Garik Tate, AI Futurist, Investor, and AI Strategy Consultant talks about how AI-driven planning can be used to underpin Exit Planning. If you're a small business owner thinking about selling in the next 5 years you'll better understand what's possible to help increase value and sellability.
@Garik Tate has more than a decade of experience as a successful entrepreneur. He grew up in small business family and founded companies spanning Software Development, Outsourcing, and Publishing with up to 75 employees.
Garik is a sought-after speaker on AI’s future, and its practical application in business. His expertise and passion for the subject have earned him a reputation as a respected voice in the AI community, and he is often sought out by companies looking for advice on how to leverage the power of AI to drive growth and success.
Our discussion focuses on how to incorporate #AI into #exitplanning for small business owners. You'll understand how to;
www.valhalla.team - Product Development
www.2xyou.com - Virtual Assistant
www.blvnp.com - Publishing
Timestamped summary of this episode:
00:00:03 - Introduction to Garrick Tate
Garrick Tate is an AI futurist, investor, and AI strategy consultant with a decade of entrepreneurial experience. He has founded and led successful companies in software development, outsourcing, and publishing, specializing in AI, IQ, and EQ.
00:01:14 - The Role of Outsourcing in Exit Planning
Garrick discusses how outsourcing can be used in exit planning to increase profits and ultimately raise the value of a business. He emphasizes the importance of utilizing AI and automation to free up human resources for more complex tasks.
00:07:07 - The Value of Human Intelligence
Despite the rise of AI, Garrick highlights the unique complexities and capabilities of human intelligence. He believes that humans are still the best assets in business and that their potential should be fully utilized alongside AI technologies.
00:09:55 - The Last Mile Upgrade in Exit Planning
Garrick introduces the concept of the "last mile upgrade" in exit planning, which involves integrating the latest technologies, such as AI and automation, to remove constraints and significantly increase a business's potential value before a potential acquisition.
00:11:16 - Considering the Decision to Sell or Keep a Business
Garrick discusses the factors to consider when deciding whether to sell or keep a business. He emphasizes the importance of reducing owner dependency, increasing EBITDA, and factoring in opportunity costs before making a decision.
00:17:19 - Introduction,
Garik Tate explains the various components of the business, including the VA company and software company. He focuses on the new offering related to exit planning and how they help businesses remove constraints and reduce risk to increase acquisition potential.
00:19:19 - Detailed Process Analysis,
Garik discusses their process of creating a whiteboard diagram of every process in a company, from prospecting to sales to fulfillment. They then create a metrics dashboard to track key performance indicators and identify constraints. With this information, they provide a prescription list of areas to address within 90 days.
00:20:08 - Theory of Constraints,
Garik explains the theory of constraints, emphasizing the importance of identifying and removing the biggest constraints in a business. He mentions the 90-day window as a timeframe to focus on the lowest hanging fruit that contribute to constraint removal and capacity adjustment.
00:23:29 - Opportunities in Remote and Local Businesses,
Garik notes that the theory of constraints applies to any industry, but their specialization in remote and internet-based businesses allows them to control inputs and outputs through software and remote teams. He also highlights the potential for digitizing customer interactions in local businesses.
00:27:40 - Implementing AI and Automation,
Garik shares an example of improving their VA company's recruitment process through systematization and tripling the number of people processed. He emphasizes the importance of clear inputs and the possibility of adding AI and automation to processes once they are systematized.
00:36:13 - The Value of No Code Tools,
No code tools are accessible to anyone and can be used to solve problems without having to learn how to code. They provide an easy way to add functionality to websites or create interactions with viewers.
00:37:19 - The Importance of Having a Goal,
To effectively learn and use development skills, it's important to have a specific goal in mind. Setting clear objectives and learning the necessary skills to achieve them is more effective than aimlessly learning without a purpose.
00:38:08 - Empowering Your Team,
Business owners can use no code tools as an opportunity to empower their team and delegate tasks. This allows for leadership training and the addition of AI or automation to the company. It's a way to prepare the business for future growth and success.
00:39:26 - Quicker and Cheaper Solutions with AI,
AI enables quicker and cheaper solutions to business problems that may have seemed impossible in the past. Business owners should embrace the capabilities of AI and use it to improve their businesses.
00:42:35 - Solving Business Problems with AI,
No code tools, such as Zapier, Google Sheets, and Chatgbt Playground, can be used to solve various business problems. From automating follow-up sequences to integrating tools, these tools provide a stack that can significantly enhance business operations.
00:53:05 - The Evolution of Entrepreneurship,
In medieval times, entrepreneurs engaged in arbitrage by buying high in one place and selling low in another. Today, modern entrepreneurs play arbitrage with the future, disrupting industries and capitalizing on emerging trends. As a result, prices will decrease, but businesses will provide more value in the long run.
00:54:26 - Seizing the Moment of Disruption,
The next five to ten years present a unique opportunity for businesses to position themselves ahead of their competition. By embracing new technologies like AI, businesses can stay in parity and avoid falling behind. It's a crucial time to invest in the future and take advantage of the creative potential it offers.
00:57:35 - Being a Great Business,
Being a great business requires effort, regardless of the level of success. Embracing new technologies and adapting to change is crucial. The current wave of technological advancements presents a challenge and an opportunity for businesses to excel and provide value in different areas.
01:02:06 - Looking Forward and Backward,
Small businesses are essential in keeping powerful entities in check. Looking to the future while reflecting on the past can help businesses thrive. It's important for small businesses to have a voice and contribute to the development and improvement of our society.
01:03:06 - Connecting with Garik Tate,
If you're seeking to increase your business valuation or need virtual assistant services or product development, reach out to Garik Tate on LinkedIn.
00:00:03
Awesome. All right. Welcome into the Small Business Banter Podcast. Really pleased to welcome in Garik Tate. How you going, Garik?
00:00:13
I'm doing well. Michael. Garik is an AI futurist, an investor, an AI strategy consultant. He's got decade of entrepreneurial experience. So he's founded and led successful companies in software development, outsourcing and publishing.
00:00:34
And his expertise lies at the intersection of AI, IQ and EQ. What I particularly like about some of the information Garik published about himself was that we're going to talk a lot about outsourcing business process outsourcing with an exit planning bent. But he likes getting his clients businesses to higher levels of profits with a mind on ultimately that owner of that business getting out at a higher value. So it's a twist. But again, welcome in Garik.
00:01:14
In today's episode, we are going to talk very specifically about exit planning and how you use outsourcing to ramp that up. We're going to cover off why sometimes, and more often, I think, where exit planning leads you to reconsider whether you should actually sell because you've done such a good job of your outsourcing and your exit planning, how AI is going to change. Add detract from small business across the globe and then your experiences as a founder and an Exeter. So can you give us a little bit about the work you do and who Garik Tate is to kick us off? Yeah, absolutely.
00:01:59
And thank you for having me, Michael. I've been looking forward to this conversation for a while. So my background, I feel like just very fortunate. Right place, right time. My family is entrepreneurial.
00:02:14
We get our start in Internet marketing and was able to also graduate college early because in the northwest United States you can skip last few years of high school to take a few years of college. So, right as I graduated 18, we were just starting a new business in the family. My brother and my father jumped into that and it was all in Internet marketing. And so I was very fortunate to get a really big head start building businesses, building companies. And now we've built three companies at this point and been working with AI for about six years now of that decade.
00:02:54
Very first software project, we built it ourselves, an AI for optimizing advertising and have never really looked back. AI is probably my biggest passion in the world. Yeah, starting in AI six years ago could be paralleled with starting in manufacturing 100 years ago in terms of how quickly I know it's been around in various forms, but it just seems to have captured everybody's imagination and created all these opportunities and all these fears. So looking forward to digging down that. But you run three businesses.
00:03:35
What are those three businesses? Garik? Yeah, so we have a software company, a VA company, and a publishing company. So the publishing does books and magazines. We don't do vanity publishing.
00:03:47
So if the book doesn't make money. We don't make money. So that's our focus. We're not in the self publishing space, even though we take a lot of the learnings from it. And then VA company specializes in helping entrepreneurs take their business to the next level, kind of level up their older systems and processes and get a little more mature system process installed while getting a VA.
00:04:09
And then software. We specialize in AI and automation. Okay. And the software company is called Valhalla? Yep.
00:04:17
Valhalla. Yep. Valhalla. You're wearing one of their T shirts, I think. Yeah, I've got the logo.
00:04:26
The name came about know Norse mythology, their version of Heaven. It's the only version of Heaven where you are preparing for something in the future. It's not the end point. It's a point where you're practicing, you're becoming a better warrior. You're training with other people.
00:04:41
You drink, you party, you have a good time, but you're there with a purpose, and that purpose is to help stop the end of the world. And so thought it was a good name for a company that's really about building people up, expanding potential, and growing people to start new businesses, which is a lot of what we're focusing on right now, helping other businesses and potentially starting new ventures. Yeah. And then if you want to call it traditional outsourcing what? We didn't say that's.
00:05:08
Called two xu, I think. Yes. Two xu. Didn't say the name. Yeah.
00:05:12
And you've been based in Cebu, the Philippines, for ten years now. So you've again been on the ground in well known out sourcing hub for a long time. Yes, sir. Sibu is probably the best place, I think, in Southeast Asia to get really great English skilled people. And the people here just has such a beautiful culture.
00:05:41
There's a lot you learn from, obviously, being on the ground here and a lot of things to kind of adjust mindset for engaging with the culture here. But if you can crack it, then I think Cebu is just an amazing place to start a company. Yeah. In that mix of things. Where you saw yourself at EQ was one of the three, and I've listened to some other of your podcasts, and you do talk a lot about that EQ stuff, broadly speaking, both with your clients and also with the staff that you work with over there.
00:06:20
I think that's perhaps a missing element of outsourcing generally, where it hasn't perhaps worked or hasn't gone as efficiently as it can, because it's kind of been viewed perhaps as a little bit of just get some stuff done off and it'll come back. And you're very much about building people, which has to be that way, whether it's staff in your office or staff wherever. The way I look at that, actually, is that right now we're building these AIS, and we're building intelligence into them. They still truly cannot hold a candle to human intelligence. And I don't think they're going to be there at least this decade.
00:07:07
So let's talk about the here and now. But every human is just a galaxy of complexity inside their mind. People really are your best asset. You yourself are your best asset. And people around you are, I would say second best, maybe, but we're underutilizing them just like we were underutilizing them 100 years ago before literally, we measure cars on horsepower, how many horses could drag this?
00:07:35
And humans were the same way. We were putting our bodies and our physical prowess into certain positions that, sure, we can do that because we're the most versatile, most adaptable, best tool for most jobs, but we're not optimized for that. And it's the same thing, I think, with intelligence is right now, just like electricity and manufacturing has taken over a lot of the things that humans could do, but we weren't the best at it before, but we could do anything. We're very adaptable now. AI is being added.
00:08:07
A lot of places that are taking over the data entry work, the rote work, the repeatable, predictable work, so that we can free up ourselves to fully utilize what makes us human, fully utilize that galaxy of complexity that we really have. And I'm sure we'll dive more into that later, but people really are the best asset. Yeah. And there's layers of that. So as a business owner, and I do want to get straight into the exit planning piece, but you layer this AI.
00:08:43
As a business owner, you can outsource tasks and the staff or the team you have that are on the ground doing the stuff you've outsourced can also use AI and outsource further and focus on their best use of their time. So it's all about finding that level where you're spending whoever's time on the best possible use of that time. So we connected a month ago, and what really struck me, we had a 1 hour conversation, but you could see the pathway between a business owner now better utilizing other resources that they don't currently utilize to improve their business. With that, you took it a little further and said maybe that could become I don't want to speak out of school here, but you saw the pathway to integrating that perhaps as even as an exit planning part of exit planning, yes. We call it like the last mile upgrade.
00:09:55
Taking the newest technologies with AI, with automation, and then doing things that we couldn't do even a few years ago, adding them into your business to remove constraints in order to dramatically increase your business's potential and hopefully do in a way that fits into your exit planning goals. So it's like a last mile upgrade. It's an upgrade you can make in order to increase the valuation right before that big acquisition. Yeah. And look, it still remains the holy grail for a lot of owners to build a successful business and make money as you go, but also to leave it in a place where ideally it's got value.
00:10:37
You can sell it to do whatever you might want to do. Or as I like to contemplate more owners thinking about keeping it because within exit planning, within getting processes and systems built in, it just makes you, as the owner, less needed in the business, day to day anyway. Literally. Literally, your valuation is defined, bottom line, like the master statement. Your valuation is defined as your discount on future earnings while factoring in opportunity cost.
00:11:16
So that's about increasing EBITDA, it's about reducing risk so that it's consistent income, but it's also reducing the owner dependency, therefore decreasing the opportunity cost because you're freed up to do those other things. And if you factor in the fact that you're discounting that future earnings, well, why would you sell it? Now, there are good answers to that. There are lots of good answers to that question. But it's a hard question to ask because you are discounting future earnings, factoring in opportunity cost.
00:11:44
And if you're going to be making enough money and your opportunity cost is very low because you're freed up, you're not selling a job, you're selling an asset. Well, there's a strong argument that it's worth keeping. And so this process, I think of running it like you're going to sell it even if you don't plan to sell it, makes a lot of sense. Yeah, I think that's where we really bonded over that very opportunity to make it so that it is sellable. But you have more of a choice.
00:12:18
We could talk a lot about why you're in business. Lots of owners have different reasons and some, the business, you've got a requirement to produce a certain financial return, but it also can provide a lot of other non financial benefits, purpose and the opportunity to express and create and change the world and all those things. But from your perspective, could you just talk a little bit generally about and if you don't call it outsourcing. What I mean by that is when an owner or a business decides their growth is capped or they're inefficient and so they need some more resources and instead of hiring a full time staff member or three, or they look at outsourcing to is that what we're talking about here? In terms of broadly outsourcing?
00:13:23
In some broad strokes, our companies specialize in providing a full time resource. We think that especially for knowledge workers, especially premium, high level knowledge workers, you want them to be obsessing about your business so they get those ideas in the shower, right? If you're really on your one thing, then that's not just saturating your conscious mind, it's also saturating your unconscious mind. And so those ideas in the shower about how they can improve the business, how they can take the initiative, that's when you get the magic from that. So we really specialize ourselves in that full time space.
00:13:56
But otherwise, yeah, I think broadly, that's exactly what we do. What are some of the reasons an owner should initially think about outsourcing? Or what are the scenarios they find themselves in when they should think about tapping into something like this? So I think there's two different answers, at least in the domains that I specialize in. One is in software development, that's one answer.
00:14:31
And one is in the VA side. Are we talking more on the VA side? Yes, let's do that and we'll come back to technology. Got it. So on the VA side, I would say at least in the domain that I'm in, there's a lot of different answers to this.
00:14:48
One is just it could just be costing that you want to reduce margins. Generally speaking, we don't play in that space providing hundreds of low talent workers. We generally specialize in a different type of outsourcing, which is that a lot of business owners, especially at one point in their career, have, even if they've not been a solopreneur, they ran the company like a solopreneur, and they're doing a lot of things themselves. And they need help, not Just with a second brain to attack the problems. So maybe they just need a second brain.
00:15:31
That's why it's called two xu. Second one of them to attack the problems. But they might also need help with building out what we call boss business operating systems. So they might need help creating those things. If you read from the EMyth or you read from Traction the EOS or from Work the System by Sam Carpenter, you read all these books about creating systems and process operations, but it's either never felt like the right time or you've just been a little bit too overwhelmed or it's not quite applicable.
00:16:02
You need someone coming from the outside who can kind of put their foot down, say no, like this is how we can do it. This is how it's going to be done. So in our space, we provide the VA, but we provide them with the training and also with the oversight. We provide secondary resources that support that VA in creating those EOS and EMyth style systems into your business. Like you're diagramming your leads, funnel diagramming your chart, all those extra materials that make life a lot easier as a business owner comes pre installed.
00:16:37
So that's generally the value and the space that we play in, which is a little bit different. But there's a lot of other reasons you might want to outsource. Yeah. So when owners do contact you, where do you start to get immediately focus them and yourselves on? Is there low hanging fruit where a knowledge worker or a solopreneur or a thought leader can really get some traction pretty quickly based on how it's worked with.
00:17:19
There'S?
00:17:22
If I'm, if I'm breaking down the constellation of the space that we play in, we have our VA company, we have our software company, which previously a software company has largely specialized in building products with companies or building internal operational tools like ERPs or CRMs for internal companies as they go franchised route. So like, hey, I'm now going to create ten new locations or franchise new locations, and I need to build tools to an IP internally to facilitate that. That's generally what our software company has done. But what I think is more relevant in this conversation is a new offering that we've done a lot in the past but haven't systematized until recently, which is the process more related to exit planning, which is let me go through my business, detail it out, and then figure out how I can remove constraints or remove risk in order to to get acquired a higher amount. And so in that space, the process that we've done in the past and that we would walk businesses through is we create a whiteboard diagram of every single process in their company in the spine of fulfillment, so all the way from prospecting to sales to onboarding fulfillment.
00:18:38
And we try to detail out every single step. A lot of businesses might have that in broad strokes, but it has a lot of handoffs, it's bigger blocked. And for us, there is a level of insight and efficiency gained that is hard to overstate if you make the commitment to detail out every single step. And once that's done, we then create also a metrics dashboard that tracks the metrics associated with those steps. And therefore we try to figure out where the constraints are, like what are your conversion rates at different points of fulfillment, where do things fall into cracks, et cetera, et cetera.
00:19:19
Create those KPIs and then with those two assets in front of us, we can then make a prescription list of areas that you can either add in SOPs which we have a lot of specialization, like I said, from the VA company, or you can add in automations and AI, which is our specialization from a software company. And so that prescription list is then geared towards what is possible in the next 90 days to achieve in order to remove the constraints from your business, right? So if you're going to five years out from sale, and you went and talked to a business broker or an exit planner and they assessed the business, I would too. I'd say, okay, I understand where you've been, but where's the business going? Because that's what a buyer is buying.
00:20:08
And so you've got time. And so I love the idea there that there's I guess like a 90 day window because it's very easy to say to grow the value, business grow sales.
00:20:24
How do you do that? Do you know whether you're converting at whatever rate now, let alone actually getting an increase in sales?
00:20:37
Does it identify the constraints you might have but use the 90 day period to really push through some quick wins if you like, or at least to get some confidence that there's potential in the business, but let's just run it for 90 days and see how we go. Yeah. I'm a huge fan of Eli Goldrat's work around the theory of constraints, which is you want to remove the biggest constraints inside of your business. If you remove constraints that are upstream from that, you don't make the problem better, you make it worse, because that just overwhelms, even more the point of constraint. So adjusting your capacity.
00:21:25
And this is obviously a lot more applicable to businesses that have some historical data, that have product market fit, that have some system, some process already installed, as opposed to being in a position where you're like a startup, still trying to figure out your way in the world, figure out how you fit in. But the theory of constraints for those businesses that are a little bit established, I think, is the theory to apply. And so what we try to focus on in the 90 days is definitely the lowest hanging fruit, but the lowest hanging fruit that contributes to that theory of constraints, either freeing up the team and freeing up capacity so more of the team can attack the number one constraint or adding in automations and tools that solve that constraint directly. Are there industries where you see bigger opportunities than are there particular industries where you see these opportunities more real, more significant? Right now, I think the theory of constraints applies to just about anything.
00:22:38
But generally speaking, with our skill set, if we're supporting the prescription list and we're stepping into support in some of the constraint removal, it definitely applies more to remote businesses or internet based businesses, where more of the touch points with the client or with the customer are in the digital space. Because those were ones where you can control with software or with remote teams the inputs and outputs. Yeah, okay, again, actually, I do want. To throw in one thing, though. I think that a lot of businesses that are maybe more in the local community, serves the local folks, and is not remote or is not digital.
00:23:29
I think a lot of those businesses are ripe for very large improvements by digitizing parts of their client interaction. So even if the fulfillment is not digital, there's a lot of mom and pop shops out there or businesses that are very well established that are leaving money on the table by not digitizing and improving some of their customer experience points. So I do think that this applies to a wide breadth of companies, even not remote companies, but remote companies truly will have more prescription points that we can attack throughout the entire cycle. But you don't throw everything at it. I like this 90 day plan to prove out that we're getting some return on it.
00:24:22
But as you say, with those other, perhaps non digital, more traditional, more established businesses, one of the things you see in almost any business sale information is that the business has got a lot of potential. The owners are tired or they've been at it for a long time and they're just running it the way they want to run it. But what you've just said there is the kind of work that really does give life to the statement that the business has potential because if not, it could be a large and complex sale or sales that drive a particular business. It's not a daily consumption kind of purchase, it's something, maybe it's contracts or large capital equipment. But if you can show a buyer that we're engaging, we've got a list of leads, we're harvesting the leads because we've put in place a CRM system or something along those lines, the risks look a little bit less and the attractiveness looks a bit higher for a buyer.
00:25:44
It's well on from just saying the business has got lots of potential and if you double sales, you'll make a lot of money. So that's the kind of thing which a lot of business owners, they run the business and this is not a criticism. The reality is a lot of owners run businesses that work okay for them and the first time they really get a sense that it could be a lot better or it's not as easy to sell or it's not as valuable as I thought is because they don't know a lot. There's a lot of stuff they don't know and they've kind of got maybe got a trusted group of employees and everyone's got their capacity, their capacity constraints and motivational and energy constraints. So that's what bringing in somebody to kind of diagnose where your business, where I get involved is what's it worth if you were to sell it tomorrow and it starts to open up the question or what could it be worth and is it sellable and what's going to get in the way?
00:26:58
Which is again where we had a really terrific discussion about this. Going through a process of mapping out some of your putting in better systems and processes we didn't get to talk about well, we got other things to talk about. We got time to do that. But some of the tech through Valhalla that you would implement into businesses are we talking about, I mean, you had operating systems, systems, processes. What does that in everyday implementation look like for businesses?
00:27:40
Yeah. So I can give one example of one thing we supported. So in our VA company, a lot of the value is obviously found in finding the best people for the job on top of obviously giving the support and the training of how to implement Bos systems or EOS systems or Emith systems, et cetera. But a huge part of it is getting the right people. And so recruitment is a big constraint inside of our VA company.
00:28:16
And so we decided to do this process internally going through every step of the recruitment process and on the far side of it we were able to triple the number of people that were being processed through.
00:28:32
So you're living and breathing your own systems and philosophy to improve and the. Magic is finding those constraints where the magic is finding any constraint that is the constraint in your business. And then by adding in AI and automation, or I should say the way you figure out how to add in AI and automation is you have to know the inputs and outputs of that constraint. The first challenge is that many bottlenecks or constraints, the inputs and outputs are 80% clear but they're not 100% clear. So for instance, if you're talking with a business owner learning about their business before you advise them on exit planning, probably your input is not just that call, it's probably also you looked through their website, you probably also did some independent research and synthesizing all that into a super clear input could be very challenging.
00:29:36
But if you could do that and you have historical data of having done that many times before, you could then add AI into that process to create an output of very high quality with just the stuff you have access to on the input side. So that can be very challenging. I don't think that's the lowest hanging fruit for consultants, for instance, especially exit planning consultants. I don't think AI is going to be taking that job anytime soon, but it illustrates this point. There's a lot of processes that you can automate the inputs or rather crystallize and systematize the inputs.
00:30:13
And once you do that then adding in AI is very easy. And there's a whole realm, a huge world of automations that were not available even a year ago that now are possible to add in. Yeah, it's quite extraordinary and I can see quite overwhelming.
00:30:33
It's come around so quickly and there's still tens of thousands of businesses, I think possibly hundreds of thousands of businesses in Australia at least that still don't have a and that's an opportunity. But you can see how some owners are AI on top of that and they're doing what they want to do largely the business, if it's been around it's producing enough revenue to keep them going, sure, just about all them can be improved, but it takes a lot of faith, trust for them to take a step. The closer they are to the end of their own business journey to then invest in some improvement and systems and processes that might get them a higher value five years down the track because you can see why it becomes it's easier to ignore. So we're both making the case here that the 90 day thing, for example, is just there are smart ways to go about looking at where the first opportunities are and give yourself a bit of confidence. Makes it real also.
00:31:59
I mean, there's so many things the grass is greener on the other side because it's lined with shit. So creating something that's real keeps folks from being bamboozled of like, well, we're ten X your business and just add AI and blockchain, everything will be solved. It would be amazing. Let's make it more practical. Yeah, you and I both probably I've certainly heavily used LinkedIn, and it's just a cesspool of ten X's and two days for this.
00:32:36
And all you got to do is one, two, three, and butabing, butaboom you've got this sellable business. I guess we're a little bit more realistic. But also I was thinking before, when you go about starting a process of working with someone, how closely do you link the financials and the business strategy to the work that you might map out for a new client, a new business? So with our current process, we have not yet attempted to support the CFO in the sense of, like, we're not trying to create a new financial dashboard or create a financial data room for them to sell. I think there are some overlap and some potential future opportunities for us to be giving support and value in that area.
00:33:36
But that's not our current focus. But there's a heavily overlap in the sense of if you need to be able to use the finances to both predict the bottom line profit increase you're going to get from removing these constraints, and you need to use the finances, obviously, to also say, how much are you willing to invest?
00:34:07
Even if it's reducing cost, there's going to be some upfront costs associated with it as you're making the transition. And finance is super important for all those points. I don't think we yet provide a lot of direct support and value there. Yeah, it sounds like if someone comes to you and says, I want to sell in five years time, and I want to sell at $10 million, and I think my advisor said it's worth 2 million, it would give you some really great structure to work towards. If the owner was open to the investment that would be needed.
00:34:49
But yeah, look, it doesn't need to be like that. But I think when you link business strategy with operations and finance, you understand why you're making the investment. And we are talking about investment here. What are some of the AI tools, apps, services that you think small business owners could take advantage of and why? There's a lot going around if you get emails and newsletters, a couple of.
00:35:33
The things I work with developers every single day and they write their own code, but I famously not famously, but I consistently, if you ask my team, consistently say I read code, but I don't write code. And because of that deficiency where I don't know how to write code, I'm a very big fan of no code tools. And also developers love no code tools because it makes it much cheaper and much faster to build. It out. And so I'm a huge fan of tools that people off the street that maybe you need to approach it from an analytical point of view, you might need to approach it from that abstract thinking and use that left side of your brain.
00:36:13
But ultimately it's something that anybody can pick up without having to to learn code. So I'm a huge fan of those tools.
00:36:23
It could be driven by I know I've got a problem in my business I don't have on my website, like a really detailed survey before I talk to the client on the phone. It's not a great example, but no code is really I've played around with some of them and if I wanted to put a valuation calculator on my website, I don't need to know how to code. What I do need to know is that other people have similar things and that it's got to be easy to use. But there's a way to pull together something that I could whack up on the website and it might create some interaction with some viewers on the website. Yeah.
00:37:19
Bottom line is it's hard to suggest the best no code tools if you don't have a problem in mind. This is something also when you're teaching yourself development, the answer is have a goal in mind and then learn what you got to learn to do and that's going to cover the bases better than anything. With that being said, this is not a cop out answer. I think there is a valuable answer.
00:37:42
What I encourage business owners to do is a decide how much you want to master this tool versus how much do you want your team to master this tool. I think there's a golden opportunity for a lot of business owners that are maybe thinking about selling, thinking about moving on, and they're deciding how do I empower the team to run the company without me? And they're also wondering how do I add in last mile upgrades like AI or automation? And well, the problem can be solved. Two birds, 1 st.
00:38:08
This is an opportunity to be giving your team challenges, give people maybe in the next generation, next generation of leaders, challenges and problems that they can then use an opportunity for leadership training for themselves. And so I'm a huge fan of educating yourself but not needing to be the guy for the job. Instead, use it as a fulcrum for culture changes. Once you take that sorry, go no.
00:38:37
I reckon there's a lot of owners that know and they put them to the side, but they know they've got problems in their business. And what we're kind of saying here is there's probably a quicker, faster, cheaper solution enabled by AI now than don't think about what it might have cost five years ago. Or that's what I think is the really so log all those problems. Don't think of them as constraints or impossibles, think of them. Now, as with AI, you or some of your team can probably attack this quickly and cheaply to make your business better.
00:39:26
Yeah. And if you can decide how you want to attack the problem, let's say that you want your team members to do it. Let's say that maybe you have someone in your company who is kind of chomping at the bit for more responsibility, or else you want to train them to be looking for more responsibility. The process is to first define the acceptance criteria. I got this idea from the book Who Not How by Dan Sullivan.
00:39:55
The idea is that you write down in very clear terms what does success look like, and then that is a shared document. If you know, 1 minute goal setting, it's a similar idea. From there, you define that out and then that's a shared document so that they can then decide the best way of executing on that. So detail out what are the inputs and outputs of this process that you want them to maybe be adding AI into or the problem they want to be solving. With AI, then some tools that are probably the best tools that will be involved in the solution, depending on its particulars, are I encourage business owners and their teams to check out Chatgbt Playground.
00:40:38
So this is not the chatgpt UI. This is if you go to Forward slash Playground, you'll come across a user interface that shows off how their API actually operates. And this is something that you can then in no code tools, like make a lot of people know Zapier. You can do this with zapier. You can build automations that connect directly to the API that then give you all the benefits of chatgbt.
00:41:06
But in your own ecosystem, maybe on your website, maybe on your forms, maybe in the emails you send out, you can build this stuff out with no code tools, and you can learn how to build them by checking out the playground. So that's the first study point. The second one I encourage people to do is zapier because that's how you can integrate tools together. And then to be honest, when we build a lot of this stuff internally with no code tools, we use databases that are just Google spreadsheets. We just learned how to make a good Google spreadsheet function.
00:41:39
If you don't know how to use Google spreadsheet functions, you can type in a chat know, I need a function that does XYZ and it'll give it to you. So we use just straight up spreadsheets and also notion databases. We're a big fan of notion. If we used errortable, probably I would be saying the same about errortable. Those are two good tools that can act as a good database if you don't want to use a spreadsheet, or spreadsheets just aren't a good solution for some reason, and that will give you a good stack.
00:42:07
Zapier google Sheets, OpenAI Playground that will give you a good stack to solve many problems inside of your business. And I can give some examples with that stack if you want, but. Give us an example. I was just about to say there's a lot of jargon. I think it could kind of scare a business owner.
00:42:35
And what we're really saying is, no, there's a lot more capability to solve those problems that are running around the back of your head. So let's engage rather than be scared. An example might be. So let's go with an example. In Sales, so actually there's five different departments I recommend people look at when they're deciding how to add in AI.
00:43:00
Let's start with Prospecting as number one. So in Prospecting, one thing that you could do, let's say that there's some way that prospects indicate their interest. It could be that they chat you from a chat bot on your website. Maybe they send you an email, maybe they engage with your scorecard. There's a lot.
00:43:19
However they do it, that can be captured digitally. You can use Zap Year to automatically detect when somebody does that and then send the data you collect from that touch point. Maybe it's actually, I highly recommend the company Score app. This is something we use and Score app, they actually use AI as well to easily make a scorecard type of website. This is built by Daniel Priestley, where customers fill out a form and then you get data from that form and they've indicated their interest.
00:43:50
There's a lot of use cases for something like that. So if you set something Score app, you can connect it to Zapier. And if I'm going too fast or I'm connecting too many use too many new terminologies, just tell me to that's fine. But you can connect something with Zapier to automatically take that data. When the user indicates interest, send their data to Chat.
00:44:18
GBT prompt the chatgbt to then write a drafted letter indicating the next step. So for instance, somebody goes to your website, they fill in their name and email and says hey, I want to know more about XYZ. And then they say a little bit about themselves. You can send all that JPT for it to create a custom message to them and then automatically just throw that into your Garik inbox as a draft, where the first half of the draft is chatgbt's suggested message to them, and the bottom half is what the customer actually said in the customer's actual data. And then you just have your sales team every day just open up all their drafts and they can see pre programmed messaging to those individuals.
00:45:01
They can audit it. Maybe they don't want the AI to say stuff. Some things modify them and then just mass send it off and all of a sudden you've automated a huge chunk of your follow up sequence. Same thing with a follow up you can make a Zap Year that will after two weeks, make a custom follow up depending on the user's behavior in your CRM. Yeah, this is the investment you should make if you're striving to build a business that's more valuable for I'm going to keep throwing it into the exit planning basket and frame.
00:45:42
And I know there'd be some owners that will think, well, I can kind of manage all that. And you probably can. But the point is, if you want to grow the value of your business, you're going to have to scale, grow sales, and you're going to have less time to do all this. And that's where that investment now over the next 612 1824 months will pay off because you can process more sales opportunities or more leads, and that's what's going to get you higher revenue and higher value.
00:46:16
And that might lead to another constraint, but that's okay. We've kind of at least opened the floodgates a little. I'm a huge fan of the concept of the compounding effect of free time. So if you're at like 90% capacity, you can use that 10% to create system and processes to get to 85% capacity, and then you have 15% time, and then you can use that 15% time to create the next system and you get at 20% extra capacity, so on and so forth. So you have a compounding effect of free time.
00:46:46
And even though I'm a big fan of solving the constraint of your business, rather than just solving any constraint, by solving other constraints, you can free up capacity to attack that one constraint. It's a really valuable concept. So, yeah, prospecting was one, number one. I think there were five.
00:47:07
The five points are let me make sure I get them all right. It's prospecting onboarding customer service. So you can think of all three of those as AI tools to solve customer interactions at different parts of the funnel. Prospecting for prospects onboarding once they become customers, and then customer service for the long term. So those are three departments right there.
00:47:32
Two other departments are staff training and also data entry and data analysis. AI tools. Yeah, I don't think there'd be many businesses that couldn't benefit from focusing at least one of those. Yeah, exactly. So this is the opportunity where we're trying to encourage owners to think about and the first three around, they're really the top line.
00:48:06
They have a cost of staff to deliver. But to grow the value of a business, most businesses, depending on how they're structured, you're not going to cut cost enough off the same revenue base to dramatically grow your valuation. Where are you going to see excitement and potentially a higher multiple? Because you get a higher multiple when there's demonstrated growth and future growth potential. So it's through focusing on that front end, getting more customers to spend more money.
00:48:50
Yeah.
00:48:56
Something you said on another podcast was about where you see AI is not going to from a I don't know whose perspective you were taking, but. It. Might take some jobs. But really, the benefit of AI don't get scared was to embrace it and to view it more like to keep up.
00:49:27
You've got to effectively embrace and use AI. I probably jumbled that, but do you want to talk about that? I am very bullish, very optimistic about AI's effect on the job market overall. I think there's a lot of people that think AI is going to be utopia, a lot of people that think AI is going to be dystopia. Personally, I think it's going to be right down the middle.
00:49:54
But of all the problems AI could potentially cause, I'm not personally worried about the job side of the equation. And that, of course, biggest part, is really encouraging people to think for themselves and kind of solve them for themselves. But there's a couple of first principle concepts that I like to talk with people about, depending on their worries. So if it's individuals, let's say it's an individual that's worried about their job, they're scared about their job is going to be taken away. Well, the thing that I encourage them to keep in mind is that you're not going to be replaced by AI.
00:50:36
You're going to be replaced by somebody using AI to become ten times more effective. Right. So let's take artists. We're still wanting art from artists. In fact, the artists are making better art than non artists when they use these AI tools.
00:50:53
I don't know if you know things like mid journey or a stable diffusion, but the artists are making the best art because they know how to describe the art. And the artists are using these AI tools are producing ten times or 100 times more art. So if you're scared about being replaced here, it's not you're being replaced by AI, you're being replaced by other humans. But the flip side of that, that I think a lot of people ignore is that the supply and demand curve is often constrained not by the supply side sorry, the other way around. It's often not constrained by the demand side, it's constrained by the supply side.
00:51:31
So I'll give an example of this. When we rolled out the ATM machines, at least in America, a lot of people thought the bank tellers were going to become largely obsolete because the 80% of what the bank tellers were doing was automated by ATMs. So the obvious answer is we only need one fifth the number, so we're good. And so a lot of bank tellers were panicking, but that didn't happen. Instead, what happened is actually the number of bank tellers went up, it didn't go down.
00:52:01
And the reason was that the banks opened up way more branches because it was way cheaper to do it. So the constraint was not demand. The constraint was the supply. And I think a lot of places that people are worried about are going to go through a revolution where just the output increases. We want ten times more developers, we want ten times more salespeople and copywriters, we want ten times more artists.
00:52:27
There are exceptions. There are some areas, I think, like potentially in customer service, maybe we don't need ten times more customer service representatives. And those people, you have to decide you want to double down and become that person that's going to become ten times more effective, or do you want to transition out and then learn these skills in another market that's being disrupted that will adjust? So that's the first thing I'd say to employees, to business owners. I have a different sort of set of principles that I use to think it through, but that's why I say for the employee side, talk about it.
00:53:05
From a business owner's perspective then. So from a business owner's perspective, let me give a short story about medieval. So in medieval times, the definition of entrepreneur was someone who is playing arbitrage. So arbitrage is you buy high one place and you sell low another place. And arbitrage in medieval times was constrained by geography.
00:53:33
So you were buying high in the east or buying low in the east. And then selling high. Yeah, exactly. But the modern day entrepreneurs are playing arbitrage with the future. So a lot of things right now are being disrupted, and it's being disrupted by entrepreneurs.
00:53:54
They're seeing where the wave is going and then they're pulling from that future into the present now. And they're playing arbitrage. They're getting a high margin by being the edge of that wave, that wave as it's rolling over. And so a lot of things that are expensive now are going to become a lot cheaper because the basic supply and demand curve still applies, your competition still lowers prices. So a lot of things right now, there's a lot of money being made, I think, in the next five to ten years, but things will become cheaper.
00:54:26
But on the far end of that, we're going to be adding so much more value and we're going to be providing so much more value on a cheaper level that it's going to, in my opinion, mean that customers are going to get much better material and our margins are going to be essentially similar. But in the next five to ten years is a moment of disruption where you can put your business in a much better place than your competition. Yeah, I really implore owners that we all carry around a bag full of weighted problems and potential we can't fulfill. And that's just life in a small business. There are some exceptions where businesses are built to scale straight away, or that there are just ultra talented people where there's a lot that are good at what they do.
00:55:25
And some of these things can, whatever the day to day problems or constraints are, can look completely overwhelming. I think out of the reason I was so keen to talk with you is to go away and think about the time and cost to deal with that issue, to overcome that problem, to put away that constraint. There's probably never been a better time. If you are an owner that's got an exit in mind in five years or so, three years, then think about this as an investment that will pay back because your business will stay in parity with the other businesses that engage with AI. You could actually lose ground.
00:56:19
If you don't engage with AI, your business could fall away, perhaps even faster. So, yeah, it looks like maybe it's a point where it's really up or down. Yeah. I think right now we're in a place similar to the 1980s when computers were being rolled out in offices, where all the accountants were getting access to spreadsheet software, where the writers were getting access to Word documents. And it took a lot of investment.
00:56:53
And now, because so much of the physical infrastructure is built, this transition is happening faster and a lot cheaper, but it's no less monumental. There's a new wave of technology that's going to white collar workers that there's a big disruption. And so we've been here before as a civilization. Some businesses, they adapt. They adapt the new tools and new technologies.
00:57:16
And some businesses are slow to adapt, but they still succeed. And it's just a matter of, do you want to take advantage of this? Because right now it takes that more creative part of your brain. It's a different type of hard, but it pays a lot of dividends. So it's not harder to be a great business than it is to be a good business.
00:57:35
They both take the same amount of effort. They just take the effort in different places of your business, and they take efforts of different places of your yeah. And I think that can be triggered by just some of these suggestions. Go for a long walk. I just recently had an interview with Louise Brockman about using advisory boards.
00:57:56
So getting a fresh injection of perspective. Listening to this podcast. Listening to this podcast Garik. It's been a thoroughly enjoyable chat. I'm not done yet.
00:58:13
I've never spoken to a futurist. Right. So tell me about I want to finish with you talking about what you get out of being a futurist and why it so intrigues you, but also relate that to your experience with your family. Growing up in a business family and building businesses, you kind of combine some some pretty powerful experience. I've never been asked that question before.
00:58:54
That's a great question.
00:58:58
I guess I'll keep it brief because I think it might be a bit idiosyncratic to me. It's a very esoteric question, but I'm thrilled to be chatting to a futurist.
00:59:13
So I recently took the Myers Briggs test, and I believe I was an in T. J, which is basically someone who's really obsessed with ideas. And I remember. For as long as I can remember, I was really particular about the definitions of words like what does wisdom mean, what does love mean? What does productivity mean?
00:59:39
And I think it generally comes from falling in love with concepts and being really drawn to paradoxes, being really drawn to when you hear two smart people that feel like they're not in the same conversation, they're in their own bubbles. One futurist is talking about the end of the world, and one Futurist talking about utopia. Where the fuck is that bubble, right? I'm really drawn to those seeming paradoxes and they just nag at me until I can create a mental map that can incorporate perspectives and see where they come from. So I'm a huge fan of reading about the history of ideas and where ideas and philosophies come from and what the time they were made and who are the authors and how those authors influence other authors.
01:00:31
And on the edge of that is business. Business is you're trying to build something that wasn't there before, that other people find valuable enough to exchange for fungible value. So what money is it's a contract to? Say, civilization has said, hey, you did something worth it, and then that's worth some value, and you can spend that value in other things. So civilization has abstracted out all bargaining to a single fungible icon.
01:01:04
So then as a business, you're providing some sort of value in exchange for that. There's ways to hack that. There are black hat bad agents that can hack that system. But I think we've done remarkably well, at least when you compare it to previous other non capitalist systems. So I think we got to be grateful and respectful of what we've built so far, even as we try to improve the system.
01:01:31
But fundamentally, as an entrepreneur, you're playing that game. And so for me, it's very much a practical, cutting edge way of expressing the ideas and concepts I've been obsessed for for as long as I can remember in that esoteric sphere. All right, but yeah, you do come back to when you grow up in a family business. I can imagine that's quite impactful on the way you think about things as well.
01:02:06
This idea that you can look forward and look back I think is so important.
01:02:15
I really like to think that small business operators across the globe can keep in check. Entrepreneurialism kind of gets incorporates a lot of things, but there's a lot of overly powerful big businesses and governments and even NGOs that just completely dominate. And so I want the small business to be a check on all of so to have a look into the future. I love that.
01:02:53
Garik. So where do people, they want to have a chat to you. Where can they go? How can they reach you? Yeah, first of all, I just want to say Michael, thanks for having me.
01:03:06
This was a ton of fun. And if you're listening to this and you haven't gone back and re listened the episode and taken notes and then left a five star review, do that right now. But after you've done that, I would say if right now you're looking for a partner to increase your business valuation, then feel free to reach out to me on LinkedIn. Obviously, also, we provide VA services and product development services, so if either of those are a good fit, then hit us up as well. And I think the best way is just to reach out to me on LinkedIn.
01:03:40
You can search Garik Tate, connect with me. Say Michael Kerr sent you, and we'll be sure to connect. And it's G-A-R-I-K-T-A-T-E. But we'll put that in the information with the show. I love that you've been on the ground over there ten years.
01:03:57
Just at a personal level, you enjoying life in where you live, and it's a long way from Northwest America. Yep. It's it's tropical. I remember as long as I remember, I wanted to be somewhere where the water was warm. Being in the Northwest, quite cold, that ocean, and yeah, it's a beautiful country, so feel very fortunate that things have worked out the way they have.
01:04:25
Yeah. All right. Hey, Garik. Look, it's been really enjoyable. Thank you so much for being here and for fully engaging in in a really interesting topic.
01:04:36
So well done, and thanks. We'll stay in touch. Take care. Thank you. Michael.
01:04:47
Awesome. All right.