Is AI about to create real turmoil for distributors, or are we still too early to know what comes next?

[00:00:04] Welcome to Around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies, Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain.

[00:00:24] Whether it's M&A, SaaS and cloud computing, B2B e-commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most. We've now scared everybody away, even though I, that was a nice tribute. Dolly Parton died.

[00:00:53] Yes, I know. That was a nice tribute, but it was super loud. It's good. It's supposed to be. I'm surprised you weren't dancing around and wearing your cowboy hat. No, I was going to, but you know, that's really sad. So... Yeah. Really, really a bummer. It's a national treasure there. Gotta figure that she was doing something special if the president said put the flags down at half-staff, huh? Oh, I didn't see that. Okay. Yeah.

[00:01:18] So, my oldest son works in LA and lives up by the Hollywood Bowl in the Hollywood Hills, and he has a little dog named Dolly. So, he and Dolly went down, Jesse and Dolly went down to the Sunset Boulevard to Dolly Parton's star on Hollywood Walk of Fame there.

[00:01:44] And he took a picture of Dolly as dog next to the star. So, it was something. Anyway... There was a lot going on there, I would assume. Oh, I can only imagine what it is now. He did it like right away after it was announced. We're like right when he got home from work. So... Okay. Yeah. Anyways, I don't know that you're a big Dolly Parton fan, but hey... It was... She has quite a... I mean, quite a history. You know, she was one of 12 children. And what a business person, right? I mean...

[00:02:13] Yeah, yeah. How many, you know, how many country stars cross over into all the different things she's done? I mean, late in her career, like five years ago, she was inducted into the Rock and Roll Hall of Fame, right? Because she did the crossover work. And then she has an amusement park. Yeah. Didn't you know that? I did. I did. Dollywood. Yeah. Pigeon Forge, Tennessee. Have you been there? I have not. No, I have not. I need to put it on my list. Have you been there?

[00:02:43] I have not been inside the park, but I've been right by it when I was at the Smoky Mountains for a little rest of them. All right. So, been right by there. Well, let's get on. Yes, that was a nice tribute even though it was very loud. We'll see how... Should she have drawn that out? I can do it lower. Do you want me to do it again? No, that's fine. I think we're good. You sure? I think we're good, yeah. Okay. So, the big question is, have you recovered from last week?

[00:03:11] Well, you know what? I don't understand the word episode 203 and I can swear last week was episode 200. Well, what was it again that we described it as last week? A celebration, I guess. Yes. So, it was great. It was great. If you haven't listened to it or if you're listening and you haven't listened to it, it's well worth it. Not because of you or I, but because of everybody else that was on there.

[00:03:39] You know, our marketing director, Dana and I were talking about this earlier in the week. And I think maybe you and I have talked about it as well as Mike Marks made an interesting statement early in the show. And he said, even on one of the topics is what he started with was he said, we could talk for two hours on this topic. And then I think later Mike said that we could go all day.

[00:04:00] And if you think about it, when, as I was listening to some snippets that have come out, we, with that group of people, we probably could have gone four or five hours and not run into any, any, any slow spots or boring times at all through it. Right. It was just, just powerful conversations and everybody looks so handsome in their around the horn podcast, uh, aloha shirts.

[00:04:27] You know, uh, we had a couple of them that we had to do different colors because of the different sizes that we needed. We tried our best, but it was a pretty good shirts I got, huh? They were nice. Yeah. Everybody wore. And we got Dan Schubert out of a jacket and a tie. Yeah. Well, so there you go. Yeah.

[00:04:45] So anyways, like as Tom said, if you're listening in with us today and if you didn't get a chance to listen to last Friday's episode, it was the celebration of our 200th episode because we had done the 200th show a couple of weeks prior to that. But, uh, what a great cast that we had with us, Steve from in foreign Dan from any w and on and on and on and on and on and just great insights. Um, you know, Tom, I just, I said this before, I'm going to say it quickly today before we move too far, but I'm just grateful, you know, that we've been able to come up with us.

[00:05:15] And we have to come up with us on the platform where we are because it's people. It's people like that or Bob that just made a comment here in the thread, you know, that come regularly. but when you can get the cast of characters that we had last week to take a little bit of time out and devote to us as a large group and be willing to adjust their schedules because a few of those guys had to make some pretty significant adjustments to their schedules because

[00:05:39] matching that caliber of people up is not simple. And I had a couple of them say, just tell me what you decided on. I'll make it work. And that's a testament, I think, to what we've been able to accomplish so far. So anyways, let's see if we can keep it up. The thing that was scary for me out of last week's episode was I think everybody there made some reference or comment to when we all get together again for the 300th show.

[00:06:08] I'm like, what else are we going to do for the next 100 Fridays? It's like, of course, we're going to have a 300. You get to two, you got to get to three, you know? No, to get to three, I have to get to two. That's right. But if you get to two, you got to get to three. You got to keep going. Do you? Yeah. Okay. I love the idea. I mean, you might have to pull me along. In fact, people are going to be seeing more of us, I think, over the next year.

[00:06:34] They are. That is correct. We've got more stuff coming. Lots of around the horn 2.0 shows planned for next year, maybe even a couple later this year. Around the horn 2.0 is when we do more of a traditional podcast interview style, conversation style with individuals. Lots of those to come. And then some other kind of exciting stuff we're going to be doing with another one of the industry leaders. We're going to do some shows with them, too. So it's kind of exciting. We'll be announcing that here very shortly as well.

[00:07:04] So anyways, we should probably get ready to dive in. I'll hit that housekeeping stuff. Try and go fast like you try and go, Tom. I'm Kevin Brown. This is Tom Burton. We get together every Friday morning here on LinkedIn Live, YouTube Live, and Facebook Live. If you happen to be listening to us on the recorded podcast, which hundreds and hundreds, if not thousands now of people do every week and averaging somewhere between now between six and eight different countries. By the way, Tom,

[00:07:30] I do next week. One of the things I wanted to address, I'll hit pause there for a second, is we have some great listeners and even people that come to the live show from France and Spain, Germany regularly, Poland, Romania, Sweden, Norway, and a lot of different EU and European countries. And we don't really talk much about the news as it relates to distribution in those countries.

[00:07:59] And I've been kind of starting to think about needing to do that. So next week, well, next week we're off, right? Next week we're off. That's right. But the following, we said we get together every Friday unless someone's on a planned vacation on an airplane or in the hospital. And I am proud to announce, proud, happy, excited to announce you are going to be on a planned vacation. Oh, I thought you were going to say Tom's going to be in the hospital.

[00:08:28] You are, I just, I love that you're going to go breathe for a few days. You are just, they don't make harder workers than you. And then people say I'm a hard worker, but not compared to you. So you're going to take a planned vacation. But when we reconvene a week from two weeks from today, I've got a little bit of an announcement to make about covering some of the news in Europe and so forth. And got a little video clip that will

[00:08:55] help us understand. And I was going to do it today, but we've got so much to cover. We'll do it when you're back from your trip. I think it'll be great. So as I mentioned, we do this every week. If you're listening on the recorded podcast on Apple, Spotify, wherever that might be, we would love it. If you would hit the subscribe button, leave us a review as well. But one of the things, if you're listening in the recorded version is you don't get to see these handsome faces, nor do you get to see the newsletter that will be up in front of us in just a moment here.

[00:09:25] That newsletter is called Around the Horn and Wholesale Distribution. We're somewhere between 12 and 13,000 people getting it now. And every week it can be accessed through LinkedIn. You could find us there. If you don't get it and you would like to, you can simply go to our website for the podcast, www.aroundthehornpod.com and sign up for it there and make it very easy on yourself. Plus either of those locations, you can see the past recorded episodes as well.

[00:09:55] If you're listening on YouTube, which we love that audience, which is growing, hit that subscribe button, hit the bell. That'll give you a reminder when we go live and you can do the same thing on LinkedIn. Certainly follow the show there and love it if you'd even follow the company that sponsors this show, which is a company that Tom and I work for, LeadSmart Technologies. You can hit the follow button there as well to get some of the updates that we do. Our sponsor, LeadSmart, is the company that has developed the wholesale distribution and

[00:10:24] manufacturing industry's very first enterprise growth platform. You know, Tom, I was describing this to somebody the other day, you know, 25 years ago, there was no such thing as, I shouldn't say that, 40 years ago, there was no such thing as a ERP or a CRM. They contact managers and MRPs and different things like that. But those acronyms have really fit and really helped our industry grow. But we're in this place now where we've got so much data available to us and never before have wholesale

[00:10:54] distributors and manufacturers been able to accelerate the growth within their organization, serve their customers better, understand their business and their people better by bringing siloed data together and using AI against that siloed data. And what people are seeing right now is there's a little bit of a threat for a lot of businesses that if they don't accelerate their business through using technology tools, they have that risk of getting left behind. We're hearing a

[00:11:21] lot of people talk about that at the shows and events we go to. So an enterprise growth platform is a place where we can use a true platform, where we can access all the data from across your business, from your data warehouse or data lake, maybe a SharePoint set of documents, all of your ERP, marketing automation, e-commerce and other data sources and bring that into one unified platform. And in a single unified platform, now we can apply AI and advanced technology tools

[00:11:47] to give prescriptive guidance. What should we do next? What's the risk in our business? Where are opportunities? And we can take action on that by even sending push notifications to phones versus waiting for people to log into software. So the world is changing fast. LeadSmart is changing fast along with it. If your company is looking to accelerate your growth, understand your customers, your team and your business better, we would love to talk with you. So that's our plug for the sponsor

[00:12:12] that we have for the show. It's 200 episodes that LeadSmart has been paying the bills for this show. So we're certainly appreciative of that. So what did I miss there, Tom? Anything before we dive into the news? Oh, I think we're afraid to rock and roll. So the Fed is conspiring today in Montana, is it? Jackson Hole. Jackson Hole, Wyoming. Sorry, Jackson Hole, right? So what do you think is going to come out

[00:12:41] of that? Well, it's already happened. So the speech happened this morning. Like seven o'clock Pacific, right? I believe so. Yeah. Yeah. And, you know, basically, he said that despite, you know, the fact that the inflation numbers were better in July and June, we're still a long way from accomplishing the

[00:13:05] goal. And that we're really not making significant headway towards achieving the goal, which we all know the goal is. Kevin's 2%. And so that, you know, and he's not listening to me, is he? Yeah. At first, the market was the market kind of reacted a little bit to the downside, kind of thinking, oh, okay, he's going to, he's using this as a foundation to basically say, hey, we're going to have to raise

[00:13:33] rates in order to do something about this. But then the market, at least before the show, when I looked, had recovered quite a bit, actually. Well, now it's down again. So it's kind of rollercoastering all over the place. So I'm not sure what the market thinks about that. But I did look at polymarket. And I knew you would. And the there was a significant drop. So if you notice here,

[00:14:01] right, the drop from, I know it's a little hard to read. We'll share with the audience that's listening what what you're doing here. You're showing us the polymarket. This is, yeah, these are the odds, quote unquote, of the Fed decision in December, whether they're going to increase

[00:14:17] or decrease. The decrease dropped by 37%. And the increase increased by 21% to a 49% chance of an increase in September. So yeah, one is what you say a 1% difference between no change and an increase.

[00:14:40] So your, your thinking in our discussion last week was we should see a decrease. I would love to see that don't know enough to argue the points on it. But Alex Chausovsky that we know and love and trust, he was pretty confident as of at least one, I think he was describing increase. And I thought he said, if I remember what Alex was saying on that was the likelihood of that was September.

[00:15:10] So yeah, now we're looking at an October. It definitely drops in October and it definitely drops in December, although December is definitely higher than October. But yes, September is at least at two at the polymarket has got the look at just change in the last 30 seconds live, right? Yep. So yeah, it's now 51%.

[00:15:36] Well, maybe in the seven, maybe in the 17 minutes that we've been talking here, there's been some announcement or some hiccup of some sort. Yeah, there's listening to our conversation. But then the, look, I still think my personal opinion, which is worth not a hell of a lot, but it's worth what you pay for it coming to a free show. So that's right. I think increasing does nothing, very little good and potentially a lot of,

[00:16:06] I think there's a lot more downside than there is upside. And, but go ahead. I'm sorry. Well, but the argument is, is that even though the inflationary numbers are the result predominantly of supply side issues, right? Lack of fuel or reduction in fuel, driving prices up and so forth, is that consumers are a continuing to spend and B, there have been other price increases

[00:16:31] indirectly affected by fuel. And that there is a expectation that those price increases will not come down regardless of whether fuel costs come down, right? That's the, that's the logic of it. But I don't, I have a hard time seeing that by increasing rates 25% is going to change any of that. And if anything, it's going to affect the stock market.

[00:16:58] So it reduces, maybe it does reduce the wealth factor a bit on things, but I just don't see a lot of upside and, but that doesn't, it's like, they're so limited on the tools they have. They may just do it just because, Hey, you know, I got to throw some water on the fire and this is all I've got to do it. So I think, I think you're spot on there, Tom. I think this is like, Hey, look,

[00:17:22] there's enough pressure. We've got people thinking that, you know, this is what we should do. And man, how would I describe this better? Maybe a better way to say it is, I think to your point, you know, 25 basis points in this is not going to change anything. And it's, that's could be how they're just looking at it and say, well, let's see, let's see what happens. You're, you've said

[00:17:50] the opposite. I would almost suggest they're saying the opposite of you. They're saying, Hey, how much damage could come from that? Um, if we, if we, if we raise by a quarter point, you're saying, you know, historically, and I would bend to your side of this. And I think everybody knows, I'm not afraid to disagree with you on this or you with me is if you're going to take a risk and

[00:18:13] make a change, take a risk to the thing that could really spike productivity and do something to move the needle potentially on helping business grow versus the consumer side, because what the consumers to your point earlier have been saying for how many days, how many years now that we've been through this is I'm going to keep spending. Now there is a point that they're not going to be able to spend anymore because credit cards are going to be capped and they're not getting raises and everything goes

[00:18:41] with that. But the consumers, they're doing, you know, minor heartbeats of ups and downs. They're not pulling back, which is what the whole point of this, if you're going to raise rates, the idea behind that is going to be saying, make it painful to spend money. Is that a fair, simple? I think that's part of it. It's painful to spend money. And then the downstream effect is that,

[00:19:06] you know, sellers will reduce prices, have more discounts, whatever, in order to make up for that reduction in spending. But I don't think, as I said, I don't think 25 points is going to do it. So if that's really what you're trying to do, raise it a point. You know, it's like, stop fooling around with it, right? If you really want to hand grenade, it's been hand grenade. Doggone it. That's exactly where I was going. It's like, if you want, if you're serious,

[00:19:33] and you think that you need to hand grenade this to really get spending to slow down and prices to come down, then do something meaningful. Do I was going to say, I was going to say a half point. Right. But I think in their mind, well, we have a squirt gun here and we'll squirt a little water on the fire and keep it from, you know, it's symbolic, right? We're symbolically going, hey, we're not going to let this fire get out of control. We have a, we have a thousand acre wildland fire. We said one engine.

[00:20:03] Yeah. Yeah. Right. The, there's an interesting statement though, that he made this morning. And he said, um, we must be confident that underlying inflation is moving to our objective clearly. And at a sufficient speed, otherwise we have work to do. So that's what's this. I think that statement in itself backs up what we're just describing here, right? In this setting is that if you, if it's not moving at a sufficient speed, do something that's meaningful.

[00:20:32] Yeah. Right. Take, take, uh, you know, you know, tighten up your belt, right? Stretch your muscles and go and go do something. It almost feels like it's just, um, and it's interesting, I guess, again, we just pretend to be economists on Friday mornings, right? Um, what's interesting to me with that is that, um, again, it'd be interesting to go back and look at history. I would think a quarter

[00:21:01] point decrease probably has a lot more impact on driving the economy than a quarter point increase would do to lower inflation. Potentially, but I don't, I don't know. Remember their job isn't, remember their job isn't to drive the economy. Their job is to maintain inflation and to make sure

[00:21:28] that there's jobs, right? Or that they're managing the job. Decreases impact the economy. Right. So if that's not their, that's not their responsibility is to go put a, to put a firecracker under the economy. Um, but yes, I think if you were to look at things holistically and if you look at the

[00:21:51] greatest good for the greatest number, I would say yes, uh, a 25% decrease overall would be, I think better overall, especially long-term or intermediate term than an increase, but they're in their silo, right? You talk about silos. They're in their silo and that's not the silo that they're, they're trying to deal with. It's there. Maybe, maybe they need it. Maybe they need an enterprise growth platform. Well, they do. They need an enterprise growth platform for all of this economic stuff,

[00:22:20] right? To not so operate in such, such silence. So I look, I was, I was saying it was a long shot, but I was willing to bet on a decrease that I wouldn't bet on that anymore. I'm not, you know, I've lost my money on that, but I knew it was a long shot to begin with, but, um, yeah, it looks like it's a coin flip for an increase at this point. So we, we don't, uh, we don't have any bets

[00:22:46] going right now, do we? That's what I'm aware of. I don't think so. So I want a steak. You want some tacos, right? Our friend, uh, our friend at the Capital Group, Rhonda Gill came to us at the Affiliated Distributors Functional Success Summit. And before we started our conversation about our technology, she wanted to know if anybody had bought any tacos or any steaks, um, having been a long time listener here. So that was pretty rough. We just have, we just have these IOUs. Yeah.

[00:23:15] Yeah. Right. Okay. I'm guessing we might have those for a long time. Uh, so anyways, so a little bit of an adjustment, uh, continue with the economy. Um, we had the inflation gauge shows core prices rose 3.3% annually in July, right? So now we've got consumer prices and that this article kind of ties into what Bob was saying here is the big difference between B2B and B2C, right? Is B2B,

[00:23:42] B2C is driven by want and B2B is driven by need. Right. And that's an interesting, you know, kind of interesting thought about the world that we work within and live within in the B2B world is that this is the stuff that's driving every B2B is driving every, you know, you think about it. We had Dan Schubert from National Association of Wholesaler-Distributors on last week, uh, with us on the celebration show, you know, their calculations are distribution contributes $8.4

[00:24:11] trillion to the U S economy, which is nearly one third of U S GDP. So talk about Bob's talk about need here, right? If you want to have a, uh, water glass at the restaurant, you're going to go to with your spouse tonight, or you want to have, um, you know, some safety equipment to keep you safe, uh, working in your yard or whatever it might be, or internal business, I should say is you need

[00:24:38] exactly need wholesale distribution in place. And those are needs, not wants. So it's an interesting, interesting component of that. So it's just going to be interesting to see. I just feel like we're just continuing. It's like, it's almost Tom, like the entire history of us doing this show, the economy has just been at the simmer point, right? Not, not flat, not, not boiling, but just

[00:25:03] kind of this, Oh, look, consumer prices, uh, consumer prices down manufacturing production up. And, and, but he's just back and forth, which is just a, it makes it difficult for big growth. Because we talked about what was in the show last week, right? Perpetual chaos, right? So that was a lot of, right? Yeah. Yeah. So there, I mean, there is a lot of perpetual chaos.

[00:25:30] There's a lot of things that are impacting the inflation numbers, whether it's tariffs, whether it's, you know, the conflicts, all those types of things, there's a lot of different variables and factor into it. Look, I tend to agree. I think it's a hard, if I, I wouldn't, I wouldn't want to be in worse shoes, you know, pounding the table going, we're going to get it down to 2%. I don't know how they do that. I think you could raise the rates 3% and it's not going to do that

[00:25:59] for three bases. Oh, wow. It's just, you know, that's, that's just flipping the tables on, on, that'd be horrible to, to try and do something to that matter. You know, it wouldn't be as horrible as you may think, because if you look at the bond market right now, which is high, right? I think we're at the 10 year is almost 4.7 and the 30 year is over five, right? And the bond market is already factoring in. And as you know, right, the bond market is what

[00:26:28] influences mortgage rates and car loans and all those types of things. And to a large degree, credit card and so forth. So it's already operating on its own trajectory, regardless of what the Fed is doing. Right? So I don't know that if, even if they were to raise rates significantly, let's say they raised by two points just for, for whatever, would that really change the bond market that

[00:26:55] significantly compared to what it is right now? Probably not. Right. So I think we're already absorbing a lot of the expectation for longer, higher prices and so forth long-term through the bond market. I don't know. I mean, look, they're not going to, I think politically that would be a complete disaster for them to do something like that. But yes, I think throwing a hand grenade into the, if they really believe, right, if you're sitting in and you're one of these governors and you

[00:27:24] really believe that the tools you have can bring down inflation, which I don't believe they can. But if you believe that, then use them. And I don't think that's going to happen. So even a quarter point change, yes, it'll affect, you know, certainly rates in some areas or whatever, but we're also, we're already feeling the effect through the bond market and the other things that are operating

[00:27:48] on their own trajectory. Yeah. It's, we're in an interesting time, Tom, let's kind of shift into this kind of moving along. We don't talk too much about political stuff other than kind of how that impacts the supply chain, but an article here from a G captain, which is where we get most of our supply chain articles, which is just a great source of, well, if you're interested in anything maritime,

[00:28:14] right, what's going on with ships and supply chain movement and so forth, gcaptain.com is great. Just being a little bit of a nautical geek, I'll say myself as I read probably too much of their stuff. But the article that we plugged in here was about the Trump administration launching the Iran sanctions campaign. So, you know, last, what was it, last weekend was Secretary Besson said, okay, the squeeze

[00:28:38] is coming and it's coming hard. So it was announced, but this, they haven't really done much of anything, but this morning they basically put the squeeze on, I think it was a bank in the UAE, a big one, and one I think somewhere in Europe that is moving Iranian funds around and basically saying, hey, you're, I haven't dug too far into this, you might have some additional feedback, but basically the idea is

[00:29:05] they're going to go look at this and look across the world and say, if you're helping Iran move money anywhere in the world and you think you're going to be allowed to take advantage of U.S. markets and so forth, game over, right? When you stop supporting Iran, you can get back access into the benefits of, they called it D-Day, economic D-Day. And so it's going to be interesting to see how this plays out.

[00:29:34] If it has any impact on this show, we don't want to talk about the political side too much of it, but there is a major supply chain concern by having the struggles and the hormones straight. So it'd be interesting if any of that does anything of significance. Yeah, I haven't, I haven't, I didn't look into today before the show and we didn't really talk about it last week. What is the status of the Iran conflict, right? What is the flavor of the week?

[00:30:01] Um, I don't know if this is now the next sort of, you know, strategy that's being incorporated as a way to get them to come back and negotiate, you know, meaningfully or, or what, right? You know, there's been all the threats of we're going to annihilate your infrastructure and, you know, we've had all kinds of threats. I don't know if this is yet another, just another artillery into the, into the equation. Just got to say, I haven't looked at it enough.

[00:30:27] Yeah. Well, I mean, the idea is basically it's, it's, and I think this is the alternative to boots on the ground ultimately, right? Yeah. Is there's no support for boots on the ground, but Joe, Joe American that, you know, on main street in Iowa, you know, does not have or feel an impact when we, there's sanctions on banking companies that they've never heard of in countries

[00:30:53] that they probably couldn't find on a map, right? No offense to that, you know, that guy, but it doesn't, he probably does have a concern about his son or his nephew or his neighbor having to go pick up a rifle and, you know, get off a plane or a ship and go fight a war. And so this is, I think, warfare, economic warfare. Yeah. I get it. As you said, another strategic in the war, right? Another, another, and it sounds

[00:31:22] like it is, but again, I haven't done enough homework to kind of see how this all fits into the bigger, bigger strategy. So you've got this shadow fleet of tankers that has been able to get through, right? That are from different countries and flagged on different countries, and they've been able to get through and that's moving Iranian oil as well. And it's that kind of, they call it the shadow fleet, I believe that's the big squeeze is put on it. Now the president said earlier in the week that

[00:31:48] they've successfully cleared the Hormuz straight of mines, which is pretty big deal. If even if they've got half of them gone, that's great. But now you start putting this economic pressure from banking, you stop these shadow fleets that are leaving and so forth. And basically you're fighting an economic war. And then the question is, you know what, how long can you hold on if you don't

[00:32:13] have access to, you know, whether you're a country, look, what would happen to our company if we didn't have access to our lines of credit and our banking relationships? And if those things got cut off, right, things change pretty quickly. So it's just a shift in where the pressure is coming from. So it's interesting because if you look at, you know, the country, right, if you look at the

[00:32:37] opinion, general opinion of the population, people want this conflict, quote unquote, ended, right? They want the war or the conflict ended. And we haven't done a good job of being able to end that, right? There's been tons of false starts or it's ending or we're going to have a resolution and then it's not, right, all the way through. Obviously there's an expectation that with

[00:33:02] the midterms coming up in November, that could have a large impact on the results of the midterms if the conflict is still occurring. So it's interesting to see if they're kind of throwing in, you know, going at things with different angles, right, other than the force angle entirely to see if we can use in this conflict in a reasonable timeframe, or at least get to the point where you can clearly see light at the end of the tunnel. Because all these other ones, maybe you saw light

[00:33:28] at the end of the tunnel and then that light switched off like 30 seconds later. So, right. Yep. Anyway, yeah. So I'm trying to be more prepared next week or next time. Sorry, I threw that curveball at you. We didn't, we didn't talk about that at all, but you know, they, they put this, basically they put a sanctioned, a major bank in Dubai and another one in the UAE. And basically it's,

[00:33:54] you know, it says they, let's see, this is, I'll just read this to you real quick. I just looked this up. It says cutting off the bank misser UAE basically came back the U S corresponding bank, correspondent banking access, uh, was cut off after an estimated proceeds of roughly 1.8 billion, over a hundred companies linking to Iranian shadow banking networks. So you've got all these banking

[00:34:23] networks that Iran's moving these dollars through, and they've got a handful of them that are supporting all of those. And basically U S treasury department, U S department of treasury, it says, uh, call it their operation escalated operation, economic outcast by targeting those and shutting down access to markets and so forth. So it's going to be interesting. So, um, the, it's, it's, I guess

[00:34:50] the challenge with this is, um, as I look at it is we have my, my friend Reza that drives me to the, the, uh, airport, um, our acupuncturist that Darlene and I go to and the owner of the French restaurant that we went to Wednesday night for our anniversary are all, uh, Persian and all from originally from Iran. And every one of them says, none of this is going to do anything good for the

[00:35:20] people of Iran until they get rid of an, not having an Ayatollah in place. So really what all this is about is it's not bringing any benefit to the people of Iran. It's bringing, it's bringing that nuclear threat down, which is beneficial to the rest of the world. Um, so hopefully this stuff is all over soon and the Strait of Hormuz has opened up and farmers in, in the U S and the rest of the

[00:35:45] world can get access to the things they need for fertilizer and fuel prices go down. And man, I tell you what, Tom, I was driving down the street the other day and, uh, I hadn't, I, I, uh, let's see. Sunday, uh, will be two full months of me being an EV driver. And, uh, I haven't paid attention to fuel prices and I looked at premium fuel was over $6 by my house the other day. Yeah. Yeah. So is it next

[00:36:15] week or the week after you think you're going to order your Tesla? Uh, I don't know. We'll have to see. Um, I want you to say, I tried to help you this morning by working on some contract stuff so that we can speed that along. When I, when I complete that part of that and you get the things that we've agreed to, if it's happens next week, is it Tesla getting ordered? Probably. Yeah. Yeah. Probably. Okay.

[00:36:42] All right. We have witnesses, hundreds, if not thousands of them this morning. I'm looking for something more firm than probably. Okay. Probably is what you're going to get for the moment. So, okay. All right. Uh, I just know that, uh, Mrs. Brown is going to not let you let you up on that one. She's going to, for the, for the, to, to let you in on the joke, Tom's been contemplating

[00:37:06] buying an EV. I have been contemplating at the same time. I'll pull, I pulled the trigger. Tom said that there needed to be an event within our company. That event is imminent. Now he's starting to, you can feel the vacillating happening. And, uh, we were at dinner, Tom and my wife and I, and out in front of the restaurant, the patio we were sitting on, I think there was, what do we count? Like between the one, the Tesla's parked in front of us after that, that, uh,

[00:37:34] the, um, I thought we counted in like five minutes, like 30 Tesla's go by. And my wife put you on the spot and said, go get it, go get it. And you threw a gauntlet down and we're pretty close to that gauntlet being achieved. So Bob just asked, he said, are you ordering a Tesla? He didn't question is if you order a Tesla, he said, are you, which is the affirmation of this action happening, uh, for fun or for ROI? I can I answer that?

[00:38:03] I agree. Take a stab at it. Sure. Yes. Is the answer. I would agree. Yeah. Yeah. Yes. Right. Tom deserves a new car. Tom drives a nice car. He has two cars. Um, but Tom deserves, well, deserves a new car, a luxury car. And he would see the ROI because Tom lives for you about a hundred, 120 miles, something like that from the office.

[00:38:27] Yeah. About that. Yeah. Yeah. And you're, you're coming down 120 hard miles, 120 hard miles. Yeah. So self-driving would be beneficial for you. Yes. Right. Yes, it would. It would very much. So that's the later drive home, like the driving home late in the evening or whatever, just being able to put it on self-driving would be a good ROI. Yes. Do you think you could actually sit quietly in that seat and just let the car do its thing?

[00:38:57] I could. Yeah. I've, I've tried the self-driving. I've used it before I drove it in my neighbor's car and it was in the pouring rain. I mean, pouring rain and it worked, it worked really, really well. I was very impressed. So you're thinking just before you leave the office to head home on Wednesday nights when you often do, or Thursdays, we just have a couple of cocktails over an early dinner and then you let the car take over? Pretty much. Yeah. Okay. All right. So there's Bob's answer.

[00:39:25] But you still can't, you can't, you can't, you can't, you can't drink and drive or be in the past. Yeah. Good. So let's, let's move back ahead to, and continue down the international. It's a hard mile. I'll tell you a hard mile, Bob, is when you have to go through downtown Los Angeles and the four Oh five and the one-on-one that are the hard mile, hard fought mile. So I'm sitting in South orange County, California, a little bit closer to San Diego than LA and Tom

[00:39:55] lives about 40 minutes or so, uh, depending on traffic could be two hours North of LA. And, uh, there is no real option to get between, uh, uh, uh, let me rephrase that. You have to go through the wall of fire, as I call it, you have to go through the wall of fire. Right. Without a boat or a helicopter, there are a plane. There is no option. Other than going through LA for us to get between where we both are. So from that standpoint, it's,

[00:40:24] um, there's no option. Tom has to go through that. We have an office here in South orange County for lead smart in Laguna Niguel, which is, I guess I'm the lucky one out of all this. I live about two and a half, three miles from our office and everybody else has a little bit longer drive. Yeah. He has easy miles. I have two and a half or three easy miles. Yeah. Right. Right. Uh, so when Tom and I go out to dinner before he drives back, we usually are at somewhere that's only about

[00:40:54] a mile from my house. Uh, so that's, I've got the good end of that. Uh, but that's okay. So Tom deserves an answer to Bob's question. Tom deserves to treat himself to a luxury electric vehicle, which will based upon Tom's financial mindset, his scientific mindset will also provide a return

[00:41:16] on investment. It also, there's an ROT factor too, for you with that self-driving ROT return on time. How's that? I expect you to have your laptop open and working. It won't work. No, no, it doesn't work. In fact, if you, in a test, it's watching your eyes, right? It's watching you. And if it sees like you're looking at your phone or whatever,

[00:41:41] while you're doing that or doing anything that's not, it will basically stop the self-driving or, um, punch you in the face or do something. Yeah. So, yeah. Um, so there is, I guess, I guess there's ways to, to, to hijack around that, but probably not the best idea. I think what Leadsmart needs to do is buy you a pair of the meta, uh, heads up display glasses. And then you can, you know, you control that by moving your wrist. Steve Levy's got them.

[00:42:11] And, uh, he's having lunch with Steve from Infor in Washington DC a while back. And he was like, looked like he was having a seizure at lunch where the way his hand was moving a little bit. And he was doing stuff to look something up on his glasses. And so we'll get you those, Tom. And then you just keep working. All right. You know, I don't know that anybody cares about you getting a new car except for, you know, this fun discussion. And really all I'm looking for is

[00:42:40] you to make the commitment on in a recorded podcast that says I am buying a Tesla. I told you probably. All right, let's move on to the next, next thing. We need, we need to get out of, we need to get into another section here. Well, we need to talk a little bit about tariffs. So this, listen, this Canadian thing, U S thing, we have three articles related to that. You know, this is a pretty significant issue. And,

[00:43:07] and, and I, I felt that in a conversation we were having with one of our great customers in Canada, very, very large distributor. We were just talking about being in an event or not. Um, that's going to be here in California, uh, later this fall. And they're not sure they're, they're bringing a whole contingency and they probably are stuck with, you know, some of their, a couple of their executives being there, but I don't know, was that the comment that was made in that call? Tom, did that surprise you?

[00:43:36] Very much so. Yeah, it did throw me off. Um, and it was, it wasn't a business decision, right? It was more of a, it's a protest, a protest, right? It was a protest and kind of a, an emotional perspective. I'm not saying it's right or wrong. It just, it was not, it wasn't a business decision. Like, Hey, it doesn't make sense for me to make the trip or

[00:44:04] whatever the case may be. So yeah, it was definitely a protest. I don't know if that would have much relevance to related to that show and so forth, right? It's not like protesting show is going to change the situation, but I understand the point. I understand the, the logic of it and, and whatever. And it is out of all of these tariffs, right? I can, I understand, you know, there's so much

[00:44:32] philosophical difference, right? Between China and the U S politically and everything like that. But it seems like we could get our act together with, with Canada and somehow figure out and that's the North American, right. The North American countries that have similar views, similar, similar. And I make that as a broad statement, right? Statements in terms of politics and views and,

[00:44:58] and democratic capitalist countries that we can't figure something out. Yeah. It just seems to be a constant, constant issue. Well, so there's good, a good article that we posted there from manufacturing.net. There's another one. Uh, I'll, I'll hit on three. The second one's from, um, Mark Brohan. And, and I tell you

[00:45:21] what, Mark's a friend, great guy. Um, Chicago guy, actually a Michigan guy, Reggie. Um, Mark has swam around Mackinac Island, Michigan. I can't even imagine that. It's brilliant. I mean, how, what a, what a tangent that was just was, but I was having lunch with him one time in Chicago and he was telling me about that. But anyways, prolific writer, really insightful. Um, he previously worked with a

[00:45:51] e-commerce related company. We published a lot of what he wrote there, but I think the stuff he's doing for, for Ian Heller and the distribution strategy, by the way, I was funny enough. We've been talking about Lake Michigan. I was texting with Ian yesterday about another article. I just sent him a note and he and his wife and his brother-in-law and sister, brother-in-law and sister-in-law were sitting on the shores of Lake Michigan watching the sunset when I was texting with Ian last night.

[00:46:14] But Mark wrote a great article here. Um, it's at distributionstrategy.com. It says UF, U S tariffs on Canadian goods take effects as distributors lean on pricing. And just a kind of a good recap of, of the shift in all of this. There's a chart that actually goes through the timeline of what's, did, did, did, did Lily send us that one, Tom to use?

[00:46:40] Yeah. This timeline is pretty kind of interesting is what's just happened throughout the course of the year, right? So February 20th was the IEPA tariff. It's a little hard to read, but we can, if you want to go through it. Yep. It's a, we can just, I'll just hit a couple of them. February 24th, then there was the global surcharge put in under section 122. May 26th, Court of International Trade strikes down 122. June 11th, federal court stays ruling tariffs continue.

[00:47:08] Uh, we should actually save this for just conversations in general. Right. But, uh, this just kind of goes through and then August 19th section three 38 Canada tariffs delayed for three days, which is when the big discussions went into place and they couldn't come out of that. And now those, uh, those took effect. And basically now we're at 50% in Canada saying, all right, whatever, 50%, but what we might not think about is the impact, which the next article that's, uh,

[00:47:37] we're, we're, uh, published there, which is coming from, uh, industrial distribution about us. Manufacturing remains deeply dependent on Canadian trade. And it really goes through and kind of talks about, it says, well, it has a subheading that says Canada fuels American industry. Canada is the second largest U S trading partner after Mexico and energy is at the heart of it. The two countries exchange, $872 billion in goods and services last year, Canada crude imports, uh, equal nearly 20%

[00:48:06] of total U S petroleum consumption. And then we've got the whole lumber market that's impacted by all of that, uh, big issue. It's, so it's, it's, this even mentioned, mentioned hockey sticks, right? But, um, it's, um, uh, a whole lot more than you might think of it's going on, right? Uh, dominant foreign

[00:48:30] source of aluminum for us smelting. Um, and now that's all going to get hit with their 50% tariff as well. So I think this one's got to get figured out because we're all my feeling, my gut says we're going to feel this a little bit more than others. And I think it's 15%, right? And what is the tariff rate? Is it? No, they, they came 50. They came back and said, we're hitting you straight on the

[00:48:55] Chinese one is 15. Okay. Yeah. Yep. Yep. Right. So, um, it's an interesting piece that's going to need to be happening. The last thing that this article talked about, it says AI powered Canada has it. It said artificial intelligence is driving a surge in electricity demand. Canada supplied 85% of us electricity imports. So not 85% of electricity, but of what came in from another country was 85%

[00:49:23] of it came from Canada. And a big part of that is going to, uh, hydroelectric. Um, well, it says that, uh, the country needs to double the capacity of its electricity grid by 2050 through major hydroelectric and nuclear projects. And they're going to get the power. Now that's coming in is getting the big squeeze on it. So it's going to be interesting. I think this one, one might be

[00:49:47] one that needs to get negotiated much quicker. Um, I'm sure the president is probably saying, don't worry about it. It's not having the impact, but clearly it will be. So, uh, why don't we dive down Tom into, uh, there's a, there's just quickly in our supply chain area. There is an interesting thing that's, and we won't spend much time for this, but again, if you get our, don't get our newsletter and you would like to, it's what we were referring to today with our newsletter. It's called the round the horn and wholesale distribution of manufacturing. You can get that

[00:50:16] at www.aroundthehornpod.com. You can certainly let us know at hello at leadsmarttech.com, uh, or certainly just look for it on LinkedIn and find that newsletter there and subscribe. It'll come to your mailbox every Friday morning. Next year, we're probably going to be doing some special updates more than once a week to it as well, but two things kind of happening right now. That are going to be significantly impacting the Panama canal. You've got the drought that's going

[00:50:44] on there already. There can only take certain types of shifts, ships, I should say. Now they've put an opportunity where you can auction, basically move into the front of the line to get through this said the auction last week hit a record 5.3 million. So somebody said, look, it's slower to get through there now because the water is lower and not as many ships can get through. And I'm going to pay

[00:51:10] to go to the front of the line. Well, that's why they have the option, right? You pay, they have the auction to see if you want to go to the front of the line, right? It's basically over, over a million, a million dollar increase. Now you start thinking about that, right? Depending on what's coming through there, you've got $5.3 million added to the cost of goods. And now if you're having something that's

[00:51:36] going to go through the Panama canal, that's coming from China or wherever looking to get to Europe through there or whatever, wherever, whatever it might be is you have to be thinking about if those goods are going through there, the per container price is going to go up significantly per manufacturer, right? If you're looking for speed, it's going to trickle down all the way across the board. So, and if we raise rates a quarter point, none of it will matter. It'll all take care of itself.

[00:52:06] That's good. Okay. Very good. So there's in follow-up to that, there's an article from Forbes that's talking about what the super El Nino that's poised to be hitting us is going to have as well. So I don't, did you get a look at that? I did. I've actually been, and we won't, I won't get into it now, but really trying to understand a little bit more about the overall impact or potential impact of this,

[00:52:36] of this quote unquote super El Nino that's coming. And one of the biggest things is increased water levels, right? Because what happens is the wind shift, the wind shift and they blow the other direction. And literally, literally like a hurricane blows the ocean and changes the water level from one, one, the East coast of Asia to the West coast of North and South America that are here.

[00:53:02] And they're talking about there can even be real impact in harbors and all of that kind of stuff on how they operate, not just in the Panama Canal, but, you know, even where we are. So. Yep. Well, they're talking about two in this article, right? There's a couple. Go ahead, Tom. Go ahead. I was just going to say the article, just a couple of sound bites from it that,

[00:53:28] that I caught was, you know, and it's interesting, right? Because so I would say if I would love to see the, the, a true smattering of, and I, and we have access to this through the software that we use for managing the podcast and simulcast, but I'd like to kind of look and see if we can narrow down. I know we can look by country. We can narrow down to, uh, West, I'll just say West coast listeners,

[00:53:54] but obviously the vast majority of people that are either watching with us today or listening on the recorded podcast later aren't here in California, specifically Southern California. We've born and raised both of us in Long Beach, you know, fun fact here, Tom and I were born in the same hospital, uh, six, but roughly seven months apart and six and a half months apart. And, um, we've spent, I don't want to say our whole life, but let's say most of our adult life, uh,

[00:54:23] listening about El Nino, El Nino is coming, El Nino is coming. And quite often it is a big, big, what do they call a nothing burger, right? Comes out of it. Maybe we get a little more rain. I think, I don't know. I won't speak for you, but when we were in our, I would say probably mid twenties

[00:54:44] to mid forties, both of us, I was paying it to, we both snow skied a ton. You know, the, the year that, the year that I met my wife, I stayed single a lot longer than you did the year. I met my wife, I skied 25 days in three countries and raced sailboats and I'm sorry, three states. I raced, uh, sailboats 60 days in three different countries that year. So we were both pretty active. I paid

[00:55:10] attention to the El Ninos because one, I was a manufacturer's rep and I sold rainwear. And two, I wanted to see how much snow was going to be in the, in the Sierras and our local mountains from that. Now I'm paying attention to what is it, uh, what's it going to do to the impact on supply chains and so forth at this stage of my career. But this is now saying there is a 90% chance in the U S national weather service forecasting that event, um, with 69%, why not just say 70, right?

[00:55:39] Um, uh, it will be the strongest on record, uh, since 1950. The discussion is that there could be eight, $84 trillion in economic damage, uh, over the, uh, from El Nino cycles over the 21st century. So not just this one, but overall, um, and says, uh, the increase in oil and gas prices compared to a

[00:56:04] year ago, driven by ongoing geopolitical tension and reduced system slack and movement of ships could be up 30%. So there is a big impact other than just getting a little bit of rain coming through. Oh yeah. Yeah. So there's a lot going on. If you under the rain is just one element, right? One effect of the whole thing, but it's not, it's not just, Oh, there's some warmer water. So we'll have

[00:56:28] more rain. Right. As I said before, sea levels actually rise. We've had higher sea levels anyway, slightly, but now you have the wind pushing the water and, you know, it could sea level could rise six, seven, eight a foot in some cases on the West coast here. Right. What does that do to a harbor? What does that do to a whole lot of other things? Not to mention just, uh, you know, the storms and

[00:56:54] everything else that I'm sure have an impact and how everything comes and goes out of a, out of a large harbor. Well, the, um, all I needed to rise is 500 feet and I'm oceanfront. There you go. Well, I live on a hill. So you never know. Hey, we could have the earthquake that cuts us off to the, you know, kind of though, you know, in closing on that, I guess what we'll know about it is, is we're recording these shows. If you look out behind me, you're looking, if I remember correctly,

[00:57:24] in your home office that you're at today, right in front of you with windows, right. And right behind me is windows. So we'll see what happens in coming shows. Cause we're just a few months away from the likelihood of this happening. So it'll be interesting to watch, but if you stop and think about it, if you want to apply this back to supply chain, before we move on one final comment is that the

[00:57:48] two ports in long beach in LA, right. They're just combined. They're just separated by a man-made spit of, of land combined. They're the third busiest port in the world. San Diego is where a huge amount of produce comes in from Latin America for the West coast. And, uh, and I'd say the Southwest and then the amount of cars that comes through the port of San Diego is astounding. So we could have

[00:58:18] major port impact from some of this as well. So something to be paid attention to come back each Friday. We'll keep you posted on the chaos, right? We'll make sense of the chaos. All right. So before we kind of pop into our AI section, just real quick, Tom, just, uh, in our, um, manufacturing distribution and MNA section of the newsletter, we discuss every week, our friends, great, uh, great

[00:58:42] customers, but good friends as well at APR supply in, uh, Pennsylvania just completed another acquisition. They announced, uh, the acquisition of mutual wholesalers and which is a PVF company, which is really great. Um, they're in West Virginia and they had been announced that they were doing it, but they finalized it all right now. And that expands one, a footprint for our friends at

[00:59:06] APR, but actually a little bit more shift into the, uh, PVF market, which they don't do as much in the other places that they cover. So Scott Weaver and your team, um, congratulations on that. So always love to plug our partners and customers where possible, right? Yep. Congratulations. Great. Uh, Tom, let's, yeah, let's slide down into our AI section and spend the time we have left today,

[00:59:30] kind of in that arena. So Mr. Gates, um, you know, been a little bit, uh, had a little bit of a dark cloud over his head the last few years. Um, and, uh, but he's come out and talked about, there is no plan for the upheaval that AI will cause. He didn't say could cause, he said will cause, which I thought was interesting. Should we impact this a little bit and talk about

[00:59:55] this a little bit? Yeah. And he wrote a full essay or a role, a whole paper on this. This wasn't just a tweet or something like that. This was a whole essay and paper on this. And, you know, basically what he's saying is the upheaval that will occur to knowledge workers and, you know, people, white collar workers, but as well as blue collar workers with physical AI and robotics and so forth

[01:00:22] will be so turbulent and so, um, you know, basically massive, right. And that nobody is preparing for it, right. The government's not preparing for it. The businesses are not preparing for it. The general population is not preparing for it. And basically he's saying that we got to get our act together and prepare for this massive upheaval that's there. Is that basically what you

[01:00:49] read out of it? Yeah. Yeah. I think, I mean, I think so. He's, I think he's, uh, in, uh, Dario from, uh, Anthropics camp, right. About the potential, the doom and gloom from it. I, I just think it's kind of interesting as we, as we look at this is, you know, I, I don't know the best way to, um,

[01:01:11] um, he's talking about it from a human humanity standpoint. Um, from that looking at it, um, basically talking about, he talked about we're source of injustice, displacing workers across white and blue collar industries. I just think if we were to really take a good look at this, Tom, what we're really seeing with this is, and I think what's starting to prove true,

[01:01:38] right. The statistics don't support the job loss history would suggest that it's going to create more jobs, but different jobs. Dirk, uh, our friend Dirk beverage talked about this a little bit last, but this a little bit last week on the show, um, about the displacement on our people. Do they have a good plan in place for this as well? And so I think we're starting to see this

[01:02:05] shake out a little bit and maybe because we're so early in the game, maybe what he's talking about, we do see a little bit later, but I, my gut kind of feels right now, like there's some really good opportunities specifically if we think about, about, um, wholesale distribution and both in manufacturing, right? Yes. Are we going to see dramatically more both, um, stationary robots in,

[01:02:32] in business and manufacturing, and then both in manufacturing and distribution, dramatically more humanoid robots. We have an article later in there. We can mention briefly about some of the advancements about, you know, um, there was a, a big robotics event in China last week where, you know, you were seeing a hundred yard dash type things and, and races, but they were also now showing, um, showing people are showing people, showing humanoid robots,

[01:03:00] being able to plug and unplug things and the dexterity is getting better. So yeah, are we going to see a lot of that? Yes, but it's still going to take people to oversee and manage all of that as well. Yeah. I'm so it's, it's a lot to talk about and I'll try and keep it succinct at least for my,

[01:03:24] we, the fact is that despite all of the doomers, right. And saying that we were going to lose, you know, huge amounts of jobs even by now, right. By 26, 27, 28 is in fact, that has not occurred, right. Job loss, significant job losses not occurred due to AI. There are actually more engineers, software engineers being hired now than ever. And if you were to look at probably

[01:03:50] the biggest impact that AI has had from a business perspective is on code, right? So everyone, whoa, the engineer is going to go away. In fact, I was talking to my doctor yesterday or the day before whose son just graduated from Georgia tech with a computer science degree. And he's like, I don't know if he's going to be able to get a job. And you know, AI is going to take all the software engineers. It's like, let me see his resume. Just make sure that on his resume, he

[01:04:18] talks about how he uses AI and he will get a job, right. He'll get a job quickly. So it's, it's where we are right now. It hasn't been a fit or hasn't been the case right now. I was talking with another friend kind of just, we were reminiscing about, you have friends besides me, you have friends besides me and Matt, your neighbor. One or two. Yeah. Yeah. Yeah. You don't need any more. I know. Um, we were

[01:04:46] reminiscing about sort of, you know, technological history, right? And I don't know if you remember back in the day, the Commodore 64 and some of these early computers that what I learned to code on. Yeah. Radio shack, the TRS 80 and, um, even getting into the early, early stages of, of PCs, right? I think that's where we are in the AI journey. We're, we're at that stage in the evolution of AI that we

[01:05:15] were back in the sort of personal computer, personal, you know, um, productivity side of things. And I don't think most people can really look ahead even 10 years and be thinking about what are some of the potential capabilities that AI could bring to the table. Right. Okay. So,

[01:05:39] and even I, and I'll say that even for myself, right? It's like, you have to really stretch to be thinking about, cause I hear people all the time say, well, you know, AI, okay, we've got it. It's done. It's not going to improve much. It's going to pretty much stay the same. You know, we have cloud and open AI, you know, we're going to have our chats and all that stuff. And it's just, like I said, well, if you, if you believe that we're at the Commodore 64 level or, or early, early, early,

[01:06:05] early stages of those. Yeah, I agree. I had, Tom says, I love those old computers. I have a lot of good stories about those old computers, which I'll save for another day. But, um, but yeah, if you remember, they had like the, the, uh, three and a quarter or five and a quarter floppy drive, I think it held like 500 K or something on it, you know, those types. Anyway, um, if you believe that we are

[01:06:30] in that early innings of this and that it's really hard to look ahead and see what it's going to look like even in the fifth, sixth, seventh inning, not to mention that the ninth inning of this, then it's, it's hard to say, right? But as far as really, really be the turmoil, I believe that's the word or turbulence that the Gates is saying that's, that's coming. And I would love for somebody

[01:06:54] to spell it out, not just, you know, throw the doom and gloom, but actually spell it out with the logic in the timeframe and what they believe will occur in that timeframe that will create that level of disruption, but we're not seeing that right now in our current stage of things. Well, that was relatively succinct. The succinct is not what a diatribe is. Uh, but, but, but I think very well

[01:07:22] said there was a comment made here that says, can we really apply historical models to something like AI? I would, I would say it's a valid question. I would say, I think you have to, because we, when you look at it from that lens, if you just go back, what, um, 30 years, roughly, which was the last time we had an event like this, right? Could you say that about the internet?

[01:07:52] Right. We said, we said exactly, people said the exact same doom and gloom about the internet, right? And then prior to that, it was computers. And prior to that, I don't remember what the one was before the, uh, the, the assembly line. Right. But we kind of take it all back as traditionally or historically, as you would look at this argument that says, well, when, when Henry Ford invented the assembly line, people said, oh my gosh, you know, everybody's going to lose their job. And what

[01:08:17] happened had this huge shift of upward job creation because more and more people were using assembly lines to do more and produce more. And the same thing has happened each time. And we haven't seen that fall off in jobs. I think it's so Tom, it's, it's really relevant to, to, um, look at the state of technology right now in industrial distribution. And I will acknowledge that I'm, I'm jaded and I'm

[01:08:47] biased in my discussion, but I go, I travel the country, other countries as well. And I'm at the events and I'm on the phone every day with distributors and manufacturers. And what I'm seeing out there right now is nobody's losing their job. Right. Um, no, I have yet to meet someone

[01:09:12] who is an owner of a distribution or manufacturing company that's saying, man, our, myself or our board, we're looking at, you know, headcount reduction and how can we, how can we use AI to reduce headcount? The discussions I'm having with people is how can we use AI? We mentioned one of them earlier, the owner of APR supply. And I have this discussion every time we see each other or we talk is how can

[01:09:38] I use AI to make my people better and accelerate the growth of our business to serve our customers better and understand our business better. What, what's new, Kevin, what, what new AI tools does lead smart have to help us make our people in our company better? Not how can I replace people? Now it may be that through this accelerated growth, they don't need as many people for some lower level

[01:10:01] tasks because they're able to automate that. That's, but that doesn't mean they will have that many fewer people. They'll use people and make their people even better in most instances by increasing the skills. Something happened earlier this week that was just astounding that I think really speaks to this. The, the, our platform partner for the tools that we've built through our Meridian 360

[01:10:27] enterprise growth platform and, and our channel cloud CRM solution that we have at Leedsmark, our platform partner and development partner is Salesforce. The biggest company in the world at CRM, we're there. One of basically one of 400 companies globally, four or 500 companies globally. They allow to build software on their platform. We happen to be their partner for distribution and manufacturing.

[01:10:52] They're the biggest and the best in the world at what they do globally, um, across the broad spectrum of users. What did they announce earlier this week, actually on Wednesday, uh, at their earnings call, their deep integration and deep partnership with Anthropic, which is Claude, which is the largest,

[01:11:14] most widely used now AI tool in the world, arguably, uh, uh, the most advanced, if not right there with, with open AI. Um, and now they have a tool called Claudeforce. What is Claudeforce going to do? It's going to allow somebody to, by asking a simple question, be able to get more data that they've ever been able to access. Your team has already been building some of those tools into

[01:11:41] our solutions. We're going to be bringing Claudeforce into our system, uh, in the not too distant future. But my point is that, uh, order entry person that had a distributor that maybe their company bought an order entry AI tool and they're buying other point AI products, they're going to need less point AI products because of tools like, uh, Claudeforce right in this setting. Some of the things that you

[01:12:08] and your team are building for us, but now all of a sudden that person that maybe didn't graduate from high school, but got a job working in the warehouse and then now is working in customer service or whatever it might be. These types of tools. And I'll, I'll really say, you know, if you're a lead smart channel cloud user and you have the tools you've already built with our genius feed and those types of things, but now we pull something like Claudeforce in

[01:12:36] right in the same software that they use every day to track issues of customers or whatever it is, they can ask any question they want to get this depth of understanding. These types of tools now, Tom, and I know I'm soapboxing a little bit here and I'll stop, but now we're elevating people. Right. We're making those people better. Will we need as many of them in the future? Probably not,

[01:13:00] but those people can be getting re-skilled to use tools like I just described to when they find the next job or maybe it's, they find the next job with the same company who just is just opened a new branch and needs somebody there. Yeah. I just jumped off my soapbox. Okay. I mean, what you're basically saying, I'll cliff note it here for you, right? What you're,

[01:13:25] what you're basically saying is, is, Hey, there's, you know, we have systems of record like lead smart and CRM and so forth and ERP. The ability to, the ability to leverage those system of record in a much more meaningful, productive, and intelligent way, right? Compared to, hey, running a couple of reports, which is basically the only way you can leverage a system of record

[01:13:51] before is run some report or maybe a BI tool or some dashboards or things like that. But you really didn't get the insights and the strategy and so forth. So the ability to leverage systems of record continues to go up. Right. And yes, if there's a way to, to enable them, enable our people, and that's what we're doing a lot with to leverage the system of record better, to do a better job and

[01:14:17] to be able to grow and increase growth and so forth. I mean, if you could, you could argue that says, Hey, we've got a five person inside sales team. Why don't we become a 10 person inside sales team? Because there's so much more we can do with that 10 people, right? You know, again, there's, there's a lot of arguments that go into saying that, Hey, if you get more capability, then maybe we need to add more people in to take advantage of those capabilities. So it's,

[01:14:46] right. As I have something, how do I get more out of it? But I do think I would like to see more of, um, I would like to see more of the, from the doomers, right. From the Bill Gates and from the Dario's or whatever. Dario's sure. Yeah. I would love to understand in their mind, the timelines, the events, the capabilities, the things that they believe that will really

[01:15:14] create that turmoil, right. Versus maybe these blanket statements that are, I do believe I'm not saying they're impossible. I just think that they have to be framed with some context, which is time, place, form and event, right. Not, not this just generic statements that are being made. Yes. Yeah. No, I was just going to say tie it to something tangible, right. Right.

[01:15:40] In that setting. Right. Why do you believe this? Why do you believe this? When do you think this will occur? Where are we at relative to that? Right. Again, if you just look at the data in present time, it's not showing us. Now, I don't, I don't have anything to base because I haven't researched it enough. If Bill Gates, there's some, something behind his thinking and reasoning that's, that's self-serving when you see, I can't remember his last name, Dario's most people reference in the

[01:16:09] founder, founder of Anthropic with his sister. Um, and, uh, you know, you, you can look back at history and tie all of his major, major, um, um, announcements about the doom and gloom are all somehow tied to him getting press as they're raising more money. And he's also trying to, he's also trying to dictate the governance and the church. Exactly. Right. That was where I was

[01:16:39] headed next. Right. Right. Well, then let's, we won't go too deep into the technology side of that, but there's to your, to your point, I was going to say the same thing, right? We have closed LLMs, which is open AI, chat GPT, cloud, those types of tools. And then there are all these open source tools of being built metas llama, the Chinese models that are the Chinese models are very, very

[01:17:07] low cost in comparison and they're open source. And a lot of these announcements and the doom and gloom are not just tied to the fundraising with the folks at cloud. I was just promoting them in their partnership with Salesforce and the benefit, but we use cloud throughout our entire organization, everybody, our company uses cloud daily, um, from that standpoint, but that doom and gloom that he's doing is really trying to get the U S government to put guardrails on. No, no, no,

[01:17:34] you need closed systems, not open source systems. If there's guardrails that say no open source systems, then it starts to create a duopoly at least likely maybe a triopoly at that standpoint, but it protects them from the outside models. So probably way, way more than this audience cares about regarding open and closed source models. I will have you notice though, it was the non-technical guy that was able to explain that. So, so eloquently too.

[01:18:05] If I may say so myself. That's if you may say so yourself. Yes. Yeah. Good. So a handful of other good articles, there's a couple of security articles in there. There's a, in our section on AI and technology. Um, if we scroll down Tom to, um, by the way, the inside there, there's an article about, uh, things about, um, I'm sorry, real quickly about manufacturers need to know about physical AI. You know, we talk nonstop, right? About,

[01:18:34] you know, the models that we're using in AI, but you know, there's that whole secondary world. Alex Chisofsky commented about this, that the physical AI world may drive more economic benefits than the traditional AI models, right? And the, the, the software related tools that we're using and the physical side of it is what are our, what's controlling our rope, our robots, right? I go back to that simple example that I've used over and over again, right? Is the bro, the, the, uh, humanoid

[01:19:04] robot that's at a distribution center that when it's done moving and, you know, loading, uh, all of the boxes that need to go out tomorrow and having them stacked ready for the drivers to go out. And it's done mopping the floor, uh, with its sensors that can see where the dust and the grime and the slips and the fall trip hazards are. It goes outside and it counts, you know, stacks of pipe or stacks of lumber and updates the ERP inventory system and so forth. So as we get to that place, you know,

[01:19:33] if you were to talk to Elon Musk, he, his take on things is that every human will have multiple humanoid robots assisting them in life. Right? So I, I talk all the time, Tom, about wanting a humanoid robot at my house, right? I think I am going to eat my words, end up having to eat my words on the 18 to 24 month timeframe. Cause we're probably six or eight months into that statement. But, um,

[01:20:01] I don't envision like if, if everybody has two of them, that means in my household, there would be four robots. That's a crowded house. It's a crowded house. Yep. So maybe there's one in the seat next to me that comes to work with me and takes care of things here. Yeah. One that drives my Tesla. I guess I wouldn't need a Tesla. I could just use my current car and have the robot drive my current

[01:20:25] car. Maybe that's the answer. Hmm. I got to think more about that. All right, let's, let's, let's move on here. You're buying a Tesla. Yeah. We're buying a Tesla. You know what? I just saw a comment in there too, talking about the doom and gloom of the world. Great, great example. Tom Harvick. Bravo, Tom. What about Y2K? Right. Yeah. Yeah. That was a, that was a nothing burger too, right?

[01:20:52] That was a big non event. Yeah. Well, wait, but before we pass the Y2K thing, I didn't make any money off Y2K. I think you made a lot. The company I worked with made a lot. Yes. Yes. Yes. I think it was your company though, right? No, that was, I was still working for another company right around there. Oh, you were? I thought you had already, I thought you had already started. I guess we, I guess we had already started some,

[01:21:18] but yes, we were doing some consulting with another company that was a software company that was very, anyway, Y2K, I can tell some good stories about that. So, so, so back, back to my statement is you made a good chunk of money. Yes. I was, I was, I was busy worrying about like Tesla money, right? You could buy a Tesla from that money, right? You could buy a Tesla. Yes. Maybe.

[01:21:43] Yeah. Yes. So anyways, I'm just going to keep going back till we have a picture of you and your Tesla to share with our guests. Hey, my friend, I think we've got some additional articles there. There's the robotics article in our technologies, cybersecurity and robotics segment, sales and marketing segment of our newsletter today had a few good articles as well. Again, if you don't get the newsletter, let us know. It's a good article too. It was in industrial

[01:22:10] distribution. I can tell you they've, they've been stepping up their game recently with some of the articles that they've been posting. I hire much higher, I'll say much higher quality, but just more and better. It's, it's a sales article. It's in our sales and marketing e-commerce section about the sale you lost before your rep knew it existed. And some of that, some things that we should be writing some articles about based upon some of the things that our technology can uncover with business that you didn't know you were losing or didn't know you had available to you. So

[01:22:39] anyways, we have our people in leadership segment. We have our industry scuttlebutt section each week and our people on the move section as well. So if you don't get that newsletter, we would love to get it out to you. The more the merrier. We're trying to get better at it as we go each week. So Tom, anything as we wind down today, you want to add? No, there was a lot in that newsletter. We barely scratched the surface. So Well, at least we didn't spend an hour in the economy. I think we did spend an hour in the economy.

[01:23:08] No, not, not, not quite. We, I got us out of there beforehand to go talk about about 53 minutes. We got only spent 53 minutes. No, because we went, because what you missed is we went into the supply chain. So remember about a good weekend, Bob. Remember, I'm talking about my Tesla and your car and all that stuff. No, no, no, no, no. We didn't talk about my car. I just said I bought one. We were talking a lot about the Tesla because I was trying to bait you into saying that you were, you would in fact,

[01:23:38] you would in fact follow through on the commitment that you made to Mrs. Brown and I. So, right. I told you probably. That is not an answer. Probably is. I would never, I would never expect that, except that from my kids. So, okay. Anyways, what's happening this weekend for you? Just getting ready to be out of town for a little bit. So I've got a few, quite a bit of things to get caught up on. Off to Lake Tahoe next week. I'm excited. Look forward to seeing the pictures.

[01:24:06] I will hold down the fort while you're gone. Happy to see. And then you're going to be on the East East coast for a bit too soon, right? Middle of the month. Yeah. Okay. Very good. Looking forward to that as well. I don't know who LinkedIn user, but they said 48 minutes, I guess, was where they were, right? Yeah, 48 minutes, yeah. Okay. All right. I'd like to know who that is. We don't see it on our notes here. We just see LinkedIn users.

[01:24:32] I think what we need to do, I think we need to, I think we need to rotate around, right? Let's, some weeks, let's start in the AI section or the sales and marketing section and work our way, work our way back. We need to be an equal opportunity, you know, show here. And we're not giving equal opportunity to the other sections.

[01:24:49] You know, it's interesting thought, you know, it came, went through my mind though, is we went for probably up until about a year ago, maybe a year and a half ago. The first few years of the show, we spent almost exclusively on AI, right?

[01:25:09] 60, 70%, maybe 80% of the show was AI. Now AI is kind of simmering out there, but all these economic things are happening out there. And look, we're going to be contacted before long by Harvard wanting to give us honorary doctorates in economics or Stanford, one of the two. I mean, it's got to be happening soon. Yeah. I'm just waiting for that phone call. Yeah. That's what I'll be doing this weekend, waiting for that.

[01:25:35] I have been fighting a bug all week, but I have been here plowing through it. I am going to get out of here today by about four and go get some rest because we have a fun dinner party tomorrow night with some good friends. I'm going to do a reverse here tri-tip and the smoker and the grill. And we're going to enjoy a bonfire in the backyard tomorrow night after maybe even a little beach time first.

[01:26:03] So Sunday, I will tell you, I will be in the water. What I missed a saying about when you were talking about El Nino is the sharks, the water's warmer up here. And we've got hammerheads in Laguna Beach last week, which we never see north of the border. You don't see much of north of the border. And they have a record number of stingrays. Yes. Record number of stingrays. That's already happening now.

[01:26:29] So literally now that the hammerhead they saw right off the beach that we're going to go to on Sunday was almost a mile offshore. But that just happened to be where he was feeding at the moment. And if there's one, there's probably more. So if I'm not, you know, so we're off next week. But if the week after, if I'm not here, you know what, I took off on a wave and bumped into some unexpected friend. So, yeah, I don't think the poly market's too high on that one. So I don't think you have too much to worry about.

[01:26:59] I'm appreciative of that. But I was in the water in Laguna on last Sunday and planned to be back in the water doing some body surfing on Sunday. So, all right, everybody. No one cares about me getting in the water on Sunday is what Tom's getting ready to tell me. And so thanks for coming. Here we are. 203 times we've done this. Couldn't do it without you. We just ask the one favor of everybody. If you like what you're hearing, get on Apple in particular is the best benefit to us.

[01:27:26] Apple and YouTube, even if you listen live on LinkedIn every week, pop over to YouTube, hit the subscribe button on the show. Apple, even more beneficial to us because it gets those algorithms moving. YouTube and Apple are the two big algorithms that help us to get this out. More people in more countries, which would be exciting. Right now we're top two globally in wholesale distribution. We should very soon be number one. And we want to cross that milestone.

[01:27:55] And you can help us if you like what we talk about each week. So, anyways, we'll wish everybody a wonderful weekend. We'll see you two weeks from today. Again, same bat channel as they used to say. Same bat time. Thanks for being with us. We'll wish everybody a great weekend. Be kind, be safe, and do good things. 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.

[01:28:24] So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often and even guests you'd like to see join us. We're looking forward to bringing you next week's session and hope that until then, you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation.

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