What Really Makes A New Technology Stick

Jeffrey Madoff: Hey, this is Jeffrey Madoff, and welcome to our podcast called Anything And Everything with my partner Dan Sullivan.
 
Dan Sullivan: Jeff, we're into the AI discussion age. What is this thing? How does this work? What's it mean for me? What's it mean for the world, and everything else? You know, it's a feature, I think, of inventors, and people bring out new things, they reorganize the entire existing world with their new things, so everything's got to change to conform to the progress of their new thing, and we can see that happening with AI. And I often say to Peter Diamandis—Peter is the great prophet of technological abundance—I often say to him, I believe in Moore's Law, Moore's Law being the central principle on how microchips improve, and it's been mainly accurate for close to 60 years now, that every 18 months or so there's more processing power, and the cost of it is cheaper.
 
And I said, but I also believe in Newton's third law, which for every action there's an opposite and equal reaction, and for technology the reaction is human nature: does human nature agree with this new technological breakthrough? My sense is that there's a negotiation that goes on with innovation and with tradition. It's a time, perhaps, to bring obsolete things, to eliminate obsolete things, and introduce a new way of doing things, but it's also a possibility to find out what's really valuable here and not be fooling around with it.
 
Jeffrey Madoff: What I find really interesting about any innovation is that, of course, the biggest champions for that innovation are those who tend to profit most from it, so that also means that there's a significant amount of bullshit that you have to wade through to actually get to what the true value is, how it can be used, and so on, and most things get oversold in either the direction of the destruction of society as we know it or the creation of a utopian society, neither of which ever happened. But what I do find interesting in our horribly divided culture is that AI is interesting because we touched on this last week, but I think it merits further discussion, it doesn't fall into party lines that there are across the aisle people who agree on certain things about AI or disagree about certain things on AI, but it doesn't fall neatly into the party politics and polarization that we've had. This could mean it's only not been captured by partisan warfare yet, or it could be that we're actually entering an era of a different kind of conversation.
 
OpenAI has already put 100 million into a super PAC for the midterms coming up, and Tropic themselves put up 20 million, so they know that there are political things, but that doesn't necessarily mean it's so neatly into the kinds of silos that most issues fall into, and lobbying is whenever you're going for major government funding and trying to avoid as much regulation as possible, you know. Then you get into the territory of its politics, but it’s politics that may be a little bit different, because it doesn't fall through party lines anymore.
 
Dan Sullivan: AI doesn't. I think it's going to be used for all sorts of things. Certainly with Steam power, I think that steam power was the first big real multiplier—one, where you didn't have to have human labor; you could eliminate a lot of human labor. It actually created more human labor because transportation exploded. One of the big things, transportation really exploded. Probably if you name the top five inventions of all time, steam locomotion would have been one of the top five, because when you change people's whole sense of distance and time, just hundreds and thousands of miles of track were laid, and people who had never gone more than 50 miles in their life could go 300 miles, and they could do it in a remarkably short period of time. So that was neither a conservative nor a liberal thing. There was just a new capability that was reorganizing how everything got done
 
Jeffrey Madoff: Right. And I would go back further, because I think something doesn't get credit it deserves, relatively speaking—it seems so simple now was the wheel, because it was only as much as you could carry for as long as you could carry it, and you know, without the wheel, you wouldn't have the railroads, and …
 
Dan Sullivan: You wouldn't really have roads.
 
Jeffrey Madoff: That's correct, because what would you need them for, right? So it's kind of fascinating when you think of all new technological advances are in order to become important is that they have to somehow act as a multiplier, right? And if they don't act as a multiplier, we don't know about all the things that came out that weren't used, the inventions that didn't … like the first square tires just didn't get off the ground. I think that that multiply effect again is agnostic, because wherever you're at politically, you want to use that technology, you know, and if you happen to be the wheel sales person, you're going to be the strongest advocate for your new product out there, and show how it's useful for so many things.
 
Dan Sullivan: Yeah, just a note on that. When the Spanish explorers came to Central and South America, they found that there were children's toys that had wheels, but there was no jump in imagination from people seeing, you know, the children have toys, but the adults don't have toys. I mean, there was some reason, and probably some of it had to do with geography, you know, there weren't wide open planes where a wheel would make total sense, and I guess they had lots of slaves. I think the other thing is, they didn't really have the animals; they didn't have horses, they didn't have cattle, and you needed real powerful animals that could take wagons, could take carts. This is a whole bunch of things, but they were struck, because in Spain, you know, in France, and all the countries that came to South America, the wheel was a standard part of transportation already.
 
Jeffrey Madoff: And even without the animals, you could load more on a cart and push it or pull It than you could carry for longer distances. There were always those things that iterated over time. Will be one of them.
 
Dan Sullivan: We went through a personal experience with this, and it had to do with how you responded to Covid, and I remember it was the 13th of March in 2020 when Babs and the whole team said, you know, we're losing half our people; they just aren't coming to workshops right now, and so we're going to close everything down until June. So, this being March, we'd have a quarter when we're just not going to have any workshops, because we don't know what's happening, and I was doing a workshop that day, and I was, you know, it was a long week, and so they told me the decision, you know, I was told the decision. I wasn't just, kind of tell you my status within my own company, anyway. So we had a plane ride home. It was Friday night, and I was just pondering, and then I realized that we had had Zoom for six years, because we're in three countries, so all of our back stage for three years had been with Zoom, and I just said, "Oh, we're going to Zoom,” and by the time we landed in Toronto, I said, "Oh, we get an opportunity to transform the whole program into Zoom,” and we had everything transformed in three months, all the workshops, and it's different.
 
You have to, wasn't the same, as we cut down on the materials, we got rid of animation, we were doing a lot of animation, and I found that on Zoom you can't show people animation because they go into television mode, they go into passive, so you just show them one sheet. But we learned a lot of things. We tested and we did things, but we had easily 40 percent of the client base who left the Program and never came back. They just refused to do it with Zoom, and in some cases, we found out what happened to their business. Their business just failed. They couldn't translate their business into a virtual form, or felt they couldn't.
 
Jeffrey Madoff: And what was their resistance?
 
Dan Sullivan: It's just not the same. It's just not the same, you know. And we saw that, especially in the financial services, that that was big. It's about 20 percent of our client base are somewhere involved in finances, could be banking, it could be, I mean, it's broken into 100 different pieces now. Financial, it's very specialized, and they said, you know, nobody … you’ll sign a check more than 100,000 dollars if it's not in person, and within a year people were signing 10 million dollar checks without it being in person, because Docusign had come in, you know, and everything like that. So my sense is that the disruptiveness that will show up as a political issue is some who are responding to the new things, and some people who are reacting to the new things. You know, they're trying to prevent the new thing from changing things, and the other people are just taking advantage of a new possibility. So, I think it's a bit like the end of a Monopoly game; all the pieces go back into the box, and a new game starts, and I think technology will have that kind of impact on politics.
 
Jeffrey Madoff: Yeah, I mean, there's a lot of impact that it's had already.
 
Dan Sullivan: Of course, the war in Iran is very interesting. That's an AI war from one side of the equation, from the Israeli and American side, they're using massive amounts of AI, and the other side isn't.
 
Jeffrey Madoff: But it's interesting, because without getting into the politics of the war, but just the strategic aspect of it, you know, choking off the oil transport in Hormuz makes it, you know, it's a classic war tactic, so it's always interesting, because it's never one thing,
 
Dan Sullivan: It's always 10 things.
 
Jeffrey Madoff: Yeah, at least.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: Yeah, just gets easier to understand, albeit incorrectly. Yeah, if you think it's just the one thing, you know.
 
Dan Sullivan: Well, the other thing is that I think one of the big changes was that all those other countries in the Middle East didn't realize that the Iranians didn't like them.
 
Jeffrey Madoff: Yeah, well …
 
Dan Sullivan: They thought Israel was a problem. They were sending rockets to everybody.
 
Jeffrey Madoff: Yeah, well, I also think that it's a historically very tribal and warlords.
 
Dan Sullivan: Plus even within Islam, there's these two sides that don't like each other, and Iran is one side and a lot of the other countries are the other side.
 
Jeffrey Madoff: Yes, so I was going to jump to a different area, which is something that has not caught on, but has been touted now for I don't know, maybe it's could be 20 years already, I'm not sure, but crypto on the surface of it. Do you remember Esperanto?
 
Dan Sullivan: No.
 
Jeffrey Madoff: Esperanto was going to be the universal language.
 
Dan Sullivan: Oh yeah, I had someone who was in the administration at the college where I went to, he was a big Esperanto. He said, "This is the language you're going to have to learn.” This is, this is 1970s and he was telling me, "No, late ‘60s.” He said, "You know, in a century everybody's going to be speaking Esperanto”
 
Jeffrey Madoff: Yeah, I guess he didn't say which century, but if you will, that was the crypto of words.
 
Dan Sullivan: Yeah, that's it. I hadn't seen that connection, but it's true.
 
Jeffrey Madoff: So why didn't that happen? I mean, everything about it seemed made to order for a computerized culture, you know, the way the transactions could be, and so on. I mean, initially people didn't want to give their credit cards online, their credit card numbers, and there was a lot of discussion, you know, a lot of my clients were in the retail world, and they were saying maybe we use online for advertising or marketing, but nobody's going to buy online, nobody wants to give up their credit card number, they're afraid that it'll be forged.
 
Dan Sullivan: Yeah, yeah, the bankers, you know, I was on a speaking engagement once, and the person sitting next to me at the dinner before the speaking day, so it was the night before, his name is Dee Bach, and he's the person that went across the country and convinced all the banks to be a member of Visa, which was Charge X to begin with, it was called Charge X, and that became Visa, and he said it was about a five year period just convincing banks to be part of this new credit card system, and he says, you know, I'd be talking to three bankers a day, and I'd be on the road for a month, two months at a time, and he said it was the hardest thing to get them to believe that this was the way the future was going.
 
Jeffrey Madoff: Why do you think crypto hasn't caught on except in certain pockets?
 
Dan Sullivan: Well, first of all, it's not money; it's a speculative investment.
 
Jeffrey Madoff: Right? I mean, there's nothing supporting it.
 
Dan Sullivan: There's nothing. It has no value. There's no value. I mean, gold has value. I mean, yeah. But the other thing is, you know, it's not a currency, because they say, well, how much is this worth? With, and they tell you in dollars, that tells you what the currency is.
 
Jeffrey Madoff: Understand what they're saying.
 
Dan Sullivan: Yeah, yeah, yeah. I mean, if it fails, people lost billions of dollars.
 
Jeffrey Madoff: Yes. What's his name?
 
Dan Sullivan: Sam Bachman Freed.
 
Dan Sullivan: I think he's in prison, isn't he?
 
Jeffrey Madoff: I believe so. Yes,
 
Dan Sullivan: Yeah, yeah, yeah, yeah. He's self-centered enough that he might enjoy just being by himself.
 
Jeffrey Madoff: I doubt it, because I think that part of being with others is that he can convince them that what he's doing is something they should give him money for.
 
Dan Sullivan: Yeah, yeah, yeah. Anyway, you know, it hasn't occurred to me at all yet that this is something I want to find out about
 
Jeffrey Madoff: Crypto you're talking about?
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: Yeah. It's interesting, though, because it has been a steady topic up and down in terms of the attention it garners, but you know, from everybody who's excited about it knows somebody who made a fortune,
 
Dan Sullivan: Yep, yep, and I know people have lost a lot of money,
 
Jeffrey Madoff: Yeah, exactly, exactly, but you know, like most things in our culture, people are always looking for the shortcut and I don't think there are any shortcuts. The every once in a while, there's an exception, but the exception gets positioned as if it's the rule.
 
Dan Sullivan: The thing about it, I have a financial advisor who he really has made a career out of thinking about money, just what is money, and why does money work. And he said the main quality that whatever the principal money is in the world has the highest fungibility, and fungibility simply means that it just works; there's just no wondering about the currency or anything else, you just accept the currency, and he says there always has to be one thing in the world that has that quality, because people just need it for efficiency of transaction. So, you know, I get in these discussions with tech people who are utopians, and they said, oh no, the U.S. dollar won't be the principal currency, and I said, you know, I'll do 1000-person test, okay? And you can do 1000-person test—you have 1000 people, and you have two piles of, they have to choose between one thing and another, and one of them is a pile of dollar bills worth 10,000 dollars, the other one is the alternative, and you ask 1000 people without thinking about it, which one would you take automatically, and he says probably the dollar bills. I said proves the point.
 
Jeffrey Madoff: Well, it made me think of, and I don't know what the tipping point was historically, but it makes me think about most people don't realize that there was no such thing as standard time for quite a while, and the clock that was in the town square, independent of any other clocks, that was the time. The problem was the railroads couldn't set schedules.
 
Dan Sullivan: Yep.
 
Jeffrey Madoff: So they were instrumental in setting standard times, so that the trains could be scheduled well. Looking at currency exchange, you know, with all the foreign currencies, and when there would be that kind of foreign trade, I'm wondering what was the universal factor that became the metric that you could measure money about and standardize a currency, at least, so that it could be converted from one currency to another. I don't know the answer to that, but it's an interesting question.
 
Dan Sullivan: Yeah, there's ... it's just called the reserve currency, and up until well, one of the stipulations of the Bretton Woods agreement, after in 1944. So this is …
 
Jeffrey Madoff: I knew you were going to bring out the Bretton Woods agreement.
 
Dan Sullivan: Well, one of the agreements that everybody agreed to, that the U.S. dollar was going to be the reserve currency, so all debts and loans were going to be in American dollars. They weren't going to be in any other currency.
 
Jeffrey Madoff: Right after towards the end of World War Two,
 
Dan Sullivan: First week of July 1944 and that was the agreement. And up until that time, the pound, more or less the British pound, had been more or less the reserve currency,
 
Jeffrey Madoff: But the necessary condition was whoever had the most money …
 
Dan Sullivan: Wo was the lender, and who was …
 
Jeffrey Madoff: That's right. That's right. Yeah, and so what's interesting about that is whether it was the pound, whether it was one dollar if it was the rupee, whatever it was, people had to agree that that was the case.
 
Dan Sullivan: Yep.
 
Jeffrey Madoff: And prior to that, trade bartering, you know, you may need that certain box load of things that you think is worth, you know, paying this box load of things for, you know, trading, and, but you know, trading currencies was relatively new, and because also there was universality in trading currencies; there wasn't universalities in terms of bartering.
 
Dan Sullivan: No, no, yeah, it was really interesting. I've been reading a whole series of novels about the 19th century British Navy, and on one of the books right now that talks about the opium trade into China, and China didn't have opium, opium came from India, and the British had more or less taken over India, and what Britain really needed was silver. They needed silver because silver backed up the pound, and the Chinese, for some reason, over centuries and centuries, had hoarded silver, so they had massive amounts of silver. So the British brought opium in, and people really liked opium, you know, they really liked opium. The Chinese leadership hated opium because they could see what it was doing to their people, but you know, how do you control 400 million people in those days? So that was the main thing that kept the British Empire going, was this movement of silver back to England as a result of the opium. I mean, the Chinese have some grievances about what the other countries did to them, British did, but you could just see that you had to back up your currency with something else.
 
In those days it was silver. There was a huge political polarization that happened in the United States in the 1880s of what was going to back up the dollar—they were going to have the dollar, was it going to be silver, was it going to be gold, and they had to equalize the value of silver and gold, but really they're not, they're not really equalized, and they made a choice, I think it was 1880s they made a choice that the dollar was going to be backed up with gold, and the value of silver fell by 80 percent immediately, and so there was just a huge uproar, uproar about William Jennings Bryant, very famous American politician, was for all the people who had been devalued because they were holding their life savings in silver, and it got devalued by 80 percent or 90 percent. It's a very tricky thing. What is the basis of all practical value? You have to have a thing that backs it up.
 
Jeffrey Madoff: Right. And that thing, for the most part, is consensus.
 
Dan Sullivan: Yep, you know, and the trust that goes along with consensus.
 
Jeffrey Madoff: Yeah, and I'm sure when that decision was made in terms of the relative value of gold and silver, there was an awful lot of backroom influencing that went on among the Rio Tinto and the other major mining companies who would profit the most, and here's what we'll do if this becomes the standard, you know, the kind of dealings that go on in anything, but it's fascinating to me, because a sale is a simple transaction, right. It's, you know, it only takes two people, and they only have to agree on one thing, that the value of what I am selling you is what you're willing to pay.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: I'm willing to accept what you're willing to pay. We have a transaction.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: And you know, when I think about what led up to that standard, and how do they calculate the exchange rates and all of that, so that from the 1944 rulings you're talking about, there's an awful lot of things happening long before that. How did that get sorted out? How did that, and if you recall, because I never talked about this before, so these things are occurring to me for the first time, traveler's checks, you had the safety or perceived safety of United States currency, so that you don't leave home without it, as Carl Mauldin reminded us on the commercials, still considered one of the most successful commercial campaigns in history. And they were an American Express, a name that makes it sound governmental, but in fact it was just a brand name; it wasn't governmental, just like United Parcel Service has nothing to do with government or anything else. It's an independent business. But what they were able to do is get a consensus that this would be accepted. Do traveler's checks even exist anymore?
 
Dan Sullivan: Yeah, I'm sure they do. Yeah, and I remember the first time I went to the UK in 1964, you really had to plan ahead. How many traveler’s checks do you need to take with you? And, of course, their money, I mean they're like cash, but you go to the bank and they sign, you sign, and then you have to sign on the back of them when you spend them, but I remember I had to plan out—I was there for seven weeks and probably Dan at his best in terms of financial management those seven weeks, yeah, because you had no backup. It was an added level. I mean, it wasn't just like cash, because cash, if you lose it, it just disappears. But they have a record, first of all, American Express has a record of you doing this, so I guess that's somewhat of a backup. I know I was very careful with my traveler's checks.
 
Jeffrey Madoff: What's fascinating to me about it also is that interim time where, you know, there was a while there, the traveler's checks ruled. If you were traveling internationally you needed to get traveler's checks, and when they realized there's a big application beyond businesses, but applying that to individual consumers, but I think what disrupted that whole business was another technology, and that was credit cards. Yeah, and the credit card business. Remember, in my parents' retail store, there weren't credit cards yet. You could pay cash, and if you couldn't pay for the whole thing, you would put it on layaway, which was first started by FW Woolworth. That was the innovation of Woolworths in terms of that, which increased their business tremendously, because most people did complete the purchase, and whatever they'd paid, if they forfeited it, that was all profit to the seller.
 
Dan Sullivan: Yeah, to the store. But just think about how that changed people's sense of time.
 
Jeffrey Madoff: In terms of?
 
Dan Sullivan: Well, essentially with layaway, you're not getting the thing until you've paid completely, correct? With a credit card, you're not paying anything, and you're getting the thing, but you're going to have to pay in the future, so it really changes people's time sense.
 
Jeffrey Madoff: Yes, and the thing is, the banks don't want you to pay it all off.
 
Dan Sullivan: Oh, no.
 
Jeffrey Madoff: They make their money paying those onerous, you know, 29.9 percent, you know, monthly fees, or whatever your balance is.
 
Dan Sullivan: So well, it's like mortgages. Nobody wants you to pay off your mortgage.
 
Jeffrey Madoff: That's right. That's right. That was probably the first major thing that I paid off in my life, in terms of privately, as an individual, was, you know, in purchasing my home as soon as I could, I paid it off. Now there are other people that were just more financially adventurous than I. I think I grew up like, you know, the example being my mom and dad, who were both business people. They hated debt. Me too. I didn't like owing anything, but there are people that, you know, would do the calculus and say, well, look, we can borrow this at, you know, one and a half percent, or whenever money was close to free to borrow, then you could make investments and you could profit and be financed, you know, by the banks, essentially. And even that wasn't appealing to me, not for any good reason, other than just I think the way I was raised. I didn't like having that kind of debt.
 
Dan Sullivan: Yeah, it's if you can't sleep in the middle of the night, I don't want that to be the thing that I'm thinking about.
 
Jeffrey Madoff: Right? Yeah, it's true. And the thing is, I also feel like, and it was like a confrontation I had many years ago in business when somebody was buying the business I was selling, and I was part of the package they were buying, and when the discussion got heated, they said we own you 24 hours a day, seven days a week, 12 months a year. You're ours. We own you. Don't own me. You're investing in me. Big difference. And I think this is all personal. I'm not talking about best business practices. I never want to be trapped by that sort of thing. I want to be able to walk away.
 
Dan Sullivan: Well, the thing that's really interesting, you know, if you bring that down to current affairs, one of the problems, the Iranian war is not really about Iran. It's about China.
 
Jeffrey Madoff: Oh yeah, these are all proxies, are going on in the Middle East.
 
Dan Sullivan: Yeah, and the big thing is that China has invested enormously in Iran, and they haven't been paid for it, and the way they're going to be paid for it is great discounts on the oil.
 
Jeffrey Madoff: Yeah, which is 80 percent bought by China.
 
Dan Sullivan: Yeah, but the other aspect about it is the Chinese are demanding it in Chinese currency, and what's going to happen, because I think it's going to be a multi-nation thing, like, as I've been reading, is that this is going to be a NATO problem, it's going to be Middle East problem, and there's going to be a lot of navies in there patrolling and guaranteeing that the straits are open, but they're going to say whatever deals you had between China and Iran, it's going to be in dollars now. The repayments going to be in dollars, you know, and you know you can really, really see that what's the central value that is being exchanged in any exchange in the world for any reason, what in fact, is somethings being exchanged, so your story about them saying they owned you, and you say no, it's an investment, they say, well, we don't look at it that way, and they said, well, if I walk tomorrow, whose problem is it?
 
Jeffrey Madoff: That's right. That's right.
 
Dan Sullivan: Yeah, it's like, if you own the bank a million dollars, it's your problem. If you own the bank 100 million dollars, it's their problem.
 
Jeffrey Madoff: That's right. Yeah, which the phrase that was result of that kind of thinking was too big to fail.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: Right. You know, because it would take down too many things with it.
 
Dan Sullivan: Yeah, there was a story of one of Trump's bankruptcies, and he was out to dinner one night, and he and a group of people were walking out after the dinner, and there was a homeless person on the sidewalk, and Trump gave him 100 dollars, and the people with Trump said, "Do you know that man?” He says, "Yes, I do.” They said, "Who is he?” And he says, "He's someone whose net worth is greater than mine.”
 
Jeffrey Madoff: Or perceived net worth.
 
Dan Sullivan: No, no, he was in debt. He was in debt. The guy on the street wasn't in debt. He just got 100 dollars so 100 dollars is more. And you know, people are really different in their relationship to the risk of that. I think we're all built differently.
 
Jeffrey Madoff: Right.
 
Dan Sullivan: You know, I really like cash in the bank.
 
Jeffrey Madoff: Well, I think if you look at your background, the business things your dad went through, you know, the dependence on the farming aspect and the crops, and selling them within that what was a relatively short window, you know, and all those things that the security was having some money in the bank, because if you didn't, you would have to oftentimes settle for less because of the other pressures you had to get your hands on money.
 
Dan Sullivan: Oh, yeah, yeah, yeah. Well, the farm failed, and one of the problems was that during the Second World War, the U.S. government guaranteed all farm prices, and my father worked in a war—he had grown up on a farm, but he worked in a war factory in Cleveland. When he got out, they forgot that the moment that the war was over, it went back to marketplace prices.
 
Jeffrey Madoff: As opposed to the guaranteed prices.
 
Dan Sullivan: Yeah, yeah, the U.S. government basically just bought all the food up. They needed it for the troops, and they needed it so that there was …
 
Jeffrey Madoff: They needed it, but they also had to know it was available.
 
Dan Sullivan: Yeah, yeah, yeah.
 
Jeffrey Madoff: This is inspiring me to want to read up on an area that I don't know that much about, which is the when did currency become unified, you know, when did we go to a single currency, and then how did the agreement come about in terms of international exchange? I mean, it's kind of, you know, fascinating. I had done a job with Sanford Weill, who was the CEO of Citizen Group, and his nickname in the 1980s was the monster, and he would basically round up numbers, you know, third and fourth place to the right on credit card debt, but there was billions being transferred every day, and that little fraction of a fraction was a ton of money, and he would do whatever was necessary to round up those figures, and you know, command that. I think you know when he got involved with Qatar and Education City, and Weill Cornell Medical College being the anchor school. There it was really interesting, because the good reason was he wanted to bring about international understanding and cooperation. The real reason was he was expanding Citibank's reach into the Middle East, and you know there's a vision that's necessary to be able to understand that and execute on that.
 
Dan Sullivan: Yeah, that big thing, you know, there's some famous, just what Sandy Weill was doing, there was a guy who was in back office in one of the banks and he was on to that, and so anytime if you average the sum of five and six, it's 11, but if you round it up, there's a little bit, there's a part of his cent, and this guy took out 12 million. He created a computer program that gave him 12 dollars million and they couldn't charge him, because, according to the records of the bank, he hadn't stolen anything.
 
Jeffrey Madoff: Interesting. Well, and you know, there's been fortunes made on the float between the interest rate, the time of purchase, and the execution of the deal, and you know that kind of trading, which again is something way beyond my understanding, other than very generally, but it's amazing. One of the things I never understood, I got involved in stock market some years ago, and would sit with this trader at Beige. This is when I was still living in Madison, Wisconsin, and really good guy, and that was a time when near buying stocks to sell those stocks, you could have a 425 dollar fee on 1,000 dollar transaction, and the part that I couldn't understand was—which, by the way, technology wiped that out; you now trade for free buy and selling, but for years that was all proprietary. Now you can get the same research the brokerage houses get, and it's kind of interesting when you think about that. That's a real democratization of knowledge.
 
Dan Sullivan: Yep. Yep.
 
Jeffrey Madoff: But what I wondered about was, so a stock reports their quarterly earnings, it was expected to be down 6 percent but it was only down 5 percent. The stock goes up. A stock that was supposed to go up 5 percent but only went up 4 percent goes down. I thought, no, wait a minute, I would rather have something that goes up 4 percent, then I'm losing less, and I never understood why. If you didn't lose as much as they thought, your stock would go up.
 
Dan Sullivan: Yeah, because the big thing is it didn't do as predicted.
 
Jeffrey Madoff: That's right.
 
Dan Sullivan: And one of the negative was a plus, and the plus was a negative.
 
Jeffrey Madoff: Yeah, I always found that counterintuitive.
 
Dan Sullivan: Well, it's like in medicine, if the tests come back and it's a negative, that's good for you.
 
Jeffrey Madoff: That's right.
 
Dan Sullivan: Yes. But if the tests come back and it's a positive, that means it's good for the doctor.
 
Jeffrey Madoff: Yes, negative and positive can mean very different things, depending on which end of it you're at, yeah. It's fascinating.
 
Dan Sullivan: The other thing is that it can only be 99 percent good. It can never be 100 percent good. It can only be 99 percent good. I said, what if you're really healthy, why don't you have one that's called 120 percent in this area? You're at 120 percent, I think it gives you more incentive towards 99 percent, and I can't get to 100 percent as a disincentive, you know. They could just drop the line, this is the average, and we're going to establish 100 percent, and if you're better than the average, we're going to give you an extra 20 percent. I think you would stay healthier if you had that incentive.
 
Jeffrey Madoff: Yeah, I guess my incentive’s to feel good. I failed back, was some years ago, I was in my late thirties, early forties, and because I was the key man in the company, you know, I'd have key man insurance, and it was like a 5 million dollar policy or something like that, and they sent a doctor, the insurance company sent a doctor to my office, so he wanted me to piss in a cup, and he said, “How is your urine flow?” I said, “Fine. How's yours?” He said, “So steady and stream it.” I said, “Yeah. As a matter of fact, hold the cup out.” And I walked across the room, and I said, “Okay, just lift it a little bit. I'm gonna piss into the cup from here.” No, no, no, no, no, no, it. I actually thought I was gonna do it, by the way. I considered trying, but yeah, but I know I failed.
 
Dan Sullivan: Worst doctors in the world, by the way.
 
Jeffrey Madoff: Oh, insurance doctors.
 
Dan Sullivan: Insurance doctors.
 
Jeffrey Madoff: Of course. Yes. Well, as the saying goes, you know, what they call the person that graduates from medical school from the worst medical school in the world? Doctor.
 
Dan Sullivan: That's like, you know, the difference between surgeons and God, but God doesn't think he's a surgeon.
 
Jeffrey Madoff: Unfortunately, yes, that seems to be. The friend of mine was telling me his dad on this development where a lot of family friends lived, and I said, you know, “I've got a couple of my aunts that live in your dad's condo development, and they think that he's one step below God,” and he said, “Well, that's two steps below where my dad thinks he is.” But yeah, it's interesting. I think going back to our beginning, in a world that's quite divided, finding consensus is very difficult. Yet, whether it's about AI, whether it's about currency exchange, setting up a standard time, consensus is necessary for the world to function. The more we refuse to cooperate with each other, the less progress is going to be made, because progress is made by those disparate elements coming together and realizing this is in all of our best interests. That's what we need to do in order to move that forward, and I think that's another area where about relationships, it's just another thing about relationships, you know, that you have to realize, and the greater good doesn't necessarily have to be altruistic, just a greater good means that now we can do international currency exchange, now we can have credit cards.
 
Dan Sullivan: And firm time system.
 
Jeffrey Madoff: Yeah.
 
Dan Sullivan: Yeah. It's really interesting. The guy's name is Fleming, by the way, who created the universal time system, a Canadian. And the problem was, as you pointed out, that this town, it's noon in this town, and it's five minutes after 12 in this town. If you were doing it on a standard system, they're both off because they're not in agreement, but the problem is when they laid tracks, they just had single tracks. They didn't have double tracks, so a train would be going this way, another train couldn't be coming the other way, so they created sidings, you know. They'd have a siding where you could pull a train off that was going this way, so the one coming back, and they were having head-on collisions, and they recognized right away you couldn't go anywhere with railroads if you didn't have a uniform time system, and that was agreed on. They had an international conference, and they all agreed that there was going to be uniformity of time, because they had the telegraph, and they could establish it with the telegraph. Before the telegraph, you couldn't establish it.
 
Jeffrey Madoff: Right. And yeah, well, telegraph was kind of the equivalent of air traffic control. You know, back then, and you know, they even had to agree on the gage of track, you know, because engines were made by different companies, and you know the only way this is going to work, we could all use that tracks like the highway system, right?
 
Dan Sullivan: That was one of the big problems that stopped Hitler, is when they invaded Russia, the Russians had a different gage of track, so the whole supply lines of the German army had to be unloaded and put on new things, and it was one of the crucial time delays that prevented them from doing what they wanted to do, because they had about a three month period when they had to take Moscow, they had to take the other cities, and winter set in. It was because of they had enormous supply delays to do that, where they just couldn't use the same set of tracks. They had to take everything off one train, put it on another train. They didn't have enough Russian cars to get the material over. Yeah, he didn't think of that. He thought of many things, but he didn't think of that.
 
Jeffrey Madoff: You know, that's what's so fascinating, is what were those decisions? How did they reach those decisions that unified whatever we're talking about, whether it's time, whether it's currency, whether it's track aging, at some point, because there, you know, there were opposing parties.
 
Dan Sullivan: Oh yeah.
 
Jeffrey Madoff: But what was the unique decision making process, or what put it over the edge? How was that negotiation accomplished? That would be very interesting to know from those different crucial decisions.
 
Dan Sullivan: Yeah, and what happened to the stock market five minutes after the decision?
 
Jeffrey Madoff: Yes. Yeah. No, it's really interesting. I'm sure there's some book or something written about this, but I think it would be really fascinating to see, is there any kind of through line in terms of how these things were approached, because they were, I mean, it was truly world changing.
 
Dan Sullivan: Yeah, well, it all comes down to measurement. I mean, there has to be some sort of physical measurement that you're using for almost anything, whether it's money, whether it's time, there has to be measurement that everybody agrees on the measurement. I mean, one of the things that's really worked in our favor is to have most of our market in the United States, but most of our expenses in Canada.
 
Jeffrey Madoff: Yeah, that is.
 
Dan Sullivan: Yeah, so for this is our thirty-seventh year, and for 37 years it's been 1.26 dollar difference.
 
Jeffrey Madoff: Was that by design or by accident?
 
Dan Sullivan: By accident, yeah, by accident.
 
Jeffrey Madoff: You know, which is also interesting, because there's a lot of people that would not admit that it was by accident, because they would want you to think that no, you know, oh geez, I wish I would have thought of that. Well, take my course, and I can tell you how to think that way. Well, the thing
 
Dan Sullivan: Well, the thing is, we started the company in Canada, you know, and we're Americans, and we realized that the bigger market was going to be south of the border, and most Canadians wouldn't think in those terms, you know? I mean, it's a vast, dangerous wasteland for most Canadians. Yeah, I have a long time, he's 35 years in the Program. He's a printer from Montreal, and in 1976 when the separatists took over Quebec, they changed the language laws, so everything had to be in French. They changed the language laws, and so he and his family moved; his father and the family moved to Toronto, and printing has probably been one of the most commoditized of all industries, because of technology. I mean, it's just, there's no joy in printing. I say it's an industry without joy, but he was very creative, and I said, "Do you know what is killing you is that you're in competition? What you need to do is to have a business where you're not in competition.” And he says, "Well, printing is just all competition,” you know, and I said, “I know, but if you could, would you like to have a printing business that's not in competition? I mean, if you could do it.” And he said, “Well, it's just not possible.” I said, “I know the way you're looking at it, it's not possible, but is there a way of looking at it where it is possible?”
 
So he was very inventive of coming in with new envelopes, and you could see right off the bat that he was very creative, and I said, "So, what if you sold them your creativity up front, and one of the conditions of them getting your creativity is that you would get the printing job with no competition?” And he did it immediately. He started in Canada. He started to really do well, you know, and he had just very innovative ways of thinking about their printing, and he would sell them the creativity, and then it came with he didn't have to compete on the bid for the printing job, okay. And then he got to the point, and he says, "You know, I've done as much as I can. I don't want to go nationwide because Toronto is really the main center. I don't want to take on a lot more overhead by going to the West Coast or the East Coast.” And I said, “I don't know if you've noticed, if you look at the map of Canada, just south of Canada, there's another country. Have you, have you ever looked at the … it's just a different way of looking at things.” I'm just suggesting different ways, and now he's got five of the biggest financial institutions in the United States, where he's creating new approaches for them, and they're paying him a yearly fee, yearly fee for his creativity, but he still gets all the printing jobs with no competitive bid.
 
Jeffrey Madoff: Interesting.
 
Dan Sullivan: Yeah, and he's been with Coach for 35 years.
 
Jeffrey Madoff: Yeah, you know, or talk about the standardization or unification of measurement, and so on. It makes me think of, you know, the Tower of Babel.
 
Dan Sullivan: I've thought about that lot over the last year.
 
Jeffrey Madoff: How so?
 
Dan Sullivan: No, it's just that we've reached Tower of Babel stage in the world.
 
Jeffrey Madoff: Yeah, it seems that way, doesn't it? Yeah, I've thought about that a lot, also.
 
Dan Sullivan: And more so than 10 years ago.
 
Jeffrey Madoff: Yeah. And how we need agreement to progress. I'm sort of looking back on today, because we went, started one place and went to actually, for me, relatively unexplored territory, but things that I think about, and it was quite interesting, because it makes me want to look deeper into some of these things, because of what those potential shared or common interests are, so that you can get over the noise and move forward, and realize, you know, to me, whoever would have been elected mayor of New York, I wasn't. On one hand, I may not have been thrilled with the choices, but whoever would win, I want them to be successful, because I live in New York, and …
 
Dan Sullivan: I know where this is going.
 
Jeffrey Madoff: You know, to me, that's what it's about ultimately, and I don't think we've passed the point of no return. I'm talking, you know, national, but I think said people lose sight of the fact that it's in all of our interests that things go well. That doesn't seem to be hard to figure out. The hard part is, how do we implement that? Yeah, where that is.
 
Dan Sullivan: Yeah, there's dips, you know, it's a bit like a Seng curve. There's when things get confusing, and then there's some sort of agreement that then things get clear again, and that's things. So, my sense is that we're just in one of those periods. I think a lot of it had to do with the reorganization of the world after the Second World War, where there was major agreement. There's these two powers, and neither of them can afford to go to war with the other one, and you know our main job is to not surprise our enemy with anything, you know, like you have to have all these roots of, yeah, we're against them and they're against us, but we're going to have a lot of communications, so that we're predictable to each other, and so that was the American Soviet standoff, and I think it was a very unnatural period of human history. I don't think we've ever seen that before, and so inside one side there was a lot of communication with each other, and on the other side there was a lot of communication with each other, but I still think that that was in 1991 that the Soviet Union collapsed, and I think it's been a lot of reorganizing in the world since that happened. Because very clearly one side won, you know. It's very clear from the Cold War that one side absolutely won, and now they can go at each other; the side that won, they can go at each other,
 
Jeffrey Madoff: You know, in spite of how modern the world is, in some ways we also haven't left those primitive roots.
 
Dan Sullivan: Yeah, one of the things I've thought a lot about is operating systems, and I think economics is the highest operating system, you know, that when everybody's agreement, how economics work, it's actually the most peaceful, it's the most cooperative. When economics is not working, it becomes very, very political. It becomes very political. You drop down because politics is an operating system, and now you have arguments, and you can actually have violence around it, and then when politics doesn't work, you go down to the religious level, because religion is an operating system. Iran is a country where the economics don't work, and where the politics don't work. They're operating on religious principles, and then when you drop down a lower than the religious level, you're back to tribal level as an operating system. So, Iran is between tribal and religious, right? Where Israel is religious in a certain way, but they have crazy politics, but they have good economics. Israel has really great economics, you know, so you're having very, very uneven battles between what seem to be countries, but most of the countries in the United Nations are just tribes with flag.
 
Jeffrey Madoff: And there have been many world leaders that have talked about if we were trying to police all the bad governments around, there are a lot more bad ones than good ones, you know. And you know, the question is, how do you neutralize the negative and try to move forward with the positive with the knowledge that never will everyone agree?
 
Dan Sullivan: Yeah, I mean, the inequality in the world on the economic level is too great to even conceive. I mean, people just have no comprehension of the smallest countries who are weakest economically. You can't even talk about them in the same category with the countries that are strong.
 
Jeffrey Madoff: Well, because also the biggest reason is that they don't wield influence because of the circumstance.
 
Dan Sullivan: Yeah. I talked to Canadians about this because they grow up with a sense that there's the United States and then there's us, and we're ... and I said, do you know that the GDP of Texas is 50 percent bigger than the GDP of Canada? And Texas isn't even the biggest of the states.
 
Dan Sullivan: California is equal to France, you know. So I said, you're not, you have no comprehension, you know, you have no comprehension of what the inequality is here. I mean, if you go to Times Square and go out 100 miles and draw a circle, that economy is bigger than Canada. And half of it's water.
 
Jeffrey Madoff: Well, Canada's divided itself also.
 
Dan Sullivan: Oh yeah.
 
Jeffrey Madoff: You know, but again, that's part of what civilization is. Civilization is people living together, mostly in a peaceful way, so that they can grow and prosper. That's the goal. Is that often achieved?
 
Dan Sullivan: Well, I mean, it's been remarkable how much of it there has been.
 
Jeffrey Madoff: True. I think that's true.
 
Dan Sullivan: You know, I look at it, what strikes me is that probably 90 percent of the world population gets up every day and kind of gets along with each other.
 
Jeffrey Madoff: Yeah. It was a fascinating story in The New York Times about Minnesota and the impact of what had gone on there. It was very interesting because it got into the different ethnic groups that are there and just change to the very positive in terms of the relationship with the citizenry and the police, which the local police in Minneapolis were great, but there was, the George Floyd was the turning point in terms of the relationships, and now the relationships are fantastic. They actually have their applicants are up by over 30 some percent for the department. People now want to work there, which is really interesting, but it's fascinating because it's to me, I've always looked at the world and life like the guy that spun plates on the Ed Sullivan show. You know that he's got seven plates, and by the time you know he gets down to number five and six and seven, and those going, then the first few are wobbling like that, so he's got to run back those going, and it's always spinning plates. That's very rare for that moment where they're all spinning the same, so something is always requiring attention. Something is always throwing it almost out of balance, but with attention that equilibrium can be restored, usually. And I was just a kid, but watching that, I thought, oh, there's seven of those, is that seven days of the week? Is this about life? It was just fascinating to me. Yeah, that is how I look at life.
 
Dan Sullivan: Yeah, just make sure your own plate is okay.
 
Jeffrey Madoff: Well, those are kind of all my own plates in a way. We're all affected by these things, so yeah, that looks what I got out of today, and it actually makes me want to do some further study into how did that come about. I find that kind of thing, you know, really, really interesting. What did you get out of today?
 
Dan Sullivan: Yeah, I think the big thing that the factors that go into having a common standard that people will agree to. I think it's an interesting, yeah, because my sense is it's not two things that have to be right, there's probably about 20 things that have to be right for it to satisfy, and it's always an experience of the past that comes into fact that things weren't working the way we wanted them to, and what are the trade-offs you have to do in the present so that everybody gets a future that's better than their past. I think that's some of the factors that come into it. The big problem is that if you insist on 100 percent your way, it never works.
 
Jeffrey Madoff: That's right.
 
Dan Sullivan: There's got to be trade-offs, and I think the biggest thing is if you're going to get this, then I have to get this, and we get down to the point where, okay, this is good. And then stick to it.
 
Jeffrey Madoff: I agree, yeah, I agree, and you can always think about the deal if the deal is ever coming up for renewal, but keeping in mind that in the interim we've set up something that is livable for both sides.
 
Dan Sullivan: Yeah. We've just been having a situation in Canada that brings up a lot of controversy, and that is that Trudeau was the Prime Minister and he resigned, and they had a leadership and they got a new leader, but then there was an election and it wasn't a majority government, and what's been happening is about, I think we're up to four now, and I think five does it. We've had people who crossed over from other parties to join the lead party, and my sense, I have a real problem with people changing parties.
 
Jeffrey Madoff: Because?
 
Dan Sullivan: Well, quit, and then there's a by-election for new things, quit, and then run as a thing, but I think trading parties, because that's not what your voters ask for. They ask you're breaking the deal with the voters. If the next election you want to run for the other party, you can do that, and there's all sorts of, you know, rumors of bribes and everything that got the people to cross over, and it's two other parties where people have crossed over. Stick with the deal, and then when there's a new deal, then change your mind. Don't change the deal in the middle of the deal,
 
Jeffrey Madoff: Right? Because then you're not representing the people who voted you in in the first place.
 
Dan Sullivan: Yeah, yeah, yeah.
 
Jeffrey Madoff: So, yeah, well, politics is called the art of compromise, and whether that's actually true or not, it seems like is.
 
Dan Sullivan: Oh, yeah. Oh, yeah.
 
Jeffrey Madoff: I mean, that's how things function well.
 
Dan Sullivan: Yeah. Well, we don't see what goes on behind closed doors, you know, we just see what makes the newspaper, you know, what makes the headlines. I'm sure there's millions and millions of deals being made every day that moves things forward.
 
Jeffrey Madoff: Oh, absolutely, absolutely. And the other thing to remember is, you know, you don't want to alienate a significant part of the market for the goods or services that you're selling.
 
Dan Sullivan: Yep.
 
Jeffrey Madoff: So I think we were definitely within the anything and everything arena today.
 
Dan Sullivan: I felt very comfortable. There was never a point in the conversation where I got nervous.
 
Jeffrey Madoff: Yeah, I like looking around that horizon and seeing, oh, there's nothing fencing me in.
 
Dan Sullivan: Very good.
 
Jeffrey Madoff: Thanks for joining us today on our show, Anything And Everything. If you enjoyed it, please share it with a friend. For more about me and my work, visit acreativecareer.com and madoffproductions.com. To learn more about Dan and Strategic Coach, visit strategiccoach.com.