Alex Hormozi's Best Advice on AI & Business | 1 Hour Compilation

0:00We do uh we're so website as a service um based company. So we build websites, do digital marketing services, that kind of stuff. Uh we cater to small medium businesses, small businesses. >> Uh average revenue per customer is 450 bucks a month. >> Okay. >> Subscription based company. >> Yeah. >> And uh yeah, we're at 20 million uh bucks in revenue. And >> notice example, right price, really small, you price it super low and it works. Go ahead. and uh we want to get to 80 80 million bucks of revenue in about 3 years.

0:32>> Okay. >> So uh the question we're asking ourselves is we're in an industry where AI is very disruptive. Um every day that goes by, you know, it's constantly degrading and decaying our our product. Uh and at [snorts] the same time, we have kind of this one channel uh risk that that we're living with. All of our sales, 100% of our growth has been done through outbound cold calling. >> Love it. >> Yeah, it's great. Um, but again, cold calling is becoming harder and harder and the industry is decaying. So, we're constantly we're trying to figure out

1:02>> the industry is decaying. >> Yeah. >> What do you mean by that? Churn is going up. >> Churn is slightly ticking up, but um, at the end of the day, you know, AI is making it easier and easier for our customers to be able to build their own websites. >> Well, yeah, I know with the type of customer we deal with, they're not usually super sophisticated. So, it we do have time. >> Just found out about Chat Jiba. So, Yeah, exactly. So, we have time, but

1:29>> some of you guys still facts, so I think you got time. >> Yeah, but this is the question, right? So, do we double down on on on marketing and create like an inbound channel and really invest hard into that or do we do um do we try to innovate on the product and figure out what else they need and like build a revenue engine? Uh, right now we're kind of we're doing we're trying to do both, but it's obviously limiting. >> So, this is this is really really good. I love that you asked this. So um I went on this long rant the other day about this particular topic which is solving problems that don't exist.

2:00>> Okay. >> So un because like you have a narrative, you have a story around AI is decaying the business but all I hear is that you have customers and your job just got way easier. >> Explain. >> So you know I mean like if you were like our churn is escalating by 10% per month. I'd be like we have a problem. We need to change something. But if it's not really showing up in any meaningful way in terms of the business itself, I think there's plenty of people who will just be super lagards on this and are not going to be replet vibe coding. They never bought your [ __ ] to begin with.

2:35>> Yeah. >> Like the person who is super into AI right now wasn't hiring WAS anyways. They built their own website. >> Mhm. >> Before AI made it quite easy, [laughter] like because I mean to be fair, website building software not that complicated. No. >> Right. Um, so you said there's two paths. So one is, you know, change the product around. My opinion, I wouldn't, that's probably wouldn't be where I'm focused unless I had some business metric that was way off that that I'm not seeing. Um, I would be doubling down on the acquisition side. What's your LT?

3:06What's your number of months average stick? >> Uh, so it's 29 months. >> Yeah. >> Yeah. No, that's the game. It's it's usually uh Yeah, it's 30 to 40. That's That's the the highest I've seen uh uh was 38 >> for this type of business. So, like you're right. You're right in the in the sweet spot there. You're a little higher priced. I think they were $2.99. Like, >> yeah, >> it all works out in the same, you know, um same thing. >> So, yeah, I think you just double down on inbound. So, paid ads.

3:34>> Paid ads. Yeah. >> Yeah. And I would just see if you get them to prepay for the quarter so you can offset >> CAC. Okay. Um on that subject, if you don't mind, uh in terms of prepaying for the quarter, Uh, you know, again, our customers are pretty price sensitive. There's people that are cheaper than us, obviously. Have you seen before? Um, my fear is the amount of churn that will generate some, you know, we we build 90% of our customers on credit cards >> and we hold on to 10% that pay us through like pad and through checks and that kind of [ __ ] It's it's awful. But, um, you know, we're going to experience churn. If we're like, hey, you need to, you know, prepay us up up front. You'd still

4:09>> We wouldn't turn just close fewer, right? >> Um, close fewer. Absolutely. And I think customers that are with us would leave us. >> Why would the people who are with you leave you for how you treat new customers? >> Sorry. >> People that are with us would leave us. >> I don't think you change your billing process for existing customers. >> I'm saying if you're doubling down on inbound, what will go up is CAC because you'll have media spend in addition to the sales commission. >> And so to offset that from a cash or how cash flow positive are you right now?

4:37>> Uh so we did 3.6 in IDA last year generated. >> Interesting. Yeah, >> that's lowish. >> It's lowish. Yeah. >> Yeah. I'm curious. >> Heavy on people. >> We're heavy on people, >> dude. AI. >> I know. I know. [laughter] >> Big thing. >> I know. >> It's like you're worried about them doing it. You're not even doing it. >> Correct. [laughter] >> Right. >> So, like um Okay, so this is what I would actually do. I would probably spend the next 6 months reorganizing the workflow. probably reduce headcount by 50%. Using AI workflows in order to actually do the same thing, increase the margin from 3.6 to like seven um or more with the added cash flow. You wouldn't have to change the price on the front end. You'd be willing to go negative for a quarter in the acquisition knowing you're going to get 29 on the back.

5:27>> That's how I'd actually fix it. >> Okay, makes sense. >> Chill, right? >> Cool. >> Yeah. like when information is like free and infinite with chat GPT or AI or whatever, what actually has value in this industry. And an interesting example, I asked her to like elaborate a bit and she said, for example, there was a lot of women in her community that their point of differentiation used to be making a beautiful ebook.

5:58>> Like just being able to get the graphics pretty or, you know, or making pretty graphics. it things like that used to give you an edge, right? But now that anyone can kind of produce graphics or or PDFs or whatever, like what actually is the value in this world? Um I'm interested to hear what you have to say, but I will answer first. Um [clears throat] I think so first off, just for everyone, information has been free for a very long time. So this is not new. there's this great thing called the internet and people could search for information and it was readily available. So what appears to be this like crazy thing like how could we how could we hide or you know put information behind a payw wall when it's so readily available. I had a a professor one of my favorite professors in college who said he was a career consultant and he said you know consulting is basically like sitting next to a river with a cup in hand and taking a cup out and then handing it to someone and charging them for it. And I've always actually always remembered that kind of visual. And so a lot of the information component is when there is infinite information, the value is in the selection and curation because no one has the time to consume all of it to figure out what's good. And so at the end of the day, most of the time we were always selling time, a compressed time.

7:14Like when you see uh a year of dates dating in 10 minutes, it's like it's a time compression. People like, "Oh, this is a good deal for my time." And so things that make things faster, things that make things easier, things that typically people will just aggregate towards. And so removing friction from people's lives will always be something that humans will go towards. Now AI has done a lot of that for sure. But like we can still there's still value to be to be given to people by your specific way of doing something. So I'll just say that like big picture that's number one.

7:44The second component is um which might be like teased out from her question is like what things are valuable and obviously we're talking school here. So like what things are valuable within the context of a community and so uh if the things that AI can do will replace things that humans can do over time. I don't think anyone's really arguing that. And so we just have to ask the question like what things can humans do that AI can't do which that that that number gets smaller, right? But people in a world that everything is fake will probably crave realness and authenticity more than anything else. And so having a community of real people going through real you know struggles and problems etc and then sharing that I think will always be valuable and if anything more valuable in the future I mean fundamentally like we're making a very big bet on it because we believe that.

8:29Um so that's thing one. Now um underneath of that it's what whatever you teach there's typically some element of it that's like here's my way of doing something and then there's some element that is consumable within that community. So community itself is consumable. Like if you had community last month, it's not like this month you're like, "Well, I don't want community anymore." You still want community, right? So you consume that product, if you will, month over month over month. Um, now there's different examples of like what other things now this is going to be kind of niche specific to whatever your thing is, uh, can someone after they understand my way of thinking or my process or my method or whatever, how can they what are the inputs of that system? And so in the gym launch world, it was like we delivered ads. That was the inputs of the system.

9:12We would go test ads. We'd figure out the ads winners and we'd say, "We already showed you how to how to run them and how to sell people once they came in." But the input was the ad. Uh there's a 3D printing community. Their input was they go look at trending uh products and they're like, "Okay, we've already taught you how to go 3D print our way. Here's the trending products for the week or the month." And so people were like, "That's consumed because next month they'll be different." There was a wholesale guy who was in here with really good retention. His thing was uh his team would go search for different uh homes uh that were, you know, potentially good deals. all the numbers pencled out and then all people had to do is just go there and if they walked in and it looked good then they would buy it. But next week it's going to be different.

9:48There's financial guys who do stock pick. You get the idea here is that like there's you have to just think what is the consumable portion of the value that I can help create and and separate that out from like maybe the one-time component. So some some of you guys sell courses, some of you guys sell uh webinars, things like that. Um you know through school and that is a one-time value which you can charge whatever the relative value is to the person. After that the value has to be sign like typically the value will be smaller because it's only based on what is consumable. And so just making sure that that is priced appropriately I think will help a lot of people get better retention in your communities. Um and so yeah I think there's tons of stuff that still has value. like you still have friends, you still are many of you are married or have spouses, things like that. AI has not replaced that. And I think if anything like the desire for true humanness will only go up like people have never been more lonely in the age of social media. What was supposed to connect us has separated us and so I think having you know the platform for communities I mean our whole goal is to make it you know real.

10:51>> What's the fastest and simplest way I can get ahead in this particular economy right now? What would you tell them? And is that different because of the current economy or is it the same as the answer you would always give? >> I don't even know what what the answer I would always give is but for right now it's AI period full stop. No questions asked. That's what it is. >> Uh can you be more specific with AI? >> It's basically applying AI to any function of the business. So you can apply AI to marketing and that could be on the paid ad side. It can be on the content side. Um it could be applying that to kind of the sales process which is either outbound u or the actual you know setting or the closing process in whatever whatever it is that somebody sells. It could be um on the delivery side like how can we personalize messaging in a way that um is going to you know reduce headcount and increase uh retention or decrease or increase stick decrease turn um uh is there a way that we can apply this to finance? Is there a way that we can apply this to recruiting? Is there a way that we can apply this to it? So all of these different you know these are all the the components of the business right u or the product itself. And so right now there's there's two the two greatest forces in business for for for making money are supply and demand and leverage. And so the idea in the ultimate scenario is that you have tremendous demand, very small supply and as the person who's the supplier, you have tremendous leverage. Not leverage in the like you have leverage over them which for sure you would in that scenario but leverage over your deliverable which is can I do this one thing a million times and be the only person who does it for many people right and so that's the perfect scenario for creating or creating value right

12:22>> and so what are the things that have the highest amount of you know demand right now for sure AI is is booming in terms of business's demand for people who have AI skills and AI related skills as it as it as it affects any of those functions of the business so it's like if we just did that we're going to start shifting the demand curve in our favor. The other benefit of the AI is that AI gives you tremendous leverage because you can, you know, spin up agents, you can do many things uh for many people with just being you. And so, you know, I define technology as something that uh decreases the value of humans uh but increases the value of a human. And so that is very much what AI is doing. All humans, you know, base labor is becoming less valuable with AI. Somebody who can use AI in of themselves is more valuable. And so it's it's never been easier to make gigantic amounts of value or money uh than it is today. And so um and also information has never been more accessible. And also I'd say the norm of having many years experience has been you know increasingly challenged. The need for accreditation and colleges and degrees has been I would say more or less dispelled especially even at the top places and so at the bottom ones even more so you know notwithstanding the the classic lawyer accountant whatever. Um, and so for somebody who's like, "How do I fast track to money?"

13:35It's you need to learn everything you possibly can about AI and never stop and try and get one specific problem for a business that either requires a lot of headcount, a lot of training uh, to perform that function and then get AI to do it. You do that, you'll make as much money as you want. >> Yeah. I think it's AI is almost like electricity. It's like when we came when we when they came up with the electricity, the the light bulb for example, it was like great, oh, now we can put these on street lights or whatever the first thing was. It's like, no, no, no, wait, think bigger, right? What else can we electrify? Not just where else can we put lights? What else can we electrify? And that's see seemingly what AI is right now. It's like, oh, it's a it's like Google, but it talks to you and it's like, oh, wait, you got the search engine. Cool. That's fine. That's the street light. But it's the AI function of how do we make this so that it can tell you the optimal, I don't know, battery charge of every electric car in the world and then tell the communicate with the grid. That's like a billion dollar idea. And it's it's sort of a we have to have well first of all educated and younger people wrap their minds around this problem cuz right now old older folks are like oh it's just a fancy it's Google 2.0 when it's a completely different thing. It's like electricity 2.0.

14:40>> I I would just posit to make this uh tactical for the people who are listening like having the billion dollar AI idea is worth exactly $0 >> to to be clear. And so I would encourage you to simply think about how you can apply AI to one of the eight functions which are going to be fundamentally the departments that exist in a business. A smaller business won't have all eight departments. A bigger one certainly will. Right? And so you have marketing, you have sales, you have product, you have customer success or support, you have IT, you have recruiting, you have HR, and you have finance,

15:10>> legal if you want to add it in. >> Sure. >> Those are the functions. Every business has those things. And that's because those things must occur in order for a business to continue. And so all you have to do is pick one of them and say, "Okay, because because right now you're trying to boil the ocean, be like, I want to AIFI." It's like that doesn't mean anything. I want to electrify the world. That means nothing. So it's like, how do we apply it in this very, very specific context? And then that will allow you to kind of eat the elephant one bite at a time. >> Justin is on. All right, Justin, are you doing $600 or 600k a month?

15:36>> $600. Uh, I've just niched down from generalist generalist income is 120k a year. >> Okay. So you're doing 120k. >> Moving away from that. >> Okay, got it. All right. Okay. And what do you do? So you do automation for ERPs. >> Yeah. >> Okay. >> Um Yeah. Particularly order processing. >> Autoprocessing. What is that? >> Order processing. Order processing. >> Emma. Yeah. Yeah. Yeah.

16:00>> Word. Okay. So you just niched down. Ads are not targetable. Okay. So before this you were doing what? >> Um automate anything for anyone. >> Automating anything for anyone. >> Yeah. >> Okay. So, how were customers coming to you before this? >> Two years ago, I did some videos on how to automate things and that's that's been it. That those videos have driven everything.

16:27>> Do you still make videos? >> I'm about to start again. >> Okay. >> Um [laughter] with a new type of video because those videos got me leads that were freelancers who wanted to automate other people. There weren't that many business owners in there. >> Interesting. Okay. Huh. Noted. Um. H. Would you ever teach people how to automate stuff?

16:54>> Yeah, I've done lots of that. I've done lots of videos. I have lots of people on my LinkedIn who want to learn how to automate. I'm trying not. >> And you don't want to sell to them, >> but >> I don't know how much money they have to be honest. A lot of people who are just getting started. >> Oh, I mean thing is about it's not about how much all of them have. It's about how much you know 5% of them have. So, what's the what's the goal here? Do you want I'm really tempted. >> Do you want to make money or like like what what's the goal? What do you want to do?

17:21>> Yeah. Goal is like 500k net profit. >> You just want to make money >> per year. Sorry. Yeah. Yeah. >> And you're good at this. >> And you care you don't care about building a sellable thing. You just care about making money. >> Yes. >> Okay. I I think that if you have a tre like right now you have a very valuable skill, I think that you teaching people this valuable skill might be something that will for sure be able to make you $500,000 a year net profit.

17:53If that's your goal, >> okay, >> that is I think for sure the easiest path, easiest and fastest. >> Okay. >> Now, if you're like, I want to get to 20 million a year, different. But if you're like, I just want to get to 500,000 a year, super doable. Okay. >> Yes. I think you just take all these people who are reaching out to you and the videos that you clearly do really well, do more of that, and then probably sell some sort of like automation certification, something like in the neighborhood of like, you know, 3 to $6,000.

18:24>> Mhm. >> So, like you have to sell two people a week to make 500 grand, >> right? Okay. >> That sounds chill. >> Yeah. Okay. Okay. >> You could probably just do it on school. You >> know how to do that? >> Yeah, just do it on school. >> Yeah, exactly. Definitely. [laughter] >> I think the number one community on school right now is an AI automation thing. Like for sure people buy that. >> Just do it. Just sell it as an annual membership. They get five, you know, f call it five or $6,000 a year. If you don't feel confident yet, start it at three. You can bump it to five or six.

18:56>> Um have it built annually >> and they get, you know, access to uh you know, call it like 20 different types of automations that are most common for businesses. Um, and the nice thing is that you'll get both business owners and you'll get freelancers who all want to do it. Either they want to do it for themselves, they want to do it for other people, but either way works. >> Yeah. Yeah. Okay. >> And if you want to be more efficient with it, I would drive it to a sales call funnel rather than direct to a purchase page.

19:21>> And so I would just like sell them and then basically show them the about page. Have them buy on the on the call with you and then they'll be in. >> Yeah. >> Love this for us. >> Great. Was that as good for you as it was for me? >> Yeah. I mean, tend to do that for a long time, but it's good to have some permission. >> Good. Yeah. Super simple. Yeah. Everybody wants this one thing from you that you have this val very very valuable skill. You have an existing media asset that continues to deliver these types of leads. Let's just go make a high a high margin product that you want to make 500,000 a year. Awesome.

19:55>> Great. Sell 100 people at 5K. Yeah. >> And it'll recur. Awesome. Amazing. >> Awesome. >> All right. This was great. All right, we'll talk soon. Welcome highlight and thanks for being a sport about the uh about the audio. You were great. >> Yeah, no worries at all. Sandwich. >> Oh, no. You're good. [laughter] No, you're but good observation. All right. Thanks, Josh. Appreciate you. NYC, what's your perspective on the upcoming AI revolution? What would you say to someone starting their career um when all experts predict AI will replace them in four years? I can't imagine an AI won't uh be better at cold calling than the average salesperson at about three.

20:34I know there's you're not dead, keep working, of course. Uh but what would you say to your child being born in this increasingly strange and unrecognizable world? How can we adapt and overcome our replacement? Um so in the short term, there are more jobs in the AI rich companies than in the non-AI companies in terms of job growth. So if we're just looking at facts, that's what it is right now. So that's kind of interesting um as a counterpoint. Um, beyond that, for my own right son that's coming, um, I'm going to do the only thing I can do, which is I'm gonna equip him with as many skills as I possibly can so he can navigate the world and get what he wants out of it. Um, and not just out of the world, which is out of life. And so I I would probably give the exact same advice to myself and I'd give the same advice to you, which is that like um, keep learning more than anything else.

21:20Like you will never be worse off from knowing more. You will never be less capable in a given situation by being more capable. And so if we just so in game theory, the most flexible player wins, right? Same thing with Darwin, right? It's the it's the adaptability which is the thing that allows you to win. And so adaptability comes from being able to succeed in different conditions in different environments. And so part of being able to succeed in different conditions and environments is your ability to learn, which is a function of intelligence, which is how quickly can you change your behavior. And so if you see this big thread and let's say you're a cold caller, then yeah, maybe you might want to learn other skills along the way. Um, that makes sense. Um, but the idea that there's not going to be any jobs like in the near term, I don't know if I, you know, the data suggests, you know, the opposite of that. And like I said earlier, the the biggest frontier companies have, you know, 5,000 plus employees and so like it seems like they still need some humans. Um, and I would say that this is probably a relatively contrary take, especially as a company that uses a lot of AI. Um I have felt and maybe you agree with me but like AI feels like it has ma hit some sort of asmtote where it takes a huge amount of energy to make very small incremental improvements. I can't really tell you a gigantic difference between like, you know, I think when GPT went from three to four, that was a monster difference.

22:40From four to five, it was significantly smaller difference in my opinion. And there's some models right now that we run that are still four because we think it's better and faster. And it just like it actually sounds less AI sloppy. And so I think uh there's a French AI guy who talks about this, but basically the way that we're currently training AI has diminishing returns. And until we can get AI to train in the real world with real-time feedback loops, just training on more data is not actually the solution to getting it to be smarter because I think all of us have seen the AI slop of the internet um and been like, well, this isn't that good. Uh and so there's there's some room, right? Um that being said, I'll tell you more importantly probably what not to do, which is to don't hide. Don't bury your head in the sand and hope for it all to go away. Don't live in fear. Ask yourself what can I do to best equip myself to succeed in an environment where the conditions change and that's going to be learning skills and that has not changed and it would just be what skills are you learning which would probably be AI adjacent skills so you can learn it just like you know years ago when you know word and excel and zoom and these tools came in in the beginning it was like oh yeah I'm proficient with word no one really says that anymore because it's assumed and I think to the same degree learning how to use AI right now is a newer skill But in time it will be something that everyone is doing because they'll have lowered the barrier to getting into.

24:00>> Um I'm a bit shocked that nobody's brought up your bot yet today. Your AI. Um >> just quick shout out. It's the best business product I've ever interacted with by >> Did you see the interview with uh Amjod >> with was that? I just started watching that the other day. >> You can see what we actually put into it there. >> Awesome. I'm Yeah, I'm gonna check that out. Um, this might sound weird, but like I was really looking forward to this interview from like a tactics perspective [laughter] and now it felt completely irrelevant once I started to use the bot. Um, so shout you know anyone who wishes they were up here asking you questions if you have access to the bot like you should be abusing it. Like [laughter]

24:40>> it is amazing. I like truly >> waited two years of consulting that I fed in as inputs. >> Yes, I know the sales pitch. Right. [laughter] It's also the truth, >> which [snorts] are always the best sales pitches. >> Yes, exactly. Um, >> which I started with the pitch, by the way, and then worked backwards to what would the most insane thing ever? It's like, well, if I just do two years of consulting and document all of it, that'd be a pretty good pitch.

25:02>> Very cool. Uh, this is maybe just like a weird question, but does it feel weird to have created a intelligence that more or less replicates what you do? Like I mean I imagine it reduced your keyman risk relatively significantly just because I I would hope your team prompts it. I hope your portfolio companies prompt it. I mean I prompted it on our biggest problem for the last like 18 months and I'm like I know exactly what to do. I know exactly the metrics. Like I'm like

25:33>> you don't need me anymore. >> Yeah I don't need you [laughter] dude. >> Um no I mean it doesn't feel weird. I mean I think the whole like so let's let's put it differently. Let's say AI didn't exist and I created a team of people that created that same outcome. >> Would I think that was bad? No. I would say like I built a better business and so AI allows you to do that. The hard part the moat is training it. That's the data. And so that's the thing about with AI businesses. So like this is a right or downer for everyone which is that everyone here wants to have an AI. Most of you probably want either AI incorporated or to have an AIcentric business. I would say that's probably many of you here. You cannot have an AI business without first having a datacentric business. period.

26:13AI works off of data. If you're like, I'm building AI, it's like, no, you're building a chat GPT overlay. You're not building AI. AI is about training with data. And if you don't collect data and structure the data well with clear inputs and outputs, you don't have anything to train the AI on, which means you have nothing. And so, you have to be a data first business in order to then become an AI enabled or an AI enhanced business. >> Very interesting.

26:37>> Hi, uh, my name's Ben. Uh we sell financial planning to high income accumulators in Australia. Uh we're currently uh around $8 million in revenue and looking to double that to 16 million by the end of our next financial year which is >> what do you sell to high income earners? What was it? >> Financial planning. >> Planning. Okay. Got it. Sorry. >> Uh and so uh my so my overarching question is about uh in the last 12 months we have doubled our team and that's sort of compressed our margin. So the profitability has not been great.

27:07Um, I'm looking at all of the disruption that's coming through with AI and technology. And we're currently very uh labor intensive delivery model. Every financial adviser has two support staff. Um, and that means we got a we got 10 advisers. So, we got a 30 person team [snorts] >> to do that delivery. We have started investing in our technology. So, we started a development team. Um, we've now uh we've got two offshore devs and we've just hired uh like a lead engineer in in Australia. Um but the question is how how much do we uh invest in in sort of uh growing out the team and the business versus trying to take some cash off the table and stock the war chest given all of the disruption that's coming.

27:50[sighs] >> It's funny cuz the way that you thought about it I think about it differently which is like I like the war chest you would spend to futureproof the business. So I wouldn't wait to future proof the business. I would want to future proof it now. >> I wouldn't say that we're waiting like you said we're investing in that tech, but it's like how future proof is any business with with you know AI and how quickly it's progressing.

28:16>> I think so I think AI is moving very quickly. I don't think adoption among humans is going to change. Like humans are still humans and so the adoption rate like people who are really smart and work really hard will get more than they did before because the tech is better. And so as as since the dawn of time, it has been man plus tools against man plus tools. And so as long as it's man plus tools versus man plus tools, then that's the game we've always been playing. As soon as it's tools versus man, we're all [ __ ] And so but I don't we're not there. Um, and so I want to solve the problems that I have today with an eye for tomorrow. Meaning, um, [clears throat] in a future state, let's say 18 months from now, if you could keep your headcount the same, but then take on two or three times the customers, that would be a W, right?

29:01>> 100%. >> That's achievable today. >> Yeah, that's working on, >> right? And so I think that the allocation of resources towards achieving that feels like the right idea. If in the short term you bring on other adviserss because it's going to generate more revenue for the business, I don't see that as necessarily detractive. Like we still need to do business. Um but we're just rapidly trying to um build up the infra the basically the tech infrastructure. We're doing this, right? Um we're still hiring people. We're just being very specific about where we're hiring. So like our media team, for example, has tripled output and the head and the headcount has stayed close to the same. Um, in some roles, uh, like for example, SDRs, we're still hiring humans because human is still better than the best AI that that's been that we've that we and we've been working on the voice AI for 2 years. Um, we do have an AI text agent um, that sells around 200 units a month, just one one agent. Uh, and so like there's there's things it's in pockets and it's just making sure that you're the first one to get into those pockets and kind of explore. Um, I do think that there's this I'm not just talking to talk to everybody. Um, I would encourage you to not be fearful.

30:18>> Mhm. It's just like that. Uh, yeah. It's like how how much because we could we're sort of um we've got a good reputation in the marketplace. I see all these opportunities. is I'm like I could go incredibly hard at this but then at the same time I'm sort of just a little bit cautious to go and have you know close to zero margin to fully you know go hard. >> So the question that you ask is one question that no there is no right answer to. So there's a handful of like those which is uh you know do I push or do I pivot? Do I invest or do I spend like these are entirely personal questions and the one that you're asking is about risk

30:53>> which is how much risk tolerance. If you ask Elon he would be like go all in sleep on the [ __ ] couch. which I don't give a [ __ ] right? I'm just saying he has one of he has one of the highest risk tolerances of all entrepreneurs out there. Um, independent what you think about, you know, who he is or whatever. Uh, objectively from a entrepreneur entrepreneurship perspective, his risk tolerance is skyhigh. There's other people who have been in the same situation and said, "I'm going to take some chips off the table. I'm going to take care of my my family, make sure that they're set up." What's the right answer?

31:18>> If you're right, that was the right answer. If you're wrong, that was the right answer. Um, and so >> you don't know if I'll be right or wrong, >> right? I mean, I I'll say that for me personally, I on the earlier part of my career, I aggressively saved to put my own oxygen mask on so that I could take big [ __ ] swings later. And so that's basically been that's been my operating model. So when I was making 20,000 a month, I was living on 500. Um, and when I was making a million a month, we were living on like 10 or 15 grand. Um, and that has basically continued to scale up. Um because I always feel like the future is going to be brighter than the past and I want to be there ready to to crush it and not be able I want to be able to swing at a fat pitch when it comes.

32:03>> Okay. Thank you, [applause] >> Alex. >> And I want to pause one thing back to your point which is like I think this may be relatively controversial but I believe that most entrepreneurs lifestyle is their greatest risk more than the risk they take in the business. And because your lifestyle is basically the outside of business fixed cost of surviving. And so if if you're if you're fixed cost of living like basically if you're like super optimizing on this side to pinch every penny and then over here you just blow all your money to me it's all

32:37>> yeah it's all one like for most of us own the majority of our businesses if not all of them in which case it's all one bank account you know it's all daddy's bank [laughter] right and so making like I see them as blended and I think many people take are so risk averse here because they take so much risk here and this risk has no ROI. >> Go for it. Yeah. >> So, let's let's get into AI a little bit. Um

33:03>> asking you the questions. I don't >> So, actually, um not many people remember, but you were one of the first people to key in on Chad GPT as a as a tool for business. >> And I remember some of your early videos. It >> was like three three almost two three years ago. Yeah, it was a lot. >> Yeah, it was like a couple weeks after Chad was launched, right? uh in like um was it November 22 or something like that? December 22.

33:29>> Yeah. Um so uh and I was very interested because I I always watch your world and I watch Silicon Valley world and I see like what is hopping over and when I saw that I was like okay this is going to be huge. [laughter] >> Um so so what what what like what sparked the interest for for Chap what what what vision did it create for you? I mean, I I think that there's there's fun questions of like what is it? So, I'm such a such a like what do I geek out on? Like, what do I really enjoy a lot? Um, is studying learning and behavior. You can hear it through all my my definitions, my business books, like that's the through line that that marries everything. Um, and so then then I mean AI obviously begs the larger question of like what does it mean to be human? And I think and I have this philosophical slants of my own interests and I think that's probably why I was drawn to it disproportionately. I also am a writer and so language is a natural thing for me and so the kind of the confluence of multip these things together u made chat really interesting.

34:31Um but just in like we we as humans tend to be very romantic about our ourselves and thinking that like no one can do what we can do and like we've been proven time and again that we're we're not as special as we think we are. Um >> that fits in your also. >> Yeah, that fits in my world. >> Yeah, it's totally align with my worldview. >> Um a lot of people very upset by that. But >> but with with each thing that it proves it can do because if if

34:56>> artificial intelligence learns almost exactly the same way that humans do through reinforcement training. And so you have you do a thing and you get an outcome. Yay or nay. And I believe at the most foundational level when you ask the question like why why are you so driven or why are founders so driven? We have gone through some reinforcement training which we may have been aware or not aware of that reinforce this set of behaviors that when you know stacked together so you see a skill as a behavior chain of multiple adaptive skills that are put in sequence uh to create an outcome that's maybe you know idealer that adaptive chain becomes more complex set of uh behaviors that becomes a skill sorry um

35:32>> and so to the same degree AI basically learns the same way humans do >> and so if it learns the same way humans do then it will be able to do what humans do Okay, that's the very first principles kind of thinking especially watching Touch of D. It kind of sucked back then, but like being able to key on that. >> Yeah, it just keeps tweaking. And so, um, >> it it's it obviously starts with with just, you know, language, but then it just continues to move move out. And I'm curious what you think about like Tesla as because, you know, it trying to us trying to clean data sets to train on larger and larger, you know, L, you know, big data that it's that it's working off of. Um obviously that will have limits and then creating high quality data will become the constraint of the learning and so then it it will have to learn from first principles itself which is going to be experimentation in the world which means that it has to have some sort of link to the real physical world which is exactly how we learn. Yes.

36:23>> Right. And so we're able like we have a so everyone who feels like you know AI is not as smart as humans. It's like because we've had a learning advantage. Yes. >> Because we take 10,000 inputs a day or whatever the number is% >> um if we take all of our senses times you know hours and whatever we can take in. um as soon as we have robo babies and I say that not like not in a weird way but like um where it can experiment and touch and taste and do all that stuff in the world I think the reinforcement loops will happen so quickly and the other part of it that will happen is that it doesn't forget and I think that's the that's the crazy part so we've you know we've obviously trained AI for different functions within our business um and business use cases and one of the things that was astonishing to me is that we were trying to train a um an SDR um so a sales development rep who would you know do outreach and do follow-upvious and what was really interesting to me is that obviously Hallucinations are still a problem right now uh with it and I think will always be a problem. I'm sure I don't know the French guy, but the guy who Google listens to and he's some, you know,

37:15>> French special, right? >> Might be. Yeah. >> Um, but he basically was saying that like LLMs will never truly get into AGI because if you have 3% error, it gets expounded, you know, at infinite. >> And so, uh, >> he didn't moderate his view, but I'll tell you. >> Oh, yeah, please. Yeah, tell me. Um, but one of the things that, uh, I found so cool for me though is that like, you know, it would it would make a mistake and I would, you know, we be like, "Hey, do this next time." an immediate and every time it would do that and I was like man I've trained a lot of sales people like scary in a cool way of just how quick it can learn and it just doesn't make a mistake after that obviously there's hallucinations but in terms of following the directions it would follow right

37:49>> and so if if you it's funny because there's there's a lot of like really cute isms and in Silicon Valley like you know being a master is something that like some skills cannot be taught and only learned like there are these very cute like rhetorical devices but they're just not they'd make no sense >> yeah if you learn it you learned it which means someone could teach it. It's just not structured >> and we didn't know how we taught it because there's multiple factors but like if we if you control the conditions you can control the outcome. At least that's my viewpoint in the world. And so

38:17>> it just means that there's more complex environments in order to learn. And so um I think I've just taken a lot of interest in that because you know the obvious of like chat GPT enters Optimus or you know Grock enters Optimus into the real world. It's like >> oh okay well it can interact with all the tools that we've already made around the world to to interact with as humans and never make a mistake after that. And then that just gets into lots of questions around existence and all that kind of stuff which I >> you said that AI implementation is a business that you'd recommend. Yes.

38:43Should I learn to code for it or just skip the basics and go all in on Claude. I see these as like um happy to glads. Uh a lot of like so in anthropic right now and so this is a little bit hearsay. Um per my understanding none of them have hands- on keyboard. So none of them are actually coding. Everyone has swarms of agents that are they have 20, 30, 50 agents at a time that are doing their coding and they're basically full-time in project management code review.

39:10That's all they're doing and that's why they're shipping so much stuff so fast. And so um if you you kind of can skip over that that chunk of time right now. Um and the nice thing is that AI is the first product that has ever existed that will teach you how to use it. You just say, "How do I use you? What do I do now?" Um, and so yes, I think that is AI implementation is a great business that I would recommend. Um, and I wouldn't even think about what's my vehicle. Start with the problem. What customer do you want to serve? What problem do you want to solve? Go solve that problem. Elon has this great story about this which is like if you're like, I want to learn to code. That's very hard. It's like saying, uh, this is what a wrench does and explaining what a wrench does. It's much more useful to say, hey, let's open up the hood of this engine. And then they're like, well, how do I open the hood of the engine? and you're like you need a wrench and now the utility of the tool has a purpose and a reinforcement that's attached to it and so if you want to start with the business owner start with the problem and then try and solve the problem and then you will learn tools in a contextually relevant way which will actually make it useful and you actually learn

40:13>> is there any like one tactical thing uh about AI claw in general that you see people doing wrong like something you learned recently >> um I think people use AI to do dumb things very fast so like it still doesn't like because at least for now the models are very agreement biased so they disagree with whatever you're saying most of the time. Um I think people just like get their cocky ideas confirmed and so then they just take lots of wrong action and so it's basically just because AI says this is a good idea doesn't mean it's a good idea,

40:47>> right? And so there's still judgment that's required today at least um to to make good calls. And yeah, and the thing is is that like no AI will give you more leverage than making a good decision. Like a decision can still have more leverage than AI. And there are still old men right now that don't use AI that are making way more money than the kids using AI. And so it's like it is a form of leverage.

41:17It has not replaced all leverage. Like I've got I have some older friends who are phenomenal business people and I'm asking you know I've asked them like are you incorporating AI and they're like I mean my teams are they're like but I'm paid to take risk. How does it change who you hire? Like what people who already have I mean think of it like this. Uh do I hire people today or let's rewind the clock five years ago. Would I hire somebody who doesn't know how to use the internet? Would I hire somebody who doesn't know how to use Excel or Slack or email or calendar or Zoom or the basic tools that you use to run a business? No.

41:54>> Do you test people's proficiency in like prompting? >> A lot more than that. Especially for the role that's super AI native. >> That's fascinating. You built an AI version of yourself. Uh it recruits for you. It trains your team. I can coach people one-on-one. What's left that only you can do?

42:18>> Well, I'm here. So, there's this. Um, I think it actually ladders up to the things I was saying earlier, like I someone still has to make the call. Someone has to still be responsible. As of right now, no AI is responsible for anything. Now, maybe that'll change in the future, but like they don't have currently, you know, you you can't start an LLC as an AI and then start processing payments and file taxes as an AI. That currently doesn't exist. Maybe it will in the future. Um, but right now, a human needs to take the risk. And so, I am compensated for risk. I'm compensated for the decisions that that that I make.

42:56And even if you have AI to assist you, you still are the one who ultimately makes the decision. They make a suggestion and make a recommendation, but you make the decision. Right, >> Mr. Mr. Mosy, thank you. That's that's Mr. Mosy to you. Uh, as a video editor who's facing client acquisition problems, I get scared thinking of AI and if I even have a scope in the future. Bro, why would you be scared of AI when AI makes your job uh a hundred times easier to scale?

43:24like for the for the short to medium term there is tremendous leverage like the the the everyone knows quote knows that AI is going to come for everyone's job okay internet is going to disrupt every industry okay and it has but guess what there's also businesses that still don't operate on the internet still use fax machines so like it's not going to be as it's it's it's going to still follow an adoption curve right it's still going to follow an adoption curve of early adopters all the way to lagards and some people never adopt it at all and so and Those businesses can still make money.

43:55Real talk. Some people use fax machines, still make money. Um, some people only do in person business and only use, you know, paper and clipboard still make money. And so, um, I wouldn't fear it. You always want to harness it because as long as humans can compete against humans, uh, with tools, that's how it's always been for the dawn of mankind. As soon as it's, uh, AI versus human, AI will win. And so, but as far as I'm concerned right now, use the AI to get as much leverage as you can. Maybe you could 100x your scale using technology rather than fearing it.

44:26>> Okay. Um so topline revenue for last year was 1.6 million. >> I love this. >> Yes. >> We are [laughter] um we are on track to do 2.1 2.2. This year the increase comes from we've been revving up the invisal line side of our practice. Two years ago we were doing eight cases a year. In the last 12 months we've done 143. >> Love it. >> Uh I have two um questions for you.

44:52one's a little bit more just straightforward tactical um which is uh I now need to hire a full-time appointment setter. Do you have any recommendations on compensation strategy there? >> Dude, it's going to be such a shortlived thing, man. Like you're going to do this for like 12 months and then I mean tops cuz SDR like uh AI AI appointment setting especially for medical for something that like is well understood is going to have like it's it's it's in swing right now. Um

45:18>> yeah, we're already using an AI for our recycling. So, >> yeah. So, you need to get an SDR. Um, so you're saying they're just recommendations for how to find an STR? >> Uh, no. I I I have Well, I mean, if you if you have any quick ones, that would be great. Um, but uh uh the the um talking um sorry, my four-year-old, >> young hungry 20-year-olds tends to work great.

45:43>> Okay. Um, the other question I had, so we've been doing our price for Invisalign is 4,500. I've been doing as a lead, which I want to get rid of, or as a as an offer, was $500 off. I hate it. It's just pass through topline like you were saying a few minutes ago. Um, so uh >> I was trying to come up with a magnet. The one I had come up with was uh coming for your free Invisalign consultation and we will make you custom lightning trays at no charge. So you get that whether or not you move forward with Invisalign. We just qualify them appropriately. You like that better than the $500 discount?

46:15>> Yeah, because my cost to produce trays is about 30 bucks. >> But does the person who come in for a free teeth whitening thing, do they want Invisalign? >> So, that's the pre-qualifying one. >> Okay. Okay. >> Right. Um, >> and you're running that offer now? >> Uh, no. I was I was about to start that and then got access to your AI and what it recommended was uh

46:40>> do a um >> uh basically a uh $49 like get get pay for a discounted $49 for >> lightning that would normally cost $400 when you come in for your invis light. Okay. So you have people who have students in the game, help cover up cover cover up offline calls and then we have a subscription model to um keep people in maintenance for lightning. >> That's Yeah,

47:04>> nice job AI. Good job. >> Um yeah, I I'm I'm going to get I'm going to get retired soon. Uh >> do that. >> No, that's it's that's that's it's um that's a good that's a good suggestion. Um so I'll give you a little a little detail. Maybe the AI didn't say this, so I still have value. Um uh when you when you get the you want to get the card over the phone if you can.

47:29Um obviously to bill and then that way you can also charge a no-show if if uh if they if they don't show up. But if you're billing them up front over the phone for the discount thing. Um that'll that'll you know dramatically decrease the show rate. And then when they come in I would probably position this I would use probably half of a menu upsell in terms of the mechanics. So obviously I like we own it to the wedding chain. So I'm super familiar with like the whitening process and sales process around this. Um and like I the sales process that we we designed more than doubled LTV. Um and so basically what we would want to do you have any computer imaging software?

48:04>> Yes. >> Okay. So I'm guessing you show them like this is what your smile could look like. >> Yeah. So we have so we can do both. Here's here's with just invisal line. Here is with Invisalign and veneers. >> Okay. Yeah. So Oh, do you do veneers too? >> Yes. >> Yep. printed. Yeah. Yeah. So, >> yeah, you know where we're going to go here. Take a picture of them. Say what, you know, here's you when you're pretty. Here's where you now. Uh, you know, which of these three looks would you prefer? All of them are buying. And you say, great. Um, I recommend this.

48:36Do you want to use the card you have on file? Which they gave you because you already have it. So, it makes the whole sales process super buttery. >> Yeah. >> I mean, yeah, that's it. Thank you. Yeah. Well, I mean, the AI kind of nailed it. Um, but yeah, that that that will work real good. >> Awesome. Okay. [clears throat] >> Thank you so much. >> Now, you bet. Congratulations, man. And thank you. >> Hey, Alex. This is Kevin Gong inside your skill advisory school group.

49:04>> What's up, stud? >> Really? Hey, a really amazing workshop today. One of my favorite topics is AI. I wanted to ask you in a recent MIT study they found that over 80% of chat GBT users experience cognitive decline. Yeah. >> And the theory is when you use your brain less for thinking and you outsource it to AI your brain atrophies like a muscle. So what's the best strategies to maximize the benefits while avoiding the cognitive debt?

49:29>> I think um we have to have dedicated time for new work. So I prefer to use it for the repeated work. And so like my books like the money models books like I did not use AI to write that. You know what I mean? Um at all. Um and so to the same degree like the next book that I write like I will not like there are things that I will use AI to assist with. Um and there are things that I won't. I do think though that many people will not like it's just like going to the gym like you have to not be lazy. Um, and I guess like that's the only I feel like that's the only real answer is like you have to keep using your brain. Um, and so it's like what are the most thought like for me the hardest work that I do is writing and it's also the stuff that I enjoy the most. Um, and so I continue to do that so that I can keep my brain sharp. Um, and I do think that many people will be lazy and they outsource their thinking to AI. And I think that's the most valuable thing. I'd rather outsource my doing and keep the thinking to me.

50:31But I do think it's going to be a longterm problem. I do think it's going to be a long-term problem for humanity. I 100% think that's a problem. >> I'm seeing it with my younger brothers because I have a 16-year-old younger brother and an 8-year-old younger brother. And I can already tell they're outsourcing all of the thinking. >> Yeah. It's like that little I don't know if you saw that meme video of like >> uh he said hi. What should I say? And it says like >> uh say hi back. And then he looks up he's like hi. And he's like oh he said hi back. What do I say now? And then it says, well, based on the blah, and then like it's just AI talking to AI. Um, so I also think that having dedicated like uh timeout time for the phone is really good. So I use um I use I use an app that like blocks my phone uh whenever I work like I can't do anything um for like hours and hours and hours. And that's how I again I think like I don't think there's a hard and fast like I wish I could say here's the three the three-step, you know, process to doing it. It's just going to be a discipline of saying like I want to keep my brain sharp and so I will use AI but I will also continue to do my other stuff.

51:34>> And just save the media stuff. Save the media stuff. >> Yeah. >> Uh for your brain. >> Got it. Save the media stuff for the brain. >> Yeah. >> Like the repeated stuff. I mean if some like basically the stuff that I was bored doing anyways I don't have to do anymore. But the stuff that I found really engaging and challenging, that's the stuff that I still want I still want to do because I enjoy thoughtprovoking, you know, either conversations or decisions.

52:04It's >> good question though. >> Thank you. >> Yeah, you bet. >> Um, and I also wanted to ask one last thing. What behaviors or outcomes would you want to see more of in your scale advisory school group? >> If everyone could be like Kevin, then that would be that would be the uh that would be the outcome that I want. Honestly, I'd say that skill advisory was such a success. Um, I was so hesitant to do anything like this cuz I I've just been I'm so afraid of something like not being great. Um,

52:31>> but it's been such a it's such a W. Um, the big thing is is making sure that u people just continue to share the tactical stuff, the tactical wins. >> Um, >> and I think it's how I started the whole community was like if everybody shares the tactical wins, then everyone will get more than they ever wanted and they'll get all their questions answered. if it becomes a, you know, everyone becomes an [ __ ] um, then it will suck. And it's been the opposite of that. Everyone's just been like giving, giving, giving. Um, and so that's been like that's what I would want more of.

53:03Um, I I will figure out ways. I'm working on ways to like have more community stuff. So, I have some things in the work, but uh, yeah, you will you will see you will you will see them when they come. >> You're amazing. Thank you so much. >> You're amazing, Kevin. I appreciate you. I have a portfolio company in Brazil with >> portfolio company. >> Yeah. >> Okay. >> 14 invested business. >> Okay. >> Last year we did0 million in ray ice which means like divided by six.

53:31>> Okay. >> Yeah. Yeah. >> Way to anchor though. It's good. [laughter] >> And this >> multiply by six and then divide it by six. >> You're [snorts] good. Okay. >> That's real. That's true. But I live in RI. >> No, you're good. Do you own uh do you own 100% of all of them? >> No. Okay. >> We have like a minority. That's one one part of my question. >> Yeah, it's going to suck. Got to keep going. >> This year we are aiming for 200 million Kore I I always thought it was a smart move to have the minority because I have the the the founder aligned on the

54:04>> How do you feel about that now? >> Yeah, I it's good and bad. It's good and bad >> because we can grow >> really >> pretty quickly. >> Uh but we don't have like different inside leaders for each area like you do like the sales, the HR and things like that. >> Do you think that structure could work for smaller business especially when we have like 20 or 30% of the the share

54:33>> centralizing services for those companies? >> No, not service like you do here. You have like the special team to help this this this >> like could you or should you do that? >> Yeah. >> No, it won't make sense. >> No. >> Financially >> economics >> and and >> they're not big enough to afford the talent that you need that you like the talent of this team would eat up 100%. Well, more you'd literally be losing money and then you have to really bank on the fact that you can exit these positions. But given the fact that those positions are small and super liquid, that would not be a bet I would make.

55:03>> Okay. And uh mostly of our companies are info products. So online courses, mentorships and things like that. >> Yeah. >> How would you protect this type of business consider AI? I think we we're already seeing that the the persons are not wanting to yeah >> learn they want the answer. So how would you actually protect us? >> I wouldn't.

55:27you wouldn't project. >> I would try and make as much as you can and look for a different vehicle. >> Okay. Thank you. >> Yeah. >> With the disruption of AI in most businesses, what are the rules that you think in business would change? For example, one channel, one offer, one avatar, $100,000 per month. I kind of have a problem with no it's just an opinion just a guess a wild guess after the implementation of AI that I can open multiple channels and get good as them as long as I have two people running each channel so it's not one person that split the focus on each channel that's the first question I have basically what do you think of the disruption AI for some rules and about this topic exactly

56:17>> so two things so first the rules of business will remain the same the principles aren't going to change supply and demand will stay the same like these rules are fundamental to business. >> In terms of my rules of thumb of one product, one avatar, one channel, >> you can for sure have more than one. I recommend people start with one because you say, "Okay, I'm going to have two of these channels." My question after that would be why? Because you're not that good at one. You're not even good enough to do 100,000 a month off one. Why would you do a second? >> Yeah.

56:44>> It's a skill issue. It's like, why not just get better? >> Yeah. >> The only exception that I've added to that is local businesses. So, if you are in bum [ __ ] Missouri and there are 10,000 people in your local market and you run a lawn care service, there's only 10,000 people and so you're going to have to go on as many channels as you can to saturate letting all 10,000 people know about your stuff. And so, in those instances, I would say yeah, you can be more multi- channelannel. But because each of the channels that most people advertise on have virtually limitless scale, especially when compared to a million dollar revenue run rate, there's no point in doing more when you could just get better at the one that you're currently doing. in so and in so doing gain more leverage and then ultimately make more money with less operational complexity.

57:25>> I have a portfolio company in Brazil with >> portfolio company. >> Yeah. >> Okay. >> 14 invested business. >> Okay. >> Last year we did 110 million in ray ice which means like divided by six. >> Okay. >> Yeah. Yeah. >> Way to anchor though. It's good. [laughter] >> And this >> multiply by six and then divide it by six. >> You're good. Okay. >> That's real. That's true. But I live in RI. >> No, you're good. Do you own uh do you own 100% of all of them?

57:52>> No. Okay. >> We have like a minority. That's one one part of my question. >> Yeah, it's going to suck. Got to keep going. [laughter] >> This year we are aiming for 200 million Kore I I always thought it was a smart move to have the minority because I have the the the founder aligned on the >> How do you feel about that now? >> Yeah, I

58:16>> it's good and bad. It's good and bad >> because we can grow >> really uh [snorts] >> really quickly. >> Yeah. >> Uh but we don't have like different inside leaders for each area like you do like the sales, the HR and things like that. >> Do you think that structure could work for smaller business especially when we have like 20 or 30% of the the share >> centralizing services for those companies?

58:44>> No, not service like you do here. You have like the special team to help this this this >> like could you or should you do that? >> Yeah. >> No, it won't make sense. >> No. >> Financially, >> economics >> and and >> they're not big enough to afford the talent that you need that you like the talent of this team would eat up 100% or more. You'd literally be losing money and then you have to really bank on the fact that you can exit these positions. But given the fact that those positions are small and super liquid, that would not be a bet I would make.

59:11>> Okay. And uh mostly of our companies are in info products. So online courses, mentorships and things like that. >> Yeah. >> How would you protect this type of business consider AI? I think we we're already seeing the the persons are not wanting to yeah >> learn they want the answer. So how would you actually protect us? >> I wouldn't.

59:36>> You wouldn't protect. I would try and make as much as you can and look for a different vehicle. >> Okay. Thank you. >> Yeah. >> What mistakes do you see entrepreneurs making around AI? Because I'll give you one.

1:00:01the the small business owners that I know that get too in like into AI and maybe they're listening to podcasts and they're on X and and and uh we're >> orange glasses ready to go. [laughter] >> Um they'll like they won't just apply AI to their business. they'll like start a new company that's like AI oriented and uh and I just think that's like the worst possible mistake because they end up doing something that like the model just does well and it's like okay so you're going to compete just directly with like all the biggest companies in the world on something that you don't even know as well as the biggest [laughter] companies in the world when you could just like and so and so there's like this like

1:00:40>> grass is greener thing happening where instead of seeing like oh I can just make you know these parts of my business even if it's just 10% % more efficient. Uh I can I can, you know, keep compounding. But what are you seeing? >> All right. Uh one, they're using AI to do dumb things really fast. Um so they're doing the wrong stuff with AI. So even like they were like a small business owner that wasn't making money now still doesn't make money but has a lot more token cost than they did before. Number two,

1:01:07>> meeting meeting summaries. Like I've never been successful. Like I I've never >> That was my bottleneck. I just need a summary. >> Yeah. No, but but it's one of those things like like I think it's cool that these apps exist. I've never uh I've never needed to take notes to achieve my goals in [laughter] business. Like I'm just like, okay, what's the next most important thing to do? I'm going to do that thing. Okay, what's the next most important thing? I'm going to do that thing. I've never I've never been like, okay, like what did we say? I mean, and I've worked in like small companies, right? I've only only been a founder. Um but but that's just such an example of like yeah, my meeting note system is like so dialed. I'm like okay like how much money have you made today?

1:01:44>> Okay. [laughter] >> So I'll say to to to counter answer the two things that I think are the right way to use it which is number one how do we take every [clears throat] function of the business >> take it from org chart based thinking to workflow based thinking and then saying okay this editor used to be involved in these six workflows. Uh we actually only need him to be now involved in three of those workflows. other three we can have AI do the vast majority of the work and so all of a sudden we can three 5x output u and so revenue per headcount on service based businesses should decrease which means margin should go up now there's this great opportunity window right now where prices aren't really going to adjust for a minute which means that your margins get absolutely stupid and so like you should do that

1:02:23>> so there's two flavors of that one is the uh the >> like I'm I'm an advocate of like don't tell people you're using AI like go have a service business that people think is all humans in the background and and then charge human prices and then have costs of tech and have the scale and operational or the the lack of operational drag of tech. That's the good game, right? Or take it department by department so you can just become more efficient at at it, right? So those are I think the two good ways of doing it to your point of like well

1:02:52>> uh being distracted is still a terrible idea as a founder. And so this has just made it so much easier for people to get distracted because like I can start a business on this or that or that. And then it's like yeah, but you still have your dry cleaning store, dude. What are we going like? And to be fair, if you have if you want to be a trillionaire, you are going to need to get into bleeding edge tech and AI, but you probably should get rid of your dry cleaning store and go all in. And so they're trying to juggle two plates and not really succeeding at either. >> Totally. Totally. Yeah. The the dry cleaning example is like use AI to constantly be monitoring every possible

1:03:21>> new space that you could expand into within your area or in in the county over, etc. And just do that, do that, do that. But it's like grass is greener. like, "Oh, what if I what if I made the operating system the agent operating system for dry cleaners?" It's like, no, just like do the thing. >> Just win at dry cleaning because it's also so much easier to compete against other dry cleaning owners cuz you for sure know that they're not adopting it the right way because they're doing the same thing with orange glasses and banging out their their replicated software, you know, like fine.

1:03:50There's also like a fair amount of AI that a lot of small businesses are probably getting for free just in the sense of like if you have a CRM that's sending emails like that company has probably adopted AI and is doing somewhat smarter targeting and so you might not need to go and build your own CRM that sends emails that are customized for every customer because like you get it for free out of the box. >> There's also this this tendency to rebuild the existing software that you're using. So it's like, oh, I've got, you know, I don't I don't need to pay Calendarly, you know, $9 a month when I It's just like, oh, so instead you're going to use 200 hours to try and recode what they just did and it breaks all the time.

1:04:30>> If there's an error, then you lose 9 grand. >> Yeah. But like that is what I'm saying all the time. >> The other note that I'll have on the media side is that I think long form is going up in quality and short form is going down in quality. When I say quality, I mean like production quality. So some of you guys have seen short [clears throat] form just like talking your face like this kind of like rant style authentic. I think in the world of AI like the more the industry will uh index towards authenticity and truth. I think the market always finds truth and so that type of stuff because now like production quality is almost commoditized because AI can make everything super high quality and so it's almost zigging back. Um, and so I think like my stuff right now I've already like is too it looks too produced for my shorts. And so I think it like our I'm doing a big push for next year is like we're switching that.

1:05:16Um, the other two themes that I repeated last time that I'll just say like we're still doing it is live and interactive. Those are things that AI will have a harder time doing. Like it's hard like if you're live you're live, right? Um, and then also interactivity with the audience. That's something that is significantly more difficult for like AI to kind of reproduce. And so I see that as kind of the alpha, you know, better returns than market in terms of uh return on effort um in terms of media and on the but on the long side, I kind of hit that already, which is kind of like I think that one is fine to go heavier production um and be more structured in how you're doing it. Um and so but it's kind of the justosition.

1:05:53It's like don't be in the middle. It's either be like have like a format that's awesome that people love or it's super raw all-in podcast style like this basically. I think it's it's there. I think it's the polls. It's a barbell strategy. The middle is not where you want to be. And so that's at least how I think about um longs versus shorts in kind of 2026 for media. Just wanted to get that out. Thanks Evelyn. Got two [laughter] applauses today.

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