Cybersecurity: Why It's Critical For Manufacturers and Wholesale Distributors

[00:00:00] Welcome to Around The Horn in Wholesale Distribution, with Kevin Brown and Tom Burton. Sponsored each week by Lead Smart Technologies, Tom, Kevin and their guests review the news of the week

[00:00:16] and dive deep into the topics impacting manufacturers, Wholesale Distribution, Independent Sales Agents, and the Global Wholesale Supply Chain. Whether it's M&A, Sass and Cloud Computing, B2BE Commerce or Supply Chain Issues,

[00:00:31] we peel back the onion with our guests into the topics that impact your business the most. How are you this morning? I'm doing good. How are you? I am doing good. You know what? Happy to be here. It's... I don't know. It's a good morning.

[00:00:47] I don't know what it is. And look forward to our conversation. We're guestless this week, which is sometimes fun. It gives us an opportunity to kind of chatter amongst ourselves, and I think we don't spend enough time talking throughout the week already,

[00:01:02] but it does give us some good opportunity today. I think there's some good news and some good... Good compelling news, I guess, that we're going to call this itself. There it is. I've got to tell you, the response I've been getting in just in conversation with people

[00:01:19] and email exchanges, text messages, LinkedIn, chat, and so forth is... The roster of guests that we've been having recently has been really powerful. You know, I've had some great comments about our last week's guest, Paul Kennedy,

[00:01:32] where Paul, if you're with us this morning, I think you're planning to be thinking again for joining us. Great feedback. I thought about something for the Paul was saying a bunch of times this week. I'm going to mention it again in a few minutes.

[00:01:43] Our time with Mahesh from 3M recently was great. The reason I mentioned all of that is that I'm working really hard right now on our guest list for the coming year.

[00:01:53] We've already got commitments from some returning guests and a bunch of new ones as well, so that should be good. Yeah, we have another good show coming. I think in the first part of the year, I'm like, yeah, I don't know what to say.

[00:02:04] We've got... I think it's the 12th of January. I'm glad you brought that up. I'm not ready to say it out loud, although everyone's committed, but it will be the blockbuster of probably all of our events, so that thanks for bringing it up time.

[00:02:19] So I think maybe the easy way to say it now until we make the announcement is we've got some power houses from wholesale distribution. So very well-known names, bringing together on January 12th on our live broadcast at 90 in Pacific,

[00:02:35] on LinkedIn, live YouTube, live Facebook live and then later in the day in our podcast. We're going to do a full hour. I'm guessing with the people that we have coming, we're going to go longer.

[00:02:46] But we're going to look at the past year. In fact, it's a great thing I'm having to talk to you about this yet, but I'll share with the audience. I think we'd love your input and feedback on what did you see as the top issues

[00:03:02] and topics relating to manufacturing and wholesale distribution in 2023. Was it the economy? Was it interest rates? Was it labor issues? Was it hiring problems to go with the labor issues? Was it, you know,

[00:03:16] I think I mentioned interest rates? Was it AI? Was it technology challenges? What more of those? We want to take probably the top three to five of those. We're going to take this panel and break all of that down.

[00:03:26] So if you've got ideas, pop them into our comments here if you're with us today, and or feel free to pop us and note about that. I'm going to talk about that in a minute. Tom, any other thoughts on that before we dive into today? Let's get moving.

[00:03:40] Good. Your mic's fading out on you. Can barely hear you. Can you hear me now? Nope. Just... Alright, go ahead and keep going. I'll see if I can fix things over here. You got it. Very good. So Tom will be back with us momentarily.

[00:03:55] So hey, thanks for being with us. My name is Kevin Brown. I'm with my co-founder of our company, Leedswar Technologies and my lifelong friend Tom Burton. We get together every single Friday. Well, almost every single Friday unless we're traveling or an inventor, the rare day off.

[00:04:11] But we get together each week here on the Hornet Hole Sub Distribution. And we chat about what's going on in the past week with each other, oftentimes with our guests.

[00:04:21] And we talk about the world of mergers and acquisitions, sales and marketing, technology, the economy, labor, all kinds of issues. As it relates to manufacturing wholesale distribution. So Tom and I as I mentioned are the co-founders of Leedswar Technologies. Leedswar is the sponsor of this show every week.

[00:04:39] Leedswar is an AI enabled CRM and customer intelligence platform.

[00:04:45] We bring data in from connected systems throughout your company and turn those things into manageable and intelligible and actionable insights on what's going on with your customer with your team and your business to help accelerate sales and grow your business.

[00:04:59] So we bring that out to that product out to wholesale distributors and manufacturers. We don't work with people outside of that arena. So we have an industry specific solution. So we get together each week and discuss a newsletter that we send out.

[00:05:13] That newsletter as well is called Around the Hornet and wholesale distribution. It goes out very early Friday mornings to thousands of people. If you don't get that and you would like to, there's two simple ways to get it. You can certainly, you know which is quite simple.

[00:05:30] It's hello at LeedswarTech.com. And we will get you on that list right away. We get handful of people from each week's show. Or secondly, you can go to around the hornpod.com where all of our previous episodes are there and you're able to listen to them there.

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[00:06:02] we're going to be looking on our screens and those that are live with us on their screens of that newsletter that we send out. And we're going to talk about most of those articles that go along with that day. So Tom, can we hear you now?

[00:06:13] I don't know, can you? Am I here? Yeah, you're still real faded but I can hear you. All right, I'm going to try one other thing here. That's okay. I think you're okay. Let's give it a whirl. All right. Let's dive into what's that? Sorry, won't touch anything.

[00:06:29] Yeah, don't touch anything. Don't touch anything. Good. By the way, we've got a few good mornings coming in here. In fact, Tom, you always do this and I always forget, you know, we have guests usually or I should say people attending with us from our LinkedIn community,

[00:06:45] YouTube and Facebook. We usually a few hundred people from that each week. Some people accept the invitation that we send out and we see that they're attending others just let us know. But let us know where you're from.

[00:06:57] The great things is and will who just mentioned checking in this morning from Chicago land. But let us know where you're from, but more importantly, share your thoughts with us. Your questions, your comments. Even challenges if you feel the need to with us discussion today.

[00:07:14] So happy to have you with us. Tom, let's dive in this first article here. Cyber attacks. Yeah, so I mean, we've talked a bit about this the last few weeks, right? About cyber attacks and so forth. I think the article is here saying is that they surged in 2023,

[00:07:31] and that the groups that are doing this are more organized, they're more structured. There's more things going on. You know, I was thinking about this as I was reading this article and, and again, we kind of started looking ahead to next year.

[00:07:46] It's a company start to do a bit of an IT makeover and if you're going to do a bit of an IT makeover for AI, and otherwise this whole thing of security has got to be part of your makeover.

[00:07:58] And I think that unfortunately it's going to get worse before it gets better. And unfortunately I think some of the AI capabilities are going to make it easier for some of these bad actors to do some of these things. Yep.

[00:08:13] Yeah, and we even talked about it last time right is not just the data like your privacy and all that, but how to make sure that they're not you know that ransomware or other people are not injecting false information into your data that you're using for other things.

[00:08:26] So I think it's going to be a it's got to be a key key part of your IT makeover strategy over the next you know 12 to 24 months. Yeah, well, I think it's going to come part of the text deck right.

[00:08:38] Yeah, and I'll say for myself right as a tech guy it's an area that I haven't put the enough attention on.

[00:08:48] I just you know it's I just assume that it's not going to happen right or you kind of hope for the best so but I think that you have to take into account more unfortunately this as as you go forward.

[00:09:01] I think you're spot on and you know we see this stuff on the news all the time right that this is going on and and the concern about it the article talked quite a bit about health records, you know as well and said I can't remember what it was exactly one in four people had had some of their health records exposed in the first three quarters of this year.

[00:09:20] Well, that's pretty dramatic right. Our audience that we're talking about now here is you know wholesale distribution and manufacturing and I've been really I think I want to say remiss but you know we've only started really talking about this regularly in the last maybe month or so.

[00:09:40] It's it's something we need to continue because I know that you know we work in our companies example leads more right we work with a lot of mid size businesses right that maybe there.

[00:09:51] Five to 25 branches we have some customers that are in the 40 50 60 branch range that are much larger companies have very large IT departments but you know there are tools and there's capabilities out there for.

[00:10:06] The smaller companies with you know outsourced IT or one or two people to be kind of working on these we're going to talk about that a little bit more even later in our discussion today but.

[00:10:15] You know the reality of it is is that the vast majority in fact this statistic it used here that 98% of businesses and government groups work in some capacity with a company that has been hit by cyber criminals in the past year and.

[00:10:29] The number that has started with it's there were more ransomware attacks in 2023. To date in the first nine months is actually what it says in the first nine months then all of last year so it's scaling incrementally right.

[00:10:44] Is it something that we've got to be paying attention and unfortunately it's working for people so they do more of it. Right. Well, and it's interesting right we'll look just be a will made that comment there right services on the dark web smaller companies of being targeted.

[00:10:59] You know so there is there is a piece of that right of moving to the cloud that's helpful.

[00:11:04] But sure you can even be moving your data to the cloud and things to the cloud and if you let somebody into your system through malware or the click of an email or whatever it might be and.

[00:11:15] Even I work we were talking about this couple weeks ago you know about the amount of even with all of the spam filters that we have and the security that we have built into three sick microsoft 365 for us at lead smart.

[00:11:28] It's astounding me the amount of fishing emails it's still even get through to me. You know that's the you know EFT remittance from such and such a customer and they've even shown up sometimes with our customers names on.

[00:11:42] Right now you know I'm I don't want to say why's enough. I think I'm scared enough that I'll click on look at the sender and go.

[00:11:50] Those people don't know us any money right now or I've never heard of that in move on but you know sometimes these things look very official. And once you let somebody get into that system you got a lot of issues.

[00:12:03] You know so that's it's something I think we're going to continue to discuss but the reality of it right and I think will even comment about that you know could be crippling to a company. You know if you think about it if you're a.

[00:12:15] You know a midsize manufacturer small to midsize distributor and all of a sudden. Your data is corrupted or your data is not available to you because someone got into your system.

[00:12:26] That is crippling to your business and we talked last week about Henry Schine the massive medical equipment distributor they could not operate their e-commerce functions right which meant didn't just mean people weren't buying online.

[00:12:40] People weren't transacting with doing purchase orders online right of existing customers so it's pretty substantial what does this could mean we're going to try and stay more on top of this I've got an idea about. I don't know if it'll be a guest for us next year.

[00:12:58] Or a separate episode we're going to start doing in fact I'll mention this briefly now.

[00:13:03] In 2024 we're going to do I don't know Tom what are we going to call us special episodes or something like that but we've got some interviews planned with some pretty impressive people and so we'll do separate episodes but.

[00:13:16] One of the people we will probably have coming in as a cybersecurity expert that has some tools for small and midsize businesses so you don't need to be you know a multi billion dollar company to really take this serious.

[00:13:30] And before we go on I want to I want to say good morning to Paul as well and I have had more comments in the last week about our last show with Paul and some of the insights that he brought so Paul I wanted to thank you again.

[00:13:45] You've been creating quite a buzz over the last week on some of the things that that we cover so yeah agreed you know and I actually had somebody told me that we should just maybe you know have Paul replaced Tom a couple times a month.

[00:13:59] I thought they used the word Tom or did they use the word Kevin no I'm talking time okay. Anyway what's funny is you say that is we're a little more informal this morning I'm realizing that the normally a little banter here but.

[00:14:15] The next article we're going to talk about is third quarter labor cut unit labor costs and and. I was actually going to bring Paul up because he said good morning we know he's with us this morning. Is that.

[00:14:28] I wanted to make a little video snippet between because both of you as I started talking about the economics statistic last week was everybody was just agreed and shook their heads is we're all confused right.

[00:14:40] And I can't remember what Paul's exact words were but that it really kind of stuck with me that we were all in the same place right we're seeing kind of conflicting data and.

[00:14:48] And I'll have to make a little snippet out of that one because it was it was funny because we are all in the in the same place but here we are again right.

[00:14:56] You know third quarter unit labor cost which we've not talked about that statistic before but that one's falling right and so we're just in this and I guess we continue to be in this weird place but.

[00:15:09] I think the pressure is building of this you know I think you called it a simmering economy once earlier this year.

[00:15:17] I think I think them we're probably going to get to a boil here pretty quickly because we're getting plenty of statistics now that are coming in that are saying hey you know what.

[00:15:28] We're probably we don't need to be a 2% I heard this comment multiple times as we we need to be on the trajectory to 2% you know so fed it's time to really start pulling back I read a statistic yesterday or not statistic a comment yesterday from pretty well known economists that was saying.

[00:15:47] They have kind of packed into already in their mind they have two interest rates reductions in Q3 other people are seeing we're going to start seeing it like Q2.

[00:15:59] Other people are saying like you want in Q2 so hopefully things are going to solidify a little bit we could get back to I don't know that there's any such thing is normal but. We'll see what comes next.

[00:16:12] Yeah just you know one sort of again this isn't really related to the start of but it was something I was seeing yesterday and I keep talking about consumer right we know consumer debt is at an all time high.

[00:16:25] And then the last month the a number of increase of withdraws from 401k's early withdraws not withdraws directly withdraws when up 13% that's so.

[00:16:37] What again you could read into that that hey as consumers we've capped out our credit cards and now we're going to our 401k right which is not a not a good economic indicator for the consumer.

[00:16:50] Well, we're going to be on right it causes all kinds of problems later. Right so again I think there is so much conflicting data so much things now we're going to add an election into the next year so who knows what that's going to do to everything but.

[00:17:03] Yeah there certainly know no clear clear vector I guess on how everything is going to come together. I think we may see the impact of this simmering economy and high interest rates and you know all of the other things impact the election.

[00:17:21] You know there's just and people you know I I'm not a political scientist nor my political at all but the.

[00:17:30] The idea is that you know people vote with their wallets and that it could be an interesting time with all of that I think the counter with all of this though.

[00:17:40] Is that stock market to stage strong you when we see the stock market can you know you had a couple you know a couple years ago things were.

[00:17:48] We're taking and we had some big dips and so for especially in tech but now if we look at you know earnings announcements for the most part are very strong.

[00:17:57] When we look at the things in the technology stocks what AI is doing to those things it's you know there's a lot and I think that's what kind of has been.

[00:18:06] The first thing that has been for the industry and that's what we're doing is being a part of the things that are doing things.

[00:18:14] From a viewpoint of many people has been the stock market but at the same time that probably has caused a lot of this simmering as well as you know describe it right. And if they do you know again I'm we don't give financial advice here but.

[00:18:28] If we start to see interest rates we start to don't take it.

[00:18:33] But if we start to see interest rates being cut earlier you know the later next year first half of the year I think you will see quite a bit of an uptick in the stock market because there's a lot of money on the sidelines.

[00:18:45] That are invested in you know interest bearing things that are going to now move back into the market there's a lot of money on the sidelines as relates to the stock market so.

[00:18:56] And then that creates a wealth of fact and I mean there's just so many different things here but it doesn't change the fact that we have. A large amount of consumer debt and all these other things so there's just all these sort of interdependencies that.

[00:19:07] Or I don't know a little bit. I don't know scary is the right word but just interesting for lack of lack of a better word.

[00:19:15] Well I think part of the risk of that comes is that we boomerang right if we go from super high interest rates effect as funny.

[00:19:22] I saw on the social media a few different times in the last couple weeks you know realtors popping up and either people that I know are sponsored ads and they're all excited about interest rates dropping was like oh great it went from 7.8 to 7.4 it will start to the 7 right.

[00:19:41] So yeah it's nice I think we're in weeks six of interest rates dropping which is great but.

[00:19:46] We've got some some turnaround to do but the hope is that we don't boomerang back to you know free money and and then just find this vicious circle we've got to find a balancing point with these things so.

[00:19:59] That's good well let's let's kind of jump ahead you know not being economists but being a quantificators on economy. Amazon business for consumer directors they just study.

[00:20:12] And so we're going to be here with directors want to leverage AI any takeaways in particular in that right away it's good article.

[00:20:19] Yeah I know it is a good article um couple things you know I think you know we talk a lot about what is going to be some of the killer apps for AI what are going to be some of the killer applications.

[00:20:30] And I hadn't thought about it but procurement and negotiation and contract analysis and all of that maybe one of the early killer apps. Yeah and you know I used to work if you remember back in the day with computer associates which.

[00:20:45] They were the worst as far as preparing complicated. Difficult and you could even argue maybe sometimes on ethical contracts that they would provide you know they working with enterprise IT right but people never understood the contracts they were signing.

[00:21:05] You know they just kind of like well I think I understand it but we'll we'll move forward and the speed of which AI can take a contract apart and break it into its pieces and.

[00:21:18] And really then provide you guidance on how to best negotiate and what's important and all that on both sides to is not just procurement but think about from the vendor perspective as well.

[00:21:29] And I think it will become an early and app that an application of AI that's early adopted in organization because it has direct implications on money and the business side but I also think it will help.

[00:21:42] Businesses understand how that same concept of what you're doing with procurement can be carried over into other parts of the business as well so. But I do think it's going to be very interesting to see. You know how it changes contracts how companies even.

[00:21:59] Or vendors even create contracts and. Does it actually maybe level the plane field a lot better and make things a lot smoother. And require less back and forth I don't know what we'll see.

[00:22:10] I think that's good. I appreciate your thoughts on that you know it's interesting is triggered for me and I have because I haven't done this yet and if anybody that's. Listen with us today has maybe pops up into the comments or share with us but.

[00:22:25] Since I've been more actively using. I think that's actually I think I mentioned you even showed you yesterday my wife had been having some back pain and she had an x-ray and.

[00:22:40] The results were, you know, I think I understood them but then I had also had this weird kind of ration in my back and they took a little biopsie of it and they thought it was you know some weird name disease that it was.

[00:22:57] I'll get this little itchy thing and but the pathology report I just had no clue what that one said so I push both of those into into bar instead of chat GPT because I wanted to be live with the internet basically.

[00:23:13] And and you actually I showed it to you and you suggested some better prompts that I could have used which is great, but I got this layman's terms example of what this medical diagnosis was from a pathologist.

[00:23:26] And I take that to the next level as an I want to start even doing much more of this myself is the agreements that I've signed in the last 45 to 60 days for our organization.

[00:23:39] There short to the four page agreements that are pretty straightforward so I haven't worried about it, but you know I have a contract sitting over here and it's one of the major ones at part of our company and. It's two hundred and three pages.

[00:23:54] So just for posterity sake for the future I have a printed copy on a desk next to me just to look at it once in a while but you have large contracts and you have one that you know is exactly.

[00:24:05] In your not necessarily in your favorite but fair loading that contract in and another one in and having them comparing contrast and give you risks and so forth what a valuable tool right.

[00:24:19] But think about now carrying that from a contract to a business contract to your sales data or to your ERP data or to your you know whatever right conceptually.

[00:24:30] You can carry all of that through and to other parts of the business but I think as far as a rapid adoption this is going to be an area of rapid adoption because it's obvious number one number two there's direct business benefit from it number two and that's what they're saying in this article is that 45%.

[00:24:47] Or are looking to do a pretty much immediately an 80% said they would be doing it within two years. Yeah, and this was in a small survey right this was not a thousand companies yeah.

[00:24:58] Right that's substantial if you're kind of looking at this and and I want your thoughts on this time right because this would triggered for me is.

[00:25:09] If you know our focus here is how does these things impact wholesale distributors and manufacturers if I'm a if I'm a distributor right and I'm thinking that. Seeing the 45% of my potential customers are willing to incorporate AI immediately.

[00:25:27] If it says they find basically I read that and if you if you read a different they shared this with me.

[00:25:32] I read that is saying they're willing to incorporate AI immediately into their procurement operation dot dot dot if the perfect tool was available right or they fight start finding some tools that they can use.

[00:25:46] But if I'm thinking about that if I'm a wholesale distributor is if that's when my customers thinking I better be prepared for what's my response to them using AI tools and how they purchase.

[00:25:57] And there's an interesting so you know we had a client right that we were working with where they were looking to use our product to manage some of their business contracts because they then would be able to track rebates.

[00:26:11] And then use to understand where the customer was in their ex in their fulfillment of that contract in order to incentivize them to keep moving right.

[00:26:21] So so now think about this process right I go through the process of analyzing the contract from a procurement or now I can take that same data and carry it over into my CRM or whatever to make sure we actually executing on that contract or is our customer executing on what they're doing there.

[00:26:39] And and and intelligently use it as a way not as as a hammer but as a tool to help facilitate so that we get maximum results out of that contract.

[00:26:49] I mean it can start there and move on it's just got a lot a lot of very very interesting downstream implications as well.

[00:26:56] Yeah, I think it goes back to you know being prepared for these things and there's easy early things you can do now it's just one of the AI tools that's built into you know our product with leets more channel cloud is.

[00:27:08] That ability to look at quotes right and comparing the quote to your P data in you know worst case scenario for you know wholesale distributors to.

[00:27:17] To do a large quote for an end user customer that's worth I was using example say it's you know a half a million dollar quote and then they say you won and three months later you've got fifty thousand dollars of purchases against that.

[00:27:30] And so I think we need to be thinking about those types of things more on the distribution side because our purchasers are going to be looking at that as well.

[00:27:47] So Kelly made a great comment here about ripe sectors I hadn't heard that term so I talked to Kelly had a call with Kelly earlier this week and she's doing this AI program at Berkeley.

[00:27:59] I like to say bizarrely but ripe sectors easy to implement and obviously a huge amount of custom data sets and you know she's she's singing your song right time added added data.

[00:28:13] And I guess low hanging fruit is the right right right sectors, but I do think again we see this we see a lot of I can't put my finger on it hesitation I guess with AI right now.

[00:28:28] And maybe a misunderstanding I don't know fear maybe too strong and I don't know if that's the right word but we see hesitation and we see.

[00:28:36] And by getting some of these ripe sectors where you're seeing the power of it and you're seeing the capability of it that then becomes the beach had that then helps push it into the other part of the organization.

[00:28:49] So yeah I think these ripe sectors are really important and I have a lot of other ideas for ripe ripe right sectors that I think can make a big difference. So before we go on you know I want your thoughts in your opinion on.

[00:29:04] You'd made a comment earlier about as it and see or. Being cautious about some of these things from most people. What do you think that is do you think it's we don't been on no enough yet.

[00:29:19] I have some thoughts all share when you're done but I'm really interested in your thoughts first is what do you think's causing people to slow down and and order take their time and getting into some of this we'd love to hear people stats in the comments if you.

[00:29:31] If you have a thought of this. The answer to the honest answer is I don't know but what I what I'm observing is that it is such a paradigm shift.

[00:29:41] It's such a shift in so many different aspects of how we're used to operating in our business, how we're operating in our life that it's.

[00:29:51] It's the hesitancy is and again I don't like to use a word fear because it's not like a fear like oh my god the bookie man's coming it's more of.

[00:30:00] This is so different and so weird that I'm a little bit nervous because the shift is so yet they see on the other side they see some of the output or the potential benefits of it and they're in their super excited.

[00:30:17] So it's a weird sort of dichotomy of excitement and hesitancy and I said I don't think it's clear it's it's and there's a lot of data is like you know Kelly is also saying they don't know where to start right a lot of.

[00:30:29] Right a lot of different variables that go into it but I think it's just the change it's a paradigm it's such a paradigm shift and how we're used to how we've operated for the last whatever. Very tough for rapid real.

[00:30:42] Think there's a little bit of ostrich bearing my head in the sand because I don't know what to do. I don't know yet I don't I mean I'm sure there is that right.

[00:30:50] I'm sure you really like you say it's probably early to know yeah I don't I don't I don't think there's I think the hesitancy is just what I just said so much as.

[00:30:58] And yeah the way some people will will address that hesitancy is just stick their head in the sand. But I'm not seeing that as a rule at this point I'm just seeing more hesitancy and maybe nervousness or in anxiety about it.

[00:31:15] The reason I just described anxiety is interesting that too. I'm I'm in Kelly's camp out here on this and you know in Kelly's a long time marketing consultant and and just worked with distributors and buying groups for I wouldn't even say how many years.

[00:31:34] But that I think the issue goes back to and it's what my experience is and you know I talked to distributors and manufacturers every day in industry folks isn't you know I spend my life on zoom and the phone.

[00:31:48] And is that really not knowing where to start and I think today's not the time because we got some articles to catch up on here but you know we're going to have that discussion at some point again soon about where are we going to take that first leap.

[00:32:03] On things moving forward if I'm a wholesale distributor where's my first leap is it am I going to go out and hire a bunch of people to try and go build an AI strategy or am I going to use that theory or that concept called incumbents.

[00:32:16] Or I'm going to rely on a trusted source whether it's my CRM provider that can bring me into that arena or I'm going to bring AI in through Microsoft 365 through there.

[00:32:28] When they call it clippy and you know advisor is pretty funny right thing about that clippy from Microsoft was around what 15 years ago. But there we go there's a comment of the day from Kelly.

[00:32:44] She says leads smarts the first leap because we have some AI built into our CRM and customer. Intelligent solution and the stuff that Tom and his team is building up right now is astounding.

[00:32:56] We'll be talking about that more down there but yeah that's that incumbent idea right and whether it's us or you're using Microsoft's AI tools coming in.

[00:33:05] I think that we're going to when we talk about maybe late adopter markets which oftentimes is wholesale distributors and manufacturing is they're probably going to start with that in my opinion.

[00:33:16] Is there going to start with that incumbent solution and then go to that big use the term you know the killer app which is something.

[00:33:27] That where people will go this wholesale change it says hey I'm going to look and change everything in my business so we're obviously these conversations are going to continue as we move forward.

[00:33:38] Yeah, I have a little bit of a different viewpoint but I'll you do for another show yeah good talk to us time you're you were so excited earlier this week about the next article in fact I'm going to hit pause here on us for just a second.

[00:33:54] For those of you that it might be listening on the recorded podcast and we're recording this live this is Friday morning December 8th it's 9.33 a.m. Pacific time we're time when I are both located and later in the day we have an editor that takes everything that we've done today put some music and some info at the front of the back of this and combines it all together John does a great job and gets that out on to all the popular podcast formats so if you're listening versus watching us live on.

[00:34:23] YouTube live Facebook live or LinkedIn live you are not seeing the newsletter that we send out every week so always it pause about midway through if you'd like the newsletter that we're talking about these articles from.

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[00:34:51] John we got excited earlier in the week Google launches their Gemini kind of really. Scaling up what's happening in the article here you use one from associated press but just about every every news organization in the world covered this.

[00:35:09] I'm going to ask you to take this away because of your profound expertise in this space. That's the December compliment. Okay good.

[00:35:23] Yeah, I mean okay so that the it's a new model right from Google that's going to compete if you want to call it that with open AI's model and chat GPT for and all those types of things.

[00:35:37] They did a lot of benchmark testing on it that showed that it was performance wise better than GPT for meaning faster more accurate more all of those types of things.

[00:35:50] The other thing that's very I guess interesting about it is what they call multi-mobile meaning that it works with images and it works with you know a lot of different types of content audio video all of that kind of stuff to.

[00:36:04] IntelliGently evaluate things which is coming on all of them. It's not like Google is going to be the only one to do that.

[00:36:11] It also is going to be tying more into their search and into the you know Google probably has the largest repository of data of any company on earth. I think that's probably safe to say yeah.

[00:36:26] And if you think about the fact that they own YouTube and they own obviously all the search data and all of the data off Android's and phones and all of that kind of stuff they have you know so there's a tremendous amount of data that they have available to train these models that they're building.

[00:36:44] And I think one thing that is not really been discussed a lot is that there are three versions of the model that they released.

[00:36:51] They kind of released a small medium and large and like a big huge model and then a medium size one and then one that actually they call nano that would actually run right on your mobile phone right on it.

[00:37:04] It would run locally on your on your device which is a big deal right because that's where everybody thinks Apple's heading is it's going to run your mobile phone. And then you're going to run your model is going to run on your computer on your device versus elsewhere.

[00:37:18] Well for yourself so yeah, I mean obviously Google has Android so they're thinking as a relates to Android but yes Apple's looking at the same thing.

[00:37:26] And so think about that for your own personal life right your model about your finances about what you know the things that you care about wine you know you brought you showed me a wine thing whatever.

[00:37:39] And it's cool or whatever is is personal to you, you can have a personal model that will run on your device right I go back to security and some of this stuff we talked about that's a different issue but you don't need a big massive model for Kevin you need a nano model.

[00:37:56] Kevin in his life now that model may be able to access other models but that's what's coming is that we'll all have our own little personal model on our on our device that reflects our self and what we care what we're reading what we whatever right and then everything can now be tailored based around that personal model that's on our things so.

[00:38:16] You know they haven't really talked a lot about that and the on the open a eyesight but it hasn't gotten a lot of press but they did actually release kind of three versions of the model here.

[00:38:26] Yeah so before we talk about the hiccup that happened with this which we'll talk about in a moment.

[00:38:32] I want to ask you this is I think important and you know we're we're not a technology showed directly we're trying to take what's going on in the world and applying it to back to the audience that we serve and company that sponsors our podcast serves which is also distribution of manufacturing but.

[00:38:54] I want to I want to throw this question out to whoever wants to comment on it but I'll throw it to you is. So right now if if you were to take.

[00:39:05] What we have today available in the largest probably best models out there there's lots of startups doing models and largely model so to speak and so forth but right now today of what's been announced the races.

[00:39:20] Google and Microsoft right i.e. Microsoft being open AI and chat GPT. I didn't face book with llama okay one of the other ones so there's definitely an Amazon I mean there's definitely other ones but yeah there it's.

[00:39:34] I have the correct me if I'm wrong I haven't heard the depth of those I know met it made some announcements earlier this week that we're pretty profound but. The Google it seems like there's a space race right and you just described for.

[00:39:50] The question is right there's I mean throughout two questions one is where's apple right and what I know about that is apples like always is probably going to come late to the game with something that's crazy game changing because of the same thing you just mentioned of all the data that they have right so my question then is.

[00:40:13] The open AI in chat GPT being 50 whatever percent owned by Microsoft are they at scale or at par with Google and all of the data that they have an apple when they jump in and all that they have and then met it in AWS because.

[00:40:32] It almost it's I think the space race thing might be a reasonable analogy to this because it may end up being these groups and then all others.

[00:40:44] Well I do believe that the large the large language models like we're talking about here going to come down to four or five major companies right the ones we just talked about. Google by far has the biggest beta data pool out of all of them.

[00:40:58] I've because of the app mostly because of the search data right they have Android they have Chrome they have YouTube they have I mean you just keep going on and on yep.

[00:41:11] I mean Google knows more about you than you know about yourself so think about you know so Google probably apple probably not far behind. You know Amazon I think for certain buying habits right what you're doing and all of that personally.

[00:41:28] And Microsoft maybe the laggard I think or the open AI piece maybe the laggard what was wondering because do you feel like those others are maybe a step ahead of them.

[00:41:38] For certain application yes okay I actually think Microsoft from a business application maybe ahead but I don't I don't know enough about Gemini yet to make a real you know they they haven't even released their development platforms which are coming in a week or so so there's still a lot more to understand there.

[00:41:57] Right it's got different applications for different purposes.

[00:42:01] But these models are going to start to become commoditized right and they're just going to be you know you'll be able to access them you'll be able to access them in an affordable price very affordable price maybe in some cases for free.

[00:42:14] They're going to get bigger and better so really the only thing that's going to differentiate is your use case. And you're own data right so there's there's going to be three things are going to differentiate the winners and AI whether it's a vendor or a business.

[00:42:30] It's how intelligent is the use case what data are they using is not available everywhere else. And what is the experience that you're creating for that user to make it a compelling use case on those things those are the three things that we're looking at all the time.

[00:42:45] Yeah these models are going to be plenty powerful for all kinds of different things so it's not about the model anymore it's about what you're doing with the model and in particular in those three things.

[00:42:56] So if I'm a wholesale distributor or manufacturer, am I going to need to kind of look at these things regarding my AI strategy much like I would cloud storage. I need to pick a horse and write that horse. Not necessarily.

[00:43:13] I think that you'll be able to use you'll be able to use these different models when they're at the right place at the right time right use the right for the right job.

[00:43:23] But what I don't think is you need to spend a lot of time worrying about what model am I going to use or picking that horses you're talking about the the time should be spent using on what am I going to.

[00:43:34] Again, how do I leverage the data that I have that isn't in these models. Sure. How do I leverage my first party data which in our industry we're very rich on first party data.

[00:43:44] What is the use cases like procurement and other things we've talked about with what are the use cases and then what is the experience I want to create for my employees my customers my users and so far.

[00:43:55] Those are the things we need to be thinking about not whether you know who's got a better bigger or better model. So let me kind of see if I can wrap that up a little bit and then another question for you related to this but. So in theory.

[00:44:10] In the not too distant future I could have a user interface that I had designed or picked for my organization that depending on what my needs are I could be using different models, but I'm accessing all of those from one interface.

[00:44:26] Yeah, but it's a user you won't know that right because the user you don't you're not going to need department to care all of our teams are using the right models for the right chops.

[00:44:35] Yeah very good very good well that that that becomes very powerful because we get the best of all worlds right I mean in theory right you're using.

[00:44:45] Microsoft Google Apple meta and whoever else you choose behind the scenes all for the best results which is very different than needing to say I'm. I'm using Amazon web services for cloud storage or cloud services versus Azure or I'm an Apple or an Android guy right.

[00:45:05] That's powerful that's good. So we want to move on past this but let's talk about the hiccup that went with this as well because there's a great lesson that goes with that.

[00:45:17] Well, yeah really pissed me off so if you if you've seen this you probably thought there's a video that went pretty viral on YouTube.

[00:45:24] It was in their announcement showing some of the capabilities of Gemini and it's ability to kind of visually look at things and have conversations based on visual. You know they were showing what apples and oranges and all kinds of things a pretty compelling video that's. That's sweet.

[00:45:43] Yeah, that's pretty. And the way the video was laid out I think it was like a five six minute video but it was laid out like this was all one spontaneous continuous conversation. Well it turns out that that video was a fake.

[00:45:57] It wasn't a fake in a sense the Google made it they did make it but it it was misrepresented in a sense that they spliced together. A whole bunch of different interactions with the model and made it look like it was one continuous spontaneous thing.

[00:46:10] And if you watch the kind the video it's like oh my gosh this is like life changing and it's not that we won't get there I'm not saying that we won't they won't get to that point.

[00:46:20] But it was very misleading and it was kind of a rug pull if you want to call it that for a lot of the in the tech world who was really excited about what they saw in that video and then found out well that's not really what was what was actually occurring.

[00:46:34] So shame on Google for that one. Well, you know a couple things with that right if you haven't.

[00:46:42] I'm seeing the video and I think it's just very simple you could just you know do a web search or just go to YouTube and search you know Google Gemini video and.

[00:46:52] And watch because it's astounding when you see that I mean the things that it showed it was going to be able to do right it. It watched was watching someone drop picture and is the picture expanded it was able to identify what that was.

[00:47:06] I think if you've used just as a simple example if you use chat GPT before and you've had to wait for our response to come back.

[00:47:15] Had that video been actual fact actually true and factual about how quickly it could do things it would be amazing about how quick that model was working.

[00:47:26] But I do think it's well worth going watching that video because just because they can't would do things that quickly today does not mean we won't be there very, very soon.

[00:47:35] The big thing is right somebody didn't think this through we're going to talk at the very end of our of our broadcast today briefly about that.

[00:47:45] So we'll want to kind of look at you know poor decisions poor decisions that are made in businesses and in this case I think. The fact that they fake the video get end up trumping the big announcement and that is not how you want to do these things.

[00:48:04] Well in Google released this to their development community right this was released so you don't you don't do something like that and then wave that in front of a technical audience.

[00:48:18] And then just go oh wow that was really not it's it was just there was just so many things I think we're poorly thought through on that and I'm just shocked that somebody thought they were going to get away with it.

[00:48:31] Yeah, well that's that's a great point and it's interesting for me and I hope hopefully for you know the folks that are with us today.

[00:48:39] And we're listening later is that you know you're you're not just the co founder and CEO of leads where you're a chief technical officer as well you're a computer scientist by education and we've talked about this.

[00:48:52] Since that announcement came out late the day we've message us night this morning you're offended right as a developer right yeah, so that's a big deal. I was disappointed I guess is the right word I was just disappointing yeah.

[00:49:05] And let's jump ahead and kind of get going to down on the day you know we've kind of added this new new well let's talk about this EU talks on AI legislating.

[00:49:16] Yeah, I can probably go buy that real fast it's still going on that's all we need to know.

[00:49:21] The interesting thing I wanted to catch on that one time is you know about European Union talking about AI legislation is it's a mess it's a mess there if you were to read this article right there.

[00:49:33] You know all of a sudden late in the negotiations earlier this week Germany France and I think Italy popped up some new thoughts which were very, very self serving based upon the AI companies some of the large ones that they have in their company or countries.

[00:49:48] Then you look at what the Biden administration put out a few weeks ago which was lukewarm and convoluted and way too long and missed a lot of things is.

[00:50:00] These people are you know I think it's and personally my view is that some regulatory group I can continue to go back and I'm going to apply it to what our audience might understand well as you know American national standards institute an ANSI standard or a NIOSH standard or.

[00:50:19] You know something similar where we have an industry trade group that is the standard and then regulation can refer back to that right just like OSHA right OSHA doesn't make rules OSHA says you need to do these things I should say to make rules they don't approve things.

[00:50:34] They have a standard and for an approval you go to these organizations right and I think my mind that would be been very beneficial here but it's interesting because.

[00:50:43] You know they're trying to get this done in the EU before they all have these elections and everything either gets stalled or they start getting different opinions from different parties.

[00:50:53] It's interesting time it's a best I said before it's not it's not a workable process so it's become a mess because it's not it's just not a practical thing right now but.

[00:51:03] Well if they if they just asked me I've got the idea they can they can model it after OSHA all right and you're fine so hey we put in a new little piece this week we sometimes talk about similar topics weeks in a row and and so we put this in and we just called it in review.

[00:51:22] There's now some new data this is the good folks Tom Gail my pocket and a group it at NDM put together some statistics in an article about the UAW strike and we and we've talked about that quite a bit as it was.

[00:51:35] You know coming and what it was going to do in the trickle down effect RP when we're on policy was with us we had some really good chatter about you know what that did that these other businesses well now what we're really looking at is that.

[00:51:47] GM is saying it's going to cost a 1.1 billion dollars they've recast earnings reports for 1.7 billion dollars. They got hit super hard during the strike at some of their most profitable plants their SUV and their truck plants high margin vehicles.

[00:52:06] They're going to end up turning out a hundred thousand lower vehicles than planned so if you're shareholder in those companies kind of a big deal.

[00:52:14] Stalantis 800 million so then the question his with all of this is you know for later on in another report says that the if cost effective the strike is anticipated to be about 900 dollars per vehicle by 2028. So guess what someone's going to pay for all of this.

[00:52:34] Maybe other union you know feels like they won for those that small group of workers but there's a big impact across the board so anyways we're going to keep probably using this in review topic.

[00:52:46] In the future to do you know kind of review back on things we've talked about before so.

[00:52:52] We'll hit this quickly I'm going to scroll through this the next topic that we have in our news letter each week is called tech talk there's a nice article in there it seems fairly basic as it describes actually from ink magazine but if you are not.

[00:53:06] If you're not up on top of ransomware issues cyber security issues if that's not your thing and you're just kind of trying to get aware there's some really good hints and points in that article.

[00:53:17] I would highly recommend that again it came from ink magazine it's called defending against ransomware back basics. It's in our newsletter you could find it if you're listening in by going to ink magazine as well.

[00:53:29] I'm sorry to be moving quick I want to hit just a couple of those really quick good stuff happening little more M&A stuff tip go.

[00:53:37] Which is a large hose and fittings distributor they've emerged with another company some great stuff in there in a newsweek article that MDM broke down about most responsible companies are some great distribution companies in that as well so each week we have that industry scuttle but section as well so.

[00:53:58] Anyways Tom you did you get a chance to read that article about the meetings in our good read section yeah I agree. I'm late to meetings all the time this is not very effective.

[00:54:13] Well it's that's the research says this right it says one it the article is described just as one incident become a better leader.

[00:54:21] I think that's the point that it says meetings it don't start on timer a third less effective here's here's the thing why I read that and it got my eye. I would love to find some statistics and I'm sure somebody's worked on this is.

[00:54:35] We went from busy people getting a lot of stuff done having meetings and we hit COVID.

[00:54:42] So we went to the other point that we had to do with every one of the things we did that was we didn't have a lot of things to do because we weren't going anywhere.

[00:54:52] And I think that that has been a hangover effect into organizations of the number of meetings we have. And there's a way to run meetings I know it's an interesting example we run our company on EOS the entrepreneur operating system.

[00:55:09] We have a leadership meeting every week that runs the exact same way and it runs well when we go outside of that right and that EOS meeting is you're not allowed to be late.

[00:55:20] The only way what's the EOS mindset is the only way you miss that meeting is if you're on vacation and it's been scheduled or you're in the hospital.

[00:55:28] So that's super structured and it's very productive but people coming late so forth and I'm guilty of that is that there are third less effective in those meetings so as a appreciative of that article. Did he thought so that before we jump to the left.

[00:55:46] I think that I'm generally a very on time person very disciplined that way. I'm going to go back through all my teams messages be right there be right there.

[00:55:57] But I do think that it is it does put a better discipline and I think again you talk about culture right there's a lot of talk right now about company culture,

[00:56:08] especially in remote world I think putting some of that in is not only is going to make it more effective but it's just going to put a better culture and more responsible culture so.

[00:56:18] Yeah, that's good. I think that's a great way to look at that is developing the culture and the organization and you know what people follow the leaders and the leaders aren't.

[00:56:27] I think that's a great way to look at the culture and the leadership of the people who are not following through on something others aren't going to do it. It's no different than parenting.

[00:56:32] Before we wind down today that we have a special feature most weeks this was an interesting article and it talks about it's called think it I described as think it through first.

[00:56:42] Nike asked teachers to work for free and this article talks about you know the billions of dollars that Nike puts out just to the top two or three athletes between LeBron James. I'll. This is the soccer player.

[00:56:58] Doesn't matter. Chris Giano it'll come to me in a second and in Michael Jordan right there's about close to four billion dollars that goes out to them for wearing their shoes.

[00:57:10] It's awesome, but they're doing this community program where kids can write right reports or something like that and get some you know.

[00:57:19] Some swag and some Nike products and so forth. So Nike went out in an announcement out to teachers asking them to help them review these for free.

[00:57:28] And if I just going to take things back to Google and the Gemini announcement right it doesn't matter what business or whether it's our business as a as a technology company or your a.

[00:57:41] Piped all in fitting distributor right when when you're making announcements and pushing things out to the public think through them.

[00:57:47] Right the impact the negative impact that can come from things that are poorly thought through and you brought that up strongly and talking about the Gemini thing with Google is like how did that get through.

[00:57:58] And the same thing with Nike, I mean why not say you get three free pairs of shoes for helping us review these essays. Yeah, you know or another you know put together a little fun and donate it to the schools or to don't pay the right.

[00:58:12] A million ways to handle it, but that was probably the worst as far as that's far as.

[00:58:19] Yeah, and the reason we talk about these things is really it's just kind of maybe an awareness of like are we working within our organizations and our teams so that when things go out to the public and even do our employees right and things go out is how are they handled?

[00:58:35] Are they you know what what could be the back. But most importantly are we doing the right thing so good stuff. Hey, good chatter today. We got a wind down.

[00:58:44] Got a full business day ahead of us still appreciate all the comments today that the work came in again if you're listening on the podcast and not seeing the newsletter we were viewing through if you'd like to get a copy of that each week just send us a note or go to the website.

[00:59:02] We're going to go down the horn pod.com or hello athletes more tech.com we'll get you the newsletter comes out every Friday morning so Tom thank you for today good time together appreciate it. Good. Good. Have a good. And everybody in we'll see you next week.

[00:59:17] Yeah, be kind do good things and have some fun. We hope you enjoyed today's episode and our guests each week we try our best to dig into the topics that are impacting your business.

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