James Klein on No-Degree Entrepreneurship and Recession Signals (Full)
Jerremy Alexander Newsome and Dave “DC” Conley interview James Klein, who has spent 45 years building businesses without finishing college and runs his consulting entirely by word of mouth. Klein describes leaving school at 19, trusting gut instincts, and the entrepreneurial rollercoaster. He outlines a K-shaped economy where capitalized businesses scale while others struggle, predicts a recession driven by inflation and oil prices, contrasts AI hype versus practical use cases, and compares Canadian universal healthcare to U.S. costs. Klein calls the biggest lie of entrepreneurship that it is easy.
Timestamps:
- (00:00) Introduction & James Klein's Background
- (01:14) Entrepreneurship Without a Degree
- (03:02) Gut Instinct & Entrepreneurial Rollercoaster
- (03:54) Kid in Medical School
- (06:10) K-Shaped Economy
- (07:46) Working Capital as Lifeblood
- (10:24) Real Entrepreneurs vs. Hobbyists
- (13:07) Word-of-Mouth Consulting Business
- (17:02) Recession Watch
- (17:28) Historical Context on Rates and Inflation
- (23:20) AI and the Job Market
- (24:06) AI in Business Use Cases
- (27:55) AI Skepticism and Monopolies
- (31:10) Trades vs. Entrepreneurship Third Door
- (35:19) Universal Healthcare Canada vs USA
- (40:49) Healthcare Policy Gaps
- (42:54) Future of Work New Contract
- (50:56) Lightning Round
- (54:03) Closing Thoughts
Connect:
- James Klein – LinkedIn
Transcript
School or trades.
2
:That's the debate.
3
:No one tells you that
there's a third door.
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:For years, there's been a whole
other group of people who just
5
:end up building something.
6
:They figure it out, took the hit
when it didn't work, and went
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:back and did it anyway, asking
for more, and a lot of them.
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:Never finished college.
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:My name is Jerremy Alexander Newsom
with my co-host Dave DC Conley, and
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:this is solving America's problems.
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:James Klein has spent 45 years as an
entrepreneur doing it, supplements,
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:consulting, and he did it with no degree.
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:No website.
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:His consulting practice runs entirely
on word of mouth because that's how
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:real business has always worked.
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:He also has a kid in medical school right
now, so he holds both truths at once.
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:He thinks a recession is closer than
most people want to admit, and he's lived
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:through enough of them to know what the
early signs actually look and feel like.
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:James, welcome to the show.
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:James Klein: Thank you
so much for having me on.
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:Jerremy: Yeah, man, my pleasure.
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:So 45 years as an entrepreneur,
even in IT restaurant supplements
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:consultings, but you never finished
university, which is really cool.
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:I think when your peers were
following the school degree,
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:get a stable job script, right?
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:That contract that we've all.
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:Seen or hurt or felt, what
were you doing instead of that?
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:And did it feel like you were
gambling or just the only thing
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:that made sense to you at the time?
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:James Klein: In retrospect,
it was the only thing that
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:made sense to me at the time.
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:I was in school about 19 years old when
my father was diagnosed with cancer,
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:Jerremy: I.
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:James Klein: and I had been working
in the family business summers and
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:weekends from the age of about 15.
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:So as his health deteriorated, I
became more active in the business.
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:I went from a full loaded school
to a part-time loaded school,
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:with the goal of graduating, I.
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:For whatever reason, things just
didn't work out that way and regrets.
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:I recognized early on I do not
have the disposition to be a good
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:employee and realized that I needed
to be the captain of my own ship.
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:Jerremy: Which is a lot of people
don't sail their own ship, man.
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:They're scared to go out into
those open waters, you know?
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:James Klein: so.
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:Jerremy: Yeah.
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:Dave: I love, I love that you
had the self-awareness at 19.
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:Me.
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:I, I'm still working on my self-awareness.
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:it was self-awareness at
19 to be like, man, I don't
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:think I could work for anyone.
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:I, how has, how has that served you?
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:like running your own business
and, and, doing your own thing
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:for, you know, quite successfully?
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:James Klein: I've, I've realized over time
that the first impressions I form about
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:people almost a hundred percent accurate.
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:I don't like you in the first 60
seconds, we're talking, chances
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:are I'm never gonna like you.
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:And in the business mistakes I've made
have been in situations where my gut.
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:Told me no, and I talked myself into
ahead and making a deal regardless.
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:So, you know, it, it's just,
it's part of the process.
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:Anybody who says that the entrepreneurial
journey is a straight line fooling
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:themselves and everybody they talk
to, it's very much a rollercoaster.
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:things are good, things can be
very good, but when things are
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:bad, they could be horrific.
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:Jerremy: And James, you have a,
you have a child in medical school
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:right now, the one, the one case
where the degree isn't optional.
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:It's the only door to go through.
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:What does it feel like to be the father
who has skipped a contract and the father
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:who's also fully funding the one that
requires that contract at the same time?
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:James Klein: Oh, I'm proud.
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:I'm in Canada and.
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:Getting into Canadian medical
school is even more difficult than
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:getting into US medical schools.
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:Dave: Yeah.
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:James Klein: All the kids are smart.
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:is not nearly as much of a
factor in the Canadian medical
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:schools as it is in the us.
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:Tuition is the equivalent of
about 20,000 US dollars a year.
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:Dave: Hmm.
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:James Klein: where the equivalent
medical schools in the US are 75
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:or a hundred thousand dollars.
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:the application process is absolutely
brutal, there's such a small percentage of
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:kids who actually get into medical school.
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:it, it just reminds me to be
immensely proud on a daily basis.
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:My kid wanted this from
the age of five and.
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:were going to do everything
to make it happen.
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:And luckily she worked really hard
in school, got great marks, was a
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:much better student than I ever was.
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:this is, this has been the
chosen career path forever.
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:So we knew it was gonna happen
and it was just a matter of time.
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:Dave: I,
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:Jerremy: Yeah.
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:Dave: I love that some of the
smartest people I know went to
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:Jerremy: Mm-hmm.
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:Dave: they also said that it is also
the coldest that they have ever been.
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:James Klein: Yeah.
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:If, if, you know, Canada, Montreal is
really far from the coldest is generally
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:in the prairies ver eastern part of
Alberta, Saskatchewan, and Manitoba, where
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:there's nothing to stop the wind where
it could be 40 below for days on end.
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:Dave: Oh my
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:James Klein: That said, I, I, I did
have some friends from Denver visit me
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:end of January to go to a hockey game,
and it was 20 below every day with
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:the windshield, so it was damn cold.
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:Jerremy: Yeah, that's unbelievably cold.
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:James Klein: Yes.
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:Dave: So you've oh, go ahead.
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:Jerremy: Yeah, so I, I, I've heard you
say before, James, like a, a, a khap
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:economy winners going one way and everyone
else kind of falling behind, right?
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:That the rich get richer, the poor
get poor kind of discussion in a way.
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:And I really like that phrase, that
term, the K shaped economy from
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:your consulting work with business
owners trying to launch and scale.
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:Where do you actually see that
split happening in real time?
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:The rich get richer.
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:The poor get poor.
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:Like what is the
distinguishing difference?
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:Is it a moment in time?
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:Is it money?
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:Is it a decision?
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:What?
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:What causes it to have that pop?
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:James Klein: It is a
combination of multiple things.
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:Think first of all, the business owners
who have money to invest in scaling their
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:businesses, if they do it properly and
there's actually a good product market
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:fit, and people are interested in what
they're selling, the sky's the limit.
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:Where things I think will be difficult for
most entrepreneurs over the next couple
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:of years those who are bootstrapped don't
have a ton of working capital and or are
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:in industries that are going to suffer.
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:So it, it's very much, I, I think it's
very important that people be self-aware.
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:Be sure that the market actually wants
the, what they're selling, but to find
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:whatever way is necessary to have the
working capital to survive the rocky
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:times that I'm convinced are ahead of us.
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:Jerremy: I mean, so tell
me about the capital.
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:I mean, because that's the
part that I'm, I love the most,
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:regarding business and also.
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:I think most people probably
struggle with the most.
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:So when you say the
capital, how much is that?
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:What does it look like?
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:What are the constraints end up happening?
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:James Klein: It, it really depends if the
person for, in the example of marketers
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:and, sorry, I'll start that over again.
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:It really depends what business
the entrepreneur is in.
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:So for example, if they're selling some
form of physical goods, need enough
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:money to have sufficient inventory
to be able to sustain momentum.
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:If they're selling a service, like
a coaching program or something
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:along those lines, it's not nearly
as capital intensive, but they need
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:money to be able to advertise and
promote and grow their businesses.
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:I'm hopeful that advertising
prices are going to come down
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:as the economy transitions.
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:Plus, I think with the recent rulings
against Meta YouTube, I think the
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:platforms are going to have to have a
different look at how they're doing some
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:things, I hope that will ultimately result
in more reasonable advertising costs.
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:But you know, capital, especially
if you're selling a physical
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:good and you need inventory.
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:Capital is the name of the game.
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:If could have the best product in
the world and you could build great
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:momentum, but if you go out of stock.
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:Getting that momentum back is
twice as hard as it was the first
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:time because you lose credibility
with your existing customers.
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:They've moved on to a competitor's
product, and then you either have to play
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:discount game or just go after acquiring
new customers to backfill the ones you
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:lost because you were out of stock.
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:And you know, as we know, the banks.
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:generally not super friendly to smaller
entrepreneurs who need working capital.
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:So quite often it's the alternative
forms of capital that come in.
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:So for example, if you're running a
Shopify store, has Shopify capital
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:where they make money available to
you based on your sales trajectory.
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:Amazon has similar
programs, so does TikTok.
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:So it's finding these alternative lenders.
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:So that you can properly fund
your business and keep everything
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:moving in the right direction.
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:Jerremy: Yeah.
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:Dave: so you see a lot of these
entrepreneurs, and I, I think is.
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:I mean, I, I did entrepreneur
consulting for a number of years and
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:angel investing and the rest of it.
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:And I, and I, and I saw both, you
know, what I would call entrepreneurs.
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:And then I, I saw a lot of people
who are sort of in the hobby of it.
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:and I think entrepreneurship
has this, idea of, you know, be
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:your own boss, build something.
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:How many do you see that are actually
building something versus trading
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:one form of precarity for another?
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:James Klein: I'm very lucky in
that the people I'm working with.
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:Generally tend be beyond the launch
phase and they have a certain critical
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:mass in their business, and I'm helping
them find the missed opportunities
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:and optimizing what it is they're
selling scale to the next level.
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:I generally will never work
with somebody who's brand new.
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:first of all, I'm too expensive for them.
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:And that like I'm intentionally
expensive and I have friends who are
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:telling me I should double my rates,
I use my price as a pressure test
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:because if they balk it all at paying
me, then I know they don't have the
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:money to properly scale their business.
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:I'm, I'm very lucky in that most
of the entrepreneurs I work with
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:realize that it's hard work.
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:It's much easier to work a 40 hour a
week job than it is to build a business.
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:Dave: Right.
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:James Klein: At this point in my
life, I still work 60 plus hours
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:most weeks, and that's by choice.
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:I love what I do.
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:I find it very stimulating,
I'm happy to do it.
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:That said, a lot of people
think, oh, sure, it's easy.
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:they find a low barrier to entry industry.
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:They go in, they build a Shopify store
or a WordPress site or whatever it is,
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:and they think they're in business.
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:They have no teams, no systems, no SOPs,
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:Jerremy: I'm attacked.
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:I'm feel,
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:James Klein: gonna grow.
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:Jerremy: I feel attacked.
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:James Klein: Yes.
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:But we all do it.
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:Jerremy: Yeah.
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:James Klein: And you know, the other
thing that I'm constantly telling
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:everybody I work with, even if they
do have teams, the team that got them
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:to whatever level they're at, in most
cases in my experience, is not the team
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:that will take them to the next level.
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:Jerremy: Yeah.
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:James Klein: So it's great to
be loyal to your employees.
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:Absolutely.
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:Treat them well.
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:the Hire a players, always.
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:You know, the best ones you can afford.
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:But just realize that at certain
points you're gonna have to make
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:changes or bring in new talent.
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:Jerremy: Right.
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:So maybe the, there's probably a
few core pieces to this podcast that
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:people are gonna really wanna tune
into and listen, and big shout outs to
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:the Mastermind that you and I are in,
which is Four Rooms with Amber Spears.
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:Just an incredible organization and
really, really remarkable people.
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:But this question might be
very helpful for so many.
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:Entrepreneurs and business
owners and people that wanna
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:start and want to create.
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:When you built your consulting
business, you did it entirely on word
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:of mouth, and you have no website,
which was a choice and a design in
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:an error where everyone is told to
build a personal brand and optimize
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:their LinkedIn or you know, whatever.
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:Facebook, Instagram, YouTube.
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:What does it say that the business has
always worked, still works the best.
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:James Klein: I think part of
it is a generational thing.
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:I didn't grow up with a camera in my hand.
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:So I try to take a selfie,
my kid laughs at me and says,
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:oh my God, you're so awkward.
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:The thought of a personal brand to me at
this point in my life creates anxiety.
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:There's nothing attractive to me
posting reels on Facebook or LinkedIn
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:or Instagram day, sharing little
tidbits of wisdom or doing it,
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:trying to build an email list or.
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:Get cold leads.
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:That's just not how I work.
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:I've always been a relationships person.
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:I like to get to know the person
before we ever do business.
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:I wanna see if we're a good fit.
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:I don't like you, I don't care how
much money you're offering me, I
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:don't wanna work with you because.
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:I have to feel good about what
I'm doing, so if I don't believe
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:in you, I don't believe in the
product you're selling, then I want
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:absolutely nothing to do with it.
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:And how this consulting business started.
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:You mentioned Amber.
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:Well, early on in COVID, we were part
of a group of about 600 marketers
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:on Facebook, and I was sharing lots
of information about FDA warning
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:letters and FTC warning letters.
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:Especially early on in COVID supplement
companies were saying, take vitamin C.
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:You won't get COVID.
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:Take this, you'll be fine.
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:And I would be calling out all
these companies and sharing warning
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:letters from the FDA saying, no,
this company cannot say that.
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:And we've made them, we've
sent them a cease and desist.
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:And one day Amber called me and
my phone rang and I said, hello.
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:And she didn't even respond with Hello.
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:The question was, what
the F are you doing?
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:I said, what do you mean?
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:She says, you've got 20 plus
years in the supplement industry.
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:Why are you giving away
your knowledge for free?
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:Start a consulting business?
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:Literally 24 hours later, I went into
that group and created a post that said,
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:Hey, I've been doing this for a long time.
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:If anybody needs help with supplements or
branding or marketing, I'm happy to talk.
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:Within 36 hours, I had money in
the bank for my first client.
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:and six years later it's going strong.
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:I'm as busy as I can be right now.
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:I have no, almost no bandwidth for
any new clients, so it makes me very
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:choosy in terms of who I will work with.
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:my biggest thing is always over deliver.
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:If you promise to do X, do x plus
something show that you are worth
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:whatever this business is paying you.
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:And I want the people who work with me
view the money they spend with me as
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:an investment rather than an expense.
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:If they spend a dollar with me,
I want them to five x, 10 x, 20
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:Jerremy: Yeah.
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:Yeah.
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:James Klein: that is.
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:Jerremy: Heck yeah.
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:Well, speaking of spending money
and having capital and being
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:prepared, you're a smart guy, dude.
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:I like talking to you and you're always
very, you always have a very good,
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:big macro perspective, I feel like.
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:And you said.
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:Three to six months from a recession
at some point, or that's how you
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:feel like we are right now, current,
present day, for those who are
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:listening to this podcast in real time.
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:And your read is, is like a Jimmy
Carter late seventies recession.
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:Not, not a 20, not a 2001 like tech
bubble, AI bubble kind of thing, and
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:not COVID, which was macro and fast
and quick and spread out and delayed
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:and immediate at the same time.
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:Walk us through what you're
seeing that makes you land late
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:seventies Jimmy Carter recession.
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:Dave: Hey.
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:And, and if you could, and if you could
tell our, our, younger listens, listen.
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:As what that was
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:Jerremy: Yeah.
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:James Klein: What that
was like was gas lines
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:Dave: Yeah.
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:James Klein: in that the Middle East.
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:Cut down vastly in the supply of gas to
the rest oil to the rest of the world.
313
:OPEC asserted itself, so literally for the
young people, like look it up on Google,
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:Dave: Mm-hmm.
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:James Klein: people would literally
line up for an hour or more to
316
:get gas to put in their car.
317
:Quite often they were limited as
to how much gas they could put in
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:because supplies were so limited.
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:my sense with the current oil situation
and while yes, the US and Canada are oil
320
:independent and can supply our own needs,
we are still very much a global economy.
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:And if oil stays at these prices.
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:I am expecting inflation
that will be quite high.
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:And again, the people who, who came of
age after:
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:interest rates at 1%, half a percent zero.
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:Jerremy: Yeah, yeah, yeah, yeah.
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:James Klein: I'm old enough to
remember 15, 16, 18% interest rates
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:on mortgages and business loans, So,
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:Jerremy: Hey, Dave, do
you, do you know that too?
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:Do you?
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:Dave: It's our running joke.
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:da.
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:You know, I am, I am.
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:You know, I'm the old man.
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:Jerremy: Yeah.
335
:James Klein: Right.
336
:So you know like when I hear
people complain that interest
337
:rates are 5% and oh my God, they're
so high, it's not sustainable.
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:Yeah,
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:Dave: Yeah.
340
:James Klein: that's based on a
very short window of information.
341
:Jerremy: Exactly right.
342
:James Klein: to the seventies
and e and eighties, you would put
343
:your money in a savings account
and earn five or 6% interest.
344
:So everything post 2008 up
until outta COVID when interest
345
:rates went up was very atypical.
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:If you look back at the
last 50 or a hundred years.
347
:A little bit of inflation
is good for the economy.
348
:It stimulates growth, but that's two
to 3% inflation if gas stays where
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:it is, and it's very expensive in
Canada right now, and I watch the
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:US News and I'm seeing $5 and $6 gas
depending on where people are in the us.
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:That is going to have a massive impact
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:Jerremy: Massive bro.
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:James Klein: of everything.
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:Jerremy: Everything.
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:James Klein: last week just announced
an 8% surcharge on all packages starting
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:April 1st because fuel costs are going up.
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:Dave: no
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:James Klein: I've got, I've got
clients moving stuff by truck
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:from a manufacturer to a three pl.
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:Shipping rates have gone
up in the last month.
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:So number one, I think even if this
gets resolved and gas goes back to
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:where it was, everybody who raised
their prices because of the high gas
363
:price, maybe we'll cut, cut back a
little bit, but they're not gonna
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:go where it was the last plus days.
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:So I'm expecting inflation to be probably.
366
:5% or greater.
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:So I think the chance of a Fed rate
cut no matter what happens after
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:Powell's gone based on the underlying
metrics, I don't think anybody's gonna
369
:be able to cut interest rates 'cause
that will just fuel more inflation.
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:So we could get into one of those spirals
It just, it's absolutely disastrous
371
:losses over the last six months.
372
:If you look at the, the labor
numbers, job jobs are actually being
373
:lost rather than being created.
374
:when you pair high inflation,
high interest rates, high
375
:gas with a lack of jobs.
376
:That has the potential to get really
ugly, and I don't think it'll be one
377
:of those one or two quarter recessions.
378
:And I know a recession by definition
is two quarters of negative growth.
379
:I think it could be a longer one for sure.
380
:Jerremy: Yeah.
381
:And a quick history
lesson for our listeners.
382
:So in 19, 1973, January, US markets
%, to:
383
:So 1973 to 1975.
384
:Those two years.
385
:50% decline.
386
:And then 1976 to 1978,
we had another 25% drop.
387
:And really the overall markets
felt like they were doing nothing.
388
:they stayed relatively flat, relatively
sideways until the early eighties.
389
:So 19 82, 19 83, or we finally,
finally started going higher.
390
:So that, to your point, man.
391
:I also feel like five to 6% inflation.
392
:or, and sorry, five.
393
:To 6% interest rates are normal and
good, and healthy and sustainable.
394
:I also totally agree with you that the
business owners right now, or the people
395
:that want to go into business or the
people that are going to school or going
396
:to college, you have to keep in mind that
there's always gonna be some shifts that
397
:are gonna be happening at some point.
398
:And this is, this is one of them
that's right in front of our face.
399
:I mean, it is right there, right now.
400
:James Klein: Very much so, and
you know, people spending a couple
401
:of hundred thousand dollars to
get a degree in art history.
402
:You know, what kind of, and no, no
disrespect to the art history majors.
403
:Like what job is waiting for
you at the end of that path?
404
:maybe you had four great years at school
and you partied and you learned something,
405
:but do you have any marketable skills?
406
:you know, AI will definitely
change some things.
407
:I don't think it's going to eliminate
as many jobs as some of the naysayers
408
:are postulating all over the internet.
409
:But AI will definitely have an impact
on the job market moving forward.
410
:Dave: Well,
411
:Jerremy: Oh yeah.
412
:Dave: yeah, let's talk
about that a little bit.
413
:when you and I talked, you know,
like we, we, we dove into the
414
:AI world and, you know, like.
415
:What I heard you say is that,
people are using AI just for the
416
:sake of using it, and it's creating
actually more work than saving time.
417
:make that case, you know, I think that
a lot of people are, are saying to
418
:businesses, to entrepreneurs, to to small
business owners that you gotta get on
419
:this train or you're gonna be left behind.
420
:so what, make the case, make your case.
421
:James Klein: Sure.
422
:the first thing is I think AI
has the potential to be great
423
:with the proper use case.
424
:For example, you run a customer
service team and half your customer
425
:interactions are, where's my package?
426
:Et cetera, et cetera.
427
:That's a perfect case for an AI bot that
finds the customer, finds their tracking
428
:information, sends it back to them.
429
:That makes all the sense in the
world, rather than having to hire.
430
:A lot of additional customer service
agents as your business scales.
431
:for specific tasks, repetitive
spreadsheets that are shared on a daily
432
:or weekly basis where you're pulling data
from the exact same places, of course,
433
:AI can do it faster and better with
less errors and free up your team to do
434
:things that do need hu human interaction.
435
:But I also see a lot of garbage.
436
:That's
437
:Jerremy: of
438
:James Klein: written by ai.
439
:Jerremy: tons of garbage.
440
:James Klein: LinkedIn
and read half the posts.
441
:Dave: Mm-hmm.
442
:James Klein: You can tell which ones were
written by AI and the person who posted
443
:it never bothered to proofread it or
personalize it or do anything with it.
444
:And to me that's just ai
garbage it for writing.
445
:AI can get you, in my
opinion, probably 80%.
446
:Of where you need to go,
but then you still need to
447
:polish it and personalize it.
448
:you know, in the IT business, it,
the, the saying has always been
449
:garbage in, garbage out, and your
output is only as good as the data
450
:and the prompts that are going in.
451
:There are a lot of people
using terrible prompts in AI
452
:creating terrible work product.
453
:The thing about AI that I don't like.
454
:Is that it's evolving way too quickly and
you know, as an example, I'm more than
455
:likely older than most of your audience.
456
:I started in business, there
were no personal computers.
457
:Dave: Yeah.
458
:James Klein: My first computer was
an IBM PC with two five and a quarter
459
:inch floppy disks, where literally
the program would be on one disc and
460
:your data would be on another, and
as the disc got full, you'd pull out
461
:the data disc and put in a new one.
462
:My first hard disc was five megabytes.
463
:It cost me, I believe, $2,000 at the time,
and I was told that I would never fill it.
464
:Now on my desk, I have
terabytes of storage.
465
:When I started, there was no internet.
466
:There was no email, and each one
of those things took, the adoption
467
:period happened over several years.
468
:Dave: Yeah.
469
:James Klein: Computers came out until
everybody had computers on their desk.
470
:That was probably a five
to eight year period.
471
:The internet came about until
everybody widely adopted it and
472
:built out e-commerce and all of that.
473
:There was a long adoption period.
474
:Same thing with email.
475
:AI is now improving and iterating on a
476
:Jerremy: Yeah.
477
:Yeah.
478
:James Klein: nobody has a clue
what some of this AI is actually
479
:doing, and I find that terrifying.
480
:Jerremy: I also kind of think
up until Dave, I think it's
481
:like the flying car fallacy too.
482
:You know, everyone's like, oh,
we're gonna have robots and AI doing
483
:everything in like five months.
484
:I'm like, I don't think so, dude, I
think it's gonna take a lot longer.
485
:most AI production is crap.
486
:It's cool, but you know, it's ai and
again, I'm fine if it's gets better, but
487
:give us a, a business like business case.
488
:Make a strong, make a strong
argument that AI is gonna genuinely
489
:reshape small businesses and
entrepreneurship for the better.
490
:And then tell me why
you're still skeptical.
491
:James Klein: I, I think it can
absolutely reshape business for the
492
:better, especially as I said earlier,
with repetitive tasks and mining
493
:data, and ha giving you numbers
you need have to be able to make
494
:proper decisions in your business.
495
:Jerremy: Faster.
496
:Yeah.
497
:James Klein: Exactly.
498
:You know, you go to your bookkeeper,
accounting person, fractional
499
:CPA, whatever they are, you say,
okay, I need, I need a bunch
500
:of reports that showed this.
501
:I have to go to the bank
to renegotiate my deal.
502
:Somebody right now has to essentially mine
all that data, manually produce a report.
503
:Chances are there's some errors in it.
504
:You have to validate the data.
505
:That could be a two or three week
process using AI properly, you can
506
:probably generate that report in an
hour, maybe less if you're really good at
507
:prompting and you know what to instruct
the AI to do on, on those levels.
508
:You know, predicting inventory
requirements and when
509
:you should be reordering.
510
:The AI can certainly do a lot of that.
511
:My biggest concern about the AI.
512
:Ecosystem is the same concern I have
with the social media platforms.
513
:are four or five, six companies
are in pretty much monopolistic
514
:Jerremy: Yep.
515
:Yep.
516
:James Klein: have all your data.
517
:They know everything's going
on, like the whole TikTok thing.
518
:Oh my god.
519
:China's gonna have your data.
520
:Guess what?
521
:China already has your data.
522
:So does Apple.
523
:So does meta, so does Google.
524
:You name it.
525
:They've all got all our data.
526
:Unless you're living totally off the
grid have just like a flip phone that
527
:has no data on it, you mention something
in a conversation five minutes later,
528
:Facebook is serving that to you as an ad.
529
:Jerremy: A hundred percent.
530
:James Klein: Ev, everybody
has all of our data.
531
:it, is what it is.
532
:My concern is primarily with all
of these roll-ups that are going on
533
:like Paramount now, the way they're
requiring all these other media
534
:entities, and literally any industry,
there's gonna be 2, 3, 4 entities that
535
:essentially have a total monopoly.
536
:On their entire space, which creates
a very high barrier to entry for
537
:somebody who has a great new idea.
538
:it's, you know, if they like your
idea, they're gonna acquire you
539
:or they'll put you outta business.
540
:So from that standpoint, as an
entrepreneur, I'd rather see more
541
:players in that market rather than
everything being so concentrated.
542
:Jerremy: Yeah, James, so.
543
:The trades right now, trades
being like electrician, plumber.
544
:Those are being sold as an obvious
alternative to college and or I
545
:should say, maybe even an obvious
alternative to working a desk.
546
:Software job because software is going to
be replaced soon and everything's going
547
:to be AI and we can't replace, you know,
manual physical labor right now instantly
548
:like cutting grass and cutting hair.
549
:But you took a third path
entirely called entrepreneurship.
550
:What does the sales pitch
for that path Leave out.
551
:For anyone who is considering stepping
into being their own boss, being their
552
:own business, what do they actually
need to know that no one tells them?
553
:James Klein: That it's much
harder than you think it is.
554
:you know, that would be the first thing.
555
:can have the best idea in the world.
556
:But until you execute on it and find who
actually agree that it's the best idea
557
:in the world and are prepared to spend
money to buy whatever your widget or
558
:service happens to be is very challenging.
559
:There's a great deal of security
and having a job and knowing that
560
:money is being deposited into your
bank account week or every two weeks
561
:or whatever pay cycle you're on.
562
:When you're an entrepreneur,
quite often it's feast or famine.
563
:And you know, there are times where you're
deciding, am I going to a restaurant
564
:this week, or do I need to buy something
for my business, or am I going without
565
:a paycheck for the next month or six
weeks because cash flow is tight.
566
:these are all the things that
people don't really understand.
567
:It's not for everybody.
568
:It's not for the faint of heart.
569
:You know, you talk about university
degrees, not everybody needs a university
570
:degree and people can make great
livings as plumbers or electricians.
571
:Or masons, like try to find somebody to do
a, a brick job today is almost impossible
572
:because it tended to be immigrants
573
:Jerremy: my gosh.
574
:James Klein: They brought that
skill from the old country.
575
:They made some money.
576
:Their kids went to university and didn't
wanna follow them into the business.
577
:Or if the second generation went
into the business, the third
578
:generation by then said, oh, hell no.
579
:And the immigrants encouraged the
second and third generations to
580
:be the first ones in the family
to go to university, et cetera.
581
:So the trades are horribly
understaffed and that they're, I
582
:find, generally they're underpaid.
583
:you know, I don't think anybody who
works 40 hours a week should have
584
:to have a second job to be able
to rent an apartment or buy food.
585
:Or anything else?
586
:I'm socially liberal.
587
:I believe in universal healthcare.
588
:You know, I believe in a bunch of
stuff that not everybody does, and
589
:yes, McDonald's needs workers, but
honestly, if you look at how many
590
:hamburgers McDonald's sells in an
hour with eight or 10 employees.
591
:If they paid tho those employees an extra
three bucks an hour, so maybe they'd have
592
:to raise the price of a quarter pounder by
5 cents to make the those economics work.
593
:But the people at the bottom
of the economy, they earn more
594
:money, it's not like they're
putting in the bank and saving it.
595
:turning around and they're putting
that money right back into the economy.
596
:They're going to Walmart.
597
:They're going to Costco,
they're going to restaurants.
598
:So.
599
:Again, I don't like to overpay, but
I think anybody who actually puts in
600
:the effort to work a job should be
entitled to the dignity of living.
601
:Not a grand life, certainly being able
to survive and not be one missed paycheck
602
:away from bankruptcy or eviction.
603
:Jerremy: Yeah.
604
:Yeah.
605
:And there's a lot of truth to that man.
606
:And I, I heard you say Universal
Healthcare, which is a perfect transition
607
:into this question that I had because
I talk to people all the time, man.
608
:And it seems like, you know, roughly
maybe Survey says Family Feud
609
:style, one in six American workers.
610
:Stay in a job that they would definitely
leave and they stay there because they're
611
:terrified of losing health insurance.
612
:Now you've been self-employed
for 45 years, you're Canadian.
613
:Do me a favor politically, if you want.
614
:That's fine.
615
:compare and contrast what American
versus international health coverage
616
:feels like across the whole arc.
617
:What you notice, what you see.
618
:Then last but not least,
make sure you sprinkle in.
619
:What does it cost over there for
you as an entrepreneur, to not
620
:have, you know, health coverage
so that you can tell the Americans
621
:what it's like up there in Canada.
622
:James Klein: Sure.
623
:You know, the US is the only
industrialized nation that does
624
:not have universal healthcare.
625
:And again, maybe it makes me a bleeding
heart liberal, but I think if you get hit
626
:by a car and end up in the hospital for
a month, or you get cancer and can't work
627
:and end up in the hospital, I don't think
either one of those should bankrupt you.
628
:I think everybody's entitled
to certainly basic healthcare.
629
:everybody in Canada has a
card from the government.
630
:You walk into the hospital or
your doctor's office and you give
631
:them the card and you're treated.
632
:Now, can people be seen by a doctor
faster in the US than in Canada?
633
:Because it's pay for service?
634
:Yes.
635
:But if you are really sick here,
you're gonna get seen very quickly.
636
:Will it take six months to a year to
get a hip replacement here where you can
637
:do it in the US in six to eight weeks?
638
:More than likely, and that's a trade off.
639
:We also have some privatized
healthcare, so for those who can afford,
640
:they can get stuff done privately
and get it done just as quickly.
641
:I needed an MRI on my back a couple
of months ago, and my wife actually
642
:works in the healthcare system.
643
:She said, I can take your requisition
to work and get somebody to do me
644
:a favor and you'll probably have
your MRI in three to four months.
645
:I called the private clinic
that's literally five minutes
646
:from my house and said I need an
MRI, and they said, no problem.
647
:Would you like to come to
today, tomorrow, the next day?
648
:cost me 750 Canadian
dollars to get the MRI.
649
:Thankfully I was able
to pay for it to do it.
650
:But that, you know,
that was for back pain.
651
:If somebody has cancer or something
and they need an MRI, those
652
:machines run 24 hours a day.
653
:You might get an appointment at 11:00 PM
to go in for your MRI, but you're going
654
:to be seen and you're going to be treated.
655
:Our system has a shortage of doctors
the same way it does there is in
656
:the us you know, especially in the
small rural communities where I read
657
:about hospitals being shut down.
658
:So people have to drive two to three
hours to get to the closest hospital.
659
:don't have that issue, but we
definitely have a shortage of doctors.
660
:for example, I live in
the province of Quebec.
661
:We're about 9 million people.
662
:I think there are over a million
people who don't have a family
663
:doc, and that's terrible.
664
:And it's, it's a combination of
there not being enough spots in the
665
:university, the government also not
having enough money to say, okay, we
666
:need another 1500 family docs quickly.
667
:Each family doc orders X amount
of tests during the year, blood
668
:tests, x-rays, MRIs, et cetera.
669
:Here's the overall cost of all
of that, but what what it results
670
:in is people who are sick.
671
:Instead of having a family doc to
go to, they show up at the emergency
672
:room and they sit and wait for 12 or
18 hours to be seen cases that are
673
:non-emergent, and they shouldn't be
going anywhere near an emergency room.
674
:So there's always a balance and there
is no perfect healthcare system.
675
:I pay for my healthcare both as
an employer, well as an employee,
676
:so any employee in Canada.
677
:Part of their deductions from their
weekly or biweekly paychecks go towards
678
:healthcare an employer, there's a certain
percentage of payroll that gets paid
679
:into the healthcare system as well.
680
:That being said, people in the
US who have great insurance, and
681
:if they're not an employee, but
they're buying insurance privately.
682
:I have family members in the US who
are paying three, four, $5,000 a month
683
:their healthcare, plus have high copays,
high deductibles, et cetera, et cetera.
684
:So I'm in the highest tax
jurisdiction in North America.
685
:But when you factor in the cost of
healthcare and everything else, there's
686
:really not that big a difference
between what somebody in Canada pays
687
:and what somebody in the US will pay.
688
:Dave: James, correct me if I'm wrong,
but when you know Universal Healthcare.
689
:Was being debated and pushed through
in Canada, that it was actually
690
:the conservatives that pushed that
because they wanted a free business
691
:from, you know, having anything to
do, with healthcare and be like, Hey,
692
:business, you, you do you, you do what
you're, you do best and we're gonna
693
:take this burden off of you guys.
694
:James Klein: Yes, and Universal
Healthcare, I believe, came about either
695
:late sixties or early seventies here.
696
:I was a kid, but I remember getting
my first government card and
697
:everything else, and I, I think
it's a net positive, certainly.
698
:Dave: yeah,
699
:James Klein: Is it perfect?
700
:Absolutely not.
701
:Are there people who abuse the system?
702
:You know, of course there are people who
abuse the system and what's happened.
703
:You know, the same as in the US
not nearly enough access for people
704
:who have mental health issues.
705
:Dave: Yeah.
706
:James Klein: So those people,
instead of having places to go end
707
:up in emergency rooms and end up.
708
:Tying up the resources
in the, in the hospitals.
709
:Same thing with long-term facilities.
710
:Some of the hospitals, like they have
30% of their beds tied up by people who
711
:should really be in a rehabilitation or
a long-term care facility, but there are
712
:no beds available in those facilities.
713
:So they're in the hospital costing
the system a thousand dollars a
714
:day to essentially lie in a bed
or sit in a chair waiting for a
715
:bed to open up somewhere else.
716
:That costs much, much less.
717
:Dave: Given your experience, you've
seen, I mean, you've seen so many changes
718
:over the decades and our thesis for this
whole thing has been like, Hey, is a new
719
:social contract when it comes to work,
and work in, America and work in general.
720
:With all of these things happening,
whether it's AI or it's recessions or, you
721
:know, like the, the direction for things
because that promise of go to school,
722
:get a good job, have a family, you know,
be happy if that was ever really true.
723
:It's definitely not true today.
724
:So given.
725
:Your experience, what
would that look like?
726
:What's a new work contract
for, you know,:
727
:What is, what is, what does that look like
for who are coming into the workforce?
728
:Maybe people who are
already in the workforce.
729
:What, what should it be?
730
:James Klein: Wow.
731
:That's a really good question.
732
:I think in an ideal world.
733
:There's always going to be
some, some unemployment, but
734
:that's probably 2% or less.
735
:There's nev, all the economists
consider full employment to essentially
736
:be somewhere around that 2% mark.
737
:There will always be some people who
are unemployable or don't wanna work.
738
:that just is what it is.
739
:It used to be that somebody with no
education could go get a job at a gas
740
:station and start off pumping gas,
and then they showed that person how
741
:to change tires and do oil changes.
742
:And eventually they could do, they
could change spark plugs and do
743
:whatever it happened to be on the car.
744
:everything's electronic.
745
:You need a certain education.
746
:You have to be able to read the scanners.
747
:So menial labor.
748
:going to change I think because automation
and electronics and everything coming in.
749
:So there's gonna be a certain
baseline for most jobs.
750
:You know, unless you're talking about
something like somebody bagging groceries
751
:at a grocery store, or you know, somebody
operating a forklift or packing boxes
752
:in a warehouse or a gardener or the pure
menial tests working on a farm and like.
753
:I have friends who live in farm country
and I see how they're always looking
754
:for people to go work on their farms.
755
:'cause honestly, nobody wants to
be shoveling manure all day long
756
:or be bent over in a field picking
lettuce or whatever it happens to be.
757
:I think that.
758
:Ultimately, despite what's going
on right now with the nationalistic
759
:tendencies and trying to bring
all kinds of jobs back to the us.
760
:Dave: Yeah.
761
:James Klein: There are certain things
that the production of which will never
762
:come back to the US just because there's
always going to be a country where it
763
:can be done cheaper and more efficiently.
764
:Dave: Mm-hmm.
765
:James Klein: you know, the Americans
to a great extent, don't wanna
766
:really work those very menial jobs.
767
:So that's why I think a robust and legal
immigration system is so important,
768
:especially with the demographics of.
769
:Reduced population growth.
770
:People are having way less babies.
771
:There are more people dying
off than babies being born.
772
:So, you know, to keep everything
moving there, I feel there has to be a
773
:stream of legal, immigration, illegal.
774
:Immigration's a totally different
story, and we could debate that for
775
:hours and what to do with these people,
but there should be a proper system.
776
:America was built on
immigrants, so was Canada and.
777
:Everybody's too politically lazy
to actually fix the problem.
778
:And I know I've gone off on a tangent
what employment looks like in:
779
:automation will continue
to grow so people will be.
780
:Rather than writing code, people
will be looking at the code that's
781
:being written by their AI bots and
all this machine learning stuff.
782
:So I think that's gonna be a big change.
783
:Entrepreneurialism is
always gonna be there.
784
:There's always gonna be somebody
785
:Jerremy: yeah.
786
:James Klein: idea to launch a new
business and be the next Steve Jobs or
787
:Michael Dell or whoever it happens to be.
788
:a lot of things will
become very commoditized.
789
:They are already, and I
think that'll only get worse.
790
:You know, certain industries I think
will continue to lose employment.
791
:Like if you walk, when was
the last time you walked into
792
:a bank and spoke to a teller?
793
:Dave: I mean, I've been saying
the exact same thing, like,
794
:why do we have all these banks?
795
:It doesn't make any sense.
796
:It seems like a real estate play to me.
797
:I.
798
:James Klein: E.
799
:E, exactly.
800
:Like if I see a teller four times a year.
801
:It's a lot and it u usually because
I'll have to do something that I
802
:can't do myself online or from an ATM.
803
:employment in banks is gonna change
and the banks are now having their
804
:people do all kinds of alternative
services to generate, to generate
805
:revenue and justify their existence.
806
:So, you know, I think a lot of those
traditional industries will change.
807
:my family's been in the travel
business for plus years, and a lot
808
:of people book their travel online.
809
:Dave: Yeah.
810
:James Klein: the need for travel
agents will continue to be diminished.
811
:will be a certain class of clients who
will still want to talk to a travel
812
:agent 'cause they don't wanna do all the
research and do all the work themselves.
813
:I think accounting firms
will drastically change.
814
:I think the practice of law will
drastically change because of the ai.
815
:where firms would need a lot of junior
lawyers to be doing a ton of research, AI
816
:will be able to do for them in an hour.
817
:What it would take an associate attorney
a day or a week or longer to do.
818
:So the economy will definitely
evolve with the implementation
819
:of the newer technology and that.
820
:That's really never gonna change.
821
:We, we constantly evolve, you know,
from wagons to the train to everything
822
:else that's just and everything else.
823
:So it's done well and responsibly, I
think it's a net positive for society.
824
:If it's done the way some of
the man monopolistic stuff is
825
:being done right now, it has the
potential to be a huge negative.
826
:so, you know, emerging markets will be
interesting because, know, some of the
827
:places where they don't have proper
electrical grids and everything else.
828
:the advent of some of the new solar
or wind, you know, you'll find
829
:areas in South America and Africa
and the poorer areas in Asia where.
830
:Things will modernize, which I think
is a net positive for the world.
831
:Certainly.
832
:healthcare is gonna evolve tremendously.
833
:Doctors are already starting to
use ai, so you know, my kid's
834
:two years into a med degree.
835
:What medical students will be
doing eight or 10 years from now
836
:be totally different just because
of the evolution of the technology.
837
:So I, I think we're in for
major paradigm shift for sure.
838
:What exactly it looks like, I'm not sure
if I knew, I would have a conversation
839
:with Jerremy and figure out which
stocks to buy and just like put 'em
840
:away and wait for them to be the next
Apples or Googles or anything else.
841
:you know, in terms of.
842
:The markets.
843
:I think there's a ton of stuff
that's vastly overvalued.
844
:And know, I, I remember 1999 we were
writing business plans and getting funded
845
:a $5 million valuations with nothing
behind the 50 or 80 page business plan.
846
:And then the dot bomb crash happened.
847
:So I, I think we are in for a
correction with some of these
848
:massive companies with just.
849
:valuations that make no sense at all.
850
:But until we get some stability in oil
and gold and politically and everything
851
:else, they'll probably continue to run up.
852
:Jerremy: Yes, yes, yes, yes, yes, yes.
853
:James got a lightning round for you.
854
:You've been on a bunch of
podcasts and listened to a bunch.
855
:You know how lightning round works.
856
:All right, my friend James.
857
:Chances the, the recession, which as
you defined and as generally defined
858
:right, two quarters of slow growth or
low growth chances the recession hits
859
:before the end of this year, 2026.
860
:James Klein: 95%.
861
:Dave: Wow.
862
:Jerremy: All right.
863
:Finish this sentence.
864
:The biggest lie entrepreneurship
sells young people is,
865
:James Klein: That it's easy.
866
:Jerremy: ah, bro, it's so true.
867
:I, that is the exact phrase I would've
said if I was in your seat in this moment.
868
:One industry you would tell a
25-year-old to run towards right now,
869
:and one industry to run away from.
870
:I.
871
:James Klein: The run, run away
from would be becoming a software
872
:engineer, because they will be
obsolete, an industry to run towards.
873
:I think there are massive opportunities
for people in the video creation world
874
:Jerremy: Hmm.
875
:Dave: Hmm.
876
:James Klein: the AI technology,
and the AI is getting really good,
877
:but then it needs, it still needs
a good video editor to get it.
878
:To the point where it's just
totally credible and believable.
879
:Jerremy: Yes, yes, yes.
880
:All right, finish this sentence.
881
:The thing.
882
:American workers, or maybe even, I mean,
Canadian workers, maybe even workers.
883
:The thing workers don't understand
about how business owners
884
:actually see them is blank.
885
:James Klein: Wow.
886
:I think there are businesses where
the employees are totally valued.
887
:But there are certainly a lot
of industries where employees
888
:are just viewed as widgets.
889
:That being said, the thing that employees
need to know is that they're necessary
890
:for that business to run and grow.
891
:Jerremy: Yeah.
892
:Necessary.
893
:Great word.
894
:Great word to put it.
895
:Well, James.
896
:I would love for you to share with
people how they can get ahold of you
897
:without a website, which is fine.
898
:I want you to have more business,
and we have so many listeners who
899
:probably wanna reach out to you or
at least get some advice or some
900
:information from your consulting piece.
901
:What's the best way to get
ahold of you, my friend?
902
:James Klein: Best way would be via
my LinkedIn, which I'm sure will
903
:end up being in the show notes.
904
:Once all of this gets, gets
published, I'm generally pretty
905
:good at responding to messages.
906
:for anybody who's listened to the
podcast and wants to reach out to me,
907
:mention your message that you heard
me on the podcast and you wanna talk.
908
:Jerremy: Easy enough.
909
:Well, James Klein, thank you so
much, man, for pouring into us on
910
:this nice early Tuesday morning.
911
:I always appreciate your energy, your
enthusiasm, your excitement, your
912
:knowledge, your candor, your acumen.
913
:Thank you, sir.
914
:Our
915
:James Klein: Well, it was an
absolute pleasure and thank
916
:you so much for having me on.
917
:Jerremy: pleasure.
918
:Dave: And here we are.
919
:What did you, what did you learn from our,
from our good buddy, James Klein here.
920
:Jerremy: Man, I learned maybe,
maybe relearned, possibly
921
:Dave: Mm-hmm.
922
:Jerremy: business is what you make of it.
923
:It is who you are.
924
:It is how you impact and work with people.
925
:And what I heard James say very
clearly over that hour is, my
926
:bro doesn't work a nine to five.
927
:He works a five to nine.
928
:And there are days and a weeks
and months where it's awesome
929
:and you're like, look at me.
930
:And I'm, I'm an entrepreneur.
931
:I have my own business, I have my
own schedule, I got my own money.
932
:I make my own decisions.
933
:And there are weeks, days, months, and
quarters where you feel like you're being
934
:strangled to death and you are breathing
through a straw every single day.
935
:'cause it's so freaking hard.
936
:And that is.
937
:The contract for entrepreneurship, right?
938
:The contract for, hey, I'm working
in a company is, ah, you're, you're
939
:not gonna have a lot of freedom.
940
:You're going to be tied down, but you're
gonna have a lot of certainty, but you're
941
:gonna have very little uncertainty.
942
:And if you are entrepreneur, you're
gonna have lot of uncertainty
943
:and very, very little certainty.
944
:And you're gonna have to work a bunch,
and you're gonna have to be creative,
945
:and you're gonna have to be insightful,
and you're gonna have to ask questions.
946
:You're gonna have to put, put tons
of value into people's lives and
947
:businesses to, to make it work.
948
:And it, that's just really a reiteration
of what I know to be true about business.
949
:What'd you learn, Mr.
950
:Dave Conley?
951
:Dave: Hey, I don't know if
I have much to add to that.
952
:I, one thing I didn't hear was do what
you're passionate about, and I think that
953
:that's sort of a lie that we tell about
954
:Jerremy: For sure,
955
:Dave: is
956
:Jerremy: for sure.
957
:Dave: you.
958
:You get into entrepreneurship because
you have a great idea and you think
959
:it'd be awesome, and then, you
know, then you gotta grind it, man.
960
:and then.
961
:God, the worst entrepreneurs in the
world that I, that I consulted with,
962
:and I, and you know, I didn't invest
in, are the ones that were passionate
963
:because they couldn't give up their idea.
964
:Even when they, they, it would not work.
965
:There was no product market fit.
966
:you know, like they could
never make a dollar on it.
967
:It was just gonna be a passion project.
968
:I'm like, ah, know, like you,
you really have to, Be one of
969
:those like problem solvers and be
passionate about the problem, not
970
:passionate about the, the product.
971
:And so like that's, that came up for me.
972
:It's like, man, if you're, if you're
going down this road, I love this road.
973
:We gotta teach this road,
we gotta experience this.
974
:you know, our kids gotta experience this.
975
:People need to, take, I mean we,
we had startup weekends where
976
:we would take like civilians.
977
:And, and do a bootcamp
with them over three days.
978
:And they went from idea to interacting
with real live strangers in 24 hours.
979
:And then, you know, we
pivoted their businesses.
980
:We, we, you know, taught them
how to learn from that stuff.
981
:Man, those startup weekends,
those are invaluable.
982
:So people who are interested
in entrepreneurship, go find
983
:one of those startup weekends.
984
:go talk to James about your idea.
985
:You know, and, you know,
talk to other entrepreneurs.
986
:Not one of 'em is gonna
say, Hey, it's easy.
987
:But a ton of them are gonna say, Hey,
it, it, it, it beats working for the man.
988
:Jerremy: Yeah.
989
:Yes, yes, yes.
990
:Well, listeners.
991
:You know what would help us keep
us from having to work for the man?
992
:Share this episode with your
friends, your loved ones, your
993
:family members on your social.
994
:Say, Hey, I really enjoyed
it, and then hit us with that
995
:five star review It takes.
996
:Four seconds and it costs you absolutely
nothing and helps the algorithm keep
997
:paying us so that we can continue
to work seven, five hours a week
998
:and love what we do and still grind
and still have the passion and all
999
:the things, but most importantly, to
serve individuals at a high capacity.
:
00:57:59,190 --> 00:58:00,690
'cause when you do that, you will win.
:
00:58:01,110 --> 00:58:06,720
And this is us winning here another
episode of Solving America's Problems.
