Dashboard: Gene Marks Explains "Open" Banking

[Music] welcome to another 21 hats dashboard brought to you by our sponsor the great game of business I'm Lauren Feldman and I'm here with genan marks welcome back Jean hey Lauren how are you I'm doing well it's great to have you here I've missed you as always you recently uh have been looking into something uh that you have suggested is becoming a bit of a trend in Europe it's called open Banking and you think it's could be something useful to American small business owners tell us about it yeah um in Europe and not just Europe it's it there are open banking Platforms in the US and uh I don't want to name any vendors but I guess if people can contact us actually I can actually send some of the names um to you but I the the the the concept is this la like when it comes time to apply for a loan uh you you go to a bank right and the bank ask you for a bunch of information and you provide the information and you have to answer a bunch of questions and they ask you like bunch of demographic data that they want and and all that good stuff and it's timec consuming and you have to do it then you go to apply for a loan at another bank you have to do the same thing another loan another bank same thing so um there are networks there are a few networks in Europe and there are some Financial lending platforms here that you know you know that again that I can I can recommend that um they you know they say listen submit the information just one time we will share that information all with our member lenders which might be a bunch of banks or it might be a bunch of private lenders or even Equity firms or whatever and you're putting your information out there once and it's in a cloud-based platform and that information gets shared and then when you update that information you only have to update it once uh instead of updating it 20 times depending on you know who's going around so the natural push back to this obviously it's it's a little controversial right because I mean what's your issue right Lauren I mean it's security right right sure yeah I mean it's like you're going to upload let me get this right I'm going to upload my information to some Dipsy Doodle you Cloud platform that promises me that my information is safe and secure and confidential just like every other Cloud platform does that gets hacked and then they're going to have all my information and all these Banks or lenders who I don't even know anything about they're going to connect in and get my information as well I'm giving the Authority for all of them to see my information when I don't really know all of them that well basically just saying yeah go at it so I don't know what's being done with my information how secure it is and how confidential it is so there's pros and cons to it I mean the open you've established the cons yeah what are the pros yeah yeah I mean like your Pros obviously is is it's it's faster um you know it saves a lot of time you can update your information just one time so uh you know then all these different banks can basically look at your information and they can come back to you and say okay based on this this is what we can lend the guy um but like I I said that the the cons are also pretty steep which is you know your information is not confidential or potentially not or or can be breached how does it work in terms of like all this information goes out does it go to everybody who who wants to see it or do they only see it if you actually apply for a loan and then somebody they first of all different lenders are different things but um some platforms are ones where um if you're putting your information out there you're basically saying I'm up for financing dudes so here I am it's like a Marketplace you know what I mean and then people just throw something at you like here's what we can give you X number of dollars for X number of years at at a certain rate yep and you're saying I'm playing the game so I'm out there and there it is so go ahead and and offer to me other platforms are are more discreet about that in other words you you share your information it doesn't necessarily mean you're looking for financing right now um but then you know when it does come time you can say okay well my information is here and and some of the platforms give you the ability to really um sort of defer or designate um who what what type of lenders you want like I only want you know International Banks to look at this information if they're your members or I only want private investors or lenders in you know SBA lenders you know that kind of stuff you know what I mean sure so it depends on the platform that you go to and it is um you know again it's supposed to be a time and a cost savings thing and the issue is whether or not it's protected it's a trend it's out there I don't know how I would feel like you on my own I mean I have to I don't if you feel the same way and like you know like in this it's 2024 Lauren I if I went to the dark web if I even knew how to get to the dark web and I paid and I am sure I can find out you your social security number you know what I mean I there's no doubt that I can find I could probably find out the first girl you kissed when you were in eighth grade well in your case it was probably like 12th grade but you know I can find out all that information is out there somewhere on the dark web uh not not that one not that one the social security number probably right I think her name was Lexi Greenberg am I right you're not right no um I I wanted to but it didn't work out for me um I tried right fair enough so but I guess my point though is that is that in this in this day and age where it's all out there anyway I mean Jesus you go through like TSA security Laur you know they take a picture of your face it's mtic it's a database of faces and then comes back to you and says yeah you can go through I mean come on how secure is that in the end and we've given it all away so why not give away all of your business information if it helps you get you know financing from a from a better lender you know what I mean well somebody if this is something of a trend in Europe or even elsewhere some people are using this successfully it' be interesting to know how they get past these concerns because the concerns seem pretty great it is true besides I think the 4day work week is a trend in Europe anyway so we know how you know I mean if they're doing that how successful can this be so I'm not sure I would do everything Europe's doing i' see that a little bit differently but that's a that's a topic for a different day all right let's go uh let's go to the next one I know you've been tracking AI on behalf of business owners looking for what's real and what's hype you recently Came Upon a survey that seems interesting it found that nearly two-thirds of business owners say that AI will lead to their businesses increasing not decreasing their head counts is that real or is that hype yeah I mean that's a good question um I I actually kind of think it's more real than hyp first of all let me ask you what are you are you using the chat gbt not as much as I should be I I have I play around with it um I haven't really found a use for it that I've you know integrated into my day-to-day activities it's more like when I have time and I can I explore I try stuff um right right but I I need to do more okay that's F I mean listen so this is this is Cox Communication you know uh they they had a survey that just came out it was their 2024 small business survey and they found that two-thirds of the business owners that they surveyed invested in AI in 2023 um and like more than half of them said that they were going to invest even more in 2024 and you know they're they're not putting enough money into training by the way it was something like 70 some percent of them um weren't providing training for their employees which I think is insane because if you're supposedly investing in AI aren't you going to teach your employees how to use this information I mean so I have a problem with that but I mean I am seeing a lot of it people are are they're they're kind of doubling down they're starting to use the CRM applications we sell um the AI stuff is like customer facing stuff do you know what I mean so um you know you draft better emails and you can start doing you know Standalone campaigns without people being involved or uh you can set up now chat bots on your it small businesses can that can automatically respond to different questions these are all forms of AI and they're all customer facing stuff and according to this survey uh you know bu and you know what's amazing to me is that we're all such cynical bastards that it takes us forever to really adopt anything you know we don't trust anyone and um I mean listen I mean it took what you and me took me years before I could trust you I'm still not all the way there listen I mean you know so and yet here's this AI stuff and you know we're all jumping right into it like you know and like and the reason why is because they realize it can provide you know help and I know that the survey is touting like it's going to help businesses increase head counts um I I I I think that businesses no business that I talk to is in the mind where they're taking Ai and their their first priority is to is to is to fire their employees and replace them with robots I just I'm not that I'm not seeing that let me just say I did highlight a story last week in the morning report about fast food businesses in California and how they're adjusting to the recent increase in the minimum wage there and this story I think it was in the Wall Street Journal was about um using AI um to you know take orders and you know it was clearly about reducing headcount oh yeah that you know by the way on the side because I I was just talk I I I wanted to write about that talk about like um a minimum wage uh you know increasing the minimum wage you know there's this big debate you know does it help does it hurt does it reduce head count does it increase head count does it you know better for employees worse for employees and there's all these studies that conflict with each other that that is like a perfect example is that when you increase the minimum wage too much you know I mean like anything if you increase it anything too much uh this this happens and in this situation you increase the minimum wage of 20 bucks an hour in California all these fast food franchis are like [ __ ] this I mean we can't raise prices any longer we got a we got a cut back on employees and now we got to turn around and invest in Tech like AI uh because we just we can't afford to hire employees so that's a whole other conversation where like minimum wage increases can hurt employees clearly there there's a point where you go too far there's just there has to be that point and is is this there maybe it is I don't know but this is this is such a a bad example in my opinion I just I don't know how anybody thinks it makes sense to single out one industry like that because you know it has ramifications for everybody else as well there are there are small business owners there who are not affected by the minimum wage but are going to lose employees to fast food companies if they don't raise to this minimum and so it's it's hurting other people and and you have this weird dynamic where you have you know you have fast casual restaurants you know Paneras that are going to lose employees cuz they're going to leave a place that doesn't isn't subject to this minimum wage to go to a fast food that that makes no sense at all as as best I could though you know what the lesson I learned about the whole rate I can't we got off of AI and the minimum wage but you know I did learn I I did I I was interviewing this economist from MIT or something just recently a few weeks ago and we were talking about the minimum wage we were talking about this story and um because I was saying like so so what is the answer I mean there's so many studies that conflict and he's like it's like anything else I mean too much of something is bad so like if you raise the minimum wage from 12 to dollar to $12.50 an hour okay that's something that can be absorbed you know but if you're going immediately from $ 15 to $20 an hour where you're increasing your 25% that's a big deal you know what I mean and and so there's there's a limit I think you're right there there's definitely a limit and also if you're going to raise it then raise it you know um don't do it just for certain workers I don't understand how that can possibly be a good situation getting back to this AI thing I just I do want to answer your question if for I mean that's an sort of an extreme example I do think there's no question that AI is going to replace jobs there's hundreds of millions of jobs over the next decade there's there's no question but then of course throughout history Lauren I mean jobs get replaced by technology you know I mean there there used to be like people that like you know knocked on Windows you know in the morning in the 19th century to wake people up because there were no alarm clocks you know and yeah and people that were climb really I've never heard that one oh yeah I'll send you a picture of it there's like a guy in Paris he's knocking on the window with a py people up like I don't see any blacksmiths around unless I'm in like Colonial Williamsburg I mean like there's you know I mean technology does replace people what we're seeing though this year is that there with 10 million jobs still open small businesses are still looking for people they they still get they need their existing people to get more work done if possible you know and I think that's where they're they're kind of leaning into it a little bit more like hey man you know can we use a chat bot to answer questions so I can have our customer service you deal with other customer service issues do you know what I mean like I'm not seeing it where small businesses are use it to write a job description or a marketing plan or a perfect example a perfect example I've been telling all clients like you have to have an AI policy this year okay because I'm seeing a lot of companies do this you know you you have Rogue employees come they start using their own little Dopey Ai mobile apps or whatever on your company's data and it gets you into trouble and if you don't have a policy that you can turn to you could be you know facing liability so everybody listening to this you need to have an AI policy this year like what what's your biggest concern Jean is it with uh somebody an employee using Ai and giving up um information that the company would not want to get out or is it just in the work prodct their wrong customers or using the you need to know if one of your employees is using it to create work product ex that's exactly I mean all of that all the above you know you need to like specifically in your policy say yo what AI apps are allowed to be used what are they allowed to be used for what departments what specific people should be using them what training are they required to have you know there there's a whole bunch of things you need to have this written policy for now about AI because if if people go Rogue with it or use it for other reasons you could be you know you could be in trouble with customers you can get face liability but if you have a written policy you've got a defense you can be like oh well that employee did this and it's clearly against our written policy and this gets back to what we were talking about replace the employee were just saying about like you know saving time I don't know how to write an AI policy for God's sake I mean what the who who does this you literally I know who does it chat GPT thank you yes right so you go to chat GPT and you're like write me this is the kind of business I'm in please write me an AI policy you know to and it will write a great AI policy now you don't use it right off the bat I mean you take it your word Smith it maybe have your attorney review it or you know whatever your it guy or whatever but it takes you to like the Red Zone you know and then you have somebody carry the ball over the goal line that would take me hours to do or some employee to do and Chad we'll do that for you in a minute so that gets back to it's that's why I think a lot of these from this Cox survey they're saying so many businesses are investing in AI I think it's mostly generative AI stuff like chat GPT or co-pilot or whatever um to help them do things a little bit faster with their existing employees I don't see anybody firing employees yet because of AI although I do think long term I think see a lot of that yeah all right last topic you recently wrote a piece asking the question what is a small business um now you you own a small business your clients are small businesses you kind of know what are you getting at here what prompted this story so I'm going to tell you what prompted this story because I send photos of okay so I as you know I've you said before like I do a lot of speaking to a lot of Industry associations okay this past week Lauren I spoke to the metal treating Institute can you imagine like 250 people in the metal treating industry have you ever heard of that before no you haven't heard of that before and yet it is I think I have actually I know somebody who owns a a company that that does that work in Cincinnati yeah okay I right I mean they they they they take like you know raw Iron and Steel they put it through furnaces they they run it through chemical you know whatever and to treat it to make it a certain way to then cut it into parts that are used by their customers and the I mean it's it's a corporate and then I went I spoke to the bearing Specialists they all these companies that make ball bearings you know and again there's hundreds of people in this room 300 people in the room and they make ball bearings and that's also like a core thing and then I went I went this is true this just this past week then I went to DC and I spoke to the National portable storage Association not pable portable I know where your mind's at okay it's portable and these are the guys that make and distribute containers on ships around the country you know when you see these big ships lined up in Jersey and on the coast with you know products they got to go into something these containers are made by people in this Association you know what I mean and they all their issues and they all their challenges and I I do this 60 times a year and I just the reason why I'm saying this right now is because I look out in the audience Lauren okay sometimes it's a couple hundred people sometimes it's a couple thousand it's a bunch of white old men you know that's the audience these are small midsize businesses they are [ __ ] white old men sorry I just cursed they're white old men okay I mean yes there are there are some females that are out there that's fine some Asians I I rarely see a black or brown face out there I re I I am out there doing this 60 times a year and I am telling you so you know and then I see when I see the I watch Hollywood movies you know I watch shits Creek you know and you've got the two you know the two gay guys who own like the store in you know in shits Creek and you know Ryan Reynolds the the hot sexy guy with his Gin Company and Anna aaway the hot sexy one in the in you runs her company in the intern and the people in you know Atlanta the black guys who run their you know their company and I'm like okay it's cool and I know that there is a population out there but like that's not what I'm saying man like you know the core is still these Boomers that are running the running businesses and then Pew research comes out with a study this last past week that just validates you know everything that I'm seeing you know so let me just give you a couple of the things that came out in this research okay for starters they they they they say that 2third of our 33 million small businesses have less than four employees most of them like 90% of them have have have less than 10 employees you know which is what I see out there it's like you know most small businesses um are you know are really really small you know secondly they're not diverse pew that 85% of our nation's business owners are white and 76% are men and the small business administration has said that more than half are over the age of 50 you know so I I I and I'm like yes thank you for saying that because that is what I'm that is if you go on the sba's website everybody every small business on the sba's website is from every color of the rainbow and I'm like that would be great you i' would love to see that but it's not what I'm seeing in reality you know and then finally you know what Pew says which I can't speak to these people that I'm speaking to because I don't know what they make but I do know the reality and you know this Lauren because you've covered small business for years like small businesses don't really make a lot of money some do some do but the PE but on average you're certainly right yeah 86% of the Pew research said that small business owners make less than $100,000 a year the average small business owner makes about7 $2,000 a year now come on we work hard you know I mean that's not you know I mean that ain't Wall Street money you know what I mean like that's you know and by the way I actually think that that is consistent with even some of the business owners that I speak to in some of these industries because they're not from New York or San Francisco they're from all over the all over the country and I don't know what they're also sounds like you're talking to particularly industrial type uh businesses uh which I think would lend itself to to what you're describing but but how did you make the leap from your observation to this study to asking the question what is a small business oh I because when people ask like the small business administration tries to Define what a small business is is something with less than 500 people and when people ask what a small business is so many people get caught up in the Romance of the business they think it's the uh the coffee shop owner or the person making candles you know or the craft store operator and you know yeah there's percentage of those businesses that are out there but they're not making a whole lot of money they turn over a lot I don't know how long you know they stick around the to me the real core small businesses in this country are the ones that have you know 50 to 100 employees that are you know in these gross unsexy Industries uh industrial related they're in the uh the industrial parks that you and I drive by and don't even notice every day because they're disgusting and yet those are the people that come to my conferences and and they're they're old white men you know that that are still writing these businesses these are this to me is what a small business is and that's what kind of like I said like but I'm glad that Pew kind of the numbers are actually showing what I'm seeing out there in the audience that's the what what what drove me to write it what are your thoughts I guess I come from a slightly different direction I think there is a really interesting question about what is a small business I know in your piece you got into the issue of well you know I I know if you use this term but are solopreneurs business owners is that a real business um I think I think this is an important issue because I don't think we do a good job of describing what it really takes to build a business in part because we don't really agree on what constitutes a business yeah and there are certain places where I see people getting hung up on these def definitions in difficult ways one is I think a lot of people use the term startup and small business interchangeably um and you know to me that's that's just crazy they're they're just two different animals you I think most of us think of a startup as you know if you call this anybody can start a business I started a business I don't call it a startup uh because I think of a startup as a business that is looking to raise Capital maybe venture capital and grow big they just they're small now so they're a small business in that sense and that's the cause of the confusion but they don't want to be small whereas somebody who starts a restaurant and is happy owning a restaurant and building that restaurant they're probably going to stay a small business that's a small business to me um these you know these definitions get difficult and then as you alluded to the the SBA doesn't really help here because they Define everything with fewer than 500 employees as a small business and you know there's a huge difference between somebody who owns a restaurant with a couple employees and somebody who has one of the industrial operations you're talking about that could have uh hundreds of employees the other term is Mom and Pop which gets you know when I got to the New York Times they use the term mom and pop interchangeably with small business that's silly to me as well you know you can laugh about this make fun of it I think it has real consequences and I think you got at some of that in in the piece you wrote yeah I I I I also want to add that like I don't a couple things first of all um there's there there's a difference between an employer-owned business and a small business I think a business is a real business when it as employees I really do I think if you're just on your own you're you're you're a freelancer you're a side gigger you're you're you're an independent agent good for you you can say that you're a small business owner or or whatever but I don't really consider because you it is your world is well I guess our relationship is over Jean uh it's been nice knowing you right because you say that you're a small business owner but I'm a very small business owner Jean yeah you are not the same kind of small business owner that uh a client of mine is with say 25 employees you know what I mean and they and they get lumped into you and it's two completely different worlds you know so there's 33 million small businesses they say in this country which by the way is [ __ ] because they're basing it based on tax returns that are filed so any anybody that files an escort return or a partnership return for their you know for their you know fish tank hobby gets you know they're considered to be a small business you know what I mean and part of that 33 million you brought this issue up in your piece too that's going to include lots of side hustles you know people who have full-time jobs plus this business on the side exactly and and on top of that the you when I talk to see see big I I work with some big companies and and they they they want to go after the small business Market you know and they they tend to get run by their PR departments and their PR departments tend to be staffed with people that don't have any small business experience and they tend to be a younger demographic as well like recently out of college demographic their small business experience is because they live in New York City because that's where you are you know if you're in PR um is you're walking around you see this cool little coffee shop or this yoga studio or you know you know something that's you you have a friend that's has an Etsy business out of their apartment you know so they consider that to me and then and so that they say oh great we want to go after small businesses so we need to go after that market you know like these are small businesses and I'm like no no they're not you know like they you the small businesses are the 7 million businesses in this country that have employees that are worried about government regulations that are worried about uh you know the cost of their materials going you know going up and out they're worried about their cash flow they're worried about financial reporting they're worried about employee management finding people retaining people they're worried about investing in technology it's not you know I get it I don't want to diss the yoga shop owner um you know with to employees but I don't you know that's not what I'm seeing when I'm when I'm speaking to people around the country all these associations are are these dirty smelly businesses with you know 25 50 100 well you're self- selecting there you're attracting a certain group of people I I I take your point I I prefer to think I think they're all businesses um I think this the term small business is kind of useless I think we because we don't agree on what exactly it represents I hate to exclude people I don't know I I think we need another set of terms um yeah that'll never happen it won't you're right but let me just throw one at you Sean busy on this podcast frequently refers to businesses that he calls owner operated businesses which I think is a a useful uh construct I think it you know it's suggests that there are employees there although it doesn't uh flat out say it but it's you know it's clearly not a Fortune 500 company um I I I think that can be a useful term I think the designation between businesses that have employees and businesses that don't is really important and that's a really significant dividing line there should be a term for one and a term for the other um Unfortunately they they all get lumped together but I don't want to say they're not businesses or not legitimate or not you know important and some of those that you're uh referring to you know do end up turning into not just real small businesses but big businesses sometimes but I I got to tell you do you know do you know who how I really when I really know I'm talking to a true small business owner is when they don't identify themselves as a small business owner you know whenever I speak to somebody that says you ask them what they do and they're like oh I'm a small business owner I'm like okay you clearly just left your corporate job and now you're all romanced because you have like a candle business on Etsy so you're a small business owner what what the clients that I deal with they're you know you ask them what they do like you know hey you know you know Lauren what you know what do you do in your business what do you do for a living oh I run a company we make candles or I you know I I I own a business that um you know that that that that manufactures paper and film or I'm an AR I run an architectural firm like they identify with what they do not that they're a small business owner you know and whenever I hear people say that they're a small business owner like they proudly say look at me I'm a small business owner I'm like dude you are you're reading a romantic novel that's the way that I look at so that's that's how I judge people and I'm very judgey let me tell you and that's what makes this fun you know there are a lot of people who reject the term small business because they just find it they find it demeaning um you know all they hear is the word small and if it's your business it's you know it doesn't seem small if you ask I mean like you I mean look you have Paul Downs on right you know I mean like you know the yeah you asked Paul Downs like you know hey Paul if I just met him for the first time hey man like what do you do you know what I mean I make furniture you know I don't I don't know if he would or he would say I'm a business owner I'm a business owner I make furniture which is fine you know what I mean like you know that's cool but usually it's coupled with what he does you know what I mean like you know most people will identify themselves with their livelihood you know what I mean so you know Jay would do the same thing Jay folz you know what I mean with his with his business I mean I don't know well he doesn't run away from the term I mean his his Twitter handle I think is is Jay Small Biz um so that might not be the best example yeah maybe maybe he's not a great example of that because I understand because you know Jay you wants to give advice to business owners as well and identifies that way and that's that's fine but I'm just saying like typical client that I meet they they I just don't hear them calling themselves small business owners maybe a business owner but it's always coupled with what their livelihood is you know what they do you know what I mean so I run a manufacturing business you know that kind of thing well once again we have completely solved this problem don't you think J we need to join the SBA and start changing some terms right away uh if anybody has any suggestions you know where to reach us please let us know I'd love to come up with some some better terms for this uh I do think it's you know it can seem silly but I I think it has an impact uh when people don't know what they're referring to and um it gets confusing and I think that's part of the reason the media doesn't do as good a job as it should in general covering all of these businesses whatever you call them fair enough Jean anything we should look for in the coming week yeah what am I writing this week Lauren uh what am I working on um I'm gonna be working oh yeah you know entrepreneur asked me to write an article on um the so far the 10 worst business decisions of the Year wow like one being the um Red Lobster all you can eat shrimp Buffet the guy the editor said you would you want to roll in it I'm like yes please so I'll be working I don't know if it's going to be out this week or not I'm just that sounds like fun yeah that'll be a fun one um and then the other one we can talk about maybe next time is uh I if we're gonna talk about AI going forward I would like to talk about specific uses of AI you know and I just you'll see a piece I'm writing in Forbes uh about Sam's Club uh because they're now using AI to stop shoplifting and um that's a specific use big company spending big bucks but ultimately we commoditized down to our level and um those kind of thing we we might talk about a small business level Jean is that what you're referring to smaller companies let's just say okay uh that sounds great I look forward to having that conversation Jean Marks is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times the Chicago Daily Herald Forbes and entrepreneur you can also hear him on ABC radio's ey on the world with John Bachelor Jean hosts two small business podcasts with paychecks Corporation and the Hartford this episode was brought to you by the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at Great game.com have a great week everyone and thank you Jean thank you Lawrence see you next week appreciate you taking the time