When Innovation Becomes An Illusion

Jeffrey Madoff: This is Jeffrey Madoff, and welcome to our podcast called Anything and Everything with my partner, Dan Sullivan. It's interesting that to me, when a major technology arrives, and you can go back through history, it rarely arrives as a neutral object. There's some kind of a story around it, and it's either, you know, utopian or devastation. And when you look back, I think it's interesting because the human behavior around these things doesn't change. And the technologies, for the most part, end up being amplifications of something that already existed, and our combination of things that make it have a greater reach. I think AI has some unique characteristics, but not in the way it's being assessed and looked at as either utopian or devastation. And I thought it might be interesting to talk about both the promise of past technologies and what ended up being delivered, because it was never one thing or the other.
 
And I thought back to one of the earliest advances was our ability to create and use fire, which goes back the furthest of anything that man interacted with, you know, because it was a control of energy, of heat, of how food could be consumed. I mean, there's all kinds of things, you know, with it. So, you know, I often think of television as, you know, it entered with two competing narratives. It would be the window on the world, broadening horizons, educating families, democratizing knowledge. It would be a vast wasteland, turning attention into mush, flattening taste and replacing things with passive consumption. And both are true. Both of those things happen. Oh, by the way, this is Anything and Everything. And we're just demonstrating that right now for you live. And I'm Jeff Madoff with my partner, Dan Sullivan.
 
Dan Sullivan: And I thought in our world of anything and everything … I was timing how long you would take before you realized that we were in the session.
 
Jeffrey Madoff: Yeah, well, you know, sometimes you want to, like, set up the action and then hit them with a title. I think we're living in a similar moment like we had with television, with AI. And I'm wondering, first of all, do you agree or disagree with AI as being mostly greeted with one of two extremes?
 
Dan Sullivan: Yeah, yeah, I think the polarization happened quite quickly after ChatGPT. I mean, first of all, AI has been around for several decades, but it wasn't in a consumer form. I mean, scientists, the military, they've been using AI for a couple of decades anyway. So it wasn't the capability as such that was the shocker. It was that it came in a readily available, very accessible consumer form. Because if you went back to October of ‘22, I don't remember anyone talking about AI. In December, everybody was talking about AI.
 
Jeffrey Madoff: Yeah, I think that it was a faster raise in profile than anything we've seen before because everything became about that.
 
Dan Sullivan: Yeah, well, that's been true about every latest breakthrough. It happened, first of all, populations were bigger and communications were more advanced. Electrification happened faster than steam power, you know, the awareness of steam power, but it was in a more consumer-available form electricity was than steam power was. One of the really interesting, just to bring up as an example of a technology that changed things in a way that wasn't foreseen, was that they realized right off the bat in early 1800s that they were going to need steam engineers if this was … they weren't available, steam engineers, people who knew how to work with the steam power in such that it was productive rather than destructive. And what they found out that boys' orphanages was an ideal place to get your future storm. And throughout England, all of a sudden, they started doing testing with boys who were orphans to see if they had the aptitude to become steam engineers. What are we going to do with our orphan boys? Well, they found one use for them, because boys had been used already in the military, especially in the Navy.
 
But these were well-off children, for the most part. What they called them, they called them squeakies. Their voices hadn't changed yet, so they were squeaky. And they were on board ship, and they were fairly expendable. It was always possible to get new boys on ship, and it's a dangerous place to work as a child. As an adult, it was dangerous to work. they would lose them. But just to say that nobody has said when they created the technology, where are we going to get the future engineers, because they didn't know that they were going to need future engineers when they created the technology. So technology is not a thing unto itself. It has immediate economic, political, and cultural ramifications the moment you bring something new in. It advantages somebody and disadvantages someone else almost right off the bat, or is perceived to.
 
Jeffrey Madoff: Well, you brought up something interesting, that AI has been around for a while, and then just becoming more mass popularized in recent history. The same thing happened with the computers. Computers were around for a few decades before the personal computer became something that I think was a huge change in how we interacted with the world. So I think there are those things that have, let's call them enterprise or professional application, and it may take some years before it comes to the public. I mean, now you don't need a movie theater necessarily to see a movie. You just watch it at home streamed to your house. I mean, all these things that are the ones that have massive change. Well, all of these things change, let's call it host business that they're in, and change them, I think, pretty dramatically. Do you remember, I know you didn't have the TV first in your home, but that you went to people's houses and you saw television. Do you remember how you felt when you first saw a TV picture?
 
Dan Sullivan: Not exactly. I think I adapted to it fairly quickly. And I suspect that I was one of the advocates in the family who wanted TV because I had friends who were well off and we would go and we would, after school, we would drop in and there were afternoon programs that you could see. I certainly remember when Mickey Mouse Club came on, that was a big deal. That was around ‘55, I think. We had just moved from the farm to a small town. It wasn't a city, but it was 10,000 people. But I remember I had a friend and they were prominent entrepreneurs. They were landscapers and their specialty was the landscaping and went with an Ohio turnpike.
 
Jeffrey Madoff: You mean to enhance the look of the turnpike?
 
Dan Sullivan: Yeah. So everything got landscaped next to the turnpike. You know, there weren't billboards, so they had lawns, especially where the interchanges were. You had the cloverleaf like that. Well, there's a vast area that was under grass, and they had one of the contracts for that, for a certain number of miles of the turnpike. So they were well off. So we would go over and watch television. You would have a full meal. You would have a Hostess Twinkie, you would have potato chips, and you would have a Pepsi. Yeah, all the major food groups.
 
Jeffrey Madoff: It was balanced.
 
Dan Sullivan: Different textures. It's so funny with Hostess Twinkies. So this was the ‘50s and we were at Canyon Ranch 50 years later in the 2000s and we had a meeting with a nutritionist. And I don't know how we got onto the topic, but he said, you know, the neat thing about a Hostess Twinkie, he says, if you had saved one of the Hostess Twinkies when you were watching the Mickey Mouse Club, didn't eat it, kept it in its package, and you had it now, and you brought it in with you to this meeting, if you open it up, it would be just as fresh as it was in 1955.
 
Jeffrey Madoff: Yeah, there's something about the ingredients in that I'm sure that they would survive a nuclear attack.
 
Dan Sullivan: Yeah, yeah. He said it would be like off the shelf. They've said, you wouldn't lose any taste. If you were satisfied back then, you'd be satisfied today. But you know, I'm kind of interested in new things. You know, so I mean, I don't have an inborn negativity. I don't see the dark side of new things. I'm at the point now where I've read enough history to know that when you introduce something new into society, it doesn't change one thing. It changes a hundred things if it becomes popular. And a lot of the uses were unpredicted.
 
Jeffrey Madoff: Well, right. I mean, you know, in business, the television business …
 
Dan Sullivan: Money was in selling televisions.
 
Jeffrey Madoff: Magnavox.
 
Dan Sullivan: Yeah. That was our first television was a Magnavox.
 
Jeffrey Madoff: I don't remember what ours was, but I do remember when the television repair guy would come over, which I thought was interesting with his toolkit. I remember getting close and looking down into the picture tube to see if I could see any more of the picture, which I couldn't, but you know, the example of nobody really knew what the business model was. And then what they did is basically take the business model from print magazines and newspapers and realize that the real money was in selling their audience to advertisers, not in selling TVs. And you could make money selling TVs because nobody had them, but it wasn't the growth business and gave advertising a reach it never had before. So there were major shifts in what the business of TV became from what they thought it was going to be initially, which is selling that appliance.
 
But when we look at AI, there's accelerated learning, pattern recognition, better pharmaceuticals and potential for medical diagnosis, and so on. New creative tools and entrepreneurial lever that turns small teams into powerful examples of what that small team can do. And on the other side, there's the concerns about mass-scale misinformation, job displacement and unemployment, surveillance, deepening inequality, and an erosion of trust, because the notion of seeing is believing with deepfakes and everything else no longer holds. So I think what makes AI distinctive is something you touched on, which is the scale and speed that it hit the general population, I think is unprecedented.
 
Dan Sullivan: Yeah, very much so.
 
Jeffrey Madoff: And people that I know in private equity and so on, or who were trying to get businesses financed, they said you had to stick .AI at the end of your business, and then you would get interest. So I think there's that two-story pattern of something, you know, the uplift story, more access, more efficiency, more creativity, more connection, and the decline story, distraction, manipulation, disliking, social decay, power concentrating in new hands, I think reveals a certain structural truth in these things, and I think it has more to do with human nature than the actual platform of AI.
 
Dan Sullivan: Yeah. Well, one of the things that's occurred to me, I think over the last, probably the last decade, is the extraordinary population growth on the planet. You know, and I think it was 1940, four years before I was born, the world population was 2.2 billion. And now it's somewhere, you know, between eight and a half and nine. So that's a quadrupling of the world population in 80 years. And along with it was the structures that existed for a 2.2 billion world population were not up to dealing with four times the population. And there's never been a time in history when you had that sudden explosion of population. Everybody says, you know, we're trying to keep up with technology. And I said, maybe you should look at it from the standpoint is that we're creating new technologies to keep up with the sheer complexity of human interactivity on the planet. That's happened because you have so many more humans. Each gets up every morning with a different idea in mind about what they're gonna do for the rest of the day and who they're gonna do it with and everything like that.
 
You know, some of the predictions in the ‘50s, there was going to be massive starvation. Paul Ehrlich, he's famous for being wrong about everything. He's a professor from Stanford University. I think he's made 50 predictions, none of them have happened. He was predicting global freezing in the 1950s and 1960s. But this sheer human complexity—and then all the empires have been falling apart since the First World War. You know, these were sort of discrete units, and you know, the British Empire, the French had an empire, the Germans had an empire, the Russians had an empire, the Ottoman Empire, the Austro-Hungarian Empire, and they all fell apart within about a 50-year period, and you got all these little nation-states, most of whom didn't like each other. So I think there was a human complexity that happened during our life. I mean, we'll never see that growth in population again that we saw just within our lifetime.
 
Jeffrey Madoff: Yeah, well, you know, I guess there is a reason that it's the only one that was described as a boom, which means explosive growth, than our generation, the Baby Boomers.
 
Dan Sullivan: Yeah, yeah, yeah. I mean, that was considered big because it happened in the United States, and the United States was, economically, was the top dog pretty well. The U.S. was about half the world economy when the Second World War ended, because there had been so much destruction of a lot of the developed countries during the Second World War. The U.S., the mainland never was damaged at all by the war.
 
Jeffrey Madoff: Well, I think that's why there were such shockwaves when 9-11 happened. And we were no longer impenetrable. And the oceans between us and the others wasn't enough to keep them away anymore, because of advances in technology. So I think It was interesting. I was talking to an Israeli friend around 9-11 after, you know, when they were building the monument, there was all the conversations about the memorial, 9-11 memorial. And I met Michael Arad, who was the architect who won the competition and designed the 9-11 memorial. And he said, you know, I want to be clear from the beginning that on one hand, we were dealing with a tremendous tragedy, number of people killed and so on. He said, but that also created a tremendous opportunity for builders. Because there are millions of square feet of office and residential space that had to be rebuilt. And he said, don't think for a minute that people did not recognize, those people did not recognize the tremendous financial opportunity that was in front of them. And my Israeli friend said, you know, it's interesting because the United States has the luxury of building a huge monument and new buildings in memoriam of that attack. We're dealing with that all the time. Yeah, it's really interesting because the distance doesn't discourage anymore.
 
Dan Sullivan: Well, I think it does. There hasn't been one since 2001. It didn't start something where the U.S. I mean, generally speaking, the two oceans make a big difference.
 
Jeffrey Madoff: Well, yes, they do. But they're not insurmountable.
 
Dan Sullivan: Yeah, this was an asymmetric strategy that worked once. After that, everything clamped down on the transportation system and, you know, flight schools were instructed to kind of be more scrutinizing who your students are.
 
Jeffrey Madoff: Yeah, yeah. Not to mention adding locks to the cockpit so that people couldn't enter it and so on. But, you know, I think that breakthroughs create capabilities.
 
Dan Sullivan: They also create breakdowns.
 
Jeffrey Madoff: Right, right. But they create capabilities faster than society can build the doors and the guardrails and the institutions to direct those capabilities responsibly. So these things happen and we don't quite know what to do to establish those guardrails because it's all moving so fast. It's all moving so quickly.
 
Dan Sullivan: Well, speaking of, I mean, how have you adapted to AI personally?
 
Jeffrey Madoff: Well, I'm going through a whole lot of different adaptation. And the way that I have adapted to it is that because a lot of my work required research in my production work. And, you know, also, the book, our book, but the book I did before that, which I didn't use AI for research then, because in 2020, it wasn't around. So I, you know, I've used it as a research assistant where I know that I have to be careful and vet the information. You can't assume that anything I get is accurate until it's been verified. So, you know, I'm using it in that way. I mean, I think about how, God, I think about when I did, you know, college term papers and stuff like that. God forbid you went to an actual library to research something. Even the internet made it so much easier to find things. And I think that, you know, one of the things that AI did that nothing else has done before, which I think makes it distinctive, is it's disrupting cognition, how we process information. And some of it, I think, is really insidious. I mean, now when you go to write an email, there's a suggested response to an email you get where you don't even have to think about it. You can just click on it if you want to be that banal. And you can summarize previous emails and conversations you've got and all these things, which the part that bothers me is it's really hard to opt out of those things, and it becomes very ever present and no matter what you're doing.
 
Dan Sullivan: Yeah, mine doesn't do that. So I never had the experience.
 
Jeffrey Madoff: I mean, so don't you have like you have Gmail, right?
 
Dan Sullivan: I have Gmail, but there's no suggestions on anything.
 
Jeffrey Madoff: Maybe there's a way I can because they're like kind of the default. I'd like to figure out and I haven't tried yet to figure out because I don't want to see.
 
Dan Sullivan: Well, I adapted that. I was just going to treat emails like they were a letter. You'll notice, I always start with your name and I sign off and everything else. I learned how to write letters early in grade school, so I've just stuck with it. And people will compliment me. They say, you know, your emails are like getting a letter from someone. The one thing I had to cut back is the size of the email that I was sending because I'd send a whole page and I realized that people don't like whole page emails. So you put the larger thing that you want to communicate into a download. So if they want to read it, they can read the download. First of all, I don't get that many emails. I mean, I would say you would be in the top five people over the last three years that I've gotten emails from.
 
Jeffrey Madoff: Do I win anything?
 
Dan Sullivan: Just my continued presence. I respond. Well, the big thing is that I tend not to follow the crowd on anything. So what's becoming trendy or anything else, the opposite would be interesting to me.
 
Jeffrey Madoff: Well, in your world, and when I'm talking about your world, not just Strategic Coach, but Joe's world with Genius Network, Joe Polish, and others, there's, I don't know what the percentage of people is, but it's a lot because they get an awful lot of emails about people who are trying to sell you different ways to build your business by using AI and to be more productive by using AI and to be more successful by using AI and on and on and on. I think you have built a very effective moat around yourself so that you're not bothered with most of that stuff. But I think there's a lot of the entrepreneurial community, which you obviously are dealing with all the time, that that's their pursuit.
 
Dan Sullivan: Well, they think they're obligated. One of the things I've observed that when somebody gets the idea to contact you, does that entail any obligation to you to respond to them?
 
Jeffrey Madoff: Interesting you say that. Yeah, go ahead.
 
Dan Sullivan: Well, for example, in the simplest form, this is in technology, it's seven o'clock at night and somebody knocks on the front door. Immediately, I know it's not for my benefit. They're not doing that for a mutual thing, and Babs will sometimes, because it bothers her more than it bothers me. And we don't receive our packages if they're delivery. We have a driveway up, and all the delivery service knows that you have to go up the driveway and drop it at the kitchen door if you're going to do that. But I don't feel obligated to respond, unless it's someone I know. And as part of what's going on in my life right now, that there's communication back and forth. But for example, even in with my own company, with the team members that, you know, and when we're in the office, we have certain days when everybody's in the office, nobody would come and knock on my door or interrupt me.
 
We have cafes in both of our Chicago and Toronto offices, we have cafes. They're like 30 to 50 seat cafes because we're on three floors and if you didn't have a cafe, people could go for half a year without seeing each other and generally everybody's in the cafe. If I'm at a table in the cafe and I'm working, nobody would interrupt me because we've set down some rules that you don't interrupt Dan when he's working. But the other thing is that if somebody wants my email number, I say, here's Becca Miller's email number. If you want to contact me, you can send an email. And Becca lives in that world. She loves that world and she's very responsive. So, the big thing is, I was aware that all of a sudden there was this big thing, everybody's connected to everybody at any time of the day, and I said, well, I don't want to live in that world. But the other thing is, it doesn't cost me anything.
 
Jeffrey Madoff: Right.
 
Dan Sullivan: That I'm aware of.
 
Jeffrey Madoff: Right. Other than time.
 
Dan Sullivan: Yeah.
 
Jeffrey Madoff: Yeah, I mean, I don't feel an obligation to answer, you know, if some, if it's a real query about the business opportunity or something, we're fine. But most of it is the, you know, the equivalent of junk mail. It's just now email, email junk mail, instead of hard copy junk mail, trying to sell me something. I never felt obligated to write back to anybody that sent me junk mail, trying to sell me something. And, you know, at the end of these, I was saying, and if you don't wish to receive these, unsubscribing does nothing. You don't get unsubscribed. They just keep sending you the crap anyhow. And I think as part of a, I don't think it's bad manners not to respond. I didn't ask you for your query. I didn't follow up four times. That could be a message in itself if you thought about it. I'm not interested, so don't bother me. But I don't feel like I need to respond you know, it's, why because you sent me something I have to respond I didn't request it. And it's for your good, not mine, but I think that that interconnectivity, that 24-7 connectivity invites those kinds of intrusions.
 
Dan Sullivan: Well, and the technology companies encourage it. I mean, they're going on the basis that everybody should be available all the time or something. And the other thing is that there's no such thing as privacy anyway, so don't worry about privacy. And I said, well, you know, if you don't tell someone else, it's private. You know, I have thoughts in my head that I haven't told anybody, so nobody knows about the thoughts in my head. I know that bothers Mark Zuckerberg, but it doesn't bother me. Yeah. I did a Perplexity. That's my AP for those who don't know. I use Perplexity. I've never been on ChatGPT, so I don't really know how it works. I mean, I generally know how it works, but I'm not familiar with that particular form. And I did Perplexity and they said, which technologies have had the greatest impact in the last 200 years? And by far, railroads was number one. Economic, political, social, cultural, cultural change, and it changed people's perception of time and distance in a very short period of time. And, you know, I study these things. I'm always interested in the past. How did something similar to what's taking place now, how did it play out over several decades that you can see it? You know, for example, the railroads never made money.
 
Jeffrey Madoff: Never made money?
 
Dan Sullivan: As an industry, they've never made money. It's what you could do with railroads that made all the money.
 
Jeffrey Madoff: Right. Transport, goods, services, people.
 
Dan Sullivan: Same thing with the airline industry. As an industry, it's never made money, but lots of other money-making activities were possible because of the airlines. And I wouldn't be surprised if computers are the same thing, I would say. As an entire industry, that means everybody involved in making computers, trying to come up with new computers and that. They still haven't made money, but they've enabled enormous money-making in other industries. So the big thing, I think, with AI, it's not the AI companies that you should be looking at. It's what are people doing with AI where they are making money. And that means it's more productive. It's more creative and it's more profitable. Those are the three indicators that you're moving ahead. And I would say my use of AI for writing has improved enormously in 22 months.
 
You mean the way you write or what?
 
Jeffrey Madoff: Dan Sullivan: The way I write, the speed with which I get things done, oh yeah, it's phenomenal. One of my quarterly books I laid out in two hours, start to finish. I laid out, usually it takes me two weeks.
 
Jeffrey Madoff: Yeah, and are you happy with the quality that you're getting? Or have you trained it in your voice and done enough stuff that you like what's coming back?
 
Dan Sullivan: Yeah, there's about 50 prompts built up that customs that, you know, and, you know, I have some rules. I only do one thing and then it does something and then I do something. And every time I do something, I'm expanding context or I'm introducing new content. But it's very useful for certain things. And I've just done one thing. I haven't tried any other AI programs or applications. I'm strictly interested in what does it do to writing.
 
Jeffrey Madoff: Yeah, well, you can become a house painter or you can become a fine artist. It depends on the brush and the material and your ideas and execution and so on. And so it's a tool that you're using in a particular way. But I think what's interesting about AI is it's affecting how people design code, write, coordinate, how you plug it into the workflow to make that workflow more efficient. Some of the ideas we'll be exploring in our book that you've written about is the idea of AI is the back stage of the casting, not hiring of any business. It should be the back stage. It's not the front stage. It should, in the ideal world, free up the front stage for those creative pursuits that make it faster, more creative, and more possible.
 
Dan Sullivan: Yeah, I think I've told you in some of our podcasts that the clients, especially the ones I don't coach, they'll ask me when they're doing their workshop, but the mealtime I make myself available for level one, level two clients. I'm the level three coach, but level one, two, they'll come and they'll have lunch with me. And the last three lunches I had over the last three weeks, the entire conversation for the entire lunch hour was on AI.
 
Jeffrey Madoff: In what way?
 
Dan Sullivan: No, they're just asking about AI. You know, they're talking about AI. They're using AI. They're wondering, you know, what's it do to creating teamwork in the future, you know, there's a lot of questions, you know, and they're hearing things. This woman asked me the question, she says, well, how do you think about AI? And I said, front stage, back stage. I said, if AI is going to have a place in my company, it's going to be back stage, it's not going to be front stage. Front stage is for humans, back stage is for technology. And she said, wow, that simplifies things. So then I gave her several examples of good example of that and bad example of that, you know, just from my own experience, where somebody had let technology interfere with the hospitality that should be provided by humans with a QR code. And I said, well, I don't feel well taken care of with a QR code. I like menus when I go into a restaurant. But I have noticed about three or four restaurants that were experimenting with QR codes have gone back to paper or laminated or whatever they're using, but it's actually something you can hold in your hands and read and, you know, ask questions about.
 
And so I think that when a new technology comes along, they say, we can apply this everywhere, but there's pushback where certain places, like when Google brought out their glasses, what was that, 15 years ago, they brought out the glasses? Immediately, they were banned in every bar and restaurant in San Francisco, which is near the center of the technological revolution, because you could take pictures with your glasses. And they said, no, no, there's no picture taking going on in this realm, you know. So my sense is that I believe in Newton's third law, for every action there's an opposite and equal reaction. And there are some things where we just said, nope, nope, you can't. You know, I go to Canyon Ranch, you can't have a phone except in your room. You can't be in the restaurant with a phone. You can't be in doing any of the activities with a phone. You have to leave your phone in your room. Well, that's a rule. And people say, well, I'm not coming back here again. I said, well, that's a choice you can make. But I think people are just establishing rules on where technology is allowed and where it won't be allowed.
 
Jeffrey Madoff: I mean, I think that's true. I think it's also the QR code in the restaurant. I did very informal research where I came across the QR codes, some very nice, expensive restaurants. And when they gave me the QR code, I said, I know I'm maybe older than your average customer, but do people actually like having to get their phone out and look at a menu on their phone? And he said, they hate it. And I said, why are you doing it? So we have to, but I think we're going to go off because you are far from unique. So many people complain about this and I don't blame them. And to me as a business person, it's also that does nothing to enhance the hospitality aspect. In fact, it distances me from it. I've got to bring the tool to decode your menu. And a menu is also a marketing tool. There's an aesthetic to it, a presentation, it's the storybook of the restaurant, but also it's trial and error. It may seem like a good idea, but it's not, because people don't like it. And I'm sure at Canyon Ranch with the phones, part of their thing is you come here to get away from all that. So we don't want people walking down the hallways with their phones, talking loud into their phones and all that. If you're in a room and the door's shut, fine. Otherwise, this is not just for you. This is the community we're setting up while you're here. So, you know, I mean, it's amazing what people can sit. They don't want their rudeness interrupted.
 
Dan Sullivan: I think these things sort themselves out over time, you know.
 
Jeffrey Madoff: Eventually, yeah. I think so.
 
Dan Sullivan: Yeah. And we're still in the early days of AI, you know, we're just a little bit beyond three years since it started. So this is, I mean, one of the reasons I focus on entrepreneurs is because entrepreneurs, based on their success, can design all sorts of environments, which most people can't.
 
Jeffrey Madoff: In larger businesses, right?
 
Dan Sullivan: No, it's just a function of how much money you make because you can buy privacy, you can buy time, you can buy service, you can buy all sorts of things. You know, my attitude is people don't like things, then change them, you know?
 
Jeffrey Madoff: Yeah, I mean, that's a complicated proposition because change doesn't come easily or quickly.
 
Dan Sullivan: No, I'm saying entrepreneurs who have money can change a lot of things really fast.
 
Jeffrey Madoff: Yeah. Yeah. I mean, depending on the nature of the investment, the size of the investment and what their stake is in it. I think that's true. I mean, I think that the most important operating principle, and we go into this in our book, and this is true, this I think is a fundamental thing with AI is human in the loop. You have to have people that are forming that bridge to the front stage where things are fact-checked before they're put out there or somehow vetted. And this isn't just for veracity, this is also to the Four Seasons, not their slogan, but, you know, what you had talked about many times, which, you know, I really like is, you know, systematize.
 
Dan Sullivan: They're predictable.
 
Jeffrey Madoff: Yes. But you need the human in the loop to be checking things because it's like having an assistant. If you don't check their output, you just put it out there. And the thing about AI is it can sound authoritative, but you can't assume that it's correct.
 
Dan Sullivan: Well, I think fast things are magical things. You know, things that happen real fast have a magic to them, but they can be magically wrong. And that's what I hear you saying. I hear you saying that. I mean, movies are magic because, you know, in the old days, anyway, they were individual frames that were just presented to you, you know, in a very, very fast sequence and looked like they were moving. You know, so it was, there's a magic to speed, but if the magic is meaningless, then after a while, things that can happen real fast, you know, it's like one hour delivery, you know, with when Prime came in, it would be same day delivery, or if it was local, it could be three hour delivery. And what they find is not everybody needs it in three hours. There were only three hours, like if I got it in a couple of days, that would be okay.
 
Jeffrey Madoff: Well, I was talking to someone, sort of a variation on that point is, saying I had the most amazing experience. I walked into this place, saw something I like, tried it on, paid for it, and left with it immediately.
 
Dan Sullivan: Wow.
 
Jeffrey Madoff: Yeah, isn't that amazing? Wow.
 
Dan Sullivan: Yeah. And it was without a delivery person.
 
Jeffrey Madoff: That's correct. That's correct. And I mean, thank goodness, at least as of yet, Amazon doesn't have drones flying around New York City, but that drone delivery was part of their three-hour delivery.
 
Dan Sullivan: Yeah, and they're finding enormous, not in my backyard is second.
 
Jeffrey Madoff: Yeah, I'm sure, I'm sure.
 
Dan Sullivan: No, I mean, it'll never happen in Toronto. It'll never happen.
 
Jeffrey Madoff: Yeah, I don't think that any of the major markets it's gonna happen when there's enough people out there with baseball bats or their hunting rifles shooting drones down.
 
Dan Sullivan: But yeah, there's also the aspect of crime. The criminals can follow where the drones are going. If it's dropped, you can send someone up and pick up the package. The drones can't take it inside your house. They'll put it on a front porch or something. But the fact is that the people who create technology, they're doubling down on what their technology can do. And they're trying to, most of them haven't paid for themselves, all the research and the development went in, they haven't paid for themselves. So they're a little bit desperate to get a payback for the original investment. And so they create a story that morally you're required to agree with their schedule on how fast the technology can go. And I said, no, I have no moral obligation to your risk whatsoever.
 
Jeffrey Madoff: Now, how do you mean that?
 
Dan Sullivan: Well, some of the big AI companies, the amount of money it's required to get their product out isn't being paid back. And, you know, the stock market is downgrading them. This is not a happy, easy time for the big technology firms that see AI as the way of the future.
 
Jeffrey Madoff: Yeah, well, I've been reading some things lately.
 
Dan Sullivan: Morgan Stanley said that there's panic in the investment world and the AI world, where people thought this was going to happen way, way faster than it's actually happened.
 
Jeffrey Madoff: Yeah, I don't know if anybody is making money at it. You might've made money if you invested and got in and got out, or in long-term investment or whatever, I don't know. But I think that there are the human qualities that can't be overlooked. And one of those main qualities is trust. Can you trust the outcome of the efforts? And I don't think people are going to have a loyalty to AI, but they will have a loyalty to a person. And I think that there are certain things, again, it's how you use the tool that's going to make the biggest difference. And I think trust is really fragile. I mean, the trust that Uber lost because of its CEO lasted for five years. And, you know, I think that AI is, there are certain things it's not good at because the only way they can increase trust is through consistency. But trust between humans and trust between a human and a machine are two very different things.
 
Dan Sullivan: Yeah. Yeah, well, I think, for example, I get Investors' Business Daily on weekends, and they're strictly an investment newspaper. That's all they talk about. And they were saying that, and this was a conversation that we had yesterday, but Tesla was down 15% over the last year. Their sales were down 15%.
 
Jeffrey Madoff: I'm sorry, which sales?
 
Dan Sullivan: Their sales, Tesla's sales.
 
Jeffrey Madoff: Right, yes.
 
Dan Sullivan: Like the EV sales were down 15%. And if you measured it before the end of September, they were up. The last three months, they just dropped enormously because the subsidies and mandates weren't there anymore. Everything got cut off on September 30th. So everybody who was going to buy bought during August and September, and it looked like sales were going way up, but they stopped and fell off a cliff. And they said that it has to be, he has to get his money now, he has to go into robots and self-driving cars, you know. They were saying it's a big gamble on their part because it's now that the EV market is now probably going into the future as a niche market.
 
Jeffrey Madoff: Will they disappear?
 
Jeffrey Madoff: No, they won't disappear, but they're a niche market. And one of the reasons they haven't gotten the prices down, and the other thing is the charging stations haven't gone in. There's no money in charging stations, so it has to be a government effort to do it. And then you've got to make them good for any car if they're going to be used. The gas stations are good for any car. But the charging stations have been made for particular cars. It takes three minutes to fill your car with gas, and everybody knows that. So my sense is that there are people who are big risk takers. I mean, their basic operation in life is to be involved in a big risk. And sometimes the risks pay off, and sometimes the risks don't pay off. But nobody else is obligated to support someone else's risk.
 
Jeffrey Madoff: Yeah, I mean, if it doesn't fulfill a need or desire that you have, you know, it's interesting. Earlier, we were talking about, you know, I was mentioning the replies that are built into Gmail. And I think that on one hand, you can summarize things faster. You can automate responses. You can standardize a lot of things and look at all of that quick. The downside is all the bot walls that exist that block real help and degrade the customer experience. I mean, have you ever experienced calling customer service and all the different prompts that you have to go through to get anybody? And try getting an actual person from the airlines if there's a question on your schedule. I think there's a lot of these things that are turning more and more people off. Now, I can't back that up with data, but I can say that I've read an awful lot about how frustrated people are with those things. You know, getting actual customer service and somebody who you can understand.
 
I'm curious to see, you know, in the big wave technology shifts that we are seeing that are happening with the unique proposition of AI, which is the building up of cognitive responses to mimic human beings. You know, I mean, that's basically what it is. I think that law firms going over cases, finding patterns, all these kinds of things, it can be a very, very powerful tool. What I wonder is, and there's so many conflicting thoughts going on in my head, but I think that things have to be easy to use, but then you can't be lazy about using them in the sense that you can be passing on things that don't reinforce your brand, that confuse your customers or alienate your customers. And alienating them is the same thing as never having any human contact with them. I mean, the whole thing that we're about in our book, Casting Not Hiring, is front stage, back stage, and the human support that is necessary to be in front of other humans, no matter what business you're in. And the agnostic nature of what we're doing is that model has worked for thousands of years.
 
Dan Sullivan: Well, the other thing is that you have enough examples, and you gave a lot of them in part one of the book, is that anytime someone differentiates themselves with live person-to-person theater, it works.
 
Jeffrey Madoff: Mhmm. Why do you think it works?
 
Dan Sullivan: We like people. People like people. People like stories.
 
Jeffrey Madoff: Mm-hmm.
 
Dan Sullivan: People like humor. They like unpredictability in human conversation. They like the unpredictability in stories. And I think there's just part of our entire nervous system is that the very fundamental thing that we figure out really fast, this is a good situation or this is a bad situation. And I think, you know, I mean, that's just, I like this, I don't like it. We walked out of a play, you know, we were in London and we walked out at the interval and we were seated so that two of us were in one row and two of us were sitting in front. And I stood up and I said, you know what would feel good right now is a good half hour walk. I would just like to get out and walk. And everybody looked at me and they said, are you thinking what I'm thinking? And I said, yes, I think I'm thinking what you're thinking and everything else. And we all four of us said, let's get out of here. This is terrible.
 
But what were we picking up on? And part of it is that all of us have a pretty solid background and going to really interesting plays. And somewhere in our brain, there's about five checks of whether this is a good play and this is not a good play. But I don't know if anybody else was leaving, but we were leaving and we just walked out. And one of our friends said, you know, I've been in that situation 20 times in my life where I didn't walk out of the play or performance or game or whatever it was. He said, but I didn't do it. And I always felt very badly about myself the next day. And I said, well, that's a very useful criteria. You just project 24 hours into the future and say, do I feel good about myself for not making a decision to leave as a result of that. But that's sort of a human thing, you know. I don't think AI could make a determination of whether to stay or to walk out of the play.
 
Jeffrey Madoff: Yeah, well, I think, what would that look like if AI walked out of the play? But I think that what you're talking about is the nuancing of a decision. And can you get that kind of nuance around a decision? And again, I think that if you're the type of person who wants to offload everything into something else, you're putting an awful lot of unfounded trust into the ability of something that you don't yet know can deliver. And I think that's a problem. The other night, we were watching this comedian, Nate Borghese. I don't know if you know who he is. He's very funny, great delivery. And he's been around for a while. I just learned about him maybe two and a half years ago. He's been, you know, he had his first Netflix special in 2019. He's now playing almost like stadiums. And I thought, well, this is interesting. There's probably 8,000 people. And it's just one guy walking around, you know, telling clever, funny stories, speaking into a microphone. And I thought, wow, that's really interesting, because this could have taken place 50 years ago, 80 years ago, 2000 years ago.
 
Dan Sullivan: Oh, yeah.
 
Jeffrey Madoff: And I thought this is really fascinating because this guy has really, he's gotten very popular and people connect to his humanity. And when you see him, he's very funny. And he's a master at some of these stories that then have a very funny twist or repetition that repeats throughout the evening of his comedy or whatever. And then I think the same thing when I see a singer perform, and there are people that spend lots and lots of money to see that performance. Now, there are lots of people who will pay to watch somebody play video games, which I have no comprehension of why anybody would be willing to pay to watch somebody else play a video game. It's not like you're seeing a sport that…
 
Dan Sullivan: Well, it's not your thing.
 
Jeffrey Madoff: It's not.
 
Dan Sullivan: No.
 
Jeffrey Madoff: It's not. But it's extremely popular.
 
Dan Sullivan: Oh, yeah. Well, gaming is now the number one sport in the world. You know, it's in the billions. People who watch this. Well, first of all, it's competition.
 
Jeffrey Madoff: Right.
 
Dan Sullivan: You know, it's happening in the moment. And competition is very interesting. It's a very interesting phenomenon.
 
Jeffrey Madoff: Yeah. And the people that go know who the competitors are and who they're rooting for. Yeah, I understand that. I just find it …
 
Dan Sullivan: Well, it's not your thing.
 
Jeffrey Madoff: No.
 
Dan Sullivan: No, me either. Well, we really went everything this time. Sometimes we emphasize anything, but I think we went everything right now.
 
Jeffrey Madoff: I think that we did. 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.