The Future Belongs To People Who Can’t Be Replaced

Jeffrey Madoff: This is Jeffrey Madoff, and welcome to our podcast called Anything And Everything with my partner, Dan Sullivan. Today, we're gonna talk about, will AI take your job—or maybe create one that you haven't imagined yet? I wanna talk about AI in possibly ways that you haven't thought about yet. And I think Dan, you and I have started so many of our conversations even before we start recording about AI. And it's a very interesting shift, what's going on out there in the world. But how unique is it? Is it apocalyptic? Is it utopian? So the question is, first of all, let's sort of frame the discussion. And what inspired this, an article that we both read, where there was a sign outside the writer's office, that writer being Ezra Klein, stop hiring humans. And so many emails that I get every week, and so many articles that are delivered every week, are about either the coming dystopian front that all jobs are wiped out or the utopian front that you'll make more money than ever and only crappy jobs are going to be eliminated. So I'd like, first of all, to get a sense from you is, what do you think is at stake here? Do you think that this is a real thing or just something that is occupying our consciousness now?
 
Dan Sullivan: Yeah, well, first of all, it's just a surprising new thing. And we're still in the surprise phase. But if you look back at other technologies, and I'll go back right to our experience, because we both were born in the 1940s, and the ‘50s was, there's a big world out there and lots of things are happening. And we had the experience of, well, you did in Akron, because I grew up in the same area, that television was going to eliminate movies. That was the big message when the three big networks more or less owned television in the 1950s and 1960s. Being American, I think America has gone through a constant introduction of new technologies that were major technologies because the consumer base was so big. The U.S. was already the number one economy in 1900. It was bigger than all the other economies in 1900, and this was constantly being fueled by new technological breakthroughs. From a standpoint of having eight or nine decades to look backwards, we've seen this before.
 
Jeffrey Madoff: Well, so give me your gut reaction. If you were looking out a window in New York City during one of your frequent visits to the States, and you saw an AI company that had a sign, stop hiring humans, what's your gut reaction to that?
 
Dan Sullivan: That it's a stupid statement. And why is it stupid? Well, because our program, Strategic Coach, coaches 2,500 business owners, and they're all hiring. And they're hiring humans. So my day-to-day experience is, it's going in just the opposite direction, that there's efficiencies that come with AI. You know, there's a lot of detail work behind the scenes. A lot of it is just getting a handle on measurements in your own company. And I would say that the general experience over the last three years, since ChatGPT started, is that they're now able to crunch numbers that they were never able to crunch before. And I think that there's a new jump in being aware of the actual numbers at a much finer degree than they could before.
 
So to give you an example, most of them knew what each month meant in terms of their numbers. So at the end of every month, they had certain measurements. You know, it's like looking at the scoreboard at the end of the first quarter. Are we winning or is the opposition winning? And I would say that being aware of their results and records has gone from a monthly record keeping to a weekly record keeping in three years. They're now aware at the end of each week what the numbers are where before it was a month, which is really interesting because you can course correct faster having the new numbers. I would say this, that there isn't a client of ours that isn't using it, but for right now they're not using it organizationally, they're using it personally.
 
The individual entrepreneur is now using AI tools to think things through, to check out research, to put into print thoughts that they had that before were loose notes, they were making memos and everything else. The other thing that's really interesting, there's a real movement towards journaling. I notice a lot of our clients are now journaling much more at the end of three years than they were three years ago, writing down their thoughts and having easy access to their thoughts for new ideas.
 
Jeffrey Madoff: When I look at a sign like that, stop hiring humans, I'm trying to think of when before has the goal of a business been to get rid of people? I can't think of a time or any technological advance that the goal was to get rid of people.
 
Dan Sullivan: Well, that certainly happened in the move over from the agricultural economy to the industrial economy, so it certainly happened at the end of the 1800s. Half the entire workforce in the United States was involved in food production in 1900. Now it's 3 percent.
 
Jeffrey Madoff: Right, but I would say along with that shift, and I don't know the numbers, it's just a gut reaction to it, is that there were other places of employment for those people to go. It's not like overall employment shrunk, but you didn't need as many people to do certain things as you used to need.
 
Dan Sullivan: Well, you had bigger unemployment numbers back then than you do now. The numbers that cause real concern right now are like if you have 6 percent unemployment, that's a big deal. Back then, it was 20 6 percent unemployment. I mean, the 1880s, 1890s, you had huge unemployment and you didn't have the safety net. The government safety nets weren't there yet for the unemployment. But at the same time, there weren't the communication vehicles to point out the problem. And now they're on top of the numbers much faster today than they were 100 years ago, 125 years ago.
 
Jeffrey Madoff: Well, I think probably the largest difference that caused that disparity in those numbers of unemployed to go down as women got more into the workplace.
 
Dan Sullivan: Yeah. And the thing that really caused that were the World Wars.
 
Jeffrey Madoff: Right. But I also think that that's how those doors initially opened. And then there was inarguable proof that women could do the work—and, by the way, get paid less for it. And we've talked many times about even today before we started recording about how the longevity, like the employees for my parents had, that your coaches and the people that work at Strategic Coach, what they have. And I'm thinking, so what's the reason for that? Aside from treating people well, which we've talked about before, but I'm thinking about technology. And then I think, what made people more productive, made them want to go to work? And I would say one of those things was air conditioning.
 
Dan Sullivan: You know, that not only changed employment, but it certainly changed where the employment was in the country. Like the South was not where you have 100-degree Fahrenheit temperatures for three or four months of the year and humid and everything else. You just couldn't do it until Carriers, the real pioneer for air conditioning. And then the transportation routes in the United States, there wasn't the interstate highway system where you could ship anything anywhere. There's far more responsibility asked of the individual today to plan out their own future. Much more emphasis on personal self-development. There's much more emphasis on being aware that the job you had today is going to change in response to changes in the marketplace.
 
And I'll give you an example of that. My oldest sister has lived for 60 years in Lorain, Ohio. Lorain was a big steel town there. I think there were three steel plants in Lorain. And I was home in the ‘80s visiting with my parents. I was just watching television, which was local television. And the final steel company in Lorraine had just closed down and they were interviewing the workers coming out. It was the final shift. After this shift was over, the factory was closed down, but not only that, there was no more steelmaking in Lorraine. And one of the workers, when he was being interviewed, he says, why didn't someone tell us this was coming? Like he was shocked, but it had been coming from 20 years previously. He just wasn't paying attention.
 
Jeffrey Madoff: Well, I think when you're getting paid on the weekly basis and things are going as you're used to them going, it's easier not to think about what could be happening. And that's ultimately the individual worker has to think about it for themselves. The business manager has to think about it regarding his workers and how that's going to impact, and of course the business owners sort of, as it flows upward, you know, the different changes. They have to be more alert if they're going to survive a lot of people who are employees and satisfied with being employees. During our lifetime, the nature of that has really changed, because there were so many jobs that basically you started working at Goodyear or Goodrich, the rubber companies in Akron, the steel companies in Canton and Lorain, the glass companies, and Corning is also in Ohio, too.
 
Dan Sullivan: Well, Toledo was the equivalent to Akron. Toledo was the glass capital. Yeah, Libby Owens Ford was the huge company because all the auto glass was made, which went to Detroit, not very far from Toledo. The safety glass for the automobiles was made in Toledo.
 
Jeffrey Madoff: You know, I think that it's fascinating because we're looking back at things. On one hand, it's history. On the other hand, it was very much a part of our lifetime. That shift happened when we were probably in our thirties. But that whole shift happened.
 
Dan Sullivan: Yeah. Well, the big thing was all cars were made in the United States. They were all American cars. And I think that the German cars were the first ones. I remember it's called Audi now. There was a German company, but they changed their name, Audi. It had another name. And I remember in our town, somebody bought a German car. Now, in the 1950s, there was a prejudice against owning a German car. When Volkswagen brought their, you know, the first, the Beatles came in in late 1950s, early 1960s, and said, didn't Hitler design this car? You know, and there was still the memory from the war. And the Japanese cars started coming in. So the big thing is that they had to compete on price because they had a bad reputation. These were the enemies. These were the worst enemies of any war that the United States had ever fought, were the Japanese and the Germans.
 
So that started to happen, but they had a better price comparison. A low-cost Japanese car was, almost anyone couldn't afford a low-cost Japanese car. They couldn't necessarily afford a GM car or a Ford car or a Chrysler car and everything like that. But the big thing is, if I noticed a change in mentality, like mental and psychological, is that people are being told these days, you have to look after your own future, and an employer is not gonna look after your future. Which is not a very strong selling point. Well, it's not a selling point, but it turns out that's what it requires, that each individual actually takes responsibility for their future employment.
 
Jeffrey Madoff: Which on the face of it, I think that's true. It always has been on the face of it. If you want to have more agency over your life and your work and so on, I think that's all positive. But I also think that the other side of that is don't expect any loyalty from me, you know, because I'm going to be going where it's best for me. Some people are short-sighted and do that just for the money, then realize that didn't necessarily work out either. But I think it does create a larger gap that's harder to bridge in terms of you want people, when you're an employer, as you are, as I am, and you want people to invest their efforts and be rewarded for their efforts. You still maintain a pretty long tenure at Coach. I was talking about my parents also and how people worked for them for decades. Now, my parents grew up at a different time where jobs could be like that. But what do you think is what keeps them working for you and Babs?
 
Dan Sullivan: Well, we put an enormous amount of emphasis. We have sort of an agreement when people come to Coach. First of all, you got three months trial where there's no fault. You can let someone go at the end of three months if, you know, you can tell they're not working out, you know, they're not even doing well what they were hired to do. Okay, but we're not. We have certain things that we need done so that somebody else could be freed up in the company. And I talked about this during our company meeting. We just had an annual meeting in Chicago with, there were about 120 of our team members there. They watched the meeting on Zoom, so they were engaged, but they were, for one reason or another, they couldn't make it. And we said, you know, that, and this is not implicit, what I'm going to explain here. It's not an implicit message, it's an explicit message, okay, is that there's a whole set of activities that we want you to take over so that somebody else can be freed up to do higher level work. Okay. And you'll get there as you go along.
 
So we have to do this and do this and do this. You know, we're watching the person. Do they show up on time? Do they do what they say they're going to do? Do they finish what they start? There's just some basic work habits. At the end of 90 days, we can just let them go with there's no fault. That's the way it is in the U.S., that's the way it is in Canada, and that's the way it is in the UK, where we have basically, it's not a question, can they work at Strategic Coach? Could they work anywhere? I mean, do they have work habits? Are they punctual? Are they capable of mastering the early tasks that were to do them? And some of them aren't, you know, and we let them go at the end of three months. But at the three-month mark, we say, now here's the deal. We're observing you, and we're observing what you do really well, and we're observing also whether you really, really like the work.
 
So there's two sides of it. Does it actually satisfy our requirements? And we're going to have a constant conversation. As long as you're at Strategic Coach, we're going to be having a conversation between, do you really do this well? And the second thing is, do you really like doing it? And that's the conversation we're going to have. And everybody in the company who has been there 15 years, 20 years, 25 years, 30 years, they have constantly negotiated with us for work that is more important to us as the company. But not only that, it really rewards you. You like the work, and are you freeing up other people by taking on greater responsibility? And so it's a constant conversation. You know, it doesn't end three months in. It goes on. Even our longest tenured person is 35 years and she's still adjusting herself and creating new things and taking on new responsibility, but she's been doing this from day one.
 
Jeffrey Madoff: Well, and what you're talking about also has nothing to do with AI.
 
Dan Sullivan: No, no, I actually haven't used the word AI at all.
 
Jeffrey Madoff: Yeah. And when you're talking about the, let's call it the audition period for employees, I think about Zappos. What they would do—I think it was after two weeks, it might've been a month, I'm not exactly sure—but the principle still holds, is that they would offer that candidate, I think it was a month, they would basically offer them a month's pay. It was $5,000.
 
Dan Sullivan: Yeah, to leave.
 
Jeffrey Madoff: To leave. That's right. Yeah. And the reason they did that was because they didn't want people that didn't want to be there because it would disrupt the culture of the company. And they felt that was way more costly, you know, than and worth getting people out early who weren't going to perform, who would disrupt the company culture and all of that sort of thing. And it's true throughout history, there's always these answers, hypothetical answers to like, what is attractive to people? What is unattractive to people? How do you get a job? How do you keep a job? All these things and all these discussions which have been had now for centuries.
 
I have nothing to do with AI either. But I want to give you a few numbers here, because Dario Amodei, who runs Anthropic, he said that AI could eliminate half of all entry-level white-collar jobs within five years and push unemployment to between 10 and 20 percent, back to those old numbers you were talking about. The World Economic Forum surveyed over 1,000 major employers and found that 41 percent of them plan to reduce their workforce because of AI in the next five years. And Goldman Sachs has modeled that roughly 300 million jobs globally could be affected by generative AI. And, you know, these are legitimate, smart business people.
 
Dan Sullivan: Well, their guess is embedding, too.
 
Jeffrey Madoff: Well, that's true. They have actually no proof that this is actually taking place. That's true.
 
Dan Sullivan: Except if it's strictly technological work. The interesting thing, technology is really good at doing technological jobs. They found a new technology means to do a better technological job. But as far as interacting with customers and that, AI has no effect whatsoever on that. We haven't even entered into the realm of teamwork relationships, customer-company relationships. I mean, AI has nothing to say about this.
 
Jeffrey Madoff: I think also what you can't automate is judgment and those nuanced decisions.
 
Dan Sullivan: Discretion.
 
Jeffrey Madoff: That's right.
 
Dan Sullivan: Well, the other thing is, Anthropic is in the marketplace of selling its technology to people. This is the billboard outside of the writer's thing. First of all, about 10 percent of this is real with the new technology. It's actually working, it's actually doing what it says it's gonna do. About 30 percent is we're in the betting and guessing stage that this is going to happen. And then there's 40 percent hype. And then there's the 20 percent of it is just a scam.
 
Jeffrey Madoff: Yes, there's a fine line between hype and scam—coincidentally, is the name of my law firm, hype and scam.
 
Dan Sullivan: But the other thing is that virtually everything that I've seen written up in the magazines is about corporations. It's not about entrepreneurial businesses, strictly about corporations.
 
Jeffrey Madoff: Well, because those are, in most cases, the major employers, right?
 
Dan Sullivan: Well, they're 50 percent. The other 50 percent is entrepreneurial businesses.
 
Jeffrey Madoff: Say that again?
 
Dan Sullivan: Well, about 50 percent of employment is large corporations, and about 50 percent is privately owned businesses, entrepreneurial businesses.
 
Jeffrey Madoff: And where would, like, government jobs be in that equation?
 
Dan Sullivan: Well, government is a third category, and the reason is that when we look at the economy, government doesn't really have anything to do with the economy, because government doesn't actually create value. Well, I don't know. No, but not in the way that corporations or businesses do, okay? They're extracting value from the activity of corporations and businesses to pay for government programs, but there's no productivity in there that we would ordinarily understand it in a business sense.
 
Jeffrey Madoff: Yeah, and I think there's … well, that's a whole other discussion.
 
Dan Sullivan: Yeah, I mean, they've eliminated 10 percent of government workers over the last year.
 
Jeffrey Madoff: Yes. And again, that becomes a whole other story, too. I don't think anybody doubts the inefficiency of bureaucratic setups.
 
Dan Sullivan: Yeah. I mean, there's bureaucracy in the private sector and there's bureaucracy in the public sector. The measurements for productivity in the private sector are very, very acute. In the public sector, there's almost no real good measurement of government productivity.
 
Jeffrey Madoff: Well, I want to shift to something that I think may be unique about AI that we haven't confronted before, because automation has always been about taking a physical task, whether you're going back into agricultural times or the steam engine or whatever, and it's automating physical labor or repetitive tasks. And now there's trying to automate judgment. Do these people meet qualifications, like in the HR world, in sorting through resumes and all that kind of thing, job applications, do these people fit in? There is judgment that is expected to be used, not in the way that I think of judgment, but they're looking for certain patterns that qualify a person for a particular job, or qualify a person for a particular legal action, or qualify a particular activity in terms of diagnostic procedures in medicine, legal reasoning. There's all these kind of jobs that are fairly high value cognitive skills. And they were supposed to be automation proof. But I also think that there have been so many examples of new things that have come along that we're supposed to totally upend the business. But the difference with AI, I think, is this outsourcing of judgment, not outsourcing, but using AI principles, make judgment about whether someone or something is going to work out in those areas.
 
Dan Sullivan: Yeah, well, I think one of the things that from our own experience, so 10 years ago, we had more or less created our own digital back stage. We had used various tools for accounting. We'd use various tools for customer data and everything like that. And we reached the point where we had just crossed about 1,500 customers. And there's just a lot of information. There's scheduling for them. They have different renewal dates. And this was all done by putting various tools together. But we reached the point where we say, you know, just from a complexity standpoint, we can't grow much higher than 2,000, and with the best effort in the world. So we switched over to Salesforce, which will integrate and automate your entire back stage. And it took about five years to do it, because we have 12 different teams that put our company together and they all have an impact on customer relationships. Every part of it does.
 
And we went through it and then all of a sudden we jumped from 1,500 to 2,500 customers because there was the teamwork that the technology involved and the communication that the technology involved was worth it. Now, there was never a thought during that transition to ever let go of any of our team members. As a matter of fact, we want to free people up for greater client contact. The more our back stage is in touch with our front stage, the better the company does. And the technology was absolutely crucial for doing that. And I think AI is going to follow the same path. Does this enable greater customer experience? Does this enhance customer experience? If not, does it eliminate employment?
 
Jeffrey Madoff: Yeah, I think that you're right. That's going to be the main driver. I also think that a big sell on it is that you can greatly reduce your overhead by not hiring because this can do the work of X number of people.
 
Dan Sullivan: Yeah, but I would say that that's more of a corporate mentality than it is an entrepreneurial business attitude, especially if they're a public corporation, because they're answerable to Wall Street every 90 days. And that's the big factor there. Who are you reporting your results to, and who do you get punished by? And if you're a public corporation, you have to report to Wall Street, and you're punished by Wall Street if you're not increasing the profitability.
 
Jeffrey Madoff: One of the things that always got me about investing in stocks was when there would be that quarterly report, and if a company was supposed to make an extra 1.50 dollars a share, but it only made 1.25 dollars a share, the stock would plummet. If you were expected to lose 1.50 dollars a share, and you lost 1.25 dollars, your stock would go up. And I never understood that, because it seemed to me that what enhances the longevity of a business is the ability to be profitable over and over again. Somehow the way that investment logic works out, if you're losing less than was anticipated, your stock value can go up. And the system gets gamed like we saw with GameStop.
 
Dan Sullivan: That's a different world. I have no experience with the corporate world whatsoever, so I'm completely ignorant. None of my working life has ever been involved with corporations, except the wisdom to not do business with them.
 
Jeffrey Madoff: Except, just to place it in proper context, Four Seasons also served as a good model for to your customers and the loyalty of your customers They're a corporation, a big corporation, and I'm sure they're using AI on many fronts, but they've kept the human element that's out front.
 
Dan Sullivan: Yeah, well, they're in the hospitality business, so it's required.
 
Jeffrey Madoff: Yeah, well, although we've both stayed at places that are in the hospitality business, that you would think these things would be self-evident, especially with the name hospitality, but it's not.
 
Dan Sullivan: Yeah. Well, you have the big economy, and the big economy requires very, very profitable corporations. And the people who are the chief executive officers have about a six-year framework to their stay at any corporation. That's about six years. That's the average that a CEO will last at any corporation. Then they're on to their next corporation. So to make themselves attractive for their next job, they have to do a good job with this job, and they have to follow the rules of Wall Street to actually do that. Yeah. So it's very interesting. We have some of our entrepreneurs who have collaborations with large corporations. And what I say is that if you're an executive at a corporation, you're entrepreneurial in the sense of what's your next placement going to be after this placement. So they treat their career like an entrepreneurial business.
 
And what's really interesting, one of our clients runs an advertiser. You've actually met him, Mark Young. And he has a great collaboration with Kroger. Kroger has 2,400 stores. And he's introduced some new ideas for using Fourspace, because all their money is based on dollar return on Fourspace in a store. But the interesting thing about it, he has a direct relationship with one individual in the corporation who treats his career like an entrepreneurial business. He has to succeed over the next five or six years so that his career gets bigger.
 
Jeffrey Madoff: But I think it's true with all of us who are entrepreneurial. You want to …
 
Dan Sullivan: No, he's not an entrepreneur. He's a corporate executive. Corporate executives are not entrepreneurs. They're hired guns.
 
Jeffrey Madoff: So are you saying Mark with Kroger is …
 
Dan Sullivan: Mark is the entrepreneur. So he's providing them with secret sauce. But the person at Kroger is not saying what Mark is doing. He's got Mark as an ace card in his pocket.
 
Jeffrey Madoff: I see, yeah.
 
Dan Sullivan: Yeah, so it's a different world. I've never been attracted to being part of that world, and nor have you, by the way.
 
Jeffrey Madoff: And I mean, I think that what ends up happening, and we've seen this in a number of examples, and I'm blanking on the guy's name. Who is the guy that ran General Electric and appeared, you know, to …
 
Dan Sullivan: Jack Welch.
 
Jeffrey Madoff: Jack Welch, for a while, appeared to be, you know, a business savant until it was realized he gutted the company.
 
Dan Sullivan: He was a serial rapist.
 
Jeffrey Madoff: That's right. That's right. He was a serial rapist of corporate value. And, you know, which is interesting in the fact that these people become celebrities, which enhances their value. Until they get found out. And if they get found out. I mean, I have worked with many public companies, and I think that there are those people, many of them, who, once they land the job, they've got one foot out the door. Because they are looking, they want the bonuses, they want the stock options, and at a certain …
 
Dan Sullivan: Yeah, well, they're a different type of creature.
 
Jeffrey Madoff: Yes.
 
Dan Sullivan: Yeah. And my sense is, I don't have the nervous system for that type of work. You know, one of my clients is a U.S. senator, but he has an entrepreneurial business at arm's length for a while. He's in politics and he's a great guy. And he's if you could pick the sort of qualities that you would like at somebody who's in Washington, in the Congress doing that, he's got all the qualities. But boy, I couldn't take three hours of that activity.
 
Jeffrey Madoff: Yeah, it was interesting. When Ralph Lauren was going to go public, a man named Peter Strom was the CEO and really good guy, liked Peter a lot. And basically he said, I'm going to find someone to take the company public. He said, that's not what I do. And Peter by that point was also old enough. He was looking towards retirement. He wasn't interested in that whole seismic shift of the business, brought in a very, very smart man to take over. And I can't believe that I'm just blanking on his name, but you know, I saw that from an unusual vantage point because of my relationship with Ralph, knowing Peter well, and seeing who was coming in, who was really smart and did the business very, very well.
 
But you see in that corporate game, because they had to replace two other CEOs in rather rapid succession, because there just wasn't the same chemistry going on. And the company was growing very, very fast. But it's fascinating, because in all these cases, it's the human element that's not gonna show up in an AI sorting for qualifications, history, et cetera. And your ability to relate and to sell to someone, which is you relate to people really well, you have no interest in selling them. And that's unnecessary. You sell by proxy in a certain way, because people want to be associated with it. But I'm talking about active salespeople that are conversant with the numbers and all that. That's just not what you do.
 
Dan Sullivan: Yeah. Yeah, first of all, the economy is huge. I mean, it's just a vast thing right now. And, you know, what I find most of our really great entrepreneurs in Strategic Coach are like architects. They're building a great edifice and they keep improving their construction. It's got a great external look to it and it's got a great internal quality to it. The amount of money they have is that anything they want in the future, money is not going to be an obstacle. Money is not going to be a problem. They've learned how to work with money, and they have the lifestyle they want. They have the way they're operating in their life. But they're also interested in constantly improving it, and technology is one of the ways you improve it.
 
Jeffrey Madoff: And how is technology a way that you improve it?
 
Dan Sullivan: Well, I would say, again, it's their awareness of exactly where they are. Like Babs can tell you at the end of every 24 hours what the payables and receivables are. So we've got it down to one day, where 24 hours, we know at the end of each day where we are. And that knowledge allows you to make different kinds of decisions tomorrow. So I would say that AI is going to speed up accounting.
 
Jeffrey Madoff: I think it already has. Yes.
 
Dan Sullivan: Yeah. Yeah. Yeah. And I think that's its main value.
 
Jeffrey Madoff: But the interesting thing is that when spreadsheets were first put into use …
 
Dan Sullivan: Fantastic improvement.
 
Jeffrey Madoff: Yeah. And it didn't replace the accountant that actually unleashed demand for more accounting knowledge that could be released and learning about the business and so on. And that's what I think is quite interesting about it, because also when talents are scarce, doctors, lawyers, engineers, whatever. And those are also areas where people think that AI is going to make a very strong footprint in there. If AI makes knowledge abundant, and less expensive to the point of being cheap, what becomes the new scarce thing people will pay a premium for? Which I think is now getting into the sweet spot of our book, which will be coming out.
 
Dan Sullivan: Human interaction.
 
Jeffrey Madoff: Yeah, yeah, yeah. And that's the part that is so … I think that's the payoff.
 
Dan Sullivan: I do too. I didn't do. Now, having said that, there are some people who are not good at that.
 
Jeffrey Madoff: That's right. Yeah, there's a lot of people that aren't good at that. But that the relationships, the experience of being truly heard, seen, and understood by another person, as when people get wealthier at a certain point, they aren't… it's very interesting. The luxury market in fashion and automobiles and art and so on has been booming up until the past year. And the ostentatious display of wealth, like you just saw that at the Met Gala, you know, that makes national news for this outrageous, expensive fashion show basically. And at a certain point—the fact that a BRCA bag, which I think costs something like 28,000 dollars or 35,000 dollars, some insane amount for a bag, what they would do is say, well, you can sign up for one, but there's not one available. We can let you know if there will be one. And it becomes a fixture of status that you've got that scarce item. But now that's been somewhat going away, except in the most ostentatious circles.
 
But people are spending more on human experiences. So many people I know when Taylor Swift was doing her big tour, flew to another country, paid 2,000 dollars, 2,500 dollars for a ticket. All in, to go see the concert, probably cost them 20,00 dollars. I mean, crazy amounts of money. I'm just tossing out these numbers, but they were very high. And then you saw that now playing out on Broadway and on the West End, where you bring in Denzel Washington, George Clooney, Jessica Chastain, all of these very talented people. But you, for the price of that ticket, a theater ticket that normally would cost you maybe two and a quarter, you're paying 1,200 dollars or 1,500 dollars per ticket because you're going to have the experience with other people of being up close with George Clooney or up close with whatever. And sporting events are the same thing. That's a status symbol. I mean, when I was going to Browns games and Cleveland Indians games, tickets weren't expensive. And I'm not comparing it to now, I'm comparing it to back then. It wasn't crazy. Now, court-sized seats at the Knicks games or any of the basketball teams, I think that that human experience is something that cannot become commoditized.
 
Dan Sullivan: Yeah. So if you were looking for some evidence of rationality here, you're looking in the wrong place.
 
Jeffrey Madoff: Well, that's right.
 
Dan Sullivan: No, I think that the world of money is not rational. The world of money is incredibly emotional.
 
Jeffrey Madoff: Because you're dealing with that desire. And desire is what drives sales for the kinds of things we're talking about.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: You know? But also with the relationship, it's interesting because there was this brief window, which, you know, of course hindsight's 20-20, as they say, but when I first heard about these things, I thought, well, this is really a stupid idea. And that was, there are people that we both know that had an avatar created about themselves, fed it a bunch of their stock answers, and this is being done to the nth degree with Mark Zuckerberg, feeling like this will foster connection in Meta with him when you're not even interacting with him. You're interacting in some mystic looking avatar with him that's been taught the stuff that he says. And it's the total opposite of the direction that things are going. That entity doesn't even really exist. I mean, it's just weird.
 
Dan Sullivan: Yeah, well, I don't think there's a direction that things are going in.
 
Jeffrey Madoff: Explain that.
 
Dan Sullivan: Well, I think a million things are going in a million different directions. You know, I mean, I don't believe that history has a direction. History is looking backwards at the road you've traveled so far, but it doesn't tell you anything about the future.
 
Jeffrey Madoff: Do you think that that's true? You know, the old statement of that, you know, learning from history so we don't make the same mistakes again?
 
Dan Sullivan: Yeah. Well, if you look about it, history is just the record of everything that people weren't expecting.
 
Jeffrey Madoff: Written by those who somehow had an interesting point of observation on it.
 
Dan Sullivan: Yeah. Yeah, and there are people who are keener at putting together patterns, but they're past pattern. I'm a real avid student of Second World War history, and YouTube is very valuable here because there's these half-hour and one-hour examinations from 80 years ago, you know, that they're looking back now with 80 years of experience. For example, Pearl Harbor, which is a major event in American history, was seen as an enormous setback to the United States because the battleship fleet was half-destroyed, and it caught everybody's surprise, and there wasn't preparation for it and everything else. But in retrospect, the way it's being interpreted now is that it was a very, very bad thing that happened to the Japanese because the Americans weren't really paying any attention to them.
 
As a matter of fact, the Americans were trying to stay out of the European situation and they were trying to stay out of the Far East. They had been through one world war and they just didn't want to have the experience. They didn't need to be. But they took it personally. And the U.S. can turn on a dime when people get interested, when you get the whole workforce interested. First of all, it ended the Depression. That was the main value of the Second World War. It ended the Great Depression. Everybody went back to work. A lot of them were drafted. About 12 million of them had a job. They had three meals a day. But everything boomed during the Second World War. But that can only be seen from a perspective of looking backwards 80 years that, oh, we see what happened here. So my sense is that people, I think, aspire to have an activity that other people will buy into as the direction of the future. But it's just a guess and a bet.
 
Jeffrey Madoff: Right. Yeah. Or for those of extreme wealth that took a very short flight in a rocket ship, but they could afford to pay for it. You know, it's also if they weren't able to sit in that rocket ship with other people. Wouldn't have been nearly as much fun.
 
Dan Sullivan: No.
 
Jeffrey Madoff: But the price for that unique experience was so high.
 
Dan Sullivan: Yeah, but one of the things that Babs and I were looking at is that our business has changed less than any other business that any of our customers have. We still have exactly the same business in 2026 as we had in 1989. It was a coaching program for entrepreneurs—just the entrepreneur, not the entrepreneur's company. All we did is the single individual who was there. It was a workshop program, and we had a series of thinking exercises that took place between nine o'clock in the morning and five o'clock in the afternoon. That was true in 1989. That was true in 2026. The business hasn't changed at all. So one of the reasons why we can have such long-term commitment to our employees is that the business never changes.
 
Jeffrey Madoff: Yep. And I was wondering, because I know that you study history a lot, what was World War I called while it was happening? You know, it's interesting because World War I presupposes there will be a two, a three, and a four.
 
Dan Sullivan: No, it wasn't called World War I. It was called the Great War.
 
Jeffrey Madoff: So, yeah. So when did that shift then? When did it become World War I? Because then again, it presupposes the sequence is going to happen.
 
Dan Sullivan: When the Second World started, I think they started naming it World War I.
 
Jeffrey Madoff: So in World War II, were they calling it World War II during World War II?
 
Dan Sullivan: No, I don't think so. I don't think so. No, I think it was named afterwards, yeah. You know, it was very interesting. The one lesson that was learned from the First World War—and General Pershing, who was actually in charge—he's the only American, I think he's the only American, might be four or five-star general, and he was in charge of the entire American force. And he violently disagreed with the armistice. He didn't want the armistice, because the British, the French, and the Americans were on the offense, and they were making tremendous gains, And from about the middle of 1918 up until November. And he said, we have to go to Germany, we have to go right downtown Berlin, and we have to prove to the German people that they lost the war. And he says, if we don't do that, in 20 years, we'll be right back at it again.
 
And in 20 years, they were right back at it again. He said, the people of Germany have no experience that they lost anything, and we have to keep going right to Berlin. That was why it was unconditional surrender in the Second World War. We have to prove to the German people that they lost the war. And the Japanese, too. If you don't destroy their home territory, they don't believe that they've lost the war. At the time of the armistice, the German people thought they were winning the war because they had control of the media in Germany. All the generals were saying, no, we're defeating them, because all the war was in Belgium and France. It wasn't in Germany.
 
Jeffrey Madoff: Well, the United States has been fortunate geographically for that reason.
 
Dan Sullivan: I love that. 3,000 mile moat on one side, 5,000 mile moat on the other, pot smoking Canadians in the north, you know? God loves America.
 
Jeffrey Madoff: So, how's this for a segue? All the areas where we're talking about with AI is that a number of these economists and experts on it have been talking about the more involved they got with AI, the more they wanted from the human beings in their lives, both business and personally. And as we know, there are many people, I don't know what the numbers are, that now look at AI as their friend that they kind of talk to. And there's always been fortune tellers and all kinds of people that do that. But I think it's kind of interesting. Do you think that it is something that is inherent in people, part of our DNA that, although I know there are people that don't like human contact, but that's not the majority. The majority of people want a sense of belonging, a sense of being heard, a sense of being seen. Do you think that in a way that AI is going to make that demand even greater for the unique human experience? And why do you think that? Is it just, I know it's all guesses and bets, but why do you think that?
 
Dan Sullivan: Well, I'll just use my own experience. So I've been two and a half years now that I've been using it for writing. And I can operate at more of a contextual level than a content level with AI. I'll write a piece and it comes back to me. And then I'll say, okay, now I'd like to introduce another idea to the content. And I spend three or four sentences. I said, I'd like you to reflect on this, and I'd like you to modify the entire document with this new idea. And then I press a button, and it's right back at me. And I say, boy, that's really great. Then I get another idea, and I say, I'd like to introduce this idea. And it's just the fact that I don't have any human being who's ever been able to do that with me, where I tell them the idea, and then the copy comes back transformed in a matter of seconds. And it's a great activity. And I'll spend three or four hours working with a document, where before it would take me five or six days because I get tired of rewriting stuff. So first of all, I think that everybody who interacts with idea does it in a different way. It depends upon how they want to kind of have a conversation with themselves. But they don't want to do the work that takes a lot of time effort. You have to put in a lot of time to get a change back that you feel satisfied with.
 
Jeffrey Madoff: Yeah, when it's essentially instantaneous.
 
Dan Sullivan: I do like instantaneous. The other thing is that the designers of Perplexity—that's my AI—and every quarter I'm aware that other people are using other kinds of tools that other companies are developing. Claude seems to be a big one that a lot of people are using. What I do is, when I have a piece that I'm really happy with, I say, I really want to thank you for your help on this. He comes back and says, oh, you're welcome, Dan. We really enjoy working with you. And we can also do this for you, and we can do this for you, and this. And I like the interaction.
 
Jeffrey Madoff: Well, as you know, my feeling is it's like thanking a vending machine.
 
Dan Sullivan: Yeah. Vending machines never do anything different. This one does something different.
 
Jeffrey Madoff: Well, what's different now? It's novel. It won't be novel for the people coming up soon. It'll become just an adopted practice.
 
Dan Sullivan: You know, the historical example of this is mirrors. When they started developing really good mirrors, I bet fashion and upkeep really improved enormously when people could see what they really looked like. The fashion industry probably took off like a rocket when people could see themselves in the mirror. There is a mirror-like quality to AI.
 
Jeffrey Madoff: Oh, yeah. And, you know, the thing is, I also, when they tell you that they've enjoyed this has no capacity for enjoyment. You know, it's that's not happening, but they know how to put together the right pattern of words that seems conversational and personal, which is, I think, another reason why many people find it addictive in that way.
 
Dan Sullivan: But I also think everything that you and I like is addictive.
 
Jeffrey Madoff: Well, there's different degrees of addiction, I would say.
 
Dan Sullivan: No, no. But the things that you double down on are an addiction. I think the things that you really enjoy doing, you're addicted to that enjoyment.
 
Jeffrey Madoff: Yeah. I mean, when I'm in the zone, for my writing or for any of the stuff that I really love and where, wow, three hours just went by. I thought I looked at the clock and it was just one o'clock. It's now 3:30.
 
Dan Sullivan: Yeah, you were in the flow.
 
Jeffrey Madoff: Yeah, and I love that. What I'd love to do, I think that there are some hard questions and interesting questions that maybe we'll do a part two on this, which I think are quite fascinating.
 
Dan Sullivan: Yeah, you know, it was really interesting when books came in. So I just read a book called Money by an Irish economist by the name of David McWilliam. And he was talking about the impact that reading had when Gutenberg was the real breakthrough artist on that. Because Gutenberg was a real craftsman. He was a goldsmith. And he put a whole bunch of technologies together, the technology of the press, and he was in an unusual position where he had access to paper. And then papermaking went through the roof. But he said there were two fundamental changes that most people, when printing came out and they could get pamphlets, actually, they had this thing, it was called a pamphlet, and they would print on one big sheet and then they would fold it about four times so that you could have—you had 16 pages printed on one sheet, and then they folded it so they had a pamphlet.
 
And the real takeoff was Martin Luther, because Martin Luther had a huge impact on religion, because he created the separate religion and Christianity. But he said that it was the first time that people started reading on their own. I mean, you had a few people who were wealthy and they could read and everything, but the vast majority of people couldn't read, and everybody could read. And they all found out that they were farsighted. So the glass industry took over, and the Venetians especially had really, really developed glass, so you could have optics with glass they could manipulate. So all of a sudden, in the paintings of the late 1400s, for the first time you see people wearing glasses. But usually they're wearing glasses reading something in the portraits that they're reading. They have a lot of books.
 
But he says what happened is that you would now be by yourself in your study, or you would be someplace by yourself, and you would be having almost like a conversation with the thing that you were reading. And Freud said that he believes that that's where consciousness really started to develop, is when people could be by themselves reading a book and having a conversation with the author. And he uses Shakespeare as his example. He says Shakespeare is the first writer who actually depicts people having conversations with themselves. Hamlet is all Hamlet having conversations with himself. And then you have in Macbeth, you have Lady Macbeth having conversations with himself. And it's Freud's contention that previous to Shakespeare, people were never depicted having conversations with themselves. And he thinks it's the impact of reading.
 
So that was 1450 is basically the printing press and Shakespeare, his great plays are about 140 years later, right before 1600. But my sense is that AI is taking reading even further now. It's where you're actually changing the words on the page. You know, you're being motivated to actually say, I'd like to develop this copy even further. I'd like you to add this idea. I'd like you to go look for some facts that support the claim being made here. You know, and everything. So I think we're getting closer and closer to having conversations with ourselves.
 
Jeffrey Madoff: Well, I think also because, you know, if you are on social media, you're getting fed things through different algorithms based on what your preferences are and all of that sort of thing. And I think that the having beliefs challenged, where there's vigorous informed debate about things, I think is rather than what I think a lot of people suffer from confirmation bias. They only want to see things that are going to reinforce what their point is and what they want to do, whatever that is.
 
Dan Sullivan: I like that.
 
Jeffrey Madoff: I like when everybody agrees with me.
 
Dan Sullivan: No, I like it when certain people agree with me. I have discernment.
 
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.