Welcome to the Growing EBITDA Podcast, where
we unlock the doors to management and technology
insights in the middle market. Join us as we
explore innovative strategies to drive revenue
and EBITDA growth, interviewing industry leaders
and technology experts. Whether you're looking
to streamline operations, understand the latest
tech trends, or lead your company towards exponential
growth, you're in the right place. Stay tuned
and let's grow together. So James, let's start
with a question. Yeah. When are we going to get
some leaders and some technology experts on this
cast? I know, I was just listening to the intro.
People are waiting. I know, it's embarrassing.
I'm like, oh no, we made a lot of promises on
this thing and they get stuck with us. That's
a good point. A lot of hollow promises. We'll
go back and edit that one. A lot of empty ones.
We'll go ahead with that. Yeah, yeah. So what
are we talking about today, James? Yeah, you
know, so right now, Mike, I'm calling in, I guess,
potting in from Nashville, visiting some clients.
And I just had a conversation today with a client.
So I thought maybe we could talk about AI today
since it seems like it's something everyone's
trying to figure out. And more and more as we
go and meet with clients, we get asked about
it. And since it's kind of on the top of my mind,
if you're okay with it, I thought maybe we could
talk about it a little bit. Let's do it. Let's
do it. Well, yeah, it is certainly everywhere.
I feel like probably because of... Knowing you,
I was an early adopter of ChatGPT. That was really
kind of my first AI exposure. And I have to be
one of their top evangelists and highest users.
I'm not going to say that it does my job, but
it certainly makes it a lot easier these days.
And I can remember, you know, you go back 18
months, 12 months ago, probably now. And I would
be talking about it at board meetings or with
other executives and just singing its praises.
candidly was getting a lot of blank stares. People
had heard of it. It was in the media every day,
but I would say nine out of 10 executives that
I was speaking with 18 months ago, weren't using
it at all and had never used it. And we're cautiously
interested in maybe learning a little bit, a
little bit more fast forward to today. I was
in a board meeting this week and we spent about
an hour talking about AI and how that's going
to impact the business. Same thing last week
in another, in another session. So I think, you
know, certainly the The popularity is there now.
Dare I say adoption yet? I think a lot of people
who maybe hadn't used it a year ago now are kind
of just finding their sea legs, so to speak,
starting to dabble with it, including folks who
I know that I know them not to be technologists,
right? So a lot of kind of technology lay people,
if you will, are starting to use it a lot more.
And did a little bit of research just to kind
of bait the hook for us for today's conversation.
It looks like about 70 plus percent of mid -market
executives are saying that they plan a significant
increase in AI investments in 2025. So not really
sure what that means. I'm sure it means a lot
of different things to a lot of different people.
I think one of the challenges is going to be,
how do you show ROI, right? My opinion, you have
tools like ChatGPT, ROI is off the charts. I
pay for whatever the expensive version is, like
20 bucks a month. huge roi but certainly and
we'll get into this a little bit later we're
seeing a lot of ai tools out there that are looking
like cadillacs that can be very offensive so
be interesting to see kind of where people are
finding bang for their buck as a whole new industry
springs up so excited to talk about it and we'll
dive into it a little bit here well i like i
like stats like that though the 70 plan to increase
because uh As a guy who just recently had a child,
let me tell you, having a baby, I now spend more
on babies than I've ever spent in my life. And
so I think when AI didn't exist before, when
you have stats like you're 70 % now planning
to spend more, well, it's like, well, to your
point, one out of 10 was probably spending something
last year. Now we see that that brought forward
a bit. And I think that the interesting thing
when we have these conversations is... Not to
date us, Mike, but a little bit of time. I can
remember when the internet came into fruition
and like I was using the Apple IIe playing Oregon
Trail at school. And then like this crazy thing,
Yahoo, came up and I was Googling, I guess Yahooing
information and learning things from the web.
And I kind of think through our time, there's
been a ton of transformation. Smartphone, tablet.
We know all the things, but that kind of like
true core, what's really changing business a
bit. It's interesting. This is the big one that
I remember because we went through blockchain.
We went through machine learning and machine
learning still around to an extent, but went
through these kind of more trend things. And,
you know, if we remember like EFTs and all that,
now we're into this point where we're like, hey,
this we think is really going to hang around.
And it's this AI. So I think finding a way that
really doesn't the buzz side that's truly tied
to operations is a great place and why I'm excited
to get it today. So maybe you can kind of tee
us up for our first topic. Yeah. So topic number
one, where are we seeing it add real value, right?
We're still early days. A lot of folks are going
to figure this out, try a lot of different options
out there in the coming years, I'm sure. But
where are you actually seeing it move the needle
today in mid -market operating companies? Yeah.
To go back a little bit, and you said you sit
in boards, which I think is a lot of the times
we have conversation around what you're seeing
and then how we're supporting other boards and
allows you and I to kind of have a dialogue of
what's going on out there in the business space.
We started a program because we were asked about
it so often by PE firms to do these one -day
workshops where we go through the business needs
and how AI can be a part of those business needs
and help folks out. And so part of this program
is we go through and explain what we've seen
in the market and we've seen it be successful.
it's good to go through a few examples that have
come out of those discovery sessions and some
tools that we've used that if folks want to know
what the tool is, feel free to reach out to us.
But we're going to speak kind of generally today
about the tool sets that we think align to the
different options. But kind of, I would say,
three, maybe four buckets we felt that folks
have been pretty successful. Number one, we've
done a lot of work with helping companies take
large amounts of data and distill that data down
for simple consumption. So where we see that
a lot is in customer service. I have a customer
service rep who needs to understand all their
products, how to support, what needs to be done,
and they need a simple answer. Putting a chatbot
on top of a large amount of data where I can
ask the chatbot natural questions like, when
an order comes back damaged, what should I do?
And have it very simply respond to help the client.
We've seen that be successful. And that call
and response is a little bit on top of what's
already in the market before AI, but now much
richer and much more efficient. Number two. is
around sales and inventory planning. So we've
all seen those kind of like algorithms in the
past, I would say seasonality, ship times, lead
times, and help folks plan their procurement
side. Well, with some of these AI tools, we can
now start to see, well, it's a holiday around
this time, so things go slower. The Panama Canal
typically goes under maintenance at this point,
so that container is going to be slower. And
it really starts to bring some more rich data
to help folks plan better and have more detailed
assumptions when they're trying to plan their
inventory and procurement. procurement. A third
one is around finance. A lot of times people
have used OCR, which allows you to receive documents,
scan those documents, and pull the text out of
those documents. The OCR process got that in
the system pretty quickly, but you still had
to take a manual process to match that document
to the right provider and make sure that the
information was close. Now, with some of the
AI tools, you can quickly load that document.
It will serve up an answer that assumes to be
correct. A human comes in and touches it, makes
sure it is, and then it moves on in the process.
And so I think those, when you think about those,
almost like what we see in the warehouse, like
cobots, where AI is bringing information to the
surface and a human's taking action, is really
where we see that actually move the needle. I
dream of fully automated where AI is doing it
from the initial question till it's all the way
answered. Probably isn't a reality. There's not
a tool that does that. But we have seen some
clients be very successful with getting those
answers brought to humans so humans can act.
Yeah, and I think what I'm seeing is the exact
same thing play out more at the executive level.
I think we're seeing even some of these simple
tools like ChatGPT, I'm seeing a lot of executives
being able to dump in business strategies. Even
a simple tool like ChatGPT, you can load in,
hey, here's this strategy that we're thinking
about, or here's this problem that we're wrestling
with. Obviously, these tools can be phenomenal
if you prompt them correctly in really helping
you refine your thought. Loading in a bunch of
data, a bunch of context, and then challenging
it to stimulate your thinking or challenge your
thinking. And certainly that's how I'm using
it on a daily basis, not just having it write
95 % of my emails. If I could get to 100, man,
we'd be cooking with fire. Yeah, you're right.
And that's that call response a bit, right? And
that's interesting. You as an individual using
that, again, as an executive over a mid -market
company, that's a prime example of a very successful
use case. One of the things we'll talk about
later in the podcast is how to do that in a wise
fashion, which I know you and I have had those
conversations to make sure you're not loading
the incorrect data and doing it correctly. But
I think that's a very practical one. And so maybe
we go to our next topic, which is since you brought
up a practical tool like ChatGPT, where is AI
kind of still a bit of hype in your opinion?
Because obviously you go to these board meetings
and there's a lot of truth in a board meeting,
but there's a little bit of hype and a little
bit of salespersonship where they're trying to
kind of... drive you to them or you walking away
feeling like they know more than they maybe do
in some spaces. Where do you feel the hype is
in AI and kind of what have you been able to
tease out and maybe double click on and understand
where they've overhyped it? I mean, specifically,
one of the things that I've come across a lot,
just some things that I've been working on of
late, there's a lot of marketing automation,
AI tools out there, which quite frankly, are
doing, in my opinion, what ChatGPT already does
quite well. Right. And they're doing it for an
extremely expensive number. You may recall this
conversation I had a few months ago where I was
helping one of our businesses think about. partnering
up with a kind of a software vendor to help them
explore a kind of a new strategy for themselves
or for one part of their business. And I shared
the partner with you and you're like, hey, whoa,
watch out. Anybody with a .ai at the end of their
name, like scrutinize them heavily, right? Because
there is just a lot of hype out there. And some
of the platforms that I've seen do exactly what...
ChatGPT does for free with a little bit of polish
on the margin, admittedly, but they're doing
what ChatGPT does for free or for 20 bucks a
month for 20, 40, 50, $100 ,000 a year for an
enterprise grade tool. And quite frankly, I think
they obviously have clients, they're companies
that are in business, hopefully they're doing
well. We want everybody to succeed in this life.
But I got to be honest with you, I think there
is a lot of hype around some of these tools.
I think you got to really ask yourself, could
somebody take a few hours, which they should
now have a few hours extra if they're using these
types of tools productively. Could they take
a couple of those now unused hours and throw
some content into ChatGPT and have that spit
out some really neat marketing stuff versus paying
for a Cadillac? I think right now the Honda,
so to speak, is like nine -tenths of the Cadillac.
And before folks really start shelling out big
dollars for some of the more expensive and admittedly
a little bit more elegant solutions, I think
you really got to kind of canvas the landscape
and say, Hey, which one of these companies do
we think is actually going to be in business
in three or four years? How much do we actually
want to invest in this? And is there a free or
near free solution? The open AI tool set goes
well beyond chat GPT, image processing, transcripting,
things like that, which if we just stick in here
in marketing for a second, those are some tools
that many marketers need. And most of those are
available for free or near free. You just got
to configure them up a little bit, which the
population of folks that can do that is, is growing
quite rapidly, right? Independence as well as
consultants. So I think you just gotta, I think
you just gotta watch out for some of this, for
some of these hyped solutions out there. Yeah.
So, Mike, one of the things that I think was
really great that you've done is you've built
some workflows for yourself for some repetitive
tasks that you've had that you said, hey, I'm
going to go kind of apply this AI tool to help
me in this very specific way. And we don't have
to get into all the use cases unless you want
to. But I think one of the things I'd be curious
to hear from you, because you kind of self -serve
this and did a bit of your own training and your
discovery. So if I'm an executive like yourself
and I'm like, hey, I got a few repetitive workflows
that Mike mentioned today that feels like they
could be automated. And maybe you could just
take us on a quick little journey of how you
went through that discovery and how you learned
to use the tool. And kind of, you know, I think
one of the things I do know is you do experiment
and failure, right? Like you tested out, didn't
work, move on to the next. But like, what are
some other tactics that maybe you use that you
could share with our listeners of like, hey,
get out there, get your hands dirty, try some
things. And then, you know, maybe align and find
something that works well like you do. Yeah,
I mean, I think it doesn't have to be an executive
task per se. The example you're talking about
was something that I do all the time. I was looking
for a kind of elegant, automated, low -cost solution.
I ended up figuring out how to take a process
that took me about 20 to 30 minutes manually
every time that I did it. And I did it, you know,
four or five times a week. I was able to get
that down to somewhere in the ballpark of five
to six seconds per instance, right? So I wake
up with four or five hours or maybe three or
four hours, whatever the math is, more time available
to go and do other things. But I really, I think
it comes down to... basic fundamental lean principles,
right? If you think about it from a process optimization
perspective, if you've got workflows in your
business where data is involved. there is a high
likelihood that even a basic tool like ChatGPT,
maybe in a closed environment or Copilot in a
closed environment, you can take some of these
basic tools and really streamline some of these
workflows. And I think you just got to kind of
challenge yourself to say, hey, let's look across
this business function by function and say, hey,
is there something that that person over there
is doing regularly that we could just spend a
few minutes process mapping and maybe we need
to find a resource to help us stitch some of
these. discrete software programs that we're
using as part of that workflow. Maybe it's CRM,
maybe it's a tool as simple as notes or something
like that, right? How do we actually stitch these
things together? There's a bunch of folks out
there with some neat tools that they're using
that they can do that and just look for waste,
right? Look for waste, map out the process, try
and find an automated AI enabled solution. And
you can build some of this stuff for literally
pennies relative to the amount of time that you're
going to save. So again, it's early days, but
we're starting to see some of these things emerge
where even some executives like myself are able
to cut out some non -value added time and pick
up some extra time to go and be productive elsewhere.
As folks probably know, one of the things we
do is we do a lot of diligence work. And as part
of our diligence work, we receive a lot of large
data sets from folks. And so one of the things
we're going to talk about in a second is around
that safety, security, privacy side of AI. But
putting that aside for a second, talk about how
I have this large data set and I need to work
through it. I'm not going to put that data in
AI, but I want to learn a way to better comb
through that data. I'll tell you, one of the
number one use cases that we hear when we go
and have these conversations is PE firms using...
the ai solution to help them build better excel
formulas which is interesting right because you're
still using excel which is a highly manual tool
you're not using a full integrated system but
now you have this helper and to your point it's
like hey this is inefficient come along with
me for this journey help me become more efficient
so i think that's an interesting point you just
made because we see that in real life like hey
i'm trying to figure out how to do this or i
you know i've never bought a business that's
a business services business? What are six questions
I should ask a business service business as I
go to look through it? I think those are a lot
of those tools. You're right. If you map those
out and have a real honest conversation with
yourself, they probably bubble to the top to
know that that's something you need to focus
on. Yeah. And I'll give you another real life
example. And I think this is just the really
powerful thing about, I primarily use ChatGPT.
The really powerful thing about that tool is
it has no limits, really. I understand that if
you start plugging in some political stuff, it
might not be your best friend. But I'll give
you an example. Real life case study, this isn't
going to go transform a mid -market business,
but it certainly transformed my week a few weeks
ago. I was headed to a conference, kind of a
big conference, a couple thousand people were
going to be there. And they encourage... people
to get to know each other at this conference,
lots of one on one meetings. And I got the attendee
list, which was, I don't know, 1500 2000 people
long, with some high level information about
each each person, right name, firm, geography,
like location, you know, some of their business
interests, so to speak, just to keep this kind
of generic as an example. I dumped that whole
list into chat GPT. And I said, Hey, based on
what you know about me, who are the 50 best people
for me to meet at this conference. And it spit
back out in, I don't know, 13 and a half seconds,
maybe, you know, on the top end, it spat out
the 50 people that it felt like I should get
to know reasons and the logic around why I should
get to know them. Then I prompted it to go chase
down their email addresses because the list didn't
have that. It came back with about 25 % of those
that were correct. You know, so I found myself
in a matter of one minute. If I were to go do
that research on my own, it would have taken
me weeks and weeks if I would have done it. And
instead, I found myself five minutes later looking
at this much more relevant list of 50, knowing
exactly who I could reach out to in advance of
going there because I had some email addresses.
And it turned out to be very productive. Most
of those folks actually that I met with were
very good people for me to connect with. And
I think you really just got to kind of challenge
yourself to think about. your everyday or your
department's daily workflows or your broader
businesses pain points and where do we have a
lot of humans doing things how can we do that
more efficiently using this tool and quite frankly
a great place to start is asking the tool for
advice on how to use the tool Inception. Right?
Like, hey, you know, I didn't do this with the
conference example, but hey, I'm going to a conference
next week. How could I use ChatGPT to help me
improve my conference outcome? And I guarantee
that thing's going to spit back, well, hey, I
could do research in advance. I could tell you,
you know, driving directions, how to get there
faster. You know, a bunch of different things.
And I think, you know, the more people start
using that tool, the more they're going to be
able to kind of understand the use cases across
their businesses. And then the more they're going
to go and be able to explore out there in the
universe of solutions and partners and options,
they're going to be better served to go in and
pursue some of those. Yeah, and you touched on
a couple of things in there. Maybe I've been
alluding that we're going to talk about it. Maybe
just jumping around the privacy side, right?
I'll stick to the example you just gave, which
is an excellent example. That's publicly available
data that you put back into GPT to become more
efficient, right? Like you didn't take anything
that was of a private nature. And so one of the
things I want to talk about is like, smart approaches
and safe approaches to using AI. And so the example
you gave is excellent. That's information that's
out there. We see it on Zoom Info. You can look
it up to your point if you did it manually, be
going to Zoom Info and trying to find it. That's
one. What we think is interesting, and if I may
speak to my PE friends for a little bit, is folks
are taking SIMs and loading them into GPT before
a deal that's not done. That is one of those
things that really concerns us that we see with
our clients. To speak about Trivista, because
Trivista is a business as well, is we have an
internal committee of about eight folks that
their committee's responsibility is to be the
governing body for AI at Trivista. So it's from
everything from when we use it, do we have to
quote it? Which tools do we want to use? What
are use cases that we're okay with? And how do
we go and build future tools that make our business
successful? That governing body released a position
that we keep up to date on tools that are approved
to be used and tools that are not. It's very
intentional and it's a conversation we have and
it's a continuous education. Another thing about
Travista is every two weeks we have an all hands
meeting and we kind of share information. AI
now is on the bi -weekly share agenda because
it's such an important thing to make sure we
stay tight out and protected on because we deal
with so much sensitive data and information.
Outside of that, another way to use it pretty
intelligently is the same way you hear this phrase
all the time, crawl, walk, run, right? Start
slow and then build up. To Mike's point around,
hey. Where do I find things that I can do, do
a little test and get better and better? You
may at one point, now that you go to enough conferences,
you may go and build a custom GPT yourself that
does that conference work. But asking questions,
exploring, working through it is a better way
to start. One of the things I always encourage
people is most of the tools today use OpenAI
on the back end. So if you go into ChatGPT and
do a little experiment and it's off limits, it
doesn't help, it doesn't work. The likelihood
of you creating a commercial tool at scale that
would be able to solve that same issue is low.
One of the things that we've done at Trivista
to protect ourselves is we went out and got something
called Azure AI. Azure AI runs on OpenAI, which
is the group that owns ChatGPT. That allowed
us to create a very safe, let's call it enclave,
where we're able to load data in a secure way.
That data doesn't go out to the web and it doesn't
train models. It's only consuming the data that's
out there. And so you hear this thing of like
large language models or LLMs. It uses the large
language model and then looks at our information
and helps us align to the two of them. One of
the things that we've been very careful about
is ensuring that that data is protected. If you're
a mid -market organization that wants to go build
a really neat tool and you feel that you've done
the small test, you've done the things that we've
said, you think there's something important to
do, then that is the time that is to go look
at these tools that are more enterprise and robust.
To Mike's earlier point, there's a heck of a
cost when you go down that way. So the last point
we'll make about this is focus on... business
first and making sure there's a business case
that drives value. You hear Mike and I say all
the time on the way to grow EBITDA is have a
business case that creates value that you can
stand behind with KPIs. The same needs to be
applied when you think about AI. I'm going to
go solve X issue. It costs me Y. The use case
is Z. Those type of conversations need to happen
around AI. It can be fun. Boards may pressure
you. Friends may tell you they're doing things.
But we'll say you still need to follow the basic
principles just like you do with anything else.
Anything else you want to add before we wrap
up? No, I think that was great. I mean, obviously,
the privacy thing was a huge concern 12, 18 months
ago. And I think that what we've seen is ChatGPT
and Copilot, et cetera, come out with. versions
of itself that are actually protecting data and
things like that. And I think everybody was a
little bit skeptical at first. I think everybody's
kind of backing off that a little bit. But you
do got to make sure that you're using an environment
and you're loading data in that you feel good
about. And obviously, don't go use the public
version of these tools and dump all your company's
most sensitive data into them without thinking
about it. So yeah, great feedback. So James,
before we close here, I got one for you. What
year was the term artificial intelligence first
coined? Okay, so I feel like this is one that
I'm going to get very wrong based on the tee
up because you chose this. And I know you're
coming off a win where you got one right. So
it's one correct and 11 wrong. So I'm sure this
is going to be tough. I'm going to go, I feel
like the 80s was a big explosion for technology.
Are you an 80s baby? Apple 1984 commercial. You
are. See, that's why you thought that it was
the 80s. You know, James came on online. I am.
Now he's a technologist. You couldn't, it'd be
tough to be further away. 1956, at the Dartmouth
Conference, which I do not know what the Dartmouth
Conference is, but apparently, allegedly, 1956
at the Dartmouth Conference just goes to show
you that AI isn't quite as new as everybody thinks.
To me, it will always be. ChatGPT's public launch
date, which was like November 23, if I'm not
mistaken, changed my life for the better, me
and everybody else on earth. But yeah, 1956.
Well, I can't believe it's taken us this long
to figure out what really adds value and what
really is, I guess. It's a great term to come
up, but I, like you, I can't imagine my life
without it now, from distilling data to writing
emails to researching things to even just trying
to figure out. What do I do in certain situations
with having a baby? It's been a great tool and
a huge help on personal and a professional level.
Definitely, definitely. Well, thanks everybody
for tuning in and we'll catch you next time.
Don't forget to follow us, like us, subscribe
to us. If you're gonna DM us, DM James. He's
kind of more hip to that, he's more hip to the
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