Ep 236: AI and Your Business: What You Should Know

Welcome to the weekly Wealth Podcast.

I am certified financial planner David Chudick.

This podcast and my wealth management practice are both designed to help the mass affluent to live better lives by how they handle their money.

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One of the really cool things that we get to do here on the weekly wealth podcast is sometimes we just have an interesting chat with a fellow entrepreneur, an entrepreneur that's had some of the same struggles that we all have had, and an entrepreneur who can just give some of their advice, some of their tidbits on how they've survived and also thrived in their businesses.

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We have a treat today.

We're talking with Mark Whitehorn.

And mark is a 21 year survivor of owning a tech company.

So we're going to talk about some ways that maybe he can help your business to survive for 21 years.

We're going to talk about how to prepare for the transition between employee and entrepreneur.

And then one of my favorite topics that is really big right now is AI, and we're talking about where he thinks AI is heading.

Hey, Mark, how are you doing?

Great.

It's a beautiful day here in South Florida and thank you for having me.

South Florida, there are definitely worse places to live, for sure.

All right, let's talk a little bit about your company.

So you've been in business for 21 years and you have been creating websites for realtors and brokers in the United States.

So first of all, like, how do you get into that?

Nobody ever is in, in kindergarten.

And they say when I grow up, I want to create websites for realtors.

It's always interesting for me to know where people maybe backed into a successful career.

Sure.

Thank you.

Great question.

So I'm a marketing person.

That's my forte.

I graduated from Fashion Institute Technology in New York and marketing and commercial photography.

And over the years I've worked or was a partner in advertising agencies where we wrote radio jingles and produced.

Remember radio?

What is radio?

Can you explain that to the young people?

Oh, you turn the dial and you get this like staticky thing.

You have to wait for your favorite song to come on and it may not come on.

You don't get just a Buck.

Exactly.

You don't have your favorite tune list.

We did newspaper ads.

How about, ladies and gentlemen, Mark and I are old, so if we're not.

If you haven't figured that out yet, we're old.

We did newspaper ads, okay?

So, yeah, people, I have one client.

He was a cellular telephone distributor.

That's back in the day when it first came out.

And his week lived and died by the business Monday edition of the Miami Herald.

If he had a good ad, he had a good week.

If not, everyone was sitting on their hands.

How did I evolve that?

That's the trick is trends, technology, change.

And what you do is you change with it.

For example, I had worked for an ad agency where desktop publishing was first coming out, and the owner owned a typesetting machine and he was still paying it off.

And I said to him, you're really losing out on a lot of creative here because we need to modernize.

And it wasn't a lot of money to modernize.

But he saw his typesetting machine and he says, no, I got to pay that off first.

And he eventually went out of business.

So that taught me a valuable lesson, which is, you can't sit on what you have.

You constantly have to change.

What's funny is you mentioned two things that almost don't exist anymore, newspapers and radio.

So if you would have just said, hey, I'm a radio advertising guy.

That's what I do, you'd be bankrupt right now.

So you had to make some change.

Correct.

When I was a partner in one ad agency where we did a lot of collateral material, and when we started, there were three profit centers.

There was the design of the materials, then we had to make film separations, CMYK for printing, and then there was the printing.

And then all of a sudden they modernized the film part where it was direct to plate.

So that eliminated one profit center.

And then all of a sudden the printing companies are going direct to our clients and saying, hey, just have Mark's company design it and we'll give you a better price on the printing.

So we went and we opened our own printing company.

It was a digital printing company, which was direct to play short run printing.

Short run printing is 1000 pieces or less in that business.

I stumbled upon the real estate industry because realtors needed to do mailings for listings and things like that.

And then one day I was at a one day trade show for realtors in Atlanta, and this young guy walks by, longish hair, and he says, hey, I've got this website product for realtors you want to help me with it?

And I said, sure.

So I left my salesman at the booth and I sat down with him and we partnered up and we tore his product apart for six months.

Because I'm a marketing person, he's a programmer, and the rest is history.

So we've been marketing websites for realtors for 21 years.

That's.

So what are some of the struggles that just of.

Because I think there's I'm a good marketing guy and then there's I'm good at running a marketing business.

And those are two different skills.

Right.

So what are some of the struggles that maybe you just personally have run into that are hard running a business?

So what I look at is I look at my clients and I look at what tools do they need to succeed.

That's the bottom line.

And then we start creating things for that.

For example, about eight years ago, smartphones had taken over and more and more people were going onto the web on smartphones.

So we went and we redid our software from scratch, rewrote the whole thing.

It was a nine month process and then another six months to transfer all our clients from the old system to the new system.

And that's the kind of investment you have to make in order to, to have longevity, to succeed.

You can't just say, it's working, I'm making some money and let's just sit on it for as long as we can.

We're constantly adding new products.

Some of them are succeed, some of them are great, and some of them die by the vine.

I go, this would be a cool idea, let's try this.

And I always go back to Thomas Edison.

How many light bulbs did he try before he came up to the new.

The one that worked.

So you constantly have to try new things, you constantly have to reinvest, you constantly have to market to new areas and you see what works.

And if it doesn't work, you just say, okay, I tried, that's fine, and you move on.

And I think that's part of the entrepreneurial mindset, is that you have to have success, and you don't have success unless you have failure, which is almost counterintuitive.

So it's almost like you need to fail very often so that you can get to this month's or this year's successful actions.

And then with technology and everything, things are changing so quickly.

So what you're doing today that's successful may not be what you need to be doing tomorrow or next year or next week to make you Successful.

And I think that's a fascinating puzzle that entrepreneurialism is.

So speaking of entrepreneurialism, you work with Realtors, but we can almost, almost substitute any type of a business owner in there.

So how does one prepare for.

I'm quitting my job.

I have a job.

I have a 9 to 5 and I'm going to go into real estate, which I can make a tremendous amount of money, or I can literally make negative money.

Or let's say I'm a cook at a restaurant and I'm saying I'm taking a risk and I'm going to start my own restaurant.

That's a different skill.

Cooking and owning a restaurant are two different things.

So mindset transitions, those kind of things.

For people that are thinking, hey, I think I want to own my own gig.

How do you prepare for that?

Thank you.

I teach.

I've been teaching classes at the Miami association of realtors for 27 years.

The marketing classes.

Basically.

One of my favorite classes is surviving the first six months as a Realtor.

It's turned it into a book.

It's on Amazon, and it's a three hour class that teaches these rookies how to go and transition.

So you have different types of people.

You have some young people who are looking to get into a career.

And real estate is an easy career to get into as long as you're willing to work hard.

And you know, that's.

And the barrier to entry is basically very little.

Right.

You can study for a few weeks, get your license, and then at least legally you're qualified.

You may not know what the heck you're actually doing, but legally you're qualified.

Correct.

You take a course where they teach you math, the law, and how to take surveys, which is pretty interesting because I never knew that before.

For example, you know where Four Corners is?

The four states that meet?

Yeah, yeah, absolutely.

And I've been there.

It's owned by the Apaches and you pay them like $8 per carload to go there.

And there's a big monument.

That symbol that's supposed to be on the exact spot is in the wrong place.

It's off by like 100ft.

Because they didn't do the survey right.

They didn't compensate for the curvature of the earth.

Anyways, I digress.

Back to realtors.

It's very easy to get into the business.

And then once you're there, you have to learn the business.

You have to learn how to be a salesperson, you have to learn how to drum up business.

You have to learn how to be an entrepreneur, you have to have a business plan.

You have to have certain tools in place in order to succeed.

Many people get into it.

They think, I'll just show up on my broker's office and they'll hand me leads and I'll go make popcorn at someone's house and I'll make a lot of money.

But it's hard.

It's a struggle.

And the biggest transition is from being an employee to being an entrepreneur, where as an employee, you're getting tasks from your boss.

As an entrepreneur, you have to create the business.

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That and that is a total different mindset shift.

Another thing that I've seen in my business as a financial advisor and is that as an employee, you're getting a paycheck, but your employer is withholding taxes and maybe giving you a 401k that you're putting your money into.

And there may be some other benefits.

As an entrepreneur, none of that stuff exists until you are unless you put it in place yourself.

Even the withholding of taxes, like you can not withhold taxes now, you're going to get a pretty big surprise at the beginning of next year.

But if you spend every dollar that comes in, you're going to really be in a hole.

You're.

I'm actually married to an accountant.

Oh.

So yeah, that keeps you straight.

It has his pluses and minuses.

I get accounting for free, but then she knows everything about me.

So there you go.

Yeah, yeah.

But yeah, you have to take.

If let's say you earn $10,000 in, in commission or now they have to say compensation.

It's the new rule.

You have to take a certain portion of that and just put it aside, don't spend it, just let it sit there.

And that's hard to do.

That's really hard to do, especially when you're living commission to commission.

So, for example, a typical realtor will do four or five deals a year, which means every two, three months they're doing a deal.

You have your ups and your downs and now all of a sudden Johnny or Jane needs braces or summer camps coming up and you got this money sitting there for the government.

You go, I'll make it up on the next deal.

And then it's April 15th and you're going, oops.

Yep, that's the difference.

And now it's April of next year and you haven't withheld any taxes for the next year yet and you're still backed up.

Those are a lot of the things that people think about.

And just incidentally, when people look at business owners, they think that person's making a lot of money.

Maybe that realtor just made fifteen thousand dollar commission, twenty thousand, five thousand, whatever the number is.

That's not what the person keeps.

When you go to a car tire shop and maybe you spend a thousand dollars on tires, the person who owns the tire shop did not make a thousand dollars.

They may end up with 50 bucks by the time it's all said and done.

After they pay for their inventory, their staff, their insurance, their benefits and everything else.

Sure.

But I bet you if you ask a lot of these small business owners, would you trade in your business for working for some company?

They will not trade in their business.

Very few would.

You are absolutely correct.

So I'm a marketing person, but I own a technology company.

You asked me to write a line of code and forget it.

If my life depended on it, I'd be dead.

So I have to rely on other people to write code, to do the programming, to make sure that the systems are working well.

I have a team in Miami of web designers and customer support people and they're all great people and I rely on them.

And I've learned that I can't do everything.

That's just it.

Periodically I'll go, oh, let me check something and it's done.

And I'm very fortunate and very blessed that I have good people that are taking care of it.

And I don't even know that it's being taken care of.

You had to almost take a risk to pay people to do the things that don't do very well or simply don't want to do so that you can do the things that you're really good at.

And that's another mindset thing that, that I think business owners need to get head wrapped around.

Sure.

So I read a great book many moons ago.

It was built to Last.

It was how to Take a small company, a mom and pop company, and make it larger.

And all of a sudden they're talking about McDonald's, and I'm going, what does a small company have to do with McDonald's?

And what it taught you is there are procedures.

You have a guidebook.

You write it down how things should happen, and then you present it to your employees.

And then as long as everyone follows with it, then you can let go.

You can trust that the system will take place, and that affords you the ability to grow.

If you don't do that, if you are basically just sitting there and just holding on to everything and not allowing micromanaging and not allowing people to do their jobs, you're not going to grow.

It's just going to be as far as you can take it.

And that's it.

Yeah.

So one of the things I do in my practice is I help businesses to prepare for sale and make them more valuable.

And one of the biggest things that businesses can do to become more valuable is what we call the hub and spoke, which is to get the business owner out of the way of everything.

If the business owner is the hub and the.

And all the spokes are going through the business owner, it just.

It's stifled.

So you need processes and procedures.

You need standard operating procedures.

You need to hire good people, people that you don't have to micromanage.

You need to set expectations.

And all those things are hard to do.

But it's also much harder to be the business owner that never gets to go home because they are involved with everything.

Are you a longtime listener of the weekly wealth podcast?

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Will you tell a few of your friends, your families, your colleagues, or your co workers about the show?

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So let's talk about AI.

AI is probably the biggest thing.

It may end up literally being the biggest thing that hit the human race by the time it's all said and done.

It does a crazy amount of things.

I use AI literally every day, purposefully, and AI, of course, in all of our lives is in the background, and we don't even realize it.

What do you think about AI?

Is it going to replace people?

How should we be thinking about AI?

If you had teenagers or college students, what would you tell them about the job market, maybe what they should or shouldn't be looking at, because there probably will be some jobs and fields that will be either replaced or almost replaced by AI.

Sure.

So we always go through this.

Many years ago, desktop publishing had first come out and all the typesetters were going, oh my God, there's my job.

So yeah, AI will change the job market, but it will also open different opportunities.

There's three different types of AI.

AI has become a really watered down term.

So first we have generative AI.

If you want a picture of the president riding a horse, you say, hey, let me have a picture of the president riding a horse.

And there it is, is in 10 seconds.

And it did it.

Is it great?

Is it sellable or is it beautiful art?

No.

Then we have automation, which will do things for you automatically without you having to lift a finger.

And then there's machine learning.

So what some business people are doing is they're not using AI properly.

For example, they came out with these AI driven chatbots.

So let's say you want to go to a retailer or I had an issue with a vendor where I needed something done and they have a chat and that I spent 20 minutes on a chat with this thing trying to stop me from talking to a real person.

It did not solve my problem.

And eventually I got a real person on the line who was able to help me.

So some business owners are going, wow, this is great.

I can save money on employees, but.

But at the same time they're losing business.

So they have to really look at AI and see is this helping my clients or not?

What we've done is we are using AI to help realtors find potential sellers.

So we looking at online activity and matching that with property tax roll data and we're finding people that realtors can approach to see if they want to sell their home.

So that is a useful tool where it's not pissing off any clients or customers or things like that.

So we have to be careful on how we use AI.

And also if it's really a tool that's helping us make more money.

And I think AI can be a way, at least in today's world, that you can lessen your load.

And there are things that AI can do for me.

But one of the things that I think AI should do is allow me in my office and you and your office to maybe have a simpler life, but then free us up to make our clients and make our customers feel more appreciated and to increase the customer and client experience.

So If I'm able to, let's say, use AI to help me to better and more quickly edit a podcast episode, that frees up time for me to send a handwritten thank you note to one of my clients that's going to give them the warm and fuzzies.

Because I don't think AI can give the warm and fuzzies at least yet.

Correct.

For example, Google has a tool where you could put like a magnifying glass.

Let's say you see a sweater on some website or something, or you see some celebrity wearing a sweater and you're going, wow, that's a cool sweater.

I want to get it.

And basically you put the magnifying glass over it and it'll show you what retailers have that sweater that is really useful.

But I think a lot of business owners, especially the large business owners, are holding back on hiring because they think that AI is going to replace employees.

Now we had this, we had a similar situation go on a few years ago with Web3.

It was the whole blockchain thing, oh my God, it's going to change the world.

And businesses invested a lot of money in that.

And then they came to the realization they're going, why am I doing this?

Why do I need this?

Web 2 works perfectly fine.

This whole web 3 thing is not for me.

I don't need it.

So I think it's going to take a little bit of time for the, the business owners to really figure out what AI tools works for them and what AI tools are basically just not there, not ready.

I do see a lot of social media post posts that I can absolutely say are AI generated.

A lot of LinkedIn posts are AI generated, or at least they appear to be.

And I, I don't necessarily respect those people that every post appears to be ad generated with those same little emojis and everything.

Because I don't think real human beings, at least on LinkedIn, actually use emojis.

Somebody who's 40 or 50 years old.

But LinkedIn will put little emojis in there.

I don't know, I think it's a tool.

I think 50 or 100 years ago, years from now, the world will be different than we could ever imagine.

But I also think that human being are still needed now in my business and probably even in the real estate business.

We still, I'm ultimately in the behavior modification game.

So if you're my financial planning client, yes, AI can help build investment models, blah, blah, blah.

But ultimately, let's say that you and I decide as a client you need to invest $500 a month just making up a number to get you to where you need to be.

If we're looking at your statements and you stop that investing for whatever reason, then we need to have a conversation.

Hey, have your goals changed?

Is there something different going on?

Is there another expense that we didn't count on?

And if not, maybe we just need to get that investment back going.

So, like the behavior modification of making sure my clients are doing the things that they need to do is still my main job.

And a robot do that.

Or maybe they can to some extent, but not as well as a human being.

I don't know.

That's how I think about it.

What about you?

It's not there yet.

I'm never.

I never say never.

But it is not there yet.

And we have to live in today and now.

Maybe one day the technology will be there where it can do more.

But there's still a lot of issues that AI has to overcome.

For example, copyright issues.

There were a lot of lawsuits going on.

For example, the New York Times sued one of the AI companies because they read all their articles.

Getty Images did the same thing because all their photographs were all read or copied or stuff like that.

So we're not there yet and we have to really keep an eye on it.

And then we have to take real baby steps into how we incorporate this into business.

The short term gains of, oh, I don't need this employee for this tech support or something like that is one thing, but it's short term and it could be losing.

You could be losing business over it.

All right, so we have probably have some realtors listening and they're thinking, you know what, marketing is the biggest part of my business and I need to find some more listings or I need to find some more buyers who are looking to buy something.

Or maybe I just need to learn more how to market my business.

So for any of the real estate agents out there that wanted to find you, how would they find you and what would you like for them to do?

Sure.

So my website is dpishowcase.com and basically we create websites and CRMs for real estate agents across the United States and Canada.

The websites come complete with a CRM client management system.

So you have your own personal one.

A lot of realtors, they will use the CRM that their broker gives them.

And if they switch brokers, then all their clients are now the property of the, the broker, the old broker.

So they need to be portable and they need to have their own CRM.

And plus, we have a lot of other tools that we use in order to help them succeed in business.

When you're in business as a realtor, you don't want to do it alone.

I'm a member of a mastermind group of a bunch of financial advisors.

We meet once a month and we talk about struggles and solutions and we help each other succeed.

So don't go it alone.

When you're an entrepreneur, that's when we make bad decisions or we just don't know what to do.

So I think that's one of the things is we want to make sure that we have a community and we have coaching and we have support.

So this is really good.

And I know this.

There are times when the real estate business may be easier.

I think this is one of the times, generically speaking, that it's not that easy.

So the real estate agents that are going to do well, they need to band together and they need to get support and build their skills.

Pretty cool stuff.

But we are the weekly wealth podcast and we talk about the mindsets, the tactics and the strategy that can help you to build and maintain wealth.

So here's the question that I'm going to ask you that I didn't tell you I was going to ask you, but Mark, what does wealth mean to you?

So when I say the word wealth, what does that mean to you, your family, and all of the people in your life that you love and care about?

So first you need to have financial stability so you're not living paycheck to paycheck.

There's that old thing that say, let's say you had to come up with a thousand dollars today to fill, fix whatever, a hot water heater or something.

Can you do that?

So that's the first step.

Then what you need to do is it's a slow road where you have to invest and then you have to reinvest and, and over time, your investments start earning enough interest.

And if you reinvest it where it just builds upon itself and it doesn't start by saying, when I get, I got $50,000, I'll go put that into some, something.

You start with $5, you start with a hundred dollars.

And especially if you're young, you have time on your side and you do that and then you have to invest cautiously.

There are some, I, I go with the basic things with certain portfolios for someone my age and it yields and so I don't have to worry about that.

So that's how you build towards wealth, is you take a certain amount of money and you start putting it aside and then you let it reinvest in itself.

And after a while you wake up, you go, wow, this worked.

I'm good.

I can retire.

I don't have to rely just on Social Security.

There are two things that work, people and money.

And it's very hard to get ahead if you, if as a person, you're the only thing that's working.

When you get yourself and your money working, whether that's through buying real estate or investments or anything else, then you're definitely looking a much better chance of achieving true wealth and financial freedom.

So awesome stuff.

So, hey everybody.

We will put Mark's website and social media handles in the show notes.

Make sure to check him out.

A lot of great information on this show that applies both to realtors and just business owners.

And until next episode, we wish everybody a blessed week.

Thanks, Mark.

Thank you.

Thank you for having me.

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