The Impact of AI on Business Growth

0:00Yeah, so let's break these down. Let's go one by one. Like I would love for you to kind of break down how, what are the different areas and kind of explaining like let's go sort of department by department. and say like, how are we still using AI? Because I do think it's important, right? And I know that's where you were going. I just want to make sure that I can draw some baskets around it for people who don't know what these tools are at all and they don't know what they mean. But I think it's safe to say that from a hype cycle perspective, you know, if you're familiar with the Gartner hype cycle, you can Google it if you're not.

0:33But I mean, basically you get the innovation trigger and then you get the peak of inflated expectations. then it comes down because nothing could ever live up to, you know, all these expectations and you're, you're kind of in the trough of disillusionment. Um, then you get the slope of enlightenment and then you kind of get the plateau of productivity. It's sort of how it goes. So it's like up, down, back up a little bit, not as much to the kind of crackhead enthusiasm that launched it.

1:02Hey everybody, another episode of business lunch. We want to welcome you to today with your host Ryan Dice and me, Roland Frazier. Ryan, how are you doing today? I am doing fine as long as I don't look at my investment portfolio. Yeah? You don't do much in stocks really at all, right? Like you pretty much stay out of the public markets. Yeah. So I don't have tons of exposure and you and I share a similar investing, you know, I think mindset in that we like to invest in our own businesses. We like to invest in private companies where we can make an impact. We like to be really heavy in cash so that we can take advantage of opportunities when they arise.

1:41But that being said, I still do have, you know, a not insignificant exposure to the public markets. And man, it did what it always did, which it kind of bounced back. But like there were, you know, a day or so there where the public markets were just getting obliterated. And, you know, I'll tell you, so don't, as long as you don't sell, you don't realize the losses. And so I'm in no hurry. So I'm like, I don't really care. There's a separate lesson there. They shot up quite a bit also right before that. Yeah, exactly. They're like now down to the all time lows as of like last June or something.

2:17It's like it dropped to where it was like 60 days ago, which was still insanely high. So yes, I mean, so much of this is just crazy kind of clickbait. So I don't necessarily want to talk about the public markets because one, we don't really care. Two, it's not our area of expertise. and three, depending on when somebody listens to this, it's going to be irrelevant. What I thought it informed and what I want to talk to you about, though, is a lot of the stocks that were getting hit the hardest were the quote unquote AI stocks. Yeah. Right. And so like NVIDIA had fallen off a lot. Amazon missed earnings a bit, but where investors really got spooked was when they announced that they were going to continue making massive capital investments in AI.

3:03And investors were like, no, we don't want to do that. We don't see that as a good thing. It used to be if you said you were doubling down on AI, you got rewarded. Now you're getting punished. At the same time, it seems like a lot of the errors come out of the AI hype balloon. And so I thought it would just be fun to have a conversation about where do we feel like AI is right now? Is it living up to the hype? Is it living up to the expectations? I mean, it depends on whose hype and whose expectations. I think that it continues to be amazing.

3:36The investors are always way, way ahead of the curve with their expectations of what is going to happen. And it's always the rosiest of rose pictures when something new comes in. And that's, I think, supported and promulgated by the investment banking community and all the people that make money by having stocks go up. So, you know, that, that, that makes sense to me that there was a lot of hype around it. Also, it's a bit of a gold rush, you know, art and you know, they're, they're wild catting if they're, if they drill the well in the right place, then, you know, it's, it's a, you know, multiple, you know, grand slam home run.

4:10So for, for me, like what I see as far as when, when chat GPT first came out, that was like crazy amazing. And all of the productivity increasing things that we were able to do with that were and continue to be just miles ahead of where we were before. We are actively using all the things that we discovered over the last, since that happened to today regularly. There was kind of like chat GPT came, then there was several months as the lull, then there's Google saying, holy crap, we're way behind, We've got to have one too. And, um, you know, but we were working on it the whole time. And, um, and of course, Amazon has been in, you know, with Alexa and, um, I say that and then it immediately starts talking.

5:05Is that what that is? That's amazing. Hey, Ryan Dice here, co-host of Business Lunch. And before we get to the show, I have an exciting invitation for you. My business partner and business lunch co-host Roland Frazier and I are hosting a live in-person event and if you're a bootstrap business owner who wants to build a 10 million and even 100 million dollar business in the next three years you need to be there this event is called get scalable live and over the last four years it has transformed from a small gathering of entrepreneurs into the largest bootstrapped entrepreneurship conference in North America now I know what you might be thinking you're probably thinking Ryan really another business event is that really what we need but trust me, this isn't just any other event.

5:48You see, unlike most conferences at Get Scaled Alive, you'll have dedicated time to take action and actually work on your business instead of just in your business. Over three days, you'll work shoulder to shoulder with like-minded entrepreneurs to implement what you're learning and get valuable feedback that you're just not going to be able to get during the normal day today. You're going to be immersed in fresh ideas, strategic insights, and you're going to get the support and guidance that you need to actually reach your business goals. So this is your opportunity. This is your chance to step out of the day-to-day to eliminate the noise and finally work again on your business, not just in your business.

6:27And if you implement, I'm confident about this, if you implement just one or two key insights from any of our sessions into your business, you're bound to see a return on investment much higher than what we could ever charge for admission. And by the way, speaking of admission, right now, Business Lunch listeners can save an additional 10 % off of our already low early bird ticket pricing. So just head over to GetScaleableLive.com and use promo code LUNCH at checkout. Again, that's GetScaleableLive.com, promo code LUNCH. It is truly amazing what can happen when you step out of the day-to-day and spend just a little bit of time surrounded by other powerful business owners.

7:10And since this opportunity only comes around once a year, you don't want to miss it. Again, the link is getscalabellive.com and don't forget to use promo code LUNCH at checkout to save up to 67 % off the full ticket price. That's all I got. I'll see you in Austin. All right, back to your regularly scheduled programming. With that unnamed thing that I can't say. Yeah, they've been working on it over there at AWS for a long time. So like there are no strangers to tech investments, nor are they strangers to investors saying you're crazy. And then they do the opposite and end up making investors a ton of money.

7:47So, but as far as like what I've seen was that we had really about a year of just the GPT Gemini kind of stuff. They're, you know, they and Claude and and Grok now I think got$600 and some million are all, and Anthropic are all kind of, you know, versions of the same thing. So then you see these, you know, after about a year you saw 11 labs and Haygen and a couple of others really, really taking shape. And so I would say like last November, I think is when we had our get scalable live and you and I sat in the green room for the first time ever, we recorded you and then had a video of you, you know, talking just from that few minutes.

8:37And we use that stuff all the time now. So like in ads and welcome videos that are personalized at scale and, you know, things like that to actually have versions of us that are welcoming people with their own names and things like that. We have used Delphi now to become a live question answerer so that people... Yeah, so let's break these down. Let's go one by one. I would love for you to kind of break down what are the different areas and kind of explaining, let's go sort of department by department and say, how are we still using AI? Because I do think it's important, right? And I know that's where you were going.

9:18I just want to make sure that I can draw some baskets around it for people who don't know what these tools are at all. And they don't know what they, what they, what they mean. But the, I think it's safe to say that from a hype cycle perspective, you know, if you're familiar with the Gartner hype cycle, you can Google it if you're not, but I mean, basically you get the innovation trigger and then you get the peak of inflated expectations. Then it comes down because nothing could ever live up to, you know, all these expectations and you're, you're kind of in the trough of disillusionment. Then you get the slope of enlightenment and then you kind of get the plateau of productivity.

9:50It's sort of how it goes. So it's like up, down, back up a little bit, not as much to the kind of crackhead enthusiasm that launched it. I want to go kind of point by point in terms of what we're doing, but where do you think we are in that cycle? Because you're somebody who's been, and I want to set the stage for those who don't know, you've been at the forefront of this for a while, not just talking about it, but actually doing it. Are we in the trough of disillusionment? Are we beginning to kind of climb back out of the slope to the slope of enlightenment? Where do you think we are? I don't think so.

10:17I think we might be teetering between the hype and the trough, but I don't think we're in a trough of disillusionment. I mean, investors might be, but I don't think users of AI are. There's the distinction. Yeah. Yeah. I think that that is, and that's why I wanted to talk about this with you because yeah, investors and their perspective is so different than what actual, within what the people who are actually using the tools perspective is. But what gets the news and what gets hyped up and what gets the clickbaity headlines is the investor perspective. So let's talk user stuff. You're actually doing it.

10:59We're actually doing it. Our team is doing it. Can you kind of go, I don't know if you want to go like team by team or department by department, but talk about like, what are we still doing today? Even if everybody else has decided that AI was overhyped, what are we doing today to increase productivity? Yeah. So I'll tell you kind of like the different areas from a high level strategic, you know, things that I find it to be really, really helpful for is having a conversation with it about things I'm thinking about doing to draw on it as an advisor. And so we've created prompts and GPTs that are actual expert advisors in each of the major areas of the business, from HR to finance to marketing to sales to strategy.

11:44And I find an example. So I can basically pull it up and say, I'm thinking about a new acquisition. I'm trying to figure out currently our market is one, two, three, four, and we're looking to accomplish the following and we're thinking about doing it from an acquisition. What are the types of companies that you would recommend that we look at in terms of categories or industries to acquire to help us achieve that goal? And then it will really help me to identify strategic acquisition candidates that I might not have thought of in addition to ones that I had. So functioning as a research assistant type capacity, right?

12:30Like if you were to have that well-informed, well-educated. I have a conversation with it. So I'm, you know, like I programmed the button on my iPhone, the top button to pull up chat GPT so that I can just basically hit that and just have a conversation. So I'm actually talking to it like a peer more than I am just using it to do to be a kind of a glorified Google, if that makes sense. So I'm getting more strategy out of it than than that. And I'll also role play scenarios with it as well. In HR, I've used it multiple times to hire key people. In terms of interview questions, in terms of, you know, best ways to do diligence, in terms of the description for their job and that sort of thing.

13:15That's been really, really helpful because when we're doing the live interviews for people, it will suggest things that are questions that we wouldn't have thought of that are really, really good questions. I might be a little uncertain about something that they say or the way they answer. And so I'll kind of run that through the AI to say, you know, this is how they answered that question. What does this mean to you in terms of the candidates qualifications for this particular position? And that's been really, really, really cool. I mean, can you think of it? Can you recall a specific example of when you did that?

13:54That sounds interesting. I've never you hadn't told me about that before. Yeah, I can't. I can't. But I remember I was because I was I was in Bordeaux and I had an interview for a CFO candidate. We had two or three back to back and it's like the middle of the night. And and so I'm, you know, not in the most work state of mind, you know, in Bordeaux, you know, wine, dinner, you know, fun, all that kind of stuff. but I had to be there and I wanted to contribute meaningfully and it was just a couple of things that they said that I wanted clarification on. It's one of those things like somebody will say something and they're supposed to be the expert and then you're just kind of like, I'm not sure if, and so I could put that in and then get feedback and questions to ask to clarify and that was actually cool and very, very helpful.

14:47So I've used it more than I would have thought for that kind of stuff. And then - Were you doing that in real time? Yeah. That's awesome. So in real time, you're asking a question because this happens a lot. And I know we get this question from a lot of our clients and portfolio companies. How do I hire for a role that I don't know anything about? Like I haven't done this before. I'm not an expert in it. If you're not, and the CFO role is a perfect example of that. A lot of entrepreneurs don't have a financial background. You're hiring a CFO. oh, many of these people are professionals at making entrepreneurs feel stupid.

15:20It's kind of how they get their kicks. And so you're interviewing them and you're almost intimidated to ask follow up questions or to ask clarifying questions. And so I love the idea. It'd be harder if it's an in-person interview, although not impossible, but I love it. It's really not. I have my iPad in front of me just like I do right now. And I'm constantly putting in questions when I'm in that, Even yesterday when you and I were doing the podcast and we were talking about is hype style marketing the traditional direct response kind of headlines and things with clickbait damaging to your brand.

16:00Well, when you and I were talking, we were talking about prestige brands. And so I just put into Gemini, I said, give me 10 examples of direct response ads used by Chanel with links and picks. and boop, boop, boop, boop. So then while we're talking without missing a beat, I can say, well, I mean, Chanel had da, da, da, da, da, da, da, da, da, da. And I do that all the time. And it is amazing as like this little satellite brain that you have. And then you get to come across as if you know all these things. I'm not trying to do that, but I mean, like it just enhances your ability to be on point for everything.

16:41You know what it reminds me of? you'll see movies sometimes where there's like a politician and they're going into a room and meeting these people and they've got like the assistant in their ear being like the person who's walking up is the you know the ceo of this and their wife you know loves a pickleball it's like oh damn how's stuff going at this and you know sandy how's the pickleball game you know it's like you've got that but i love what you said before it's not just the quote-unquote lowly assistant or the research assistant you talk to it and you treat it like like appear in these um Yeah, I have discussions with it, you know, both via text and, you know, talking to it.

17:17But then for finance, I'll use it to identify red flags. We'll upload the PDFs of financial statements and I'll ask it to do all of the ratio analysis for me and then give me anything that seems like it's off in terms of like, is it above or below the industry average for this type of industry? And that saves like a crazy amount of time. Just the ability to go through multiple deals really, really fast. And for those who don't know, I think this is important. I'm sorry. I know I'm interrupting. I want to make sure we get these details because you're so knowledgeable about this and it makes like so much sense to you.

17:55But people, a lot of people don't realize because they use Chad GPT when it first kicked off, whatever, 18 months ago, two years ago. However, I'm stuck at calendar. they don't realize that now you can upload just an image to it. You can upload an Excel file. You don't have to feed it the information sort of in chat form. You can give it the actual document just like you would forward it on to an analyst. And so there's no real extra work on your part. And that's really only, what, a few months old that it's been able to do that? It feels like maybe six, but yeah, I mean, there were like apps that were built to be able to do it.

18:33And then ChatGPT launched the feature and said, you can do this now. And some of them you can, and some of them you can't. They're all at different phases of advancedness, which is why I think using them all, or at least picking two or three to use is smart because if you're all in on one, like ChatGPT to me is kind of terrible at real-time internet access, whereas Google's got access to all of the YouTube videos and search results and things like that. you know, the Claude seems to be way better than either ChatGPT or Gemini at creating long documents or analyzing long documents. So like when we write books automatically, which we do, you know, we've got prompts that we just basically, it asks us a series of questions, and then it turns out a book, and we've done those in multiple languages.

19:20And then we've created audio books out of those books using 11 labs, which does an AI voice. You, you record your voice into it and then it will clone that and, and it's gotten better and better. And the alpha of, I think it's turbo or real voice or something like they keep calling it different things, but, but the latest one that's not quite released is insane. Like it's, it's dead on crazy. As you know, we do podcasts with it. So we've created entire podcasts of you and me or other people who are, we've done about 30 of these now for 30 different, complete different podcast shows that are either interview based where AI versions of you and me are having conversations with each other.

20:08And now it can be in audio or video. So this podcast that you're watching right now could very easily be done with AI. And so as you were saying about like uploading documents, now with HeyGen, which is one of the tools that's our favorite, I'd say like ChatGPT, Gemini, Claude, HeyGen, Eleven Labs, Delphi, and VoiceFlow are probably our biggest productivity things at this point that we use. Say those again for the poor souls who were driving and missed it yeah so uh chat gpt which is open ai's um claude which i believe is anthropic um the uh google one which is gemini those are the three main platforms that we're using to have like these conversations with and they get different things it's worth like for medical you get a second opinion i would always run my prompt through at least two of those and particularly ChatGPT and Gemini, because you will get different results.

21:14And sometimes you can get sources and citations from one of them and not from the other. And there's no rhyme or reason. I don't even think that they know how, like why it comes up with what it comes up with. So those three are like kind of the base level of being able to research, process, have conversations, et cetera. And then we use 11 Labs for all of our audio stuff and 11 Labs APIs into several of the other programs that I mentioned so that the audio is just beautifully like your voice or whatever voice you cloned. And then we use HeyGen for almost all of our video stuff. And HeyGen is where you record yourself on camera, and then you can use a green screen and change backgrounds, or you can have the background you've got, and it will actually then put words in your mouth that are typed, which can be generated by AI using one of those three platforms, if you want.

22:13And it can use the voice of 11 Labs. So it all can connect together, And it's so much better when you do it that way than when you go native. But what Heyjen does, in addition to being able to create bulk personalized videos and allow us to test multiple ads that I would never have the time to record and things like that, even creating webinar pitches and things like that. We've done a two-minute webinar ad, 45-minute webinar, and a full course, all using HeyGen for video AI. And what's really cool that you can do with it now that we've been doing, it's allowed us to really up our creative game, is you never have enough creative.

22:59So for marketing, you can just take the URL of the landing page that you've got, load it into HeyGen, and then pick which avatars of other people you want. and it scripts the video, blocks the walking or moving or whatever, allows you to have like, if you want Asian female Gen Zer and African American millennial and elderly, Caucasian, whatever, you pick whatever you want and then it will generate the multiple videos of that avatar actually pitching whatever it is that's on your landing page. So yeah, cool story about that, about both of those. I was scrolling through my Instagram feed and I saw a video and normally I see videos of me because we run ads and I'm the face of Scalable and some of our other brands.

23:57And so I'll see my own video and I hate seeing myself on camera. So I'm like, you know, I'm sure it's hurting our ad algorithm because I'm like scrolling past me so quickly, but it makes me uncomfortable. But I stopped on this one because I'm like, I don't remember filming that. And what I realized when I looked closely is I didn't film it. It was a Hey Jen ad that the team was testing. I didn't even realize at first that it wasn't me. And so they'll go and run a number of tests with different hooks and things like that. And when they get one that they feel like works, they'll have me record a new version of it.

24:30Similarly, I saw an ad and it was good and it captured my attention. and I saw at the end of it, it was for Digital Marketer, one of our portfolio companies. And I was like, what the? And I realized, I was like, oh, that's just a HeyGen model. Like an AI person that was doing this ad because I was like, that person doesn't work. Wait a minute. And so people who think, it's why I wanted to talk about this because there were lots of people who jumped in early on AI with everybody else. A lot of these tools were good, but not great. And so people were like, nah, this isn't there. This isn't very good.

25:09And now the news would have you believe that, oh, yeah, that was all just hype and it doesn't work anymore. And so there is such an advantage right now when a lot of people have abandoned it, when a lot of people are saying, oh, yeah, that AI stuff was just hype. Like while everybody else is, you know, living in the trough of delusion men or, you know, disillusion men or, you know, headed there. If you will just give some of these tools a try and implement them, there's massive productivity advantages to be made. So since you were talking about that, that literally happened two weeks ago while we were in the, it was amazing.

25:40And it just allows you to, I mean, to test dozens of ads every week without having to hire a team of people to do that. And, you know, spend all that time on scripting and videoing and everything. And the ability to have spokespeople, you know, I don't want to be the only person speaking for my company. I want brand people, you know, like brand ambassadors. But if I can have virtual brand ambassadors, then I know that they're not going to get in trouble. They're going to not have, you know, issues of being canceled for saying something wrong. They're not going to, you know, ask for six times the money because they hold us hostage because we built them up and put a lot of money behind them.

26:17To me, it's pretty amazing. So that's really, really been helpful. And then in terms of conversions, we really like VoiceFlow. VoiceFlow allows us to effectively have customer service, on-site customer service that can route people intelligently to everything and it learns as it goes. And then as you know, you and I invested in a license for air.ai, which is a sales agent, or I guess it's a voice agent, but it's primarily used for selling. We hadn't been able to get it to do that great a job at closing a complex high ticket sale, but it is really good at setting appointments. And so like basically doing outbound or inbound to answer general questions and then set an appointment.

27:16Delphi, I don't know if Delphi will route like Air and VoiceFlow will. That's something I'd have to check. But Delphi is effectively, you are the Oracle. So it's basically, I can clone you, upload all your books and videos and stuff like that. And then it becomes an educated version of you. Um, and a video one, which is, I think we've been working with it. I don't know if it's released yet or not, but, um, but, um, that, so now it's you with all of your knowledge, top of head, which is even better than you able to answer questions, which could be something that could then become a virtual consultants that could be a monthly thing.