How to Avoid the AI Trap Capturing Most Entrepreneurs

Dan Austin: [0:01] Doctor Cooper. Who's Doctor Cooper?

Dylan Koch: [0:04] Mr. Cooper, the the loan servicer. And but you put something else like that. Servicer?

Mike DeHaan: [0:08] Yeah. Is that your company?

Dan Austin: [0:10] Yes. No. That's a that's the principal. Isn't that principal from, like, that one show back in the nineties? Mr. Cooper, whatever, hanging with mister Cooper? You guys don't remember that show?

Dylan Koch: [0:18] No. I'm not in my forties. I had a teacher

Mike DeHaan: [0:20] in high school named mister Cooper, and then it's one of my core high school memories because half the day of the school year, he killed himself.

Dan Austin: [0:26] Oh, Jesus, dude.

Dylan Koch: [0:27] Mister Cooper is powered by Rocket Mortgage. So there's a lot.

Dan Austin: [0:29] Why Rocket did you say mister Cooper is powered by Rocket Mortgage?

Dylan Koch: [0:32] Okay. By

Mike DeHaan: [0:33] Rocket Mortgage.

Dylan Koch: [0:34] I'm reading their their headline here.

Mike DeHaan: [0:38] What's going on, guys? Welcome to collecting keys. Don't worry. We won't talk about such dark things

Dan Austin: [0:43] for the entire discussion. Just wanna point out hanging with mister Cooper was in 1997. Okay?

Dylan Koch: [0:49] Okay. Cool.

Dan Austin: [0:49] I got four. Two years old?

Mike DeHaan: [0:51] Four. Four. That's nice. And I was seven. I mean, I know you remember it so vividly, Dan, because you're an old man.

Dan Austin: [0:57] I don't. I didn't watch that show that often. I wasn't there. What were

Mike DeHaan: [0:59] the eighties like?

Dan Austin: [1:01] I don't remember.

Mike DeHaan: [1:02] Yeah. You you have you have at least one memory from the eighties. I guarantee it.

Dan Austin: [1:06] Probably. It just bleeds together with the nineties though. Like, the nineties, I will say this, and everybody says in their generation when they get older, the nineties was the shit. The nineties was as cool as it got. Like until like up and not as like in the history of time, but it was like the last cool period. Because then 2000 shit, the internet hit. Then from there, was just like every year you're just taking away people's cool shit to do.

Mike DeHaan: [1:27] I feel like there was cool stuff through like the early two thousands.

Dylan Koch: [1:30] That was the

Dan Austin: [1:30] last of the frontier. Let's put it that way.

Mike DeHaan: [1:32] It was a different time for you because you were at war. I was in middle school, you know?

Dan Austin: [1:37] I mean, I'll tell you what. 2005 in Iraq for a for a guy in the middle was pretty sick. But, like, you know, not for the Iraqis, but for me.

Mike DeHaan: [1:47] You guys can finally be out there on your own exploring your own closeted desires with no judgment.

Dan Austin: [1:52] Yeah. I didn't see some weird shit, but nothing like that.

Mike DeHaan: [1:56] Oh, come on. I I know the stories when we're we're having a whiskey somewhere and you really start to get emotional. It's alright. You can save those for a different time of

Dan Austin: [2:02] the show. Start talking about,

Dylan Koch: [2:03] The don't ask, don't tell.

Mike DeHaan: [2:04] Yeah. When we have our five hundredth episode, we should we can do something where you can just come and and share us share war stories. We'll get you a nice nice bottle of something.

Dylan Koch: [2:13] Yeah. I got Elijah Craig in my office over here.

Mike DeHaan: [2:15] Oh, really? Nice.

Dan Austin: [2:16] You might have stepped that up, big dog. Elijah Craig's good, but not as good as what do I got back there? I got some Blanton's back there. That's one of my favorites, actually.

Dylan Koch: [2:24] There you go. I'm not even a huge bourbon guy, but I just kinda have it. You gotta have it

Dan Austin: [2:28] in your office to be, you know, a real estate guy. You gotta have a cigar and a and a whiskey. See, I'm

Mike DeHaan: [2:33] I'm so not a brand person. I don't know any of these. I I can appreciate when something's better than something else, but, like, as soon as I have it, the name of it just leaves my mind.

Dan Austin: [2:42] Oh, you don't care about the name yet.

Mike DeHaan: [2:43] Yeah. No. I don't care about what it is.

Dan Austin: [2:45] You're not a a brand snob.

Mike DeHaan: [2:46] No. No. Not at all.

Dylan Koch: [2:48] I mean, like I wear Carhartt jackets.

Dan Austin: [2:49] Yeah. Car except for Carhartt fleeces.

Mike DeHaan: [2:51] Well, even then, like so I got those because I recognize the brand. When I'm comparing against the other ones, I don't know I would have done

Dan Austin: [2:57] the Patagucci personally. I like the Patagucci better.

Mike DeHaan: [3:00] The Patagucci ones, though,

Dylan Koch: [3:01] they look

Mike DeHaan: [3:01] bad. Like, they just weren't as nice. And they were like twice same. Look at the yeah.

Dan Austin: [3:05] If they're twice as expensive, I get

Dylan Koch: [3:07] No.

Dan Austin: [3:07] No. They did it. The same

Mike DeHaan: [3:08] to me. Like, it was probably like and so you're talking about we're talking about a a vest that we got for SLA. But So the Patagonia, like, the model that they have was not SLA brand. Oh, I So so they were they were making a presentation about who was supposed to wear those. I'm like, yeah. Not that guy. I'm hire that guy for sure.

Dan Austin: [3:25] Was it a guy with, like, manicured fingernails, very sloppy?

Mike DeHaan: [3:28] Oh, Oh, yeah. He was carrying a briefcase. I'm like, come on. Yeah.

Dan Austin: [3:31] We can't

Mike DeHaan: [3:31] do No way. Off brand.

Dan Austin: [3:33] Well, that's what you get.

Dylan Koch: [3:34] Speaking of brands, did you guys see that Allbirds, which is a shoe company

Mike DeHaan: [3:39] I did see this.

Dylan Koch: [3:40] Branded to an AI GPU processor, they were up, like, seven x on the

Dan Austin: [3:45] day. I watched the reel. I watched the reel on that this morning, and it was fascinating because it's just the typical to me, what I guess what this was presenting. Can't remember which this girl I follow is. She's actually a good follow. She does like breakdowns of stuff. I I don't like half the shit she says, but, know, she still says it. But she she was talking about the breakdown. So this company invested 5,000,000 into Allbirds and said, we're gonna invest this money as debt and it'll convert from debt to equity when you guys make the successful pivot to AI. Well, just by that announcement, it went from $3 to like $19 And so they made a bunch of this $5,000,000 investment essentially. There's a bunch of clauses in there that would allow them to convert that to equity and then they could just sell it if they want to. So the idea is as you do that to like 10 failing companies with 50,000,000 trying to get the upside. Like, it's like a, I don't know. What kind of investment would you call that? Like a-

Mike DeHaan: [4:35] Gambling.

Dan Austin: [4:36] A gambling investment. Yeah. But it's like, it's not the market driving it. It's a bullshit.

Dylan Koch: [4:41] But the same shit happened with blockchain a couple years ago. They would just pivot to a blockchain company, and their stock price would go up. Right? Yes.

Dan Austin: [4:47] Yeah. Everybody was doing that. Yeah.

Dylan Koch: [4:49] You're

Mike DeHaan: [4:49] right. There's always been that. Like, when we were in college, it was the cloud. Right? Everything had,

Dylan Koch: [4:53] like, a cloudcom before that.

Mike DeHaan: [4:55] Right? Like, yeah. Ads.com. Everyone had a .com company. You know, now it's AI. I mean, even in between blockchain, there's the NFTs. Every company was doing NFTs for, like, a little bit.

Dylan Koch: [5:06] Yeah.

Mike DeHaan: [5:06] That was that

Dan Austin: [5:07] was the NFTs was, like, the short lived. That was the one hit wonder there for, you know, fifteen minutes.

Mike DeHaan: [5:12] Yeah. The problem is that one was, like, too weird. Like, people couldn't fully understand it. And then you also have, like, the Ryan Pinedas and the freaking, Jake Pauls of the world out there promoting those so heavily that it's like Yeah. Come on. Can't do that. And also I shouldn't put them next to each other because those aren't even a close comparison.

Dan Austin: [5:28] Also, the yeah. But they were kinda doing the same thing. Yeah. But like, also it's like that was such a like, I get it. Like, well, this is your digital thing. I'm like, cool.

Dylan Koch: [5:36] Well, I'll

Dan Austin: [5:37] just take a picture of it and put it on my digital thing. I don't care if it's the real thing.

Dylan Koch: [5:40] Like, no, I own it. Well, I can still right click and hit Yeah, save

Dan Austin: [5:43] exactly. Yeah. But I actually own it. It's like cool that it just doesn't make sense because there's, I feel like people regardless still want some, when they're investing in art, still want some tangibility to that art, right? Yeah. Like it's cool that it's on the screen. Like no doubt. Like I'll give like digital artists and stuff like that. That's cool. But it's not as cool as being able to have it in your basement. Yeah. In a storage closet.

Dylan Koch: [6:02] Long story short is you guys should just turn SLA public. It's SLA AI lending company.

Mike DeHaan: [6:09] Dude, that's so fucking smart, honestly.

Dylan Koch: [6:11] And then you're gonna be billionaires. Like

Mike DeHaan: [6:13] So, like, no joke. We are working on an AI processing tool right now. Though we're not working on it, we're basically we're a pilot lender for this company that's building this. And it's definitely a little rough around the edges right now, but it's going to be it's gonna completely change the space. And so we're basically working hand in hand with them to, like, kind of test it and get everything ironed out with it. And once that's goes is up and going, we absolutely could market as that. Because, like, a lot of the tools, they're not just internal. They're actually borrower facing. Right? And so the borrower is the one that's serviced by the AI instead of, like, just our back end. And once we get that fully functioning, there's no reason we can't advertise as an AI company. And then as far as the borrower knows

Dylan Koch: [6:57] I mean, if you're doing any other kind of, like, you know, Google Ads or Facebook marketing, I mean, that Mhmm. That's gonna drive clicks.

Dan Austin: [7:02] Quick quick turnarounds on your loans. Yeah. And then we'll just do at the same speed.

Mike DeHaan: [7:07] The problem is, though, is we'll be saying that honestly. And really to make money, you gotta be doing it earlier, and you gotta be completely full of shit. Because those are the ones who make the most money at the end of the day is you you collect all that investor money before you have a tangible thing. And then hopefully, you come out the other side with with something that actually works.

Dan Austin: [7:24] With an idea. Once you get the money and get the people, then you get the money. Right.

Mike DeHaan: [7:28] I know. I've I've seen a lot of Instagram jokes about that of like, oh, the the current phase of, like, venture capital in San Francisco. And it will be like these two guys that are, like, standing up and they're like, so we we have this company and we need $30,000,000. And go, this company, and they go, we don't know yet. But we're gonna it's gonna do a thing that's gonna change a lot. And they go, oh, okay. Like, what's your guys' backgrounds? Like, oh, I dropped out of high school. I went I went to work Yeah. For two years, and I quit. And they go, oh, well, is it AI? And they go, yes. And they go, perfect. Here's $30,000,000. See you later.

Dylan Koch: [7:59] Exactly. Yeah.

Dan Austin: [8:00] Yeah. That's it. That's so

Dylan Koch: [8:01] that's so

Dan Austin: [8:02] it, though.

Dylan Koch: [8:02] They have the corporate speak like, oh, we're gonna drive synergies and pull out Yeah. You know, like, all this kind of bullshit. So dumb.

Dan Austin: [8:08] This, this is a good topic to talk about because I I have this note. I wanna see what your guys' opinions are. So if you read Facebook much at all, you'll probably come across personal acquaintances out there that are spending time building their own AI agents or building this AI system for their business. And I have a couple friends that have implemented in their business, like built stuff themselves, and I trust that they've done great things. Like I'm not like trying to like shit on anybody that's doing it. But I feel like there's an argument that for like most people, it's just like another deflection of doing what you're supposed to be doing. Amazing. Entrepreneur. As Yes.

Mike DeHaan: [8:43] Totally. Like I'm now building an AI agent to

Dan Austin: [8:45] do the shit I don't wanna do. So then I spend all my time trying to build this thing that'll be very, very imperfect because I'm not an expert. And I'll do the shit I don't want it to do. Instead, maybe you could hire a person or you could hire a company to build it for you. Like, hire a like Mike and I, like, we're not hiring a company. Like, they already had a product that we're piloting it for them. Like, to me, that seems like a better use of your time.

Mike DeHaan: [9:05] Yeah. Well, I I feel like that trend that you're seeing I mean, we've seen this with everything, you know, over the past while. Right? If you go back to the.com age, you had all these companies that were very heavily hiring teams to, like, build their own websites, these own things before, like, the WordPress and different website builders and stuff came out, which maybe was fruitful, maybe wasn't. Right? Now we're seeing the same thing with AI. And if if you are in any kind of credible industry, eventually, somebody that is better at it than you is doing it full time will come out with a product to do whatever you're trying to do with And the thing that's so silly about what I think with this trend right now is you have these people that, to your point, are completely detracting from actually growing their business. They're making less revenue. They're making less money. They're spending all this time to be quote, unquote AI experts. When realistically, whatever they're building is probably gonna be obsolete in the next twelve months when somebody who actually knows what they're doing comes and builds the thing that you're trying to build. Yeah. You know? So, like, honestly, it's better just to wait and be good at your business and let the AI dorks, like, figure out whatever you're trying to do because there's somebody that's in your industry that has been involved in that whole movement for years before you that is trying to do the same thing. I guarantee

Dylan Koch: [10:12] it. And they'll figure it out, and then you'll just buy it from them.

Dan Austin: [10:15] Exactly. Yeah. Exactly.

Mike DeHaan: [10:16] And you know what? The thing is it probably wouldn't be that expensive because one thing I found with a lot of the AI stuff, like the different services, like the different programs and tools and stuff, they're not inherently that expensive at all. Right. Right? A couple $100 because it's not that expensive for that to run.

Dan Austin: [10:30] Because they don't need any, they don't have any overhead. Most of them don't have big offices. Most of them don't have a ton Right? Of mean, significantly less overhead to run these businesses. And it's more of like a, the way we're looking at with our system, like their cost is like tokens. Right? Yeah. And so then they're gonna pass it on to you plus whatever profit they need.

Mike DeHaan: [10:47] Well, so a little while ago, I forget which big entrepreneur it was, but they said that AI will allow for the first one person billion dollar company. And then I read this thing, it was up two weeks ago, that not quite one person, but there's been a 1,000,000,000 in sales two person company that has come out that utilized AI. And basically, it was is they built a website and a sales platform that sold GLP ones.

Dan Austin: [11:12] Oh, shit.

Dylan Koch: [11:13] Oh, wow. Smart. Yeah.

Mike DeHaan: [11:14] Right? So weight loss stuff. So they just heavily targeted people. They were selling a product that already exists and is generally commoditized. Right? But it just did it on such an efficient mass scale. And I guess they've done already over $1,000,000,000 in sales. You know, what their actual profit looks like, I don't know, but that's insane. It was two guys. They built this thing over the course of, like, two and a half years.

Dan Austin: [11:33] Yeah. Who cares if it's even 1%? That's still pretty good. Percent of a billion is a lot.

Mike DeHaan: [11:38] No. It's still pretty good.

Dylan Koch: [11:40] There's a guy in my GoPod who is really into this kind of stuff. Anybody's also a real estate agent. And he was trying to do, like, the OpenClaw thing to make it, like, some process and workflows better for listings and stuff.

Dan Austin: [11:52] Sounds like him.

Dylan Koch: [11:52] Anyway but he brought up a good point. He's now he's building an AI course for real estate agents on school, Hermosys thing, whatever.

Dan Austin: [12:00] Just his AI doesn't work for him.

Dylan Koch: [12:02] Totally. He said that the claw bots that were really popular for a while where people were buying these Mac minis and whatever, that they would run on Anthropic software, Opus 4.0, whatever it was, right? But you needed the pro platform of Anthropic to run it. But Anthropic changed the billing mechanism where if you use Claw, you'd run out. Like, and so

Mike DeHaan: [12:22] it went from basically you need

Dylan Koch: [12:24] $200 a month to like $200 a day to run your Open Claw.

Dan Austin: [12:27] Yeah. What they did, I heard about this, what they did was they said they changed the pricing model so Open Claw is kind of useless and then they dropped their own product.

Dylan Koch: [12:34] Pretty much. Yeah. Right. And so anybody who had an Open Claw just got overnighted pretty much.

Dan Austin: [12:39] Yeah. Your whole thing. And and Anthropics is better even probably, honestly.

Dylan Koch: [12:42] And that's what he said.

Mike DeHaan: [12:43] That's like the other flaw with this whole system where I was trying to do it themselves. There's still like the overlord that controls your infrastructure. Yeah. They can change it whenever you want.

Dan Austin: [12:53] And it's based on usage. Right?

Mike DeHaan: [12:54] Isn't it? So the more you

Dan Austin: [12:55] need it, then they just change their pricing and they wipe you out. And then now you have to buy theirs. It's like Yeah. It just to me, the whole thing seems like more power to you depending on like what you're doing. Like I like I know there's people trying to do like email management. There's probably some simple things that you can build like a quick agent for, which totally makes sense. But guys that are like going all in and like, that's all they're spending their time on doing and talking about, to me it seems like a waste of time. Either that or your core business sucks anyways, and just, you just shut it all down. Yeah. Because like if you don't have something in front of you in your business that you know you should be doing that'll actually make you exponentially more revenue than working on your little AI system, then you're probably in the wrong business anyways.

Mike DeHaan: [13:28] And I also think people tend to go try to go too complex. Because so, like, on, Claude this past weekend, we're hiring loan officers right now. Speaking which, if anyone needs a job, shoot me up on Instagram at mike underscore invest if you wanna sell loans. And, I used it to build a usable sizer for quoting out loans that I can give to new loan officers that might be, like, a little bit greener around how to judge the quality of fix and flip loans. And so the whole point of it is I took the different, like, rate sheets and calculators and stuff that we have from our different investors, And I put it all into a singular tool. And so what they can do is if they're on the phone with a borrower, they can quote something out in, like, ten seconds by just entering the basics of the loan as opposed to having to shop it around. Right? Or, like, having to shop around after the fact or, you know, get too far into the weeds of the deal. And that's something that if I try to do that on Excel, would've taken me a hell of a long time. But I was able to to do it on Cloud, and it's actually like a thing that we can embed on a website. And it took me, I don't know, maybe four hours, five hours. It's pretty easy.

Dylan Koch: [14:30] See, I wonder if something like that will come to the off market business because I've used it to help clean up marketing list and stuff. But, like, DataFlick and Autantic were both these big providers for a while that promoted AI data. Like, that's your data better, get better motivated sellers. It was always a bust for me. I tried both of them. And so maybe the sixth time, like, I don't know.

Mike DeHaan: [14:49] Well, I think the problem is it requires like regular quality control. All this stuff does. And the problem with people that are like selling these tools, especially in kind of like the French industries, like wholesale real estate, they're doing that because it doesn't work in their own company. They couldn't figure out how to do it, and so they're just trying to find a bunch of schmucks to buy it. Right? And so even with the tool that I built, the first couple times that I sort of like had it built out and like functioning, it was so confidently give me back numbers. And if you didn't have critical thinking skills or understand enough math to like recognize that it was wrong, it'd be very easy to be like, okay, cool. That worked. Right? Or like to know and have enough discipline to actually click through, like, all the different potential settings to make sure that it's alright because you don't know what it's actually doing on the back end. You know? And so when it comes to things like data, that's even worse because the complexity there is so massive. And the number of things they can screw up is kind of infinite. Right? Especially if you're looking at, like, a mailing list of a 100,000 people in a city, and you don't know what they're filtering against what they're doing.

Mike DeHaan: [15:50] Like, this has always been my biggest knock on the different marketing companies in the wholesale space, whether the school calling companies like the REI Direct Mail or whatever, is they always promise that they're gonna do it better. But we all know that as they grow, what it's gonna look like is they're gonna pull a general list. A Filipino is gonna, like, filter out people that you've mailed before, and they're gonna just send it. And they have no real reason to make sure that it's it's credible. You're right there, Dan.

Dan Austin: [16:16] I hate owning a cat. I don't like it climbing on me. Like, it always gets up on my sheet.

Mike DeHaan: [16:22] It's because you're warm. My basement cat. Maybe you should turn up your heat in your house.

Dylan Koch: [16:26] Right. Probably should.

Mike DeHaan: [16:27] It's one of those things that while it's so unregulated, it's gonna be hard to know what the true value is. But at the same time, I think that most people that are trying to, like, optimize their entire businesses or build their own CRM, they see people that are like, yeah, I built like an entire infrastructure for my business. I'm like, great. That's not gonna be useful to you in six months. You just wasted so much time doing that. I guarantee it.

Dylan Koch: [16:47] Well, the things the things that people should be doing in business that we've alluded to before is usually, like, marketing and sales for most businesses. And that's those things are hard to do.

Mike DeHaan: [16:58] Yeah. And I I think instead of saying, like, who on my team can this replace? This is this is a problem, I think, with small entrepreneurs, which is a lot of our circle. Because small entrepreneurs, they still have a scarcity mindset. And so what they're always trying to do is reduce their expenses Yeah. When it's so much easier to increase your revenue. And so what they try to do is they look at, their salaries, which is always your biggest expense, and they say, how can I get rid of these with AI? When instead you say, how can I increase my revenue while keeping salaries the same? Yeah. You know, that's gonna be a much bigger spread every single time, but people just don't understand that. And so if instead of of trying to replace your employees, you build tools to make it so you can have worse employees that do a better job more efficiently. Right? Or even like, I won't say worse employees. I say lower paid employees. So if we overseas, right, you can get good overseas employees that maybe just don't have the quite knowledge, the knowledge base that you need. And you do that, you're gonna end up net significantly better than you've trying to just, like, axe, I don't know, $20 a month off your salaries. Yeah. Honestly. Mhmm. Alright.

Mike DeHaan: [17:55] Move on from that. I'll get off my high horse here.

Dan Austin: [17:57] The next point Dylan's gonna know more about than than my dumbass, but doctor Copper is indicating that's the truth. That's what people call it. Right, Dylan? Doctor. Copper?

Dylan Koch: [18:06] Correct.

Dan Austin: [18:06] Doctor. Copper is the basically the is copper. People use it as like, they call Doctor. Copper for I don't Dylan, you probably know why, but it's because it actually has a lot to do with indicating market swings because it's so heavily involved in so many different parts of the market would be my understanding, right?

Dylan Koch: [18:21] Yeah. I mean, it's just like, when it declines a certain percentage, and actually we can just probably look it up, it has been a good indicator of forecoming recessions in the next, I think it's six months.

Dan Austin: [18:32] And it's been like, it's on a tear. It's above $6 a pound right now, which is indicative of expansion, not contraction. What do you guys think?

Mike DeHaan: [18:41] Well, like, I understand the whole concept here is just trying to say production's continuing. Right? But I think the problem like, when you look at any of these sort of, I would say, like, import export indicators, mind you, it's predicted the last eight recessions. For sure. But I think that now more than ever, we have this massive divergence of, like, wealth between the haves and the have nots. And I think fundamentally, a lot of businesses are doing fine. It's the individuals that are not. You know?

Dan Austin: [19:07] So who cares about those people? You

Mike DeHaan: [19:09] know what? You you wanna know who doesn't care? The economy. Like, honestly.

Dan Austin: [19:13] That's what was gonna say. My point was that was kind of funny way to get there. But, like, what is the market doing as a mask? Because if the market keeps going up and you're listening to this show and you're like, I care about the market going up because I'm invested at some level, then you don't really care.

Dylan Koch: [19:26] I mean, it is wild that the S and P hit all time highs yesterday.

Mike DeHaan: [19:29] Yeah. It's it

Dan Austin: [19:30] feels wild.

Dylan Koch: [19:31] Right? Like, during a war, during somewhat declining economic data Mhmm. And, like, gasoline prices, doctor like, copper going up, all of, like, the actual essentials, raw materials to run the world, not just The United States, are increasing demand, shorter supply because of the war, you would think that those increased prices would cause economic weakness, and therefore that would affect the stock market. But that hasn't been the case.

Dan Austin: [19:54] Which would typically happen like in like after, you know, 09/11, not exactly after nine eleven, but going into anytime you're going into a war, you're taking a lot of resources from the economy.

Dylan Koch: [20:04] Well, like, the next example is COVID, which, like, things crashed almost immediately. But then they just pumped the trillions of dollars, and they've pretty much said well, they said they're not gonna do that this time around. Who knows if that's true

Dan Austin: [20:13] or not? They should not do that this time around because that just

Dylan Koch: [20:16] It's a diminishing returns aspect.

Dan Austin: [20:17] I think it's accelerating. Right? Like now it's like, okay. So that really created issues last time. This time it would accelerate that to even whatever's happening, whatever the impending cliff is accelerates even quicker.

Dylan Koch: [20:27] Well, there I mean, the feds, one of their worries is inflation. And if you're gonna get inflation from this war and you you pop a hold of money, it's a fuel in

Dan Austin: [20:35] the fire. About inflation? Bullshit.

Dylan Koch: [20:37] Yeah. Well Yeah. Right.

Mike DeHaan: [20:38] Something that I I would like to see is, like, what is the difference in, like, corporate spending versus consumer spending versus several years ago? Because consumers consumer spending is gonna be down because stuff is just so much more expensive. Right? People are just buying, like, less luxury

Dan Austin: [20:53] or something.

Mike DeHaan: [20:53] Or is

Dan Austin: [20:54] it the same? Because people are buying less, but

Mike DeHaan: [20:56] the But same costs are more, totally. And which is a which is a problem. Right. It is.

Dan Austin: [21:00] You're getting less less for what you spend the same amount of money.

Dylan Koch: [21:03] Dollar amount the same, volume less.

Mike DeHaan: [21:04] Yeah. And we all we all see this right now. Right? Like like my wife and his finances are up like 30% over a couple years ago, and we're not really buying that much more stuff. Yeah. You know, it's crazy. Expensive, dude. Like, everything's expensive. The typical grocery run is more expensive. Gas is more expensive. Even, like, freaking software. Like, we just got our our PandaDoc invoice today. And apparently, they're charging us usage fees now on top of our limited subscription. I'm like, yeah. So that's new, but it's because everyone can basically nickel and dime their way to whatever. And that's this that's the current economy that we live in. And so when we're talking about production being up, it's like, who is this for? You know, they're producing more, but are they just selling it to each other? Right? And so you have the commercial are they selling it to governments? And so it's cutting out the consumer market altogether. I feel like it has to be the case. And that can equally fuel the market, especially if that's the vast majority of the consumption going on. But that doesn't mean that it's a healthy situation for all of us who live in the economy.

Dan Austin: [21:59] So in my sense, which is senseless sometimes most often, but my sense here is all other economic indicators are not looking great. Like, typically, we'd be in a recession right now. Because remember, I mean, maybe you don't remember, but, like, in 2019, like everybody was like, we're ready for a recession. We're due for a recession. It's gonna happen. Everything was going towards recession. And then COVID hit. And we had this like super deep recession that popped right back out and the fed just completely printed their way out of it. Right? So theoretically, should we have been in a recession back then, even if you just look at the cycles of what a recession looks like, I wouldn't consider that COVID a recession. I think that was like a blip and they changed the trajectory of that. All of that money they printed created even more problems with inflation and people are, people truly are the, even us, we're all high income earning people. Like you could feel it like, right? You have to be making probably, would guess, I don't even know, multiple 7 figures a year consistently to be like, I don't feel it. To, you know what I mean? And you probably still feel a little bit because you're not flying private, all that stuff. You're seeing everything go up. Right? But anyways, back to my point here. All the indicators economically are pointing towards you should be in a recession right now.

Dan Austin: [23:07] Everything's been going bad. Is AI such an uplift that it's carrying everything else? You look at the S and P 500 as a top few there's just a few companies now is what's everybody else. S and P four ninety seven doesn't matter or whatever it is. Right? Seven nine whatever they call it, 493, whatever. And those companies have such large masses of wealth that they can spend their way out of anything, and they're heavily, heavily investing in AI. And so copper being where it's at now, is that really not driven by the mass market? It's more driven by AI because they need to get power lines to data centers. They gotta build data centers which are copper intensive. They, know, you have all these actual like things that need real copper just for this small concentration. And so is that actually carrying the copper index up? So you're like, oh, everything's good. The rest of the market looks like shit, but then AI also uplifts the whole market because it's such a massive amount of spending.

Mike DeHaan: [24:03] And that's kind of my point. Right? It's like, what is that compared to the consumer sentiment? Sure. Because I get as if the vast majority of the spending is coming from the massive corporations that have trillions and trillions of dollars, yeah, it's gonna inflate the the value.

Dylan Koch: [24:17] So two things. One, we're hitting even all time highs today. We're about we're at seventy eighty four in the S and P 500, and we crossed 7,000 yesterday. But I was looking for something when I saw yesterday. I can't find it. But to Dan's point, they measure something in markets called breadth, which is, like, how much like, the percentage of companies that move the whole market.

Mike DeHaan: [24:33] Mhmm.

Dylan Koch: [24:34] And the story here is there's, eight of the companies basically were responsible for the move of the S and P 500 yesterday. And that was a standard deviation of of, like, six. So, like, one in every 1,000 years, like, kind of rate that correlation happens.

Dan Austin: [24:49] Wow.

Dylan Koch: [24:49] So all I'm saying, what's happening now is not a normal scenario.

Mike DeHaan: [24:54] No. This is like the the current arms race, honestly. Like, you have all of these individuals, these companies that are larger than most countries.

Dylan Koch: [25:03] Yeah.

Mike DeHaan: [25:03] Right? Yeah. That are currently jockeying for their place in the future as the core AI robotics whatever company. Right? Like, have surpassed the phase where it's like nations that are trying to do that and it is people. Yeah. You know? Yeah. The CEOs.

Dan Austin: [25:20] It kinda makes me wonder. It's like reminiscent of like a hundred years ago when like the antitrust stuff came into play and they started breaking up companies like Standard Oil, because they were just amassing too much wealth. So they made the companies get broken up. Are we in a position right now where you're the Facebook or Meta, you're Google, you're Anthropic, you're OpenAI, you they have so much money, and they're the only ones that can invest in it right now.

Mike DeHaan: [25:42] Yeah. Right? They have

Dan Austin: [25:43] such deep pockets. They can do that. And they could ride out whatever consumer recession we're in, and then be the only players capable of deploying this to the masses in five years from now. And we'll be maybe their company's 100x bigger, which would be nuts to think about, right? Yeah. But there's just like, there's almost unlimited market for like people's systems being able to do jobs for you. Right? It's just unlimited amount of growth for them. So is that the point to where now we have to say, well, Meta, you're no longer Meta, you're this, you're that, and break them up?

Mike DeHaan: [26:16] I mean, maybe the problem is is you need people that actually care. Right? Like when the federal government is in charge, they're participants. Right. And the whole thing, like, why why would they?

Dan Austin: [26:26] Well, they're not gonna do it now. They're not gonna do it now. We're not there yet. But in ten years, five years?

Dylan Koch: [26:30] Well, if you say to that analogy, let's say it's an arms race. So like, let's say they're building railroads or like, you know, like you were saying in the 1920s Americas, you don't have the global arms race that you do because now their scapegoat, whether it's true or not, is gonna be like, well, China's gonna build the AI, and if we gonna do it, then we're gonna lose to them. Right. Right? That's not necessarily true back when oil companies were were all over the world. Or, like, they're mostly concentrated in The United States.

Dan Austin: [26:53] Right. Yeah. That's a good point.

Mike DeHaan: [26:55] That's fair. I think the challenge is always this sort of mentality that we will lose. Right? I'm like, will we? Like, is it the worst thing if China's AI is better than ours? I mean, a lot of China's tech is already better. You know, we've been utilizing them forever.

Dan Austin: [27:07] There's a couple perspectives to think about. The one that was recently, I like, brought to me, which is it's a good point, is China desperately wants to be the number one in the world. And it's because they can do what The US has been doing, where we can set the world economy up to benefit us.

Mike DeHaan: [27:24] Mhmm.

Dan Austin: [27:25] And so that's why The US has been able to do all the things that we do, because the economy is really focused like we're the we're the nucleus. Where now if you shift that nucleus to China, the actual downside is actually significant compared to where we're at now. Not because like we would just lose things and China would just crush us, but the world would shift to where China's the nucleus. And so the benefits would all in source to them, and our really fragile debt ridden economy would just collapse, there'd be really not a lot left.

Mike DeHaan: [27:51] But people always say this, are they significant? Significant to who? There's a still there's already a massive poverty rate Massachusetts.

Dan Austin: [27:56] A good a good example would be like, can't just go buy a house anymore because who's gonna give you a loan? That whole American dream of the housing market would not exist.

Dylan Koch: [28:03] You're talking about like a change in governments. Governments.

Dan Austin: [28:06] No, I'm talking about a change of so I'm trying to repeat the articulation to me, so it's not gonna sound as cool. But basically the whole world, The US benefits from the whole world having us as the nucleus, right? Because now we get to make the rules. So now if China gets to set the rules, they can set up the petrodollars and all that sort of stuff that favors them, which is what they would wanna do. That's what America's been doing. Why wouldn't any country wanna have any little fracture in your economy? You just use the world to fix it and everybody would just patch it together and everything's set up to benefit The US right now. So alternatively to that is, it's just the China. Everything's set up to everybody wants to buy China's debt. And I the only example I can come up with right now, top of head is like, everybody wants to buy China's debt, no longer the use The US debt, which means we can't just sell treasuries, meaning the government can no longer back these private institution loans. There's just way less capital coming into our market. So there's not as much money, which is how we kind of live because you just go get more money. Like, has anybody in The US ever had a hard time getting money?

Mike DeHaan: [29:05] Yeah. It's a land business. People have a hard time getting money almost all the time, Dan. Okay.

Dan Austin: [29:10] In the history, there has been some people. Yeah. But what I guess what I'm saying is, like, if you're a middle aged white dude who's done reasonably well for yourself, you have no problem getting money, like, in in America. Far as when I say get money, like, people being willing to loan you money and stuff like that.

Mike DeHaan: [29:23] Yeah. I guess my my sort of view against this is just always I don't see what situation things get like net worse for the majority of Americans that are already kind

Dan Austin: [29:35] of not awesome. That's a good it's a great argument.

Mike DeHaan: [29:37] Yeah. General like, a quality of life in terms of, like, the homes that we live in things is better than a lot of other countries. Right? If you look at other, like, first world countries though, where they have access to better health care, you know, they general affordability is significantly higher. The way that the society works is a lot more uniform because they are a more uniform culture. Like, those are things that are already screwed up, and those aren't gonna get better regardless of what happens. You know? And so if China all of a sudden was, like, the number one power, those gonna happen overnight magically. What we'll see is, like, a massive dip in The US because a lot of, like, the big companies are going to now go where their next opportunity is, which is in China, which they're also all already doing, by way.

Dan Austin: [30:19] To some level, they're not allowed to legally.

Dylan Koch: [30:21] But Can I touch on that? Because, like, 2001 is when, quote, unquote, we let China into WTO, which is the World Trade Organization. And if you remember, the late nineties to early two thousands is when a lot of the Midwest

Dan Austin: [30:32] I do remember that.

Dylan Koch: [30:33] And their manufacturing jobs got shipped overseas.

Dan Austin: [30:35] Mhmm.

Dylan Koch: [30:36] Right? So even that was a, I would say, a net negative. Yes. So our material things stayed cheap or got cheaper, but it came at the cost of jobs that got shipped overseas.

Dan Austin: [30:46] Yeah. Yeah. And then you guys in the Midwest all started doing drugs. Right?

Dylan Koch: [30:50] All over The United

Mike DeHaan: [30:51] States, people started doing drugs.

Dan Austin: [30:52] Yeah. Then you guys shipped your drug addicts over to here in the West Coast, and now we all have drug addicts.

Dylan Koch: [30:56] I don't have fentanyl

Dan Austin: [30:56] in was because of China. Yeah. It's because you sent them to us.

Mike DeHaan: [31:00] Either way, like the economy talk is always so it just seems so pointless to me because it does not represent the current lifestyle being experienced by the average American. Right? Which is fine. That's like not what the politicians and the news people want you to care about. They want you to think that things are ripping so that you they get your votes, and they can stay at the top of the pyramid. So the direction that we're going, I think, is inherently pretty dangerous because we're even getting away from, like, nations that had, like, at least people that they cared about. And it's purely just individuals that are driving the entire thing that have, like, maybe their companies they care about, but also they'll easily axe 50% of those people if they can be replaced with AI. Right? So they don't really care. Oh, yeah. So now we're gonna have, like, the set of, like, the point 1% of the point 1% of the point 1% that's essentially driving everything forward. You know? And if you look at pretty much every sci fi sort of, like, series story that's ever been written, right, dystopian, that's essentially what caused it.

Dan Austin: [32:01] Yeah. Yeah. It is. It's it's happening in front of our eyes.

Dylan Koch: [32:03] Like It

Dan Austin: [32:04] is. It's like when you think about the pointless wars we're in right now, like, do you think Ukrainians and Russian people were like, yeah. Let's go fuck those dudes up? No. Probably not.

Mike DeHaan: [32:11] Do you think that everybody in the people were like, let's go bomb Iran. Who made that decision? The Iranians didn't want that. Even the Iranian government has released a statement saying, hey, American people, just so you know, we don't hate you. We just hate your leadership. Right. I mean Right?

Dan Austin: [32:26] Which I think they they have said death to America. So I mean, it's kind of like out of one side of their mouth. But Yeah. Also, I believe that generally the population of Iran is not trying to do anything to harm America. It's just like the general population of America isn't trying to harm Iranians. But there are a very select few people that think we need to harm each other. Exactly. And we're too stupid to know why.

Dylan Koch: [32:45] Wasn't Iran this is actually a legitimate question. I'm ignorant in this. Wasn't Iran going through their own somewhat regime change prior to us getting involved in this war?

Mike DeHaan: [32:55] They've been trying to do that forever.

Dan Austin: [32:56] Yeah. Supposedly. I mean, and then you make it and I I sometimes wonder if that's being sensationalized by The US media.

Dylan Koch: [33:02] Sure.

Mike DeHaan: [33:03] Right? Sure.

Dan Austin: [33:03] Yeah. Like, oh, there's been 30,000 people murdered in Iran by their governments. Like, really? I don't know. Because that is that why we need to go bomb them? I don't I

Mike DeHaan: [33:12] feel like it's just so hard to believe. I guess

Dylan Koch: [33:13] the Follow that logic. Yes.

Dan Austin: [33:15] Yeah. The point is like, can we believe it? And and really at the end of the day, doesn't matter if you can believe it or not. What matters is that it's very obvious that the point 001% of people are making all the decisions that affect everybody in the world. Yeah. You know? I bet you if you went to Russia, like the people were probably pretty sweet. But you know what? The governments don't talk to each other.

Mike DeHaan: [33:34] Mhmm. Totally. Yeah. I don't know. Like the I like, we've said this many, many times in the show. I just think now more than ever, it's important to have, like, your own sort of ability to generate value so you can escape from the system in some way. Right? And to be you know, make sure that your entire existence isn't tied isn't dependent on being tied to, like, some organization or something.

Dan Austin: [33:56] My theory has always been to earn my way out of the average person's problems.

Mike DeHaan: [34:01] Yeah. Yeah. But the problem is is that that average person, as the top people get larger and larger, the box gets much Yeah. Much bigger.

Dan Austin: [34:09] Yeah. I am the average person, but I'm saying, you you the With having some freedom and security, you're able to like weather certain storms.

Mike DeHaan: [34:17] Mhmm.

Dan Austin: [34:18] And to the most extreme point is you're able to weather significant storms of like, I don't know, massive government fallout or economic fallout.

Dylan Koch: [34:25] Well, here we go. Let's hope you guys are good with that. I'm gonna change the subject pretty abruptly. Yeah.

Dan Austin: [34:30] Yes. We're done being doomers.

Dylan Koch: [34:32] I got an email from Opendoor for our personal residence, and I have not got one of these in a long time. And Cat's the dang.

Dan Austin: [34:41] Sorry. Cat's back. Fucking bathroom cat.

Dylan Koch: [34:45] This offer is actually pretty close to ARV. Would say that's actually pretty accurate. Yeah. Yeah. But of course, if I sign it, and then they'll be like, oh, we're gonna be $60 less.

Mike DeHaan: [34:54] Oh, yeah.

Dan Austin: [34:55] Of course.

Mike DeHaan: [34:55] You should do this as like an experiment for the show. You don't have to show the title. You're escrow. You should. I I wanna know their process. What are they doing? How good's the sales guy? Do they wanna sell loans? Let's take a look

Dylan Koch: [35:04] at that. Seriously. You

Dan Austin: [35:06] should definitely do that and just, like, ghost them.

Dylan Koch: [35:08] I'll fill it out when I get home later. Yeah.

Mike DeHaan: [35:10] That's actually what we should do, Dan, to recruit some some more sales folks. We should just start like applying for like software companies and stuff. Oh. And and just like if the sales guy's good, just like see if we can recruit them. Probably. Like, you're not I'm not buying your product, but you've been good to work with. You should come over and work for me. Absolutely.

Dylan Koch: [35:29] Do they have, like, the the pest control people in your neighborhood? They sell

Dan Austin: [35:32] solar panels. Want some of the no. The solar panels feel a little dirty. The pest control people are Mormons, so they at least have a certain level of, like, ethical standards. Certain level, I should say. But I'd get some of them pest control people to work. They could sell anything.

Dylan Koch: [35:46] Dude, I've had one come to my house. They're good. They met every objection. I'm just like, I'm sorry, dude. I'm not interested. Bye. Like

Dan Austin: [35:53] Yeah. Yeah. They're no. Seriously, they're even if it's a stupid answer, they have one. Yeah. They're they're good. I've told you guys a story about when I I had two pest control companies for like an entire six months because I was so impressed with the Point Pest Control guy. Was like

Dylan Koch: [36:05] That is hilarious.

Dan Austin: [36:07] I was like, dude, you know what? Like, you did a good job. Like, I already have a pest guy, but I'll just I'll buy this. Like, and I told him that too. I was like, I already have a guy, but I'll pay for you. He did a good job.

Mike DeHaan: [36:16] That's funny.

Dan Austin: [36:16] I mean, it was only a few $100, but whatever.

Dylan Koch: [36:18] There was a guy that there's like a kid, high school kid that was trying to sell mulch in our neighborhood. And, you know, he's in high school and he came up and knocked, you know, opened the door and he's like, I'm selling mulch for like the band or football team, whatever it was. And I'm looking around, I'm like, well, how much mulch do I need? How many bags do need to get? And he's like, oh, I don't know. I'm like, oh. I'm interested, man.

Dan Austin: [36:37] Yeah. Exactly.

Mike DeHaan: [36:38] That sounds about right.

Dan Austin: [36:40] Yeah. Sales pitch at least.

Mike DeHaan: [36:41] Yeah. See, if he was a really good salesperson, he would have whipped out like a ruler or like a tape measure, and would just like measure. And he's like, well, for every three feet we need this much, he would have sold you twice as much as you actually need it.

Dylan Koch: [36:51] And I would have had been like, that sound you sounds right? Sure. I I

Mike DeHaan: [36:54] have no idea.

Dan Austin: [36:55] Yeah.

Dylan Koch: [36:56] Yeah. But instead he's just like, no. I don't know.

Mike DeHaan: [36:58] Cool. Right on, guys. Thanks for listening, everybody. Yeah. You guys have a great rest of your week. We'll talk to you guys next time.

Dan Austin: [37:03] See y'all. See you.

Mike DeHaan: [37:05] This episode is sponsored by Sir Lenzelot LLC, also known as SLA Capital, which, if you didn't know, is Dan and I's private lending company. So, yes, we are sponsoring our own show, but what you're do about it? It is our private lending company that offers hard money and DSCR loans to real estate investors of all types. So you can be a new investor, an experienced investor. You can be buying flips. You can be buying rentals, whatever. We can do everything. And not only that, but the rates that we offer are just as competitive, if not cheaper, than pretty much every other company out there. So whatever big company you've been working with, bring us their term sheets, and I guarantee that we can probably beat it. We have the same connections they do. We just don't have all the overhead and middlemen. So if you wanna come and check us out, go to slacapital.com/keys, and I will know that you came from the show. And by seeing that you came from here, when you get the closing, you will save $500 on your first loan with us. So slacapital.com/keys, we would love to fund your next deal. Thanks for listening, everyone. If you want more from us, you can shoot us a follow on Instagram. I am at Mike underscore Invest. Dan is at investor man. Dan and Dylan is at Dylan underscore does underscore deals. Choose to follow and send us a DM to let us know what you think of the show.