimes feel like you run into distribution companies. I think this topic of, you know, when can AI make good decisions? You know, if you, if you dig into that article there's stuff in there about corporate governance. Right. So you know, if you're is, is your, is your AI agent acting as an agent as a representative of your company and can your company be held liable for its decisions. I think, you know, that's the kind of thing that's going to get worked out in case law over the years. I think it, it's, it's scary, right, because we know that, you know, we used AI to help us write an article the other day that totally fabricated a quote from somebody. Right. And so we're going through and checking. We're like, where did this come from? It was complete fabrication. And you know, that's the kind of thing where like you, it looked perfectly legitimate and AI wasn't intentionally doing something wrong. It was like it was kind of synthesizing some material from this interview. And so it put it together in this quote that had nothing, wasn't a quote.

I'm not sure what to do. So I'll do something on my own to try and help you. Even though it's not what you're looking for.

Exactly. And you can imagine that's this close to being a liability problem, right?

Yes.

And, and you know, so you could imagine it handing out information or making commitments that it. Yes, I guarantee that delivery will be there by 8 o' clock on Thursday. And it's not even close. And now the contractor is saying, hey, I want you to compensate me for the labor that I scheduled to be there based on the commitment that you made. And that you can imagine that.

Great, great, great use case.

Yeah. Or mechanics liens or all these different ways that, that you might incur liability through the commitments of a agentic AI. At the same time you can't really afford to lose the benefits of that productivity versus your competitors. So I think it's going to be interesting to see how, you know, how does it, how do the technologists reduce those risks? By reducing, you know, hallucination. But I think when you restrict hallucination, you're restricting the simultaneously the freedom of these agents to act. So I, I'm not sure how it's gonna play out. I think it's interesting and important.

Yeah, I think those are good, good points. It just makes me think we started doing this about and it was really to help guests as well. But probably four or five months ago we started having Lily that does the front end support on the podcast take the all the articles after she gave gets a newsletter ready to go and running them through an AI tool to give us a recap on the articles. And we just thought, you know, forwarding that to a guest would be really helpful to them so they have a little less work to do until we real. And Lily caught it right away that, hey, some of these get a little hallucinations to them of what it's coming up with. So she, when she sends them out, she says, you know, as a reminder, this is AI generated and you know, spot check the articles too. But Tom and I now we've been, as we review it, we're trying to catch. Because we're looking at both and we're, you know, we're seeing it's coming back with things from articles that are like. Yeah, it didn't say that, but I think it's.

That's a great example. Right. And I mentioned Ian and your take on this is the value that we get out of summarizing those articles, even though we have hallucinations in them, exceeds not doing it at all.

Right.

In other words, ah, screw this. Right? This is. Cause, you know, there's hallucinations in here, there's risks in here, but yet there's so much value out of seeing the summary there and doing them that it's worth the risk. And then what we need to do is, and we are doing things right to mitigate the prompting and the engineering of it so that the risks are reduced over time. And I mentioned Ian in your taken. You're right, you're probably getting the cream of the crop right at the show there with the, in terms of the visionary. But do you believe that there is a, A resistance, so to speak, on the AI front to, hey, to jump in because I'm focusing too much on the potential risks or the problems and I'm not putting enough emphasis on the potential value. And is it because, hey, I don't know what I could, what I would do about the problems or there's just too much, you know, if I, if they do send that wrong thing and yeah, that will happen. Right. But look at all the plus that could happen. Right. That would offset that. So any, any general trends that you're seeing from that perspective.

I think the people at our conference are, are aggressively embracing AI for the most part. Now we'll have a few people there who are there as rebels for their conservative organization who, you know, talk somebody into attending. But, you know, the organization itself is still pretty conservative, but generally speaking, you're going to find a pretty aggressive, aggressive audience. I think it depends also on where you apply it. You know, I mean, I think it's, it's less of a risk in marketing automation than in reviewing legal contracts.

Sure.

So, you know, people can take chances in, you know, hey, somebody sends out a bad offer, as long as you've got the legal disclaimer. Right. You probably can back away from it if somebody screws up, you know. But if I, you know, evaluate if I redline a document with AI and I get it wrong, I could be in big trouble. So I think, I think you have to be selective about where you apply it. I think it's a major issue for technologists is how do you reduce that risk or at least call it out. It is interesting to me that we use OTTER on all of our calls. So people like oh you have your AI tool on your calls. Yeah, that's true. But also we're just recording the calls which you never used to do.

Right.

So that's the, the, or the, the actual AI or the actual recording. It just gives us a really valuable record of calls that we wouldn't have previously recorded gotten the audio of. And so the, the, the transcripts are useful and sometimes we go back, you know like what do we agree to do for those, for that company?

Well that's, yeah that, that's, that's for us the key use. Tom and I just have testing out at the tool called Sembly right now and there's a lot of things I don't like about it but what I love about it is and I have this turned on fully right now. I wish I could modify it versus offer on but it literally is listening for what I committed to do right in the call and it adds them to my Microsoft to do list.

Yeah, yeah. I just hope my wife doesn't discover that technology.

I sent a note to Penny about it already.

Oh yeah, some friend you are.

Yeah, exactly. But anyways I back to kind of what this was. There was a great little component here or comment from this article back to the McKinsey one. It said and we're talking about agents versus just AI in general. Right. So building an AI driven tool that can do tasks and projects and do things for us autonomously and bringing that information back to us. So this has AI agents as corporate citizens who need management said to fully realize the value of a genic AI organizations should focus less on treating these systems as experimental tools and more and managing them like they manage people. Right. In the future ready enterprise AI agents become corporate citizens. Accountable, governed and expected deliverable to deliver measurable value. I love that that quote or that you know those statements related to that is like people because we, you know was it Amazon this week that said how many people they're going to let go?

Yes.

Right. And made the announcement. So you know where that's the fear. You know, I was just talking to a, a very large wholesale distributor last week about this and, and we were talking about. I, I just encouraged him to embrace the idea that said, what if you could look at your 40, whatever branches that you have and you're just say 1,000 employees. And what if you're never going to get it across the board? But what if 80% of your employees now could 3x their productivity?

Right.

Same head count. Because the number of people it takes to run a branch just went way down. Now, we were not even talking about robotics being introduced into that. Right. Or humanoid robots. But what if now we needed half the people to manage a branch? Now you could keep the same head count and double the quantity of branches that you have. Right. And, and look at the revenue that comes from that. If you start taking that mindset, the, the metrics of it are going to be different for everybody. You know, every time I say two or three x, Tom, Tom is like, no, you're thinking too small. Think 10x. Okay, but just 2x conservatively. What does that do to an organization? And if we start thinking about agents as people or augmenting people, there are components of this that it's like it's human and an agent working together. And I love the comment here about managing accordingly.

Yeah, I think. And there are other kinds of automation that are happening at the same time.

Right.

Like, so there's a really interesting CNBC episode recently about how Lennar is 3D printing houses. And okay, that's a, that's gonna dramatically. And they built a whole community and now they're building another one and they're committed to using 3D printers on site to build houses. And guess what? You need a fraction of the labor to do that. Right. So I think you're seeing, you know, AI sort of hitting the white collar labor. I think we predicted more it was going to be on the blue collar labor, but it seems to be hitting.

White collar labor more.

But now you've got, you know, 3D printing, which is in robotics, which are starting to get into the blue collar labor market. You know, then quantum computing is going to super accelerate all this stuff. So I think it's really hard to predict what's going to happen. But, man, I am concerned that there's not going to be enough jobs left over to provide full employment when it's all over.

Well, what I was listening. I'm going to send you a link later to a podcast. I'll text it to you into a podcast. I was been listening to earlier in the week and we'll talk about. The reason I'm not going to share it fully right now is because we're going to talk about parts of it either next week's show or afterwards. But it talks about the downside of, you know, and it's one of the. I can't remember the gentleman's name, but he's been working on AI for 40 years and it's not a doom and gloom per se. It just illuminates where some of the risks are.

Yeah.

From a, from a humankind standpoint.

Right.

Where are we at if we have autonomous drones and humanoid androids that can make decisions on their own about who to kill in a worse. Right. So he breaks down a handful of these things and some of them he provide some answers to. But I can't remember what the term is that's been used regarding a. A standard wage for everybody in a country.

Universal basic income.

Universal basic income. So the discussion was, hey, you know, what if to back to, you know, talking about if you could 10x an employee. What am I trying to say? 10x their performance. Right. Or output. Well, do we need then nine other less people? Well, what do those people do?

I guess. I mean I understand the logic behind that as you can do the math and make it work. My concern is idle humans generally don't have good outcomes and, and Idol.

So that was my point about bringing up this other podcast is what he's saying is what do we do with these people? Right. It's if we. I would love to be. And I'm already. I don't know what it is. Maybe it's 1.5xing my productivity. And what I'm really doing and this is how I'm using things is I'm using AI to get to projects that I wouldn't normally get to and to do things that I wouldn't normally do or I want our organization to do. We're using AI to do it and maximize things. But if all of a sudden I only had to work 20 hours a week because of all of this, okay, well, I've got a company that I'm running that produces an income for me. But if, if I was Joe Worker. Right. And now I can go sit on the beach and the government is now going to give me a wage. To your point. Right. What are the outcomes? Is that spike drug addiction or does it, you know what, what is what comes from that? It's got to be worked through.

Yeah.

It's not good I mean, I got a young, our younger son is a cop, right. And, and you know, he doesn't put in this many words, but, you know, people who are idle, they get into trouble often. Yeah, I'm not saying everyone's like that, but I, I, I, it feels like it. We're not accounting for human psychology in the universal basic income solution. It's not that I'm against the, you know, economically, it's just I don't think it's going to lead to good things.

I agree completely. It's like, you know, the, the Four Hour Work Week, you know, that popular book for a few years ago that sounded appealing for about, you know, a month. And then people get anxious again, right. And they want to do something, they want to produce something, they want to feel valuable, they want to feel like they're contributing. And, you know, we all, we all go, oh my God, I'd love to have a month off or three months off or whatever. But it's like I have a neighbor who recently retired and I just watch, you know, it's just like he's looking for things to do and I can tell it's not in a positive, positive way. And I think if you get all these employees that are not able to work. I agree with you, Ian. It's a real problem. And even if they have financial means, I don't think they don't have the spiritual means to, you know, fulfill what they need to.

That's a great example, Tom, because how many people do we know who flunked retirement?

Almost.

Yeah, right, right.

Majority of people. Right. You know, a year later they're doing something again.

Right. I always say I want the ability to retire, not the retirement.

Right.

Yeah, right.

Yeah.

Well, so, you know, that's, but talking about, you know, idle hands, as I think is the old, old phrase to go with that. Right. When I hired Tom from the federal penitentiary on the work release program, I knew we had to keep him really busy. So.

Yeah, well, you, you were hired a man of conviction. You just didn't know what kind.

Perfectly said, yes, very good. Just have to wear that thing around.

My ankle, which is a pain in the butt. But other than that.

So last thing before we move on because we want to spend time of why you, Ian? Where you joined us today is. But we do have an article here from Time magazine. A lot of the discussion in the article is about a study that MIT did researching from their, they call it their media lab, some they call it concerning results from the idea that could chat GPT or chatGPT like tools be eroding critical thinking skills. It's a great read. Uh, we're not going to talk about it today.

Let's bring that one back next week. I have a lot I want to talk about on that and we, we don't have the time right now.

No, I think you're right in it. It's funny I'd said, Ian, maybe we'll talk about this over a, over a beer at the reception next week if you get a chance to read that. But it is right. It, it's a great article. So I, I agree, Tom. We'll bring it back. So, Tom, do you have one of those banners? Let's fly up that from Ian here. Let's. Ian, spend some time telling us about the event. We talked about your company earlier. We've got the event coming up next Tuesday, Wednesday, Thursday in Chicago. So by the way, as a side note, I missed the second one, but I was at the first one. Perfect city, great hotel, right by the airport. Easy in and out. Great decision, in my opinion, on where you're holding it. Thanks.

Free air conditioning. I mean, what more do you want?

Free air conditioning.

Oh, no, it's an upchurch.

Oh, it is an upcharge. Okay. It'll be on your resort fee when you leave. That's right.

Yeah.

So I mean, this is a really, this, this is all about technology, right? So the. We have, you know, 40s, 50 technology companies either presenting, exhibiting or people who are just networking there. And so it's a great place, you know, for people to meet up with you, Kevin, and many other technology companies who are bringing AI enabled solutions to distribution. We have some really good general sessions. So Don Sarno, who's the head of digital for Sona Par North America, is doing a keynote. Jamie Head, who's head of AI for Partstown, is going to be there. We've got a panel that led by Janet Zelenka, who's just a genius. I was on the board of some electrical with her. She's got a panel with Paul Kennedy, who's the president CEO of DSG Supply, Dina Stanton at Kendroll and Tracy Duel at Bostro Braun. We got Tracy Sponenberg talking about integrating AI and human intelligence. I mean, it's a really all star lineup. We got a former head of Amazon Last Mile Delivery who's going to be speaking. And then we have all these breakout sessions and exhibit tables.

So.

And I thought probably the best part though is you've got, you know, hundreds of distribution executives who are really into this stuff, are really curious, who are going to be, you know, meeting with each other and checking with each other. I mean, they're going to, they have experience with a lot of these technologies and you can get references. Right, right. While you're there. So I mean, it's the only major live conference about AI that's focused on the distribution industry and it's our third one. So we feel like it's gotten better and better and better. And we have a special surprise in the opening because it turns out I learned this week that Jonathan can sing.

Wait, wait, say that again.

Jonathan, my business partner knows how to sing. I didn't know that. I've known him for 15 years longer than that.

So we had karaoke night on Tuesday.

Well, I got, we got some special planned.

Okay.

Any farther, you'll see.

Okay.

Wow.

So it's, it's, it's gonna be, it's, it's the two day immersion in AI for the industry and it's great. So it's really exciting and I appreciate the chance to come on here and on your show and talk about it. Thanks.

We'll do it, we'll do it earlier. Right. So, but I'm sure. Is there tickets still available if somebody.

There's few. We're, we're just about sold out.

Okay.

And we still have people signing up. We've had four people sign up this morning and so. But we're just about out. And I don't like that classroom style seating. So I try to avoid it whenever I can, you know, with just rows of chairs or that. I guess that's the theater style. We're trying to, we're trying to stick with rounds and classroom styles for the desk in front of you. That's really the limiting factor on attendance now. We're going to have, you know, so we're trying to make it a comfortable environment so there will be a little bit of that seating and not much.

We've got a mix of customers that are there of ours and a mix of different prospects that are at different levels of discussions with us. So, you know, it's. I, I made a little video that I published on LinkedIn. I think it was in February on my way to the Industrial Supply association meeting in. Where were we for that one? Nashville. Just about being involved in these types of things and not just industry stuff, but when you go to the trade association or the buying group events. And I can't tell you how many people I talk to who might belong to, you know, and write A check every year to their trade association, but they don't participate.

Yeah.

And going to these events, I mean, just a good example. I was in Denver and in an industry event last month and I had a discussion with some executive leaders from this particular company. I won't say who they are, but I just. At the keynote address on the first day, a guy at my table, not knowing who I was, started talking about what I do. And they have 700 branch locations and now we're in discussions because I chose. I chose to write a check for a couple of thousand dollars to go to an event and listen to get smarter myself.

Right.

And those are the types of things that drop into your lap.

Yeah, well, that's, you know, that's. Who was the Supreme Court justice who said, I believe in the kind of luck you find in the library at 2 o' clock in the morning.

Perfect. You know, there you go.

You work hard for that kind of luck.

The crop, the crossroads of hard work. Right. And opportunity. So anyways, that's. That's what we've got time for. We've got busy morning ahead still. Ian, thank you for being with us. Distribution Strategy Group, Applied AI conference in Chicago starting on Tuesday, late morning. If you're able to make it, specifically if you're in the Midwest and can get to Chicago, it's a place to be. If you're going. I'd love to see you there. You're going to get to see Ian. And evidently we're going to get some entertainment from Mr. Pine. So I'm looking. Looking for the recorder will be going good.

All right. We're doing a karaoke night. Be sure to get Kevin up there.

Oh, are you a singer, too?

Kevin?

Only you know he's a dancer, right? You can, you know, he's a dancer.

I am a dancer at the start of every show.

I didn't know that.

Okay.

Yeah.

You mean like on stage dancing?

Oh, yeah, yeah, yeah. I mean, I've got all this stuff happening, you know.

Yeah.

Awesome. All right.

Yeah. No, I should not be let out of my cage in that. And they do not have enough kettle one or Heineken at that hotel.

I bet we do.

I think, I think that's a challenge. I think you just put a challenge.

Yeah, he did. He dropped the gauntlet down. All right, my friend, we'll see you Monday evening or Tuesday. Thanks for coming on, sharing some of your thoughts besides just the discussion. And we've got to have you on as a. Just a regular guest sometime soon too. Look forward to Jonathan and I were messaging a couple months about that. We didn't get it scheduled, so we'll get him too. We'll see you soon. Thanks for being with us, everybody. Thanks for joining us again. Kevin Brown, Tom Burton with our special guest, Ian Heller. We do this every Friday morning. We hope you can continue to join us. If you don't get the newsletter that we talked about, a couple quick ways as we mentioned, helloadsmartech.com or find us on LinkedIn Lead Smart Technologies page or the podcast website www.aroundthehornpod.com get that newsletter. Share your thoughts, your insights. Best thing you can do for us, push that subscribe leave a review button. It helps us raise up in the algorithms which gets this information out to more and more people in wholesale distribution. I don't know we had today we're averaging right now five to seven countries every week and we would like to get that raised up a little higher. So thanks for being with us. We wish everybody a great weekend. Be kind, be safe and do good things.

Thanks everyone.