Michael Kleinmann - From Chaos to Clarity: Streamlining Your Business for Sustainable Growth

In 3, 2, 1.

Welcome back to Becoming Preferred, the podcast for entrepreneurs and business leaders who want to grow their business, level up their game and become preferred in the markets they serve.

Let's be honest, in today's market, growing your revenue is only half the battle.

The real danger?

Growing so fast that you break your own business when your logistics fracture, your software stacks multiply and your profit margin start bleeding cash.

Marketing success can quickly turn into an operational nightmare.

Our guest today is the man who steps in when guesswork fails.

Michael Kleinman is a seasoned D2C operator, founder and fractional C suite executive who has built and scaled multiple businesses to the mid eight figure mark.

He is a master at turning back end infrastructure, fulfillment and supply chains away from boring cost centers and into lethal competitive advantages.

Whether you are running an e commerce giant, skill scaling a subscription model, or just trying to protect your margins in a shifting economy, today's conversation is a blueprint for logic driven execution.

Please join me for my conversation with Michael Kleinman.

Well, hi Michael, welcome to the program.

We're delighted to have you.

Thanks for having me.

Now I'm excited about this.

Now where are we speaking to you from?

Where did you happen to be today?

Today I happen to be in New York City.

Beautiful city.

I've been going there for years and I always enjoy having a chance to visit.

I'm really excited about today's episode because you've got some varied experiences.

For sure we're going to get into it.

We'll talk about building brands, what goes into building brands, what to look for, maybe some of the landmines when you're going to build a brand because I know you've had those, you've built many eight figure brands and lots of experience in your consulting practice.

Let's go back to high school though for a minute because our listeners always like to know how you got into this and they like the backstory.

So you're back in high school.

Where were you living at the time?

What were you going to be when you grow up?

I mean, I was on Long island and I always wanted to be the CEO of something and I didn't really care what it was as long as it was the CEO of something.

And I think in high school I just wanted to be out of high school because I knew if I was out of high school I could work and then I could do something more interesting.

Right.

I was always like ahead of my time.

So yeah, no, I get, I couldn't get out fast enough.

So yeah, I totally get.

What were your Interest points.

So you wanted to be.

You wanted to do your own thing, obviously.

So you were probably bored in school, you probably excelled in school and you got hey, I want to do.

But were you tempted to go in one direction or another?

I gravitated towards technology and business because I felt the most comfortable there.

Something math oriented and something with strategic thinking.

But I didn't know what I wanted to do.

So.

Yeah, I mean, when I was in college, I started my first business and I still didn't know what I wanted to do, but I just liked having a business and it was fun for me because most people did not own a business in college.

No, no.

Well, it's.

And like I said, I kind of did my own gig as well, so I understand it.

So going back to 2001.

Yeah, I believe you acquired.

The company was called freshpear.com and the dot coms were just kind of getting started and yeah, going in those days and I was an early investor and so.

But where do we go?

Is this going to be a big thing or not?

And did you start this one or.

Did you acquire this one somewhere in the middle?

It kind of started in my apartment and it was more of an idea than anything else.

And I'm the one who really took the idea and turned it into something tangible.

Yeah, it was the wild west of the Internet.

We had no idea what was going on.

And anytime you want to do something, you had to do it from scratch, figure it out yourself.

So there was no Shopify.

There were these things that exist now that are plug and play.

That that was not a thing.

So it was fun.

It's a very fun time.

You had to build your own online stores.

And I like, I say you had it with the concept, but then you built it into.

And the product mix was, I think male, female, underwear and.

Or the categories we've seen those verticals, those, I guess, product lines, if you will.

I happen to be a Tommy John's kind of a guy, so when those went online, I thought those are good.

Those are marketing and ordering some products.

Most of the time I still visited my stores, but now I look back at what I'm buying online and I buy almost everything online.

There's some things like a suit jacket, whenever I still go see my tailor, go see something along those lines.

But pretty much everything else you can find online and customized.

So as you're building that as an entrepreneur, what were some of the early hurdles that you had to overcome in order to get your company positioned?

I mean, we had Just about every hurdle you can think of.

When, when I started at Freshpear, vendors did not want to sell to online companies.

They didn't even understand online.

They didn't even have websites or they were just getting into it.

Right.

Amazon didn't sell clothing at that time.

So it was very different.

I had conversations with really big companies.

Like there were some companies I met with where they were doing hundreds of millions of dollars and I had to sit down with the CEO and explain to them why we should sell their product online and how it was not competitive to them.

And it was really educating people as to what they should do because no one had any idea.

And if I had to start that company all over again, it would be impossible because everyone sells direct to consumer now.

So I was really in the right place at the right time in a industry that was kind of slower, I think, to adapt to online shopping.

No, it's interesting now.

Pretty much you can find everything online and right.

Amazon's come in and those categories are changing all the time.

You took the success of.

And back in, I believe it was around 2012, you then leveraged, you went, you finished with that organization company and you started your own called the Underwear Expert.

Let's talk about that particular.

You know, what were you seeing as the opportunity?

Yeah, I had been there.

You know, I was the president of the company for 10 years and I took it as far as I wanted to take it.

We were selling.

We had 30,000 SKUs that we sold.

Right.

We had a huge staff and I created National Underwear Day.

And we just had.

It was a.

It was a huge success right across, like, I kind of checked every box and I was kind of bored.

I was like, I was ready for my next challenge.

And I'm so programmed to the startup world that I'm, I think like, I think like a startup founder whether I want to or not.

So I was ready for my next thing and I decided that, okay, times had changed.

I don't want to do the same thing all over again.

I wanted to stay in the underwear business and I decided I would specialize a little more.

So I decided to specialize on the men's side, but again, didn't want to compete with Amazon, didn't want to compete with a brand selling direct.

So I decided subscription model.

It always intrigued me.

I really did not know what I was getting myself into.

But if I could figure out my last company, I could figure out my next company.

So I figured it out and.

And I launched a subscription.

So, yeah, that's that's how.

Pretty much how Underwear Expert was born.

In a NutShell, you've scaled two companies and a lot of our listeners are interested, whether they work for an organization or they're entrepreneurs.

Even ourselves, we're always wrestling with what's the best way to scale an organization.

And it seems like it comes down to some of the titles that you have in the C suite.

You pretty much warn every title.

Yeah.

Around operations.

So I do want to talk about that.

So let's talk about the core philosophy of scaling.

So you talk a lot about helping brands in your consulting business, Power mq, and we'll talk more about that in a little bit.

But navigate the realities of scaling rather than just chasing raw growth.

So for listeners who might confuse the two, what's the critical difference between a business that's simply growing its revenue and one that's truly building a scalable infrastructure?

So as difficult as it may be to scale a business right, every.

Every business is a little different.

If the underlying foundation is not solid, then anything you do on top of it is eventually going to break and you're just not going to be scaling efficiently.

So I like to scale efficiently because as a startup founder, there's no cash and you have to figure out how to do the like, unthinkable, Right?

Like how do you get from zero to a hundred with next to nothing or maybe fumes?

That's how I like to think.

Even if you raise money, why waste it if you don't have to?

So I like to have a foundation that's efficient.

That way when you pour gasoline on it, it works efficiently as opposed to, you know, wasting tons of money on inefficient processes and then you run out of money.

Well, I believe you say true scaling means to increase your revenue exponentially, but while your operating costs only increase in a linear way.

So if your backend infrastructure isn't designed to handle the weight of the marketing success or revenue growth, it'll actually break your business, won't it?

Or kill your customer experience and erode the margins.

So many different things can go wrong.

You can just waste money on your fulfillment operation, or you have a bad customer service experience, which you're spending all this money to acquire customers, and then they have a bad experience, they're never coming back.

So you want everything.

Obviously everything can't be perfect immediately, but you want to have as many things in place as possible.

That way, if you're doing double the business, triple the business, 10 times the business, your infrastructure doesn't need to change at all.

You just have, you know, more things happening, more transaction volume.

Right.

But like the underlying system should work.

So that's how I like to operate.

And in addition to the couple businesses that I've owned, I've also scaled a lot of other businesses.

So this is the philosophy that I use with clients with my own businesses.

I like a solid foundation that works efficiently.

That way there are no surprises.

Let's talk about that.

So you're working with an organization.

When you come to companies and you've seen many of them, what's the first thing that you start to look at?

First you talk about a strong foundation that might mean lots of things to lots of people.

Can you unpack that, what a strong foundation looks like?

Yeah, I think everyone asks me what is the first thing you look at?

And you know, I always look at the financials, right.

Because that tells the real story and I never believe financials when I see them.

So I validate the financials.

Right.

Because the devil's in the details.

But in parallel to like kind of looking at the financials and really understanding it, the first thing I do is I talk to, you know, the founder, the CEO, whoever the top people are.

I want to hear the problem from their perspective.

That doesn't mean that's what the problem is, but they know their business better than I do.

So let's hear what they have to say.

Right?

And then based on what they think the problem is and based on what the financials say, then there's some discovery to try to kind of poke at things and see where the problems really are, see if it matches up with the executives, you know, idea of where the problems are and then come up with a project plan of, here are the, here's some short term wins, here are some longer term things.

Depends on the business.

So you're looking at where they're, where to be, what's that gap?

And then maybe close, close that gap.

Do you see commonalities when you're first going in?

Do you start to see things which, from bad habits to, they don't have this, they have this are you see some things that are, you pretty much can always count on, typically in the.

First conversation that I have with the CEO, they will know directionally what the issues are like.

They'll know the people that they need to replace, even though they may not do that for several years.

They know the, the weak links in the people and then they know the aspects of the business that, that they've not been able to fix.

Right.

The areas like they know there's a problem with X, they've they haven't been able to figure it out for whatever reason and they need that addressed.

So they pretty much know, but they may not know the details and they may not be able to prioritize those things.

And, and in a lot of cases, you know, you think something's important but it's not going to impact the business if you fix it.

So it's probably just a waste of time and money.

But so yeah, we, I kind of help synthesize all of that into an action plan.

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And now back to my conversation with Michael Kleinman.

Now you focus a lot on direct to consumer work in a world where it's B2B.

So I always went after B2B because it was if they weren't coming.

I had retail stores at one time and retail business customers come in but it relied on advertising in order to get them to come into the store.

And this would probably sound familiar and our cost of acquisition was huge.

We were spend if we spend a million dollars on advertising, we would almost just sell enough to cover the advertising and then some.

And all that work just went on and it was kind of we weren't much further ahead.

It was really tricky that way because we didn't know we're spraying prey, we're trying radio advertise every medium that there is.

When you're going into a direct to consumer, it's a different animal.

And I have a lot of clients who don't know how to get there.

There are B2B, but they go through distribution channels.

And can any business, say, in a B2B environment go to direct consumer?

Like, have you seen where a B2B wants to go direct to consumer?

D2C is there.

Don't do that.

If you're this kind of business or if you're this kind of business, how does that apply across the spectrum?

Yeah, it's.

I was talking to someone yesterday and it was like, do you do the movie first or the TV show first?

Right.

And some do one and some do the other and it does translate.

I think if you have a really strong B2B business, that means that there's demand.

And if there's demand, you can pretty much forecast what your revenue would be.

Right.

You can look on Amazon and run reporting off of Amazon and see what the demand is on Amazon for that thing.

Right.

You can look at.

I mean, there's a lot of analytics that you can get about different things to try to see if B2C makes sense.

But I would say categorically, yeah, if you have a really big B2B business, that means there's some amount of demand and why not sell direct to consumer?

Your margins are better.

Yeah.

Right now, to run a B2B, you're going to end up.

You're paying for sales teams, you're paying for support teams, you're paying for CRM software, you're paying.

It sounds like Direct to Consumer is almost a cleaner operating business.

We don't need the manpower.

Is that true or.

A really long time ago, people used to say to me, oh, wow, you're running a website.

That's great.

Your margins must be so much higher.

And if you had any idea what goes into that, like, no.

If anything, your margins are probably lower.

Right.

You know, instead of having rent, you have technology.

There are other things that you need.

So I think if you are the brand and you have B2B and you have infrastructure in place, you're probably not going to use most of that infrastructure for the website.

The website is going to be significantly more automated in that sense.

Like, you know, the orders will come in and go out automatically.

B2B orders, like department store orders, are extremely complex.

Right.

You could have very specific requirements for each B2B account that have to be manually done.

So.

And I did have a customer that had B2B and B2C with very complex B2B things.

So we, we worked on all that together.

So, yeah, it's different, though.

It's a different animal completely.

Well, most, if we look from shifting operations to expense to asset.

Most entrepreneurs view logistics, warehousing and fulfillment as boring cost centers.

And it's just on the P and L, right?

You view them as a strategic asset.

So how can a business owner shift their mindset and turn their supply chain into a true competitive advantage?

That's a really good question.

I was reading this morning that there's 73,003 PLs in the United States.

I don't know if that's true or not.

I saw it on like listeners.

What three plus.

Oh.

So a third party logistics company is a company that becomes your warehouse.

So instead of, you know, if you're selling online, you need a place to store your inventory, receive inventory in, ship inventory out, process returns, store packaging also projects all that.

And if you try to do it yourself, you kind of are in the warehouse business, right?

And you really want to be in the marketing business, not the warehouse business.

So there's a whole lot of companies in the United States and around the world that are either single location or multi location warehouses.

They all have some sort of technology platform that plugs into your Shopify or whatever you're using and they handle everything.

So your inventory goes to the warehouse, they count it, sort it, put it away, manage it.

Your orders go there, they ship them out, your returns go there, they process them.

So basically, you can outsource your whole entire warehouse operation to any number of 3 PLs.

When you're outsourcing to a third party logistics or a 3PL provider, it's a massive milestone for a growing D2C brand.

But sometimes it goes sideways.

What are the hidden traps or missteps entrepreneurs make when partnering with the three PL?

And how can they protect themselves?

So it's really about planning, right?

You have to understand the requirements of the client and the capabilities of the three pl.

And, and it's really good to do a test because you know, a salesperson will always tell you that they can do something, but until you actually do it, you don't know if it really will work the way you want.

So this really becomes an issue.

I think when you're moving warehouses, right?

If it's the first warehouse you're working with, you're probably not going to have issues.

You might just outgrow them at some point, right?

But if you're going from warehouse a, a certain warehouse brand to another warehouse brand, you're used to processes that work a certain way.

You move to another warehouse, they may not have that at all, or it might just be different.

And that's really where you have to get into the details.

So we actually help clients determine if they should move, we help them negotiate their contracts, and we help them coordinate the moves.

Because you really have to kind of line up all the requirements and all the details so that you don't wind up with a problem when you move.

Is there a range?

And I realize it's different on products and based on volume, but let's say product is $100, okay, go through a 3PL, how much should we be allocating, generally speaking, to maybe marketing, to maybe to the operations, then to the 3pl, and then how much left over?

Is there any set rules?

I mean, I can't answer that question the way you want me to, but I can tell you that there are a lot of variables.

For example, what does this thing weigh and how big is it?

Because the dimensional weight is going to significantly factor into this.

Right?

You know, are you shipping in the U.S. are you shipping internationally?

What kind of standards do you have?

How fast do you want it to get to the customer?

So I think that, you know, it should be less than 15%.

There's a huge, huge range depending on all the different variables.

How many units per order?

You know, I mean, there's so many different things.

But by moving to a3PL, you can get your costs lower than if you did it yourself.

Even with all their fees and their margin and all of that.

Right.

You just have to do it correctly.

And you also need a certain volume.

So if you're shipping 50 orders a day, this is not something you're going to do.

But if you're shipping a few thousand orders a month, that's when you can go into a warehouse and really save money.

And.

Well, it's the same way when we do our books.

If you were buying one of our books and we ship it to Amazon, they take the lion's share of it.

You make a few bucks, right, Going through a direct ship or A3PL, just to use the postal system.

For instance, in the out of Canada, it's like $12 for a book where it's only $2.65.

In the US if we're shipping a case of them, right.

All of a sudden now we get scale and it starts to make sense.

So it's.

We want to sell bulk orders not just at a time and take.

But also like the, the shipping methods change all the time.

I mean, it used to be that shipping did not really change that much other than you know three, like a 3% increase every year in costs.

Now every three months we have different shipping methods.

We're changing the actual shipping carriers themselves.

Amazon is a shipping carrier that you can use separate from selling on Amazon.

So for one of the businesses that I own, under our expert, we send orders Amazon in the United States.

And we don't even sell on Amazon.

Well, no, it's the market.

Like I say, they're evolving.

They started, I think they're using FedEx or UPS and they started buying their own trust, their own systems.

It's that last mile that can make a difference.

Let's talk about acquisition costs.

You see that, you watch Shark Tank.

You watch some of these people who have interesting brands and different types of products.

Is there first of all, is there still room out there for direct to consumer or most of the categories been attacked and is it hard to break into that or if we are going to break into it, what should we be looking for in our product?

You know, obviously a mode of some sort, something unique, something we've developed.

And then what's a general range of cost of acquisition?

Because that seems to be a question that they the sharks ask is how much does it cost you?

You know, $10, $12, $50, whatever the number, what's your rules on some of.

That cost per acquisition specifically?

It depends on the audience are going after the creative, how good you are at marketing.

I mean you could have a $20 or a $200.

Right.

And then kind of wherever you land is going to be based on how much you're spending, the other things that you're doing to get brand awareness.

So again, huge range.

Right.

But can you repeat the question?

What was the first question you asked.

Me as far as opportunity goes?

Yeah.

All of a sudden I have an idea for a product.

A lot of the categories you can find online and products you buy online, I pick something, it's online or on Amazon or somewhere.

So if you're starting scratch and let's say there's somebody out there that has a business idea, are there still lots of good opportunities there for a direct to consumer?

If you've got a brand like what should I be looking for in my product or my services where we can do services too with SaaS from a product perspective or even a SaaS point of view, is it getting saturated or are there lots of opportunities?

I mean I, I have not been in a SaaS business and I would love to.

So that's definitely on my radar.

But I think with AI evolving so quickly, I Would be scared if I had a SaaS business because someone in their garage could duplicate it overnight.

So that's SaaS.

But I think product businesses, yeah, you come up with something that solves an actual problem, like a problem solution, a category that is at the beginning of being popular, not kind of fully matured.

And then you need to have a budget to make it popular.

If you can create some sort of cult like following around something, use social media to do that.

Yes, I think it will work.

But direct to consumer brands are very expensive.

If you want to pick something easy to do, don't, don't have a direct to consumer brand.

The danger of overcomplicating the tech stack.

You talk about this on your website.

You emphasize the importance of simplifying tech stacks.

Yeah, Protect margins.

So in a world full of shiny new SaaS tools and AI integrations, how does an entrepreneur know when their tech stack has become a liability rather than a help?

I think if you have a business that's been around for a while, at the speed in which technology is currently evolving, you need to continuously reevaluate what you're using.

Is it the best thing?

And you just need to have experts that are helping you make these decisions.

So a lot of businesses that we go into, you know, the, the person or the people that are in charge of the website have been in that role for too long.

They kind of grew up with that company.

They learned as the company evolved and while they were instrumental in getting the company to a certain point, they're not able to get the company to the next point.

And when we go into clients, I mean at the most basic level, right in Shopify, they'll have tons and tons of apps installed.

Sometimes they'll have multiple apps that do the same thing.

Many times if they've been around for a while, they will have apps that are so old that Shopify now has that feature for free, but they're paying for it somewhere else.

So this doesn't always amount to a lot of money, but creates a complex situation where you've just like over engineered your website.

It's slow because you have so many things going on, they're not efficient.

And if you want to make more money, you want to improve the conversion rate on your website, you want to improve the speed of your website.

And simplifying the tech stack is one way to do that.

Interesting.

What are the must haves like?

Are, are you seeing with AI technology?

For instance, we got bots.

People can interact with a bot and they're getting Better and better all the time.

You know, even with one of our tools, we're, we're looking at where we can respond to clients in real time.

And it's pretty intelligent because it's got a database of responses.

Yeah.

To go.

Yeah, we have similar, similar kind of.

Making it a little freer.

So we too heavy on the, the payroll expense or you still gotta have somebody there taking a human looking at it and someone to be able to take care of it.

Necessary.

I think it depends on the product.

I think certain types of product catalogs lend themselves really well to some sort of AI tool.

Other things you might need a little more of a human touch.

I think it depends on how complicated it is.

But yeah, I mean with Underwear Expert, we use some AI tools mostly to get the customer an answer immediately as opposed to waiting for an answer.

And a certain, if you look at customer service, some percentage of the inquiries can be solved by AI.

And some of them require human intervention.

For under expert, they are a little more complicated.

So we try to offer as much human intervention as possible.

But no, if it's something like change my address, cancel my order, reset my password, things like that, you should be able to do immediately without any friction.

So we leverage AI when we can.

But I'm a big fan of talking to a human.

No, makes sense.

Yeah.

This transition, you started another business that's on the consulting side, on the fractional side, what did you see as an opportunity, first of all, so, and I guess who are fractional CEOs or CFOs rather.

And there's a time and a place when, hey, we need that vision, that exercise versus say an accountant or bookkeeper, you serve as a fractional C suite executive and operational advisor.

So for a founder who is currently wearing every hat, CEO, coo, cfo, cie.

So how do they know when it's time to stop trying to figure it out themselves and bring in fractional leadership?

Someone like yourself?

Yeah, I think asking for help is difficult, especially if it's your baby and people know they need help.

But usually something will happen where they will realize that they need help.

So I think it's hard to just wake up and automatically think you need consultants.

Right.

I think usually if it's a founder run company, you know, sales will stop growing or business will be stagnant or there'll be some issue or whatever.

And then it gets them thinking that, oh, they need this person or that person.

But you know, with the 25 years of D2C experience, I think that I've learned so much, and I've spent so much time dealing with so many crazy situations that I can go into a business and save them the time, the frustration, and the expense of figuring it out themselves from scratch when I've already done it.

And if I haven't done the exact thing, I've done something so close to it that they're probably very similar.

So I've been doing consulting for a long time, but it's always been a favor to someone or someone I knew I've never really focused on.

It's only in the last year and a half that I've been spending, you know, 80% of my time on consulting.

And.

And we built a whole team around the consulting business finally.

But it's fun because I get to go in and apply all of my experience and see, like, fairly immediate results with someone's business that is not mine.

And it's great.

I love it.

Yeah, you can sleep a little differently.

Well, it's.

Yeah, it's different.

Yeah, sure.

And if the founder is spending half their time dealing with supply chain delays, broken software integrations, warehouse disputes, focus, vision and revenue.

And I think the power that you bring to the table is, as you say, 25 years of institutional knowledge to solve problems in five hours.

It would take a founder months to try and solve and take care of it.

So that makes sense.

Let's talk about as far as the challenges that you see in operation, operational challenges or unsolvable operational challenges.

You are known for developing creative solutions to complex operational challenges.

At others couldn't even crack.

So without breaking any NDAs, tell us about a time that a business was completely stuck and the unconventional maybe pivot that you used to turn things around.

Yeah, I mean, there have been a lot of these, but I think people will hire me because they.

They're stuck.

Right.

It could be all different definitions of stuck, but it could be that they're burned out and they're emotionally stuck.

It could be that the revenue is stagnant for three years.

A key person left, the business started to unravel.

There are like a million different situations why they might be stuck.

Maybe they didn't evolve fast enough and now there's a lot of competition.

So they usually bring me in when there's some sort of problem and they need to figure it out.

And, you know, conventional solutions may not necessarily work.

Or maybe they kind of exhausted everything and I'll just come in and I think about every business as if it's mine.

Right.

As if I'm signing the checks.

And I'm responsible for everything.

And I go in and I immerse myself in it.

And then I come up with all sorts of creative ideas.

That's kind of how I operate.

An example of this was we had a client that they were stagnant for many years, and I went in to try to figure it out, and it turns out there were, I don't know, maybe 50 reasons why they were stagnant for so many years, but I started looking at the biggest ones and none of the expenses were under control.

Like the fulfillment costs, the way fulfillment was configured, like all the, all the foundational stuff was like, completely wrong because the person in charge of it had zero experience, but everyone trusted that person.

So that, that was one thing, right?

And then we started looking at website, right?

And they had all of.

They had multiple websites all kind of like, glued together in some sort of custom fashion.

When Shopify does so much out of the box with no customizations, that if you're going to create some crazy custom solution, that's probably why your business is not working.

So we unraveled it and consolidated multiple websites to one.

We went through and we did projects that they wouldn't have been able to do themselves because they were just too difficult and they didn't understand it.

And so my kind of mode of operating for this client was simplification.

I just went through the whole entire business and tried to simplify everything.

And, and every time I did that, they saved money and the business grew.

And then you compound a few dozen things together, and that's how you can grow a business, you know, and double it over a short period of time.

Or transform it from where it's at to, yeah, you want it to be.

So that's pretty much.

That's what we do.

You, you have an approach that replaces guesswork with the long, driven execution and proven systems.

Can you share a quick framework or example of how an entrepreneur can take a chaotic feeling process in their own business and then turn it into a predictable system?

I mean, look, if you use Claude, you can tell Claude what your problem is and it will, you know, synthesize it into.

Into a process.

So.

But I've been playing around with Claude a lot, and half of what it tells me is wrong, so I have to correct it.

But I think that if you need help creating processes, that's great for an AI tool, but if you don't know what the process should be, the process you have is antiquated.

You think there's a better way to do it.

You can use all the AI tools in the world.

But I think you need an expert to look at it and give you an opinion.

And you know, that would be my recommendation.

I agree with you.

I think if we focus and lean into the human aspects, and I know that you do, it's which KPIs, what are the wisdom?

I can't be accountable, it can't be responsible, it can't be empathetic.

And I don't think it ever will be.

It can write a poem, it'll make you cry, but it never had its heart broken.

So we need the wisdom.

We need that human element.

What it does is it allowed us to accelerate SOPs.

Like for instance, we do something, we look at what we're doing, we can create an SOP real easily.

Like just record what we do.

Nice document, simple process, tweak it every once in a while or do whatever.

To your point, if you're looking forward, if you're looking at crystal glass, you've seen AI coming down, you're an early adopter.

I get that.

Yeah.

Get strategy.

And so where do you see things going in the next one to two, three years for businesses?

A lot of people are concerned.

My job's on the line, I'm going to be losing.

And it's like, you know, we probably need some guardrails.

Right.

Rules of the road for ar.

We still need someone to drive the car.

We still need somebody who can help us navigate those minds.

And I know that you and your firm do that, kind of see things according to Michael.

So for several months I was afraid of AI, like, and I was, I had some sort of anxiety around AI and I, I knew I just had to like, think it through and process it.

And then a few weeks ago, I don't know, I woke up one day and I realized that this is actually a benefit.

Right.

If I was just graduating college, I would be screwed.

But with the amount of experience I have and existing businesses and clients, I think if you have a lot of experience, this is something that is like a once in a lifetime opportunity where you might have a business where you've had problems that you couldn't solve, AI could actually help you solve those problems.

Whereas before it would have been too expensive and too time consuming to do that.

So I don't know if that's the answer that you want, but.

No, that's a good answer.

I think it's democratized the whole system.

Yeah.

I think it's work.

Your condo.

Yeah.

Live in the world and run a multi million Dollar business.

I. I think it's going to be really interesting after living through the whole dot com thing, I have that.

I think if you have that perspective, you know that a lot of what's going on is noise and it's going to disappear.

And I don't get that excited every day, every time there's a new thing because I've lived through this before.

But I also think that this is, this is moving faster than the whole dot com boom moved.

Oh, night and day.

Yeah.

It's looked at numbers just in the growth of chat GPT over Instagram and it did in a couple of months versus what they did in the expansion.

So it's accelerated.

I call it the fourth great disruption.

We started off with teams when people all upset and started burning the looms and starting fires.

And because a loom could do in hours, it took days for someone else.

Then we had the lamp lighters.

Lighters, replacement electricity.

But we needed installers, we needed repair people.

The industrial.

Now I remember when computers came out, I was old enough to remember everybody go, that's going to be.

And now secretaries became.

And typing poles became executive assistants and schedulers.

So I think I just saw a survey literally the other day of companies that are now increasing their hiring of new hires, even from college.

But they're requiring that they learn some basic analytical skills using AI tools.

Right.

So when I went to school calculator, you couldn't use one.

You weren't allowed to.

I know.

I remember that you were always told the professors would always say you need to learn how to do it because you're not always going to have your calculator with you all the time.

To be honest, I've had my calculator with me for years and so it is always with me.

So I have to remember some algebraic equation when I can just ask Siri or.

And we've had agentic AI since 1967.

So on the agent side.

So I think that the key is to learn the tools, apply them.

But it's exciting.

I think there's.

Are you still optimistic that there's lots of opportunity out there for companies?

Oh yeah.

I think there's a lot more opportunity, but it's different.

And yeah, you really have to kind of take it day by day and evaluate what makes sense.

And I don't think you have to make any rash decisions.

I think these things are going to evolve and you have to evolve with it.

And it's just moving faster than we're used to.

Yeah, no, it's.

I Think it expands the marketplace too, because productivity's improved as a speaker and a trainer and an author, and we have training, company training products.

English was my primary dominant audience.

And now we're evaluating tools where it will take me.

It'll take everything.

And I want to put it in Mandarin or Cantonese and literally within two minutes, just my lip sync.

I'm speaking fluent whatever language.

And so it opens up those products consulting.

So I'm now looking globally versus and that's a marketplace.

I think it's going to boil down to the logistics, as you said, and distribution and making that work.

And I know you have expertise around that as well.

Yeah.

What's the best place people to find you?

We've mk.

Com.

I know they can go.

They can find you on LinkedIn as well.

Yeah.

Michael Kleinman.

Those are the best places to get hold of you.

And if they want to have an initial consult with you and talk about their business, I'm assuming they can get hold of and Sally.

Yeah, we'd love to chat.

Awesome.

Well, Michael, this was a real treat.

Thank you so much for sharing your insights.

Lots of good value there and lots for us to think about.

Whether you work within an organization, whether you're an entrepreneur or you own your own business.

Lots there and lots of information.

So thanks for being our guest today.

Thank you so much.

As you're listening to this episode, what is one idea that you've heard that's caught your attention and why does it matter so much to you?

And who is one person who you.

Can share that with?

Either sharing this episode or just sharing that insight that occurred to you while you were listening?

Perhaps it is the realization that blind trust in an unqualified team member can quickly wreck your operational foundations.

Or maybe it is that when a business stagnates, the real culprit is often a cracked foundational operation rather than a bad marketing plan.

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